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Speciality Chemicals07-Feb-2025
SINGAPORE (ICIS)–Japanese
carmaker Mitsubishi Motors Corp (MMC) is
set to invest Peso (Ps) 7 billion ($121
million) in the Philippines over the next five
years.
MMC president and CEO Takao Kato announced the
plan during a meeting with Philippine President
Ferdinand Marcos Jr on 6 February.
The plan includes adding a new production model
at the Mitsubishi Motors Philippines Corp
(MMPC) plant in Laguna province, according to a
statement issued by the Presidential
Communications Office (PCO).
Kato said the Philippines is MMC’s most
important investment in southeast Asia, citing
its good and stable economy.
MMPC operates a manufacturing plant in Santa
Rosa, Laguna, with an annual production
capacity of 50,000 units, which can be doubled,
it stated.
As of November last year, MMPC had a 19% share
of the domestic market, trailing behind
Toyota’s 46% share.
Marcos also announced that MMC will be part of
the government’s Revitalizing the Automotive
Industry for Competitiveness Enhancement (RACE)
program which aims to boost the
competitiveness of the local automotive
industry.
“In the ASEAN, (the) Philippines is our number
one market,” MMC’s Kato said.
Within southeast Asia, MMC also has
production facilities in Thailand, Indonesia
and Vietnam.
The Japanese carmaker also has
manufacturing plants in China and Russia.
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 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).
($1 = Ps58)
Speciality Chemicals07-Feb-2025
SINGAPORE (ICIS)–South Korea is streamlining
regulations to make it easier for regions
densely populated by petrochemical companies to
qualify as “industrial crisis response areas”,
a designation that unlocks government support
and financial assistance to mitigate impact of
market downturns.
Yeosu, Ulsan, Daesan petrochemical hubs to
benefit
Focus shifts to manufacturing for crisis
designation
Voluntary business restructuring encouraged
This designation also unlocks access to
tailored assistance in areas like employment
stability, R&D, commercialization, market
access, and consulting, according to a Ministry
of Trade, Industry and Energy (MOTIE)
administrative notice released on 5 February.
The new regulation follows a wide-ranging
support package unveiled by the government on
23 December 2024, aimed at bolstering the
competitiveness of its domestic petrochemical
industry, which is facing a global oversupply
driven by expansions in China and the Middle
East.
This policy shift is expected to benefit major
petrochemical hubs such as Yeosu, Ulsan, and
Daesan, providing them with greater access to
resources designed to mitigate economic
downturns and to support continued growth
within the sector.
Previously, the high proportion of the services
sector in cities like Yeosu hindered their
ability to be designated as industrial crisis
response areas.
The revised regulations will now assess
“regional stagnation” based solely on the
manufacturing sector, excluding service
industries.
This change will allow regions heavily reliant
on manufacturing, particularly petrochemicals,
to meet the designation criteria more readily.
MULTI-PRONGED STRATEGY
A cornerstone of the government’s latest plan
is encouraging voluntary business
restructuring, encompassing facility closures,
sales, joint ventures, efficiency improvements,
and new business acquisitions.
To facilitate these changes, the government
will implement legal reforms and offer a range
of financial and tax incentives.
These include extending the grace period for
acquiring 100% of holding company shares from
three to five years and streamlining merger
reviews with the Korean Fair Trade Commission
(FTC), the country’s regulatory authority for
economic competition.
A dedicated consultation channel between MOTIE
and the FTC will further expedite reviews and
support restructuring efforts.
Separately, the government plans to provide up
to Korean won (W) 3 trillion ($2.1 billion) in
financing packages for petrochemical companies
seeking to revamp their business portfolios,
including expanded access to a W1 trillion
business restructuring fund managed by the
Korea Development Bank.
For designated Industrial Crisis Response
Areas, existing loan maturities from policy
financial institutions will be extended,
principal repayments deferred; national tax
payment deadlines extended; and seizure and
sale deferred for up to one year.
Beyond restructuring, the government is
targeting cost reduction.
The duty-free period for crude oil used in
naphtha production will be extended by a year
until the end of 2025 and import surcharges on
liquefied natural gas (LNG) used as industrial
raw materials will be refunded.
A “fast-track” approval process will be
implemented for ethane terminal and storage
tank construction to facilitate access to
cheaper raw materials.
Additional cost-saving measures include
expanding electricity rate options through
distributed power trading and rationalizing
safety regulations.
The plan will also support R&D focused on
shifting production from general-purpose
petrochemicals to specialized, high-value-added
products.
An “R&D Investment Roadmap for 2025-2030”
will be unveiled in the first half of this
year, and preliminary feasibility studies for
high-value and eco-friendly chemical material
technology development will be conducted.
The support ratio for regional investment
subsidies in Industrial Crisis Response Areas
will be increased, national strategic and new
growth technologies will be identified, and a
W50 billion “High-Value Specialty Fund” will be
established to promote production of specialty
chemicals.
DOMESTIC PRODUCERS
STRUGGLE
South Korea’s four largest petrochemical
manufacturers – LG Chem, Lotte Chemical, Kumho
Petrochemical and Hanwha Solutions – faced
continued challenges in 2024.
LG Chem reported a net loss of W899.2
billion in the fourth quarter, reversing the
net profit of W128.5 billion a year ago due to
decreased demand for both petrochemicals and
battery materials. It also reported an
operating loss of W252 billion in the same
period.
The company has revised down its capital
expenditure plan for the year to W2 trillion-3
trillion from W4 trillion previously as it
navigates the market downturn.
Separately, as part of its global expansion
strategy, LG Chem has secured a deal to supply
cathode materials to Prime Planet Energy and
Solutions (PPES) – a joint venture of Japanese
carmaker Toyota and appliance maker Panasonic –
starting 2026.
The company will focus on developing
eco-friendly materials and technologies that
align with PPES’ low-carbon vision.
Meanwhile, major ethylene producer Lotte
Chemical in Q3 2024 reported a loss of W514
billion, on “delayed demand recovery, lower
product spreads due to currency depreciation,
one-time costs from maintenance at overseas
subsidiaries, and rising shipping costs”.
The company is now pursuing an asset-light
strategy, which involved liquidation of its
Malaysian synthetic rubber production
subsidiary Lotte Ube Synthetic Rubber (LUSR) –
a joint venture with Japan’s Ube Elastomer.
Based in Johor, Malaysia, LUSR produces 50,000
tonnes/year of polybutadiene rubber (PBR).
Lotte Chemical also plans to generate W1.4
trillion in proceeds from sale of stakes in
overseas subsidiaries.
Synthetic rubber major Kumho Petrochemical Co
reported on 4 February a Q4 net income of W61.3
billion, down 33% year on year, due to weak
market demand due to a year-end drop in raw
material prices; with operating profit
shrinking by about 72% to W10 billion despite a
19% increase in sales to W1.8 trillion.
Insight article by Nurluqman
Suratman
($1 = W1,446)
Thumbnail image shows an aerial view of a
container pier in South Korea’s southeastern
port city of Busan.
(YONHAP/EPA-EFE/Shutterstock)
Gas06-Feb-2025
Dutch regulator ‘reprimanded’ company over
possible market manipulation on TTF gas hub
Price manipulation on major benchmark hub
can cost other participants, consumers
Company in question to be ‘closely
watched’, trader committed to ‘no longer
engage’ in such behaviour
Additional reporting by Jamie Stewart
LONDON (ICIS)–The Dutch energy regulator has
“reprimanded” an international company for
“possible market manipulation” at the TTF gas
hub, according to a statement released 6
February.
The statement was clearly intended to deter
market participants from attempting to “mark
the close”, as it termed the behaviour, adding
such behaviour was “an illegal trading
practice”. It did not reveal the company in
question and did not cite any specific penalty.
The Dutch Authority for Consumers and Market
(ACM) added it would “continue to keep a close
watch on the company” and that the trader had
pledged to no longer “engage in this conduct”.
MARKET INFLUENCE
According to ACM, the practice of “marking the
close” can occur if a market participant
influences the reference price on a wholesale
energy market by buying or selling close to the
moment that a settlement price is determined.
This can involve bidding for orders with a much
higher asking price or buying excessively large
volumes on offer right before the market close,
as a result of which the price spikes up.
The reverse can also be true, with the price
range pushed down by repeatedly offering
volumes at a lower price or selling excessively
large volumes.
As a result of a closing value that does not
otherwise reflect market fundamentals or the
prevailing price range, other traders, as well
as Dutch and other European energy consumers,
foot the bill for forward contracts that later
settle at this closing price.
IMPLICATIONS
The cases cited by ACM concerned the short-term
Day-ahead contract at the Dutch TTF gas hub.
The ICIS TTF Day-ahead is a benchmark price
commonly used across the energy industry.
The TTF is by far the most traded hub in
Europe, and market moves would affect other
hubs not only locally but across the continent.
Rules across Europe governing energy market
trade are laid out in the EU’s Regulation on
Wholesale Energy Market Integrity and
Transparency which covers market abuse
including market manipulation and insider
trading.
ICIS POSITION
Richard Street, international regulatory
affairs head at ICIS’ parent company LexisNexis
Risk Solutions, said: “We were aware of the
issues referred to by ACM. We have strict data
standards that allow us to remove any
off-market trades.
“Market participants who make trades they know
are off-market can pre-empt any issues by
marking these deals as ‘P&C’ or contact us
confidentially to make us aware of the
circumstances surrounding unusual activity.”
Street added it was “clearly disappointing that
ACM has had to publicly reprimand certain
traders for their behaviour” but he was hopeful
that this “sends a clear message that
regulators are watching and will take action
where necessary”.
The Dutch regulator added: it was “calling on
market participants and other relevant
stakeholders on the wholesale energy markets to
share information about possible illegal
trading activities. They can do so using
ACER’s Notification
Platform. See also ACM’s
website: Reporting suspicious
energy trading.” Eduardo
Escajadillo
EDITOR’S VIEW
How price reporting is done is of vital
importance to maintain trust in the integrity
of commodities markets, and in the price
formation process itself. This is important
because these markets, in some way, touch all
of our lives.
Price reporting agencies (PRAs) such as ICIS
welcome the support of regulators in ensuring a
robust price discovery environment.
In this case the Dutch regulator ACM has flexed
its muscles, reminding all market participants
of their obligations, as well as its own as a
watchdog with a duty to consumers.
Best practice in the discipline of price
reporting is defined by the EU Benchmarks
regulation, which as a benchmark administrator
ICIS aligns its practices to, as well as the
long-standing IOSCO principles of best price
for price reporting in commodities markets.
ICIS has long been a voluntary signatory to the
IOSCO principles and is audited against these
principles every year.
PRAs best-practice models also lay out how to
deal with unusual trading patterns. Central to
the approach is transparency if transactions
are deleted from a price assessment process,
which does happen from time to time.
For example, this
British NBP gas market comment published by
ICIS as recently as 30 January, said: “February
’25 trades recorded at the time of the close at
the value of 130.500p/th were deemed to be
outside of the prevailing range of verified
market information reflecting the value of the
contract at that time and were therefore
excluded from the assessment and ICIS indices.”
Our publicly available pricing methodologies,
for example our
gas methodology, give more details
regarding ICIS price reporting practices.
Jamie Stewart

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Ammonia06-Feb-2025
BARCELONA (ICIS)–BP plans to sell its to sell
its Ruhr Oel refinery, crackers and downstream
assets at Gelsenkirchen in Germany.
The company will start marketing the assets
immediately, with the aim of completing the
sale this year, according to a statement
published on 6 February by the UK headquartered
energy giant.
According to the ICIS Supply & Demand
Database BP operates a refinery and two
crackers with combined capacity of 1.065
million tonnes/year of ethylene, as well as
units with 645,000 tonnes/year propylene,
430,000 tonnes/year benzene plus cumene,
cyclohexane, methanol, toluene and ammonia
facilities.
BP said the assets for sale include DHC Solvent
Chemie in Mulheim an der Ruhr.
All refinery owners in Europe are under
pressure to rationalise their portfolios thanks
to the shift to vehicle electrification and
high cost base. There is also intense
competition from new refineries starting up in
Asia and the Middle East.
BP said the move is in line with its strategic
drive to deliver a simpler, more focused,
higher value company.
The company said that it has implemented
numerous projects to modernize the
infrastructure of the refinery in Gelsenkirchen
in recent years. This includes renewing
the power grid and establishing an independent
steam supply.
The refinery can process crude oils from around
the world, produce fuels and also has the
potential to manufacture biofuels and process
recycled plastics, said bp.
Michael Connolly, ICIS principal refining
analyst pointed out that the refinery is
configured to give a moderately high yield of
gasoline, meaning it is not really suited to
the future of the European market, where
vehicle electrification is hurting demand.
He said BP already had plans to reduce the
capacity of the refinery from 260,000 bbl/day
to 155,000 bbl/day in 2025.
“Undoubtedly it would have used Russian crude,
but despite having access to seaborne crude,
the loss of Russian crude through sanctions
would have impacted financials,” he said.
The economics of the facility will also be more
challenging, as for all European refiners,
because cracks or margins for gasoil production
have declined to pre-Ukraine war levels, added
Connolly.
ICIS expects German crude refining capacity to
fall from 2.1 million bbl/day in 2020 to 1.8
million bbl/day by 2026 and well off their peak
refining capacity of 2.4 bd in 2007.
Emma Delaney, BP executive vice president,
customers & products said, “BP needs to
continually manage its global portfolio as we
position to grow as a simpler, more focused,
higher-value company. After a thorough review,
we have concluded that a new owner would be
better suited for the site to take it forward.
We are convinced that the refinery can unlock
its full potential under new ownership.”
Focus article by Will Beacham
Graphics by Miguel
Rodriguez-Fernandez
Thumbnail photo: bp’s refinery site in
Gelsenkirchen, Germany (Source: BP)
Clarification: recasts to
explain BP has two crackers at the site.
Crude Oil06-Feb-2025
LONDON (ICIS)–Chemicals producer prices in the
eurozone and EU were flat in December from the
previous month, official data showed on
Thursday.
Spain (-0.2%), Italy (-0.2%), the Netherlands
(-0.5%) and Poland (-0.1%) all posted declines
while Germany, Europe’s biggest chemicals
producer, recorded zero price growth.
France (+0.2%) was the only major EU country to
report a rise in chemicals producer prices.
General industrial producer prices in December
rose by 0.4% month on month in both the
eurozone and EU, statistics agency Eurostat
said in a first estimate that is subject to
revision.
The annual industrial producer price average
for the whole of 2024 fell by 4.2% in the
eurozone and by 4.0% in the EU from 2023.
Polystyrene05-Feb-2025
HOUSTON (ICIS)–Senate Bill 543 was passed in
2023, but it was not until 1 January 2025 that
the ban on polystyrene foam was implemented.
According to The Oregon Department of
Environmental Quality (DEQ), “[The] 2023 Senate
Bill 543 (ORS 459.465 to 459.477) prohibits
food vendors from using polystyrene foam
containers for prepared food, prohibits the
sale of polystyrene foam containers or
polystyrene foam packing peanuts, and prohibits
the sale of foodware containers with added
perfluoroalkyl or polyfluoroalkyl substances
(PFAS).”
“PFAS are a group of chemicals that are
considered “emerging environmental
contaminants” because public knowledge about
their harmful effects and how they are
regulated are relatively new or undeveloped.
PFAS are water soluble and highly mobile, and
can accumulate in living organisms. Many newer
PFAS transform into highly persistent
perfluorinated chemicals in the environment,
and can last for hundreds to thousands of
years, depending on the PFAS compound,”
according to The Oregon DEQ.
What does this mean for polystyrene in Oregon?
Well, the bill states that food vendors must
not use polystyrene foam containers when
selling, offering for sale, serving or
dispensing prepared food to a consumer.
Examples of this include to-go containers that
many use to take home leftovers or to pick up
food-orders. This also applies to polystyrene
foam plates and cups.
Although food vendors must not use polystyrene
foam, the bill also states that a person may
not sell, offer for sale or distribute in or
into the state polystyrene foam containers or
polystyrene foam packaging peanuts. Also, a
person may not sell, offer for sale or
distribute in or into the state a foodware
container containing intentionally-added PFAS.
The Oregon DEQ noted that businesses with
existing inventory of the examples above may
not use or sell the material after 1 January
2025.
Polyethylene Terephthalate05-Feb-2025
LONDON (ICIS)–Senior editor, recycling
Matt Tudball talks
to Helen McGeough, global
recycling analytics team lead about some of the
key topics that will be discussed at the
upcoming ICIS
PET Value Chain Conference on 6-7
March in Amsterdam.
Topics include:
Improving the supply chain for recycled PET
Getting access to good-quality feedstocks
Deposit return schemes (DRS) growing in
Europe
Impact of high feedstocks on R-PET prices
Spreads between virgin PET and R-PET
Ethylene05-Feb-2025
SAO PAULO (ICIS)–Brazil’s chemical industry
posted a $48.7 billion trade deficit in 2024 as
imports surged to $63.9 billion, driven by
“predatory pricing” from US and Asian
suppliers, the country’s chemicals trade group
Abiquim said.
Asian suppliers, moreover, benefited from
discounted Russian raw materials and, in
China’s case, from heavy subsidies from the
state, the trade group added.
The overall deficit, while substantial,
remained below the 2022 record of $63 billion,
though Abiquim noted this was primarily due
what it described as “predatory import pricing”
which cushioned the “real imbalance” in the
trade balance.”
Import volumes rose 11.5% to 65.3 million
tonnes of chemicals, with fertilizer
intermediates accounting for 41.1 million
tonnes, up 7.4% from 2023.
This marked the highest import volume since
records began in 1989, as Asian suppliers
leveraged cheaper Russian materials amid the
war in Ukraine.
Abiquim’s CEO said 2024 had been challenging
for Brazil’s chemicals producers, although the
year was also marked by the higher import tariffs
approved for 30 chemical products, which gave
the sector a boost in November and December,
said Andre Passos.
Following October’s tariff implementation,
domestic production rose 6.35% in the final two
months, he added.
The trade group’s CEO said higher tariffs were
a welcome step but much more needed to be done
to protect Brazil’s chemicals producers’
operations and their transition to the green
economy.
“We know that this [higher tariffs] is just the
first step and it is essential to keep facing
up to the extremely adverse international
scenario, with excess production capacity for
chemical products in the world and heavy
subsidy programs in the world’s main chemical
producers,” said Passos.
“We are crossing the gateway to the low-carbon
economy and the chemical industry is ready to
lead this transition. Low-carbon chemistry is
related to the use of technologies that reduce
or neutralize greenhouse gas emissions.
“Renewable chemistry, carbon capture and
storage, and chemical recycling are some
examples of this leadership that can be
exercised by the Brazilian chemical industry,”
he concluded.
ASIA DOMINATES
Asian suppliers, excluding the Middle East,
dominated imports with a 31% share worth $19.6
billion, creating an $18 billion regional trade
gap.
The deficit with Asia has steadily worsened
from $10bn in 2020 to $16.2bn in 2023, said
Abiquim, reflecting China’s overcapacities and
the country’s switch from net importer to next
exporter for most chemicals.
Domestic manufacturers faced increased
competition across all segments, with imports
of resins and elastomers jumping 32.4%, organic
chemicals 14.3%, inorganics 9.1%, and other
industrial chemicals 9.3%.
Import prices averaged 6.3% lower than 2023,
leading to domestic plant closures, said
Abiquim.
Brazilian chemical exports rose 4.3% to $15.2
billion, though volumes dipped 0.2%.
The sector maintained its position as the
country’s third-largest manufacturing exporter,
behind food products at $66.5 billion and base
metals at $23.2 billion, said Abiquim.
Petrochemicals05-Feb-2025
MUMBAI (ICIS)–India’s Supreme Petrochem Ltd
(SPL) expects to commission the first phase of
its 70,000 tonne/year acrylonitrile butadiene
styrene (ABS) plant in Nagothane in April-June,
a company source said on Wednesday.
Another 70,000 tonne/year ABS unit will be
added at the site in the western Maharashtra
state, in the second phase of the project, the
source said.
SPL expects the two phases to cost Indian
rupees (Rs) 8.5 billion ($98 million), when the
project was announced in 2023.
“Mechanical completion of the first phase of
our mass ABS project is expected by end of
March 2025 and commissioning is scheduled for
the first quarter of financial year 2025-26,”
the source said.
The company’s fiscal year begins in April.
“There is an available market for domestically
manufactured product,” the source said, citing
that “nearly over 50% of the country’s ABS
requirement or around 140,000 tonnes, is
currently being imported”.
Separately, the company plans to invest Rs8
billion to build a greenfield petrochemical
complex at Karnal in the northern Haryana
state.
It plans to build a 100,000 tonne/year
polystyrene (PS) unit and a 50,000 tonne/year
expandable PS (EPS) unit, along with downstream
products such as including 3D panels, PS
sheeting, extruded PS, among others.
“Pre-project activities for that site are going
on right now,” the source said.
“The new projects will meet increased demand
for PS and EPS in domestic and export markets
in the years ahead,” he added.
SPL can produce more than 300,000 tonnes/year
of PS; 118,000 tonnes/year of EPS and other
downstream products at its two facilities at
Nagothane in Maharashtra; and Manali in the
southern Tamil Nadu state, according to the
company’s website.
($1 = Rs87.13)
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