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Polyethylene Terephthalate18-Apr-2024
SINGAPORE (ICIS)–Buying activities in the Asia
and Middle East polyethylene terephthalate
(PET) markets remained relatively need-based,
with factors like geopolitical tensions and
uncertainties in freight rates clouding
sentiment.
Asian market sentiment mixed, PET tracks
upstream closely
Uncertainty around freight rates leads to
need-based buying
Mideast buyers’ inventories high, but some
replenishment expected post-Eid break
In this chemical podcast, ICIS editors Damini
Dabholkar and Zachary Tia discuss recent market
conditions with an outlook ahead in Asia and
the Middle East.
ICIS will be at the Chinaplas conference in
Shanghai from 23-26 April. Please get in
touch with our team there for more discussion
on the PET market.
Crude Oil18-Apr-2024
SINGAPORE (ICIS)–Oil prices rose on Thursday,
reversing sharp losses in the previous session,
after the US re-instated oil sanctions on
Venezuela, and amid discussions by the EU about
implementing new restrictions on Iran.
EU leaders mull fresh sanctions against
Iran at Brussels summit
Market uncertainty tied to potential
Israeli response to Iran
Poor economic data from China cap crude
gains
Product ($/barrel)
Latest (at 04:27 GMT)
Previous
Change
Brent June
87.57
87.29
0.28
WTI May
82.87
82.69
0.18
Both crude benchmarks
fell overnight by nearly $3/barrel on
demand concerns, with the US showing a
higher-than-expected build in crude
inventories.
The US on 17 April announced it would not renew
a license expiring on Thursday which had
previously eased sanctions on Venezuelan oil,
opting to re-instate punitive measures due to
President Nicolas Maduro’s failure to fulfill
his election commitments.
The US’ six-month sanctions relief for
Venezuela took effect on 18 October 2023.
Meanwhile, EU leaders are in Brussels, Belgium
for a two-day summit (17-18 April) to discuss
intensifying sanctions against Iran following
Tehran’s missile and drone attack on Israel
on 13 April, an incident that prompted global
powers to attempt averting a broader Middle
Eastern conflict.
“We have to adjust, to expand them [the
sanctions] on Iran,” French President Emmanuel
Macron said in Brussels ahead of the summit.
“We are in favor of sanctions that can also
target all those who help manufacture drones
and missiles that were used in the attacks last
Saturday and Sunday [13-14 April].”
Israel has indicated its intention to
retaliate, although it has not specified the
means of response.
Iran and Venezuela, which are among the
founding members of oil cartel OPEC, have
substantial oil reserves, with Iran having the
world’s fourth-largest proven oil reserves and
Venezuela holding the largest.
Despite their influence on global oil prices,
international sanctions have curtailed their
production and export capabilities and market
impact.
“The lack of direction in the market reflects
the significant uncertainty about Israel’s
possible response to Iran’s attack over the
weekend,” Dutch banking and financial
information services provider ING said in a
note.
“However, for oil, sanctions are already in
place, the issue is that they have not been
strictly enforced for the last couple of years.
And the big question is whether they will be
enforced more rigorously now,” it said.
Keeping a lid on prices was poor March economic
data from China, the world’s second-biggest
economy.
Chinese exports in
March fell by 7.5% year on year, the
biggest fall since August last year.
March retail sales and industrial output also
missed expectations, heightening concerns of
muted demand from the world’s largest crude
importer.
The US, on the other hand, showed improved in
economic activity from late February to early
April, with firms indicating expectations for
steady inflation pressures, based on a Federal
Reserve survey released on 17 April.
The Federal Reserve is currently not
considering interest rate cuts in the near term
due to a combination of resilient economic
activity and persistently high inflation.
In March, US employers added more than 300,000
jobs – the most in nearly a year – and retail
sales exceeded expectations after expanding by
0.7% month on month.
Focus article by Nurluqman
Suratman
An oil tanker at the dock of the El Palito
oil refinery at Puerto Cabello, Carabobo,
Venezuela – 13 March 2022. (Juan Carlos
Hernandez/ZUMA Press Wire/Shutterstock)
Ethylene17-Apr-2024
SAO PAULO (ICIS)–US manufacturers were
“uniformly optimistic” in March about the
prospects for the next 12 months on expected
higher sales, the country’s Federal Reserve
(Fed) Beige Book said on Wednesday.
The Beige Book is a summary of US economic
activity during the past six weeks among the 12
districts, one of which is the Federal Reserve
Bank of Dallas. That bank includes all of Texas
and northern Louisiana, the home of many
petrochemical plants and refineries.
The Beige Book published on Wednesday contains
survey responses collected in the six week to 8
April.
US manufacturing activity was in the doldrums
in 2023 and beginning of 2024, but the
manufacturing PMI index for March showed
activity expanding
for the first time in 17 months.
Earlier this week, official data from the Fed
showed manufacturing output expanding 0.5% in
March.
Increased recent demand may have been one of
the reasons for manufacturers to feel
reasonably optimistic for the months ahead.
“Contacts were uniformly optimistic for the
remainder of 2024, projecting steady to
moderately higher sales moving forward; in one
case, however, that still meant that total
sales in 2024 would fall short of their 2023
levels,” said the Fed.
“The positive forecasts were based largely on
firms’ own recent demand trends, although one
contact cited the prospects of productivity
gains from AI and expected cuts in the federal
funds rate as additional sources of optimism.”
For the six weeks covered in the report,
overall US manufacturing revenues were
practically unchanged, with half of respondents
reporting moderate gains in sales over the
cycle and the other half experiencing moderate
losses.
In the Dallas district – the 11th District in
the Fed’s terminology – the economy expanded
modestly, propped by services and housing.
However, the district’s manufacturing output
“declined slightly”, with job creation slowing.
“Employment growth slowed as wages, input
costs, and selling prices grew at a moderate
pace. Overall, Texas firms noted an uptick in
uncertainty,” said the Fed.
OVERALL, STEADY
The overall US economic continued expanding in
the six weeks to 8 April, with 10 out of 12
districts experiencing “either slight or
modest” economic growth, up from eight in the
previous report.
Some downside economic risks remain, however,
with labor shortages still being mentioned,
although with the expectation that over the
course of the next 12 months a more balance
labor market could emerge.
“On balance, contacts expected that labor
demand and supply would remain relatively
stable, with modest further job gains and
continued moderation of wage growth back to
pre-pandemic levels,” said the Fed.
Price increases were practically unchanged from
the last report, with logistics disruptions in
the Red Sea and the collapse of Baltimore’s Key
Bridge not leading yet to a significant
increase in costs, despite some shipping
delays.
“Another frequent comment was that firms’
ability to pass cost increases on to consumers
had weakened considerably in recent months,
resulting in smaller profit margins. Inflation
also caused strain at nonprofit entities,
resulting in service reductions in some cases,”
concluded the Fed.
“On balance, contacts expected that inflation
would hold steady at a slow pace moving
forward. At the same time, contacts in a few
districts – mostly manufacturers – perceived
upside risks to near-term inflation in both
input prices and output prices.”
Thumbnail image shows an ExxonMobil plant
in Beaumont, Texas. Photo courtesy of
ExxonMobil
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Crude Oil17-Apr-2024
LONDON (ICIS)–Eloise Radley, Energy Market
Reporter, and Ignacio Sotolongo, Senior Editor
at ICIS, sit down to discuss how geopolitics
have impacted US oil production in recent years
and how things could change if we see a new
administration in November.
Ethylene17-Apr-2024
SAO PAULO (ICIS)–Polymers major Braskem and US
petrochemicals engineering services provider
Lummus are to carry out a joint study with US
engineering services provider Lummus to
electricity one of its steam crackers in
Brazil.
Financial details were not disclosed.
The two companies did not disclose which
facility Lummus’ proprietary technology for
e-cracking will be tested.
Lummus commercializes its proprietary
technology under the branded name
SRT-e.
“The SRT-e electric cracking heater
leverages Lummus’ proven Short Residence
Time (SRT) technology modified to operate
using electricity and incorporates a modular
unit-cell design that can be replicated for
plants to accommodate any commercial capacity,”
said the two companies.
“The technology uses all commercially
demonstrated components, plus an optimum heat
flux profile leading to a longer radiant coil
life and longer run length. In addition,
decoking can be carried out on a unit-cell
basis so maintaining a spare heater is not
required.”
Steam cracking is one of the most
energy-intensive activities within a
petrochemical plant. The sheer amount of energy
required has so far made crackers’
electrification elusive.
Some petrochemicals majors are developing
experimental e-cracking units. In 2022, Dow and
Shell announced one test
unit in the Netherlands.
Also in 2022, Germany’s BASF and Saudi Arabia’s
SABIC, together with industrial gases major
Linde, announced another test
unit at BASF’s flagship Ludwigshafen site.
Speciality Chemicals17-Apr-2024
BARCELONA (ICIS)–Europe is finalizing the
Packaging and Packaging Waste Regulation
(PPWR), with far-reaching implications for both
virgin and recycled polymer producers.
Most significant EU packaging legislation
in decades
Includes binding targets for recycling and
recyclability
PPWR will have huge impact on virgin and
recycled packaging sectors
Legislation in final stages but may not be
passed before EU elections in June
Working groups need to be set up across
recycling value chains
In this Think Tank podcast, Will
Beacham interviews ICIS senior
recycling editor Mark Victory,
ICIS insight editor Nigel
Davis, 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.
Recycled Polyethylene Terephthalate17-Apr-2024
SINGAPORE (ICIS)–Asia recycled polymers
markets were sluggish for the most part in
2023. In early 2024 too, challenges that dim
the short-term outlook persist.
Some legislations surrounding recycling were
also put in place in the region over the last
few years, but the obstacles that limit the
growth of this sector still remain.
In this chemical podcast, ICIS senior editor
Arianne Perez and analysts Joshua Tan and Chua
Xin Nee share their insights on the topic.
Crude Oil17-Apr-2024
SINGAPORE (ICIS)–Singapore’s petrochemical
shipments in March fell by 3.6% year on year to
Singapore dollar (S$) 1.16 billion ($853
million), extending the 2% contraction in the
previous month and weighing on overall non-oil
domestic exports (NODX), official data showed
on Wednesday.
March non-electronic NODX down 23.2% year
on year
March manufacturing PMIs show continued
expansion
Singapore economy forecast to grow 1.0-3.0%
in 2024
Overall exports of chemicals and
chemical products in March fell by 37%
year on year to S$3.54 billion,
reversing the 5.8% expansion in
February, Enterprise Singapore said in
a statement.
The country’s NODX for the month fell
by 20.7% – a much steeper decline from
February’s 0.2% contraction – to S$14
billion because of a high base a year
ago, with shipments to most major
trading partners posting declines.
March non-electronic NODX, which
includes petrochemicals and
pharmaceuticals, fell by 23.2% year on
year to S$11.2 billion.
Overall NODX to seven out of
Singapore’s top 10 markets fell in
March, but shipments to Hong Kong,
Taiwan and China rose.
Singapore is a major manufacturer and
exporter of petrochemicals in southeast
Asia. Its petrochemicals hub Jurong
Island houses more than 100 global
chemical firms, including energy majors
ExxonMobil and Shell.
In the first quarter, the country’s
economy grew by 2.7% year on year in
the first quarter, accelerating
slightly from the 2.2% expansion in the
preceding quarter, according to
official advance estimates.
On a quarter-on-quarter seasonally
adjusted basis, Singapore’s economy
expanded by 0.1%, extending the 1.2%
expansion in Q4.
The manufacturing sector in Q1 grew by
0.8% year on year, moderating from the
1.4% expansion in the previous quarter.
“Within the sector, output expansions
in the chemicals, precision engineering
and transport engineering clusters more
than offset output contractions in the
electronics, biomedical manufacturing
and general manufacturing clusters,”
the Ministry of Trade and Industry
(MTI) said.
For the whole of 2024, Singapore’s
economy is expected to expand by
1.0-3.0%, compared with actual GDP
growth of 1.1% growth in 2023, the
ministry said.
Manufacturing activity in Singapore
improved in March, with the Singapore
Institute of Purchasing and Materials
Management (SIPMM) purchasing managers’
index (PMI) inching
up to 50.7, marking the
seventh straight month of expansion.
In contrast, a separate survey of
private manufacturers by financial
information and services provider
S&P Global showed Singapore’s March
PMI eased to 55.7 from 56.8 in
February.
Focus article by Nurluqman
Suratman
Thumbnail image: Singapore harbour
and the Marina Bay Sands Hotel, 16
March 2023. (Franz
Neumeier/imageBROKER/Shutterstock)
($1 = S$1.36)
Crude Oil17-Apr-2024
SINGAPORE (ICIS)–Japan’s chemical exports rose
by 3.9% year on year to yen (Y) 1.03 trillion
in March, supported by higher plastic materials
shipments abroad, amid the continued weakness
of the yen, official data showed on Wednesday.
The country’s exports of plastic materials rose
by 19.3% year on year to Y297 billion in March,
Ministry of Finance (MOF) data showed.
By volume, exports of plastic materials rose by
7.6% year on year to 513,959 tonnes.
Shipments of organic chemicals, meanwhile,
slipped by 2.2% year on year to Y199.4 billion
in March.
Exports of motor vehicles rose by 15.8% year on
year to Y1.5 trillion in March, while shipments
of motor vehicle parts were up by 3.7% at Y349
billion.
Japan’s overall exports rose by 7.3% year on
year to Y9.47 trillion in March, up for the
fourth straight month, while imports were down
by 4.9% at Y9.1 trillion.
This resulted in a trade surplus of around Y366
billion, the first in three months and
reversing the around Y378 billion deficit
recorded in February this year.
By destination, Japan’s overall exports to the
US rose by 8.5% year on year while those to
China were up by 12.6%.
WEAK YEN PROVIDES TAILWIND FOR
EXPORTSThe March trade data
follows the yen sinking hit 34-year lows to the
dollar beyond 154 yen this week as hopes of
quick US interest rates receded amid persistent
inflation.
US Federal Reserve Chair Jerome Powell,
speaking at the Washington Forum on the
Canadian Economy on 16 April, said the US
economy has not seen inflation come back to the
central bank’s goal, pointing to the further
unlikelihood that interest rate cuts are in the
offing anytime soon.
At 01:33 GMT, the yen was trading at 154.62 to
the dollar. The US dollar extended gains on 16
April, with the US Dollar Index (DXY) rising to
highs of 106.51 before closing around 106.06.
Higher interest rates in the US make
dollar-denominated assets more attractive due
to higher yields compared to Japanese assets.
Japan’s finance minister Shunichi Suzuki on 16
April said that he is closely monitoring the
yen’s depreciation and are ready to implement
all necessary measures to address the situation
if needed.
Japanese authorities intervened in the currency
market in 2022 to purchase the yen on three
occasions.
“Jawboning from officials appeared to be an
everyday affair with markets largely ignoring
them for now as the move higher appears to be
in line with recent market developments –
higher US treasury yields while the Bank of
Japan is still perceived to normalise slowly,”
Singapore-based OCBC Global Markets Research
said in a note.
The Bank of Japan on 19 March
ended eight years of negative rates, ending
the country’s historic era of negative interest
rates, but this has failed to stop the slide in
the yen.
In a statement announcing the policy change,
the central bank said that the economy has
“recovered moderately” and that it is “highly
likely that wages will continue to increase
steadily.”
Focus article by Nurluqman
Suratman
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