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Gas13-May-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 10 May 2024.
PODCAST: APIC ‘24: Asia recycled plastics sees
sustainable finance focus
By Damini Dabholkar 10-May-24 12:22
SINGAPORE (ICIS)–Sustainable finance is a key
interest for companies seeking to enter the
recycled plastics market in Asia or to expand
their current capacities. Despite the various
financial instruments available, the absence of
a clear entry point often results in
uncertainty for firms. In this podcast, ICIS
analysts Chua Xin Nee and Joshua Tan explore
the different types of sustainability-related
loans available and their successful use cases.
China-SE Asia arbitrage flow for MTBE
unworkable on oil price falls
By Keven Zhang 10-May-24 11:50
SINGAPORE (ICIS)–The arbitrage of methyl
tertiary butyl ether (MTBE) from China to
southeast Asia can be reopened, after blenders
in southeast Asia finish consuming their
existing inventory.
PODCAST: Weak demand expected for Asia
propylene and downstream PO
By Damini Dabholkar 09-May-24 15:02 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.
China exports return to growth in April amid
signs of improving demand
By Nurluqman Suratman 09-May-24 14:31
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 petrochemical market edges up in Apr,
demand outlook remains weak
By Yvonne Shi 08-May-24 13:20 SINGAPORE
(ICIS)–China’s petrochemical market edged up
in April, with the ICIS China Petrochemical
Index – which tracks 17 key products in the
domestic market – rising slightly by 1.60% to
1267.60 by the end of the month as compared
with March.
Singapore April manufacturing slows amid
persistent external headwinds
By Nurluqman Suratman 07-May-24 11:59
SINGAPORE (ICIS)–Singapore’s manufacturing
activity fell in April as a result of decreased
export orders triggered by external demand
headwinds and high global interest rates.
NE Asia C3 talks to kick off, but supply
concerns weigh on buyers
By Julia Tan 06-May-24 12:02 SINGAPORE
(ICIS)–Discussions for June arrivals will kick
off as China returns from the Labour Day
holidays, even with the potential headwinds of
poor downstream demand and ample supply from
Southeast Asia.
Ammonia10-May-2024
HOUSTON (ICIS)–The US Department of
Agriculture (USDA) is anticipating larger corn
and soybean supplies and ending stocks
according to the May World Agricultural Supply
and Demand Estimate (WASDE) report.
For corn, the outlook is for not only increased
supply and stockpiles, but also greater
domestic use and exports with the current corn
crop being projected at 14.9 billion bushels.
This is a dip of 3% from last year’s record as
a decline in area is partially offset by an
increase in yield.
Right now, the yield projection is at 181.0
bushels per acre and is based on a
weather-adjusted trend assuming normal planting
progress and summer growing season weather,
estimated using the 1988-2023 period.
With higher beginning stocks, total corn
supplies are forecasted to be at 16.9 billion
bushels, the highest since 2017-2018.
Total US corn use is forecast to rise just
under 1% relative to a year ago on higher
domestic use and exports. Food, seed and
industrial use is forecast at 6.9 billion
bushels.
Corn used for ethanol is unchanged relative to
a year ago, based on expectations of flat motor
gasoline consumption. Feed and residual use is
projected higher on larger supplies and lower
expected prices.
Corn exports are forecasted to rise by 50
million bushels to 2.2 billion bushels,
supported by a reduction in exports for
Argentina, Brazil, Russia and Ukraine with the
US projected to be the world’s largest exporter
for the second consecutive year, with an
expected increase in global market share.
With total US corn supply rising more than use,
ending stocks are up 80 million bushels from
last year, and if realized, would be the
highest in absolute terms since 2018-2019.
The season-average farm price for corn is now
being projected at $4.40 per bushel.
For soybeans, the monthly update is calling for
not only higher supplies and ending stockpiles
but also upticks in exports.
Currently the soybean crop is being projected
at 4.45 billion bushels, up 285 million bushels
on higher area and trend yield.
With higher beginning stocks and production,
soybean supplies are forecast at 4.8 billion
bushels, up 8% from 2023-2024.
Soybean exports are forecasted to come in at
1.83 billion bushels, which would be up by 125
million bushels from 2023-2024 with higher
exports this fall due to a lower Brazilian 2024
harvest.
With strong seasonal exports after harvest
followed by pressure from larger South American
production in 2025, the US. share of global
exports is forecast at 28%, down from the prior
five-year average of 32%.
Ending stocks are projected at 445 million
bushels, up 105 million bushels from last year.
The current season-average soybean price is
forecasted at $11.20 per bushel compared with
$12.55 per bushel in 2023-2024.
The next WASDE report will be released on 12
June,
Speciality Chemicals10-May-2024
HOUSTON (ICIS)–Global rates for shipping
containers are surging, liquid chemical tanker
rates were mixed, and wait times at the Panama
Canal have eased, highlighting this week’s
logistics roundup.
CONTAINER RATES
Container rates surged this week after rising
last week for the first time since January amid
general rate increases (GRIs) implemented
because of rising demand and as continued Red
Sea diversions have overall capacity fully
deployed.
Maersk CEO Vincent Clerc said during a Q1
earnings conference call that demand is
trending toward the higher end of its guidance.
Average global rates surged by 16% over the
week, according to supply chain advisors Drewry
and as shown in the following chart.
Meanwhile, rates from Shanghai to the US West
Coast jumped by 18%, and rates from Shanghai to
the East Coast soared by 16%, as shown in the
following chart.
Drewry expects freight rates ex-China to
continue increasing in the upcoming week amid a
huge demand spike and tight capacity.
Capacity is growing from newly built ships,
according to international freight platform
ShipHub, who said that 2.83m 20-foot equivalent
units (TEUs) of container ship capacity is on
order for 2024, after 2.34m TEUs were ordered
in 2023.
That is almost double the capacity added in
2021 and 2022, which were both around 1.1m
TEUs.
Shipping analysts Linerlytica said that
over-capacity concerns are on the backburner
with containership diversions to the Cape route
effectively removing more than 7% of the total
fleet.
Rates from North China to the US Gulf were flat
this week after spiking the previous week, as
shown in the following chart from ocean and
freight rate analytics firm Xeneta.
Container ships and costs for shipping
containers are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers, such as polyethylene
(PE) and polypropylene (PP), are shipped in
pellets.
They also transport liquid chemicals in
isotanks.
LIQUID CHEM TANKER RATES
US chemical tanker freight rates assessed by
ICIS were mostly unchanged but fell from the US
Gulf (USG) to ARA.
From the USG to Rotterdam, there are bits of
part cargo space still available for April.
This trade lane has been mostly quiet over the
last few weeks. If this trend continues, this
route could face further downward pressure.
On the other hand, from the USG to the
Caribbean, rates have risen slightly since last
week leaving the market overall mixed. Methanol
continues to be active out of this market to
various destinations.
From the USG to Brazil, space remains tight
despite the slow market as only a handful of
indications being seen in the market.
Space is available for H1 May out of
Columbia and H2 May out of the USG.
Although ICIS does not assess spot rates from
the USG to the Mediterranean, this trade lane
has continued to tighten up, with several
cargoes of Glycols, Caustic and Veg Oil fixed.
There is limited space for May which may likely
cause rates to further tighten, although there
could be some working space for June.
PANAMA CANAL
Wait times for non-booked vessels ready for
transit fell for both northbound and southbound
transits this week, according to the Panama
Canal Authority (PCA) vessel
tracker and as shown in the following
image.
Wait times a week ago were 4.4 days for
northbound traffic and 6.5 days for southbound
vessels.
The PCA will increase the
number of slots available for Panamax vessels
to transit the waterway beginning 16 May and
will add another slot for Neopanamax vessels on
1 June based on the present and projected water
levels in Gatun Lake.
PORT OF BALTIMORE
The Key Bridge Response Unified Command (UC) is
scheduled to use precision cuts made with small
charges to remove a large section of the
Francis Scott Key Bridge wreckage from on top
of the container ship Dali, which struck the bridge on
26 March and caused its collapse.
Source: Key Bridge Response 2024
The exact time of the precision cuts will
depend on multiple environmental and
operational factors.
The closing of the port did not have a
significant impact on the chemicals industry as
chemicals make up only about 4% of total
tonnage that moves through the port, according
to data from the American Chemistry Council
(ACC).
The ACC said less than 1% of all chemicals
involved in waterborne commerce, both domestic
and trade volumes, pass through Baltimore.
Additional reporting by Kevin Callahan
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Ammonia10-May-2024
SAO PAULO (ICIS)–Brazil’s state of Rio Grande
do Sul remains at a standstill from the floods,
with Thai petrochemicals major Indorama’s
subsidiary in the country also suspending
operations at its Triunfo facilities, a
spokesperson confirmed to ICIS.
Two main ports in Brazil’s southernmost state
remain closed, while fertilizers players have
said demand is likely to be hit on the back of
a reduced planting season.
A spokesperson for Indorama said the company
had suspended operations at Triunfo on 3 May
until further notice.
Indorama’s operations in Brazil are the result
from its acquisition of Oxiteno and operates at
Triunfo a methyl ethyl ketone (MEK) plant with
a production capacity of 42,000 tonnes/year and
a butene-2 plant with capacity at 42,000
tonnes/year, according to ICIS Supply &
Demand.
“Initially, we ensured that the emergency
shutdown was carried out safely. Currently, we
are carefully assessing the weather and
logistical conditions, as well as the guidance
from the relevant authorities, to determine the
short, medium and long-term impacts [of the
suspension],” said the Indorama spokesperson.
Earlier in the week, Brazil’s polymers producer Braskem and
styrenics producer Innova
declared force majeure from its operations in
Triunfo, as did styrene butadiene rubber (SBR)
producer Arlanxeo.
Official figures on Friday put the dead toll at
116, with more than 130 people still
unaccounted for, while more than 100,000 remain
displaced from their homes and nearly two
million people in the 12-million-strong state
are being affected by Brazil’s worst floods in
nearly a century.
To make matters worse, rains returned to Rio
Grande do Sul by the latter part of the week,
forcing authorities to suspend some rescue
operations.
Brazilians this week have kicked off a
remarkable national mobilization to help
alleviate the disruption gauchos – as
citizens from Rio do Grande do Sul are known in
Portuguese – are going through.
From workplaces to residential buildings, from
civil associations to companies, there is
practically no place in the country where an
effort to collect goods, food and money is not
being deployed.
PORTS CLOSED, AGRICULTURE
HITThe Port Authority for Rio
Grande do Sul, called Portos RS and which
oversees operations at the Port of Rio Grande,
Port of Pelotas and Port of Porto Alegre, said
operations at the two latter facilities remain
shut to traffic.
The Port of Rio Grande is operating normally,
it added.
“[Portos RS] maintains operations at the Port
of Porto Alegre suspended, due to the
maintenance of the level of Lake Guaiba above
the so-called flood level. At the Port of
Pelotas, in the south of the state, the
shipment of wood logs remains suspended and
activities are paralyzed at the terminal,” the
Authority said.
“Regarding the crossing to Sao Jose do Norte [a
city north of Porto Alegre], the vehicle and
passenger transport service is suspended due to
the high level of Laguna dos Patos.”
This week, several fertilizers players said to
ICIS demand is likely to be hit as planting for
some crops which had just started is likely to
be delayed, postpone, or cancelled.
Moreover, seeds recently planted could also get
damaged by high levels of moisture, potentially
ruining their harvest.
“There has been great damage to infrastructure
in the state, with fertilizers mixers
underwater and authorities still calculating
the impacts,” said an urea trader.
“The rice harvest is almost done, but wheat
planting is in its early days and producers of
urea believe demand destruction can happen due
to the circumstances.”
Another fertilizers source added that around
70% of soybeans in Rio Grande do Sul had
already been harvested, but there is still 30%
to be harvested which would now be at risk.
It added that 30% would represent approximately
6.5 million tonnes of soybeans, or 5% of
Brazil’s total production.
Rio Grande do Sul is the main rice producer in
Brazil, and the source said the harvest for
that crop was already behind schedule when the
rains started, with 78% harvested.
“We estimate that the unharvested volume should
significantly affect the supply of rice in
Brazil, increasing the upward pressure on
prices, “the source said.
“Corn was also in the process of being
harvested, with an estimated 83% harvested by
the time the rains started. It is not possible
yet to estimate precisely how much of this
amount at risk has been lost.”
Front page picture: Voluntaries working in
Rio Grande do Sul organizing donations
Source: Government of Rio Grande do Sul
Additional reporting by Bruno Menini,
Deepika Thapliyal and Chris
Vlachopoulos
Recycled Polyethylene Terephthalate10-May-2024
LONDON (ICIS)–Senior Editor for Recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
FD NWE Colourless flake market entering
more stable period during May
UK flake prices still under upward pressure
Demand outlook still hard to predict
Recycled Polyethylene Terephthalate10-May-2024
SINGAPORE (ICIS)–Sustainable finance is a key
interest for companies seeking to enter the
recycled plastics market in Asia or to expand
their current capacities.
Despite the various financial instruments
available, the absence of a clear entry point
often results in uncertainty for firms.
In this podcast, ICIS analysts Chua Xin Nee and
Joshua Tan explore the different types of
sustainability-related loans available and
their successful use cases.
Tan will be speaking at the Asia Petrochemical
Industry Conference (APIC) 2024 in Seoul, South
Korea, on 31 May.
His presentation is on “Asian recycled polymers
– short-term hiccups to long-term optimism”, as
part of the sustainability and circular economy
panel.
Visit ICIS during APIC ’24 on 30-31 May at
Booth 13 in the Grand Ballroom Foyer in the
Grand InterContinental Seoul Parnas.
Book a meeting with ICIS here.
Base Oils09-May-2024
HOUSTON (ICIS)–Global base oils markets face
regionally unique pricing dynamics but largely
stagnant underlying demand and sufficient
supply amid still challenging macroeconomic
conditions. Crude oil price volatility and its
effect on refining economics will be a key
driver going forward this year.
Tighter European spot availability of
Group I
Ample supply, demand weakness drives
unprecedented low Group III in US
Chinese prices weaken versus
import
US Group II fills regional supply
gaps in Middle East, Asia during H1
ASIATight supply of
Group II will likely be alleviated to some
extent in May and June.
Significant volume upwards of 10,000 tonnes of
US-origin Group II lots comprising 70N, 110N,
220N and 600N grades landed on Indian shores in
the first-half of April, and a second shipment
of a similar size was also heard to have
arrived in India in late April.
The below graph compares CFR 150N India prices
with FOB Asia NE and FOB USG export prices for
the same grade.
This is likely to more than offset the reduced
supply of South Korean and Taiwanese cargoes,
especially that of heavy grade 500/600N, in
recent months.
Demand for South Korea-origin Group II cargoes
was relatively strong in April in regions such
as India and the UAE, while demand in other
parts of Asia such as China and southeast Asia
was subdued.
May to June is typically a lull season for base
oils from the key downstream lubricants sector.
ICIS analysts forecast Asia
Group II prices to dip slightly in May before
recovering in June.
As for Group I, spot availability of southeast
Asian material continued to be in short supply,
with sporadic offers of Thai-origin brightstock
cargoes heard.
With few alternatives of Group I imports from
other sources such as Europe or the Middle
East, the tight supply situation is expected to
persist in the coming months.
CHINAMost downstream
lubricant producers in China are expected to
maintain steady purchasing pace in May, and the
unusual weakness in March and April trade
sentiment may sustain, too.
Trades were far weaker than expected in these
two months, the traditional peak demand season
for base oil.
Group II price gains in Asia were noticeable
through March and April, compared with small
increases in China.
Such a price divergence is expected to widen in
May partly as Asian refiners may further hike
their export prices in view of expected supply
shortage caused by robust demand in southeast
Asia.
However, slow growth in China’s real economy
such as the automobile and industrial sectors
may lead to flat buying demand for lubricant
oils, hence domestic lubricant oils producers
may continue to buy base oils on a need-to
basis, according to many producers.
The average import costs of contractual Group
II base oils are expected to be higher than
their sale prices in China during April, said
key importers, citing increasing export prices
from Asian refiners and depreciating Chinese
yuan against the US dollar.
This, combined with ample supply of domestic
Group II materials amid limited routine
maintenance, may cause significant price
spreads between domestic and imported Group II
base oils.
Therefore, downstream producers are expected to
cut the usage of imported cargoes. The
lubricant oil producers and importers in China
may have little import interest as a result.
USGroup II and Group III
prices have diverged, with Group II spot rising
on tighter availability following a slew of
exports in Q1 and two price increases this
spring up to 55 cents/gal on 100N.
The price increases were implemented on the
back of higher costs for crude and VGO and
affected term contract customers to a greater
degree, but spot prices have been pressured
upward in tandem to a lesser extent.
The availability issue may be temporary as it
is due to unconfirmed work by one refiner,
other refiners being sold out and production of
Group III cutting into Group II yields.
Group III suppliers have not raised prices in
2024. Rather SK Enmove’s 4cSt posted price is
down by 50 cents/gal over two separate
decreases this year. Separately, Motiva has
reduced its 4cSt posted price by a cumulative
65 cents/gal.
ICIS spot 4cSt has fallen by 15%, while spot
100N has risen by 8.2%.
The US 4cSt
price decline has been unprecedented,
bringing US Group III lower than Asia.
The graph shows the US 4cSt price as it
compares with the Asia 4cSt price and the US
100N price.
US EIA data show:
Production up 5.5% YTD compared to 2023
Consumption down 29.5% YTD compared to 2023
(-27.2% in January and -32.2% in February)
Demand data are worse than 2023 so far this
year, which explains the heavy export months of
Q1 and potentially why Group II supplies are
more balanced domestically in early May.
ICIS analysts
forecast a general downtrend to flat
pricing for the remainder of the year.
EUROPEEuropean domestic
Group I base oils spot supply limitations, a
key driver of spot price increases in the last
month, are expected to continue in May and
early June.
SN150 remains the tightest grade, closely
followed by SN500. Domestic brighstock supply
is balanced, contrasting with the export
market, where shortages drove price hikes from
March through April.
In the European export market, availability is
likely to remain limited through the rest of
Q2.
Players are expected to continue prioritising
domestic supply, and very few offers are
anticipated for the export market.
Brightstock is expected to be tight for export
now that Eni has stopped production at Livorno.
A limited number of producers offer brightstock
in sufficient volumes for export requirements,
and the removal of Eni from the market means
there will be significantly less availability.
While lower demand at the beginning of Q2
offset the limited availability, buying
interest looks set to increase further into the
quarter and as a result there could be supply
shortages.
Buying interest has been increasing from west
Africa, north Africa and east Africa in early
May, and this is likely to continue throughout
Q2. Demand from west Africa will then drop off
in Q3 amid rainy season.
ICIS analysts
forecast European Group I prices to rise
through August.
MIDDLE EASTGroup II
remains oversupplied in the UAE following bulk
arrival of volumes from Asia and the US in late
April and H1 May, and the trend is likely to
persist into late May and early June.
Import volumes from the US and northeast Asia
upwards of a combined volume 25,000 tonnes of
110N, 150N, 220N and 500N/600N have dampened
fresh imports’ interest from Asia.
The recent firmness in offers and selling
indications for northeast Asian 150N and
500N/600N exports have thus resulted in weak
response from regional importers.
The UAE market in the Middle East continues to
rely on sourcing low viscosity index (VI) Group
I base oils from Iran in the absence of spot
high VI availability from Asia, Europe and from
within the region.
Spot Group I supply from Asia and from within
the region is likely to remain curtailed as
major producers in these markets opt to focus
on contractual commitments.
This is expected to sustain demand and prices
for Group I Iranian product in the near term.
The Eid ul Adha holidays in mid-June may temper
imports’ and ex-tank offtake in H2 June before
recovering in July.
ANALYSTS’ VIEWWith ICIS
crude forecast currently expecting crude to
hover around the $90/barrel mark for most
of the remainder of the year, this could keep
some pressure on base oils pricing.
With VGO, while slightly elevated vs typical
spreads with crude, gas oil and fuel oil,
moving broadly in line with crude, higher crude
prices flow through to lower base oils margins
for producers.
We have seen European prices rise on the recent
crude rise, where cash margins are close to
their sustainable minimum, while other regions
have held stable. Upward pressure may come in
Asia where gas oil price rises over the summer
might have the most significant effect on the
base oil market, resulting in upward pressure
there due to competition from fuels producing
units.
In the US, where margins are highest currently,
there is expectation of a flat to declining
market on sufficient length in supply.
Base oils are used to produce finished
lubricants and greases for automobiles and
other machinery.
Focus article by Amanda Hay, Eashani
Chavda, Samantha Wright, Matthew Chong, Whitney
Shi, Veena Pathare and Michael
Connolly
Styrene09-May-2024
HOUSTON (ICIS)–The entire Americas Styrenics
(AmSty) joint venture (JV) is for sale, and not
just Trinseo’s 50% stake, Trinseo CEO Frank
Bozich said on Thursday.
The company announced in March it
started the process to sell its 50% in the
styrene and polystyrene (PS) JV with Chevron
Phillips Chemical (CPChem).
During Trinseo’s Q1
earnings call on Thursday, Bozich clarified
that the entire AmSty was for sale, not just
Trinseo’s stake.
He added that since the March announcement,
Trinseo has seen indications of interest from a
number of potential strategic and financial
buyers.
He did not name potential buyers or say how
much money Trinseo expects from the sale.
The process of “actively” marketing the JV has
not yet started, he said.
The JV agreement between Trinseo and CPChem
includes a number “prescriptive elements” that
need to be completed before a joint marketing
of the JV begins, he said.
Trinseo expects a deal with a buyer to be
signed by early 2025 and will use the proceeds
from its share from the sale of AmSty to pay
down debt, he added.
Trinseo is also
trying to sell its wholly owned styrenics
assets.
The company’s other businesses include Latex
Binders, Base Plastics and Engineered
Materials.
Additional reporting by Al Greenwood
Thumbnail shows a cup made of polystyrene.
(Image by ICIS)
Polypropylene09-May-2024
SAO PAULO (ICIS)–Braskem will be able to
deliver material to its customers from its
other three sites in Brazil after
it declared force majeure at its Triunfo
complex following heaving flooding in the area,
Brazilian polymers major CFO Pedro Freitas said
on Thursday.
Freitas did not clarify when the company
expects its facilities in Triunfo, state of Rio
Grande do Sul, could return to operations as
the area reels from floods which started on 29
April.
Freitas said Braskem’s facilities there – which
account for 30% of its production capacity in
Brazil – were not directly affected by the
flooding, but the company is founding
difficulties in transport to and from the
complex.
The floods in Rio do Grande
do Sul, Brazil’s worst in 80 years, have
caused widespread road blockages, landslides
and a dam collapse.
“The blockages made our operations inviable.
Our assets are 100% safe and were not affected,
but we are having difficulties with transport:
from the coaches transporting our employees to
the trucks taking material out,” said Freitas.
“We contemplated bringing employees in by
helicopter, but that wasn’t viable in for an
extended period to keep operations running. In
those conditions, we decided to stop operations
in a safe and controlled manner.”
The CFO was speaking to reporters and chemical
equity analysts on Thursday following the
publication of Braskem’s Q1
financial results.
Despite Freitas’ assurances, the company only
produces some polyethylene (PE) grades at its
Triunfo facilities, and sources have said
supply of products such as high density
polyethylene (HDPE) and low density
polyethylene (LDPE) could tighten in the force
majeure goes on for an extended period.
The same happens for some polypropylene (PP)
products.
In Brazil, Braskem is the sole manufacturer of
PE and PP. Its market shares in 2023 were about
56% and 70%, respectively, according to figures
from the ICIS Supply & Demand Database
(SNDD).
Brazil’s PP capacity is nearly 2 million
tonnes/year, while PE capacity is about 3
million tonnes/year, of which 41% is HDPE, 33%
is linear low density polyethylene (LLDPE) and
26% is LDPE.
The Triunfo complex can produce 740,000
tonnes/year of PP, 550,000 tonnes/year of HDPE,
385,000 tonnes/year of LDPE and 300,000
tonnes/year of LLDPE. Triunfo PP capacity
accounts for nearly 37% of Brazil’s PP
capacity, while PE capacity accounts for about
40%.
Difficulties in transport of employees at the
Triunfo petrochemicals hub has also been the
main reason for other chemicals companies in
the complex such Innova and Arlanxeo to declare
force majeure from their facilities.
RAINS RETURN
Rio Grande do Sul’s floods have brought the
state to a standstill and, to make matters
worse, rains returned on Wednesday, 8 May and
forced some rescue operations for the more than
100,000 residents displaced to be suspended.
In those conditions, Freitas would not venture
in forecasting when the Triunfo complex could
return to operations.
“It could be some days still [to return to
normal operations], perhaps more than a week.
But with the rain back, we cannot really
forecast when it will be,” said Freitas.
“But we are optimising our sales from our other
sites in the states of Sao Paulo, Rio de
Janeiro and Bahia.”
RECOVERY AT LAST?
Braskem’s CEO, Roberto Bischoff, also present
at the press conference, concluded saying that
Braskem’s improved earnings during Q1 were the
sign that things were improving for the company
and Brazil’s chemicals producer generally.
Earnings before interest, taxes, depreciation,
and amortization (EBITDA) improved both year on
year and quarter on quarter, although sales
posted a more mixed result while the company
posted again a net loss for the quarter.
Braskem
(in $ million)
Q1 2024
Q1 2023
Change
Q4 2023
Change Q1 vs Q4
Sales
3,618
3,743
-3%
3,369
7%
EBITDA
230
205
12%
211
9%
Net profit/loss
-273
35
N/A
-317
-14%
“We are seeing better spreads in
petrochemicals. After the efforts by the
company to improve our financial resilience, we
expect the results of that will continue
showing for the rest of 2024,” concluded the
CEO.
Front page picture: Braskem’s facilities in
Triunfo, Brazil (Source: Braskem)
With additional reporting by Bruno
Menini
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