Methyl methacrylate (MMA) and polymethyl methacrylate (PMMA)

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Discover the factors influencing methyl methacrylate (MMA) and polymethyl methacrylate (PMMA) markets

Methyl methacrylate (MMA) is a flammable liquid that can be used for paint, coatings, adhesives and medical applications. However, it is usually polymerised to make polymethyl methacrylate (PMMA), a rigid transparent plastic originally manufactured in the early 1930s and widely known by its Perspex, Plexiglas and Lucite trade names.

Lightweight, stress-resistant, and able to withstand years of UV and weather exposure, PMMA is a common replacement for glass. It is also used for flat screen televisions, liquid crystal displays (LCDs), and optical fibres.

Historic oversupply led to declining prices and a failure to invest in production facilities. This means, despite its critical importance in consumer markets, MMA production can be affected by shut downs and aging technology. Production challenges, including routine maintenance, can lead to rapid price increases.

Ethylene-based MMA production is a rising technology, especially in markets where ethylene is more readily available and cheaper than other feedstocks. Raw materials prices are keenly watched by industry players to monitor costs.

ICIS MMA price assessments are the global industry benchmark. We provide coverage from Asia (including China), Europe and the US for contract and spot prices, closely examine supply and demand fundamentals and monitor the raw materials markets that directly affect MMA and PMMA costs.

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Methyl methacrylate (MMA) and polymethyl methacrylate (PMMA) news

German auto industry opposes EU tariffs on EVs from China

LONDON (ICIS)–Germany’s auto industry is opposed to tariffs on electric vehicles (EVs) from China, trade group German Association of the Automotive Industry said on Wednesday. The group, known as VDA in its German acronym, was reacting to a European Commission proposal of tariffs on battery electric vehicles (BEVs) from China after an investigation concluded they benefited from unfair subsidies. VDA said the proposed tariffs were not the right tool to strengthen the competitiveness of Europe’s auto industry. Instead, the tariffs would further escalate the risk of trade conflicts, to the detriment of Germany’s automakers, it said. “The fact is that we need China to solve global problems,” in particularly in dealing with the climate crisis, it said. China played a crucial role in a successful transformation towards electromobility and digitalization, and a trade conflict would jeopardize this transformation, the group said. However, VDA added that the extent of the subsidies China grants EV makers was “a challenge” for Europe and it called on China to make “constructive proposals” to settle the dispute. Germany ranks first in Europe and second after China globally in terms of EV production, and the bulk of German EV production goes into export, according to VDA data released this week. Industry observers have noted that Germany-based EV production relies on imports of materials and batteries from China. The US last month announced tariff hikes on Chinese imports of EVs, batteries and other materials, starting 1 August. In related news, the business climate in Germany’s automotive industry deteriorated in May amid fears about impacts on German automakers from the conflict with China, according to a recent survey by Munich-based ifo research. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Additional reporting by Graeme Paterson Please also visit the ICIS topic page Automotive: Impact on chemicals Thumbnail photo shows a Volkswagen EV; photo source: Volkswagen

12-Jun-2024

Automotive major Stellantis plants in Argentina, Brazil still affected by floods aftermath

SAO PAULO (ICIS)–Stellantis’ facilities in Argentina remain shut and its plant in Goiana, northeast Brazil, has also partially stopped, a spokesperson for the global automotive major said to ICIS on Friday. In Argentina, Stellantis operates production facilities in Ferreyra, in the Cordoba province in the north, where trade with Rio do Grande do Sul is commonplace. The company said in mid-May those facilities had to shut due to the lack of inputs. On Friday, it added Goiana has now been affected too and it is partially out of operations. “Both plants in Argentina are still out of production. In Brazil, Goiana facilities has partially stopped,” the spokesperson said. Stellantis is the result of the merger between Fiat Chrysler and PSA Group. Germany’s automotive major Volkswagen stopped production at three plants in the state of Sao Paulo in mid-May due to the lack of inputs. The company had not responded to a request for comment at the time of writing. Rio Grande do Sul is Brazil’s southernmost state and petrochemicals-intensive automotive parts producers there are major suppliers to the rest of Brazil and Argentina. As of Friday, the emergency services in Rio Grande do Sul said 169 had died due to the floods, while 44 remains unaccounted for. Nearly 40,000 people are still taking refuge in shelters, while 580,000 remain displaced from their homes. Nearly 2.4 million have been affected by the floods. Earlier in May, a spokesperson for Brazil’s automotive trade group Anfavea did not respond to questions from ICIS about the impact of the floods on the sector's annual output. However, it said the trade group would publish its first estimates at a press conference on 6 June, when it will publish production, sales and export data for May. In early May, at the press conference presenting April data, the trade group said it feared the sector could be hit given Rio Grande do Sul's importance to Brazil's auto industry. The petrochemicals hub of Triunfo, near Porto Alegre, returned to operations on 20 May, led by Brazil’s polymers major Braskem, but a consultant in Porto Alegre said to ICIS the reopening there was the odd one out amid widespread disruption for most industrial sectors. As of Friday, the Port of Porto Alegre, the state’s largest city, remained shut, although Rio Grande and Pelotas ports were operating normally. The emergency services in Rio Grande do Sul said 169 had died due to the floods, while 44 remains unaccounted for. Nearly 40,000 people are still taking refuge in shelters, while 580,000 remain displaced from their homes. Nearly 2.4 million have been affected by the floods in the 12-million people state of Rio Grande do Sul. The automotive industry is a major global consumer of petrochemicals, and chemicals make up more than one-third of the raw material costs for an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA), among others. Front page picture: Stellantis' facilities in Ferreyra, province of Cordoba, Argentina; archive image Source: Stellantis 

31-May-2024

DuPont flags $60 million in dis-synergies from break-up, assures on PFAS liabilities

HOUSTON (ICIS)–DuPont expects about $60 million in dis-synergies from its break-up into three independent publicly traded companies, CEO Ed Breen and CFO Lori Koch told analysts in a conference call on Thursday. The US specialty chemicals and materials company announced late on Wednesday that it plans to separate its electronics and water businesses into two publicly traded companies while the existing DuPont, dubbed “New DuPont”, will continue as a diversified industrial company. The dis-synergies were largely related to insurance, audit fees, leadership and boards, that is, “public company stand-up costs”, Koch said. The dis-synergies were “not a huge number” and would be across all three companies, she said. As for separation costs, those are estimated at $700 million, with the biggest cost items being IT separation and tax, legal and audit work, she said. DIVESTMENT NOT RULED OUT While DuPont is pursuing spin-offs and is not running a parallel M&A processes for electronics and water, it does not entirely rule out divesting them. “If somebody wants to call and propose something, we are going to listen to it,” Breen said in response to analysts' questions. He also said that the water business, which is relatively smaller, may be spun off before electronics. The timing for the separations is good as markets are coming out of destocking cycles, Breen noted. Especially in semiconductors, “we are going into a real upcycle”, he added. DuPont has been working on the separation for about six months and expects to complete it within the coming 18-24 months, he said. The relatively long completion timeline is mainly due to tax matters as DuPont intends to execute tax-free separations, he said. In some of the countries where DuPont operating, a separated business must be run for a full 12 months before it gets tax-free status, Breen said. New DuPont, with annual sales of $6.6 billion, and the electronic spin-off (sales: $4.0 billion), are expected to have investment-grade balance sheets whereas the smaller water business (sales: $1.5 billion), may not, Koch said. PFAS As for DuPont’s liabilities for poly- and perfluoroalkyl substances (PFAS), those will be allocated between the three companies pro rata, based on their earnings before interest, tax, depreciation and amortization (EBITDA) in the last year before the spin-off, Breen said. The amount of PFAS liabilities may not be that large as DuPont expects to “make great progress” on settling claims by the time the spin-offs will be completed in 18-24 months, he said. BREEN’S NEW ROLE Breen will step down as CEO on 1 June, to be succeeded by Koch. However, he will continue as full-time executive chairman of DuPont’s board of directors, focusing on the separations, including the appointment of the spin-off companies’ boards and the hiring of their management teams. Breen would not rule out that he may join the boards of the electronics and water spin-offs but added that a decision has yet to be made. PROFILES OF THE THREE COMPANIES' MARKETS New DuPont, focused on healthcare, advanced mobility, and safety & protection: Electronics, focused on semi-conductors and interconnect solutions: Raw materials used by the electronic business include, among others, monomers, pigments and dyes, styrenic block copolymers, copper foil, filler alumina, nickel, silver, palladium, photoactive compounds, polyester and other polymer films, polyethylene (PE) resins, polyurethane (PU) resins, polyvinyl chloride (PVC) compounds and silicones, according to DuPont's website. Water, focused on reverse osmosis, ion exchange, and ultra filtration: Raw materials used by the water business include, among others, methyl methacrylate (MMA), styrene, polysulfone, high density polyethylene (HDPE), polyethylene (PE), aniline, calcium chloride, caustic and sulfuric acid, according to DuPont's website. DuPont's shares traded at $78.44/share, down 0.13%, at 11:00 local time on the New York Stock Exchange. With additional reporting by Al Greenwood Thumbnail photo source: DuPont

23-May-2024

Volkswagen, Stellantis idle car plants in Brazil, Argentina after floods

SAO PAULO (ICIS)–Volkswagen (VW) idled its three plants in the Brazilian state of Sao Paulo on Monday, as suppliers in the floods-hit state of Rio Grande do Sul are unable to produce any automotive parts, a spokesperson for the German automotive major told ICIS. At the same time, a spokesperson for Stellantis, another major auto producer, confirmed to ICIS that it had shut down its plant in Ferreyra, in Argentina’s Cordoba province, also due to a lack of input. Rio Grande do Sul is Brazil’s southernmost state and petrochemicals-intensive automotive parts producers there are major suppliers to the rest of Brazil and Argentina. However, the state is still reeling from severe flooding on 29 April which has brought around 90% of industrial activity to a standstill, according to local authorities. VOLKSWAGENVW is using a so-called “collective vacation” clause under Brazilian labor laws to send workers at its plants in Anchieta, Taubate, and Sao Carlos home for at least 10 days. However, a plant operated by VW in Sao Jose dos Pinhais, in the state of Parana, continues to operate normally, VW said. "Volkswagen do Brasil informs that continues with the same preventive vacation position. The situation of parts supply is being monitored minute by minute,” said the spokesperson. The workers at the Anchieta and Taubate plants will start a 10-day collective vacation on Monday, and the workers at the Sao Carlos plant will start an 11-day collective vacation on the same day. 'Collective vacation' is a measure regularly applied by industrial companies to manage production. Brazil’s labor laws normally grant employees around 30 days/year of annual leave. In the industrial sector, as work is a "collective" activity, vacation periods can be organized by the employer for a group of employees, hence the name. STELLANTISIn the meantime, Stellantis – the result of the merger between Fiat Chrysler and PSA Group – told ICIS that it is analyzing whether its other plants in Argentina and Brazil will also need to be shut down. In Cordoba, a province in north Argentina and a major trading partner with Rio Grande do Sul, there are fears that its economy – which is already suffering after the country went into recession – could take a further hit. In Argentina, Stellantis operates another plant in El Palomar, in the Buenos Aires department. In Brazil, its main facilities are in Betim in the state of Minas Gerais. “Stellantis is following with dismay and expresses its solidarity with the victims of the floods in Rio Grande do Sul. The unprecedented impact of the catastrophe has directly affected the logistics system for the transportation and supply of industry components. “The company had to stop production at the Stellantis Automotive Centers in Córdoba, Argentina, and is still analyzing the need for further stoppages at its plants in the region,” said the spokesperson. Both General Motors (GM) and South Korea's Hyundai – who also have production facilities in Brazil – had yet to respond to a request for a comment. A spokesperson for Brazil’s automotive trade group Anfavea did not respond to questions from ICIS about the impact of the floods on the sector's annual output. However, it did say that it would make its first estimates at a press conference on 6 June, when it will publish production, sales and export data for May. Earlier, the trade group said it feared the sector could be hit given Rio Grande do Sul's importance to Brazil's auto industry. INDUSTRY REELS AFTER FLOODSCompanies based in the petrochemicals hub of Triunfo, near Porto Alegre – the biggest city in Rio Grande do Sul – have also shut, mostly as employees are having problems getting to and from work. Companies including Braskem, Innova, and Arlanxeo all declared force majeure from Triunfo in the first week of May. Sources said some of them will try to restart operations this week, although that has not been officially confirmed to ICIS. The automotive industry is a major global consumer of petrochemicals, and chemicals make up more than one-third of the raw material costs for an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA), among others. Front page picture: Volkswagen's plant in Anchieta, state of Sao Paulo Source: Volkswagen

20-May-2024

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 10 May 2024. PODCAST: APIC ‘24: Asia recycled plastics sees sustainable finance focus By Damini Dabholkar 10-May-24 12:22 SINGAPORE (ICIS)–Sustainable finance is a key interest for companies seeking to enter the recycled plastics market in Asia or to expand their current capacities. Despite the various financial instruments available, the absence of a clear entry point often results in uncertainty for firms. In this podcast, ICIS analysts Chua Xin Nee and Joshua Tan explore the different types of sustainability-related loans available and their successful use cases. China-SE Asia arbitrage flow for MTBE unworkable on oil price falls By Keven Zhang 10-May-24 11:50 SINGAPORE (ICIS)–The arbitrage of methyl tertiary butyl ether (MTBE) from China to southeast Asia can be reopened, after blenders in southeast Asia finish consuming their existing inventory. PODCAST: Weak demand expected for Asia propylene and downstream PO By Damini Dabholkar 09-May-24 15:02 SINGAPORE (ICIS)–Asia's propylene market will continue to see weak demand, although potential curbs in plant run rates in China amid weak margins could lend support. China exports return to growth in April amid signs of improving demand By Nurluqman Suratman 09-May-24 14:31 SINGAPORE (ICIS)–China’s April exports rose by 1.5% year on year to $292.5 billion in April, reversing the 7.5% contraction in March supported by signs of improved global demand, customs data showed on Thursday. China petrochemical market edges up in Apr, demand outlook remains weak By Yvonne Shi 08-May-24 13:20 SINGAPORE (ICIS)–China’s petrochemical market edged up in April, with the ICIS China Petrochemical Index – which tracks 17 key products in the domestic market – rising slightly by 1.60% to 1267.60 by the end of the month as compared with March. Singapore April manufacturing slows amid persistent external headwinds By Nurluqman Suratman 07-May-24 11:59 SINGAPORE (ICIS)–Singapore’s manufacturing activity fell in April as a result of decreased export orders triggered by external demand headwinds and high global interest rates. NE Asia C3 talks to kick off, but supply concerns weigh on buyers By Julia Tan 06-May-24 12:02 SINGAPORE (ICIS)–Discussions for June arrivals will kick off as China returns from the Labour Day holidays, even with the potential headwinds of poor downstream demand and ample supply from Southeast Asia.

13-May-2024

Brazil’s Indorama suspends operations at Triunfo, ports still closed, fertilizers demand to be hit

SAO PAULO (ICIS)–Brazil’s state of Rio Grande do Sul remains at a standstill from the floods, with Thai petrochemicals major Indorama’s subsidiary in the country also suspending operations at its Triunfo facilities, a spokesperson confirmed to ICIS. Two main ports in Brazil’s southernmost state remain closed, while fertilizers players have said demand is likely to be hit on the back of a reduced planting season. A spokesperson for Indorama said the company had suspended operations at Triunfo on 3 May until further notice. Indorama's operations in Brazil are the result from its acquisition of Oxiteno and operates at Triunfo a methyl ethyl ketone (MEK) plant with a production capacity of 42,000 tonnes/year and a butene-2 plant with capacity at 42,000 tonnes/year, according to ICIS Supply & Demand. “Initially, we ensured that the emergency shutdown was carried out safely. Currently, we are carefully assessing the weather and logistical conditions, as well as the guidance from the relevant authorities, to determine the short, medium and long-term impacts [of the suspension],” said the Indorama spokesperson. Earlier in the week, Brazil’s polymers producer Braskem and styrenics producer Innova declared force majeure from its operations in Triunfo, as did styrene butadiene rubber (SBR) producer Arlanxeo. Official figures on Friday put the dead toll at 116, with more than 130 people still unaccounted for, while more than 100,000 remain displaced from their homes and nearly two million people in the 12-million-strong state are being affected by Brazil’s worst floods in nearly a century. To make matters worse, rains returned to Rio Grande do Sul by the latter part of the week, forcing authorities to suspend some rescue operations. Brazilians this week have kicked off a remarkable national mobilization to help alleviate the disruption gauchos – as citizens from Rio do Grande do Sul are known in Portuguese – are going through. From workplaces to residential buildings, from civil associations to companies, there is practically no place in the country where an effort to collect goods, food and money is not being deployed. PORTS CLOSED, AGRICULTURE HITThe Port Authority for Rio Grande do Sul, called Portos RS and which oversees operations at the Port of Rio Grande, Port of Pelotas and Port of Porto Alegre, said operations at the two latter facilities remain shut to traffic. The Port of Rio Grande is operating normally, it added. “[Portos RS] maintains operations at the Port of Porto Alegre suspended, due to the maintenance of the level of Lake Guaiba above the so-called flood level. At the Port of Pelotas, in the south of the state, the shipment of wood logs remains suspended and activities are paralyzed at the terminal,” the Authority said. “Regarding the crossing to Sao Jose do Norte [a city north of Porto Alegre], the vehicle and passenger transport service is suspended due to the high level of Laguna dos Patos.” This week, several fertilizers players said to ICIS demand is likely to be hit as planting for some crops which had just started is likely to be delayed, postpone, or cancelled. Moreover, seeds recently planted could also get damaged by high levels of moisture, potentially ruining their harvest. “There has been great damage to infrastructure in the state, with fertilizers mixers underwater and authorities still calculating the impacts,” said an urea trader. “The rice harvest is almost done, but wheat planting is in its early days and producers of urea believe demand destruction can happen due to the circumstances.” Another fertilizers source added that around 70% of soybeans in Rio Grande do Sul had already been harvested, but there is still 30% to be harvested which would now be at risk. It added that 30% would represent approximately 6.5 million tonnes of soybeans, or 5% of Brazil’s total production. Rio Grande do Sul is the main rice producer in Brazil, and the source said the harvest for that crop was already behind schedule when the rains started, with 78% harvested. “We estimate that the unharvested volume should significantly affect the supply of rice in Brazil, increasing the upward pressure on prices, “the source said. “Corn was also in the process of being harvested, with an estimated 83% harvested by the time the rains started. It is not possible yet to estimate precisely how much of this amount at risk has been lost.” Front page picture: Voluntaries working in Rio Grande do Sul organizing donations Source: Government of Rio Grande do Sul Additional reporting by Bruno Menini, Deepika Thapliyal and Chris Vlachopoulos

10-May-2024

LOGISTICS: Container rates rise for first time since January; Canadian rail workers vote to strike

HOUSTON (ICIS)–Global average rates for shipping containers rose for the first time since January, workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike, and the US regulator that oversees railroads finalized a rule allowing reciprocal switching, highlighting this week’s logistics roundup. CONTAINER RATES Shipping container rates have been rising steadily since December when attacks by Houthi rebels on commercial vessels in the Red Sea forced carriers to take the longer route around the tip of the African continent before leveling off last week. This week, the global average for 40-foot shipping containers rose by 1%, according to supply chain advisors Drewry and as shown in the following chart. Rates from Shanghai to the US East Coast edged slightly higher, but rates from China to the West Coast edged slightly lower, as shown in the following chart. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said that the overall container market has settled into a new routine that avoids the Red Sea. “Though significant backlogs, congestion and equipment shortages seen during the first few weeks of the crisis have dissipated, adjustments have resulted in some moderate but ongoing disruptions,” Levine said in a weekly update. He said that even after falling drastically since the beginning of the year, prices remain well above normal and are likely to increase relative to this new floor as demand is set to increase for peak season. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID CHEMICAL TANKERS US liquid chemical tanker freight rates assessed by ICIS were unchanged this week. From the US Gulf (USG) to Asia, the market has been quieter this week as a holiday-shortened week has sidelined some key players. There have been only a few parcels quoted, which is placing downward pressure on freight rates for smaller lots. Larger base cargoes of monoethylene glycol (MEG), methyl tertiary butyl ether (MTBE), and methanol have been popular chemicals on this route, keeping larger freight rates steady. From the USG to India, the market has been very quiet. PORT OF BALTIMORE Since the opening of a fourth channel into the Port of Baltimore, 171 commercial vessels have transited the waterway, including five of the vessels that were trapped inside the port after the containership Dali struck the Key Bridge, causing it to collapse, according to the Unified Command (UC). The MSC Passion III entered the port on 29 April, according to vesselfinder.com, making it the first container ship to enter the port since the accident. The closing of the port did not have a significant impact on the chemicals industry as chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. But a market participant in Ohio told ICIS previously that it is seeing delays in delivery times for imports as vessels originally destined to offload in Baltimore are getting re-routed to other ports. PANAMA CANAL Wait times for non-booked vessels ready for transit edged for higher both directions this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 2.5 days for northbound traffic and 5.6 for southbound traffic. The PCA will increase the number of slots available for Panamax vessels to transit the waterway beginning 16 May and will add another slot for Neopanamax vessels on 1 June based on the present and projected water levels in Gatun Lake. RAILROADS Workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike. A first work stoppage could occur as early as 22 May, if no new collective agreements are reached by then, officials at labor union Teamsters Canada Rail Conference (TCRC) said in a televised announcement on 1 May. The rail carriers warned that a work stoppage would disrupt supply chains throughout North America and constrain trade between Canada and the US and Mexico. The two railroads account for the bulk of freight rail traffic in Canada. Meanwhile, chemical industry participants were largely supportive of a final rule adopted by the Surface Transportation Board (STB) on reciprocal switching for inadequate service by railroads, but think the scope was too narrow and it does not cover a significant portion of rail traffic. For the first time, the STB said it is requiring that three service metrics be maintained on a standardized basis across all Class 1 railroads. In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. Rail is also the predominant shipping method for US ethanol. Additional reporting by Kevin Callahan and Stefan Baumgarten Please see the Logistics: Impact on chemicals and energy topic page

03-May-2024

Besieged by imports, Brazil’s chemicals put hopes on hefty import tariffs hike

SAO PAULO (ICIS)–Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. For some products, Brazil’s chemicals trade group Abiquim, which represents producers, has made official requests for the import tariffs to go up to a hefty 35%, from 9% in some cases. On Tuesday, Abiquim said several of its member companies “are already talking about hibernating plants” due to unprofitable economics. It did so after it published another set of somber statistics for the first quarter, when imports continued entering Brazil em masse. Brazil’s government Chamber of Foreign Commerce (Camex) is concluding on Tuesday a public consultation about this, with its decision expected in coming weeks. Abiquim has been busy with the public consultation: it has made as many as 66 proposals for import tariffs to be hiked for several petrochemicals and fertilizers, including widely used polymers such polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), polystyrene (PS), or expandable PS (EPS), to mention just a few. Other chemicals trade groups, as well as companies, have also filed requests for import tariffs to be increased. In total, 110 import tariffs. HARD TO FIGHT OFFBrazil has always depended on imports to cover its internal chemicals demand, but the extraordinary low prices coming from competitors abroad has made Brazil’s chemicals plant to run with operating rates of 65% or lower. More and more, the country’s chemicals facilities are becoming white elephants which are far from their potential, as customers find in imported product more competitive pricing. Considering this dire situation and taking into account that the current government in Brasilia led by Luiz Inacio Lula da Silva may be more receptive to their demands, Abiquim has put a good fight in publica and private for measure which could shore up chemical producers’ competitiveness. This could come after the government already hiked import tariffs on several products in 2023 and re-introduced a tax break, called REIQ, for some chemicals which had been withdrawn by the previous Administration. While Brazil’s chemicals production competitiveness is mostly affected by higher input costs, with natural gas costs on average five times higher than in the US, the industry is hopeful a helping hand from the government in the form of higher import tariffs could slow down the flow of imports into Brazil. As a ‘price taker region’ given its dependence on imports, Latin American domestic producers have taken a hit in the past two years. In Brazil, polymers major Braskem is Abiquim’s commanding voice. Abiquim, obviously, has always been very outspoken – even apocalyptic – about the fate of its members as they try to compete with overseas countries, namely China who has been sending abroad product at below cost of production. The priorities in China’s dictatorial system are not related to the balance of markets, but to keep employment levels stable so its citizens find fewer excuses to protest against the regime which keeps them oppressed. Capitalist market dynamics are for the rest of the world to balance; in China’s dictatorial, controlled-economy regime the priority is to make people feel the regime’s legitimacy can come from never-ending economic growth. The results of such a policy for the rest of the world – not just in chemicals but in all industrial goods – is becoming clear: unprofitable industries which cannot really compete with heavily subsidized Chinese players. The results of such a policy in China are yet to be seen, but subsiding at all costs any industry which creates employment may have debt-related lasting consequences: as they mantra goes, “there is no such thing as a free lunch.” Abiquim’s executive president urged Lula’s cabinet to look north, to the US, where the government has imposed hefty tariffs on almost all China-produced industrial goods or raw materials for manufacturing production. “[The hikes in import tariffs] have improved the US’ scenario: despite the aggressive advance in exports by Asian countries, the drop in US [chemicals] production in 2023 was of 1%, while in Brazil the index for production fell nearly by 10%,” said Andre Passos. “The country adopted an increase in import taxes of over 30% to defend its market from unfair competition. The taxation for some inputs, such as phenol, resins and adipic [acid], for example, exceeds three digits. “Here, we are suggesting an increase in rates to 20% in most claims … We need to have this breathing space for the industry to recover,” he concluded. As such, the figures for the first quarter showed no sign of imports into Brazil slowing down. The country posted a trade deficit $9.9 billion during the January-March period; the 12-month accumulated (April 2023 to March 2024) deficit stood at $44.7 billion. A record high of 61.2 million tonnes of chemicals products entered Brazil in Q1; in turn, the country’s industry exported 14.6 million tonnes. Abiquim proposals for higher import tariffs Product Current import tariff Proposed tariff Expandable polystyrene, unfilled, in primary form 12.6% 20% Other polystyrenes in primary forms 12.6% 20% Carboxymethylcellulose with content > =75%, in primary forms 12.6% 20% Other polyurethanes in liquids and pastes 12.6% 20% Phthalic anhydride 10.8% 20%  Sodium hydrogen carbonate (bicarbonate) 9% 35% Copolymers of ethylene and alpha-olefin, with a density of less than 0.94 12.6% 20% Other orthophthalic acid esters 11% 20% Other styrene polymers, in primary forms 12.6% 20% Other silicon dioxides 0% 18% Other polyesters in liquids and pastes  12.6% 20% Commercial ammonium carbonates and other ammonium carbonates 9% 18% Other unsaturated polyethers, in primary forms 12.6% 20% Polyethylene terephthalate, with a viscosity index of 78 ml/g or more 12.6% 20% Phosphoric acid with an iron content of less than 750 ppm 9% 18% Dinonyl or didecyl orthophthalates 11% 20% Poly(vinyl chloride), not mixed with other substances, obtained by suspension process 12.6% 20% Poly(vinyl chloride), not mixed with other substances, obtained by emulsion process 12.6% 20% Methyl polymethacrylate, in primary form  12.6% 20% White mineral oils (vaseline or paraffin oils) 4% 35% Other polyetherpolyols, in primary forms 12.6% 20% Other unfilled epoxy resins in primary forms 12.6% 20% Silicon dioxide obtained by chemical precipitation 9% 18% Acrylonitrile-butadiene rubber in plates, sheets, etc 11% 35% Other organic anionic surface agents, whether or not put up for retail sale, not classified under previous codes 12.6% 23% Phenol (hydroxybenzene) and its salts 7% 20% Fumaric acid, its salts and esters 10 ,8% 20% Plasticizers and plastics 10 ,8% 20% Maleic anhydride 10 ,8% 20% Adipic acid salts and esters 10 ,8% 20% Propylene copolymers, in primary forms 12.6% 20% Adipic acid 9% 20% Unfilled polypropylene, in primary form 12.6% 20% Filled polypropylene, in primary form 12.6% 20% Methacrylic acid methyl esters 10 ,8% 20% Other ethylene polymers, in primary forms 12.6% 20% Acrylic acid 2-ethylhexyl esters 0% 20% 2-Ethylexanoic acid (2-ethylexoic acid) 10. 8% 20% Other copolymers of ethylene and vinyl acetate, in primary forms 12.6% 20% Other unfilled polyethylenes, density >= 0.94, in primary forms 12.6% 20% Polyethylene with a density of less than 0.94, unfilled 12.6% 20% Other saturated acyclic monoalcohol acetates, c atom <= 8 10. 8% 20% Polyethylene with a density of less than 0.94, with filler 12.6% 20% Triacetin 10. 8% 20% Sodium methylate in methanol 12.6% 20% Stearic alcohol (industrial fatty alcohol) 12.6% 20% N-butyl acetate                              11% 20% Stearic acid (industrial monocarboxylic fatty acid) 5% 35% Alkylbenzene mixtures 11% 20% Organic, non-ionic surface agents 12.6% 23% Ammonium nitrate, whether or not in aqueous solution 0.0% 15% Monoethanolamine and its salts 12.6% 20% Isobutyl alcohol (2-methyl-1-propanol) 10.8% 20% Butan-1-ol (n-butyl alcohol) 10.8% 20% Styrene-butadiene rubber (SBR), food grade as established by the Food Chemical Codex, in primary forms 10.8% 22% Styrene                                9% 18% Hexamethylenediamine and its salts 10.8% 20% Latex from other synthetic or artificial rubbers 10.8% 35% Propylene glycol (propane-1, 2-diol) 10.8% 20% Preparations 12.6% 20% Linear alkylbenzene sulfonic acids and their salts 12.6% 23% 4,4'-Isopropylidenediphenol (bisphenol A, diphenylolpropane) and its salts 10.8% 20% Dipropylene glycol 12.6% 20% Butanone (methyl ethyl ketone) 10.8% 20% Ethyl acetate                                 10.8% 20% Methyl-, ethyl- and propylcellulose, hydroxylated 0.0% 20% Front page picture: Chemical production facilities outside Sao Paulo  Source: Union of Chemical and Petrochemical industries in the state of Sao Paulo (Sinproquim) Focus article by Jonathan Lopez Additional information by Thais Matsuda and Bruno Menini

30-Apr-2024

China extends ADDs on MIBK from South Korea, Japan, South Africa

SINGAPORE (ICIS)–China has imposed anti-dumping duties (ADD) on imports of methyl isobutyl ketone (MIBK) from South Korea, Japan and South Africa for another five years starting 20 March 2024, the Chinese Ministry of Commerce said. There were no changes in the duty rates, which range from 15.9% to 190.4% depending on origin. Company Duty rate South Korea   Kumho P&B Chemicals Inc 18.5%   All others 32.3% Japan   Mitsui Chemicals Inc 45.0%   Mitsubishi Chemical Corporation 47.8%   All others 190.4% South Africa   Sasol South Africa (Pty) Ltd 15.9%   All others 34.1% The ADDs had been in place for five years from 20 March 2018 to 19 March 2023, and were extended for another year of investigation. The ministry said scrapping the measure would result in re-occurrence of dumping.

20-Mar-2024

INTERVIEW: German biofuels producer Verbio develops ethenolysis-based renewable chemicals project

LONDON (ICIS)–German biofuels producer Verbio is pushing into renewable chemicals with a €80 million -100 million commercial-scale ethenolysis project that will use rapeseed-based biodiesel to produce specialty chemicals. Strategic move to renewable chemicals; 17,000 tonnes/year of 1-decene, 32,000 tonnes/year of methyl 9-decenoate, (9-DAME); Produced from renewable rapeseed methyl ester (RME), using ethenolysis and innovative metathesis catalysts. Ethenolysis is a chemical process in which terminal olefins are degraded. In chemical terms, it is a cross metathesis. The "VerBioChem" project, adjacent to Verbio’s bio-refinery at the Bitterfeld chemicals production hub in Saxony-Anhalt state, is expected to be commissioned in 2025, Andreas Kohl, the company's head of specialty chemicals and catalysts, told ICIS. Regular production at the "first-of-its-kind" commercial-scale ethenolysis  plant should start in 2026, he said. Groundbreaking is scheduled for May. “To our knowledge, it will be the only plant worldwide to operate an ethenolysis process,” he said. 1-decene is mainly used to produce polyalphaolefins (PAO), which are used as group IV lubricants, Kohl said. The 1-decene market is estimated at about 500,000-700,000 tonnes/year, according to Kohl.  Producers of fossil-based 1-decene include INEOS, ExxonMobil, and Chevron Phillips Chemical (CPChem), among others. 9-DAME has applications in surfactants, lubricants, polymers and other specialty markets. While 9-DAME is currently not available on the market in larger quantities, Verbio sees it as a “platform molecule” for use in solvents, surfactants and lubricants, Kohl said. The Bitterfeld plant might also produce C18 diacids in various forms in the medium term, he said. Verbio has been in contact for a couple of years with partners and on request supplies customers with kilogram samples of 1-decene and 9-DAME from a pilot plant, he added. UNIQUE CATALYSTSThe company has developed a unique in-house process for ethenolysis, based on proprietary metathesis catalysts from its 100%-owned subsidiary, XiMo, Kohl said. The process allows the use of ethylene “as kind of a scissor” to split the biodiesel, he said. XiMo specializes in metathesis catalysts, specifically of "Schrock-type" tungsten, molybdenum and ruthenium complexes, he said. Richard Schrock, one of the founders of XiMo, was co-winner of the 2005 Nobel Prize in chemistry for his work on developing the olefin metathesis method in organic synthesis. To serve the ethenolysis plant’s captive needs, as well as the wider chemical industry, XiMo is investing in new capacity close to Budapest, Hungary The 10 tonne/year of metathesis catalyst project in Hungary, which will proceed parallel with the ethenolysis project in Bitterfeld, is due to be in production in 2026. XiMo’s metathesis catalysts “represents a new tool for the chemical industry", for use in industrial processes in the renewable, polymer, flavors and fragrances, agrochemicals and various other markets, Kohl said. STRATEGIC SHIFT TO CHEMICALS Verbio's biofuels are mainly sold into the energy market, “but this is not necessarily the future for us”, Kohl said. While the company has existing biodiesel-linked chemicals production (phytosterol and glycerin), it decided several years ago to expand in renewable chemicals in a bigger way – driven by an ambition to add more value to biodiesel, reduce Verbio's dependence on the biofuels energy market, and help "defossilize" the chemical industry, he said. “We want to become much more independent of the political decisions that are influencing the biofuels market, and chemicals will be a major part of the company in the future,” Kohl said. Although the chemical industry keeps working to reduce its carbon footprint, most of its products are based on carbon and will continue to be so, he said. The challenge, therefore, is to defossilize the industry, which means getting away from fossil-based carbon, leaving three main sources of carbon: carbon capture; recycling; and biomass, Kohl said. “Biomass is a very versatile, a very interesting source of carbon, and it is here today” as companies are already producing chemicals from biomass, he said. Verbio, with its expertise in biomass, is well positioned to expand in renewable chemicals, he said. With the ethenenolysis plant, Verbio will start to serve the chemical industry “with unique, renewable and biobased molecules with a low CO2 footprint”, Kohl said. “This will enable our customers to take a big step towards climate neutrality, saving CO2, attacking scope three emissions, and it will help to defossilize the chemical industry,” he said. The carbon footprint of the new ethenolysis plant will be “at least” about 70-80% lower than that of a fossil-based 1-decene plant, he said. Verbio is undertaking the project’s basic engineering and execution in-house, rather than contracting it out, he noted. FOOD VERSUS CHEMICALS Rapeseed (known as canola in North America) is readily available in Germany as it is part of crop rotation, Kohl said. While using rapeseed for chemical production could trigger debates similar to the “food versus fuels” controversy, it is important to realize that only about 40% of the mass of rapeseed is oils, he said. The remaining 60% is a protein-sugar fraction that is needed in cattle feed “to close the protein gap” and thus supports the food sector. If Germany did not have the rapeseed protein, it would have to import even more soya from South America, he said. He also noted that the use of biomass to make biofuels and other renewable products has been found to stabilize the overall agricultural market in Europe and provide farmers with sustainable income, thus keeping them in business. Verbio at a glance: Sales for the 12 months ended 30 June 2023: €1.97 billion. Employees: about 1,200. Operations in Germany, Poland, Hungary, India, US and Canada. Production of biodiesel and bioethanol: nearly 930,000 tonnes. Production of biomethane: 1.08 GWH. Existing chemical production: phytosterol and biodiesel glycerol (glycerin) CEO: Claus Sauter Headquarters: Zorbig, near Leipzig, Germany Source: Verbio Thumbnail photo source: Verbio Interview article by StefanBaumgarten.

13-Mar-2024

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