Xylenes

HOUSTON (ICIS)–Australian global miner Rio Tinto has announced it will develop Pongamia seed farms in Australia as part of a new biofuels pilot and explore the potential of Pongamia seed oil as a feedstock for renewable diesel, a cleaner alternative to traditional fossil fuels. The company also wants to determine if it can contribute to Rio Tinto's renewable diesel needs while potentially contributing to the growth of a new biofuel sector in Australia. Pongamia is a legume tree native to Australia which is fast-growing, resilient and produces oil-rich seeds that can be processed into renewable diesel with the seed able to be harvested annually, leaving the trees and soil intact to store carbon dioxide. ​ Rio Tinto said it is in the final stages of acquiring approximately 3,000 hectares of cleared land near Townsville in north Queensland to establish farms to study growth conditions and measure seed oil yields. It has partnered with Midway Limited, to oversee the planting and management of the Pongamia seed farms and who will also engage with nurseries, agricultural experts and research organizations throughout the pilot. As part of its ongoing efforts to achieve net-zero Scope 1 and 2 carbon emissions by 2050, Rio Tinto is actively exploring the potential of biofuels in the low-carbon energy mix. The company said it sees biofuels as an avenue to reduce reliance on fossil diesel, while fleet electrification technologies mature. It is also investigating how biofuels could be used in scenarios where electrification may face practical limitations. “Diesel accounts for around 10 percent of our emissions footprint in Australia. While we continue to pursue electrification as the long-term solution for displacing the majority of our diesel use, the Pongamia seed pilot is an important parallel pathway that could reduce our reliance on diesel in the mid-term,” said Jonathon McCarthy, Rio Tinto Chief Decarbonisation Officer. “Australia does not yet have a biofuel feedstock industry sufficient to meet domestic demand. A sustainable biofuels industry here could enhance the region’s fuel security, create local economic opportunities and contribute to emissions reductions targets.” The company said this pilot follows a smaller-scale trial at Rio Tinto Gove operations in the Northern Territory where Pongamia saplings were planted to learn more about their response to low soil quality, heat and other climatic conditions in northern Australia.​

20-Sep-2024

SINGAPORE (ICIS)–Thai conglomerate Siam Cement Group (SCG) plans to use ethane imported from the US as feedstock for its Long Son Petrochemical (LSP) complex in Vietnam to boost the project’s long-term competitiveness. Storage, supporting facilities for ethane to be built on site Ethane targeted as major feedstock for LSP cracker; C2 market “turbulence” expected LSP commercial operations start October SCG is in talks with a contractor for the new ethane storage project, with construction of the facilities expected to take about three years to complete, the company said in roadshow presentation on 16 September. “The site is equipped with a central utility system, ready for the installation of ethane gas storage tanks and pipelines,” the company said in a separate statement on 16 September. SCG has yet to finalize the capital expenditure for the project, and the prospective US ethane supplier for LSP was not disclosed. The $5.4bn LSP project in Ba Ria-Vung Tao province is Vietnam’s first integrated petrochemical complex and is 100%-owned by Thai conglomerate SCG. The mixed-feed cracker at the site currently uses propane and naphtha feedstocks imported from Qatar under a long-term supply deal. The cracker can produce 950,000 tonnes/year of ethylene; 400,000 tonnes/year of propylene; and 100,000 tonnes/year of butadiene (BD). SCG said that LSP is already operating flexible gas cracker which can use a variety of feedstocks, including ethane, propane, and naphtha. Ethane imported from the US is currently cheaper by $200-400/tonne than existing feedstock, SCG said, noting that the average price of ethane has been around 40% lower than that of naphtha and propane over the past three years. The feedstock derived from shale gas also provides greater price stability as it is linked to US natural gas prices, unlike naphtha, which is influenced by oil price fluctuations. FEEDSTOCK DIVERSIFICATION The enhancement to LSP's feedstock flexibility is part of SCG's efforts to bolster its chemicals business in the face of global oversupply, low demand and oil price volatility, SCG said. For ethylene (C2), the company expects "future turbulence" in the market, especially in 2027-2028 amid a wave of new global cracker additions, especially in China. Global ethylene supply is projected by SCG to grow at a slower average rate of around 3-4% in 2025-2030, compared with 5% in 2019-2024. China will comprise around 53% of new ethylene supply additions in 2025-2030, it noted. SCG expects an "extended chemicals trough with low margin" in 2025-2030 amid continued naphtha price volatility. “The current global situation and the future outlook over the next 2-5 years will be marked by increased volatility,” SCG CEO and president Thammasak Sethaudom said on 16 September. “All SCG businesses are moving forward with strategies that align with these dynamics while also reducing carbon dioxide emissions…to ensure long-term competitiveness.” LSP COMMERCIAL OPERATIONS START OCTOBER The LSP complex has completed performance test runs in September and is on track to start commercial operations next month, according to SCG. Its utilization rate following start-up will be "determined by global demand dynamics", it said. LSP’s downstream plants include a 500,000 tonne/year high density polyethylene (HDPE) unit; a linear low density PE (LLDPE) unit of the same capacity; and a 400,000 tonne/year polypropylene (PP) unit. The cracker had an outage in February due to a technical issue and resumed normal operations in August. It had declared a force majeure in February due to issues at the cracker that also shut its downstream PE and PP units. Credit ratings agency Fitch Ratings in a note on 17 September said that it expects LSP to ramp up its utilization rate to 70-80% in 2025, “supported by its cost competitiveness versus imports and the flexibility to use both propane and naphtha as feedstock”. Imports currently fulfil nearly all of Vietnam's petrochemical requirements. Focus article by Nurluqman Suratman Thumbnail photo: Aerial view of SCG's Long Son Petrochemical Complex in Vietnam (Source: SCG)

19-Sep-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 13 September. Customers more willing to pay green premium as net zero transition gathers pace 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. Global oil demand growth lowest since 2020 on China slowdown Global crude oil demand continued to decelerate in the first half of the year, the International Energy Agency (IEA) said on Thursday, with consumption growth of 800,000 bbl/day year on year the weakest since 2020. IPEX: Index falls in August as weak demand, softer crude put downward pressure on chemical prices in Asia The ICIS Petrochemical Index (IPEX) was down 1.3% in August month on month as weak downstream demand and softer upstream crude oil costs continued to exert downward pressure on chemical prices in northeast Asia. Europe PX, OX spot prices tumble on softer Asian market, lower contract values Europe paraxylene (PX) and orthoxylene (OX) spot prices plummeted week on week in the week ending 6 September, on the back of softer values in the influential Asian market and lower domestic contract prices, respectively. Demographic drag on chemicals to deepen A continuing flow of poor economic data caused further stock market jitters in September, and as the prospect of a meaningful recovery in the global economy recedes into next year, new analysis suggests that the demographic drag on growth may be stronger than previously thought.

16-Sep-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 13 September 2024. Asia LAB struggles amid crude oil weakness; Q4 supply to tighten By Clive Ong 13-Sep-24 13:40 SINGAPORE (ICIS)–Asia’s linear alkylbenzene (LAB) market remains in the doldrums with sentiment staying cautious following recent slippages in crude oil prices, while supply could tighten in the fourth quarter. INSIGHT: China-US trade tensions build as anti-dumping cases increase By Fanny Zhang 12-Sep-24 18:35 SINGAPORE (ICIS)–The US has become the top target of China’s anti-dumping cases for chemical imports, underscoring growing trade barriers between the world's two biggest economies. Saudi Arabia fosters closer ties with China; Aramco, Chinese firms sign fresh deals By Nurluqman Suratman 12-Sep-24 12:39 SINGAPORE (ICIS)–Energy giant Saudi Aramco has signed new agreements to advance separate expansion plans with Chinese petrochemical producers Rongsheng and Hengli. China Aug petrochemical markets tumble; weak demand persists By Yvonne Shi 11-Sep-24 16:38 SINGAPORE (ICIS)–Domestic prices of most petrochemicals in China declined in August due to weak demand and new capacity, with not much improvement in market conditions expected throughout September. Asia solvent MX facing headwinds in Sept amid various bearish factors By Jasmine Khoo 10-Sep-24 12:13 SINGAPORE (ICIS)–Within Asia, trading activity for solvent grade mixed xylenes (MX) in certain import markets like southeast Asia is poised to take a hit going forward into the later part of September. Heavy rains, floodings continue in north Vietnam in Yagi’s wake By Nurluqman Suratman 09-Sep-24 16:42 SINGAPORE (ICIS)–Heavy rains and floodings continued in northern Vietnam on Monday, two days since Super Typhoon Yagi made landfall in the region and killed more than 20 people. UPDATE: Sumitomo Chemical to close two Singapore MMA/PMMA lines by end-Sept By Nurluqman Suratman 11-Sep-24 12:48 SINGAPORE (ICIS)–Sumitomo Chemical will close two of its three production lines for methyl methacrylate (MMA) monomer and polymethyl methacrylate (PMMA) in Singapore by the end of September this year, the Japanese producer said on Wednesday. PODCAST: Weak fuel LPG demand to weigh on China 2024 propane/butane imports By Lillian Ren 11-Sep-24 10:50 SINGAPORE (ICIS)–ICIS has revised down its forecast for China’s combined imports of propane and butane for 2024 because of weaker-than-expected demand in fuel applications. Wang Yen, Senior Analyst speaks with Lillian Ren, analyst on the China propane, butane and LPG markets. UPDATE: Indonesia starts ‘safeguard measures’ probe into LLDPE imports By Izham Ahmad 10-Sep-24 18:09 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.

16-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

BUENOS AIRES (ICIS)–For years, Latin American petrochemicals companies have been trying to increase diversity within to better represent the consumers they want to sell their products to – without much success. Company boards and middle management levels continue to be mostly populated by men, and most of them tend to be white, in a region where ethnic minorities are sometimes the majorities. The environmental, social, and governance (ESG) mantra has been used so many times that it has become a bit futile. A few statistics to show off positive trends are one thing – real change is another. Companies need to go the extra mile to be as plural as society. And in some Latin American countries like Brazil, that mostly means one thing: blackness, in the country outside Africa with the largest black population. They will need to hire and promote people who will not conform to the norm; visionary people who will be wise enough to know a company will not reach its sales potential until they try, at least, to resemble the society they operate in. Brazil’s polymers major Braskem – the largest petrochemicals producer in Latin America – seems to have found one of those people: meet Debora Ferraz, global senior HR manager at the company and specialist in diversity, equity, and inclusion (DE&I) issues. “My job is not only about gender inequality, although that is still a big part of it, of course. My job goes much further than that and it involves making Braskem more like the country: in Brazil, 50% of the population are black or have black roots,” said Ferraz. “We have now established a system in which the HR person looking to hire will not see in what university the candidate coursed his or her studies. Before, we always ended up hiring people who were anything but plural: they all spoke English, they all came from the same universities. Behavior is now the key element in our hiring processes.” Ferraz went on to say that in Braskem’s Mexican operations, a country with painful statistics showing sexism is women’s everyday life, a hiring process will not go ahead if there is not at least one woman shortlisted. In Europe, where nationality is probably the biggest factor determining discrimination, Braskem pays more attention to that; in the US, it is veterans of war, many of whom find themselves lost in a competitive labor market after 20 or 30 years of service, she said. Ferraz was speaking to delegates at an event about sustainability organized by the Latin American Petrochemical and Chemical Association (APLA). Her talk captivated the audience, and it was recurrently referred to thereafter. RACISM: LONG SHADOWBrazil is Latin America’s largest economy, with 220 million consumers, and it is a case increasingly studied when it comes to racism and discrimination. The shadow of four centuries of Portuguese Empire rule, where enslaved black Africans composed the bread and butter of the workforce, have left a mark present still today, in all aspects of life. “The black and brown [Brazilians with black roots] populations represent 9.1% and 47% of the Brazilian population, respectively. Yet, the share of these population is lower in the indicators that reflect higher levels of life conditions,” said a report by Brazil's statistics office IBGE in 2022. “This indicator already shows a disadvantage of those populations when inserting in the labor market. The proportions of the black and brown populations among those unemployed and underutilized are higher than what they represent in the labor force,” it added. Racism is so ingrained in Brazil that when the country officially abolished slavery in 1888, the last nation in the western hemisphere to do so, it gave no rights worth the name to its black population and even decided to go as far as Italy or Japan to look for the workers it needed to feed its nascent industrial sectors. Hence the large Japanese or Italian minorities present in the country, who were allowed to integrate fairly well and some of whom went on to build business empires, quickly becoming part of the economic fabric. Meanwhile, blacks remained at the favelas, Brazil’s famous shanty towns, only mixing with the non-black population when they went to do the badly paid jobs, many times in the informal economy. Fernando Henrique Cardoso, the Brazilian center-right president who stabilized the economy in the 1990s and gave way to the successes of President Luiz Inacio Lula da Silva in his first and second terms (2001-2011), has become a reference in racism studies. A quote by Cardoso lies in one of the walls of Sao Paulo’s Museu Afro-Brasil, which only opened its doors in 2004 and is a painful journey through Brazil’s most shameful past, a quote which sums up why the integration of all Brazilians will be a long-term and laborious enterprise. “An economic system which was based in slavery and violence for four centuries creates a deformed society,” said Cardoso. And a deformed society will invariably take many decades – hopefully not centuries – to be fixed. Companies like Braskem should make more efforts to bring people like Ferraz in but, most importantly, listen to what they have to say and follow their advice – Ferraz is black herself, and without doubt she will have suffered racism. “We need to aim to have a good representation of society within the company. To get serious with this, we must have quantitative targets: we can do continuous training with employees, but if we don’t set clear targets, nothing will be achieved,” said Ferraz, who has been in her current post since 2022. “Up to that year, 30% of our workforce was black but that figure had not changed in the preceding 15 years, no matter how many trainings we did. Since 2022, that figure has increased to 37%. What has changed? That we set clear targets, and we are fighting hard to achieve them. I speak monthly with the CEO and with other board members, because they are the first ones who must believe in this.” Speaking at the same panel, Paola Argento, head of diversity at Argentina’s energy and petrochemicals major YPF, corroborated that until a company does not employ a plurality of workers – each of them feeling free enough to bring its own singularity to the workplace – a company will not reach its potential. “If we all come from the same universities, the final product we offer will not be innovative. Plurality allows us to produce better products and services. These days, most consumers do care about these issues, so the lack of plurality and innovation will end up negatively affecting sales,” said Argento. “But to achieve this true plurality of thinking, the highest executives at a company have to understand it and be fully behind it.” The APLA sustainability event runs in Buenos Aires on 4 September. Front page picture source: Brazil's statistics office IBGE Insight by Jonathan Lopez

04-Sep-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 30 August. Europe OX post-summer restocking intentions unclear as weak demand lingers Restocking operations after the summer were once common practice in the European orthoxylene (OX) market, but this year could be different. BASF to shut down adipic acid production at Ludwigshafen next year BASF is to end production of adipic acid and several downstream units at Ludwigshafen, Germany, as part of structural changes underway at the site, the company said on Thursday. Rising costs, outages fail to rattle sluggish propylene oxide market in Europe Outages at domestic suppliers, a local unit being flagged for a potential sale and rising production costs have failed to rattle a sluggish European propylene oxide (PO) market. Europe August nylon 6,6 contract prices soften in a slow market European nylon 6,6 contract prices for August softened from July levels, posting highly varied monthly deltas. Global spot index slips on lower prices in northeast Asia, US Gulf The global spot ICIS Petrochemical Index (IPEX) slipped by nearly one-percentage point in the week ending 23 August, on the back of price falls in northeast Asia and the US Gulf.

02-Sep-2024

SAO PAULO (ICIS)–Brazil’s analysts and economists are increasingly thinking inflation will continue to rise in 2024 but remain upbeat about GDP growth this year, the Banco Central do Brasil (BCB) said in its weekly Focus Survey. Rates to stay higher for longer on inflation uptick Currency to remain weak to year end GDP growth robust this year, mixed opinions on 2025 The survey, on the prospects for the largest Latin American economy, revised upward projections for inflation, GDP growth, and the exchange rate of the real in 2024. Meanwhile, the recent uptick in inflation may not be enough for the central bank to raise interest rates, but the consensus among analysts is now that the main interest rate benchmark, the Selic, could rise in 2026. INFLATION According to the survey, economists now expect the 2024 IPCA consumer price index to end the year at 4.25%, up from the 4.22% projection in the previous week and the sixth consecutive weekly increase. The 2025 inflation outlook edged up to 3.93% from 3.91%, while projections for 2026 and 2027 remained steady at 3.60% and 3.50%, respectively. The latest inflation figures for July showed prices had risen for a fourth consecutive month, with the annual rate of inflation at 4.50%, well above the April low of 3.69%. However, official data this week for the so-called IPCA-15 – which measures the month’s first fortnight’s price rises – showed a small decrease from 4.50% to 4.35%. Analysts at Capital Economics, who have been suggesting the central bank could hike the Selic as soon as this year to contain the latest rise in inflation, said the IPCA-15 data published this week was likely to make the central bank pause for now when it meets again to set monetary policy in September. “The breakdown of the data showed that the fall in inflation was pretty broad based. Housing and health inflation fell particularly sharply to 3.6% year on year [in the first fortnight of August] and 5.8% year on year, respectively, although this was partly offset by a rise in transport inflation,” said Capital Economics. “Developments in underlying inflation were a bit more concerning. Our estimate of underlying core services inflation – which strips out volatile items – edged up in the first half of August.” SELIC The monetary easing cycle that started a year ago as inflation was coming down is now considered well and truly over. Most analysts expect the central bank to keep interest rates on hold for the rest of this year and potentially in 2025, with only a few forecasting a rise. Earlier in August, the bank left the Selic unchanged at 10.50%. During the inflation crisis, the Selic peaked in 2023 at 13.75%. This week, the Focus Survey showed Brazilian economists and analysts agree that the Selic will not be lowered this year – for the 10th consecutive week, despite the latest tribulations in the exchange rate and investors’ doubts about the government’s commitment to fiscal discipline. However, the average in this week’s survey showed they are still forecasting a half a percentage point fall for 2025 to 10.0%, also unchanged from the previous survey. The novelty this week was that, from an earlier projection for the Selic at 9.0% in 2026, economists have now upgraded that and expect interest rates to end that year at 9.5%, the first change in the forecast in 14 weeks. The 2027 rate expectation remained at 9.0%. “Many Copom [monetary policy committee at the BCB] members have sounded very hawkish in recent media comments, opening the door to a rate hike,” said Capital Economics this week after the IPCA-15 data was published. “The next meeting in September will be a close call, but we think that, on balance, the fall in inflation in the first half of August, alongside the Fed’s seeming confirmation that it will kick off its easing cycle in September, mean that it’s a bit more likely that Copom will leave rates unchanged at 10.50%.” GDP One bright spot in this week’s central bank survey was that Brazil’s economy is expected to continue on a strong recovery path, with analysts now forecasting GDP growth of 2.43% in 2024, up from 2.23% in earlier surveys. However, the forecast for 2025 was for a minor dip to 1.86% from 1.89%. Unlike Brazilian economists, the IMF said it expected Brazil’s economy to grow 2.4% in 2025 in July, in part as a result of the reconstruction efforts at Rio Grande do Sul. Brazil’s southernmost state, a key industrial and agriculture producer in the country, was hit by the severe floods in May and its economy came to a standstill for nearly a month. According to this week’s survey, GDP growth estimates for 2026 and 2027 remain steady at 2.0%. REAL EXCHANGE RATE The median projection for the exchange rate for the real to the US dollar in 2024 increased slightly to reais (R) 5.32, from R5.31. The real has sharply depreciated this year versus the dollar on the back of higher inflation and investors’ fears that the cabinet presided over by Luiz Inacio Lula da Silva wants to expand public services at the expense of a larger fiscal deficit. Lula’s direct attacks on the governor of the central bank have not helped either. As such, most economists no longer expect the exchange rate to hover around R5 to the dollar as it did at the beginning of the year. For 2024, they are now forecasting a dollar to be worth R5.32, while in 2025 it would be at R5.30 and in 2026 at R5.25. Focus article by Jonathan Lopez

28-Aug-2024

HOUSTON (ICIS)–Canada plans to impose a 100% tariff on all electric vehicles (EVs) made in China, effective on 1 October, and on top of the 6.1% tariff it already imposes on such automobiles, the government said on Monday. The tariff includes electric and certain hybrid passenger automobiles, trucks, buses and delivery vans, the government said. In addition, the government plans to impose a 25% tariff on imports of steel and aluminum products from China, effective on 15 October. The tariffs will not apply to Chinese goods in transit on the day that the duties come into force. Canada could impose more tariffs against other Chinese imports following a 30-day review, it said. Those imports could include batteries and battery parts, semiconductors, solar products and critical minerals. For other countries, Canada plans to limit which ones are eligible to participate in its Incentives for Zero-Emission Vehicles (iZEV), Incentives for Medium and Heavy Duty Zero Emission Vehicles (iMHZEV) and Zero Emission Vehicle Infrastructure Program (ZEVIP). Eligibility would be limited to products made in countries with which Canada has negotiated free trade agreements. CANADA'S EV DUTIES FOLLOW THOSE BY US AND EUEVs made in China have become the target of punitive duties by a growing number of regulators. Earlier in the month, the European Commission announced plans to impose up to 36% countervailing duties on EVs from China. US tariffs on Chinese EVs were scheduled to reach 100% on 1 August. EVs typically consume more plastics on a per unit basis than automobiles powered by internal combustion engines (ICEs). EVs also pose different material challenges, which is increasing demand for different plastics and compounds. Policies that prolong the use of ICE-based vehicles could extend the operating life of the nation's refineries. Companies could be more willing to invest in maintenance and repairs if they are confident that they could recoup their investments. Refineries produce many building block chemicals, such as propylene, benzene, toluene and mixed xylenes (MX). Thumbnail shows an EV charging station. Image by Xinhua/Shutterstock

26-Aug-2024

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Blue flake prices rise at the low end in eastern Europe Wide range of views on eastern Europe bale prices Mixed coloured flake demand remains poor September price talks getting underway

23-Aug-2024