Xylenes

SAO PAULO (ICIS)–Dow has decided to stop producing polyether polyols at its site in San Lorenzo, in Argentina’s province of Santa Fe, on the back of poor economics, the US chemicals major confirmed to ICIS on Wednesday. Dow said global oversupply for polyols had caused the San Lorenzo plant to persistently operate at low rates. The company had already intended to halt polyurethane (PU) production there in 2021, but pressure from trade unions and the national government at the time stopped it from taking the decision. According to Dow, 40 employees at the plant will be affected by the closure, although trade unions say the figure is 120. The United Petrochemical Workers and Employees Union representing the plant’s employees said the company took the decision to shut the plant without notifying workers representatives, according to reports by local media in Santa Fe. Dow said, however, employees had been “notified in accordance” with Argentine labor laws. “The business driver for this final decision is aligned with the company’s strategy to optimize its asset footprint. The San Lorenzo production unit has been operating at low utilization rates, while there is an excess of installed capacity in polyol plants all over the world,” said the company. “Dow has worked to minimize any potential impact and is well positioned to meet customer demands and deliver the product mix needed to serve them. These customers may also acquire products from other suppliers at competitive prices, as they currently do.” The chemicals major said it would continue to “work closely with all stakeholders” of the San Lorenzo site to ensure an “orderly and smooth” transition. The PU plant had a production capacity of 50,000 tonnes/year, according to the ICIS Supply and Demand Database. Dow keeps a large presence in Argentina, where it is the sole producer of polyethylene (PE). Its main operating facilities are in Bahia Blanca, south of Buenos Aires, where it employs 3,000 workers in 12 production plants. Additional reporting by Bruno Menini

09-Oct-2024

SINGAPORE (ICIS)–Volatility marked the first few days of re-opening of China’s financial and commodities markets as investors’ initial hopes of more economic measures were crushed. Implementation plans for pre-holiday measures unclear Infrastructure-focused sovereign bonds to drive growth further China GDP growth to slow to 4.3% in 2025 – World Bank The highly anticipated return of Chinese market players after a week-long absence sparked a surge in the equities markets, with the closely watched CSI 300 – which tracks shares of the top 300 companies trading in Shanghai and Shenzhen, had surged by 11% on 8 October. “Expectations were high after the monetary announcements made [in] the week of 24 September and there were even news reports of up to a [yuan] CNY10 trillion ($1.4 trillion) stimulus,” hedge fund portfolio manager Rikki Malik said in a note issued on Wednesday for investment research and analysis firm Smartkarma. On Wednesday, the CSI300 index fell by 7%, reflecting concerns over the lack of concrete new stimulus measures from Beijing to sustain the rally. Other Asian equity indices tracked the weakness in Chinese bourses amid risk aversion also stoked by geopolitical jitters in the Middle East At 08:53 GMT, Hong Kong's Hang Seng Index was down by around 1.4% at 20,637.24, continuing from its sharpest single-day decline in 16 years in the previous session. Chemicals giant Sinopec was down by 3.61% and state energy firm PetroChina fell by 3.14% in Hong Kong. Elsewhere in Asia, South Korea's KOSPI Composite ended 0.61% lower to 2,594.36 while Japan's key Nikkei 225 closed up by 0.87% at 39,277.96 China’s petrochemical futures tumbled, with polyvinyl chloride (PVC), purified terephthalic acid (PTA) and paraxylene (PX) futures leading the slump. Market sentiment was also weighed down by crude oil’s plunge overnight, in which both Brent and WTI benchmarks shed more than 4%. POST-HOLIDAY POLICY BRIEFING UNDERWHELMS The National Development and Reform Commission (NDRC) – China’s top economic planner – held a briefing on 8 October in which chairman Zheng Shanjie said that China was "fully confident" of achieving economic targets for 2024. But his failure to detail sufficiently big or new measures rekindled market doubts about Beijing's commitment to ensuring the economy can climb out of its most serious slump since the global pandemic and achieve a 5% growth. Market players were initially expecting the government to adopt further fiscal measures to arrest the slowdown of the world’s second-biggest economy. Instead, the NDRC emphasized confidence in achieving the "around 5%" growth target for this year based on policy measures announced in late September. Toward this end, issuance of long-term sovereign and local government bonds will be accelerated to fund infrastructure projects well into next year. Additionally, the NDRC announced upcoming investments in key strategic areas totaling yuan (CNY) 100 billion, on top of plans to expedite CNY100 billion in central government investment originally planned for 2025. NO MAJOR NEAR-TERM IMPACT FROM STIMULUS MEASURES During the seven-day China holiday in the first week of October, domestic tourist trips grew 5.9% year on year, with revenues up by 6.3% over the same period. But the per trip spend was near flat at 0.4%, according to data from the Ministry of Culture and Tourism. Week-long holidays in the country, including the Spring Festival/Lunar New Year and Labor Day celebrations in February and May, respectively, typically result in spikes in domestic tourism spending. In October, domestic tourism activities remained positive this year while there were also reports of stronger outbound and inbound travel during the period. The two earlier major holidays in China – the Spring Festival and Labour Day holidays – had recorded stronger improvements across number of trips, total spend and spend per trip, according to Singapore-based UOB Global Economics & Markets Research in a note on Wednesday. "Although the recovery in outbound travel may dilute the demand for domestic tourism, the moderation in spend per trip continue to indicate more cautious spending amongst consumers," it said. "The initial spillover from recent PBOC [People's Bank of China]-led stimulus to consumer spending including the rollout of local government vouchers and promotions to boost consumption had been lacking in the National Day holiday statistics," UOB said. "This further affirms the need for stronger fiscal measures that target consumption and support to the labor market particularly with youth unemployment rate rising to 18.8% in Aug which continues to hamper the recovery in consumer confidence." Ahead of the National Day holidays, China’s central bank had announced stimulus measures estimated to be worth at least CNY3 trillion, which is equivalent to 2.3% of its GDP. These measures include a 50-basis point cut to banks' reserve requirement ratio (RRR), injecting CNY1 trillion into the financial system. Further measures include a CNY1 trillion capital injection to state-owned banks, a reduction in interest rates on existing mortgages to release CNY150 billion in funds, and CNY800 billion allocated to swap and re-lending facilities for stock purchases. “Investors were also disappointed that some of the 2025 budget would be pulled forward to this year, implying no new money, but… it is easier to issue special bonds which are off budget, rather than going through the rigmarole of increasing this year’s budget deficit,” said SmartKarma’s Malik. Markets will now be closely watching for further fiscal stimulus to support consumption and investment. “In addition, given the onset of winter, construction projects need to be started quickly. We fully expect there to be further issuance of ultra-long special bonds,” Malik added. Investors watching for signs of China's next policy moves now have three key dates circled on their calendars. In late October, the Standing Committee of the National People’s Congress (NPC) is scheduled to meet in late October. Meanwhile, China’s Q3 GDP is slated for release on 18 October; while country’s Politburo is due to meet early December, leading to the annual Central Economic Work Conference (CEWC). The CEWC is a pivotal annual meeting in China during which country's economic agenda is set for the upcoming year. The conference typically takes place over two to three days in December. CHINA 2025 GROWTH TO SLOW DESPITE STIMULUS – WB Economic growth in China is projected to slow to 4.3% next year from 4.8% in 2024 despite economic stimulus measures that China introduced in September, the World Bank warned in a report on 7 October. This is due in part to low consumer and investor confidence, property market weakness, an ageing population and global tensions, the multilateral institution said. “Recently signalled fiscal support may lift short-term growth but longer-term growth will depend on deeper structural reforms,” the World Bank said. “China has led growth in the region for more than three decades, but its relative growth is likely to slow down in future,” it added. Insight article by Nurluqman Suratman With contributions from Jonathan Yee ($1 = CNY7.07)

09-Oct-2024

SINGAPORE (ICIS)–China’s petrochemical futures tumbled on Wednesday morning as a lack of further economic stimulus measures from the government left investors worrying about demand. At the end of the morning session, polyvinyl chloride (PVC), purified terephthalic acid (PTA) and paraxylene (PX) futures led the slump, with losses ranging from 2.4-3.5%. Market sentiment was also weighed down by crude oil’s plunge overnight, in which both Brent and WTI benchmarks shed more than $3/bbl. In physical markets, spot transactions were sluggish at most petrochemicals, including acetone, butadiene, acrylonitrile, propylene oxide, upon resumption of trade due to weak demand. China had a week-long National Day holiday on 1-7 October. Futures market gains in the previous session lost steam as market hopes for additional economic measures did not materialize. In a briefing on 8 October, the National Development and Reform Commission (NDRC) – China’s top economic planner – provided no details on how to execute the aggressive measures announced in late September. Market players were initially expecting the government to adopt further fiscal measures to arrest the slowdown of the world’s second-biggest economy. ($1 = CNY7.07)

09-Oct-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 4 October. US Tampa port reopens after Helene's hit; US-wide losses could top $160 billion The port at Tampa in the US state of Florida reopened over the weekend, the port’s authorities said on Sunday, after Hurricane Helene's destructive path put the US state of Florida against the ropes. SHIPPING: ILA ports strike to weigh on US PE, PVC exports; carriers set congestion surcharges Participants in the US chemical industry worry that a prolonged strike by US Gulf and East Coast dock workers will hurt exporters and lead to supply surpluses, and some carriers are already initiating port congestion surcharges that will add increased costs on top of delays to both imports and exports. SHIPPING: Union, US ports remain at impasse as strike enters second day Negotiations have yet to resume between union dock workers and the US Gulf and East Coast ports as a costly strike enters its second day. US demand for ACN, other chems could take a hit as Boeing strike enters fourth week US acrylonitrile (ACN) demand could soften as 33,000 Boeing employees remain on strike in a work stoppage that is entering its fourth week. SHIPPING: Trucks, container ships backing up as US ports strike marks third day In only its third day, a strike by dock workers at US Gulf and East Coast ports is leading to idled trucks and growing numbers of container ships queuing outside of the ports. SHIPPING: Union, US ports reach tentative agreement, dock workers to return to work on Friday The three-day strike by US Gulf and East Coast dock workers has been suspended until 15 January to allow negotiations to resume, according to a joint statement from the union and ports. INSIGHT: No signs of petchems demand recovery from car sector on the horizon, H2 2025 may be a moment of truth After a strong rebound in car sales last year, the European automotive industry is facing a more challenging environment in the second half of 2024, leading to a drop in petrochemical requirements from car manufacturers. Consumer appetite for new vehicles has become more sluggish following a post-Covid catch-up phase in 2023, mainly due to a mixed economic environment and persistently high interest rates, along with uncertainty on both policy and political developments across the continent. SHIPPING: With strike over, some US ports extending gate hours; container rates fall further With the suspension of the strike at US Gulf and East Coast ports until 15 January, carriers are urging customers to use extended gate times being offered by some ports to collect or deliver any urgent containers to terminals.

07-Oct-2024

HOUSTON (ICIS)–Australian fertilizer firm Minbos Resources, who is advancing the Cabinda Phosphate project in Angola, announced the $14 million loan facility agreement with the International Development Corporation of South Africa Limited (IDC) has been executed. The company said the loan proposal is awaiting credit committee approval, which it said is proceeding favorably, with the completion of the documentation and the normal legal and regulatory processes expected to take several months. “The company is now in a great funding position with a complementary mix of funding solutions to advance the Cabinda Phosphate project. It is wonderful to have the support of the South African IDC for this important project in Sub-Saharan Africa,” said Lindsay Reed, Minbos Resources managing director. “We are receiving tremendous support from some of Angola’s most important banking and investment institutions, which is a testament to the project’s importance for agriculture in Angola. I would like to thank all parties for their continued support in our endeavors.” The Cabinda project, located in northeast Angola, is being developed based on an initial name plate capacity of 150,000 tonnes/year of enhanced phosphate rock with initial production calculated at 50,000 tonnes/year. Previously Minbos said expansion will come in two stages with it planning to add a second and third granulation circuit to reach a name plate capacity of 450,000 tonnes/year after 8 years of operations.

02-Oct-2024

LONDON (ICIS)–Underlying demand for European recycled agglomerates has increased throughout 2024, and is expected to rise sharply as pyrolysis-based chemical recycling scales. The majority of recycled polyolefin agglomerates are currently used by mechanical recyclers. Nevertheless, pyrolysis based chemical recyclers are increasingly targeting agglomerates as a feedstock. While chemical recycling can process waste types that it would be difficult or impossible for mechanical recyclers to use, though, it is a myth that there is no link between the input waste quality and output quality of chemical recyclers, and that chemical recyclers can use any form of waste. Take pyrolysis-based chemical recycling as an example. Pyrolysis-based plants targeting mixed plastic waste as feedstock – with a focus on polyolefins – currently account for ~60% of all operating chemical recycling capacity in Europe according to ICIS Recycling Supply Tracker – Chemical. Typically, pyrolysis-based processes aim to limit chlorine content in bales- due to corrosion risks –  polyethylene terephthalate (PET) content in bales – because it doesn’t pyrolyse and it creates oxygenation – nylon and flame retardants – which also oxygenates the process. They also typically aim to minimise moisture content, because loose water molecules in the reactor can cause changes to pressure values. The production of pyrolysis oil requires an inert atmosphere (i.e. heating in the absence of oxygen). The quality of input waste is one of the largest dictators of output quality across pyrolysis oil grades, dictating the type of impurities and boiling point. Boiling point, chlorine, sulphur, fluorine, nitrogen and oxygen contents are among the key determiners of pyrolysis oil prices – with an average spread of €1,150/tonne currently being seen between the lowest value (tyre-derived) and highest value (naphtha substitute) grades of pyrolysis oil that ICIS prices. Any sorting that needs to be done to remove the presence of these materials in the input bale adds additional cost and slows throughput. Pyrolysis oil can be – and often is – run through an upgrader or purifier to enhance its properties, but the quality of input waste has an impact both on yield and quality – and, therefore, profitability. This is one of the reasons the environmental impact of pyrolysis oil remains unclear and varies from producer to producer. While pyrolysis oil producers continue to test with a wide-range of waste input qualities, many producers are turning to agglomerations of polyolefins, and it is expected to become a leading feedstock for pyrolysis-based chemical recycling in the mid-term. This is in response to some of the challenges chemical recyclers have found with pre-treatment and sorting on site. This is particularly connected to the need to adapt processes continuously to account for continually shifting feedstock mixes. Pre-treating and sorting at waste manager level creates economies of scale and prevents the slowdown in throughput sometimes associated with chemical recyclers sorting on site. The use of agglomerates helps pyrolysis oil producers: Limit impurities such as sulphur, fluoride, oxygen, chlorine and nitrogen in finished pyrolysis oil – which typically results in a higher realizable price for that pyrolysis oil, and greater feasibility for use in a cracker Enable placing feedstock straight into the reactor and thereby save on capital expenditure Ensure a more consistent feedstock, with pre-treatment handled at waste managers which benefit from economies of scale and long-standing technical know-how Avoid slowing throughput and the expense of onsite sorting Avoid degradation and allow players to stockpile material ahead of plant scale-ups Target specific waste input mixed (although this can result in additional cost premiums) In response to the growing interest in recycled polyolefin agglomerates, ICIS has launched a new recycled agglomerates price index as part of its mixed plastic waste and pyrolysis oil (Europe) pricing service. The new index is for spot prices of agglomerated forms of mixed polyolefin material containing at least 95% polyolefin content and a maximum moisture content of 3%. It is assessed weekly on an ex-works Europe basis. The mixed plastic waste and pyrolysis oil (Europe) pricing service also offers pricing for mixed polyolefin bales, high plastic content refuse derived fuel (RDF) bales, reject unsorted plastic waste bales from municipal recover facilities (MRFs), and 3 spot price series for pyrolysis oil (tyre derived, non-upgraded, and naphtha substitute). For more information on these new series, or to share feedback, please contact Mark Victory at mark.victory@icis.com.

02-Oct-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 27 September. Intensifying seller competition pushes Europe plasticizer DOTP spot prices to nine-month low Intensifying competition between Turkish, northeast Asian and local sellers pushed down dioctyl terephthalate (DOTP) prices in the European plasticizers spot market. BASF sets new corporate strategy, mulls ag solutions IPO, to exit Brazil coatings BASF is planning an overhaul of its structure, marking a clearer delineation between businesses it considers core and “standalone” units serving specific industries, and is readying the separation of its agricultural solutions operations. Europe PX imports down more than a third in H1 amid softer demand, freight costs Imports of paraxylene (PX) into the EU and the UK fell by 35.6% in the first half of 2024 year on year because of weaker downstream demand and higher freight costs, according to new data from the ICIS Supply and Demand database. Europe PP September contract prices soften on underwhelming demand European polypropylene (PP) contract prices have softened for September, despite initial offers of increases. September flash PMIs show eurozone economy stagnating, UK still growing Initial purchasing manager index (PMI) figures for the eurozone reveal that the region’s economy is contracting, with the previously resilient services sector weakening and the manufacturing recession deepening.

30-Sep-2024

LONDON (ICIS)–Ahead of the approaching European Petrochemical Conference (EPCA) in Berlin 7-10 October, ICIS editors discuss market conditions in a variety of solvent markets. Market updates on methyl ethyl ketone (MEK), methyl isobutyl ketone (MIBK), isopropanol (IPA), phenol, acetone, toluene, mixed xylenes, glycol ethers and propylene glycol ethers, butyl acetate and ethyl acetate Trade flows and impact of freight rate movements Overcapacity versus low demand levels Upcoming maintenance programs In this episode, Jane Massingham talks to editors Nick Cleeve, Jane Gibson, Zubair Adam, Cameron Birch and Marion Boakye.

27-Sep-2024

SINGAPORE (ICIS)–Macroeconomic challenges in China have kept overall sentiment bearish in Asia’s petrochemical markets, but there was a late pick-up in demand for some products just days before a week-long holiday in the country in October. China fresh economic measures stimulate buying in glycerine market Pre-holiday restocking not as strong as expected Outlook bearish for aromatics Initial excitement over China's new set of economic stimulus appears to be fizzling out based on crude price movement. At midday, Brent crude was down 21 cents at $74.96/bbl, while US crude was down 26 cents at $71.30/bbl, after gaining by more than $1/bbl overnight. China’s measures amid doubts about the world's second-biggest economy's ability to achieve its 5% GDP growth target followed the US Federal Reserve’s jumbo 50-basis point (bps) cut in interest rates on 18 September. People's Bank of China (PBoC) measures announced on 24 September Source: Oxford Economics/China State Council "We believe the recent rapid development in both domestic and external conditions were the major driving forces behind the PBoC's latest move," Oxford Economics' lead economist Betty Wang said in a research note. "Domestically, the weaker-than-expected August economic data suggest that the risk of missing this year's growth target has grown," she said. "Externally, the Fed's outsized rate cuts last week, along with other major central banks' entering easing mode, has eased the depreciation pressure on the Chinese Yuan and provided the PBoC more room to ease monetary policy," Wang added. Concerns about the economic health of the world’s two biggest economies have been weighing down on sentiment across the equities and commodities markets. For petrochemicals, a slower-than-expected demand pick-up ahead of China’s October national holidays have further dimmed prospects of market recovery. Petrochemical demand is typically seasonally strong in September, but pre-holiday restocking in China failed to gain momentum during the month until the government announced on 24 September a basket of measures to boost economic activity. In Asia’s refined glycerine market, buyers in China were making enquiries for spot cargoes. Mid-Autumn holidays early last week in China, Taiwan, Japan, and South Korea had also caused temporary pause in market activities. China’s economy is sputtering amid a property downturn. The sector remained on a slump, with total investments in the industry registering a 10.2% year-on-year decline in January-August 2024, which also weighs down on the construction industry. Property and construction are main downstream industries for petrochemicals. Chinese factories were also in contraction mode for the fourth straight month in August, registering official purchasing managers’ index (PMI) readings of below the expansion treshold of 50. In the polyethylene (PE) pipe market, major suppliers have maintained firm offers to China on recent gains in upstream crude market, while most downstream converters have completed September procurement and were waiting for October offers. Poor demand had recently sent toluene prices in Asia tumbling to year-to-date lows, while prices of solvents such as ethyl acetate (etac) and butyl acetate (butac) have slumped to multi-year lows. ICIS analyst Jimmy Zhang expects most petrochemical products to post price declines in September, extending the weakness in August, amid declines in upstream crude prices and the overall bearish sentiment. ICIS forecasts that 26 out of the 31 products it tracks to post lower average prices this month, led by paraxylene (PX) and purified terephthalic acid (PTA). Focus article by Jonathan Yee and Pearl Bantillo Additional reporting from Judith Wang, Melanie Wee and Helen Yan Thumbnail image: Lianyungang Port in east China's Jiangsu Province on 18 September 2024 (Shuttertock)

25-Sep-2024

SINGAPORE (ICIS)–China’s petrochemical futures markets surged on Tuesday following announcement of fresh measures to rev up activity in the world’s second-biggest economy. As the close of trade on Tuesday, polyvinyl chloride (PVC) was leading the charge in China’s domestic futures market, with a 3.3% increase, with seven others also posting strong gains. Product Prices at close of trade (CNY/tonne) % change from 23 Sept Linear low density polyethylene (LLDPE)                                   7,969 1.2% Polyvinyl chloride (PVC)                                   5,388 3.3% Ethylene glycol (EG)                                   4,459 1.9% Polypropylene (PP)                                   7,360 1.4% Styrene monomer (SM)                                   8,559 0.7% Paraxylene *                                   7,012 2.4% Purified terephthalic acid (PTA)*                                   4,930 2.2% Methanol*                                   2,396 1.6% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange Shares of major Chinese chemical producers traded in Shanghai and Shenzhen bourses also increased, welcoming the central bank’s economic measures. Company  Closing prices on 24 September (CNY/share) % change from 23 Sept Hengli Petrochemical 13.12 5.4% PetroChina 8.36 4.4% Rongsheng* Petrochemical 8.84 4.1% Satellite Chemical* 16.08 7.7% Sinopec 6.76 4.3% Wanhua Chemical 78.96 4.4% Sources: Shanghai and *Shenzhen bourses The Shanghai composite index surged by 4.15% to close at 2,863 on Tuesday. It was the index’s biggest single-day rally since 6 July 2020. People’s Bank of China (PBoC) governor Pan Gongsheng announced in a press conference the new economic measures, which include cuts on banks’ reserve requirement ratio (RRR), key policy rate and mortgage rates to revive the economy. China's economic weakness has been a major drag on overall sentiment across the equities and commodities markets this year. “The move [basket of stimulus by China’s central bank] is bold by historical standards and came earlier than we had expected,” said Betty Wang, lead economist at UK-based Oxford Economics, in a research note on Tuesday. “The policy measures include cuts to the policy rate and reserve requirement ratio (RRR), adjustment to mortgage lending and policy support to stock market,” Wang said. “The continuous weakness in domestic economy and the outsized rate cut from the [US] Federal Reserve were the likely catalysts behind the PBoC's latest move,” the economist said. This is the first time since the COVID-19 pandemic that the central bank offered a combination of rate cuts, RRR cuts, and structural monetary policies as stimulus measures. A 20-basis point (bps) interest rate cut in the 7-day reverse repurchase (repo) rate and a broad-based 50bps RRR cut are also rare, Oxford Economics noted. Focus article by Fanny Zhang ($1 = CNY7.04) Thumbnail image: At a container terminal at Lianyungang Port in east China's Jiangsu Province, 18 September 2024. (Shutterstock)

24-Sep-2024