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HOUSTON (ICIS)–Companies continuing LNG development activities in Mexico are likely to require a high risk tolerance and long-term engagement strategy to navigate the growing number of complexities in the country’s energy landscape. Mexico’s state-run utility CFE has attempted in recent years to drum up support for its proposed LNG projects backed by the federal administration but has had to turn to the private sector to stay engaged in LNG opportunities because it lacks the expertise required to develop those major projects. Private sector market participants must partner with the CFE because the company controls so much firm natural gas pipeline capacity and electricity generation in Mexico. Stable, cost-effective supply of both is required for the development of LNG projects. CFE’s leadership is also influential within the current administration’s policy-making circles. This situation means that it is a key stakeholder for many LNG projects. It has a track record, however, of bilateral agreements that appear to change and have a discretionary nature in practice. US developer New Fortress Energy’s Pichilingue small-scale LNG project operations’ start and stop and the incorporation of bilateral negotiations for the developers’ Fast LNG Altamira project reflects this discretionary style. It continued even after Pichilingue’s commercial operations began. Neither company responded to comment but a Mexico-based market participant said the 145,000cbm Energos Grand began to supply CFE with gas near La Paz early on 29 May after a year without LNG supply to the small-scale Pichilingue terminal. This was not, however, immediately confirmed. The Energos Grand is currently chartered by New Fortress, according to ICIS LNG Edge. It left Sabine Pass on 31 March and since its arrival near Pichilingue has loitered around the terminal. REGULATIONS, PERMITS Other obstacles or potential delays to announced project timelines include the latest proposed updates by energy regulator CRE to Mexico’s natural gas transport and storage tariff regulations as well as unclear permitting processes at other energy agencies. There is still an opportunity for market participants to provide feedback during the comment period for the proposed regulations. Mexico’s natural gas association (AMGN) has already submitted detailed feedback. The CRE’s previous proposed updates to gas regulations have in some cases been extended with productive dialogue between market participants submitting comment to the website of regulatory reform agency CONAMER and the CRE. CONAMER’s processes require CRE to respond to certain types of comment submitted by parties that would be affected by changes in regulation. LNG developers active in Mexico are at various stages of obtaining permits from the US where most of their gas would have to be sourced to be competitively priced for their projects. That permitting process with the US Department of Energy is standardised with consistent, publicly-available updates. The permitting processes at the various environmental and regulatory energy agencies in Mexico are in some cases less standardised. Mexico LNG projects continue drawing interest despite complexities Project Announced Dates Status Observations Fast LNG Altamira Unit 1 start ramp up: Jul ’23 May ’23: company announced 90% Unit 1 progress; Units 2 and 3 pending negotiations CFE is anchor customer; Units 2 and 3 pending bilateral negotiations Energia Costa Azul (phase one) Expected operational summer 2025 achieved FID; under construction, no major known delays Fully contracted to Mitsui, TotalEnergies; Sempra has numerous MOUs with key stakeholder CFE Vista Pacifico awaiting FID Feb ’23 MOU with CFE, Carso Energy for newbuild pipe to supply Sonora, Baja California, connect to Samalayuca-Sasabe and Sasabe-Guaymas systems Some public statements that CFE could have percentage of LNG profit, LNG for Manzanillo but binding agreement has not been published Saguaro LNG (Mexico Pacific LNG) targeting FID on first two trains (4.7mtpa each) in 2023 Situation on final permitting in Mexico unclear; continuing commercial discussions on third train proposed for second phase (so far Shell signed SPA for 1.1mtpa, Exxon has option for 1mtpa from train 3); has 20-year offtake agreements with ExxonMobil (2mtpa), Shell (2.6mtpa), Guangzhou Development Gas Trading (2mtpa) Offtake from first two trains at 70%; New pipeline in Mexico likely required, remains pending; Likely linked to ONEOK Saguaro Connector line which may make FID mid-2023, come online Q2 ’25 Amigo LNG Q2 ’23: company target for EPC start for liquefaction plant marine facilities awaiting FID; has DOE export authorisation Obtained US DOE FTA, non-FTA export authorisation; Q2 ’26 is goal for commissioning, startup, first LNG shipment to Asia Pichilingue (small-scale) Commercial operations began Jul ’21 Import terminal; uses small-scale ISO flex concept; recent Energos Grand appears to be first vessel in at least a year Operations appear at times to be subject to bilateral negotiations; gas supply intended for La Paz, Baja power plants especially during summer; not mentioned during most recent earnings presentation; New Fortress secured LNG supply for its regas terminals through 2027 Coatzacoalcos LNG None Issued call for expression of interest in Nov ’22 but no results published Feedgas likely a challenge; CFE’s terms in expression of interest requirements also considered challenging Source: Companies, ICIS, US Department of Energy (DOE) These processes appear to also have become discretionary to a degree with market participants saying requirements and timelines are unclear. Certain energy agencies like energy ministry SENER had to develop regulations for LNG export because it had no precedent for such activities. Mexico-based sources have previously said that others like CRE simply appear to have a discretionary pattern. The CRE’s full board of commissioners was appointed by the current federal administration, which has made its state-centric approach to energy policy very clear. A recent court victory in Mexico against CRE’s permit processing practices has established a precedent that could help others attempting to move their permitting processes forward at the CRE. Taking such a strategy, however, may mean that attempts to engage other state-owned entities like utility CFE afterward for pipeline capacity could be met with resistance. PROJECT OUTLOOK New Fortress’ first unit of Fast LNG Altamira is scheduled for a July or August start with potential remaining for delays because of ongoing negotiations with CFE. This despite recently receiving a permit to export LNG from SENER. Construction on US Sempra’s Energia Costa Azul (ECA), the only Mexico LNG export project to have achieved final investment decision (FID) thus far, appears to be proceeding as planned with no known interference, though local communities have been known to block energy projects near completion to extract further concessions from companies. ECA and Sempra’s Vista Pacifico currently seem to be the furthest along in development followed by Mexico Pacific Limited’s Saguaro LNG, though feedgas supply, more binding offtaker agreements and several other key updates remain pending. Sempra has developed complex energy projects in the country including projects that were repeatedly delayed. This situation suggests that maintaining longterm stakeholder engagement is essential especially during the period of transition coming for Mexico’s federal administration as it approaches presidential elections in 2024. Mexico’s president appoints the director of CFE, the energy minister leading SENER and CRE’s board of commissioners among other key energy and environmental agency heads. Claudia De La Rosa

NEW YORK (ICIS)–LyondellBasell will take a multi-pronged approach to boost production and sales of recycled and bio-based plastics as demand accelerates through 2030, the head of its Circular and Low Carbon Solutions business said. The company is targeting the production of 2m tonnes/year or more of recycled and renewable-based plastics by 2030, with this business generating at least $1bn of incremental earnings before interest, tax, depreciation and amortisation (EBITDA) by that time. It expects to reach an intermediate EBITDA target of $500m by 2027. For the 2m tonne/year production target by 2030, recycled plastics will dominate the volumes, said Yvonne van der Laan, executive vice president, Circular and Low Carbon Solutions at LyondellBasell, in an interview with ICIS. ELECTRIC CRACKINGLyondellBasell on 1 June announced a major step to decarbonise its operations with a memorandum of understanding (MoU) with Technip Energies and Chevron Phillips Chemical to potentially build a demonstration unit using Technip’s electric steam cracking furnace technology at its Channelview, Texas, site. Electric cracking would involve the use of renewable energy to heat cracker furnaces rather than natural gas, allowing up to a 90% reduction in furnace greenhouse gas emissions (GHG). “This is very much related to our GHG reduction ambitions and also very helpful [in creating] a platform for the products coming out of Channelview to improve their carbon footprint,” said van der Laan. This would include chemically recycled plastics produced downstream from the Channelview cracker which can process pyrolysis oil from plastic waste. LyondellBasell is targeting a 42% reduction in Scope 1 and 2 GHG emissions, and a 30% reduction in Scope 3 emissions by 2030 versus a 2020 baseline. HOUSTON REFINERY CLOSURE PLANSMeanwhile, the company’s recent announcement to postpone the closure of its Houston refinery to the end of Q1 2025 versus a previous target of the end of 2023 in no way delays plans or targets for its Circular and Low Carbon Solutions business, the executive said. “This has been carefully analysed, and it actually provides for a great transition to prepare the site for some of the repurposing we are looking at,” said van der Laan. The Houston refining site will play a key role in the Circular and Low Carbon Solutions business as a regional hub. The company sees the extension enabling a smoother transition between the shutdown of the refinery and the implementation of retrofitting and plastics recycling projects. Options being evaluated include recycled and renewable-based feedstocks, and green and blue hydrogen. The projects under development would connect to existing assets in the Houston area and use existing infrastructure on the refining site including hydrotreaters, pipelines, tanks, utilities, buildings and laboratories. “We have two big flagship sites – one in Cologne, Germany, and one in Houston around our Channelview, Texas, operations, and this perfectly fits into that plan,” said van der Laan. DEMAND ACCELERATIONDemand for recycled plastics is expected to far outpace production capacity in the years ahead. “On the demand side we see very strong fundamentals which is basically the driver for our strategy going forward. On the packaging side, the consumer brand owners have made very ambitious pledges on recycled content, and this is where the most urgent demand is,” said van der Laan. “It’s society, it’s consumers and this is partly being translated into regulations to support it,” she added. Demand for recycled polyethylene (PE) and polypropylene (PP) of around 15m tonnes/year is expected to outpace supply by 50% by 2030, according to the company. Of that demand, 65% will come from packaging of which 55% is attributed to food packaging in particular. “In our view of that demand outlook, we have only taken into account what is currently announced [in terms of regulations]. Anything that comes on top will be a further tailwind for that demand development or acceleration,” said van der Laan. The EU in November 2022 updated its Packaging and Packaging Waste Directive (PPWD) with new minimum recycled content requirements and bans on certain single-use plastics. The recycled content target for plastic packaging is 50% by 2025 and 55% by 2030. “Brand owners are obviously reacting not just to regulations but to what consumers want, and more and more are willing to pay for it,” said van der Laan. CARBON FOOTPRINT AND RECYCLINGReducing carbon footprint is complementary to plastics recycling, said the executive. “It’s complementary and it means that in the future, we will make sure we work with new technologies that also address carbon footprint,” said van der Laan, pointing to electric furnaces as one of those technologies. “We are working to see how we can ultimately get to net zero for those sites, which means that any product coming from those sites will also meet GHG targets,” she added. LyondellBasell’s MoReTec technology to chemically recycle plastic waste is also not only high yielding and scalable, but also has a lower carbon footprint than standard pyrolysis processes, she pointed out. “In general terms, I can say that it’s lower than typical standalone ‘no-frills’ pyrolysis technology. With MoReTec, we can integrate it with our cracker streams so we can do something with the gas stream and not just the liquid. But we are also doing other things to make sure that in terms of GHG emissions, it will meet our own ambitions,” said van der Laan. In November 2022, the company decided to move forward with engineering to build a chemically recycled plastics plant using its MoReTec technology at its Wesseling, Germany, site near Cologne. A final investment decision is targeted for the end of 2023, and start-up of the 50,000 tonne/year output plant is expected by the end of 2025. SCALING UPFuture MoReTec plants could scale much higher than the 50,000 tonne/year capacity at its first planned project, especially around its Cologne and Houston hubs where there is high population density and existing infrastructure. “If you want to process [the feedstock] in steam crackers, you still need to hydrotreat or post-treat it and that’s exactly what you have to do at scale again, because otherwise the costs are too high,” said van der Laan. “So that’s where our integrated large-scale hubs come in, because that’s where you localise or centralise these streams to do this in an efficient way,” she added. SECURING FEEDSTOCK FROM 3RD PARTIESLyondellBasell is already using third-party pyrolyisis oil feedstock at its crackers in Cologne, Germany, and Channelview, Texas, to ultimately produce recycled PE and PP downstream, and will continue to source supply in addition to producing its own feedstock supply with MoReTec plants. In May, LyondellBasell, Infinity Recycling and Invest-NL made an equity investment in the Netherlands-based Pryme to help the company commercialise its pyrolysis process for recycling plastic waste. Pryme is building a chemical recycling plant in Rotterdam with scheduled start-up later this year, and plans to build a second larger project by 2025. LyondellBasell plans to use some of the pyrolysis oil from Pryme at its Cologne, Germany, hub. In the US, LyondellBasell in February signed a long-term contract with Nexus Circular for the latter to supply LyondellBasell with around 24,000 tonnes/year of recycled feedstock. The material will be produced at Nexus Circular’s new chemical recycling facility, which will start construction in 2023, and be used in LyondellBasell’s Channelview, Texas, cracker. “These are two examples of how this fits very well with our integrated hub strategy at those larger sites where we can really concentrate and scale. It is part of our strategy going forward,” said van der Laan. WASTE COLLECTION ECOSYSTEMLyondellBasell will also engage further upstream with the waste collection ecosystem to help ensure a steady stream of waste plastics supply. “Part of the strategy is that we also move upstream with partners to make sure we create the required sorting capacity, so that plastic that today ends up in incineration or landfill is getting sorted and treated properly to serve as feedstock,” said van der Laan. In March, LyondellBasell and European waste treatment company EEW Energy from Waste signed a letter of intent (LOI) which includes exploring a long-term partnership to extract and recycle plastics out of incineration waste streams. This could include construction of waste pre-sorting facilities at or near EEW incineration plants to remove plastics from waste streams bound for incineration, and investment in advanced sorting facilities. In the US, Cyclyx International, ExxonMobil and LyondellBasell in October 2022 signed an agreement to develop an advanced plastic waste sorting and processing facility around Houston, Texas. The $100m Cyclyx Circularity Center is expected to start up in 2024 and produce 150,000 tonnes/year of plastic waste feedstock to supply LyondellBasell’s and ExxonMobil’s chemical recycling operations. “This allows us to offer to the players that own the waste, a better alternative and access to a value chain that today they cannot access through a landfill or incineration model,” van der Laan said. MECHANICAL RECYCLING INVESTMENTSWhile much of the focus in plastics recycling has been on chemical recycling, LyondellBasell continues to invest in mechanical recycling as well. In April, LyondellBasell agreed to buy out partner Veolia’s 50% stake in mechanical recycler Quality Circular Polymers (QCP) with locations in Belgium and the Netherlands, taking full ownership. Earlier this year, LyondellBasell has also made an investment in solvent-based recycling company APK based in Germany, and acquired Italy-based recycled polymers compounder Mepol, which also has operations in Poland. Having both chemical and mechanical recycling capabilities addresses both mixed plastic waste flexibles that are hard to recycle, and rigid plastics that are easier to process through mechanical recycling. And downstream, the recycled plastics coming out of chains serve different markets. “Advanced (or chemical) recycling is very much in demand by the brand owners for food packaging solutions or medical uses, whereas our mechanical recycling solutions are also ending up with brand owners in packaging such as bottles and caps,” van der Laan pointed out. ADDRESSING HARD-TO-RECYCLE PLASTIC FILMSMore chemical recycling capacity is needed to address the issue of hard-to-recycle plastic films and flexibles such as bags – an issue in the public spotlight lately with an ABC investigative report on plastic bag recycling. “That’s what advanced recycling does, really [addressing] the hard-to-recycle plastic waste which is flexibles, films (including multi-layer) and mixed plastic waste,” said van der Laan. Interview article by Joseph Chang

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Early bids and offers coming in below May price levels R-PET colourless flake could hit parity with PET Further possible reductions won’t bolster demand

Above average rainfall headed for South Europe is likely to reduce drought risk in Spain and could further increase Italian run of river production, which has already been boosted by wet weather. The Balkans, where reservoir levels are already reaching the maximum of the range experienced at the same time 2018-2021, are also set to receive above average precipitation, which could pressure prices. The outlook for the Nordics is drier, raising the possibility that recent increases in reservoir stocks could run out of steam. REVIEW In the Nordics, reservoir levels have increased over the last few weeks, bringing hydro stocks closer to parity with 2015-2021 average. Stocks have gone from 21% below the historic average in week 18 to just 1% below in week 21. Reservoir stocks have also put further ground between 2023 and 2022 levels, going from 5% up on 2022 levels in week 18 to 15% up in week 21. Drought has retreated from parts of South Europe over May as above average precipitation offered relief to parched rivers, particularly in Italy, and could feed into reservoirs. However, reservoir stocks in the region have fallen further behind the historic average, going from 4% below the 2015-2021 in week 18 to 5% below. The Balkan markets, which have largely remained untouched by drought so far this year, have enjoyed strong run of river production in recent weeks. Aggregated Balkan stocks remained above both 2022 and 2018-2021 average levels, although on an individual level Bulgarian stocks remained below both 2022 and historic average levels and Greek stocks remained below the historic average. OUTLOOK SOUTH EUROPE Wet weather has brought relief to parched Italian rivers, with run of river generation more than doubling month on month. Run of river production averaged 4.7GW during May, compared with 1.9GW in April. Although this brought Italian run of river closer to the 2016-2021 average for May, it still fell about 500MW short of this historic average. Above average precipitation for the time of year is set to continue, according to forecaster MetDesk, with rainfall over Italy and Spain more than 40% above seasonal norms throughout the remainder of week 22, week 23 and, for Spain, week 24. According to the latest data from the European Drought Observatory (EDO), which covers the first ten days of May, drought risk in South Europe was mostly confined to the Iberian peninsula. But parts of Spain experienced heavy rain in the last few days of the month and the further heavy rainfall forecast is likely to reduce drought risk. MetDesk did warn in their summer forecast that risk of a heatwave in late June could not be ruled out, but as of yet temperatures in the region are forecast in line with or only slightly above seasonal norms up to week 24. Reservoir levels are substantially above the equivalent week during 2022 in Italy, France and Spain, and only Spanish levels are substantially below the 2015-2021 average. *Italy, Spain, Switzerland and France Italian reservoir levels were slightly below the 2015-2021 average. Market participants said improved Italian reservoir levels compared with 2022 were partially due to conservation of water and did not warrant a reduction in prices. But should precipitation continue this could erode risk currently built into summer delivery products. NORDICS Aggregated reservoir levels in the Nordics were up 15% on the same time in 2022 and only 1% below the 2015-2021 average in week 21. This represented an improvement of six percentage points compared with the delta to the historical average for week 20. *Finland, Sweden and Norway The EDO had indicated some recovery in soil moisture at the beginning of May, with drought receding somewhat, but an upcoming period of very dry weather could reverse this trend and is potentially bullish for prices. MetDesk projected precipitation at least 40% below normal in Sweden during the remainder of week 22 and week 23 and 20-40% below seasonal norms in Finland and Norway in week 22, turning to at least 40% below for Norway in week 23. BALKANS Overall, aggregated Balkan reservoir stocks remain close to the maximum for 2018-2021 levels, and filling rates show little sign of slowing down. *Romania, Bulgaria, Serbia and Greece Higher than average precipitation forecast through the remainder of week 22, week 23 and week 24 signals the trend is likely to be ongoing, although MetDesk’s forecast confidence is reduced for week 24. Flows on the Danube River at the point at which it enters Romania are 28% up on the multiyear average for May, which is an important indicator of hydropower production for the region as the river feeds into the Iron Gate complex, which supplies both Romania and Serbia. Bulgarian stocks remain below seasonal average levels but have closed the gap significantly since week 18, when stocks were 11% below seasonal norms. Reservoir levels are now only 6% below the 2018-2021 historic average. Increased reservoir stocks compared to the previous year have weighed on power contracts for summer delivery, as regional utilities are expected to use stored hydropower to rein in any price peaks over the third quarter. MARKET IMPACT Further precipitation forecast in South Europe could erode risk if run of river and reservoir levels are boosted significantly. Recovery in Nordic reservoir levels is bearish for prices for the time being, but a dry spell could halt the trend. Balkan reservoir levels remain significantly above the historic average, weighing on products for summer delivery and the trend is likely to continue as further above average rainfall is incoming.

China’s manufacturing data fell deeper intro contractionary territory in May, logging a purchasing manager’s index (PMI) of 48.8, and further dimming the demand outlook for global commodities. Downstream demand in the world’s second-biggest economy continued to languish, while its domestic petrochemical capacity continued to grow at a rapid pace. Updated on 2 June 2023 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 09:10 GMT on 2 June 2023) Dow cuts Q2 sales guidance on challenging macros By Joseph Chang 02-Jun-23 04:48 NEW YORK (ICIS)–US-based Dow is taking down its Q2 sales forecast to a range of $11.0bn-11.5bn from its prior estimate of $11.75bn-12.25bn on challenging macroeconomic conditions and lower pricing levels, its CEO said at an investor conference. NE Asia C2 outlook downbeat on rising regional supply, weak China data By Yeow Pei Lin 01-Jun-23 11:26 SINGAPORE (ICIS)–Northeast Asia’s ethylene (C2) players are cautious on expectations of rising regional supplies and weak downstream outlook for the third quarter as the recovery in the Chinese economy loses momentum. Caixin China May manufacturing PMI rises to 50.9, first expansion in three months By Nurluqman Suratman 01-Jun-23 11:26 SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) picked up from 49.5 in April to 50.9 in May, marking the first expansion in three months, the Chinese media firm said on Thursday. China manufacturing weakness weighs on crude; outlook dims further By Nurluqman Suratman 31-May-23 13:36 SINGAPORE (ICIS)–China’s manufacturing sector lost further momentum in May, heightening concerns that oil consumption in the world’s second-biggest economy could weaken further. INSIGHT: Petrochemical prices and margins under relentless pressure By Nigel Davis 31-May-23 00:38 LONDON (ICIS)–The persistent global weak demand environment continues to put pressure on producers and prices are falling as the balance with output remains elusive. PODCAST: Demand flops in chemical markets around the world, gloomy outlook By Will Beacham 30-May-23 20:25 BARCELONA (ICIS)–Chemical markets around the world are suffering from collapsed demand conditions and oversupply with no prospect of a turnaround in the coming months. Depressed US manufacturing activity weighing on PP demand By Zachary Moore 26-May-23 05:40 HOUSTON (ICIS)–Demand for polypropylene (PP) in the US is facing a bearish short-term outlook as the US manufacturing sector remains in contractionary territory. INSIGHT: A tale of two economies, as resurgent services eclipses languishing industry By Tom Brown 25-May-23 23:05 LONDON (ICIS)–After the dark warnings of late 2022, ministers at the European Commission could be forgiven for sounding a little smug. PODCAST: Rampant China chemicals overcapacity could rebalance by 2024/5 By Will Beacham 25-May-23 21:00 BARCELONA (ICIS)–Excess capacity plaguing China’s petrochemical markets could return to more balanced conditions by 2024/5 as the current wave of additions ends and demand gradually improves. APIC ’23: INSIGHT: Asia petrochemicals navigate poor demand amid China start-ups; carve ‘green’ path By Pearl Bantillo 24-May-23 19:50 SINGAPORE (ICIS)–Uncertainties will hound Asia’s petrochemical markets for the rest of the year and possibly into 2024 amid the global economic slowdown at a time of strong capacity additions in regional powerhouse China. INSIGHT: Europe petrochemicals demand remains weak and prices under intense pressure By Nigel Davis 23-May-23 23:10 LONDON (ICIS)–This striking chart from Germany’s chemicals and pharmaceuticals trade association, the VCI, does not even tell the full story for the country’s petrochemical and polymers sectors. INSIGHT: Europe chemicals rebound slow going as distributors face tough Q2 By Tom Brown 16-May-23 22:27 LONDON (ICIS)–The much-heralded rebound in European chemicals demand is yet to register above a murmur, with demand tepid as destocking weighs further on consumption and manufacturing remains bearish, conditions are becoming increasingly chilly for distributors. Unencumbered by the scale of large capital assets operated by chemicals producers and without the burden of energy-intensive goods production, chemicals distribution was not as hard-hit as the wider industry by the energy crisis that bedevilled Europe through much of 2022. Germany-based major Brenntag reported a close to twofold increase in post-tax profits in 2022, while Netherlands-based IMCD reported a 37% increase in gross profit for the year. Global chemicals recovery delayed to 2024 on interest rates, China slower recovery – Unigel CEO By Jonathan Lopez 18-May-23 04:27 SAO PAULO (ICIS)–The upturn in global petrochemicals will not come in earnest until 2024 as China’s recovery is proving slower than expected and high interest rates continue depressing demand for durable goods, the CEO at Brazil’s chemicals producer Unigel said on Wednesday. Roberto Noronha added that the second quarter is being “as tough” as the first one; some green shoots should start appearing in the second half of this year, he added. He was speaking to reporters and financial analysts following the publication of Unigel’s Q1 sales and earnings figures, which posted sharp year-on-year falls. APIC ’23: India to see wave of new capacities through to 2030 – CPMA chief By Nurluqman Suratman 19-May-23 12:28 NEW DELHI (ICIS)–India will see a wave of new petrochemical production capacities through to 2030 as it seeks to meet growing domestic demand amid strong economic growth, the president of India’s Chemicals & Petrochemicals Manufacturers’ Association (CPMA) said on 19 May. In 2023, India added 1.25m tonnes/year of new polyethylene (PE) capacity and 0.5m tonnes/year of polypropylene (PP) capacity, Kamal Nanavaty told delegates of the Asia Petrochemical Industry Conference (APIC) in New Delhi, India. Another 1m tonnes/year of new PE and PP capacities will be added in 2024, he said. INSIGHT: Weak demand dominates chemicals in Q2 as economies drag By Nigel Davis 11-May-23 00:41 LONDON (ICIS)–The persistence and wide spread of the demand slump is the key issue for chemical producers in 2023, now mid-way through the second quarter. Recent financial reporting from chemical companies of all types and in all locations has underlined the impact of weak demand on sales in the first quarter. The year-on-year comparisons have proved to be stark, and reduced production the driver of lower revenues at a time of still high costs of sales. China the lynchpin for global polyolefins demand recovery – LyondellBasell exec By Joseph Chang 10-May-23 23:27 NEW YORK (ICIS)–China will be the lynchpin for global demand recovery in polyolefins, a LyondellBasell executive said on Wednesday. INSIGHT: Opportunities and challenges for China’s polyolefins post-COVID: 3, Entering a new phase of uncertain demand By Lucy Shuai 08-May-23 17:00 SINGAPORE (ICIS)–Social and economic activity in China is gradually recovering following removal of zero-COVID policies in late 2022 and the demand outlook is attracting worldwide attention. China to continue avoiding BPA spot imports; wide buy-sell gap to persist By Li Peng Seng 08-May-23 11:40 SINGAPORE (ICIS)–The strong buying momentum for bisphenol A (BPA) in the two weeks leading up to the Labour Day break in China has failed to extend into the post-holiday period. INSIGHT: Opportunities and challenges for China polyolefins post-COVID: 1, Changing trade flows By Lucy Shuai 04-May-23 14:00 SINGAPORE (ICIS)–Surging capacities in China’s polyolefins market in recent years have increased China’s footprint in the global supply chain and changed global trade flows. Meanwhile, an intensive period of new plant start-ups in south China this year have also altered domestic trade. INSIGHT: Opportunities and challenges for China polyolefins post-COVID: 2, Seeking new outlets By Lucy Shuai 05-May-23 14:00 SINGAPORE (ICIS)–China’s polyolefins industry will need to seek new outlets in 2023 as capacities keep on rising while margins may remain curbed after slumping a year ago. Caixin China Apr manufacturing PMI slips to 49.5 on weaker domestic demand By Nurluqman Suratman 04-May-23 15:59 SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) for April slipped to 49.5 from the neutral 50.0 mark in March amid subdued domestic demand conditions, the Chinese media firm said on Thursday. Lacklustre Europe butadiene eyes Asia for relief By Nel Weddle 04-May-23 21:13 LONDON (ICIS)–Europe’s butadiene (BD) market fundamentals are just about satisfactory, market sources say, given the recent past and current macroeconomic challenges. Players are pinning hopes on Asia to steer the way to better times. NSIGHT: Permit reform may help US chems maintain cost advantage By Al Greenwood 05-May-23 03:41 HOUSTON (ICIS)–US lawmakers are continuing to file permit-reform proposals to make it easier to build pipelines and other infrastructure projects, which could help US chemical producers maintain their cost advantage by giving them more access to cheap fuel, feedstock and renewable power. Asian, Mideast PET makers see lower selling pressure amid tight supply By Zachary Tia 27-Apr-23 15:38 SINGAPORE (ICIS)–Many Asian and Middle Eastern polyethylene terephthalate (PET) producers faced lower selling pressure in April given tight supply, amid higher production costs on the back of firming upstream feedstock prices in April. Oil tankers line up in China’s Shandong on stockpiling, tighter checks By Fanny Zhang 25-Apr-23 15:43 SINGAPORE (ICIS)–Crude carriers have been spending longer times waiting for discharge in China’s Shandong ports, as high inventories reduced tank availability. Also, customs widened cargo checks to crack down on false declarations, according to industry sources. INSIGHT: China aromatics markets volatile with gasoline demand By Seymour Chenxia 26-Apr-23 19:26 SINGAPORE (ICIS)–China’s domestic gasoline demand volatility on the back of the pandemic and crude market dynamics since the third quarter of 2022 has impacted on mixed aromatics, toluene and xylene. Price trends for the three products have varied slightly based on respective market fundamentals. INSIGHT: Hope for 2023 European construction market recovery falters as spring demand uptick fails to materialise By Nicole Simpson 19-Apr-23 20:52 LONDON (ICIS)–Since late 2022, chemicals players have been hopeful that better demand is just around the corner but optimism is faltering as economic conditions remain challenging and spring construction demand has failed to ignite. INSIGHT: Plastics, petchems in Europe still waiting for construction season, Q2 may be reality check By Vicky Ellis 20-Apr-23 21:45 LONDON (ICIS)–As warmer, sunnier days grow more frequent, Europe’s construction industry should be ramping up for a busy period. But the season is proving a disappointment, with weaker demand across a wide range of petrochemical and plastics EU chems trade surplus for Jan-Feb 2023 rises on previous year By Morgan Condon 20-Apr-23 21:54 LONDON (ICIS)–The EU chemicals sector trade balance increased in January and February compared to the previous year, according to the latest data from Eurostat on Thursday. Imports decreased during the period, but exports to countries outside the of the EU showed marginal gains. North America EO operating rates to recover with new derivatives capacity – CDI By Joseph Chang 17-Apr-23 19:33 MONTCLAIR, New Jersey (ICIS)–North America ethylene oxide (EO) operating rates are poised to recover with new derivatives capacity starting up in the coming years and a recovery in China, a Chemical Data (CDI) analyst said. Global oil demand growth hopes pinned on faltering Chinese economy By Barney Gray 12-Apr-23 18:42 LONDON (ICIS)–Chinese government data for March, published earlier this month, indicated that domestic consumer demand is weak and the manufacturing sector was under pressure at the end of Q1, which could hinder the anticipated China-led growth in global oil demand. ExxonMobil’s Singapore resid upgrade project on track for 2025 start-up By Nurluqman Suratman 12-Apr-23 14:21 SINGAPORE (ICIS)–ExxonMobil is on track to start commercial production at its latest upgrade project for lubricant base stocks in Singapore in 2025 after facing construction delays due to the pandemic, according to a company official. IMF keeps developing Asia 2023 growth forecast at 5.3%; trims India projections By Nurluqman Suratman 12-Apr-23 13:23 SINGAPORE (ICIS)–The International Monetary Fund (IMF) has kept its 2023 growth forecast for developing Asia at 5.3% but trimmed its forecast for next year amid rising risks in global financial conditions. Japan’s Asahi Kasei cuts medium-term income targets as demand slows By Nurluqman Suratman 11-Apr-23 18:35 SINGAPORE (ICIS)–Japanese chemicals major Asahi Kasei on Tuesday slashed its medium-term operating income target, citing heavy blows from prolonged semiconductor shortages, stagnant demand due to lockdowns in China, and high prices of feedstock and fuel. INSIGHT: China LDPE supply likely to exceed demand all this year By Joanne Wang 13-Apr-23 14:00 SINGAPORE (ICIS)–The supply of low density polyethylene (LDPE) in China is likely to exceed demand for the remainder of this year putting severe pressure on prices. Domestic prices plunged to a 32-month low on 7 April caused mainly by increased domestic production and destocking by foreign suppliers at the end of 2022. INSIGHT: US chemical earnings ‘rebound’ in H2 may disappoint By Joseph Chang 11-Apr-23 06:16 NEW YORK (ICIS)–Approaching Q1 earnings season, players will be watching closely for signs of a sustainable recovery from the Q4 trough ravaged by inventory destocking. While results through 2023 should certainly bounce from a horrendous Q4, they may well disappoint, given deteriorating macroeconomic indicators. UK car sales hit post-pandemic peak in March on better supply By Morgan Condon 05-Apr-23 18:09 LONDON (ICIS)–UK car sales rose to their highest level since before the COVID-19 pandemic in March, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT) on Wednesday. INSIGHT: Asia petrochemical demand and pricing could be challenged this year compared to 2022 By Jimmy Zhang 05-Apr-23 15:00 SINGAPORE (ICIS)–China’s petrochemical industry growth this year could be more subdued than earlier projections, according to participants in an ICIS webinar late last month. INSIGHT: Crude oil jump not likely to kick start petrochemicals trend By Nigel Davis 04-Apr-23 23:55 LONDON (ICIS)–The OPEC+ decision driven increase in crude oil prices on Monday puts upward pressure on oil products and petrochemicals prices in what remains an uncertain demand environment. China’s demand recovery remains focal point for oil markets – analysts By Nurluqman Suratman 04-Apr-23 15:12 SINGAPORE (ICIS)–China’s consumption recovery will be the key focal point for oil markets for the rest of the year, as attention shifts towards demand growth following the shock move by OPEC and its allies earlier this week to further cut supply. SE Asian NBR dented by slower buying, demand outlook murky By Ai Teng Lim 30-Mar-23 15:35 SINGAPORE (ICIS)–Spot discussions in southeast Asia for acrylonitrile butadiene rubber (NBR) are under pressure from waning buying interest, and trade liquidity may stay curbed in the near term if buyers and sellers remain divided in their pricing outlook. AFPM ’23: US construction season may be late, slow – Huntsman By Al Greenwood 29-Mar-23 04:11 SAN ANTONIO (ICIS)–Early signs in the US are pointing to a residential construction season that will be later and slower than typical, the CEO of Huntsman said on Tuesday. Asia fatty acids market to remain flat in near term on uncertainties By Helen Yan 28-Mar-23 15:59 SINGAPORE (ICIS)–Asia’s fatty acid demand is expected to remain flat in the near term as buyers retreat from the market and adopt a cautious stance, given the uncertainties and weak macro-economic conditions. INSIGHT: US recycled plastics industry continues to navigate changes in global trade according to latest statistics By Emily Friedman 28-Mar-23 01:41 HOUSTON (ICIS)–Though competitive recycled resin imports continue to pressure the domestic US recycled plastics market as freight rates improve, Q4 and full-year 2022 US import and export data of plastic scrap show a setback in overall import volume despite the recent trend. AFPM ’23: With supply chain constraints largely over, freight costs expected to trend lower By Adam Yanelli 26-Mar-23 23:19 SAN ANTONIO (ICIS)–Participants in the US chemicals industry have been coping with high costs for transporting products over the past two years because of persistent supply chain constraints brought on by the COVID-19 pandemic. AFPM ’23 – INSIGHT: US petchem exports poised to hit record on capacity, logistics and cost advantage By Joseph Chang 25-Mar-23 03:33 NEW YORK (ICIS)–With the last wave of new capacity additions and easing of logistics constraints, the US petrochemical sector has a clear path to boosting exports to new records in 2023, heading into this year’s International Petrochemical Conference (IPC). Southeast Asia PP market braces for a tough Q2 By Jackie Wong 18-Mar-23 00:35 SINGAPORE (ICIS)–With demand on a considerable slowdown since the end of the Lunar New Year holiday in early February, the polypropylene (PP) market in southeast Asia is now bracing itself for an even tougher Q2 as different elements come together, threatening to create a perfect storm. Intra-Asia chemical tanker demand hampered by aromatics plant turnarounds By Hwee Hwee Tan 21-Mar-23 17:16 SINGAPORE (ICIS)–Aromatics plant turnarounds in Asia and cargo diversions to the US gasoline blending sector are expected to continue to curtail intra-regional shipping demand into the second quarter. China PP prices fall to nearly three-year low amid increasing supply, lower-than-expected demand By Lucy Shuai 22-Mar-23 12:44 SINGAPORE (ICIS)–China polypropylene (PP) prices fell to a nearly three-year-low amid increasing supply and lower-than-expected demand, and the market may remain under pressure in Q2. Asia petrochemicals demand tepid on macroeconomy, oversupply concerns By Nurluqman Suratman 24-Mar-23 14:16 SINGAPORE (ICIS)–Asia’s petrochemical markets continue to face tepid demand as economic recovery in regional bellwether China remains slower than initially expected, with new production capacities adding to oversupply concerns. Recessionary conditions to define H1, Q1 destocking still ‘palpable’ – LANXESS CEO By Tom Brown 15-Mar-23 21:15 COLOGNE (ICIS)–2023 will be a difficult for the chemicals sector, with market conditions likely to remain bleak through the end of the second quarter, the CEO of LANXESS Matthias Zachert said on Wednesday. Zachert also said the destocking trend that emerged in the closing months of 2022 continues to be felt. The impact of weaker demand in a high-cost, low-growth environment is likely to weigh on chemicals players globally through the first six months of 2023, with destocking continuing and customers hesitant about making substantial new commitments, according to Zachert. INSIGHT: China growth ambitions deliver a reality check while financial risk multiplies By Nigel Davis 14-Mar-23 23:33 LONDON (ICIS)–Petrochemicals production turned up in January following months of decline, as demand started to improve and prospects for growth brightened. But the take-off, from a miserable few months at the end of 2022, was slower than some hoped for – as evidenced by capacity utilisation. Subsequently, the brightness seen by some around the Lunar New Year holiday in China in February has dimmed and China’s government has delivered a dose of reality. ICIS data focus on basic chemicals and synthetic materials (that is, resins, elastomers and fibres), so the core petrochemical industry building blocks and the major polymers. In January, production of those materials rose 0.9% globally, to 280.9m tonnes. As ICIS chief economist, Kevin Swift, notes, this follows a 0.1% decline in December, a 1.9% decline in November “and generally declining activity since March”. The sector is by no means in a good place. Overall, production volumes were down 5.2% year on year in January with gains largely centred on North America, Central & South America, Europe and the Middle East. Production in northeast Asia was weak. Capacity utilisation improved in January by 0.4 percentage points to 66.2% which was encouraging but this rate compared with a much more robust 71.7% in January 2022. INSIGHT: US petchem exports to hit record on capacity surge, easing of logistics constraints By Joseph Chang 14-Mar-23 01:00 NEW YORK (ICIS)–With the last wave of new capacity additions and easing of logistics constraints, the US petrochemical sector has a clear path to boosting exports to new records in 2023. Even with a recessionary global economic outlook dampening demand overseas and capacity surging in China, the US cost advantage is simply too great to hold back the floodgates. US petrochemical exports will run into a big headwind from a surge of new projects starting up in China. China will be adding record-breaking chemical and fertilizer capacity in 2023 of 137m tonnes/year, dwarfing the previous record of around 93m tonnes/year in 2014 and driving global oversupply, according to an ICIS analysis. S Korea Q4 ’22 GDP contracts on quarter; full-year ’23 growth to slow on weak exports By Pearl Bantillo 07-Mar-23 13:50 SINGAPORE (ICIS)–South Korea’s economic output shrank by 0.4% in the October-December 2022 from the previous quarter, unchanged from advance estimates, as manufacturing and exports contracted amid a global economic slowdown. For the whole of 2022, manufacturing growth decelerated to 1.4% from 6.9% in the previous year, while export of goods posted a much slower growth of 3.4% from 10.5% in 2021. For 2023, full-year growth is projected to slow down to 1.6% amid high inflation and interest rates. “Growth will fall even further below its pre-pandemic average this year on a tougher base effect, high energy prices and higher interest rates. However, eased Covid-19 restrictions will provide some support,” said Matthew Cunningham, economist at Spain-based FocusEconomics had stated in a recent note. China sets conservative 5.0% GDP growth target; petrochemical markets cautious By Fanny Zhang 06-Mar-23 14:33 SINGAPORE (ICIS)–China has set its 2023 economic growth goal at around 5%, a conservative number underscoring an overall cautious outlook that sent crude prices falling on Monday after recent strong gains, while Chinese petrochemical futures markets largely mixed. At the start of China’s National People’s Congress (NPC) in Beijing on 5 March, Chinese Premiere Li Keqiang announced the GDP growth target, lower than the previous year’s target of around 5.5% although the figure represents an acceleration from the actual 3.0% growth recorded in 2022. China’s parliament will be in session for 10 days to outline the country’s broad goals and plans for 2023. Economists deemed the GDP target realistic as the economy recovers from severe COVID-19 impact over the past three years. INSIGHT: LatAm petchems at mercy of global markets as China’s reopening key for prices By Jonathan Lopez 04-Mar-23 00:26 SAO PAULO (ICIS)–Latin American petrochemicals companies are dependent on a recovery in global prices to post healthier spreads in 2023 as all eyes are now on China’s economy reopening. Although Latin American petrochemicals producers and distributors concentrate on domestic consumers, China and other foreign markets are important for the region because they influence margins and stimulate demand for commodity exports. INSIGHT: Optimism on China recovery as manufacturing PMI leaps into expansion By Joseph Chang 02-Mar-23 07:00 NEW YORK (ICIS)–The long-awaited China recovery may finally be at hand, as a key leading indicator of manufacturing activity surged higher. Asia fatty alcohols to see improved sentiment following China Feb PMI data By Helen Yan 02-Mar-23 14:13 SINGAPORE (ICIS)–Asia’s fatty alcohols and other oleochemical markets are likely to see an improvement in sentiment and demand, following the latest February data showing factory activity rising significantly in China. INSIGHT: European chemical producers see demand weakness persist but look to H2 2023 By Nigel Davis 28-Feb-23 23:51 LONDON (ICIS)–A slower than hoped for re-start in China but a turn up in key indicators in the US colour the macroeconomic outlook and the driving forces behind industrial production demand for chemicals. INSIGHT: East China toluene xylene price gap fluctuates amid shifting market dynamics By Veronica Zhang 28-Feb-23 19:39 SINGAPORE (ICIS)–The East China toluene-xylene price gap has fluctuated widely in 2022 and early 2023 amid a shift in supply-demand fundamentals as export demand grew and domestic consumption remained more subdued. China phenol, acetone industry out of the red; uncertainties loom in March By Yoyo Liu 27-Feb-23 15:00 SINGAPORE (ICIS)–China’s phenol and acetone industry has emerged from the red on increased prices after the Lunar New Year holiday on 21-27 January. INSIGHT: China imports of Russia oil to rise further in 2023 on cheap prices By Fanny Zhang 27-Feb-23 21:59 SINGPORE (ICIS)–China is expected to boost imports of Russia oil further in 2023 to take advantage of price discounts, with a significant increase likely in volumes flowing to independent refineries in Shandong. INSIGHT: Northeast Asia plasticizers exports to drive intense competition globally By Nicole Simpson 27-Feb-23 21:40 LONDON (ICIS)–Northeast Asian plasticizers exports are expected to continue to drive strong competition between sellers globally as China import interest remains low. INSIGHT: Weak consumer confidence weighs on China recovery post-reopening By Pearl Bantillo 22-Feb-23 23:54 SINGAPORE (ICIS)–China’s prospects turned brighter after it abandoned its zero-COVID policy, but two of its major growth engines – exports and the property sector – may struggle to perform amid a general weakness in consumer confidence. The possibility of the world plunging into recession still cannot be ruled out. Bank of Korea pauses interest rate hikes, lowers economic growth forecast By Nurluqman Suratman 23-Feb-23 10:53 SINGAPORE (ICIS)–South Korea’s central bank on Thursday kept interest rates unchanged at 3.50% and lowered its economic growth forecast for 2023 amid slowing domestic consumption and exports. Asia Group II base oils supply to dip slightly on China demand pick-up By Matthew Chong 23-Feb-23 12:31 SINGAPORE (ICIS)–Asia’s Group II base oils spot supply is expected to be slightly reduced in the coming months, after being in relative abundance since late 2022. INSIGHT: China bounce a bust By Joseph Chang 17-Feb-23 04:09 NEW YORK (ICIS)–Hopes for a quick rebound in China’s economy and demand for chemicals and plastics after the Lunar New Year and zero-COVID in the rearview mirror have been dashed thus far. While it is still early days and there are some signs of recovery, disappointment reigns for now. INSIGHT: China’s reopening having a gradual, positive impact on PE demand By Amy Yu 17-Feb-23 00:44 SINGAPORE (ICIS)–Polyethylene (PE) markets in Asia are expected to recover more strongly in 2023 but the magnitude of growth may depend on the speed of demand recovery in China. Currently, demand in February is not stronger than expected. INSIGHT: Asia petrochemical prices to rise but margins under pressure in February – ICIS analysts By Ann Sun 15-Feb-23 20:49 SINGAPORE (ICIS)–Higher prices in most value chains are expected in the Asia petrochemical market in February in view of balanced-to-tight fundamentals driven by subdued supply and restocking activities. However, companies are still struggling with negative margins. Global oil supply to exceed demand in H1 2023 – IEA By Tom Brown 15-Feb-23 19:54 LONDON (ICIS)–Global oil supply is expected to exceed demand for the first half of 2023, but the balance could quickly snap the other way later in the year as demand recovers and some Russian output and is shut out of parts of the world, the International Energy Agency (IEA) said. Thai domestic PET average prices rise on increased buying pressure By Zachary Tia 14-Feb-23 22:16 SINGAPORE (ICIS)–The average price for Thailand domestic spot bottle-grade polyethylene terephthalate (PET) cargoes firmed on the back of higher buying pressure in the week ended 10 February. China disappoints hopes of swift PP demand lift, global markets eye exports closely By Vicky Ellis 14-Feb-23 20:47 LONDON (ICIS)–A raft of offers of Chinese polypropylene (PP) into other regions, and signs that demand is not pinging back quickly, are denting hopes that a fast Chinese recovery will pull up global markets. Thai PTTGC expects demand recovery in 2023 on China reopening By Nurluqman Suratman 14-Feb-23 14:39 SINGAPORE (ICIS)–Thai petrochemical major PTT Global Chemicals expects demand for its aromatics and polymers products to improve this year following China’s reopening. Singapore Q4 economy expands by 2.1%, full-year 2022 GDP growth at 3.6% By Nurluqman Suratman 13-Feb-23 11:22 SINGAPORE (ICIS)–Singapore’s economy grew by 2.1% year on year in the fourth quarter, moderating from the 4.0% expansion in the previous quarter, amid a slowdown in the manufacturing sector, official data showed on Monday. INSIGHT: Petrochemicals beginning to expand again but margins challenged By Nigel Davis 07-Feb-23 00:25 LONDON (ICIS)–Signs of a tentative upturn for the major petrochemicals and polymers are welcome although it is clear that profitability is likely to remain under pressure in the first half. For the big polyolefins, polyethylene (PE) and polypropylene (PP), additional supply creates a headache that will persist for some time. Thailand R-PET feedstock supply rises on recovering tourism By Arianne Perez 07-Feb-23 12:46 SINGAPORE (ICIS)–Spot availability of post-consumer bale feedstock in Thailand has been increasing for weeks now due to more tourists coming back to the country. China January petrochemical markets rebound; near-term outlook mixed By Yvonne Shi 08-Feb-23 13:54 SINGAPORE (ICIS)–China’s petrochemical markets posted strong gains in holiday-shortened January, largely in anticipation of strong demand post Lunar New Year as both production and consumption picked up after the country abandoned its zero-COVID policy. NE Asia C2 up in supply-led recovery; China downstream demand still slow By Yeow Pei Lin 10-Feb-23 11:43 SINGAPORE (ICIS)–Northeast Asia’s spot ethylene (C2) prices advanced as supply decreased on cracker turnarounds and reduced inflows from other regions. Asian EPDM stays soft, eyes on Q2 China recovery By Ai Teng Lim 08-Feb-23 11:51 SINGAPORE (ICIS)–Discussions are limited this week in Asia’s spot market for ethylene propylene diene monomer (EPDM) imports, as sluggish buying persisted. Lower demand drives down slack wax prices in the US By Daniel Lopes 09-Feb-23 07:00 HOUSTON (ICIS)–US slack wax prices are falling based on lacklustre demand and ample supply in Q1. A market participant said sales in January were particularly low when compared to the same period last year, and this is due to continued high inflation and economic uncertainties, which have changed consumption habits. Asia naphtha buoyed by crude oil; thin demand limits gains By Melanie Wee 08-Feb-23 17:03 SINGAPORE (ICIS)–Asia naphtha markets are being propped up by gains in global crude oil futures although a lack of robust demand is keeping a lid on the upward pressure. Asia BDO extends post-Lunar New Year gains amid snug availability By Clive Ong 03-Feb-23 11:38 SINGAPORE (ICIS)–Asia’s butanediol (BDO) market extended gains after the Lunar New Year holidays, while snug availability and renewed demand in the region fuelled talk of further potential strength in the market. Asia soda ash market firms on limited supply, robust China demand By Helen Lee 02-Feb-23 15:52 SINGAPORE (ICIS)–Asia’s soda ash market has firmed on the back of limited export volumes from China, where domestic demand strengthened after the Lunar New Year holidays. China post-holiday demand key indicator for oleochemical trade flows By Lucas Hall 02-Feb-23 02:48 ORLANDO (ICIS)–Chinese demand following the end of Lunar New Year will be the key indicator in determining oleochemical trade flows in 1H 2023, according to sources on the sidelines of the American Cleaning Institute (ACI) annual meeting and industry convention. US styrene market stabilises after plants return to production By John Donnelly 31-Jan-23 22:55 HOUSTON (ICIS)–After several plant outages that boosted spot prices, the US styrene market has stabilised with units back in operation although running at reduced rates. Soft demand and rising feedstock costs promise to pressure margins through Q1. China official Jan manufacturing PMI swings to expansion mode at 50.1 By Nurluqman Suratman 31-Jan-23 12:33 SINGAPORE (ICIS)–China’s official manufacturing purchasing managers index (PMI) crossed to expansionary territory in January at 50.1, from a 34-month low of 47.0 in the previous month as the country relaxed its zero-COVID policy, official data showed on Tuesday. China 2023 GDP growth forecast revised up to 5.2% as activity recovers – IMF By Nurluqman Suratman 31-Jan-23 11:58 SINGAPORE (ICIS)–China’s GDP growth is projected to rebound to 5.2% in 2023 from 3.0% last year as a sudden lifting of most its pandemic-related restrictions paved the way for a rapid rebound in economic activity, according to the World Economic Outlook (WEO) Update of the International Monetary Fund (IMF) released on Tuesday. Developing Asia economic growth forecast raised to 5.3% – IMF By Nurluqman Suratman 31-Jan-23 11:48 SINGAPORE (ICIS)–Economic growth in emerging and developing Asian economies is expected to rise in 2023 and 2024 to 5.3% and 5.2%, respectively, after the deeper-than-expected slowdown in 2022, the International Monetary Fund (IMF) said on Tuesday. Dow expects Chinese stimulus, reopening to boost demand By Al Greenwood 27-Jan-23 03:37 HOUSTON (ICIS)–Dow is seeing signs that China’s reopening from COVID-19 lockdowns is progressing, and that should increase demand for its products, along with government stimulus, the CEO said on Thursday. “We’re seeing China opening up. We’re not seeing issues with people coming to work,” said Jim Fitterling, CEO. He made his comments during an earnings conference call. Other CEOs have also remarked that employees are returning to work, according to Fitterling. Right now, Dow is not seeing any COVID-19 outbreaks that China cannot manage, he said. Asia naphtha market sentiment mixed; eyes on China’s recovery By Melanie Wee 26-Jan-23 12:18 SINGAPORE (ICIS)–Asia naphtha markets are being kept afloat by hopes of recovering China petrochemical demand, although diminishing downstream margins are keeping demand cautious. Spot naphtha CFR (cost and freight) Japan indicative prices averaged at $715.50/tonne for first-half March delivery at midday session on Thursday, holding on to the previous day’s Asia close. Prices have climbed by some 10% compared with month-earlier levels, fluctuating with volatile crude oil futures, ICIS data shows. CRUDE SUMMARY: Oil prices steady as market awaits OPEC+ panel meeting By Eloise Radley 26-Jan-23 04:27 LONDON (ICIS) – Crude prices remained relatively steady on Wednesday, staying within $1/bbl of Tuesday’s settlement price. Hopes of increased demand in China balanced builds in US crude and gasoline stocks.Weekly data from the US Energy Information Administration (EIA) showed that US crude stocks saw a marginal build of 0.53m bbl last week. Despite this build, the rise was over six times smaller than the anticipated 3.4m bbl. This applied slight upwards pressure to prices in afternoon trading. However, gasoline stock increased by 1.76m bbl, over double the expected 0.62m bbl. US distillate stocks fell by 0.51m bbl, less than the predicted 1.90m bbl drop. Asia petrochemicals pin hopes on China’s post-holiday demand By Pearl Bantillo 25-Jan-23 14:38 SINGAPORE (ICIS)–Asia’s petrochemical players are largely betting on strong revival of China’s demand following lifting of most COVID-19 curbs, having built up stocks in the weeks leading to the Lunar New Year holiday. At midday, naphtha, as well as aromatics products benzene and toluene, were trading higher on the back of crude gains, which were being driven up by optimism over China’s economic prospects after the world’s second-biggest economy abandoned its zero-COVID policy. China is on holiday the whole week for the Lunar New Year festivities. Most other countries in northeast Asia and southeast Asia also observed the holiday at the start of the week. VIDEO: China chemicals market review and outlook By Chris Qi 20-Jan-23 11:26 SINGAPORE (ICIS)–Watch ICIS China information director Chris Qi review China chemical industry in 2022 and an outlook for the industry in 2023. China ethylene buyers’ price ideas edge up ahead of holiday By Yeow Pei Lin 20-Jan-23 11:14 SINGAPORE (ICIS)–Northeast Asia’s spot ethylene prices rebounded slightly in recent days, aided by limited offers, improving prices for certain derivatives in China and strong feedstock naphtha costs. European engineering plastics demand stays sluggish in light of persistent economic uncertainty By Yashas Mudumbai 20-Jan-23 00:34 LONDON (ICIS)–The engineering plastics markets for polyacetal (POM) and polybutylene terephthalate (PBT) in Europe are continuing to see lower than usual demand, as macroeconomic challenges cause market players to be circumspect. INSIGHT: Chems face rough earnings season amid warnings, lower margins By Al Greenwood 20-Jan-23 00:04 HOUSTON (ICIS)–Chemical companies have kicked off the earnings season by waring that they could miss analysts’ estimates and struggle to keep up with rising costs. Malaysia central bank maintains 2.75% key interest rate amid economic headwinds By Nurluqman Suratman 19-Jan-23 18:49 SINGAPORE (ICIS)–Malaysia’s central bank on Thursday unexpectedly kept its key benchmark interest rate unchanged amid expectations that the country’s 2023 economic growth will moderate this year amid a global slowdown. Pakistani buyers struggle to pay Asian R-PET, R-PE cargoes By Arianne Perez 19-Jan-23 18:10 SINGAPORE (ICIS)–As Pakistan struggles with a financial crisis, importers of recycled polyethylene terephthalate (R-PET) and recycled polyethylene (R-PE) have struggled to settle payments with suppliers. China MDI markets see active restocking spurred on by planned turnarounds By Shannen Ng 19-Jan-23 12:37 SINGAPORE (ICIS)–News of two major methylene diphenyl diisocyanate (MDI) producers in China planning turnarounds for February spurred restocking activity in the week ending 18 January, ahead of the Lunar New Year holiday. Oil falls by more than $1/bbl on surprise build in US crude inventories By Nurluqman Suratman 19-Jan-23 12:16 SINGAPORE (ICIS)–Oil prices fell by more than $1/bbl on Thursday after industry data showed a surprise build in US crude inventories for the second straight week, raising concerns of faltering fuel demand. Asia BDO rebounds as buyers pin hopes on renewed post-holiday demand By Clive Ong 19-Jan-23 11:38 SINGAPORE (ICIS)–Asia’s 1,4-butanediol (BDO) market surged this week as buying momentum for February cargoes picked up on expectations of firmer demand post-Lunar New Year. US economy poised to enter mild recession as inflation has peaked – ICIS economist By Joseph Chang 19-Jan-23 05:30 NEW YORK (ICIS)–The US economy is likely to enter a relatively mild recession in 2023, the ICIS chief economist said on Wednesday. INSIGHT: Poor demand, high costs stifle Europe industry despite falling gas prices By Aura Sabadus 18-Jan-23 22:56 LONDON (ICIS)–Falling gas prices could reignite some interest in European industrial output but a combination of high operating costs and sluggish demand, reminiscent of the 2008 financial crisis, is likely to slow recovery this year, according to ICIS research. European phenol struggles with costs while acetone tightens, but demand remains slow By Jane Gibson 18-Jan-23 22:07 LONDON (ICIS)–The recent fall in gas prices is good news for the phenol and acetone chain. But this alone is unlikely to prompt producers to increase operating rates quite yet. Japan’s Toyota targets record ’23 car output of 10.6m units, with caveat By Pearl Bantillo 18-Jan-23 13:21 SINGAPORE (ICIS)–Global automotive giant Toyota is targeting to produce 10.6m units in 2023, subject to a possible downward adjustment of 10% if problems with supply of semiconductors persist. Bank of Japan maintains low interest rates despite rising inflation By Nurluqman Suratman 18-Jan-23 12:49 SINGAPORE (ICIS)–The Bank of Japan (BOJ) on Wednesday maintained its ultra-low interest rate policy despite rising inflation levels and warned that risks to the country’s economic outlook remain extremely high. Asia MEC underpinned by hopes of post-Lunar New Year recovery By Keven Zhang 18-Jan-23 11:32 SINGAPORE (ICIS)–Asia methylene chloride (MEC) was buoyed by spot demand in the last week before the Lunar New Year. Europe ECH demand muted in Q1, could improve in Q2 By Heidi Finch 18-Jan-23 00:21 LONDON (ICIS)–Europe epichlorohydrin (ECH) demand is likely to face a tough first quarter, as macroeconomic headwinds and Asian competition continue to weigh. OUTLOOK ’23: Chemical M&A stymied by rates, uncertainty but may rebound in H2 By Joseph Chang 18-Jan-23 00:00 NEW YORK (ICIS)–High interest rates, lack of available financing and economic and earnings uncertainty are holding back chemical industry mergers and acquisitions (M&A). However, activity may be poised to rebound in H2 2023 as the backlog of undone deals builds up, a clearer earnings picture emerges and especially if the financing market improves. INSIGHT: Asia petrochemicals to rebound in January amid demand recovery – ICIS analysts By Jenny Yi 17-Jan-23 21:45 SINGAPORE (ICIS)–The Asia petrochemical market is expected to rebound from January in view of demand recovery in the coming months with China’s abandonment of its strict zero-COVID policy. The appreciation of Asia currencies against the US dollar should also support the outlook. PODCAST: Europe PE, PP analytical 2023 outlook By Ben Lake 17-Jan-23 19:35 LONDON (ICIS)–European polymer editors Vicky Ellis and Ben Lake are joined by analysts Emiliano Basualto and Lorenzo Meazza to discuss the year ahead in what could be a transitional 12 months for the polyethylene (PE) and polypropylene (PP) markets. NE Asia polyester prices stable to firm; post-holiday outlook optimistic By Judith Wang 17-Jan-23 16:30 SINGAPORE (ICIS)–Spot polyester prices in northeast Asia were stable to firm during the week, on the back of stronger feedstock prices, while overall buying has slowed ahead of the Lunar New Year holiday. China 2022 GDP growth slows to 3%; re-opening to drive 2023 recovery By Nurluqman Suratman 17-Jan-23 16:21 SINGAPORE (ICIS)–China’s economy grew by 3% in 2022, marking its slowest pace of expansion in decades, highlighting the impact of the country’s long-standing zero-COVID strategy. India December exports fall 12.2% amid global economic slowdown By Priya Jestin 17-Jan-23 14:21 MUMBAI (ICIS)–India’s merchandise exports in December declined by 12.2% year on year to $34.5bn, with further weakness likely in 2023 amid the global economic slowdown, with its major markets – the US and Europe – possibly facing a recession. BPA prices in China, India at more than two-year low; ample supply may linger By Li Peng Seng 17-Jan-23 11:38 SINGAPORE (ICIS)–Import prices of bisphenol A (BPA) in China and India have slumped to their lowest levels in more than two years, weighed down by ample supply. INSIGHT: Weak, sometimes negative product margins challenged petchem players in 2022 By Nigel Davis 16-Jan-23 23:54 LONDON (ICIS)–As in the depths of the COVID-19 downturn, chemical producers, particularly those based largely in northwest Europe, remain focused on cash. Global weekly spot IPEX up on rising chemical prices across all regions By Miguel Rodriguez Fernandez 16-Jan-23 18:57 LONDON (ICIS)–Spot chemical prices were up 2.2% on the back of firmer values across all regions, according to latest figures from the weekly ICIS Petrochemical Index (IPEX). Qatar’s $6bn Ras Laffan project to boost Mideast PE exports, shift trade flows By Nurluqman Suratman 16-Jan-23 13:49 SINGAPORE (ICIS)–Qatar’s $6bn joint venture Ras Laffan petrochemicals complex is expected to boost the Middle East’s polyethylene (PE) exports and could result in a major shift to global trade flows once it comes on stream, according to ICIS analysts. China re-opening bodes well for SE Asia PE, but Lunar New Year slowdowns ahead By Izham Ahmad 16-Jan-23 11:53 SINGAPORE (ICIS)–China’s surprise announcement of the re-opening of its borders and the easing of COVID-19 restrictions has injected renewed vigour into the southeast Asian PE market, but the impact could be short-lived as market activity slows down for the typical Lunar New Year holiday lull. INSIGHT: A turbulent 2020s requires near-term focus but clear, longer-term strategies By Nigel Davis 12-Jan-23 00:49 LONDON (ICIS)–The World Economic Forum (WEF) talks of a global risks landscape this year that “feels both wholly new and eerily familiar” in its Global Risks Report 2023. INSIGHT: Downward pressure on petchem and plastics prices persists globally By Nigel Davis 11-Jan-23 01:19 LONDON (ICIS)–Falling base chemical and polymer prices globally reflect the weaker and uncertain demand environment while shifted supply and demand balances have coloured spot activity at the end of 2022 and the start of 2023 for a handful of chemical commodities. The ICIS Petrochemical Index tracked down further in December with the focus on the US Gulf basket of prices: the 12 commodities and polymers collated for the index. China petrochemical players build stocks on hopes of strong post-holiday demand By Fanny Zhang 12-Jan-23 11:20 SINGAPORE (ICIS)–Players in China’s petrochemical markets are actively building up stocks on expectation of a strong recovery in post-Lunar New Year demand. East Asia, Pacific 2023 growth seen at 4.3% on China rebound – World Bank By Nurluqman Suratman 11-Jan-23 15:12 SINGAPORE (ICIS)–Economies in the east Asia and Pacific region in 2023 are expected to log an average growth of 4.3%, accelerating from the estimated 3.2% pace in 2022 but lower than the previous forecast of above 5% for the current year, the World Bank said. NE Asia ethylene falls on weak China demand, ample supply By Yeow Pei Lin 06-Jan-23 10:56 SINGAPORE (ICIS)–Northeast Asia’s spot ethylene market started 2023 on a soft note due to China’s raging COVID-19 outbreak, which has exacerbated the seasonal downstream demand lull ahead of the Lunar New Year holiday. China Dec petrochemical markets weak; better post-Lunar New Year demand eyed By Yvonne Shi 05-Jan-23 14:14 SINGAPORE (ICIS)–China’s petrochemical markets stayed depressed in December despite substantial relaxation of pandemic-related lockdowns, as a consequent spike in COVID-19 infections continued to restrict logistics operations. Any recovery in demand is unlikely until after the week-long Lunar New Year holiday on 21-27 January. OUTLOOK ’23: US PVC and vinyls chain face new year of weakened demand By Bill Bowen 05-Jan-23 04:00 HOUSTON (ICIS)–US polyvinyl chloride (PVC) enters 2023 with mixed outlook: nominations for price increases for January and an economic outlook that runs counter to those separately proposed increases. OUTLOOK ’23: China ACN, downstream capacities to expand; oversupply challenges prevail By Candy Nie 06-Jan-23 12:12 SINGAPORE (ICIS)–China’s acrylonitrile (ACN) market will continue to see a slew of capacity expansions, particularly in the first half of 2023. Downstream demand is also expected to rise with new downstream units coming online and some COVID-19 restrictions gradually easing since end-2022. OUTLOOK ’23: Plant activity will tighten US propylene balance even as economy undermines demand By John Donnelly 05-Jan-23 03:00 HOUSTON (ICIS)–Derivative demand for US propylene will remain weak until at least Q3, but plant maintenance and a new propylene oxide/tertiary butyl alcohol (POTBA) plant will help support the market in the first half of the year. OUTLOOK ’23: Weak demand, import pressure to persist in Europe MPG market By Nicole Simpson 05-Jan-23 18:30 LONDON (ICIS)–Demand in the European mono propylene glycol (MPG) market is expected to remain lacklustre, especially in Q1, as macroeconomic headwinds and pressure from Asian imports persist. OUTLOOK ’23: Jet kerosene demand to increase on relaxed COVID-19 restrictions By Cassandra Abolaji 04-Jan-23 20:00 LONDON (ICIS)–The outlook for the European jet kerosene market is optimistic for 2023, as the world reaches almost full recovery from COVID-19 travel restrictions. OUTLOOK ‘23: New capacity, China’s COVID-19 surge weigh on Asia EVA market By Helen Lee 04-Jan-23 15:13 SINGAPORE (ICIS)–Asia’s supply of ethylene vinyl acetate (EVA) is expected to lengthen as new capacities start-up, while surging COVID-19 cases in China following easing of pandemic-related restrictions could cap demand recovery in the first quarter of 2023. China Dec PMI at 34-month low; recovery expected to come in Feb By Fanny Zhang 03-Jan-23 15:44 SINGAPORE (ICIS)–China’s official manufacturing purchasing managers index (PMI) slumped to a 34-month low of 47.0 in December amid fast-spreading COVID-19 outbreaks. Recovery is expected to happen in February when factories come back on stream from the Lunar New Year holiday break. OUTLOOK ’23: Mid East, South Asia PS markets to hinge on SM trend, China’s recovery By Damini Dabholkar 29-Dec-22 10:38 SINGAPORE (ICIS)–The Q1 2023 outlook for polystyrene (PS) markets in the Middle East and South Asia remains uncertain and will largely be dependent on the availability and prices of upstream commodities. The market is not expected show any strong signs of recovery, however, at least until end January, which is when many countries in Asia celebrate the Lunar New Year. Post Lunar New Year, demand is likely to see an uptick, as has been observed historically. OUTLOOK ’23: Automotive sector hits the brakes for growth prospects By Morgan Condon 28-Dec-22 22:30 LONDON (ICIS)–Conditions have been challenging for the automotive industry in recent years, and no immediate reprieve is expected in the near term against a backdrop of geopolitical volatility. Growth expectations for 2022 were not fulfilled and the Russian invasion of Ukraine at the end of February stifled any post-pandemic macroeconomic recovery. This trend looks set to continue in the industry in 2023. China downgrades COVID, stops quarantine for inbound travellers By Fanny Zhang 27-Dec-22 11:29 SINGAPORE (ICIS)–China will downgrade COVID-19 to a more common infectious disease, manage it at Category B instead of the top-level Category A and scrap quarantine for inbound travellers from 8 January, the National Health Commission (NHC) announced late on Monday. Currently, COVID-19 is classified as Category B but managed as Category A that applies to diseases like plague and cholera in China. OUTLOOK ’23: Europe naphtha demand to improve, Russian sanctions to tighten supply By Cassandra Abolaji 23-Dec-22 00:30 LONDON (ICIS)–The Europe naphtha market ended 2022 on a volatile note and will remain volatile at the start of 2023. This after months of weakening feedstock demand partially caused by China’s absence from the market due to lingering COVID-19 restrictions and high oil prices. OUTLOOK ’23: Europe MX to lag behind pre-COVID-19 levels despite improved consumption By Zubair Adam 23-Dec-22 00:30 LONDON (ICIS)–2022 has been a rough year for mixed xylenes (MX) in Europe mainly due to issues with gasoline and global events impacting chemical demand with no significant recovery prior to pre-pandemic levels. OUTLOOK 23’: China toluene market may face oversupply and trade flow change China toluene market pivoted from net import to net export in 2022 amid Russia-Ukraine war, but in 2023 the domestic market might face increased supply whereas demand weakness may persist putting pressure on the export market. OUTLOOK ’23: Asia PP’s potential oversupply may outweigh China’s demand recoveryPossible oversupply in Asia’s polypropylene (PP) market may outweigh the impact of demand recovery in China in 2023. OUTLOOK ’23: Asia BDO to struggle with long supply while awaiting demand rebound The Asian 1,4-butanediol (BDO) market continues to be mired in weakness, while the malaise could extend into the new year given the slow market conditions amid the yearend lull and the upcoming Lunar New Year holidays in the second half of January. OUTLOOK ’23: Asia IPA to see poor demand, ample supply in H1 2023 Asian isopropanol (IPA) spot markets will likely face headwinds in the first half of 2023 on poor demand and ample supply. OUTLOOK ’23: Asian PET to face headwinds as supply likely to outstrip demand Asia’s polyethylene terephthalate (PET) supply will likely outstrip demand in 2023 on the back of new capacities scheduled to come online in the upcoming year. OUTLOOK ’23: Asia adipic acid supply to increase amid demand concerns Asia’s adipic acid market will see an increase in overall production capacity in 2023, however, the bigger question for the industry is whether its downstream derivatives are growing at a pace quick enough to support it. OUTLOOK ‘23: China’s MX to face further uncertainty from downstream PX China’s mixed xylene (MX) prices surged to a decade-high level on soaring crude oil prices in the first half of 2022, before fluctuating downwards in the second half of 2022. In 2023, the market may see support from the launch of some downstream paraxylene (PX) units, but this could depend on the profitability of the PX industry. OUTLOOK ’23: East, south Asia ethanolamines to face supply headwind The ethanolamines market in east and south Asia remains under downward pressure towards the end of the year. Tepid demand appears entrenched with limited signs of any significant rebound in the near term. OUTLOOK ’23: East and South Asia LAB mired in weakness although optimism remains The linear alkylbenzene (LAB) markets in east and south Asia continue to be mired in weakness with demand in a low ebb. Buyers remain mostly unhurried with supply ample in most regions. Asia petrochemicals sector to bottom out in December By Jimmy Zhang 16-Dec-22 12:15 SINGAPORE (ICIS)–Although bullish sentiment has started to develop in Asian petrochemical markets from early December amid China’s easing of pandemic curbs, concerns are still in place amid the global economic headwinds and slowing of trading activity ahead of year-end holidays. China petchems demand recovery unlikely before Q2 2023 despite easing COVID restrictions By Jenny Yi 14-Dec-22 23:34 SINGAPORE (ICIS)–China’s zero-COVID strategy has been eased since early December. ICIS analysts expect, however, that demand for most commodity petrochemicals will not improve significantly in the short term, and that large-scale recovery may only begin in the second quarter of 2023. Asia fatty acids near-term demand tepid; may pick up after Lunar New Year By Helen Yan 14-Dec-22 12:13 SINGAPORE (ICIS)–Asia’s fatty acids demand will remain tepid in the near term amid the year-end holiday lull but will likely pick up after the Lunar New Year holidays next year. INSIGHT: Chemicals output falls as industrial activity contracts globally, 2023 expected weak By Nigel Davis 14-Dec-22 00:23 LONDON (ICIS)–It is not so much a question of how low will it go but how slow will it be – and for how long? Capacity utilisation data show that the chemicals sector globally has geared down in the face of current headwinds. And there are many of those. China petrochemical futures mixed; near-term demand recovery in doubt By Fanny Zhang 08-Dec-22 13:03 SINGAPORE (ICIS)–China’s petrochemical futures markets were mixed on Thursday morning as demand may remain soft despite a further relaxation in the country’s COVID-19 curbs. “We don’t see any strong demand recovery for commodities in the short term,” said Zhang Junfeng, an analyst at brokerage China Merchant Securities. “Consumer confidence still needs time to rebuild,” Zhang said. Late on 7 December, the Chinese government announced 10 measures to optimise its COVID-19 policy, including allowing people with mild or no symptoms to quarantine at home, and cancelling of testing requirements for domestic travelers. GPCA ’22: Supply chain localisation could help reduce logistics pressure – Saudi society By Tom Brown 07-Dec-22 23:15 RIYADH (ICIS)–Supply chain operators should shift further towards localised operations and away from globalisation to build resilience and adapt to the volatility that has strained logistics for several years, the chairman of the board for the Saudi Supply Chain and Procurement Society said. The current state of extreme stress on global trade links that has been seen since the COVID-19 pandemic decoupled movement along traditional supply routes is unlikely to be a temporary phase, and further localisation of supply chains could be a solution, according to Supply and Procurement Association board chair Saleh Ibrahim Al-Shabnan. INSIGHT: Easing in supply chains could signal further problems for Europe’s chems sector ahead By Morgan Condon 02-Dec-22 20:46 LONDON (ICIS)–Easing supply chain disruption has given petrochemical producers in Europe some respite in the wake of recent crashing demand. But the smoother flow of product could lead to further destabilising of market fundamentals, rather than providing balance to the market. As new orders in Europe have subsided, this has given room for producers to catch up with backlogs, smoothing out extended lead times, and allowing congested bottlenecks to dissipate. While this has been some help in the short-term, the likelihood is that diminished appetite for materials could eventually disrupt logistics, as deliveries slow down to match need. US manufacturing contracts for first time in 30 months By Stefan Baumgarten 02-Dec-22 01:04 HOUSTON (ICIS)–The US manufacturing purchasing managers’ index (PMI) fell by 1.2 points from 50.2 in October to 49.0 in November – pushing the index into contraction territory, last seen in May 2020 during the first wave of the COVID-19 pandemic, ICIS senior economist Kevin Swift said. He was commenting on the November PMI report by Institute for Supply Management (ISM), released earlier on Thursday, which showed the first contraction in manufacturing after 29 consecutive expansions. Caixin’s Nov China manufacturing PMI rises to 49.4 By Nurluqman Suratman 01-Dec-22 10:33 SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) rose to 49.4 in November from 49.2 in October but remained in contractionary territory as ongoing COVID-19 containment measures continued to weigh on the sector, the Chinese media firm said on Thursday. A PMI reading above 50 indicates  expansion in the manufacturing economy, while a lower number denotes contraction. Manufacturers in China registered a further fall in output, with the rate of contraction picking up slightly from October, amid a sustained reduction in sales, Caixin said in a statement. Companies frequently linked the decline to the impact of COVID-19 restrictions on operations and customer demand,” Caixin said. UK manufacturing woes continue as output, new orders and employment fall By Jonathan Lopez 01-Dec-22 20:45 MADRID (ICIS)–The UK’s manufacturing sectors remained in contraction territory in November because of lower output, shrinking orders, and reduced employment levels, analysts at S&P Global said on Thursday. The UK’s PMI index came in at 46.5 points in November, a slight improvement from October’s 46.2 points, but any reading below the 50.0 points mark shows contraction. “The intermediate goods sector fared especially poorly, while downturns also continued at consumer and investment goods producers,” said the analysts. INSIGHT: Preparing for a difficult winter in Europe and a tougher 2023/24 By Nigel Davis 26-Nov-22 00:56 LONDON (ICIS)–A mild autumn has alleviated some of the tension in Europe’s energy markets and the pressure on natural gas availability. But colder weather beckons and gas usage will rise putting, as it does in normal years, upward pressure on gas prices. The filling of storage tanks across the continent has provided a buffer against the worst damage that the Russia-Ukraine war can do to Europe’s energy supply, while reduced demand by industry has made a significant contribution. What is not clear is how energy availability to industry, and the costs of that gas and power, change moving into 2023. NE Asia ethylene output to remain weak up to at least H1 2023 By Yeow Pei Lin 25-Nov-22 11:53 SINGAPORE (ICIS)–Northeast Asia’s ethylene production is expected to be constricted by heavy cracker turnarounds, poor margins and weak downstream demand up to at least the first half of 2023. China’s weak phenol imports to prompt deeper output cuts in Asia By Helen Lee 25-Nov-22 16:06 SINGAPORE (ICIS)–China’s phenol imports are being weighed down by a combination of ample domestic supply, rising COVID-19 caseloads, easing upstream markets, and the absence of restocking ahead of the Lunar New Year holidays in late January. SE Asia PE market dazed by China stop-start demand By Izham Ahmad 24-Nov-22 16:36 SINGAPORE (ICIS)–Initial spot import offers for December shipments of polyethylene (PE) in southeast Asia were announced in the same range as the previous week’s assessment or softer this week, with market players baffled by the stop-start nature of China’s demand for PE. German manufacturers increase warehouse capacity post-pandemic By Morgan Condon 23-Nov-22 20:40 LONDON (ICIS)–German industrial players have expanded warehouse capacity and focus more on supply chains in the wake of the pandemic, according to the latest data released by the Ifo Institute on Wednesday. Results of the study from the economic research group found that 68% of companies surveyed increased warehouse sizing, with 65% seeking additional suppliers since 2020, and 54% of firms now monitor their supply chains more closely. The outbreak of COVID-19 in 2020 initially caused a slowdown in manufacturing, as regions applied lockdowns, and implemented restrictions at ports and borders to contain the spread of the virus. IMF urges China to further recalibrate COVID-19 strategy By Nurluqman Suratman 23-Nov-22 18:22 SINGAPORE (ICIS)–The International Monetary Fund (IMF) has urged China to further recalibrate its COVID-19 strategy and provide additional support to its beleaguered property sector to mitigate risks from a global economic slowdown. Following the recovery from the initial impact of the pandemic, the world’s second-biggest economy remains under pressure, with growth projected to slow to 3.2% in 2022, from an 8.1% pace last year, before improving to 4.4% in 2023 and 2024, the IMF stated on 22 November following a review of China’s economic conditions. PODCAST: Sustainable development may create new growth space for petrochemical industry By Yvonne Shi 18-Nov-22 11:29 SINGAPORE (ICIS)–ICIS analysts Jady Ma and Yvonne Shi discuss how sustainable development is working on the petrochemical industry and subsequent reactions. PODCAST: Macroeconomics prove challenging for global chems in 2023, although some bright spots remain By Morgan Condon 16-Nov-22 22:50 LONDON (ICIS)–After several challenging years in the wake of the COVID-19 pandemic, volatile geopolitical conditions and a tough macroeconomic backdrop mean that things are unlikely to turn a corner for global chemicals producers heading into the new year. Senior economist for global chemicals Kevin Swift talks to senior reporter for Europe Morgan Condon about the outlook for the coming year, and the key features for the market in 2023. INSIGHT: Lacklustre demand from various outlets impacting polyols, TDI and toluene By Zubair Adam 17-Nov-22 21:03 LONDON (ICIS)–Weaker activity from the automotive and flexible foam industries is impacting the consumption of polyols and toluene diisocyanate (TDI), with some additional impacts from the latter on feedstock toluene due to lower production. No short term demand recovery is envisaged for the whole value chain. INSIGHT: China’s property rescue plan to boost some petrochemicals By Fanny Zhang 16-Nov-22 20:57 SINGAPORE (ICIS)–China’s latest measures to rescue the stressed property sector are expected to lift some petrochemicals, although they are unlikely to reverse bearish sentiment on the sluggish property market, according to economists and analysts. China outlook dims further on fresh COVID-19 surge, real estate slump By Nurluqman Suratman 16-Nov-22 13:17 SINGAPORE (ICIS)–China’s economic outlook just turned dimmer amid downbeat October data, with surging domestic COVID-19 infections and slumping real estate market threatening to aggravate weak petrochemical demand. Asia soap noodles to remain sluggish in near term on year-end holiday lull By Helen Yan 16-Nov-22 10:52 SINGAPORE (ICIS)–Asia’s soap noodles market is likely to remain sluggish in the near term as buyers remain cautious and are reluctant to lock in large forward spot volumes ahead of the year-end holiday lull. China’s zero COVID-19 policy has had an impact on regional trade. Weak demand outweighs refined COVID-19 policy, capping China PP price rise By Zhibo Xiao 15-Nov-22 16:02 SINGAPORE (ICIS)–China’s polypropylene (PP) futures surged following the release of the refined COVID-19 policy on 11 November, but the market may still face pressure toward the year-end amid tepid demand recovery, intensive arrivals of competitively-priced imports and expected new plant start-ups. Asia’s MIBK players pin hopes in 2023 rally By Angeline Soh 15-Nov-22 16:38 SINGAPORE (ICIS)–Asia’s methyl isobutyl ketone (MIBK) players expressed hopes in a 2023 rally, after the easing of global COVID-19 infection rates, and China’s easing of some of its strictest restrictions based on its zero-Covid policy. China eases COVID-19 curbs, petrochemical futures boosted By Fanny Zhang 11-Nov-22 16:20 SINGAPORE (ICIS)–China will relax its COVID-19 control measures in view of changing circumstances, shoring up equity markets accordingly. The National Health Commission (NHC) announced 20 measures on Friday in a push for more targeted and optimised control of the pandemic. Under the new policies, the quarantine time for close contacts of cases is shortened to five days in centralised locations from seven previously. Asia ethylene little changed as players await direction from ’23 term talks By Yeow Pei Lin 11-Nov-22 11:16 SINGAPORE (ICIS)–Asia’s ethylene spot import prices for December-arrival cargoes were broadly stable this week, as the weak downstream margins and strong US arrivals continued to be counterbalanced by limited regional supply. Bearish sentiment dominates Asia November petrochemical markets By Amy Yu 11-Nov-22 10:29 SINGAPORE (ICIS)–Bearish sentiment in Asian petrochemical markets has risen due to weak demand from late October, and we expect prices of most products in the region to remain on a downward trend in November. US chem shares surge as broader market rises on positive inflation data By Adam Yanelli 11-Nov-22 06:23 HOUSTON (ICIS)–US-listed shares of chemical companies surged on Thursday, largely outperforming the broader market which rose significantly on favourable economic data on inflation.The Dow Jones Industrial Average rose by 3.7%, while the Dow Jones US Chemicals Index rose by 4.95% and the S&P 500 Chemicals Industry Index rose by 5%. Europe PET buyers lured by imports, but demand questionable By Caroline Murray 11-Nov-22 01:58LONDON (ICIS)–The window of opportunity for polyethylene terephthalate (PET) importers appears wide due to Europe’s unique cost situation, but demand is so low that PET buyers are unsure how to proceed. British industrial demand to remain below previous years By ICIS Editorial 10-Nov-22 01:05 LONDON (ICIS)–Despite recent pressure to NBP Day-ahead and front month gas prices, a return to high levels of industrial offtake in Britain is unlikely, ICIS analysis shows. Normal industrial demand over the past five years has averaged 10mcm daily. However, since the rise of gas prices in Britain, industrial gas offtake has dropped to around 5.6mcm from January to November 2022. EU, eurozone September chems prices decline modestly in split market By Morgan Condon 10-Nov-22 01:30 LONDON (ICIS)–Chemical pricing in September was mixed for European producers, with some key manufacturing nations bucking the modest declines recorded in the eurozone and wider EU, according to the EU’s statistical agency, Eurostat. The latest data from Eurostat indicates that Italy and Poland recorded single-figure gains compared with the previous month, supported by smaller gains in France and Germany. Asia BDO retreats on poor demand, weak domestic China market By Clive Ong 10-Nov-22 11:27 SINGAPORE (ICIS)–The Asian 1,4-butanediol (BDO) market trended lower as demand in the region dissipated amid a poor economic outlook. Some participants believe that demand in the region, in particular China, could remain weak until after the Lunar New Year in late January. Asia petrochemical markets mixed amid high inflation By Felicia Loo 09-Nov-22 14:28 SINGAPORE (ICIS)–Asia’s petrochemical markets were mixed amid economic headwinds and dampening consumption in China amid a slowing economy, with no let-up on its harsh zero COVID-19 policy, dampening consumption. China, India ethanolamines markets under downward pressure as demand wanes By Clive Ong 10-Nov-22 14:28 SINGAPORE (ICIS)–The ethanolamines markets in China and India remain under downward pressure amid prevailing weak demand and ample supply. Participants continue to expect weak markets in the near term as the global economic outlook remains uncertain. China’s MEC demand disrupted by zero-COVID strategy By Keven Zhang 09-Nov-22 11:41 SINGAPORE (ICIS)–China’s methylene chloride (MEC) prices saw steep falls in the past two weeks due to disruption to its domestic demand by the new round of lockdowns implemented to contain the COVID-19 spread in the country, although production cutbacks may provide some support in the near term. INSIGHT: More pain for chemicals as US Federal Reserve has ‘a ways to go’ on rate hikes By Joseph Chang 03-Nov-22 06:25 NEW YORK (ICIS)–US and global chemical producers will likely see more pain ahead as the US Federal Reserve still has a “ways to go” in its tightening cycle to bring inflation down to its 2% target. It’s not pausing or pivoting, and not budging from its target. The US equity market as measured by the S&P 500 fell 2.5% on 2 November on disappointment that the Fed gave no indication it will stop interest raising rates, other than acknowledging it has already tightened monetary policy significantly. The Fed hiked its benchmark rate by 0.75 percentage points – its third consecutive hike of that magnitude – to a range of 3.75-4.00%. “Our message is clear – we think we have a ways to go. We have some ground to cover with interest rates before we get to that level… we think is sufficiently restrictive,” said Fed chair Jerome Powell at the Federal Open Market Committee (FOMC) press conference. INSIGHT: Asia October PMIs point to broadening export downturn By Nurluqman Suratman 02-Nov-22 17:21 SINGAPORE (ICIS)–Amid falling new orders and inventory build-up, Asia’s export downturn is broadening with the latest data pointing to further weakness in factory activity across the region. The slowdown in manufacturing activity has now widened from northeast Asia to also include southeast Asia amid waning export demand. Asia’s manufacturing purchasing managers’ index (PMIs) fell in October to an average of 49.6, down from 50.7 in September, due largely to a fall in new orders and lower production as export orders weakened further. China’s Oct petchem market falls on oversupply, poor confidence By Yvonne Shi 02-Nov-22 12:57 SINGAPORE (ICIS)–China’s petrochemical market fell significantly in October. As of October 31, the ICIS China Petrochemical Price Index (which tracks 17 commodities) dropped 5.4% from September 30 to close at 1220.11 points. The quick fall after a sharp rise after the National Day holiday reflects sluggish demand and lack of market confidence. China’s petrochemical market started the downtrend from the middle of the month till the end. An official source before the 20th National Congress of the Communist Party of China disclosed that China’s epidemic prevention and control will continue to adhere to the zero-COVID policy, which hit market confidence severely. UK manufacturing sector output contracts further as new orders dry up By Tom Brown 01-Nov-22 20:00 LONDON (ICIS)–UK manufacturing sector output slipped further into contraction in October, and hit a 29-month low as new order volumes shrank at the fastest rate since May 2020, according to data from S&P Global on Tuesday. The sector purchasing managers’ index (PMI) fell further in the month, dropping to 46.2 from 48.4 in September, although they were stronger than initial readings for the month of 45.8. A PMI score below 50.0 signifies contraction. It was the third consecutive month of contraction for the sector, as the economic outlook continued to deteriorate. New orders and new export business both declined in the month. Players in the UK cited softer demand from China, the war in Ukraine and ongoing obstacles to exporting posed by Brexit. Business optimism slipped to the lowest level since the height of the COVID-19 pandemic. China posts 3.9% Q3 GDP growth; President Xi secures third term By Pearl Bantillo 24-Oct-22 13:21 SINGAPORE (ICIS)–China posted an annualised GDP growth of 3.9% in the third quarter, up from 0.4% in the previous quarter, but a combination of a zero-COVID policy and a property downturn will continue to weigh on the world’s second-biggest economy. US economy continues to slow, recession likely – NABE survey By Stefan Baumgarten 24-Oct-22 22:00 HOUSTON (ICIS)–The US economy continues to slow and is likely already in recession or may soon be in recession, according to findings in the latest business conditions survey by the National Association for Business Economics (NABE) on Monday. INSIGHT: Asia C3 to face headwinds in fourth quarter By Julia Tan 25-Oct-22 10:00 SINGAPORE (ICIS)–The Asian propylene market is facing headwinds as it steps into the fourth quarter as demand looks likely to remain weak until the end of the year on poor derivative margins. China PP lacks post-holiday support as weak demand overshadows high costs By Zhibo Xiao 27-Oct-22 12:34  SINGAPORE (ICIS)–Domestic polypropylene (PP) prices in China rose and then fell after the country’s National Day holiday on 1-7 October as bearish demand outweighed the brief surge in crude values. INSIGHT: A new world for Asia olefins as capacity surges, demand remains uncertain By Amy Yu 28-Oct-22 12:00 SINGAPORE (ICIS)–The Asia olefins industry is witnessing a new world of significantly squeezed margins for all producers, with incremental capacity addtions set against the backdrop of weak demand. CDI Economic Summary: Recession odds rise as slowdown takes hold amid Fed tightening By Kevin Swift 27-Oct-22 23:07 CHARLOTTE, North Carolina (ICIS)–Monetary tightening across the world led by the US Federal Reserve, protracted inflation and geopolitical events have raised the odds of recession in many major economies. Asia petrochemicals stay bearish as China keeps zero-COVID policy By Nurluqman Suratman 21-Oct-22 11:40 SINGAPORE (ICIS)–Bearish sentiment prevails across Asia’s petrochemical markets with no immediate end in sight on China’s zero-COVID strategy, which has been weighing on overall industrial activities of the world’s second-biggest economy. South and East Asia LAB quiet while rising feedstock costs squeeze margins By Clive Ong 20-Oct-22 17:02 SINGAPORE (ICIS)–The linear alkyl benzene (LAB) market in East and South Asia remains quiet while suppliers talked of squeezed margins from rising feedstock costs. The desire for higher values, however, were countered by the persistently weak demand in the region. India, SE Asia ethanolamines remain under pressure from competitive offers By Clive Ong 20-Oct-22 15:13 SINGAPORE (ICIS)—The ethanolamines markets in southeast Asia and India remain under downward pressure from competitive offers and tepid demand. Participants anticipate further weakness in the near term as the Chinese market looks set to remain weak. INSIGHT: Japan economy to find succor in automotive output recovery By Pearl Bantillo 20-Oct-22 12:25 SINGAPORE (ICIS)–Japan may be able to count on a recovery in car production, which should provide much-needed boosts to related industries, including petrochemicals, to cushion its economic downturn. INSIGHT: European home improvement sector slumps on economic slowdown, post-COVID effects By Nicole Simpson 19-Oct-22 21:33 LONDON (ICIS)–As the threat of recession looms over Europe and consumers look to cut back on unnecessary spending, demand for home improvement and do-it-yourself (DIY) goods has plummeted. Asia oleochemicals market likely flat in Q4 on zero-COVID policy in China By Helen Yan 19-Oct-22 12:44 SINGAPORE (ICIS)–Asia’s oleochemicals market is expected to remain flat in the fourth quarter due to the prevailing sluggish demand from China amid its zero-COVID policy, which is expected to remain in place for the rest of this year. INSIGHT: Global demand slump eclipses Asia export benefits from currency falls By Pearl Bantillo 18-Oct-22 13:14 SINGAPORE (ICIS)–Asia’s tumbling currencies will not spell strong exports for the region as a combination of surging inflation and high interest rates slows the pace of global economic activities. EPCA ’22: Chemicals supply chains lengthening, security of supply increasingly important – Vopak CEO By Nigel Davis 07-Oct-22 17:40 BERLIN (ICIS)–Chemicals supply chains are becoming necessarily longer as consumers and producers see markets balancing between imports and local production, the CEO at tank storage operator Vopak said this week. China September petrochemical markets up; demand outlook still bleak By Yvonne Shi 11-Oct-22 14:16 SINGAPORE (ICIS)–China’s petrochemical markets were mostly higher in September on supply tightness in some products and aided by pre-holiday restocking, but overall demand is not expected to improve by much in the coming months. IMF trims developing Asia growth outlook on China weakness By Nurluqman Suratman 12-Oct-22 12:46 SINGAPORE (ICIS)–The International Monetary Fund (IMF) has trimmed its economic growth forecast for emerging and developing Asian economies on account of China’s slowdown. Asia BDO market faces lengthening supply, uncertain demandBy Clive Ong 13-Oct-22 13:07 SINGAPORE (ICIS)–The nascent recovery in Asian’s 1,4-butanediol (BDO) market in September now faces the challenge of lengthening supply with demand staying uncertain. Singapore Q4 GDP growth slows to 4.4%, monetary policy tightened By Nurluqman Suratman 14-Oct-22 11:37 SINGAPORE (ICIS)–Singapore’s central bank on Friday tightened its monetary policy to dampen persistent price pressures which has slowed its economy to a year-on-year growth of 4.4% in the fourth quarter. EPCA ’22: Chemical industry may slow but must manage through cycle, Equate CEO By Nigel Davis 06-Oct-22 17:11 BERLIN (ICIS)–The chemical industry may slow over the next 12 months but it is a question of managing through the cycle, Equate’s CEO Naser Aldousari said on the sidelines of EPCA 2022 on Wednesday. Aldousari remains optimistic for the sector and emphasises its resilience. Asia Q4 petrochemical demand faces headwinds as global economy slows By Felicia Loo 06-Oct-22 14:28 SINGAPORE (ICIS)–Petrochemical demand in Asia will be largely undermined because regional factories face continued weakness in export demand in the fourth quarter. EPCA ’22: COVID-19 pandemic set gender parity back a generation – Dow exec By Tom Brown 05-Oct-22 23:21 BERLIN (ICIS)–The impact of the COVID-19 pandemic set the progress of gender parity back 30 years, Dow’s head of inclusion and diversity said on Wednesday, because of the disproportionate impact it had on women’s participation in the labour market. EPCA ’22: Europe ADA, nylon 6,6 demand may weaken further in October By Marta Fern 05-Oct-22 16:00 LONDON (ICIS)–European adipic acid (ADA) and downstream nylon 6,6 markets face affordability concerns, high costs of production and competition with lower priced imports from Asia. EPCA ’22: European auto output will only recover to pre-pandemic levels in 2025 – analyst By Jonathan Lopez 04-Oct-22 18:21 BERLIN (ICIS)–Production from the European petrochemicals-intensive automotive sector is unlikely to recover to pre-pandemic levels until 2025 at the earliest, a chemicals analyst at the Boston Consulting Group (BCG) said on Tuesday. Andreas Gocke, global lead for chemicals at BCG, said the war in Ukraine and supply-chain issues have only seen a further deterioration in the outlook for the automotive sector, which was already negative in 2021. EPCA ’22: Weak demand, wider uncertainty shapes Europe acrylate esters outlook By Mathew Jolin-Beech 04-Oct-22 22:00 LONDON (ICIS)–Europe’s acrylate esters markets are set to be gripped by ongoing weak demand and wider macroeconomic uncertainty in Q4 and early 2023. EPCA ’22: PODCAST: Europe petrochemicals face ‘winter of discontent By Will Beacham 04-Oct-22 15:19 BERLIN (ICIS)–Europe’s petrochemical sector faces a ‘winter of discontent’, battered by high energy costs, collapsing downstream demand and increased imports from Asia. In this Think Tank podcast, Will Beacham interviews ICIS Insight editor Nigel Davis, ICIS senior analyst Lorenzo Meazza, and Paul Hodges, chairman of New Normal Consulting. The European Petrochemicals Association (EPCA) annual meeting runs on 4-6 October in Berlin. EPCA ‘22: Demand concerns loom over Europe PC market in Q4 By Miguel Rodriguez Fernandez 03-Oct-22 19:14 LONDON (ICIS)–Pessimism reigns in the European polycarbonate (PC) market moving into the end of 2022 as demand from the key customer sectors is likely to remain tepid due to Europe’s dim macroeconomic outlook. INSIGHT: Trends converging to create Q4 glut in US plastics By Al Greenwood 30-Sep-22 05:21 HOUSTON (ICIS)–North American polymer markets are facing a growing glut because of weakening demand, expanding capacity and rising inventories. Europe economic sentiment dropping as Germany on brink of recession By Morgan Condon 29-Sep-22 23:13 LONDON (ICIS)–European economic sentiment continued falling in September, for both the EU and the eurozone, and the German economy is heading towards a recession, as sentiment is shaped by sustained high energy prices. Lockdowns, property crisis to slow China 2022 GDP growth to 2.8% – World Bank By Nurluqman Suratman 29-Sep-22 13:3 SINGAPORE (ICIS)–China, the world’s second-biggest economy, is projected to grow at a much slower pace of 2.8% this year compared with an earlier forecast of 5.0%, according to the World Bank, amid the country’s zero-COVID policy and ongoing property crisis. INSIGHT: India PVC market weathers stormy first half, safeguard investigation begins By Damini Dabholkar 29-Sep-22 11:00 SINGAPORE (ICIS) –India’s polyvinyl chloride (PVC) market stabilised slightly in September, after having weathered a storm over the previous 12 months. China’s PE prices rebound, eyes on demand sustainability By Sijia Li 28-Sep-22 12:11 SINGAPORE (ICIS)–China’s polyethylene (PE) prices have rebounded following continual declines in the past two months, finding support from improved end-user demand during the September-October traditional peak season. INSIGHT: High cost threatens Asia petrochemical output as regional currencies tumble By Pearl Bantillo 27-Sep-22 12:26 SINGAPORE (ICIS)–Asia’s petrochemical production is at risk of shrinking further as imported raw materials get more expensive each day that Asian currencies tumble to new lows. INSIGHT: Russia-Ukraine war, surging inflation continue to dim growth expectations By Tom Brown 27-Sep-22 00:17 LONDON (ICIS)–The outlook for global growth is continuing to darken as the economy loses momentum in the wake of the Russia-Ukraine war, with fresh economic projections pointing to a substantial deterioration in prospects from 2023 even relative to a few months ago US HB Fuller sees rebound in Asia, slowdown in Europe By Al Greenwood 23-Sep-22 05:43 HOUSON (ICIS)–HB Fuller began to see a rebound in Asian demand during its fiscal third quarter because China is reopening from its COVID-19 lockdowns, the US-based adhesives producer said on Thursday, a trend that other chemical producers have yet to see. INSIGHT: US plastics becomes sixth-largest industry By Melissa Wheeler 22-Sep-22 23:21 HOUSTON (ICIS)–The US plastics industry has moved two spots up to become the sixth-largest industry in the country, according to the Plastics Industry Association (PLASTICS). Asia MEG market under pressure as downstream cuts operation to ease high inventories By Judith Wang 22-Sep-22 18:13 SINGAPORE (ICIS)–Asia’s monoethylene glycol (MEG) market has been under pressure during the week as downstream polyester sector initiated another round of operation cuts in a bid to relieve inventory pressure. INSIGHT: Widespread demand reduction makes a tough quarter tougher By Nigel Davis 21-Sep-22 23:49 LONDON (ICIS)–It has been a tough third quarter for most upstream producers of chemicals and others as weaker demand and rising costs have combined to hit earnings and shift guidance. US inland truck capacity increases as demand remains firm By Adam Yanelli 21-Sep-22 05:15 HOUSTON (ICIS)–Spot and contract rates for inland truck deliveries have fallen from record-highs as capacity has increased and demand has remained strong, according to panelists on a webinar hosted by supply chain market intelligence provider Freightwaves. INSIGHT: Asia petrochemical market to rebound in September By Amy Yu 15-Sep-22 18:17 SINGAPORE (ICIS)– Some Asia petrochemical prices rebounded in early September after the decrease in August. ANALYSIS AND RESOURCES

Updated at 09:00 GMT on 2 June. Please scroll down to see headlines. The war in Ukraine has caused oil and especially gas price volatility, as restricted flows from Russia to Ukraine caused values to spike to record-breaking levels before collapsing to pre-war levels. Since December 2022, unseasonably mild winter weather hit demand, reversing gas prices. However millions of tonnes of chemical and fertilizer production remain offline across Europe thanks to the elevated gas prices and poor macro-economic conditions which have impacted demand. 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. 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 since then. GAS SUMMARY Gas storage remains robust in Europe, winter demand fell thanks to mild weather Poor downstream demand still affecting industrial production, gas demand Record shipments of liquefied natural gas (LNG) to Europe so far in 2022/23 LNG plus Norwegian, Algerian, Azerbaijani pipeline imports compensate for Russian supply shortfall Europe LNG processing operating at full capacity Nord Stream I and II pipelines damaged by explosions, zero flows to Europe EU implements voluntary 15% cut to consumption 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 EU agrees ban on seaborne imports from 5 December 2022, petroleum products from 5 February 2023 From 5 December Russian crude oil cargoes will only be insured if subject to price cap CHEMICALS SUMMARY Millions of tonnes of capacity remain offline despite gas cost collapse Elevated oil, gas prices dent consumer confidence and demand Prospect of recession, more cheap imports from Asia Margins, prices under pressure due to collapsed downstream demand 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. How vulnerable are energy and energy-related Russian supplies to disruptions? Europe has historically depended 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 further reduced in 2022. By the end of last year Russian pipeline supplies fell to less than 10% of Europe’s total gas imports compared to 40% in the previous year. Russian volumes shipped through Ukraine to Europe are now at third of what they should be as part of a five-year transit agreement Russia has banned exports of gas to several EU countries, and the Nord Stream I and II pipelines have been damaged. In 2022 flows via Yamal and Nord Stream 1 stopped completely. European petrochemicals players faced even higher gas prices as a result, though these have since collapsed to pre-war levels. Fertilizer companies – where gas can account for 80% of costs – have been forced to curtail production. Chemicals were affected, especially those with high exposure to gas prices through utilities or feedstocks. 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. 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. Sanctions have been imposed on imports of Russian crude oil and products by sea, but the ban does not include pipeline oil. 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. SInce the ban came into place, Russia has successfully switched exports mainly to China and India, though priced at a steep doscount. 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. Now millions of tonnes of fertilizer and chemical capacity are offline in Europe. ICIS has also created an interactive timeline which shows the history of the gas impact since July 2021. These products have been most badly affected by outages in Europe, with more than half of capacity offline or running at reduced rates in some cases. Analysis by the ICIS Margin Analytics team shows the products which are most exposed to energy and gas prices in Europe as a feedstock or utility. Europe is 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. Collapsed demand means that millions of tonnes of European chemicals capacity remains offline despite much lower gas costs. The conflict in Ukraine has pushed European gas prices back up to record levels, forcing exposed chemical producers to cease production, or add further energy surcharges. Rising oil prices since late 2021 have already put chemical margins under pressure, and volatility has continued into 2022. As oil and naphtha prices soared, margins for ethylene production based on naphtha went negative 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 feedstock and energy costs in Europe. Elevated oil and gas prices also dent downstream consumer confidence and spending, with recession a possibility later in 2022 or 2023. What contingency plans are being put in place? Europe prepared for a difficult winter although rising storage fullness levels, falling demand and more import capacity for liquefied natural gas (LNG) have helped it get by, assuming there will not be an extensive cold spell. As of 6 March, storage facilities across Europe were 54% full compared with just 20% last March. Some 30bn cubic meters of new capacity were added between September 2022 and March 2023. The capacity includes offshore terminals in the Netherlands, Germany and Estonia/Finland. Demand has been decreasing by more than 20% in the industrial sector in north-west European countries and by 20-30% for households in Germany, according to official data. Nevertheless, there is a possibility that Russia may completely stop its gas supplies to Europe via the last two remaining routes – Ukraine and Turkey, which could lop off some 70 cubic meters of Russian gas entering Europe daily. In such a scenario, the most affected countries would be those in eastern and central Europe, which are landlocked and have been struggling to secure regasified LNG from importing countries. 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 if the region experiences a cold snap in the weather. 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. 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 had forced consumers to limit or stop production or seek import substitution globally. The mild winter has alleviated this situation. FERTILIZERS The fertilizer sector, one of the most gas-intensive industries, has also been one of the most affected so far as gas can account for up to 80% of production costs. Production has been cut back drastically because it is no longer economic. PETROCHEMICALS On the petrochemicals side, there are now deep production cuts for products such as methyl methacrylate (MMA) and melamine which are heavily exposed to natural gas for utilities or as a feedstock. 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. Companies with flexibility are switching from natural gas to liquefied petroleum gas (LPG) or other sources of energy. 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. UKRAINE CHEMICALS UNDER THREAT With Russian forces present in 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 Dow cuts Q2 sales guidance on challenging macros By Joseph Chang 02-Jun-23 04:48 NEW YORK (ICIS)–US-based Dow is taking down its Q2 sales forecast to a range of $11.0bn-11.5bn from its prior estimate of $11.75bn-12.25bn on challenging macroeconomic conditions and lower pricing levels, its CEO said at an investor conference. PODCAST: Ukraine SOE corporate governance is vital for reconstruction efforts, specialist By Aura Sabadus 01-Jun-23 21:28 LONDON (ICIS)– Corporate governance rules at Ukraine’s energy state owned enterprises (SOEs) have been critical to market reforms and to helping the country secure a long-term gas transit contract with Russia. NE Asia C2 outlook downbeat on rising regional supply, weak China data By Yeow Pei Lin 01-Jun-23 11:26 SINGAPORE (ICIS)–Northeast Asia’s ethylene (C2) players are cautious on expectations of rising regional supplies and weak downstream outlook for the third quarter as the recovery in the Chinese economy loses momentum. Caixin China May manufacturing PMI rises to 50.9, first expansion in three months By Nurluqman Suratman 01-Jun-23 11:26 SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) picked up from 49.5 in April to 50.9 in May, marking the first expansion in three months, the Chinese media firm said on Thursday. High stocks could curb Italian Q4 ‘23 gas and power risk By Camilla Vitanza 31-May-23 23:44 LONDON (ICIS)– High gas storage levels could reduce some of the risk premium priced in the Italian gas and power Q4 ’23 products ahead of expiry, although LNG supply will likely remain a key driver. China manufacturing weakness weighs on crude; outlook dims further By Nurluqman Suratman 31-May-23 13:36 SINGAPORE (ICIS)–China’s manufacturing sector lost further momentum in May, heightening concerns that oil consumption in the world’s second-biggest economy could weaken further. INSIGHT: Petrochemical prices and margins under relentless pressure By Nigel Davis 31-May-23 00:38 LONDON (ICIS)–The persistent global weak demand environment continues to put pressure on producers and prices are falling as the balance with output remains elusive. PODCAST: Demand flops in chemical markets around the world, gloomy outlook By Will Beacham 30-May-23 20:25 BARCELONA (ICIS)–Chemical markets around the world are suffering from collapsed demand conditions and oversupply with no prospect of a turnaround in the coming months. Depressed US manufacturing activity weighing on PP demand By Zachary Moore 26-May-23 05:40 HOUSTON (ICIS)–Demand for polypropylene (PP) in the US is facing a bearish short-term outlook as the US manufacturing sector remains in contractionary territory. INSIGHT: A tale of two economies, as resurgent services eclipses languishing industry By Tom Brown 25-May-23 23:05 LONDON (ICIS)–After the dark warnings of late 2022, ministers at the European Commission could be forgiven for sounding a little smug. PODCAST: Rampant China chemicals overcapacity could rebalance by 2024/5 By Will Beacham 25-May-23 21:00 BARCELONA (ICIS)–Excess capacity plaguing China’s petrochemical markets could return to more balanced conditions by 2024/5 as the current wave of additions ends and demand gradually improves. APIC ’23: INSIGHT: Asia petrochemicals navigate poor demand amid China start-ups; carve ‘green’ path By Pearl Bantillo 24-May-23 19:50 SINGAPORE (ICIS)–Uncertainties will hound Asia’s petrochemical markets for the rest of the year and possibly into 2024 amid the global economic slowdown at a time of strong capacity additions in regional powerhouse China. INSIGHT: Europe petrochemicals demand remains weak and prices under intense pressure By Nigel Davis 23-May-23 23:10 LONDON (ICIS)–This striking chart from Germany’s chemicals and pharmaceuticals trade association, the VCI, does not even tell the full story for the country’s petrochemical and polymers sectors. APIC ’23: Asia PE, PP margins to stay in unhealthy range despite China reopening By Nurluqman Suratman 19-May-23 19:25 NEW DELHI (ICIS)–Asia’s polyethylene (PE) and polypropylene (PP) markets are expected to face poor margins across all production routes despite China’s reopening, an industry analyst said on Friday. APIC ’23: Japan petrochemical plants run at 80% on current demand By Pearl Bantillo 19-May-23 17:13 NEW DELHI (ICIS)–Japan’s petrochemical plants have been running at an average rate of about 80% amid demand uncertainties this year, an industry executive told ICIS. INSIGHT: Fundamental Asia olefin imbalance persists despite better margins By Joey Zhou 19-May-23 14:00 SINGAPORE(ICIS)–Asia olefin margins from major production routes have improved and remained in profitable territory since March, driven by lower feedstock prices. Eurozone inflation rises on energy cost pressure By Morgan Condon 17-May-23 20:05 LONDON (ICIS)–Eurozone inflation edged up slightly on persistent pressure from energy costs in April, as the rate for the wider EU showed a soft decrease, according to the latest data from the EU’s statistical agency Eurostat on Wednesday. Annual inflation in the eurozone rose to 7.0%, up from 6.9% in March.  In the wider EU, annual inflation fell to 8.1%, from 8.3% in the previous month. Compared to a year prior, inflation for the eurozone remained slightly softer, as the rate was pitched at 7.4% in April 2022, while the level remained stable on the previous year for the EU at 8.1%. Global oil demand expectations for 2023 increased in May on stronger China recovery – IEA By Morgan Condon 16-May-23 22:25 LONDON (ICIS)–Global oil demand is set to increase in 2023, driven by strength in China, according to the International Energy Agency (IEA) on Tuesday. The IEA’s monthly oil report shows that demand is expected to rise by 2.2m bbl/day year on year in 2023, marking an average 102m bbl/day, supported by economic recovery in China surpassing expectations. Macroeconomic pressures and soft demand was reflected in weaker oil pricing in April and early May, caused lingering concerns of a recession in some regions. The IEA, however, increased its output forecast on a strong recovery in the second half of the year. China is expected to account for nearly 60% of global growth in 2023. INSIGHT: Weak demand dominates chemicals in Q2 as economies drag By Nigel Davis 11-May-23 00:41 LONDON (ICIS)–The persistence and wide spread of the demand slump is the key issue for chemical producers in 2023, now mid-way through the second quarter. Recent financial reporting from chemical companies of all types and in all locations has underlined the impact of weak demand on sales in the first quarter. The year-on-year comparisons have proved to be stark, and reduced production the driver of lower revenues at a time of still high costs of sales. Certainly, the focus in Europe and large parts of the rest of the world has shifted from energy costs (and availability). Higher feedstock costs, slow demand maintain pressure on US polyether polyol margins By Zachary Moore 21-Apr-23 06:41 HOUSTON (ICIS)–A combination of higher feedstock costs along with slower demand has been maintaining pressure on margins for US polyether polyol producers, with margins likely to remain compressed over the next few months. INSIGHT: Plastics, petchems in Europe still waiting for construction season, Q2 may be reality check By Vicky Ellis 20-Apr-23 21:45 LONDON (ICIS)–As warmer, sunnier days grow more frequent, Europe’s construction industry should be ramping up for a busy period. But the season is proving a disappointment, with weaker demand across a wide range of petrochemical and plastics products. INSIGHT: Hope for 2023 European construction market recovery falters as spring demand uptick fails to materialize By Nicole Simpson 19-Apr-23 20:52 LONDON (ICIS)–Since late 2022, chemicals players have been hopeful that better demand is just around the corner but optimism is faltering as economic conditions remain challenging and spring construction demand has failed to ignite. INSIGHT: Diverse Asia April price trends for olefins and aromatics chain chemicals By Jimmy Zhang 19-Apr-23 19:15 SINGAPORE (ICIS)– Weak consumer confidence and economic pressures are expected to weigh on the price outlook for Asia petrochemicals. UK summer demand to drop, exports to France in Q3 likely By Anna Coulson 19-Apr-23 00:07 LONDON (ICIS)–National Grid is confident that there will be sufficient supply to meet electricity demand over the summer, the UK’s Electricity System Operator (ESO) announced in its Summer Outlook 2023 on 18 April. Global oil demand growth hopes pinned on faltering Chinese economy By Barney Gray 12-Apr-23 18:42 LONDON (ICIS)–Chinese government data for March, published earlier this month, indicated that domestic consumer demand is weak and the manufacturing sector was under pressure at the end of Q1, which could hinder the anticipated China-led growth in global oil demand. IMF keeps developing Asia 2023 growth forecast at 5.3%; trims India projections By Nurluqman Suratman 12-Apr-23 13:23 SINGAPORE (ICIS)–The International Monetary Fund (IMF) has kept its 2023 growth forecast for developing Asia at 5.3% but trimmed its forecast for next year amid rising risks in global financial conditions. INSIGHT: Europe chemicals must wait until 2026/7 for gas cost relief By Will Beacham 11-Apr-23 22:58 BARCELONA (ICIS)–Although record inflows of liquefied natural gas (LNG) have helped European gas prices fall, a cold winter could see them soar, with relief from volatility only in prospect for petrochemical customers by 2026/7 when major new sources come onstream globally. INSIGHT: Vietnam economy sputters as first petrochemical complex about to start up By Pearl Bantillo 06-Apr-23 11:00 SINGAPORE (ICIS)–Vietnam hopes to stem deteriorating manufacturing conditions, borne of weak external demand, by cutting the cost of borrowing to spur domestic activity as it gears toward commercial operations of its first petrochemicals complex. US auto sector faces economic headwinds on rising interest rates, higher prices By Adam Yanelli 05-Apr-23 05:05 HOUSTON (ICIS)–US March auto sales ticked lower from February as economic headwinds have replaced supply chain issues as obstacles facing the industry that relies heavily on chemicals. Developing Asia 2023 GDP to grow faster at 4.8% but downside risks remain – ADB By Nurluqman Suratman 04-Apr-23 12:10 SINGAPORE (ICIS)–Developing economies in the Asia Pacific region are projected to grow at a faster pace of 4.8% this year and in 2024 on the back of higher consumption, tourism and investments due to continued easing of pandemic restrictions, but downside risks remain, the Asian Development Bank (ADB) said. INSIGHT: Europe chems look to tough Q2 as economic indicators remain choppy By Tom Brown 03-Apr-23 21:47 LONDON (ICIS)–With expectations growing for some of the headwinds buffeting the chemicals sector to ease in the second half of the year, conditions remain challenging for the second quarter, while economic indicators point to a continuing “volatile phase” according to an analyst. Oil surges after surprise OPEC+ output cut, lifting Asia naphtha, benzene By Nurluqman Suratman 03-Apr-23 12:57 SINGAPORE (ICIS)–Oil prices rose by more than $6/bbl on Monday after the OPEC and its allies unexpectedly announced further production cuts of about 1.16m barrels per day on Sunday. Hungary unlikely to reach EU intermediate gas storage targets By Irina Breilean 29-Mar-23 12:53 LONDON (ICIS)–Hungary may not reach the next EU intermediate storage fullness target on 1 May, ICIS analysis indicates. EU intermediate targets have been in place since November 2022, in preparation for the start of the 2023 gas winter. The targets apply to all member states with underground gas storage sites on their territories and directly interconnected to their market areas. Intermediate targets are in force for 1 February, 1 May, 1 July, and 1 September, two months ahead of the beginning of the gas year. ICIS data shows storage sites across Hungary were 33.2% full on 27 March, a 26.2 percentage point increase compared to last year. However, this still stands 3.8 percentage points short of the upcoming May target of 37%. Joint gas purchasing uptake may be slow as buyers locked into contracts By Gretchen Ransow 28-Mar-23 23:20 LONDON (ICIS)–Uptake of the EU’s joint purchasing model may be limited in its first year, as companies were already locked into contracts due to “huge panic” about prices in 2022, European Commission vice-president Maros Sefcovic told the European Parliament’s Committee on Industry, Research and Energy (ITRE) on 28 March. However, if the platform does prove successful the EU wants to extend the model beyond gas to other strategic commodities such as hydrogen, critical raw materials or technologies linked to the energy transition. Sefcovic told ITRE on 28 March that there was still much work to do but joint gas purchasing would give valuable experience for the future. Ukraine’s new policy proposals to ‘revolutionise’ energy sector By Aura Sabadus 28-Mar-23 00:22 LONDON (ICIS)–Ukraine is preparing a raft of wide-ranging regulations that could pave the way for the complete overhaul of its energy sector. The step is a priority for the mid-term, a senior Kyiv-based lawyer told ICIS. Maksym Sysoiev, partner at global law firm Dentons, said the reconstruction of the energy sector is deemed a priority for Ukraine and added that if all regulations that are now under discussion are implemented, they would trigger a “revolution” in the energy sector. Russia to extend export restrictions on fertilizers until November By Deepika Thapliyal 27-Mar-23 22:39 LONDON (ICIS)–Russia is planning to extend restrictions on fertilizer exports until November to guarantee availability in the domestic market, according to the country’s agriculture minister Dmitry Patrushev. Current restrictions on exports are valid until end-May. To curb inflation and to ensure that there was a reliable supply of fertilizers to its farmers, the government imposed export quotas in December 2021. The restrictions have continued since the war with Ukraine broke out in February 2022, although they have not had a significant impact on the availability of Russian fertilizer exports – apart from nitrates. Asia petrochemicals demand tepid on macroeconomy, oversupply concerns By Nurluqman Suratman 24-Mar-23 14:16 SINGAPORE (ICIS)–Asia’s petrochemical markets continue to face tepid demand as economic recovery in regional bellwether China remains slower than initially expected, with new production capacities adding to oversupply concerns. European acrylates subdued with underwhelming demand By Mathew Jolin-Beech 24-Mar-23 01:26 LONDON (ICIS)–The European acrylates markets are all currently subdued with demand described as “soft.” CDI Economic Summary: US regional banking crisis lowers odds of soft landing By Joseph Chang 23-Mar-23 22:21 NEW YORK (ICIS)–The failure of two sizeable banks (Silicon Valley Bank and Signature Bank) in the US and the crisis of confidence contagion spreading to other regional banks and now European financial institutions threatens to significantly tighten lending conditions at the very least, further slowing economic growth and potentially tipping US and European economies into recession. Asia PMDI import markets bearish on poor downstream demand By Shannen Ng 23-Mar-23 15:12 SINGAPORE (ICIS)–Asian import markets for polymeric methylene diphenyl diisocyanate (PMDI) were dominated by largely bearish sentiment in the week ended 22 March. PODCAST: Asia, Mideast PS demand tepid on competitive imports, feedstock volatility By Damini Dabholkar 23-Mar-23 11:14 SINGAPORE (ICIS)–Asian and Middle Eastern polystyrene (PS) markets are seeing slow demand with regional supply remaining relatively unchanged. INSIGHT: US Fed undeterred from 2% inflation goal means more tough times ahead for chemicals By Joseph Chang 23-Mar-23 05:34 NEW YORK (ICIS)–Even amid a regional banking crisis, the US Federal Reserve remains undeterred in its goal of bringing inflation down to its 2% target. This was evidenced by another 0.25 percentage point rate hike and will mean weakening economic conditions, a lower chance of a soft landing and a more challenging demand environment for chemicals going forward. Phenol energy surcharges will start to disappear on lower TTF, but no demand improvement seen By Jane Gibson 23-Mar-23 00:57 LONDON (ICIS)–Falling upstream gas prices may offer chemical sellers and buyers some relief but the impact on demand levels has yet to be significant. PODCAST: Plunging shipping rates point to normalising global logistics, Europe under pressure By Will Beacham 22-Mar-23 22:58 BARCELONA (ICIS)–Steep falls in container shipping rates indicate that the pandemic-induced logistics crisis may be drawing to a close, but this now makes Europe more vulnerable to a flood of cheap imports from Asia. US R-PET buying sentiment weakens in wake of banking crisis By Arianne Perez 22-Mar-23 20:11 SINGAPORE (ICIS)–Asian exporters of recycled polyethylene terephthalate (R-PET) cargoes are expected to continue to see cautious buying from converters in the US following the banking crisis. INSIGHT: New PE/PP capacities risk derailing nascent Asia polyolefin recovery By Izham Ahmad 22-Mar-23 17:28 SINGAPORE (ICIS)–A wave of new polyethylene (PE) and polypropylene (PP) supply in Asia is threatening to upend the tentative demand recovery the region has been experiencing since the end of the Lunar New Year holidays as new suppliers fight to establish market share in an increasingly crowded market. Asia polyamide 6,6 Q2 mood darkened by fiscal year closing, demand outlook By Josh Quah 22-Mar-23 13:12 SINGAPORE (ICIS)–Asia’s nylon polyamide 6,6 (PA66) markets remain weak, ahead of turnarounds coming up for some producers in northeast Asia. China PP prices fall to nearly three-year low amid increasing supply, lower-than-expected demand By Lucy Shuai 22-Mar-23 12:44 SINGAPORE (ICIS)–China polypropylene (PP) prices fell to a nearly three-year-low amid increasing supply and lower-than-expected demand, and the market may remain under pressure in Q2. Asia naphtha swings to multi-month lows on volatile crude By Melanie Wee 21-Mar-23 13:42 SINGAPORE (ICIS)–Asia’s naphtha markets can expect heightened volatility, largely tracking crude oil futures movement, as demand prospects are being weighed down by market jitters over the health of the global banking system. PODCAST: Subdued spot trading activity in Europe’s oxo-alcohols and derivatives markets By Marion Boakye 21-Mar-23 03:35 LONDON (ICIS)–Throughout March – the oxo-alcohols and derivative markets in Europe have experienced weak spot demand, ample supply, and thin import opportunities. INSIGHT: Constrained consumer budgets limit demand for major chemicals consuming sectors By Nigel Davis 21-Mar-23 00:49 LONDON (ICIS)–This is by no means an easy time for chemical producers as the industry’s major downstream markets continue to be influenced by the impact on demand of rising costs and higher interest rates. Europe’s chemical sector shrinks – battered by high costs, poor demand and cheaper imports By Will Beacham 20-Mar-23 23:10 BARCELONA (ICIS)–Collapsing Q4 profits and losses for European chemical majors, together with low expectations for 2023, show just how badly the sector is still suffering. Europe markets firm after emergency UBS Credit Suisse purchase By Tom Brown 20-Mar-23 20:15 LONDON (ICIS)–European markets firmed on Monday after Switzerland-based banking group UBS announced plans to acquire embattled rival Credit Suisse, raising market hopes that banking sector contagion may be limited. Global weekly spot IPEX down on price declines across regions By Will Beacham 20-Mar-23 19:11 LONDON (ICIS)–The global weekly spot ICIS Petrochemical Index (IPEX) fell by 2.0% week on week on the back of lower index values across regions. PODCAST: Asian PP markets grapple with increased supply, lower-than-expected demand in 2023 By Damini Dabholkar 20-Mar-23 19:06 SINGAPORE (ICIS)–Asian polypropylene (PP) markets are being challenged by increasing capacity in 2023, especially in the China market, while demand continues to recover more slowly than expected. Crude dips to lowest since December 2021 on banking sector turmoil By James Dennis 20-Mar-23 17:52 SINGAPORE (ICIS)–Crude prices declined on Monday to their lowest levels since December 2021 before recovering on growing financial concerns following equity market losses and instability in the banking sector in Asian trading. Asia petrochemical shares, oil prices weaken after UBS rescue of Credit Suisse By Nurluqman Suratman 20-Mar-23 12:43 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia were mostly weaker and crude futures fell on Monday on fears of a banking crisis contagion, as troubled Credit Suisse was rescued by its Swiss rival UBS in a government-backed deal. INSIGHT: European TiO2 operations at risk, but China may not be the answer By Heidi Finch 17-Mar-23 17:53 LONDON (ICIS)–While energy costs in Europe are more relaxed  compared with 2022 peaks, the TiO2 marketand the wider chemical industry in Europe are still facing residual economic and demand headwinds. European production is at risk, while China/Asia capacity is increasing. Asia glycerine demand weighed down by caution after US bank collapse and turmoil By Helen Yan 17-Mar-23 11:48 SINGAPORE (ICIS)–Asia’s glycerine spot demand has been weighed down by prevailing caution following the collapse of two mid-sized banks in the US and plunging bank stocks in Europe. INSIGHT: Banking contagion threatens to spread, hit chemicals demand hard By Joseph Chang 17-Mar-23 05:47 NEW YORK (ICIS)–The failure of two sizeable banks (Silicon Valley Bank, Signature Bank) in the US and the crisis of confidence contagion spreading to other US regional banks and now European financial institutions threatens to significantly tighten lending conditions at the very least, further slowing economic growth and potentially tipping the US and European economies into recession. Asia naphtha tumbles on tepid demand; crude oil losses By Melanie Wee 16-Mar-23 12:56 SINGAPORE (ICIS)–Asia naphtha markets are under pressure on the back of fragile demand, while taking cues from global crude oil futures. INSIGHT: Banking woes rattle US chem shares By Al Greenwood 16-Mar-23 05:03 HOUSTON (ICIS)–Shares of US-listed chemical companies fell on Wednesday amid concerns about the implications of a string of bank failures. Topic Page by Aura Sabadus and Will Beacham. Additional reporting by  Richard Ewing and Sophie Udubasceanu. Maps and graphs by Yashas Mudumbai.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. China’s economy has reached a definitive turning point because of its ageing population and the end of the real estate bubble. We should get used to chemicals and polymers demand growth in the region of 1-2% per year, possibly even a minus growth during some years, from hereon in. This requires a big adjustment in global chemicals supply because as recently as only three years ago, the consensus was that Chinese demand would grow at some 6-7% per year over the next few decades. But the adjustment hasn’t arrived in China’s linear-low density polyethylene (LLDPE) and low-density PE (LDPE markets),  where overstocking appears to be behind the January-April data, which suggest full-year 2023 demand growth of 3% for each of the polymers. For example, China’s LLDPE imports in February this year at 499,168 tonnes reached their highest level on record for the month. But imports in March and April fell month on month by 6% and 7%, respectively. January-April 2023 LLDPE exports reached 64,678 tonnes, 96% higher than last year. These were the highest January-April exports on record. The CFR China LLDPE film grade price spread over CFR Japan naphtha costs so far this year is just $1/tonne higher than its lowest annual level since 1993 – when ICIS started its price assessments. And despite the weak market conditions and a 5% scheduled rise in China’s capacity this year following an 11% increase in 2022, this year’s LLDPE domestic operating rate is at 85% compared with just 78% in HDPE. It is a very similar story in LDPE. So, unless macroeconomic conditions improve, expect destocking in both polymers and potentially weaker full-year 2023 demand growth than is suggested by the January-April data. Even a 3% growth would be much lower than the 2000-2021 average growth of 11% for LLDPE and 7% for LDPE. The New Normal has truly arrived. 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.

HOUSTON (ICIS)–By the end of this year, Honeywell plans to start commercial production of its catalyst-coated membranes (CCMs), a product that could boost the performance of electrolysers by 25% and allow the units to produce green hydrogen more efficiently, a director of the US-based industrial conglomerate said on Thursday. Honeywell had announced the CCMs just over a year ago. It is progressing to commercial production because it already has large-scale membrane manufacturing in place. For several years, the company has made Separex membrane systems that purify natural gas by removing carbon dioxide. “We are leveraging that membrane’s experience. That’s why it’s a natural play for us,” said Maya Gomez, Honeywell director of offering management, flow battery and green hydrogen. She made her comments in an interview with ICIS. “We will have commercial production by the end of the year,” she said. Membranes are a key component of electrolysers, which use electricity to split water molecules into oxygen and hydrogen. When that electricity is produced by renewable sources such as solar panels or wind turbines, the resulting hydrogen is called green. Policy makers are relying on green hydrogen to supply power to applications that are difficult to wean off of carbon-emitting fuels. These applications include process heat for chemical plants and other industrial complexes as well as feedstock to make fuels for heavy-duty trucks, aircraft and marine vessels. Hydrogen is also used in fuel cells, which can generate electricity for electric vehicles (EVs). Companies such as Mitsubishi Power have proposed using green hydrogen as a method of storing excess renewable power. Mitsubishi Power is developing turbines for power plants that can burn blends of hydrogen. The US has introduced several policies that are intended to lower production and operating costs for green hydrogen plants in the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law. New technology such as Honeywell’s membrane could further reduce production costs and speed up adoption of green hydrogen. When Honeywell announced the catalyst-coated membranes, it said that they could reduce electrolyser stack costs by 25%. During the past year, Honeywell has been working with electrolyser manufacturers, and it has been able to replicate the performance enhancement that the company observed in its labs, Gomez said. Honeywell’s product can be used in proton-exchange membranes (PEMs) or anion-exchange membranes (AEMs), an up-and-coming technology that could deliver the lower operating costs of PEM-based electrolysers with the lower capital costs of alkaline-based electrolysers, Gomez said. Enapter recently unveiled what it described as the world’s first megawatt-class AEM-based electrolyser. Interview article by Al Greenwood

HOUSTON (ICIS)–More than 32m single-family residences (SFRs) and an additional 1m multifamily residences (MFRs) are at moderate or more significant risk of sustaining damage from hurricane-force winds while about 7.8m homes are susceptible to storm surge damage from hurricanes, CoreLogic said on Thursday. In its 2023 Hurricane Risk Report, the real-estate information provider said damage from hurricane-force winds could have a combined reconstruction cost value (RCV) of $11.6tr and the damage from storm surge flooding could add an additional RCV of $2.6tr based on their direct or indirect exposure to coastlines. Source: CoreLogic Forecasters from the US National Oceanic and Atmospheric Administration (NOAA) and Colorado State University (CSU) are both predicting a near-average Atlantic hurricane season, which runs from 1 June to 30 November. CoreLogic said that property counts in the specified regions have risen by 1% from last year and values are 10% higher, making costs to repair or replace damaged homes higher than last year. CoreLogic uses RCV to estimate how much it will cost to repair structures after storms. Figures are based on an assumption of total (100%) destruction of the structure, or the cost to completely rebuild the existing structure assuming total destruction. The RCV combines materials, equipment and labour, but does not include the value of the land or lot. INCREASED DEMAND FOR CHEMS The damage and efforts to rebuild can translate to increased demand for many chemicals and polymers that are used in the construction sector. The white pigment titanium dioxide (TiO2) is used in paints. Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA). Blends of aliphatic and aromatic solvents are also used to make paints and coatings. For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation. Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols. High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes. Unsaturated polyester resins (UPR) are used to make coatings and composites. Vinyl acetate monomer (VAM) is used to make paints and adhesives. HURRICANE IMPACTS ON CHEM INDUSTRY While damage from hurricanes can lead to increased demand for chemicals, hurricanes and tropical storms can also disrupt the North American petrochemical industry as many of the nation’s plants and refineries are along the US Gulf Coast in the states of Texas and Louisiana. The US Energy Information Administration (EIA) said that in 2021 offshore oil and gas production in the Gulf of Mexico accounted for about 15% of total US crude oil production, and about 2% of total dry natural gas production. The 2022 Atlantic hurricane season was near-average and less than what was originally forecast. But Hurricane Ian brought devastating storm surge, strong winds and heavy rainfall which combined to cause more than $50bn in damage in the continental US. Minimal impact was seen in the oil and chemicals industries, with only a handful of oil rigs on the US Gulf Coast experiencing brief shut-ins. Chemical facilities in Florida, Georgia and the US Carolinas also experienced brief closures during Hurricane Ian. In 2021, Hurricane Ida slammed the US Gulf state of Louisiana, impacting production of products such as the chlor-alkali chain all the way through polyvinyl chloride (PVC), methylene diphenyl diisocyanate (MDI), styrene, linear alpha olefins (LAO), phthalic anhydride (PA) and butanediol (BDO). Focus story by Adam Yanelli Additional reporting by JT Strasner, Al Greenwood

HOUSTON (ICIS)–LyondellBasell still can make a strong case for converting its refinery in Houston into a sustainability hub, even though it is delaying its exit from the refining business to the end of the first quarter of 2025. The refinery has the right mix of processing units, logistics, access to feedstocks and government incentives to become a hub for sustainable chemicals and fuels The refinery is connected by pipeline to a nearby cracking complex in Channelview, which could convert sustainable feedstock produced by the sustainability hub into olefins When LyondellBasell announced the delay, the company said it expects the refining site to become part of a regional hub for its Circular and Low Carbon Solutions business and support the growth of its Circulen line of sustainable products THE REFINERYThe company originally planned to end operations at the 268,000 bbl/day Houston refinery by end 2023. It is delaying the exit because of favourable inspections and consistent performance. The delay will also allow LyondellBasell to have a smoother transition between shutting down the refinery and implementing the retrofitting and circular projects needed to convert the complex into a sustainability hub. Comments and announcements made over the past several months are providing clues about how that conversion project could take shape. RENEWABLE NAPHTHAThe latest clue came from Neste, the company that Peter Vanacker headed before becoming the CEO of LyondellBasell. Neste and Kinder Morgan have started up a storage and logistics hub in Harvey, Louisiana that will collect used cooking oil and other renewable feedstocks that Neste uses to produce renewable diesel, sustainable aviation fuel (SAF) and renewable naphtha at its plants in Martinez, California; Singapore; Rotterdam in the Netherlands; and Porvoo in Finland. The companies said the hub in Louisiana can be expanded at Neste’s option. Neste pioneered the production of naphtha from renewable feedstock, and the Houston refinery is a short distance by sea from the Harvey storage and logistics hub in Louisiana. LyondellBasell could modify its refinery’s hydrocracker to handle renewable feedstock. If needs be, LyonellBasell could upgrade the feedstock at its refinery’s hydrotreaters. In fact, the Houston refinery has a lot of hydroprocessing capacity, which would give it the ability to treat a lot of material, said Mike Connolly, ICIS principal analyst for refining. The renewable naphtha produced in Houston can be shipped via existing pipelines to LyondellBasell’s nearby cracking operations in Channelview. Channelview is a natural destination for the refinery’s naphtha because the complex lacks a catalytic reformer. The olefins produced from the renewable naphtha can be polymerised and marketed under LyondellBasell’s existing CirculenRenew brand. LyondellBasell already processes renewable naphtha at its cracker in Wesselling, Germany. The feedstock comes from Neste under a long-term commercial agreement. Meanwhile, the renewable diesel or sustainable aviation fuel (SAF) produced by the hydrocracker could be sold in the growing markets for these fuels. CHEMICALLY RECYCLINGFor more than a year, LyondellBasell discussed building a chemical recycling plant at the refinery using its MoReTec process technology. The existing hydrotreaters could upgrade the resulting pyoil produced by the MoReTec plant into a naphtha that LyondellBasell’s Channelview crackers could convert into olefins. LyondellBasell could market the polymers made from these olefins under its existing CirculenRevive brand. If LyondellBasell pursues this project, it would be the company’s second commercial-scale MoReTec plant. It is considering building the first one in Wesseling. LyondellBasell should make a final investment decision on the Wesseling project by the end of 2023. BLUE AND GREEN HYDROGENAll of this hydrotreating and hydrocracking would require hydrogen. Houston’s position as the nation’s refining and petrochemical hub already gives it access to plenty of hydrogen made by steam methane reforming. However, LyondellBasell could choose to provide its Houston operations with blue or green hydrogen. It, Air Liquide, Chevron and Uniper are part of a consortium that is evaluating sites for a hydrogen and ammonia project on the Gulf Coast. The Houston refinery is the top choice for the site. More hydrogen could come from the proposed Houston HyVelocity Hub. It is among the hubs participating in the Department of Energy’s Regional Clean Hydrogen Hubs programme. Blue and green hydrogen would further reduce the carbon footprint of the naphtha and fuels produced in Houston. GOVERNMENT INCENTIVESState and federal programmes could lower LyondellBasell’s development and production costs while offering it tax credits that could further enhance the profitability of the sustainability hub. The US Inflation Reduction Act (IRA) introduced several tax credits and production credits for low-carbon hydrogen, low-carbon fuels and carbon-capture projects. The IRA is recent regulation, so it remains to be seen whether its incentives and tax credits could be applied to renewable plastics and chemicals. The possibility does exist, since these renewable products sequester carbon dioxide. The IRA is explicit about renewable fuels, so any renewable diesel, SAF or renewable gasoline produced at the sustainability hub would qualify for tax credits. Moreover, the US states of California, Oregon and Washington have adopted Low Carbon Fuel Standards (LCFS), which would offer more incentives for any renewable fuels produced in Houston. Texas is moving closer to reviving a tax-break programme that it offered to industrial projects. Hydrogen and renewable fuel projects could qualify under the proposed bill. If Texas revives the programme, LyondellBasell could apply for tax breaks, lowering the cost for the conversion project. Insight article by Al Greenwood Thumbnail shows bales of waste plastic, which could be recycled. Image by RICHARD VOGEL/AP/Shutterstock