Engineering plastics (POM, PBT)

HOUSTON (ICIS)–US ammonia-to-power solutions provider Amogy has announced a partnership with HD Korea Shipbuilding & Offshore Engineering, POSCO Holdings, Seoul National University and the American Bureau of Shipping to explore the feasibility of an innovative offshore ammonia cracking solution to deliver low-cost, accessible clean hydrogen fuel. Amogy said under this partnership, HD Korea Shipbuilding will design the ammonia supply system and integrate it into the overall system, and it will provide its ammonia-cracking technology. Seoul National University will contribute expertise in process design and simulation, while POSCO Holdings intends to harness its proprietary cracking process design technology to optimize the systems needed for ship application. The American Bureau of Shipping will oversee certification of the design as the class society. Amogy said ammonia, a hydrogen carrier, offers a more cost-effective and convenient alternative to liquefied hydrogen due to its established storage and transport infrastructure. Additionally, with energy density 2.7 times greater than hydrogen, ammonia is emerging as an optimal carbon-free fuel for the maritime industry. Further, the company said their technology unlocks the potential of ammonia as a hydrogen carrier by leveraging state-of-the-art catalyst materials to crack ammonia into hydrogen and nitrogen at lower reaction temperatures with high durability thereby reducing heating and maintenance requirements. “We are excited to join forces with this esteemed consortium to develop an innovative offshore ammonia cracking solution,” said Seonghoon Woo, Amogy CEO. “This partnership marks a pivotal advancement in leveraging ammonia to achieve net-zero emissions.”

17-Sep-2024

HOUSTON (ICIS)–As the US recycled polyethylene terephthalate (R-PET) market continues to develop and new players establish supply relationships across members in the value chain, pricing mechanisms have shifted significantly over the course of the last 5+ years. Historically, R-PET pricing was linked to virgin pricing, but at a deficit, meaning recycled resins were expected to be cheaper than virgin. Now, the tables have turned, particularly for sought after "sustainability-driven" grades of recycled resin which typically command a premium to virgin due to the tight supply and high demand of these higher quality, clear resins. Pricing for these grades of recycled resins has shifted within the R-PET industry, such that pellet prices are largely based on their own feedstock and production costs. While spot pellet pricing is subjected to the additional lens of local supply and demand, including substitution with imports or cheap virgin, contract pellet pricing is now largely based off of bale feedstock formulas, with some contracts specifying individual step inputs, and others specifying the bale index and then an adder to represent the processing cost. Eventually, the market may move to a uniform indexed pellet price, settled on a routine frequency by the market, similar to how R-PET pricing is established in Europe, or how other commodity resin prices are established in the US, such as polyethylene (PE). Within the ICIS US R-PET commodity services, two new price series have been introduced which represent food grade pellet pricing calculated via a formula, starting with bale feedstock costs. While each contract will have unique formula inputs which are largely kept private, the following prices are meant as an indicator of average pellet pricing based on formula, as this can vary significantly from active spot market transactions – depending on the current market supply and demand. There is one assessment for the East Coast and one for the West Coast based on various bale feedstocks. The formula is listed below: [([(Bale price indicator + bale freight ) ÷ bale yield] + bale to flake processing costs) ÷ flake yield] + flake to pellet processing costs = pellet price Formula input descriptors: Bale price indicator: What quality (curbside or deposit) and region (East Coast vs West Coast) descriptors are used for selecting base pricing for bale feedstock costs in relation to the type most often used by local recyclers. Bale freight: Cost to transport material from bale producer (typically material recovery facility (MRF)) to bale buyer (typically the recycler/reclaimer). Bale yield: Factor to account for loss of material due to contamination within the bale; Curbside bales have higher contamination levels and thus lower yields. Bale to flake processing costs: Associated production costs from sorting, washing, grinding processes, including but not limited to facilities costs, utilities, labor, etc. Flake yield: Factor to account for loss of material due to contamination from flake to pellet stage. Flake to pellet processing costs: Associated production costs from pelletization, including but not limited to facilities costs, utilities, labor, etc. The numeric input values were gathered from market participants, with median values used among responses. The inputs are subject to change pending further feedback or market cost changes, such as the recent inflation of production costs within the last ~2-4 years. This price excludes delivery costs of the final pellet. This price also excludes explicit margin adders, though some processing costs may include inherit margin depending on the processing yield fluctuation. For more information on these new series, or to share feedback, please contact Emily Friedman at Emily.friedman@icis.com.

16-Sep-2024

HOUSTON (ICIS)–Fertilizer developer Genesis Fertilizers announced it has partnered with technology provider CARBONCO and has agreed to negotiate formal licensing and process design package services for a carbon capture and storage (CCS) project. Genesis said this collaboration marks a significant step toward the potential production of sustainable, low-carbon ammonia and urea nitrogen fertilizer for their farming partners and the broader fertilizer industry in North America. Under the terms CARBONCO would be responsible for implementing a solution capable of capturing approximately 1 million tonnes of carbon dioxide annually, which would then be transported directly to a sequestration hub. If implemented, the CCS project would be built at the proposed Genesis Fertilizers production complex to be constructed in Belle Plaine, Saskatchewan, Canada. The company said both parties are confident that this first-of-its-kind CCS project would play a pivotal role in supplying exceptionally clean grain to the market. “In line with our ultimate low carbon intensity fertilizer goal, Genesis Fertilizers has been working with CARBONCO and is pleased to welcome them as our technology provider to explore an exciting opportunity to implement their carbon capture solution,” said Jason Mann, Genesis Fertilizers CEO. “We believe that CARBONCO is the most suitable partner for our project, offering a robust solution that meets our technical and commercial needs.” The front-end engineering design (FEED) phase for Genesis Fertilizers project is expected to begin within the next few months. The company said the final investment decision will be made based on the results of the FEED work and other critical steps, but it is aiming to commence commercial operations by 2029. As proposed there would eventually be both ammonia and urea production with plans to have 75% of output locked into farmer commitments with the balance sold on the open market. Genesis has previously said the goal of this development is to help farmers have access to a vertically integrate fertilizer supply and enable the production of low carbon grain.

13-Sep-2024

SITGES, Spain (ICIS)–Chemical companies will find it easier to charge a green premium as the cost of carbon increases, fossil feedstock availability declines and customers realize the true value of the products they are buying. The cost of living crisis and poor profitability down industrial value chains mean that companies are resistant to paying more for low carbon and more sustainable products. But that will change as regulators push up the cost of carbon content in materials while the switch away from fossil fuels will make green alternatives more attractive, according to panel speakers at  the Fecc (European Association of Chemical Distributors) annual congress in Sitges, Spain. They argue that people will be willing to pay a green premium once there is regulatory support for carbon pricing, which will incentivize customers to take account of the savings low carbon products offer. Richard Jenkins, senior vice president for coatings solutions at France’s Arkema said: “The number of carbon credits will reduce, the number of companies seeking them will increase, and this will drive up the value of CO2 avoidance. So when I’m sitting in front of customers, I’m telling them they have to consider the whole cost of carbon – it might cost more per unit but overall you are saving on the costs of CO2.” The EU’s Emission Trading System (ETS) works under the principle of “cap and trade” where  companies are granted allowances for the maximum amount of CO2 they may emit from their facilities. They may buy and sell their allowances but the overall volume is steadily reduced each year in line with the EU’s climate targets. As they become more scarce, the price tends to increase. Georg Winkler, senior partner for consultants McKinsey & Company added: “If you decarbonize polyethylene (PE) packaging and then break down the actual costs, they are tiny – this should only change the price of the product by a cent or so. Also, if we have a single-use-plastics tax in Europe then we can point out the cost saving to our customers.” Ib Jensen, president and CEO of Swedish specialty chemicals group Perstorp said: “I don’t like the term green premium; I prefer the term fossil discount. Consumers are increasingly ready to pay a premium, especially in B2C (business-to-consumer), but also in B2B (business-to-business) they are appreciating [the need for a] green premium.” As the transition to low-carbon transportation accelerates, demand for diesel and petroleum will decrease, leading to the closure of more oil refineries. In turn this will reduce availability of petrochemical feedstocks for chemical production, potentially pushing up the cost of these materials. Arkema’s Jenkins said: “I don’t believe that today’s fossil-based chemistry will remain at the same scale and cost that it is today. We drive a lot less than we used to and some of my suppliers are telling me that some raw materials will be less available in the future. I think the old solutions may start to cost more, and as we get to scale the cost of new solutions will come down.” He added: “There is a lot of focus on energy efficiency so solutions which contribute to an overall cut in the cost of use are important. Now you’re talking about value rather than per unit cost – what it is doing and enabling and solving versus what it is, which is product push.” The Fecc annual congress takes place in Sitges, Spain from 11-13 September 2024. Focus article by Will Beacham Thumbnail photo source: Jeppe Gustafsson/Shutterstock

13-Sep-2024

SINGAPORE (ICIS)–Energy giant Saudi Aramco has signed new agreements to advance separate expansion plans with Chinese petrochemical producers Rongsheng and Hengli. Signing conducted during China Premier Li’s state visit to Saudi Arabia Deals with the Chinese firms part of Aramco's downstream expansion Aramco moves closer to acquire 10% of Hengli Petrochemical Chinese Premier Li Qiang and Saudi Crown Prince Mohammed Bin Salman on 11 September discussed cooperation in energy, investment, and trade, according to state news agency Saudi Press Agency (SPA). In a separate meeting with GCC secretary general Jasem Mohamed Albudaiwi in Riyadh, Li called on China and Gulf Cooperation Countries (GCC) countries to align their development strategies and “speed up free trade agreement negotiations”, according to Chinese state media Xinhua. Li is in the Middle East on 10-13 September for state visits to Saudi Arabia and the UAE, both members of GCC. The four other members of GCC are Bahrain, Kuwait, Oman and Qatar. PLANS WITH RONGSHENG The new agreements follow a previously signed framework agreement with Rongsheng Petrochemical for a potential joint-venture expansion of Saudi Aramco Jubail Refinery Company (SASREF) facilities. SASREF operates a 305,000 barrel/day refinery complex in Al-Jubail, Saudi Arabia with downstream aromatics units that can produce 260,000 tonnes/year of toluene and 275,000 tonnes/year of benzene, according to the ICIS Supply and Demand Database. Aramco now owns 10% of Rongsheng Petrochemical, bought for $3.4 billion, with further plans between the two companies to take stakes in each other’s subsidiaries. Rongsheng Petrochemical manufactures and distributes a range of petrochemical and chemical fiber products, including purified terephthalic acid (PTA), polyester yarns, polyester filaments, and polyethylene terephthalate (PET). The Saudi oil giant intends to acquire 50% of Ningbo Zhongjin Petrochemical (ZJPC), which is fully owned by Rongsheng, with plans to upgrade existing assets and jointly develop a new materials project in Zhoushan. The proposed Chinese yuan (CNY) 67.5 billion Zhoushan new materials project would produce polyethylene (PE), propylene oxide (PO), styrene, ethylene vinyl acetate (EVA), polyolefin elastomer and bisphenol A (BPA). Rongsheng, in turn, would acquire a 50% stake in Aramco’s SASREF, which operates a refinery in Jubail. POTENTIAL DEALS WITH HENGLI With Hengli, talks have advanced relating to Aramco’s potential acquisition of a 10% stake in the Chinese group’s petrochemical arm, subject to due diligence and required regulatory clearances.’ The two companies had signed a memorandum of understanding (MoU) on the proposed transaction in in April 2024. Hengli Group operates across the entire production chain of oil refining, petrochemicals, polyester film, and textiles. It is one of the biggest PTA producers in China. "China is an important country in our global downstream growth strategy," Aramco downstream president Mohammed Al Qahtani said. "These agreements reflect our collective intention to elevate our relationships in vital sectors to advance our downstream objectives." Aramco is targeting a fourfold increase in its crude oil-to-chemicals conversion capacity to four million barrels/day by 2030. Focus article by Nurluqman Suratman Thumbnail image: Chinese Premier Li Qiang meets with Saudi Crown Prince and Prime Minister Mohammed bin Salman Al Saud, and co-chairs the Fourth Meeting of the High-Level Chinese-Saudi Joint Committee with him at Riyadh's al-Yamamah Palace in Saudi Arabia on 11 September 2024.

12-Sep-2024

SINGAPORE (ICIS)–Indonesia has initiated an investigation as to whether “safeguard measures” would be needed in response to a sharp increase in imports of linear low density polyethylene (LLDPE), its trade ministry said. The Trade Security Committee (KPPI) under the Ministry of Trade started the probe on 9 September following a complaint from The Indonesia Olefin, Aromatics and Plastics Industry Association (INAPLAS), acting on behalf of Chandra Asri Pacific and Lotte Chemical Titan Nusantara Indonesia. The committee noted initial findings suggested there were possible losses to the domestic industry over the years 2021-2023 arising from the sharp increase in imports of LLDPE. It also noted that the biggest sources of these imports were Malaysia and Thailand, which accounted for over 70% of LLDPE imports into Indonesia. Government data showed that in 2023, Indonesia's LLDPE imports increased by 33.3% to 280,385 tonnes, compared with a 3.3% decline registered in 2022, the ministry said. Some market participants ICIS spoke with said they were not yet ready to respond to the announcement as await more details from the government. (adds paragraphs 5-6)

10-Sep-2024

SINGAPORE (ICIS)–Indonesia has initiated an investigation as to whether “safeguard measures” would be needed in response to a sharp increase in imports of linear low density polyethylene (LLDPE), its trade ministry said. The Trade Security Committee (KPPI) under the Ministry of Trade started the probe on 9 September following a complaint from The Indonesia Olefin, Aromatics and Plastics Industry Association (INAPLAS), acting on behalf of Chandra Asri Pacific and Lotte Chemical Titan Nusantara Indonesia. The committee noted initial findings suggested there were possible losses to the domestic industry over the years 2021-2023 arising from the sharp increase in imports of LLDPE. It also noted that the biggest sources of these imports were Malaysia and Thailand, which accounted for over 70% of LLDPE imports into Indonesia.

10-Sep-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 September 2024. Strong regional currencies weigh on Asia recycling exports The weakening of the US dollar against major currencies in Asia since August will continue to strain exports of recycled polyethylene terephthalate (R-PET), recycled polyethylene (R-PE), and recycled polypropylene (R-PP). Asia refined glycerine market stagnates on stand-off between buyers and sellers Asia’s refined glycerine market may likely continue to remain tepid in the near term due to a persistent stand-off between buyers and sellers. UPDATE: Oil falls by $1/bbl, Asia petrochemical shares tumble on global growth worries Asian petrochemical shares slumped on Wednesday as regional bourses tracked Wall Street’s rout overnight on poor data from both the US and China, with crude prices shedding more than $1/bbl in late Asian trade. At the close of trade in Tokyo, Mitsui Chemicals fell 3.07% and Sumitomo Chemical tumbled by more than 4%, with the Nikkei 225 index down 4.24% at 37,047.61. Asian PX hits fresh year low, levels last seen in December 2022 Asian paraxylene (PX) prices hit a fresh year low, amid a lack of buyers' confidence and overnight losses seen in upstream crude markets. INSIGHT: China-Canada trade frictions may affect MEG trade flows Trade frictions between China and Canada have intensified recently following the Canadian government’s decision to impose tariffs on imports of electric vehicles (EVs) as well as steel and aluminum from China starting 1 October. INSIGHT: Qatar to emerge as PVC exporter next year when $279 million plant comes online Qatar will become an exporter of polyvinyl chloride (PVC) as early as next year when commercial operations start at its first plant, because its 350,000 tonne/year capacity will be more than 10 times the state's annual imports. Asia titanium dioxide Sept key drivers to be stock levels, exchange rates While the titanium dioxide (TiO2) spot price in Asia is likely to find support with the start of the traditional demand season in September, a large-scale revival now seems unlikely.

09-Sep-2024

HOUSTON (ICIS)–US recycled plastics Senior Editor, Emily Friedman and Americas recycled plastics Analyst, Josh Dill, dive deeper into the challenges chemical recyclers face, following Josh’s recent webinar, Chemical Recycling Growth: Accelerating Progress Towards Meeting Recycling Targets (view the recording here). While the webinar primarily highlighted legislative uncertainties, this discussion expands on the other hurdles including: Technological difficulties faced by chemical recyclers as a nascent industry Challenges in securing adequate feedstock which is financially sustainable Overall economic headwinds as many recyclers look to startup new plants

06-Sep-2024

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Further narrowing of the colorless flake range in eastern Europe Latest Italian bale auctions see colorless and blue bales drop More bullish sentiment displayed by some sellers in September

06-Sep-2024