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Europe chemicals buyers shift from contractual volumes to spot market on crest of falling demand

LONDON (ICIS)–As economic indicators continue to warn of a downturn towards the end of 2022, Europe’s chemicals markets are adjusting buying habits in a bid to shelter from the crash. The pressure of high-cost materials has led to a pivot in fundamentals, as buyers are walking away from contracted volumes in favour of spot material. Supply chain issues unfolding in the wake of the pandemic have not been resolved – if anything, they have exacerbated by China’s zero-COVID policy causing mass lockdowns in the country, and the war in Ukraine disrupting trade flows. Where demand had previously been kept taut, soaring prices and the ever-nearer prospect of a recession has disrupted the usual patter of business negotiations for the chemicals sector. “We are unlikely to even reach contract minimum in 2022. Suppliers ask about mitigation plan and if we buy more next year,” said one acrylonitrile (ACN) buyer in response to the change. As discussions of a temporary move to monthly contracts instead of quarterly settlements continue, increased prices are challenging consumption in the melamine market. One supplier advised that some customers took smaller volumes for August, while others didn’t take volume at all, and this view was echoed by consumers. “We stepped out of the market because of low demand in the third quarter, we live from stock,” said one melamine buyer. The situation has also permeated European base oils fundamentals, with some producers commenting on oversupply in what has been a generally balanced market. Buying tracked an uptick ahead of summer, and now with the seasonal lull, high inventories and rising prices, suppliers have noted that customers have postponed picking up their material. “We see a dramatic situation on the market. No-one is buying on domestic. It’s vacation season and a lot of product is available,” said one producer. One phthalic anhydride (PA) producer also advised that the impact could be seasonal, with European buyers using up their stocks ahead of the typical summer slowdown. This is not guaranteed, however, and a spike in cheap imports would drive down price negotiations for annual contracts. “It's really just the spot market which is concerning… Customers had a real advantage compared to spot players [this year] but if this changes now, then certainly it's going to leave a bad impression,” the PA producer said. “It might put pressure on the formula for the contracts. Nowadays I don't even want to look so far away as the market is so volatile.” The possibility of more competitive material coming from other regions is also affecting sentiment in European epoxy resins, with one non-integrated producer advising that the market is currently very weak. “We're working only on contracts [for feedstocks] in which we have cut off volumes in agreement with our suppliers. Everybody in Europe knows that much cheaper transport coming from Asia will have an influence on European production,” they said. While sentiment suggests that demand could be set to nosedive, the silver lining is that this could provide more long-term balance to market fundamentals, providing constricted supply chains with some relief. Front page picture source: imageBROKER/Shutterstock Focus article by Morgan Condon Additional reporting by Anne-Sophie Briant-Vaghela, Eashani Chavda, Heidi Finch, Melissa Hurley and Jane Massingham

18-Aug-2022

Japan's July chemical exports rise 15.9%, overall shipments grow 19%

SINGAPORE (ICIS)–Japan's chemical exports rose by 15.9% year on year to yen (Y) 1,017bn in July, supporting the overall growth in shipments abroad, official data showed on Wednesday. The country's exports of organic chemicals rose by 30.6% year on year to Y198bn in July, while shipments of plastic materials were up by 8.0%, the Ministry of Finance (MOF) said in a statement. On a volume basis, exports of plastic materials fell by 8.3% year on year to 456,257 tonnes in July. Japan's overall exports rose by 19% year on year to Y8,753bn in July while imports were up by 47.2% at Y10,190bn. The country's exports to China rose by 12.8% in July, while shipments to the US were up by 13.8%.

17-Aug-2022

Nuanced discussion of US plastics EPR legislation takes centre stage at Resource Recycling Conference in Austin, TX

HOUSTON (ICIS)–Bringing to a close Day 1 of the Resource Recycling Conference, six panellists from across the recycling and plastic packaging value chain discussed the good, the bad and the ugly of US plastics extended producer responsibility (EPR) legislation. Though relatively new to the plastics packaging space, EPR has been applied in the US for the end of life management of several other items, such as electronics and mattresses. Globally, other countries such as Canada and many throughout Europe have already adopted plastics related EPR. EPR programmes are widely viewed as solutions to reducing plastic waste, by adding additional layers of responsibility on producers for end of life product management. Essentially, EPR programmes are any solutions that shift end of life cost from municipalities to the producer, summarised Pete Keller, vice president of recycling and sustainability at Republic Services. If implemented correctly, EPR programmes should increase the amount of plastic waste collected, and thus available for the growing recycled plastics market. Within the last two years, four states have passed plastics packaging related EPR bills, Oregon, Maine, Colorado and most recently California. Though these bills are all grouped under EPR, each individual programme varies significantly based on the set-up of the Producer Responsibility Organization (PRO) and the distribution of authority and rulemaking. Panellist Bree Dietly, principal at Breezeway Consulting, commented "I believe three out of four should not be classified as EPR," on the grounds that three states broadly removed producer power to change or influence the programme. Others noted the importance of robust advisory systems, whether through councils or joint management strategies. This way, stakeholders are able to be involved in determining the "rates and dates" for performance requirements from the programme, said Shannon Crawford, director of recycling and environmental policy at WM. In addition to rates and dates, some programmes grant the PRO with the authority to determine end markets for secondary commodities. When discussing the California EPR programme, Keller said, "Material might have to go to a different end market if CalRecycle gets to define what a 'responsible' end market is." This would not only impact the economic modelling of MRFs, but also the availability of supply for recyclers and reclaimers across the country. Despite the low confidence in a national EPR programme being introduced, several states continue to consider EPR bills prior to the close of the summer legislative session and in preparation for 2023. While EPR brings the potential for increased plastic collection, these programmes also come with a multitude of challenges, as municipalities, MRFs, recyclers and producers navigate the implementation of each individual programme. Beyond implementation, panellists emphasised the importance of flexibility within programmes, as waste streams, consumer habits and end markets evolve with time. The COVID-19 pandemic has reinforced how drastic things can change, as commercial and office based recycling diminished, and at home e-commerce introduced record levels of shipping packaging, often called the "Amazon effect". In terms of future consumer behaviour, several panellists voiced concern that if consumers were given free or increased collection access, they may abuse it. "We have customers who use the bin as a second garbage can" commented Keller. Aside from increased access to recycling, EPR programmes do no directly incentivise consumers to recycle. "The US is a consumer culture, we like to buy things." said Preston Peck, recycle reset project lead at the City of Tacoma. "They are not going to recycle more because the price of aluminium just spiked," commented Dietly. Instead, through EPR producers will be economically invested in collection in order to supplement feedstock prices and overall product costs. But, all four state programmes do harmonise on one thing, the importance of consumer education. All four EPR bills require support for educational outreach to consumers, hoping to not only boost collected volumes but reduce system contamination in the process. Though no system is perfect, collaborative conversations such as these are critical for the success of future EPR programmes. The Resource Recycling Conference will run through Wednesday, 17 August, in Austin, Texas. Thumbnail image shows PET flakes

16-Aug-2022

Germany’s natgas levy to cost chem industry more than €3bn/year – VCI

LONDON (ICIS)–Germany’s levy on natural gas consumption (“Gasumlage”) will cost the country’s chemical-pharmaceutical industry more than €3bn/year, according to an estimate by producers’ trade group VCI. The estimate comes after the levy was set at euro cent 2.419 per kilowatt hour (€24.19/MWh) on Monday. Gas consumers will have to pay the levy starting on 1 October 2022 until 1 April 2024, when it will expire. The levy will allow the government to raise funds to cover 90% of the additional costs gas importing power firms incur because of the shortfalls in Russian gas supplies. While the chemical industry recognises the need for the levy, it is worried about its impacts, said VCI director general Wolfgang Grosse Entrup. From an economic point of view, the levy was the best way to manage the gas supply situation, he said. “But doing the right thing also has side effects: For our energy-intensive industry, which has already been hit hard, it is an extremely bitter pill,” he said. Burdens from high gas and electricity prices, as well as expensive raw materials, have pushed many producers to the breaking point, he said. He urged the government to keep the levy as low as possible. “We must not endanger the economic performance of our companies. Companies that are particularly affected now need relief,” he said. VCI is in “intensive dialogue” with the federal government on such relief, he added. The country’s economic affairs ministry previously indicated that the levy, which will be adjusted every three months, could rise as high as euro cent 5.0/kWh.

16-Aug-2022

US August home-builder sentiment turns negative, housing recession looms

HOUSTON (ICIS)–An index that measures sentiment among US home builders swung to negative in August, marking the first time since May 2020 that the industry was this pessimistic, a trade group said on Monday. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell for the eighth consecutive month to 49. Anything below 50 indicates pessimism. Above 50 indicates optimism. The industry has entered a housing recession, brought on by tighter monetary policy from the Federal Reserve and persistently elevated construction costs, said Robert Dietz, chief economist for the NAHB. Other housing market indicators point to steeper deterioration in the market. The volume of single-family starts will likely decline in 2022, the first such drop since 2011, Dietz said. A component of the sentiment index that measures buyer traffic fell to 32, according to the NAHB. Outside of the pandemic, it was the lowest level since April 2014. Among the home builders surveyed, 19% said they reduced prices during the past month to boost sales or limit cancellations, the NAHB said. Among those reporting price cuts, the average reduction was 5%. The top reason behind falling house demand was higher interest rates, cited by 69% of the builders surveyed. The average rate for a 30-year loan was 5.22%, according to Freddie Mac, a company that buys and securitises mortgages. While that is down from the 2022 high of 5.81%, the figure is still 2.25 points higher than a year ago. Moreover, mortgage rates have not been this high since 2009. Higher mortgage rates are not the only trend raising home prices and discouraging sales. Labour shortages, inflation and supply-chain issues have increased construction costs. During the second quarter, an index that measures housing affordability fell to 102.8, according to the National Association of Realtors (NAR). In 2019-2021, the index was never below 150. As home affordability declined, the housing market index and its components have deteriorated throughout 2022. The following table shows the monthly housing market index and its components. Jan Feb Mar Apr May Jun Jul Aug Housing Market Index 83 81 79 77 69 67 55 49 Single Family Sales: Present 89 89 87 86 78 76 64 57 Single Family Sales: Next 6 Months 82 80 70 73 63 61 49 47 Traffic of Prospective Buyers 69 65 66 61 53 48 37 32 Source: NAHB The housing market is a key consumer of chemicals, driving demand for a wide variety of chemicals, resins and derivative products, such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibres, among many others. The weakening US housing market has dragged down demand for some plastics and chemicals for which construction is a large end-market. US contracts for polyvinyl chloride (PVC) were assessed lower because of lower domestic demand and falling spot export prices. Focus article by Al Greenwood Thumbnail shows a home being built. Image by NAHB.

15-Aug-2022

BLOG: China 2022 PE demand may fall by 5% with net imports 3.2m tonnes lower

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. There is some excitement out there that China’s polyolefins markets have finally bottomed out. But any recovery seems likely to be supply rather than demand driven. Rate cuts at local refineries in April-June were said to be the highest ever, reflecting weak fuels demand. The rate cuts might reduce the availability of feedstocks to make polyethylene (PE) and polypropylene (PP). But if fuels demand is weak, so must be polyolefins demand. Weak demand looks set to continue because China has no choice but to stick to its zero-COVID policies. And because of the “Common Prosperity” economic reforms, low economic and so chemicals demand growth is, anyway, no longer seen as such a bad thing. China has moved past its era of growth for growth's sake. Still not convinced? Then look at the ICIS data which show: Under a best-case outcome, average PE demand across the three grades would decline by 2% in 2022 over last year. The medium-case scenario would see consumption fall by 4%, which is what is suggested by annualised local production and net import data for January-June this year. The worst-case result would see a 5% contraction in demand. A best-case result of total PE net imports falling by 630,000 tonnes over last year. The medium-case outcome would see net imports – 1.4m tonnes lower – again based on annualising January-June net imports. My worst-case scenario sees net imports falling by 3.2m tonnes. The thing is, though, that this kind of analysis will become redundant as we move from a chemicals industry driven by constant volume growth. Events in China and elsewhere tell us that the new winners will need to focus on value. This will require a whole new set of success metrics. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

15-Aug-2022

Saudi Aramco posts record Q2 net profit on higher oil prices

SINGAPORE (ICIS)–Saudi Aramco's second-quarter net profit surged to a record riyal (SR) 181.6bn ($48bn), on the back of higher crude oil prices and sales volumes. Saudi Riyal (SR) billion Q2 2022 Q2 2021 % change H1 2022 H1 2021 % change Net sales 562.07 312.35 79.9% 1,029.07 584.43 76.1% Operational profit 324.49 179.12 81.2% 602.19 331 81.9% Net profit 181.64 95.47 90.3% 329.67 176.91 86.3% The quarterly earnings were the biggest since the energy giant’s initial public offering (IPO) in 2019. Aramco's overall hydrocarbon production totalled 13.6m barrels of oil equivalent per day in the second quarter, it said in a statement on 14 August. The integration of petrochemicals major SABIC into Aramco is "progressing ahead of schedule and the company continues to capture synergies in multiple areas", the company said. Aramco’s refining and petrochemical joint ventures with PETRONAS in Malaysia, namely, Pengerang Refining Company Sdn Bhd and Pengerang Petrochemical Sdn Bhd (collectively known as PRefChem), started operations in May and will reach full capacity of 300,000 barrels per day by the end of the year, it said. "We expect oil demand to continue to grow for the rest of the decade, despite downward economic pressures on short-term global forecasts," Aramco president and CEO Amin Nasser said. "But while there is a very real and present need to safeguard the security of energy supplies, climate goals remain critical, which is why Aramco is working to increase production from multiple energy sources — including oil and gas, as well as renewables, and blue hydrogen," he added. ($1 = SR3.75) Thumbnail image: Aramco, Khurais, Saudi Arabia – 28 June 2021. (By Amr Nabil/AP/Shutterstock) Click here to read the Ukraine topic page, which examines the impact of the conflict on oil, gas, fertilizer and chemical markets.

15-Aug-2022

TOPIC PAGE: Coronavirus, oil price direction – impact on chemicals

China's domestic petrochemical prices had tumbled across the board in July because of weak demand, which is expected to persist in the months ahead as global economic growth cools down. Flare-ups of COVID-19 infections continue in parts of the country, prompting small-scale lockdowns at several cities during the week. Indonesia and Malaysia posted strong second-quarter annualized GDP growths of 5.4% and 8.9%, respectively, but the pace of expansion is widely expected to slow down for the rest of the year with external demand likely to weaken as global economies grapple with high inflation. Updated on 12 August 2022 On this topic page we analyse the impact of coronavirus and oil price dynamics on chemical markets and bring together the latest news reported by ICIS.  Scroll down to see the latest interactive graphics, podcasts and videos.  Click here to register for regular updates to help you navigate these challenging times. LATEST HEADLINES (Last updated at 09:30 GMT on 12 August 2022) Malaysia’s Q2 GDP expands 8.9%, growth to moderate on global uncertainties By Nurluqman Suratman 12-Aug-22 15:20 SINGAPORE (ICIS)–Malaysia’s economy grew by 8.9% year on year in the second quarter of this year on improving domestic demand, but heightened global uncertainties are expected to weigh on its growth outlook, the central bank said on Friday. High production costs erode Asian R-HDPE margins By Arianne Perez 12-Aug-22 13:48 SINGAPORE (ICIS)–As production costs of recycled high-density polyethylene (R-HDPE) blow moulding pellets remain high in Asia while demand stays lacklustre, sellers’ margins will continue to narrow in the weeks ahead. PODCAST: Asian olefins producers challenged to preserve margins in H2 – ICIS analysts By Morgan Condon 12-Aug-22 05:00 LONDON (ICIS)–Asian olefins capacity is set to increase in the coming months, but against the prospect of a global recession and challenging demand it is unclear how this will develop for producers. Trade data show US base oil export availability has not returned to pre-pandemic levels By Amanda Hay 12-Aug-22 03:04 HOUSTON (ICIS)–ICIS trade data reveal that the US has not yet returned to pre-pandemic export levels of base oils as supply constraints, shifting trade flows and high prices have curbed export activity. OPEC revises crude demand forecast down on slowing global economy By Jonathan Lopez 11-Aug-22 22:40 MADRID (ICIS)–While crude oil demand continued its “strong recovery” to pre-pandemic levels, economic growth showed signs of a slowdown in July and, with it, crude demand also took a hit, producing cartel OPEC said on Thursday. UK to face increased competition for LNG in fourth quarter By Hector Falconer 11-Aug-22 19:20 LONDON (ICIS)–Britain is likely to face increased competition for LNG supply in the fourth quarter of 2022 amid uncertainty over Russian piped supply to mainland Europe, supporting NBP winter contracts especially in the case of cold weather. Oil prices exposed to opposing fundamentals, extreme volatility By Cecilia Barreiro 11-Aug-22 18:58 LONDON (ICIS)–The August outlook for oil prices is subject to increased uncertainty resulting from a number of bullish and bearish factors. Russia’s invasion of Ukraine will continue to be a central driving force and keep oil markets volatile while rising global inflation is expected to keep a lid on demand. Singapore trims 2022 GDP growth forecast to 3-4% on global headwinds By Nurluqman Suratman 11-Aug-22 11:43 SINGAPORE (ICIS)–Singapore on Thursday trimmed its 2022 GDP growth forecast to 3-4%, from the previous estimate of 3-5%, due to the deteriorating global economic environment. SE Asia palm biodiesel to see record export volumes, healthy demand By Keven Zhang 11-Aug-22 11:15 SINGAPORE (ICIS)–Southeast Asia's palm methyl ester (PME) export volumes are likely to climb to record highs in July and August, as several bullish factors boost buying interest. Thai PTTGC Q2 net profit falls sharply amid lower chem margins By Nurluqman Suratman 10-Aug-22 15:30 SINGAPORE (ICIS)–PTT Global Chemical’s (PTTGC) net profit fell by 83.9% year on year in the second quarter, weighed partly by lower margins across all of its chemicals businesses, the Thailand-based producer said on Wednesday. Saudi SABIC Q2 net profit up 3.8%; H2 margins to stay under pressure By Nurluqman Suratman 10-Aug-22 12:42 SINGAPORE (ICIS)–Saudi petrochemicals major SABIC posted a 3.8% year-on-year increase in second-quarter net profit, while it expects margins to remain under pressure in the second half of 2022. INSIGHT: Indonesia economy surprises in Q2; prospects dim in H2 By Pearl Bantillo 10-Aug-22 21:03 SINGAPORE (ICIS)–Indonesia’s growth momentum is expected to weaken for the rest of the year and into 2023, as high inflation hits overall domestic consumption. External demand is being threatened by a possible global recession. China July petrochemical markets slump; outlook stays bearish By Yvonne Shi 09-Aug-22 08:00 SINGAPORE (ICIS)–China's petrochemical markets fell across the board in July on weak demand, which persists into August while supply is projected to grow for the rest of the year. INSIGHT: Business, chemicals indicators point to global downturn By Will Beacham 04-Aug-22 19:09 BARCELONA (ICIS)–New economic data combined with deteriorating chemical industry performance, suggests that the second half of the year could be bleak. Latest figures for July from Oxford Economics’ Global Business Sentiment Index show declining confidence about growth, and fears about downside risks while a recent profit warning from Covestro and slumping chemical prices suggest demand may be waning along supply chains. OUTLOOK: China’s PE market to feel pressure from imports, slowing demand growth By Joanne Wang 02-Aug-22 14:24 SINGAPORE (ICIS)–China’s polyethylene (PE) market may feel stronger pressure from increasing imports in the second half of 2022 amid weak overseas demand, while domestic producers may kick off another round of output reduction on squeezed margins and subdued demand. China’s domestic PE prices were largely on a downtrend in the first half of the year. Prices increased around the world in the first quarter as the Russia-Ukraine conflict pushed up crude prices sharply. Asia July industries – a mixed bag as battle with inflation continues By Nurluqman Suratman 02-Aug-22 13:59 SINGAPORE (ICIS)–Asia's manufacturing sector in July presented a mixed performance, with major economies in the northeast showing a marked slowdown in activity, as the region continues to contend with high input costs and weak demand. For China, both the official and non-official manufacturing purchasing managers' indices (PMI) for July indicated continued weakness in the world’s second-biggest economy Supply problems continued to disrupt German manufacturers in July – Ifo By Morgan Condon 01-Aug-22 17:27 LONDON (ICIS)–Bottlenecks continued to disrupt German manufacturing in July, with the majority of the chemicals industry hit by material shortages, according to the latest data from the Ifo Institute. Supply problems impacted 73.3% of German manufacturing companies surveyed by Ifo in July, down from 74.1% in June. Chemicals were less impacted than other downstream sectors. OUTLOOK: China’s oxo-alcohols weighed by slow demand recovery, increasing supply By Claire Gao 29-Jul-22 16:07 SINGAPORE (ICIS)–China’s oxo-alcohols markets will face downward pressure from slow recovery of demand and increasing supply, although the outlook of export is promising. OUTLOOK: US EDC likely to re-enter global markets in 2H as macroeconomic headwinds change flows By Bill Bowen 29-Jul-22 05:56 HOUSTON (ICIS)–US ethylene dichloride (EDC) is likely to see weakened demand and greater availability in the second half of 2022 as demand for its downstream derivative polymer weakens on less construction activity amid macroeconomic headwinds. INSIGHT: Europe industry facing difficult August as gas supply concerns mount By Nigel Davis 29-Jul-22 00:14 LONDON (ICIS)–It is almost like stepping back in time, with industrial sectors in Europe vying for the attention of governments and lawmakers to try to secure operations should the region’s gas crisis escalate. S Korea's S-Oil Q2 net income more than doubles; Q3 PX spread to weaken By Nurluqman Suratman 28-Jul-22 13:38 SINGAPORE (ICIS)–S-Oil's second-quarter net income more than doubled year on year on strong refining margins and robust aromatics demand, but the South Korean producer’s paraxylene (PX) spread is expected to weaken in July-September 2022. SE Asia August PE offers stable to soft but Vietnam market under intense pressure By Izham Ahmad 28-Jul-22 11:22 SINGAPORE (ICIS)–Initial spot import offers for August shipments of polyethylene (PE) in southeast Asia were announced either stable or softer this week as buying sentiment continued to be depressed by the slump in demand from China. VIDEO: China’s new EVA capacities to weigh on Q3 sentiment By Joanne Wang 22-Jul-22 12:29 SINGAPORE (ICIS)–Watch ICIS senior industry analyst Joanne Wang discuss the ethylene vinyl acetate (EVA) capacity increases in China and the recently launched EVA China RMB index. Chinese ethanolamines slump weighs on sentiment in Asia and India By Clive Ong 22-Jul-22 10:45 SINGAPORE (ICIS)–The ongoing slump in the ethanolamines market in domestic China continues to weigh on sentiment of players in Asia and India. OUTLOOK: European MMA demand uncertain amid wider economic challenges By Mathew Jolin-Beech 21-Jul-22 23:24 LONDON (ICIS)–The European methyl methacrylate (MMA) market is facing uncertain H2 demand amid wider geopolitical and economic challenges. Asia BDO remains weighed down by ongoing Chinese market slump By Clive Ong 21-Jul-22 16:53 SINGAPORE (ICIS)–Asian butanediol (BDO) market continues to be impacted by the ongoing slump in the Chinese domestic sector. Sentiment has turned increasingly bearish with participants anticipating further weakness in the near term. OUTLOOK: US MEG market expected to get longer through Q3 By Melissa Wheeler 21-Jul-22 05:10 HOUSTON (ICIS)–The monoethylene glycol (MEG) market is expected to remain long through Q3 as suppliers continue to offer more product. PODCAST: China’s base oils demand to be better in autumn, imports to decline YOY in H2 By Whitney Shi 20-Jul-22 15:11 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Whitney Shi discuss the outlook of China's base oil market in this episode. Prolonged heatwave could hinder operations at Europe petrochemicals plants By Jonathan Lopez 19-Jul-22 18:09 MADRID (ICIS)–High temperatures across Europe could reduce operating rates at some petrochemicals plants, as cooling operations become more difficult, trade groups have warned. OUTLOOK: Middle East base oils market to face stable-to-soft demand in H2 By Izham Ahmad 19-Jul-22 10:46 SINGAPORE (ICIS)–The Middle East base oils spot market is expected to still face uncertainties in the final half of 2022 as supply of most grades is expected to be mixed, with demand expected to remain stable to soft due to sluggish economic growth and global automotive sales. World petrochemical sentiment weak as demand falters By Felicia Loo 15-Jul-22 14:12 SINGAPORE (ICIS)-Global petrochemical markets are mired in a challenging situation writ large, with demand dull as recession risks gather pace. VIDEO: Asia adipic acid demand struggles to reach pre-lockdown levels By Josh Quah 15-Jul-22 14:01 SINGAPORE (ICIS)–Watch ICIS editor Josh Quah discuss developments in Asia's adipic acid market. PODCAST: Chems sector resilient in Q2 but conditions forecast bleak for H2 By Tom Brown 14-Jul-22 18:44 LONDON (ICIS)–Projected second-quarter financial data for BASF hints that conditions for chemicals players may have been stronger than expected in the second quarter of 2022, but rising COVID-19 infection numbers in China only add to the slew of bearish news for the second half of the year. PODCAST: China's LDPE facing continued supply pressure By Joanne Wang 14-Jul-22 10:28 SINGAPORE (ICIS)–In this episode, ICIS analyst Jady Ma and Joanne Wang discuss the recent developments and outlook of China's low density polyethylene (LDPE) market. Europe PET high prices detrimental to sales in bearish climate By Caroline Murray 13-Jul-22 23:15 LONDON (ICIS)–The peak season for polyethylene terephthalate (PET) bottlers in Europe is the summer but the combination of extraordinarily high prices and the unstable economy is affecting sales. China PP hits lowest levels this year on slumping crude, weak demand By Lucy Shuai 13-Jul-22 16:43 SINGAPORE (ICIS)–China’s polypropylene (PP) prices fell to their lowest levels this year from slumping crude oil and weak downstream demand, on concerns of a global economic recession. Crude falls nearly $2/bbl on fresh China COVID-19 curbs By Nurluqman Suratman 12-Jul-22 11:08 SINGAPORE (ICIS)–Oil prices fell by nearly $2/bbl on Tuesday morning on worries over fresh COVID-19 restrictions in China, the world's biggest crude importer. INSIGHT: Demand uncertainty pressuring prices as downturn gathers momentum By Nigel Davis 11-Jul-22 23:43 LONDON (ICIS)–Movement in the ICIS weekly and monthly petrochemical indexes illustrate the strain being put on producers to hold prices in the face of increasing demand uncertainty and the volatile feedstock and energy cost environment. European melamine spot prices stable-to-soft; Q3 contract talks ongoing as supplier and consumer pricing ideas clash By Melissa Hurley 08-Jul-22 00:44 LONDON (ICIS)–European melamine third quarter contract discussions continued this week. More progress is expected towards the end of the week, heading in to next week. Talks between suppliers and consumers are divisive as pricing expectations remain unmatched. PODCAST: Europe's oxo-alcohols chain faces demand erosion amid economic uncertainty By Mathew Jolin-Beech 07-Jul-22 22:03 LONDON (ICIS)–The European oxo-alcohols chain faces a slowdown in demand from end use sectors as the wider geopolitical and economic uncertainties begin to bite. This ICIS podcast explores the latest developments for oxo-alcohols and its derivative markets. PODCAST: Global shortage of MEK eases, though US prices remain high By Nick Cleeve 07-Jul-22 17:58 LONDON (ICIS)–Methyl ethyl ketone (MEK) prices are softening globally as supply constraints ease, although prices in the US, a net importer, remain at extremely high levels, drawing exports from Asia and Europe. Asia petchems mired in bearishness on elevated recession fears By Felicia Loo 07-Jul-22 11:21 SINGAPORE (ICIS)–Asian petrochemical markets are in a jam, with price bearishness across the board as recession risks continue to mount. OUTLOOK: Tight supply concerns flip to reduced oil demand by Q4 By Barney Gray 07-Jul-22 00:49LONDON (ICIS)–Oil prices were in a post-Covid recovery phase prior to Russia’s invasion of Ukraine in February. Since then, H1 crude prices have been driven by the fallout from the war, reaching record highs. But the oil market will be characterised by major volatility and rising uncertainty as we head into H2. PODCAST: UK chemicals fighting Four Horsemen of the Apocalypse – CIA CEO By Will Beacham 05-Jul-22 22:48 LONDON (ICIS)–The UK chemicals industry is battling the quadruple challenges of Brexit, COVID-19, the cost of living crisis and the war in Ukraine, according to Stephen Elliott, CEO of UK trade group the Chemical Industries Association. OUTLOOK: Demand for low-end R-PET to continue to shrink By Arianne Perez 04-Jul-22 15:03 SINGAPORE (ICIS)–Low-end applications of recycled polyethylene terephthalate (R-PET) will become less popular as the more competitive virgin PET continues to eat into its market share. China’s propylene faces headwinds from ample supply, weak demand in June By Yi Liang 04-Jul-22 10:21 SINGAPORE (ICIS)–China’s domestic propylene market continues to face headwinds from ample supply and sluggish end-user demand in June, with market sentiment turning bearish. Mideast petchem market sentiment bearish on weak demand By Felicia Loo 01-Jul-22 11:30 SINGAPORE (ICIS)–Sentiment in the Middle East petrochemical markets is bearish, as demand is tepid against a backdrop of ample supply. The soaring inflation rates have led to a reduced purchasing power, weakening buyers’ appetites. Asia AA and acrylates largely lower; sentiment softer on China downtrend By Li Li Chng 29-Jun-22 21:20 SINGAPORE (ICIS)— Asia’s acrylic acid (AA) and acrylate esters spot discussions were under pressure, with market sentiment bearish amid a downtrend in China. PODCAST: China PP to face uncertainties in H2 ’22 amid high costs By Lucy Shuai 29-Jun-22 17:47 SINGAPORE (ICIS)–ICIS analysts Jady Ma and Lucy Shuai discuss the recent developments and outlook of China's polypropylene (PP) market. PODCAST: Europe and Middle East isocyanates demand slows By ICIS Editorial 29-Jun-22 17:09 LONDON (ICIS)–Isocyanates Europe editor Zubair Adam discusses current demand and supply market trends for Europe with isocyanates Middle East editor Damini Dabholkar. US ethylene begins Q3 with ample supply, eroding margins By John Donnelly 29-Jun-22 05:45 HOUSTON (ICIS)–The US ethylene market is seeing ample supply, lower margins but decent derivative demand heading into Q3. INSIGHT: Energy demand rebound at a time of crisis, bp stats show By Nigel Davis 28-Jun-22 23:39 LONDON (ICIS)–Here is the energy crisis writ large. The chart, from bp as it released its latest Statistical Review of World Energy on Tuesday, shows the sharp rebound in energy consumption as COVID-19 restrictions eased and global economic activity recovered. PODCAST: Isocyanates face high costs, squeezed margins in H2 – ICIS analysts By Morgan Condon 28-Jun-22 21:02 LONDON (ICIS)–The isocyanates market is faced with steep production costs and weakening demand across downstream sectors, presenting the industry with a darkening outlook. European PVC shows signs of lengthening on demand, global trends By Chris Barker 28-Jun-22 17:29 LONDON (ICIS)–European polyvinyl chloride (PVC) contract prices for June have settled with rollovers to decreases compared to May, with indications that the outlook for availability has lengthened compared to earlier in the year. Asia ADA trade flows punch above weight in May By Josh Quah 24-Jun-22 13:57 SINGAPORE (ICIS)–Northeast Asia adipic acid (ADA) markets logged a large trade surplus in May, according to import-export data captured by ICIS Supply and Demand Database. Europe capro, nylon 6 markets face slow summer demand By Marta Fern 24-Jun-22 00:35 LONDON (ICIS)–European caprolactam (capro) and nylon 6 markets are facing persistent soft demand, which could weaken further in the coming months while the costs of production are on the rise. VIDEO: Asia MEG may face more challenges in H2 2022 By Judith Wang 23-Jun-22 17:16 SINGAPORE (ICIS)–Watch ICIS Senior Editor Judith Wang discuss current developments in Asia's monoethylene glycol (MEG) market and its outlook. China’s NBR import offers plummet with domestic losses, soft demand By Ai Teng Lim 23-Jun-22 15:56 SINGAPORE (ICIS)–China's import offers for acrylonitrile butadiene rubber (NBR) are at year-low levels, as sellers tried to chase deals with wider discounts. Tight tonnage and robust demand push Asian chemical tanker market, sentiment bullish By Luffy Wu 23-Jun-22 14:37 SINGAPORE (ICIS)–The Asian chemical tanker shipping market saw overall upward pressure amid high global bunker levels and regional tonnage tightness, drained by robust long-haul activities and clean petroleum product (CPP) markets. PODCAST: How may China respond to looming global energy crisis? By Bee Lin Chow 23-Jun-22 13:32 SINGAPORE (ICIS)–ICIS analysts discuss how China may respond to what seems like a looming global energy crisis. US SBR demand healthy from tyre sector, but tyre imports growing By Amanda Hay 23-Jun-22 05:34 HOUSTON (ICIS)–US styrene butadiene rubber (SBR) demand healthy for tyres, but North American tyre manufacturers face growing tyre imports. INSIGHT: Don’t stifle chemicals now in the face of energy uncertainty and climate reform – UK industry By Nigel Davis 22-Jun-22 22:20 LONDON (ICIS)-The UK chemical industry is now 6% larger than at the onset of the pandemic, chief executive of the country’s sector trade group, the Chemical Industries Association (CIA), said last week. PODCAST: China benzene prices hit 8-year high; cost and supply support to persist By Yoyo Liu 17-Jun-22 10:37 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Yoyo Liu discuss the recent developments and outlook of China's benzene market. Asian BD buying slows as domestic China tumbles By Ai Teng Lim 17-Jun-22 09:48 SINGAPORE (ICIS)–Sentiment was duller in this week’s spot talks for Asian butadiene (BD) imports, as buyers retreated after the domestic China market suffered heavy losses early-week. PODCAST: Europe PET speculation rife in face of diverging upstream dynamics By Caroline Murray 17-Jun-22 00:07 LONDON (ICIS)–Mixed xylene prices are skyrocketing higher than PX prices and concerns over negative margins mount. PX June contract talks are ongoing. By contrast, MEG supply remains lengthy and demand has been low, pressuring down spot prices. The June MEG contract price also remains unconfirmed. INSIGHT: PET, politicians and TikTok – the industry’s battle for our attention By Matt Tudball 16-Jun-22 22:17 BRUSSELS (ICIS)–The battle for our attention is a fierce one. In the post-COVID-19 world, as employees we feel a sense of email overload and Zoom fatigue while as a consumer we face a constant bombardment of media telling us what we should be doing, thinking, eating, drinking and watching. Asian petrochemicals to rebound in June amid bumpy recovery – ICIS analysts By Ann Sun 16-Jun-22 12:12 SINGAPORE (ICIS)–Asian petrochemical market is expected to be generally firmer in June given higher crude prices and easing lockdowns in China, according to a latest Price Forecast by ICIS analysts. PODCAST: Global base oils supply and refinery margins to stay under pressure in H2 By Eashani Chavda 15-Jun-22 22:35 LONDON (ICIS)–ICIS editors Eashani Chavda, Samantha Wright and Amanda Hay are joined by ICIS analyst Mike Connolly to discuss the latest developments in Europe and US base oils markets. Key topics include: supply shortages, shifting trade flows, refinery margins and additive shortages. PODCAST: Chemical distributors see inflation hurting demand, downturn in prospect By Will Beacham 14-Jun-22 22:03 BARCELONA (ICIS)–Rising inflation is now hurting demand for chemicals, raising the prospect of a broad economic downturn later this year or in 2023, according to chemical distributors. China PE finds support from stimulus policies; eyes on demand performance By Sijia Li 14-Jun-22 14:57 SINGAPORE (ICIS)–China’s domestic polyethylene (PE) market entering June has found support from stimulus policies and costs. Looking ahead, players are focusing on demand recovery, with the easing of lockdowns in multiple regions amid decreasing COVID-19 infections. India domestic LAB prices rise; China demand improves as lockdowns ease By Clive Ong 10-Jun-22 11:53 SINGAPORE (ICIS)–India’s domestic prices for linear alkylbenzene (LAB) have spiked on the back of rising costs, but some players expect some headwinds with the monsoon season kicking off. Monsoon season to hamper India demand China demand sees uptick as COVID-19 restrictions ease China’s competitively priced cargoes still available in Asia (including India), Mideast Oil prices drop more than $1/bbl on partial lockdowns in China By Nurluqman Suratman 10-Jun-22 11:34 SINGAPORE (ICIS)–Oil prices fell more than $1/bbl on Friday on renewed demand fears after fresh COVID-19 lockdown measures were announced in China, but tight supply concerns capped losses. INSIGHT: Sustainability to remain the key driver for Asia recycled polymers By Arianne Perez 10-Jun-22 11:00 SINGAPORE (ICIS)–Capacity expansions of recycled polyethylene terephthalate (R-PET) and recycled polyethylene (R-PE) faced delays amid the onslaught of COVID-19, particularly last year, but overall growth of Asia polymers recycling is set to continue with sustainability as the main driver. PODCAST: European ACN market keeps a close eye on ammonia and propylene By ICIS Editorial 09-Jun-22 18:35 LONDON (ICIS)–The European acrylonitrile (ACN) market has good supply and some softening demand, but costs remain high. In this latest podcast, ICIS deputy managing editor Jane Massingham (Europe) talks to managing editor fertilizers, Julia Meehan and senior editor on olefins, Nel Weddle about the ammonia and propylene markets and what to expect in the months ahead. PODCAST: Asia benzene, styrene short-term outlook to hinge on demand-supply balance By Jasmine Khoo 09-Jun-22 11:35 SINGAPORE (ICIS)–Asia’s benzene prices have hit an all-time high on strong performance from the US amid the turnaround season, while styrene price gains have been lagging behind due to weak performance in the styrenics sector. In this podcast, Jasmine Khoo speaks with editors Angeline Soh and Trixie Yap on benzene and its key downstream styrene monomer (SM) and styrenics sectors. China PP exports may fall on narrow price gap with SE Asia By Lucy Shuai 08-Jun-22 17:09 SINGAPORE (ICIS)–With the lifting of COVID-19 lockdowns in China, as well as stimulus policies to boost the economy, China’s polypropylene (PP) prices have rebounded since late May. However, as PP prices have fallen in the southeast Asian market, China's PP exports may fall in June due to a narrow price gap. VIDEO: China PP demand set to improve in June as restrictions ease By Lucy Shuai 08-Jun-22 16:21 SINGAPORE (ICIS)–Watch industry analyst Lucy Shuai share her insights on the rebound seen in China's polypropylene (PP) market following the easing of strict COVID-19 curbs in the country. Asia Q3 biodiesel market sentiment to stay weak on poor European demand By Felicia Loo 07-Jun-22 12:13 SINGAPORE (ICIS)–The third-quarter market sentiment for southeast Asian palm methyl ester (PME) biodiesel is expected to remain weak amid poor buying requirements from Europe, a key importing region for southeast Asian material. Germany's chemicals hit hard by China lockdowns, automotive sentiment improves – Ifo By Jonathan Lopez 03-Jun-22 16:49 MADRID (ICIS)–Lockdowns in China to contain the coronavirus pandemic have had a major impact on export-intensive industrial sectors in Germany such as chemicals, research institute Ifo said on Thursday. Asia MEG rebounds on higher crude, demand recovery expectations By Judith Wang 03-Jun-22 10:50 SINGAPORE (ICIS)–Asia’s monoethylene glycol (MEG) weekly prices rebounded during the week amid stronger crude values and expectations of demand improvement due to easing lockdowns in Shanghai. Global chem production fell 2.9% year on year in April By Stefan Baumgarten 03-Jun-22 01:57 HOUSTON (ICIS)–Global chemical production volumes in April fell 4.1% month on month and 2.9% year on year, and they were off 0.4% year on year for the first four months of 2022, ICIS senior economist Kevin Swift said in a report on Thursday. China methanol to face ample supply, mixed demand performance By Doris He 01-Jun-22 21:05 SINGAPORE (ICIS)–China’s methanol market is expected to face overall ample supply from domestic and overseas producers in the near term, while demand may be mixed from different downstream sectors. INSIGHT: China, India to be main drivers of PVC supply, demand in Asia By Jonathan Chou 01-Jun-22 11:00 SINGAPORE (ICIS)–The coronavirus pandemic has changed how we live our lives, upending also supply and demand dynamics for polyvinyl chloride (PVC) and its related markets. Over two years on since the pandemic hit, much of Asia has attempted “living with COVID-19” in 2022, with some starting to treat it as an endemic disease. China SM margins likely to be squeezed by higher costs, weak demand By Tina Zhang 31-May-22 11:55 SINGAPORE (ICIS)–Margins in China's styrene monomer (SM) market are expected to continue to be squeezed in the near term, in view of rising feedstock benzene values and weak demand. China petrochemical market sentiment upbeat on Shanghai recovery plan By Fanny Zhang 30-May-22 13:27 SINGAPORE (ICIS)–China’s domestic petrochemical market sentiment is upbeat at the start of the week, with demand expected to recover when the two-month lockdown in Shanghai is lifted in June. Asian epoxy market stable, Chinese domestic market outlook ambiguous By Luffy Wu 27-May-22 11:54 SINGAPORE (ICIS)–The Asia epoxy resins market saw overall stable market sentiment while buyers exhibited improved price acceptability compared with in April. Asia nylon market cautious as Shanghai inches towards June reopening By Josh Quah 26-May-22 16:16 SINGAPORE (ICIS)–The lockdowns have been damaging for Asia's nylon market, with prolonged demand loss particularly felt in the CFR (cost & freight) China market. There have been recent signs, however, that the worst may have passed in the lead up to the reopening of key cities in China. PODCAST: Weak demand from lubricants, China’s Group II base oil import margins to be negative By Whitney Shi 25-May-22 14:09 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Whitney Shi discuss the recent developments and outlook of China's base oil market. INSIGHT: China crude consumption softens amid COVID-19 lockdowns By Pearl Bantillo 25-May-22 12:00 SINGAPORE (ICIS)–China’s consumption of crude has softened as industrial production is hit by pandemic-related restrictions in place since February, with no sign of the government giving up on its zero-COVID policy. INTERVIEW: China emergence from lockdowns, stimulus to recharge auto and construction – Covestro CFO By Joseph Chang 25-May-22 05:17 NEW YORK (ICIS)–China’s easing of and potential emergence from COVID-19 lockdowns along with government stimulus should spark a major recovery in its automotive and construction markets, the chief financial officer (CFO) of Germany-based Covestro said on Tuesday. Asian MMA peaks in May; outlook pending clarity amid easing restrictions in China By Li Li Chng 24-May-22 13:47 SINGAPORE (ICIS)–Asian methyl methacrylate (MMA) peaked in May, after increasing around 17% since H2 February. Market players are awaiting clearer picture on China’s lifting of COVID-19 lockdowns and restrictions. PODCAST: Europe PE and PP update and outlook By Ben Lake 23-May-22 23:42 LONDON (ICIS)–Senior editor, Vicky Ellis, and market editor, Ben Lake, join forces to discuss a distinct change in the polymers market. The frenzied activity in March and April has given way to a far more relaxed sentiment in May – on the buy-side, at least. Vicky and Ben give their outlook for June and take a look at events that could shake up the markets again. INSIGHT: China PE demand to rebound from June, but slow road ahead By Amy Yu 23-May-22 18:27 SINGAPORE (ICIS)—China polyethylene (PE) demand is expected to firm as COVID-19 containment measures ease, but the pace of recovery remains hindered by remaining lockdown measures. ANALYSIS AND RESOURCES

12-Aug-2022

TOPIC PAGE: War in Ukraine, gas crisis

Updated at 08:30 GMT on 12 August with latest headlines. Please scroll down to see headlines. Map of gas-related outages updated at 17:45 GMT on 22 July.  The war in Ukraine first caused oil price volatility, which increased as surging COVID-19 cases in China led to fresh lockdowns, hitting demand and disrupting supply chains. China is the world’s second biggest economy and largest oil importer. Now Russia's decision to reduce flows of natural gas to Europe means the continent has to look forward to a winter of potential rationing, which could hit chemical production. Tightened supply has also sent gas prices soaring, with high costs forcing production cuts, especially in fertilizers. India is facing a more severe shortage of fertilizers and edible oil amid wide-ranging trade disruptions as the Ukraine war rages on, with financial sanctions tightening on Russia. Europe’s energy challenge is immense and put into stark relief by the response to Russia’s war in Ukraine. Cutting the ties that bind EU and non-EU nations to Russian gas and oil will be extremely painful this year and in years to come: the actions proposed by the European Commission put that into context. This topic page examines the impact of the Ukraine conflict on oil, gas, fertilizer and chemical markets. Image credit Vadim Ghirda/AP/Shutterstock Europe’s energy markets witnessed a year of record prices and extreme volatility in 2021. Russia's invasion of Ukraine has led to more difficult conditions for global markets in 2022. GAS SUMMARY Gas storage low in Europe, winter demand 30% higher than rest of year Record shipments of liquefied natural gas (LNG) to Europe so far in 2022 LNG could ease Europe shortages if Russia supplies cut Europe LNG processing operating at full capacity Russia resumed flows through Nord Stream I pipeline, but at reduced levels EU plan calls for a 15% cut to consumption, industry may face much higher reductions AMMONIA SUMMARY Russia supplies 20% of global seaborne ammonia market Disrupted supply has pushed up fertilizer and food prices OIL SUMMARY Friendship oil pipeline flows through Ukraine Russian oil feeds around a quarter of Europe demand Europe seeks to end reliance on Russian crude oil CHEMICALS SUMMARY High Europe gas and electricity prices force price hikes, energy surcharges Volatile oil and feedstock prices dent chemical producer margins Elevated oil prices dent consumer confidence and demand CEOs plan now for winter gas rationing BASF says it will have to close Ludwigshafen site if gas supplies fall below 50% for a prolonged period Europe is heavily reliant on Russian gas and exposed to disruptions in supply,  but Russia is also an important oil exporter and a supplier of fossil fuel products, which find their way to international markets via Ukraine's ports. Sanctions and measures against Russian exports of oil and gas have sent shockwaves across the global economy, lifting the cost of living, impacting industrial and agricultural production and potentially leading to social unrest. ICIS has taken a broader perspective, asking how vulnerable energy and energy-related supplies are to disruptions, what contingency plans are put in place and what could be expected in the upcoming weeks. How vulnerable are energy and energy-related Russian supplies to disruptions? Europe depends for close to 40% of its annual gas consumption on Russian supplies, imported via four routes – Ukraine, Belarus-Poland as well as the Nord Stream 1 and TurkStream corridors linking Russia to Germany and Turkey via the Baltic and Black Sea, respectively. Overall Russian pipeline supplies were limited throughout 2021, and since the beginning of this year producer Gazprom has shipped only one-third of the gas that it was expected to deliver to European consumers via Ukraine as part of a five-year transit agreement. Russia has banned exports of gas to several EU countries, and reduced flows through the Nord Stream I pipeline. European petrochemicals players face even higher gas prices as a result. Fertlizer companies – where gas can account for 80% of costs – have been forced to curtail production. If the conflict escalates, Ukraine transit pipelines may come under attack but disruptions could be limited because the infrastructure has been built to grant flexibility, allowing the operator to reroute flows away from potentially damaged segments. AMMONIA IMPACT The Togliatti-Azot pipeline, the world’s longest ammonia pipeline stretching 2,471km from the Togliatti Azot plant in Russian Samara Oblast to the Ukrainian Black Sea port of Yuzhny, could be caught up in the cross-fire. Russian ammonia supplies account for around 20% of the global seaborne merchant ammonia market each month. Around two thirds of those volumes are exported via Yuzhny, with the rest reaching European and global markets via Baltic ports. Ammonia is a prime material for fertilizers, so curtailments could potentially lead to higher food prices and shortages. Ammonia market players are scrambling to cover positions and assess options as the Russian invasion of Ukraine saw loadings at the key export hub of Yuzhny halted with immediate effect. Russian nitrogen fertilizer major Togliatti confirmed the suspension of the transit of ammonia to the Black Sea port via pipeline to ensure the safety of people living in the vicinity of the lengthy conduit. The Samara Oblast-based giant also confirmed the shut down of four of its seven ammonia units, with the other three plants operating at reduced rates. OIL PIPELINES VULNERABLE Supplies on the world’s longest oil pipeline, the Friendship (Druzhba) pipeline, could be threatened if the conflict leads to tough sanctions. The pipeline carries oil from central Russia 4,000km west to Ukraine and Belarus and runs close to the Belarus-Ukraine border. Russia exports around 5m bbl/day, of which half are exported to Europe, including via this pipeline. Russian oil accounts for about a quarter of Europe’s consumption, with the Druzhba pipeline carrying close to 1m bbl/day. Should sanctions be imposed and exports hindered, Europe will need to secure alternative cargoes from the global market. Europe consumed most exports of Urals, Russia’s biggest export grade, in 2021 after Saudi Arabia boosted market share in China. Almost 10m tonnes of Urals went through Rotterdam in the first half of last year, up 2m tonnes on 2020. Germany stands most exposed because it gets 25% of its oil from Russia. CHEMICALS IMPACT Gas and electricity are important components in the production costs of many chemicals. Surging gas and feedstock prices in Europe have caused big hikes in contract and spot prices. Europe is now at a competitive disadvantage to other regions and some customers are seeking new sources of lower-priced supply, especially from Asia and the Middle East. The conflict in Ukraine has pushed European gas prices back up to record levels, so some chemical producers may consider ceasing production, or adding further energy surcharges. Rising oil prices since late 2021 have already put chemical margins under pressure, and this has continued into 2022. As oil and naphtha prices soared, margins for ethylene production based on naphtha went nagative for the first time ICIS record began. The are now are swinging wildy in tandem with oil price movements. Chemical producers are struggling to pass on increasing naphtha feedstock and energy costs, especially in Europe. Elevated oil prices also dent downstream consumer confidence and spending. What contingency plans are being put in place? US and European officials have been planning for backup LNG supplies. Exports of LNG from Algeria, Qatar, the US and even Australia have been discussed as alternatives. Although Europe imported a record 11bn cubic metres (bcm) of LNG in January alone, half of which were sourced in the US, much of future supplies would depend on price as well as supply and processing capacity. Europe is proposing to replace 100bn cubic metres (m3) of Russian gas with alternative supplies by the end of the year. “In this scenario, there would be huge problems unless Europe gets it act together. I estimate that even with new liquified natural gas (LNG) supplies from the US, Norway, and Qatar plus energy efficiency measures and more use of renewables, Europe would still be short by 30-40bn m3," said ICIS senior energy editor, Aura Sabadus. You will find more infographics at Statista If the Asian premium were to increase, LNG cargoes would head in that direction, even as seasonal European winter gas demand is on average 30% higher than the rest of the year. Supply disruptions caused by escalating tensions may lead to a price rebound, incentivising more LNG to return to Europe. However, European import terminals are already operating at nameplate capacity. A record of 5,000GWh/day was reached in mid-January, according to EU data. Even if more LNG were to reach European terminals, countries in central and eastern Europe which rely on Russian flows shipped via Ukraine, would struggle to secure imported LNG. For oil markets, in case of an attack but no international sanctions, the worst-case scenario would be for approximately 240,000 bbl/day of lost Russian exports via Ukraine. There are other seaborne routes, including the Russian Black Sea port of Novorossiysk. Gas rationing – impact on Europe petrochemicals, fertilizers Embattled European fertilizer and petrochemical producers may be the first in line to cut gas consumption as political pressure is mounting to save supplies ahead of a difficult winter. As Russia, Europe’s largest gas supplier, has been limiting exports to less than a quarter of its deliveries two years ago and may stop them altogether amid its political stand-off with the EU, Brussels has now issued guidance to reduce demand by 15% between 1 August 2022 – 31 March across member states. Policymakers recommend voluntary reductions but say these would become mandatory in case of a supply emergency jeopardising the bloc’s security. DEMAND REDUCTION The EU’s largest consumers include households, accounting for 37% of total demand, electricity and heat generation covering around 30% and industrial consumption accounting for another 30%. Record high gas prices and an ongoing gas supply crunch over the least year have already been forcing industrial consumers to limit or stop production or seek import substitution globally. Data compiled by ICIS Gas Analytics show that overall year-on-year gas demand has declined by 8.2% in the year to date and by 3.9% for the same period over the 2015-2019 average. EU proposals for demand reduction released on 20 July indicate the industrial sector may be priority target for major reductions, with three sectors – glass, ceramics and chemicals – consuming half of the sector’s total. FERTILIZERS The fertilizer sector, one of the most gas-intensive industries, has also been one of the most affected so far because with gas prices soaring more than five times the long-term average in recent months, the cost to produce ammonia and urea rose to $1,700/tonne and $1,250/tonne respectively. This is around 60% above the current market price of these key products of the fertilizer sector. ICIS experts focusing on the fertilizer sector estimate that as much as 40% of urea production may have been cut year on year in Europe, although the information is difficult to confirm since there is no official confirmation on specific output limitations. PETROCHEMICALS On the petrochemicals side, there have been no reports of shutdowns or production reductions, but producers are making detailed plans for rationing, particularly in Germany, where the chemicals and pharmaceuticals industry uses about 140 TWh per year, or about 15 percent of Germany's gas consumption. Gas is mainly used by petrochemicals to generate energy such as electricity and steam as well as to fire furnaces for production complexes such as crackers. Sites are able to lower operating rates significantly, but they may be forced to close if gas supplies drop so much that production becomes uneconomic or difficult from a technical perspective. BASF’s Ludwigshafen site is the world’s largest integrated chemical complex owned by a single company and confirmed to ICIS that it will have to shut down if gas supply collapses by more than half for a sustained period of time. Ukraine conflict threatens Europe oil supply, chemicals production With Russia's invasion of Ukraine, sanctions could cut supplies of crude oil through the Druzhba pipeline, threatening oil refinery operations and chemicals production at installations in Hungary, Slovakia, Czech Republic, Poland and the former East Germany. Russian oil supplies up to a quarter of Europe’s crude imports, with refineries in central and eastern Europe, which are attached to the Druzhba pipeline, particularly reliant on these supplies. Any interruption to these supplies could force refineries to reduce operating rates unless they can find alternative supplies. Analysis of the ICIS Supply & Demand database shows that the countries Druzhba runs through, except for Germany, are reliant on Russian crude oil for more than half of their imports, led by Slovakia which obtained 96% of its supplies from Russia in 2021. Chemical production downstream of refineries in these countries could be impacted by any reduction in operating rates. The ICIS data forecast that for 2022, 2.79m tonnes of ethylene (11% of total European capacity) and 2.34m tonnes of propylene (12% of total European capacity) are reliant on refineries located along the Druzhba pipeline. While some alternative sources of crude oil could be sourced, it is unlikely normal levels of operations could be maintained. Michael Connolly, ICIS Principal Analyst Refining said: “Although many have built alternate sources, keeping full operating rates would be difficult for them as they rely on a consistent and reliable source of crude. Most refiners in Europe are aware of the risk of Russian crude and over the past 5-10 years have tried to reduce their dependence, or at least to build some capability to have an alternate supply – it doesn't mean they would be unaffected, but there should be a little bit of resilience, depending on the site.” Connolly explained that some land-locked refineries along the Druzhba pipeline have built pipelines to the coast, allowing alternative sources of crude oil to be sourced. However, these pipelines may not have capacity to feed the whole refinery. A spokesperson for Grupa LOTOS said: "The LOTOS refinery has dealt with suspended supplies by land before. Due to the contamination of Russian oil with chlorines, PERN, the state-owned operator of transmission and storage infrastructure, had to completely discontinue the transmission of crude oil from the eastern direction between 24 April and 9 June 2019." He added that scheduling of oil supplies by sea helped to secure volumes sufficient to maintain an unchanged level of throughput and maximise fuel production. TotalEnergies and PKN Orlen declined to comment while MOL and PCK have not yet replied to requests for comment. UKRAINE CHEMICALS UNDER THREAT With Russian forces advancing across Ukraine, chemical and fertilizer facilities may be threatened by physical damage, interrupted power and gas supplies or logistics disruption. Kalush cracker closed Karpatnaftohkhim's cracker at Kalush has been closed down because of the imposition of martial law in Ukraine. It has capacity (tonnes/year) of 250,000 (ethylene); 117,000 (propylene) 110,000 (LLDPE), 300,000 (PVC), 100,000 (benzene). Black Sea export hub closed  Ammonia market players have scrambled to cover positions and assess options as the Russian invasion of Ukraine saw loadings at the key export hub of Yuzhny halted with immediate effect. Russian nitrogen fertilizer major Togliatti confirmed the suspension of the transit of ammonia to the Black Sea port via pipeline to ensure the safety of people living in the vicinity of the lengthy conduit. The Samara Oblast-based giant also confirmed the shut down of four of its seven ammonia units, with the other three plants operating at reduced rates. Russia export disruptions to shift global trade flows, future capacities threatened Disruptions to Russia’s chemicals and polymers exports will change trade flows, particularly to Europe and Asia, as international sanctions, lack of logistics and even “self-sanctions” limit volumes. While Russia’s capacities are relatively small on a global scale, they can still have a significant impact on regional markets if these exports are disrupted. Key Russia exports include methanol, polyethylene (PE), polypropylene (PP), styrene and paraxylene (PX). Russia has increased exports of high density polyethylene (HDPE) and polypropylene (PP) in particular in 2020 and 2021 as new capacity started up from SIBUR’s ZapSibNeftekhim complex in Tobolsk in 2020. LATEST HEADLINES Malaysia’s Q2 GDP expands 8.9%, growth to moderate on global uncertainties By Nurluqman Suratman 12-Aug-22 15:20 SINGAPORE (ICIS)–Malaysia’s economy grew by 8.9% year on year in the second quarter of this year on improving domestic demand, but heightened global uncertainties are expected to weigh on its growth outlook, the central bank said on Friday. High production costs erode Asian R-HDPE margins By Arianne Perez 12-Aug-22 13:48 SINGAPORE (ICIS)–As production costs of recycled high-density polyethylene (R-HDPE) blow moulding pellets remain high in Asia while demand stays lacklustre, sellers’ margins will continue to narrow in the weeks ahead. PODCAST: Asian olefins producers challenged to preserve margins in H2 – ICIS analysts By Morgan Condon 12-Aug-22 05:00 LONDON (ICIS)–Asian olefins capacity is set to increase in the coming months, but against the prospect of a global recession and challenging demand it is unclear how this will develop for producers. Trade data show US base oil export availability has not returned to pre-pandemic levels By Amanda Hay 12-Aug-22 03:04 HOUSTON (ICIS)–ICIS trade data reveal that the US has not yet returned to pre-pandemic export levels of base oils as supply constraints, shifting trade flows and high prices have curbed export activity. Gas-fired generation drives German power Cal ’23 By Anne Petersen 12-Aug-22 00:45 LONDON (ICIS)–The price of gas remains the main driver for the German power Cal ’23, despite the German government’s focus on limiting the use of gas for power production. OPEC revises crude demand forecast down on slowing global economy By Jonathan Lopez 11-Aug-22 22:40 MADRID (ICIS)–While crude oil demand continued its “strong recovery” to pre-pandemic levels, economic growth showed signs of a slowdown in July and, with it, crude demand also took a hit, producing cartel OPEC said on Thursday. UK to face increased competition for LNG in fourth quarter By Hector Falconer 11-Aug-22 19:20 LONDON (ICIS)–Britain is likely to face increased competition for LNG supply in the fourth quarter of 2022 amid uncertainty over Russian piped supply to mainland Europe, supporting NBP winter contracts especially in the case of cold weather. Oil prices exposed to opposing fundamentals, extreme volatility By Cecilia Barreiro 11-Aug-22 18:58 LONDON (ICIS)–The August outlook for oil prices is subject to increased uncertainty resulting from a number of bullish and bearish factors. Russia’s invasion of Ukraine will continue to be a central driving force and keep oil markets volatile while rising global inflation is expected to keep a lid on demand. Singapore trims 2022 GDP growth forecast to 3-4% on global headwinds By Nurluqman Suratman 11-Aug-22 11:43 SINGAPORE (ICIS)–Singapore on Thursday trimmed its 2022 GDP growth forecast to 3-4%, from the previous estimate of 3-5%, due to the deteriorating global economic environment. SE Asia palm biodiesel to see record export volumes, healthy demand By Keven Zhang 11-Aug-22 11:15 SINGAPORE (ICIS)–Southeast Asia's palm methyl ester (PME) export volumes are likely to climb to record highs in July and August, as several bullish factors boost buying interest. PODCAST: Global chemical prices collapse, Europe prepares for dry summer, tough winter By Will Beacham 10-Aug-22 22:43 BARCELONA (ICIS)–Global chemical prices are falling just as Europe braces itself for more summer heatwaves, drought and a winter of gas rationing. Thai PTTGC Q2 net profit falls sharply amid lower chem margins By Nurluqman Suratman 10-Aug-22 15:30 SINGAPORE (ICIS)–PTT Global Chemical’s (PTTGC) net profit fell by 83.9% year on year in the second quarter, weighed partly by lower margins across all of its chemicals businesses, the Thailand-based producer said on Wednesday. Saudi SABIC Q2 net profit up 3.8%; H2 margins to stay under pressure By Nurluqman Suratman 10-Aug-22 12:42 SINGAPORE (ICIS)–Saudi petrochemicals major SABIC posted a 3.8% year-on-year increase in second-quarter net profit, while it expects margins to remain under pressure in the second half of 2022. INSIGHT: Indonesia economy surprises in Q2; prospects dim in H2 By Pearl Bantillo 10-Aug-22 21:03 SINGAPORE (ICIS)–Indonesia’s growth momentum is expected to weaken for the rest of the year and into 2023, as high inflation hits overall domestic consumption. External demand is being threatened by a possible global recession. Saudi SABIC Q2 net profit up 3.8%; H2 margins to stay under pressure By Nurluqman Suratman 10-Aug-22 12:42 SINGAPORE (ICIS)–Saudi petrochemicals major SABIC posted a 3.8% year-on-year increase in second-quarter net profit, while it expects margins to remain under pressure in the second half of 2022. China July petrochemical markets slump; outlook stays bearish By Yvonne Shi 09-Aug-22 08:00 SINGAPORE (ICIS)–China's petrochemical markets fell across the board in July on weak demand, which persists into August while supply is projected to grow for the rest of the year. Asia BDO extends losses as demand at a low ebb By Clive Ong 04-Aug-22 16:47 SINGAPORE (ICIS)–The Asian butanediol (BDO) market extended losses with the downtrend still firmly entrenched. Market participants expect further downside potential in the near term as the decline that started in April does not appear to have run its course. PODCAST: LPG substitution of higher-priced LNG limited in China By Yan Wang 04-Aug-22 15:37 GUANGZHOU (ICIS)–ICIS analysts Wang Yan and Xu Fei discuss with Asia deputy news editor Pearl Bantillo why China is not aggressively using liquefied petroleum gas (LPG) as substitute for liquefied natural gas (LNG) in fuel applications in industries despite global supply concerns and soaring LNG prices. Asian import offers for NBR fall with weak demand, outlook bleak By Ai Teng Lim 04-Aug-22 10:34 SINGAPORE (ICIS)–Asian spot import offers for acrylonitrile butadiene rubber (NBR) have slipped lower as sellers widened discounts to chase deals in a low-demand market. India July exports slip; trade deficit widens to record $31bn By Priya Jestin 03-Aug-22 14:43 MUMBAI (ICIS)–India’s merchandise exports in July dipped for the first time in over a year, while increased imports of crude oil and coal bloated the country’s trade deficit to a record $31bn. Asia butac, etac slump; demand tepid on weak regional currencies By Melanie Wee 02-Aug-22 17:41 SINGAPORE (ICIS)–Asia’s butyl acetate (butac) markets are being weighed down by tepid demand as continued weakness of currencies in the region continues to undermine imports. Asia July industries – a mixed bag as battle with inflation continues By Nurluqman Suratman 02-Aug-22 13:59 SINGAPORE (ICIS)–Asia's manufacturing sector in July presented a mixed performance, with major economies in the northeast showing a marked slowdown in activity, as the region continues to contend with high input costs and weak demand. OUTLOOK: Asia epoxy resins to stay sluggish; price competition may intensify By Luffy Wu 02-Aug-22 13:46 SINGAPORE (ICIS)–Uncertain end-demand outlook and recession fears continue to haunt Asia’s epoxy resins market, with aggressive exports from China forcing some regional suppliers to lower offer. South Korea July inflation nears 24-year high at 6.3% By Nurluqman Suratman 02-Aug-22 12:26 SINGAPORE (ICIS)–South Korea's consumer price index (CPI) rose by 6.3% year on year in July, accelerating from 6.0% in the previous month and the fastest rate recorded in nearly 24 years. OUTLOOK: Europe soda ash market considers quarterly prices as yearly contracts see further correction By Anne-Sophie Briant-Vaghela 28-Jul-22 18:33 LONDON (ICIS)–Northwest Europe (NWE) and Black Sea contract prices rose 3% and 5.4% from Q2 contract prices this week, marking a third adjustment to annual agreements settled in Q4 last year, as the market reconsiders the pace at which to negotiate prices going forward in the face of heightened volatility in upstream markets. OUTLOOK: Asian OX demand to stay soft, export opportunity to the West By Samuel Wong 28-Jul-22 16:47 SINGAPORE (ICIS)–Demand for Asian orthoxylene (OX) is expected to stay soft for the second half of the year, amid a pessimistic downstream demand outlook going forward. Shell Q2 chemicals loss of $158m as margins hit By Nigel Davis 28-Jul-22 17:54 LONDON (ICIS)–Higher feedstock and utility costs and higher turnaround activities hit Shell’s chemicals earnings in the second quarter, the energy giant said on Thursday. PODCAST: Asia C2, downstream recovery in H2 fraught with risks By Jasmine Khoo 28-Jul-22 15:25 SINGAPORE (ICIS)–The first half of 2022 saw widespread cutbacks in Asia’s cracker and downstream operating rates as the market faced more headwinds from the war in Ukraine and COVID flare-ups in China. Belgium’s Solvay Q2 underlying profit jumps on higher prices, strong demand By Pearl Bantillo 28-Jul-22 14:42 SINGAPORE (ICIS)–Solvay’s second-quarter underlying profit increased 70% year on year on the back of higher prices and a 6% increase in sales volumes amid strong demand across key markets, the Belgian specialty chemicals producer said on Thursday. S Korea's S-Oil Q2 net income more than doubles; Q3 PX spread to weaken By Nurluqman Suratman 28-Jul-22 13:38 SINGAPORE (ICIS)–S-Oil's second-quarter net income more than doubled year on year on strong refining margins and robust aromatics demand, but the South Korean producer’s paraxylene (PX) spread is expected to weaken in July-September 2022. Fitch downgrades PTTGC rating as high costs to hit earnings By Pearl Bantillo 25-Jul-22 17:44 SINGAPORE (ICIS)–Fitch Ratings has downgraded PTT Global Chemical’ long-term national rating and senior unsecured rating to “AA” from “AA+” given weaker earnings prospect for the Thai producer. Singapore June core inflation at 4.4% – highest since Nov 2008 By Nurluqman Suratman 25-Jul-22 14:11 SINGAPORE (ICIS)–Singapore's core year-on-year inflation in June stood at 4.4%, up from 3.6% in May and the highest hit since November 2008, official data showed on Monday. India's RIL Q1 oil-to-chems earnings jump 63%; cracker rates fall to 87% By Nurluqman Suratman 25-Jul-22 12:36 SINGAPORE (ICIS)–Reliance Industries Ltd's (RIL) oil-to-chemicals net profit increased by around 63% year on year in its fiscal first quarter ending June 2022 on the back of higher oil and product prices. BLOG: Europe’s gas crisis: the implications for global chemicalsBy John Richardson 25-Jul-22 11:41 SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The European chemicals is no doubt in the midst of intensive crisis management because of the risk that this winter will see power cuts and interruptions in the supply of natural gas supply needed for feedstocks and to run furnaces, etc. INSIGHT: Weakening Asian currencies stifle petrochemical demand By Felicia Loo 22-Jul-22 13:41 SINGAPORE (ICIS)–The continued depreciation of Asian currencies against the strong US dollar is quashing hopes of a petrochemical demand recovery, as imports become more expensive, eroding the purchasing power of buyers in the region. INSIGHT: Europe chemicals must prepare now for deep gas cuts By Will Beacham 22-Jul-22 11:00 LONDON (ICIS)–Chemical companies across Europe need to prepare now for an almighty battle over gas rationing as winter approaches. The Nord Stream pipeline is back online at around 40% capacity, but it may continue to operate at very reduced rates and could easily be switched off again if the Kremlin decides to continue using it as a political weapon to hurt Europe’s economy. Gas rationing is still likely this winter, with or without this source of supply. INSIGHT: Ferts, petchems in firing line as EU gas stockpile pressure intensifies By Aura Sabadus 20-Jul-22 18:38 LONDON (ICIS)–Embattled European fertilizer and petrochemical producers may be the first in line to cut gas consumption as political pressure is mounting to save supplies ahead of a difficult winter. As Russia, Europe’s largest gas supplier, has been limiting exports to less than a quarter of its deliveries two years ago and may stop them altogether amid its political stand-off with the EU, Brussels has now issued guidance to reduce demand by 15% between 1 August 2022 – 31 March across member states. Gas flows resume on Nord Stream pipeline but remain below capacity By Tom Brown 21-Jul-22 12:22 LONDON (ICIS)–Flows resumed on Thursday along the Nord Stream natural gas pipeline between Russia and Europe, but the volume of deliveries remains significantly below capacity. Running between Russia and Germany, the pipeline is a key part of the EU’s energy infrastructure, and there had been questions over whether gas deliveries would resume once work had been completed. Inflation to stay ‘undesirably’ high in mid-term – ECB’s Lagarde By Tom Brown 21-Jul-22 23:42 LONDON (ICIS)–Inflation levels in the eurozone are expected to remain high for some time, European Central Bank (ECB) president Christine Lagarde said on Thursday, as the bank moved to hike each of its key interest rates and prepare a new bond purchase scheme. OUTLOOK: Asia PX to take cue from downstream in H2; tight supply to ease By Samuel Wong 21-Jul-22 13:57 SINGAPORE (ICIS)–Asia’s paraxylene (PX) is expected to take its cue from the downstream purified terephthalic acid (PTA) market in the second half of 2022, moving away from the previous strong support from gasoline blending markets. Developing Asia GDP growth cut to 4.6% on China slowdown – ADB By Nurluqman Suratman 21-Jul-22 12:05 SINGAPORE (ICIS)–The Asian Development Bank (ADB) on Thursday cut its GDP growth forecast for developing Asian countries to 4.6% from its previous projection of 5.2%, with China’s growth lowered by a full percentage point to 4.0%. INTERVIEW: Financing market a major headwind for chemical deals – banker By Joseph Chang 18-Jul-22 23:53 NEW YORK (ICIS)–Extremely challenged debt markets will be a major headwind for leveraged chemical deals going forward, an investment banker said. Global weekly spot IPEX down significantly on falls across regions By Yashas Mudumbai 18-Jul-22 17:40 LONDON (ICIS)–The spot chemicals index dropped by 5.2% as falls across regions continued, according to the latest figures from the weekly ICIS Petrochemical Index (IPEX). Asia July petrochemicals on general downtrend; sentiment to stay bearish By Jimmy Zhang 18-Jul-22 17:07 SINGAPORE (ICIS)–Downward price corrections have been seen for crude and Asia’s petrochemicals markets in July, following a general increase in June. ICIS expects the bearish sentiment to continue throughout the month as previous sharp increases in crude prices may not be seen again for the rest of 2022. OUTLOOK: Asia FAE demand to stay soft on sluggish Chinese economy By Helen Yan 15-Jul-22 17:37 SINGAPORE (ICIS)–Asia’s fatty alcohol ethoxylates (FAE) demand is expected to remain soft in the near term due to prevailing weak market conditions and a sluggish Chinese economy. OUTLOOK: Asia VAM correction accelerates; H2 demand to stay weak By Helen Lee 15-Jul-22 15:48 SINGAPORE (ICIS)–Asia’s vinyl acetate monomer (VAM) market correction has accelerated (this week) since late May (late May refers to the start of the correction) on broad-based demand slowdown, with inflationary pressures dampening the outlook in the second half. Indonesia palm oil shipments surge 89% in June after lifting export banBy Nurluqman Suratman 15-Jul-22 15:20 SINGAPORE (ICIS)–Indonesia's shipments of palm oil and its derivatives surged by 89.3% year on year in June following the lifting of an export ban a month earlier, official data showed on Friday. World petrochemical market sentiment weak as demand falters By Felicia Loo 15-Jul-22 14:12 SINGAPORE (ICIS)-Global petrochemical markets are mired in a challenging situation writ large, with demand dull as recession risks gather pace. OUTLOOK: East, South Asia LAB at a crossroad amid elevated economic uncertainty By Clive Ong 15-Jul-22 11:12 SINGAPORE (ICIS)–Linear alkylbenzene (LAB) markets in east and south Asia are at a crossroad with the path ahead mired in uncertainty. With outlook increasingly clouded, participants found decision-making an onerous task. Inflationary pressures could impact economic growth in Europe for coming years By Morgan Condon 14-Jul-22 22:55 LONDON (ICIS)–The European economy is set to hit record highs for inflation this year as the Russian invasion of Ukraine has driven energy and food prices higher, but volatile macroeconomic conditions obfuscate when sentiment will calm down. INSIGHT: Asia C2, downstream recovery in H2 fraught with risks (Part 2) By Yeow Pei Lin 14-Jul-22 13:00 SINGAPORE (ICIS)–The outlook for Asia's ethylene derivatives remains largely weak in the second half of 2022. Capacity is growing across downstream sectors but demand is uncertain amid China's zero-COVID stance and global recession fears. INSIGHT: Asia C2, downstream recovery in H2 fraught with risks By Yeow Pei Lin 13-Jul-22 13:00 SINGAPORE (ICIS)–The first half of 2022 saw widespread cutbacks in Asia’s cracker and downstream operating rates as the market, which was already sagging under the weight of huge capacity increases in South Korea and China, faced more headwinds from the war in Ukraine and COVID flare-ups in China. Singapore tightens monetary policy further to tame inflationBy Nurluqman Suratman 14-Jul-22 13:53 SINGAPORE (ICIS)–Singapore's central bank unexpectedly tightened its monetary policy on Thursday in a bid to quell mounting inflation pressures, which are expected to continue heating up this year. OUTLOOK: China base oils imports to continue decline in H2 By Whitney Shi 12-Jul-22 13:43 SINGAPORE (ICIS)–China’s base oils imports slumped year on year in January-June 2022 on strong import prices, which will likely persist into the second half although demand from downstream lubricant producers could improve in the third quarter. LNG shipping activity rises in both basins By Roman Kazmin 12-Jul-22 11:39 SINGAPORE (ICIS)–South Korean shipowner H-Line has chartered a vessel for a single voyage on behalf of the incumbent KOGAS as charter activity steps up in the Atlantic and Pacific basins. Crude falls nearly $2/bbl on fresh China COVID-19 curbs By Nurluqman Suratman 12-Jul-22 11:08 SINGAPORE (ICIS)–Oil prices fell by nearly $2/bbl on Tuesday morning on worries over fresh COVID-19 restrictions in China, the world's biggest crude importer. OUTLOOK: Asia naphtha braces for H2 with trepidation, frail demand By Melanie Wee 12-Jul-22 10:33 SINGAPORE (ICIS)–Asia naphtha markets are headed for challenging times as cautious demand outweighs oil supply concerns. Europe petchems natgas worries rise as Nord Stream 1 enters maintenance By Morgan Condon 08-Jul-22 17:18 LONDON (ICIS)–The threat of short gas supply in Europe is causing concern in the region’s petrochemicals industry and could begin to weigh down on production. INSIGHT: UK chemicals battle 'Four Horsemen of the Apocalypse' By Will Beacham 08-Jul-22 18:23 LONDON (ICIS)–The UK’s chemical sector is battling against “The Four Horsemen of the Apocalypse” as it is battered by the fallout from Brexit, COVID-19, the cost of living crisis and the war in Ukraine, according to the CEO of trade group The Chemical Industries Association (CIA). Malaysia May chemicals sales up 7.7%; high inflation threatens production By Nurluqman Suratman 08-Jul-22 16:16 SINGAPORE (ICIS)–Malaysia's chemicals sector sales in May rose by 7.7% year on year, supporting the overall expansion in manufacturing revenue, but inflation headwinds are expected to continue to weigh on overall factory activity. NE Asia ethylene stays weak; August demand recovery likely tepid By Yeow Pei Lin 08-Jul-22 10:53 SINGAPORE (ICIS)–Northeast Asia’s spot ethylene import prices fell for a 14th week as poor downstream demand continued to outweigh production cuts. Crude trades below $100/bbl on global recession fears By Nurluqman Suratman 07-Jul-22 12:02 SINGAPORE (ICIS)–Oil prices were extending losses on Thursday, with both key benchmarks trading below the psychological $100/bbl mark, amid growing concerns that the global economy will again plunge into a recession. Asia petchems mired in bearishness on elevated recession fears By Felicia Loo 07-Jul-22 11:21 SINGAPORE (ICIS)–Asian petrochemical markets are in a jam, with price bearishness across the board as recession risks continue to mount. Elevated concerns on the economic front, from the fallout of the Russia-Ukraine conflict and sanctions on Russia, plus fears of upward spiralling inflation continue to weigh on sentiment. OUTLOOK: Tight supply concerns flip to reduced oil demand by Q4 By Barney Gray 07-Jul-22 00:49 LONDON (ICIS)–Oil prices were in a post-Covid recovery phase prior to Russia’s invasion of Ukraine in February. Since then, H1 crude prices have been driven by the fallout from the war, reaching record highs. But the oil market will be characterised by major volatility and rising uncertainty as we head into H2. Japan May trade deficit biggest in eight years; imports surge 48.9% By Pearl Bantillo 16-Jun-22 18:56 SINGAPORE (ICIS)–Japan posted its biggest trade deficit in eight years at yen (Y) 2.385tr ($18bn), with imports surging by 48.9%, largely due to high energy prices and sharp depreciation of the yen. US LNG deliveries to the UK in July set to be more profitable than Asian destinations By Kaja Sillett 16-Jun-22 18:36 LONDON (ICIS)–US LNG deliveries to the UK in July are set to be more profitable than to east Asian destinations, despite the British NBP July’22 contract remaining at a discount to the equivalent ICIS East Asia Index (EAX) price, according to ICIS calculations. India May exports grow 20.6%; trade deficit widens to $24.3bn By Priya Jestin 16-Jun-22 17:03 MUMBAI (ICIS)–India’s merchandise exports in May rose by 20.6% year on year to $38.9bn, backed by higher shipments of petroleum products and chemicals, but the country’s trade deficit widened due to high cost of energy imports. China MEG prices rise on stronger crude market By Cindy Qiu 16-Jun-22 14:57 SINGAPORE (ICIS)–China’s monoethylene glycol (MEG) prices have been on an uptrend since June, mainly driven by the bullish crude market, as supply-demand fundamentals remain largely unchanged. This has somewhat dampened market players’ confidence in the market outlook. Asian petrochemicals to rebound in June amid bumpy recovery – ICIS analysts By Ann Sun 16-Jun-22 12:12 SINGAPORE (ICIS)–Asian petrochemical market is expected to be generally firmer in June given higher crude prices and easing lockdowns in China, according to a latest Price Forecast by ICIS analysts. Asia BDO weakens on prevailing weak demand, ample supply By Clive Ong 16-Jun-22 11:32 SINGAPORE (ICIS)–The Asian butanediol (BDO) market remains on a downtrend with regional demand staying lacklustre while ample supply made buyers unhurried. Suppliers concede that buying interest showed limited signs of any revival with further market weakness a possibility. S Korea truckers' strike to hit Ulsan petrochemical output; halts port ops By Nurluqman Suratman 10-Jun-22 18:28 SINGAPORE (ICIS)–The ongoing nationwide strike by unionised truckers in South Korea are forcing several producers in the petrochemical hub of Ulsan to consider production cuts amid logistics disruption. SE Asia biodiesel market optimism rises on post-lockdown China By Felicia Loo 10-Jun-22 17:35 SINGAPORE (ICIS)–Market optimism in China to increase imports of southeast Asian palm methyl ester (PME) biodiesel helped bolster market sentiment to some degree amid higher weekly gains in feedstock crude palm oil (CPO) futures. Asia PET offers reaching level of last historic high on recent upstream price surges By Hazel Goh 10-Jun-22 12:15 SINGAPORE (ICIS)–Asia polyethylene terephthalate (PET) offers increased in the week and were approaching the level of the last historic high four years ago amid recent Asia upstream price surges. NE Asia ethylene stays bearish on ample supply, weak demand By Yeow Pei Lin 10-Jun-22 11:59 SINGAPORE (ICIS)–Northeast Asia’s spot ethylene prices stayed weak due to ample supply amid limited demand for end-June and first-half July arrival cargoes. India domestic LAB prices rise; China demand improves as lockdowns ease By Clive Ong 10-Jun-22 11:53 SINGAPORE (ICIS)–India’s domestic prices for linear alkylbenzene (LAB) have spiked on the back of rising costs, but some players expect some headwinds with the monsoon season kicking off. Oil prices drop more than $1/bbl on partial lockdowns in China By Nurluqman Suratman 10-Jun-22 11:34 SINGAPORE (ICIS)–Oil prices fell more than $1/bbl on Friday on renewed demand fears after fresh COVID-19 lockdown measures were announced in China, but tight supply concerns capped losses. S Korea truck drivers go on strike amid rising fuel costs, inflation By Nurluqman Suratman 08-Jun-22 14:17 SINGAPORE (ICIS)–South Korea's unionised cargo truck drivers are staging a nationwide, indefinite general strike at ports and container depots across the country in a move which could potentially impact petrochemical-related supply chains and logistics. East Asia and Pacific growth to slow to 4.4% in 2022 on China deceleration – World Bank By Nurluqman Suratman 08-Jun-22 11:54 SINGAPORE (ICIS)–Growth in East Asia and the Pacific is projected to slow to 4.4% this year from the 7.2% expansion in 2021, reflecting the marked deceleration in China, the World Bank said late on Tuesday. Asian PTA prices up on firmer feedstock costs, sustainability uncertain By Samuel Wong 08-Jun-22 11:51 SINGAPORE (ICIS)–Asian purified terephthalic acid (PTA) prices were supported by costs push because of higher feedstock paraxylene (PX) costs, but long-term sustainability is still a question amid a lack of strong demand growth in the downstream polyester sector. China May petrochemicals track crude gains; June demand to improve By Yvonne Shi 08-Jun-22 11:09 SINGAPORE (ICIS)–China’s petrochemical markets largely tracked gains in crude prices in May, accompanied by some improvement in demand as pandemic-related restrictions have started to ease. Japan's Q1 GDP revised to smaller contraction of 0.5% By Nurluqman Suratman 08-Jun-22 11:01 SINGAPORE (ICIS)–Japan's economy shrank less than initially reported in the first quarter, contracting by an annualised 0.5% instead of the initial 1.0% drop, on the back of improved private consumption, official data showed on Wednesday. Asia polyester prices gain momentum tracking higher crude, rising cost pressure By Judith Wang 07-Jun-22 16:27 SINGAPORE (ICIS)–Asia polyester prices gained further momentum as bullish crude futures and rising feedstock prices bolstered spot discussions, while demand has showed some improvement on easing lockdowns in China. Asia Q3 biodiesel market sentiment to stay weak on poor European demand By Felicia Loo 07-Jun-22 12:13 SINGAPORE (ICIS)–The third-quarter market sentiment for southeast Asian palm methyl ester (PME) biodiesel is expected to remain weak amid poor buying requirements from Europe, a key importing region for southeast Asian material. INSIGHT: India cuts raw material import duties to boost local production By Priya Jestin 07-Jun-22 12:07 MUMBAI (ICIS)–India has cut import duties on some raw materials in the hope of boosting overall domestic production amid surging inflation and rupee weakness. VIDEO: China PTA plants’ run rates stay low on high production costs By Winnie Huang 01-Jun-22 18:35 SINGAPORE (ICIS)–Watch industry analyst Lifang Huang discuss China’s purified terephthalic acid (PTA) market amid high production cost. PODCAST: China LPG prices fluctuate on elevated costs, weak demand By Candy Nie 01-Jun-22 17:44 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Candy Nie discuss the recent developments and outlook of China's Liquefied petroleum gas (LPG)  market. Saudi Aramco’s June LPG contract prices continue downtrend By Candy Nie 01-Jun-22 15:10 SINGAPORE (ICIS)–Saudi Aramco’s term contract prices (CP) for June-loading liquefied petroleum gas (LPG) continued to edge down and hit a five-month low, the company announced on Tuesday afternoon. China MTBE cargoes face narrowing arbitrage opportunities into Europe By Jun Kai Heng 01-Jun-22 14:17 SINGAPORE (ICIS)–The reopening of the Chinese economy in June is expected to pressure arbitrage opportunities into Europe for Chinese methyl tertiary butyl ether (MTBE) cargoes. S Korea May petrochemical exports rise 14%, total exports up 21.3% By Nurluqman Suratman 01-Jun-22 12:32 SINGAPORE (ICIS)–South Korea's petrochemical exports rose by 14% year on year to $5.18bn in May, supporting the overall rise in shipments abroad, official data showed on Wednesday. Japan's au Jibun Bank May manufacturing PMI dips to 53.3 on slower output growth By Nurluqman Suratman 01-Jun-22 11:38 SINGAPORE (ICIS)–au Jibun Bank’s manufacturing purchasing managers’ index (PMI) for Japan slipped to 53.3 in May from 53.5 in April as new orders rose at a slower rate, the Japanese bank said on Wednesday. Topic Page by Aura Sabadus and Will Beacham. Additional reporting by  Richard Ewing and Sophie Udubasceanu. Maps and graphs by Yashas Mudumbai.

12-Aug-2022

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