LONDON (ICIS)–Join European senior editor manager Vicky Ellis, as she talks to European and African PE/PP senior editor Ben Lake and Turkey PE/PP senior editor manager Samantha Wright. The group discuss the coming month, as players see sentiment cool from a hectic first quarter. Senior analyst Lorenzo Meazza also drops in to react to LyondellBasell’s announcement that it plans to “review” all European polymer and olefin assets,  following on from announcements of closures of ExxonMobil and SABIC crackers.

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.

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)

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

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

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.

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.

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.

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. Visit us at Booth 13 at the Grand Ballroom Foyer at the Grand InterContinental Seoul Parnas! Book a meeting with ICIS here.