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HOUSTON (ICIS)–The US Department of
Agriculture (USDA) is expecting lower corn
production but a higher output of soybeans,
according to the August World Agricultural
Supply and Demand Estimates (WASDE) report.
The agency is showing that the current outlook
for US corn outlook is for lower supplies,
reduced feed and residual use, slightly higher
food, seed, and industrial use, smaller exports
and lower ending stocks.
Corn production is forecast at 14.4bn bushels,
down 146 million bushels from the July
projection. The season’s first survey-based
corn yield forecast, at 175.4 bushels/acre, is
1.6 bushels below last month’s projection.
Among the major producing states reports
indicate that yields are forecast above those
of a year ago in Illinois, Minnesota and South
Dakota.
Meanwhile yields in Indiana, Missouri, Nebraska
and Ohio are forecast below a year ago. Iowa is
unchanged.
Projected beginning stocks for 2022-2023 are
20m bushels higher based on a lower use
forecast where a reduction in corn used for
ethanol is partially offset by greater use for
glucose and dextrose.
Total US corn use for 2022-2023 is reduced by
45m bushels to 14.5bn bushels, with feed and
residual use lowered by 25m bushels based on a
smaller crop.
Exports for 2022-2023 are cut by 25m bushels to
2.4bn bushels.
With supply falling more than use, ending
stocks are lowered by 82m bushels to 1.4bn
bushels.
The season average corn price received by
producers is unchanged at $6.65/bushel.
For soybeans, the USDA is calling for higher
beginning stocks, production, exports and
ending stocks.
Beginning soybean stocks are raised on lower
2021-2022 exports, while soybean production is
forecast at 4.53bn bushels, up by 26m bushels
with higher yields more than offsetting a lower
harvested area.
The harvested area is forecast at 87.2m acres,
down by 300,000 acres from July. The first
survey-based soybean yield forecast of 51.9
bushels/acre is raised by 0.4 bushels from last
month.
Soybean supplies for 2022-2023 are projected at
4.8bn bushels, up 36m bushels from last month.
Exports are raised 20m bushels to 2.16bn
bushels on increased supplies, while soybean
ending stocks are forecast at 245m bushels, up
by 15m bushels.
The season-average soybean price is forecast at
$14.35/bushel, down 5 cents/bushel from last
month.
The next WASDE report will be released on 12
September.
12-Aug-2022
HOUSTON (ICIS)–Shipping container rates from
east Asia and China to the US continued to
slump this week despite being in what is
typically the peak season as many importers
ordered goods earlier than normal to avoid
delays from congested ports.
Rates to the west coast fell by 11%, according
to data from online freight shipping
marketplace and platform provider Freightos and
are now below $6,000/FEU (40-foot equivalent
unit).
Rates to the east coast fell by 6% this week
and are nearing the $9,000/FEU level.
Rates remain elevated compared with
pre-pandemic levels but are down by 62% to the
west coast compared with the same time a year
ago, and down by 47% to the east coast year on
year.
Judah Levine, head of research at Freightos,
said market participants are not expecting
rates to firm or a surge in volume, but the
floor is likely to remain well above
pre-pandemic levels.
Data from the National Retail Federation (NRF)
indicates that volumes peaked in May, setting a
new monthly record, as June volume declined by
6%.
July imports are expected to be level with June
volumes, the NRF said.
This data aligns with the reduction of
container ships waiting to unload at the west
coast ports of Los Angeles and Long Beach,
which together account for about 40% of all
containerized imports into the US.
According to the Marine Exchange of Southern
California (MESC), the backlog hit a new
record low on Monday
of 10 vessels, and fell even lower to nine
container ships on Wednesday.
The record high was 109 vessels waiting to
unload, set on 9 January.
Some of the reduction is from shippers sending
container ships to other ports because of the
backup at LA/LB.
German container shipping major Hapag-Lloyd
said in an operational update that the backlog
at the Port of Savannah has lengthened to 48
ships at anchor with 14- to 18-day waiting
times.
Container ships are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers such as polyethylene
(PE) and polypropylene (PP), which are shipped
in pellets.
Visit the ICIS
Supply Chain topic page
Visit the ICIS
coronavirus topic page
Thumbnail shows containers. Image by
Vincent Thian/AP/Shutterstock.
12-Aug-2022
HOUSTON (ICIS)–Petrobras announced it has
begun the opportunity disclosure stage for the
sale of its mining rights for research and
mining of potassium salts in Brazil.
The mining asset is composed of 34 mining
titles of potassium salts located in the Amazon
Basin and granted by the National Mining Agency
(ANM).
Of these 34 titles, 8 are mining concessions, 4
are mining requirements and 22 are in the
process of obtaining a research authorisation.
The company said the main information about the
opportunity, as well as the eligibility
criteria for the selection of potential
participants, is available at Petrobras
investor section on its website.
It further added that the subsequent stages of
the sale process will be informed to the market
in due course and that this effort is aligned
with the company’s portfolio optimisation
strategy and capital allocation improvement
which is aimed at maximising value.
12-Aug-2022
LONDON (ICIS)–Senior Editor for Recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
August monthly prices settle
Bottle, flake supply volumes up
Concerns grow around macroeconomic
situation
12-Aug-2022
LONDON(ICIS)– ICIS hydrogen editor Jake Stones
speaks to Robert Dale, founder and director of
energy consultancy Beyond2050, on the policy
implications of the Conservative party
leadership contest between Liz Truss and Rishi
Sunak for UK hydrogen. Dale explains
experience, campaign discussion and key
supporters of the two candidates, providing a
picture of a potential UK hydrogen landscape
after the winner is announced on 2 September.
12-Aug-2022
MADRID (ICIS)–Chemicals companies on the River
Rhine in Germany are having to hire additional
barges to move product along the key waterway,
which is set to increase their logistics costs
during the third quarter.
Low water levels on the Rhine are allowing
barges to load only partially, requiring more
of them to be hired.
Evonik, LANXESS and Covestro – which have
facilities along the banks of the river – have
confirmed to ICIS they are hiring more barges
due to the low water levels.
On Thursday, German chemicals major BASF – with
its flagship site of Ludwigshafen also on the
Rhine’s bank – warned some types of barges may not be able to
navigate at all if the water levels
continue falling.
During the 2018 drought, companies posted
sharply higher logistics costs, with BASF’s at €200m just
for the fourth quarter of that year, due to the
hiring of more barges.
Evonik took a €35m hit during the second half
of 2018, but most of it was in the fourth
quarter, when the drought was more acute.
That is the worry across northwest Europe’s
petrochemicals players: this year, the drought
is already hitting in the third quarter, so the
financial impact could be much larger if water
levels continue low throughout H2.
On Friday, the Rhine’s navigable water levels
at the Kaub gauge measuring point, the
shallowest along the river, stood at 42cm, but
are forecast to fall to 34cm by Tuesday (16
August), according to the German waterway
information consultancy Elwis.
In 2018’s drought, water levels stood as low as
25cm.
Evonik, LANXESS and Covestro’s main production
facilities are located further north from Kaub,
where water levels are not as low.
Source: Elwis
MORE BARGES, PLEASEEvonik
confirmed it has been prompted to hire more
barges due to the low water levels for some
time now, but also more trucks.
“At present, there are no significant
restrictions on our logistics chains at Evonik
due to the low water level of the Rhine. Our
production is running,” a spokesperson told
ICIS.
“Our impression is that many companies are now
better prepared for the topic of low water on
the Rhine than they were in 2018 – for example,
by adaption of transport concepts, improved
water level forecasts and optimisation of
transport operations.”
The spokesperson went on to say that “several
extraordinary challenges” persist for logistics
in Germany’s chemicals industry, however,
making it less attractive as an investment
location.
“These challenges range, for example, from
restrictions in rail freight transport due to
necessary and long overdue infrastructure
measures in the DB [the train operator]
network, a lack of truck drivers in Europe,
dilapidated canal locks and additional waiting
times for inland waterway vessels in the
seaports,” they said.
Covestro also said production at its German
facilities located by the Rhine has not yet
been impacted but confirmed it has had to hire
additional barges for transport.
As well as hiring additional barges, Covestro
said it is increasing the frequency of
shipments and shifting some shipments to road
or rail.
“As always at this Rhine water level, our Rhine
Logistics Task Force has been activated and we
are taking measures in line with our standard
processes, such as filling raw material tanks
and emptying product tanks to create buffer
capacity,” said a spokesperson for the
Cologne-headquartered producer.
“In addition, we are closely monitoring not
only the level of the Rhine but also the
development of the water level of the
tributaries as well as the canals and their
lock operations.”
Leverkusen-headquartered LANXESS also confirmed
it has had to hire additional barges to
transport material, but added it has not yet
shifted transport to rail or road.
“If the level of the Rhine were to fall
further, we could shift a certain proportion of
our deliveries to rail and road as a
supplement,” it said.
TROUBLE ON THE DANUBE
A spokesperson for Austria’s polymers and
fertilizers major Borealis – part of energy
major OMV – said waterway transport along the
Danube River has also been hampered by low
water levels.
It said the company has stopped using the
Danube for fertilizers operations, which have
key plants located in Linz by the Danube.
“For our fertilizer business, the drought has a
high impact on transportation via waterways,
currently mainly the Danube is at too low a
level for using barges. This causes us to seek
alternative transport means,” the spokesperson
said.
–
Front page pictgure: The River Rhine in
Cologne, Germany, on 10 August
Source: Martin
Meissner/AP/Shutterstock
Focus article by Jonathan
Lopez
Additional reporting by Will Beacham and
Nazif Nazmul
12-Aug-2022
China’s domestic petrochemical prices had
tumbled across the board in July because of
weak demand, which is expected to persist in
the months ahead as global economic growth
cools down.
Flare-ups of COVID-19 infections continue in
parts of the country, prompting small-scale
lockdowns at several cities during the week.
Indonesia and Malaysia posted strong
second-quarter annualized GDP growths of 5.4%
and 8.9%, respectively, but the pace of
expansion is widely expected to slow down for
the rest of the year with external demand
likely to weaken as global economies grapple
with high inflation.
Updated on 12 August 2022
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LATEST HEADLINES (Last updated
at 09:30 GMT on 12 August 2022)
Malaysia’s Q2 GDP expands 8.9%, growth to
moderate on global
uncertainties
By Nurluqman Suratman 12-Aug-22 15:20
SINGAPORE (ICIS)–Malaysia’s economy grew by
8.9% year on year in the second quarter of this
year on improving domestic demand, but
heightened global uncertainties are expected to
weigh on its growth outlook, the central bank
said on Friday.
High production costs erode Asian R-HDPE
margins
By Arianne Perez 12-Aug-22 13:48 SINGAPORE
(ICIS)–As production costs of recycled
high-density polyethylene (R-HDPE) blow
moulding pellets remain high in Asia while
demand stays lacklustre, sellers’ margins will
continue to narrow in the weeks ahead.
PODCAST: Asian olefins producers challenged to
preserve margins in H2 – ICIS
analysts
By Morgan Condon 12-Aug-22 05:00 LONDON
(ICIS)–Asian olefins capacity is set to
increase in the coming months, but against the
prospect of a global recession and challenging
demand it is unclear how this will develop for
producers.
Trade data show US base oil export availability
has not returned to pre-pandemic
levels
By Amanda Hay 12-Aug-22 03:04 HOUSTON
(ICIS)–ICIS trade data reveal that the US has
not yet returned to pre-pandemic export levels
of base oils as supply constraints, shifting
trade flows and high prices have curbed export
activity.
OPEC revises crude demand forecast down on
slowing global economy
By Jonathan Lopez 11-Aug-22 22:40 MADRID
(ICIS)–While crude oil demand continued its
“strong recovery” to pre-pandemic levels,
economic growth showed signs of a slowdown in
July and, with it, crude demand also took a
hit, producing cartel OPEC said on Thursday.
UK to face increased competition for LNG in
fourth quarter
By Hector Falconer 11-Aug-22 19:20 LONDON
(ICIS)–Britain is likely to face increased
competition for LNG supply in the fourth
quarter of 2022 amid uncertainty over Russian
piped supply to mainland Europe, supporting NBP
winter contracts especially in the case of cold
weather.
Oil prices exposed to opposing fundamentals,
extreme volatility
By Cecilia Barreiro 11-Aug-22 18:58 LONDON
(ICIS)–The August outlook for oil prices is
subject to increased uncertainty resulting from
a number of bullish and bearish factors.
Russia’s invasion of Ukraine will continue to
be a central driving force and keep oil markets
volatile while rising global inflation is
expected to keep a lid on demand.
Singapore trims 2022 GDP growth forecast to
3-4% on global headwinds
By Nurluqman Suratman 11-Aug-22 11:43
SINGAPORE (ICIS)–Singapore on Thursday trimmed
its 2022 GDP growth forecast to 3-4%, from the
previous estimate of 3-5%, due to the
deteriorating global economic environment.
SE Asia palm biodiesel to see record export
volumes, healthy demand
By Keven Zhang 11-Aug-22 11:15 SINGAPORE
(ICIS)–Southeast Asia’s palm methyl ester
(PME) export volumes are likely to climb to
record highs in July and August, as several
bullish factors boost buying interest.
Thai PTTGC Q2 net profit falls sharply amid
lower chem margins
By Nurluqman Suratman 10-Aug-22 15:30
SINGAPORE (ICIS)–PTT Global Chemical’s (PTTGC)
net profit fell by 83.9% year on year in the
second quarter, weighed partly by lower margins
across all of its chemicals businesses, the
Thailand-based producer said on Wednesday.
Saudi SABIC Q2 net profit up 3.8%; H2 margins
to stay under pressure
By Nurluqman Suratman 10-Aug-22 12:42
SINGAPORE (ICIS)–Saudi petrochemicals major
SABIC posted a 3.8% year-on-year increase in
second-quarter net profit, while it expects
margins to remain under pressure in the second
half of 2022.
INSIGHT: Indonesia economy surprises in Q2;
prospects dim in H2
By Pearl Bantillo 10-Aug-22 21:03
SINGAPORE (ICIS)–Indonesia’s growth momentum
is expected to weaken for the rest of the year
and into 2023, as high inflation hits overall
domestic consumption. External demand is being
threatened by a possible global recession.
China
July petrochemical markets slump; outlook stays
bearish
By Yvonne Shi 09-Aug-22 08:00 SINGAPORE
(ICIS)–China’s petrochemical markets fell
across the board in July on weak demand, which
persists into August while supply is projected
to grow for the rest of the year.
INSIGHT: Business, chemicals indicators
point to global downturn
By Will Beacham 04-Aug-22 19:09 BARCELONA
(ICIS)–New economic data combined with
deteriorating chemical industry performance,
suggests that the second half of the year could
be bleak. Latest figures for July from Oxford
Economics’ Global Business Sentiment Index show
declining confidence about growth, and fears
about downside risks while a recent profit
warning from Covestro and slumping chemical
prices suggest demand may be waning along
supply chains.
OUTLOOK: China’s PE market to feel
pressure from imports, slowing demand
growth
By Joanne Wang 02-Aug-22 14:24 SINGAPORE
(ICIS)–China’s polyethylene (PE) market may
feel stronger pressure from increasing imports
in the second half of 2022 amid weak overseas
demand, while domestic producers may kick off
another round of output reduction on squeezed
margins and subdued demand. China’s domestic PE
prices were largely on a downtrend in the first
half of the year. Prices increased around the
world in the first quarter as the
Russia-Ukraine conflict pushed up crude prices
sharply.
Asia July industries – a mixed bag as
battle with inflation
continues
By Nurluqman Suratman 02-Aug-22 13:59 SINGAPORE
(ICIS)–Asia’s manufacturing sector in July
presented a mixed performance, with major
economies in the northeast showing a marked
slowdown in activity, as the region continues
to contend with high input costs and weak
demand. For China, both the official and
non-official manufacturing purchasing managers’
indices (PMI) for July indicated continued
weakness in the world’s second-biggest economy
Supply problems continued to disrupt
German manufacturers in July –
Ifo
By Morgan Condon 01-Aug-22 17:27 LONDON
(ICIS)–Bottlenecks continued to disrupt German
manufacturing in July, with the majority of the
chemicals industry hit by material shortages,
according to the latest data from the Ifo
Institute. Supply problems impacted 73.3% of
German manufacturing companies surveyed by Ifo
in July, down from 74.1% in June. Chemicals
were less impacted than other downstream
sectors.
OUTLOOK: China’s oxo-alcohols weighed by slow
demand recovery, increasing
supply
By Claire Gao 29-Jul-22 16:07 SINGAPORE
(ICIS)–China’s oxo-alcohols markets will face
downward pressure from slow recovery of demand
and increasing supply, although the outlook of
export is promising.
OUTLOOK: US EDC likely to re-enter global
markets in 2H as macroeconomic headwinds change
flows
By Bill Bowen 29-Jul-22 05:56 HOUSTON
(ICIS)–US ethylene dichloride (EDC) is likely
to see weakened demand and greater availability
in the second half of 2022 as demand for its
downstream derivative polymer weakens on less
construction activity amid macroeconomic
headwinds.
INSIGHT: Europe industry facing difficult
August as gas supply concerns
mount
By Nigel Davis 29-Jul-22 00:14 LONDON
(ICIS)–It is almost like stepping back in
time, with industrial sectors in Europe vying
for the attention of governments and lawmakers
to try to secure operations should the region’s
gas crisis escalate.
S Korea’s S-Oil Q2 net income more than
doubles; Q3 PX spread to
weaken
By Nurluqman Suratman 28-Jul-22 13:38 SINGAPORE
(ICIS)–S-Oil’s second-quarter net income more
than doubled year on year on strong refining
margins and robust aromatics demand, but the
South Korean producer’s paraxylene (PX) spread
is expected to weaken in July-September 2022.
SE Asia August PE offers stable to soft but
Vietnam market under intense
pressure
By Izham Ahmad 28-Jul-22 11:22 SINGAPORE
(ICIS)–Initial spot import offers for August
shipments of polyethylene (PE) in southeast
Asia were announced either stable or softer
this week as buying sentiment continued to be
depressed by the slump in demand from China.
VIDEO: China’s
new EVA capacities to weigh on Q3
sentiment
By Joanne Wang 22-Jul-22 12:29 SINGAPORE
(ICIS)–Watch ICIS senior industry analyst
Joanne Wang discuss the ethylene vinyl acetate
(EVA) capacity increases in China and the
recently launched EVA China RMB index.
Chinese
ethanolamines slump weighs on sentiment in Asia
and India
By Clive Ong 22-Jul-22 10:45 SINGAPORE
(ICIS)–The ongoing slump in the ethanolamines
market in domestic China continues to weigh on
sentiment of players in Asia and India.
OUTLOOK: European
MMA demand uncertain amid wider economic
challenges
By Mathew Jolin-Beech 21-Jul-22 23:24 LONDON
(ICIS)–The European methyl methacrylate (MMA)
market is facing uncertain H2 demand amid wider
geopolitical and economic challenges.
Asia BDO remains
weighed down by ongoing Chinese market
slump
By Clive Ong 21-Jul-22 16:53 SINGAPORE
(ICIS)–Asian butanediol (BDO) market continues
to be impacted by the ongoing slump in the
Chinese domestic sector. Sentiment has turned
increasingly bearish with participants
anticipating further weakness in the near term.
OUTLOOK: US MEG
market expected to get longer through
Q3
By Melissa Wheeler 21-Jul-22 05:10 HOUSTON
(ICIS)–The monoethylene glycol (MEG) market is
expected to remain long through Q3 as suppliers
continue to offer more product.
PODCAST: China’s
base oils demand to be better in autumn,
imports to decline YOY in H2
By Whitney Shi 20-Jul-22 15:11 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Whitney Shi
discuss the outlook of China’s base oil market
in this episode.
Prolonged
heatwave could hinder operations at Europe
petrochemicals plants
By Jonathan Lopez 19-Jul-22 18:09 MADRID
(ICIS)–High temperatures across Europe could
reduce operating rates at some petrochemicals
plants, as cooling operations become more
difficult, trade groups have warned.
OUTLOOK: Middle
East base oils market to face stable-to-soft
demand in H2
By Izham Ahmad 19-Jul-22 10:46 SINGAPORE
(ICIS)–The Middle East base oils spot market
is expected to still face uncertainties in the
final half of 2022 as supply of most grades is
expected to be mixed, with demand expected to
remain stable to soft due to sluggish economic
growth and global automotive sales.
World
petrochemical sentiment weak as demand
falters
By Felicia Loo 15-Jul-22 14:12 SINGAPORE
(ICIS)-Global petrochemical markets are mired
in a challenging situation writ large, with
demand dull as recession risks gather pace.
VIDEO: Asia
adipic acid demand struggles to reach
pre-lockdown levels
By Josh Quah 15-Jul-22 14:01 SINGAPORE
(ICIS)–Watch ICIS editor Josh Quah discuss
developments in Asia’s adipic acid market.
PODCAST: Chems sector resilient in Q2 but
conditions forecast bleak for
H2
By Tom Brown 14-Jul-22 18:44 LONDON
(ICIS)–Projected second-quarter financial data
for BASF hints that conditions for chemicals
players may have been stronger than expected in
the second quarter of 2022, but rising COVID-19
infection numbers in China only add to the slew
of bearish news for the second half of the
year.
PODCAST:
China’s LDPE facing continued supply
pressure
By Joanne Wang 14-Jul-22 10:28 SINGAPORE
(ICIS)–In this episode, ICIS analyst Jady Ma
and Joanne Wang discuss the recent developments
and outlook of China’s low density polyethylene
(LDPE) market.
Europe PET high
prices detrimental to sales in bearish
climate
By Caroline Murray 13-Jul-22 23:15 LONDON
(ICIS)–The peak season for polyethylene
terephthalate (PET) bottlers in Europe is the
summer but the combination of extraordinarily
high prices and the unstable economy is
affecting sales.
China PP hits lowest levels this year
on slumping crude, weak
demand
By Lucy Shuai 13-Jul-22 16:43 SINGAPORE
(ICIS)–China’s polypropylene (PP) prices fell
to their lowest levels this year from slumping
crude oil and weak downstream demand, on
concerns of a global economic recession.
Crude falls
nearly $2/bbl on fresh China COVID-19
curbs
By Nurluqman Suratman 12-Jul-22 11:08 SINGAPORE
(ICIS)–Oil prices fell by nearly $2/bbl on
Tuesday morning on worries over fresh COVID-19
restrictions in China, the world’s biggest
crude importer.
INSIGHT: Demand
uncertainty pressuring prices as downturn
gathers momentum
By Nigel Davis 11-Jul-22 23:43 LONDON
(ICIS)–Movement in the ICIS weekly and monthly
petrochemical indexes illustrate the strain
being put on producers to hold prices in the
face of increasing demand uncertainty and the
volatile feedstock and energy cost environment.
European melamine
spot prices stable-to-soft; Q3 contract talks
ongoing as supplier and consumer pricing ideas
clash
By Melissa Hurley 08-Jul-22 00:44 LONDON
(ICIS)–European melamine third quarter
contract discussions continued this week. More
progress is expected towards the end of the
week, heading in to next week. Talks between
suppliers and consumers are divisive as pricing
expectations remain unmatched.
PODCAST:
Europe’s oxo-alcohols chain faces demand
erosion amid economic
uncertainty
By Mathew Jolin-Beech 07-Jul-22 22:03 LONDON
(ICIS)–The European oxo-alcohols chain faces a
slowdown in demand from end use sectors as the
wider geopolitical and economic uncertainties
begin to bite. This ICIS podcast explores the
latest developments for oxo-alcohols and its
derivative markets.
PODCAST: Global shortage of MEK eases,
though US prices remain high
By Nick Cleeve 07-Jul-22 17:58 LONDON
(ICIS)–Methyl ethyl ketone (MEK) prices are
softening globally as supply constraints ease,
although prices in the US, a net importer,
remain at extremely high levels, drawing
exports from Asia and Europe.
Asia petchems
mired in bearishness on elevated recession
fears
By Felicia Loo 07-Jul-22 11:21 SINGAPORE
(ICIS)–Asian petrochemical markets are in a
jam, with price bearishness across the board as
recession risks continue to mount.
OUTLOOK: Tight
supply concerns flip to reduced oil demand by
Q4
By Barney Gray 07-Jul-22 00:49LONDON
(ICIS)–Oil prices were in a post-Covid
recovery phase prior to Russia’s invasion of
Ukraine in February. Since then, H1 crude
prices have been driven by the fallout from the
war, reaching record highs. But the oil market
will be characterised by major volatility and
rising uncertainty as we head into H2.
PODCAST: UK
chemicals fighting Four Horsemen of the
Apocalypse – CIA CEO
By Will Beacham 05-Jul-22 22:48 LONDON
(ICIS)–The UK chemicals industry is battling
the quadruple challenges of Brexit, COVID-19,
the cost of living crisis and the war in
Ukraine, according to Stephen Elliott, CEO of
UK trade group the Chemical Industries
Association.
OUTLOOK: Demand
for low-end R-PET to continue to
shrink
By Arianne Perez 04-Jul-22 15:03 SINGAPORE
(ICIS)–Low-end applications of recycled
polyethylene terephthalate (R-PET) will become
less popular as the more competitive virgin PET
continues to eat into its market share.
China’s propylene
faces headwinds from ample supply, weak demand
in June
By Yi Liang 04-Jul-22 10:21 SINGAPORE
(ICIS)–China’s domestic propylene market
continues to face headwinds from ample supply
and sluggish end-user demand in June, with
market sentiment turning bearish.
Mideast petchem
market sentiment bearish on weak
demand
By Felicia Loo 01-Jul-22 11:30 SINGAPORE
(ICIS)–Sentiment in the Middle East
petrochemical markets is bearish, as demand is
tepid against a backdrop of ample supply. The
soaring inflation rates have led to a reduced
purchasing power, weakening buyers’ appetites.
Asia AA and
acrylates largely lower; sentiment softer on
China downtrend
By Li Li Chng 29-Jun-22 21:20 SINGAPORE (ICIS)—
Asia’s acrylic acid (AA) and acrylate esters
spot discussions were under pressure, with
market sentiment bearish amid a downtrend in
China.
PODCAST: China PP
to face uncertainties in H2 ’22 amid high
costs
By Lucy Shuai 29-Jun-22 17:47 SINGAPORE
(ICIS)–ICIS analysts Jady Ma and Lucy Shuai
discuss the recent developments and outlook of
China’s polypropylene (PP) market.
PODCAST: Europe
and Middle East isocyanates demand
slows
By ICIS Editorial 29-Jun-22 17:09 LONDON
(ICIS)–Isocyanates Europe editor Zubair Adam
discusses current demand and supply market
trends for Europe with isocyanates Middle East
editor Damini Dabholkar.
US ethylene
begins Q3 with ample supply, eroding
margins
By John Donnelly 29-Jun-22 05:45 HOUSTON
(ICIS)–The US ethylene market is seeing ample
supply, lower margins but decent derivative
demand heading into Q3.
INSIGHT: Energy
demand rebound at a time of crisis, bp stats
show
By Nigel Davis 28-Jun-22 23:39 LONDON
(ICIS)–Here is the energy crisis writ large.
The chart, from bp as it released its latest
Statistical Review of World Energy on Tuesday,
shows the sharp rebound in energy consumption
as COVID-19 restrictions eased and global
economic activity recovered.
PODCAST:
Isocyanates face high costs, squeezed margins
in H2 – ICIS analysts
By Morgan Condon 28-Jun-22 21:02 LONDON
(ICIS)–The isocyanates market is faced with
steep production costs and weakening demand
across downstream sectors, presenting the
industry with a darkening outlook.
European PVC
shows signs of lengthening on demand, global
trends
By Chris Barker 28-Jun-22 17:29 LONDON
(ICIS)–European polyvinyl chloride (PVC)
contract prices for June have settled with
rollovers to decreases compared to May, with
indications that the outlook for availability
has lengthened compared to earlier in the year.
Asia ADA trade
flows punch above weight in
May
By Josh Quah 24-Jun-22 13:57 SINGAPORE
(ICIS)–Northeast Asia adipic acid (ADA)
markets logged a large trade surplus in May,
according to import-export data captured by
ICIS Supply and Demand Database.
Europe capro,
nylon 6 markets face slow summer
demand
By Marta Fern 24-Jun-22 00:35 LONDON
(ICIS)–European caprolactam (capro) and nylon
6 markets are facing persistent soft demand,
which could weaken further in the coming months
while the costs of production are on the rise.
VIDEO: Asia MEG
may face more challenges in H2
2022
By Judith Wang 23-Jun-22 17:16 SINGAPORE
(ICIS)–Watch ICIS Senior Editor Judith Wang
discuss current developments in Asia’s
monoethylene glycol (MEG) market and its
outlook.
China’s NBR
import offers plummet with domestic losses,
soft demand
By Ai Teng Lim 23-Jun-22 15:56 SINGAPORE
(ICIS)–China’s import offers for acrylonitrile
butadiene rubber (NBR) are at year-low levels,
as sellers tried to chase deals with wider
discounts.
Tight tonnage and
robust demand push Asian chemical tanker
market, sentiment bullish
By Luffy Wu 23-Jun-22 14:37 SINGAPORE
(ICIS)–The Asian chemical tanker shipping
market saw overall upward pressure amid high
global bunker levels and regional tonnage
tightness, drained by robust long-haul
activities and clean petroleum product (CPP)
markets.
PODCAST: How may
China respond to looming global energy
crisis?
By Bee Lin Chow 23-Jun-22 13:32 SINGAPORE
(ICIS)–ICIS analysts discuss how China may
respond to what seems like a looming global
energy crisis.
US SBR demand
healthy from tyre sector, but tyre imports
growing
By Amanda Hay 23-Jun-22 05:34 HOUSTON
(ICIS)–US styrene butadiene rubber (SBR)
demand healthy for tyres, but North American
tyre manufacturers face growing tyre imports.
INSIGHT: Don’t
stifle chemicals now in the face of energy
uncertainty and climate reform – UK
industry
By Nigel Davis 22-Jun-22 22:20 LONDON
(ICIS)-The UK chemical industry is now 6%
larger than at the onset of the pandemic, chief
executive of the country’s sector trade group,
the Chemical Industries Association (CIA), said
last week.
PODCAST: China benzene
prices hit 8-year high; cost and supply support
to persist
By Yoyo Liu 17-Jun-22 10:37 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Yoyo Liu
discuss the recent developments and outlook of
China’s benzene market.
Asian BD buying
slows as domestic China
tumbles
By Ai Teng Lim 17-Jun-22 09:48 SINGAPORE
(ICIS)–Sentiment was duller in this week’s
spot talks for Asian butadiene (BD) imports, as
buyers retreated after the domestic China
market suffered heavy losses early-week.
PODCAST: Europe
PET speculation rife in face of diverging
upstream dynamics
By Caroline Murray 17-Jun-22 00:07 LONDON
(ICIS)–Mixed xylene prices are skyrocketing
higher than PX prices and concerns over
negative margins mount. PX June contract talks
are ongoing. By contrast, MEG supply remains
lengthy and demand has been low, pressuring
down spot prices. The June MEG contract price
also remains unconfirmed.
INSIGHT: PET,
politicians and TikTok – the industry’s battle
for our attention
By Matt Tudball 16-Jun-22 22:17 BRUSSELS
(ICIS)–The battle for our attention is a
fierce one. In the post-COVID-19 world, as
employees we feel a sense of email overload and
Zoom fatigue while as a consumer we face a
constant bombardment of media telling us what
we should be doing, thinking, eating, drinking
and watching.
Asian
petrochemicals to rebound in June amid bumpy
recovery – ICIS analysts
By Ann Sun 16-Jun-22 12:12 SINGAPORE
(ICIS)–Asian petrochemical market is expected
to be generally firmer in June given higher
crude prices and easing lockdowns in China,
according to a latest Price Forecast by ICIS
analysts.
PODCAST: Global
base oils supply and refinery margins to stay
under pressure in H2
By Eashani Chavda 15-Jun-22 22:35 LONDON
(ICIS)–ICIS editors Eashani Chavda, Samantha
Wright and Amanda Hay are joined by ICIS
analyst Mike Connolly to discuss the latest
developments in Europe and US base oils
markets. Key topics include: supply shortages,
shifting trade flows, refinery margins and
additive shortages.
PODCAST: Chemical
distributors see inflation hurting demand,
downturn in prospect
By Will Beacham 14-Jun-22 22:03 BARCELONA
(ICIS)–Rising inflation is now hurting demand
for chemicals, raising the prospect of a broad
economic downturn later this year or in 2023,
according to chemical distributors.
China PE finds
support from stimulus policies; eyes on demand
performance
By Sijia Li 14-Jun-22 14:57 SINGAPORE
(ICIS)–China’s domestic polyethylene (PE)
market entering June has found support from
stimulus policies and costs. Looking ahead,
players are focusing on demand recovery, with
the easing of lockdowns in multiple regions
amid decreasing COVID-19 infections.
India domestic
LAB prices rise; China demand improves as
lockdowns ease
By Clive Ong 10-Jun-22 11:53 SINGAPORE
(ICIS)–India’s domestic prices for linear
alkylbenzene (LAB) have spiked on the back of
rising costs, but some players expect some
headwinds with the monsoon season kicking off.
Monsoon season to hamper India demand
China demand sees uptick as COVID-19
restrictions ease
China’s competitively priced cargoes still
available in Asia (including India), Mideast
Oil prices drop
more than $1/bbl on partial lockdowns in
China
By Nurluqman Suratman 10-Jun-22 11:34 SINGAPORE
(ICIS)–Oil prices fell more than $1/bbl on
Friday on renewed demand fears after fresh
COVID-19 lockdown measures were announced in
China, but tight supply concerns capped losses.
INSIGHT:
Sustainability to remain the key driver for
Asia recycled polymers
By Arianne Perez 10-Jun-22 11:00 SINGAPORE
(ICIS)–Capacity expansions of recycled
polyethylene terephthalate (R-PET) and recycled
polyethylene (R-PE) faced delays amid the
onslaught of COVID-19, particularly last year,
but overall growth of Asia polymers recycling
is set to continue with sustainability as the
main driver.
PODCAST: European
ACN market keeps a close eye on ammonia and
propylene
By ICIS Editorial 09-Jun-22 18:35 LONDON
(ICIS)–The European acrylonitrile (ACN) market
has good supply and some softening demand, but
costs remain high. In this latest podcast, ICIS
deputy managing editor Jane Massingham (Europe)
talks to managing editor fertilizers, Julia
Meehan and senior editor on olefins, Nel Weddle
about the ammonia and propylene markets and
what to expect in the months ahead.
PODCAST: Asia
benzene, styrene short-term outlook to hinge on
demand-supply balance
By Jasmine Khoo 09-Jun-22 11:35 SINGAPORE
(ICIS)–Asia’s benzene prices have hit an
all-time high on strong performance from the US
amid the turnaround season, while styrene price
gains have been lagging behind due to weak
performance in the styrenics sector. In this
podcast, Jasmine Khoo speaks with editors
Angeline Soh and Trixie Yap on benzene and its
key downstream styrene monomer (SM) and
styrenics sectors.
China PP exports
may fall on narrow price gap with SE
Asia
By Lucy Shuai 08-Jun-22 17:09 SINGAPORE
(ICIS)–With the lifting of COVID-19 lockdowns
in China, as well as stimulus policies to boost
the economy, China’s polypropylene (PP) prices
have rebounded since late May. However, as PP
prices have fallen in the southeast Asian
market, China’s PP exports may fall in June due
to a narrow price gap.
VIDEO: China PP
demand set to improve in June as restrictions
ease
By Lucy Shuai 08-Jun-22 16:21 SINGAPORE
(ICIS)–Watch industry analyst Lucy Shuai share
her insights on the rebound seen in China’s
polypropylene (PP) market following the easing
of strict COVID-19 curbs in the country.
Asia Q3 biodiesel
market sentiment to stay weak on poor European
demand
By Felicia Loo 07-Jun-22 12:13 SINGAPORE
(ICIS)–The third-quarter market sentiment for
southeast Asian palm methyl ester (PME)
biodiesel is expected to remain weak amid poor
buying requirements from Europe, a key
importing region for southeast Asian material.
Germany’s chemicals hit hard by China
lockdowns, automotive sentiment
improves – Ifo By Jonathan Lopez 03-Jun-22
16:49 MADRID (ICIS)–Lockdowns in China to
contain the coronavirus pandemic have had a
major impact on export-intensive industrial
sectors in Germany such as chemicals, research
institute Ifo said on Thursday.
Asia MEG rebounds on higher crude, demand
recovery expectations
By Judith Wang 03-Jun-22 10:50 SINGAPORE
(ICIS)–Asia’s monoethylene glycol (MEG) weekly
prices rebounded during the week amid stronger
crude values and expectations of demand
improvement due to easing lockdowns in
Shanghai.
Global chem production fell 2.9% year on year
in April
By Stefan Baumgarten 03-Jun-22 01:57 HOUSTON
(ICIS)–Global chemical production volumes in
April fell 4.1% month on month and 2.9% year on
year, and they were off 0.4% year on year for
the first four months of 2022, ICIS senior
economist Kevin Swift said in a report on
Thursday.
China methanol to face ample supply, mixed
demand performance
By Doris He 01-Jun-22 21:05 SINGAPORE
(ICIS)–China’s methanol market is expected to
face overall ample supply from domestic and
overseas producers in the near term, while
demand may be mixed from different downstream
sectors.
INSIGHT: China, India to be main drivers of PVC
supply, demand in Asia
By Jonathan Chou 01-Jun-22 11:00 SINGAPORE
(ICIS)–The coronavirus pandemic has changed
how we live our lives, upending also supply and
demand dynamics for polyvinyl chloride (PVC)
and its related markets.
Over two years on since the pandemic hit, much
of Asia has attempted “living with COVID-19” in
2022, with some starting to treat it as an
endemic disease.
China SM margins likely to be squeezed by
higher costs, weak demand
By Tina Zhang 31-May-22 11:55 SINGAPORE
(ICIS)–Margins in China’s styrene monomer (SM)
market are expected to continue to be squeezed
in the near term, in view of rising feedstock
benzene values and weak demand.
China petrochemical market sentiment upbeat on
Shanghai recovery plan
By Fanny Zhang 30-May-22 13:27 SINGAPORE
(ICIS)–China’s domestic petrochemical market
sentiment is upbeat at the start of the week,
with demand expected to recover when the
two-month lockdown in Shanghai is lifted in
June.
Asian epoxy
market stable, Chinese domestic market outlook
ambiguous
By Luffy Wu 27-May-22 11:54 SINGAPORE
(ICIS)–The Asia epoxy resins market saw
overall stable market sentiment while buyers
exhibited improved price acceptability compared
with in April.
Asia nylon market cautious as Shanghai
inches towards June
reopening
By Josh Quah 26-May-22 16:16 SINGAPORE
(ICIS)–The lockdowns have been damaging for
Asia’s nylon market, with prolonged demand loss
particularly felt in the CFR (cost &
freight) China market. There have been recent
signs, however, that the worst may have passed
in the lead up to the reopening of key cities
in China.
PODCAST: Weak demand from
lubricants, China’s Group II base oil import
margins to be negative
By Whitney Shi 25-May-22 14:09 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Whitney Shi
discuss the recent developments and outlook of
China’s base oil market.
INSIGHT: China
crude consumption softens amid COVID-19
lockdowns
By Pearl Bantillo 25-May-22 12:00 SINGAPORE
(ICIS)–China’s consumption of crude has
softened as industrial production is hit by
pandemic-related restrictions in place since
February, with no sign of the government giving
up on its zero-COVID policy.
INTERVIEW: China
emergence from lockdowns, stimulus to recharge
auto and construction – Covestro
CFO
By Joseph Chang 25-May-22 05:17 NEW YORK
(ICIS)–China’s easing of and potential
emergence from COVID-19 lockdowns along with
government stimulus should spark a major
recovery in its automotive and construction
markets, the chief financial officer (CFO) of
Germany-based Covestro said on Tuesday.
Asian MMA peaks
in May; outlook pending clarity amid easing
restrictions in China
By Li Li Chng 24-May-22 13:47 SINGAPORE
(ICIS)–Asian methyl methacrylate (MMA) peaked
in May, after increasing around 17% since H2
February. Market players are awaiting clearer
picture on China’s lifting of COVID-19
lockdowns and restrictions.
PODCAST: Europe
PE and PP update and outlook
By Ben Lake 23-May-22 23:42 LONDON
(ICIS)–Senior editor, Vicky Ellis, and market
editor, Ben Lake, join forces to discuss a
distinct change in the polymers market. The
frenzied activity in March and April has given
way to a far more relaxed sentiment in May – on
the buy-side, at least. Vicky and Ben give
their outlook for June and take a look at
events that could shake up the markets again.
INSIGHT: China PE
demand to rebound from June, but slow road
ahead
By Amy Yu 23-May-22 18:27 SINGAPORE
(ICIS)—China polyethylene (PE) demand is
expected to firm as COVID-19 containment
measures ease, but the pace of recovery remains
hindered by remaining lockdown measures.
ANALYSIS AND RESOURCES
12-Aug-2022
Updated at 08:30 GMT on 12 August
with latest headlines. Please scroll down to
see headlines.
Map of gas-related outages updated at 17:45
GMT on 22 July.
The war in Ukraine first caused oil price
volatility, which increased as surging COVID-19
cases in China led to fresh lockdowns, hitting
demand and disrupting supply chains. China is
the world’s second biggest economy and largest
oil importer.
Now Russia’s decision to reduce flows of
natural gas to Europe means the continent has
to look forward to a winter of potential
rationing, which could hit chemical production.
Tightened supply has also sent gas prices
soaring, with high costs forcing production
cuts, especially in fertilizers.
India is facing a more severe shortage of
fertilizers and edible oil amid wide-ranging
trade disruptions as the Ukraine war rages on,
with financial sanctions tightening on Russia.
Europe’s energy challenge is immense and put
into stark relief by the response to Russia’s
war in Ukraine. Cutting the ties that bind EU
and non-EU nations to Russian gas and oil will
be extremely painful this year and in years to
come: the actions proposed by the European
Commission put that into context.
This topic page examines the impact of the
Ukraine conflict on oil, gas, fertilizer and
chemical markets.
Image credit Vadim
Ghirda/AP/Shutterstock
Europe’s energy markets witnessed a year of
record prices and extreme volatility in 2021.
Russia’s invasion of Ukraine has led to more
difficult conditions for global markets in
2022.
GAS SUMMARY
Gas storage low in Europe, winter demand
30% higher than rest of year
Record shipments of liquefied natural gas
(LNG) to Europe so far in 2022
LNG could ease Europe shortages if Russia
supplies cut
Europe LNG processing operating at full
capacity
Russia resumed flows through Nord Stream I
pipeline, but at reduced levels
EU plan calls for a 15% cut to consumption,
industry may face much higher reductions
AMMONIA SUMMARY
Russia supplies 20% of global seaborne
ammonia market
Disrupted supply has pushed up fertilizer
and food prices
OIL SUMMARY
Friendship oil pipeline flows through
Ukraine
Russian oil feeds around a quarter of
Europe demand
Europe seeks to end reliance on Russian
crude oil
CHEMICALS SUMMARY
High Europe gas and electricity prices
force price hikes, energy surcharges
Volatile oil and feedstock prices dent
chemical producer margins
Elevated oil prices dent consumer
confidence and demand
CEOs plan now for winter gas rationing
BASF says it will have to close
Ludwigshafen site if gas supplies fall below
50% for a prolonged period
Europe is heavily reliant on Russian gas and
exposed to disruptions in supply, but
Russia is also an important oil exporter and a
supplier of fossil fuel products, which find
their way to international markets via
Ukraine’s ports.
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.
ICIS has taken a broader perspective, asking
how vulnerable energy and energy-related
supplies are to disruptions, what contingency
plans are put in place and what could be
expected in the upcoming weeks.
How vulnerable are energy and
energy-related Russian supplies to
disruptions?
Europe depends for close to 40% of its annual
gas consumption on Russian supplies, imported
via four routes – Ukraine, Belarus-Poland as
well as the Nord Stream 1 and TurkStream
corridors linking Russia to Germany and Turkey
via the Baltic and Black Sea, respectively.
Overall Russian pipeline supplies were limited
throughout 2021, and since the beginning of
this year producer Gazprom has shipped only
one-third of the gas that it was expected to
deliver to European consumers via Ukraine as
part of a five-year transit agreement.
Russia has banned exports of gas to several EU
countries, and reduced flows through the Nord
Stream I pipeline. European petrochemicals
players face even higher gas prices as a
result. Fertlizer companies – where gas can
account for 80% of costs – have been forced to
curtail production.
If the conflict escalates, Ukraine transit
pipelines may come under attack but disruptions
could be limited because the infrastructure has
been built to grant flexibility, allowing the
operator to reroute flows away from potentially
damaged segments.
AMMONIA IMPACT
The Togliatti-Azot pipeline, the world’s
longest ammonia pipeline stretching 2,471km
from the Togliatti Azot plant in Russian Samara
Oblast to the Ukrainian Black Sea port of
Yuzhny, could be caught up in the cross-fire.
Russian ammonia supplies account for around 20%
of the global seaborne merchant ammonia market
each month.
Around two thirds of those volumes are exported
via Yuzhny, with the rest reaching European and
global markets via Baltic ports. Ammonia is a
prime material for fertilizers, so curtailments
could potentially lead to higher food prices
and shortages.
Ammonia market players are scrambling to cover
positions and assess options as the Russian
invasion of Ukraine saw loadings at the key
export hub of Yuzhny halted with immediate
effect.
Russian nitrogen fertilizer major Togliatti
confirmed the suspension of the transit of
ammonia to the Black Sea port via pipeline to
ensure the safety of people living in the
vicinity of the lengthy conduit.
The Samara Oblast-based giant also confirmed
the shut down of four of its seven ammonia
units, with the other three plants operating at
reduced rates.
OIL PIPELINES VULNERABLE
Supplies on the world’s longest oil pipeline,
the Friendship (Druzhba) pipeline, could be
threatened if the conflict leads to tough
sanctions. The pipeline carries oil from
central Russia 4,000km west to Ukraine and
Belarus and runs close to the Belarus-Ukraine
border. Russia exports around 5m bbl/day, of
which half are exported to Europe, including
via this pipeline.
Russian oil accounts for about a quarter of
Europe’s consumption, with the Druzhba pipeline
carrying close to 1m bbl/day. Should sanctions
be imposed and exports hindered, Europe will
need to secure alternative cargoes from the
global market.
Europe consumed most exports of Urals, Russia’s
biggest export grade, in 2021 after Saudi
Arabia boosted market share in China. Almost
10m tonnes of Urals went through Rotterdam in
the first half of last year, up 2m tonnes on
2020.
Germany stands most exposed because it gets 25%
of its oil from Russia.
CHEMICALS IMPACT
Gas and electricity are important components in
the production costs of many chemicals. Surging
gas and feedstock prices in Europe have caused
big hikes in contract and spot prices.
Europe is now at a competitive disadvantage to
other regions and some customers are seeking
new sources of lower-priced supply, especially
from Asia and the Middle East.
The conflict in Ukraine has pushed European gas
prices back up to record levels, so some
chemical producers may consider ceasing
production, or adding further energy
surcharges.
Rising oil prices since late 2021 have already
put chemical margins under pressure, and this
has continued into 2022. As oil and naphtha
prices soared, margins for ethylene production
based on naphtha went nagative for the first
time ICIS record began. The are now are
swinging wildy in tandem with oil price
movements.
Chemical producers are struggling to pass on
increasing naphtha feedstock and energy costs,
especially in Europe. Elevated oil prices also
dent downstream consumer confidence and
spending.
What contingency plans are being put in
place?
US and European officials have been planning
for backup LNG supplies. Exports of LNG from
Algeria, Qatar, the US and even Australia have
been discussed as alternatives. Although Europe
imported a record 11bn cubic metres (bcm) of
LNG in January alone, half of which were
sourced in the US, much of future supplies
would depend on price as well as supply and
processing capacity.
Europe is
proposing to replace 100bn cubic metres
(m3) of Russian gas with alternative supplies
by the end of the year.
“In this scenario, there would be huge problems
unless Europe gets it act together. I estimate
that even with new liquified natural gas (LNG)
supplies from the US, Norway, and Qatar plus
energy efficiency measures and more use of
renewables, Europe would still be short by
30-40bn m3,” said ICIS senior energy editor,
Aura Sabadus.
You will find more infographics at Statista
If the Asian premium were to increase, LNG
cargoes would head in that direction, even as
seasonal European winter gas demand is on
average 30% higher than the rest of the year.
Supply disruptions caused by escalating
tensions may lead to a price rebound,
incentivising more LNG to return to Europe.
However, European import terminals are already
operating at nameplate capacity. A record of
5,000GWh/day was reached in mid-January,
according to EU data.
Even if more LNG were to reach European
terminals, countries in central and eastern
Europe which rely on Russian flows shipped via
Ukraine, would struggle to secure imported LNG.
For oil markets, in case of an attack but no
international sanctions, the worst-case
scenario would be for approximately 240,000
bbl/day of lost Russian exports via Ukraine.
There are other seaborne routes, including the
Russian Black Sea port of Novorossiysk.
Gas rationing – impact on Europe
petrochemicals, fertilizers
Embattled European fertilizer and petrochemical
producers may be the first in line to cut gas
consumption as political pressure is mounting
to save supplies ahead of a difficult winter.
As 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, Brussels has now issued guidance to
reduce demand by 15% between 1 August 2022 – 31
March across member states.
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 have already
been forcing industrial consumers to limit or
stop production or seek import substitution
globally.
Data compiled by
ICIS Gas Analytics show that overall
year-on-year gas demand has declined by 8.2% in
the year to date and by 3.9% for the same
period over the 2015-2019 average.
EU proposals for demand reduction released on
20 July indicate the industrial sector may be
priority target for major reductions, with
three sectors – glass, ceramics and chemicals –
consuming half of the sector’s total.
FERTILIZERS
The fertilizer sector, one of the most
gas-intensive industries, has also been one of
the most affected so far because with gas
prices soaring more than five times the
long-term average in recent months, the cost to
produce ammonia and urea rose to $1,700/tonne
and $1,250/tonne respectively.
This is around 60% above the current market
price of these key products of the fertilizer
sector.
ICIS experts focusing on the fertilizer sector
estimate that as much as 40% of urea production
may have been cut year on year in Europe,
although the information is difficult to
confirm since there is no official confirmation
on specific output limitations.
PETROCHEMICALS
On the petrochemicals side, there have been no
reports of shutdowns or production reductions,
but 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.
BASF’s Ludwigshafen site is the world’s largest
integrated chemical complex owned by a single
company and confirmed to ICIS that it will have
to shut down if gas supply collapses by more
than half for a sustained period of time.
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.
TotalEnergies and PKN Orlen declined to comment
while MOL and PCK have not yet replied to
requests for comment.
UKRAINE CHEMICALS UNDER THREAT
With Russian forces advancing across 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
Malaysia’s Q2 GDP expands
8.9%, growth to moderate on global
uncertainties
By Nurluqman Suratman 12-Aug-22 15:20
SINGAPORE (ICIS)–Malaysia’s economy grew by
8.9% year on year in the second quarter of this
year on improving domestic demand, but
heightened global uncertainties are expected to
weigh on its growth outlook, the central bank
said on Friday.
High
production costs erode Asian R-HDPE
margins
By Arianne Perez 12-Aug-22 13:48 SINGAPORE
(ICIS)–As production costs of recycled
high-density polyethylene (R-HDPE) blow
moulding pellets remain high in Asia while
demand stays lacklustre, sellers’ margins will
continue to narrow in the weeks ahead.
PODCAST: Asian olefins
producers challenged to preserve margins in H2
– ICIS analysts
By Morgan Condon 12-Aug-22 05:00 LONDON
(ICIS)–Asian olefins capacity is set to
increase in the coming months, but against the
prospect of a global recession and challenging
demand it is unclear how this will develop for
producers.
Trade
data show US base oil export availability has
not returned to pre-pandemic
levels
By Amanda Hay 12-Aug-22 03:04 HOUSTON
(ICIS)–ICIS trade data reveal that the US has
not yet returned to pre-pandemic export levels
of base oils as supply constraints, shifting
trade flows and high prices have curbed export
activity.
Gas-fired generation
drives German power Cal ’23
By Anne Petersen 12-Aug-22 00:45 LONDON
(ICIS)–The price of gas remains the main
driver for the German power Cal ’23, despite
the German government’s focus on limiting the
use of gas for power production.
OPEC
revises crude demand forecast down on slowing
global economy
By Jonathan Lopez 11-Aug-22 22:40 MADRID
(ICIS)–While crude oil demand continued its
“strong recovery” to pre-pandemic levels,
economic growth showed signs of a slowdown in
July and, with it, crude demand also took a
hit, producing cartel OPEC said on Thursday.
UK to
face increased competition for LNG in fourth
quarter
By Hector Falconer 11-Aug-22 19:20 LONDON
(ICIS)–Britain is likely to face increased
competition for LNG supply in the fourth
quarter of 2022 amid uncertainty over Russian
piped supply to mainland Europe, supporting NBP
winter contracts especially in the case of cold
weather.
Oil
prices exposed to opposing fundamentals,
extreme volatility
By Cecilia Barreiro 11-Aug-22 18:58 LONDON
(ICIS)–The August outlook for oil prices is
subject to increased uncertainty resulting from
a number of bullish and bearish factors.
Russia’s invasion of Ukraine will continue to
be a central driving force and keep oil markets
volatile while rising global inflation is
expected to keep a lid on demand.
Singapore trims 2022 GDP
growth forecast to 3-4% on global
headwinds
By Nurluqman Suratman 11-Aug-22 11:43
SINGAPORE (ICIS)–Singapore on Thursday trimmed
its 2022 GDP growth forecast to 3-4%, from the
previous estimate of 3-5%, due to the
deteriorating global economic environment.
SE
Asia palm biodiesel to see record export
volumes, healthy demand
By Keven Zhang 11-Aug-22 11:15 SINGAPORE
(ICIS)–Southeast Asia’s palm methyl ester
(PME) export volumes are likely to climb to
record highs in July and August, as several
bullish factors boost buying interest.
PODCAST: Global chemical
prices collapse, Europe prepares for dry
summer, tough winter
By Will Beacham 10-Aug-22 22:43 BARCELONA
(ICIS)–Global chemical prices are falling just
as Europe braces itself for more summer
heatwaves, drought and a winter of gas
rationing.
Thai
PTTGC Q2 net profit falls sharply amid lower
chem margins
By Nurluqman Suratman 10-Aug-22 15:30
SINGAPORE (ICIS)–PTT Global Chemical’s (PTTGC)
net profit fell by 83.9% year on year in the
second quarter, weighed partly by lower margins
across all of its chemicals businesses, the
Thailand-based producer said on Wednesday.
Saudi
SABIC Q2 net profit up 3.8%; H2 margins to stay
under pressure
By Nurluqman Suratman 10-Aug-22 12:42
SINGAPORE (ICIS)–Saudi petrochemicals major
SABIC posted a 3.8% year-on-year increase in
second-quarter net profit, while it expects
margins to remain under pressure in the second
half of 2022.
INSIGHT: Indonesia
economy surprises in Q2; prospects dim in
H2
By Pearl Bantillo 10-Aug-22 21:03
SINGAPORE (ICIS)–Indonesia’s growth momentum
is expected to weaken for the rest of the year
and into 2023, as high inflation hits overall
domestic consumption. External demand is being
threatened by a possible global recession.
Saudi
SABIC Q2 net profit up 3.8%; H2 margins to stay
under pressure
By Nurluqman Suratman 10-Aug-22 12:42
SINGAPORE (ICIS)–Saudi petrochemicals major
SABIC posted a 3.8% year-on-year increase in
second-quarter net profit, while it expects
margins to remain under pressure in the second
half of 2022.
China
July petrochemical markets slump; outlook stays
bearish
By Yvonne Shi 09-Aug-22 08:00 SINGAPORE
(ICIS)–China’s petrochemical markets fell
across the board in July on weak demand, which
persists into August while supply is projected
to grow for the rest of the year.
Asia
BDO extends losses as demand at a low
ebb
By Clive Ong 04-Aug-22 16:47 SINGAPORE
(ICIS)–The Asian butanediol (BDO) market
extended losses with the downtrend still firmly
entrenched. Market participants expect further
downside potential in the near term as the
decline that started in April does not appear
to have run its course.
PODCAST: LPG substitution
of higher-priced LNG limited in
China
By Yan Wang 04-Aug-22 15:37 GUANGZHOU
(ICIS)–ICIS analysts Wang Yan and Xu Fei
discuss with Asia deputy news editor Pearl
Bantillo why China is not aggressively using
liquefied petroleum gas (LPG) as substitute for
liquefied natural gas (LNG) in fuel
applications in industries despite global
supply concerns and soaring LNG prices.
Asian
import offers for NBR fall with weak demand,
outlook bleak
By Ai Teng Lim 04-Aug-22 10:34 SINGAPORE
(ICIS)–Asian spot import offers for
acrylonitrile butadiene rubber (NBR) have
slipped lower as sellers widened discounts to
chase deals in a low-demand market.
India
July exports slip; trade deficit widens to
record $31bn
By Priya Jestin 03-Aug-22 14:43 MUMBAI
(ICIS)–India’s merchandise exports in July
dipped for the first time in over a year, while
increased imports of crude oil and coal bloated
the country’s trade deficit to a record $31bn.
Asia
butac, etac slump; demand tepid on weak
regional currencies
By Melanie Wee 02-Aug-22 17:41 SINGAPORE
(ICIS)–Asia’s butyl acetate (butac) markets
are being weighed down by tepid demand as
continued weakness of currencies in the region
continues to undermine imports.
Asia
July industries – a mixed bag as battle with
inflation continues
By Nurluqman Suratman 02-Aug-22 13:59
SINGAPORE (ICIS)–Asia’s manufacturing sector
in July presented a mixed performance, with
major economies in the northeast showing a
marked slowdown in activity, as the region
continues to contend with high input costs and
weak demand.
OUTLOOK: Asia epoxy
resins to stay sluggish; price competition may
intensify
By Luffy Wu 02-Aug-22 13:46 SINGAPORE
(ICIS)–Uncertain end-demand outlook and
recession fears continue to haunt Asia’s epoxy
resins market, with aggressive exports from
China forcing some regional suppliers to lower
offer.
South
Korea July inflation nears 24-year high at
6.3%
By Nurluqman Suratman 02-Aug-22 12:26
SINGAPORE (ICIS)–South Korea’s consumer price
index (CPI) rose by 6.3% year on year in July,
accelerating from 6.0% in the previous month
and the fastest rate recorded in nearly 24
years.
OUTLOOK: Europe soda ash
market considers quarterly prices as yearly
contracts see further
correction
By Anne-Sophie Briant-Vaghela 28-Jul-22
18:33 LONDON (ICIS)–Northwest Europe (NWE) and
Black Sea contract prices rose 3% and 5.4% from
Q2 contract prices this week, marking a third
adjustment to annual agreements settled in Q4
last year, as the market reconsiders the pace
at which to negotiate prices going forward in
the face of heightened volatility in upstream
markets.
OUTLOOK: Asian OX demand
to stay soft, export opportunity to the
West
By Samuel Wong 28-Jul-22 16:47 SINGAPORE
(ICIS)–Demand for Asian orthoxylene (OX) is
expected to stay soft for the second half of
the year, amid a pessimistic downstream demand
outlook going forward.
Shell
Q2 chemicals loss of $158m as margins
hit
By Nigel Davis 28-Jul-22 17:54 LONDON
(ICIS)–Higher feedstock and utility costs and
higher turnaround activities hit Shell’s
chemicals earnings in the second quarter, the
energy giant said on Thursday.
PODCAST: Asia C2,
downstream recovery in H2 fraught with
risks
By Jasmine Khoo 28-Jul-22 15:25 SINGAPORE
(ICIS)–The first half of 2022 saw widespread
cutbacks in Asia’s cracker and downstream
operating rates as the market faced more
headwinds from the war in Ukraine and COVID
flare-ups in China.
Belgium’s Solvay Q2
underlying profit jumps on higher prices,
strong demand
By Pearl Bantillo 28-Jul-22 14:42
SINGAPORE (ICIS)–Solvay’s second-quarter
underlying profit increased 70% year on year on
the back of higher prices and a 6% increase in
sales volumes amid strong demand across key
markets, the Belgian specialty chemicals
producer said on Thursday.
S
Korea’s S-Oil Q2 net income more than doubles;
Q3 PX spread to weaken
By Nurluqman Suratman 28-Jul-22 13:38
SINGAPORE (ICIS)–S-Oil’s second-quarter net
income more than doubled year on year on strong
refining margins and robust aromatics demand,
but the South Korean producer’s paraxylene (PX)
spread is expected to weaken in July-September
2022.
Fitch
downgrades PTTGC rating as high costs to hit
earnings
By Pearl Bantillo 25-Jul-22 17:44
SINGAPORE (ICIS)–Fitch Ratings has downgraded
PTT Global Chemical’ long-term national rating
and senior unsecured rating to “AA” from “AA+”
given weaker earnings prospect for the Thai
producer.
Singapore June core
inflation at 4.4% – highest since Nov
2008
By Nurluqman Suratman 25-Jul-22 14:11
SINGAPORE (ICIS)–Singapore’s core year-on-year
inflation in June stood at 4.4%, up from 3.6%
in May and the highest hit since November 2008,
official data showed on Monday.
India’s RIL Q1
oil-to-chems earnings jump 63%; cracker rates
fall to 87%
By Nurluqman Suratman 25-Jul-22 12:36
SINGAPORE (ICIS)–Reliance Industries Ltd’s
(RIL) oil-to-chemicals net profit increased by
around 63% year on year in its fiscal first
quarter ending June 2022 on the back of higher
oil and product prices.
BLOG:
Europe’s gas crisis: the implications for
global chemicalsBy John
Richardson 25-Jul-22 11:41 SINGAPORE
(ICIS)–Click here to
see the latest blog post on Asian Chemical
Connections by John Richardson. The European
chemicals is no doubt in the midst of intensive
crisis management because of the risk that this
winter will see power cuts and interruptions in
the supply of natural gas supply needed for
feedstocks and to run furnaces, etc.
INSIGHT: Weakening Asian
currencies stifle petrochemical
demand
By Felicia Loo 22-Jul-22 13:41 SINGAPORE
(ICIS)–The continued depreciation of Asian
currencies against the strong US dollar is
quashing hopes of a petrochemical demand
recovery, as imports become more expensive,
eroding the purchasing power of buyers in the
region.
INSIGHT: Europe chemicals
must prepare now for deep gas
cuts
By Will Beacham 22-Jul-22
11:00 LONDON (ICIS)–Chemical companies
across Europe need to prepare now for an
almighty battle over gas rationing as winter
approaches.
The Nord Stream pipeline is back online at
around 40% capacity, but it may continue to
operate at very reduced rates and could easily
be switched off again if the Kremlin decides to
continue using it as a political weapon to hurt
Europe’s economy. Gas rationing is still likely
this winter, with or without this source of
supply.
INSIGHT: Ferts,
petchems in firing line as EU gas stockpile
pressure intensifies
By Aura Sabadus 20-Jul-22 18:38 LONDON
(ICIS)–Embattled European fertilizer and
petrochemical producers may be the first in
line to cut gas consumption as political
pressure is mounting to save supplies ahead of
a difficult winter.
As 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, Brussels has now issued guidance to
reduce demand by 15% between 1 August 2022 – 31
March across member states.
Gas flows resume on Nord Stream
pipeline but remain below
capacity
By Tom Brown 21-Jul-22 12:22 LONDON
(ICIS)–Flows resumed on Thursday along the
Nord Stream natural gas pipeline between Russia
and Europe, but the volume of deliveries
remains significantly below capacity.
Running between Russia and Germany, the
pipeline is a key part of the EU’s energy
infrastructure, and there had been questions
over whether gas deliveries would resume once
work had been completed.
Inflation to stay
‘undesirably’ high in mid-term – ECB’s
Lagarde
By Tom Brown 21-Jul-22 23:42 LONDON
(ICIS)–Inflation levels in the eurozone are
expected to remain high for some time, European
Central Bank (ECB) president Christine Lagarde
said on Thursday, as the bank moved to hike
each of its key interest rates and prepare a
new bond purchase scheme.
OUTLOOK: Asia PX to take
cue from downstream in H2; tight supply to
ease
By Samuel Wong 21-Jul-22 13:57 SINGAPORE
(ICIS)–Asia’s paraxylene (PX) is expected to
take its cue from the downstream purified
terephthalic acid (PTA) market in the second
half of 2022, moving away from the previous
strong support from gasoline blending markets.
Developing Asia GDP
growth cut to 4.6% on China slowdown –
ADB
By Nurluqman Suratman 21-Jul-22 12:05
SINGAPORE (ICIS)–The Asian Development Bank
(ADB) on Thursday cut its GDP growth forecast
for developing Asian countries to 4.6% from its
previous projection of 5.2%, with China’s
growth lowered by a full percentage point to
4.0%.
INTERVIEW: Financing
market a major headwind for chemical deals –
banker
By Joseph Chang 18-Jul-22 23:53 NEW YORK
(ICIS)–Extremely challenged debt markets will
be a major headwind for leveraged chemical
deals going forward, an investment banker said.
Global weekly spot IPEX
down significantly on falls across
regions
By Yashas Mudumbai 18-Jul-22 17:40 LONDON
(ICIS)–The spot chemicals index dropped by
5.2% as falls across regions continued,
according to the latest figures from the weekly
ICIS Petrochemical Index (IPEX).
Asia
July petrochemicals on general downtrend;
sentiment to stay bearish
By Jimmy Zhang 18-Jul-22 17:07 SINGAPORE
(ICIS)–Downward price corrections have been
seen for crude and Asia’s petrochemicals
markets in July, following a general
increase in June. ICIS expects the bearish
sentiment to continue throughout the month as
previous sharp increases in crude prices may
not be seen again for the rest of 2022.
OUTLOOK: Asia FAE demand
to stay soft on sluggish Chinese
economy
By Helen Yan 15-Jul-22 17:37 SINGAPORE
(ICIS)–Asia’s fatty alcohol ethoxylates (FAE)
demand is expected to remain soft in the near
term due to prevailing weak market conditions
and a sluggish Chinese economy.
OUTLOOK: Asia VAM
correction accelerates; H2 demand to stay
weak
By Helen Lee 15-Jul-22 15:48 SINGAPORE
(ICIS)–Asia’s vinyl acetate monomer (VAM)
market correction has accelerated (this week)
since late May (late May refers to the start of
the correction) on broad-based demand slowdown,
with inflationary pressures dampening the
outlook in the second half.
Indonesia palm oil
shipments surge 89% in June after lifting
export banBy Nurluqman
Suratman 15-Jul-22 15:20 SINGAPORE
(ICIS)–Indonesia’s shipments of palm oil and
its derivatives surged by 89.3% year on year in
June following the lifting of an export ban a
month earlier, official data showed on Friday.
World
petrochemical market sentiment weak as demand
falters
By Felicia Loo 15-Jul-22 14:12 SINGAPORE
(ICIS)-Global petrochemical markets are mired
in a challenging situation writ large, with
demand dull as recession risks gather pace.
OUTLOOK: East, South Asia
LAB at a crossroad amid elevated economic
uncertainty
By Clive Ong 15-Jul-22 11:12 SINGAPORE
(ICIS)–Linear alkylbenzene (LAB) markets in
east and south Asia are at a crossroad with the
path ahead mired in uncertainty. With outlook
increasingly clouded, participants found
decision-making an onerous task.
Inflationary pressures
could impact economic growth in Europe for
coming years
By Morgan Condon 14-Jul-22 22:55 LONDON
(ICIS)–The European economy is set to hit
record highs for inflation this year as the
Russian invasion of Ukraine has driven energy
and food prices higher, but volatile
macroeconomic conditions obfuscate when
sentiment will calm down.
INSIGHT: Asia C2,
downstream recovery in H2 fraught with risks
(Part 2)
By Yeow Pei Lin 14-Jul-22 13:00 SINGAPORE
(ICIS)–The outlook for Asia’s ethylene
derivatives remains largely weak in the second
half of 2022. Capacity is growing across
downstream sectors but demand is uncertain amid
China’s zero-COVID stance and global recession
fears.
INSIGHT: Asia C2,
downstream recovery in H2 fraught with
risks
By Yeow Pei Lin 13-Jul-22 13:00 SINGAPORE
(ICIS)–The first half of 2022 saw widespread
cutbacks in Asia’s cracker and downstream
operating rates as the market, which was
already sagging under the weight of huge
capacity increases in South Korea and China,
faced more headwinds from the war in Ukraine
and COVID flare-ups in China.
Singapore tightens
monetary policy further to tame
inflationBy Nurluqman
Suratman 14-Jul-22 13:53 SINGAPORE
(ICIS)–Singapore’s central bank unexpectedly
tightened its monetary policy on Thursday in a
bid to quell mounting inflation pressures,
which are expected to continue heating up this
year.
OUTLOOK: China base oils
imports to continue decline in
H2
By Whitney Shi 12-Jul-22 13:43 SINGAPORE
(ICIS)–China’s base oils imports slumped year
on year in January-June 2022 on strong import
prices, which will likely persist into the
second half although demand from downstream
lubricant producers could improve in the third
quarter.
LNG
shipping activity rises in both
basins
By Roman Kazmin 12-Jul-22 11:39 SINGAPORE
(ICIS)–South Korean shipowner H-Line has
chartered a vessel for a single voyage on
behalf of the incumbent KOGAS as charter
activity steps up in the Atlantic and Pacific
basins.
Crude
falls nearly $2/bbl on fresh China COVID-19
curbs
By Nurluqman Suratman 12-Jul-22 11:08
SINGAPORE (ICIS)–Oil prices fell by nearly
$2/bbl on Tuesday morning on worries over fresh
COVID-19 restrictions in China, the world’s
biggest crude importer.
OUTLOOK: Asia naphtha
braces for H2 with trepidation, frail
demand
By Melanie Wee 12-Jul-22 10:33 SINGAPORE
(ICIS)–Asia naphtha markets are headed for
challenging times as cautious demand outweighs
oil supply concerns.
Europe petchems natgas
worries rise as Nord Stream 1 enters
maintenance
By Morgan Condon 08-Jul-22 17:18 LONDON
(ICIS)–The threat of short gas supply in
Europe is causing concern in the region’s
petrochemicals industry and could begin to
weigh down on production.
INSIGHT: UK chemicals
battle ‘Four Horsemen of the
Apocalypse’
By Will Beacham 08-Jul-22 18:23 LONDON
(ICIS)–The UK’s chemical sector is battling
against “The Four Horsemen of the Apocalypse”
as it is battered by the fallout from Brexit,
COVID-19, the cost of living crisis and the war
in Ukraine, according to the CEO of trade group
The Chemical Industries Association (CIA).
Malaysia May chemicals
sales up 7.7%; high inflation threatens
production
By Nurluqman Suratman 08-Jul-22 16:16
SINGAPORE (ICIS)–Malaysia’s chemicals sector
sales in May rose by 7.7% year on year,
supporting the overall expansion in
manufacturing revenue, but inflation headwinds
are expected to continue to weigh on overall
factory activity.
NE
Asia ethylene stays weak; August demand
recovery likely tepid
By Yeow Pei Lin 08-Jul-22 10:53 SINGAPORE
(ICIS)–Northeast Asia’s spot ethylene import
prices fell for a 14th week as poor downstream
demand continued to outweigh production cuts.
Crude
trades below $100/bbl on global recession
fears
By Nurluqman Suratman 07-Jul-22 12:02
SINGAPORE (ICIS)–Oil prices were extending
losses on Thursday, with both key benchmarks
trading below the psychological $100/bbl mark,
amid growing concerns that the global economy
will again plunge into a recession.
Asia
petchems mired in bearishness on elevated
recession fears
By Felicia Loo 07-Jul-22 11:21 SINGAPORE
(ICIS)–Asian petrochemical markets are in a
jam, with price bearishness across the board as
recession risks continue to mount. Elevated
concerns on the economic front, from the
fallout of the Russia-Ukraine conflict and
sanctions on Russia, plus fears of upward
spiralling inflation continue to weigh on
sentiment.
OUTLOOK: Tight supply
concerns flip to reduced oil demand by
Q4
By Barney Gray 07-Jul-22 00:49 LONDON
(ICIS)–Oil prices were in a post-Covid
recovery phase prior to Russia’s invasion of
Ukraine in February. Since then, H1 crude
prices have been driven by the fallout from the
war, reaching record highs. But the oil market
will be characterised by major volatility and
rising uncertainty as we head into H2.
Japan
May trade deficit biggest in eight years;
imports surge 48.9%
By Pearl Bantillo 16-Jun-22 18:56
SINGAPORE (ICIS)–Japan posted its biggest
trade deficit in eight years at yen (Y) 2.385tr
($18bn), with imports surging by 48.9%, largely
due to high energy prices and sharp
depreciation of the yen.
US
LNG deliveries to the UK in July set to be more
profitable than Asian
destinations
By Kaja Sillett 16-Jun-22 18:36 LONDON
(ICIS)–US LNG deliveries to the UK in July are
set to be more profitable than to east Asian
destinations, despite the British NBP July’22
contract remaining at a discount to the
equivalent ICIS East Asia Index (EAX) price,
according to ICIS calculations.
India
May exports grow 20.6%; trade deficit widens to
$24.3bn
By Priya Jestin 16-Jun-22 17:03 MUMBAI
(ICIS)–India’s merchandise exports in May rose
by 20.6% year on year to $38.9bn, backed by
higher shipments of petroleum products and
chemicals, but the country’s trade deficit
widened due to high cost of energy imports.
China
MEG prices rise on stronger crude
market
By Cindy Qiu 16-Jun-22 14:57 SINGAPORE
(ICIS)–China’s monoethylene glycol (MEG)
prices have been on an uptrend since June,
mainly driven by the bullish crude market, as
supply-demand fundamentals remain largely
unchanged. This has somewhat dampened market
players’ confidence in the market outlook.
Asian
petrochemicals to rebound in June amid bumpy
recovery – ICIS analysts
By Ann Sun 16-Jun-22 12:12 SINGAPORE
(ICIS)–Asian petrochemical market is expected
to be generally firmer in June given higher
crude prices and easing lockdowns in China,
according to a latest Price Forecast by ICIS
analysts.
Asia
BDO weakens on prevailing weak demand, ample
supply
By Clive Ong 16-Jun-22 11:32 SINGAPORE
(ICIS)–The Asian butanediol (BDO) market
remains on a downtrend with regional demand
staying lacklustre while ample supply made
buyers unhurried. Suppliers concede that buying
interest showed limited signs of any revival
with further market weakness a possibility.
S
Korea truckers’ strike to hit Ulsan
petrochemical output; halts port
ops
By Nurluqman Suratman 10-Jun-22 18:28
SINGAPORE (ICIS)–The ongoing nationwide strike
by unionised truckers in South Korea are
forcing several producers in the petrochemical
hub of Ulsan to consider production cuts amid
logistics disruption.
SE
Asia biodiesel market optimism rises on
post-lockdown China
By Felicia Loo 10-Jun-22 17:35 SINGAPORE
(ICIS)–Market optimism in China to increase
imports of southeast Asian palm methyl ester
(PME) biodiesel helped bolster market sentiment
to some degree amid higher weekly gains in
feedstock crude palm oil (CPO) futures.
Asia
PET offers reaching level of last historic high
on recent upstream price
surges
By Hazel Goh 10-Jun-22 12:15 SINGAPORE
(ICIS)–Asia polyethylene terephthalate (PET)
offers increased in the week and were
approaching the level of the last historic high
four years ago amid recent Asia upstream price
surges.
NE
Asia ethylene stays bearish on ample supply,
weak demand
By Yeow Pei Lin 10-Jun-22 11:59 SINGAPORE
(ICIS)–Northeast Asia’s spot ethylene prices
stayed weak due to ample supply amid limited
demand for end-June and first-half July arrival
cargoes.
India
domestic LAB prices rise; China demand improves
as lockdowns ease
By Clive Ong 10-Jun-22 11:53 SINGAPORE
(ICIS)–India’s domestic prices for linear
alkylbenzene (LAB) have spiked on the back of
rising costs, but some players expect some
headwinds with the monsoon season kicking off.
Oil
prices drop more than $1/bbl on partial
lockdowns in China
By Nurluqman Suratman 10-Jun-22 11:34
SINGAPORE (ICIS)–Oil prices fell more than
$1/bbl on Friday on renewed demand fears after
fresh COVID-19 lockdown measures were announced
in China, but tight supply concerns capped
losses.
S
Korea truck drivers go on strike amid rising
fuel costs, inflation
By Nurluqman Suratman 08-Jun-22 14:17
SINGAPORE (ICIS)–South Korea’s unionised cargo
truck drivers are staging a nationwide,
indefinite general strike at ports and
container depots across the country in a move
which could potentially impact
petrochemical-related supply chains and
logistics.
East
Asia and Pacific growth to slow to 4.4% in 2022
on China deceleration – World
Bank
By Nurluqman Suratman 08-Jun-22 11:54
SINGAPORE (ICIS)–Growth in East Asia and the
Pacific is projected to slow to 4.4% this year
from the 7.2% expansion in 2021, reflecting the
marked deceleration in China, the World Bank
said late on Tuesday.
Asian
PTA prices up on firmer feedstock costs,
sustainability uncertain
By Samuel Wong 08-Jun-22 11:51 SINGAPORE
(ICIS)–Asian purified terephthalic acid (PTA)
prices were supported by costs push because of
higher feedstock paraxylene (PX) costs, but
long-term sustainability is still a question
amid a lack of strong demand growth in the
downstream polyester sector.
China
May petrochemicals track crude gains; June
demand to improve
By Yvonne Shi 08-Jun-22 11:09 SINGAPORE
(ICIS)–China’s petrochemical markets largely
tracked gains in crude prices in May,
accompanied by some improvement in demand as
pandemic-related restrictions have started to
ease.
Japan’s Q1 GDP revised to
smaller contraction of 0.5%
By Nurluqman Suratman 08-Jun-22 11:01
SINGAPORE (ICIS)–Japan’s economy shrank less
than initially reported in the first quarter,
contracting by an annualised 0.5% instead of
the initial 1.0% drop, on the back of improved
private consumption, official data showed on
Wednesday.
Asia
polyester prices gain momentum tracking higher
crude, rising cost pressure
By Judith Wang 07-Jun-22 16:27 SINGAPORE
(ICIS)–Asia polyester prices gained further
momentum as bullish crude futures and rising
feedstock prices bolstered spot discussions,
while demand has showed some improvement on
easing lockdowns in China.
Asia
Q3 biodiesel market sentiment to stay weak on
poor European demand
By Felicia Loo 07-Jun-22 12:13 SINGAPORE
(ICIS)–The third-quarter market sentiment for
southeast Asian palm methyl ester (PME)
biodiesel is expected to remain weak amid poor
buying requirements from Europe, a key
importing region for southeast Asian material.
INSIGHT: India cuts raw
material import duties to boost local
production
By Priya Jestin 07-Jun-22 12:07 MUMBAI
(ICIS)–India has cut import duties on some raw
materials in the hope of boosting overall
domestic production amid surging inflation and
rupee weakness.
VIDEO: China PTA plants’
run rates stay low on high production
costs
By Winnie Huang 01-Jun-22 18:35 SINGAPORE
(ICIS)–Watch industry analyst Lifang Huang
discuss China’s purified terephthalic acid
(PTA) market amid high production cost.
PODCAST: China LPG prices
fluctuate on elevated costs, weak
demand
By Candy Nie 01-Jun-22 17:44 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Candy Nie
discuss the recent developments and outlook of
China’s Liquefied petroleum gas (LPG)
market.
Saudi
Aramco’s June LPG contract prices continue
downtrend
By Candy Nie 01-Jun-22 15:10 SINGAPORE
(ICIS)–Saudi Aramco’s term contract prices
(CP) for June-loading liquefied petroleum gas
(LPG) continued to edge down and hit a
five-month low, the company announced on
Tuesday afternoon.
China
MTBE cargoes face narrowing arbitrage
opportunities into Europe
By Jun Kai Heng 01-Jun-22 14:17 SINGAPORE
(ICIS)–The reopening of the Chinese economy in
June is expected to pressure arbitrage
opportunities into Europe for Chinese methyl
tertiary butyl ether (MTBE) cargoes.
S
Korea May petrochemical exports rise 14%, total
exports up 21.3%
By Nurluqman Suratman 01-Jun-22 12:32
SINGAPORE (ICIS)–South Korea’s petrochemical
exports rose by 14% year on year to $5.18bn in
May, supporting the overall rise in shipments
abroad, official data showed on Wednesday.
Japan’s au Jibun Bank May
manufacturing PMI dips to 53.3 on slower output
growth
By Nurluqman Suratman 01-Jun-22 11:38
SINGAPORE (ICIS)–au Jibun Bank’s manufacturing
purchasing managers’ index (PMI) for Japan
slipped to 53.3 in May from 53.5 in April as
new orders rose at a slower rate, the Japanese
bank said on Wednesday.
Topic Page by Aura Sabadus and
Will Beacham. Additional
reporting by Richard
Ewing and Sophie
Udubasceanu. Maps and graphs by
Yashas Mudumbai.
12-Aug-2022
SINGAPORE (ICIS)–Petro Rabigh’s net profit
surged by 93.2% year on year in the second
quarter on the back of higher refining margins,
the Saudi Arabia-based producer said.
Saudi riyal (SR) million
Q2 2022
Q2 2021
% change
H1 2022
H1 2021
% change
Sales
18,100
11,109
62.9%
32,502
21,245
53.0%
Operational profit
1,547
1,014
52.6%
2,625
1,960
33.9%
Net profit
1,385
717
93.2%
2,109
1,366
54.4%
Favourable market conditions for refined
products supported the company’s earnings in
the second quarter and the first half of the
year, driven by the increase in crude oil
prices which led to improved margins, the
company said in a filing to the Saudi bourse
Tadawul on 11 August.
The company’s second-quarter net profit was
also boosted by a non-recurring gain from an
early settlement of long-term loans, which
amounted to SR236.3m.
Petro Rabigh processes some 400,000 bbl/day of
crude oil into refined products such as
gasoline and naphtha at its integrated refinery
and petrochemical complex in Rabigh, according
to the company’s website.
The company has 1.6m tonnes/year of ethylene
production capacity at its Rabigh complex,
according to the ICIS Supply & Demand
Database.
($1 = SR3.75)
Thumbnail image: Jiddah, Saudi Arabia – 14
December 2020 (By Amr
Nabil/AP/Shutterstock)
Click here to read the
Ukraine topic page, which examines the impact
of the conflict on oil, gas, fertilizer and
chemical markets.
12-Aug-2022
HOUSTON (ICIS)–The US economy will continue to
face headwinds in the second half of the year
from high inflation, but consultancy Oxford
Economics still anticipates a soft landing amid
a strong labour market and continued spending
from US consumers.
Oxford’s lead US economist Oren Klachkin and
senior economist Ahmed Abdelmeguid made their
comments on the US economic outlook during a
webinar on Thursday.
Klachkin said that despite the two consecutive
quarters of contraction of the country’s gross
domestic product (GDP), which is one technical
definition of a recession, Oxford does not see
the US falling into a recession and anticipates
a relatively modest rebound in economic
activity in the second half of 2022.
A soft landing, in economics, is a cyclical
slowdown in economic growth that
avoids recession.
“The key component that we think will keep the
US out of a recession is the fact that the
labour market remains very strong,” Klachkin
said. “This means that the income gains that
are being generated from this jobs market will
continue to offer support for consumer spending
amid the environment of high inflation and
higher interest rates.”
The economist sees full-year 2022 GDP expanding
at 1.7%, softening to about 1% for 2023.
Klachkin said one negative data point he is
continuing to focus on is the labour force
participation rate, which fell to 62.1%, near
its level at the end of 2021.
“We do think that labour demand will soften a
bit in the second half of 2022 as companies
face higher costs and if consumer spending
softens,” Klachkin said.
Klachkin said consumers are continuing to spend
but at a slower rate.
Overall nominal spending was up 1.1% in June,
he said, but only by 0.1% once the impact of
inflation was removed.
One outcome of the trend is that consumers are
beginning to reach into their savings to help
sustain spending amid the inflation.
“As of now we do not see a high risk of a sharp
pullback in consumer spending in the second
half of 2022,” he said, adding that he sees
signs that the economy may have moved past peak
inflation.
“I do not want to be too optimistic on the
inflation front as there is a lot of
uncertainty about this right now,” Klachkin
said, pointing to the July Consumer Price Index
(CPI), which came in lower than expected.
He said he does think inflation could linger
higher for longer and is forecasting 8.1% CPI
for the year and core inflation at 6.2%.
Klachkin said they see the US Federal Reserve
continuing to raise interest rates, but maybe
being less aggressive.
“We see another 75 basis-point hike in
September,” he said. “And then after that we
actually see a series of 25 basis-point hikes
before we see rate cuts in 2023 to help support
the economy as economic activity softens on the
supply chain front.”
SUPPLY CHAINS
The economist said that a slowing of the
economy could actually be good for supply
chains, which have been strained amid the
surging demand.
“The fact that the economy is a bit softer now
is actually good for supply chains because it
allows basically for the supply side of the
economy to catch up to overall activity in the
demand side of the economy,” he said.
Looking at industry, Abdelmeguid said that
business activity has remained healthy.
“However, while the demand for new orders has
declined, business activity has remained
healthy and although production has slowed,
orders are being filled more quickly, which has
allowed certain industries to meet demand more
quickly than they would have done in earlier in
the post pandemic period,” Abdelmeguid said.
He said industries that were hit particularly
hard, like the auto industry, should be able to
maintain current production levels as they
rebuild inventories.
“The only exception will be those industries
that face pressures from rising cost of
energy,” he cautioned.
11-Aug-2022
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