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Viewing 1-10 results of 55694
MADRID (ICIS)–The eurozone’s manufacturing
sectors led the downturn in September but
services continued contracting, putting the
economy on a downward trend at the end of the
third quarter, S&P Global said on Friday.
The September flash composite PMI –
manufacturing and services together – stood
well below the 50.0 points mark, which shows
economic contraction. Data were collected 8-20
September.
New orders – a key measure to gauge upcoming
demand levels – posted the sharpest drop for
almost three years.
“The overall reduction in output was again led
by manufacturing, but the service sector saw
activity decrease for the second month running.
Although firms continued to expand their
staffing levels in September, the rate of job
creation was only marginal amid evidence of
spare capacity and the gloomiest outlook since
the final quarter of last year,” said S&P
Global and Hamburg Commercial Bank, who jointly
compile the PMI index.
“Despite the weak demand environment, input
costs continued to rise sharply, and the rate
of inflation even picked up from that seen in
August. Output prices, meanwhile, increased at
the softest pace in over two-and-a-half years
amid muted pricing power.”
Eurozone flash PMI
indices
(below 50.0 points = contraction)
September
August
Composite (services
+ manufacturing)
47.1
46.7
Services
48.4
47.9
Manufacturing
output (1)
43.4
43.4
Manufacturing (2)
43.4
43.5
Economic output has been falling for four
consecutive months, although services output
recovered slightly from August.
Manufacturing continued to post the worst
figures. Barring a brief period of growth
during Q1, the eurozone’s manufacturing output
has decreased continuously since the middle of
2022.
“Central to the latest reduction in business
activity was a further deterioration in
customer demand, as highlighted by a fourth
successive monthly decrease in new orders,”
said the PMI authors.
“Manufacturing new orders contracted rapidly
again, but the acceleration in the overall rate
of decline was centred on the service sector,
where the drop in new business was the sharpest
since the pandemic.”
Sharp falls in new orders meant that companies
often turned to work on outstanding business to
maintain activity levels. This meant
backlogs of work decreased markedly again
during September, with the latest depletion the
most pronounced since June 2020.
“Eurozone businesses also signalled a waning of
confidence in the year-ahead outlook at the end
of the third quarter. Although on balance firms
continued to predict a rise in activity over
the coming 12 months, sentiment dipped to the
lowest since November last year,” they said.
“Optimism waned across both monitored sectors,
with manufacturing sentiment only just in
positive territory.”
NOT ALL DOOM AND
GLOOMCyrus de la Rubia, chief
economist at Hamburg Commercial Bank, said the
September PMI index showed a “grim picture”,
but added there had also been some green
shoots.
“Sure, activity has been reduced once again and
new incoming business has been shrinking for
three months in a row. However, companies are
hiring in September at a somewhat faster pace
than they did in August,” said de la Rubia.
“Thus, companies still show some resilience and
optimism in the face of lower demand. Having
said this, we expect the eurozone to enter a
contraction in the third quarter. Our nowcast,
which incorporates the PMI indices, points to a
drop of 0.4% compared to the second quarter.”
NOTES:
1. The Manufacturing Output Index is based on
the survey question “Is the level of
production/output at your company higher, the
same or lower than one month ago?”
2. Manufacturing PMI is a composite index based
on a weighted combination of new orders (0.30);
output (0.25); employment (0.20); suppliers’
delivery times (0.15); and stocks of materials
purchased (0.10).
22-Sep-2023
Updated at 04:00 GMT on 22 September 2023.
Please scroll down to see headlines.
The war in Ukraine has caused oil and
especially gas price volatility, as restricted
flows from Russia to Ukraine caused values to
spike to record-breaking levels before
collapsing to pre-war levels.
Since December 2022, unseasonably mild winter
weather hit demand, reversing gas prices.
However millions of tonnes of chemical and
fertilizer production remain offline across
Europe thanks to the elevated gas prices and
poor macro-economic conditions which have
impacted demand.
Europe’s energy challenge is immense and put
into stark relief by the response to Russia’s
war in Ukraine. Cutting the ties that bind EU
and non-EU nations to Russian gas and oil will
be extremely painful this year and in years to
come.
This topic page examines the impact of the
Ukraine conflict on oil, gas, fertilizer and
chemical markets.
Image credit Vadim
Ghirda/AP/Shutterstock
Europe’s energy markets witnessed a year of
record prices and extreme volatility in 2021.
Russia’s invasion of Ukraine has led to more
difficult conditions for global markets since
then.
GAS SUMMARY
Gas storage remains robust in Europe,
winter demand fell thanks to mild weather
Poor downstream demand still affecting
industrial production, gas demand
Record shipments of liquefied natural gas
(LNG) to Europe so far in 2022/23
LNG plus Norwegian, Algerian, Azerbaijani
pipeline imports compensate for Russian supply
shortfall
Europe LNG processing operating at full
capacity
Nord Stream I and II pipelines damaged by
explosions, zero flows to Europe
EU implements voluntary 15% cut to
consumption
AMMONIA SUMMARY
Russia supplies 20% of global seaborne
ammonia market
Disrupted supply has pushed up fertilizer
and food prices
OIL SUMMARY
Friendship oil pipeline flows through
Ukraine
Russian oil feeds around a quarter of
Europe demand
Europe seeks to end reliance on Russian
crude oil
EU agrees ban on seaborne imports from 5
December 2022, petroleum products from 5
February 2023
From 5 December Russian crude oil cargoes
will only be insured if subject to price cap
CHEMICALS SUMMARY
Millions of tonnes of capacity remain
offline despite gas cost collapse
Elevated oil, gas prices dent consumer
confidence and demand
Prospect of recession, more cheap imports
from Asia
Margins, prices under pressure due to
collapsed downstream demand
Sanctions and measures against Russian exports
of oil and gas have sent shockwaves across the
global economy, lifting the cost of living,
impacting industrial and agricultural
production and potentially leading to social
unrest.
How vulnerable are energy and
energy-related Russian supplies to
disruptions?
Europe has historically depended for close to
40% of its annual gas consumption on Russian
supplies, imported via four routes – Ukraine,
Belarus-Poland as well as the Nord Stream 1 and
TurkStream corridors linking Russia to Germany
and Turkey via the Baltic and Black Sea,
respectively.
Overall Russian pipeline supplies were limited
throughout 2021 and further reduced in 2022. By
the end of last year Russian pipeline supplies
fell to less than 10% of Europe’s total gas
imports compared to 40% in the previous year.
Russian volumes shipped through Ukraine to
Europe are now at third of what they should be
as part of a five-year transit agreement
Russia has banned exports of gas to several EU
countries, and the Nord Stream I and II
pipelines have been damaged. In 2022 flows via
Yamal and Nord Stream 1 stopped completely.
European petrochemicals players faced even
higher gas prices as a result, though these
have since collapsed to pre-war levels.
Fertilizer companies – where gas can account
for 80% of costs – have been forced to curtail
production. Chemicals were affected, especially
those with high exposure to gas prices through
utilities or feedstocks.
If the conflict escalates, Ukraine transit
pipelines may come under attack but disruptions
could be limited because the infrastructure has
been built to grant flexibility, allowing the
operator to reroute flows away from potentially
damaged segments.
AMMONIA IMPACT
The Togliatti-Azot pipeline, the world’s
longest ammonia pipeline stretching 2,471km
from the Togliatti Azot plant in Russian Samara
Oblast to the Ukrainian Black Sea port of
Yuzhny, could be caught up in the cross-fire.
Russian ammonia supplies account for around 20%
of the global seaborne merchant ammonia market
each month.
Around two thirds of those volumes are exported
via Yuzhny, with the rest reaching European and
global markets via Baltic ports. Ammonia is a
prime material for fertilizers, so curtailments
could potentially lead to higher food prices
and shortages.
Ammonia market players are scrambling to cover
positions and assess options as the Russian
invasion of Ukraine saw loadings at the key
export hub of Yuzhny halted with immediate
effect.
Russian nitrogen fertilizer major Togliatti
confirmed the suspension of the transit of
ammonia to the Black Sea port via pipeline to
ensure the safety of people living in the
vicinity of the lengthy conduit.
OIL PIPELINES VULNERABLE
Supplies on the world’s longest oil pipeline,
the Friendship (Druzhba) pipeline, could be
threatened if the conflict leads to tough
sanctions. The pipeline carries oil from
central Russia 4,000km west to Ukraine and
Belarus and runs close to the Belarus-Ukraine
border. Russia exports around 5m bbl/day, of
which half are exported to Europe, including
via this pipeline.
Russian oil accounts for about a quarter of
Europe’s consumption, with the Druzhba pipeline
carrying close to 1m bbl/day.
Sanctions have been imposed on imports of
Russian crude oil and products by sea, but the
ban does not include pipeline oil.
Europe consumed most exports of Urals, Russia’s
biggest export grade, in 2021 after Saudi
Arabia boosted market share in China. Almost
10m tonnes of Urals went through Rotterdam in
the first half of last year, up 2m tonnes on
2020.
Germany stands most exposed because it gets 25%
of its oil from Russia.
SInce the ban came into place, Russia has
successfully switched exports mainly to China
and India, though priced at a steep doscount.
CHEMICALS IMPACT
Gas and electricity are important components in
the production costs of many chemicals. Surging
gas and feedstock prices in Europe have caused
big hikes in contract and spot prices. Now
millions of tonnes of fertilizer and chemical
capacity are offline in Europe.
ICIS has also created an interactive timeline
which shows the history of the gas impact since
July 2021.
These products have been most badly affected by
outages in Europe, with more than half of
capacity offline or running at reduced rates in
some cases.
Analysis by the ICIS Margin Analytics team
shows the products which are most exposed to
energy and gas prices in Europe as a feedstock
or utility.
Europe is at a
competitive disadvantage to other regions and
some customers are seeking new sources of
lower-priced supply, especially from Asia and
the Middle East.
Collapsed demand means that millions of tonnes
of European chemicals capacity remains offline
despite much lower gas costs.
The conflict in Ukraine has pushed European gas
prices back up to record levels, forcing
exposed chemical producers to cease production,
or add further energy surcharges.
Rising oil prices since late 2021 have already
put chemical margins under pressure, and
volatility has continued into 2022. As oil and
naphtha prices soared, margins for ethylene
production based on naphtha went negative for
the first time ICIS record began. The are now
are swinging wildy in tandem with oil price
movements.
Chemical producers are struggling to pass on
increasing feedstock and energy costs in
Europe. Elevated oil and gas prices also dent
downstream consumer confidence and spending,
with recession a possibility later in 2022 or
2023.
What contingency plans are being put in
place?
Europe prepared for a difficult winter although
rising storage fullness levels, falling demand
and more import capacity for liquefied natural
gas (LNG) have helped it get by, assuming there
will not be an extensive cold spell.
As of 6 March, storage facilities across Europe
were 54% full compared with just 20% last
March.
Some 30bn cubic meters of new capacity were
added between September 2022 and March 2023.
The capacity includes offshore terminals in the
Netherlands, Germany and Estonia/Finland.
Demand has been decreasing by more than 20% in
the industrial sector in north-west European
countries and by 20-30% for households in
Germany, according to official data.
Nevertheless, there is a possibility that
Russia may completely stop its gas supplies to
Europe via the last two remaining routes –
Ukraine and Turkey, which could lop off some 70
cubic meters of Russian gas entering Europe
daily.
In such a scenario, the most affected countries
would be those in eastern and central Europe,
which are landlocked and have been struggling
to secure regasified LNG from importing
countries.
For oil markets, in case of an attack but no
international sanctions, the worst-case
scenario would be for approximately 240,000
bbl/day of lost Russian exports via Ukraine.
There are other seaborne routes, including the
Russian Black Sea port of Novorossiysk.
Gas rationing – impact on Europe
petrochemicals, fertilizers
Embattled European fertilizer and petrochemical
producers may be the first in line to cut gas
consumption if the region experiences a cold
snap in the weather.
Russia, Europe’s largest gas supplier, has been
limiting exports to less than a quarter of its
deliveries two years ago and may stop them
altogether amid its political stand-off with
the EU.
Policymakers recommend voluntary reductions but
say these would become mandatory in case of a
supply emergency jeopardising the bloc’s
security.
DEMAND REDUCTION
The EU’s largest consumers include households,
accounting for 37% of total demand, electricity
and heat generation covering around 30% and
industrial consumption accounting for another
30%.
Record high gas prices and an ongoing gas
supply crunch over the least year had forced
consumers to limit or stop production or seek
import substitution globally. The mild winter
has alleviated this situation.
FERTILIZERS
The fertilizer sector, one of the most
gas-intensive industries, has also been one of
the most affected so far as gas can account for
up to 80% of production costs. Production has
been cut back drastically because it is no
longer economic.
PETROCHEMICALS
On the petrochemicals side, there are now deep
production cuts for products such as methyl
methacrylate (MMA) and melamine which are
heavily exposed to natural gas for utilities or
as a feedstock.
Producers are making detailed plans for
rationing, particularly in Germany, where the
chemicals and pharmaceuticals industry uses
about 140 TWh per year, or about 15 percent of
Germany’s gas consumption.
Gas is mainly used by petrochemicals to
generate energy such as electricity and steam
as well as to fire furnaces for production
complexes such as crackers.
Sites are able to lower operating rates
significantly, but they may be forced to close
if gas supplies drop so much that production
becomes uneconomic or difficult from a
technical perspective.
Companies with flexibility are switching from
natural gas to liquefied petroleum gas (LPG) or
other sources of energy.
Ukraine conflict threatens Europe oil
supply, chemicals production
With Russia’s invasion of Ukraine, sanctions
could cut supplies of crude oil through the
Druzhba pipeline, threatening oil refinery
operations and chemicals production at
installations in Hungary, Slovakia, Czech
Republic, Poland and the former East Germany.
Russian oil supplies up to a quarter of
Europe’s crude imports, with refineries in
central and eastern Europe, which are attached
to the Druzhba pipeline, particularly reliant
on these supplies. Any interruption to these
supplies could force refineries to reduce
operating rates unless they can find
alternative supplies.
Analysis of the ICIS Supply & Demand
database shows that the countries Druzhba runs
through, except for Germany, are reliant on
Russian crude oil for more than half of their
imports, led by Slovakia which obtained 96% of
its supplies from Russia in 2021.
Chemical production downstream of refineries in
these countries could be impacted by any
reduction in operating rates. The ICIS data
forecast that for 2022, 2.79m tonnes of
ethylene (11% of total European capacity) and
2.34m tonnes of propylene (12% of total
European capacity) are reliant on refineries
located along the Druzhba pipeline. While some
alternative sources of crude oil could be
sourced, it is unlikely normal levels of
operations could be maintained.
Michael Connolly, ICIS Principal Analyst
Refining said: “Although many have built
alternate sources, keeping full operating rates
would be difficult for them as they rely on a
consistent and reliable source of crude. Most
refiners in Europe are aware of the risk of
Russian crude and over the past 5-10 years have
tried to reduce their dependence, or at least
to build some capability to have an alternate
supply – it doesn’t mean they would be
unaffected, but there should be a little bit of
resilience, depending on the site.”
Connolly explained that some land-locked
refineries along the Druzhba pipeline have
built pipelines to the coast, allowing
alternative sources of crude oil to be sourced.
However, these pipelines may not have capacity
to feed the whole refinery.
A spokesperson for Grupa LOTOS said: “The LOTOS
refinery has dealt with suspended supplies by
land before. Due to the contamination of
Russian oil with chlorines, PERN, the
state-owned operator of transmission and
storage infrastructure, had to completely
discontinue the transmission of crude oil from
the eastern direction between 24 April and 9
June 2019.”
He added that scheduling of oil supplies by sea
helped to secure volumes sufficient to maintain
an unchanged level of throughput and maximise
fuel production.
UKRAINE CHEMICALS UNDER THREAT
With Russian forces present in Ukraine,
chemical and fertilizer facilities may be
threatened by physical damage, interrupted
power and gas supplies or logistics disruption.
Kalush cracker closed
Karpatnaftohkhim’s cracker at Kalush has been
closed down because of the imposition of
martial law in Ukraine. It has capacity
(tonnes/year) of 250,000 (ethylene); 117,000
(propylene) 110,000 (LLDPE), 300,000 (PVC),
100,000 (benzene).
Black Sea export hub
closed
Ammonia market players have scrambled to cover
positions and assess options as the Russian
invasion of Ukraine saw loadings at the key
export hub of Yuzhny halted with immediate
effect.
Russian nitrogen fertilizer major Togliatti
confirmed the suspension of the transit of
ammonia to the Black Sea port via pipeline to
ensure the safety of people living in the
vicinity of the lengthy conduit.
The Samara Oblast-based giant also confirmed
the shut down of four of its seven ammonia
units, with the other three plants operating at
reduced rates.
Russia
export disruptions to shift global trade flows,
future capacities threatened
Disruptions to Russia’s chemicals and polymers
exports will
change trade flows, particularly to Europe
and Asia, as international sanctions, lack of
logistics and even “self-sanctions” limit
volumes.
While Russia’s capacities are relatively small
on a global scale, they can still have a
significant impact on regional markets if these
exports are disrupted.
Key Russia exports include methanol,
polyethylene (PE), polypropylene (PP), styrene
and paraxylene (PX).
Russia has increased exports of high density
polyethylene (HDPE) and polypropylene (PP) in
particular in 2020 and 2021 as new capacity
started up from SIBUR’s ZapSibNeftekhim complex
in Tobolsk in 2020.
LATEST HEADLINES
Germany producer prices fall by a record
12.6%
By Stefan Baumgarten 21-Sep-23 02:58 LONDON
(ICIS)–Producer prices in Germany fell 12.6%
year on year in August, marking the biggest
year-on-year decline since 1949, when
collection of the data began.
UK inflation edges down in August despite
higher fuel prices
By Morgan Condon 20-Sep-23 20:30 LONDON
(ICIS)–UK annual inflation slowed for the
third consecutive month in August, according to
the latest data from the Office for National
Statistics (ONS) on Wednesday. The Consumer
Prices Index (CPI) was recorded at 6.7%, down
from 6.8% in July, driven by softening
inflation for food prices. Further contraction
was offset by rising prices for motor fuels.
Oil
prices hit highest since Nov ‘22 on China
recovery hopesBy Nurluqman
Suratman 15-Sep-23 12:11 SINGAPORE
(ICIS)–Upbeat August data on China’s
industrial production and consumer spending
accompanied by cuts in banks’ reserve
requirement on Friday sent crude prices soaring
to their highest level since November 2022.
INSIGHT: Lummus, Clariant
enhance PDH tech amid tougher propylene market
By Al
Greenwood14-Sep-23 23:15
HOUSTON (ICIS)–The enhancements that Lummus
Technology and catalyst producer Clariant have
made to the CATOFIN propane dehydrogenation
(PDH) technology will compete not just with the
market leading Oleflex tech from Honeywell UOP,
but with new entrants from Dow and KBR as well
as renewable processes that have become more
popular as companies strive to become more
sustainable.
INSIGHT: ICIS Leading
Business Barometer gauges pressured global
economy
By Nigel Davis 14-Sep-23 18:47 LONDON
(ICIS)–The health of the chemical industry can
be used as a bellwether for the that of the
wider economy, tied as it is so closely to
upstream energy and vitally important
downstream industries and sectors, principally
autos, construction and electronics.
PODCAST: Global oil Q4
tight supply could intensify on three
factors
By Eloise Radley 14-Sep-23 16:03 LONDON
(ICIS)–Crude prices rose above $90/bbl for the
first time in 2023, in the week ending 8
September.
Europe, US economies to
grow in 2024, China slowdown to persist for
years: economist
By Will Beacham 12-Sep-23 23:41 SITGES,
SPAIN (ICIS)–Europe and the US economies
should grow next year while China will be
trapped in a prolonged multi-year slowdown,
according to Koes De Leus, chief economist of
BNP Paribas Fortis.
INSIGHT: Saudi, Russia
crude cuts firm prices but macro bearishness
casts a shadow
By Tom Brown 11-Sep-23 23:45 LONDON
(ICIS)–News last week that Saudi Arabia and
Russia are to extend voluntary crude oil output
cuts through to the rest of the year has driven
prices to the highest levels of the year, but
economic weakness and stronger flows from
elsewhere may cap gains.
Singapore factory activity improves in Aug but
major external headwinds
remain
By Nurluqman Suratman 06-Sep-23 13:58 SINGAPORE
(ICIS)–The country’s manufacturing purchasing
managers’ index (PMI) rose marginally to 49.9
in August from 49.8 in July, marking the third
consecutive month of improvement, according to
data from the Singapore Institute of Purchasing
and Materials Management.
INSIGHT: Styrene capacity build up shifts
global cost curve and threatens structural
change
By Moritz Lank 05-Sep-23 23:40 LONDON
(ICIS)–High cost styrene production units are
challenged in a difficult, slow-growing demand
environment and one in which global capacity is
building fast.
INSIGHT: Trinseo seeks breathing room amid
fiercely challenging market, financing
conditions
By Joseph Chang 07-Sep-23 03:55 NEW YORK
(ICIS)–It has been a tough stretch for Trinseo
as the polymers and latex binders producer
seeks to refinance debt coming due next year
amid fiercely challenging market and credit
conditions, especially in Europe where it still
operates a good chunk of assets even after
shutdowns.
European caustic soda quiet during August lull,
spot prices under further
pressure
By Chris Barker 29-Aug-23 22:48 LONDON
(ICIS)–European caustic soda players cut back
activity in August, adding to the market’s
already weak outlook.
Asia fatty alcohols mid-cuts C12-14 weakens on
feedstock PKO decline
By Helen Yan 30-Aug-23 12:40 SINGAPORE
(ICIS)–Despite ongoing and upcoming plant
turnarounds, spot prices of mid-cuts C12-14 are
facing downward pressure from the decline in
the feedstock palm kernel oil (PKO) prices and
stagnant demand.
Europe MA offers undercut Asian offers, some
restocking may be seen
By Anne-Sophie Briant-Vaghela 29-Aug-23 22:05
LONDON (ICIS)–European maleic anhydride (MA)
prices could be near a bottom, although it
remains to be seen how long the uptick or a
halt in the downtrend will last given unanimous
expectations that underlying demand will be
stagnant for the rest of the year.
Europe jet fuel price
rally stalls following upstream volatility,
fading gasoil strength
By Shruti Salwan 25-Aug-23 17:17 LONDON
(ICIS)–Consumption for aviation and road fuels
has started to soften as the wind-down of the
summer travel season begins, with lower gasoil
and jet fuel spending exerting downward
pressure on prices.
CDI
Economic Summary: US mild recession expected in
H1 2024
By Kevin Swift 25-Aug-23 03:30 CHARLOTTE,
North Carolina (ICIS)–The US economy could
enter a mild recession in H1 2024 as the lag
effects from the Federal Reserve’s heavy dose
of rate hikes finally kick in. The Fed has also
signaled the potential for further hikes as
core inflation remains sticky.
Gas sell-off to
trigger German peak spark spread
upside
By Daniel Muir 24-Aug-23 22:48 LONDON
(ICIS)–The sell off of benchmark natural gas
contracts after Australian LNG strike risks
eased should see clean peak spark spreads for
German front-year delivery rebound in coming
sessions, traders told ICIS.
Front-month clean dark
and clean spark spreads
tighten
By Anna Coulson 24-Aug-23 00:32 LONDON
(ICIS)–Rising fuel costs saw German rolling
front-month Clean Dark and Clean Spark Spreads
improve slightly over the last seven days, but
a weaker fuel mix saw coal and gas front-year
profitability decrease.
Thailand 2023 growth
forecast cut to 2.5-3.0% after H1
slowdown
By Nurluqman Suratman 21-Aug-23 15:37
SINGAPORE (ICIS)–Thailand on Monday cut its
full-year growth forecast to 2.5-3.0% after the
economy slowed in the first half of the year
due to the weakness in global demand which has
weighed on exports and manufacturing.
INSIGHT: Shrinking China
trade signals trouble for chemicals
everywhereBy Will Beacham
10-Aug-23 19:26 BARCELONA (ICIS)–Double-digit
declines in China’s latest import and export
figures, together with shrinking domestic
manufacturing data, confirm a persistent
collapse in demand for chemicals around the
world.
Thailand’s PTTGC swings to Q2 net loss
on crude-led slump in product
prices
By Pearl Bantillo 10-Aug-23 15:04 SINGAPORE
(ICIS)–Thai producer PTT Global Chemical swung
into a net loss of baht (BT) 5.6bn ($159m) in
the second quarter of 2023 as product prices
tracked the slump in upstream crude prices amid
global recession and petrochemical overcapacity
concerns.
Saudi raises most Sept crude prices for
Asia; hikes all Europe
prices
By James Dennis 08-Aug-23 10:49 SINGAPORE
(ICIS)–Saudi Arabia issued its September
Official Selling Prices (OSP), with price rises
for most grades for customers in Asia and more
marked increases for customers in northwest
Europe and the Mediterranean, while there were
no increases for US buyers.
Saudi
Aramco Q2 net profit falls 37.9% on lower oil
prices, poor chemical
margins
By Nurluqman Suratman 07-Aug-23 15:49
SINGAPORE (ICIS)–Aramco’s net profit fell by
37.9% year on year in the second quarter on the
back of lower crude oil prices and weakening
refining and chemicals margins, the Saudi
energy giant said on Monday.
Singapore manufacturing
shows signs of recovery; external headwinds
persistBy Nurluqman Suratman
03-Aug-23 12:55 SINGAPORE (ICIS)–Singapore’s
manufacturing sector showed signs of recovery
in July as new orders improved, but export
headwinds are expected to persist as economic
conditions at major trading partners remain
poor.
OUTLOOK: US BD, SBR
likely to remain oversupplied amid weak
demandBy Amanda Hay
03-Aug-23 03:03 HOUSTON (ICIS)–US butadiene
(BD) and styrene butadiene rubber (SBR) are
expected to remain oversupplied through the
second half of 2023 because of weak demand for
tyres.
Austrian gas storage
withdrawals could buck 2022 trend in Q4
‘23By Irina Breilean
02-Aug-23 22:54 LONDON (ICIS)–Austrian VTP
price dynamics suggest storage withdrawals will
likely concentrate during the first quarter of
2024, with VTP Q1 ’24 prices trading at a
premium over Q4 ’23, October ’23 and November
’23.
INSIGHT: BASF grapples
with demand trough, slow road
backBy Tom Brown 02-Aug-23
21:12 LONDON (ICIS)–BASF and the wider
chemicals sector is dealing with an environment
more singular even than the conditions seen in
the pandemic and 2008 financial crash according
to BASF chief Martin Brudermuller, with little
sign of a V-shaped recovery from the current
demand trough.
INSIGHT: Commercial
start-up of Vietnam petrochemical complex
delayed amid weak global
demand
By Pearl Bantillo 02-Aug-23 18:57
SINGAPORE (ICIS)–Thailand’s Siam Cement Group
(SCG) expects mechanical completion and
commissioning of Vietnam’s first cracker in
August to September, pushing back
the full
commercial start-up of the Long Son
Petrochemical project to the second half of the
year amid oversupply concerns in Asia.
China
rolls out fresh stimulus to boost growth as
July manufacturing contracts
By Fanny Zhang 31-Jul-23 16:30 SINGAPORE
(ICIS)–China has announced new measures to
revive its fragile economy that has been losing
steam since the second quarter, with the focus
on boosting consumption.
INFOGRAPHIC: Europe PET in survival mode
despite peak summer season
By Miguel Rodriguez Fernandez 24-Jul-23 19:01
LONDON (ICIS)–Post-COVID life, coupled with
the Russia-Ukraine war and the volatile
macroeconomics it has unleashed, are upending
consumers’ habits. Restaurants are full,
tourism is booming, yet people are saving on
supermarket purchases, which is severely
hurting demand f or polyethylene terephthalate
(PET).
IMF ups 2023 global GDP forecast, slowed growth
expectations remain
By Tom Brown 25-Jul-23 21:00 LONDON (ICIS)–The
IMF on Tuesday modestly increased its global
GDP growth estimates for 2023 while maintaining
expectations that the recovery over the next 18
months will continue substantially slower than
in 2022 as post-COVID headwinds and the
Russia-Ukraine war weigh on the economy.
OUTLOOK: Europe polyols demand forecast
uncertain for H2
By Zubair Adam 26-Jul-23 17:00 LONDON
(ICIS)–Polyols consumption in Europe was
mainly limited in H1 2023, and there is no
major recovery expected in H2.
OUTLOOK: Short-term European SBR demand
expectations bearish
By Melissa Hurley 27-Jul-23 17:00 LONDON
(ICIS)–European styrene butadiene rubber (SBR)
demand has weakened in 2023 and the situation
is expected to continue in the third quarter.
INSIGHT: Resurgence of Iran gas price debate as
politicians seek a rollback to
formula
By Keven Zhang 28-Jul-23 12:00 SINGAPORE
(ICIS)–In mid-July, an official announcement
from the Iranian government stated that the
natural gas price for petrochemical producers
was Iranian rials (Rls)70,000/cubic metre, up
from Rls50,000/cubic metre.
OUTLOOK: Europe PX braces
for a gloomy H2 amid recessionary
fears
By Miguel Rodriguez Fernandez 21-Jul-23
17:00 LONDON (ICIS)–The Europe paraxylene (PX)
market is getting ready to navigate a second
half of the year marked by disappointing
downstream demand, as the challenging
macroeconomic scenario keeps denting orders
from customers.
French nukes to drive
German gas-to-power demand in
August
By Eduardo Escajadillo 20-Jul-23 23:07
LONDON (ICIS)–German gas-fired generation
could potentially gain momentum in August to
compensate in the event of lower French nuclear
power output amid warmer temperatures forecast
in northwest Europe.
Ukraine needs more
realistic energy targets to attract investors,
MP
By Aura Sabadus 20-Jul-23 17:42 LONDON
(ICIS)–Ukraine must guarantee a stable
regulatory environment and competitive market
conditions if it is determined to attract
investments to rebuild its war-ravaged energy
sector, Andrii Zuphanyn, the chair of the gas
subcommittee in the Ukrainian parliament told
ICIS.
Profit warnings may drive
sell-side M&A – bankers
By Joseph Chang 20-Jul-23 04:55 NEW YORK
(ICIS)–A very active earnings
warning season for the chemical
industry portending difficult conditions
throughout 2023 could lead to more M&A
activity, particularly on the sell side.
Robust domestic demand to
drive Asia ‘23 growth amid weak
exports
By Nurluqman Suratman 19-Jul-23 14:31
SINGAPORE (ICIS)–The Asian Development Bank
(ADB) on Wednesday maintained its growth
outlook for developing economies in Asia and
the Pacific at 4.8% this year as robust
domestic demand continues to support the
region’s recovery.
INSIGHT: Pakistan gets
much-needed reprieve; polymer imports to
improve
By Pearl Bantillo 14-Jul-23 17:11
SINGAPORE (ICIS)–Billions of US dollars have
started flowing into Pakistan after getting the
much-awaited IMF stamp of approval that the
south Asian nation will set its house in order,
averting an impending sovereign debt default.
INSIGHT: Chems warn of
weak consumer goods, China as earnings season
starts
By Al Greenwood 13-Jul-23 21:41 HOUSTON
(ICIS)–Chemical companies have flagged
weakness in consumer goods and China in a wave
of profit warnings issued before the start of
earnings season.
PODCAST: Falling chemical
prices signal switch from inflation to
deflation
By Will Beacham 12-Jul-23 20:07 BARCELONA
(ICIS)–Falling chemical prices could be a
leading indicator of a switch from inflation to
deflation in the broader economy.
OUTLOOK: No respite from
economic pressures and weak demand for Europe
plasticizers market
By Nicole Simpson 12-Jul-23 17:21 LONDON
(ICIS)–Weak demand, strong competition between
sellers and economic woe are expected to
continue defining the European plasticizers
spot market through the second half of 2023.
OUTLOOK: As busy
‘warnings season’ nears end, a new reality sets
in for H2 2023
By Joseph Chang 12-Jul-23 05:37 NEW YORK
(ICIS)–A very active earnings warnings season
for the chemical industry is just about over,
resulting in a big reset downwards in earnings
expectations for Q2 and the rest of the year.
With a new reality setting in, the industry is
bracing for earnings and new guidance that is
likely to be far less optimistic than at the
start of the year.
OUTLOOK: Asia methanol to
grapple with more supply; feedstock swings to
direct market
By Keven Zhang 11-Jul-23 11:40 SINGAPORE
(ICIS)–Asia’s methanol market is expected to
grapple with increased global supply in the
second half of 2023 as new capacities are
slated to come on stream in China, Middle East
and north America.
Europe suffers further
operating rate cuts as demand malaise,
overcapacity bite
By Will Beacham 07-Jul-23 16:49 BARCELONA
(ICIS)–Collapsing demand and competition from
other regions have led to further deterioration
in operating rates for Europe’s petrochemical
sector, new data from ICIS shows.
South
Korea removes tariffs on naphtha, crude imports
until yearend
By Nurluqman Suratman 07-Jul-23 15:21
SINGAPORE (ICIS)–South Korea has removed
tariffs imposed on naphtha and crude oil
imports, to reduce cost burden for the domestic
petrochemical industry and tame high inflation.
Ukraine can scale up wind
output despite war, market
challenges
By Aura Sabadus 06-Jul-23 20:01 LONDON
(ICIS)–Ukraine could bring online as much as
55GW of wind capacity by 2050 despite major
challenges related to the Russian invasion and
issues linked to market design.
Weak
economic activity pressuring European oil
demand, refining margins
By Cecilia Barreiro 06-Jul-23 00:07 LONDON
(ICIS)–It has been difficult for oil prices to
push above the $80/bbl threshold as economic
anxiety weighs on the market. Weak industrial
and manufacturing demand in the US, EU and
China has driven bearish market sentiment
despite recent announcements from Saudi Arabia,
Russia and Algeria of further supply cuts.
Eurozone manufacturing
slips to mid-2020 levels as demand slows, rate
hikes bite
By Tom Brown 03-Jul-23 19:00 LONDON
(ICIS)–Eurozone manufacturing sector activity
slowed in June to the weakest level since the
early days of the COVID-19 pandemic as demand
continued to fall, confidence sank and
producers started to feel the impact of the
central bank’s interest rate hikes.
INSIGHT: China MTBE pushed into overseas
markets due to limited domestic
demand
By Aviva Zhang 30-Jun-23 12:30 SINGAPORE
(ICIS)–Chinese methyl tert-butyl ether (MTBE)
producers have been pushing into overseas
markets since 2022 due to limited domestic
consumption potential. Production capacity is
in surplus and gasoline demand has plateaued.
Brazil’s chemicals May producer prices fall
sharply on lower naphtha values, stronger
real
By Jonathan Lopez 30-Jun-23 02:26 SAO PAULO
(ICIS)–Brazil’s chemicals producer prices fell
by nearly 6% in May, month on month, on the
back of lower global naphtha values and a
stronger currency bringing down prices in
reais, the country’s statistics office IGBE
said on Thursday.
INSIGHT: Worries over weak Asia PA6 and
domestic China market remain
By Josh Quah 28-Jun-23 20:25 SINGAPORE
(ICIS)–Asia polyamide 6 (PA6) markets are
ending the quarter with much of the concerns
that have been prevalent since the start of it
– against a backdrop of weak demand in most
regions and already below-threshold margin
levels under pressure of falling further.
OX imports into Europe up by nearly 10% in
Q1
By Miguel Rodriguez Fernandez 27-Jun-23 19:55
LONDON (ICIS)–Imports of orthoxylene (OX) into
the EU and the United Kingdom went up by 9.9%
in Q1 year on year, according to the latest
data from the ICIS Supply and Demand database.
European heatwave could
dampen German power imports through
July
By Calum Andrews 23-Jun-23 01:05 LONDON
(ICIS)–Germany is likely to maintain a net
import position through July, market sources
have suggested to ICIS, however the extent will
largely hinge on European temperatures.
INSIGHT: Embedding
inflation further weakens 2023 industrial
demand for chemicals
By Nigel Davis 22-Jun-23 20:12 LONDON
(ICIS)–Chemical producers in Europe are in an
especially difficult position but operators
worldwide have had to face up to the fact that
demand recovery in 2023 appears increasingly
distant.
INSIGHT: LANXESS CEO
‘Lehman 2’ warning highlights extreme and
broadening demand weakness
By Joseph Chang 21-Jun-23 05:29 NEW YORK
(ICIS)–A huge earnings warning by
Germany-based specialty chemicals company
LANXESS highlights the extreme and extended
weakness in European and global construction
and electronics markets, along with surprising
declines in “usually stable” consumer
applications.
Asia
polyolefins overcapacity to worsen amid
eurozone recession
By Nurluqman Suratman 20-Jun-23 14:38
SINGAPORE (ICIS)–Asia’s polyolefins market is
bracing for a supply overhang as heavy capacity
additions coincide with a significant weakening
of demand from the recession-laden eurozone,
and amid the slowing Chinese economy.
Global weekly spot IPEX
down again on declines across
regions
By Yashas Mudumbai 19-Jun-23 18:58 LONDON
(ICIS)–The global spot ICIS Petrochemical
Index (IPEX) went down by 1.7% week on week on
the back of price declines across all regions.
Ample
UK gas supply to boost exports over winter
2023
By Hector Falconer 16-Jun-23 01:30 LONDON
(ICIS)–National Gas released its Gas Winter
Review and Consultation on 15 June. For this
coming winter, the British grid operator
expects:
INSIGHT: Shell joins list
of companies reviewing chemicals as demand
tanks, overcapacity grows
By Will Beacham 15-Jun-23 22:36 BARCELONA
(ICIS)–Shell has joined the ranks of major
chemical companies which are reviewing and
rationalising their operations as demand and
profitability continue to fall amid rampant
overcapacity.
INSIGHT: Asia
petrochemicals markets plunge in June on supply
length – ICIS analysts
By Ann Sun 15-Jun-23 18:24 SINGAPORE
(ICIS)–Following a weak May, petrochemical
markets in Asia are witnessing a further drop
in prices in June on supply/demand imbalances.
INSIGHT: Shell to be
‘ruthless’ in capital allocation with Singapore
petchems, Europe units under
review
By Joseph Chang 15-Jun-23 05:29 NEW YORK
(ICIS)–UK-based energy giant Shell will take a
“ruthless” approach to capital allocation along
with a focus on simplification. There will be a
renewed commitment to oil and gas, and
liquefied natural gas (LNG) where returns are
expected to be the highest, while chemicals
will come under greater scrutiny with the
Singapore energy and petrochemical
assets under
review and European plants being
evaluated “unit by unit”.
JUNE
CRUDE OUTLOOK: Bearish demand narrative
confronted by tightening global oil
supplies
By Cecilia Barreiro 13-Jun-23 22:39 LONDON
(ICIS)–Oil prices are expected to continue
retreating during the rest of June as worries
over the health of the global economy and
bearish oil demand prospects depress market
sentiment. However, dwindling spare capacity
and a tighter sour-crude market could rekindle
price volatility in July.
PODCAST: China, energy
transition spur volatility in oil and chemical
markets
By Will Beacham 13-Jun-23 20:36 BARCELONA
(ICIS)–As China’s economy decelerates and the
shift to renewable energy gathers pace, prepare
for much greater volatility in the oil and
chemical markets.
Global spot IPEX down for
ninth consecutive week on falls across all
regions
By Miguel Rodriguez Fernandez 12-Jun-23
19:31 LONDON (ICIS)–The global spot ICIS
Petrochemical Index (IPEX) went down by 1.8%
week on week on the back of price declines
across all regions.
Saudi
Arabia 2023 GDP growth slows to 2.1% on oil
output cuts – IMF
By Nurluqman Suratman 08-Jun-23 15:31
SINGAPORE (ICIS)–Saudi Arabia, the world’s
biggest crude exporter, is expected to post a
slower GDP growth of 2.1% this year in view of
production cuts announced in April, according
to the International Monetary Fund (IMF).
Czech
Republic eyes SMRs development in addition to
standard reactors by 2030
By Simona Uhrinova 08-Jun-23 01:14 LONDON
(ICIS)–The Czech Republic would need to
develop small and medium sized modular reactors
(SMRs) in addition to standard nuclear plants
to reduce its dependence on cross-border
imports before 2030.
ICIS
China May petrochemical price index slumps 7%;
June demand stays weak
By Yvonne Shi 08-Jun-23 11:33 SINGAPORE
(ICIS)–Sluggish demand sent the ICIS China
Petrochemical Price Index in May tumbling by 7%
from end-April despite some stability in the
upstream crude market during the period.
Fears
of gloomy summer for Europe PE,
PP
By Ben Lake 06-Jun-23 19:25 LONDON
(ICIS)–Polyethylene (PE) and polypropylene
(PP) players in Europe are bracing for a
challenging summer, with buyers worried by
woeful demand, while producers closely monitor
already lowered operating rates to avoid
dipping into negative margins.
Dow
cuts Q2 sales guidance on challenging
macros
By Joseph Chang 02-Jun-23 04:48 NEW YORK
(ICIS)–US-based Dow is taking down its Q2
sales forecast to a range of $11.0bn-11.5bn
from its prior estimate of $11.75bn-12.25bn on
challenging macroeconomic conditions and lower
pricing levels, its CEO said at an investor
conference.
PODCAST: Ukraine SOE
corporate governance is vital for
reconstruction efforts,
specialist
By Aura Sabadus 01-Jun-23 21:28 LONDON
(ICIS)– Corporate governance rules at
Ukraine’s energy state owned enterprises (SOEs)
have been critical to market reforms and to
helping the country secure a long-term gas
transit contract with Russia.
NE
Asia C2 outlook downbeat on rising regional
supply, weak China data
By Yeow Pei Lin 01-Jun-23 11:26 SINGAPORE
(ICIS)–Northeast Asia’s ethylene (C2) players
are cautious on expectations of rising regional
supplies and weak downstream outlook for the
third quarter as the recovery in the Chinese
economy loses momentum.
Caixin China May
manufacturing PMI rises to 50.9, first
expansion in three months
By Nurluqman Suratman 01-Jun-23 11:26
SINGAPORE (ICIS)–Caixin’s China manufacturing
purchasing managers’ index (PMI) picked up from
49.5 in April to 50.9 in May, marking the first
expansion in three months, the Chinese media
firm said on Thursday.
High
stocks could curb Italian Q4 ‘23 gas and power
risk
By Camilla Vitanza 31-May-23 23:44 LONDON
(ICIS)– High gas storage levels could reduce
some of the risk premium priced in the Italian
gas and power Q4 ’23 products ahead of expiry,
although LNG supply will likely remain a key
driver.
China
manufacturing weakness weighs on crude; outlook
dims further
By Nurluqman Suratman 31-May-23 13:36
SINGAPORE (ICIS)–China’s manufacturing sector
lost further momentum in May, heightening
concerns that oil consumption in the world’s
second-biggest economy could weaken further.
INSIGHT: Petrochemical
prices and margins under relentless
pressure
By Nigel Davis 31-May-23 00:38 LONDON
(ICIS)–The persistent global weak demand
environment continues to put pressure on
producers and prices are falling as the balance
with output remains elusive.
PODCAST: Demand flops in
chemical markets around the world, gloomy
outlook
By Will Beacham 30-May-23 20:25 BARCELONA
(ICIS)–Chemical markets around the world are
suffering from collapsed demand conditions and
oversupply with no prospect of a turnaround in
the coming months.
Depressed US
manufacturing activity weighing on PP
demand
By Zachary Moore 26-May-23 05:40 HOUSTON
(ICIS)–Demand for polypropylene (PP) in the US
is facing a bearish short-term outlook as the
US manufacturing sector remains in
contractionary territory.
INSIGHT: A tale of two
economies, as resurgent services eclipses
languishing industry
By Tom Brown 25-May-23 23:05 LONDON
(ICIS)–After the dark warnings of late 2022,
ministers at the European Commission could be
forgiven for sounding a little smug.
PODCAST: Rampant China
chemicals overcapacity could rebalance by
2024/5
By Will Beacham 25-May-23 21:00 BARCELONA
(ICIS)–Excess capacity plaguing China’s
petrochemical markets could return to more
balanced conditions by 2024/5 as the current
wave of additions ends and demand gradually
improves.
APIC
’23: INSIGHT: Asia petrochemicals navigate poor
demand amid China start-ups; carve ‘green’
path
By Pearl Bantillo 24-May-23 19:50
SINGAPORE (ICIS)–Uncertainties will hound
Asia’s petrochemical markets for the rest of
the year and possibly into 2024 amid the global
economic slowdown at a time of strong capacity
additions in regional powerhouse China.
INSIGHT: Europe
petrochemicals demand remains weak and prices
under intense pressure
By Nigel Davis 23-May-23 23:10 LONDON
(ICIS)–This striking chart from Germany’s
chemicals and pharmaceuticals trade
association, the VCI, does not even tell the
full story for the country’s petrochemical and
polymers sectors.
APIC
’23: Asia PE, PP margins to stay in unhealthy
range despite China
reopening
By Nurluqman Suratman 19-May-23 19:25 NEW
DELHI (ICIS)–Asia’s polyethylene (PE) and
polypropylene (PP) markets are expected to face
poor margins across all production routes
despite China’s reopening, an industry analyst
said on Friday.
APIC
’23: Japan petrochemical plants run at 80% on
current demand
By Pearl Bantillo 19-May-23 17:13 NEW
DELHI (ICIS)–Japan’s petrochemical plants have
been running at an average rate of about 80%
amid demand uncertainties this year, an
industry executive told ICIS.
INSIGHT: Fundamental Asia
olefin imbalance persists despite better
margins
By Joey Zhou 19-May-23 14:00
SINGAPORE(ICIS)–Asia olefin margins from major
production routes have improved and remained in
profitable territory since March, driven by
lower feedstock prices.
Eurozone inflation rises on energy cost
pressure
By Morgan Condon 17-May-23 20:05 LONDON
(ICIS)–Eurozone inflation edged up slightly on
persistent pressure from energy costs in April,
as the rate for the wider EU showed a soft
decrease, according to the latest data from the
EU’s statistical agency Eurostat on Wednesday.
Annual inflation in the eurozone rose to 7.0%,
up from 6.9% in March. In the wider EU,
annual inflation fell to 8.1%, from 8.3% in the
previous month. Compared to a year prior,
inflation for the eurozone remained slightly
softer, as the rate was pitched at 7.4% in
April 2022, while the level remained stable on
the previous year for the EU at 8.1%.
Global oil demand expectations for 2023
increased in May on stronger China recovery –
IEA
By Morgan Condon 16-May-23 22:25 LONDON
(ICIS)–Global oil demand is set to increase in
2023, driven by strength in China, according to
the International Energy Agency (IEA) on
Tuesday. The IEA’s monthly oil report shows
that demand is expected to rise by 2.2m bbl/day
year on year in 2023, marking an average 102m
bbl/day, supported by economic recovery in
China surpassing expectations. Macroeconomic
pressures and soft demand was reflected in
weaker oil pricing in April and early May,
caused lingering concerns of a recession in
some regions. The IEA, however, increased its
output forecast on a strong recovery in the
second half of the year. China is expected to
account for nearly 60% of global growth in
2023.
INSIGHT: Weak demand dominates
chemicals in Q2 as economies
drag
By Nigel Davis 11-May-23 00:41 LONDON
(ICIS)–The persistence and wide spread of the
demand slump is the key issue for chemical
producers in 2023, now mid-way through the
second quarter. Recent financial reporting from
chemical companies of all types and in all
locations has underlined the impact of weak
demand on sales in the first quarter. The
year-on-year comparisons have proved to be
stark, and reduced production the driver of
lower revenues at a time of still high costs of
sales. Certainly, the focus in Europe and large
parts of the rest of the world has shifted from
energy costs (and availability).
Higher feedstock costs,
slow demand maintain pressure on US polyether
polyol margins
By Zachary Moore 21-Apr-23 06:41 HOUSTON
(ICIS)–A combination of higher feedstock costs
along with slower demand has been maintaining
pressure on margins for US polyether polyol
producers, with margins likely to remain
compressed over the next few months.
INSIGHT: Plastics,
petchems in Europe still waiting for
construction season, Q2 may be reality
check
By Vicky Ellis 20-Apr-23 21:45 LONDON
(ICIS)–As warmer, sunnier days grow more
frequent, Europe’s construction industry should
be ramping up for a busy period. But the season
is proving a disappointment,
with weaker demand across a wide range of
petrochemical and plastics products.
INSIGHT: Hope for 2023
European construction market recovery falters
as spring demand uptick fails to
materialize
By Nicole Simpson 19-Apr-23 20:52 LONDON
(ICIS)–Since late 2022, chemicals players have
been hopeful that better demand is just around
the corner but optimism is faltering as
economic conditions remain challenging and
spring construction demand has failed to
ignite.
INSIGHT: Diverse Asia
April price trends for olefins and aromatics
chain chemicals
By Jimmy Zhang 19-Apr-23 19:15 SINGAPORE
(ICIS)– Weak consumer confidence and economic
pressures are expected to weigh on the price
outlook for Asia petrochemicals.
UK
summer demand to drop, exports to France in Q3
likely
By Anna Coulson 19-Apr-23 00:07 LONDON
(ICIS)–National Grid is confident that there
will be sufficient supply to meet electricity
demand over the summer, the UK’s Electricity
System Operator (ESO) announced in its Summer
Outlook 2023 on 18 April.
Global oil demand growth
hopes pinned on faltering Chinese
economy
By Barney Gray 12-Apr-23 18:42 LONDON
(ICIS)–Chinese government data for March,
published earlier this month, indicated that
domestic consumer demand is weak and the
manufacturing sector was under pressure at the
end of Q1, which could hinder the anticipated
China-led growth in global oil demand.
IMF
keeps developing Asia 2023 growth forecast at
5.3%; trims India
projections
By Nurluqman Suratman 12-Apr-23 13:23
SINGAPORE (ICIS)–The International Monetary
Fund (IMF) has kept its 2023 growth forecast
for developing Asia at 5.3% but trimmed its
forecast for next year amid rising risks in
global financial conditions.
INSIGHT: Europe chemicals
must wait until 2026/7 for gas cost
relief
By Will Beacham 11-Apr-23 22:58 BARCELONA
(ICIS)–Although record inflows of liquefied
natural gas (LNG) have helped European gas
prices fall, a cold winter could see them soar,
with relief from volatility only in prospect
for petrochemical customers by 2026/7 when
major new sources come onstream globally.
INSIGHT: Vietnam economy
sputters as first petrochemical complex about
to start up
By Pearl Bantillo 06-Apr-23 11:00
SINGAPORE (ICIS)–Vietnam hopes to stem
deteriorating manufacturing conditions, borne
of weak external demand, by cutting the cost of
borrowing to spur domestic activity as it gears
toward commercial operations of its first
petrochemicals complex.
US
auto sector faces economic headwinds on rising
interest rates, higher
prices
By Adam Yanelli 05-Apr-23 05:05 HOUSTON
(ICIS)–US March auto sales ticked lower from
February as economic headwinds have replaced
supply chain issues as obstacles facing the
industry that relies heavily on chemicals.
Developing Asia 2023 GDP
to grow faster at 4.8% but downside risks
remain – ADB
By Nurluqman Suratman 04-Apr-23 12:10
SINGAPORE (ICIS)–Developing economies in the
Asia Pacific region are projected to grow at a
faster pace of 4.8% this year and in 2024 on
the back of higher consumption, tourism and
investments due to continued easing of pandemic
restrictions, but downside risks remain, the
Asian Development Bank (ADB) said.
INSIGHT: Europe chems
look to tough Q2 as economic indicators remain
choppy
By Tom Brown 03-Apr-23 21:47 LONDON
(ICIS)–With expectations growing for some of
the headwinds buffeting the chemicals sector to
ease in the second half of the year, conditions
remain challenging for the second quarter,
while economic indicators point to a continuing
“volatile phase” according to an analyst.
Oil
surges after surprise OPEC+ output cut, lifting
Asia naphtha, benzene
By Nurluqman Suratman 03-Apr-23 12:57
SINGAPORE (ICIS)–Oil prices rose by more than
$6/bbl on Monday after the OPEC and its allies
unexpectedly announced further production cuts
of about 1.16m barrels per day on Sunday.
Hungary unlikely to reach EU
intermediate gas storage
targets
By Irina Breilean 29-Mar-23 12:53 LONDON
(ICIS)–Hungary may not reach the next EU
intermediate storage fullness target on 1 May,
ICIS analysis indicates. EU intermediate
targets have been in place since November 2022,
in preparation for the start of the 2023 gas
winter. The targets apply to all member states
with underground gas storage sites on their
territories and directly interconnected to
their market areas. Intermediate targets are in
force for 1 February, 1 May, 1 July, and 1
September, two months ahead of the beginning of
the gas year. ICIS data shows storage sites
across Hungary were 33.2% full on 27 March, a
26.2 percentage point increase compared to last
year. However, this still stands 3.8 percentage
points short of the upcoming May target of 37%.
Joint gas purchasing uptake may be slow
as buyers locked into
contracts
By Gretchen Ransow 28-Mar-23 23:20 LONDON
(ICIS)–Uptake of the EU’s joint purchasing
model may be limited in its first year, as
companies were already locked into contracts
due to “huge panic” about prices in 2022,
European Commission vice-president Maros
Sefcovic told the European Parliament’s
Committee on Industry, Research and Energy
(ITRE) on 28 March. However, if the platform
does prove successful the EU wants to extend
the model beyond gas to other strategic
commodities such as hydrogen, critical raw
materials or technologies linked to the energy
transition. Sefcovic told ITRE on 28 March that
there was still much work to do but joint gas
purchasing would give valuable experience for
the future.
Ukraine’s new policy proposals to
‘revolutionise’ energy
sector
By Aura Sabadus 28-Mar-23 00:22 LONDON
(ICIS)–Ukraine is preparing a raft of
wide-ranging regulations that could pave the
way for the complete overhaul of its energy
sector. The step is a priority for the
mid-term, a senior Kyiv-based lawyer told ICIS.
Maksym Sysoiev, partner at global law firm
Dentons, said the reconstruction of the energy
sector is deemed a priority for Ukraine and
added that if all regulations that are now
under discussion are implemented, they would
trigger a “revolution” in the energy sector.
Russia to extend export restrictions on
fertilizers until November
By Deepika Thapliyal 27-Mar-23 22:39 LONDON
(ICIS)–Russia is planning to extend
restrictions on fertilizer exports until
November to guarantee availability in the
domestic market, according to the country’s
agriculture minister Dmitry Patrushev. Current
restrictions on exports are valid until
end-May. To curb inflation and to ensure that
there was a reliable supply of fertilizers to
its farmers, the government imposed export
quotas in December 2021. The restrictions have
continued since the war with Ukraine broke out
in February 2022, although they have not had a
significant impact on the availability of
Russian fertilizer exports – apart from
nitrates.
Asia
petrochemicals demand tepid on macroeconomy,
oversupply concerns
By Nurluqman Suratman 24-Mar-23 14:16
SINGAPORE (ICIS)–Asia’s petrochemical markets
continue to face tepid demand as economic
recovery in regional bellwether China remains
slower than initially expected, with new
production capacities adding to oversupply
concerns.
European acrylates
subdued with underwhelming
demand
By Mathew Jolin-Beech 24-Mar-23 01:26
LONDON (ICIS)–The European acrylates markets
are all currently subdued with demand described
as “soft.”
CDI
Economic Summary: US regional banking crisis
lowers odds of soft landing
By Joseph Chang 23-Mar-23 22:21 NEW YORK
(ICIS)–The failure of two sizeable banks
(Silicon Valley Bank and Signature Bank) in the
US and the crisis of confidence contagion
spreading to other regional banks and now
European financial institutions threatens to
significantly tighten lending conditions at the
very least, further slowing economic growth and
potentially tipping US and European economies
into recession.
Asia
PMDI import markets bearish on poor downstream
demand
By Shannen Ng 23-Mar-23 15:12 SINGAPORE
(ICIS)–Asian import markets for polymeric
methylene diphenyl diisocyanate (PMDI) were
dominated by largely bearish sentiment in the
week ended 22 March.
PODCAST: Asia, Mideast PS
demand tepid on competitive imports, feedstock
volatility
By Damini Dabholkar 23-Mar-23 11:14
SINGAPORE (ICIS)–Asian and Middle Eastern
polystyrene (PS) markets are seeing slow demand
with regional supply remaining relatively
unchanged.
INSIGHT: US Fed
undeterred from 2% inflation goal means more
tough times ahead for
chemicals
By Joseph Chang 23-Mar-23 05:34 NEW YORK
(ICIS)–Even amid a regional banking crisis,
the US Federal Reserve remains undeterred in
its goal of bringing inflation down to its 2%
target. This was evidenced by another 0.25
percentage point rate hike and will mean
weakening economic conditions, a lower chance
of a soft landing and a more challenging demand
environment for chemicals going forward.
Phenol energy surcharges
will start to disappear on lower TTF, but no
demand improvement seen
By Jane Gibson 23-Mar-23 00:57 LONDON
(ICIS)–Falling upstream gas prices may offer
chemical sellers and buyers some relief but the
impact on demand levels has yet to be
significant.
PODCAST: Plunging
shipping rates point to normalising global
logistics, Europe under
pressure
By Will Beacham 22-Mar-23 22:58 BARCELONA
(ICIS)–Steep falls in container shipping rates
indicate that the pandemic-induced logistics
crisis may be drawing to a close, but this now
makes Europe more vulnerable to a flood of
cheap imports from Asia.
US
R-PET buying sentiment weakens in wake of
banking crisis
By Arianne Perez 22-Mar-23 20:11 SINGAPORE
(ICIS)–Asian exporters of recycled
polyethylene terephthalate (R-PET) cargoes are
expected to continue to see cautious buying
from converters in the US following the banking
crisis.
INSIGHT: New PE/PP
capacities risk derailing nascent Asia
polyolefin recovery
By Izham Ahmad 22-Mar-23 17:28 SINGAPORE
(ICIS)–A wave of new polyethylene (PE) and
polypropylene (PP) supply in Asia is
threatening to upend the tentative demand
recovery the region has been experiencing since
the end of the Lunar New Year holidays as new
suppliers fight to establish market share in an
increasingly crowded market.
Asia
polyamide 6,6 Q2 mood darkened by fiscal year
closing, demand outlook
By Josh Quah 22-Mar-23 13:12 SINGAPORE
(ICIS)–Asia’s nylon polyamide 6,6 (PA66)
markets remain weak, ahead of turnarounds
coming up for some producers in northeast Asia.
China
PP prices fall to nearly three-year low amid
increasing supply, lower-than-expected
demand
By Lucy Shuai 22-Mar-23 12:44 SINGAPORE
(ICIS)–China polypropylene (PP) prices fell to
a nearly three-year-low amid increasing supply
and lower-than-expected demand, and the market
may remain under pressure in Q2.
Asia
naphtha swings to multi-month lows on volatile
crude
By Melanie Wee 21-Mar-23 13:42 SINGAPORE
(ICIS)–Asia’s naphtha markets can expect
heightened volatility, largely tracking crude
oil futures movement, as demand prospects are
being weighed down by market jitters over the
health of the global banking system.
PODCAST: Subdued spot
trading activity in Europe’s oxo-alcohols and
derivatives markets
By Marion Boakye 21-Mar-23 03:35 LONDON
(ICIS)–Throughout March – the oxo-alcohols and
derivative markets in Europe have experienced
weak spot demand, ample supply, and thin import
opportunities.
INSIGHT: Constrained
consumer budgets limit demand for major
chemicals consuming sectors
By Nigel Davis 21-Mar-23 00:49 LONDON
(ICIS)–This is by no means an easy time for
chemical producers as the industry’s major
downstream markets continue to be influenced by
the impact on demand of rising costs and higher
interest rates.
Europe’s chemical sector
shrinks – battered by high costs, poor demand
and cheaper imports
By Will Beacham 20-Mar-23 23:10 BARCELONA
(ICIS)–Collapsing Q4 profits and losses for
European chemical majors, together with low
expectations for 2023, show just how badly the
sector is still suffering.
Europe markets firm after
emergency UBS Credit Suisse
purchase
By Tom Brown 20-Mar-23 20:15 LONDON
(ICIS)–European markets firmed on Monday after
Switzerland-based banking group UBS announced
plans to acquire embattled rival Credit Suisse,
raising market hopes that banking sector
contagion may be limited.
Global weekly spot IPEX
down on price declines across
regions
By Will Beacham 20-Mar-23 19:11 LONDON
(ICIS)–The global weekly spot ICIS
Petrochemical Index (IPEX) fell by 2.0% week on
week on the back of lower index values across
regions.
PODCAST: Asian PP markets
grapple with increased supply,
lower-than-expected demand in
2023
By Damini Dabholkar 20-Mar-23 19:06
SINGAPORE (ICIS)–Asian polypropylene (PP)
markets are being challenged by increasing
capacity in 2023, especially in the China
market, while demand continues to recover more
slowly than expected.
Crude
dips to lowest since December 2021 on banking
sector turmoil
By James Dennis 20-Mar-23 17:52 SINGAPORE
(ICIS)–Crude prices declined on Monday to
their lowest levels since December 2021 before
recovering on growing financial concerns
following equity market losses and instability
in the banking sector in Asian trading.
Asia
petrochemical shares, oil prices weaken after
UBS rescue of Credit Suisse
By Nurluqman Suratman 20-Mar-23 12:43
SINGAPORE (ICIS)–Shares of petrochemical
companies in Asia were mostly weaker and crude
futures fell on Monday on fears of
a banking
crisis contagion, as troubled Credit
Suisse was rescued by its Swiss rival UBS in a
government-backed deal.
INSIGHT: European TiO2
operations at risk, but China may not be the
answer
By Heidi Finch 17-Mar-23 17:53 LONDON
(ICIS)–While energy costs in Europe are more
relaxed compared with 2022 peaks, the
TiO2 marketand the wider chemical industry in
Europe are still facing residual economic and
demand headwinds. European production is at
risk, while China/Asia capacity is increasing.
Asia
glycerine demand weighed down by caution after
US bank collapse and turmoil
By Helen Yan 17-Mar-23 11:48 SINGAPORE
(ICIS)–Asia’s glycerine spot demand has been
weighed down by prevailing caution following
the collapse of two mid-sized banks in the US
and plunging bank stocks in Europe.
INSIGHT: Banking
contagion threatens to spread, hit chemicals
demand hard
By Joseph Chang 17-Mar-23 05:47 NEW YORK
(ICIS)–The failure of two sizeable banks
(Silicon Valley Bank, Signature Bank) in the US
and the crisis of confidence contagion
spreading to other US regional banks and now
European financial institutions threatens to
significantly tighten lending conditions at the
very least, further slowing economic growth and
potentially tipping the US and European
economies into recession.
Asia
naphtha tumbles on tepid demand; crude oil
losses
By Melanie Wee 16-Mar-23 12:56 SINGAPORE
(ICIS)–Asia naphtha markets are under pressure
on the back of fragile demand, while taking
cues from global crude oil futures.
INSIGHT: Banking woes
rattle US chem shares
By Al Greenwood 16-Mar-23 05:03 HOUSTON
(ICIS)–Shares of US-listed chemical companies
fell on Wednesday amid concerns about the
implications of a string of bank failures.
Topic Page by Aura Sabadus and
Will Beacham. Additional
reporting by Richard
Ewing and Sophie
Udubasceanu. Maps and graphs by
Yashas Mudumbai.
22-Sep-2023
HOUSTON (ICIS)–Swedish producer Cinis
Fertilizer has signed a 10-year agreement with
Ascend Elements, a leading American
manufacturer of engineered battery materials,
regarding the sourcing of sodium sulphate.
The company said this agreement along with a
collaboration with potash producer K+S Minerals
lay the foundation for Cinis to establish a
fertilizer production plant in Hopkinsville,
Kentucky.
This will be their third plant with the two
other plants located in Sweden with Cinis
saying becoming established in the US is part
of their larger plan to reach a production
level of 1.5m tons of potassium sulphate coming
from six facilities by the end of the year
2030.
The terms of the agreement call for up to
240,000 short tons per year of sodium sulphate
starting in 2026 with Cinis having entered into
a letter of intent with K+S regarding the off
take of their finished product.
They have also arranged to purchase potassium
chloride from K+S facilities in
Saskatchewan to supply the US fertilizer plant,
which is scheduled to start in 2026, with
the capacity to produce up to 300,000 tonnes of
potassium sulphate yearly.
“In the past year, we have experienced massive
international interest in our environmentally
friendly fertilizer, where circularity and
fossil-free production are key. For
manufacturers of batteries, it is important
that the entire production chain meets high
requirements for resource efficiency and
environmental friendliness,” Jakob Liedberg,
Cinis Fertilizer CEO said.
“The agreement with Ascend Elements in addition
with the letter of intent with K+S, which
includes the purchase of our full plant
production capacity, gives us the confidence we
need to establish Cinis Fertilizer on the
American market.”
21-Sep-2023
HOUSTON (ICIS)–A surge in new US industrial
projects and a chronic shortage of construction
labourers are contributing to cost overruns of
about 50% for some renewable fuel and chemical
projects.
Decades of labour shortages in skilled
craftsmen have worsened in recent years with no
easy fixes. In a recent survey of contractors,
61% said projects have been delayed because of
labour shortages
Some material shortages persist. In the
same survey, 65% said supply-chain problems
have caused project delays
Half of the respondents in the survey said
companies have cancelled, postponed or scaled
back projects because of higher costs
LIST COST OVERRUNS
The capital budget for
the second commercial-scale plant of Origin
Materials rose to $1.60bn from $1.07bn.
Origin also is splitting the project into two
phases, delaying the startup and reducing the
scale of the plant. The project will produce
renewable oils that can be processed into
biofuels and feedstock that can be converted
into a component used to make polyethylene
terephthalate (PET) or polyethylene furanoate
(PEF)
Phillips 66 expects to spend $1.25bn to
convert its San Francisco refinery in Rodeo,
California, to produce renewable fuels, up
47% from an earlier estimate of $850m made in
May 2022
The costs for
an ultrapure sulphuric acid plant being
built in Casa Grande, Arizona, have increased
to $300m-380m, up 50%. The project, currently
on hold, is being developed by Chemtrade
Logistics and joint-venture partner Kanto
Group
UPCOMING US
PROJECTSChemical companies plan
to add capacity through the rest of the decade
in the US. The following table shows the
chemicals that will have capacity increase by
at least 1m tonnes in 2030 from 2023.
Ethylene
High density polyethylene (HDPE)
Methanol
Acetic Acid
Vinyl chloride monomer (VCM)
Ethylene Dichloride (EDC)
Caustic Soda
Chlorine
Polyvinyl Chloride (PVC)
Polyester polymer
Purified terephthalic acid (PTA)
Polyethylene Terephthalate (PET)
Propylene
Source: ICIS Supply and Demand
Database
CHRONIC LABOUR
SHORTAGESConstruction costs are
rising in part because of labour shortages,
which are contributing to higher salaries.
Construction pay is rising at its fastest rate
in two decades, said Ken Simonson, chief
economist for the Associated General
Contractors (AGC), a trade group that
represents companies that build infrastructure,
industrial plants and other nonresidential
construction projects.
Average hourly earnings for construction
workers in non-supervisory roles reached $34.40
in August, a premium of 18.6% over the average,
according to the US Bureau of Labor Statistics
(BLS). Among private workers in non-supervisory
roles, only utility and information employees
earned more.
The AGC and Autodesk recently completed an
annual survey of the construction workforce
that illustrated how hard it is to find
qualified workers.
85% of the respondents have job openings
they are trying to fill
68% of applicants lack the skills needed to
work in construction
A third fail to pass drug tests
Simonson summarised some of the reasons behind
the labour challenges.
For decades, students were encouraged to
pursue higher education at the expense of craft
trades
Tightened immigration rules have made it
more difficult to fill empty roles through
employment-based immigration
Because of its nature, construction cannot
offer employees hybrid or remote jobs
Employees tend to retire earlier in the
construction industry because it is physically
demanding
SOME MATERIAL SHORTAGES
PERSISTWhile costs for many
construction materials have stabilised or
fallen, some shortages persist, such as for
transformers, switch gears and other electrical
equipment, Simonson said.
Diesel prices have recently risen by their
largest amount since 1990, contributing to
construction costs.
Recent tariffs that the US imposed on steel and
other materials have set a floor on prices,
Simonson said. As inflation cools, those
tariffs will keep prices for those materials at
an elevated level.
SURGE IN MANUFACTURING
CONSTRUCTIONAn incredible surge
in US manufacturing projects has increased
demand for construction labour and materials,
which could add more pressure on costs.
The following chart shows the increase in
construction spending for manufacturing
projects. Figures are in millions of dollars.
Source: US Census Bureau
In July 2023, the most recent month for which
data are available, spending in manufacturing
spending rose by 71% year on year.
Simonson listed some of the reasons behind the
surge in spending.
Semiconductor fabrication plants (fabs),
other electronics projects
Petrochemical plants and liquefied natural
gas (LNG) plants
Electric vehicles (EVs) and associated
battery plants
Projects intended to shorten and simplify
supply chains by bringing manufacturing closer
to customers
Renewable energy and carbon-capture
projects
To qualify for many government incentives,
projects need to contain a certain amount of
materials made in the US. Consequently,
companies are building more plants to produce
those materials in the US
Insight article by Al
Greenwood
Thumbnail shows hard hat worn by
construction workers. Image by
Shutterstock.
21-Sep-2023
SINGAPORE (ICIS)–Vietnam’s Nghi Son Refinery
and Petrochemical (NSRP) will restart some of
its units on 7-9 October following more
than a month of turnaround.
The NSRP complex, which is located at the Nghi
Son Economic Zone in Thanh Hoa Province in the
northcentral coast of Vietnam, has completed
70% of the turnaround as of 18 September, the
company said on 20 September.
Its refinery can process up to 200,000 bbl/day
of crude oil into refined products.
NSRP resumed on 20 September product deliveries
from its inventory reserve of 9,000 cubic
metres of gasoline and 75,000 cubic metres of
diesel, the company said.
“From 7 to 9 October 2023, some key processing
units can be partially restarted. Once the
turnaround is complete, the refinery can resume
normal operations and continue to provide
stable petroleum products to the Vietnamese
market,” the company said.
The NSRP complex houses a 400,000 tonne/year
polypropylene (PP) plant, which accounts for
about a third of Vietnam’s domestic output of
the polymer, according to ICIS data.
The complex produces aromatics – benzene,
toluene, paraxylene and mixed xylenes – as well
as propylene, which goes into the PP plant at
the site.
The whole complex began its 55-day turnaround
in late August.
The shutdown of the whole complex is the
company’s first major maintenance since
starting commercial operations in 2018.
NSRP is a joint venture among Vietnam Oil and
Gas Group (PetroVietnam), Kuwait Petroleum
Europe and Japanese petrochemical producers
Idemitsu Kosan and Mitsui Chemicals.
21-Sep-2023
MUMBAI (ICIS)–India’s Odisha state has
approved Indian Oil Corp’s (IOC) polyester
products manufacturing project and a green
ammonia project from L&T Energy Green Tech,
a state government official said on Thursday.
IOC’s polyester project in the Bhadrak district
is expected to have units producing 100,000
tonnes/year of polyester staple fibre (PSF);
167,000 tonnes/year of drawn texture yarn
(DTY); and 33,000 tonnes/year of full drawn
yarn (FDY), the company reported to the
Ministry of Environment in February 2021.
The plants are expected to cater to domestic
demand as well as to exports to Bangladesh,
Vietnam, Nepal and Indonesia.
IOC will source monoethylene glycol (MEG) and
purified terephthalic acid (PTA) feedstock for
the plants from its new plants at Paradip.
The 357,000 tonne/year MEG plant at Paradip was
commissioned in February 2023, according to
IOC’s annual report released on 2 August 2023,
while it expects to commission a 1.2m
tonne/year PTA line and an 800,000 paraxylene
(PX) line in January 2024.
Separately, the Odisha government also cleared
a proposal from L&T Energy Green Tech Ltd
to set up a 320,000 tonne/year green ammonia
plant in Paradip with an investment of Indian
rupee (Rs) 10.3bn ($124m).
L&T Energy Green Tech is a subsidiary of
Indian engineering and construction company
Larsen & Toubro (L&T).
Seven other projects were approved by the
eastern Indian state on 12 September, Odisha
state official said, adding that timelines for
these are still being worked out.
These projects are:
SW Utkal Steel doubling production capacity
in Jagatsinghpur to 24m tonnes/year
Jagatsinghpur
Jindal Ferrous’ 2.35m tonne/year carbon
steel plant in Jajpur
MSP Metallics’s 1.39m tonne/year steel
plant in Jharsuguda
Avaada Electro’s facility to produce green
energy equipment including ingots, wafers,
solar cells and modules in Khurda
Berger Paints’ 400,000 tonne/year plant in
Khurda
Petronet LNG’s terminal in Gopalpur
Toshali Cements’ capacity expansion in in
Koraput
($1 = Rs83.17)
21-Sep-2023
HOUSTON (ICIS)–The American Chemistry Council
(ACC) has started an initiative in response to
an unprecedented surge in US rules and
regulations that, if unchecked, could make it
increasingly difficult to make materials in the
country, the trade group said on Wednesday.
“The broad swath of regulations targeting our
industry reveals a disturbing lack of vision
and appreciation of chemistry’s role in
creating the solutions that the country needs,”
said Chris Jahn, president of the ACC. “This is
an unprecedented attack on our industry.”
The ACC has identified 13 proposed regulations
that target the chemical industry and that
would cost the US economy nearly $7bn/year,
based on estimates from the federal government.
Many chemical companies have told the ACC that
their regulatory burden is already too high,
and they expect it to grow, Jahn said.
These regulations often contradict the very
policy goals of the signature legislative
achievements of the administration of President
Joe Biden, such as the following:
The Bipartisan Infrastructure Law.
The Chips and Science Act programme .
The renewable energy provisions of the
Inflation Reduction Act (IRA).
The regulations will make it harder to make the
materials needed to build highways, expand the
electrical grid, produce semiconductor chips
and manufacture wind turbines, solar panels and
electric vehicles (EVs). According to Jahn:
500 chemistries are needed to manufacture a
computer chip.
On average, 10 tonnes of polymers go into
the wind turbine.
On average, 50% of the volume and 10% of
the weight of an EV is plastic.
Solar panels, green hydrogen, direct-air
capture and carbon capture rely on chemicals.
“At the heart of the issue is a massive surge
in new, unduly restrictive regulations and a
lack of coordination within the Biden
administration that’s hindering the chemical
industry’s ability to innovate, grow and create
products,” Jahn said.
To address the regulations, the ACC has started
an initiative called “Chemistry Creates,
America Competes”, and it wants the government
to do the following:
The Office of Management and Budget needs
to review the effects that significant
rulemaking and administrative policies could
have on supply chains, trade, national
security, energy, climate, healthcare,
infrastructure and innovation.
The administration should assign a senior
official with economic expertise who can assess
the effects that proposed regulations would
have on national goals such as maintaining and
protecting supply chains.
The Environmental Protection Agency (EPA)
should use a science-based process to develop
rules and regulations that protect health and
the environment without suppressing innovation,
weakening supply chains and encouraging
production to move overseas.
Congress should exercise oversight over
rules and regulations of the chemical sector.
It should examine how EPA regulations on some
chemicals could cut off access to products and
technologies that are needed by US producers of
energy, vehicles, infrastructure, healthcare
and semiconductors.
Congress should consider legislation to
improve the regulatory process, to streamline
the permitting process and to replace overly
conservative regulations with those that are
more flexible and science-based.
Jahn stressed that the ACC is opposed to flawed
regulations and not to regulations in general.
“We’re confident by working together as
partners, many of these can be rightsized in
ways that keep strong regulations in place and
Americans safe without regulating to zero,
without banning chemistries outright and
regulating them at trace levels, which are de
facto bans.
“We support responsible regulations, as long as
it’s driven by science, promotes innovation and
supports supply-chain resiliency,” he said.
20-Sep-2023
TORONTO (ICIS)–Ford and labour union Unifor
have reached a tentative three-year collective
deal for about 5,600 Ford auto workers in
Canada, thus avoiding a strike.
After Unifor extended its strike deadline, the
deal was reached late on Tuesday (19 September)
– covering wages and pensions, as well as job
security amid the transition to electric
vehicles (EVs).
Neither Ford nor Unifor disclosed details as
the deal is still subject to ratification by
Unifor members.
Unifor will use the deal as a template in
upcoming negotiations with General Motors (GM)
and Stellantis, it has said.
A strike would have hit a Ford assembly plant
at Oakville, west of Toronto, along with two
engine plants in Windsor, at the US border to
Detroit, and two parts distribution centres.
The Oakville plant is due to start building EVs
next year.
Meanwhile, in the US a
strike by about 13,000 United Auto Workers
(UAW) members at three plants – one each by GM,
Ford, and Stellantis – entered its sixth day on
Wednesday.
UAW’s president Shawn Fain has said that the
strike would be extended to other plants if the
Big Three Detroit automakers “have not made
substantial progress toward a fair agreement”
by noon on Friday, 22 September.
US-Canada auto manufacturing is tightly
integrated, with disruptions in either country
affecting suppliers from the chemicals,
plastics and other industries on both sides of
the border.
The petrochemicals industry is paying close
attention because an extended auto strike
in the US would massively disrupt demand
for polymers. A typical vehicle contains nearly
$3,950 of chemistry including chemical products
and chemical processing.
The automotive industry is a major global
consumer of petrochemicals that contributes
more than one-third of the raw material costs
of an average vehicle.
The automotive sector drives demand for
chemicals such as polypropylene (PP), along
with nylon, polystyrene (PS), styrene butadiene
rubber (SBR), polyurethane (PU), methyl
methacrylate (MMA) and polymethyl methacrylate
(PMMA).
Additional reporting by Adam Yanelli, Al
Greenwood and Joseph Chang
Please also visit the ICIS
automotive topic page
Thumbnail photo shows a Ford Edge vehicle,
which is assembled at the Oakville plant west
of Toronto; photo source: Ford
20-Sep-2023
LONDON (ICIS)–Ukraine’s Naftogaz does not
intend to renew its transit contract with
Russia once it expires at the end of 2024 but
Europe’s supply needs may also have to be
considered, the incumbent’s CEO told ICIS in an
exclusive interview on 20 September.
Oleksiy Chernyshov said Naftogaz as the
organiser of transit was not profiting from
current arrangements since Russia ships much
less than what it should do under its
contractual obligations.
“We are not seeking the renewal of this
contract and that’s a clear statement [just] as
we are not seeking to continue it right now,
while Ukraine is at war with Russia,” he said.
“We service this transit only as a favour to
our EU partners not to deprive them of basic
needs of gas during winter.”
However, he added that if European companies
ask for transit to continue, even as the EU set
a 2027 phase-out date for Russian gas, Naftogaz
would ask for a solution to be found, including
to Gazprom’s current refusal to pay in line
with existing contractual terms.
ARBITRATION
Last year, Naftogaz
initiated arbitration against Russia’s
Gazprom in response to non-payment.
It had been involved in a spate of arbitrations
with Gazprom over the years, including a recent
case, where a tribunal in The Hague
awarded $5bn to the Naftogaz Group for
losses incurred following Russia’s annexation
of Crimea in 2014.
Earlier this month, the Ukrainian military said
it had recaptured some of the oil and gas rigs
that had been seized.
Chernyshov said Naftogaz has not been able to
inspect them yet and added that even though
some of the rigs had been recaptured, the
company would continue to push for the recovery
of the $5bn in compensation for lost
opportunities, profit and assets.
STORAGE
Chernyshov insisted that Naftogaz’ main
concerns as of now relate to increasing
internal onshore gas production and attracting
a large number of non-resident companies to use
Ukraine’s storage capacity.
He said he expected more than 16 billion cubic
meters (bcm) to be injected in storage by 1
November, of which 3bcm would be held by
non-resident companies.
As of 19 September, there were 14.7bcm in
stock, of which 2bcm had been injected by
foreign companies.
To compare, 0.31bcm were injected by
non-resident companies at the same time last
year.
“These volumes [stored by international
companies] have not been guaranteed by
additional business insurance. It’s great that
Naftogaz has a reputation that can inspire
trust to these major traders,” he added.
Last month, Naftogaz along with the gas grid
operator, GTSOU and backed by EU and US
partners issued
a report confirming that Ukrainian gas
transmission and storage could withstand
extreme scenarios of simultaneous
missile-induced outages and severe market
conditions.
The report was intended to reassure traders
that Ukraine’s gas infrastructure was safe to
use despite Russia’s ongoing war.
Many traders have been incentivised to inject
gas in Ukraine by attractive summer-winter
price spreads this year.
They told ICIS that as long as winter prices
remain €14.00/MWh or higher above current spot
levels, they would continue to use Ukrainian
facilities.
Ukrainian market sources, however, say that if
non-resident companies start withdrawing the
2-3bcm volumes they may accumulate in storage
until the start of the heating season, Ukraine
may face a tough winter.
This is because it may be looking to use small
gas turbines to compensate for
electricity-generating capacity that had been
damaged or lost as a result of Russian missile
attacks or occupation.
IMPORTS AND PRODUCTION
Chernyshov, however, is adamant that locally
produced gas and volumes held in storage would
be sufficient to see Ukraine through the cold
season.
“Naftogaz has a record number of new wells that
we executed over the course of 2023 and we
expect 7-8% growth overall this year compared
to last year and this would be also increased
compared to 2021,” he said.
Chernyshov said 54 new wells had been
commissioned since the start of 2023 and added
that the company’s target is to produce 13.5bcm
this year, and 14bcm in 2024.
He explained the company’s priority was to
bolster local production not only by increasing
Naftogaz’ own output but also by supporting
private production.
As Ukraine banned the export of locally
produced gas at the start of war, Naftogaz
stepped in to buy volumes from independent
companies, snapping up 1bcm since April.
He said the average purchase price has been
$300/1000m3 (€28.50/MWh), which is around
€10.00/MWh lower than current spot TTF gas
prices assessed by ICIS. Some EU traders said
they expected Naftogaz to buy gas for the
remaining weeks of September and for October
but Chernyshov rejected the claims.
“Formally I can confirm that there will be no
imports unless something dramatic happens, such
as losses in our internal gas production,” he
said.
20-Sep-2023
SINGAPORE (ICIS)–In this podcast, Joey Zhou
from the ICIS analytics team and Seymour
Chenxia from the ICIS information team discuss
recent developments and outlook for the Asian
propylene market.
Asian propylene prices rise in September
amid firmer upstream costs and demand recovery
Asian Games could lead to logistics
disruptions in East China market
Supply-demand imbalances may persist with
Asian propylene capacity growing by 11% in 2024
Average Asian propylene prices expected to
fall in 2024 on lower feedstock costs
20-Sep-2023
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