Polycarbonate (PC)

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Discover the factors influencing polycarbonate (PC) markets

These strong, hard, tough and transparent engineering thermoplastics are used to manufacture a multitude of products. They range from medical devices to car parts and lighting covers, which means that polycarbonates are constantly in demand. A variety of upstream and downstream factors such as availability of raw materials, seasonal fluctuations, and consumer trends can impact polycarbonate prices, which makes trading all the more complex.

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Polycarbonate news

EPCA '24 PODCAST: Covestro ADNOC deal puts Europe petrochemicals in the spotlight

BARCELONA (ICIS)–ADNOC’s agreement to buy Covestro ahead of next week’s European Petrochemical Association (EPCA) annual meeting highlights the challenges and opportunities facing Europe’s beleaguered chemical industry. Abu Dhabi National Oil Co (ADNOC) to acquire Covestro for equity value of €11.7 billion ADNOC diversifies downstream from oil and gas Covestro global leader in polycarbonate (PC) and polyurethanes (PU) PC and PU struggle with poor demand from automotive, construction Covestro operating profit slumped from around €3bn in 2021 to near €1bn in 2023 Covestro boasts strong sustainability-related product portfolio More M&A likely in Europe petrochemicals thanks to cheap bottom-of-cycle valuations Oil prices may collapse to $30/bbl if OPEC goes for market share In this Think Tank podcast, Will Beacham interviews Nigel Davis and John Richardson from the ICIS market development team and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson's ICIS blogs.

01-Oct-2024

UPDATE: ADNOC makes public takeover offer for Germany’s Covestro

LONDON (ICIS)–Abu Dhabi state oil and petrochemicals player ADNOC has launched a public takeover offer for Germany-based producer isocyanates, polycarbonates and adhesives specialist Covestro, representing an equity value of €11.7 billion. After over a year of reports of a possible deal between the players and concrete negotiations that have been underway since June this year, the Emirati company made a concrete public takeover offer of €62 per share. The price represents a 21% premium to Covestro’s per-share value at the close on 23 June, when the company announced the beginning of due diligence procedures between the two companies. ADNOC estimates the enterprise value of the deal, which also includes net debt and pension obligations that would be taken on as a result of a purchase, at €14.7 billion. The company will also subscribe to new shares representing a 10% increase of Covestro’s share capital at the offer price, which will result in proceeds of €1.17 billion to be used to further the Leverkusen-based producer’s growth strategy. The company had not responded for requests for comment on whether that sum is part of the offer price or in addition to it at the time of publication. The deal is subject to a minimum acceptance threshold of 50% of Covestro’s issued share capital plus one share, with Covestro’s management and supervisory boards backing the deal. The joint investment agreement, which would stand until the end of 2028 if the deal goes through, ADNOC has committed not to sell, close, or significantly reduce Covestro’s business activities, and to abide by existing works agreements. “We are convinced that the agreement reached today with ADNOC International is in the best interest of Covestro, our employees, our shareholders, and all other stakeholders,” said Covestro CEO Markus Steilemann. The deal will play into ADNOC’s plan to diversify and build out its chemicals platform, according to CEO Sultan Adhem Al-Jaber. “This strategic partnership is a natural fit and aligns seamlessly with ADNOC’s ongoing smart growth and future proofing strategy and our vision to become a top five global chemicals company,” he said. If the takeover deal closes, Covestro will continue to be managed as a stock corporation, the company added. (Update re-leads, adds detail throughout) Thumbnail photo source: Covestro

01-Oct-2024

BLOG: PC trade flows: The need for new approaches to reflect trade tensions

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: The soundtrack of my youth was the Canadian rock band, Rush. In the fabulous Tom Sawyer, the lyrics include: “His mind is not for rent, always hopeful yet discontent, he knows changes aren't permanent, but change is”. Don’t let your mind be rented by anybody who tells you that the global chemicals industry isn’t going through the most profound set of changes in its modern-day history. Nobody knows all the details of the changes that will be permanent. Anybody who claims they do know will lead you down a path away from essential scenario planning. We do know that in this world of flux and chaos at a micro level, the following macro trends are here to stay: Sustainability, ageing populations across most of the G20, much more volatile geopolitics, ever greater economic, social and political disruptions caused by climate change and the end of debt bubbles. How will, for example, geopolitics and rising trade tensions reshape global polycarbonate (PC) trade flows, demand and trade flows? In today’s post,  I look at scenarios for China’s net imports or net exports of polycarbonate in 2024-2030 based on levels of trade tensions and its ability to export to third-party countries such as Mexico. These countries have become a means by which China is getting around the trade tensions by relocating export-focused manufacturing plants. The ICIS base case forecasts that China’s PC demand growth will fall to an annual average of 3% in 2024-2030 from 17% in 1992-2023. Assuming this 3% demand growth, capacity growth at 4% and an operating rate of just 47% in 2024-2030 (the 1992-2023 operating rate averaged 68%), ICIS forecasts that China’s PC net imports will be around 460,000 tonnes a year. Let’s imagine in a world of increased trade tensions, China decides it cannot afford to rely on large volumes of imports. Because of the trade tensions, it also cannot export significant quantities of PC to countries such as Mexico to make autos, etc. Under this outcome, let’s keep demand and capacity growth the same in the base case but raise operating rates to 55%. Average annual net imports fall to just 80,000 tonnes. What if, though, trade tensions are not that bad? If we again keep demand and capacity growth the same as the base case but raise the operating rate to 63%, China becomes a net exporter at an annual average of 460,000 tonnes between 2024 and 2030. I plan to attempt to build new demand and supply models today's demographic, geopolitical, debt, sustainability and climate change realities. This is going to be immensely difficult. Failure will be a big part of any success. But given today's events, do we have any other choice? 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.

13-Sep-2024

BLOG: The China story is consistent even in higher-value polycarbonate

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: If this wasn’t so critically important, I’d be getting bored by now in telling the same old story. As today’s blog confirms it is the same story in the engineering or higher-value polymer polycarbonate (PC), as it is many other in chemicals and polymers. In 1992, China, with a 22% share of the global population accounted for 3% of global demand. By the end of this year, we expect China to be responsible for 47% of global demand from an 18% share of the global population. Here we go again: Events in China (demographics, debts, its geopolitical relationship with the West and the rise in China’s chemicals and polymers capacity) mean that today’s chemicals world is very different from the past. Are you still not convinced? Then consider these ICIS PC data points: During the1992-2021 Chemicals Supercycle, China’s demand growth averaged 17% per in year. In 2022-2030 we are forecasting this will drop to 3%. In 1992-2023, China accounted for 76% of global net imports of PC among the regions and countries that imported more than they exported. China's percentage shares of global net imports have been falling since 2021, the year of the Evergrande Moment. The ICIS base case predicts China’s net PC imports will average just 460,000 tonnes a year in 2024-2030 compared with 1.1 million tonnes during the peak years of 2010-2023. But 460,000 tonnes assume an operating rate of just 47% compared with the long-term average of 68%. Raise operating rates closer to 68% and you end up with China as a net exporter. There is, however, a scenario where China struggles to directly export chemicals and polymers where it is not already an established player. This could apply to PC. In 2023, 83% of Taiwan’s PC production, 41% of Thailand’s production, 34% of South Korea’s production and 26% of Japan’s production was dependent on exports to China. A valid question therefore seems to be: What should these countries do next? What would it take to return to the very healthy average global PC operating rate of 83% in1992-2023? Assuming no change to our base case assumption on production (the same as demand), global capacity would have to fall by an average 138,000 tonnes per year versus our forecast that capacity will instead grow by 153,000 tonnes each year. What might be the answer for producers in countries such as South Korea? Becoming more differentiated than their Chinese competitors as they emerge as winners in the fourth industrial revolution: Sustainability. 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.

06-Sep-2024

SABIC, China's Fujian govt sign agreement for engineering thermoplastics compounding plant

SINGAPORE (ICIS)–SABIC has signed a potential investment agreement with the Fujian government on 1 August to build an engineering thermoplastics compounding plant in the Chinese province, the Saudi Arabia chemicals giant said on Tuesday. The planned compounding plant will be located in the Gulei Port Economic Development Zone at Zhangzhou in Fujian, it said in a statement without disclosing capacity details. It will primarily produce SABIC's pelletized LEXAN polycarbonate (PC) and CYCOLOY PC/acrylonitrile-butadiene-styrene (ABS) polymer blend for use in advanced materials. These materials will be tailored to the needs of industries including electrical and consumer electronics, automotive, and emerging sectors such as solar energy, electrification, and 5G. The site will include compounding lines, color development capabilities, and advanced equipment. SABIC currently operates a technology center in Shanghai and three compounding plants in China in Guangzhou, Shanghai and Chongqing. The new plant is also expected to create synergies with SABIC’s two existing joint ventures – SINOPEC SABIC Tianjin Petrochemical Co (SSTPC) and SABIC FUJIAN Petrochemicals Co (SFPC). “This investment agreement marks another significant milestone for SABIC’s growth in China and reflects our continued confidence in investing in the country," said Abdulrahman Al-Fageeh, SABIC's CEO. "Building on this, we will continue to collaborate with our existing global and local partners and customers to grow together in China.”

06-Aug-2024

SABIC Q2 net profit surges 85% on higher margins amid improved prices

SINGAPORE (ICIS)–SABIC's net profit surged by 84.7% year on year to Saudi riyal (SR) 2.18 billion in the second quarter, supported by higher margins amid improved average selling prices, the chemicals giant said on Thursday. in Saudi riyal (SR) billions Q2 2024 Q2 2023 % Change H1 2024 H1 2023 % Change Sales 35.72 34.1 4.8 68.4 70.53 -3.0 Operational profit 2.1 1.64 28.0 3.31 3.4 -2.6 Net profit 2.18 1.18 84.7 2.43 1.84 32.1 “The global economy experienced a slight decline in the second quarter of 2024, primarily due to unexpected downturns in the recent economic indicators of major countries," said Abdulrahman Al-Fageeh, SABIC's CEO and executive board member. However, PMI data continued to indicate improvement in global economic conditions, while global trade showed signs of recovery, driven by higher exports, inventory restocking and increased financial activities, Al-Fageeh noted. "As inflationary pressures ease, some central banks have begun reducing interest rates, potentially providing additional stimulus to the global economy.” Q2 KEY POINTS – Q2 sales growth primarily attributed to the improvements of the average selling prices and a slight increase in sales volume. – Gross profit rose by SR1.76 billion due to improved profit margins for key products, partially offset by increased operating expenses from non-recurring charges. – A reversal of zakat provision, which is a mandatory Islamic tax on wealth, resulted in a non-cash benefit of SR545 million in Q2 2024, compared to a zakat expense of SR440 million in Q2 2023, due to updated regulations. – The petrochemicals segment's revenue increased by 10% quarter-over-quarter to SR 33.33 billion in Q2, driven by higher methanol sales volume. – EBITDA rose 37% to SR 4.88 billion in Q2, compared to SR 3.56 billion in Q1, due to higher sales volume and average selling prices. Market trends on quarter-on-quarter basis: – Methyl tertiary butyl ether (MTBE) prices remained stable, supported by summer demand. – Methanol prices held steady, driven by tight supply and low inventories in China, as well as strong demand from Asia. – Monoethylene glycol (MEG) prices were flat, due to higher supply and stable demand. – Polyethylene (PE) prices increased slightly, due to delayed Middle East deliveries and tightened Southeast Asian supplies. – Polypropylene (PP) prices rose, supported by tight container and vessel supply. – Polycarbonate (PC) prices slightly increased, despite global oversupply, with high freight rates adding pressure to subdued demand in automotive and construction sectors. Separately, SABIC has successfully commissioned its new hydrotreater plant in Geleen, the Netherlands.  This facility plays a crucial role in SABIC's advanced recycling process, transforming pyrolysis oil derived from post-consumer mixed plastic waste into high-quality alternative feedstock. This feedstock is then used to produce the SABIC's TRUCIRCLE circular polymers. H1 KEY POINTS – The company's revenue decreased by 3% year on year primarily due to a decline in sales volume. – Net profit rose on the back of an 18% increase in gross profit (SR1.96 billion) due to improved margins, partially offset by increased operating expenses from non-recurring charges. – Earnings were also supported by a SR245 million increase in the share of results from associates and non-integral joint ventures. OUTLOOK"Looking ahead, a global GDP growth of 2.7% is expected in 2024. At SABIC, our long-term focus remains on strategic portfolio optimization, restructuring of underperforming assets, and prioritizing sustainability and innovation," the company said. "We maintain a disciplined approach in managing our CAPEX, projecting a spending at the lower range of $4.0 to 5.0 billion for 2024." SABIC is 70%-owned by energy giant Saudi Aramco. Thumbnail shows a SABIC production facility (Source: SABIC)

02-Aug-2024

PODCAST: Glimmers of hope for Europe acetone and phenol derivative chain in a difficult climate; freight/logistics key

LONDON(ICIS)–European downstream demand remains low due to inflation and high interest rates. Add logistics issues and a continuous flow of imports to that, and the doom of European petrochemical industry begins. But with the recent reduction in interest rates by ECB and increased tariffs on Asian EVs, there is hope that the acetone and phenol derivative chain might come back to its glory. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Meeta Ramnani (polycarbonate), Mathew Jolin-Beech (methyl methacrylate) and ICIS senior analyst Michele Bossi (aromatics and derivatives) discuss the latest development in imports, bans and interest rates that are likely to impact the acetone, phenol and derivatives markets. Acetone market balanced to tight on export demand, slim import volumes and curtailed op rates as phenol struggles to find demand Cut of interest rates by ECB and tariffs on Chinese EVs increases hope of recovery of demand Dependency increases on Asian imports for PC BPA and epoxy players keep close eye on upstream, logistics and regulatory factors Challenging global as well as regional logistics impact MMA supply in Europe Podcast edited by Meeta Ramnani

14-Jun-2024

Saudi Aramco Q1 net income falls amid weaker refining, chemicals margins

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

SABIC Q1 net income falls 62%, warns of industry overcapacity

SINGAPORE (ICIS)–SABIC's net income fell by 62% year on year to Saudi Riyal (SR) 250 million in the first quarter amid a drop in prices and sales volumes, the chemicals major said late on Wednesday. Losses from discontinued operations continue to weigh on results Overcapacity persists, pressuring the industry as market growth lags – CEO Spending range of $4 billion to $5 billion expected for 2024 in Saudi riyal (SR) billions Q1 2024 Q1 2023 % Change Sales 32.69 36.43 -10 Operational profit 1.21 1.76 -31 Net income 0.25 0.66 -62 "The decrease in net profit is attributed to lower revenues, lower results from associates and joint ventures in addition to losses from discontinued operations," SABIC said in a filing on the Saudi bourse, Tadawul. SABIC swung to a net loss of Saudi riyal (SR) 2.77bn ($739m) in 2023, largely due to one-off losses related to a divestment. Q1 revenue fell following a 3% decline in average selling prices and a 7% reduction in sales quantities. "Global economic uncertainty remained high during the first quarter of 2024, caused by geopolitical and logistical issues. Adding to these challenges were high global inflation levels and strict lending policies," SABIC CEO Abdulrahman Al-Fageeh said in a separate statement. Al-Fageeh in an investor call cautioned that overcapacity remains a challenge for the industry, creating a gap between supply and demand that is likely to persist throughout 2024. While positive demand signals emerged in Q1 2024, "the year outlook remains uncertain as the world still navigates through geopolitical situations with high inflation", he said. SABIC plans to adopt a disciplined approach to capital expenditure, projecting a spending range of $4 billion to $5 billion for the year, compared with $3.5 billion to 3.8 billion last year. NEW PROJECTS SABIC has started construction of its $6.4bn manufacturing complex in China’s southern Fujian province. The project "would add a qualitative range of products to SABIC’s portfolio of chemicals and polymers and enhance the company's presence in the Chinese market", the company said. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC also inaugurated the world’s first large-scale electrically heated steam olefins cracking furnace in Netherlands, which will pave the way for the company to fulfill its commitment to reach carbon neutrality by 2050. SABIC is 70%-owned by energy giant Saudi Aramco. ($1 = SR3.75) Thumbnail photo by SABIC Focus article by Nurluqman Suratman

02-May-2024

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 March 2024. Asia PX supply to decrease; demand outlook uncertain By Samuel Wong 28-Mar-24 13:08 SINGAPORE (ICIS)–Supply for paraxylene (PX) in Asia is expected to gradually decrease heading into the second quarter of 2024 as a result of several planned maintenance shutdowns. INSIGHT: GCC signs deal with Turkey to start FTA talks as part of diversification plans By Nurluqman Suratman 28-Mar-24 00:54 SINGAPORE (ICIS)–The Gulf Cooperation Council's (GCC) recent deal with Turkey to launch negotiations for a free trade agreement (FTA) further signals the bloc's commitment to diversify away from oil revenues. PODCAST: A tale of two olefins – diverging trends in Asia's olefins markets By Julia Tan 27-Mar-24 19:11 SINGAPORE (ICIS)–Asia's ethylene (C2) market will see northeast Asia supply in Q2 remain ample on the back of relatively high run rates at northeast Asian crackers. Saudi Aramco eyes further chemical investments in China with local partners By Nurluqman Suratman 26-Mar-24 12:03 SINGAPORE (ICIS)–China has a "vitally important" place in Saudi Aramco's global investment strategy, with the energy giant actively developing additional investment opportunities with its Chinese partners in the chemicals sector, Aramco president and CEO Amin Nasser said. China’s Sinopec 2023 profit falls 13% as chemicals incur loss for second year By Fanny Zhang 25-Mar-24 15:14 SINGAPORE (ICIS)–Chinese producer Sinopec posted a 12.9% decrease in full-year 2023 net profit as product prices fell across the board, dragged down by operating losses in chemicals. Asia PC makers grapple with poor Chinese demand By Li Peng Seng 25-Mar-24 10:57 SINGAPORE (ICIS)–Asia’s polycarbonate (PC) makers have been struggling to raise prices in China recently due to slow demand, while production costs continue to rise.

01-Apr-2024

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