Polyethylene (PE)

Understanding the world’s most widely used plastic

Discover the factors influencing polyethylene (PE) markets

From the packaging on our food to the paints in our homes, polyethylene (PE) surrounds us as by far the largest commodity plastic by overall volume. It is essential to our daily lives. With countless applications in everyday materials, it is crucial for anyone with an active interest in the market to understand what is driving PE markets. Adapting efficiently to the significant changes in how it is being produced and consumed around the world is key.

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Polyethylene (PE) news

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 12 July 2024. OUTLOOK: Asia naphtha market braces for supply uncertainties By Li Peng Seng 12-Jul-24 12:00 SINGAPORE (ICIS)–Asia’s naphtha market sentiment is expected to be choppy in the short term due to a lack of clarity on arbitrage supplies against volatile demand. OUTLOOK: Asia EVA market loses shine as demand from PV sector lags By Helen Lee 11-Jul-24 11:25 SINGAPORE (ICIS)–Demand for ethylene vinyl acetate (EVA) from China’s photovoltaic (PV) industry is likely to remain lackluster amid an oversupply in the entire industry chain. PODCAST: China to accelerate hydrogen development via energy law By Patricia Tao 10-Jul-24 11:25 SINGAPORE (ICIS)–China's recent decision to include hydrogen in its draft national energy law signals a transformative shift in the country's energy landscape. China EV giant BYD to invest $1 billion in Turkey production plant By Nurluqman Suratman 09-Jul-24 15:24 SINGAPORE (ICIS)–Chinese electric vehicle (EV) giant BYD has agreed to invest $1 billion to set up a manufacturing plant in Turkey which will produce up to 150,000 vehicles per year. PODCAST: Asia recycling market sees increased interest in pyrolysis By Damini Dabholkar 09-Jul-24 11:17 SINGAPORE (ICIS)–Market players in Asia are increasingly becoming more interested in the use of pyrolysis oil as fuel. OUTLOOK: SE Asia PE to see some demand recovery in H2, challenges persist By Izham Ahmad 09-Jul-24 15:07 SINGAPORE (ICIS)–The southeast Asian polyethylene (PE) market is expected to face modest demand recovery in the second half (H2) of the year, but this is likely to be negated by increased supply and the threat of high freight costs affecting import shipments.

15-Jul-2024

VIDEO: Europe R-PET pellet price range narrows on SUPD-driven demand

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including, Colourless flake prices rise in Italy Food-grade pellet (FGP) price range narrows on improved demand FGP proactive buyers move to secure volumes ahead of Single Use Plastics Directive (SUPD) implementation in January

12-Jul-2024

INSIGHT: After Beryl, US chems may see 11 more hurricanes

HOUSTON (ICIS)–The conditions that helped make Beryl become a hurricane before hitting Texas chemical plants will persist through the rest of the season, with meteorologists forecasting 11 more forming in the Atlantic basin. Conditions are already conducive for hurricanes even though the peak of the season does not happen until the late summer. Beryl still disrupted chemical operations even though it was a relatively weak hurricane when it made landfall in Texas. The next hurricane could disrupt global chemical markets if it damages terminals and ports on the Gulf Coast. BERYL'S KNOCKS OUT POWEREven though Beryl was a Category 1 hurricane – the weakest class – it still caused more than 2 million outages in Texas. Many of the disruptions that Beryl caused to the chemical industry were because of power outages. A roughly equal number of disruptions was caused by companies shutting down operations as a precaution. Other disruptions were attributed to bad weather. PORT DISRUPTIONSBeryl's other major effect was on ports. The ports of Corpus Christi, Freeport, Texas City and Houston had shut down. Beryl caused Freeport LNG Development to shut down its operations. CONDITIONS THAT MADE BERYL SO POWERFUL WILL PERSISTBeryl illustrates the destructive potential of a weak Category 1 hurricane that travels through parts of Texas that host critical powerlines and ports. The meteorology firm AccuWeather estimates that total damage and economic loss caused by Beryl was $28-32 billion. Beryl was remarkable because, prior to making landfall in Texas, it had become a Category 5 hurricane, the most powerful class under the Saffir-Simpson scale. It was the first time that such a powerful hurricane had formed so early in the year, something that US meteorologist attributed to exceptionally warm ocean temperatures. The surface temperatures at sea are already close to what is typical during the mid-September, the peak hurricane season, according to the National Oceanic and Atmospheric Administration (NOAA). After Beryl made landfall in Mexico's Yucatan peninsula, it weakened into a tropical storm before passing over more warm water in the Gulf of Mexico. There it strengthened rapidly and became a hurricane once more before hitting Texas. The warm waters that contributed to Beryl's strength will persist and should soon be joined by La Nina, a weather phenomenon that also makes hurricanes more likely. METEOROLOGISTS RAISE HURRICANE FORECASTEarlier this week, the hurricane forecast for this year was raised by meteorologists at Colorado State University's Tropical Weather & Climate Research. The following compares the center's latest hurricane forecast to its update in June and to the average for the years 1991-2020. July June Average Named Storms 25 23 14.4 Named Storm Days 120 115 69.4 Hurricanes 12 11 7.2 Hurricane Days 50 45 27.0 Major Hurricanes 6 5 3.2 Major Hurricane Days 16 13 7.4 Source: Colorado State University Like NOAA, Colorado State University (CSU) noted that extremely warm sea surface temperatures and a possible La Nina are making it more likely for hurricanes to form and strengthen. THE NEXT HURRICANE COULD CAUSE MORE DAMAGEThe next hurricane can prove to be a bigger logistical headache for railroad companies. Beryl had caused only brief disruptions at BNSF and Union Pacific (UP). Beryl's path did not threaten US oil and gas production in the Gulf of Mexico. The next storm could threaten those wells, causing several energy producers to shut in production. Damage to Gulf Coast oil, ethane, LPG and LNG terminals could disrupt energy markets if the outages last long enough. Texas and the neighboring state of Louisiana are home to most of the nation's LNG export capacity. Prolonged outages at LNG terminals could lead to an oversupply of natural gas in the US because producers could lose an outlet to ship out excess capacity. Prices for natural gas could consequently fall. Prices for ethane tend to follow those for natural gas, so they would also fall in the event of a supply glut. Texas ships ethane and liquefied petroleum gas (LPG) to crackers all over the world. If the next hurricane damages those terminals and leads to a prolonged shutdown, it could have global repercussions by interrupting shipments of feedstock to crackers. In the US, it could cause prices for those products to plummet, especially for propane. US midstream companies are already trying to ship out as much LPG as possible because production has been so prolific. Over the years, US producers have exported increasing amounts of polyethylene (PE) and polyvinyl chloride (PVC). If the next hurricane damages those plants, then it would have a direct effect on global petrochemical markets. Insight by Al Greenwood Thumbnail shows a distribution transformer of a power line knocked down by Beryl. Image by Reginald Mathalone/NurPhoto/Shutterstock

11-Jul-2024

VIDEO: UK, eastern Europe C R-PET flake range narrows, Italian bale prices rise

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Rises on the low end of colourless flake narrows UK, eastern Europe ranges Colourless, blue bale prices rise in Italian monthly auctions Increased bale supply, tighter PET, cheaper R-PET imports

05-Jul-2024

Four Asia chemical majors in consortium to build green polyester supply chain

SINGAPORE (ICIS)–A consortium consisting of four Asian petrochemical producers have agreed to establish a sustainable polyester fiber supply chain. Japan's Mitsubishi Corp, South Korea’s SK geo centric, Thailand’s Indorama Ventures Ltd (IVL), and India Glycols along with three other companies are part of the consortium, the companies said in a joint statement on Thursday. Japanese sports apparel firm Goldwin is the project owner of the initiative, while Finnish refiner Neste is also part of the consortium alongside Japan-based engineering firm Chiyoda Corp. Financial details of the project were not disclosed. The project aims to utilize renewable and bio-based materials as well as materials produced via carbon capture and utilization (CCU) to manufacture polyester fibers for THE NORTH FACE brand in Japan. Outdoor apparel and equipment brand THE NORTH FACE is operated by Goldwin in Japan. "After that, the launch of further products and brands of Goldwin will be considered," Chiyoda said in the statement. The polyester fiber produced from the project is planned to be used by Goldwin for a part of THE NORTH FACE products, including sports uniforms in July this year. Chiyoda will supply CCU-based paraxylene (PX) to the supply chain, while Thai polyester producer IVL will contribute renewable CCU-based purified terephthalic acid (PTA). In March 2022, Chiyoda started producing carbon dioxide (CO2)-based PX at its pilot plant at the company's Koyasu Research Park in Kanagawa prefecture as part of a project linked with Japan's New Energy and Industrial Technology Development Organization (NED). SK geo centric and Neste will be supplying renewable PX and renewable naphtha, respectively. India Glycols, which produces monoethylene glycol (MEG), will supply bio-ethylene glycol made mainly from sugarcane. Toyobo MC Corporation (TMC) – a joint venture between Toyobo Co and Mitsubishi Corp – will be supplying renewable bio-CCU polyethylene terephthalate (PET). Details on supply volumes from each of the consortium partners were not disclosed. Thumbnail photo: A generic polyester clothing label (Sandvik/imageBROKER/Shutterstock)

04-Jul-2024

Hurricane Beryl on track to make landfall near US, Mexico border

HOUSTON (ICIS)–Hurricane Beryl is on track to make landfall on Monday near the border of Mexico and the US on the Gulf Coast, although the path could change in the next few days. If Beryl holds to its forecasted path, it would spare the major refining and petrochemical hubs in the US and Mexico. In addition, few if any energy companies may choose to shut in US oil and gas wells in the Gulf of Mexico. Major US oil and LNG ports would escape the worst of the storm. The following map shows the forecasts path of Hurricane Beryl as of midday on Wednesday. The forecasted path puts Hurricane Beryl between the Mexican petrochemical hub of Altamira, Tamaulipas state and the US hub of Corpus Christi, Texas state. IF BERYL CHANGES COURSE, IT COULD THREATEN CORPUS CHRISTIIn addition to being a refining and petrochemical hub, Corpus Christi is a major oil-exporting port and hosts a terminal that exports liquefied natural gas (LNG). Were a storm to disrupt US LNG exports, it would have a knock-on effect on petrochemical prices by shutting down one of the eight LNG export terminals in the country. If the disruption lasted long enough, prices for natural gas would fall. Lower gas prices would drag down those for ethane, the main feedstock that US crackers use to produce ethylene. Petrochemical producers could benefit from lower feedstock costs. UPDATE ON HURRICANE BERYLHurricane Beryl is the first Category 5 hurricane to form so early in the season. Category 5 hurricanes have the strongest winds under the Saffir-Simpson Hurricane Wind Scale, with speeds exceeding 157 miles/hour (253 km/hour). Beryl is near Jamaica and it should weaken as it approaches the Yucatan peninsula in Mexico, where it should make landfall on Friday. It will cross the peninsula, enter the Bay of Campeche and remain north of the Mexican state of Veracruz, which is home to the petrochemical hub of Coatzacoalcos and the Ethylene XXI integrated polyethylene (PE) complex. It will swing north before making another landfall near Brownsville, Texas state and Matamoros, Tamaulipas state. BUSY HURRICANE SEASONMeteorologists have warned that this year's hurricane season could be the most active ever, with 17-25 named storms. Out of those, 8-13 should be hurricanes and 4-7 should be major hurricanes. Major hurricanes are Category 3-5 storms with wind speeds of at least 111 miles/hour.

03-Jul-2024

Brazil’s Braskem still facing logistical woes at Triunfo facilities

RIO DE JANEIRO (ICIS)–Brazil’s polymers major Braskem is still facing some logistical challenges at its facilities in Triunfo, in the floods-hit state of Rio Grande do Sul, according to a letter to customers seen by ICIS. Braskem was forced to shut down its Triunfo facilities after the severe flooding which affected the state in May. By the beginning of June, the producer said it hoped its operations would return to normality in a few days, according to a spokesperson in a written response to ICIS. However, according to the letter to customers, dated 28 June, Braskem’s operations at Triunfo are yet to return to normality, mostly due to logistical woes as many roads and key port operations at the Brazilian state were hit by the aftermath of the floods. “Specific challenges resulting from force majeure still persist in some logistics modes, leading to the partial receipt of inputs for the production of products derived from ethanol and green ethylene,” said the letter. “At the moment, there is no risk of interruption in the supply of these products, and we are implementing alternatives to return availability to normal levels.” At the end of June, an analyst said to ICIS most of the roads in Rio do Grande do Sul had reopened, although some of them were operating at reduced capacity. The Port of Porto Alegre, the largest city in the state and close to the Triunfo petrochemicals hub, only reopened in mid-June. TRIUNFO KEY FOR PLASTICS Braskem is Brazil’s sole manufacturer of polyethylene (PE) and polypropylene (PP), the most widely used polymers. Its market share in 2023 for PE stood at 56% and for PP at 70%, according to figures from the ICIS Supply & Demand database. The Triunfo complex, meanwhile, is key for the country’s polymers supply chain, accounting for nearly 37% of Brazil’s PP capacity and 40% of PE capacity. Brazil’s total PP production capacity is nearly 2 million tonnes/year. PE capacity is about 3 million tonnes/year, with 41% being high-density polyethylene (HDPE), 33% being linear low-density polyethylene (LLDPE) and 26% being low-density polyethylene (LDPE). Braskem’s Triunfo complex can produce 740,000 tonnes/year of PP, 550,000 tonnes/year of HDPE, 385,000 tonnes/year of LDPE and 300,000 tonnes/year of LLDPE. Additional reporting by Jonathan Lopez 

03-Jul-2024

BLOG: China’s Third Plenum later this month: Implications for petchem markets

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. China’s petrochemical markets might well respond positively to any new economic stimulus measures announced during the delayed Third Plenum government meeting that takes place on 15-18 July. But the scale of economic reforms required are such that I believe the more likely outcome is China remaining stuck with lower growth than during the 1992-2021 Petrochemicals Supercycle. Sourabh Gupta – Senior Fellow at the Institute for China-America Studies in Washington, DC – wrote in an article for the East Asia Forum that reforms needed include: Progressively lifting Hukou restrictions to make public services more equitable. Building a unified and portable social security net more in line with advanced economies. A shift from indirect to direct taxes. Individual income tax revenues comprised 33% of total revenues in OECD countries compared to 9% in China. The tax base must expand as four out of five Chinese households do not pay personal income tax. He cautioned that reform would not be easy in a country that preferred top-down capital-intensive approaches and was disdainful of high welfare spending. China appears to have doubled-down on its capital-intensive approach since the end of the property bubble through investing in export-focused manufacturing. This raises the issue of geopolitical threats to its GDP growth, such as the US and the EU recently raising tariffs on Chinese electric vehicles and batteries. “If China is to maintain growth rates of 4-5% per year, it can only do so if the rest of the world agrees to reduce its own investment and manufacturing levels to less than half the Chinese level” wrote Michael Pettis, Professor of Finance at Peking University, in an article for the Carnegie Endowment for International Peace. The Economist reported that as reshoring accelerated, governments had adopted over 1,500 policies to promote specific industries in both 2021 and 2022. This compared with almost none in the early 2010s. But this latest Third Plenum could be as significant as the ones cited by Reuters in 1978 and 1993. The 1978 Plenum opened China up to foreign investment. In 1993, the Plenum liberalised trading in the Yuan and launched “socialist market” reforms following Deng Xiaoping’s Southern Tour a year earlier. How will we know the outcomes? If China’s polyethylene (PE) and polypropylene (PP) price spreads return to their Supercycle levels over the six-to-12-months.  If this doesn’t happen, more reforms will be needed as too much supply will continue to chase too little demand. Despite recent rebounds in spreads, China CFR high-density PE (HDPE) spreads over CFR Japan naphtha costs remain 116% lower than during the Supercycle with low-density (LDPE) spreads 46% lower and linear-low density (LLDPE) spreads 80% lower. The story is very similar in China PP spreads over naphtha. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

03-Jul-2024

Major Hurricane Beryl continues trek toward Mexico, US Gulf

HOUSTON (ICIS)–Hurricane Beryl continued to make its way west toward Mexico and the US Gulf on Tuesday afternoon, with landfall possible some time on Sunday. Meteorologists at the National Hurricane Center (NHC) said Beryl was about 125 miles (205 km) east southeast of Isla Beata, Dominican Republic, and moving west northwest at 22 miles/hour. Source: National Hurricane Center (NHC) The storm is going back and forth between a Category 4 and Category 5 hurricane as maximum sustained winds are at 155 miles/hour but had been at 165 mile/hour earlier in the day. According to the Saffir-Simpson Hurricane Winds Scale, a storm reaches Category 5 when maximum sustained winds reach 157 miles/hour. Saffir-Simpson Hurricane Wind Scale Category Wind speed 1 74-95 miles/hour 2 96-110 miles/hour 3 111-129 miles/hour 4 130-156 miles/hour 5 157+ miles/hour The most recent forecast indicates Beryl could miss southern Veracruz state in Mexico, where Braskem Idesa has its integrated polyethylene (PE) Ethylene XXI complex and where a lot of Mexico’s petchem capacity is located. Altamira is still in the projected path. The regions have been experiencing a drought and rainfall from Beryl could provide the area with much-needed rain but could also impact operations at the multitude of chemical facilities in the area. Another scenario would be if the storm swings to the north, which could threaten oil and gas production in the US Gulf as well as Gulf Coast petchem operations. A producer with capacity in the Corpus Christi area said it was still too early to decide on operations. ACTIVE HURRICANE SEASON The early activity in the Atlantic Ocean is in line with forecasts calling for a busier than usual hurricane season. The US National Oceanic and Atmospheric Administration (NOAA) is predicting the greatest number of hurricanes in the agency’s history. NOAA forecasters with the Climate Prediction Center said that the hurricane season – which started on 1 June and runs through 30 November – has an 85% chance to be above normal, a 10% chance of being near normal and only a 5% chance of being below normal. Damage from hurricanes can lead to increased demand for chemicals, but hurricanes and tropical storms can also disrupt the North American petrochemical industry because many of the nation's plants and refineries are along the US Gulf Coast in the states of Texas and Louisiana. In 2022, oil and natural gas production in the Gulf of Mexico accounted for about 15% of total US crude oil production and about 2% of total US dry natural gas production, according to the US Energy Information Administration (EIA). Even the threat of a major storm can disrupt oil and natural gas supplies because companies often evacuate US Gulf platforms as a precaution. Additional reporting by Mark Milam, Al Greenwood and Melissa Wheeler

02-Jul-2024

Category 4 Hurricane Beryl headed toward Mexico, could threaten chem ops along US Gulf Coast

HOUSTON (ICIS)–Hurricane Beryl, already a major Category 4 storm, is making its way toward Mexico, but it remains too early to tell where it will ultimately make landfall. Beryl is now the earliest Category 4 storm on record in the Atlantic. The previous earliest was Hurricane Dennis on 8 July 2005. The US National Hurricane Center (NHC) said as of 1900 GMT Beryl was about 60 miles (100km) west northwest of Carriacou Island with maximum sustained winds of 150 miles/h and moving west-northwest at 20 miles/h. Source: National Hurricane Center (NHC) Late-cycle track guidance from the Tropical Cyclone Guidance Project (TCGP) shows the different tracks based on various models in the image below. Source: Tropical Cyclone Guidance Project (TCGP) If the storm continues to move to the west, it could threaten Mexican facilities in Veracruz state, which is in the south of the Bay of Campeche. Also in the region are the major port city of Coatzacoalcos and Braskem Idesa’s integrated polyethylene (PE) Ethylene XXI complex. Beryl could also make landfall near Altamira, which has been experiencing a drought and could provide the area with much-needed rain but could also impact operations at the multitude of chemical facilities in the area. Another scenario would be if the storm swings to the north, which could threaten oil and gas production in the US Gulf as well as Gulf Coast petchem operations. Beryl is expected to pass near Jamaica on Wednesday but the storm is unlikely to affect the chlor-alkali chain. Jamaica is home to a number of large alumina refineries that consume significant volumes of US caustic soda, used to refine alumina from bauxite, or aluminium ore. ACTIVE HURRICANE SEASON The early activity in the Atlantic Ocean is in line with forecasts calling for a busier-than-usual hurricane season. The US National Oceanic and Atmospheric Administration (NOAA) is predicting the greatest number of hurricanes in the agency’s history. NOAA forecasters with the Climate Prediction Center said that the hurricane season – which started on 1 June and runs through 30 November – has an 85% chance to be above normal, a 10% chance of being near normal and only a 5% chance of being below normal. The prediction of 17-25 named storms is the highest ever, topping the 14-23 predicted in 2010. A storm is named once it has sustained winds of 39 miles/h. Saffir-Simpson Hurricane Wind Scale Category Wind speed 1 74-95 miles/h 2 96-110 miles/h 3 111-129 miles/h 4 130-156 miles/h 5 157+ miles/h Damage from hurricanes can lead to increased demand for chemicals, but hurricanes and tropical storms can also disrupt the North American petrochemical industry because many of the nation's plants and refineries are along the US Gulf Coast in the states of Texas and Louisiana. In 2022, oil and natural gas production in the Gulf of Mexico accounted for about 15% of total US crude oil production and about 2% of total US dry natural gas production, according to the US Energy Information Administration (EIA). Even the threat of a major storm can disrupt oil and natural gas supplies because companies often evacuate US Gulf platforms as a precaution. Additional reporting by Al Greenwood, Kelly Coutu, Bill Bowen

01-Jul-2024

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