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TOPIC PAGE: Coronavirus, oil price direction – impact on
      chemicals
TOPIC PAGE: Coronavirus, oil price direction – impact on chemicals
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 impact of coronavirus and oil price dynamics on chemical markets and bring together the latest news reported by ICIS.  Scroll down to see the latest interactive graphics, podcasts and videos.  Click here to register for regular updates to help you navigate these challenging times. 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
INSIGHT: Pakistan rupee plunges to record low amid economic
      crisis, US dollar shortage
INSIGHT: Pakistan rupee plunges to record low amid economic crisis, US dollar shortage
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) Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news. Visit the ICIS construction topic page for analysis of the impact on chemical markets and links to latest news
BLOG: Assessing confidence and the China PE demand recovery:
      more scenarios are needed
BLOG: Assessing confidence and the China PE demand recovery: more scenarios are needed
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.
US Eastman to cut workforce as destocking continues in Q1
US Eastman to cut workforce as destocking continues in Q1
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.
Tata Chemicals Europe, Vertex Hydrogen sign low carbon
      hydrogen deal
Tata Chemicals Europe, Vertex Hydrogen sign low carbon hydrogen deal
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.
PODCAST: Bulgarian energy developments in doubt as country
      gears for new elections
PODCAST: Bulgarian energy developments in doubt as country gears for new elections
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.
US Dow expects destocking to continue in Q1
US Dow expects destocking to continue in Q1
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.
Smaller European locations likely to be part of Dow shutdown
      plans - CEO
Smaller European locations likely to be part of Dow shutdown plans – CEO
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.
Dow to cut jobs, close plants in latest cost saving drive,
      with focus on Europe
Dow to cut jobs, close plants in latest cost saving drive, with focus on Europe
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.
HH2E announces new renewable hydrogen production project in
      Germany
HH2E announces new renewable hydrogen production project in Germany
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.
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