News library
ICIS premium news services
Our subscription platform provides access to our full range of breaking news and analysis.
Viewing 1-10 results of 52923
LONDON (ICIS)–UK inflation rose to a
40-year-high in April as energy and fuel costs
continued to rise, the Office for National
Statistics (ONS) said on Wednesday.
April’s 9% rise in the Consumer Prices Index
(CPI), which excludes housing costs, is the
highest level since 1982, based on indicative
ONS modelling for earlier periods which
pre-date its current CPI series.
The rise in April was up from 7% in
March.
UK households have faced higher energy, food
and petrol costs as crude oil and gas prices
have continued to rise, partly driven by the
war
in Ukraine.
Also on 1 April, the UK government’s energy
regulator Ofgem (Office of Gas and Electricity
Markets) raised the price cap which limits the
price energy suppliers can charge consumers.
In the transport sector, costs rose as petrol
prices were driven up by higher crude oil
values.
“Average petrol prices stood at 161.8 pence per
litre in April 2022, compared with 125.5 pence
per litre a year earlier. The April 2022 price
is the highest recorded,” the ONS said in a
statement.
The Bank of England raised its key interest
rate on 5 May to the highest level in more
than a decade in a bid to curb escalating
inflation levels.
UK Q1 GDP
data from the ONS on 12 May showed 0.8%
growth for the quarter but contracted in March
as consumer spending slowed due to a surge in
living costs.
18-May-2022
SINGAPORE (ICIS)–UAE-based polyolefins
producer Borouge on Wednesday said that it is
planning to launch an initial public offering
(IPO) and list on the Abu Dhabi Securities
Exchange (ADX) by early June this year.
The IPO will consist of around 3bn ordinary
shares, representing 10% of Borouge’s shares
held by Abu Dhabi National Oil Company (ADNOC)
and Austria-based producer Borealis.
The subscription period for the UAE retail
offering will be from 23-28 May, while that for
qualified investors will be from 23-30 May. The
shares are expected to be admitted for trading
on the ADX on 3 June.
Borouge is a joint venture between ADNOC and
Borealis. Post-IPO, ADNOC will have a 54% stake
in Borouge, while Borealis’ stake will be 36%.
Its production capacity currently stands at
around 2.7m tonnes/year of polyethylene (PE)
and 2.2m tonnes/year of polypropylene (PP),
according to the company.
In the first quarter of 2022, the company
started up its fifth
480,000 tonne/year PP unit at its Ruwais
site.
The fifth PP unit boosted Borouge’s overall
polyolefins production capacity to 5m
tonnes/year.
Development of the company’s phase four project
at the Ruwais complex is underway.
The
$6.2bn Borouge 4 project is expected to be
completed in 2025 and will boost the site’s
polymers capacity to 6.4m tonnes/year.
Borouge’s sales volumes from its consumer
solutions and infrastructure solutions units
totaled 2.5m tonnes/year and 1.7m tonnes/year
in 2021.
The company’s polymer products were mainly sold
in Asia, representing about 59% of total sales
volumes, as well as the Middle East and Africa
– which, combined, accounted for around 33% of
overall sales volumes.
“Global polyolefins demand in Borouge’s markets
is forecasted to account for approximately 86%
of global polyolefin demand growth between 2022
and 2026, resulting in a forecasted 1.2x GDP
growth in consumer solutions and approximately
1.4x GDP growth in infrastructure solutions,”
the company said.
(adds details throughout)
18-May-2022
SINGAPORE (ICIS)–UAE-based polyolefins
producer Borouge on Wednesday said that is
planning an initial public offering (IPO), and
to list the company on the Abu Dhabi Securities
Exchange (ADX) by early June this year.
The offering will consist of around 3bn
ordinary shares representing 10% of the
petrochemical producer’s issued share capital,
Borouge said in a statement.
The offering will run from 23 May to 28 May for
retail investors.
The company expects its shares to be admitted
for trading on the ADX on 3 June.
Borouge is a 50:50 joint venture between Abu
Dhabi National Oil Company (ADNOC) and
Austria-based producer Borealis.
Under the IPO plan, ADNOC will hold a 54%
shareholding in Borouge, while Borealis’ stake
will be 36% in the joint venture firm.
Borouge’s production capacity currently stands
at around 2.7m tonnes/year of polyethylene (PE)
and 2.2m tonnes/year of polypropylene (PP),
according to the company.
The company in March this year
started up its new 480,000 tonne/year fifth
polypropylene (PP) unit at its Ruwais site.
18-May-2022
NEW YORK (ICIS)–Brazil-based chemical
distributor Quimica Anastacio is sharpening its
focus on flexibility and nimbleness, along with
organic growth versus M&A, amid a period of
elevated price volatility, its CEO said.
Throughout the COVID-19 pandemic, with
outbreaks rolling through different regions of
the world and disrupting supply chains, the
distributor has had to pivot quickly to replace
some suppliers of critical materials and secure
containers in short supply.
A big part of this pivot was having its
purchasing department shift to about 70% FOB
(free on board) in sourcing supply, where it
arranges freight to directly pick up product
from the port of the supplier, as opposed to
CFR (cost and freight), where the supplier
ships containers directly to the distributor’s
port.
Prior to the pandemic, only about 30% of its
global sourcing was done on an FOB basis.
Quimica Anastacio sources products from 62
different countries.
“This capability was very important during this
period. We had to go after the containers
because suppliers had difficulty finding them
and price was an issue as well,” said Jan
Krueder, CEO. He made his comments in an
interview with ICIS.
“The supplier has two issues – one is to have
product available during a crisis. The supplier
has its own challenges in producing and having
enough raw materials. Then the second issue is
getting the freight to our port – the port of
Santos for example – when it already exports to
many countries,” he added.
Thus, having the capability to arrange its own
freight to pick up product directly from the
supplier is a critical advantage.
Quimica Anastacio’s strong relationships with
suppliers is also an advantage during periods
of limited supply, the CEO pointed out.
While supply chain disruptions are still a
challenge, product availability is now
normalising, Krueder said.
However, the Russia/Ukraine war is causing
commodity prices to surge, not only for
oil-based chemicals, but for those based on
corn and other agricultural inputs as well, he
noted.
Price volatility is a “bigger issue”, and the
key is to stay competitive under different
pricing scenarios by being aligned with pricing
trends, said the CEO, who also pointed out that
it’s not about all prices rising, but major
fluctuations both up and down for different
chemicals.
In cases where prices are rising, there have so
far been no signs of demand destruction, he
noted.
Amid the long period of supply chain
disruptions and now more volatile pricing,
“customers are perhaps seeing distribution with
different eyes”, said Kruder.
“Before the COVID crisis, there was more
incentive and pressure to buy directly and just
on price. But nowadays buyers value companies
that really can see the supply chain in a more
complete way. So I think we are not just
distributors but consultants,” he added.
“It’s not just about pressing a button and
buying, but about knowing the chain, where the
movements are, and what the risks are in
supplies from certain countries, and in certain
products. And so that’s where we can be more
useful and relevant to the customer because we
live and breathe these markets,” said Krueder.
GROWTH AMID A CHALLENGING LATIN AMERICA
OUTLOOKLatin America, the key
region where Quimica Anastacio operates, is
undergoing a period of turbulence with greater
political polarisation, changes in governments,
rising interest rates to counter inflation and
currency exchange rate volatility, he noted.
With anaemic GDP growth expected in 2022 in
Latin America (consensus ex-Venezuela at 2.0%),
chemicals demand growth will be challenging.
However, Krueder still sees strong organic
growth opportunities for Quimica Anastacio with
its target of launching at least eight new
products every month by working with customers.
Much of the new product development will be in
specialties, where the CEO aims to boost this
part of the business to 30% of sales from
around 20% currently.
“This is something which sustains growth even
when the economy is not growing,” said Krueder.
The company operates 18 segments across three
large divisions of Beauty and Health, Nutrition
and Industrial Processes. The latter’s segments
include polyurethanes (PU), lubricants,
plastics, polyvinyl chloride (PVC), household
cleaning products, and paints and construction.
“We see them as independent entities with their
own strategies, targets, marketing budgets and
product development targets. If you don’t see
each segment as a single company, it does not
make sense to stay in these markets because we
compete with some companies which are only
focused on these markets,” said Krueder.
“If each business unit sees itself as its own
company, they have to show results, and one of
those results is to bring more products,” he
added.
New product launches for Quimica Anastacio are
primarily driven by customers looking for more
efficient and economical solutions for existing
specifications, rather than new formulations.
This could involve everything from modifying a
product from powder to liquid form, blending,
sourcing from a different country, sourcing a
consolidated package of products, improving
logistics or changing packaging to offer a
better solution.
NO M&A IN NEAR
TERMThese days, it’s hard to
find a sizeable chemical distributor that is
not focused on M&A but Quimica Anastacio
stands out in this respect as being completely
focused on organic growth.
The company generated sales of around $553m in
2021, essentially doubling sales since 2016. It
ranks No 39 globally in the latest
ICIS Top 100 Chemical Distributors listing.
“Our strategy is to stay independent. And it
would make zero sense in this moment to go into
the M&A market because we already have been
growing continuously in Brazil and Latin
America, and are one of the market leaders,”
said Krueder.
Quimica Anastacio instead prefers to sustain
sales growth by investing its own capital and
launching new products with customers.
Staying independent also allows for faster
decision making and being nimble in adjusting
to different market scenarios, the CEO pointed
out.
“We want to focus 100% of our energy on our
business, and not on M&A strategies. We of
course see many companies focusing on M&A
with [assets] coming in and coming out. We
prefer to to grow, but in a healthy, gradual
way,” said Krueder.
Quimica Anastacio’s main presence is in Brazil,
but it has boosted operations in Argentina and
recently started distribution in Mexico.
Meanwhile, its Anastacio Overseas trading
company sells in almost all counties in Latin
America and has recently entered Africa, he
noted.
While the company has never made an
acquisition, the CEO does not completely rule
M&A out in the future.
“If we see our model of launching new products
is getting saturated, we could in one or two
years come to the conclusion that it would make
sense to buy a small specialty company to get
stronger in some segments. But it’s not the
case right now,” said Krueder.
CAPTION: Quimica Anastacio is expanding its
warehouse footprint in Brazil. Pictured is its
distribution center in Barueri, Sao Paulo.
SUSTAINABILITY AND REDUCING CARBON
FOOTPRINTQuimica Anastacio is
also focused on sustainability, expanding the
number of warehouses across Brazil to cut
transport distance and thus carbon footprint,
as well as offering reverse logistics.
“Those that are not looking at sustainability
now will be out of the game in a couple of
years,” said Krueder.
“What we try to do is reduce the kilometres
transported,” he added.
To this effect, the company recently opened a
new warehouse in Porto Alegre in Rio Grande do
Sul state in the south of Brazil, and plans to
open another in Curitiba in Parana state by the
end of the year, bringing the number of
warehouses in Brazil to seven.
In an example of “reverse logistics”, the
company supplies packaging for customers, and
then arranges the logistics to collect this
packaging when its use is finished.
Interview article by Joseph
Chang
Thumbnail shows Jan Krueder, CEO of Quimica
Anastacio.
17-May-2022
MADRID (ICIS)–This short outlook video on the
LNG market looks at:
The latest tenders from EGAS, IEASA and
more
Maintenance work in the US, a planned
terminal expansion in France
NBP prices and impacts on LNG, Russian LNG
flows and Japan’s demand role in Asia
17-May-2022
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.
Lockdowns have frozen large sections of
China’s economy
Some restrictions may be in place until
November
May be no China demand rebound in 2022
Demand for polymers in China may fall this
year
China could drag down global polymer,
chemicals demand growth
China PE, PP margins have often been
negative since last year
Slowing global economy hurts China exports
China may not remain driver of global
economic growth
Common Prosperity policy undermined by
zero-COVID policy, economic problems
Common Prosperity aims to redistribute
wealth, tackle property bubble, environmental
problems
In this Think Tank podcast, Will
Beacham interviews ICIS senior
consultant for Asia, John
Richardson.
Editor’s note: This podcast is an opinion
piece. The views expressed are those of the
presenter and interviewees, and do not
necessarily represent those of ICIS.
ICIS is organising regular updates to help
the industry understand current market trends.
Register here .
Read the latest issue of ICIS
Chemical Business.
Read Paul Hodges and John Richardson’s
ICIS
blogs.
17-May-2022
LONDON (ICIS)–Petronas has agreed to acquire
Sweden-based firm Perstorp, the Malaysia state
oil and gas company said on Tuesday, in a move
set to further expand its specialty chemicals
footprint.
Petronas has agreed to acquire the entire
equity interest in Perstorp Holding AB for
Malaysian ringgit (M$) 7.02bn (€1.54bn) from
private equity firm PAI Partners, giving the
firm an enterprise value of €2.3bn.
The deal is being carried out through its
Petronas Chemicals Group (PCG) arm, which has
stated a strategy to expand its basic chemicals
portfolio and to diversify further into
derivatives and specialties, with the Perstorp
acquisition representing the creation of a
specialty chemicals portfolio.
The acquisition is “a major milestone for PCG
in establishing a key platform to diversify
into the specialty chemical industry and
capture new growth opportunities, whilst
enabling us to future proof our business
against market cyclicality and volatility” said
PCG CEO Mohd Yusri Mohamed Yusof.
Petronas also acquired Netherlands-based
silicones, lube oil additives and chemicals
producer BRB Group in 2019.
Acquired by PAI Partners in 2006 and
transferred from its IV fund to a new
investment vehicle managed by the firm and
counting Landmark Partners as a cornerstone
investor in 2018, Perstorp focuses on the
resins and coatings, engineering fluids and
animal nutrition markets.
The company has dealt with “continued
challenges” in recent years, according to chief
Jans Secher, speaking when the company
announced a loss for the fourth
quarter of 2019, and has pursued a lengthy
programme of cost-cutting measures, but has
seen stronger financial growth since then.
Perstorp saw a downgrade to its credit rating
in April 2020 by S&P Global Ratings due to
the COVID-19 pandemic, to B- with a negative
outlook, citing heavy exposure to cyclical end
markets such as transportation, industrial and
construction.
The agency upgraded the company’s outlook from
negative to stable in December 2021, but
maintained the B- rating.
Perstorp has since swung back to profit,
recording record earnings
before interest, taxes, depreciation and
amortisation (EBITDA) in the fourth quarter of
2021 on the back of improved margins despite
the energy price surge, and healthy demand.
The company reported a record in the first
quarter with the highest EBITDA in its history
at Swedish kroner (Skr) 845m (€81m).
PCG estimates that the purchase will add 28%
incremental revenue based on 2021 results and
add 2.3m tonnes/year to its production
portfolio.
“By tapping into PCG’s strength and market
leading position in the Asia Pacific region, we
are confident that Perstorp can continue to
develop into its next phase of growth,” said
Secher.
($1 = M$4.39; €1 = SKr 10.44)
Thumbnail picture: Petronas Towers in Kuala
Lumpur, Malaysia (Source: C F
Tham/AP/Shutterstock)
17-May-2022
SINGAPORE (ICIS)–Thailand’s economy posted a
first-quarter annualized growth of 2.2%, faster
than the 1.8% pace set in the previous quarter,
on the back of stronger private consumption and
exports as COVID-19 restrictions have eased.
On a seasonally adjusted quarter-on-quarter
basis, the economy expanded by 1.1% in the
period January to March 2022, data from the
Office of National Economic and Social
Development Council (NESDC) show on Tuesday.
On a year-on-year basis, private consumption in
the first quarter accelerated to 3.9% from 0.4%
in the previous quarter.
Exports during the period grew 14.6% to
$73.3bn, with chemicals and petrochemical
products posting an 18.7% increase year on
year.
Manufacturing posted a slower growth of 1.9% in
the first quarter from 3.8% in the previous
quarter.
Tourism receipts grew for the first time in 11
quarters, rising 63.8% year on year to $4.2bn
in January-March 2022 as COVID-19 measures were
relaxed. The sector is a major component of the
Thai economy.
For the whole of 2022, the Thai economy is
projected to grow by 2.5-3.5%, supported by
improvement in domestic demand, recovery of
domestic tourism, and continued export growth,
NESDC stated.
Exports are projected to post a 7.3% growth,
while headline inflation is estimated to be in
the 4.2-5.2% range, it said.
($1 = Bt34.52)
Visit the ICIS Coronavirus
topic page for analysis of the
impact on chemical markets and links to latest
news.
17-May-2022
SINGAPORE (ICIS)–Click here to see the
latest blog post on Asian Chemical Connections
by John Richardson. Regular readers of the blog
will know that we first highlighted the great
polyolefins market divergence in April 2021. We
said that:
Asian and Middle East producers needed to
sell more to Europe because of much better
netbacks than in China.
Buyers should secure more resin supplies
from Asia.
Until comparative price differentials and
spreads started to normalise – which we would
be able to recognise from the historic ICIS
Pricing data – producers and buyers needed to
focus on these two parallel opportunities.
But this would require dealing with very
challenging container-freight markets. ICIS
trade-flow data suggest this can be done.
We also presented a scenario where European
demand remained strong with supply tight as
China moved in the opposite direction. This
scenario has happened, as we detail in today’s
post.
If you haven’t done so already you can
literally, make or save millions of dollars
from these highly unusual trading patterns. It
is never too late to start.
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.
17-May-2022
SINGAPORE (ICIS)–Malaysia’s Pengerang Refining
and Petrochemical (PRefChem) is widely
expected to restart its manufacturing complex
soon, after more than two years of outage,
which would inject fresh supply in Asia at a
time of soft demand.
Some market sources said the refinery and
cracker could be in the process of
restarting, with others saying
the downstream polymer units could resume
production in June.
PRefChem has yet to respond to ICIS’ query on
the issue, at the time of writing.
Its site in Johor, Malaysia, houses an
integrated refinery and petrochemical complex.
Naphtha output from its 300,000 bbl/day
refinery will be fed to the cracker, which can
produce 1.2m tonnes/year of ethylene and
609,000 tonnes/year of propylene, for captive
use of downstream units.
If fully operational, PRefChem’s annual
petrochemical production capacity is expected
to be 7.7m tonnes.
The restart may weigh on overall sentiment
across the petrochemical markets in Asia,
coming at a time of downbeat demand amid
continuing COVID-19 lockdowns in China.
Olefin production margins in Asia have remained
squeezed by high feedstock costs, prompting
regional cracker operators to keep output
curbed.
Regional supply, nonetheless, may still be
long, given severe weakness in demand.
While not expecting fresh supply to hit the
spot market when PRefChem restarts, the naphtha
market has been bearish, with recent prompt
cargoes fetching discounts.
In the downstream polyethylene (PE) markets,
some apprehensions remained, over whether the
planned restart could be carried out without
any major hiccups, according to sources close
to the matter.
PRefChem’s downstream units are expected to
produce linear low-density PE (LLDPE) and
polypropylene (PP) at the initial stages, the
sources said.
The company can produce 350,000 tonnes/year of
LLDPE, 400,000 tonnes/year of high-density PE
(HDPE) and 900,000 tonnes/year of PP at the
site.
If the restart is successful, the additional
capacity is expected to have a major impact on
the southeast Asian market, especially in
current market conditions where China’s market
is effectively closed to imports due to the
lockdowns.
This would mean PRefChem would probably try to
sell most of their available volume to
southeast Asia, a market that is already
struggling with poor downstream demand.
For some buyers though, the resumption of
supply from PRefChem could mean better days
ahead, as they would then have more diversity
in terms of PE supply which, they hope, could
equate to more price competition.
Suppliers, however, are concerned because they
expect pre-sales of PRefChem cargo to be priced
below market levels, in order to build
acceptance of the new product.
“We have to stand by for [market] turbulence,”
a market player said.
PRefChem’s Johor site was in the process of
starting up when a fatal fire hit the diesel
hydrotreating (DHT) unit at the refinery
in mid-March
2020, shutting down the whole complex.
The company, which comprises Pengerang Refining
and Pengerang Petrochemical, is a 50:50 joint
venture between energy firms PETRONAS of
Malaysia and Saudi Aramco.
Focus article by Pearl
Bantillo
Additional reporting by Melanie Wee, Izham
Ahmad and Julia Tan
17-May-2022
Contact ICIS
If you want to find out how our decision-making tools can help you navigate market shifts, contact us today. Simply fill in your details, submit the form and a member of our team will get in touch with you.
Need Help?