Mixed plastic waste and pyrolysis oil

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Gain a transparent view of the opaque mixed plastic waste and pyrolysis oil markets in Europe. With the growth of chemical recycling in Europe, competition for mixed plastic waste feedstock is intensifying. Pyrolysis-based plants targeting mixed plastic waste (with a focus on polyolefins) as feedstock account for ~60% (2023) of all operating chemical recycling capacity in Europe.

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Mixed plastic waste and pyrolysis oil news

Saudi SABIC swings to net loss in 2023 on Hadeed sale, challenging market

SINGAPORE (ICIS)–Saudi Arabia’s chemicals major SABIC swung to a net loss of Saudi riyal (SR) 2.77bn ($739m) in 2023, largely due to one-off losses related to a divestment, while earnings from continued operations shrank amid challenging global market conditions. in Saudi Riyal (SR) bn 2023 2022 % Change Revenue 141.5 183.1 -22.7 EBITDA 19.0 36.4 -47.7 Net income from continuing operations 1.3 15.8 -91.8 Net income attributable to equity holders of the parent -2.8 16.5 – The company's net loss for 2023 was "driven mainly from the fair valuation of the Saudi Iron and Steel Co (Hadeed) business", SABIC in a filing to the Saudi bourse Tadawul on 27 February. In early September 2023, SABIC announced it had agreed to sell its entire stake in the Saudi Iron and Steel Co (Hadeed) to Saudi Arabia's sovereign wealth fund for SR12.5bn. The sale resulted in non-cash losses worth SR2.93bn. From continuing operation, full-year net income declined by 91.8% on reduced profit margins for major products, as well as lower earnings of joint ventures and associated firms. SABIC also incurred charges from non-recurring items amounting to SR3.47bn in 2023,“as a result of impairment charges and write-offs of certain capital and financial assets as well as provisions for the restructuring program in Europe and constructive obligations”. Meanwhile, SABIC’s average product sales price in 2023 fell by 21%, reflecting the global downturn in petrochemical markets, it said. Overall sales volumes fell by 2% year on year in 2023 amid sluggish end-user demand, the company said. "Year 2023 presented numerous challenges for the petrochemical industry – the market environment was shaped by lackluster macroeconomic sentiment, weak end-user demand, and a wave of incremental supply for a large suite of products," it said. The company's petrochemicals business posted a 20% year-on-year decline in sales to SR131.3bn in 2023, with EBITDA down by 42% at SR14.6bn. "The petrochemical industry navigates a challenging operating environment – underwhelming demand within our target markets led to lower year end product prices and there remains considerable uncertainty heading into the first quarter of 2024," SABIC CEO Abdulrahman Al-Fageeh said. "The announced divestment of Hadeed is proceeding as planned – this optimization of internal resources will enhance our core focus on petrochemicals," he said. SABIC is also pursuing a number of initiatives to address the "competiveness of our European assets" aimed at a "maintainable and modernized footprint in the region", Al-Fageeh added. The company plans a higher capital expenditure of between $4bn and 5bn in 2024, compared with $3.5bn-3.8bn last year. SABIC has started construction of its $6.4bn manufacturing complex in China’s southern Fujian province. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC is 70%-owned by energy giant Saudi Aramco. ($1 = SR3.75)

28-Feb-2024

AdvanSix petitions US to impose Superfund taxes on imports of nylon 6, capro

HOUSTON (ICIS)–AdvanSix has requested that the US impose Superfund taxes on imports of nylon 6 and caprolactam (capro). On Tuesday, AdvanSix did not immediately respond to a request for comment. AdvanSix proposed a tax rate of $14.77/ton. The next step is for the government to gather comments and consider requests for hearings about AdvanSix's request. The deadline to file comments or request hearings is 22 April. HOW THE SUPERFUND TAX WORKSThe US introduced the Superfund taxes in mid-2022 on taxable chemicals and imports of taxable substances. The proceeds raised by the taxes will help replenish the government's Superfund program, which pays for clean-up at waste sites. The Superfund tax regime divides materials into two groups. The first group is levied on the sale or use of 42 chemicals by producers or importers. Many of these chemicals are fundamental building blocks such as ethylene, propylene, butadiene (BD), benzene, toluene, xylene and methane. The second group is restricted to imports and covers substances that are sold or used in the US. This second batch of taxes applies to substances that contain at least 20% of the 42 taxable chemicals. In addition, the taxable rate would depend on the proportion of the 42 taxable chemicals contained in the substance. The request by AdvanSix falls under this second group. As part of its request AdvanSix filed two petitions asking the US to add nylon 6 and capro to its list of taxable substances. Thumbnail shows nylon Image by Shutterstock.

27-Feb-2024

Japan January inflation at 2.0%; end to negative interest rates in sight

SINGAPORE (ICIS)–Japan's core consumer inflation in January rose by 2.0%, matching the Bank of Japan's (BoJ) price stability target and supporting expectations that the central bank will end its ultra-low interest rates policy by April. Consumer inflation at lowest since March 2022 BoJ’s benchmark interest rate at -0.1% since Jan 2016 Weaker yen drives up import costs The core consumer price index (CPI) – which excludes volatile fresh food prices – in January weakened from 2.3% in the previous month, marking its third straight month that the country's inflation has slowed, data from the Statistics Bureau showed on Tuesday. January's core CPI reading also marks its lowest point since March 2022 as cost of imported raw materials decreased but the number came in higher than market expectations. "[BoJ] Governor Kazuo Ueda has expressed confidence of anchoring inflation above the government’s target of 2% and inflation reading is expected to pick up in February as the impact from the government’s price relief measures fades on a year-on-year basis, boosting market expectations that the BOJ is nearing the end of its ultra-loose monetary policy soon," Malaysia-based HongLeong Bank said in a research note on Tuesday. The sharp depreciation of the yen has caused Japan's import bill to soar. At 03:45 GMT, the yen was trading at Y150.48 against the US dollar, down by more than 6% from the start of the year. Source: xe.com Japan relies significantly on imported crude oil as it lacks substantial domestic production. About 80-90% of its crude oil imports are sourced from the Middle East, according to the International Energy Agency (IEA). While the country’s domestic refineries can satisfy demand for transportation fuels, it imports liquefied petroleum gas (LPG) and naphtha heavily as domestic production does not meet the required levels. ALL EYES ON BOJ The BoJ is widely expected to end its negative interest policy, introduced in January 2016, by April this year. The policy was kept for years to stimulate credit growth and investment, in the central bank’s fight against deflation. In its latest meeting in January, the central bank kept its benchmark interest rate at -0.1%, but its quarterly economic report hinted at possible policy normalisation. For the whole of 2023, Japan’s consumer inflation posted an annualized average of 3.1%, up from the previous year’s 2.3% average and the highest recorded since 1982, because of the weaker yen, which made imports more expensive. Despite BoJ officials' confidence in hitting the 2% inflation target, recent data undermines this view following two consecutive quarters of GDP contraction due to weak consumption. Japan’s economy shrank by an annualised rate of 0.4% in the fourth quarter of 2023, following a 2.9% contraction in the July-September period. For the whole of 2023, it posted a 1.9% growth. Because of the recession in the second half of last year, the country was overtaken by Germany as the third-biggest economy in the world. "The challenging growth outlook for Japan adds further risk to a delay to our projected timeline for BOJ normalisation in 2024," Singapore-based UOB Global Economics & Markets Research said. "That said, we still expect BOJ’s normalisation to commence only after 2024’s Shunto Spring wage negotiations between major corporations and unions which takes place around March," it added. Shunto is the Japanese term for “spring wage offensive”. The season, which is typically between February and April, refers to a period when thousands of Japanese labor unions simultaneously negotiate wages and working conditions with their employers. Focus article by Nurluqman Suratman Thumbnail image: Large container cranes stand at a port in Tokyo, Japan on 15 February 2024. (FRANCK ROBICHON/EPA-EFE/Shutterstock)

27-Feb-2024

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 23 February. LyondellBasell to lease California plant to produce recycled resins from waste LyondellBasell has acquired a recycling plant in California from PreZero in which it plans to produce post-consumer recycled resins from plastic waste, the US chemicals major said on Tuesday. Brazil’s Unigel gets green light from creditors for debt restructuring Unigel has agreed a Brazilian reais (R) 3.9 billion ($791 million) debt restructuring with its creditors, which has saved the beleaguered styrenics, acrylics and fertilizer producer from filing for bankruptcy for the time being. Mexico's Orbia to pause PVC investments after weak Q4 results Orbia will be pausing polyvinyl chloride (PVC) capacity expansion due to weak market economics which weighed on its 2023 earnings, the Mexico-based producer said. US Huntsman expects gradual recovery, seeks to boost prices and volume Huntsman expects a gradual recovery to take hold in 2024, in which the company will attempt to pursue higher prices and recover share, the CEO said on Thursday. Pembina to supply Dow Canada net-zero petchem project with ethane Canadian midstream energy firm Pembina Pipeline has entered into long-term agreements to supply Dow’s upcoming net-zero petrochemicals project at Fort Saskatchewan in Alberta province with 50,000 bbl/day of ethane.

26-Feb-2024

TOPIC PAGE: Sustainability in the fertilizers industry

Updated on 26 February. On this topic page, we gather the latest news, analysis and resources, to help you to keep track of developments in the area of sustainability in the fertilizers industry. LATEST NEWS HEADLINES Germany’s Heraeus invests in Japanese ammonia tech company By Stefan Baumgarten 22-Feb-24 LONDON (ICIS)–German technology group Heraeus has invested an undisclosed amount in Tsubame BHB, a Japanese company that has developed a precious metal-based technology for decentralized ammonia production. Malaysia’s PCG, Sarawak Petchem agree to study low-carbon ammonia and urea plant By Nurluqman Suratman 21-Feb-24 SINGAPORE (ICIS)–Malaysia’s PETRONAS Chemicals Group (PCG) and methanol producer Sarawak Petchem on Wednesday signed an agreement for a joint feasibility study aimed at establishing a low-carbon ammonia and urea production facility in Bintulu, Sarawak. Egypt’s Helwan signs agreement to produce black urea By Deepika Thapliyal 20-Feb-24 LONDON (ICIS)–In Egypt, Helwan has signed an agreement with SML-INNO UK Ltd to set up the world's first vertical integrated unit to produce black urea, with a capacity of 130,000 tonnes annually, the company said today. EU eases climate proposals after widespread farmer protests By Chris Vlachopoulos 07-Feb-24 LONDON (ICIS)–European Commission President Ursula von der Leyen announced on Tuesday that the EU has agreed to ease key demands in its climate proposal plans, following intense protests from farmers. Tecnimont awarded engineering contract for Portugal green hydrogen, ammonia plant By Graeme Paterson 05-Feb-24 LONDON (ICIS)–Tecnimont has been awarded an engineering contract to develop an integrated green hydrogen and green ammonia plant at Sines, Portugal, its parent company Maire said on Monday. EU proposes relaxation in policy following farmer protests By Deepika Thapliyal 31-Jan-24 LONDON (ICIS)–The European Commission Wednesday proposed relaxing green farming requirements under the Common Agricultural Policy (CAP), in its first attempt to quell farmer protests across Europe as the sector struggles to stay economically viable. Biden Administration invests $207m in domestic fertilizer and clean energy endeavours By Chris Vlachopoulos 23-Jan-24 LONDON (ICIS)–The Biden Administration is investing $207m in domestic fertilizer and renewable energy projects, the US Department of Agriculture (USDA) Secretary Tom Vilsack announced on Monday, 22 January. Brazil’s state of Ceara, Bp sign MoU for green hydrogen site By Jonathan Lopez 18-Jan-24 SAO PAULO (ICIS)–The government of the Brazilian state of Ceara and UK-headquartered energy major Bp signed this week a Memorandum of Understanding (MoU) to build a green hydrogen site. Atome Energy in talks with buyers for green fertilizer from Paraguay unit By Manuja Pandey 17-Jan-24 LONDON (ICIS)–UK's Atome Energy Plc is in advanced negotiations with leading international players for the offtake of green calcium ammonium nitrate (CAN) fertiliser from its production facility in Villeta, Paraguay. Sweden's Cinis targets Asia potash market with Itochu partnership By Andy Hemphill 16-Jan-24 LONDON (ICIS)–Swedish green-tech start-up Cinis Fertilizer has signed a letter of intent (LOI) with Japan-headquartered trading house Itochu to launch its environmentally-friendly mineral fertilizer in the Asian market. Helwan selects Eurotecnica's Euromel G5 technology for new melamine facility in Egypt By Melissa Hurley 15-Jan-24 LONDON (ICIS)–Eurotecnica has been selected by Helwan Fertilizers Company (HFC) for the implementation of a world-scale melamine plant based on proprietary Euromel G5 melamine technology, the technology arm of Switzerland's Proman said on Monday. India’s Adani Group plans $24bn green energy park; RIL to commission giga complex By Priya Jestin 12-Jan-24 MUMBAI (ICIS)–India’s western Gujarat state is set to become the domestic hub of green energy projects following an announcement by the Adani Group to set up a large green energy park and Reliance Industries Ltd (RIL) set to commission its giga complex in the state soon. INPEX and LSB pick technology for US ammonia project By Stefan Baumgarten 10-Jan-24 HOUSTON (ICIS)–INPEX Corp and LSB Industries have chosen KBR’s blue ammonia technology for a planned 1.1m tonne/year low-carbon ammonia project on the US Gulf Coast, KBR said on Wednesday. Bayer partners with energy firms on hydrogen cluster in Germany By Stefan Baumgarten 09-Jan-24 LONDON (ICIS)–Pharmaceuticals and agrochemicals company Bayer has signed a memorandum of understanding (MoU) with three energy firms – E.ON, Iqony and Westenergie – to establish a hydrogen cluster at its Bergkamen production site near Dortmund, at the eastern edge of Germany's Ruhr industrial region. At the core of the project will be the production of green hydrogen from imported ammonia. S Korean group picks KBR tech for Malaysian green ammonia project By Al Greenwood 08-Jan-24 HOUSTON (ICIS)–A South Korean consortium has chosen KBR's K-GreeN process technology for a green ammonia project that it will develop in Sarawak, Malaysia, the US-based engineering company said on Monday. Abu Qir signs MoU for green ammonia project in Egypt By Sylvia Traganida 03-Jan-24 LONDON (ICIS)–North Abu Qir for Agricultural Nutrients has signed a memorandum of understanding (MoU) with ABB International Group, MPS Infrastructure Company, and Petrojet for the supply of green hydrogen and renewable electricity. EU CARBON BORDER ADJUSTMENT MECHANISM (CBAM) EXPLAINED What is it? The risk of carbon leakage frustrates the EU’s efforts to meet climate objectives. It occurs when companies transfer production to countries that are less strict on emissions, or when EU products are replaced by more carbon-intensive imports. This new mechanism would counteract this risk by putting a carbon price on imports of certain goods from outside of the EU. How will it work? EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods, the corresponding cost can be fully deducted for the EU importer. This will help reduce the risk of carbon leakage by encouraging producers in non-EU countries to make their production processes greener. A reporting system will apply from 2023 with the objective of facilitating a smooth roll out and to facilitate dialogue with non-EU countries. Importers will start paying a financial adjustment in 2026. How is the fertilizer industry affected? The fertilizer industry is one of the sectors to fall under the CBAM. The more energy-intensive nitrogen fertilizers will be affected most in the sector by the mechanism. DEFRA CONSULTATIONS EXPLAINED The UK’s Department for Environment, Food & Rural Affairs (DEFRA) launched a consultation at the beginning of November 2020 on reducing ammonia emissions from urea fertilizers. The consultation ran until 26 January 2021. It set out three options for tackling ammonia emissions: A total ban on solid urea fertilizers A requirement to stabilise solid urea fertilizers with the addition of a urease inhibitor. A requirement to restrict the spreading of solid urea fertilizers to between 15 January and 31 March of a given year. Liquid urea is excluded from any new rules or restrictions. DEFRA is currently analysing the feedback received. In March 2022, DEFRA announced that it had delayed introducing restrictions on the use of urea by at least a year to support farmers with fertilizer availability and keep their costs down Should DEFRA decide to restrict the use of urea in the future, growers would be left with just ammonium nitrate-based fertilizers. PREVIOUS  NEWS HEADLINES Yara aims to launch first container ship to run off clean ammonia India’s Odisha state approves green hydrogen, ammonia, methanol projects ADM announces launch of regenerative agriculture program in Brazil Fertiglobe completes first renewable ammonia shipment with carbon certification Allied Green Ammonia picks Topsoe’s tech for Australia project Germany’s VNG looks to secure offtake from Norwegian low carbon ammonia plant Gentari enters into agreement with AM Green to invest into a green ammonia delivery platform ITOCHU Corporation, Orascom Construction sign MOU for development of ammonia bunkering in Suez Canal India developing port infrastructure for green hydrogen exports S Korea, Saudi Arabia firms sign 46 pacts, includes blue ammonia project INSIGHT: CBAM reporting begins, fertilizer exporters to EU challenged to account for carbon KBR to supply green ammonia tech to Madoqua Power2X site in Portugal Germany’s SOM to build green hydrogen, ammonia facility in Brazil’s Piaui state US ADM and Syngenta sign MoU to collaborate on low carbon oilseeds to meet biofuel demand Tecnicas Reunidas, Allied Green Ammonia to build green hydrogen and green ammonia plant in Australia Australian fertilizer producer Orica accelerates climate change targets Nestle, Cargill and CCm Technologies launch joint UK trial on sustainable fertilizer EnBW acquires stake in planned Norwegian ammonia plant  Yara Germany signs agreement for decarbonisation of cereal cultivation using green fertilizers Hyphen, ITOCHU ink MoU to explore potential Namibia hydrogen collaboration  INSIGHT: BASF grapples with demand trough, slow road back SABIC AN ships low-carbon urea to New Zealand US Cargill and John Deere collaborate to enable revenue for farmers adopting sustainability Canada’s Lucent Bio announces approval of biodegradable nutrient delivery patent Aker, Statkraft’s 10-year PPA to spur European renewable ammonia push further BASF, Yara Clean Ammonia to evaluate low-carbon blue ammonia production facility in US Gulf Coast Yara Clean Ammonia, Cepsa to launch clean hydrogen maritime corridor EU details CBAM reporting obligations Saudi Arabia’s Ma’aden exports its first low-carbon blue ammonia shipments to China US Bunge and Nutrien Ag announce alliance to support sustainable farming practices Maire subsidiary Stamicarbon wins US green ammonia engineering contract India’s IFFCO launches liquid nano-DAP fertilizer EU Parliament backs CBAM, emissions trading measures OCP granted €100m green loan to build solar plants at Morocco facilities EU unveils plans to tackle greenwashing India’s IFFCO and CIL to manufacture nano DAP for three years USDA awards Ostara funds to boost sustainable phosphate fertilizer output Canadian prime minister confirms fertilizer emission goal is voluntary US fertilizers industry increases carbon capture in 2021 – TFI Indian president calls for reduction in chemical fertilizer use IFFCO plans to export nano urea to 25 countries Amman selects Elessent Clean Technologies for Indonesia sulphuric acid plant Lotte Chemical forms clean ammonia consultative body with RWE and Mitsubishi Corporation Global 2020-2021 specialty fertilizer demand growth led by north America, Asia BASF and Cargill extend enzymes business and distribution to US Saudi Aramco awards sulphur facilities overhaul contract to Technip India sets green hydrogen targets for shipping, oil & gas, fertilizer sectors Germany misses climate target despite lower energy consumption TFI reacts to US Congress passing the Water Resources Development ActHelm becomes a shareholder in UK bio-fertilizer company Unium Bioscience Yara inks deal to deliver fossil-free green fertilizers to Argentina Canadian firms plan fuel cell generator pilot using green ammonia Deepak Fertilizers awards contract to reduce emissions, increase productivity Saudi Aramco launches $1.5bn sustainability fund to support net zero ambition CF Industries and ExxonMobil plan CCS project in Louisiana Canada’s plan to cut fertilizer emissions is voluntary – minister Canada’s fertilizer emission goal raises food production concerns Uniper, Vesta to cooperate on renewable ammonia site in the Netherlands German Uniper to work with Japan’s JERA on US clean ammonia projects ADNOC ships first cargo of low-carbon ammonia to Germany US Mosaic and BioConsortia expand collaboration to microbial biostimulant IMO deems Mediterranean Sea area for sulphur oxides emissions control Canada's Soilgenic launches new enhanced efficiency fertilizers technology for retail Austria's Borealis aims to produce 1.8m tonnes/year of circular products by 2030 European Parliament rejects proposed carbon market reform IFA ’22: southern Africa looks to bio-fertilizer as cheaper, sustainable option IFA '22: Indian farmers will struggle to embrace specialty fertilizers – producer Canadian Nutrien plans to build world’s largest clean ammonia facility in Louisiana Japan's JGC Holdings awards green ammonia plant contract to KBR Bayer to partner with Ginkgo to produce sustainable fertilizers Australia Orica and H2U Group partner on Gladstone green ammonia project Canada sets tax credit of up to 60% for carbon capture projects UK delays urea restrictions to support farmers as fertilizer costs at record high EU states agree to back carbon border tax Yara to develop novel green fertilizer from recycled nutrients USDA announces plans for $250m grant programme to support American-made fertilizer Canada seeks guidance to achieve fertilizer emissions target Fertilizer titan Pupuk Indonesia develops hydrogen/blue ammonia business India launches green hydrogen/ammonia policy, targets exports Canada AmmPower to develop green hydrogen and ammonia facility in Louisiana US DOE awards grant to project to recover rare earth elements from phosphate production Fertiglobe, Masdar, Engie to develop green hydrogen for ammonia production Czech Republic’s Spolana enhances granular AS production India’s Reliance to invest $80bn in green energy projects Yara, Sweden’s Lantmannen aim to commercialise green ammonia by 2023 Novatek and Uniper target Russia to Germany blue-ammonia supply chain Fertz giant Yara goes green with electrification of Norwegian factoryCanada Arianne Phosphate exploring use of phosphate for hydrogen technology FAO and IFA renew MoU to promote sustainable fertilizer use Sumitomo Chemical, Yara to explore clean ammonia collaboration Sri Lanka revokes ban on imports Tokyo scientists convert bioplastic into nitrogen fertilizer Aramco plans Saudi green hydrogen, ammonia project China announces action plan for carbon peaking & neutrality Saudi Aramco targets net zero emissions from operations by 2050 Fertiglobe goes green with Red Sea zero-carbon ammonia pro Australian fertilizer major Incitec Pivot teams up for green ammonia study INTERVIEW: BASF to scale up new decarbonisation tech in second half of decade – CEO India asks fertilizer companies to speed up production of nano DAP Japan's Itochu set to receive first cargo of blue ammonia for fertilizer use Norway's Yara acquires recycled fertilizers maker Ecolan Bayer Funds US start-up aims to cut nitrogen fertilizer use by 30% BP: Green ammonia production in Australia feasible, but needs huge investment Origin and MOL explore shipping green ammonia from Australia India’s IFFCO seeks to export nano urea fertilizer Sri Lanka reinstates ban on import of chemical fertilizers Nutrien to cut greenhouse gas emissions 30% by 2030 RESOURCES IFA – Fertilizers and climate change  TFI – Sustainability report 

26-Feb-2024

CDI Economic Summary: US Fed rate cuts delayed on sticky inflation, economic resilience

CHARLOTTE, North Carolina (ICIS)–With disinflation having stalled above the US Federal Reserve’s targeted rate, Wall Street expectations of six rate cuts this year have evaporated. Interest rate futures are now moving towards fewer cuts and along the lines the latest Fed “dot plots” of three cuts this year. Any cuts that were to emerge will not happen until May or June. Starting with the production side of the economy, the January ISM US Manufacturing PMI registered 49.1, up 2 points from December and the 15th month in contraction. Only four industries out of 18 expanded, and weakness remains broad-based. But production moved back into expansion, as did new orders. The latter featured a 5.5-point gain to a positive 52.5 reading. This is always a good sign. Order backlogs contracted, however, at a faster pace. Both new orders and order backlogs, when combined with the reading on inventories, are good indicators of future activity. Inventories contracted, which could provide a floor for output. The long and deep de-stocking cycle could be ending, with the possibility for restocking this year. Meanwhile, the ISM US Services PMI improved 2.9 points to 53.4, a reading indicating modest expansion. The Manufacturing PMI for Canada remained in contraction during January while Mexico expanded. Brazil’s manufacturing PMI improved into expansion. Euro Area manufacturing has been in contraction for 18 months, and the region continues to skirt recession. China’s manufacturing PMI was slightly above breakeven levels for the third month, as its recovery continues to face headwinds. Other Asian PMIs were mixed. AUTO AND HOUSING OUTLOOKTurning to the demand side of the economy, light vehicle sales slumped in January due to severe winter weather. This allowed inventories to move up, but they still remain low compared to historical norms. Economists see light vehicle sales of 15.9 million this year before improving to 16.3 million in 2025. The latest cyclical peak was 17.2 million in 2018. Pent-up demand continues to provide support for this market. Homebuilder confidence remains in negative territory but is improving. Housing activity peaked in Spring 2022 and into mid-2023, with the latest housing reports being mixed. We expect that housing starts will average 1.42 million in 2024 and 1.48 million in 2025. We are above the consensus among economists. Demographic factors are supporting housing activity during this cycle. There’s significant pent-up demand for housing and a shortage of inventory. Falling mortgage interest rates will also support affordability and thus demand. RETAIL SALES FALLWith severe winter weather in much of the nation, nominal retail sales fell back in January. Sales were weak across most segments, but sales at restaurants and bars advanced. Spending for services is holding up, but the overall pace is slowing. Job creation continues at a good pace, and the unemployment rate is still at low levels. There are 1.4 vacancies per unemployed worker. This is off from a year ago but at a historically elevated level, which is still fostering wage pressures in services. Incomes are still holding up for consumers. INFLATION STILL HIGH BUT WILL EASEThe headline January Consumer Price Index (CPI) was up 3.1% year on year and core CPI (excluding food and energy) was up 3.9%. Progress on disinflation has been made but appears to be stabilizing. Economists expect inflation to average 2.7% this year, down from 4.1% in 2023 and 8.0% in 2022. Inflation is expected to soften further to 2.3% in 2025. Our ICIS leading barometer of the US business cycle has provided a signal consistent with the “rolling recession” scenario in manufacturing and transportation. The services sectors, however, continue to expand but are slowing. Recent readings show stabilization in this leading index, which is encouraging. US GDP FORECAST POINTS TO SOFT LANDINGAfter real GDP rose 5.8% in 2021 and then slowed to a 2.5% gain in 2022, the much-anticipated recession failed to materialize. In 2023, the economy expanded by 2.5% again. US economic growth is slowing from the rapid pace of Q3 and Q4, but those gains will aid 2024 performance which is showing a 2.1% gain. A cyclical slowdown in economic activity is occurring in 2025, economic growth should average 1.7% for the year. WEAKER OUTLOOK FOR EUROPE, CHINALooking overseas, recent global indicators show slow economic growth and soft commodity prices. Europe is skirting a shallow recession. The conflict affecting Red Sea seaborne trade adds to supply chain disruptions, costs and uncertainty for the region. Within the context of demographic headwinds, continued property sector woes and soft export markets, China’s economy has lost momentum. The government and Bank of China are responding with stimulus measures. For more updates and interactive charts, visit our ICIS Topic Page – Macroeconomic Outlook: Impact on Chemicals

23-Feb-2024

Pembina to supply Dow Canada net-zero petchem project with ethane

TORONTO (ICIS)–Canadian midstream energy firm Pembina Pipeline has entered into long-term agreements to supply Dow’s upcoming net-zero petrochemicals project at Fort Saskatchewan in Alberta province with 50,000 bbl/day of ethane. Pembina is a major supplier of ethane to the petrochemical industry in Alberta. Dow announced in November that it will proceed with the construction of a new integrated ethylene cracker and derivatives facility in Fort Saskatchewan, to be completed in two phases, with in-service dates of 2027 and 2029. The first phase of the "Path2Zero Project" includes about 1.285 million tonnes/year of ethylene and polyethylene (PE) capacity and the second phase adds another 600,000 tonnes/year. Dow’s project represents “a significant increase” to the current ethane market in Alberta and is an important development for the oil and gas industry in the Western Canadian Sedimentary Basin (WCSB), Pembina said. To support Dow's project, Pembina is evaluating several possible options to invest in new infrastructure, including incremental deep-cut processing capacity at certain gas plants, de-ethanizer expansions at existing fractionation facilities, potential new straddle facilities, and smaller expansion opportunities, it said. Furthermore, the Path2Zero Project will directly drive incremental ethane demand, the extraction of which should also increase the supply of other associated natural gas liquids (NGL) – propane, butane and condensate, Pembina said. The resulting NGL volume growth across the WCSB would benefit Pembina over a period of many years and support higher utilization and potential expansions of its asset its Alberta, it said. Pembina's assets include gas processing facilities, the Redwater fractionation complex, the Peace and Northern pipeline systems, the Alberta Ethane Gathering System, and storage facilities. Thumbnail photo of Pembina’s Redwater fractionation complex north east of Edmonton, Alberta; photo source: Pembina

23-Feb-2024

UK Q2 energy price cap falls quarterly, year on year

Additional reporting by Hector Falconer Q2 energy price cap falls to £1,690, in line with lower wholesale gas and power prices The Q2 cap is £238 lower than the Q1 cap and has also fallen year on year The Q3 price cap is likely to fall further if gas and power prices continue their bearish trajectory, however bullish drivers could limit losses LONDON (ICIS)–The UK energy price cap for April-June has decreased quarter on quarter and year on year in line with lower wholesale gas and power prices, energy regulator Ofgem said on 23 February. The cap was introduced in January 2019 and sets the maximum price that gas and electricity suppliers can charge end-users for each unit of energy consumed. Ofgem sets the cap through a methodology that considers a range of supplier operating costs, including ICIS wholesale energy price assessments, as well as network costs and VAT. The price cap is likely to fall further for the third quarter of 2024 if prices continue their bearish trajectory, however any bullish driver such as a hot summer could limit losses. FALLING PRICES ICIS assessed the NBP gas Q2 ’24 contract at an average 84.338p/th between 16 November and 15 February – the period used by Ofgem to calculate wholesale energy costs. This was much lower than the previous year when the equivalent contract averaged 228.967p/th between 16 November 2022 and 15 February 2023. Prices have declined steadily from their peak after Russia’s invasion of Ukraine, although NBP products are still well-above seasonal average levels seen before the energy supply crisis. As gas is a key price driver for the UK power market, UK power prices have tracked a similar bearish trend, with UK power Q2 ’24 prices significantly below Q2 ’23 prices. ICIS assessed the UK power Baseload Q2 ’24 contract at an average £76.02/MWh between 16 November and 15 February, 65% lower than the Q2 ’23 over equivalent dates. The Q2 ’24 contract has maintained a premium to its European counterparts, which indicates that the UK is likely to import power from neighbouring countries, including France, through the front-quarter. Data from French nuclear fleet operator EDF shows that nuclear output is set to remain strong through the second quarter of 2024, averaging 46.5GW in the period 1 April to 30 June, 9.5GW above the 2019-23 average. CAP OUTLOOK Both gas and power Q3 ’24 prices are currently at a premium to Q2 ’24 price however, both contracts have continued to shed ground through the first quarter of 2024. Barring any shift in the underlying fundamentals, Q3 ’24 gas and power prices are likely to continue to fall, which could results in the Q3 price cap being lower than the Q2 cap. According to ICIS price assessments on 22 February, the NBP Q3 ’24 contract was 2.225p/th above the Q2 ’24 contract and the UK power Baseload Q3 ’24 contract was £2.65/MWh above the Q2 equivalent. From January to March 2018-2023 the NBP Q2 contract averaged 89.971p/th and the 2018-2023 average of Q3 when it was the front quarter was 85.072p/th – indicating that Q3 ’24 may dip below the Q2 ’24 price level nearing delivery. European gas storage sites currently sit at 65%, which is 22% above the 2017-21 average, according to data from Gas Infrastructure Europe. This, mixed with low levels of historical gas demand could continue to pressure Q3 prices – especially if the UK has a windy summer period which would mute gas-fired power demand. On the power side, heatwaves remain a risk factor in the third quarter, as this would support air condition demand in the UK and on the continent, therefore supporting power prices. High river water temperatures can also lead to reduced output at French nuclear plants, as reactors cannot be cooled effectively. This could also be a potentially bullish driver for UK power prices. Furthermore, low wind generation would also be a risk factor supporting UK power prices and increase gas-for-power demand.

23-Feb-2024

US Huntsman mulls commercial-scale MIRALON carbon nanotube project

HOUSTON (ICIS)–Huntsman is considering a commercial-scale project of its MIRALON carbon nanutube technology after it starts up a pilot plant mid-year, the US-based producer said on Thursday. The pilot plant will be in Texas, and it will produce 30 tonnes/year of MIRALON. "We feel that we should have sufficient data from that to initiate the larger expansion, which will be in 2025," said Peter Huntsman, CEO. He made his comments during an earnings conference call. Huntsman did not disclose the capacity of the expansion, but he considered it to be a commercial scale reactor. From that point, increasing capacity would be a matter of additional reactors of that same size. In the next year or two, Huntsman will be able to inspect the product coming out of the plant and qualify the material. Even though the pilot plant has yet to start up, Huntsman indicated that the company is already producing material. "Right now, we're able to sell as much as we're able to make of the product," he said. However, Huntsman is selling MIRALON to very high-end applications, such as satellites and to space agencies. Huntsman expects that economies of scale will broaden the end uses of the material. Right now, the company is considering concrete, tires and batteries for electric vehicles. Other applications stem from MIRALON's ability to dissipate static charges. These include adhesives and floor coatings. It can also be used as a light-weight structural carbon fiber used in composites. Huntsman produces MIRALON via methane pyrolysis. Under it, natural gas is converted to solid carbon and hydrogen with little, if any, carbon dioxide (CO2). If process uses renewable energy, then it emits no CO2. Huntsman's methane-pyrolysis process is different from other technologies because it produces a much higher grade of solid carbon, the company said. For most methane pyrolysis, the solid carbon is at best the equivalent of carbon black, according to Huntsman. Huntsman acquired the MIRALON technology in 2018 when it bought Nanocomp.

22-Feb-2024

Saudi Arabia’s December oil exports fall 16%; total shipments down 9.7%

SINGAPORE (ICIS)–Saudi Arabia’s oil exports in December declined by 15.8% year on year to riyal (SR) 72.0bn ($19.2bn) amid output cuts, with its share to total overseas shipments slipping by 5.3 percentage points to 73.1%, official data showed on Wednesday. Overall exports for the last month of 2023 declined by 9.7% year on year to SR98.5bn, according to the Saudi Arabia’s General Authority for Statistics. The country, which is the biggest crude exporter in the world and the de facto leader of oil cartel OPEC, has extended its voluntary oil production cut of 1m bbl/day by another three months to March 2024 amid the global economic slowdown. Meanwhile, Saudi Arabia’s non-oil exports (including re-exports) in December 2023 grew by 12.0% year on year to SR26.5bn, with shipments of products of chemical and allied industries posting a 5.5% increase, while those categorized under “plastics, rubber and articles thereof” fell by 7.6%. These two categories accounted for a combined 53.7% of Saudi Arabia’s total non-oil merchandise exports in December. China was Saudi Arabia’s biggest trading partner in December, with about a 15% share to total exports, followed by Japan and India, with shares of 11.0% and 8.8%. respectively. Total merchandise imports for the month declined by 7.1% year on year to SR60.4bn. ($1 = SR3.75)

21-Feb-2024

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