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Updated at 10:45 GMT on 27 May with updated maps and graphs plus latest news. Please scroll down to see headlines. The war in Ukraine caused oil price volatility which has increased as surging COVID-19 cases in China led to fresh lockdowns which have hit demand. China is the world’s second biggest economy and largest oil importer. India is facing a more severe shortage of fertilizers and edible oil amid wide-ranging trade disruptions as the Ukraine war rages on, with financial sanctions tightening on Russia. 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: the actions proposed by the European Commission put that into context. 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 in 2022. GAS SUMMARY Gas storage low in Europe, winter demand 30% higher than rest of year Record shipments of liquefied natural gas (LNG) to Europe so far in 2022 LNG could ease Europe shortages if Russia supplies cut Europe LNG processing operating at full capacity On 27 April Russia suspended gas deliveries to Poland and Bulgaria 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 CHEMICALS SUMMARY High Europe gas and electricity prices force price hikes, energy surcharges Volatile oil and feedstock prices dent chemical producer margins Elevated oil prices dent consumer confidence and demand Europe is heavily reliant on Russian gas and exposed to disruptions in supply,  but Russia is also an important oil exporter and a supplier of fossil fuel products, which find their way to international markets via Ukraine’s ports. Any interruptions in supplies caused either by cyber or physical attacks or sanctions in response to them could send shockwaves across the global economy, lifting the cost of living, impacting industrial and agricultural production and potentially leading to social unrest. ICIS has taken a broader perspective, asking how vulnerable energy and energy-related supplies are to disruptions, what contingency plans are put in place and what could be expected in the upcoming weeks. How vulnerable are energy and energy-related Russian supplies to disruptions? Europe depends 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 since the beginning of this year producer Gazprom has shipped only one-third of the gas that it was expected to deliver to European consumers via Ukraine as part of a five-year transit agreement. On 27 April Russia banned exports of gas to Poland and Bulgaria. European petrochemicals players could face even higher gas prices as a result. 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. 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. 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. Should sanctions be imposed and exports hindered, Europe will need to secure alternative cargoes from the global market. 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. 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. Europe is now 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. The conflict in Ukraine has pushed European gas prices back up to record levels, so some chemical producers may consider ceasing production, or adding further energy surcharges. Rising oil prices since late 2021 have already put chemical margins under pressure, and this has continued into 2022. As oil and naphtha prices soared, margins for ethylene production based on naphtha went nagative 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 naphtha feedstock and energy costs, especially in Europe. Elevated oil prices also dent downstream consumer confidence and spending. What contingency plans are being put in place? US and European officials have been planning for backup LNG supplies. Exports of LNG from Algeria, Qatar, the US and even Australia have been discussed as alternatives. Although Europe imported a record 11bn cubic metres (bcm) of LNG in January alone, half of which were sourced in the US, much of future supplies would depend on price as well as supply and processing capacity. Europe is proposing to replace 100bn cubic metres (m3) of Russian gas with alternative supplies by the end of the year. “In this scenario, there would be huge problems unless Europe gets it act together. I estimate that even with new liquified natural gas (LNG) supplies from the US, Norway, and Qatar plus energy efficiency measures and more use of renewables, Europe would still be short by 30-40bn m3,” said ICIS senior energy editor, Aura Sabadus. You will find more infographics at Statista If the Asian premium were to increase, LNG cargoes would head in that direction, even as seasonal European winter gas demand is on average 30% higher than the rest of the year. Supply disruptions caused by escalating tensions may lead to a price rebound, incentivising more LNG to return to Europe. However, European import terminals are already operating at nameplate capacity. A record of 5,000GWh/day was reached in mid-January, according to EU data. Even if more LNG were to reach European terminals, countries in central and eastern Europe which rely on Russian flows shipped via Ukraine, would struggle to secure imported LNG. 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. ICIS publishes May oil price forecast The crude price has switched from being driven by supply, to driven by demand in recent weeks. China’s future oil demand growth is under question, with lockdowns ongoing in many cities. Furthermore, the IMF has downgraded global GDP growth for 2022 by 0.8%, whilst the US Fed is expected to raise interest rates by 0.5% in May; these will inevitably reduce oil demand growth for the remainder of the year. The EU may impose direct sanctions on Russian crude oil sales later this year. The exact details of the sanctions are still unclear, but it is likely that the sanctions will be implemented in a phased manner over the course of 2022.  The phased nature of the sanctions does mean that the overall impact on prices will be much more muted than previously expected, as it will give Russia time to find alternative buyers of the crude such as India, and therefore Russia’s overall exports will be negatively impacted, but much less so than if the sanctions were due to be implemented immediately. Nevertheless, if the oil sanctions are implemented, this will be a bullish move and is accounted for in the ICIS base case forecast, where the May Dated BFOE price is expected to average at $111/bbl. Europe is managing to significantly reduce its purchases of Russian crude – Germany, for instance, has halved its imports of Russian crude. But overall, Russian crude exports have largely returned to pre-crisis levels, as India substantially increases its Russian import volumes to take advantage of extremely large discounts (-$38/bbl). New oil supply is due on the market in May as the US and other allies release ~1.3 million barrels per day for 6 months, providing the market with much needed supply over the medium term. However, ICIS anticipates a strong summer driving season in the West, pushing prices to over $120/bbl in late summer. Crude prices are expected to fall considerably from these levels in winter 2022/2023 as a combination of high energy costs, high inflation and higher interest rates leads to lower economic growth and less overall oil demand. ICIS expects crude prices to fall below $100/bbl in early 2023. Ukraine conflict threatens Europe oil and 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. TotalEnergies and PKN Orlen declined to comment while MOL and PCK have not yet replied to requests for comment. A ban or restrictions on exports of Russian crude oil is one amongst many possible sanctions against Russia in the event of an invasion or incursion into Ukraine. Russia claims it has withdrawn some military forces from the border with Ukraine but the US White House say there is no evidence of this happening. Base oils buyers are switching from Russian to European sourcing amid fears of sanctions against these products. European polymer markets are also seeing some impact. A regional polymer seller said: “What we do see, making the market a bit murky, is Russian suppliers eliminating European stock … fire-selling their stocks particularly in eastern Europe and this is putting pressure on prices.” UKRAINE CHEMICALS UNDER THREAT With Russian forces advancing across Ukraine, chemical and fertiliser 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 Malaysia’s PCG Q1 net profit rises 42.1% on stronger prices By Nurluqman Suratman 27-May-22 15:33 SINGAPORE (ICIS)–PETRONAS Chemicals Group’s (PCG) net profit rose by 42.1% year on year in the first quarter of this year on the back of higher product prices, the Malaysian producer said on Friday. China Jan-Apr industrial profits growth slows to 3.5% By Fanny Zhang 27-May-22 15:32 SINGAPORE (ICIS)–China’s industrial profits in the first four months of 2022 increased by 3.5% year on year, the slowest in 16 months, data from the National Bureau of Statistics (NBS) showed on Friday. SE Asia biodiesel in bearish market on tepid Europe demand By Felicia Loo 27-May-22 15:23 SINGAPORE (ICIS)–The southeast Asian palm methyl ester (PME) biodiesel market maintained its bearish sentiment, amid a closed arbitrage window to move cargoes westwards. Asia soap noodles market to stay soft into Q3 amid waning demand By Helen Yan 27-May-22 15:04 SINGAPORE (ICIS)–Asia’s soap noodles market is likely to remain soft into the third quarter (Q3) on tapering demand as consumers keep a tight lid on their costs-of-living expenses amid inflationary pressures and a looming global recession. China LPG prices fluctuate on elevated costs, weak demand By Candy Nie 27-May-22 14:07 SINGAPORE (ICIS)–China’s liquefied petroleum gas (LPG) prices seesawed in a tight range in May, generally hovering above yuan (CNY) 6,000/tonne, but the market may come under some downward pressure in June on demand woes. China’s mixed aromatics import loss widens a bit amid higher costs By Yvonne Shi 27-May-22 11:43 SINGAPORE (ICIS)–Theoretical margins for importing mixed aromatics widened slightly within the negative territory due to larger gains in import costs. K+S Potash Canada unveils long term growth plan for Bethune mine By Mark Milam 26-May-22 12:59 HOUSTON (ICIS)–K+S Potash Canada (KSPC) has announced a long-term growth plan which includes a focus on planning for a sustained increase of potash production at its Bethune mine. Azoty swings to Q1 profit of Zl 882 after securing maximum ferts output By Will Conroy 26-May-22 12:51 LONDON (ICIS)–Second largest European fertilizer maker Grupa Azoty swung to a first-quarter net profit of zloty (Zl) 882m ($205.1m) from Zl 86m a year ago as it managed to maintain fertilizer production at maximum capacity throughout the quarter, the Polish company said. Strong downside risk for the German power far curve By Anne Petersen 26-May-22 11:56 LONDON (ICIS)–German clean spreads for this winter and the years ahead have soared since the outbreak of the war in Ukraine putting them well in the money for Q4 ’22 onwards and suggesting a strong downside risk for the German power far curve. FOCUS: Competition for US LNG intensifies as new deals are signed By Ruth Liao 26-May-22 11:34 HOUSTON (ICIS)–Even before the Russia/Ukraine war, US LNG developed as the prime destination for flexible, hub-linked export volumes to serve both Atlantic and Pacific markets. Slovakia rules out coal-fired power plant life extensions By Lukasz Kulesza 26-May-22 11:14 LONDON (ICIS)–The government of Slovakia told ICIS it has ruled out extending lifespans at the country’s existing coal plants despite any energy security concerns as Europe seeks to pivot away from Russian gas. Ukraine’s Naftogaz calls for Nord Stream 1 EU rules derogation to be lifted By Aura Sabadus 26-May-22 09:57 LONDON (ICIS)–The Ukrainian gas incumbent Naftogaz has called on the European Commission and member states to revoke a derogation from EU regulation granted to Nord Stream 1 and suspend flows via the pipeline amid concerns over the reliability of Russia’s Gazprom as a supplier. Ukraine, Hungary extend firm capacity trial for gas imports By Aura Sabadus 26-May-22 09:53 LONDON (ICIS)–The Ukrainian and Hungarian gas grid operators GTSOU and FGSZ have extended a pilot project for firm import border capacity into Ukraine until the end of March 2023, according to a GTSOU statement. Above-average LNG sendout amid ongoing influx of shipments to Europe By Victoria Tchen 26-May-22 06:52 LONDON (ICIS)–European LNG sendout is forecast to remain above the three-year May 2019-2021 average of 254mcm/day for the last week of the month, as Europe remains a prime destination for cargoes, ICIS Analysis shows. Singapore April chemicals output falls 3.4%; overall manufacturing up 6.2% By Nurluqman Suratman 26-May-22 14:28 SINGAPORE (ICIS)–Singapore’s chemicals cluster output in April fell by 3.4% year on year, weighed down by plant turnarounds and weak demand in the petrochemicals segment, official data showed on Thursday. INSIGHT: Asia glycerine to see China demand in Q3, arbitrage opportunities in EU By Helen Yan 26-May-22 12:00 SINGAPORE (ICIS)–Asia’s glycerine market may face upward price pressure in the third quarter (Q3) due to an anticipated pick-up in demand from China as it eases its lockdown restrictions amid prevailing tight supply in Europe. East, south Asia ethanolamines demand wanes on buyers’ caution By Clive Ong 26-May-22 11:53 SINGAPORE (ICIS)–Ethanolamines demand in east and south Asia has waned as uncertainty over near-term economic outlook intensified. South Korea raises key rate to 1.75% amid rising inflation By Nurluqman Suratman 26-May-22 11:30 SINGAPORE (ICIS)–South Korea’s central bank on Thursday raised its key interest rate by 25 basis points (bps) to 1.75% as inflationary pressures have remained high. INSIGHT: China crude consumption softens amid COVID-19 lockdowns By Pearl Bantillo and Fanny Zhang 25-May-22 12:00 SINGAPORE (ICIS)–China’s consumption of crude has softened as industrial production is hit by pandemic-related restrictions in place since February, with no sign of the government giving up on its zero-COVID policy. VR Group’s Russia-Finland rail closure hits Russian methanol exporters By Eashani Chavda 23-May-22 09:54 LONDON (ICIS)–Finnish railway company VR Group is preparing a plan to stop the transport of goods between Russia and Finland and has begun to terminate contracts, in yet another blow to the Russian methanol market. US economists ratchet up inflation expectations – survey By Stefan Baumgarten 23-May-22 09:00 HOUSTON (ICIS)–US inflation is set to be worse than previously expected, according to a panel of 53 economists in the National Association of Business Economists’ (NABE) May outlook survey. France’s GRTgaz considering direct export capacity to Germany By Andrea Battaglia 23-May-22 08:43 LONDON (ICIS)–French gas exports to Germany could increase as a project to allow physical exit flows at the Obeirgailbach-Medelsheim point is currently being looked into, French transmission system operator GRTgaz confirmed. German business sentiment up in May; outlook flat By Morgan Condon 23-May-22 05:11 LONDON (ICIS)–Business sentiment in Germany improved in May, but the outlook is flat, according to the Ifo research institute. INSIGHT: War drives up China toluene exports as pandemic weighs on local demand By Veronica Zhang 23-May-22 04:20 SINGAPORE (ICIS)–China toluene market prices have soared since May, with few prompt deals done as export demand surged on the Russia-Ukraine crisis and local demands were curbed by Covid-19 pandemic. Germany’s economy could begin recovering by year end – institute By Stefan Baumgarten 20-May-22 13:57 LONDON (ICIS)–Germany’s economy could begin to recover by the turn of the year – if there are no additional impacts from geopolitical conflicts, and if the sharp rise in energy and raw material prices moderates, the country’s IW Institute of the German Economy said in its spring 2022 forecast. US gas supply crunch could ease by ’23 – trade group By Ruth Liao 20-May-22 13:10 HOUSTON (ICIS)–Tightening US natural gas supply that has not kept up pace with rising demand has been a driving factor for the Henry Hub futures benchmark, although increased supply is expected to re-balance the US market into 2023, according to an American Gas Association (AGA) market webinar. Germany’s producer prices rise at record pace, chems up 29.5% By Stefan Baumgarten 20-May-22 11:11 LONDON (ICIS)–Producer prices in Germany rose at a record 33.5% year on year in April amid Ukraine war impacts and high energy prices, in particular for natural gas, the country’s federal statistics agency reported. Russia’s Gazprom halts gas supply to Finland By ICIS Editorial 20-May-22 11:02 LONDON (ICIS)–Russian gas supplier Gazprom Export informed Finnish gas importer Gasum on Friday that contracted supplies would be halted at 7am local time on 21 May. Clariant eyes strong first-half 2022 despite headwinds By Morgan Condon 20-May-22 06:04 LONDON (ICIS)–Clariant is making gains towards its 2025 financial targets, driven by a strong first half of 2022, CEO Conrad Keijzer asserted at its delayed 2021 financial results announcement. Potash offers slip from all-time highs amid reduced demand; supply concerns continue By Andy Hemphill 20-May-22 17:59 LONDON (ICIS)–Offer pricing in the global muriate of potash (MOP) fertilizer market has slipped slightly from all-time highs, necessitated by buyer resistance to high-priced tonnes and reduced demand in some nations. Urea market weak despite high-volume Indian purchase By Deepika Thapliyal 20-May-22 17:27 LONDON (ICIS)–The urea market outlook remains weak despite India buying nearly 1.7m tonnes, as there is no major demand anywhere else. Asia oleochem players mull over Indonesia’s latest palm oil DMO policy By Helen Yan 20-May-22 17:19 SINGAPORE (ICIS)–Asia’s oleochemical market players are mulling over the latest news that Indonesia will reimpose its domestic market obligation (DMO) policy on palm oil. Asia PBT market softens on weak demand, economic uncertainty By Clive Ong 20-May-22 16:02 SINGAPORE (ICIS)–The Asian polybutylene terephthalate (PBT) market remains under downward pressure on prevailing weak demand. Some participants anticipate further potential weakness in the near term as demand showed little pick-up. Asia biodiesel sentiment bearish on weak buying appetite By Felicia Loo 20-May-22 15:55 SINGAPORE (ICIS)–The southeast Asian palm methyl ester (PME) biodiesel market was down on bearish sentiment and weak demand from major buyers Europe and China. Asian fatty alcohol players retreat as CPO falls on export ban removal By Helen Yan 20-May-22 12:42 SINGAPORE (ICIS)–Asia’s fatty alcohols buyers and sellers are holding off any bids and offers in the near term due to declining crude palm oil (CPO) prices, after the Indonesian authorities announced on Thursday that it will lift the palm oil export ban on 23 May. Asia BDO under pressure as tepid demand persists, economic uncertainty By Clive Ong 20-May-22 12:17 SINGAPORE (ICIS)–The Asian butanediol (BDO) market remains under downward pressure from prevailing soft demand in the region. Buying momentum could remain slow in the near term from economic headwinds from the Ukraine conflict and Russian sanctions, as well as the lockdown in China which looks set to ease. US gas supply crunch could ease by 2023 – trade association By Ruth Liao 20-May-22 09:03 HOUSTON (ICIS)–Tightening US natural gas supply that has not kept up pace with rising demand has been a driving factor for the Henry Hub futures benchmark, although increased supply is expected to re-balance the US market into 2023, according to an American Gas Association market webinar on 19 May. CRUDE SUMMARY: Global economic concerns make for volatile session By Barney Gray 19-May-22 14:08 LONDON (ICIS)–Oil prices rebounded during a volatile session even as global economic concerns weighed on sentiment. Bullish factors such as Shanghai’s planned easing of coronavirus restrictions and a tightening supply balance provided upside. Limited pool of FSRUs available for European LNG import projects By Yasmin Yonan 19-May-22 11:49 LONDON (ICIS)–Following European commitments to phase out Russian gas there has been increased demand for Floating Storage and Regasification Units (FSRUs) to facilitate LNG supply. EU governing bodies reach agreement on new gas storage targets By Diane Elijah 19-May-22 15:13 LONDON (ICIS)–On 19 May, the European Parliament and the Council of the EU announced they provisionally agreed on new gas storage targets mandating that storage facilities in the EU27 be 80% full by 1 November 2022 and 90% full the following years. To enter into force, the new rules must be formally adopted by the parliament and the council and then published in the official journal of the EU. ICIS calculated that shippers in the EU27 will need to inject 42.4 billion cubic metres (bcm) in storage between 19 May and 1 November to refill stocks to 80% of their capacity by 1 November. This is the target that they must achieve. Asian PX market split between strong US octane demand, negative Chinese PTA marginsBy Samuel Wong 19-May-22 18:39 SINGAPORE (ICIS)–Asian paraxylene (PX) prices were supported by a strong gasoline market in the US, coupled with firm demand for octane blendstocks. Mideast polyols demand weakens, upstream PO declines By Damini Dabholkar 19-May-22 18:22 SINGAPORE (ICIS)–Prices of polyols were softer this week, on account of weaker demand and lower upstream prices. Overall, the outlook is bearish as supply in Asia remains ample and demand in the Middle East has weakened significantly after the Eid holiday. Philippines’ central bank hikes policy interest rate by 25bpsBy Pearl Bantillo 19-May-22 18:26 SINGAPORE (ICIS)–The Philippines’ central bank hiked its policy interest rate on Thursday by 25 basis points (bps), following a rebound in economic activity and amid elevated inflationary pressures. GLM COMMENT: Europe and Asia’s changing LNG price relationshipBy Edward Cox 19-May-22 17:28 LONDON (ICIS)–East Asian spot LNG has almost always been priced at a premium to the ICIS TTF given the former’s high dependency on LNG and with Europe able to tap into more domestic gas production and pipeline imports. Japan Apr chemical exports rise 8.5%, total exports up 12.5% By Nurluqman Suratman 19-May-22 13:24 SINGAPORE (ICIS)–Japan’s chemical exports rose by 8.5% year on year to yen (Y) 1,036bn in April but overall trade remained at a deficit following a jump in imports, official data showed on Thursday. CRUDE SUMMARY: A mixed bag of market drivers moves crude lower By Barney Gray 18-May-22 14:12 LONDON (ICIS)–Crude prices dipped in afternoon trading on Wednesday. The easing of Chinese coronavirus restrictions gave rise to hopes of a demand boost and reports of reduced Russian production in April were balanced by news that the US is planning to relax sanctions against Venezuela. European Commission ramps up renewables targets to phase out Russia energy dependence By Tom Brown 18-May-22 12:04 LONDON (ICIS)–The European Commission on Wednesday set out new targets for renewable power development, decarbonising road transport and improving energy efficiency as the EU seeks to wean itself off of Russian oil and gas supplies. Rotterdam coal rises amid ongoing geopolitical uncertainty By David Battista 18-May-22 11:43 LONDON (ICIS)–The front-year Rotterdam coal price gained nearly $19/tonne between 10 and 17 May, due to ongoing uncertainty in the wider energy complex amid fallout from the Russian war in Ukraine. Finland could struggle to meet demand should Russian supplies stop By Daniel Muir 18-May-22 11:02 LONDON (ICIS)–Russian gas supplies to Finland could end as soon as 20 May, according to Finnish state-owned energy company Gasum, which could lead to shortages in the summer. EU revises its transition targets to cut reliance on Russian gas By Diane Elijah 18-May-22 10:58 LONDON (ICIS)–The president of the European Commission, Ursula von der Leyen, on 18 May presented the EU’s strategy to phase-out its reliance on Russian gas. Operating costs for LNG vessels rise on Ukraine war By Hal Brown 18-May-22 10:14 LONDON (ICIS)–Operating expenses (OPEX) are rising for LNG vessels crewed by Russians and Ukrainians. Austrian gas storage rules target dependence on Russia By Ed Martin 18-May-22 10:02 LONDON (ICIS)–The Austrian government is seeking to rapidly implement a raft of new storage regulations aimed at boosting security of supply and reducing dependence on Russian gas. CropEnergies warns Germany on plans to reduce biofuels production By Stefan Baumgarten 18-May-22 08:54 LONDON (ICIS)–Germany must not reduce the use of biofuels from arable crops, the CEO of biofuels producer CropEnergies said on Wednesday, adding his voice to the country’s latest “fuel-versus-food” debate. INSIGHT: Europe refineries and chemicals would be hit by Russia oil, products ban By Will Beacham 18-May-22 07:14 BARCELONA (ICIS)–European oil refineries and downstream chemical plants will come under increasing financial pressure from higher logistics costs and crude oil prices if a proposed ban on Russian oil and refined products comes into force later this year. CRUDE SUMMARY: Oil price bounces after weekly downtrend By Barney Gray 13-May-22 15:47 ONDON (ICIS) – Oil prices enjoyed a bounce on Friday but ended the day down week on week as bearish sentiment continued to weigh on demand. In its May report, the IEA forecast that world oil demand growth will slow from 4.4m bbl/day in Q1 to 1.9m bbl/day in Q2 and will ease back to growth of less than 0.5m bbl/day in the second half of the year. For the full year, demand is now expected to increase by 1.8m bbl/day to 99.4m bbl/day. Germany’s biofuels industry wary amid new fuel-vs-food debate By Stefan Baumgarten 13-May-22 14:22 LONDON (ICIS)–Germany’s biofuels industry is watching closely as rising food prices have sparked a new “fuel-vs-food” debate and may even bring an end to racing on the country’s highways (“Autobahn”) without speed limit. US PVC gets inquiries from Ukraine after two months of silence By Bill Bowen 13-May-22 12:59 HOUSTON (ICIS)–US suppliers of polyvinyl chloride (PVC) are getting inquiries from plastics processors in Ukraine, a surprise development in a war-torn market that has been almost completely silent in recent weeks. Germany’s raw material price index falls month on month By Stefan Baumgarten 13-May-22 11:37 LONDON (ICIS)–Germany’s raw material price index fell 12.0% month on month in April, following a sharp March increase amid the Ukraine war, Hamburgisches WeltWirtschafts Institut (HWWI) said. Ukraine starts landmark commercial electricity exports to Moldova By Aura Sabadus 13-May-22 09:45 LONDON (ICIS)–Ukrainian electricity company Ukrhydroenergo started landmark commercial exports to Moldova on 12 May, less than two months after both countries synchronised with the European power grid, the Ukrainian electricity transmission system operator Ukrenergo confirmed. Chemicals production in EU, eurozone fell in March in wake of Ukraine invasion By Morgan Condon 13-May-22 07:46 LONDON (ICIS)–Chemicals production fell in the EU and eurozone in March compared to the previous month, according to the latest data from the EU’s statistical agency Eurostat. UK plastics export ban on Russia not likely to impact producers – trade group By Tom Brown 13-May-22 07:16 LONDON (ICIS)–The British Plastics Federation (BPF) on Friday backed the UK government’s plans to ban exports of plastics and chemicals and impose import tariffs on certain products to Russia. Asia petrochemical supplies rise as China exports grow amid weak yuan By Fanny Zhang 13-May-22 16:13 SINGAPORE (ICIS)–Asia’s petrochemical markets are being weighed down by growing supply, with China exporting more products – spurred by the weak yuan and poor domestic demand amid lockdowns. INSIGHT: Indonesia consumer demand at risk; may not prolong CPO export ban By Pearl Bantillo 13-May-22 12:00 SINGAPORE (ICIS)–Indonesia’s consumer demand recovery is being threatened by elevated commodity prices, with April inflation exceeding the 3% mark, while the government has taken to banning exports of crude palm oil (CPO) and its derivatives to ease surging prices of domestic cooking oil. Asia fatty acids remain soft on China lockdowns and Indonesia export ban uncertainty By Helen Yan 13-May-22 15:05 SINGAPORE (ICIS)–Asia’s fatty acids market is likely to remain soft in the near term, due to the economic slowdown in China and the expected removal of Indonesia’s export ban on crude palm oil (CPO) sometime in May. Asia’s BD spot discussions see uptick on prompt demand, but outlook still clouded By Ai Teng Lim 13-May-22 14:49 SINGAPORE (ICIS)–Discussions in Asia’s spot butadiene (BD) market took a bullish turn this week, as buying interest for prompt delivery supplies picked up alongside some production hiccups. Gazprom faces $12bn bill and penalties if it fails to pay for Ukraine transit – CEOs By Aura Sabadus 11-May-22 14:25 LONDON (ICIS)–Russia’s Gazprom could face a $12bn bill related to an old arbitration claim and additional multi-million dollar penalties if it refuses to pay for the gas transiting Ukraine to Europe. CRUDE SUMMARY: Oil rallies on improved sentiment after early-week losses By Barney Gray 11-May-22 14:10 LONDON (ICIS)–Oil prices recovered ground on Wednesday as the EU sought unanimous support over its decision to ban Russian oil imports. INSIGHT: Can US, global economies avoid recession amid a whirlwind of headwinds? By Joseph Chang 11-May-22 12:10 NEW YORK (ICIS)–Can the US and major economies around the world avoid a recession in the face of what can only be called a whirlwind of headwinds? Europe naphtha refinery margins stay pressured, but gasoline spikes to multiyear highs By Shruti Salwan 11-May-22 11:59 LONDON (ICIS)–European naphtha market fundamentals remain exceptionally weak amid improved availability and weakening feedstock demand capping any major upsides posed by falling ICE Brent crude oil futures and high gasoline refinery margins. Second FSRU will double the Netherlands’ LNG regas capacity by Q3 ’22 By Victoria Tchen 11-May-22 11:37 LONDON (ICIS)–Dutch gas infrastructure company Gasunie announced on 10 May it has signed a five-year binding contract for the lease of a floating storage regasification unit (FSRU) from US LNG company New Fortress Energy. Council of the EU agrees position on new gas storage rules By Diane Elijah 11-May-22 11:16 LONDON (ICIS)–On 11 May, the Council of the EU adopted its position on the new EU gas storage rules . This means negotiations with the European Parliament to agree on the final text of the new rules can now start. Bulgaria holds LNG supply talks with US; expects deliveries from 1 June By Luka Dimitrov 11-May-22 11:06 LONDON (ICIS)–Importing US LNG could bring cheaper gas prices for Bulgarian consumers than signing a new long-term pipeline contract with Russian state supplier Gazprom. Germany introduces law to speed up LNG project development as pivot away from Russian gas gathers pace By Arlind Neziri 11-May-22 10:55 LONDON (ICIS)–The German government on Tuesday announced it was introducing the LNG Acceleration Act as it continues its push to diversify its supply away from Russian gas. Austria to buy up to 1.4bcm of gas with federal funds to build strategic stocks By Edward Martin 11-May-22 10:42 LONDON (ICIS)–Austrian operator Gas Grid Management (AGGM) on 10 May launched a tender to procure 12.6TWh – or roughly 1.2-1.4 billion cubic metres (bcm) depending on calorific value – of gas with federal funding. PCK Schwedt faces uncertain future as Germany moves to ban Russian oil By Stefan Baumgarten 11-May-22 10:28 LONDON (ICIS)–Germany’s PCK Schwedt refinery faces an uncertain future as the nation firmly supports the proposed EU embargo on Russian oil. US natural gas futures scale to historic highs in volatile trading By Ruth Liao 11-May-22 09:26 HOUSTON (ICIS)–Uncertainty on timing of supply has driven the volatility in US gas futures, as the Henry Hub front-month contract soared to new historic highs on 5 May, only to crash lower for two sessions and rebound. UK targets chems, plastics trade in latest Russia sanctions By Tom Brown 11-May-22 08:32 LONDON (ICIS)–The UK’s latest round of sanctions on trade with Russia targets chemicals trade flows, with export bans and import tariffs announced this week. PODCAST: Ban on Russian crude, products would disadvantage Europe refiners, chemicals By Will Beacham 11-May-22 08:22 BARCELONA (ICIS)–A ban on Russian imports of oil and refined products in Europe would increase logistics costs and exclude refineries and integrated chemical producers from deeply discounted crude oil. Russia declines to reroute Sokhranivka gas flows after Ukraine’s force majeure By Aura Sabadus 11-May-22 06:11 LONDON (ICIS)–The European benchmark ICIS TTF firmed at the open on 11 May as natural gas flows from Russia to Ukraine over the Sokhranivka border point ceased, following the 10 May declaration of force majeure by grid operator GTSOU. China petrochemicals stay soft in April; demand concerns remain By Yvonne Shi 10-May-22 16:44 SINGAPORE (ICIS)–China’s petrochemical markets remained soft in April, weighed down by COVID-related lockdowns which will continue to dampen demand in the near term. Asian polyacetal spot discussions stable amid mixed demand outlook By Ai Teng Lim 10-May-22 13:37 SINGAPORE (ICIS)–Discussions for Asian exports of polyacetals (POM) have been rangebound this week, but it remains to be seen how the regional demand-supply balance may shift if various geopolitical issues, like the Russia-Ukraine turmoil and the COVID-19 lockdowns in China, stretch longer than expected. Asia naphtha market contango deepens, China lockdowns curb demand By Melanie Wee 10-May-22 12:45 SINGAPORE (ICIS)–Asia naphtha markets are under pressure from downbeat demand amid persistent lockdowns in China, exacerbated by poor downstream margins. CRUDE SUMMARY: Oil price rallies further as tight supply concerns mount By Barney Gray 06-May-22 14:06 LONDON (ICIS)–Oil prices continued their rally on Friday as worries over global economic growth were trumped by tighter supply concerns. Outlook for ammonium sulphate remains bright through Q2 – AdvanSix By Al Greenwood 06-May-22 13:27 HOUSTON (ICIS)–The outlook for ammonium sulphate should remain bright through the peak of the demand season in the second quarter, the CEO of US producer AdvanSix said. EU gas strategy to be presented in the second half of May By Diane Elijah 06-May-22 13:03 LONDON (ICIS)–The European Commission plans to adopt its REPowerEU strategy to end the EU’s reliance on Russian fossil fuels on 18 May, subject to confirmation nearer the time, a spokesperson for the commission told ICIS. CRUDE SUMMARY: Oil price gains on proposed EU embargo on Russian crude By Barney Gray 06-May-22 09:03 LONDON (ICIS)–Oil prices consolidated gains on Thursday as further details emerged regarding the EU proposed ban on Russian crude. INSIGHT: Ukraine war hurts Europe chemicals, alters patterns of trade By Will Beacham 06-May-22 08:29 BARCELONA (ICIS)–Europe’s chemical industry faces multiple headwinds which could see it lose out to other regions, and lead to more sourcing from further afield by downstream customers and distributors. France likely to remain net power importer until nuclear availability rises substantially By Karishma Sadanandan 06-May-22 15:33 LONDON (ICIS)–France is unlikely to regain its status as a net exporter of power until such a time as nuclear availability rises closer to historic seasonal norms. SE Asia biodiesel sales weak on poor demand By Felicia Loo 06-May-22 14:46 SINGAPORE (ICIS)–The southeast Asian palm methyl ester (PME) biodiesel market remained in weak demand territory, amid poor uptake from Europe and China. Germany’s Evonik Q1 net income rises amid higher selling prices By Nurluqman Suratman 06-May-22 14:16 SINGAPORE (ICIS)–Evonik’s net income rose by around 69% year on year in the first quarter of this year amid higher selling prices at its performance materials and specialty additives businesses, the German specialty chemicals maker said on Friday. Asia glycerine gains on demand; arbitrage window to Europe opens By Helen Yan 06-May-22 14:04 SINGAPORE (ICIS)–Asia’s spot glycerine prices increased on the back of improving demand, with the arbitrage window to Europe expected to remain open in the near term. Trinseo expects Q2 earnings to resemble Q1 By Al Greenwood 06-May-22 09:54 HOUSTON (ICIS)–US-based styrenics and engineered materials producer Trinseo expects its second-quarter earnings to be similar to those in the first quarter, the CEO said on Thursday. China’s propylene market in stalemate on strong costs, weak demand By Yi Liang 06-May-22 13:35 SINGAPORE (ICIS)–Propylene prices in China’s Shandong province fluctuated in a narrow range in late April on cost pressures and bearish downstream demand, after rallying from the recent low seen on 17 March, alongside the crude slumps. INSIGHT: Crude-led inflation surge sparks global monetary tightening By Nurluqman Suratman and Pearl Bantillo 05-May-22 18:01 SINGAPORE (ICIS)–Strong crude prices amid the Russia-Ukraine war have been fuelling unprecedented spikes in inflation, which major economies around the world set out to tame by raising interest rates, some more aggressively than others, while a few are hoping to wait it out as much as possible. China’s PP futures surge 2.51% on rising crude futures By Zhibo Xiao 05-May-22 15:59 SINGAPORE (ICIS)–China’s polypropylene (PP) futures prices rose by 2.51% on Thursday on the back of rising crude futures values. British gas NBP prompt to deliver below May ’22 on oversupply risk By Kaja Sillett 05-May-22 13:00 LONDON (ICIS)–LNG arrivals, mild forecasts and high storage fullness should see British gas prompt products remain below front-month indications at the NBP through the rest of May, after flipping beneath in April. Shell Q1 chemicals earnings rise 49.6% despite lower sale volumes By Nurluqman Suratman 05-May-22 14:53 SINGAPORE (ICIS)–Shell’s chemicals and products unit posted a 17.7% year-on-year increase in its first-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), despite lower chemical sales volumes, the energy firm said on Thursday. S Korea’s Kumho Petrochemical Q1 net profit falls 22%; sales up 19% By Pearl Bantillo 04-May-22 17:42 SINGAPORE (ICIS)–South Korean synthetic rubber giant Kumho Petrochemical reported on Wednesday a 22% year-on-year decline in first-quarter net profit despite a double-digit sales growth. Philippines’ Petron Q1 profit surges; petrochemical sales up 30% By Pearl Bantillo 04-May-22 13:54 SINGAPORE (ICIS)–Petron’s first-quarter net profit more than doubled year on year to pesos (Ps) 3.6bn ($69m) on the back of strong crude prices, the Philippines’ sole refiner said on Wednesday. Oil rises more than $1/bbl on supply worries; China woes cap gainsBy Nurluqman Suratman 04-May-22 12:54 SINGAPORE (ICIS)–Oil prices rose by more than $1/bbl on Wednesday on concerns over tight supply after industry data showed a drop in US crude and fuel inventories last week, but worries over poor manufacturing data from China capped gains. Methanex stands to benefit from market impacts of Ukraine war By Stefan Baumgarten 28-Apr-22 15:22 TORONTO (ICIS)–Methanex is benefiting from the market-related impacts of the ongoing Ukraine war and the sanctions imposed on Russia, the CEO of the Canada-based international methanol producer said on Thursday. Thai SCG Q1 net profit falls 41% on chemical margin squeeze By Pearl Bantillo 28-Apr-22 14:59 SINGAPORE (ICIS)–Thai conglomerate Siam Cement Group’s (SCG) first-quarter net profit declined by 41% year on year on squeezed chemical margins due to high feedstock cost amid weak China demand. Asia biodiesel buy/sell gap widens on CPO price surge By Felicia Loo 28-Apr-22 16:45 SINGAPORE (ICIS)–Asia’s palm methyl ester (PME) biodiesel faces a gaping buy/sell gap, a trend expected to persist after Indonesia announced its ban on feedstock crude palm oil exports. Asia palm shipping market cautious after Indonesia’s export ban By Luffy Wu 28-Apr-22 16:25 SINGAPORE (ICIS)–The Asia palm shipping market is taking a cautious stance after Indonesia announced an export ban from 28 April on domestic cooking oil and refined, bleached and deodorised (RBD) palm olein, with an extension of the ban to crude palm oil (CPO). Tight fuel ethanol supply to SE Asia persists; spot prices firm By Bonnie Yin 28-Apr-22 16:24 SINGAPORE (ICIS)–Import supply of fuel ethanol in southeast (SE) Asia tightened on limited feedstock availability and improved demand from other regions, with market indications higher. Asia Group II base oils supply short in Q2, China demand stifled on lockdowns By Matthew Chong 28-Apr-22 15:12 SINGAPORE (ICIS)–Asia’s Group II base oils supply is expected to remain tight for the rest of the second quarter on reduced production. Asia’s soap noodles to see upward pressure as Indonesia extends export ban to CPO By Helen Yan 28-Apr-22 13:22 SINGAPORE (ICIS)–Asia’s soap noodles market is expected to see upward price pressure in the near term following the announcement by Indonesian authorities on 27 April, to extend the export ban on cooking oil to include crude palm oil (CPO) exports. Asia SBR spot discussions may waver with increased China exports By Ai Teng Lim 28-Apr-22 09:24 SINGAPORE (ICIS)–Asian spot import prices for styrene butadiene rubber (SBR) are losing some ground as more, and competitively-priced, materials emerged from China. Europe petchems face higher gas prices as Gazprom halts supplies to Poland, Bulgaria By Jonathan Lopez 27-Apr-22 11:50 MADRID (ICIS)–European petrochemicals players could face even higher gas prices after Russia’s state-owned Gazprom said it was halting deliveries to Poland and Bulgaria. Natural gas prices shot up nearly 20% in European morning trading after Russia demanded its gas supplies to Poland and Bulgaria are paid for in roubles (Rb) instead of US dollars. Bulgaria’s gas supply also to be halted from Russia, following Poland By Ruth Liao, Aura Sabadus 27-Apr-22 03:22 HOUSTON AND LONDON (ICIS)-Bulgaria’s gas supply from Russian producer Gazprom will be suspended starting 27 April, according to a statement from the country’s energy minister on 26 April. This follows earlier news from Poland’s PGNiG that Gazprom was also suspending its volumes through the Yamal pipeline. The Bulgarian energy minister’s statement said state company Bulgargaz and Bulgarian Energy Holding (BEH) found that the Russian decree to pay in roubles was not in line with their expiring contract and posed significant risks to the country. The statement said the ministry of energy, BEH and transporter Bulgartransgaz have taken measures to make alternative gas supply arrangements and no restrictive measures would be required for the country’s consumption. Asia’s volatile supply conditions for caustic soda may persist amid China lockdowns By Jonathan Chou 27-Apr-22 15:20 SINGAPORE (ICIS)–Asia’s supply conditions for liquid caustic soda could remain unpredictable in the near term amid uncertain supply conditions caused by continued lockdowns in China. France’s Air Liquide Q1 revenue rises 29.1% on surge in energy prices By Nurluqman Suratman 27-Apr-22 15:20 SINGAPORE (ICIS)–Air Liquide’s revenue rose by 29% year on year in the first quarter of this year, reflecting the sharp rise in energy prices contractually passed on to Large Industries customers, the French industrial gases and services firm said on Wednesday. Japan’s Toyota FY2021 global output surges, domestic production slumps By Nurluqman Suratman 27-Apr-22 15:05 SINGAPORE (ICIS)–Japan’s automaker Toyota on Wednesday said that its worldwide production surged to 8.57m units in the year ending 31 March 2022 but domestic output slumped to a 45-year low. Norway’s Yara Q1 net income surges on higher prices By Nurluqman Suratman 27-Apr-22 14:47 SINGAPORE (ICIS)–Yara’s net income surged to $947m in the first quarter of this year, reflecting higher selling prices which more than offset higher natural gas costs, the Norwegian fertilizer major said on Wednesday. Indonesia’s ban on RBD palm olein to see limited impact on oleochemical market By Helen Yan 27-Apr-22 12:25 SINGAPORE (ICIS)–Indonesia’s ban on domestic cooking oil and refined, bleached and deodorised (RBD) palm olein is expected to have limited impact on the oleochemical market as players adopt a wait-and-see stance. INSIGHT: China PP exports to rise in May on new start-ups, stronger US dollar By Lucy Shuai 27-Apr-22 12:00 SINGAPORE (ICIS)–China’s polypropylene (PP) imports and exports both fell in the first quarter of 2022. The volume of imports may remain low, but exports are likely to rise in the near term. Asia MPG sentiment to weaken further amid sellers’ competition By Jasmine Khoo 27-Apr-22 11:34 SINGAPORE (ICIS)–Asian market sentiment for monopropylene glycol (MPG) in May is poised to weaken from a persistently widening gap between Chinese origin industrial-grade propylene glycol (PGI) cargoes and those of other regional origin. China’s April Group II base oils imports expected to slump on negative margins By Whitney Shi 26-Apr-22 18:20 SINGAPORE (ICIS)–China’s Group II base oils imports started to drop in March and are expected to fall sharply in April, in response to deeper negative import margins from March-April. SE Asia-China methanol arbitrage window opens, demand uncertain By Keven Zhang 26-Apr-22 13:42 SINGAPORE (ICIS)–Losses in the key China market exerted downward pressure on methanol prices in southeast Asia, as the arbitrage window between the two regions opened. Northeast Asia Power Play: The struggle between nuclear, coal and gas generation at record LNG prices By Alex Siow 26-Apr-22 12:44 In the face of record high LNG spot prices – and strong prices across commodities – ICIS have noticed that the three major baseload fuel of nuclear, coal and LNG seemed to be struggling to meet demand. In Japan and South Korea, the much-needed additional nuclear generation, has again been delayed while gas and coal ability to respond is limited. Global EDC supply may stay tight despite rising Asian availability By Jonathan Chou 26-Apr-22 12:29 SINGAPORE (ICIS)–While spot ethylene dichloride (EDC) supply within Asia may increase, availability from the US and Europe is expected to remain curtailed due to an ongoing force majeure declaration and higher production costs respectively. Netherlands working on Russian fuel independence by end of 2022 By Arlind Neziri 25-Apr-22 11:27 LONDON (ICIS)–The Dutch government is working on making the Netherlands independent from Russian fossil fuels by the end of 2022, according to a 22 April announcement. Oil flows ongoing despite Bryansk explosions – trader By Richard Price 25-Apr-22 07:08 LONDON (ICIS)–Explosions shook two oil facilities in the western Russian city of Bryansk early on Monday, home to a section of the Druzhba pipeline – a key export route for Russian crude headed to Europe. German regulator begins gas consumption survey to prepare for supply shortages By Eduardo Escajadillo 22-Apr-22 12:39 LONDON (ICIS)–The German Federal Network Agency (BNetzA) is to start gathering data from grid operators and large consumers in the THE market area, as a part of the first early warning level of the country’s gas emergency plan , the regulator announced on 21 April. UK grid constraints could limit export potential to Europe By Rob Dalton 22-Apr-22 12:29 LONDON (ICIS)–UK grid and export constraints could limit the country’s ability to maximise its potential as an LNG import location for onward supply to Europe this summer, as the continent strives to meet EU-proposed storage obligations by autumn. Danish storage to lean on tight German supply By Daniel Muir 22-Apr-22 11:49 LONDON (ICIS)–Danish gas stores may be facing a 175mcm gap going into gas winter, according to ICIS analysis. India market softens on Russian supplies, China lockdown By Keven Zhang 22-Apr-22 07:22 SINGAPORE (ICIS)–Trades for methanol into India were concluded at lower levels, with extensive volumes of Russian spot cargoes arriving in May. Eurozone manufacturing nearly stalls in April as war worsens bottlenecks By Jonathan Lopez 22-Apr-22 05:56 MADRID (ICIS)–Manufacturing activity across the eurozone nearly stalled in April as supply chain bottlenecks worsened because of the Russian invasion of Ukraine, according to the S&P Global PMI index. INSIGHT: Upstream, energy volatility drives demise of the quarterly contract By Will Beacham 22-Apr-22 05:26 BARCELONA (ICIS)–A large scale switch from quarterly to monthly contracts is under discussion in Europe, driven by extreme volatility in upstream feedstock and energy costs. China firms eyed as Shell markets its share in Sakhalin-2 LNG project By Roman Kazmin 22-Apr-22 15:55 SINGAPORE (ICIS)–The share of Shell’s stake in the Sakhalin Energy Sakhalin-2 LNG project in the Russian far east could be sold to Chinese energy companies, a Moscow-based source confirmed to ICIS on 22 April. Asia PBT demand tepid, margins stay tight By Clive Ong 22-Apr-22 11:52 SINGAPORE (ICIS)–The Asian polybutylene terephthalate (PBT) market remains under downward pressure with demand on the wane, while sellers expect limited improvement in margins for the near term. US PPG Q1 income falls on higher costs, supply chain disruptions and geopolitical impacts By Adam Yanelli 21-Apr-22 16:26 HOUSTON (ICIS)–US PPG saw a decrease in year-on-year income for Q1 on higher costs, ongoing supply chains constraints, the initial impacts from Russia’s invasion of Ukraine and increasing COVID-19 restrictions in China, the paints and coatings producer said on Thursday. INTERVIEW: Chemicals M&A activity to slow on Russia/Ukraine war, inflation impact – banker By Joseph Chang 21-Apr-22 15:48 NEW YORK (ICIS)–Chemicals mergers and acquisitions (M&A) activity in 2022 will likely slow from the strong pace in 2021 on heightened energy volatility and economic uncertainty from the Russia/Ukraine war along with higher interest rates and other factors, an investment banker said on Thursday. INSIGHT: Early US chem earnings show resilience amid war By Al Greenwood 21-Apr-22 11:10 HOUSTON (ICIS)–US chemical earnings covering the first months of 2022 have shown resilience, and companies have seen demand hold up despite inflation and the start of Russia’s invasion of Ukraine. Dutch AkzoNobel Q1 profit shrinks 29% amid supply chain disruptions By Pearl Bantillo 21-Apr-22 15:17 SINGAPORE (ICIS)–AkzoNobel’s first-quarter net profit fell by 29% year on year as sales volumes dipped 7% due to continued supply constraints, with negative impact from the Russia-Ukraine war and COVID-19 restrictions in China Indian NBR import discussions gain on supply constraints By Ai Teng Lim 21-Apr-22 15:50 SINGAPORE (ICIS)–Indian import discussions for acrylonitrile-butadiene-rubber (NBR) are gaining ground, as cargo availabilities of deep-sea origin dwindle, prompting buyers with concrete requirements to raise bids and secure replacement volumes from Asia. China’s offshore oil giant CNOOC shares gain 28% at Shanghai debut By Fanny Zhang 21-Apr-22 16:39 SINGAPORE (ICIS)–The share price of China’s biggest offshore oil producer, CNOOC, gained 27.7% over their initial public offering (IPO) of yuan (CNY) 10.8/share at their debut on China’s A-share market, in contrast to a 2.3% slump in the Shanghai composite index on Thursday. INSIGHT: Will growing US LNG exports erode petchem feedstock advantage? By Joseph Chang 20-Apr-22 14:18 NEW YORK (ICIS)–It was back in 2013 at the start of the US liquefied natural gas (LNG) building boom when several US chemical and other manufacturing company executives came out against exports, arguing that the country would be shipping away its feedstock advantage overseas. CRUDE SUMMARY: Oil prices volatile as demand concerns dominate sentiment By Barney Gray 20-Apr-22 14:11 LONDON (ICIS)–Oil prices were in negative territory for most of Wednesday, spurred by weak demand signals from the US Energy Information Agency (EIA) offsetting bullish supply indicators. However, a late rally left crude prices comparatively flat on the day. ICIS VIEW: UK can become key LNG conduit for continent but faces capacity restrictions By Rob Dalton 20-Apr-22 10:58 LONDON (ICIS)–The UK has emerged as a strong contender to be a key supplier of gas to mainland Europe this summer as infrastructure constraints combine with new EU storage obligations and favourable locational spreads. Russia eases restrictions on fertilizer exports By Deepika Thapliyal 20-Apr-22 10:00 LONDON (ICIS)–In Russia, the government has eased restrictions on fertilizer exports by raising export quotas for producers by nearly 700,000 tonnes until 31 May, according to a resolution signed by Prime Minister Mikhail Mishustin. Germany on track to meet gas storage targets with current injection rates By Arlind Neziri 20-Apr-22 09:55 LONDON (ICIS)–Current German gas injection rates, which have seen fullness rise four percentage points this month to 26%, could lead to Germany meeting its mandated storage targets in August and October, if sustained. Germany’s producer prices jump 30.9% in March on Ukraine war impact By Stefan Baumgarten 20-Apr-22 09:04 LONDON (ICIS)–Producer prices in Germany rose 30.9% year on year in March, the highest increase since 1949 when the country’s statistical agency began tracking the data, it said. Russia’s petchems, crude and LPG export duties down in May By Sergei Blagov 20-Apr-22 06:09 MOSCOW (ICIS)–Russia’s export duties levied on some petrochemicals products and crude oil will decrease in May. EU car sales fall in March as war in Ukraine impacts auto production By Morgan Condon 20-Apr-22 06:08 LONDON (ICIS)–Car sales in the EU fell in March and for the first quarter overall compared to the previous year, the European Automobile Manufacturers’ Association (ACEA) said. France’s chemicals sales up 6% in 2021 but slowdown expected on energy costs, geopolitical woes By Jonathan Lopez 20-Apr-22 05:49 MADRID (ICIS)–France’s chemicals sales – including pharmaceuticals – rose by 6% in 2021, year on year, to €69bn, the country’s trade group France Chimie said . Malaysia exports more palm oil in Q1 on sunflower oil disruption By Helen Yan 20-Apr-22 03:35 SINGAPORE (ICIS)–Supply disruption of edible vegetable sunflower oil due to the Russia-Ukraine conflict and restrictions on palm oil exports to the US have seen Malaysia diversifying and increasing its palm oil exports to other countries and regions. CRUDE SUMMARY: Crude plummets on fears of lower growth forecasts By Cecilia Barreiro 19-Apr-22 14:08 LONDON (ICIS) – Oil prices eroded from Monday’s rally on concerns over demand growth after the IMF said the global economy will strongly decelerate in 2022 because of Russia’s invasion of Ukraine. These projections were enough to offset bullish pressures stemming from a wave of closures at Libya’s oilfields and the reopening of China’s manufacturing plants across Shanghai. Germany’s Henkel prepares Russia exit amid growing pressure on firms to leave By Stefan Baumgarten 19-Apr-22 12:32 LONDON (ICIS)–Henkel is preparing to exit its business in Russia, where it employs about 2,500 people, the Germany-based international adhesives and detergents major said. Gazprom’s gas production stable, European piped exports drop in Q1 2022 By Diane Elijah 19-Apr-22 10:28 LONDON (ICIS)–Russian producer Gazprom’s gas production between 1 January and 15 April amounted to 155.9 billion cubic metres (bcm), or 1.3% more than in the same period last year, the state-controlled company announced on its Telegram channel. INSIGHT: Record natgas prices are raising costs for US chemical producers By Al Greenwood 19-Apr-22 10:26 HOUSTON (ICIS)–Prices for natural gas are hitting highs not seen since 2008, raising feedstock and energy costs for petrochemical producers. Russian coal ban puts bullish pressure on German gas Cal ‘23 By Eduardo Escajadillo 19-Apr-22 10:12 LONDON (ICIS)–The EU ban on Russian coal imports may support the Calendar Year 2023 contract on the German THE hub, ICIS analysis shows. Baltic states look to LNG in push to diversify from Russian gas supply By Daniel Muir 19-Apr-22 10:04 LONDON (ICIS)–Latvia, Estonia and Finland would have to collectively replace around 3.4 billion cubic metres (bcm)/year of Russian piped gas if they were to eliminate Russian imports. Poland-Belarus border paraffin wax prices up, deliveries from Russia drying up By Cameron Birch 19-Apr-22 10:03 LONDON (ICIS)–Spot prices for semi-refined paraffin wax at the Poland-Belarus border were assessed higher by triple digits amid continued strong levels of demand and a worsening supply picture. Supply chain woes to worsen, high food prices potentially ‘tragic’ – ICIS economist By Jonathan Lopez 19-Apr-22 15:05 MADRID (ICIS)–The war in Ukraine is set to worsen supply chain woes for the rest of 2022 while the hike in food prices as fertilizers values rocket could have “tragic” consequences in emerging countries, according to an economist at ICIS. Kevin Swift, Senior Economist for Global Chemicals at ICIS, said the EU’s proximity to Russia puts the 27-country bloc at high risk of an energy crisis if supplies of crude oil or natural gas were to be halted. Europe, developing economies to bear brunt of Ukraine war hit – IMF By Jonathan Lopez 19-Apr-22 15:00 MADRID (ICIS)–European and developing economies are to bear the brunt of the economic hit caused by Russia’s invasion of Ukraine as the world economy yet again experiences “a major shock”, the International Monetary Fund (IMF) said on Tuesday. In its April World Economic Outlook (WEO) projections, the IMF sharply reduced its global GDP growth forecast for 2022 by 0.8 percentage points to 3.6%; the world economy grew by 6.1% in 2021. US gas futures surge on supply concerns By Ruth Liao 18-Apr-22 23:18 HOUSTON (ICIS)–The US gas futures front-month contract continued to gain upward momentum, as the May ’22 contract on the NYMEX broke through $8.00/MMBtu on Monday during intraday trading. The NYMEX front month settled at $7.82/MMBtu, buoyed by supply concerns mainly from limited upstream growth and facing multi-year lows in storage levels. Germany bets on floating LNG import terminals, environmentalists sceptical By Stefan Baumgarten 15-Apr-22 09:21 LONDON (ICIS)–Germany’s government is seeking to rent floating liquefied natural gas (LNG) import terminals to quickly move away from Russian gas – but critics warn of a lack of transparency and environmental impacts. US natural gas reaches new record high on tight supply By Fauzeya Rahman 14-Apr-22 17:47 HOUSTON (ICIS)–US natural gas prices reached new multi-year highs on Thursday as tight production coupled with April weather-driven demand boosted the Henry Hub benchmark. US oil, natgas drillers add rigs as energy prices continue to soar By Adam Yanelli 14-Apr-22 15:22 HOUSTON (ICIS)–US oil and natural gas drillers each added two new wells this week amid volatile energy markets boosted by supply concerns. CRUDE SUMMARY: Oil prices up on Russian rhetoric By Barney Gray 14-Apr-22 14:11 LONDON (ICIS)–Crude prices were up as the impending loss of up to 3m bbl/day of Russian output in May offset bearish factors. Europe plans to increase regasification capacity as it pivots away from Russian gas By Hal Brown 14-Apr-22 11:11 LONDON (ICIS)–Since Russia’s invasion of Ukraine, Europe has announced its intention to develop an additional LNG import capacity of around 33mtpa with reports of new projects coming through regularly. Tightening supply may limit European gas storage injections in April By Gretchen Ransow 14-Apr-22 11:06 LONDON (ICIS)–Constrained Norwegian supply and limited wind generation are likely to cap storage injections in the latter part of April. France issues demand side response rules to mitigate potential gas supply disruptions By Andrea Battaglia 14-Apr-22 11:03 LONDON (ICIS)–The French transmission system operator could ask large gas consumers with consumption exceeding 5GWh per year – roughly 0.5million cubic metres (mcm), including gas-fired power plants and industrial consumers, to reduce or fully halt their gas consumption in case of extreme supply tightness, according to a new law decree published on 8 April. France’s new LNG project could curb interest in MidCat pipeline By Andrea Battaglia 14-Apr-22 10:59 LONDON (ICIS)–As Europe seeks ways to reduce its dependence on Russian gas, political leaders in France and Spain recently mulled a revival of the Midi-Catalunia (MidCat) pipeline project, aiming to increase the interconnection capacity of the Iberian Peninsula. EU calls for full embargo of Russian energy, fast-tracks adoption of new storage rules By Diane Elijah 14-Apr-22 10:26 LONDON (ICIS)–The European Parliament called for additional sanctions against Russia including an immediate full embargo on Russian oil, coal, gas and nuclear fuel, in a non-binding resolution adopted with a vast majority on 7 April. Europe’s gas-to-coal switch profitable despite Russian coal ban By Raymond Shi 14-Apr-22 10:15 LONDON (ICIS)–Europe’s clean dark spreads are likely to remain profitable enough to encourage gas-to-coal fuel switching in the medium term, despite an incoming blanket ban on coal imports from Russia. US New Fortress plans US Gulf Fast LNG project By Fauzeya Rahman 14-Apr-22 09:58 HOUSTON (ICIS)–US developer New Fortress wants to build a 2.8mtpa offshore LNG export plant in the US Gulf and start operations by the first quarter of 2023. Covestro’s Steilemann warns of consequences of embargo on Russian gas By Nigel Davis 14-Apr-22 09:29 LONDON (ICIS)–An immediate embargo on natural gas from Russia would be short-sighted and threaten entire production and supply chains and thousands of jobs, Covestro CEO and VCI president elect, Markus Steilemann, has warned. Asia’s PBT holds steady while demand remains tepid By Clive Ong 14-Apr-22 17:14 SINGAPORE (ICIS)–The Asian polybutylene terephthalate (PBT) market was stable amid thin trade. Demand in Asia remains soft with uncertainty expected to stay elevated in the near term. NE Asia ethylene downcast; China demand to stay weak By Yeow Pei Lin 14-Apr-22 12:03 SINGAPORE (ICIS)–Northeast Asia’s spot ethylene prices fell for a second week, hobbled by deeper downstream output cuts in China amid COVID-related logistic bottlenecks. India March exports hit record high; fertilizer imports up eightfold By Priya Jestin 14-Apr-22 16:19 MUMBAI (ICIS)–India’s exports in March rose 19.8% year on year to $42.2bn – exceeding the $40bn mark for the first time – on continued increase in demand for its engineering goods and petroleum products. Singapore tightens monetary policy as inflation threatens economy By Nurluqman Suratman 14-Apr-22 14:01 SINGAPORE (ICIS)–The Monetary Authority of Singapore (MAS) will allow the Singapore dollar to appreciate against a basket of trade-weighted currencies to tackle rising domestic inflation, which threatens economic growth this year. Singapore Q1 GDP moderates to 3.4% amid manufacturing slowdown By Nurluqman Suratman 14-Apr-22 10:46 SINGAPORE (ICIS)–Singapore’s economy grew by 3.4% year on year in the first quarter, moderating from the 6.1% expansion in the fourth quarter of 2021, amid a slowdown in manufacturing, official advance estimates showed on Thursday. US natgas rises to just under $7.00/MMBtu on supply concerns By Ruth Liao 13-Apr-22 17:07 HOUSTON (ICIS)–US gas futures soared nearly 5% higher on Wednesday amid supply concerns, as the Henry Hub front-month contract briefly crossed over the $7.00/MMBtu mark during trading before settling just below. US crude futures surge $3.65/bbl on supply concerns By Ignacio Sotolongo 13-Apr-22 15:12 HOUSTON (ICIS)–NYMEX WTI crude futures for May delivery extended the previous session’s rally and recouped all of the previous week’s losses, settling at $104.25/bbl, up $3.65, as the loss of Russian oil exports due to sanctions will start impacting global supplies in May. CRUDE SUMMARY: Oil prices continue firming on the loss of Russian crude supplies in May By Barney Gray 13-Apr-22 14:22 LONDON (ICIS)–A demonstrable lack of progress in ending the Russia-Ukraine war has offset bearish US inventory data, as the market braces itself for the loss of up to 3m bbl/day from Russia in May. Grupa Azoty unaffected by EU sanctions on stakeholder – company By Will Conroy 13-Apr-22 10:35 LONDON (ICIS)–Poland’s Grupa Azoty on Tuesday said in a statement that sanctions imposed by the EU and other western powers on Russian oligarch Viatcheslav Kantor, who indirectly owns 19.82% of the company, are not expected to have an impact on its operations. Crude demand hit by China lockdowns, Russian supply to be 1.5m bbl/day lower in April – IEA By Jonathan Lopez 13-Apr-22 10:15 MADRID (ICIS)–Severe lockdowns implemented in China to contain the spread of the pandemic are set to reduce global crude oil demand this year, the International Energy Agency (IEA) said. Canada’s central bank hikes key rate as Ukraine war accelerates inflation By Stefan Baumgarten 13-Apr-22 10:08 TORONTO (ICIS)–Canada’s central bank on Wednesday raised its target for the overnight lending rate by 50 basis points, to 1.0% from 0.5%, and said rates would need to be further increased to curb rising inflation. German institutes slash GDP forecast, Russian gas halt would spark recession By Stefan Baumgarten 13-Apr-22 08:38 LONDON (ICIS)–Leading German economic research institutes have slashed their 2022 forecast for the country’s economic growth – and are warning that a sudden interruption of Russian gas supplies would lead to a recession. Russia’s naphtha exports down sharply in March as buyers turn away – IEA By Jonathan Lopez 13-Apr-22 06:51 MADRID (ICIS)–Petrochemicals companies in Europe and most major markets shunned naphtha from Russia during March, as sanctions against the country were announced, the International Energy Agency (IEA) said. Asia MEG discussions slip to lowest in 2022 as demand deteriorates By Judith Wang 13-Apr-22 17:45 SINGAPORE (ICIS)–Asia’s monoethylene glycol (MEG) discussions slipped to their lowest levels since the beginning of the year, as downstream demand deteriorated amid further operation cuts from major polyester producers. Affordability could derail the role of gas in India’s energy transition By Joachim Moxon 13-Apr-22 16:5 Winter is over, but the start of spring has brought little relief to a stretched global LNG market. In late January, ICIS assessments for delivery to India briefly touched below $20/MMBtu for March delivery and this now seems as low as it will get for spot prices in 2022. Asia naphtha jumps on crude oil gains; shrugs off thin demand By Melanie Wee 13-Apr-22 13:28 SINGAPORE (ICIS)–Asia’s naphtha prices jumped on Wednesday, tracking crude gains, but the market is poised for volatility against a backdrop of cautious demand as supply concerns loom. US crude futures surge $6.31/bbl on OPEC warning By Ignacio Sotolongo 12-Apr-22 16:09 HOUSTON (ICIS)–NYMEX WTI crude futures for May delivery settled at $100.60/bbl, up $6.31, in response to OPEC’s monthly report warning that Russian oil and gas exports will be impossible to replace if sanctions for Russia’s invasion of Ukraine target energy. US to allow sales E15 gasoline this summer to help reduce gasoline prices By Adam Yanelli 12-Apr-22 15:51 HOUSTON (ICIS)–The US plans to increase domestic fuel supplies by authorizing E15 gasoline – gasoline blended with 15% ethanol – to be sold this summer. German chems can cope without Russian coal – VCI By Stefan Baumgarten 12-Apr-22 11:49 LONDON (ICIS)–Germany’s chemical industry can cope without supplies of coal from Russia, chemical producers’ trade group VCI said. Gas-to-coal fuel switching to remain profitable despite Russian coal import ban By Raymond Shi 12-Apr-22 10:33 LONDON (ICIS)–Clean dark spreads are likely to remain profitable enough to encourage gas-to-coal fuel switching in the medium term, despite an incoming blanket ban on coal imports from Russia. Russian urea exports to Brazil halve in Q1 By Deepika Thapliyal 12-Apr-22 10:23 LONDON (ICIS)–In Brazil, imports of urea from Russia declined 53% in the first quarter, while total imports were at over 1.6m tonnes, down 17% from nearly 2m tonnes in the same period of 2021, according to the ICIS Supply and Demand Database. Germany’s March chem wholesale prices jump 40.1% on war impact By Stefan Baumgarten 12-Apr-22 09:51 LONDON (ICIS)–Chemical wholesale prices in Germany kept rising sharply in March – 40.1% year on year and 6.7% month on month – according to the latest data from the country’s federal statistics agency. Ukraine crisis to hit global growth but refinery margins soar in March – OPEC By Tom Brown 12-Apr-22 08:59 LONDON ICIS)–OPEC on Tuesday revised down global GDP growth expectations for the year from 4.2% to 3.9% on the back of the invasion of Ukraine, while a growing supply-demand imbalance drove refinery margins to the highest levels since the pandemic last month, according to the group. PODCAST: Europe buyers look to Asia as logistics crisis persists By Will Beacham 12-Apr-22 08:05 BARCELONA (ICIS)–Downstream customers in Europe are seeking new supplies of chemicals from Asia as they avoid high prices and Russian material, but the global logistics crisis may persist for the rest of the year. Most European urea imports up in 2021; Russian imports to fall on sanctions By Deepika Thapliyal 12-Apr-22 07:00 LONDON (ICIS)–Urea imports rose for most European countries in 2021 despite prices being at record highs, except for some including Spain and the UK, which saw slight year-on-year declines. German economic sentiment sinks further in April, stagflation on the horizon – Zew By Tom Brown 12-Apr-22 06:21 LONDON (ICIS)–Expectations for Germany’s economic growth sank further in April compared to the previous month, with the assessment of future prospects falling further and expectations that the next half-year could see the country descend into stagflation, institute Zew said. Demand slowdown weighs on Asia polyester talks; outlook bearish By Judith Wang 12-Apr-22 16:48 SINGAPORE (ICIS)–The overall demand slowdown in China has weighed on polyester discussions, while major polyester producers in China are cutting operations amid rising inventories and a bearish market outlook. China petrochemicals supply chain struggles amid pandemic curbs By Fanny Zhang 12-Apr-22 14:33 SINGAPORE (ICIS)–China’s entire petrochemical supply chain is facing strong headwinds due to tough pandemic-related restrictions in place at various production hubs, including Shanghai. Oil rises more than $2/bbl on OPEC tight supply warning By Nurluqman Suratman 12-Apr-22 13:21 SINGAPORE (ICIS)–Oil prices rose more than $2/bbl on Tuesday, reversing sharp losses in the previous session, after OPEC warned it would not be able to replace supply lost from Russia due to sanctions. China March vehicle markets slump; sales down 11.7% on year By Fanny Zhang 12-Apr-22 11:59 SINGAPORE (ICIS)–China’s vehicle markets took hits from increasing outbreaks of COVID-19 in March, with sales down by 11.7% year on year to 2.23m and production losing 9.1% to 2.24m units, official industrial data showed on Monday. US gas futures rise nearly 6%, hit highest level since 2008 By Ruth Liao 11-Apr-22 17:21 HOUSTON (ICIS)–US natural gas futures on the NYMEX scaled higher to $6.64/MMBtu on Monday, the highest front-month settlement for the Henry Hub benchmark since October 2008. US crude futures slide $3.97/bbl on length liquidation By Ignacio Sotolongo 11-Apr-22 15:13 HOUSTON (ICIS)–NYMEX WTI crude futures for May delivery settled at $94.29/bbl, down $3.97/bbl, on market sentiment that the co-ordinated effort by members of the International Energy Agency (IEA) to release barrels from strategic petroleum reserves will help alleviate the loss of Russian barrels. BASF projects Q1 profit drop on Wintershall Dea Nord Stream 2 loan write-downs By Tom Brown 11-Apr-22 11:02 LONDON (ICIS)–BASF’s first-quarter net income is likely to fall substantially year on year, largely on the back of impairments related to its Wintershall Dea oil and gas joint venture unit, particularly on loans to the presently-halted Nord Stream 2 pipeline, the Germany-based firm said. OGE plans construction of pipeline link for Wilhelmshaven LNG terminal By Eduardo Escajadillo 11-Apr-22 10:59 LONDON (ICIS)–Germany’s Open Grid Europe (OGE) intends to complete the connection line for the floating storage regasification unit (FSRU) at Wilhelmshaven by the end of 2022, the company announced over the weekend. North Sea oil market slump challenges tight supply narrative By Richard Price 11-Apr-22 10:00 LONDON (ICIS)–Crude oil’s meteoric rise to $140/bbl after Russia’s invasion of Ukraine pointed to the tightest market in decades. However, signals in the physical market and newly emerging demand concerns have seen sentiment reshape. The reality is that Russian crude has still been finding its way into the European refining ecosystem, but these volumes should wane throughout April. Dow acquires stake in LNG import terminal in Stade, Germany By Jonathan Lopez 11-Apr-22 09:51 MADRID (ICIS)–Dow has acquired a stake in Hanseatic Energy Hub GmbH (HEH), a consortium building a liquefied natural gas (LNG) terminal on its Stade facilities in Germany, the US chemicals major said. Suspended German coal phase-out could save 2bcm of gas in 2023 By ICIS Editorial 11-Apr-22 09:09 LONDON (ICIS)–Suspending Germany’s coal phase out by two years would limit demand for natural gas by 2 billion cubic metres (bcm) in 2023, according to ICIS modelling. Russia among top three urea exporters to the US in January-February By Deepika Thapliyal 11-Apr-22 08:17 LONDON (ICIS)–In the US, urea imports were at 870,551 tonnes in January-February, up 16% from 749,060 tonnes in the same period of 2021, according to the ICIS Supply and Demand Database. INEOS calls on UK government to allow test fracking site By Tom Brown 11-Apr-22 07:02 LONDON (ICIS)–INEOS has requested that the UK government allow it to develop a shale gas test site in the country, a year and a half after writing down the value of its exploration assets in the space after the country declared a moratorium on fracking. March IPEX up 8.6% on firming prices in northeast Asia, US Gulf By Miguel Rodriguez Fernandez 11-Apr-22 18:14 LONDON (ICIS)–The ICIS Petrochemical Index (IPEX) rose by 8.6% month on month in March, as rising feedstock crude oil and energy prices pushed petrochemicals and plastics prices higher globally. Asian MEK soars to new high on US, Europe demand By Julia Tan 11-Apr-22 17:46 SINGAPORE (ICIS)–Asian methyl ethyl ketone (MEK) import markets continued to soar to new highs in the week ended 8 April, as demand from the US and Europe kept trading levels high and selling pressure low despite tepid demand from Asia. China March petrochemicals track crude gains; lockdowns keep output low By Yvonne Shi 11-Apr-22 15:51 SINGAPORE (ICIS)–China’s petrochemical markets mainly tracked crude gains in March, with additional upward pressure from tighter supply on reduced local production due to pandemic-related lockdowns. Topic Page by Aura Sabadus and Will Beacham. Additional reporting by  Richard Ewing and Sophie Udubasceanu. Maps and graphs by Yashas Mudumbai.

LONDON (ICIS)–It had to happen eventually. Since late 2021, chemicals producers have been passing on substantial price increases to keep up with energy, raw material, and inflation costs, while multiple CEOs warned that, eventually, those cost increases would hit consumers. Chemicals producers are very early in the chain to products being completed and then sold, but signs are emerging from multiple sectors that those price increases are starting to be felt, and impact on demand at a point where costs of living are surging and consumer caution is increasing. A huge market sell-off that originated in the US and rippled through stock exchanges in Asia and Europe late last week was triggered by unexpectedly weak results from big-box retail chains in the country. Walmart adjusted full-year sales expectations and Target noted a “well below expectations” first quarter. Walmart’s CEO Carl Douglas McMillon stated on an earnings call that the firm was seeing margin erosion from customers prioritising food purchases over bigger-ticket items and less pressing spending on electronics and other capital goods. Another bleak note for the makers of capital goods and their suppliers was sounded by technology firm Cisco, which also reported a bearish outlook on the back of a logistics environment that has deteriorated further in the wake of the Russia-Ukraine war, and lockdowns in China. FOOD COSTS The darkening macroeconomic environment has resulted in a slight moderation of some commodity pricing, with the pace of crude price growth more muted despite some tightness in the chain, while remaining at high price levels relative to mid-2021. Both WTI and Brent benchmarks remain over $110/bbl. – A slight reduction in price pressures for raw materials could stand to reduce costs for chemicals producers, but is less likely to buoy consumer spending as food pricing has continued to rise, as highlighted by IMF chief Kristalina Georgieva, speaking at a World Economic Forum (WEF) panel this week. “We have commodity price shock in many countries, [and a] particular shock I want to bring your attention to is food prices … Because of that sense that maybe the economy’s getting into tougher waters,” she said. “The oil price went down, but food price continues to go up, up up. Why? We can shrink the use of petrol when growth slows down, but we have to eat every day.” European energy prices continue high as the continent tries to wean itself off Russian oil and gas imports in an extremely tight timeframe. Even the UK, which is less directly dependent on Russian natural gas but is more exposed as a consequence to open market pricing, is looking at a potential hike in the annual energy price cap to £2,800 per household in October, following a 50% increase to £1,970 last month. Jonathan Brearley, head of UK energy regulator Ofgem, described the current situation as a once-in-a-generation event, and warned that 12m people, close to a fifth of the whole country, could be pushed into fuel poverty by the hike. In the face of those projections, it seems trivial to draw attention to the prospect of lower spending on electronics, cars, and home decoration. However, the fact is that the higher costs chemicals firms have been pushing down the chain will push up the cost of those items at time when consumers are much less interested in buying them. Chemicals pricing 2020-2022 Source: ICIS Even if the energy crisis were resolved tomorrow, the long tail of value chain cost hikes from upstream to downstream means that those higher prices would be likely to remain through much of the year. As it is, chemical company executives will be eyeing a potential scenarios in the second half of the year where end user demand falls but production costs remain high. The IMF cut its global GDP growth expectations practically in half last month, from 6.1% to 3.6%, while the European Commission slashed its forecast for the EU in 2022 to 2.7% from 4%, noting that the war is sustaining economic headwinds that had been expected to subside. 3.6% is a long way from zero growth or recession, but the IMF’s Georgieva did not rule out a slip into negative growth for some regions. “What we may see is recession in some countries that … haven’t recovered from the previous crisis, highly dependent on energy imports from Russia or imports of food,” she said. The EU, with its crippling dependency on Russian energy and intricately woven food supply lines, fits that description extremely well. TWO-SPEED RECOVERY From a chemicals sector perspective, the outlook could be even darker, as a substantial driver of what growth there is is coming from the service sector. Recent purchasing managers’ index (PMI) data for the eurozone shows manufacturing growth close to a standstill, while service sector performance is more robust. This is an inverse of the situation during the pandemic when consumers, unable to travel or socialise, poured cash into new capital goods and home improvement. Now, after two years of being trapped at home, and facing the highest energy and inflation levels since the 1970s, consumers are prioritising what discretionary cash they do have for restaurants, concerts, and holidays. Commenting on recent French business climate data, ING economist Charlotte de Montpellier, noted that current indicators point to a two-speed economy, with services in the fast lane. “In the industrial sector where weaknesses are accumulating, we are seeing deteriorated prospects, falling foreign order books, weak demand due to high prices, and supply difficulties,” she noted. Over the last few years, the watchwords for the chemicals sector have been diversity and resilience, with firms moving to diversify their end-market exposure and targeting less cyclic portfolio mixes. SECTOR RESILIENCE Food and healthcare sector demand is likely to remain strong irrespective of the current economic storm, and shortages that have dogged certain sectors over the last few years may keep demand for some consumer goods stronger than it would have been. The semiconductor chip drought over the past two years has created pent-up demand for vehicles and consumer electronics that is likely to continue to filter through despite the current market climate. This is borne out by a less pessimistic view on exports from Germany’s automotive sector. The most recent survey by think tank Ifo showed that export optimism had improved slightly among manufacturers, despite little expectation of any improvement in the immediate future. This could speak to players adapting once more to the latest tumult for the global economy as much as any expectation that any of the current headwinds will subside any time soon. As much as anything else that industrial producers have learned since 2020, an ability to come to terms with and adapt to previously unthinkable market conditions may be one of the most fundamental. With a land war in Europe, food shortages, and energy conditions not seen since the fuel crisis of the 1970s, following straight on the heels of a global pandemic, company responsiveness may be an even greater competitive differentiator than forward planning. Insight article by Tom Brown

China’s consumption of crude has softened as industrial production is hit by pandemic-related restrictions in place since February, with no sign of the government giving up on its zero-COVID policy. Crude imports for the year are projected to grow at the second-slowest pace in over two decades at 1.7% “due to COVID-19 resurgence since mid-March and the soaring crude prices”, according to ICIS senior analyst Jean Zou. Granted the lockdowns in China have been damaging for Asia’s nylon market, with prolonged demand loss particularly felt in the CFR (cost & freight) China market, but there have been recent signs that the worst may have passed in the lead up to the reopening of key Chinese cities. Asian methyl methacrylate (MMA) peaked in May, after increasing around 17% since H2 February. Market players are awaiting clearer picture on China’s lifting of the lockdowns and restrictions. Updated on 27 May with news story links 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 09:00 GMT on 27 May 2022) Asian epoxy market stable, Chinese domestic market outlook ambiguous By Luffy Wu 27-May-22 11:54 SINGAPORE (ICIS)–The Asia epoxy resins market saw overall stable market sentiment while buyers exhibited improved price acceptability compared with in April. Asia nylon market cautious as Shanghai inches towards June reopening By Josh Quah 26-May-22 16:16 SINGAPORE (ICIS)–The lockdowns have been damaging for Asia’s nylon market, with prolonged demand loss particularly felt in the CFR (cost & freight) China market. There have been recent signs, however, that the worst may have passed in the lead up to the reopening of key cities in China. PODCAST: Weak demand from lubricants, China’s Group II base oil import margins to be negative By Whitney Shi 25-May-22 14:09 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Whitney Shi discuss the recent developments and outlook of China’s base oil market. INSIGHT: China crude consumption softens amid COVID-19 lockdowns By Pearl Bantillo 25-May-22 12:00 SINGAPORE (ICIS)–China’s consumption of crude has softened as industrial production is hit by pandemic-related restrictions in place since February, with no sign of the government giving up on its zero-COVID policy. INTERVIEW: China emergence from lockdowns, stimulus to recharge auto and construction – Covestro CFO By Joseph Chang 25-May-22 05:17 NEW YORK (ICIS)–China’s easing of and potential emergence from COVID-19 lockdowns along with government stimulus should spark a major recovery in its automotive and construction markets, the chief financial officer (CFO) of Germany-based Covestro said on Tuesday. Asian MMA peaks in May; outlook pending clarity amid easing restrictions in China By Li Li Chng 24-May-22 13:47 SINGAPORE (ICIS)–Asian methyl methacrylate (MMA) peaked in May, after increasing around 17% since H2 February. Market players are awaiting clearer picture on China’s lifting of COVID-19 lockdowns and restrictions. PODCAST: Europe PE and PP update and outlook By Ben Lake 23-May-22 23:42 LONDON (ICIS)–Senior editor, Vicky Ellis, and market editor, Ben Lake, join forces to discuss a distinct change in the polymers market. The frenzied activity in March and April has given way to a far more relaxed sentiment in May – on the buy-side, at least. Vicky and Ben give their outlook for June and take a look at events that could shake up the markets again. INSIGHT: China PE demand to rebound from June, but slow road ahead By Amy Yu 23-May-22 18:27 SINGAPORE (ICIS)—China polyethylene (PE) demand is expected to firm as COVID-19 containment measures ease, but the pace of recovery remains hindered by remaining lockdown measures. Asia BDO under pressure as tepid demand persists, economic uncertainty By Clive Ong 20-May-22 12:17 SINGAPORE (ICIS)–The Asian butanediol (BDO) market remains under downward pressure from prevailing soft demand in the region. Buying momentum could remain slow in the near term from economic headwinds from the Ukraine conflict and Russian sanctions, as well as the lockdown in China which looks set to ease. INSIGHT: US supply chain problems may continue for two more years By Al Greenwood 19-May-22 21:00 HOUSTON (ICIS)–US supply-chain problems could persist for another two years because new problems continue to pop up. Since the pandemic started more than two years ago, problems continue to compound problems, said Eric Byer, president of the National Association of Chemical Distributors (NACD). He participated in a conference call with the ACC. Markets sell-off drives down Europe chemical stocks By Tom Brown 19-May-22 19:28 LONDON (ICIS)–European chemical company stocks fell on Thursday amid a wider market sell-off as below-expectations US retail financials and high domestic inflation drive fears that falling consumer demand could result in a recession. PODCAST: China’s MMA demand recovery to lag despite Shanghai reopening By Olivia Dai 19-May-22 15:06 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Olivia Dai discuss the recent developments and outlook of China’s methyl methacrylate (MMA) market. Asia fatty alcohols near-term demand may pick up on China lockdown easing By Helen Yan 18-May-22 12:14 SINGAPORE (ICIS)–Improved Chinese demand may lend support to Asia’s fatty alcohols market, as China gradually eases its COVID-19 lockdown restrictions. This is amid expectations that Shanghai, a major port and key financial and production hub, is likely to open up fully from 1 June. Increase of PP, PE imports from China in Pakistan due to lockdowns By Nadim Salamoun 17-May-22 23:29 DUBAI (ICIS)–Chinese polypropylene (PP) and polyethylene (PE) breakbulk and containerized cargoes have been increasingly available in the Pakistani market, directly competing with Gulf Cooperation Council (GCC)-origin material. The situation could be attributed to the increased lockdowns in China, which have negatively impacted domestic demand. PODCAST: Slowing China will hurt global economy, chemicals By Will Beacham 17-May-22 21:29 BARCELONA (ICIS)–As lockdowns, the Common Prosperity policy and lacklustre export markets cut growth in China’s economy, the global chemical industry should prepare for negative demand growth in 2022. Easing of lockdown provides limited support for Asian IPA By Julia Tan 17-May-22 19:31 SINGAPORE (ICIS)–Asian isopropanol (IPA) markets saw slightly mixed indicative prices in the week, although market sentiment continues to be weak. Market sources underlined on Tuesday that demand was not likely to pick up until mid-June. Despite news that Shanghai lockdowns would begin to ease in early June, a number of market participants were fairly sceptical that this would provide significant support to the Asian IPA markets. Asia petrochemical supplies rise as China exports grow amid weak yuan By Fanny Zhang 13-May-22 16:13 SINGAPORE (ICIS)–Asia’s petrochemical markets are being weighed down by growing supply, with China exporting more products – spurred by the weak yuan and poor domestic demand amid lockdowns. The Chinese yuan (CNY) lost nearly 7% against the US dollar from the start of April to 13 May, with the exchange rate at CNY6.79 to $1, data from the People’s Bank of China (PBoC) show. The yuan depreciation has caused a narrowing or closing of arbitrage windows for moving cargoes into China, while opening up better export opportunities. With a weaker yuan, the trading route “out of China” may stay for a while, traders said. The country’s domestic demand is significantly dented by tight restrictions on people movement and business activity following a strong resurgence of COVID-19 infections, consequently, exerting strong downward pressure on Asian markets. Asia fatty acids remain soft on China lockdowns and Indonesia export ban uncertainty By Helen Yan 13-May-22 15:05 SINGAPORE (ICIS)–Asia’s fatty acids market is likely to remain soft in the near term, due to the economic slowdown in China and the expected removal of Indonesia’s export ban on crude palm oil (CPO) sometime in May. China lockdowns are weighing on demand in Asia. “There is too much uncertainty, with the market not sure when China will lift its lockdowns and when Indonesia will lift its export ban on palm oil,” a regional supplier said. Market players are adopting a cautious stance and buyers are reluctant to commit to any large spot purchases, given the uncertainty and expectations that the export ban is likely to be removed soon. Container rates from China to US down by 20% since Shanghai lockdowns began By Adam Yanelli 13-May-22 05:23 HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to both US coasts have fallen by between 13-20% since COVID-19-related lockdowns began in Shanghai in March, and with China holding fast to its zero-COVID-19 policy, the trend could continue. The impact of the lockdown measures on China’s available exports has been significant, leading to the major ocean shipping alliances announcing cancellations of at least a third of their scheduled sailings out of Asia through early June. US considers dropping Chinese tariffs to fight inflation – Biden By Al Greenwood 11-May-22 06:09 HOUSTON (ICIS)–The administration of US President Joe Biden is discussing whether removing the tariffs imposed on Chinese imports would lower inflation, he said on Tuesday. The US imposed tariffs on billions of dollars’ worth Chinese imports – including plastics and chemicals – amid allegations of unfair trade policies on the part of China, which included unfair technology transfers and theft of intellectual property. INSIGHT: Can US, global economies avoid recession amid a whirlwind of headwinds? By Joseph Chang 12-May-22 01:10 NEW YORK (ICIS)–Can the US and major economies around the world avoid a recession in the face of what can only be called a whirlwind of headwinds? In the US, the Federal Reserve is moving to tame the inflation beast and engineer a soft landing for the economy. Fed chair Jerome Powell opened the FOMC (Federal Open Market Committee) press conference on 4 May by addressing the American people directly. “Inflation is much too high, and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down. We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses,” said Powell. Asian spot TiO2 to come under pressure from weak Chinese yuan in early May By Joson Ng 06-May-22 11:17 SINGAPORE (ICIS)–A depreciating Chinese currency against the US dollar could start to have an impact on the Asian titanium dioxide (TiO2) spot market starting in May. Turkey PE and PP prices stable, market quiet amid public holidays By Samantha Wright 05-May-22 23:53 LONDON (ICIS)–Turkish polyethylene (PE) and polypropylene (PP) values were steady this week due to a lack of activity following a public holiday. Europe ABS, SAN import challenge likely to persist By Yashas Mudumbai 05-May-22 19:20 LONDON (ICIS)–Acquiring imports from Asia for European styrene acrylonitrile (SAN) and acrylonitrile-butadiene-styrene (ABS) market players remains a challenge amid ongoing logistical constraints. There has been some tightness in supply due to reduced imports from Asia. INSIGHT: EU Russia oil ban will further drive global remapping of trade By Tom Brown 05-May-22 19:11 LONDON (ICIS)–The European Commission’s proposed ban on Russian oil imports by the end of the year is more likely to drive further remapping of global trade flows than drive a spike in crude prices, but the pain could be more substantial in refined products markets. Oil rises more than $1/bbl on supply worries; China woes cap gains By Nurluqman Suratman 04-May-22 12:54 SINGAPORE (ICIS)–Oil prices rose by more than $1/bbl on Wednesday on concerns over tight supply after industry data showed a drop in US crude and fuel inventories last week, but worries over poor manufacturing data from China capped gains. PODCAST: Europe chemicals could face short periods of gas rationing this winter By Will Beacham 03-May-22 22:12 BARCELONA (ICIS)–European chemical companies may be forced to cut gas use for short periods this winter if demand is very high and supply crimped, though steps are being taken to avoid this scenario. Margin pressure to persist in European ethanolamines market By Cameron Birch 03-May-22 21:33 LONDON (ICIS)–Two main questions dominate the European ethanolamines market as participants make forecasts for the rest of Q2 and into Q3. First, is the question of continued uncertainty linked to feedstock costs, and, second, is the uncertainty that surrounds the demand picture across the continent. Europe ADA, capro, nylon markets to face slow demand in May By Marta Fern 30-Apr-22 01:41 LONDON (ICIS)–European nylon 6 and 6,6 is facing soft demand in May, as the downstream automotive sector continues to struggle with shortages of vital components, seasonally slower fibres and yarns markets and high price points starting to have negative effect on buying interest, amid a cautious approach to stockholding levels. Asia’s glycerine market to face upward pressure when China lifts its lockdowns By Helen Yan 29-Apr-22 12:30 SINGAPORE (ICIS)–Asia’s glycerine market is likely to face further upward price pressure when China lifts its lockdown measures, which is expected to be sometime in May. PODCAST: China petrochemical trade face disruptions on lockdowns By Nurluqman Suratman 29-Apr-22 11:16 SINGAPORE (ICIS)–In this episode of the podcast, information manager Yvonne Shi discusses with senior reporter Nurluqman Suratman the impact of COVID-19 lockdowns in China. US Q1 GDP falls amid Omicron, supply chain disruptions By Stefan Baumgarten 28-Apr-22 08:56 HOUSTON (ICIS)–US real GDP fell at an annual rate of 1.4% in Q1, the Bureau of Economic Analysis (BEA) said in an “advance estimate” of Q1 GDP on Thursday. Asia’s ABS continues tumble since late March on poor end-use demand By Angeline Soh 28-Apr-22 19:04 SINGAPORE (ICIS)–Asia’s acrylonitrile butadiene styrene (ABS) sentiment was down for the sixth week, as end-use consumption continued to dwindle from the lockdowns across major market, China, amid the Russia-Ukraine war. Asia Group II base oils supply short in Q2, China demand stifled on lockdowns By Matthew Chong 28-Apr-22 15:12 SINGAPORE (ICIS)–Asia’s Group II base oils supply is expected to remain tight for the rest of the second quarter on reduced production. Asian butyl-A rebounds tracking China; outlook remains uncertain on COVID-19 By Li Li Chng 27-Apr-22 21:33 SINGAPORE (ICIS)–Asian butyl acrylate (butyl-A) prices rebounded following the recent firm China domestic price trend, but uncertainties about the development of COVID-19 in China after the Labour Holidays will likely keep players on their toes. Oil prices fall $3/bbl on worries over China COVID-19 lockdowns By Nurluqman Suratman 25-Apr-22 11:04 SINGAPORE (ICIS)–Oil prices extended the previous week’s losses on Monday, with Brent crude down more than $3/bbl on worries that the prolonged COVID-19 lockdown in China’s largest city, Shanghai, will dent fuel demand. INSIGHT: China MX market wave under pressure from crude and pandemic By Veronica Zhang 25-Apr-22 10:00 SINGAPORE (ICIS) –After the Lunar New Year Holiday mixed xylenes (MX) prices in China surged on robust crude oil. However, MX prices fell back heavily in March as crude oil weakened and on the resurgence of the pandemic. Asia PVC spot market weighed down by influx of China supply By Jonathan Chou 22-Apr-22 11:59 SINGAPORE (ICIS)–Asia’s polyvinyl chloride (PVC) spot market is being weighed down by an influx of material coming from China, where domestic consumption is hampered by lockdowns. FOCUS: Dow’s European crackers switch to propane from naphtha By Al Greenwood 22-Apr-22 02:00 HOUSTON (ICIS)–Dow’s crackers in Europe are relying on their flexibility to switch to propane feedstocks in response to the sharp rise in naphtha prices, the CFO said on Thursday. China’s zero-COVID strategy dampens petrochemical demand By Felicia Loo 20-Apr-22 12:28 SINGAPORE (ICIS)–China’s petrochemical demand is being chipped away amid stifling COVID-19 lockdowns and supply-chain woes besetting the world. Shanghai proposes to resume production against pandemic control to ease China’s supply disruption By Yvonne Shi 19-Apr-22 14:19 SINGAPORE (ICIS)–China’s chemical supply tightness is expected to last for a while amid transportation woes as a result of COVID-19 lockdowns, though over the weekend Shanghai Municipal Commission of Economy and Informatization issued guidelines to resume work and production. PODCAST: Demise of the quarterly chemicals contract By Will Beacham 19-Apr-22 22:50 BARCELONA (ICIS)–Some chemical markets, especially in Europe, are shifting from quarterly to monthly contracts, driven by upstream volatility. Could this signal the demise of the quarterly contract? In this Think Tank podcast, Will Beacham interviews ICIS head of market reporting, Barbara Ortner, ICIS Insight Editor Nigel Davis, and Paul Hodges, chairman of New Normal Consulting. China MTBE exports surge as COVID-19 hits domestic demand By Winnie Huang 19-Apr-22 17:57 SINGAPORE (ICIS)–China’s methyl tertiary butyl ether (MTBE) exports in March-May are expected to reach up to 44,000 tonnes, as domestic suppliers divert their cargoes to overseas markets to ease heavy inventory pressure from coronavirus-hit demand. PODCAST: Asia LAB mired in uncertainty as upstream markets roil sentiment By Jasmine Khoo 19-Apr-22 12:07 SINGAPORE (ICIS)–In this episode of the ICIS Asia podcast, Jasmine Khoo speaks with Clive Ong, editor for the ICIS linear alkylbenzene (LAB) and linear alkylbenzene sulphonate (LAS) report, on recent developments in the regional market. INSIGHT: China lockdowns to weigh on economy after moderate Q1 growth By Pearl Bantillo 18-Apr-22 17:38 SINGAPORE (ICIS)–Lockdowns in parts of China will weigh on the world’s second-biggest economy in the months ahead, after pulling a better-than-expected 4.8% annualized growth in the first quarter. April extrusion-grade PC contract prices hit record high on rising energy costs By Miguel Rodriguez Fernandez 14-Apr-22 17:31 LONDON (ICIS)–European extrusion-grade polycarbonate (PC) contract prices rose in April to a record high on the back of higher energy costs, according to market information gathered by ICIS. Extrusion-grade PC buyers claim they are facing serious problems to swallow new price rises as their margins are narrow and downstream buyers are resisting new increases. Besides, demand for some extrusion-grade PC applications is waning. That is the case for protective sheets, which used to be in demand in 2020 and 2021 to contain the spread of COVID-19. INSIGHT: China’s COVID-19 lockdowns take toll on textile demand; MEG market slows to a standstill By Judith Wang 14-Apr-22 10:00 SINGAPORE (ICIS)–China’s widespread lockdowns amid its zero-COVID strategy have dealt a blow to downstream textile demand and weighed on spot monoethylene glycol (MEG) discussions, although stronger energy costs and regional supply cuts are providing some support to the MEG market. INSIGHT: China’s Q1 PP market in ‘M’ shape; Q2 to see tight supply, uncertain demand By Lucy Shuai 13-Apr-22 10:00 SINGAPORE (ICIS)–China’s polypropylene (PP) market performed bearishly after an initial bull run in the first quarter of 2022, showing an overall ‘M’ shape. Following rises on the back of high upstream costs, the recurrence of the coronavirus in many parts of China has caused local authorities to escalate prevention and control measures, hindering demand and logistics and in turn dragging down domestic PP prices. Amid the cost pressure and rising Covid-19 infection cases, supply is expected to remain tight in the second quarter. But demand recovery depends on the pandemic. China petrochemicals supply chain struggles amid pandemic curbs By Fanny Zhang 12-Apr-22 14:33 SINGAPORE (ICIS)–China’s entire petrochemical supply chain is facing strong headwinds due to tough pandemic-related restrictions in place at various production hubs, including Shanghai. Cargo deliveries were being hampered as truck drivers were avoiding places with high infection rates, where they would be stuck for 14 days of required quarantine. Cities that recorded spikes in COVID-19 cases caused by the more infectious Omicron variant are in different forms of lockdown, which may be prolonged as China is keeping to its zero-COVID policy. Zhejiang, Jiangsu, Shandong and Hebei are among the affected provinces. US caustic soda bulk liquid freight rates jump out of the US Gulf By Bill Bowen 09-Apr-22 03:10 HOUSTON (ICIS)–Liquid bulk cargo freight rates out of the US Gulf for liquid caustic soda, particularly to the Mediterranean, jumped higher during the week, moving up from about $100-120/dry metric tonne (dmt) to $180-200/dmt, or higher, depending on parcel size, according to export market participants. Demand for liquid chemical shipments to Europe from Asia, the US, Latin America and the Middle East is drying up the supply of bulk liquid carriers out of the US Gulf. Sentiment for Asian spot BD discussions wavers on soft demand By Ai Teng Lim 08-Apr-22 15:43 SINGAPORE (ICIS)–Asian spot discussions for butadiene (BD) have lost some ground this week, as some sellers moderated expectations slightly to induce buying and move some cargoes. Asia fatty alcohols to be weighed on by Chinese demand slump, falling PKO By Helen Yan 08-Apr-22 14:20 SINGAPORE (ICIS)–Asia’s fatty alcohols market may face further downward pressure in the near term due to a slump in Chinese demand and declining feedstock palm kernel oil (PKO) prices. Fatty alcohols C12-14 prices have been trending down in recent weeks on declining feedstock PKO prices while Chinese demand has slumped amid renewed lockdowns to contain the spike in coronavirus infections. INSIGHT: Gulf players look to Europe as Ukraine crisis continues, recession risk remains By Will Beacham 05-Apr-22 22:20 BARCELONA (ICIS)–The war in Ukraine could see Gulf petrochemicals producers strengthen their collective footprint in Europe, as European buyers look for new import sources, but the risk of recession globally could still stand to cut demand for Middle East petrochemicals. Russia’s invasion of Ukraine is understood to have led buyers in some European chemicals markets to look elsewhere for product, according to marker sources, opening up possibilities for Middle East exporters to seize market share. Europe PX spot prices down on softer Asian market, OX spot values flatten By Miguel Rodriguez Fernandez 04-Apr-22 18:27 LONDON (ICIS) — European paraxylene (PX) spot prices fell week on week on the back of lower values in the Asian PX market while orthoxylene (OX) pricing in Europe remained stable, according to market information gathered by ICIS. Trade for Asian PX physical cargoes and physical swaps declined last week, amid increasing market uncertainties, which pushed prices down in that region. New outbreaks of COVID-19 in China had interrupted production activities and disrupted supply chains, what had a negative impact on demand. Asia PBT stable while volatile crude oil roils sentiment By Clive Ong 01-Apr-22 10:14 SINGAPORE (ICIS–Asia’s polybutylene terephthalate (PBT) market is expected to remain uncertain in the near term amid the flux in the crude oil markets and lower demand in China, though for the time being prices are holding steady with lower trading activity. Congestion at US ports could ease by end of year without further ‘jolts’ to the system By Adam Yanelli 01-Apr-22 05:43 HOUSTON (ICIS)–Congestion at US ports could ease by year end as long as there are no more “jolts to the system”, but continued strong demand for goods by US consumers, new COVID-19 outbreaks in Asia and possible labour strife between shippers and West Coast dockworkers could make the issue persist. Asia EVA demand buoyant on China PV sector growth, global recovery By Helen Lee 31-Mar-22 19:02 SINGAPORE (ICIS)–Asia’s ethylene vinyl acetate (EVA) demand outlook is buoyant amid growth in downstream photovoltaic (PV) sector in China despite new pandemic-related lockdowns in the country. Oil falls by more $5/bbl on US’ reserves release plan, weak China data By Nurluqman Suratman 31-Mar-22 11:19 SINGAPORE (ICIS)–Oil futures slumped by more than $5/bbl on Thursday as the US is planning a massive release from its strategic reserves to calm the gasoline market, with overall sentiment further weighed down by weak China data. Asia FAE market to soften into Q2 on higher Indonesia levies and China slowdown By Helen Yan 28-Mar-22 16:52 SINGAPORE (ICIS)–Asia’s fatty alcohol ethoxylates (FAE) market is likely to soften in the near term, due to declining feedstock fatty alcohol C12-14 costs and a slowing Chinese economy. China petrochemical logistics woes worsen on Shanghai lockdown By Fanny Zhang 28-Mar-22 16:34 SINGAPORE (ICIS)–Further delays in petrochemical deliveries in China can be expected as Shanghai was placed under lockdown to contain surging COVID-19 cases in the metropolis. Shanghai starts city-wide lockdown to fight pandemic By Fanny Zhang 28-Mar-22 10:30 SINGAPORE (ICIS)–China’s megacity of Shanghai announced the start of a two-phase lockdown and mass testing early Monday, in an effort to curb the worst outbreak of COVID-19 so far in the city. Oil falls by more than $4/bbl as Shanghai lockdown fuels demand worries By Nurluqman Suratman 28-Mar-22 10:12 SINGAPORE (ICIS)–Oil prices fell by more than $4/bbl on Monday on fresh demand worries following news that local authorities have imposed a two-phased lockdown of Shanghai over nine days to control the spread of COVID-19. ANALYSIS AND RESOURCES

SINGAPORE (ICIS)–South Korean producer S-Oil is running the No 2 residue fluidized catalytic cracking (RFCC) unit at its Onsan refinery at limited capacity, after restarting it following a blast at the site that killed one person last week. The blast occurred at the refinery’s alkylation unit at about 20:50 Seoul time (13:50 GMT) on 19 May. Alkylate is used a raw material for the production of clean gasoline. The company halted production at the No 2 alkylation plant, along with the nearby No 2 residue fluid catalytic cracking (RFCC) unit and a paraxylene (PX) unit, at the site in the southeastern city of Ulsan following the incident. The incident also caused the shutdown of its No 2 methyl tertiary butyl ether (MTBE) unit. S-Oil in a stock exchange filing on 23 May said that it has resumed production at the No 2 RFCC unit and plans to restart production at its No 1 paraxylene (PX) unit after scheduled maintenance between 8 June and 15 July. On-spec production at the No 2 RFCC unit – which can produce 705,000 tonnes/year of propylene – has been achieved but the plant is still running at reduced capacity, according to a company source. The No 2 unit is expected to be “going to go full [run rate] soon”, the source said, without providing a timeline. S-Oil’s polypropylene (PP) production process linked to the No 2 RFCC unit has not been restarted, the source said. The company’s PP plant at the Onsan site has a 405,000 tonne/year capacity, according to the ICIS Supply and Demand Database. The company’s No 1 PX unit was initially scheduled to undergo a scheduled 45-day maintenance from 7-8 June. The company’s No 2 PX unit was not affected by the blast. The two PX units at the site have a combined 1.7m tonne/year capacity. S-Oil’s 300,000 tonne/year propylene oxide (PO) plant at the Onsan site is currently running normally. The Onsan site can produce up to 187,000 tonnes/year of ethylene. Energy giant Saudi Aramco is the largest shareholder of S-Oil, which is the third biggest refiner in South Korea. Focus article by Nurluqman Suratman Additional reporting by Samuel Wong, Tess Tseng and Jasmine Khoo

SINGAPORE (ICIS)–Thailand’s SCG Chemicals plans to expand the capacity of its Portugal-based subsidiary Sirplaste by 25%, in response to strong demand for recycled plastics in Europe. The recycling firm has an existing 36,000 tone/year capacity post-consumer recycled resins (PCR), of which 9,000 tonnes/year is recycled high-density polyethylene (R-HDPE). SCG Chemicals recently completed acquisition of a 70% stake in Sirplaste, which sells its recycled plastics output in Europe. The planned expansion will go hand in hand with upgrading to high-quality recycled production capacity to cater to a growing market in line with SCG Chemicals’ environmental goals, according to its parent firm – Thai conglomerate Siam Cement Group (SCG) – in a presentation to investors on Friday. SCG Chemicals is looking at growing its environment-friendly or green polymer portfolio to 1m tonnes by 2030 and decarbonize current operations by 20% by 2030 from 2021 levels, with the goal of going carbon neutral by 2050. The company has built Thailand’s first advanced recycling demonstration plant, and is “targeting creation of green feedstock and food-grade resins with virgin-like characteristics”, SCG said in the presentation. The advanced recycling demo plant in Rayong province with about 4,000 tonnes/year capacity was launched in late January 2021. The demo plant is expected “to develop and scale-up chemical recycling technologies that can turn post-use consumer plastic into recycled feedstock for virgin plastic resin production for petrochemical plants,” according to SCG Chemical’s website. SCG Chemicals is currently seeking regulatory approval for a planned initial public offering (IPO) on the Stock Exchange of Thailand (SET).

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. China’s 2022 polypropylene (PP) demand growth may only be flat over next year, down from earlier data suggested 4%, the blog believes. Of course, we must be careful here. Time and again, China has confounded the pessimists through effective economic stimulus. Just look what happened in H2 2020. But you need to prepare a scenario for this time being different because of claims that the zero-COVID lockdowns will continue for most of the rest this year. Then again, the great news is that Shanghai – responsible for at the very least 3.8% of China’s GDP – has started to re-open. As you stress test your business against weaker-than-expected demand – using ICIS data and the support of our excellent analysts and consultants, including our great team in China – also consider the downside risks for China’s net imports. The blog’s latest worst-case outcome for net imports sees them falling to just 200,000 tonnes this year from 2021’s 3.4m tonnes. 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)–K+S Potash Canada (KSPC) has announced a long-term growth plan which includes a focus on planning for a sustained increase of potash production at its Bethune mine. The company said production capacity is intended to grow continuously over the next couple of decades, and is currently targeted toward 4m tonnes/year, which effectively doubles the current production output of the operation. KSPC said it is currently undertaking a feasibility stage, mapping out the future milestones of growth and timelines for supporting projects. The company will work closely with provincial and federal governments during this phase to ensure it can sustain future growth. “Optimising our business at Bethune mine enhances the strong position of K+S as an internationally-oriented producer of minerals critical to agriculture and other industries,” said Holger Riemensperger, K+S chief operating officer. “Bethune mine is looking at safely and sustainably growing profitability while simultaneously reducing environmental impact, and building a more diverse and inclusive workforce while continuing to engage with local and Indigenous communities throughout all stages of the plan.” KSPC currently employs over 400 people at the Bethune mine and Saskatoon and Port Moody offices but it is currently seeking employees in various engineering, IT, operations, trade, and supporting roles, with a longer-term outlook to hire more than a hundred additional employees. “The main focus right now is to establish the team that will drive the growth plan and associated projects,” said Sam Farris, KSPC president. “Planning for growth is an opportunity to develop infrastructure and programs that will continue our progress toward becoming world-class, and I’m confident we’ll continue to attract the talent we need across the business to realise these opportunities.”

HOUSTON (ICIS)–ACWA Power, OQ and Air Products signed a joint development agreement to develop a green ammonia project in Oman, the companies said on Thursday. The agreement follows a memorandum of understanding (MoU) that the three signed in December. The project would use wind and solar energy to power an electrolyser, which will split water molecules into hydrogen and oxygen. An air separation unit would extract nitrogen from the atmosphere. Another plant would produce ammonia from the nitrogen and the green hydrogen produced from the electrolyser. The companies would build the project in Oman’s Salalah Free Zone and they would own equal stakes. The companies did not specify timelines or capacities. However, Air Products CEO Sefi Ghasemi said the Omani project would be similar to the one that his company is developing with other companies in Saudi Arabia. The Saudi project involves: more than four gigawatts (GW) of renewable power from solar, wind and storage production of 650 tonnes/day of hydrogen by electrolysis production of 1.2m tonnes/year green ammonia The Saudi project plans to export the ammonia. Once the ammonia arrives at market, the hydrogen will be extracted and used as fuel.

LONDON (ICIS)–The European phenol and acetone markets are paying close attention to demand in the downstream bisphenol-A (BPA), epoxy resins, polycarbonate (PC) and methyl methacrylate (MMA) markets because sectors such as automotive remain slow and demand caution is creeping into construction. In this podcast, ICIS Europe senior editor Jane Gibson discusses recent downstream market developments with senior editor Heidi Finch, markets reporter Mat Jolin-Beech and data reporter Miguel Rodriguez-Fernandez. European phenol and acetone turnarounds end soon. Will demand match supply? MMA market softens on weak demand and Asian imports, counteracting local supply disruptions PC market lengthens as demand hit by high product pricing, economic woes BPA contract demand holds despite derivative caution on supply constraints and strong contract over spot trend High costs, strong Asian export competition and demand uncertainty present challenge to Europe BPA and epoxy markets

LONDON (ICIS)–The Ukrainian gas incumbent Naftogaz has called on the European Commission and member states to revoke a derogation from EU regulation granted to Nord Stream 1 and suspend flows via the pipeline amid concerns over the reliability of Russia’s Gazprom as a supplier. In a letter sent to top EC officials this month and seen by ICIS, Naftogaz said it was imperative for the EU to review the derogation granted to Nord Stream 1 in 2020, which exempts the 55 billion cubic meter/year pipeline from complying with EU requirements for unbundling and third-party access. Naftogaz said the exemption should be lifted because of “significant changes in the security of supply situation since 2020,” including Gazprom’s decision not to increase supplies to Europe in 2021 despite soaring demand and Russia’s war against Ukraine since February 2022. Nord Stream 1 was originally granted a derogation from these requirements under EU energy law partly as a result of security of supply considerations. DEROGATION On 17 April 2019 the European parliament and the Council adopted the directive 2019/692 amending the directive 2009/73 concerning common rules for the internal natural gas market. The pipeline’s operator, Nord Stream AG, submitted an application for derogation from the application of the primary provisions of the EU gas directive on 19 December 2019 to the German Federal Network Agency (BNetzA) after the changes to the EU gas directive were implemented into German law by the amended Energy Industry Act of the Federal Republic of Germany (EnWG). The derogation applies to the pipeline section located on German territory, including German territorial waters and is initially valid for 20 years, retroactively from the amended EnWG’s entry into force on 12 December 2019. With the letter sent to the EC, Naftogaz as the organiser of the Russian gas transit via Ukraine is calling for a formal reassessment of the derogation, the total or at least partial suspension of flows via Nord Stream 1 and their rerouting via Ukraine. Neither the EC nor BNetzA commented by publication time. CONTRACTUAL TERMS The letter comes amid Ukrainian concerns that Gazprom would seek to pay less for the shipment of gas via its territory, despite a ship-or-pay contract signed at the end of 2019, effectively requesting the Russian producer to pay for transit, even if it does not use the transmission infrastructure. The letter notes Gazprom cannot “unilaterally relieve itself of contractual obligations.” According to the five-year agreement concluded at the end of 2019 with Naftogaz, as the organiser of the transit via Ukraine, Gazprom is expected to ship 109.6million cubic meters/day between 2021-2024 via two border points: Sokhranivka and Sudzha. However, on 10 May 2022 the Ukrainian gas transmission system operator GTSOU, which executes the transit, decided to declare force majeure and halt inflows via Sokhranivka in eastern Ukraine, which had been under Russian control for several weeks. Naftogaz said the decision was taken amid concerns that Russian troops or Russian-affiliated individuals were stealing transit gas and looking to divert it for use by a regional cogeneration (CHP) plant as well as a ferroalloy plant. “If the operator [GTSOU] had taken no action, it would have had to use its own gas to balance the lacking volumes stolen by the occupiers. At current gas prices, losses could amount to $1bn per month,” the letter said. REROUTING GTSOU offered Gazprom to reroute the gas free of charge to the Sudzha border point, which has a daily entry capacity of 244mcm. GTSOU and Naftogaz say it is technically possible to reroute the gas via this point, quoting the example of 12-25 October 2020 when flows were diverted from Sokhranivka to Sudzha during a period of maintenance. A source close to Naftogaz said Gazprom responded to the force majeure letter to say they would not recognise the claim and that they would continue to ship gas via Sokhranivka. Gazprom further insists that if Ukraine fails to offtake the gas delivered at this border point it would lead to a proportional reduction in payments, the source said, noting this could be a violation of contractual terms. Gazprom did not answer by publication time.