Energy

HOUSTON (ICIS)–Global hydrogen solutions provider Plug Power has announced the signing of a memorandum of understanding (MOU) with Allied Green Ammonia (AGA) to supply electrolyzer capacity for a proposed ammonia facility in Australia. The terms call for up to 3 gigawatts of electrolyzer capacity for AGA’s upcoming hydrogen to ammonia facility with the company stating that the green hydrogen produced by their electrolyzers help decarbonize the ammonia production process. AGA plans to establish a 2,500 tonne per day green ammonia operation with the proposed location at Gove Peninsula seen as being strategically placed to align with Asia trading partnerships. Following the MOU, Plug and AGA plan to enter an agreement to initiate a Basic Engineering and Design Package (BEDP) for the project. The BEDP is expected to advance mid-May of this year, with final investment decision planned for Q4 2025, with the progressive delivery of the 3GW electrolyzer supply slated to begin in Q1 2027. “Ammonia producers have recognized the substantial advantages of cost and carbon reduction through electrolysis-based hydrogen,” said Andy Marsh, Plug Power CEO. “We’re thrilled to sign this MOU and partner with AGA. Our expertise in constructing and operating large-scale hydrogen production facilities and our PEM electrolyzer manufacturing capability to support their 3GW project position us as the ideal partner for this endeavor.” AGA said this agreement is a critical first step and a testament to the alignment of the companies’ respective visions. “This agreement, in light of Plug’s unrivalled expertise and complementary technologies, is a strong vote of confidence in our capabilities and a significant milestone in the planned delivery of Allied Green’s facility, which will be one of the most energy efficient green hydrogen and green ammonia projects globally,” said Alfred Benedict, Allied Green Ammonia managing director.

03-May-2024

HOUSTON (ICIS)–Global average rates for shipping containers rose for the first time since January, workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike, and the US regulator that oversees railroads finalized a rule allowing reciprocal switching, highlighting this week’s logistics roundup. CONTAINER RATES Shipping container rates have been rising steadily since December when attacks by Houthi rebels on commercial vessels in the Red Sea forced carriers to take the longer route around the tip of the African continent before leveling off last week. This week, the global average for 40-foot shipping containers rose by 1%, according to supply chain advisors Drewry and as shown in the following chart. Rates from Shanghai to the US East Coast edged slightly higher, but rates from China to the West Coast edged slightly lower, as shown in the following chart. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said that the overall container market has settled into a new routine that avoids the Red Sea. “Though significant backlogs, congestion and equipment shortages seen during the first few weeks of the crisis have dissipated, adjustments have resulted in some moderate but ongoing disruptions,” Levine said in a weekly update. He said that even after falling drastically since the beginning of the year, prices remain well above normal and are likely to increase relative to this new floor as demand is set to increase for peak season. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID CHEMICAL TANKERS US liquid chemical tanker freight rates assessed by ICIS were unchanged this week. From the US Gulf (USG) to Asia, the market has been quieter this week as a holiday-shortened week has sidelined some key players. There have been only a few parcels quoted, which is placing downward pressure on freight rates for smaller lots. Larger base cargoes of monoethylene glycol (MEG), methyl tertiary butyl ether (MTBE), and methanol have been popular chemicals on this route, keeping larger freight rates steady. From the USG to India, the market has been very quiet. PORT OF BALTIMORE Since the opening of a fourth channel into the Port of Baltimore, 171 commercial vessels have transited the waterway, including five of the vessels that were trapped inside the port after the containership Dali struck the Key Bridge, causing it to collapse, according to the Unified Command (UC). The MSC Passion III entered the port on 29 April, according to vesselfinder.com, making it the first container ship to enter the port since the accident. The closing of the port did not have a significant impact on the chemicals industry as chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. But a market participant in Ohio told ICIS previously that it is seeing delays in delivery times for imports as vessels originally destined to offload in Baltimore are getting re-routed to other ports. PANAMA CANAL Wait times for non-booked vessels ready for transit edged for higher both directions this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 2.5 days for northbound traffic and 5.6 for southbound traffic. The PCA will increase the number of slots available for Panamax vessels to transit the waterway beginning 16 May and will add another slot for Neopanamax vessels on 1 June based on the present and projected water levels in Gatun Lake. RAILROADS Workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike. A first work stoppage could occur as early as 22 May, if no new collective agreements are reached by then, officials at labor union Teamsters Canada Rail Conference (TCRC) said in a televised announcement on 1 May. The rail carriers warned that a work stoppage would disrupt supply chains throughout North America and constrain trade between Canada and the US and Mexico. The two railroads account for the bulk of freight rail traffic in Canada. Meanwhile, chemical industry participants were largely supportive of a final rule adopted by the Surface Transportation Board (STB) on reciprocal switching for inadequate service by railroads, but think the scope was too narrow and it does not cover a significant portion of rail traffic. For the first time, the STB said it is requiring that three service metrics be maintained on a standardized basis across all Class 1 railroads. In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. Rail is also the predominant shipping method for US ethanol. Additional reporting by Kevin Callahan and Stefan Baumgarten Please see the Logistics: Impact on chemicals and energy topic page

03-May-2024

RIO DE JANEIRO (ICIS)–Huntsman’s assets in Europe are not energy intensive and have been spared from the energy crisis, but more broadly, the 27-country EU is still lacking a comprehensive policy to address the issue, the CEO at US chemicals major Huntsman said on Friday. Peter Huntsman, one of the chemical industry’s most outspoken CEOs, said the company is not planning to divest any asset in Europe but said the region should stop its “nonsense” about reindustrialization and implement policies that create actual economic growth. The CEO added he is feeling “bullish” about the coming quarters regarding demand, arguing the chemical industry had gone to “hell” and was just coming back from the steep low prices of 2023. In North America, Huntsman said the construction industry should post a marked recovery in the coming quarters after two years in the doldrums because of high interest rates because, he argued, even with current interest rates, the industry will adapt. Huntsman’s sales and earnings in the first quarter fell again, year on year, as higher sales volumes could not offset low selling prices; the company said, however, that a notable improvement in sales volumes quarter on quarter should be a signal that the recovery is underway. Among others, Huntsman produces polyurethanes (PUs), which are widely used in the construction and automotive sectors. EUROPE NONSENSEPeter Huntsman on Friday first referred to the EU’s need to stop its “nonsense” about reindustrialisation, without elaborating further, but he was more measured when asked about the company’s assets in that region. He nonetheless made clear that he thinks European governments have yet to formulate, two years into the region’s biggest energy crisis in decades, appropriate policies to address the issue. “What I am most concerned about Europe is high energy costs. Most of our businesses there are not energy intensive assets, so they are competitive; in fact we have some strong businesses there, and our margins in Advanced Materials [the division] are stronger there than in other parts of the world,” said Huntsman, speaking to reporters and chemical equity analysts on Friday. “There are businesses in Europe in which you will do OK, such as aerospace, lightweighting. But if you are energy intensive, if you produce fertilizers, glass, cement… you have some portfolio concerns there. Energy prices are too high, and this is not being addressed by governments, they still have to come up with realistic policies to address that.” Europe’s construction has also taken a hit from the crisis after interest rates shot up to bring down inflation, with projects put on hold and many building companies in financial distress. Huntsman’s CEO said he is not hoping for a strong recovery anymore in that sector in Europe, but simply for stability, which could come with governments taking more decisive action to prop up GDP growth. “If we look at the past two years… We are looking for stability: it is the volatility that concerns us the most. We need to see Europe stop its the nonsense policies around reindustrialization and get the economy growing once again,” he said. See Huntsman assets in Europe at bottom table. NORTH AMERICA CONSTRUCTIONPeter Huntsman was feeling more optimistic about North America’s construction sector, where even if high interest rates stay for longer, builders will adapt to the situation, easing the way towards a recovery. “US builders are doing two things: if interest rates were to stay where they are, they are going to adapt, perhaps building smaller units, and if rates do come down, that will open up demand quite a bit higher than it has been in the last couple of years. There are big gaps [in housing stock] which need to filled,” said Huntsman. “I am increasingly feeling better and better [about an improvement in demand]. In Q1 we saw a lot of inventory drawdown, now we are seeing a slow, steady recovery as we try to get back to average inventory levels. By and large inventory levels feel pretty thin in MDI [methylene diphenyl diisocyanate] and we look forward to moderate growth in coming quarters.” MDI is consumed mainly in PU foams, used in construction, refrigeration, packaging, and insulation. MDI is also used to make binders, elastomers, adhesives, sealants, coatings and fibers. Huntsman’s CFO, Philip Lister, also at the press conference, added that in a normal year the company’s growth in volumes from the first quarter to the second would be around 5%, as construction and other seasonal activities enter their annual peak. “This year, we are expecting more [than 5% growth],” said Lister. CHINA ELECTRIC VEHICLESHuntsman’s CEO said China’s electric vehicle (EV) sector continues to boom, although potential trade restrictions in the EU, after those imposed by the US, could start denting China’s dominance in that sector. However, the company also knows what China’s dominance in the sector, thanks to the country’s strong public support for it, can mean for western producers: in 2023, Huntsman suspended an EV battery materials project in the US because of aggressive imports from China. But the CEO added that even if China’s EV sector slowed down, the company would still be able to tap into other growing markets such as lightweighting or insulation, among others. “The automotive sector continues to be one of the strongest areas of growth in China. How long that continues [remains to be seen], but probably for some time still,” said Huntsman. “There is a broader question about [trade in the EV chain] with the US, which has been extremely limited, or Europe, where there is a lot of talk about limitations to China’s EVs.” He added that despite sluggish activity in the residential construction sector because of financial woes in building companies, exemplified by the demise of major company Evergrande, subsectors such as energy conservation, insulation, building materials and infrastructure are still doing well. “By and large we are seeing in China a slow but steady recovery in volumes and pricing. Elsewhere, I am getting more bullish. A year ago, we were in a nightmare, and we expected a recovery in the second half [of 2023] which didn’t happen and got worse and worse, until we found ourselves in hell,” said Huntsman. “At the beginning of this year we have seen good, reliable, consistent growth. What we need to see is that growth continues in the second half of this year.” HUNTSMAN ASSETS IN EUROPE Product Location Capacity (in tonnes) Aniline Wilton, UK 340,000 Epoxy resins Bergkamen, Germany 18,000 Monthey, Switzerland 120,000 Duxford, UK 10,000 Isocyanates Runcorn, UK 70,000 Maleic anhydride (MA) Moers, Germany 105,000 MDI Rozenburg, The Netherlands 470,000 Nitrobenzenes Wilton, UK 455,000 Polyalolef Grimsby, UK 15,000 Polyester polyols Huddersfield, UK 20,000 Rozenburg, The Netherlands 86,000 Unsaturated polyester resins (UPRs) Ternate, Italy 8,000 Source: ICIS Supply & Demand Database Front page picture: Huntsman’s headquarters in The Woodlands, Texas  Source: Huntsman Additional reporting by Miguel Rodriguez-Fernandez

03-May-2024

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

02-May-2024

HOUSTON (ICIS)–Global technology provider Topsoe has signed a contract with fertilizer producer CF Industries for support on a front-end engineering and design (FEED) study for a proposed low-carbon ammonia plant in Louisiana. Topsoe said it will license its SynCOR ammonia technology to CF which when combined with carbon capture and storage will enable the production of low-carbon ammonia. Currently CF is evaluating development of the plant project in collaboration with ammonia marketer Mitsui & Co. If the project advances, it is intended to create low-carbon ammonia for use as a decarbonized energy source. “We believe low-carbon ammonia helps unlock the door towards a net zero future. Our technology offers a cost-effective route to producing low carbon ammonia while also enabling carbon capture, at industrial proven scale,” said Henrik Rasmussen, Topsoe, managing director, the Americas. “CF and Topsoe have a long-standing relationship spanning many decades and we are proud to extend our collaboration with this award.”

01-May-2024

China’s energy regulator expects tight power supply in summer Yunnan province drought and hot weather could lead to higher LNG demand Focus on China’s economy recovery SINGAPORE (ICIS)-China’s National Energy Administration (NEA) expects that power demand will rise rapidly and the maximum power load will increase by more than 100GW this summer compared to the previous year, it said in a press conference on 29 April. High power demand could further support LNG imports to support gas-fired generation – China’s April LNG imports were already the highest on record for that month, ICIS data shows. The NEA expects tight power supply during the summer, especially in some areas of the eastern, central, southern and southwestern provinces and Inner Mongolia. The pressure on power markets could become more acute if more extreme heatwaves occur, the NEA added. To secure energy and power supply, China’s government will accelerate the construction of coal power plants and put them into operation before the peak demand periods of summer and winter. This comes after a relatively comfortable winter where coal and gas stocks were not heavily drawn down. The State Council has urged the NEA to increase inspections of power transmission lines in forests to prevent large-scale outages. Several forest fires in Sichuan and Guizhou provinces occurred in early 2024, causing large-scale power transmission line closures. FOCUS ON YUNNAN Yunnan province, one of the major hydro-electric power producers in China, has been experiencing severe drought since last winter. This has cut hydropower generation which plays a vital role in the power supply of Guangdong province, and will likely lead to a rise in gas demand for power generation. Guangdong province is the biggest gas-for-power customer in China. The China Meteorological Administration (CMA) assessed that Yunnan province is still experiencing severe-to-extreme drought levels on 30 April. The CMA forecasts 0.5-1.5°C hotter-than-average weather from June to August except in some small areas of central China with forecasts slightly below average. China’s spot LNG demand would likely increase if the drought in Yunnan province extends into a particularly hot summer. But Chinese buyers do not expect spot demand to increase in the short term as downstream demand remains sluggish over the shoulder months, sources said. China’s overall LNG imports in April reached 6.7m tonnes, a record high for the month, underpinned by high contractual supply. ECONOMIC RECOVERY China’s economy has shown some signs of improvement with policy support since the start of 2024. China’s first-quarter GDP stood at $4.1 trillion, up by 5.3% year on year, National Bureau of Statistics (NBS) data showed on 17 April. But NBS also released the April Purchasing Manufacturers’ Index on 30 April which stood at 50.4, down from 50.8 the previous month. The manufacturing industry faltered again even though it held above 50 points which still means some expansion. China’s economic recovery will require more policy stimulus amid a weak property market, sources said.

01-May-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 26 April. LyondellBasell sees continued PE momentum in North America, Europe – CEO Polyethylene (PE) demand in North America and Europe should continue to improve in Q2 and through H2 with consistently healthy demand in packaging, the CEO of LyondellBasell said on Friday. Eastman eyes 2027 startup for second US methanolysis plant, French project timing uncertain Eastman expects to reach a final investment decision (FID) on its second US methanolysis (chemical recycling) plant in Q3, CEO Mark Costa and CFO Willie McLain told analysts during the company’s Q1 earnings call on Friday. Dow sees ‘meaningful’ H2 recovery on PE margins, steady demand improvement – CFO Dow continues to expect a strong second half, mainly driven by higher integrated polyethylene (PE) margins, with Q2 sales also expected to trend higher versus the first half in all three of its segments, its chief financial officer said on Thursday. INSIGHT: Latin America’s nascent EV market increasingly a Chinese affair Latin America’s take-up of electric vehicles (EVs) has started to gain momentum, said the International Energy Agency (IEA) this week, with Chinese producers drawing customers with sharply lower prices than western, established brands. Canada moves ahead with plastics registry as UN plastics pollution session starts in Ottawa Following the conclusion of a consultation period, Canada’s federal government has published a formal notice in the Canada Gazette for its planned Federal Plastics Registry. Styrolution Sarnia closure further tightens North America styrene market INEOS Styrolution’s decision this past weekend to temporarily close its Sarnia, Ontario, styrene unit will further tighten a market already dealing with several outages. Prices are under upward pressure with contract prices the highest since Q3 2023.

29-Apr-2024

SAO PAULO (ICIS)–The founder of Unigel, aged 87, is actively fighting the Brazilian chemicals and fertilizers producer’s most decisive battle, one for its survival, as it tries to restructure its debts, one step away from bankruptcy. Henri Armand Szlezynger, who founded Unigel in 1966, has fought several financial battles before, and overcame them. But the current struggle is the most decisive yet because it could see him and his family losing their controlling stake at the producer if investment funds were to take over. Last week, Brazilian financial daily Valor reported the country’s fund IG4 was seeking to acquire a controlling stake in Unigel, citing several unnamed sources. IG4 and Unigel had not responded to a request for comment at the time of writing. Unigel producers styrenics and is one of Brazil’s few fertilizers producers, a sector it entered just a few years ago and which could prove to have been the reason for the company’s threatened demise. BELGIUM-BORN, BRAZIL-MADEIf ICIS had a profile section portraying chemicals industry people, Szlezynger would have featured in it several times. Szlezynger was born to a Belgian Jewish family in 1936 which moved to Brazil when he was just three years old as Europe was entering the abyss of war. The family had a good position and sent Szlezynger to the best schools in Brazil. After that, he went to the US to study chemical engineering at the Massachusetts Institute of Technology (MIT). Aged only 30, he founded Unigel. From there, on he went to become one of Brazil’s richest citizens, with Forbes estimating his net worth at Brazilian reais (R) 17.2 billion ($3.3 billion) in 2022. From its foundation 58 years ago, Szlezynger still controls Unigel, and his presence cannot go unnoticed: he still goes to the company's headquarters in Sao Paulo every weekday, according to previous profiles of him published in the press. A remarkable fate for an 87-year-old. Unigel’s frantic 2023 was marked by high natural gas costs which made its fertilizer plants – and the company as a whole – a loss-making enterprise, a situation it tried to fix by knocking on the door of Brazil’s state-owned energy major Petrobras. With a government-appointee CEO, to say Petrobras is to say Luiz Inacio Lula da Silva, a President who has repeatedly said that Brazil must reduce its dependence on fertilizer imports. In Brazil’s economy, entrepreneurs and politicians tend to have close relationships, and Szlezynger has recurrently ticked the right boxes to get the support his company may have needed as the years and crises went by. In the north, stronghold of Lula’s Workers’ Party (PT), he has not shied away from showing sympathy with PT politicians. In southern and generally conservative-governed states, Szlezynger has had good relationships with politicians from the right. However, the business-politics link did not work for Unigel’s current downturn. Conversations with Petrobras were going nowhere while the company continued to lose millions every month. In a way, Unigel’s annus horribilis of 2023 ended slightly earlier, in October, when everything changed: the company failed to pay a coupon on one of its bonds, effectively defaulting on its debt obligations. Brazilian financial regulations give breathing space for companies in debt stress to negotiate their obligations with creditors, and Unigel is currently undergoing that process. Earlier in April, it said negotiations were progressing, without disclosing more detail. Jonathan Szwarc, head of Latin America credit research at Debtwire, a data firm specialized on leveraged capital markets, told ICIS that Szlezynger would not easily give up his controlling interest, but added the current crisis would be difficult to circumvent. “Unigel has had financial woes before and overcame them, but this time is quite different: once you fail to pay a coupon, things can go down very quickly. You are not meeting your debt obligations: a default,” said Scwarz. “The company has now an initial agreement with some of its creditors, but it would need to convince 50% plus one of them for it to be effective: we don’t know if that is the case. That’s where they are: seeking adherents to that initial agreement to bring it before a judge, who must approve the Extrajudicial Reorganization Process.” Will Szlezynger, after 58 successful years, be forced by circumstances to call it a day? Not that fast. Szwarc said that, in Unigel’s case, sentimental issues could be as strong as economic issues. “If they are up against it, Szlezynger may decide to reluctantly sell the company, but I really think that is the last option he contemplates," he said. "If Unigel was to be sold to a fund, I imagine he would prefer a Brazilian fund, with whom he would speak the same language business-wise, than a foreign fund." As an example, the analyst mentioned negotiations to raise $150m just in January, in the midst of the debt restructuring negotiations, through a group led by US investment fund Pimco, which is also the largest bondholder, according to reports at Brazilian financially daily Valor at the time. That deal, which could have given Unigel breathing space amid its restructuring, fell through because it would have brought closer what Szlezynger has fiercely opposed: the funds taking away from the founding family a controlling interest. “The company’s assets are good. But Unigel was very unlucky in terms of the petrochemicals and fertilizers downcycles combined. You must keep in mind that just in 2022 Unigel’s bonds were trading well over 100% [generating returns],” said Szwarc. “The assets will continue operating in any case: either under a new ownership structure, in which the Szlezynger may still have a stake even if it’s not the controlling stake, or under a potential bankruptcy, when the assets could be sold separately.” The analyst concluded saying he did fail to understand how Petrobras – the Lula-led government, effectively – had not paid more attention to Unigel, whose production of styrenics as well as fertilizers Brazil badly needs if the country is to reduce its dependence on imports. BRAZILIAN SAGAAmid all Unigel things that occurred in 2023, one of the most fascinating was its very public charge against Petrobras in November, when the company announced it would be shutting down one fertilizer plant in Camacari, state of Bahia, due to Petrobras’ “unbearable” pricing policy for natural gas. It was part of Unigel’s strategy, however, as it became clear later in December when the two firms signed a tolling agreement for the fertilizers assets, in what seemed to be Petrobras finally giving in on natural gas pricing. A Brazilian economic-political saga could not just end there. In March, Unigel announced it was halting its fertilizers production, still mentioning high natural gas prices, while Brazil’s Federal Audit (TCU in its Portuguese acronym) raised concerns about the tolling deal, which would have meant losses for Petrobras. As a state-owned company, Petrobras is audited by TCU civil servants. And as a company, the purpose of it is to make a profit: a sweet deal for Unigel on gas would not be following that logic, the auditors said. Adding to it all, Petrobras said earlier in April it was re-entering the fertilizers sector by re-starting a large fertilizer plant in Araucaria, state of Parana, idled since 2020. The energy major said fertilizers were now part of its strategic plan to 2028, adding it would therefore focus on “assets that already belong” to it. Unigel’s fertilizers plants at the centre of the story, Camacari and Laranjeiras, state of Sergipe, were a lease from Petrobras signed in 2019, when the prior Brazilian Administration wanted Petrobras’ to focus on crude oil. It was then when Unigel decided to go big on fertilizers. What does seasoned Szlezynger think about that move now? He would not be too hard on himself if he thinks it was a bad move indeed, which is putting at risk his nearly six decades business legacy. Petrobras returning to the fertilizers sector is, on the other hand, an expected move by Lula’s cabinet, who in general wants to expand the role of the state in the economy, or at least in those sectors where the country's trade deficit is large, such as fertilizers. The two plants leased to Unigel may end up, therefore, being run by Petrobras again at some point. Unigel and its relentless founder will need to fend for themselves amid the largest financial crisis ever hitting the company. At the end of the day, Lula's key constituency and the PT party's cadres would have had a hard time to digest the state was going to give strong and direct support to a private company owned by one of the richest citizens in the land. The Unigel saga continues and, whatever the next act is, Szlezynger is still likely to have a role in it. Insight by Jonathan Lopez

29-Apr-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 26 April. NEWS Mexico's potential ADDs on China plastics no panacea amid wider stiff competition – Alpek CEO Mexico’s potential antidumping duties (ADDs) on several China-produced plastics will not by itself bring the Mexican market back to balance as “stiff competition” is coming from many other fronts as well, the CEO at chemicals producer Alpek said on Wednesday. INSIGHT: Latin America’s nascent EV market increasingly a Chinese affair Latin America’s take-up of electric vehicles (EVs) has started to gain momentum, said the International Energy Agency (IEA) this week, with Chinese producers drawing customers with sharply lower prices than western, established brands. Mexico’s Alpek Q1 earnings fall but volumes up on shy demand recovery Alpek’s first-quarter earnings and sales fell year on year but improved quarterly on a slight demand recovery, particularly for polyesters, the Mexican chemicals producer said on Tuesday. PRICING LatAm PP domestic prices drop in Argentina on poor demand Domestic polypropylene (PP) prices dropped in Argentina this week. Despite producer prices being unchanged, local distributors have lowered prices due to poor demand. Market participants have reported a 40-60% drop in sales in the past few weeks. LatAm PE domestic prices down in Argentina on sluggish demand After more than a year, domestic polyethylene (PE) prices in Argentina were assessed lower due to sluggish demand. Argentina January PE imports down 32% month on month Argentina polyethylene (PE) imports decreased by 32% month on month in January, totaling 19,106 tonnes, according to the latest figures from the ICIS Supply & Demand database.

29-Apr-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 26 April 2024. Thailand's SCG Q1 net profit slumps 85%; eyes better H2 conditions By Nurluqman Suratman 26-Apr-24 12:45 SINGAPORE (ICIS)–Siam Cement Group (SCG) posted an 85% year-on-year decline in Q1 net profit on losses from chemicals operations, but the Thai conglomerate expects the segment’s earnings to recover in H2 on improved olefins demand and expected restart of its Vietnam petrochemical complex. China VAM exports jump; shipments to India surge in Q2 By Hwee Hwee Tan 25-Apr-24 13:42 SINGAPORE (ICIS)–China's vinyl acetate monomer (VAM) spot offers have tumbled, boosting buying interest in its outbound cargoes, and lifting its exports to India to a multi-month high into the second quarter. SE Asia PE May offers mostly rangebound; demand still weak By Izham Ahmad 24-Apr-24 14:09 SINGAPORE (ICIS)–Initial spot import offers for May shipments of polyethylene (PE) in southeast Asia were announced mostly rangebound so far in the week, while buying interest remained under pressure near recent lows. Saudi Aramco eyes stake in Hengli Petrochemical; prowls for more China investments By Fanny Zhang 23-Apr-24 14:13 SINGAPORE (ICIS)–Saudi Aramco continues its quest for downstream petrochemical investments in the world’s second-biggest economy, adding Hengli Petrochemical in a list of target companies in which the global energy giant intends to acquire a strategic stake. PODCAST: Production constraints keep Asian BD spot trades buoyant in Q1, demand outlook mixed By Damini Dabholkar 22-Apr-24 17:35 SINGAPORE (ICIS)–Persistent production constraints have driven Asia’s spot prices for butadiene (BD) to near two-year-high levels, but how the rally goes from here may hinge on downstream demand conditions. CHINAPLAS ’24: PODCAST: China PP exports strong, imports weak in Q1 By Sijia Li 22-Apr-24 16:23 SINGAPORE (ICIS)–ICIS analyst Sijia Li and senior industry analyst Joanne Wang discuss developments in China's polyolefins market.

29-Apr-2024