Polyethylene (PE)

MUMBAI (ICIS)–State-owned GAIL (India) Ltd plans to lay an ethylene/propylene (C2/C3) liquid pipeline from its gas processing complex at Vijaipur in the central Madhya Pradesh state to its Pata petrochemical complex at Auraiya in the northern Uttar Pradesh state. “The project will augment feedstock availability with additional polymer production at Pata Petrochemical Complex, reduce energy consumption and carbon footprint,” the company said in the notes accompanying its fiscal Q4 results. GAIL’s financial year ends in March. The proposed project is expected to cost Indian rupees (Rs) 17.9bn ($215m) and will be commissioned within 32 months, it said. Once operational, the pipeline will have the capacity to transport 950,000 tonnes/year of liquid feedstock to the Pata complex, it added. GAIL reported on 16 May a near-fourfold jump in net profit for the fourth quarter ending 31 March 2024 to Rs21.8bn, from Rs6.0bn in the same period last year. For the full fiscal year 2023-24, GAIL’s net profit increased by 67% year on year to Rs88.4bn. “The robust performance during the year was primarily driven by better physical performance across all major segments, despite lower prices in petrochemicals and liquid hydrocarbons,” GAIL managing director and chairman Sandeep Gupta said. GAIL currently operates a 200,000 tonne/year high density polyethylene (HDPE) plant; two linear low density polyethylene (LLDPE)/HDPE swing plants with capacities of 230,000 tonnes/year and 400,000 tonnes/year; and a 10,000 tonne/year butene-1 line at its Pata complex. The company is also setting up a 60,000 tonne/year polypropylene (PP) unit at the complex which is expected to come on stream in the current calendar year 2024. ($1 = Rs83.45)

17-May-2024

HOUSTON (ICIS)–US plastic scrap trade continues to show robust import activity amid flat export volumes in the first quarter. Polyethylene terephthalate (PET) plastic scrap in particular continues to see strong growth in import and export volumes despite domestic recyclers citing only moderate-to-weak demand. This is likely due to the wide window of arbitrage for recycled flake and pellet resin into the US. On the other hand, US PET bale prices have minimally improved following last year's market crash, creating export opportunities to other global destinations. US remains a net importer of plastic scrap US PET scrap imported increased 88% Q1 2024 vs Q1 2023 US PET scrap exported increased 33% Q1 2024 vs Q4 2023 Q1 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915 – remain strong, having dropped only 2% quarter on quarter, but having jumped 38% year on year when comparing with Q1 2023. Exports on the other hand were nearly identical quarter on quarter, having leveled off over the last several quarters around 100,000 tonnes. US plastic scrap imports totaled 127,176 tonnes in Q1 2024, marking it the strongest first quarter in the last 10 years, and only the second strongest quarter ever, following Q4 of last year. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and now also flake material. PET SCRAP IMPORTS CONTINUE RECORD PACEPET in particular continued to see growth in imported scrap volumes, increasing 88% year on year. PET scrap now constitutes nearly 50% of all US imported plastic scrap, followed by the "other" plastic scrap category at 29% and polyethylene (PE) scrap at 14%. Overall plastic scrap imports from Mexico continued to drop, down both year on year and quarter on quarter, largely driven by declines in PET scrap imports. Canada on the other hand increased year on year but declined quarter on quarter with the broader volume trend. Together, plastic scrap coming from Canada and Mexico continues to constitute nearly half (46%) of US plastic scrap imports. Material from Thailand comes in as the third largest region for US plastic scrap imports at 7% of the total volume. When considering just PET scrap, Thailand continued their strong growth trajectory with nearly identical volumes to Q4 2023. US PET scrap imports from Thailand in Q1 2024 increased 82% year on year. Despite this growth, Canada still sends the largest volume of PET scrap to the US at 11,960 tonnes in Q1 2024. When considering other countries, PET imports from Asian-based countries now makes up over 40% of the total PET scrap import volume, passing up Canada and Mexico at a combined 21%. Market participants confirm they have seen a notable rise in imported recycled polyethylene terephthalate (R-PET) activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor and facility costs in light of cheaper ocean freight rates. Though, other regions may not always be in a cost-competitive position, as most recently seen in South American countries like Peru and Colombia, where local bale prices have increased significantly, while US feedstock prices remain relatively stable. Supporting the increase in imported scrap plastic, US recyclers who continue to have strong order volumes were heard to be supplementing their operations with imported feedstock. Several recyclers now purchase low-cost spot or imported R-PET flake to process into their food-grade pellet product and redirect their internally produced flake from high-cost domestic bale feedstock to sell directly to customers. This in turn has alleviated pressure from US PET bales, thus enabling price stability for pellet material which is formulated to US bale feedstock costs. In the long term, the US will seek imports of bale or flake feedstock not just due to the cost driver but to feed growing plastic recycling capacities amid stagnant plastic collection rates domestically. PET SCRAP EXPORTS TO MEXICO ACCELERATEUnlike many other polymer types which continue to see declining volumes following the Chinese National Sword and Basel Convention adoption several years ago, exports of PET scrap have increased, as many global regions with growing R-PET capacities see a cost-play opportunity. PET scrap exports, which could include PET bales, rose 33% quarter on quarter and 21% year on year, coming in at 21,662 tonnes in Q1 2024. Specifically, exported PET scrap to Mexico increased 38% year on year, making up 61% of all US PET scrap exports. At present, aggressive buying activity from Mexican recyclers continues to drive up West Coast PET bale prices. Exports to Mexico have always made up a small portion of US PET bale sales from southern California or states like Texas, though the current activity has been notably strong. PE SCRAP TRADE REMAINS ROBUSTPE continues to be a leading polymer type for US plastic scrap exports, coming in at 35,359 tonnes in Q1 2024. Of that volume, India is the largest destination at 25%, followed by Malaysia and Canada tied at 16%. On the other hand, PE scrap imports show mixed trends. While Canada and Mexico continue to make up nearly 75% of imported PE scrap volumes, US imports from Mexico increased 24% quarter on quarter. On the other hand, imports from Canada decreased 40% quarter on quarter. This time last year, India did not export any PE scrap to the US, and now is the third largest per Q1 data.

14-May-2024

SAO PAULO (ICIS)–Plastics producers in Rio Grande do Sul remain shut following the floods but are working under the “hypothesis” operations could normalize by the end of May, a full month after the floods hit the Brazilian state, trade group Abiplast said. As such, they have made calculations for losses in revenue during a month, since 29 April when the floods started until the end of May. According to the trade group, the estimated impact on plastics producers in the state could come up to Brazilian reais (R) 680 million ($132 million), or an estimated daily impact of R$23 million since the floods started on 29 April. Rio Grande do Sul and its petrochemicals hub in Triunfo, near the city of Porto Alegre, is home to 40% of Brazil’s polyethylene (PE) and polypropylene (PP) production capacities. Despite the end of May hypothesis, a spokesperson for the trade group conceded that as things stand – with hundreds of roads still blocked and workers unable to turn up for duty – to set a date for restart of operations would be premature, however. “Plastics transformers’ plant have stopped …The [estimated costs would include the] costs of potential renovations and recovery of assets in the areas degraded,” said Abiplast. “The main plastic products could also suffer price increases if there is an increase [in selling prices] by manufacturers.” Several petrochemicals companies based at the Triunfo production hub, near the state’s largest city of Porto Alegre, declared force majeure last week, including Brazil’s polymers major Braskem, Innova and Arlanxeo. Thai major Indorama’s subsidiary in Brazil said to ICIS it had suspended operations. Meanwhile, fertilizers players have said to ICIS demand could be hit considering the state’s prowess within Brazil’s large agricultural sector. Analysts at S&P Global have also said fertilizers could be greatly hit, although they said petrochemicals could be spare from a large impact if the situation normalizes in coming days or weeks, at most. TRIUNFO: KEY TO PLASTICSAccording to figures by Abiplast, Triunfo has production capacities of 740,000 tonnes/year for PP, and of 1.2 million tonnes/year for PE, with a large chunk of that belonging to Braskem, for whom the Triunfo facilities represent 30% of its production capacity in Brazil. Braskem is the sole manufacturer of polyethylene (PE) and polypropylene (PP). Its market shares in 2023 were about 56% and 70%, respectively, according to figures from the ICIS Supply and Demand Database. Brazil’s PP capacity is nearly 2 million tonnes/year, while PE capacity is about 3 million tonnes/year, of which 41% is high density polyethylene (HDPE), 33% is linear low density polyethylene (LLDPE) and 26% is low density polyethylene (LDPE). The 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. The company said last week it was confident it will be able to deliver material from its other sites in the country, but sources have pointed out some of the specialized PE grades are only produced at Triunfo, and feared a hit to supply and increasing prices if the disruption in Rio Grande do Sul prolongs. According to Abiplast, there are 1,428 plastic processing and recycling companies in Rio Grande do Sul, the second largest state in Brazil in number of plastic processing companies, behind Sao Paulo’s 5,200 companies. The state’s plastics sector employs 33,100, added the trade group. Their sales in 2023 stood at R8.2 billion, or 7.1% of the total revenue posted by Brazilian plastics processing industry of R117 billion. The tragedy has consumed the Brazilian government since the second week of the floods – after a rather slow response during the first days. Some analysts have described this as Brazilian President Luiz Inacio Lula da Silva’s ‘Katrina moment’ as a reference to the poor handling of the Hurricane Katrina in the US in 2005 by former President George W Bush. Additional reporting by Bruno Menini Front page picture: A sign in Sao Paulo calling residents to collaborate in the floods relief effort Source: Jonathan Lopez/ICIS 

14-May-2024

HOUSTON (ICIS)–The biggest plastics trade show in the Western Hemisphere returned last week after a six-year hiatus. Delegates returned to consider an industry that is increasingly being shaped by government policy which is favoring sustainability and electric vehicles (EVs) while restricting the use of some classes of chemicals that are used in processing aids. SUSTAINABLE CONTENTThe regulatory outlook is influencing companies' sustainability goals, and that is influencing which plastics they buy and which ones are made by producers. Sustainability was the most prominent theme at the show. The title of the keynote address given by BASF Corp CEO Mike Heinz was "Our Plastics Journey: The Road to Shaping a Sustainable Future". Other examples of sustainability at the show include the following: Executives from SABIC and NOVA Chemicals talked at lengths about what their companies are doing to incorporate more recycled content into their materials. Renewable plastics producers CJ CheilJedang and Danimer Scientific had booths showcasing their grades of polyhydroxyalkanoate (PHA), a renewable polyester. GREENMANTRA showcased its chemical recycling technology, which breaks down plastics to produce waxes, which are then then uses to make additives that make it easier to incorporate waste plastic into finished products. If the exhibitor booths and keynote address weren't enough to drive home the prominence of sustainability, delegates only had to consider the recent round of talks for the UN plastic waste treaty. It was held just days before NPE. While the plastics industry is advocating curbs on pollution, several groups at the talks were pushing for curbs on production. US lawmakers have repeatedly introduced bills that would impose moratoria on new plants. A small number of US states are adopting mandates that require minimum amounts of recycled content. A few states are also adopting policies calling for extended producer responsibility (EPR). The outlook of regulations is causing consumer goods producers and other plastic consumers to start seeking out sustainable materials now, so they have time to rearrange their supply chains and so prepare for the anticipated regulations. POLICIES PROMOTING EVS, LIGHTWEIGHTINGGovernment support should rekindle sales of EV and pull them out of what could be a temporary lull, according to BASF. The world will need more EVs if it wants to achieve its carbon-cutting goals. In the US, the federal government and individual states are adopting and proposing policies that will promote EV adoption. The Environmental Protection Agency (EPA) introduced a new tailpipe rule that will require the US light vehicle fleet to emit progressively smaller amounts of carbon dioxide (CO2). The EPA is expected to decide if California can adopt its Advanced Clean Car II (ACC II), which would phase out the sale of ICE-based vehicles by 2035. If the EPA grants California's request, that would trigger similar programs in several other states. The US Department of Transportation (DOT) is proposing stricter efficiency standards under its Corporate Average Fuel Economy (CAFE) program. EVs have material challenges that are different from automobiles powered by internal combustion engines (ICEs), and these are increasing demand for new grades of plastics. Some plastics will need to tolerate higher voltage environments, while others will need good thermal management properties. BASF and other companies at NPE showcased how several of their materials were meeting these challenges. At the same time, auto companies will want materials that will lighten their vehicles so they can travel farther on a battery charge. ICE automakers also want to lighten their vehicles, in part to comply with stricter emission requirements. Longer term, Dow highlighted the revolutionary ramifications that autonomous vehicles will have on the plastic industry. Such vehicles are driven almost entirely by machines, which should greatly reduce crashes and accidents. Dow said automakers could replace nearly all steel and aluminum paneling used in automobiles with plastic alternatives. SUBSTANCES OF CONCERNDow and Clariant highlighted the ramifications of substances of concern, so called because regulators are concerned about their effects on safety. The latest such substance include per- and poly fluorinated alkyl substances (PFAS), which are used in many polymer processing aids (PPAs). Clariant has recently introduced a hydrocarbon-based processing aid. Longer term are the possible ramifications of the prioritization process that the EPA has started on five chemicals. The regulator would like to start the prioritization process on five additional chemicals each year. The prioritization process is the first step in determining whether a chemical poses an unreasonable risk. If the EPA makes such a finding, then it will proceed with the risk management phase, in which it will propose ways to manage the unreasonable risks. If the chemicals are used in plastics, then any subsequent restrictions could cause companies to find alternative materials. EXCESS PLASTICS CAPACITYExcess plastic capacity will likely persist even as destocking ends and demand recovers. NOVA Chemicals expects future expansion will be on pause until later in the decade. Lost cost regions like North America should suffer less than higher cost regions like Europe. SABIC recently started up its first ethylene and PE production in the US through its joint venture with ExxonMobil, while announcing plans to shut down a cracker in Europe. The company did not rule out further capacity rationalizations Produced by Plastics Industry Association (PLASTICS), NPE: The Plastics Show took place 6-10 May in Orlando, Florida. Insight by Al Greenwood Thumbnail shows cups made out of plastic. Image by Shutterstock.

14-May-2024

HOUSTON (ICIS)–Global rates for shipping containers are surging, liquid chemical tanker rates were mixed, and wait times at the Panama Canal have eased, highlighting this week’s logistics roundup. CONTAINER RATES Container rates surged this week after rising last week for the first time since January amid general rate increases (GRIs) implemented because of rising demand and as continued Red Sea diversions have overall capacity fully deployed. Maersk CEO Vincent Clerc said during a Q1 earnings conference call that demand is trending toward the higher end of its guidance. Average global rates surged by 16% over the week, according to supply chain advisors Drewry and as shown in the following chart. Meanwhile, rates from Shanghai to the US West Coast jumped by 18%, and rates from Shanghai to the East Coast soared by 16%, as shown in the following chart. Drewry expects freight rates ex-China to continue increasing in the upcoming week amid a huge demand spike and tight capacity. Capacity is growing from newly built ships, according to international freight platform ShipHub, who said that 2.83m 20-foot equivalent units (TEUs) of container ship capacity is on order for 2024, after 2.34m TEUs were ordered in 2023. That is almost double the capacity added in 2021 and 2022, which were both around 1.1m TEUs. Shipping analysts Linerlytica said that over-capacity concerns are on the backburner with containership diversions to the Cape route effectively removing more than 7% of the total fleet. Rates from North China to the US Gulf were flat this week after spiking the previous week, as shown in the following chart from ocean and freight rate analytics firm Xeneta. 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 CHEM TANKER RATES US chemical tanker freight rates assessed by ICIS were mostly unchanged but fell from the US Gulf (USG) to ARA. From the USG to Rotterdam, there are bits of part cargo space still available for April. This trade lane has been mostly quiet over the last few weeks. If this trend continues, this route could face further downward pressure. On the other hand, from the USG to the Caribbean, rates have risen slightly since last week leaving the market overall mixed. Methanol continues to be active out of this market to various destinations. From the USG to Brazil, space remains tight despite the slow market as only a handful of indications being seen in the market.  Space is available for H1 May out of Columbia and H2 May out of the USG. Although ICIS does not assess spot rates from the USG to the Mediterranean, this trade lane has continued to tighten up, with several cargoes of Glycols, Caustic and Veg Oil fixed. There is limited space for May which may likely cause rates to further tighten, although there could be some working space for June. PANAMA CANAL Wait times for non-booked vessels ready for transit fell for both northbound and southbound transits this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 4.4 days for northbound traffic and 6.5 days for southbound vessels. 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. PORT OF BALTIMORE The Key Bridge Response Unified Command (UC) is scheduled to use precision cuts made with small charges to remove a large section of the Francis Scott Key Bridge wreckage from on top of the container ship Dali, which struck the bridge on 26 March and caused its collapse. Source: Key Bridge Response 2024 The exact time of the precision cuts will depend on multiple environmental and operational factors. 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. Additional reporting by Kevin Callahan

10-May-2024

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: FD NWE Colourless flake market entering more stable period during May UK flake prices still under upward pressure Demand outlook still hard to predict

10-May-2024

SAO PAULO (ICIS)–Braskem will be able to deliver material to its customers from its other three sites in Brazil after it declared force majeure at its Triunfo complex following heaving flooding in the area, Brazilian polymers major CFO Pedro Freitas said on Thursday. Freitas did not clarify when the company expects its facilities in Triunfo, state of Rio Grande do Sul, could return to operations as the area reels from floods which started on 29 April. Freitas said Braskem’s facilities there – which account for 30% of its production capacity in Brazil – were not directly affected by the flooding, but the company is founding difficulties in transport to and from the complex. The floods in Rio do Grande do Sul, Brazil’s worst in 80 years, have caused widespread road blockages, landslides and a dam collapse. “The blockages made our operations inviable. Our assets are 100% safe and were not affected, but we are having difficulties with transport: from the coaches transporting our employees to the trucks taking material out,” said Freitas. “We contemplated bringing employees in by helicopter, but that wasn’t viable in for an extended period to keep operations running. In those conditions, we decided to stop operations in a safe and controlled manner.” The CFO was speaking to reporters and chemical equity analysts on Thursday following the publication of Braskem’s Q1 financial results. Despite Freitas’ assurances, the company only produces some polyethylene (PE) grades at its Triunfo facilities, and ⁠sources have said supply of products such as high density polyethylene (HDPE) and low density polyethylene (LDPE) could tighten in the force majeure goes on for an extended period. The same happens for some polypropylene (PP) products. In Brazil, Braskem is the sole manufacturer of PE and PP. Its market shares in 2023 were about 56% and 70%, respectively, according to figures from the ICIS Supply & Demand Database (SNDD). Brazil’s PP capacity is nearly 2 million tonnes/year, while PE capacity is about 3 million tonnes/year, of which 41% is HDPE, 33% is linear low density polyethylene (LLDPE) and 26% is LDPE. The 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. Triunfo PP capacity accounts for nearly 37% of Brazil’s PP capacity, while PE capacity accounts for about 40%. Difficulties in transport of employees at the Triunfo petrochemicals hub has also been the main reason for other chemicals companies in the complex such Innova and Arlanxeo to declare force majeure from their facilities. RAINS RETURN Rio Grande do Sul’s floods have brought the state to a standstill and, to make matters worse, rains returned on Wednesday, 8 May and forced some rescue operations for the more than 100,000 residents displaced to be suspended. In those conditions, Freitas would not venture in forecasting when the Triunfo complex could return to operations. “It could be some days still [to return to normal operations], perhaps more than a week. But with the rain back, we cannot really forecast when it will be,” said Freitas. “But we are optimising our sales from our other sites in the states of Sao Paulo, Rio de Janeiro and Bahia.” RECOVERY AT LAST? Braskem’s CEO, Roberto Bischoff, also present at the press conference, concluded saying that Braskem’s improved earnings during Q1 were the sign that things were improving for the company and Brazil’s chemicals producer generally. Earnings before interest, taxes, depreciation, and amortization (EBITDA) improved both year on year and quarter on quarter, although sales posted a more mixed result while the company posted again a net loss for the quarter. Braskem (in $ million) Q1 2024 Q1 2023 Change Q4 2023 Change Q1 vs Q4 Sales 3,618 3,743 -3% 3,369 7% EBITDA 230 205 12% 211 9% Net profit/loss -273 35 N/A -317 -14% “We are seeing better spreads in petrochemicals. After the efforts by the company to improve our financial resilience, we expect the results of that will continue showing for the rest of 2024,” concluded the CEO. Front page picture: Braskem's facilities in Triunfo, Brazil (Source: Braskem) With additional reporting by Bruno Menini

09-May-2024

LONDON (ICIS)–Join European senior editor manager Vicky Ellis, as she talks to European and African PE/PP senior editor Ben Lake and Turkey PE/PP senior editor manager Samantha Wright. The group discuss the coming month, as players see sentiment cool from a hectic first quarter. Senior analyst Lorenzo Meazza also drops in to react to LyondellBasell's announcement that it plans to "review" all European polymer and olefin assets,  following on from announcements of closures of ExxonMobil and SABIC crackers.

09-May-2024

ORLANDO (ICIS)–SABIC is looking for further opportunities for growth in the Americas as part of its strategy to navigate an era of excess capacity around the world, one that has led it and other producers to shutter capacity in high-cost regions, an executive said. "We are actively looking at our growth opportunities throughout North America as well as South America," said Sami Al-Osaimi, executive vice president, polymers, SABIC. He made his comments during a presentation at this year’s NPE: The Plastics Show. Al-Osaimi said the Americas is a very key strategic market for SABIC. The company has seen good momentum in North America. "We are definitely going to really make sure that we leverage what exactly our customers require," he said. About two years ago, SABIC and ExxonMobil started operations at an integrated polyethylene (PE) and ethylene glycols (EG) complex in Corpus Christi, Texas, US, under the Gulf Coast Growth Ventures (GCGV) joint venture. The startup marks SABIC's first US-based ethylene and PE production, albeit through a joint venture. At the same time, Al-Osaimi acknowledged the challenges facing the industry. The market is contending with the consequences of a surge in new ethylene capacity that has started up in recent years. ICIS estimates that up to 20 million tonnes/year may need to shut down to keep operating rates at healthy levels. High-cost regions are bearing the brunt. Earlier in April, SABIC announced plans to shut down a cracker in Geleen, the Netherlands. ExxonMobil revealed plans to shut down its cracker in France during that same week. Al-Osaimi did not rule out further capacity rationalizations during a question-and-answer session that followed his presentation at NPE. "SABIC always is looking to its operations in Americas, globally, and how to become more efficient and effective to support our customers to really develop the right solutions," he said. "This is going to be an ongoing process." OPPORTUNITIES IN CHEM RECYCLING, E-CRACKINGSABIC is further improving chemical recycling technology to make it more effective and efficient, he said. SABIC and Plastic Energy are developing a chemical recycling plant under a joint venture in Geleen. Completion had been expected in the fourth quarter of 2023. There are still challenges with scaling up the technology, Al-Osaimi said. Still, SABIC is open to expansion, with possible sites including the US, Saudi Arabia and other regions. In addition, SABIC, BASF and Linde recently started up a demonstration unit of an electric cracker (e-cracker). As the group demonstrates the technology, it would explore expanding the site and potentially building new units, Al-Osaimi said. STRATEGY OF COLLABORATION, INNOVATIONIn prepared remarks, Al-Osaimi elaborated on how SABIC was navigating the challenges in the market by stressing its focus on innovation and collaboration with customers. The company is focusing on end markets such as advanced packaging, automotive, transportation, building and construction, consumer goods, electrical components and health and hygiene, he said. Electric vehicles (EVs) have material challenges, that present opportunities for SABIC. The company is developing polymers to prevent thermal runaway – part of its larger BLUEHERO initiative, Al-Osaimi said. Companies that build automobiles powered by internal combustion engines (ICEs) still want to lower their weight to improve their fuel efficiency and reduce their greenhouse gas emissions, he said. That is creating demand for lighter weigh materials. Produced by Plastics Industry Association (PLASTICS), NPE: The Plastics Show takes place 6-10 May in Orlando, Florida. Focus article by Al Greenwood Thumbnail image shows polyethylene (PE), which is used in plastics bags. (Photo by Elaine Thompson/AP/Shutterstock)

07-May-2024

SINGAPORE (ICIS)–Saudi Aramco's net income fell by 14.4% year on year to Saudi riyal (SR) 102.3 billion in the first quarter amid lower crude oil volumes and weakening downstream margins, the energy giant said on Tuesday. in SR billions Q1 2024 Q1 2023 % Change Sales 402.04 417.46 -3.7 Operational Profit 202.05 222.18 -9.1 Net profit 102.27 119.54 -14.4 Early this year, Saudi Arabia’s government ordered Aramco to halt its oil expansion plan and to target a maximum sustained production capacity of 12m barrels/day, 1m barrels/day below the target announced in 2020. In the first quarter, Aramco's downstream income before interest, income taxes and zakat (annual Islamic tax) slumped by 64% year on year to SR4.62 billion. The drop in downstream earnings reflects weakening refining and chemicals margins, partially offset by inventory valuation movement, it said. The drop in group earnings was partially offset by lower production royalties, an increase in crude oil prices compared to the same period last year and lower income taxes and zakat. Despite having a capacity of 12 million barrels/day, Saudi Arabia currently produces about 9 million barrels/day as part of production cuts initiated by OPEC and its allies in October 2022 and further voluntary cuts by Saudi Arabia and other OPEC+ members in April 2023, all designed to stabilize oil prices. Following an OPEC+ meeting in June 2023, Saudi Arabia – the world's top crude exporter – announced a further oil production cut of 1 million barrels/day. “Looking ahead, I expect our portfolio to continue to evolve as we aim to contribute to an energy transition that offers solutions to climate challenges, but at the same time recognizes the need for affordable, reliable, and flexible energy supplies," added Amin Nasser, Aramco's President and CEO. Aramco's chemicals arm SABIC and China's Fujian Energy and Petrochemical Group Co held a groundbreaking ceremony to mark the start of construction at the SABIC Fujian Petrochemical Complex in China's Fujian province during the first quarter. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. Thumbnail photo : One of Aramco's US offices (Source: Saudi Aramco)

07-May-2024