
Mono propylene glycol (MPG)
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Discover the factors influencing mono propylene glycol (MPG) markets
Commonly used in unsaturated polyester resins (UPR) and coatings, antifreeze and de-icing applications on an industrial scale, mono propylene glycol (MPG) demand responds to activity levels in the construction, aviation and automotive sectors. The MPG USP grade is used in pharmaceutical, cosmetics and other consumer related applications. Seasonal factors and consumer trends can also cause noticeable market movements – as can upstream fluctuations in feedstocks and crude oil. This level of volatility highlights the importance of accurate and timely information. The most success comes from informed decision-making.
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BP puts Gelsenkirchen, Germany refinery, crackers up for sale
BARCELONA (ICIS)–BP plans to sell its to sell its Ruhr Oel refinery, crackers and downstream assets at Gelsenkirchen in Germany. The company will start marketing the assets immediately, with the aim of completing the sale this year, according to a statement published on 6 February by the UK headquartered energy giant. According to the ICIS Supply & Demand Database BP operates a refinery and two crackers with combined capacity of 1.065 million tonnes/year of ethylene, as well as units with 645,000 tonnes/year propylene, 430,000 tonnes/year benzene plus cumene, cyclohexane, methanol, toluene and ammonia facilities. BP said the assets for sale include DHC Solvent Chemie in Mulheim an der Ruhr. All refinery owners in Europe are under pressure to rationalise their portfolios thanks to the shift to vehicle electrification and high cost base. There is also intense competition from new refineries starting up in Asia and the Middle East. BP said the move is in line with its strategic drive to deliver a simpler, more focused, higher value company. The company said that it has implemented numerous projects to modernize the infrastructure of the refinery in Gelsenkirchen in recent years. This includes renewing the power grid and establishing an independent steam supply. The refinery can process crude oils from around the world, produce fuels and also has the potential to manufacture biofuels and process recycled plastics, said bp. Michael Connolly, ICIS principal refining analyst pointed out that the refinery is configured to give a moderately high yield of gasoline, meaning it is not really suited to the future of the European market, where vehicle electrification is hurting demand. He said BP already had plans to reduce the capacity of the refinery from 260,000 bbl/day to 155,000 bbl/day in 2025. “Undoubtedly it would have used Russian crude, but despite having access to seaborne crude, the loss of Russian crude through sanctions would have impacted financials,” he said. The economics of the facility will also be more challenging, as for all European refiners, because cracks or margins for gasoil production have declined to pre-Ukraine war levels, added Connolly. ICIS expects German crude refining capacity to fall from 2.1 million bbl/day in 2020 to 1.8 million bbl/day by 2026 and well off their peak refining capacity of 2.4 bd in 2007. Emma Delaney, BP executive vice president, customers & products said, “BP needs to continually manage its global portfolio as we position to grow as a simpler, more focused, higher-value company. After a thorough review, we have concluded that a new owner would be better suited for the site to take it forward. We are convinced that the refinery can unlock its full potential under new ownership.” Focus article by Will Beacham Graphics by Miguel Rodriguez-Fernandez Thumbnail photo: bp's refinery site in Gelsenkirchen, Germany (Source: BP) Clarification: recasts to explain BP has two crackers at the site.
06-Feb-2025
CORRECTED: INSIGHT: US tariffs unleash higher costs to nation's chem industry
Correction: In the ICIS story headlined “INSIGHT: US tariffs unleash higher costs to nation's chem industry” dated 3 February 2025, the wrong volumes were used for the following imports: Canadian ethylene-alpha-olefin copolymers, having a specific gravity of less than 0.94; Canadian polyethylene having a specific gravity of 0.94 or more, in primary forms; Canadian polyethylene having a specific gravity of less than 0.94, in primary forms; Canadian polypropylene, in primary forms; Canadian mixed xylene isomers; Mexican polypropylene, in primary forms; and Mexican cyclohexane. The US did not import cyclohexane from Mexico in 2023. A corrected story follows. HOUSTON (ICIS)–The tariffs that the US will impose on all imports from Canada, Mexico and China will unleash higher costs for the nation's chemical industry, create supply-chain snarls and open it to retaliation. For Canada, the US will impose 10% tariffs on imports of energy and 25% tariffs on all other imports. For Mexico, the US imposed 25% tariffs on all imports but the countries' presidents said on Monday the tariffs are being paused for a month. For China, the US will impose 10% tariffs on all imports. US IMPORTS LARGE AMOUNTS OF PE FROM CANADAUS petrochemical production is concentrated along its Gulf Coast, which is far from many of its manufacturing hubs in the northeastern and midwestern parts of the country. As a result, individual states import large amounts of polyethylene (PE) from Canada – even though the nation as a whole has a large surplus of the material. Even Texas imports large amounts of PE from Canada – despite its abundance of plants that produce the polymer. In addition, polyester plants in North and South Carolina import large amounts of the feedstocks monoethylene glycol (MEG) and purified terephthalic acid (PTA) from Canada. The US as a whole imports significant amounts of polypropylene (PP) and polyvinyl chloride (PVC) from Canada – again, despite its surplus of these plastics. The following table lists some of the main plastics and chemicals that the US imported from Canada in 2023. The products are organized by their harmonized tariff schedule (HTS) code. HTS PRODUCT MEASUREMENT VOLUMES 3901.40.00 Ethylene-alpha-olefin copolymers, having a specific gravity of less than 0.94 kilograms 1,319,817,405 3901.20.50 Polyethylene having a specific gravity of 0.94 or more, in primary forms kilograms 1,088,071,523 3901.10.50 Polyethylene having a specific gravity of less than 0.94, in primary forms kilograms 420,561,390 2917.36.00 Terephthalic acid and its salts kilograms 407,710,439 2905.31.00 Ethylene Glycol kilograms 329,542,378 3902.10.00 Polypropylene, in primary forms kilograms 271,201,880 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms kilograms 188,800,413 2902.44.00 Mixed xylene isomers liters 746,072 2905.12.00 Propan-1-ol (Propyl alcohol) and Propan-2-ol (isopropyl alcohol) kilograms 87,805,095 3901.30.60 Ethylene-vinyl acetate copolymers kilograms 71,372,396 Source: US International Trade Commission (ITC) IMPORTS FROM MEXICOMexico is not as large of a source of US petrochemical imports as Canada, but shipments from the country are still noteworthy. The following table lists some of the main plastics and chemicals that the US imported from Mexico in 2023. HTS PRODUCT MEASUREMENT VOLUMES 2917.36.00 Terephthalic acid and its salts kilograms 69,230,708 3901.10.50 Polyethylene having a specific gravity of less than 0.94, in primary forms kilograms 34,674,435 2915.24.00 Acetic anhydride kilograms 25,294,318 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms kilograms 24,005,371 2915.31.00 Ethyl acetate kilograms 18,855,544 3901.20.50 Polyethylene having a specific gravity of 0.94 or more, in primary forms kilograms 14,469,582 3902.10.00 Polypropylene, in primary forms kilograms 8,849,478 Source: US International Trade Commission (ITC) IMPORTS FROM CHINAChina remains a significant source for a couple of noteworthy chemicals despite the effects of the tariffs that US President Donald Trump imposed during his first term in office. The following table shows 2023 US imports from China. HTS PRODUCT MEASUREMENT VOLUMES 29152100 Acetic acid kilograms 21,095,566 39093100 Poly(methylene phenyl isocyanate) (crude MDI, polymeric MDI) kilograms 206,642,886 Source: US International Trade Commission (ITC) China's shipments of plastics goods are more significant. OIL TARIFFS WILL HIT US REFINERSCanada and Mexico are the largest sources of imported crude oil in the US, and the heavier grades from these countries complement the lighter grades that the US produces in abundance. Those imports help fill out refining units that process heavier crude fractions, such as hydrocrackers, cokers, base oil units and fluid catalytic cracking (FCC) units. Refiners cannot swap out heavier Canadian and Mexican grades with lighter US grades. Instead, they will need to pay the tariffs or find another supplier of heavier grades, possibly at a higher cost. The following table shows the largest sources of imported crude in 2023. Figures are listed in thousands of barrels/day. COUNTRY IMPORTS % Canada 3,885 59.9 Mexico 733 11.3 Saudi Arabia 349 5.4 Iraq 213 3.3 Colombia 202 3.1 Total US imports 6,489 Source: Energy Information Administration (EIA) US refiners could take another hit from higher catalyst costs. These are made from rare earth elements, and China remains a key source. TARIFFS TO RAISE COSTS FOR FERTILIZERCanada is the world's largest producer of potash, and it exports massive amounts to the US. It is unclear how the US could find another source. Russia and Belarus are the world's second and third largest potash producers. Together, the three accounted for 65.9% of global potash production in 2023, according to the Canadian government. Canada accounts for significant shares of other US imports of fertilizers. The following table lists some of Canada's fertilizer shipments to the US in 2023 and shows its share of total US imports. Figures are from 2023. HTS PRODUCT MEASUREMENT VOLUME % 31042000 Potassium chloride metric tonne 11850925 88.8 31023000 Ammonium nitrate, whether or not in aqueous solution metric tonne 295438 76.6 31024000 Mixtures of ammonium nitrate with calcium carbonate or other inorganic nonfertilizing substances metric tonne 29203 75.7 31055100 Mineral or chemical fertilizers, containing nitrates and phosphates metric tonne 1580 66.1 31022100 Ammonium sulfate metric tonne 947140 49.6 31052000 Mineral or chemical fertilizers, containing the three fertilizing elements nitrogen, phosphorus and potassium metric tonne 147850 41.4 Source: US ITC SUPPLY CHAIN SNARLSIf US companies choose to avoid the tariffs and seek other suppliers, they could be exposed to delays and supply chain constraints. Other companies outside of the petrochemical, plastic and fertilizer industries will also be seeking new suppliers. The scale of these disruptions could be significant because Canada, Mexico and China are the largest trading partners in the US. The following table lists the top 10 US trading partners in 2023 based on combined imports and exports. Country Total Exports ($) General Imports ($) TOTAL Mexico 322,742,472,406 475,215,965,697 797,958,438,103 Canada 354,355,997,349 418,618,659,183 772,974,656,532 China 147,777,767,493 426,885,009,750 574,662,777,243 Germany 76,697,761,127 159,272,068,221 235,969,829,348 Japan 75,683,130,214 147,238,042,342 222,921,172,556 South Korea 65,056,093,590 116,154,470,335 181,210,563,925 UK 74,315,228,810 64,217,031,774 138,532,260,584 Taiwan 39,956,725,574 87,767,403,487 127,724,129,061 Vietnam 9,842,922,146 114,426,076,081 124,268,998,227 Source: US ITC RETALIATIONUS petrochemical exports would be tempting targets for retaliation because of their magnitude and the global capacity glut. China, in particular, could impose tariffs on US chemical imports and offset the disruptions by increasing rates at under-utilized plants. So far, none announced plans to target chemicals on Sunday. Canada's plans to impose 25% tariffs on $30 billion in US goods does not include oil, refined products, chemicals or plastics. That batch of tariffs will take place on February 4. Canada will impose 25% tariffs on an additional $125 billion worth of US goods following a 21-day comment period, it said. The government did not highlight plastics or chemicals in this second batch of tariffs. Instead, it said the tariffs will cover passenger vehicles and trucks, including electric vehicles, steel and aluminium products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles and recreational boats. In a statement issued on Sunday, Mexico's president made no mention of retaliatory tariffs. Instead, she said she will provide more details about Mexico's response on Monday. China said it will start legal proceedings through the World Trade Organization (WTO) and take corresponding countermeasures. RATIONALE BEHIND THE TARIFFSThe US imposed the tariffs under the nation's International Emergency Economic Powers Act (IEEPA), which gives the president authority to take actions to address a severe national security threat. In a fact sheet, Trump cited illegal immigration and illicit drugs. Saturday's executive order is the first time that a US president imposed tariffs under IEEPA. Prior IEEPA actions lasted an average of nine years. They can be terminated by a vote in Congress. Insight article by Al Greenwood (Thumbnail shows containers, in which goods are commonly shipped. Image by Shutterstock)
03-Feb-2025
SHIPPING: Asia-US container rates edge lower on LNY slowdown, roll out of new alliances
HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US ticked slightly lower this week, while global average rates dropped by 2% as the Lunar New Year holiday began in China. This period usually sees a significant reduction in shipping volumes as factories shut down or cut production in anticipation of the holiday, leading to lower demand for shipping services. Rates to both US coasts fell by 1%, according to supply chain advisors Drewry and as shown in the following chart. Drewry expects spot rates to decrease slightly in the coming week due to the increase in capacity created by the LNY slowdown. The following chart from Drewry shows the decrease in global average rates. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said transpacific rates should continue to face downward pressure before likely rebounding in mid-February. Transpacific rates to the West Coast have dipped by 17% since mid-January, according to Freightos data, but are still more than double levels seen in 2019. Continued diversions away from the Red Sea and the Suez Canal continue to absorb capacity across the market. Even as progress is being made with a ceasefire in the Israel-Hamas conflict, shipping companies are still avoiding the shorter route. Global shipping major Maersk said this week that it will continue to avoid the Suez Canal and Red Sea until safe passage through the area is ensured for the longer term to optimize stability and certainty across supply chains. 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. TARIFFS Frontloading of volumes to get ahead of proposed tariff hikes is likely over as US President Donald Trump said on Friday that tariffs will begin on 1 February for Canada, Mexico and China. “This will keep ocean volumes and rates to the US higher than they otherwise would be in Q1 and possibly into Q2 depending on the timing of the increases,” Levine said. “This pull-forward could also be felt in lower volumes and rates after tariffs are introduced.” LIQUID TANKER SPOT RATES STEADY Rates for liquid chemical tankers ex-US Gulf held steady this week. The transatlantic eastbound route saw some activity with monoethylene glycol (MEG) and caustic soda fixed to the Mediterranean, and urea ammonium nitrate (UAN) and ammonia to the UK. There are a few smaller parcels moving on the route, brokers said, but nothing significant as it appears some trader volumes are still being affected in the aftermath of the recent winter storm. On the USG-Asia route, part cargo space has tightened across the regular players, a broker said, with Odfjell showing only 1,000-2,000 tonnes of available space for February. The USG to South America trade lane was quiet this week, brokers said, with contract of affreightment (COA) nominations steady.
31-Jan-2025
INSIGHT: US states near Canada face massive tariff bill on plastics imports
HOUSTON (ICIS)–Customers in several US states closer to Canada than its Gulf Coast petrochemical hubs import large amounts of plastics and chemicals from the country, including materials that the US produces in abundance, and these shipments could soon become subject to tariffs totalling hundreds of millions of dollars. US President Donald Trump has said he could announce on February 1 tariffs of up to 25% on imports from Canada and Mexico. Even though the US has large surpluses of many plastics and chemicals, domestic companies still import large amounts of these materials from Canada. These customers face the prospects of higher tariffs from Canadian imports or potentially higher shipping costs from suppliers that are farther away. CANADIAN EXPORTS TO NORTHERN STATESUS plastics and chemicals production is concentrated on the Gulf Coast in the south, which is far from the manufacturing and plastic processing hubs in Michigan, Illinois and Ohio in the north. These and other northern US states are much closer to Canada's petrochemical plants in Sarnia, Ontario province, than they are to the Gulf Coast. The following table shows various plastics and chemicals that Canadian exported in 2023 to Michigan, Illinois and Ohio. The bottom row shows how much customers from each state would pay if a 25% tariff was levied on the total value of these 2023 exports. Export figures are in tonnes. HTS Code Description Michigan (tonnes) Illinois (tonnes) Ohio (tonnes) 3901.10.00 PE having a specific gravity of less than 0.94 30,403 41,967 59,908 3901.20.00 PE having a specific gravity of 0.94 or more 125,693 66,493 85,328 3901.40.00 Ethylene-alpha-olefin copolymers 163,543 155,042 88,793 3902.10.00 Polypropylene 6,232 122,970 20,694 3901.30.00 Ethyl vinyl acetate copolymer 55 55,012 2,526 2905.31.00 Ethylene glycol 5 152,746 8,634 Total tariff bill $119,027,186 $243,701,358 $103,054,090 Source: Statistics Canada CANADIAN IMPORTS FROM THE CAROLINASNorth and South Carolina are also large destinations for Canadian exports. These states are home to auto plants as well as facilities that make polyethylene terephthalate (PET), which uses monoethylene glycol (MEG) and purified terephthalic acid (PTA) as feedstocks. The following table shows 2023 shipments made to these states. The bottom row shows how much customers would pay if a 25% tariff was levied on the total value of these exports. Export figures are in tonnes. HTS Code Description South Carolina (tonnes) North Carolina (tonnes) 3904.10.00 PVC, not mixed with any other substances 428 134,433 2905.31.00 Ethylene glycol 66,973 2,731 2917.36.00 Terephthalic acid and its salts 102,162 162,505 3901.10.00 PE having a specific gravity of less than 0.94 25,379 13,076 3901.20.00 PE having a specific gravity of 0.94 or more 79,301 30,278 3901.40.00 Ethylene-alpha-olefin copolymers 98,070 40,879 3902.10.00 Polypropylene 38,763 1,033 Total tariff bill $168,380,231 $166,512,281 Source: Statistics Canada Even though Texas is home to many plastics and chemical plants, it is still a destination for a large amount of plastic exports from Canada. The following table shows 2023 shipments made to Texas. The bottom row shows how much customers would pay if a 25% tariff was levied on the total value of these exports. Export figures are in tonnes. HTS Code Description Texas (tonnes) 3901.10.00 PE having a specific gravity of less than 0.94 62,300 3901.20.00 PE having a specific gravity of 0.94 or more 189,247 3901.40.00 Ethylene-alpha-olefin copolymers 185,610 3902.10.00 Polypropylene 21,315 Total tariff bill $145,297,714 Source: Statistics Canada CONSEQUENCES OF TARIFFSWhether the US proposes the tariffs on February 1 is still up in the air. Trump has used the threat of tariffs as a negotiating tool in the past, as he did against Mexico during his first term and against Colombia earlier this month. In both cases, the US reached agreements with the countries without imposing the tariffs. If the US does impose the tariffs, customers could pay the additional tax, or they could find another supplier. For states closer to Canada, new suppliers could increase shipping times and costs. If the tariffs are broad enough, customers will be competing for cargo space with other companies that are also procuring supplies from new suppliers. The tariffs could make the US plastic and chemical markets more vulnerable to weather disruptions because most of its production is concentrated along the Gulf Coast. This region of the US is vulnerable to hurricanes and, increasingly, to sub-freezing temperatures. Since 2021, the Gulf Coast has had spells of sub-freezing temperature every winter season. The region's plants were not designed to operate in such low temperatures, so they typically suffer from unplanned outages during the winter. Canadian material made US chemical and plastic supply chains more resilient by offering an alternative to Gulf Coast material. HOW CANADIAN TARIFFS COULD UNFOLDIf the US does pursue tariffs against Canada, it will likely do so under the International Emergency Economic Powers Act (IEEPA) of 1977, said Jacob Jensen, a data analyst for the American Action Forum (AAF), a think tank. The IEEPA allows the president to propose actions to address a severe national security threat. In the case of tariffs, immigration, fentanyl or both would be declared as national emergencies, and that would trigger IEEPA. Once the president notifies Congress through a letter or a speech, the tariffs could be imposed. Imposing tariffs under IEEPA would be a first for the US, Jensen said. It could also be long term. The average duration of an IEEPA order is nine years. They can be terminated by a vote in Congress. The US can impose tariffs under other laws, but the ones that Trump proposed for Canada do not meet the parameters under those regulations. Tariffs under Section 301 address unfair trade practices and require investigations. The US has not started such an investigation on Canadian trade practices. Tariffs under Section 232 cover specific products and are not broad-based like the ones Trump proposed against Canada. Tariffs under Section 201 are intended to provide temporary relief for a group of products or an industry. They are not broad-based. Tariffs under Section 122 have a limit of 15%. Tariffs under Section 338 have no precedence and could face court challenges. OTHER POTENTIAL TARIFFSSince winning the election, Trump also proposed tariffs of 25% on imports from Mexico and 10% on imports from China. During his campaign, Trump proposed the following tariffs: Baseline tariffs of 10-20% on all imports. Tariffs of 60% on imports from China. A reciprocal trade act, under which the US would match tariffs that other countries impose on its exports. Insight by Al Greenwood
30-Jan-2025
Latin America stories: weekly summary
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 27 January. NEWS Colombia accepts US terms for migrants’ deportations, fends off 25% tariff threat Colombia became over the weekend the first Latin American country to get a taste of President Donald Trump’s immigration policy mixed with unconventional diplomacy after the country refused landing to two flights with repatriated Colombian migrants. INSIGHT: Trump executive orders to revamp US energy and trade policyBuckle your seatbelts. US President Trump kicked off Day One with a slew of executive orders that will completely revamp energy and trade policy, with major implications for chemicals and plastics. INSIGHT: Argentina’s chemicals, manufacturing could be collateral victims of liberalization pushArgentina’s cabinet drive to shift the economy from staunch protectionism into liberal bastion is increasing fears among chemicals and wider manufacturing players that the country’s beleaguered industrial fabric is yet to suffer further losses in output in coming years. INSIGHT: Brazil’s GDP to be hit by potential US tariffs; COP30 loses significant emitter Brazil could be hit with US import tariffs of 5% by mid-2025, according to credit rating agency Moody’s, while the Brazilian leading role in climate negotiations in November will be diminished as one of the largest carbon emitters, the US, is absent from the talks. Argentina’s manufacturing output still falling but ‘expansionary phase’ starting overallArgentina’s petrochemicals-intensive manufacturing output continued falling in November, down 2.3% year on year, but overall economic output rose while consumer and business confidence is growing. Brazil’s grain harvest expected at record 322 million tonnes, up 8%Brazil’s fertilizers-intensive agricultural sector is expected to produce 322.3 million of grains, pulses, and oilseeds in the 2024-2025 harvest, up 8.2% year on year, according to the National Supply Company (Conab). Mexico’s cabinet wants Pemex to meet 80% of national fertilizers demandThe Mexican government continues putting high hopes on Pemex’s ability to sharply increase its fertilizers output and has suggested the state-owned energy major produce as much as 80% of the country’s demand. Brazil’s Petrobras to start up ANSA fertilizer plant in H2 2025Petrobras will start up its ANSA fertilizers plant in Araucaria, state of Parana, in the second half (H2) 2025, according to a spokesperson for the Brazilian state-owned energy major. German lubes maker Fuchs forms JV with distributor Remsac in PeruFuchs Group has established a joint venture in Peru with local distributor Remsac, the German lubricants producer said on Friday. Austria’s ALPLA to take majority stake in Brazilian recycler Clean BottleAustrian packaging firm ALPLA aims to enter Brazil's recycling market by purchasing a majority stake acquisition in high density polyethylene (HDPE) recycler Clean Bottle, the company said on Wednesday. Brazil’s December lube demand risesBrazil’s lube demand rose in December for a ninth month on the back of a jump in consumption of everything from transformer oils to engine oils. PRICING Braskem-Idesa announces February price increase in MexicoBraskem Idesa is seeking a price increase of $110/tonne on high-density polyethylene (HDPE) and low-density polyethylene (LDPE) as of 1 February, according to a customer letter seen by ICIS. LatAm PP domestic, international prices increase in Mexico on higher spot propylene costsDomestic and international polypropylene (PP) prices increased in Mexico, tracking higher spot propylene costs. In other Latin American countries, domestic prices were unchanged. LatAm international LLDPE, HDPE prices steady to higher on back of expensive US export offersInternational linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) prices were assessed as steady to higher across Latin American countries. Low density polyethylene (LDPE) prices were assessed unchanged.
27-Jan-2025
PODCAST: Europe oxo-alcohols, derivatives markets mostly sluggish into 2025
LONDON (ICIS)–European oxo-alcohols and derivatives markets have been slow to start up in the new year as familiar factors suppress consumption. Players were hoping for reasonable restocking activity this month, following the destocking period that took place in late Q4 2024, but spot activity has been below expectations for many players down the value chain. Oxo-alcohols and butyl acetate reporter Marion Boakye speaks to acrylate esters reporter Mathew Jolin-Beech and glycol ethers reporter Cameron Birch about conditions down the oxo-alcohols value chain.
27-Jan-2025
Asia petrochemical trades wane; Trump’s tariff threat weighs on Feb outlook
SINGAPORE (ICIS)–Trades in Asia’s petrochemical markets have slowed down ahead of the Lunar New Year holiday, with a general oversupply in the region and the threat of US tariffs clouding the outlook in February. Some downstream plants start shutting down two weeks before the holiday Buyers mostly stay on sidelines while some suppliers raise prices Players cautiously optimistic over post-holiday demand Demand across oleochemicals, polyethylene (PE) film, acrylonitrile butadiene styrene (ABS), styrene acrylonitrile (SAN) has softened as factories wind down or shut operations ahead of the Lunar New Year holidays. The Lunar New Year, which falls on 29 January, is celebrated in most parts of northeast and southeast Asia, with China on holiday from 28 January to 4 February. Uncertainty over US trade policy under Donald Trump’s administration, which expressed its intention to impose 10% tariffs on China from 1 February, has weighed on market sentiment going into and during the holiday. “China is slowing down ahead the Lunar New Year. Buying interest is low as market players are going away back to their hometowns,” said a source in the PE pipe grade market. A southeast Asia-based glycerine producer said: “We have not been getting any enquiries from China recently for glycerine, so we have been focusing on other regions.” Same conditions were observed in Vietnam, which is on holiday from 27 January to 3 February. Spot transactions were minimal in Asia, with trade discussions mostly deferred until after the holidays. MARKET ACTIVITY TO RESUME H2 FEB In the Asian recycling market, active trades may only resume when major exporters in China and Taiwan are back in the second half of February from a prolonged holiday. China and Taiwan have the largest exporters of recycled polyethylene terephthalate (rPET), recycled polyethylene (rPE) and recycled polypropylene (rPP) pellets. Meanwhile, suppliers of PE pipe grade, titanium dioxide (TiO2), and caprolactam (capro), have either reduced spot supply or hiked prices before the holiday even though demand remains weak. In the TiO2 market, players deemed the price hike on 21 January was more in anticipation of some improvement in post-holiday demand. “I don’t expect many trades to happen before LNY [Lunar New Year]. Most buyers said they are covered,” one market player said. TRUMP WORRIES CONTINUE For capro, styrene monomer (SM) and monoethylene glycol (MEG), demand is expected to improve post-holiday on seasonal restocking or improved opportunities for Chinese exporters. However, uncertainties over US President Donald Trump’s trade policies, including potential 10% tariffs on Chinese products from 1 February, and oversupply in key markets are tempering optimism in the near term. In December 2024, ABS and SAN end-users ramped up production to frontload shipments of contractual volumes to the US ahead of Trump’s widely anticipated tariffs of as much as 60% on Chinese goods. This led to a marked increase in China’s styrenics exports for the month. Starting January, these end-use factories reduced their run rates, having met their contractual obligations, with some having shut their plants as early as last week. The pre-Lunar New Year period typically sets the stage for post-holiday recovery, when inventories are cleared and demand resumes. Market players were keeping a cautiously optimistic outlook on demand recovery. “Ethyl acetate (etac) inventories will rise [post-Lunar New Year holiday] with production, but [Chinese domestic] demand will remain weak in February,” said a China-based market source. All eyes are focused on how soon Trump will impose his promised tariffs, with actual market impact likely to be felt a month after the announcement, according to market players. Focus article by Jonathan Yee Additional reporting from Yvonne Shi, Izham Ahmad, Arianne Perez, Helen Yan, Angeline Soh, Seng Li Peng, Isaac Tan, Joson Ng, Tan Hwee Hwee, Luffy Wu, Yvonne Shi, Melanie Wee, Judith Wang Thumbnail image: At Qingdao Port in Shandong province, China, on 23 January 2025. (Costfoto/NurPhoto/Shutterstock)
27-Jan-2025
SHIPPING: Asia-US container rates plunge on Lunar New Year holiday lull
HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US plunged this week, as did global average rates amid the typical slowdown around the Lunar New Year (LNY) holiday. Meanwhile, shipowners are out with surcharges on various trade lanes, which could support rates at current levels even with the slowdown in volumes. Global average rates fell by 11% according to supply chain advisors Drewry and as shown in the following chart. Rates from Shanghai to Los Angeles fell by 8%, while rates from Shanghai to New York fell by 7%, as shown in the following chart. Drewry expects spot rates to decrease slightly in the coming week on the back of the Chinese Lunar New Year holidays. Rates from online freight shipping marketplace and platform provider Freightos also showed decreases, with a 10% fall from Asia to the West Coast and a 3% drop to the East Coast. Judah Levine, head of research at Freightos, said the lull around LNY is pressuring rates lower. CMA CGM has announced a congestion surcharge of $300/FEU originating from Callao and San Antonio to the US East Coast and US Gulf. Global shipping major Maersk announced peak season surcharges of $1,000 for all sizes of containers for shipments from Middle East countries to the US and Canada East Coast, effective 1 February. Hapag-Lloyd has announced peak season surcharges of $600/container from Chile to Asia. 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. RETURN TO SUEZ CANAL NOT IMMINENT While the ceasefire agreement between Israel and Hamas led to some optimism that transits through the Suez Canal could resume, passage of commercial vessels through the waterway are not imminent. Levine said there remains skepticism among shipping analysts that the Houthi rebels will refrain from attacks on commercial vessels in the Red Sea even during the first stage of the ceasefire. Negotiations on the second phase of the agreement are scheduled to begin on 5 February. Levine said ocean carriers do see the ceasefire as a promising first step, but only CMA CGM has said it will increase its use of the Suez Canal. Most carriers will not take the costly and complicated concrete steps to return to the Red Sea until they are confident that the route is and will remain safe. Many shippers and freight forwarded are also hesitant to change course. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said carriers will want assurance they have safe passage for crews and ships in the long term and that the situation will not suddenly deteriorate. PANAMA CANAL President Donald Trump surprised some when he said that the US should reclaim the Panama Canal. A US congressman has since introduced a bill that would authorize the purchase of the Panama Canal. The US is the largest user of the canal, with around 70% of all traffic heading to or coming from US ports. About 40% of US container traffic use the canal. The US relinquished control of the canal on 31 December 1999 in The Panama Canal Treaty, signed by then US President Jimmy Carter. Panamanian President Jose Raul Molino said the treaty, along with The Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, established the permanent neutrality of the Canal, guaranteeing its open and safe operation for all nations. The Panama Canal remains the primary route for trade between Asia and the US Gulf and East Coast. LIQUID TANKER RATES US chemical tanker freight rates assessed by ICIS were largely stable week on week, with just the USG to Brazil trade lane seeing a slight increase on smaller volumes but overall unchanged. The market remained quiet this week, with COA volumes steady. For cargoes moving in and out of South America some space remains available, capping the gains seen on the week. Strong interest that was seen over the past two months is waning, which is likely to put additional pressure on freight rates. Volumes from the US continue to flow, but cargo moving into Asia is slowing because of the Lunar New Year holiday. However, monoethylene glycol (MEG) and ethanol entered the market for February loading. A different scenario is playing out on the transatlantic eastbound route where February loading space is already available for spot but on a limited basis. On the other hand, there seems to be a lot of interest on the USG to India trade lanes as there is a lot of lube oils interest for January with limited spot space remaining as owner await COA nominations. Several inquiries were seen for methanol, ethanol and vinyl acetate monomer (VAM). Additional reporting by Kevin Callahan
24-Jan-2025
US ExxonMobil may build cracker, PE plant in Texas
HOUSTON (ICIS)–ExxonMobil may build an ethane cracker and polyethylene (PE) plant near Corpus Christi, Texas, the company said in an application for a tax break. If ExxonMobil proceeds with the project, it would be built in Calhoun county, which is north of Corpus Christi, the application said. Construction could start in 2025 and finish at the end of 2030. Production could start in 2031, the application said. ExxonMobil is considering other locations for the possible project, including the Middle East, Asia and other sites in North America. ExxonMobil did not disclose capacity figures. The total capital investment could be $8.6 billion. In a statement, ExxonMobil said it was evaluating multiple locations around the world for a future chemical plant. It acknowledged the advantages of a project on the Gulf Coast, which it could integrate with its operations in the Permian basin. "While this site has potential, we are very early in our evaluation process," ExxonMobil said. "Filing for a tax abatement before a final decision is required by law and is part of our due diligence to gain greater clarity for our shareholders and the community. "As we look to meet global demand for our products, we’ll continue to evaluate the market conditions before we make a decision," the company said. ExxonMobil is involved in an existing petrochemical complex in nearby San Patricio county under the Gulf Coast Growth Ventures joint venture with SABIC. Operations started earlier in the decade, and that complex produces ethylene, PE and ethylene glycols. Thumbnail shows PE pellets. Image by ICIS. (adds comments from ExxonMobil, paragraphs 6-8) (adds clarification about operations starting earlier in the decade, paragraph 9)
24-Jan-2025
UPDATE: US freeze shuts numerous chem plants, major ports
HOUSTON (ICIS)–Winter storm Enzo, which caused a hard freeze along the US Gulf Coast, led to widespread shutdowns among chemical plants and refineries. Companies shut down at least five ethylene glycol (EG) units and at least eight crackers because of bad weather. Other plants, such as a propane dehydrogenation (PDH) unit, also shut down. Pre-emptive shutdowns and operational disruptions reported so far include: BASF idles Geismar, Louisiana, EO operations following winter weather BASF TotalEnergies cracker shuts down due to weather Dow's Plaquemine, Louisiana, glycol ethers site down following winter weather Dow's Taft, Louisiana, glycol ethers site down following winter weather Dow idles Taft, Louisiana, EO site following winter weather Dow's Taft, Louisiana, ethanolamines site down following winter weather Enterprise's PDH1 unit in Texas has unplanned shutdown Formosa shuts Louisiana PVC unit ahead of freeze GCGV Portland, Texas, EG site down ahead of freezing temperatures Indorama's Clear Lake, Texas, EG site down for winter weather Indorama Lake Charles cracker shut due to weather Indorama shuts Port Neches, Texas, cracker ahead of winter storm Indorama's Port Neches, Texas, ethanolamines unit down due to winter weather Indorama's Port Neches, Texas, EG unit down ahead of winter weather Ingleside, Texas, cracker shut before winter storm LACC Lotte/Westlake Louisiana cracker and EG unit down ahead of winter weather Lyondell Channelview, Texas, crackers flaring on operations issues Lyondell La Porte, Texas, cracker shutting due to weather Shell's Geismar, Louisiana, EO, EG site down following winter weather SHUTDOWNS AT REFINERIES AND BIOFUELSMotiva's refinery in Port Arthur, Texas, experienced unexpected interruptions and shutdowns of several critical pieces of equipment, it said in a filing with the Texas Commission on Environmental Quality (TCEQ). The disruptions caused emissions at a catalytic reformer, a fluid catalytic cracking (FCC) unit and a delayed coker unit. Renewable Biofuels conducted a planned shutdown at its biodiesel plant in Port Neches, Texas, for freeze protection, according to a filing with the TCEQ. MIDSTREAM DISRUPTIONSIn some cases, midstream companies reported freeze offs and hydrates forming. If these happen on a wide enough scale, they could interrupt the supply of natural gas. Chemical plants and refineries burn natural gas to produce process heat, and power plants use it to produce electricity. PORTSPorts in Houston and New Orleans were closed through Wednesday because of cold weather. Container vessel operations will begin at Port Houston at 19:00 local time on Wednesday, while all Port Houston facilities will begin normal operations on Thursday. NO WIDESPREAD POWER OUTAGES Texas avoided the widespread power outages that had led to several plant shutdowns during winter storm Uri in 2021. FREEZING TEMPERATURES TO END BY FRIDAYTemperatures rose above freezing during Wednesday, and daily highs should continue to rise as the week progresses. Lows should be just below freezing on Wednesday and Thursday, according to meteorologists. (Thumbnail shows snow, which can precipitate in the type of cold weather that can disrupt plant operations. Image by Michael Ainsworth/AP/Shutterstock)
22-Jan-2025
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