Engineering plastics (POM, PBT)

HOUSTON (ICIS)–Some ports in Florida have resumed operations while millions in the US state remain without power after Hurricane Milton made landfall earlier in the week, south of the fertilizer hub of Tampa. A few ports in Florida have maintained Port Condition Zulu, under which they are closed to inbound and outbound vessels. Others have reopened and have set Port Condition IV, which is a hurricane seasonal alert to which ports return after a storm. The following table summarizes the port conditions in Florida. Port Status Condition Port of Pensacola Open Normal Port Panama City Open Draft restrictions Port St Joe Open Normal Port Tampa Bay Closed Zulu SeaPort Manatee Closed Zulu PortMiami Open IV Port Everglades Open IV Port of Palm Beach Open IV Fort Pierce Open with Restrictions IV with restrictions Port Canaveral Open IV Jaxport Open IV Port of Fernandina Closed Zulu Source: US Coast Guard OUTAGESFlorida has more than 2.2 million reported outages, according to the website poweroutage.us. That is down by more than 1 million versus the immediate aftermath of the hurricane. Prolonged outages can disrupt economic activity and slow down demand for plastics and chemicals. CSX WARNS OF RAIL DELAYSThe railroad company CSX warned of delays while it works to clear tracks, install generators and conduct repairs. All routes north of Jacksonville, Florida are open with no anticipated issues, it said. The area south, from Callahan to the north end of Anthony, is also clear. Work continues in central Florida, and CSX is addressing washouts on the Carter and Vitis subdivisions. The CFR line should be open later Friday night, providing a potential route into Winter Haven. CSX is making contingency plans for possible issues with a gas pipe washout near the Miami area. IMPACT ON FERTILIZERS, PHOSPHATES, CHEMSFor chemicals, there is some epoxy resin, phenolic resin and unsaturated polyester resin (UPR) production in Lakeland and Kathleen, Florida. Milton will make landfall far from Pensacola, Florida, which has plants that make nylon and thermoset resins. Tampa is an important hub for the US fertilizer industry, hosting corporate offices, trading, product storage, shipping and other logistical operations. Fertilizer producer Mosaic has its headquarters in Tampa. The company has not issued any statements regarding its corporate operations. A source at the fertilizer company Yara said it was shutting down its Tampa offices to comply with the evacuation orders. Near Tampa is Florida's phosphate mining operations in Bone Valley, which covers parts of Hardee, Hillsborough, Manatee and Polk counties. In all, Florida has 27 phosphate mines, of which nine are active, according to the Florida Department of Environmental Protection. Canadian fertilizer producer Nutrien has yet to restart its White Springs phosphate operations following Helene, an earlier hurricane that made landfall farther north in Florida’s Big Bend region. On 30 September, Mosaic said its Riverview operations were off line following water intrusion from a storm surge caused by Hurricane Helene. Thumbnail Photo: Hurricane Milton. (By Cira/Noaa/Planet Pix via ZUMA Press Wire/Shutterstock)

11-Oct-2024

LONDON (ICIS)–The risks for Germany’s chemical industry keep rising, economists said during a webinar hosted by chemical producers’ trade group VCI, and noted: Weak demand, domestically and abroad Investments stall Geopolitical uncertainty Contrary to hopes at the start of the year, Europe’s largest economy is likely to shrink for a second straight year in 2024, the government said this week in revising its previous 0.3% GDP growth projection to a 0.2% decline. The economy shrank 0.3% in 2023 and has not been able to generate strong growth since 2018. Weak or negative GDP trends translate into lower demand for chemicals. So far this year, demand for chemicals from nearly all domestic key customer industries, except food and paper, has been weak, said VCI economist Christiane Kellermann. Year-on-year % changes in domestic chemical sales, by major customer markets, January-August 2024: Construction: -3.9% Plastics: -4.5% Metal products: -7.4% Autos: -5.8% Food: +1.5% Glass, ceramics: -7.8% Paper: +0.9% Printing products: -7.3% Furniture: -7.3% Machinery: -8.3% Electrical equipment: -16.1% Source: VCI Many of the chemical industry’s customers in manufacturing are curbing their production, and in the important construction end market there is no noticeable recovery. Meanwhile, export sales of German chemicals were weak in most regions, with the exception of Asia, Kellermann said. Year-on-year % changes in chemical exports, by region, January-July: EU: -2.5% Non-EU Europe: -1.1% Asia: +1.8% North America: -3.6% Latin America: -3.4% Source: VCI INVESTMENTSThe low demand translates into low production rates and low capacity utilization. In fact, over the past two-and-half years chemical producers have been running plants at utilization levels that were below profitability thresholds, Kellermann said. As companies suffer low demand in Germany, with little prospect of improvement, and cannot run existing plants and equipment at profitable levels, it does not make sense for them to invest in new plants, she said. In a recent VCI survey, 74% of chemical companies said they were unlikely to invest in expanding production in Germany, she noted. Only 15% said they were likely to invest in expanding production while 9% were undecided, according to the survey. Companies cited the country’s bureaucracy and long project permitting processes, high energy and labor costs, and high and complicated corporate taxes as key obstacles to investing in Germany. Only 13% said that a lack of trained workers deterred them from investing in the country. With little or no new investment, “import pressures” rise and the chemical industry’s export capabilities will decline in coming years, she said. Germany’s chemical industry loses in international competitiveness, in particular in energy-intensive basic chemicals, she added. GEOPOLITICAL RISKS Michael Gromling, an economist from the German Economic Institute in Cologne, who was also presenting at the VCI webinar, estimated that in order to return to a meaningful growth path and achieve a recovery (“Aufschwung”), Germany needed to generate annual average GDP growth of 2.5% from 2025 through 2030. This, however, was “not realistic”, given the weakness across all industries and the geopolitical and structural challenges companies face, he said. The country’s industries were export-dependent and therefore sensitive to geopolitical tensions, trade conflicts and protectionism, he said. Geopolitical tensions were holding back investment decisions, and without a detente it would be very difficult for Germany to achieve its Aufschwung, he said. An end to the Ukraine war and peace in the Middle East would be a “game changer”, creating an opportunity for reviving the global investment cycle, he added. However, rather than relaxing, tensions could further sharpen after the 5 November US presidential election, he said. Gromling did not say which candidate – current Vice President Kamala Harris or former President Donald Trump – he sees as the greater risk. For the time being, VCI maintains its 2024 growth forecast for the country’s chemical-pharmaceutical production unchanged at 3.5% (excluding pharma: +5.0%). If realized, the increase would only partially offset last year’s 7.9% production decline (excluding pharma: -10.4%). However, VCI may cut its 2024 sales forecast of 1.5% as exports were trending weaker than expected, Kellermann indicated. Focus article by Stefan Baumgarten Thumbnail image source: VCI

11-Oct-2024

LONDON (ICIS)–Markets editor Stephanie Wix and reporter Meeta Ramnani join senior editor manager Vicky Ellis to pick out key themes ahead of the 29th Fakuma plastics processing trade fair in Germany, in this latest ICIS podcast. They discuss the clash of pessimism and optimism for acrylonitrile butadiene styrene (ABS), the changing European landscape for polycarbonate (PC) given ADNOC’s recent offer for Covestro, and pressure from cheap imports for PE and PP and engineering plastics polyacetal (POM) and polybutylene terephthalate (PBT). Fakuma runs from 15-19 October.

11-Oct-2024

LONDON (ICIS)–Senior Editor for Recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: UK colourless flake range widens in October Eastern Europe bale, flake price views divided Frustration around single-use plastics directive (SUPD) uncertainty Food-grade pellet demand weak ahead of January SUPD target

11-Oct-2024

LONDON (ICIS)–Imagine you sold a product with no control over how much of it was produced at any one time; that you had to sell it within weeks of it being produced regardless of what the demand for it was like; and that the demand was constantly changing. For most waste managers, no imagination is required, this is their daily reality. And it’s one of the biggest drivers of volatility throughout the recycling chain globally. Waste originates from both the general public and industry, and as a result, the composition and quantity of waste generated at any one time varies continuously depending on consumer behaviour and industrial production trends. Waste managers typically hold contracts for waste collection with municipalities. They cannot turn material away. Because of variations in consumer and industrial production trends, different countries can have vastly different supply at any one time. The quality of that input waste (how contaminated it is, the tensile strength etc.) depends on a variety of factors including how it's been treated and stored before its entered the chain, the type of additives it contains, what other materials it has come into contact with (because contact with substances such as polyvinyl chloride (PVC) causes contamination), level of discolouration, gel content, and odour. Coupled with this, the more times a polymer has been recycled, the lower its tensile strength, and typically end-use suitability becomes increasingly limited. How many cycles it takes before the waste material becomes unusable varies from polymer-to-polymer, process to process, and level of other degradation. The longer you store waste (this is typically, but not exclusively, in the form of bales) without reprocessing it – or selling it on for reprocessing – the more it degrades. This can be due to a number of things, including the contaminants it contains, thermolytic degradation (from heat – typically the sun), and hydrolytic degradation (from water – common in the case of polyethylene terephthalate (PET). Meanwhile, new (and perhaps more valuable) strains of waste are constantly entering the chain, and warehouse space is limited. If the waste quality is too low, then waste managers either need to dispose of the material, sell it to the burn-for-energy sector, or use it captively for energy creation. Burn-for-energy bales typically sell at negative values, whereby sellers pay for the removal of waste based on cost saving against alternative disposal methods. As a result, most waste managers look to offload bales within a timeframe of around 4-6 weeks (although this varies from market to market). Reprocessed recycled material, meanwhile, serves a huge variety of end-use markets. Major offtake markets include, but aren’t limited to, packaging, construction, automotive, outdoor furniture, refuse bags, strapping, and horticulture. Demand between the end-uses also varies dramatically, and players in each market purchase for differing reasons. Some markets, such as packaging, are heavily driven by brand sustainability targets and regulation, other markets, such as construction, mostly purchase on cost saving against virgin. This has huge impacts on willingness to pay, Intensifying legislative and consumer pressure on sustainability in packaging over the past few years has seen a significant pricing gap develop between display packaging suitable, and non-display packaging suitable grades across most global recycled polymer markets. There is currently, for example, a spread of up to €1,500/tonne between the highest priced grade of Europe recycled polypropylene (R-PP) pellet (which is a post-consumer natural grade predominantly used in domestic goods and cosmetic applications), and the lowest priced grade (which is black injection-moulded pellets, which typically serves non-packaging applications). Ideally (from their point of view) waste managers and recyclers would primarily serve applications driven by sustainability targets where premiums are typically highest. Nevertheless, each downstream market has differing technical requirements  – with display packaging and automotive typically having the strictest technical requirements and construction, bin bags and outdoor furniture the lowest. This means that there is typically a higher volume of material sold into non-packaging applications. While sorting allows waste managers to extract the valuable fractions and, to an extent, control contaminants etc. it doesn’t control the input waste mix. So the type of material suitable to serve each application is changing constantly. There is also a direct correlation between feedstock waste quality and reprocessed output quality for both mechanical and chemical recycling. This creates a continuous supply/demand mismatch that is often underappreciated by players newly entering the market. This mismatch coupled with the need to offload material relatively quickly is the reason, for example, 90% mixed polyolefin bale prices have traded as high as €600/tonne ex-works NWE (northwest Europe) and as low as €0/tonne ex-works NWE since July 2022. Because waste fractions typically produce a variety of different flake and pellet grades depending on what is extractable from individual bales – especially for recycled polyolefins – they typically react to system wide demand in each locality. Individual flake and pellet prices, though, often react to demand from specific end-use markets. This can result in periods where waste bale prices are high but prices for some flake and pellet grades those bales serve are low, resulting in squeezed margins. This is especially true for grades that are purchased for cost-saving reasons, meaning that they need to aggressively compete with virgin and off-spec material. The reverse also regularly occurs, whereby bale prices can be low because demand in key end-uses such as construction is weak and general availability of waste is high, but volumes extracted for packaging suitable grades are limited and demand from that particular sector is firm. It is also increasingly common for material with broadly identical specifications to trade at different price levels depending on which sector it is being sold into. Further distortions in the chain are created because reprocessed material such as flakes and pellets can be stored for long-periods of time, and flake and pellet producers are not forced to offload material as quickly as waste managers. This leads to fragmented and localised downstream markets where spreads against feedstock costs and profitability are constantly shifting. Volatile feedstock costs also results in challenges for investment. This is particularly true for emerging technologies such as chemical recycling and bio-based plastics. Thatis because new producers seeking private investment are often required to project future costs (typically for a period of at least 5 years), with waste feedstock typically their largest variable cost. The unpredictability of waste values make this a herculean task. When players first explore circular plastic markets, they are often surprised by the variability and fragmentation of prices through the chain. In the majority of cases the direct cause can be traced back to the feedstock waste markets. ICIS assesses more than 100 grades throughout the recycled plastic value chain globally – from waste bales through to pellets. This includes recycled polyethylene (R-PE), recycled PET (R-PET), R-PP, mixed plastic waste and pyrolysis oil. On 1 October ICIS launched a recycled polyolefins agglomerate price range as part of the Mixed Plastic Waste and Pyrolysis Oil (Europe) pricing service. For more information on ICIS’ recycled plastic products, please contact the ICIS recycling team at recycling@icis.com

11-Oct-2024

HOUSTON (ICIS)–Roaring ashore as a Category 3 hurricane late 9 October and bringing fierce winds, heavy rainfall and significant inland storm surge Hurricane Milton inundated the Tamp, Florida area, which is a key hub of the US fertilizer industry. In the aftermath of the storm there were market sources, based in this region, who were reporting being unharmed but that they were now facing considerable flooding, which was causing property damage in places and overall restricting public movement. The section of Florida pounded by Milton is the location of not only production sites but also storage and logistic operations as well as corporate office facilities and the home to the numerous employees of the local fertilizer industry. The Port of Tampa, which handles about 25% of domestic fertilizer exports, said on their website that recovery efforts have begun, and that staff is working with the US Army Corps of Engineers, US Coast Guard and other maritime partners to assess landside and seaside operations. “Our port is currently without power. Some damage was observed to buildings but there has been no significant damage to docks, so far. The port is accessible through main gates, but please be advised there are road closures and flooding concerns in the surrounding roadways to our port,” the Port of Tampa announced. “We are working with our fuel terminal operators to assess their facilities and learn when they will be able to return to service. Individual port tenants will make independent decisions on when to resume their operations.” The extent of impacts to the fertilizer industry were not yet clear but Canadia fertilizer producer Nutrien, who only has the White Springs phosphate facility within Florida, said the company is still dealing with the impacts of the last storm but was able to avoid further issues from this hurricane. “While Nutrien’s White Springs phosphate facility was not impacted by Hurricane Milton, we are continuing to assess the timeline for White Springs’ restart following Hurricane Helene.  Nutrien’s nitrogen facilities were not impacted by Hurricane Milton,” said a Nutrien spokesperson. Fertilizer titan Mosaic, who not only has their headquarters within Tampa but also has numerous assets for production and logistics, said their immediate focus is on their workforce. “As Hurricane Milton has now passed through central Florida, we are working to contact our employees and confirm their safety. When conditions allow, we'll begin assessing the impacts on our operations,” said Mosaic. There were concerns ahead of the storm over the potential environmental consequences of Milton as Florida has 25 stacks of slightly radioactive phosphogypsum waste that are a by-product of phosphate fertilizer production. The fear that the winds and rains could release the material across the land and water resources that are nearby as has occurred in past hurricane events. There was no immediate report of the conditions of the stacks as of late 10 October but ahead of the storm Florida environmental officials had said they were preparing and would have all resources available to oversee the regulated facilities and operations. Sources said the areas that were more south of Tampa were apparently struck harder but there has not been full confirmation of the damages inflicted with a source saying it is a “different story down there”. There were weather reports of over 18 inches of rain having been received in nearby St Petersburg, Florida. The hurricane also generated several strong tornadoes as it approached which are being blamed for some of the physical damage to structures. A market participants said that with it being less than 24 hours since landfall it was going to take some time for the fertilizer industry to assess the scale of the impacts from Milton, saying it is “too soon for that”. Federal and state officials have not yet projected an estimated amount of damages as assessments were just barely getting underway. It likely did great harm to the Florida citrus industry with orange groves bearing fruit and drawing close to their harvest period. It is feared that it will be determined in the coming days that the storm’s intensity will result in a substantial decline in production this season, with others crops having also been exposed to harm like sugarcane and strawberries.

10-Oct-2024

LONDON (ICIS)–Glycolysis-based chemical recycling technology company Ioniqa has filed for bankruptcy protection, the company announced in press release on Thursday. The company is headquartered in the Netherlands. It is concentrated on chemically recycling polyethylene terephthalate (R-PET). In the press release, the company stated that it has determined that “achieving a positive cash flow from its advanced polyester recycling technology will take too long.” Advanced recycling is a term that is often used as an alternative description for chemical recycling (although mechanical recyclers also use the term advanced recycling to refer to some mechanical recycling processes). It attributed this to the comparatively low price of traditional virgin PET and the supply chain for chemically recycled PET still being in development. It also attributed some of the blame to “the implementation of regulated mandatory standards for meaningful recycling levels… [being] too far out into the future.”  It stated that this meant that large-scale deployment of its technology was not economically feasible at this time. Ioniqa has a glycolysis-based chemical recycling demonstration plant in Geleen, The Netherlands, which has been operational since 2019 and has an estimated output of 8,000 tonnes/year according the ICIS Recycling Supply Tracker – Chemical. Investors in the site include The Coca Cola Company, Unilever, Indorama Ventures, Koch Technology Solutions, and Infinity Recycling’s Circular Plastics Fund. Chemical recycling is an umbrella term for a variety of methods that use different production routes and feedstocks to create new material from waste. This means that each process (and each technology and individual player) has vastly different cost-structures and the economics of each chemical recycling method vary substantially.  Coupled with this, achievable prices for chemically recycled products vary significantly between grade and polymer type. Common chemical recycling methods include pyrolysis, gasification, glycolysis, hydrolysis, methanolysis, and enzymatic hydrolysis. In chemical recycling, chemical processes are used to revert waste back to an earlier molecular state. Waste can be reverted back to monomer, building block chemicals, or all the way back to crude oil/energy. Chemical recycling alters the fundamental chemical properties of the material. In glycolysis, a transesterification catalyst is used to break the ester linkages. Typical catalysts include monoethylene glycol (MEG), diethylene glycol (DEG), propylene glycol (PG) or dipropylene glycol (DPG)..In glycolysis, a transesterification catalyst is used to break the ester linkages, which are replaced by hydroxyl terminals. This produces bisterephthalate (BHET) and PET glycozates. These can be reacted with aliphatic diacids to make: polyester polyols, which are in turn used in polyurethane (PU) foams; co-polyesters; unsaturated resins; and hydrophobic dyes. If combined with virgin BHET, the process produces chemically recycled PET via dimethyl terephthalate (DMT) or purified terephthalic acid (PTA) glycolysis. Typical catalysts include monoethylene glycol (MEG), diethylene glycol (DEG), propylene glycol (PG) or dipropylene glycol (DPG). Transesterification does not work on polymers such as polyolefins due to a lack of cutting points. As a result, glycolysis is predominantly focussed on PET, and this means that it typically uses sorted and separated monomaterial as a feedstock, which can add additional cost. The most common form of chemical recycling in Europe is pyrolysis-based. This is in large part being driven by demand from ambitious brand sustainability targets in the packaging sector. Many fast-moving consumer goods (FMCG) brands see chemical recycling as the only viable way to reach large scale food-grade packaging suitable recycled polyolefins given current EFSA requirements that 95% of input waste must be former food-contact to gain food-contact approval. Most PET input waste is sourced from used plastic drinks bottles, making it easier for R-PET producers to meet this 95% requirement than other polymers, and there is a well established R-PET food-grade pellet sector – using traditional recycling methods – across Europe. R-PET is also the only mechanical recycling technology recognised as suitable for producing food-contact material under European Commission regulation (EU) 2022/1616 on ‘recycled plastic materials and articles intended to come into contact with foods’. Pyrolysis-based chemical recycling uses heat and pressure – typically in the absence of oxygen, although it is sometimes present in controlled volumes – to transform waste feedstocks (most commonly plastic waste or end-of-life tyres) into an earlier molecular state. Pyrolysis-based plants targeting mixed plastic waste as feedstock – with a focus on polyolefins – currently account for more than 60% of all operating chemical recycling capacity in Europe according to ICIS Recycling Supply Tracker – Chemical. PET, however, does not pyrolyse. Highlighting just how variable achievable prices for chemically recycled materials can be, pyrolysis oil prices in Europe are currently regularly trading on the spot market anywhere from €800-2,200/tonne ex-works Europe depending on grade. ICIS assesses more than 100 grades throughout the recycled plastic value chain globally – from waste bales through to pellets. This includes recycled polyethylene (R-PE), recycled PET (R-PET), R-PP, mixed plastic waste and pyrolysis oil. On 1 October ICIS launched a recycled polyolefins agglomerate price range as part of the Mixed Plastic Waste and Pyrolysis Oil (Europe) pricing service. For more information on ICIS’ recycled plastic products, please contact the ICIS recycling team at recycling@icis.com Clarification: recasts glycolysis process technology paragraph

10-Oct-2024

HOUSTON (ICIS)–Warmer waters in the Atlantic Basin could make record-setting hurricanes like Milton and Beryl more common, which strengthened rapidly to become major storms that caused significant damage. Most of the petrochemical and refining capacity of the US is along the Gulf of Mexico, making the plants vulnerable to the disruptions caused by more powerful hurricanes that could become more common in the future. Rising exports of energy, chemical feedstock and plastics from the US Gulf Coast have caused local hurricanes to have global consequences. If wind shear becomes more common, then it could offset some of the strengthening effects that warmer water will have on hurricane development. RECORD-SETTING HURRICANE SEASONWarm water is like rocket fuel for tropical storms and hurricanes, and that led to the rapid intensification of Milton, which strengthened from a tropical storm into a Category 5 hurricane in less than two days. By midday on Monday, the rapid strengthening of Milton placed it among the top three Atlantic hurricanes, behind only 2005's Hurricane Wilma and 2007's Hurricane Felix, said Alex DaSilva, lead hurricane expert at the meteorology company AccuWeather. Milton had set another record as the strongest hurricane to occur in the Gulf of Mexico, according to Levi Silvers, research scientist at the Department of Atmospheric Sciences at Colorado State University, which publishes regular hurricane forecasts. Milton was also the Gulf's strongest hurricane since Rita in 2005, Silvers said. Milton would weaken to a Category 3 hurricane before making landfall on Wednesday night. AccuWeather estimates that Milton could cause more than $200 billion in damage and economic loss. Earlier on July 2, Beryl set its own record by becoming the earliest Category 5 hurricane to form in the Atlantic basin, beating the previous record holder by an astounding two weeks, DaSilva said. According to Silvers, Beryl also accumulated more cyclone energy than any other storm occurring before August. "Basically, it was the strongest early storm we have had by several measures." After forming in the Atlantic Beryl weakened after passing over Mexico's Yucatan peninsula before making landfall in Texas and disrupting operations at several petrochemical plants. AccuWeather estimated that total damage and economic loss caused by Beryl was $28 billion to $32 billion. Hurricane Helene set a record for the amount of available atmospheric moisture, also known as precipitable rain, according to AccuWeather. Such extreme amounts of moisture allowed Helene to carry it far inland, leading to rapidly rising river levels and flash flooding. AccuWeather estimates that Helene caused $225 billion to $250 billion in damage and economic loss in Florida, Georgia and the Carolinas. WARM WATER THREATSIf the planet continues to warm, one of the consequences would be elevated water temperatures. Warmer waters contributed to the strength and rapid intensification of these three hurricanes, DaSilva said. The danger is not just the surface temperature of the Atlantic but also something that meteorologists call ocean heat content, DaSilva said. Ocean heat content reflects water temperatures below the surface. A warmer planet will also heat up the atmosphere, allowing the air to hold more moisture. That would lead to more rainfall and greater risks of floods. "I am concerned that we are going to be seeing more episodes of rapid intensification," DaSilva said. "The tie between sea surface temperatures and rapid intensification – we are pretty confident about that." Silvers also expressed concern about the threat posed by elevated water temperatures. WIND SHEAR REMAINS UNKNOWN VARIABLEMeteorologists are less sure if wind shear could become more common in a warmer planet, DaSilva said. Wind shear usually discourages the formation of tropical weather. If wind shear does become more common, it could partially offset the effects of warmer water. In a world with more wind shear, it might not generate more hurricanes, but those that do form will strengthen rapidly into more powerful storms, DaSilva said. The length of the Atlantic hurricane season could also expand by starting sooner than the current June 1 date, DaSilva said. DaSilva doubts that the Atlantic season would last beyond its November 30 end date, because wind shear becomes more common during the final months of the year. Silvers, though, said it is difficult to determine if the timing of Atlantic storms will change in the future. "This season is a perfect example, with record breaking storms before and after the peak of the season, but almost nothing during the historical peak," Silvers said. MORE DISRUPTIONS FOR US, GLOBAL CHEMICALSMost of the petrochemical plants and refineries in the US are on the Gulf Coast, so more powerful hurricanes would leave them more vulnerable to damage and shutdowns. The US now exports significant amounts of polyethylene (PE), polyvinyl chloride (PVC), vinyl chloride monomer (VCM) and other chemicals. Hurricanes disrupt port operations, so those exports could be delayed, increasing the risk of global shortages. DISRUPTIONS TO WORLD'S CHEMICAL FEEDSTOCKSIn addition, the US is increasingly relying on exports to take away excess ethane and liquefied petroleum gas (LPG) produced from its oil fields. These petrochemical feedstocks are being imported by an increasing number of crackers and propane dehydrogenation (PDH) units, with GAIL (India) became the latest to announce plans to build an ethane cracker. Nearly all of the terminals that handle these exports of ethane and LPG are on the Gulf Coast, and all of the expansion projects are in the region. Hurricanes could disrupt operations at these terminals and interrupt the supply of these feedstocks to crackers and PDH units throughout the world. HURRICANES DISRUPT US LNG TERMINALSThe majority of US LNG capacity is on the Gulf Coast and its preponderance will only increase as the country starts up more terminals. This will have effects on US and global energy prices. Disruptions in global shipments could raise LNG costs. In the US, extended shutdowns of LNG terminals would increase supplies of natural gas, pushing prices lower for it and ethane. Lower ethane prices in the US could increase margins for ethylene derivatives. DISRUPTIONS TO US OIL EXPORTSThe Gulf Coast is a large exporter of oil, with major terminals in Corpus Christi, Houston and Nederland in Texas. In addition, the Gulf Coast is home to the Louisiana Offshore Oil Port (LOOP), the only deepwater crude port in the US. Companies are planning more offshore ports. Enterprise Products received a deepwater port license for its Sea Port Oil Terminal (SPOT), which could load 2 million bbl/day of crude oil. If built, it would be built 30 nautical miles off the Texas coast. In 2020, Phillips 66 and Trafigura Group announced that they created a 50/50 joint venture called Bluewater Texas Terminal to develop an offshore deepwater oil port 21 nautical miles east of the port of Corpus Christi. Energy Transfer is proposing its Blue Marlin Offshore Port, which could load up to one very large crude carrier (VLCC) per day. Texas GulfLink, a subsidiary of Sentinal Midstream, is developing a deepwater oil terminal off the Gulf Coast. If built, these offshore oil ports would be vulnerable to hurricanes, along with the onshore terminals on the Gulf Coast. That could restrict global oil supplies and push prices higher. Higher prices would increase costs for crackers that use naphtha as a feedstock. Insight article by Al Greenwood Thumbnail shows damage caused by Hurricane Milton. Image by Chris Urso/Tampa Bay Times/ZUMA Press Wire/Shutterstock

10-Oct-2024

SINGAPORE (ICIS)–Japanese producers Idemitsu Kosan and Mitsui Chemicals on Wednesday said that they are moving to the front-end engineering and design (FEED) stage of a plan to consolidate their ethylene facilities in Chiba into a single unit. The two companies have completed the feasibility study for the project announced in late March, they said in a statement. Under the plan, Idemitsu's 413,000 tonne/year ethylene facility in Chiba will be closed, with operations to be combined with Mitsui's plant. Mitsui Chemicals has a bigger cracker with an ethylene capacity of 612,000 tonnes/year at the site. The two companies plan to complete the consolidation project by fiscal year 2027, which ends on 31 March 2028. The two plants are operated by their 50:50 joint venture company Chiba Chemicals, which was established in 2010. "The feasibility study examined the impact of consolidating the ethylene facilities on feedstock procurement, as well as on the production and supply setup for the products involved," they said. "As the two companies reached the conclusion that consolidation will be feasible, they have agreed to move on to the FEED phase." The FEED phase typically involves scrutinizing a project’s challenges, risks, costs and the like in greater detail, and determining the basic specifications of the plant.

09-Oct-2024

HOUSTON (ICIS)–The proposed spinoff of Mexican polyester producer Alpek has reached a key milestone, with corporate parent Alfa saying on Tuesday that it has solicited consents from more than 90% of the holders of a batch of senior notes. Alfa needed consents to amend some covenants and provisions that would allow it to spin off Alpek, it said. Alfa did not provide a timeline for the spinoff. Alfa has been discussing the possible spinoff for months. Alfa was once a large conglomerate that owned Alpek, Nemak (aluminum and auto parts), Sigma (refrigerated foods), Alestra (IT and communications) and Newpek (natural gas and hydrocarbons). If Alfa completes the spinoff, it would be left with Sigma. Alpek produces polyethylene terephthalate (PET) and recycled PET (rPET) as well as polypropylene (PP) through its Indelpro joint venture with LyondellBasell and expandable polystyrene (EPS) through Styropek.

08-Oct-2024