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Propylene09-May-2024
SINGAPORE (ICIS)–Asia’s propylene market will
continue to see weak demand, although potential
curbs in plant run rates in China amid weak
margins could lend support.
Downstream, China’s propylene oxide (PO) import
demand may continue to be adversely impacted by
domestic Chinese start-up capacities, while
demand in the main downstream polyols sector is
unlikely to recover in the second quarter (Q2).
South Korea June-loading propylene volumes
likely to increase month on month
Domestic Chinese PO start-ups to keep
domestic supply lengthy, hampering import
demand
Global PO supply excluding China remains
tight, downstream polyols likely muted in Q2
In this chemical podcast, ICIS editors Julia
Tan and Shannen Ng discuss trends in the Asian
propylene and PO markets.
Crude Oil09-May-2024
SINGAPORE (ICIS)–China’s April exports rose by
1.5% year on year to $292.5 billion in April,
reversing the 7.5% contraction in March
supported by signs of improved global demand,
customs data showed on Thursday.
China posts $72.4bn April trade surplus,
exceeding March
Year-to-date trade balance slightly below
2023 levels
SE Asia grows as key Chinese export
destination; exports to the US, EU continue to
decline
China’s imports rose by 8.4% year on year in
April, reversing the 1.9% contraction in March,
General Administration of Customs data showed.
This led to a trade surplus of $72.4 billion in
April, up from the $58.6 billion surplus in
March this year.
By export destination, the Association of
Southeast Asian Nations (ASEAN) continued to
grow in importance for China.
April exports to the region were up 20.4% year
on year, bringing the year-to-date growth level
to 6.3%.
Through the first four months of the year,
ASEAN remained the largest export destination
for China, accounting for 16.9% of total
exports.
Exports to the US remained weak, falling by
1.6% year on year in April for a year-to-date
decline of 1.0%.
Exports to the EU also struggled, down 3.3%
year on year in April and contracting by 4.8%
in the year to date.
“It remains to be seen if President Xi’s trip
to Europe, where improving trade ties were
emphasized, will help bring about a trade
recovery in the coming months,” Dutch banking
and financial information services provider ING
said in a note.
China’s trade balance through the first four
months of the year amounted to $255.7 billion,
lower than the $266.0 billion in the same
period of 2023.
In Chinese yuan (CNY) terms, which are more
relevant for gauging GDP growth, the trade
balance was CNY1,817.3 billion in the first
four months of this year – slightly weaker than
the CNY1,829.0 billion over the comparable
period in 2023.
By export product, the performance of various
categories remained uneven in January-April of
this year, ING said.
Automobiles continued to see strong growth amid
China’s strong competitiveness in the new
energy vehicle sector, up 21.2% year on year.
The impact of auto sector price competition can
also be seen in the export data; volume growth
was even higher at 26.0% year on year on a
year-to-date basis.
Household appliance exports have also been a
surprising area of strength, up 12.6% year on
year for the first four months of 2024.
“With domestic demand for household appliances
likely to recover after the rollout of trade-in
policies, the sector could see a recovery this
year,” ING said.
“PMI data has shown export orders expanded for
two consecutive months, which is a favorable
sign, but we anticipate that global external
demand conditions are likely to be relatively
lukewarm at best this year.”
China’s
manufacturing activity expanded for a
second month in April amid improved overseas
demand, but the rate of expansion weakened amid
higher production costs.
China saw surprisingly strong economic growth
in the first quarter, fueled by exports from
its manufacturing sector.
The world’s second-largest economy expanded by
5.3% year on year in the first three months of
2024, accelerating from the 1.6% growth in the
previous quarter.
A debt-ridden property market with declining
home prices, coupled with weak consumer
confidence and shrinking foreign demand,
however, creates significant headwinds for
China’s economic growth.
In response, Beijing is doubling down on
industrial policy, prioritizing high-tech and
green technology.
China has set an ambitious economic growth
target of around 5% for 2024.
Focus article by Nurluqman
Suratman
Thumbnail photo shows a port in Suqian,
China. (Source:
Costfoto/NurPhoto/Shutterstock)
Ethylene08-May-2024
ORLANDO (ICIS)–BASF Corp CEO Mike Heinz is
optimistic that a binding agreement could be
reached during the next round of negotiations
of the UN plastic waste treaty, he said on
Wednesday.
BASF had sent a team to the previous round that
was held in Ottawa, he said. “The feedback that
we received from them was cautiously
optimistic.”
Heinz made his comments in an interview with
ICIS at this year’s NPE: The Plastics Show. He
also gave the keynote address at the trade
show.
Another reason for optimism is that all of the
parties are pursuing the same objective: to
prevent plastic waste from entering the
environment, Heinz said. An agreement would be
one that all stakeholders could live with.
He acknowledged some disagreement about how to
achieve that objective. Some want to curb
production of plastic, he said.
BASF and others want to achieve it by curbing
pollution.
Already, BASF and other chemical companies are
incorporating recycled materials into their
products.
Recycling can be part of a larger sustainable
production chain, under which chemical
complexes rely on renewable energy to make
products from recycled and renewable materials
that can be recovered and reused.
These materials can be used to make wind
blades, electric vehicles (EVs) and other
products critical to reducing emissions of
carbon dioxide (CO2).
Heinz summed up the path to a sustainable
future as resting on three three pillars: make,
use and recycle.
SUSTAINABILITY
VERBUNDDuring his speech and in
a subsequent interview with ICIS, Heinz
described what could be characterized as a
Verbund based on sustainability.
“This will take some time, but the good news is
we already have some concrete examples on how
it can be done,” Heinz said.
As an example, he held up a jacket made with
100% recycled nylon 6 from BASF that was sold
by Inditex, the owner the clothing brand Zara.
Heinz pointed to BASF’s equity stakes in
European wind packs. By 2030, BASF wants green
energy to account for 60% of its power
consumption.
For chemical companies, one of the most
power-hungry processes is steam cracking. BASF,
SABIC and Linde are developing an e-cracker
that would rely on electric furnaces to
generate the heat needed to produce ethylene.
The electricity could come from renewable
sources, which would significantly reduce the
CO2 emissions of steam cracking.
Crackers can process renewable naphtha made
from natural oils or pyrolysis oil produced at
chemical recycling plants.
It will take time for these feedstocks to
become abundant, but the model is possible, and
BASF is making chemicals with such feedstocks.
New, renewable feedstocks can lead to new
chemistries that result in materials that have
better qualities than those based on petroleum.
The products can also help customers
achieve their own sustainability goals. Lighter
plastics can allow automobiles to travel
farther on a tank of gasoline or on a battery
charge. Other plastics will be critical to make
EVs safe.
Products can be designed to last longer, he
said. When they do reach the end of their
lifecycles, they can be designed to be easier
to recover and recycle.
STEPS NEEDED TO ACHIEVE
SUSTAINABILITYDuring his keynote
speech, Heinz noted that while the chemical
industry is part of the problem, it can be a
bigger part of the solution.
Change will require passionate people,
innovation and collaboration, he said. In
particular, the chemical industry needs to
collaborate with lawmakers and nongovernmental
organizations (NGO) to come up with those
solutions.
Produced by Plastics Industry Association
(PLASTICS), NPE: The Plastics Show takes place
6-10 May in Orlando, Florida.
Interview article by Al Greenwood
Thumbnail shows a plastic bottle, which can
be recycled. Image by
monticello/imageBROKER/Shutterstock
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Speciality Chemicals08-May-2024
LONDON (ICIS)–LyondellBasell has launched a
strategic review of the bulk of its operations
in Europe, the producer said on Wednesday,
based on its strategy to focus on assets
perceived to have long-lasting competitive
advantage.
The producer will conduct a review of its
European olefins, polyolefins, intermediates
and derivatives businesses, driven by its move
announced last year to reinvest in its
strongest performing operations.
“At the 2023 Capital Markets Day, we stated our
intent to concentrate our portfolio around
businesses with long-lasting competitive
advantage and to reinvest around those
advantaged areas generating superior returns at
meaningful scale. These criteria have not
changed,” said Lyondell CEO Peter Vanacker.
The strategy announced at the 2023 investor day
was based around three pillars: prioritizing
growth spending on businesses where the company
“has leading positions in expanding and
well-positioned markets”, growing circular
solutions earnings to $1 billion/year by 2030,
and shifting from cost controls to a broader
idea of value creation.
Energy-intensive industries in Europe have been
challenged by the sharp increase in gas prices
seen since Russia’s invasion of Ukraine, which
remain substantially above pre-war and
pre-pandemic norms despite falling dramatically
since the nadir of winter 2022.
Described by former BASF chief Martin
Brudermuller earlier this year as a “systemic”
change to the European operating environment,
the higher cost of operating Europe has
prompted a number of reviews by large global
players.
BASF is looking to cut €1 billion off
the annual operating costs of its Ludwigshafen,
Germany, complex. The company tapped plant sale
specialists International Process Plants this
week to explore the sale of its Ludwigshafen
ammonia, methanol and melamine units, idled in
2023 due to high production costs.
Dow also announced plans to review
underperforming and smaller assets. A
significant proportion of any cuts had been
expected to land in Europe, although the US
major has not given an update on the process
since it was announced in early 2023.
Indorama Ventures is also currently reviewing
six assets out of its “West” portfolio for
potential shutdown.
While global gas pricing has come down, the
cost of shipping gas will always be higher than
sending it through a dedicated pipeline, as was
the case with the Russia-derived natural gas
that made up around half of the EU’s energy
consumption prior to the war.
As part of its stated intent to continue
developing its sustainable and circular
business, investments in a commercial-scale
MoReTec plant, LyondellBasell’s
proprietary technology to convert plastic waste
into liquid raw materials, and the development
of a circularity hub in the Cologne, Germany
region, will continue as planned, the company
said.
“The company will prioritize its investments to
align operations with our circularity and net
zero ambitions,” Vanacker added. “We understand
that strategic assessments can create
uncertainty for our employees and customers,
but we are committed to operate our assets
safely and reliably throughout this process.”
LyondellBasell European
prodcution
Product
Capacity (kt)
Ethylene
1,805
HDPE
1,260
LDPE
740
MTBE
810
Polypropylene
2,175
Propylene
990
Propylene Oxide
785
Styrene
680
TBA
970
Update re-leads, adds detail
throughout
Additional reporting by Graeme Paterson,
infographics by Yashas Mudumbai
Ethanol08-May-2024
LONDON (ICIS)–In this latest podcast, markets
editor Nazif Nazmul interviews Paddy Lowe, CEO
and founder of the synthetic fuels producing
company Zero Petroleum.
Synthetic fuels can play a vital role in
slashing emissions across the transport sector
in the coming years, although the road to
scaling up is fraught with obstacles, as well
as opportunities.
Synthetic fuels, also known as e-fuels, are
derived from renewable electricity, air and
water.
The power-to-liquid process entails chemical
conversion of energy.
Energy density of synthetic fuels and
compatibility with international combustion
engine (ICE) vehicles could provide a long-term
decarbonisation alternative to electric
vehicles (EVs) and biofuels
Rail, marine, aviation, agricultural
sectors can utilise synthetic fuels alongside
road transport
Synthetic fuels gaining traction in the
aviation industry in the form of e-SAF
Achieving cost parity with fossil-based
gasoline will still take approximately 10 more
years
Legislative support likely to expedite time
needed to achieve economies of scale
Production process reliant on sourcing vast
amount of renewable energy
Click here to open in
a new window.
Speciality Chemicals08-May-2024
LONDON (ICIS)–German industrial production
fell 0.4% in March month on month, but output
from the chemical-pharmaceuticals sector rose
slightly according to statistical data released
on Wednesday.
Bundesbank, chem-pharma production
order volume index (2021=100):
March 2024
February 2024
March 2023
Q1 2024
Q4 2023
Q1 2023
92.6
91.6
85.7
90.1
84.6
86.3
Production in the energy-intensive industries,
which includes chemicals, remained flat month
on month in March but rose 4.8% in Q1 2024 from
Q4 2023.
In the automotive industry, which is an
important end market for chemicals, March
production rose 0.6% from February.
March 2024 production
+/- change from February
Total output from industry, construction
and energy
-0.4%
Industrial production
-0.4%
-Intermediate goods
-0.6%
-Capital goods
0.1%
-Consumer goods
-1.4%
Energy
-4.2%
Construction
1.0%
(source: Statistisches Bundesamt,
Wiesbaden)
Industrial production was down 3.4% from March
2023 while total production from industry,
construction and energy was down 3.3%.
LACK OF ORDERSAccording
to a survey by the Munich-based research group
ifo on Wednesday, a shortage of new
manufacturing orders worsened in April, slowing
the overall economy.
In manufacturing, 39.5% of companies reported a
lack of orders, up from 36.9% in ifo’s January
survey.
In the chemical industry the share of companies
reporting a lack of orders was 46.6% in April.
In related news, a labor union has threatened
“massive” strikes in the building and
construction sectors after a failure to reach a
new collective agreement with their employers.
Along with the auto sector, building and
construction are important end markets for the
chemicals industry.
Speciality Chemicals08-May-2024
BARCELONA (ICIS)–Europe’s chemical industry
stands to benefit in the long-term from the
expansion of wind, solar and other low carbon
methods of producing energy.
– Growth in renewables means spot electricity
prices can turn negative if demand dips
– Europe electricity prices higher than pre-war
as tied to price of natural gas, now mainly
liquefied natural gas (LNG)
– Europe sees significant growth in
solar, while wind faces delays due to supply
chain issues
– Decarbonizing includes reducing emissions
from gas plants via carbon capture and storage
(CCS) and other technologies
– Challenges include grid infrastructure to
transport electricity across regions with
varying renewable output
– Despite regulatory hurdles, there is
political will for grid investment as part of
the energy transition
In this Think Tank podcast, Will
Beacham interviews ICIS power markets
editor Andrea Battaglia, ICIS
head of power analysis Matthew
Jones, ICIS senior consultant Asia
John Richardson and
Paul Hodges, chairman of
New Normal Consulting.
Editor’s note: This podcast is an opinion
piece. The views expressed are those of the
presenter and interviewees, and do not
necessarily represent those of ICIS.
ICIS is organising regular updates to help
the industry understand current market trends.
Register here .
Read the latest issue of ICIS
Chemical Business.
Read Paul Hodges and John Richardson’s
ICIS
blogs.
Polyvinyl Chloride08-May-2024
SINGAPORE (ICIS)–Asia’s polyvinyl chloride
(PVC) markets are expected to see some
uncertainty in the coming months, with factors
like China’s domestic demand, the impact of
India’s monsoon and some policy changes
expected to shape the landscape.
June offers from Asian producers awaited
next week
SE Asian economies see healthy growth in
Q1, expected to support PVC demand
Low domestic demand in China encourages
exports, especially to India
In this chemical podcast, ICIS editors Jonathan
Chou, Damini Dabholkar and analyst Lina Xu
discuss recent market conditions with an
outlook ahead in Asia.
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here.
Butanediol08-May-2024
SHANGHAI (ICIS)–Asia’s 1,4-butanediol (BDO)
market continues to be pressured by oversupply
amid slowing demand.
With the first peak season in March to April
ending, demand in some sectors has started to
slow.
In this chemical podcast, ICIS markets reporter
Corey Chew reports from China on market
expectations before Enmore’s 14th BDO and
Derivatives Development Forum.
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