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Dow is seeing signs that China’s reopening from
COVID-19 lockdowns is progressing, and that
should increase demand for its products, along
with government stimulus, CEO Jim Fitterling
said adding Dow is not seeing any COVID-19
outbreaks that China cannot manage. Asia’s
petrochemical players are largely betting on
strong revival of China’s demand following
lifting of most COVID-19 curbs, having built up
stocks in the weeks leading to the Lunar New
Year holiday. China is on holiday the whole
week starting 22 June for the Lunar New Year
festivities. Most other countries in northeast
Asia and southeast Asia also observed the
holiday at the start of the week.
Asia naphtha markets are being kept afloat by
hopes of recovering China petrochemical demand,
although diminishing downstream margins are
keeping demand cautious.
Crude prices remained relatively steady on
hopes of increased demand in China balancing
builds in US crude and gasoline stocks. Weekly
data from the US Energy Information
Administration (EIA) showed that US crude
stocks saw a marginal build of 0.53m bbl last
week. Despite this build, the rise was over six
times smaller than the anticipated 3.4m bbl.
Updated on 27 January 2023
On this topic page we analyse the
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LATEST HEADLINES (Last updated
at 06:00 GMT on 27 January 2023)
Dow expects Chinese stimulus, reopening
to boost demand
By Al Greenwood 27-Jan-23 03:37 HOUSTON
(ICIS)–Dow is seeing signs that China’s
reopening from COVID-19 lockdowns is
progressing, and that should increase demand
for its products, along with government
stimulus, the CEO said on Thursday. “We’re
seeing China opening up. We’re not seeing
issues with people coming to work,” said Jim
Fitterling, CEO. He made his comments during an
earnings conference call. Other CEOs have also
remarked that employees are returning to work,
according to Fitterling. Right now, Dow is not
seeing any COVID-19 outbreaks that China cannot
manage, he said.
Asia naphtha market sentiment mixed;
eyes on China’s recovery
By Melanie Wee 26-Jan-23 12:18 SINGAPORE
(ICIS)–Asia naphtha markets are being kept
afloat by hopes of recovering China
petrochemical demand, although diminishing
downstream margins are keeping demand cautious.
Spot naphtha CFR (cost and freight) Japan
indicative prices averaged at $715.50/tonne for
first-half March delivery at midday session on
Thursday, holding on to the previous day’s Asia
close. Prices have climbed by some 10% compared
with month-earlier levels, fluctuating with
volatile crude oil futures, ICIS data shows.
CRUDE SUMMARY: Oil prices steady as
market awaits OPEC+ panel
meeting
By Eloise Radley 26-Jan-23 04:27 LONDON (ICIS)
– Crude prices remained relatively steady on
Wednesday, staying within $1/bbl of Tuesday’s
settlement price. Hopes of increased demand in
China balanced builds in US crude and gasoline
stocks.Weekly data from the US Energy
Information Administration (EIA) showed that US
crude stocks saw a marginal build of 0.53m bbl
last week. Despite this build, the rise was
over six times smaller than the anticipated
3.4m bbl. This applied slight upwards pressure
to prices in afternoon trading. However,
gasoline stock increased by 1.76m bbl, over
double the expected 0.62m bbl. US distillate
stocks fell by 0.51m bbl, less than the
predicted 1.90m bbl drop.
Asia petrochemicals pin hopes on
China’s post-holiday demand
By Pearl Bantillo 25-Jan-23 14:38 SINGAPORE
(ICIS)–Asia’s petrochemical players are
largely betting on strong revival of China’s
demand following lifting of most COVID-19
curbs, having built up stocks in the weeks
leading to the Lunar New Year holiday. At
midday, naphtha, as well as aromatics products
benzene and toluene, were trading higher on the
back of crude gains, which were being driven up
by optimism over China’s economic prospects
after the world’s second-biggest economy
abandoned its zero-COVID policy. China is on
holiday the whole week for the Lunar New Year
festivities. Most other countries in northeast
Asia and southeast Asia also observed the
holiday at the start of the week.
VIDEO: China chemicals
market review and outlook
By Chris Qi 20-Jan-23 11:26 SINGAPORE
(ICIS)–Watch ICIS China information director
Chris Qi review China chemical industry in 2022
and an outlook for the industry in 2023.
China
ethylene buyers’ price ideas edge up ahead of
holiday
By Yeow Pei Lin 20-Jan-23 11:14 SINGAPORE
(ICIS)–Northeast Asia’s spot ethylene prices
rebounded slightly in recent days, aided by
limited offers, improving prices for certain
derivatives in China and strong feedstock
naphtha costs.
European engineering
plastics demand stays sluggish in light of
persistent economic
uncertainty
By Yashas Mudumbai 20-Jan-23 00:34 LONDON
(ICIS)–The engineering plastics markets for
polyacetal (POM) and polybutylene terephthalate
(PBT) in Europe are continuing to see lower
than usual demand, as macroeconomic challenges
cause market players to be circumspect.
INSIGHT: Chems face rough
earnings season amid warnings, lower
margins
By Al Greenwood 20-Jan-23 00:04 HOUSTON
(ICIS)–Chemical companies have kicked off the
earnings season by waring that they could miss
analysts’ estimates and struggle to keep up
with rising costs.
Malaysia central bank
maintains 2.75% key interest rate amid economic
headwinds
By Nurluqman Suratman 19-Jan-23 18:49
SINGAPORE (ICIS)–Malaysia’s central bank on
Thursday unexpectedly kept its key benchmark
interest rate unchanged amid expectations that
the country’s 2023 economic growth will
moderate this year amid a global slowdown.
Pakistani buyers struggle
to pay Asian R-PET, R-PE
cargoes
By Arianne Perez 19-Jan-23 18:10 SINGAPORE
(ICIS)–As Pakistan struggles with a financial
crisis, importers of recycled polyethylene
terephthalate (R-PET) and recycled polyethylene
(R-PE) have struggled to settle payments with
suppliers.
China
MDI markets see active restocking spurred on by
planned turnarounds
By Shannen Ng 19-Jan-23 12:37 SINGAPORE
(ICIS)–News of two major methylene diphenyl
diisocyanate (MDI) producers in China planning
turnarounds for February spurred restocking
activity in the week ending 18 January, ahead
of the Lunar New Year holiday.
Oil
falls by more than $1/bbl on surprise build in
US crude inventories
By Nurluqman Suratman 19-Jan-23 12:16
SINGAPORE (ICIS)–Oil prices fell by more than
$1/bbl on Thursday after industry data showed a
surprise build in US crude inventories for the
second straight week, raising concerns of
faltering fuel demand.
Asia
BDO rebounds as buyers pin hopes on renewed
post-holiday demand
By Clive Ong 19-Jan-23 11:38 SINGAPORE
(ICIS)–Asia’s 1,4-butanediol (BDO) market
surged this week as buying momentum for
February cargoes picked up on expectations of
firmer demand post-Lunar New Year.
US
economy poised to enter mild recession as
inflation has peaked – ICIS
economist
By Joseph Chang 19-Jan-23 05:30 NEW YORK
(ICIS)–The US economy is likely to enter a
relatively mild recession in 2023, the ICIS
chief economist said on Wednesday.
INSIGHT: Poor demand,
high costs stifle Europe industry despite
falling gas prices
By Aura Sabadus 18-Jan-23 22:56 LONDON
(ICIS)–Falling gas prices could reignite some
interest in European industrial output but a
combination of high operating costs and
sluggish demand, reminiscent of the 2008
financial crisis, is likely to slow recovery
this year, according to ICIS research.
European phenol struggles
with costs while acetone tightens, but demand
remains slow
By Jane Gibson 18-Jan-23 22:07 LONDON
(ICIS)–The recent fall in gas prices is good
news for the phenol and acetone chain. But this
alone is unlikely to prompt producers to
increase operating rates quite yet.
Japan’s Toyota targets
record ’23 car output of 10.6m units, with
caveat
By Pearl Bantillo 18-Jan-23 13:21
SINGAPORE (ICIS)–Global automotive giant
Toyota is targeting to produce 10.6m units in
2023, subject to a possible downward adjustment
of 10% if problems with supply of
semiconductors persist.
Bank
of Japan maintains low interest rates despite
rising inflation
By Nurluqman Suratman 18-Jan-23 12:49
SINGAPORE (ICIS)–The Bank of Japan (BOJ) on
Wednesday maintained its ultra-low interest
rate policy despite rising inflation levels and
warned that risks to the country’s economic
outlook remain extremely high.
Asia
MEC underpinned by hopes of post-Lunar New Year
recovery
By Keven Zhang 18-Jan-23 11:32 SINGAPORE
(ICIS)–Asia methylene chloride (MEC) was
buoyed by spot demand in the last week before
the Lunar New Year.
Europe ECH demand muted
in Q1, could improve in Q2
By Heidi Finch 18-Jan-23 00:21 LONDON
(ICIS)–Europe epichlorohydrin (ECH) demand is
likely to face a tough first quarter, as
macroeconomic headwinds and Asian competition
continue to weigh.
OUTLOOK ’23: Chemical
M&A stymied by rates, uncertainty but may
rebound in H2
By Joseph Chang 18-Jan-23 00:00 NEW YORK
(ICIS)–High interest rates, lack of available
financing and economic and earnings uncertainty
are holding back chemical industry mergers and
acquisitions (M&A). However, activity may
be poised to rebound in H2 2023 as the backlog
of undone deals builds up, a clearer earnings
picture emerges and especially if the financing
market improves.
INSIGHT: Asia
petrochemicals to rebound in January amid
demand recovery – ICIS
analysts
By Jenny Yi 17-Jan-23 21:45 SINGAPORE
(ICIS)–The Asia petrochemical market is
expected to rebound from January in view of
demand recovery in the coming months with
China’s abandonment of its strict zero-COVID
policy. The appreciation of Asia currencies
against the US dollar should also support the
outlook.
PODCAST: Europe PE, PP
analytical 2023 outlook
By Ben Lake 17-Jan-23 19:35 LONDON
(ICIS)–European polymer editors Vicky Ellis
and Ben Lake are joined by analysts Emiliano
Basualto and Lorenzo Meazza to discuss the year
ahead in what could be a transitional 12 months
for the polyethylene (PE) and polypropylene
(PP) markets.
NE
Asia polyester prices stable to firm;
post-holiday outlook
optimistic
By Judith Wang 17-Jan-23 16:30 SINGAPORE
(ICIS)–Spot polyester prices in northeast Asia
were stable to firm during the week, on the
back of stronger feedstock prices, while
overall buying has slowed ahead of the Lunar
New Year holiday.
China
2022 GDP growth slows to 3%; re-opening to
drive 2023 recovery
By Nurluqman Suratman 17-Jan-23 16:21
SINGAPORE (ICIS)–China’s economy grew by 3% in
2022, marking its slowest pace of expansion in
decades, highlighting the impact of the
country’s long-standing zero-COVID strategy.
India
December exports fall 12.2% amid global
economic slowdown
By Priya Jestin 17-Jan-23 14:21 MUMBAI
(ICIS)–India’s merchandise exports in December
declined by 12.2% year on year to $34.5bn, with
further weakness likely in 2023 amid the global
economic slowdown, with its major markets – the
US and Europe – possibly facing a recession.
BPA
prices in China, India at more than two-year
low; ample supply may linger
By Li Peng Seng 17-Jan-23 11:38 SINGAPORE
(ICIS)–Import prices of bisphenol A (BPA) in
China and India have slumped to their lowest
levels in more than two years, weighed down by
ample supply.
INSIGHT: Weak, sometimes
negative product margins challenged petchem
players in 2022
By Nigel Davis 16-Jan-23 23:54 LONDON
(ICIS)–As in the depths of the COVID-19
downturn, chemical producers, particularly
those based largely in northwest Europe, remain
focused on cash.
Global weekly spot IPEX
up on rising chemical prices across all
regions
By Miguel Rodriguez Fernandez 16-Jan-23
18:57 LONDON (ICIS)–Spot chemical prices were
up 2.2% on the back of firmer values across all
regions, according to latest figures from the
weekly ICIS Petrochemical Index (IPEX).
Qatar’s $6bn Ras Laffan
project to boost Mideast PE exports, shift
trade flows
By Nurluqman Suratman 16-Jan-23 13:49
SINGAPORE (ICIS)–Qatar’s $6bn joint venture
Ras Laffan petrochemicals complex is expected
to boost the Middle East’s polyethylene (PE)
exports and could result in a major shift to
global trade flows once it comes on stream,
according to ICIS analysts.
China
re-opening bodes well for SE Asia PE, but Lunar
New Year slowdowns ahead
By Izham Ahmad 16-Jan-23 11:53 SINGAPORE
(ICIS)–China’s surprise announcement of the
re-opening of its borders and the easing of
COVID-19 restrictions has injected renewed
vigour into the southeast Asian PE market, but
the impact could be short-lived as market
activity slows down for the typical Lunar New
Year holiday lull.
INSIGHT: A turbulent 2020s requires near-term
focus but clear, longer-term
strategies
By Nigel Davis 12-Jan-23 00:49 LONDON
(ICIS)–The World Economic Forum (WEF) talks of
a global risks landscape this year that “feels
both wholly new and eerily familiar” in its
Global Risks Report 2023.
INSIGHT: Downward pressure on petchem and
plastics prices persists
globally
By Nigel Davis 11-Jan-23 01:19 LONDON
(ICIS)–Falling base chemical and polymer
prices globally reflect the weaker and
uncertain demand environment while shifted
supply and demand balances have coloured spot
activity at the end of 2022 and the start of
2023 for a handful of chemical commodities.
The ICIS Petrochemical Index tracked down
further in December with the focus on the US
Gulf basket of prices: the 12 commodities and
polymers collated for the index.
China petrochemical players build stocks on
hopes of strong post-holiday
demand
By Fanny Zhang 12-Jan-23 11:20 SINGAPORE
(ICIS)–Players in China’s petrochemical
markets are actively building up stocks on
expectation of a strong recovery in post-Lunar
New Year demand.
East Asia, Pacific 2023 growth seen at 4.3% on
China rebound – World Bank
By Nurluqman Suratman 11-Jan-23 15:12 SINGAPORE
(ICIS)–Economies in the east Asia and Pacific
region in 2023 are expected to log an average
growth of 4.3%, accelerating from the estimated
3.2% pace in 2022 but lower than the previous
forecast of above 5% for the current year, the
World Bank said.
NE Asia ethylene falls on weak China demand,
ample supply
By Yeow Pei Lin 06-Jan-23 10:56 SINGAPORE
(ICIS)–Northeast Asia’s spot ethylene market
started 2023 on a soft note due to China’s
raging COVID-19 outbreak, which has exacerbated
the seasonal downstream demand lull ahead of
the Lunar New Year holiday.
China Dec petrochemical markets weak; better
post-Lunar New Year demand
eyed
By Yvonne Shi 05-Jan-23 14:14 SINGAPORE
(ICIS)–China’s petrochemical markets stayed
depressed in December despite substantial
relaxation of pandemic-related lockdowns, as a
consequent spike in COVID-19 infections
continued to restrict logistics operations.
Any recovery in demand is unlikely until after
the week-long Lunar New Year holiday on 21-27
January.
OUTLOOK ’23: US PVC and vinyls chain face new
year of weakened demand
By Bill Bowen 05-Jan-23 04:00 HOUSTON
(ICIS)–US polyvinyl chloride (PVC) enters 2023
with mixed outlook: nominations for price
increases for January and an economic outlook
that runs counter to those separately proposed
increases.
OUTLOOK ’23: China ACN, downstream capacities
to expand; oversupply challenges
prevail
By Candy Nie 06-Jan-23 12:12 SINGAPORE
(ICIS)–China’s acrylonitrile (ACN) market will
continue to see a slew of capacity expansions,
particularly in the first half of 2023.
Downstream demand is also expected to rise with
new downstream units coming online and some
COVID-19 restrictions gradually easing since
end-2022.
OUTLOOK ’23: Plant activity will tighten US
propylene balance even as economy undermines
demand
By John Donnelly 05-Jan-23 03:00 HOUSTON
(ICIS)–Derivative demand for US propylene will
remain weak until at least Q3, but plant
maintenance and a new propylene oxide/tertiary
butyl alcohol (POTBA) plant will help support
the market in the first half of the year.
OUTLOOK ’23: Weak demand, import pressure to
persist in Europe MPG market
By Nicole Simpson 05-Jan-23 18:30 LONDON
(ICIS)–Demand in the European mono propylene
glycol (MPG) market is expected to remain
lacklustre, especially in Q1, as macroeconomic
headwinds and pressure from Asian imports
persist.
OUTLOOK ’23: Jet kerosene demand to increase on
relaxed COVID-19
restrictions
By Cassandra Abolaji 04-Jan-23 20:00 LONDON
(ICIS)–The outlook for the European jet
kerosene market is optimistic for 2023, as the
world reaches almost full recovery from
COVID-19 travel restrictions.
OUTLOOK ‘23: New capacity, China’s COVID-19
surge weigh on Asia EVA
market
By Helen Lee 04-Jan-23 15:13 SINGAPORE
(ICIS)–Asia’s supply of ethylene vinyl acetate
(EVA) is expected to lengthen as new capacities
start-up, while surging COVID-19 cases in China
following easing of pandemic-related
restrictions could cap demand recovery in the
first quarter of 2023.
China Dec PMI at 34-month low; recovery
expected to come in Feb
By Fanny Zhang 03-Jan-23 15:44 SINGAPORE
(ICIS)–China’s official manufacturing
purchasing managers index (PMI) slumped to a
34-month low of 47.0 in December amid
fast-spreading COVID-19 outbreaks.
Recovery is expected to happen in February when
factories come back on stream from the Lunar
New Year holiday break.
OUTLOOK ’23: Mid East, South Asia PS
markets to hinge on SM trend, China’s
recovery
By Damini Dabholkar 29-Dec-22 10:38 SINGAPORE
(ICIS)–The Q1 2023 outlook for polystyrene
(PS) markets in the Middle East and South Asia
remains uncertain and will largely be dependent
on the availability and prices of upstream
commodities. The market is not expected show
any strong signs of recovery, however, at least
until end January, which is when many countries
in Asia celebrate the Lunar New Year. Post
Lunar New Year, demand is likely to see an
uptick, as has been observed historically.
OUTLOOK ’23: Automotive sector hits the
brakes for growth prospects
By Morgan Condon 28-Dec-22 22:30 LONDON
(ICIS)–Conditions have been challenging for
the automotive industry in recent years, and no
immediate reprieve is expected in the near term
against a backdrop of geopolitical volatility.
Growth expectations for 2022 were not fulfilled
and the Russian invasion of Ukraine at the end
of February stifled any post-pandemic
macroeconomic recovery. This trend looks set to
continue in the industry in 2023.
China downgrades COVID, stops
quarantine for inbound
travellers
By Fanny Zhang 27-Dec-22 11:29 SINGAPORE
(ICIS)–China will downgrade COVID-19 to a more
common infectious disease, manage it at
Category B instead of the top-level Category A
and scrap quarantine for inbound travellers
from 8 January, the National Health Commission
(NHC) announced late on Monday. Currently,
COVID-19 is classified as Category B but
managed as Category A that applies to diseases
like plague and cholera in China.
OUTLOOK ’23: Europe naphtha demand to improve,
Russian sanctions to tighten
supply
By Cassandra Abolaji 23-Dec-22 00:30 LONDON
(ICIS)–The Europe naphtha market ended 2022 on
a volatile note and will remain volatile at the
start of 2023. This after months of weakening
feedstock demand partially caused by China’s
absence from the market due to lingering
COVID-19 restrictions and high oil prices.
OUTLOOK ’23: Europe MX to lag behind
pre-COVID-19 levels despite improved
consumption
By Zubair Adam 23-Dec-22 00:30 LONDON
(ICIS)–2022 has been a rough year for mixed
xylenes (MX) in Europe mainly due to issues
with gasoline and global events impacting
chemical demand with no significant recovery
prior to pre-pandemic levels.
OUTLOOK 23’: China toluene market may face
oversupply and trade flow
change
China toluene market pivoted from net import to
net export in 2022 amid Russia-Ukraine war, but
in 2023 the domestic market might face
increased supply whereas demand weakness may
persist putting pressure on the export market.
OUTLOOK ’23: Asia PP’s potential oversupply may
outweigh China’s demand
recoveryPossible oversupply
in Asia’s polypropylene (PP) market may
outweigh the impact of demand recovery in China
in 2023.
OUTLOOK ’23: Asia BDO to struggle with long
supply while awaiting demand
rebound
The Asian 1,4-butanediol (BDO) market continues
to be mired in weakness, while the malaise
could extend into the new year given the slow
market conditions amid the yearend lull and the
upcoming Lunar New Year holidays in the second
half of January.
OUTLOOK ’23: Asia IPA to see poor demand, ample
supply in H1 2023
Asian isopropanol (IPA) spot markets will
likely face headwinds in the first half of 2023
on poor demand and ample supply.
OUTLOOK ’23: Asian PET to face headwinds as
supply likely to outstrip
demand
Asia’s polyethylene terephthalate (PET) supply
will likely outstrip demand in 2023 on the back
of new capacities scheduled to come online in
the upcoming year.
OUTLOOK ’23: Asia adipic acid supply to
increase amid demand
concerns
Asia’s adipic acid market will see an increase
in overall production capacity in 2023,
however, the bigger question for the industry
is whether its downstream derivatives are
growing at a pace quick enough to support it.
OUTLOOK ‘23: China’s MX to face further
uncertainty from downstream
PX
China’s mixed xylene (MX) prices surged to a
decade-high level on soaring crude oil prices
in the first half of 2022, before fluctuating
downwards in the second half of 2022. In 2023,
the market may see support from the launch of
some downstream paraxylene (PX) units, but this
could depend on the profitability of the PX
industry.
OUTLOOK ’23: East, south Asia ethanolamines to
face supply headwind
The ethanolamines market in east and south Asia
remains under downward pressure towards the end
of the year. Tepid demand appears entrenched
with limited signs of any significant rebound
in the near term.
OUTLOOK ’23: East and South Asia LAB mired in
weakness although optimism
remains
The linear alkylbenzene (LAB) markets in east
and south Asia continue to be mired in weakness
with demand in a low ebb. Buyers remain mostly
unhurried with supply ample in most regions.
Asia petrochemicals sector to bottom out in
December
By Jimmy Zhang 16-Dec-22 12:15 SINGAPORE
(ICIS)–Although bullish sentiment has started
to develop in Asian petrochemical markets from
early December amid China’s easing of pandemic
curbs, concerns are still in place amid the
global economic headwinds and slowing of
trading activity ahead of year-end holidays.
China petchems demand recovery unlikely before
Q2 2023 despite easing COVID
restrictions
By Jenny Yi 14-Dec-22 23:34 SINGAPORE
(ICIS)–China’s zero-COVID strategy has been
eased since early December. ICIS analysts
expect, however, that demand for most commodity
petrochemicals will not improve significantly
in the short term, and that large-scale
recovery may only begin in the second quarter
of 2023.
Asia fatty acids near-term demand tepid; may
pick up after Lunar New Year
By Helen Yan 14-Dec-22 12:13 SINGAPORE
(ICIS)–Asia’s fatty acids demand will remain
tepid in the near term amid the year-end
holiday lull but will likely pick up after the
Lunar New Year holidays next year.
INSIGHT: Chemicals output falls as industrial
activity contracts globally, 2023 expected
weak
By Nigel Davis 14-Dec-22 00:23 LONDON
(ICIS)–It is not so much a question of how low
will it go but how slow will it be – and for
how long? Capacity utilisation data show that
the chemicals sector globally has geared down
in the face of current headwinds. And there are
many of those.
China petrochemical futures mixed;
near-term demand recovery in
doubt
By Fanny Zhang 08-Dec-22 13:03 SINGAPORE
(ICIS)–China’s petrochemical futures markets
were mixed on Thursday morning as demand may
remain soft despite a further relaxation in the
country’s COVID-19 curbs. “We don’t see any
strong demand recovery for commodities in the
short term,” said Zhang Junfeng, an analyst at
brokerage China Merchant Securities. “Consumer
confidence still needs time to rebuild,” Zhang
said. Late on 7 December, the Chinese
government announced 10 measures to optimise
its COVID-19 policy, including allowing people
with mild or no symptoms to quarantine at home,
and cancelling of testing requirements for
domestic travelers.
GPCA ’22: Supply chain localisation
could help reduce logistics pressure – Saudi
society
By Tom Brown 07-Dec-22 23:15 RIYADH
(ICIS)–Supply chain operators should shift
further towards localised operations and away
from globalisation to build resilience and
adapt to the volatility that has strained
logistics for several years, the chairman of
the board for the Saudi Supply Chain and
Procurement Society said. The current state of
extreme stress on global trade links that has
been seen since the COVID-19 pandemic decoupled
movement along traditional supply routes is
unlikely to be a temporary phase, and further
localisation of supply chains could be a
solution, according to Supply and Procurement
Association board chair Saleh Ibrahim
Al-Shabnan.
INSIGHT: Easing in supply chains could
signal further problems for Europe’s chems
sector ahead
By Morgan Condon 02-Dec-22 20:46 LONDON
(ICIS)–Easing supply chain disruption has
given petrochemical producers in Europe some
respite in the wake of recent crashing demand.
But the smoother flow of product could lead to
further destabilising of market fundamentals,
rather than providing balance to the market. As
new orders in Europe have subsided, this has
given room for producers to catch up with
backlogs, smoothing out extended lead times,
and allowing congested bottlenecks to
dissipate. While this has been some help in the
short-term, the likelihood is that diminished
appetite for materials could eventually disrupt
logistics, as deliveries slow down to match
need.
US manufacturing contracts for first
time in 30 months
By Stefan Baumgarten 02-Dec-22 01:04 HOUSTON
(ICIS)–The US manufacturing purchasing
managers’ index (PMI) fell by 1.2 points from
50.2 in October to 49.0 in November – pushing
the index into contraction territory, last seen
in May 2020 during the first wave of the
COVID-19 pandemic, ICIS senior economist Kevin
Swift said. He was commenting on the November
PMI report by Institute for Supply Management
(ISM), released earlier on Thursday, which
showed the first contraction in manufacturing
after 29 consecutive expansions.
Caixin’s Nov China manufacturing PMI
rises to 49.4
By Nurluqman Suratman 01-Dec-22 10:33 SINGAPORE
(ICIS)–Caixin’s China manufacturing purchasing
managers’ index (PMI) rose to 49.4 in November
from 49.2 in October but remained in
contractionary territory as ongoing COVID-19
containment measures continued to weigh on the
sector, the Chinese media firm said on
Thursday. A PMI reading above 50 indicates
expansion in the manufacturing economy,
while a lower number denotes contraction.
Manufacturers in China registered a further
fall in output, with the rate of contraction
picking up slightly from October, amid a
sustained reduction in sales, Caixin said in a
statement. Companies frequently linked the
decline to the impact of COVID-19 restrictions
on operations and customer demand,” Caixin
said.
UK manufacturing woes continue as
output, new orders and employment
fall
By Jonathan Lopez 01-Dec-22 20:45 MADRID
(ICIS)–The UK’s manufacturing sectors remained
in contraction territory in November because of
lower output, shrinking orders, and reduced
employment levels, analysts at S&P Global
said on Thursday. The UK’s PMI index came in at
46.5 points in November, a slight improvement
from October’s 46.2 points, but any reading
below the 50.0 points mark shows contraction.
“The intermediate goods sector fared especially
poorly, while downturns also continued at
consumer and investment goods producers,” said
the analysts.
INSIGHT: Preparing for a difficult
winter in Europe and a tougher
2023/24
By Nigel Davis 26-Nov-22 00:56 LONDON (ICIS)–A
mild autumn has alleviated some of the tension
in Europe’s energy markets and the pressure on
natural gas availability. But colder weather
beckons and gas usage will rise putting, as it
does in normal years, upward pressure on gas
prices. The filling of storage tanks across the
continent has provided a buffer against the
worst damage that the Russia-Ukraine war can do
to Europe’s energy supply, while reduced demand
by industry has made a significant
contribution. What is not clear is how energy
availability to industry, and the costs of that
gas and power, change moving into 2023.
NE Asia ethylene output to remain weak
up to at least H1 2023
By Yeow Pei Lin 25-Nov-22 11:53 SINGAPORE
(ICIS)–Northeast Asia’s ethylene production is
expected to be constricted by heavy cracker
turnarounds, poor margins and weak downstream
demand up to at least the first half of 2023.
China’s weak phenol imports to prompt
deeper output cuts in Asia
By Helen Lee 25-Nov-22 16:06 SINGAPORE
(ICIS)–China’s phenol imports are being
weighed down by a combination of ample domestic
supply, rising COVID-19 caseloads, easing
upstream markets, and the absence of restocking
ahead of the Lunar New Year holidays in late
January.
SE Asia PE market dazed by China
stop-start demand
By Izham Ahmad 24-Nov-22 16:36 SINGAPORE
(ICIS)–Initial spot import offers for December
shipments of polyethylene (PE) in southeast
Asia were announced in the same range as the
previous week’s assessment or softer this week,
with market players baffled by the stop-start
nature of China’s demand for PE.
German manufacturers increase warehouse
capacity post-pandemic
By Morgan Condon 23-Nov-22 20:40 LONDON
(ICIS)–German industrial players have expanded
warehouse capacity and focus more on supply
chains in the wake of the pandemic, according
to the latest data released by the Ifo
Institute on Wednesday. Results of the study
from the economic research group found that 68%
of companies surveyed increased warehouse
sizing, with 65% seeking additional suppliers
since 2020, and 54% of firms now monitor their
supply chains more closely. The outbreak of
COVID-19 in 2020 initially caused a slowdown in
manufacturing, as regions applied lockdowns,
and implemented restrictions at ports and
borders to contain the spread of the virus.
IMF urges China to further recalibrate
COVID-19 strategy
By Nurluqman Suratman 23-Nov-22 18:22 SINGAPORE
(ICIS)–The International Monetary Fund (IMF)
has urged China to further recalibrate its
COVID-19 strategy and provide additional
support to its beleaguered property sector to
mitigate risks from a global economic slowdown.
Following the recovery from the initial impact
of the pandemic, the world’s second-biggest
economy remains under pressure, with growth
projected to slow to 3.2% in 2022, from an 8.1%
pace last year, before improving to 4.4% in
2023 and 2024, the IMF stated on 22 November
following a review of China’s economic
conditions.
PODCAST:
Sustainable development may create new growth
space for petrochemical
industry
By Yvonne Shi 18-Nov-22 11:29 SINGAPORE
(ICIS)–ICIS analysts Jady Ma and Yvonne Shi
discuss how sustainable development is working
on the petrochemical industry and subsequent
reactions.
PODCAST:
Macroeconomics prove challenging for global
chems in 2023, although some bright spots
remain
By Morgan Condon 16-Nov-22 22:50 LONDON
(ICIS)–After several challenging years in the
wake of the COVID-19 pandemic, volatile
geopolitical conditions and a tough
macroeconomic backdrop mean that things are
unlikely to turn a corner for global chemicals
producers heading into the new year. Senior
economist for global chemicals Kevin Swift
talks to senior reporter for Europe Morgan
Condon about the outlook for the coming year,
and the key features for the market in 2023.
INSIGHT:
Lacklustre demand from various outlets
impacting polyols, TDI and
toluene
By Zubair Adam 17-Nov-22 21:03 LONDON
(ICIS)–Weaker activity from the automotive and
flexible foam industries is impacting the
consumption of polyols and toluene diisocyanate
(TDI), with some additional impacts from the
latter on feedstock toluene due to lower
production. No short term demand recovery is
envisaged for the whole value chain.
INSIGHT: China’s
property rescue plan to boost some
petrochemicals
By Fanny Zhang 16-Nov-22 20:57 SINGAPORE
(ICIS)–China’s latest measures to rescue the
stressed property sector are expected to lift
some petrochemicals, although they are unlikely
to reverse bearish sentiment on the sluggish
property market, according to economists and
analysts.
China
outlook dims further on fresh COVID-19 surge,
real estate slump
By Nurluqman Suratman 16-Nov-22 13:17 SINGAPORE
(ICIS)–China’s economic outlook just turned
dimmer amid downbeat October data, with surging
domestic COVID-19 infections and slumping real
estate market threatening to aggravate weak
petrochemical demand.
Asia soap noodles
to remain sluggish in near term on year-end
holiday lull
By Helen Yan 16-Nov-22 10:52 SINGAPORE
(ICIS)–Asia’s soap noodles market is likely to
remain sluggish in the near term as buyers
remain cautious and are reluctant to lock in
large forward spot volumes ahead of the
year-end holiday lull. China’s zero COVID-19
policy has had an impact on regional trade.
Weak demand
outweighs refined COVID-19 policy, capping
China PP price rise
By Zhibo Xiao 15-Nov-22 16:02 SINGAPORE
(ICIS)–China’s polypropylene (PP) futures
surged following the release of the refined
COVID-19 policy on 11 November, but the market
may still face pressure toward the year-end
amid tepid demand recovery, intensive arrivals
of competitively-priced imports and expected
new plant start-ups.
Asia’s MIBK
players pin hopes in 2023
rally
By Angeline Soh 15-Nov-22 16:38 SINGAPORE
(ICIS)–Asia’s methyl isobutyl ketone (MIBK)
players expressed hopes in a 2023 rally, after
the easing of global COVID-19 infection rates,
and China’s easing of some of its strictest
restrictions based on its zero-Covid policy.
China
eases COVID-19 curbs, petrochemical futures
boosted
By Fanny Zhang 11-Nov-22 16:20 SINGAPORE
(ICIS)–China will relax its COVID-19 control
measures in view of changing circumstances,
shoring up equity markets accordingly. The
National Health Commission (NHC) announced 20
measures on Friday in a push for more targeted
and optimised control of the pandemic. Under
the new policies, the quarantine time for close
contacts of cases is shortened to five days in
centralised locations from seven previously.
Asia ethylene little changed as players
await direction from ’23 term
talks
By Yeow Pei Lin 11-Nov-22 11:16 SINGAPORE
(ICIS)–Asia’s ethylene spot import prices for
December-arrival cargoes were broadly stable
this week, as the weak downstream margins and
strong US arrivals continued to be
counterbalanced by limited regional supply.
Bearish sentiment dominates Asia
November petrochemical
markets
By Amy Yu 11-Nov-22 10:29 SINGAPORE
(ICIS)–Bearish sentiment in Asian
petrochemical markets has risen due to weak
demand from late October, and we expect prices
of most products in the region to remain on a
downward trend in November.
US chem shares surge as broader market
rises on positive inflation
data
By Adam Yanelli 11-Nov-22 06:23 HOUSTON
(ICIS)–US-listed shares of chemical companies
surged on Thursday, largely outperforming the
broader market which rose significantly on
favourable economic data on inflation.The Dow
Jones Industrial Average rose by 3.7%, while
the Dow Jones US Chemicals Index rose by 4.95%
and the S&P 500 Chemicals Industry Index
rose by 5%.
Europe PET buyers
lured by imports, but demand
questionable
By Caroline Murray 11-Nov-22 01:58LONDON
(ICIS)–The window of opportunity for
polyethylene terephthalate (PET) importers
appears wide due to Europe’s unique cost
situation, but demand is so low that PET buyers
are unsure how to proceed.
British
industrial demand to remain below previous
years
By ICIS Editorial 10-Nov-22 01:05 LONDON
(ICIS)–Despite recent pressure to NBP
Day-ahead and front month gas prices, a return
to high levels of industrial offtake in Britain
is unlikely, ICIS analysis shows. Normal
industrial demand over the past five years has
averaged 10mcm daily. However, since the rise
of gas prices in Britain, industrial gas
offtake has dropped to around 5.6mcm from
January to November 2022.
EU, eurozone
September chems prices decline modestly in
split market
By Morgan Condon 10-Nov-22 01:30 LONDON
(ICIS)–Chemical pricing in September was mixed
for European producers, with some key
manufacturing nations bucking the modest
declines recorded in the eurozone and wider EU,
according to the EU’s statistical agency,
Eurostat.
The latest data from Eurostat indicates that
Italy and Poland recorded single-figure gains
compared with the previous month, supported by
smaller gains in France and Germany.
Asia
BDO retreats on poor demand, weak domestic
China market
By Clive Ong 10-Nov-22 11:27 SINGAPORE
(ICIS)–The Asian 1,4-butanediol (BDO) market
trended lower as demand in the region
dissipated amid a poor economic outlook. Some
participants believe that demand in the region,
in particular China, could remain weak until
after the Lunar New Year in late January.
Asia
petrochemical markets mixed amid high
inflation
By Felicia Loo 09-Nov-22 14:28 SINGAPORE
(ICIS)–Asia’s petrochemical markets were mixed
amid economic headwinds and dampening
consumption in China amid a slowing economy,
with no let-up on its harsh zero COVID-19
policy, dampening consumption.
China, India
ethanolamines markets under downward pressure
as demand wanes
By Clive Ong 10-Nov-22 14:28 SINGAPORE
(ICIS)–The ethanolamines markets in China and
India remain under downward pressure amid
prevailing weak demand and ample supply.
Participants continue to expect weak markets in
the near term as the global economic outlook
remains uncertain.
China’s MEC demand disrupted by
zero-COVID strategy
By Keven Zhang 09-Nov-22 11:41 SINGAPORE
(ICIS)–China’s methylene chloride (MEC) prices
saw steep falls in the past two weeks due to
disruption to its domestic demand by the new
round of lockdowns implemented to contain the
COVID-19 spread in the country, although
production cutbacks may provide some support in
the near term.
INSIGHT: More
pain for chemicals as US Federal Reserve has ‘a
ways to go’ on rate hikes
By Joseph Chang 03-Nov-22 06:25 NEW YORK
(ICIS)–US and global chemical producers will
likely see more pain ahead as the US Federal
Reserve still has a “ways to go” in its
tightening cycle to bring inflation down to its
2% target. It’s not pausing or pivoting, and
not budging from its target. The US equity
market as measured by the S&P 500 fell 2.5%
on 2 November on disappointment that the Fed
gave no indication it will stop interest
raising rates, other than acknowledging it has
already tightened monetary policy
significantly. The Fed hiked its benchmark rate
by 0.75 percentage points – its third
consecutive hike of that magnitude – to a range
of 3.75-4.00%. “Our message is clear – we think
we have a ways to go. We have some ground to
cover with interest rates before we get to that
level… we think is sufficiently restrictive,”
said Fed chair Jerome Powell at the Federal
Open Market Committee (FOMC) press conference.
INSIGHT: Asia
October PMIs point to broadening export
downturn
By Nurluqman Suratman 02-Nov-22 17:21 SINGAPORE
(ICIS)–Amid falling new orders and inventory
build-up, Asia’s export downturn is broadening
with the latest data pointing to further
weakness in factory activity across the region.
The slowdown in manufacturing activity has now
widened from northeast Asia to also include
southeast Asia amid waning export demand.
Asia’s manufacturing purchasing managers’ index
(PMIs) fell in October to an average of 49.6,
down from 50.7 in September, due largely to a
fall in new orders and lower production as
export orders weakened further.
China’s Oct
petchem market falls on oversupply, poor
confidence
By Yvonne Shi 02-Nov-22 12:57 SINGAPORE
(ICIS)–China’s petrochemical market fell
significantly in October. As of October 31, the
ICIS China Petrochemical Price Index (which
tracks 17 commodities) dropped 5.4% from
September 30 to close at 1220.11 points. The
quick fall after a sharp rise after the
National Day holiday reflects sluggish demand
and lack of market confidence. China’s
petrochemical market started the downtrend from
the middle of the month till the end. An
official source before the 20th National
Congress of the Communist Party of China
disclosed that China’s epidemic prevention and
control will continue to adhere to the
zero-COVID policy, which hit market confidence
severely.
UK manufacturing
sector output contracts further as new orders
dry up
By Tom Brown 01-Nov-22 20:00 LONDON (ICIS)–UK
manufacturing sector output slipped further
into contraction in October, and hit a 29-month
low as new order volumes shrank at the fastest
rate since May 2020, according to data from
S&P Global on Tuesday. The sector
purchasing managers’ index (PMI) fell further
in the month, dropping to 46.2 from 48.4 in
September, although they were stronger than
initial readings for the month of 45.8. A PMI
score below 50.0 signifies contraction. It was
the third consecutive month of contraction for
the sector, as the economic outlook continued
to deteriorate. New orders and new export
business both declined in the month. Players in
the UK cited softer demand from China, the war
in Ukraine and ongoing obstacles to exporting
posed by Brexit. Business optimism slipped to
the lowest level since the height of the
COVID-19 pandemic.
China posts 3.9% Q3 GDP growth; President Xi
secures third term
By Pearl Bantillo 24-Oct-22 13:21 SINGAPORE
(ICIS)–China posted an annualised GDP growth
of 3.9% in the third quarter, up from 0.4% in
the previous quarter, but a combination of a
zero-COVID policy and a property downturn will
continue to weigh on the world’s second-biggest
economy.
US economy continues to slow, recession likely
– NABE survey
By Stefan Baumgarten 24-Oct-22 22:00 HOUSTON
(ICIS)–The US economy continues to slow and is
likely already in recession or may soon be in
recession, according to findings in the latest
business conditions survey by the National
Association for Business Economics (NABE) on
Monday.
INSIGHT: Asia C3 to face headwinds in fourth
quarter
By Julia Tan 25-Oct-22 10:00 SINGAPORE
(ICIS)–The Asian propylene market is facing
headwinds as it steps into the fourth quarter
as demand looks likely to remain weak until the
end of the year on poor derivative margins.
China PP lacks post-holiday support as weak
demand overshadows high
costs
By Zhibo Xiao 27-Oct-22 12:34 SINGAPORE
(ICIS)–Domestic polypropylene (PP) prices in
China rose and then fell after the country’s
National Day holiday on 1-7 October as bearish
demand outweighed the brief surge in crude
values.
INSIGHT: A new world for Asia olefins as
capacity surges, demand remains
uncertain
By Amy Yu 28-Oct-22 12:00 SINGAPORE (ICIS)–The
Asia olefins industry is witnessing a new world
of significantly squeezed margins for all
producers, with incremental capacity addtions
set against the backdrop of weak demand.
CDI Economic Summary: Recession odds rise as
slowdown takes hold amid Fed
tightening
By Kevin Swift 27-Oct-22 23:07 CHARLOTTE, North
Carolina (ICIS)–Monetary tightening across the
world led by the US Federal Reserve, protracted
inflation and geopolitical events have raised
the odds of recession in many major economies.
Asia petrochemicals stay bearish as China keeps
zero-COVID policy
By Nurluqman Suratman 21-Oct-22 11:40 SINGAPORE
(ICIS)–Bearish sentiment prevails across
Asia’s petrochemical markets with no immediate
end in sight on China’s zero-COVID strategy,
which has been weighing on overall industrial
activities of the world’s second-biggest
economy.
South and East Asia LAB quiet while rising
feedstock costs squeeze
margins
By Clive Ong 20-Oct-22 17:02 SINGAPORE
(ICIS)–The linear alkyl benzene (LAB) market
in East and South Asia remains quiet while
suppliers talked of squeezed margins from
rising feedstock costs. The desire for higher
values, however, were countered by the
persistently weak demand in the region.
India, SE Asia ethanolamines remain under
pressure from competitive
offers
By Clive Ong 20-Oct-22 15:13 SINGAPORE
(ICIS)—The ethanolamines markets in southeast
Asia and India remain under downward pressure
from competitive offers and tepid demand.
Participants anticipate further weakness in the
near term as the Chinese market looks set to
remain weak.
INSIGHT: Japan economy to find succor in
automotive output recovery
By Pearl Bantillo 20-Oct-22 12:25 SINGAPORE
(ICIS)–Japan may be able to count on a
recovery in car production, which should
provide much-needed boosts to related
industries, including petrochemicals, to
cushion its economic downturn.
INSIGHT: European home improvement sector
slumps on economic slowdown, post-COVID
effects
By Nicole Simpson 19-Oct-22 21:33 LONDON
(ICIS)–As the threat of recession looms over
Europe and consumers look to cut back on
unnecessary spending, demand for home
improvement and do-it-yourself (DIY) goods has
plummeted.
Asia oleochemicals market likely flat in Q4 on
zero-COVID policy in China
By Helen Yan 19-Oct-22 12:44 SINGAPORE
(ICIS)–Asia’s oleochemicals market is expected
to remain flat in the fourth quarter due to the
prevailing sluggish demand from China amid its
zero-COVID policy, which is expected to remain
in place for the rest of this year.
INSIGHT: Global demand slump eclipses Asia
export benefits from currency
falls
By Pearl Bantillo 18-Oct-22 13:14 SINGAPORE
(ICIS)–Asia’s tumbling currencies will not
spell strong exports for the region as a
combination of surging inflation and high
interest rates slows the pace of global
economic activities.
EPCA ’22: Chemicals supply chains lengthening,
security of supply increasingly important –
Vopak CEO
By Nigel Davis 07-Oct-22 17:40 BERLIN
(ICIS)–Chemicals supply chains are becoming
necessarily longer as consumers and producers
see markets balancing between imports and local
production, the CEO at tank storage operator
Vopak said this week.
China September petrochemical markets up;
demand outlook still bleak
By Yvonne Shi 11-Oct-22 14:16 SINGAPORE
(ICIS)–China’s petrochemical markets were
mostly higher in September on supply tightness
in some products and aided by pre-holiday
restocking, but overall demand is not expected
to improve by much in the coming months.
IMF trims developing Asia growth outlook on
China weakness
By Nurluqman Suratman 12-Oct-22 12:46 SINGAPORE
(ICIS)–The International Monetary Fund (IMF)
has trimmed its economic growth forecast for
emerging and developing Asian economies on
account of China’s slowdown.
Asia BDO market faces lengthening
supply, uncertain demandBy Clive
Ong 13-Oct-22 13:07 SINGAPORE (ICIS)–The
nascent recovery in Asian’s 1,4-butanediol
(BDO) market in September now faces the
challenge of lengthening supply with demand
staying uncertain.
Singapore Q4 GDP growth slows to 4.4%, monetary
policy tightened
By Nurluqman Suratman 14-Oct-22 11:37 SINGAPORE
(ICIS)–Singapore’s central bank on Friday
tightened its monetary policy to dampen
persistent price pressures which has slowed its
economy to a year-on-year growth of 4.4% in the
fourth quarter.
EPCA ’22: Chemical industry may slow
but must manage through cycle, Equate
CEO
By Nigel Davis 06-Oct-22 17:11 BERLIN
(ICIS)–The chemical industry may slow over the
next 12 months but it is a question of managing
through the cycle, Equate’s CEO Naser Aldousari
said on the sidelines of EPCA 2022 on
Wednesday. Aldousari remains optimistic for the
sector and emphasises its resilience.
Asia Q4
petrochemical demand faces headwinds as global
economy slows
By Felicia Loo 06-Oct-22 14:28 SINGAPORE
(ICIS)–Petrochemical demand in Asia will be
largely undermined because regional factories
face continued weakness in export demand in the
fourth quarter.
EPCA
’22: COVID-19 pandemic set gender parity back a
generation – Dow exec
By Tom Brown 05-Oct-22 23:21 BERLIN (ICIS)–The
impact of the COVID-19 pandemic set the
progress of gender parity back 30 years, Dow’s
head of inclusion and diversity said on
Wednesday, because of the disproportionate
impact it had on women’s participation in the
labour market.
EPCA
’22: Europe ADA, nylon 6,6 demand may weaken
further in October
By Marta Fern 05-Oct-22 16:00 LONDON
(ICIS)–European adipic acid (ADA) and
downstream nylon 6,6 markets face affordability
concerns, high costs of production and
competition with lower priced imports from
Asia.
EPCA
’22: European auto output will only recover to
pre-pandemic levels in
2025 – analyst
By Jonathan Lopez 04-Oct-22 18:21 BERLIN
(ICIS)–Production from the European
petrochemicals-intensive automotive sector is
unlikely to recover to pre-pandemic levels
until 2025 at the earliest, a chemicals analyst
at the Boston Consulting Group (BCG) said on
Tuesday.
Andreas Gocke, global lead for chemicals at
BCG, said the war in Ukraine and supply-chain
issues have only seen a further deterioration
in the outlook for the automotive sector, which
was already negative in 2021.
EPCA ’22: Weak demand, wider
uncertainty shapes Europe acrylate esters
outlook
By Mathew Jolin-Beech 04-Oct-22
22:00 LONDON (ICIS)–Europe’s acrylate
esters markets are set to be gripped by ongoing
weak demand and wider macroeconomic uncertainty
in Q4 and early 2023.
EPCA ’22: PODCAST: Europe
petrochemicals face ‘winter of
discontent
By Will Beacham 04-Oct-22 15:19 BERLIN
(ICIS)–Europe’s petrochemical sector faces a
‘winter of discontent’, battered by high energy
costs, collapsing downstream demand and
increased imports from Asia. In this Think Tank
podcast, Will Beacham interviews ICIS Insight
editor Nigel Davis, ICIS senior analyst Lorenzo
Meazza, and Paul Hodges, chairman of New Normal
Consulting. The European Petrochemicals
Association (EPCA) annual meeting runs on 4-6
October in Berlin.
EPCA ‘22: Demand concerns loom over
Europe PC market in Q4
By Miguel Rodriguez Fernandez 03-Oct-22 19:14
LONDON (ICIS)–Pessimism reigns in the European
polycarbonate (PC) market moving into the end
of 2022 as demand from the key customer sectors
is likely to remain tepid due to Europe’s dim
macroeconomic outlook.
INSIGHT: Trends converging to create Q4 glut in
US plastics
By Al Greenwood 30-Sep-22 05:21 HOUSTON
(ICIS)–North American polymer markets are
facing a growing glut because of weakening
demand, expanding capacity and rising
inventories.
Europe economic sentiment dropping as Germany
on brink of recession
By Morgan Condon 29-Sep-22 23:13 LONDON
(ICIS)–European economic sentiment continued
falling in September, for both the EU and the
eurozone, and the German economy is heading
towards a recession, as sentiment is shaped by
sustained high energy prices.
Lockdowns, property crisis to slow China 2022
GDP growth to 2.8% – World
Bank
By Nurluqman Suratman 29-Sep-22 13:3 SINGAPORE
(ICIS)–China, the world’s second-biggest
economy, is projected to grow at a much slower
pace of 2.8% this year compared with an earlier
forecast of 5.0%, according to the World Bank,
amid the country’s zero-COVID policy and
ongoing property crisis.
INSIGHT: India PVC market weathers stormy first
half, safeguard investigation
begins
By Damini Dabholkar 29-Sep-22 11:00 SINGAPORE
(ICIS) –India’s polyvinyl chloride (PVC) market
stabilised slightly in September, after having
weathered a storm over the previous 12 months.
China’s PE prices rebound, eyes on demand
sustainability
By Sijia Li 28-Sep-22 12:11 SINGAPORE
(ICIS)–China’s polyethylene (PE) prices have
rebounded following continual declines in the
past two months, finding support from improved
end-user demand during the September-October
traditional peak season.
INSIGHT: High cost threatens Asia petrochemical
output as regional currencies
tumble
By Pearl Bantillo 27-Sep-22 12:26 SINGAPORE
(ICIS)–Asia’s petrochemical production is at
risk of shrinking further as imported raw
materials get more expensive each day that
Asian currencies tumble to new lows.
INSIGHT: Russia-Ukraine war, surging inflation
continue to dim growth
expectations
By Tom Brown 27-Sep-22 00:17 LONDON (ICIS)–The
outlook for global growth is continuing to
darken as the economy loses momentum in the
wake of the Russia-Ukraine war, with fresh
economic projections pointing to a substantial
deterioration in prospects from 2023 even
relative to a few months ago
US HB Fuller sees rebound in Asia, slowdown in
Europe
By Al Greenwood 23-Sep-22 05:43 HOUSON
(ICIS)–HB Fuller began to see a rebound in
Asian demand during its fiscal third quarter
because China is reopening from its COVID-19
lockdowns, the US-based adhesives producer said
on Thursday, a trend that other chemical
producers have yet to see.
INSIGHT: US plastics becomes sixth-largest
industry
By Melissa Wheeler 22-Sep-22 23:21 HOUSTON
(ICIS)–The US plastics industry has moved two
spots up to become the sixth-largest industry
in the country, according to the Plastics
Industry Association (PLASTICS).
Asia MEG market under pressure as downstream
cuts operation to ease high
inventories
By Judith Wang 22-Sep-22 18:13 SINGAPORE
(ICIS)–Asia’s monoethylene glycol (MEG) market
has been under pressure during the week as
downstream polyester sector initiated another
round of operation cuts in a bid to relieve
inventory pressure.
INSIGHT: Widespread demand reduction makes a
tough quarter tougher
By Nigel Davis 21-Sep-22 23:49 LONDON
(ICIS)–It has been a tough third quarter for
most upstream producers of chemicals and others
as weaker demand and rising costs have combined
to hit earnings and shift guidance.
US inland truck capacity increases as demand
remains firm
By Adam Yanelli 21-Sep-22 05:15 HOUSTON
(ICIS)–Spot and contract rates for inland
truck deliveries have fallen from record-highs
as capacity has increased and demand has
remained strong, according to panelists on a
webinar hosted by supply chain market
intelligence provider Freightwaves.
INSIGHT: Asia petrochemical market to rebound
in September
By Amy Yu 15-Sep-22 18:17 SINGAPORE (ICIS)–
Some Asia petrochemical prices rebounded in
early September after the decrease in August.
ANALYSIS AND RESOURCES
27-Jan-2023
SINGAPORE (ICIS)–Pakistan’s currency – the
rupee – plunged to a fresh record low on Friday
as its economic problems pile up amid a severe
lack of US dollars to pay for imports,
underscoring an immediate need for bailout
funds from the International Monetary Fund
(IMF).
At 06:38 GMT, the Pakistani rupee (PRs) was
trading at PR250.501 against the US dollar in a
highly volatile trade, which saw the pair
hitting an intra-day high of PRs231.781.
At current prices, the Pakistani rupee has shed
about 11% of its value from the start of the
year, making imports more expensive while the
central bank’s foreign exchange reserves
continue to shrink.
As of 13 January, Pakistan’s foreign exchange
reserves can barely cover one month’s worth of
imports, also because of contractions in both
exports and remittances, according to
Spain-based FocusEconomics in its February
Consensus Report on East and South Asia.
According to media reports, the State Bank of
Pakistan’s (SBP) US dollar reserves was at less
than $5bn, down from more than $16bn in
end-January 2021.
Pakistan procures 100% of its polyolefin needs
via imports, which came
to a halt in the week of 9 January 2023
following the central bank’s decision to put a
stop to the issuing of letters of credit (LCs)
to “non-essential” businesses.
Importers of recycled polyethylene
terephthalate (R-PET) and recycled polyethylene
(R-PE) were struggling to settle
payments with suppliers, prompting Asian
recyclers to halt shipments to Pakistan.
Concerns over securing LCs have been crippling
activity in the Pakistan market since August
2022, exacerbated by devastating summer floods
and dwindling foreign exchange reserves that
dropped to their lowest levels since 2014.
A nationwide blackout engulfed Pakistan at the
start of the week following a grid failure
which took hours to be resolved, while the
country is still reeling from massive economic
damage wrought by unprecedented flooding in
June-October 2022.
Overall production is being threatened by high
energy costs, inflation and an extreme shortage
of US dollars to finance imports of raw
materials.
The main Karachi port is severely congested as
a consequence, with thousands of containers
stuck at the port, according to media reports
this week.
“We have revised down our forecast growth in
the fiscal year ending June 2023 (FY23) to 1.5%
from 2% at the time of our last review of
Pakistan’s rating in October, and risks are now
further to the downside,” Fitch Ratings
director for Asia-Pacific sovereign ratings
Krisjanis Krustins told ICIS, adding that
Pakistan’s inflation is projected to be higher
at 24%.
To tame strong inflationary pressures, the SBP
on 23 January hiked its policy interest rates
by 100 basis points (bps) to 17%.
In its monetary policy statement, the central
bank had stressed that completing the pending
ninth review under the IMF’s extended
funding facility (EFF) “is critical for
reducing uncertainty and unlocking multilateral
and bilateral inflows”.
The IMF is scheduled to send a review mission
to Pakistan next week.
The south Asian country is hoping to revive a
stalled bailout package from the global
financial stability watchdog which comes with
stringent conditions, including a market-based
exchange rate, higher electricity and gas
rates, and additional taxes to contain the
fiscal deficit.
Pending approval from the IMF is the release of
$1.1bn, originally scheduled for disbursement
in November 2022 as part of a $6bn bailout
package that Pakistan secured in 2019.
“For Pakistan to return to the IMF programme,
it will have to agree to the IMF’s conditions.
Given Pakistan’s uneven record of performance
under IMF programmes in the past, there is
unlikely to be much flexibility on these
conditions, in our view,” Krustins of Fitch
Ratings said.
“Returning to compliance with the IMF programme
is critical to securing new external funding,
including from friendly countries, to finance
growth and post-flood recovery.”
Pakistan is reeling from hefty economic damage
sustained following unprecedented flooding in
June-October 2022, which submerged a third of
the country in water.
“Floods have caused an estimated USD 40 billion
in damage and, by destroying crops, have stoked
inflation and imports,” FocusEconomics said.
“The risk of a balance of payments crisis
remains high, with social unrest further
clouding the outlook,” it said.
BOP measures an economy’s transactions
involving foreign exchange with the rest of the
world.
With contributions from Nadim Salamoun and
Arianne Perez
Insight article by Pearl
Bantillo
(Thumbnail image: Pakistani rupees – Photo
by Tahir Ikram)
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topic page for analysis of the
impact on chemical markets and links to latest
news.
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ICIS construction topic page
for analysis of the impact on chemical
markets and links to latest news
27-Jan-2023
SINGAPORE (ICIS)–Click here to see the
latest blog post on Asian Chemical Connections
by John Richardson.
Because China is a managed economy there must
be a high level of confidence in many aspects
of how the economy is being managed.
How strong will confidence be among consumers
and investors during 2023 given the bursting of
the property bubble and the sudden reversal of
the zero-COVID policies and what’s followed
that decision?
The strength of this intangible will probably
play the defining role in determining the
strength of China’s economic recovery this
year, making firm number-based judgements
impossible.
But we do have some hard numbers on the amount
of excess savings built up since zero-COVID
began – $2.6 trillion of additional bank
deposits, according to a 24 January Financial
Times article.
The FT, however, quoted analysts who said that
when you discount money transferred into banks
from high-risk financial products, mainly in
real estate, and the “natural growth” in
savings due to higher incomes, this left just
$200 billion of potential “revenge spending”.
How good will China’s exports be in 2023? Has
inflation peaked in the West or might a strong
China recovery reignite global inflation and
dampen exports worth 20% of China’s GDP?
We’ve probably never before faced such an
uncertain China outlook, which is why we’ve
extended my range of scenarios for China’s
polyethylene (PE) demand in 2023, as the main
chart in today’s post shows, from the
usual three to four scenarios:
Scenario 1, the ICIS base case, sees 4%
average growth across the three grades of PE.
This would leave this year’s total demand at
around 39m tonnes, up from 2022’s 38m tonnes
(note that what should be close to the final
demand numbers for last year are now available.
This follows the publication of the full trade
data for 2022 and ICIS estimates of
January-December local production).
· Scenario 2 (our preferred scenario) would
see 2023 demand at approximately 38.5m tonnes
(2% growth) with Scenario 3 (minus 2%) at 37m
tonnes and Scenario 4 (minus 5%) at 36m tonnes.
And we, of course, need four scenarios for
China’s net PE imports with high-density (HDPE)
the most vulnerable to a steep decline because
its capacity increases over demand have been
the highest in the three grades of PE (also the
blog post for the relevant slide).
Last year’s net HDPE imports were 5.6m tonnes.
They could be as high as 5.1m tonnes in 2023
are as low as 3.4m tonnes.
Anything in the region of 3.4m tonnes would
require a razor-like focus on the HDPE net
import markets other than China, which are also
detailed in today’s post.
Editor’s note: This blog post is an opinion
piece. The views expressed are those of the
author, and do not necessarily represent those
of ICIS.
27-Jan-2023
HOUSTON (ICIS)–Eastman plans to reduce its
workforce as part of a $200m cost-cutting
programme that will include what it calls an
“improved asset footprint” – all part of its
response to a manufacturing recession in which
destocking has continued into the first
quarter, the US-based specialty chemicals
producer said on Thursday.
One component of the programme should reduce
manufacturing and supply-chain costs by $125m,
Eastman said. This component should achieve the
following:
More efficient operations associated with a
slow demand environment.
Optimise Eastman’s supply-chain network.
Lower the company’s planned manufacturing
maintenance schedule when compared with 2022.
Improve asset footprint to serve customers
and lower costs.
Eastman did not elaborate on how it would
improve its asset footprint and whether that
would entail plant shutdowns.
Another component of the programme will reduce
non-manufacturing costs by $75m. Eastman plans
to achieve these cost savings by cutting
discretionary external spending and by
workforce reduction.
Eastman did not specify the magnitude of the
workforce reductions.
DESTOCKING AMID MANUFACTURING
RECESSIONThe cost-cutting
programme is Eastman’s response to what it
calls a manufacturing recession that began in
the fourth quarter.
The company’s customers in North America,
Europe and China undertook inventory destocking
that went beyond the levels that are typical of
the fourth quarter.
Eastman’s Advanced Materials segment noted
aggressive customer inventory destocking for
specialty plastic product lines, particularly
in end-markets that serve consumer durables.
The segment makes polyvinyl butyral (PVB),
copolyesters such
as Tritan and cellulose
esters such as Treva.
The company’s Additives and Functional Products
segment saw destocking especially in building,
construction and personal-care end-markets.
The segment makes hydrocarbon resins, rosins,
cellulose esters and additives used in inks and
coatings.
Eastman’s Chemical Intermediates segment saw
destocking across all of its key end-markets.
The segment makes acetic acid, acetate esters,
alkylamines, plasticizers, oxo-alcohols,
acetyls and glycol ethers.
Eastman’s fourth segment, Fibres, did not
report any fourth-quarter destocking. The
segment makes acetate tow and cellulosic
fibres.
OUTLOOKEastman expects
aggressive inventory destocking to end in the
first quarter. Volumes should recover modestly
in the back half of the year.
Inflation for 2023 should moderate from 2022
levels, during which Eastman’s costs rose by
$1.3bn for raw materials, energy and
distribution.
Pensions and other post-retirement benefits
should increase by $110m. Eastman expects
additional headwinds from unfavourable exchange
rates.
Nonetheless, 2023 adjusted earnings/share
should increase by 5-15%, excluding the 75 cent
hit from pensions.
26-Jan-2023
LONDON(ICIS)–Tata Chemicals Europe and Vertex
Hydrogen announced that the two companies have
signed a Heads of Terms agreement for the
offtake of over 200MW of low carbon hydrogen.
The offtake agreement will see Vertex supply
Tata Chemicals with the low carbon hydrogen
within the HyNet hydrogen cluster located in
the northwest of England.
Tata Chemicals has stated that the company is
seeking to achieve net zero manufacturing by
2030.
Vertex is expecting to be able to delivery
nearly 4GW of low carbon hydrogen by 2030, with
the UK Government having set targets of 10GW of
hydrogen production capacity by 2030, of which
at least 5GW will be renewable hydrogen.
The hydrogen will be produced at the Stanlow
Manufacturing Complex in Ellesmere Port and
will have a capacity of 1GW over two units by
2026.
26-Jan-2023
LONDON (ICIS)— In 2022, when Gazprom stopped
supplies to Bulgaria, the country switched at
short notice from nearly full dependence on
Russian gas to complete diversification. It
commissioned a new interconnector with Greece,
tapped LNG imports and ramped up off-takes of
Caspian gas. More recently it signed a deal for
access to Turkey’s infrastructure, which could
open up a new supply route to southeast Europe.
However, Luka Dimitrov, senior energy
journalist focusing on southeast Europe tells
regional gas market specialist Aura Sabadus
that the political instability combined with a
number of controversial measures taken in
recent weeks raise concerns about the future of
Bulgaria’s energy sector and that of the entire
region.
26-Jan-2023
HOUSTON (ICIS)–Dow expects destocking to
continue during the first quarter after seeing
a significant amount of inventory purging
during the fourth quarter, the US-based
producer said on Thursday.
“We are not at a restocking state yet,” said
Jim Fitterling, Dow CEO. He made his comments
during an earnings conference call.
Such destocking has already been noted by the
Federal Reserve in its Beige Book survey of
economic conditions and by RPM International,
US-based producer of paints, coatings,
adhesives and sealants.
Dow’s comments provide more proof that
customers are working down their stocks beyond
what is typical during the end of the year.
“Manufacturing activity in the last half of
December really slowed, so you could see that
in order patterns. And that stayed slow in the
first half of January,” Fitterling said.
Such downstream destocking had led Dow to lower
operating rates by 10% during the fourth
quarter, he said.
Destocking accounted for two-thirds of the
quarter-on-quarter decline in Q4 earnings
before interest, tax, depreciation and
amortisation (EBITDA), said Howard Ungerleider,
CFO. The rest of the decline was caused by the
seasonal slowdown that is typical in the fourth
quarter.
Manufacturing activity is picking up, and the
company is seeing signs of that in its order
book. However, the industry is not in a
restocking state, Fitterling said.
He expects the market will enter such a state
as the year progresses. Typically, the second
and third quarters are Dow’s highest volume
quarters. Also, markets do not have a lot of
excess inventory.
For Dow’s Performance Materials and Coatings
segment, destocking represented about 50-60% of
the slowdown that it saw in the fourth quarter,
Fitterling said. “The destocking is going to
work itself through in the first quarter, and
then I think you will see us get back to more
normal seasonality.”
On silicones and siloxanes, Dow saw destocking
in downstream end-markets such as personal care
and home consumer-goods as well as in building
and construction. “I think that will rebound as
the year progresses,” Fitterling said.
For the company’s polyethylene (PE) business,
it expects a little bit of destocking to
continue into the first quarter, Fitterling
said.
DESTOCKING EXTENDS BEYOND
DOWRPM
noted that normalising supply chains are
causing some of its customers to slow down
purchasing. That has allowed some companies to
return to the inventory-management practices
that preceded the pandemic.
Already, demand has fallen for products made by
some of RPM’s businesses, and the company
expects that trend will continue during its
fiscal third quarter, which runs through
February.
RPM also is adopting more normal buying
patterns, and it is adjusting its inventory
levels to more typical levels, the company
said.
As a result of those inventory adjustments, the
company is lowering production rates at some of
its plants. It could take six to nine months
for RPM to bring inventory levels back to where
the company wants them.
The Federal Reserve noted in its Beige Book
that some companies are starting to bring their
inventories back to pre-pandemic levels.
Fed contacts in the Atlanta district said that
they plan to bring their inventory levels back
to more normal levels. These companies plan to
return to just-in-time inventory management
instead of the just-in-case practices that
characterised the pandemic.
The Atlanta district includes the states of
Georgia, Florida, eastern Tennessee and the
southern parts of Mississippi and Louisiana.
SLOWER GROWTH
A return to normal inventory practices is not
the only factor driving inventory destocking.
In the Federal Reserve’s Richmond district, a
fabric producer said some of its customers are
reducing inventory levels because of concerns
about lower demand. The Richmond district
includes the states of Virginia, Maryland,
North Carolina and South Carolina.
A chemical producer in the Boston district
noted weakening demand from the construction
and automobile industries. Competing producers
are shedding excess inventory. The Boston
district includes the states of Massachusetts
and others in the northeastern US.
Kevin Swift, senior economist for global
chemicals at ICIS, expects the country
will enter
a mild recession in 2023.
Forward-looking indicators also point to a
slowdown.
The ICIS Leading Business Barometer (LBB)
declined for the 11th month in January, and it
continued to signal a recession in the upcoming
months
The US manufacturing purchasing managers’
index (PMI) was
below 50 for the second consecutive
month in December, signalling continued
contraction
Manufacturing indices declined at three
Federal Reserve Bank districts, as shown in the
following table
Federal Reserve Bank
Survey Title
Jan Reading
Richmond
Fifth District Survey of Manufacturing
Activity
-11
Philadelphia
Manufacturing Business Outlook Survey
-8.9
New York
Empire State Manufacturing Survey
-32.9
Focus article by
Al Greenwood
Thumbnail shows storage tanks.
26-Jan-2023
LONDON (ICIS)–Plans by Dow to cut costs
through headcount reduction and shutting down
some assets is likely to hit smaller-scale
operations in its European portfolio amid a
wider global move, the CEO of the US-based
chemicals major said on Thursday.
The company announced more detail on plans to
realise $1bn in cost savings through 2023, with
$500m in earnings before interest, tax,
depreciation and amortisation (EBITDA) expected
to be driven through a 2,000-person headcount
reduction, some shutdowns and process
improvements
The company intends to save an additional $500m
by decreasing turnaround spending, reducing raw
materials purchases, and reducing some
spending.
Intended to prioritise business operations
towards more cost or growth-advantaged markets
in the wake of the shifting energy cost
landscape seen since the onset of the UKraine
war, the cost-cutting measures are likely to
eliminate around 6% of the company’s global
workforce.
The measures will not be exclusively focused on
Europe, but the shifting dynamics in the region
as governments struggled to adapt to the loss
of most of the cheap Russian gas that powered
the continent was a major factor in Dow’s
financial results last year, according to CEO
Jim Fitterling.
Around 60% of the nearly $3bn decline in 2022
company earnings before interest and taxes
(EBIT), to $6.59bn, was related to energy
pricing in Europe and the cooling effect that
has had on demand, he said.
Conditions improved in the fourth quarter on
the result of a warmer winter and more
favourable inventory conditions in the region,
but long-term competitiveness remains a
concern.
“They’ve done an admirable job, especially in
Germany, switching away from Russian natural
gas over to other sources,” Fitterling said,
speaking on an investor call on Thursday.
“So that has helped, but we still have to take
a look at long-term energy policies and work
with governments [and] EU member states on
energy policies because we’re a long way away
from long term competitiveness in Europe,” he
added.
SMALLER ASSETS IN THE
FRAME
No specific locations or sites have been
publicly earmarked for closure, with more
clarity expected before the end of the quarter,
but decisions that are in the process of being
worked through so far largely fall on smaller
European assets, Fitterling said.
Dow has substantial integrated cracker
operations in Terneuzen, Netherlands,
Tarragona, Spain, and Bohlen, Germany, as well
as substantial operations in Schkopau and Stade
in the country. The company also operates
smaller sites, such as Barry, UK, and Leuna,
Germany,.
Even within the larger integrated complexes,
there are units that are seeing increasingly
challenged economics. Trinseo announced plans
in September 2022 to close its Bohlen styrene
plant, with potential implications for Dow’s
benzene operations at the site.
The company’s Stade propylene oxide operations
also utilise older chlorohydrin technology,
which is less economical than the process
technologies used at newer production units in
the space.
The focus of the closure plans is on units that
are likely to struggle to remain competitive
irrespective of energy price movements,
according to Fitterling.
“The decisions we announced today around
restructuring, we’ve looked at locations that
are going to be challenged in any scenario and
take actions on those,” he said.
The company is less focused on its larger
operations, despite the economics of its
European cracker operations standing as less
competitive than lower-cost North American
units, but discussions are ongoing with
European governments about improving the
long-term economics of those sites.
“On large sites like our large cracker sites,
we’re still able to run cashflow positive, and
we’re working hard on the energy situation.
We’ll continue to analyse that through this
year and see what kind of work we can do with
the governments there to make them more
competitive long term,” Fitterling said.
The headcount reduction plans are not focused
exclusively on Europe, but conditions in the
region are a large part of the impetus for the
moves, he added.
“The 2,000 headcount reduction is not all
specific to Europe, although Europe is a big
part of the earnings decline that is driving us
to take these actions,” he said.
“The site and asset decisions we’ve made so far
are really smaller-scale locations where we
know they will be challenged through the year.
We haven’t released the list of those, we’re
working through that with the European works
councils, but we will be doing that as we get
towards the end of this quarter,” he added.
Front page picture: Dow facilties in
Delfzijl, in Groningen, the Netherlands
Source: European Chemical Site Promotion
Platform (ECSPP)
Focus article by Tom
Brown
Clarification: Recasts list of smaller Dow
sites in paragraph 11.
26-Jan-2023
LONDON (ICIS)–Dow plans to cut 2,000 jobs from
its workforce and close plants, potentially in
Europe, as part of its $1bn 2023 cost saving
drive, it said on Thursday.
“We are taking these actions to further
optimise our cost structure and prioritise
business operations toward our most
competitive, cost-advantaged and
growth-oriented markets, while also navigating
macro uncertainties and challenging energy
markets, particularly in Europe,” said CEO Jim
Fitterling.
Dow said that structural cost improvements of
$500m would relate to a global workforce
reduction of approximately 2,000 roles and
increased productivity. It specified “Shutting
down select assets, while further evaluating
Dow’s global asset base, particularly
in Europe, to ensure long-term
competitiveness and enhance cost efficiency.”
Operating expense reduction in the plan total
$500m with a drive to decrease plant turnaround
spending, cut purchased raw materials,
logistics and utilities costs and “Aligning
spending levels to the macroeconomic
environment.”
The company will take charges in the first
quarter of 2023 of between $550m and $725m for
costs associated with the cutbacks and asset
write-downs and write-offs.
It said that longer term it remains on track to
grow underlying earnings before interest, tax,
depreciation, and amortisation (EBITDA) by more
than $3bn by 2030 and cut its carbon emissions
by 30% from a 2005 baseline. It aims for carbon
neutrality by 2050.
In 2022, Dow’s
EBITDA fell by 24% by $9.3bn with a 57%
year on year slump in the fourth quarter. Dow’s
volumes in Q4 2022 were down 8% globally but
18% lower in its Europe, the Middle East,
Africa, and India (EMEAI), region.
This will reduce Dow’s workforce, which
currently stands at 35,700, by 6%.
Thumbnail image shows Dow company name on
floor of New York Stock Exchange (credit:
Richard Drew/AP/Shutterstock)
Recasts to include total number of Dow
employees and the percentage of jobs to be
cut.
26-Jan-2023
LONDON (ICIS)–German energy company HH2E has
announced that it intends to build a renewable
hydrogen production facility in the country.
The HH2E Thierbach project will be located in
the Borna region in the east of Germany will
have an initial capacity of 100MW by 2025,
potentially scaling to over 1GW by 2030, HH2E
said in a press release.
The first phase of the project will be
supported by two investors, Foresight and
HydrogenOne.
The hydrogen that will be produced from the
facility “will serve renewable hydrogen
customers and offtakers, including leading
players in the mobility sector, large-scale
energy and industrial customers such as the
chemical industry and commercial air and road
transport operators,” HH2E said.
The final investment decision (FID) is due to
be taken later this year with the preliminary
investment decision (PID) already having been
approved by the consortium.
This will be HH2E’s second such project in
Germany after the Lubmin project, with both set
to have a similar technology-mix and design to
reduce risk and implementation time.
The Lumbin project, announced in June last
year, will have the same capacity as the
Thierbach project and aims to produce over
600,000tonnes/year of renewable hydrogen by
2030 by combining a 50MW alkaline electrolyser
with a 200MWh high-capacity battery.
HH2E are aiming to have 4GW of renewable
hydrogen capacity in Germany by 2030, with
Germany expecting to have 5GW of renewable
capacity over the same time frame.
26-Jan-2023
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