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LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 26 May.
Supply concerns lead to
heightened focus on Europe C2, C3 export
potential
The prospect of lengthier olefins balances for
European producers developing over the summer
months has ramped up export interest, with
propylene and to a lesser extent ethylene
volumes already fixed.
Europe caustic soda under
downward pressure in May
European caustic soda’s rocky road has
continued in May, with contract and spot prices
falling and demand remaining low.
Europe butadiene contract
falls by €80/tonne for June
The European butadiene (BD) contract reference
price for June has been set at €880/tonne, down
by €80/tonne from May.
IFA
’23: Sulphuric acid tanker market in desperate
search for ‘fuel of the future’
Freight rates remain a key concern for
sulphuric and phosphoric acid players across
the globe – especially as shipowners continue
to delay investment in new-build chemical
tankers, as the market searches for a path to
achieve carbon-neutral shipping.
Europe PP contracts move
past monomer pass through in May
European polypropylene (PP) prices have
continued on a downward trend with contracts
agreed down for May beyond the monomer
passthrough.
29-May-2023
SINGAPORE (ICIS)–PETRONAS Chemicals Group’s
(PCG) first-quarter net profit shrank by 74%
year on year to Malaysian ringgit (M$) 536m
($117m) on margin pressure as production costs
increased.
Q1 earnings before interest, tax, depreciation
and amortization (EBITDA) margin declined to
14%, while plant utilization rate during the
period averaged 96%, the Malaysian producer
said on Monday.
In million ringgit (M$)
Q1 2023
Q1 2022
% change
Sales
7,557
6,634
13.9
EBITDA
1,083
2,422
(55.3)
Operating profit
592
2,097
(71.8)
Net profit
536
2,072
(74.1)
EBITDA slumped 55% over the period due to lower
product spreads and higher energy and utilities
costs.
“Though we saw some positive movements in
selected regions in the first quarter, the
overall chemical sector remains cautious given
the still volatile energy prices,” PCG managing
director and CEO Mohd Yusri Mohamed Yusof said.
“There has been some uplift in demand from
China post-Chinese New Year for selected
chemicals, but we have yet to see meaningful
recovery,” he said.
Operating expenses were driven up by energy and
utilities cost “adding pressure on margins”, he
said, but noted that this cost should ease in
the coming quarters.
“We continue to be cautious of the outlook for
2023, given the recent developments of the US
banking sector and its potential impact to the
global economy, the prolonged Russia-Ukraine
conflict as well as slower than expected China
recovery,” Mohd Yusri said.
On the company’s operations within the
Pengerang Integrated Complex (PIC), he said:
“We resumed gradual plant start up at the end
of last year. So far commissioning works are
progressing well, and we expect to bring the
plants on board in the fourth quarter of the
year.”
In the long term, Mohd Yusri said that the
chemical industry is expected to continue
growing at an annual pace of about 3% on the
back of rising consumption across industries
including pharmaceuticals, automotive and
construction.
($1 = M$4.60)
29-May-2023
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 25 May 2023.
NE
Asia ethylene plummets; spread against naphtha
narrowsBy Yeow Pei Lin
26-May-23 12:21 SINGAPORE (ICIS)–Northeast
Asia’s ethylene import prices on 25 May fell to
levels last seen in January, pummelled by
plentiful supply and slack downstream demand.
PODCAST: Rampant China
chemicals overcapacity could rebalance by
2024/5
By Will Beacham 25-May-23 21:00 BARCELONA
(ICIS)–Excess capacity plaguing China’s
petrochemical markets could return to more
balanced conditions by 2024/5 as the current
wave of additions ends and demand gradually
improves.
Nippon Shokubai launches Indonesia AA plant;
signs green chems deal with Chandra
Asri
By Pearl Bantillo 5-May-23 13:49 SINGAPORE
(ICIS)–Japanese producer Nippon Shokubai has
inaugurated its new acrylic acid (AA) plant in
Indonesia and has signed an initial deal with
local producer Chandra Asri Petrochemical to
explore green chemical business opportunities.
APIC ’23: INSIGHT: Asia petrochemicals
navigate poor demand amid China start-ups;
carve ‘green’ path
By Pearl Bantillo 24-May-23 19:50 SINGAPORE
(ICIS)–Uncertainties will hound Asia’s
petrochemical markets for the rest of the year
and possibly into 2024 amid the global economic
slowdown at a time of strong capacity additions
in regional powerhouse China.
INSIGHT: APIC ’23: Rapid capacity expansion
poses risks for Asia’s synthetic rubber
industry
By Ann Sun 23-May-23 13:36 SINGAPORE
(ICIS)–China’s reopening brings some hope to
global synthetic rubber demand, but China-led
capacity expansion is putting the synthetic
rubber industry in the region at risk with
overcapacity a growing concern.
APIC ’23: INSIGHT: Asia phenol, acetone
capacity expansion cycle to peak in
2023
By Jenny Yi 23-May-23 11:57 SINGAPORE
(ICIS)–Asia’s phenol and acetone capacities
entered a new round of expansion cycle in the
second half of 2020 and will reach its peak in
2023, which can be regarded as a record wave of
capacity increase in the markets’ history.
INSIGHT: Rapid olefin capacity growth
in China intensifies Asia supply-demand
imbalance
By Amy Yu 22-May-23 19:35 SINGAPORE(ICIS)–
China ethylene capacity is expected to exceed
50m tonnes/year in 2023, with a compound annual
growth rate (CAGR) of 18% from 2019 to 2023.
INSIGHT: APIC ’23: Asia petrochemicals
industry needs to recalibrate for sustainable
growth
By Nurluqman Suratman 22-May-23 14:20 SINGAPORE
(ICIS)–Industry leaders at the Asia
Petrochemical Industry Conference (APIC) in
India last week were fully focused on one topic
– sustainability – as the region battles to
meet the needs of its fast-growing population
with future net-zero targets.
INSIGHT: Rapid olefin capacity growth
in China intensifies Asia supply-demand
imbalance
By Amy Yu 22-May-23 19:35 SINGAPORE(ICIS)–
China ethylene capacity is expected to exceed
50m tonnes/year in 2023, with a compound annual
growth rate (CAGR) of 18% from 2019 to 2023.
VIDEO: China PP prices plummet to three-year
low; late-Q2 pressure likely
By Zhibo Xiao 23-May-23 11:26 SINGAPORE
(ICIS)–In this video, ICIS Industry Analyst
Zhibo Xiao discusses the polypropylene (PP)
market in China and how its sluggishness is a
result of weak demand and increasing supply.
29-May-2023
TORONTO (ICIS)–Canadian chemical industry
executives are defending the government
subsidies and incentives that help drive the
sector’s decarbonisation.
While a lot of people look at these incentives
as “corporate welfare, I would push against
this wholeheartedly”, Mike Burt, president and
global director, climate and energy for Dow
Chemical Canada, told participants at an
industry webinar this week.
Rather, a company like Dow may get an incentive
that was “miniscule” compared with the overall
investment, and the payback to the country’s
economy on a 30 or 50-year project was
“magnitudes” bigger than the incentive, he
said.
Dow is still in talks with the Canadian
government about plans, announced in October
2021, to build a net zero carbon emissions
cracker project at Fort Saskatchewan in Alberta
province. It expects to make a final
investment decision (FID) in October.
Bob Masterson, CEO and president of trade group
Chemistry Industry Association of Canada
(CIAC), said that the incentives for
decarbonising the industry involved investment
tax credits or production credits.
As such, companies have to build and operate
the plant before the incentives kick in, with
no risk for taxpayers, he said.
The industry was not looking to the government
“to pick up the tab” for its decarbonisation,
he added.
It was the government’s role to create the
right conditions for companies to make
the investment, he said.
In addition to new projects such as the Dow
complex, Masterson stressed that the existing
facilities need to be kept in mind in
addressing decarbonisation.
Canada’s built chemical production
infrastructure has a roughly estimated value of
Canadian dollar (C$) 300bn ($220bn), and almost
all of this would need to be recapitalised in
coming years for the industry to get to net
zero emissions, he said.
The country therefore needed to “radically”
raise its ability to attract capital, in
particular with the challenges from the US
incentives under that country’s Inflation
Reduction Act (IRA), he said.
Oliver Sheldrick from Clean Energy Canada, a
research centre at Vancouver’s Simon Fraser
University, said that 10 big production sites
accounted for more than half of the emissions
in Canada’s chemicals and fertilizer industry.
Concentrating on those sites would go a long
way to reduce the industry’s emissions, he
noted.
According to Clean Energy Canada’s recent white
paper, “Decarbonizing the
Canadian Chemical and Fertilizer Industry”,
the top emitters are:
1 NOVA Chemicals’ ethylene and polyethylene
(PE) complex at Joffre, Alberta, which includes
a cogeneration power plant;
2 Canadian Fertilizer Ltd, Medicine Hat,
Alberta;
3 Dow’s existing petrochemicals complex at Fort
Saskatchewan, Alberta;
4 Redwater Fertilizer, Sturgeon County,
Alberta;
5 NOVA Chemicals’ Corunna petrochemicals site
in south Ontario;
6 K+S’ Bethune potash mine in Saskatchewan;
7 CF Industries Courtright fertilizer complex
in Ontario;
8 Koch Fertilizer complex, Brandon, Manitoba;
9 Mosaic’s potash site in Belle Blaine,
Saskatchewan;
10 Nutrien’s nitrogen operations at Fort
Saskatchewan, Alberta.
Critics have questioned whether it makes sense
for a relatively small country like Canada to
even try to compete against the US IRA
incentives.
Canada’s incentive policies came under public
scrutiny earlier this month when automaker
Stellantis halted construction
work on a battery cell project at
Windsor, at the border to Detroit, Michigan, in
a dispute over government funding.
($1 = C$1.36)
(Thumbnail photo: Canadian flag; souce:
shutterstock)
Focus article by Stefan
Baumgarten
26-May-2023
LONDON (ICIS)– Despite seemingly positive
signals for North Sea energy development from
gas prices at nearly double long-term averages,
UK investment remains sluggish at best and
long-term decline seems to be on the cards.
The ICIS NBP Month +1 contract has halved since
the explosion on the Nord Stream pipeline in
September 2022, mainly due to steady British
LNG imports along with a strong storage
buildout on the continent.
UK gas production also peaked in 2022 off the
back of record-high gas prices alongside an
easing of maintenance and restrictions on
production.
Gas prices remain structurally high because of
a fundamental mismatch between supply and
demand, which, in theory, should act as an
incentive for UK North Sea producers.
DEVELOPMENT OF NEW FIELDS
While on the face of it the UK seems to be
steadily expanding production within the North
Sea, with the potential to add around
48.2mcm/day to the UK gas system by the end of
the decade, the supply situation looks more
precarious when placed under the microscope.
Only three new fields gained development
approval last year (Jackdaw, Abigail and
Tommeliten A), with these projects containing
over 12bcm of discoverable gas reserves. While
this may seem like a sizeable addition for the
UK, this is around a fraction of the 67.5bcm
discovered in the previous decade.
There are also ten projects under review by the
UK government which could add around 97.5bcm to
the UK energy balance.
However, investment appetite for long-term,
costly oil and gas fields may be under threat
with two of Britain’s recent additions (Cambo
and Rosebank) continually delaying their final
investment decisions because of uncertainty
around economic conditions and taxes.
This has been mainly evidenced in a significant
reduction in capital expenditure on the UK
continental shelf (UKCS) since the beginning of
2010. Investment in the North Sea reached an
all-time peak of £16.2bn in 2014 and has now
more than halved to £4.7bn in 2022.
Capital expenditure is set to reduce even
further over the next decade, falling to a
projected low of £2.5bn.
COMPANIES FACING HEADWINDS
The current high-price environment should in
theory incentivise continued investment in the
UK’s North Sea to capture this high value.
However, the introduction of the Energy Profits
Levy in 2022 has caused significant turmoil in
the UK’s upstream process, and has discouraged
investment and raised costs for many producers.
A recent business outlook report from trade
association Offshore Energies UK estimated
around 500mn barrels of oil had been wiped off
the UK North Sea’s balance sheets owing to
risks associated with investment.
To go one step further, the gradual erosion of
the UKCS, along with unfavourable investment
conditions, will force the Britain back into
the global gas market and leave it increasingly
exposed to developments worldwide.
Indeed, the OEUK estimated that imports cost
the UK £117bn in 2022, compared with £54bn in
the previous year.
In 2022, the UK imported around 60% of its gas
needs, with production taking up 40%.
However, forecasts suggest the UK will need to
import 85% of the oil and gas it requires
within a decade, this sets up a sore sight for
the UK consumer.
GLOBAL GAS PRICE ALIGNMENT
While the UK has access to multiple sources of
flexible gas supply (Norway, Belgium/the
Netherlands and LNG volumes), this reliance on
imports has left the British gas market exposed
to high prices and extreme volatility as it
links the NBP to international price movements.
The correlation of front-month contracts at the
British NBP to the equivalent contract at the
US Henry Hub (HH) and ICIS East Asian Index
(EAX) have all significantly increased in
recent years.
The relationship between the NBP and EAX has
strengthened by 39 percentage points since
2018, with a similar movement between the NBP
and HH at 35 percentage points.
The Russian invasion of Ukraine, and the
subsequent loss in eastern piped gas volumes,
accelerated this trend in globalised gas
markets and has only served to strengthen the
NBP’s interrelated relationship with the rest
of the world.
For example, an explosion last summer at the
Freeport LNG terminal, one of the US’ largest
such plants, caused several NBP near-curve
contracts to soar.
Looking towards the current forward curve,
prices are set to remain two-three times above
the historical norm seen between 2010-2021
until new global supply comes online.
Even then, contracts remain above €15/MWh,
which shows elevated prices could be the new
normal for some time to come.
Britain’s exposure to global gas price
movements is only set to strengthen as supplies
will remain constrained in the foreseeable
future along with a particular dependence on
the premium fuel of choice, LNG.
26-May-2023
LONDON (ICIS)–Gas dynamics, twinned with
expectations of significant demand increases to
hold off until at least 2024, will likely see
the German power baseload Q4 ’23 contract
maintain its discount to the Cal ’24 product,
market participants told ICIS.
“I would guess Q4 ’23 would remain below Cal
’24, at least in delivery” one power trader
stated, although “OTC trading may see some
spikes after the summer break”.
According to ICIS price assessments, the German
power Q4 ’23 contract averaged a €7.54/MWh
discount to the benchmark Cal ’24 product over
week 20, compared to a €44.39/MWh average
premium over the first week of 2023.
By contrast, the Q4 ’22 product averaged a
€32.37/MWh premium to Cal ‘23 through week 20
in 2022, with concerns over Russian gas
supplies shifting risk towards high-demand
winter months.
BEARISH GAS SIGNALS
Fundamental differences in key underlying gas
curves have been crucial drivers in contrasting
winter spreads compared to previous years,
market sources told ICIS.
“Winter risk is still the main driver for
prices” one power trader told ICIS, “but as gas
storage [levels] and LNG supply are both
healthy as well as EDF’s [nuclear] production
target in line with market expectations, the
winter risk premium has lost quite a bit”.
ICIS collated data shows German gas storage
levels last standing at 75.3% on 25 May, 35.3
percentage points higher than the equivalent
date in 2022, likely shifting risk to the
second winter quarter even in the event of
extreme cold in the first quarter.
“Storage is high, Q4 is relaxed” another trader
stated, adding, however, that rapidly declining
gas inventories amid colder temperatures
twinned with higher Asian LNG demand “could
lift prices for 2024”.
ICIS recently reported that Germany was
still set to rely on below-average demand
through winter to maintain comfortable
supply, despite strong storage levels and new
LNG terminals.
DEMAND UNCERTAINTY
In addition to strong gas fundamentals,
expectations of sticky demand responses to
down-trending gas and power markets could be
adding extra weight to longer-dated products.
Whilst the German power front-month contract
has set repeated fresh lows in recent weeks,
total demand has averaged just 51.8GW through
May to date, according to EU transparency
platform ENTSO-E, 1.8GW below the 2017-2022
average for the same month.
“I think demand
destruction will remain at current price levels
and part of it forever, until electrification
kicks in”, one trader stated.
“Prices are still not low enough to
significantly increase demand” another source
echoed, “[and] apparently the market is
expecting this to go on for a long period of
time”.
INFLATED 2024 PREMIUMS
While current gas dynamics seemingly support
bearish trends on the Q4 ’23 product, latest
projections from ICIS Power Foresight highlight
potential overvaluations in 2024 dated
contracts.
ICIS priced the German Cal ’24 product at
€133.05/MWh on Wednesday, containing a
€12.49/MWh risk premium compared to the
corresponding model run price forecast.
Upside has been largely driven by spill over
from bullish French nuclear developments, amid
concerns that cracks discovered to EDF’s Penly
1 nuclear plant could be widespread across
the fleet.
26-May-2023
LONDON (ICIS)–Senior Editor for Recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
More drops in food-grade pellet prices
Southern, Eastern Europe colourless flake
prices down
Views on outlook for June
26-May-2023
Petrochemical demand is likely to remain muted,
possibly through to 2024 amid the global
economic slowdown and recent heavy capacity
expansions in China.
Overcapacity concerns are expected to hound the
polyolefins, synthetic
rubber, phenol and acetone
markets in Asia, with downstream demand in
China remaining weak.
Global consumption for the rest of the year
will continue to be deterred by high inflation
and interest rates.
Updated on 26 May 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.
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help you navigate these challenging
times.
LATEST HEADLINES (Last updated
at 10:45 GMT on 26 May 2023)
Depressed US
manufacturing activity weighing on PP
demand
By Zachary Moore 26-May-23 05:40 HOUSTON
(ICIS)–Demand for polypropylene (PP) in the US
is facing a bearish short-term outlook as the
US manufacturing sector remains in
contractionary territory.
INSIGHT: A tale of two
economies, as resurgent services eclipses
languishing industry
By Tom Brown 25-May-23 23:05 LONDON
(ICIS)–After the dark warnings of late 2022,
ministers at the European Commission could be
forgiven for sounding a little smug.
PODCAST: Rampant China
chemicals overcapacity could rebalance by
2024/5
By Will Beacham 25-May-23 21:00 BARCELONA
(ICIS)–Excess capacity plaguing China’s
petrochemical markets could return to more
balanced conditions by 2024/5 as the current
wave of additions ends and demand gradually
improves.
APIC
’23: INSIGHT: Asia petrochemicals navigate poor
demand amid China start-ups; carve ‘green’
path
By Pearl Bantillo 24-May-23 19:50
SINGAPORE (ICIS)–Uncertainties will hound
Asia’s petrochemical markets for the rest of
the year and possibly into 2024 amid the global
economic slowdown at a time of strong capacity
additions in regional powerhouse China.
INSIGHT: Europe
petrochemicals demand remains weak and prices
under intense pressure
By Nigel Davis 23-May-23 23:10 LONDON
(ICIS)–This striking chart from Germany’s
chemicals and pharmaceuticals trade
association, the VCI, does not even tell the
full story for the country’s petrochemical and
polymers sectors.
INSIGHT: Europe chemicals rebound slow
going as distributors face tough
Q2
By Tom Brown 16-May-23 22:27 LONDON (ICIS)–The
much-heralded rebound in European chemicals
demand is yet to register above a murmur, with
demand tepid as destocking weighs further on
consumption and manufacturing remains bearish,
conditions are becoming increasingly chilly for
distributors. Unencumbered by the scale of
large capital assets operated by chemicals
producers and without the burden of
energy-intensive goods production, chemicals
distribution was not as hard-hit as the wider
industry by the energy crisis that bedevilled
Europe through much of 2022. Germany-based
major Brenntag reported a close to twofold
increase in post-tax profits in 2022, while
Netherlands-based IMCD reported a 37% increase
in gross profit for the year.
Global chemicals recovery delayed to
2024 on interest rates, China slower recovery –
Unigel CEO
By Jonathan Lopez 18-May-23 04:27 SAO PAULO
(ICIS)–The upturn in global petrochemicals
will not come in earnest until 2024 as China’s
recovery is proving slower than expected and
high interest rates continue depressing demand
for durable goods, the CEO at Brazil’s
chemicals producer Unigel said on Wednesday.
Roberto Noronha added that the second quarter
is being “as tough” as the first one; some
green shoots should start appearing in the
second half of this year, he added. He was
speaking to reporters and financial analysts
following the publication of Unigel’s Q1 sales
and earnings figures, which posted sharp
year-on-year falls.
APIC ’23: India to see wave of new
capacities through to 2030 – CPMA
chief
By Nurluqman Suratman 19-May-23 12:28 NEW DELHI
(ICIS)–India will see a wave of new
petrochemical production capacities through to
2030 as it seeks to meet growing domestic
demand amid strong economic growth, the
president of India’s Chemicals &
Petrochemicals Manufacturers’ Association
(CPMA) said on 19 May. In 2023, India added
1.25m tonnes/year of new polyethylene (PE)
capacity and 0.5m tonnes/year of polypropylene
(PP) capacity, Kamal Nanavaty told delegates of
the Asia Petrochemical Industry Conference
(APIC) in New Delhi, India. Another 1m
tonnes/year of new PE and PP capacities will be
added in 2024, he said.
INSIGHT: Weak demand dominates chemicals in Q2
as economies drag
By Nigel Davis 11-May-23 00:41 LONDON
(ICIS)–The persistence and wide spread of the
demand slump is the key issue for chemical
producers in 2023, now mid-way through the
second quarter.
Recent financial reporting from chemical
companies of all types and in all locations has
underlined the impact of weak demand on sales
in the first quarter. The year-on-year
comparisons have proved to be stark, and
reduced production the driver of lower revenues
at a time of still high costs of sales.
China the lynchpin for global polyolefins
demand recovery – LyondellBasell
exec
By Joseph Chang 10-May-23 23:27 NEW YORK
(ICIS)–China will be the lynchpin for global
demand recovery in polyolefins, a
LyondellBasell executive said on Wednesday.
INSIGHT: Opportunities and challenges for
China’s polyolefins post-COVID: 3, Entering a
new phase of uncertain
demand
By Lucy Shuai 08-May-23 17:00 SINGAPORE
(ICIS)–Social and economic activity in China
is gradually recovering following removal of
zero-COVID policies in late 2022 and the demand
outlook is attracting worldwide attention.
China to continue avoiding BPA spot imports;
wide buy-sell gap to persist
By Li Peng Seng 08-May-23 11:40 SINGAPORE
(ICIS)–The strong buying momentum for
bisphenol A (BPA) in the two weeks leading up
to the Labour Day break in China has failed to
extend into the post-holiday period.
INSIGHT: Opportunities and challenges for China
polyolefins post-COVID: 1, Changing trade
flows
By Lucy Shuai 04-May-23 14:00 SINGAPORE
(ICIS)–Surging capacities in China’s
polyolefins market in recent years have
increased China’s footprint in the global
supply chain and changed global trade flows.
Meanwhile, an intensive period of new plant
start-ups in south China this year have also
altered domestic trade.
INSIGHT: Opportunities and challenges for China
polyolefins post-COVID: 2, Seeking new
outlets
By Lucy Shuai 05-May-23 14:00 SINGAPORE
(ICIS)–China’s polyolefins industry will need
to seek new outlets in 2023 as capacities keep
on rising while margins may remain curbed after
slumping a year ago.
Caixin China Apr manufacturing PMI slips to
49.5 on weaker domestic
demand
By Nurluqman Suratman 04-May-23 15:59 SINGAPORE
(ICIS)–Caixin’s China manufacturing purchasing
managers’ index (PMI) for April slipped to 49.5
from the neutral 50.0 mark in March amid
subdued domestic demand conditions, the Chinese
media firm said on Thursday.
Lacklustre Europe butadiene eyes Asia for
relief
By Nel Weddle 04-May-23 21:13 LONDON
(ICIS)–Europe’s butadiene (BD) market
fundamentals are just about satisfactory,
market sources say, given the recent past and
current macroeconomic challenges. Players are
pinning hopes on Asia to steer the way to
better times.
NSIGHT: Permit reform may help US chems
maintain cost advantage
By Al Greenwood 05-May-23 03:41 HOUSTON
(ICIS)–US lawmakers are continuing to file
permit-reform proposals to make it easier to
build pipelines and other infrastructure
projects, which could help US chemical
producers maintain their cost advantage by
giving them more access to cheap fuel,
feedstock and renewable power.
Asian, Mideast PET makers see lower selling
pressure amid tight supply
By Zachary Tia 27-Apr-23 15:38 SINGAPORE
(ICIS)–Many Asian and Middle Eastern
polyethylene terephthalate (PET) producers
faced lower selling pressure in April given
tight supply, amid higher production costs on
the back of firming upstream feedstock prices
in April.
Oil tankers line up in China’s Shandong on
stockpiling, tighter checks
By Fanny Zhang 25-Apr-23 15:43 SINGAPORE
(ICIS)–Crude carriers have been spending
longer times waiting for discharge in China’s
Shandong ports, as high inventories reduced
tank availability. Also, customs widened cargo
checks to crack down on false declarations,
according to industry sources.
INSIGHT: China aromatics markets volatile with
gasoline demand
By Seymour Chenxia 26-Apr-23 19:26 SINGAPORE
(ICIS)–China’s domestic gasoline demand
volatility on the back of the pandemic and
crude market dynamics since the third quarter
of 2022 has impacted on mixed aromatics,
toluene and xylene. Price trends for the three
products have varied slightly based on
respective market fundamentals.
INSIGHT:
Hope for 2023 European construction market
recovery falters as spring demand uptick fails
to materialise
By Nicole Simpson 19-Apr-23 20:52 LONDON
(ICIS)–Since late 2022, chemicals players have
been hopeful that better demand is just around
the corner but optimism is faltering as
economic conditions remain challenging and
spring construction demand has failed to
ignite.
INSIGHT: Plastics, petchems in Europe still
waiting for construction season, Q2 may be
reality check
By Vicky Ellis 20-Apr-23 21:45 LONDON
(ICIS)–As warmer, sunnier days grow more
frequent, Europe’s construction industry should
be ramping up for a busy period. But the season
is proving a disappointment, with weaker demand
across a wide range of petrochemical and
plastics
EU chems trade surplus for Jan-Feb 2023 rises
on previous year
By Morgan Condon 20-Apr-23 21:54 LONDON
(ICIS)–The EU chemicals sector trade balance
increased in January and February compared to
the previous year, according to the latest data
from Eurostat on Thursday. Imports decreased
during the period, but exports to countries
outside the of the EU showed marginal gains.
North America EO operating rates to recover
with new derivatives capacity –
CDI
By Joseph Chang 17-Apr-23 19:33 MONTCLAIR, New
Jersey (ICIS)–North America ethylene oxide
(EO) operating rates are poised to recover with
new derivatives capacity starting up in the
coming years and a recovery in China, a
Chemical Data (CDI) analyst said.
Global oil demand growth hopes pinned on
faltering Chinese economy
By Barney Gray 12-Apr-23 18:42 LONDON
(ICIS)–Chinese government data for March,
published earlier this month, indicated that
domestic consumer demand is weak and the
manufacturing sector was under pressure at the
end of Q1, which could hinder the anticipated
China-led growth in global oil demand.
ExxonMobil’s Singapore resid upgrade project on
track for 2025 start-up
By Nurluqman Suratman 12-Apr-23 14:21 SINGAPORE
(ICIS)–ExxonMobil is on track to start
commercial production at its latest upgrade
project for lubricant base stocks in Singapore
in 2025 after facing construction delays due to
the pandemic, according to a company official.
IMF keeps developing Asia 2023 growth forecast
at 5.3%; trims India
projections
By Nurluqman Suratman 12-Apr-23 13:23 SINGAPORE
(ICIS)–The International Monetary Fund (IMF)
has kept its 2023 growth forecast for
developing Asia at 5.3% but trimmed its
forecast for next year amid rising risks in
global financial conditions.
Japan’s Asahi Kasei cuts medium-term income
targets as demand slows
By Nurluqman Suratman 11-Apr-23 18:35 SINGAPORE
(ICIS)–Japanese chemicals major Asahi Kasei on
Tuesday slashed its medium-term operating
income target, citing heavy blows from
prolonged semiconductor shortages, stagnant
demand due to lockdowns in China, and high
prices of feedstock and fuel.
INSIGHT: China LDPE supply likely to exceed
demand all this year
By Joanne Wang 13-Apr-23 14:00 SINGAPORE
(ICIS)–The supply of low density polyethylene
(LDPE) in China is likely to exceed demand for
the remainder of this year putting severe
pressure on prices. Domestic prices plunged to
a 32-month low on 7 April caused mainly by
increased domestic production and destocking by
foreign suppliers at the end of 2022.
INSIGHT: US chemical earnings ‘rebound’ in H2
may disappoint
By Joseph Chang 11-Apr-23 06:16 NEW YORK
(ICIS)–Approaching Q1 earnings season, players
will be watching closely for signs of a
sustainable recovery from the Q4 trough ravaged
by inventory destocking. While results through
2023 should certainly bounce from a horrendous
Q4, they may well disappoint, given
deteriorating macroeconomic indicators.
UK car sales hit post-pandemic peak in March on
better supply
By Morgan Condon 05-Apr-23 18:09 LONDON
(ICIS)–UK car sales rose to their highest
level since before the COVID-19 pandemic in
March, according to the latest data from the
Society of Motor Manufacturers and Traders
(SMMT) on Wednesday.
INSIGHT: Asia petrochemical demand and pricing
could be challenged this year compared to
2022
By Jimmy Zhang 05-Apr-23 15:00 SINGAPORE
(ICIS)–China’s petrochemical industry growth
this year could be more subdued than earlier
projections, according to participants in an
ICIS webinar late last month.
INSIGHT: Crude oil jump not likely to
kick start petrochemicals
trend
By Nigel Davis 04-Apr-23 23:55 LONDON
(ICIS)–The OPEC+ decision driven increase in
crude oil prices on Monday puts upward pressure
on oil products and petrochemicals prices in
what remains an uncertain demand environment.
China’s demand recovery remains focal
point for oil markets –
analysts
By Nurluqman Suratman 04-Apr-23 15:12 SINGAPORE
(ICIS)–China’s consumption recovery will be
the key focal point for oil markets for the
rest of the year, as attention shifts towards
demand growth following the shock move by OPEC
and its allies earlier this week to further cut
supply.
SE Asian NBR dented by slower buying, demand
outlook murky
By Ai Teng Lim 30-Mar-23 15:35 SINGAPORE
(ICIS)–Spot discussions in southeast Asia for
acrylonitrile butadiene rubber (NBR) are under
pressure from waning buying interest, and trade
liquidity may stay curbed in the near term if
buyers and sellers remain divided in their
pricing outlook.
AFPM ’23: US construction season may be late,
slow – Huntsman
By Al Greenwood 29-Mar-23 04:11 SAN ANTONIO
(ICIS)–Early signs in the US are pointing to a
residential construction season that will be
later and slower than typical, the CEO of
Huntsman said on Tuesday.
Asia fatty acids market to remain flat in near
term on uncertainties
By Helen Yan 28-Mar-23 15:59 SINGAPORE
(ICIS)–Asia’s fatty acid demand is expected to
remain flat in the near term as buyers retreat
from the market and adopt a cautious stance,
given the uncertainties and weak macro-economic
conditions.
INSIGHT: US recycled plastics industry
continues to navigate changes in global trade
according to latest
statistics
By Emily Friedman 28-Mar-23 01:41 HOUSTON
(ICIS)–Though competitive recycled resin
imports continue to pressure the domestic US
recycled plastics market as freight rates
improve, Q4 and full-year 2022 US import and
export data of plastic scrap show a setback in
overall import volume despite the recent trend.
AFPM ’23: With supply chain constraints largely
over, freight costs expected to trend
lower
By Adam Yanelli 26-Mar-23 23:19 SAN ANTONIO
(ICIS)–Participants in the US chemicals
industry have been coping with high costs for
transporting products over the past two years
because of persistent supply chain constraints
brought on by the COVID-19 pandemic.
AFPM ’23 – INSIGHT: US petchem exports
poised to hit record on capacity, logistics and
cost advantage
By Joseph Chang 25-Mar-23 03:33 NEW YORK
(ICIS)–With the last wave of new capacity
additions and easing of logistics constraints,
the US petrochemical sector has a clear path to
boosting exports to new records in 2023,
heading into this year’s International
Petrochemical Conference (IPC).
Southeast Asia PP market braces for a
tough Q2
By Jackie Wong 18-Mar-23 00:35 SINGAPORE
(ICIS)–With demand on a considerable slowdown
since the end of the Lunar New Year holiday in
early February, the polypropylene (PP) market
in southeast Asia is now bracing itself for an
even tougher Q2 as different elements come
together, threatening to create a perfect
storm.
Intra-Asia chemical tanker demand
hampered by aromatics plant
turnarounds
By Hwee Hwee Tan 21-Mar-23 17:16 SINGAPORE
(ICIS)–Aromatics plant turnarounds in Asia and
cargo diversions to the US gasoline blending
sector are expected to continue to curtail
intra-regional shipping demand into the second
quarter.
China PP prices fall to nearly
three-year low amid increasing supply,
lower-than-expected demand
By Lucy Shuai 22-Mar-23 12:44 SINGAPORE
(ICIS)–China polypropylene (PP) prices fell to
a nearly three-year-low amid increasing supply
and lower-than-expected demand, and the market
may remain under pressure in Q2.
Asia petrochemicals demand tepid on
macroeconomy, oversupply
concerns
By Nurluqman Suratman 24-Mar-23 14:16 SINGAPORE
(ICIS)–Asia’s petrochemical markets continue
to face tepid demand as economic recovery in
regional bellwether China remains slower than
initially expected, with new production
capacities adding to oversupply concerns.
Recessionary conditions to define H1,
Q1 destocking still ‘palpable’ – LANXESS
CEO
By Tom Brown 15-Mar-23 21:15 COLOGNE
(ICIS)–2023 will be a difficult for the
chemicals sector, with market conditions likely
to remain bleak through the end of the second
quarter, the CEO of LANXESS Matthias Zachert
said on Wednesday. Zachert also said the
destocking trend that emerged in the closing
months of 2022 continues to be felt. The impact
of weaker demand in a high-cost, low-growth
environment is likely to weigh on chemicals
players globally through the first six months
of 2023, with destocking continuing and
customers hesitant about making substantial new
commitments, according to Zachert.
INSIGHT: China growth ambitions deliver
a reality check while financial risk
multiplies
By Nigel Davis 14-Mar-23 23:33 LONDON
(ICIS)–Petrochemicals production turned up in
January following months of decline, as demand
started to improve and prospects for growth
brightened. But the take-off, from a miserable
few months at the end of 2022, was slower than
some hoped for – as evidenced by capacity
utilisation. Subsequently, the brightness seen
by some around the Lunar New Year holiday in
China in February has dimmed and China’s
government has delivered a dose of reality.
ICIS data focus on basic chemicals and
synthetic materials (that is, resins,
elastomers and fibres), so the core
petrochemical industry building blocks and the
major polymers. In January, production of those
materials rose 0.9% globally, to 280.9m tonnes.
As ICIS chief economist, Kevin Swift, notes,
this follows a 0.1% decline in December, a 1.9%
decline in November “and generally declining
activity since March”. The sector is by no
means in a good place. Overall, production
volumes were down 5.2% year on year in January
with gains largely centred on North America,
Central & South America, Europe and the
Middle East. Production in northeast Asia was
weak. Capacity utilisation improved in January
by 0.4 percentage points to 66.2% which was
encouraging but this rate compared with a much
more robust 71.7% in January 2022.
INSIGHT: US petchem exports to hit
record on capacity surge, easing of logistics
constraints
By Joseph Chang 14-Mar-23 01:00 NEW YORK
(ICIS)–With the last wave of new capacity
additions and easing of logistics constraints,
the US petrochemical sector has a clear path to
boosting exports to new records in 2023. Even
with a recessionary global economic outlook
dampening demand overseas and capacity surging
in China, the US cost advantage is simply too
great to hold back the floodgates. US
petrochemical exports will run into a big
headwind from a surge of new projects starting
up in China. China will be adding
record-breaking chemical and fertilizer
capacity in 2023 of 137m tonnes/year, dwarfing
the previous record of around 93m tonnes/year
in 2014 and driving global oversupply,
according to an ICIS analysis.
S Korea Q4 ’22 GDP contracts on
quarter; full-year ’23 growth to slow on weak
exports
By Pearl Bantillo 07-Mar-23 13:50 SINGAPORE
(ICIS)–South Korea’s economic output shrank by
0.4% in the October-December 2022 from the
previous quarter, unchanged from advance
estimates, as manufacturing and exports
contracted amid a global economic slowdown. For
the whole of 2022, manufacturing growth
decelerated to 1.4% from 6.9% in the previous
year, while export of goods posted a much
slower growth of 3.4% from 10.5% in 2021. For
2023, full-year growth is projected to slow
down to 1.6% amid high inflation and interest
rates. “Growth will fall even further below its
pre-pandemic average this year on a tougher
base effect, high energy prices and higher
interest rates. However, eased Covid-19
restrictions will provide some support,” said
Matthew Cunningham, economist at Spain-based
FocusEconomics had stated in a recent note.
China sets conservative 5.0% GDP growth
target; petrochemical markets
cautious
By Fanny Zhang 06-Mar-23 14:33 SINGAPORE
(ICIS)–China has set its 2023 economic growth
goal at around 5%, a conservative number
underscoring an overall cautious outlook that
sent crude prices falling on Monday after
recent strong gains, while Chinese
petrochemical futures markets largely mixed. At
the start of China’s National People’s Congress
(NPC) in Beijing on 5 March, Chinese Premiere
Li Keqiang announced the GDP growth target,
lower than the previous year’s target of around
5.5% although the figure represents an
acceleration from the actual 3.0% growth
recorded in 2022. China’s parliament will be in
session for 10 days to outline the country’s
broad goals and plans for 2023. Economists
deemed the GDP target realistic as the economy
recovers from severe COVID-19 impact over the
past three years.
INSIGHT: LatAm
petchems at mercy of global markets as China’s
reopening key for prices
By Jonathan Lopez 04-Mar-23 00:26 SAO PAULO
(ICIS)–Latin American petrochemicals companies
are dependent on a recovery in global prices to
post healthier spreads in 2023 as all eyes are
now on China’s economy reopening. Although
Latin American petrochemicals producers and
distributors concentrate on domestic consumers,
China and other foreign markets are important
for the region because they influence margins
and stimulate demand for commodity exports.
INSIGHT: Optimism on China recovery as
manufacturing PMI leaps into
expansion
By Joseph Chang 02-Mar-23 07:00 NEW YORK
(ICIS)–The long-awaited China recovery may
finally be at hand, as a key leading indicator
of manufacturing activity surged higher.
Asia fatty alcohols to see improved sentiment
following China Feb PMI data
By Helen Yan 02-Mar-23 14:13 SINGAPORE
(ICIS)–Asia’s fatty alcohols and other
oleochemical markets are likely to see an
improvement in sentiment and demand, following
the latest February data showing factory
activity rising significantly in China.
INSIGHT: European chemical producers see demand
weakness persist but look to H2
2023
By Nigel Davis 28-Feb-23 23:51 LONDON (ICIS)–A
slower than hoped for re-start in China but a
turn up in key indicators in the US colour the
macroeconomic outlook and the driving forces
behind industrial production demand for
chemicals.
INSIGHT: East China toluene xylene price gap
fluctuates amid shifting market
dynamics
By Veronica Zhang 28-Feb-23 19:39 SINGAPORE
(ICIS)–The East China toluene-xylene price gap
has fluctuated widely in 2022 and early 2023
amid a shift in supply-demand fundamentals as
export demand grew and domestic consumption
remained more subdued.
China phenol, acetone industry out of the red;
uncertainties loom in March
By Yoyo Liu 27-Feb-23 15:00 SINGAPORE
(ICIS)–China’s phenol and acetone industry has
emerged from the red on increased prices after
the Lunar New Year holiday on 21-27 January.
INSIGHT: China imports of Russia oil to rise
further in 2023 on cheap
prices
By Fanny Zhang 27-Feb-23 21:59 SINGPORE
(ICIS)–China is expected to boost imports of
Russia oil further in 2023 to take advantage of
price discounts, with a significant increase
likely in volumes flowing to independent
refineries in Shandong.
INSIGHT: Northeast Asia plasticizers exports to
drive intense competition
globally
By Nicole Simpson 27-Feb-23 21:40 LONDON
(ICIS)–Northeast Asian plasticizers exports
are expected to continue to drive strong
competition between sellers globally as China
import interest remains low.
INSIGHT: Weak consumer confidence weighs on
China recovery
post-reopening
By Pearl Bantillo 22-Feb-23 23:54 SINGAPORE
(ICIS)–China’s prospects turned brighter after
it abandoned its zero-COVID policy, but two of
its major growth engines – exports and the
property sector – may struggle to perform amid
a general weakness in consumer confidence. The
possibility of the world plunging into
recession still cannot be ruled out.
Bank of Korea pauses interest rate hikes,
lowers economic growth
forecast
By Nurluqman Suratman 23-Feb-23 10:53 SINGAPORE
(ICIS)–South Korea’s central bank on Thursday
kept interest rates unchanged at 3.50% and
lowered its economic growth forecast for 2023
amid slowing domestic consumption and exports.
Asia Group II base oils supply to dip slightly
on China demand pick-up
By Matthew Chong 23-Feb-23 12:31 SINGAPORE
(ICIS)–Asia’s Group II base oils spot supply
is expected to be slightly reduced in the
coming months, after being in relative
abundance since late 2022.
INSIGHT: China bounce a bust
By Joseph Chang 17-Feb-23 04:09 NEW YORK
(ICIS)–Hopes for a quick rebound in China’s
economy and demand for chemicals and plastics
after the Lunar New Year and zero-COVID in the
rearview mirror have been dashed thus far.
While it is still early days and there are some
signs of recovery, disappointment reigns for
now.
INSIGHT: China’s reopening having a gradual,
positive impact on PE demand
By Amy Yu 17-Feb-23 00:44 SINGAPORE
(ICIS)–Polyethylene (PE) markets in Asia are
expected to recover more strongly in 2023 but
the magnitude of growth may depend on the speed
of demand recovery in China. Currently, demand
in February is not stronger than expected.
INSIGHT: Asia petrochemical prices to rise but
margins under pressure in February – ICIS
analysts
By Ann Sun 15-Feb-23 20:49 SINGAPORE
(ICIS)–Higher prices in most value chains are
expected in the Asia petrochemical market in
February in view of balanced-to-tight
fundamentals driven by subdued supply and
restocking activities. However, companies are
still struggling with negative margins.
Global oil supply to exceed demand in H1 2023 –
IEA
By Tom Brown 15-Feb-23 19:54 LONDON
(ICIS)–Global oil supply is expected to exceed
demand for the first half of 2023, but the
balance could quickly snap the other way later
in the year as demand recovers and some Russian
output and is shut out of parts of the world,
the International Energy Agency (IEA) said.
Thai domestic PET average prices rise on
increased buying pressure
By Zachary Tia 14-Feb-23 22:16 SINGAPORE
(ICIS)–The average price for Thailand domestic
spot bottle-grade polyethylene terephthalate
(PET) cargoes firmed on the back of higher
buying pressure in the week ended 10 February.
China disappoints hopes of swift PP demand
lift, global markets eye exports
closely
By Vicky Ellis 14-Feb-23 20:47 LONDON (ICIS)–A
raft of offers of Chinese polypropylene (PP)
into other regions, and signs that demand is
not pinging back quickly, are denting hopes
that a fast Chinese recovery will pull up
global markets.
Thai PTTGC expects demand recovery in 2023 on
China reopening
By Nurluqman Suratman 14-Feb-23 14:39 SINGAPORE
(ICIS)–Thai petrochemical major PTT Global
Chemicals expects demand for its aromatics and
polymers products to improve this year
following China’s reopening.
Singapore Q4 economy expands by 2.1%, full-year
2022 GDP growth at 3.6%
By Nurluqman Suratman 13-Feb-23 11:22 SINGAPORE
(ICIS)–Singapore’s economy grew by 2.1% year
on year in the fourth quarter, moderating from
the 4.0% expansion in the previous quarter,
amid a slowdown in the manufacturing sector,
official data showed on Monday.
INSIGHT: Petrochemicals beginning to expand
again but margins challenged
By Nigel Davis 07-Feb-23 00:25 LONDON
(ICIS)–Signs of a tentative upturn for the
major petrochemicals and polymers are welcome
although it is clear that profitability is
likely to remain under pressure in the first
half. For the big polyolefins, polyethylene
(PE) and polypropylene (PP), additional supply
creates a headache that will persist for some
time.
Thailand R-PET feedstock supply rises on
recovering tourism
By Arianne Perez 07-Feb-23 12:46 SINGAPORE
(ICIS)–Spot availability of post-consumer bale
feedstock in Thailand has been increasing for
weeks now due to more tourists coming back to
the country.
China January petrochemical markets rebound;
near-term outlook mixed
By Yvonne Shi 08-Feb-23 13:54 SINGAPORE
(ICIS)–China’s petrochemical markets posted
strong gains in holiday-shortened January,
largely in anticipation of strong demand post
Lunar New Year as both production and
consumption picked up after the country
abandoned its zero-COVID policy.
NE Asia C2 up in supply-led recovery; China
downstream demand still slow
By Yeow Pei Lin 10-Feb-23 11:43 SINGAPORE
(ICIS)–Northeast Asia’s spot ethylene (C2)
prices advanced as supply decreased on cracker
turnarounds and reduced inflows from other
regions.
Asian EPDM stays soft, eyes on Q2 China
recovery
By Ai Teng Lim 08-Feb-23 11:51 SINGAPORE
(ICIS)–Discussions are limited this week in
Asia’s spot market for ethylene propylene diene
monomer (EPDM) imports, as sluggish buying
persisted.
Lower demand drives down slack wax prices in
the US
By Daniel Lopes 09-Feb-23 07:00 HOUSTON
(ICIS)–US slack wax prices are falling based
on lacklustre demand and ample supply in Q1. A
market participant said sales in January were
particularly low when compared to the same
period last year, and this is due to continued
high inflation and economic uncertainties,
which have changed consumption habits.
Asia naphtha buoyed by crude oil; thin demand
limits gains
By Melanie Wee 08-Feb-23 17:03 SINGAPORE
(ICIS)–Asia naphtha markets are being propped
up by gains in global crude oil futures
although a lack of robust demand is keeping a
lid on the upward pressure.
Asia BDO extends post-Lunar New Year gains amid
snug availability
By Clive Ong 03-Feb-23 11:38 SINGAPORE
(ICIS)–Asia’s butanediol (BDO) market extended
gains after the Lunar New Year holidays, while
snug availability and renewed demand in the
region fuelled talk of further potential
strength in the market.
Asia soda ash market firms on limited supply,
robust China demand
By Helen Lee 02-Feb-23 15:52 SINGAPORE
(ICIS)–Asia’s soda ash market has firmed on
the back of limited export volumes from China,
where domestic demand strengthened after the
Lunar New Year holidays.
China post-holiday demand key indicator for
oleochemical trade flows
By Lucas Hall 02-Feb-23 02:48 ORLANDO
(ICIS)–Chinese demand following the end of
Lunar New Year will be the key indicator in
determining oleochemical trade flows in 1H
2023, according to sources on the sidelines of
the American Cleaning Institute (ACI) annual
meeting and industry convention.
US styrene market stabilises after plants
return to production
By John Donnelly 31-Jan-23 22:55 HOUSTON
(ICIS)–After several plant outages that
boosted spot prices, the US styrene market has
stabilised with units back in operation
although running at reduced rates. Soft demand
and rising feedstock costs promise to pressure
margins through Q1.
China official Jan manufacturing PMI swings to
expansion mode at 50.1
By Nurluqman Suratman 31-Jan-23 12:33 SINGAPORE
(ICIS)–China’s official manufacturing
purchasing managers index (PMI) crossed to
expansionary territory in January at 50.1, from
a 34-month low of 47.0 in the previous month as
the country relaxed its zero-COVID policy,
official data showed on Tuesday.
China 2023 GDP growth forecast revised up to
5.2% as activity recovers –
IMF
By Nurluqman Suratman 31-Jan-23 11:58 SINGAPORE
(ICIS)–China’s GDP growth is projected to
rebound to 5.2% in 2023 from 3.0% last year as
a sudden lifting of most its pandemic-related
restrictions paved the way for a rapid rebound
in economic activity, according to the World
Economic Outlook (WEO) Update of the
International Monetary Fund (IMF) released on
Tuesday.
Developing Asia economic growth forecast raised
to 5.3% – IMF
By Nurluqman Suratman 31-Jan-23 11:48 SINGAPORE
(ICIS)–Economic growth in emerging and
developing Asian economies is expected to rise
in 2023 and 2024 to 5.3% and 5.2%,
respectively, after the deeper-than-expected
slowdown in 2022, the International Monetary
Fund (IMF) said on Tuesday.
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
26-May-2023
Updated at 10:30 GMT on 26 May. Please
scroll down to see headlines.
The war in Ukraine has caused oil and
especially gas price volatility, as restricted
flows from Russia to Ukraine caused values to
spike to record-breaking levels before
collapsing to pre-war levels.
Since December 2022, unseasonably mild winter
weather hit demand, reversing gas prices.
However millions of tonnes of chemical and
fertilizer production remain offline across
Europe thanks to the elevated gas prices and
poor macro-economic conditions which have
impacted demand.
Europe’s energy challenge is immense and put
into stark relief by the response to Russia’s
war in Ukraine. Cutting the ties that bind EU
and non-EU nations to Russian gas and oil will
be extremely painful this year and in years to
come.
This topic page examines the impact of the
Ukraine conflict on oil, gas, fertilizer and
chemical markets.
Image credit Vadim
Ghirda/AP/Shutterstock
Europe’s energy markets witnessed a year of
record prices and extreme volatility in 2021.
Russia’s invasion of Ukraine has led to more
difficult conditions for global markets since
then.
GAS SUMMARY
Gas storage remains robust in Europe,
winter demand fell thanks to mild weather
Poor downstream demand still affecting
industrial production, gas demand
Record shipments of liquefied natural gas
(LNG) to Europe so far in 2022/23
LNG plus Norwegian, Algerian, Azerbaijani
pipeline imports compensate for Russian supply
shortfall
Europe LNG processing operating at full
capacity
Nord Stream I and II pipelines damaged by
explosions, zero flows to Europe
EU implements voluntary 15% cut to
consumption
AMMONIA SUMMARY
Russia supplies 20% of global seaborne
ammonia market
Disrupted supply has pushed up fertilizer
and food prices
OIL SUMMARY
Friendship oil pipeline flows through
Ukraine
Russian oil feeds around a quarter of
Europe demand
Europe seeks to end reliance on Russian
crude oil
EU agrees ban on seaborne imports from 5
December 2022, petroleum products from 5
February 2023
From 5 December Russian crude oil cargoes
will only be insured if subject to price cap
CHEMICALS SUMMARY
Millions of tonnes of capacity remain
offline despite gas cost collapse
Elevated oil, gas prices dent consumer
confidence and demand
Prospect of recession, more cheap imports
from Asia
Margins, prices under pressure due to
collapsed downstream demand
Sanctions and measures against Russian exports
of oil and gas have sent shockwaves across the
global economy, lifting the cost of living,
impacting industrial and agricultural
production and potentially leading to social
unrest.
How vulnerable are energy and
energy-related Russian supplies to
disruptions?
Europe has historically depended for close to
40% of its annual gas consumption on Russian
supplies, imported via four routes – Ukraine,
Belarus-Poland as well as the Nord Stream 1 and
TurkStream corridors linking Russia to Germany
and Turkey via the Baltic and Black Sea,
respectively.
Overall Russian pipeline supplies were limited
throughout 2021 and further reduced in 2022. By
the end of last year Russian pipeline supplies
fell to less than 10% of Europe’s total gas
imports compared to 40% in the previous year.
Russian volumes shipped through Ukraine to
Europe are now at third of what they should be
as part of a five-year transit agreement
Russia has banned exports of gas to several EU
countries, and the Nord Stream I and II
pipelines have been damaged. In 2022 flows via
Yamal and Nord Stream 1 stopped completely.
European petrochemicals players faced even
higher gas prices as a result, though these
have since collapsed to pre-war levels.
Fertilizer companies – where gas can account
for 80% of costs – have been forced to curtail
production. Chemicals were affected, especially
those with high exposure to gas prices through
utilities or feedstocks.
If the conflict escalates, Ukraine transit
pipelines may come under attack but disruptions
could be limited because the infrastructure has
been built to grant flexibility, allowing the
operator to reroute flows away from potentially
damaged segments.
AMMONIA IMPACT
The Togliatti-Azot pipeline, the world’s
longest ammonia pipeline stretching 2,471km
from the Togliatti Azot plant in Russian Samara
Oblast to the Ukrainian Black Sea port of
Yuzhny, could be caught up in the cross-fire.
Russian ammonia supplies account for around 20%
of the global seaborne merchant ammonia market
each month.
Around two thirds of those volumes are exported
via Yuzhny, with the rest reaching European and
global markets via Baltic ports. Ammonia is a
prime material for fertilizers, so curtailments
could potentially lead to higher food prices
and shortages.
Ammonia market players are scrambling to cover
positions and assess options as the Russian
invasion of Ukraine saw loadings at the key
export hub of Yuzhny halted with immediate
effect.
Russian nitrogen fertilizer major Togliatti
confirmed the suspension of the transit of
ammonia to the Black Sea port via pipeline to
ensure the safety of people living in the
vicinity of the lengthy conduit.
OIL PIPELINES VULNERABLE
Supplies on the world’s longest oil pipeline,
the Friendship (Druzhba) pipeline, could be
threatened if the conflict leads to tough
sanctions. The pipeline carries oil from
central Russia 4,000km west to Ukraine and
Belarus and runs close to the Belarus-Ukraine
border. Russia exports around 5m bbl/day, of
which half are exported to Europe, including
via this pipeline.
Russian oil accounts for about a quarter of
Europe’s consumption, with the Druzhba pipeline
carrying close to 1m bbl/day.
Sanctions have been imposed on imports of
Russian crude oil and products by sea, but the
ban does not include pipeline oil.
Europe consumed most exports of Urals, Russia’s
biggest export grade, in 2021 after Saudi
Arabia boosted market share in China. Almost
10m tonnes of Urals went through Rotterdam in
the first half of last year, up 2m tonnes on
2020.
Germany stands most exposed because it gets 25%
of its oil from Russia.
SInce the ban came into place, Russia has
successfully switched exports mainly to China
and India, though priced at a steep doscount.
CHEMICALS IMPACT
Gas and electricity are important components in
the production costs of many chemicals. Surging
gas and feedstock prices in Europe have caused
big hikes in contract and spot prices. Now
millions of tonnes of fertilizer and chemical
capacity are offline in Europe.
ICIS has also created an interactive timeline
which shows the history of the gas impact since
July 2021.
These products have been most badly affected by
outages in Europe, with more than half of
capacity offline or running at reduced rates in
some cases.
Analysis by the ICIS Margin Analytics team
shows the products which are most exposed to
energy and gas prices in Europe as a feedstock
or utility.
Europe is at a
competitive disadvantage to other regions and
some customers are seeking new sources of
lower-priced supply, especially from Asia and
the Middle East.
Collapsed demand means that millions of tonnes
of European chemicals capacity remains offline
despite much lower gas costs.
The conflict in Ukraine has pushed European gas
prices back up to record levels, forcing
exposed chemical producers to cease production,
or add further energy surcharges.
Rising oil prices since late 2021 have already
put chemical margins under pressure, and
volatility has continued into 2022. As oil and
naphtha prices soared, margins for ethylene
production based on naphtha went negative for
the first time ICIS record began. The are now
are swinging wildy in tandem with oil price
movements.
Chemical producers are struggling to pass on
increasing feedstock and energy costs in
Europe. Elevated oil and gas prices also dent
downstream consumer confidence and spending,
with recession a possibility later in 2022 or
2023.
What contingency plans are being put in
place?
Europe prepared for a difficult winter although
rising storage fullness levels, falling demand
and more import capacity for liquefied natural
gas (LNG) have helped it get by, assuming there
will not be an extensive cold spell.
As of 6 March, storage facilities across Europe
were 54% full compared with just 20% last
March.
Some 30bn cubic meters of new capacity were
added between September 2022 and March 2023.
The capacity includes offshore terminals in the
Netherlands, Germany and Estonia/Finland.
Demand has been decreasing by more than 20% in
the industrial sector in north-west European
countries and by 20-30% for households in
Germany, according to official data.
Nevertheless, there is a possibility that
Russia may completely stop its gas supplies to
Europe via the last two remaining routes –
Ukraine and Turkey, which could lop off some 70
cubic meters of Russian gas entering Europe
daily.
In such a scenario, the most affected countries
would be those in eastern and central Europe,
which are landlocked and have been struggling
to secure regasified LNG from importing
countries.
For oil markets, in case of an attack but no
international sanctions, the worst-case
scenario would be for approximately 240,000
bbl/day of lost Russian exports via Ukraine.
There are other seaborne routes, including the
Russian Black Sea port of Novorossiysk.
Gas rationing – impact on Europe
petrochemicals, fertilizers
Embattled European fertilizer and petrochemical
producers may be the first in line to cut gas
consumption if the region experiences a cold
snap in the weather.
Russia, Europe’s largest gas supplier, has been
limiting exports to less than a quarter of its
deliveries two years ago and may stop them
altogether amid its political stand-off with
the EU.
Policymakers recommend voluntary reductions but
say these would become mandatory in case of a
supply emergency jeopardising the bloc’s
security.
DEMAND REDUCTION
The EU’s largest consumers include households,
accounting for 37% of total demand, electricity
and heat generation covering around 30% and
industrial consumption accounting for another
30%.
Record high gas prices and an ongoing gas
supply crunch over the least year had forced
consumers to limit or stop production or seek
import substitution globally. The mild winter
has alleviated this situation.
FERTILIZERS
The fertilizer sector, one of the most
gas-intensive industries, has also been one of
the most affected so far as gas can account for
up to 80% of production costs. Production has
been cut back drastically because it is no
longer economic.
PETROCHEMICALS
On the petrochemicals side, there are now deep
production cuts for products such as methyl
methacrylate (MMA) and melamine which are
heavily exposed to natural gas for utilities or
as a feedstock.
Producers are making detailed plans for
rationing, particularly in Germany, where the
chemicals and pharmaceuticals industry uses
about 140 TWh per year, or about 15 percent of
Germany’s gas consumption.
Gas is mainly used by petrochemicals to
generate energy such as electricity and steam
as well as to fire furnaces for production
complexes such as crackers.
Sites are able to lower operating rates
significantly, but they may be forced to close
if gas supplies drop so much that production
becomes uneconomic or difficult from a
technical perspective.
Companies with flexibility are switching from
natural gas to liquefied petroleum gas (LPG) or
other sources of energy.
Ukraine conflict threatens Europe oil
supply, chemicals production
With Russia’s invasion of Ukraine, sanctions
could cut supplies of crude oil through the
Druzhba pipeline, threatening oil refinery
operations and chemicals production at
installations in Hungary, Slovakia, Czech
Republic, Poland and the former East Germany.
Russian oil supplies up to a quarter of
Europe’s crude imports, with refineries in
central and eastern Europe, which are attached
to the Druzhba pipeline, particularly reliant
on these supplies. Any interruption to these
supplies could force refineries to reduce
operating rates unless they can find
alternative supplies.
Analysis of the ICIS Supply & Demand
database shows that the countries Druzhba runs
through, except for Germany, are reliant on
Russian crude oil for more than half of their
imports, led by Slovakia which obtained 96% of
its supplies from Russia in 2021.
Chemical production downstream of refineries in
these countries could be impacted by any
reduction in operating rates. The ICIS data
forecast that for 2022, 2.79m tonnes of
ethylene (11% of total European capacity) and
2.34m tonnes of propylene (12% of total
European capacity) are reliant on refineries
located along the Druzhba pipeline. While some
alternative sources of crude oil could be
sourced, it is unlikely normal levels of
operations could be maintained.
Michael Connolly, ICIS Principal Analyst
Refining said: “Although many have built
alternate sources, keeping full operating rates
would be difficult for them as they rely on a
consistent and reliable source of crude. Most
refiners in Europe are aware of the risk of
Russian crude and over the past 5-10 years have
tried to reduce their dependence, or at least
to build some capability to have an alternate
supply – it doesn’t mean they would be
unaffected, but there should be a little bit of
resilience, depending on the site.”
Connolly explained that some land-locked
refineries along the Druzhba pipeline have
built pipelines to the coast, allowing
alternative sources of crude oil to be sourced.
However, these pipelines may not have capacity
to feed the whole refinery.
A spokesperson for Grupa LOTOS said: “The LOTOS
refinery has dealt with suspended supplies by
land before. Due to the contamination of
Russian oil with chlorines, PERN, the
state-owned operator of transmission and
storage infrastructure, had to completely
discontinue the transmission of crude oil from
the eastern direction between 24 April and 9
June 2019.”
He added that scheduling of oil supplies by sea
helped to secure volumes sufficient to maintain
an unchanged level of throughput and maximise
fuel production.
UKRAINE CHEMICALS UNDER THREAT
With Russian forces present in Ukraine,
chemical and fertilizer facilities may be
threatened by physical damage, interrupted
power and gas supplies or logistics disruption.
Kalush cracker closed
Karpatnaftohkhim’s cracker at Kalush has been
closed down because of the imposition of
martial law in Ukraine. It has capacity
(tonnes/year) of 250,000 (ethylene); 117,000
(propylene) 110,000 (LLDPE), 300,000 (PVC),
100,000 (benzene).
Black Sea export hub
closed
Ammonia market players have scrambled to cover
positions and assess options as the Russian
invasion of Ukraine saw loadings at the key
export hub of Yuzhny halted with immediate
effect.
Russian nitrogen fertilizer major Togliatti
confirmed the suspension of the transit of
ammonia to the Black Sea port via pipeline to
ensure the safety of people living in the
vicinity of the lengthy conduit.
The Samara Oblast-based giant also confirmed
the shut down of four of its seven ammonia
units, with the other three plants operating at
reduced rates.
Russia
export disruptions to shift global trade flows,
future capacities threatened
Disruptions to Russia’s chemicals and polymers
exports will
change trade flows, particularly to Europe
and Asia, as international sanctions, lack of
logistics and even “self-sanctions” limit
volumes.
While Russia’s capacities are relatively small
on a global scale, they can still have a
significant impact on regional markets if these
exports are disrupted.
Key Russia exports include methanol,
polyethylene (PE), polypropylene (PP), styrene
and paraxylene (PX).
Russia has increased exports of high density
polyethylene (HDPE) and polypropylene (PP) in
particular in 2020 and 2021 as new capacity
started up from SIBUR’s ZapSibNeftekhim complex
in Tobolsk in 2020.
LATEST HEADLINES
Depressed US
manufacturing activity weighing on PP
demand
By Zachary Moore 26-May-23 05:40 HOUSTON
(ICIS)–Demand for polypropylene (PP) in the US
is facing a bearish short-term outlook as the
US manufacturing sector remains in
contractionary territory.
INSIGHT: A tale of two
economies, as resurgent services eclipses
languishing industry
By Tom Brown 25-May-23 23:05 LONDON
(ICIS)–After the dark warnings of late 2022,
ministers at the European Commission could be
forgiven for sounding a little smug.
PODCAST: Rampant China
chemicals overcapacity could rebalance by
2024/5
By Will Beacham 25-May-23 21:00 BARCELONA
(ICIS)–Excess capacity plaguing China’s
petrochemical markets could return to more
balanced conditions by 2024/5 as the current
wave of additions ends and demand gradually
improves.
APIC
’23: INSIGHT: Asia petrochemicals navigate poor
demand amid China start-ups; carve ‘green’
path
By Pearl Bantillo 24-May-23 19:50
SINGAPORE (ICIS)–Uncertainties will hound
Asia’s petrochemical markets for the rest of
the year and possibly into 2024 amid the global
economic slowdown at a time of strong capacity
additions in regional powerhouse China.
INSIGHT: Europe
petrochemicals demand remains weak and prices
under intense pressure
By Nigel Davis 23-May-23 23:10 LONDON
(ICIS)–This striking chart from Germany’s
chemicals and pharmaceuticals trade
association, the VCI, does not even tell the
full story for the country’s petrochemical and
polymers sectors.
APIC
’23: Asia PE, PP margins to stay in unhealthy
range despite China
reopening
By Nurluqman Suratman 19-May-23 19:25 NEW
DELHI (ICIS)–Asia’s polyethylene (PE) and
polypropylene (PP) markets are expected to face
poor margins across all production routes
despite China’s reopening, an industry analyst
said on Friday.
APIC
’23: Japan petrochemical plants run at 80% on
current demand
By Pearl Bantillo 19-May-23 17:13 NEW
DELHI (ICIS)–Japan’s petrochemical plants have
been running at an average rate of about 80%
amid demand uncertainties this year, an
industry executive told ICIS.
INSIGHT: Fundamental Asia
olefin imbalance persists despite better
margins
By Joey Zhou 19-May-23 14:00
SINGAPORE(ICIS)–Asia olefin margins from major
production routes have improved and remained in
profitable territory since March, driven by
lower feedstock prices.
Eurozone inflation rises on energy cost
pressure
By Morgan Condon 17-May-23 20:05 LONDON
(ICIS)–Eurozone inflation edged up slightly on
persistent pressure from energy costs in April,
as the rate for the wider EU showed a soft
decrease, according to the latest data from the
EU’s statistical agency Eurostat on Wednesday.
Annual inflation in the eurozone rose to 7.0%,
up from 6.9% in March. In the wider EU,
annual inflation fell to 8.1%, from 8.3% in the
previous month. Compared to a year prior,
inflation for the eurozone remained slightly
softer, as the rate was pitched at 7.4% in
April 2022, while the level remained stable on
the previous year for the EU at 8.1%.
Global oil demand expectations for 2023
increased in May on stronger China recovery –
IEA
By Morgan Condon 16-May-23 22:25 LONDON
(ICIS)–Global oil demand is set to increase in
2023, driven by strength in China, according to
the International Energy Agency (IEA) on
Tuesday. The IEA’s monthly oil report shows
that demand is expected to rise by 2.2m bbl/day
year on year in 2023, marking an average 102m
bbl/day, supported by economic recovery in
China surpassing expectations. Macroeconomic
pressures and soft demand was reflected in
weaker oil pricing in April and early May,
caused lingering concerns of a recession in
some regions. The IEA, however, increased its
output forecast on a strong recovery in the
second half of the year. China is expected to
account for nearly 60% of global growth in
2023.
INSIGHT: Weak demand dominates
chemicals in Q2 as economies
drag
By Nigel Davis 11-May-23 00:41 LONDON
(ICIS)–The persistence and wide spread of the
demand slump is the key issue for chemical
producers in 2023, now mid-way through the
second quarter. Recent financial reporting from
chemical companies of all types and in all
locations has underlined the impact of weak
demand on sales in the first quarter. The
year-on-year comparisons have proved to be
stark, and reduced production the driver of
lower revenues at a time of still high costs of
sales. Certainly, the focus in Europe and large
parts of the rest of the world has shifted from
energy costs (and availability).
Higher feedstock costs,
slow demand maintain pressure on US polyether
polyol margins
By Zachary Moore 21-Apr-23 06:41 HOUSTON
(ICIS)–A combination of higher feedstock costs
along with slower demand has been maintaining
pressure on margins for US polyether polyol
producers, with margins likely to remain
compressed over the next few months.
INSIGHT: Plastics,
petchems in Europe still waiting for
construction season, Q2 may be reality
check
By Vicky Ellis 20-Apr-23 21:45 LONDON
(ICIS)–As warmer, sunnier days grow more
frequent, Europe’s construction industry should
be ramping up for a busy period. But the season
is proving a disappointment,
with weaker demand across a wide range of
petrochemical and plastics products.
INSIGHT: Hope for 2023
European construction market recovery falters
as spring demand uptick fails to
materialize
By Nicole Simpson 19-Apr-23 20:52 LONDON
(ICIS)–Since late 2022, chemicals players have
been hopeful that better demand is just around
the corner but optimism is faltering as
economic conditions remain challenging and
spring construction demand has failed to
ignite.
INSIGHT: Diverse Asia
April price trends for olefins and aromatics
chain chemicals
By Jimmy Zhang 19-Apr-23 19:15 SINGAPORE
(ICIS)– Weak consumer confidence and economic
pressures are expected to weigh on the price
outlook for Asia petrochemicals.
UK
summer demand to drop, exports to France in Q3
likely
By Anna Coulson 19-Apr-23 00:07 LONDON
(ICIS)–National Grid is confident that there
will be sufficient supply to meet electricity
demand over the summer, the UK’s Electricity
System Operator (ESO) announced in its Summer
Outlook 2023 on 18 April.
Global oil demand growth
hopes pinned on faltering Chinese
economy
By Barney Gray 12-Apr-23 18:42 LONDON
(ICIS)–Chinese government data for March,
published earlier this month, indicated that
domestic consumer demand is weak and the
manufacturing sector was under pressure at the
end of Q1, which could hinder the anticipated
China-led growth in global oil demand.
IMF
keeps developing Asia 2023 growth forecast at
5.3%; trims India
projections
By Nurluqman Suratman 12-Apr-23 13:23
SINGAPORE (ICIS)–The International Monetary
Fund (IMF) has kept its 2023 growth forecast
for developing Asia at 5.3% but trimmed its
forecast for next year amid rising risks in
global financial conditions.
INSIGHT: Europe chemicals
must wait until 2026/7 for gas cost
relief
By Will Beacham 11-Apr-23 22:58 BARCELONA
(ICIS)–Although record inflows of liquefied
natural gas (LNG) have helped European gas
prices fall, a cold winter could see them soar,
with relief from volatility only in prospect
for petrochemical customers by 2026/7 when
major new sources come onstream globally.
INSIGHT: Vietnam economy
sputters as first petrochemical complex about
to start up
By Pearl Bantillo 06-Apr-23 11:00
SINGAPORE (ICIS)–Vietnam hopes to stem
deteriorating manufacturing conditions, borne
of weak external demand, by cutting the cost of
borrowing to spur domestic activity as it gears
toward commercial operations of its first
petrochemicals complex.
US
auto sector faces economic headwinds on rising
interest rates, higher
prices
By Adam Yanelli 05-Apr-23 05:05 HOUSTON
(ICIS)–US March auto sales ticked lower from
February as economic headwinds have replaced
supply chain issues as obstacles facing the
industry that relies heavily on chemicals.
Developing Asia 2023 GDP
to grow faster at 4.8% but downside risks
remain – ADB
By Nurluqman Suratman 04-Apr-23 12:10
SINGAPORE (ICIS)–Developing economies in the
Asia Pacific region are projected to grow at a
faster pace of 4.8% this year and in 2024 on
the back of higher consumption, tourism and
investments due to continued easing of pandemic
restrictions, but downside risks remain, the
Asian Development Bank (ADB) said.
INSIGHT: Europe chems
look to tough Q2 as economic indicators remain
choppy
By Tom Brown 03-Apr-23 21:47 LONDON
(ICIS)–With expectations growing for some of
the headwinds buffeting the chemicals sector to
ease in the second half of the year, conditions
remain challenging for the second quarter,
while economic indicators point to a continuing
“volatile phase” according to an analyst.
Oil
surges after surprise OPEC+ output cut, lifting
Asia naphtha, benzene
By Nurluqman Suratman 03-Apr-23 12:57
SINGAPORE (ICIS)–Oil prices rose by more than
$6/bbl on Monday after the OPEC and its allies
unexpectedly announced further production cuts
of about 1.16m barrels per day on Sunday.
Hungary unlikely to reach EU
intermediate gas storage
targets
By Irina Breilean 29-Mar-23 12:53 LONDON
(ICIS)–Hungary may not reach the next EU
intermediate storage fullness target on 1 May,
ICIS analysis indicates. EU intermediate
targets have been in place since November 2022,
in preparation for the start of the 2023 gas
winter. The targets apply to all member states
with underground gas storage sites on their
territories and directly interconnected to
their market areas. Intermediate targets are in
force for 1 February, 1 May, 1 July, and 1
September, two months ahead of the beginning of
the gas year. ICIS data shows storage sites
across Hungary were 33.2% full on 27 March, a
26.2 percentage point increase compared to last
year. However, this still stands 3.8 percentage
points short of the upcoming May target of 37%.
Joint gas purchasing uptake may be slow
as buyers locked into
contracts
By Gretchen Ransow 28-Mar-23 23:20 LONDON
(ICIS)–Uptake of the EU’s joint purchasing
model may be limited in its first year, as
companies were already locked into contracts
due to “huge panic” about prices in 2022,
European Commission vice-president Maros
Sefcovic told the European Parliament’s
Committee on Industry, Research and Energy
(ITRE) on 28 March. However, if the platform
does prove successful the EU wants to extend
the model beyond gas to other strategic
commodities such as hydrogen, critical raw
materials or technologies linked to the energy
transition. Sefcovic told ITRE on 28 March that
there was still much work to do but joint gas
purchasing would give valuable experience for
the future.
Ukraine’s new policy proposals to
‘revolutionise’ energy
sector
By Aura Sabadus 28-Mar-23 00:22 LONDON
(ICIS)–Ukraine is preparing a raft of
wide-ranging regulations that could pave the
way for the complete overhaul of its energy
sector. The step is a priority for the
mid-term, a senior Kyiv-based lawyer told ICIS.
Maksym Sysoiev, partner at global law firm
Dentons, said the reconstruction of the energy
sector is deemed a priority for Ukraine and
added that if all regulations that are now
under discussion are implemented, they would
trigger a “revolution” in the energy sector.
Russia to extend export restrictions on
fertilizers until November
By Deepika Thapliyal 27-Mar-23 22:39 LONDON
(ICIS)–Russia is planning to extend
restrictions on fertilizer exports until
November to guarantee availability in the
domestic market, according to the country’s
agriculture minister Dmitry Patrushev. Current
restrictions on exports are valid until
end-May. To curb inflation and to ensure that
there was a reliable supply of fertilizers to
its farmers, the government imposed export
quotas in December 2021. The restrictions have
continued since the war with Ukraine broke out
in February 2022, although they have not had a
significant impact on the availability of
Russian fertilizer exports – apart from
nitrates.
Asia
petrochemicals demand tepid on macroeconomy,
oversupply concerns
By Nurluqman Suratman 24-Mar-23 14:16
SINGAPORE (ICIS)–Asia’s petrochemical markets
continue to face tepid demand as economic
recovery in regional bellwether China remains
slower than initially expected, with new
production capacities adding to oversupply
concerns.
European acrylates
subdued with underwhelming
demand
By Mathew Jolin-Beech 24-Mar-23 01:26
LONDON (ICIS)–The European acrylates markets
are all currently subdued with demand described
as “soft.”
CDI
Economic Summary: US regional banking crisis
lowers odds of soft landing
By Joseph Chang 23-Mar-23 22:21 NEW YORK
(ICIS)–The failure of two sizeable banks
(Silicon Valley Bank and Signature Bank) in the
US and the crisis of confidence contagion
spreading to other regional banks and now
European financial institutions threatens to
significantly tighten lending conditions at the
very least, further slowing economic growth and
potentially tipping US and European economies
into recession.
Asia
PMDI import markets bearish on poor downstream
demand
By Shannen Ng 23-Mar-23 15:12 SINGAPORE
(ICIS)–Asian import markets for polymeric
methylene diphenyl diisocyanate (PMDI) were
dominated by largely bearish sentiment in the
week ended 22 March.
PODCAST: Asia, Mideast PS
demand tepid on competitive imports, feedstock
volatility
By Damini Dabholkar 23-Mar-23 11:14
SINGAPORE (ICIS)–Asian and Middle Eastern
polystyrene (PS) markets are seeing slow demand
with regional supply remaining relatively
unchanged.
INSIGHT: US Fed
undeterred from 2% inflation goal means more
tough times ahead for
chemicals
By Joseph Chang 23-Mar-23 05:34 NEW YORK
(ICIS)–Even amid a regional banking crisis,
the US Federal Reserve remains undeterred in
its goal of bringing inflation down to its 2%
target. This was evidenced by another 0.25
percentage point rate hike and will mean
weakening economic conditions, a lower chance
of a soft landing and a more challenging demand
environment for chemicals going forward.
Phenol energy surcharges
will start to disappear on lower TTF, but no
demand improvement seen
By Jane Gibson 23-Mar-23 00:57 LONDON
(ICIS)–Falling upstream gas prices may offer
chemical sellers and buyers some relief but the
impact on demand levels has yet to be
significant.
PODCAST: Plunging
shipping rates point to normalising global
logistics, Europe under
pressure
By Will Beacham 22-Mar-23 22:58 BARCELONA
(ICIS)–Steep falls in container shipping rates
indicate that the pandemic-induced logistics
crisis may be drawing to a close, but this now
makes Europe more vulnerable to a flood of
cheap imports from Asia.
US
R-PET buying sentiment weakens in wake of
banking crisis
By Arianne Perez 22-Mar-23 20:11 SINGAPORE
(ICIS)–Asian exporters of recycled
polyethylene terephthalate (R-PET) cargoes are
expected to continue to see cautious buying
from converters in the US following the banking
crisis.
INSIGHT: New PE/PP
capacities risk derailing nascent Asia
polyolefin recovery
By Izham Ahmad 22-Mar-23 17:28 SINGAPORE
(ICIS)–A wave of new polyethylene (PE) and
polypropylene (PP) supply in Asia is
threatening to upend the tentative demand
recovery the region has been experiencing since
the end of the Lunar New Year holidays as new
suppliers fight to establish market share in an
increasingly crowded market.
Asia
polyamide 6,6 Q2 mood darkened by fiscal year
closing, demand outlook
By Josh Quah 22-Mar-23 13:12 SINGAPORE
(ICIS)–Asia’s nylon polyamide 6,6 (PA66)
markets remain weak, ahead of turnarounds
coming up for some producers in northeast Asia.
China
PP prices fall to nearly three-year low amid
increasing supply, lower-than-expected
demand
By Lucy Shuai 22-Mar-23 12:44 SINGAPORE
(ICIS)–China polypropylene (PP) prices fell to
a nearly three-year-low amid increasing supply
and lower-than-expected demand, and the market
may remain under pressure in Q2.
Asia
naphtha swings to multi-month lows on volatile
crude
By Melanie Wee 21-Mar-23 13:42 SINGAPORE
(ICIS)–Asia’s naphtha markets can expect
heightened volatility, largely tracking crude
oil futures movement, as demand prospects are
being weighed down by market jitters over the
health of the global banking system.
PODCAST: Subdued spot
trading activity in Europe’s oxo-alcohols and
derivatives markets
By Marion Boakye 21-Mar-23 03:35 LONDON
(ICIS)–Throughout March – the oxo-alcohols and
derivative markets in Europe have experienced
weak spot demand, ample supply, and thin import
opportunities.
INSIGHT: Constrained
consumer budgets limit demand for major
chemicals consuming sectors
By Nigel Davis 21-Mar-23 00:49 LONDON
(ICIS)–This is by no means an easy time for
chemical producers as the industry’s major
downstream markets continue to be influenced by
the impact on demand of rising costs and higher
interest rates.
Europe’s chemical sector
shrinks – battered by high costs, poor demand
and cheaper imports
By Will Beacham 20-Mar-23 23:10 BARCELONA
(ICIS)–Collapsing Q4 profits and losses for
European chemical majors, together with low
expectations for 2023, show just how badly the
sector is still suffering.
Europe markets firm after
emergency UBS Credit Suisse
purchase
By Tom Brown 20-Mar-23 20:15 LONDON
(ICIS)–European markets firmed on Monday after
Switzerland-based banking group UBS announced
plans to acquire embattled rival Credit Suisse,
raising market hopes that banking sector
contagion may be limited.
Global weekly spot IPEX
down on price declines across
regions
By Will Beacham 20-Mar-23 19:11 LONDON
(ICIS)–The global weekly spot ICIS
Petrochemical Index (IPEX) fell by 2.0% week on
week on the back of lower index values across
regions.
PODCAST: Asian PP markets
grapple with increased supply,
lower-than-expected demand in
2023
By Damini Dabholkar 20-Mar-23 19:06
SINGAPORE (ICIS)–Asian polypropylene (PP)
markets are being challenged by increasing
capacity in 2023, especially in the China
market, while demand continues to recover more
slowly than expected.
Crude
dips to lowest since December 2021 on banking
sector turmoil
By James Dennis 20-Mar-23 17:52 SINGAPORE
(ICIS)–Crude prices declined on Monday to
their lowest levels since December 2021 before
recovering on growing financial concerns
following equity market losses and instability
in the banking sector in Asian trading.
Asia
petrochemical shares, oil prices weaken after
UBS rescue of Credit Suisse
By Nurluqman Suratman 20-Mar-23 12:43
SINGAPORE (ICIS)–Shares of petrochemical
companies in Asia were mostly weaker and crude
futures fell on Monday on fears of
a banking
crisis contagion, as troubled Credit
Suisse was rescued by its Swiss rival UBS in a
government-backed deal.
INSIGHT: European TiO2
operations at risk, but China may not be the
answer
By Heidi Finch 17-Mar-23 17:53 LONDON
(ICIS)–While energy costs in Europe are more
relaxed compared with 2022 peaks, the
TiO2 marketand the wider chemical industry in
Europe are still facing residual economic and
demand headwinds. European production is at
risk, while China/Asia capacity is increasing.
Asia
glycerine demand weighed down by caution after
US bank collapse and turmoil
By Helen Yan 17-Mar-23 11:48 SINGAPORE
(ICIS)–Asia’s glycerine spot demand has been
weighed down by prevailing caution following
the collapse of two mid-sized banks in the US
and plunging bank stocks in Europe.
INSIGHT: Banking
contagion threatens to spread, hit chemicals
demand hard
By Joseph Chang 17-Mar-23 05:47 NEW YORK
(ICIS)–The failure of two sizeable banks
(Silicon Valley Bank, Signature Bank) in the US
and the crisis of confidence contagion
spreading to other US regional banks and now
European financial institutions threatens to
significantly tighten lending conditions at the
very least, further slowing economic growth and
potentially tipping the US and European
economies into recession.
Asia
naphtha tumbles on tepid demand; crude oil
losses
By Melanie Wee 16-Mar-23 12:56 SINGAPORE
(ICIS)–Asia naphtha markets are under pressure
on the back of fragile demand, while taking
cues from global crude oil futures.
INSIGHT: Banking woes
rattle US chem shares
By Al Greenwood 16-Mar-23 05:03 HOUSTON
(ICIS)–Shares of US-listed chemical companies
fell on Wednesday amid concerns about the
implications of a string of bank failures.
Topic Page by Aura Sabadus and
Will Beacham. Additional
reporting by Richard
Ewing and Sophie
Udubasceanu. Maps and graphs by
Yashas Mudumbai.
26-May-2023
SINGAPORE (ICIS)–Click here to see
the latest blog post on Asian Chemical
Connections by John Richardson.
Twelve years ago, fellow ICIS blogger Paul
Hodges and I first warned about China’s debt
and demographic risks.
We weren’t, of course, able to say when China’s
debt and demographic problems would come to a
head. But since 2011, we’ve kept our readers
regularly informed of the key milestones on the
road to where we’ve arrived today – permanently
much lower GDP and chemicals and polymers
growth.
“A growth model dependent on stimulus and debt
was always going to be unsustainable and now it
has run out of steam,” Ruchir Sharma, chair of
Rockefeller International, wrote in the
Financial Times earlier this week.
He added that China’s GDP growth potential was
only half of its 5% target for 2023 due to a
shrinking population.
For those who haven’t followed our work over
the last 12 years, see today’s post.
Using polypropylene (PP) as an example, I today
discuss how China’s extraordinary growth in
demand since 1999 was the result of three
historic events that are now exactly that –
history.
China benefited from economic liberalisation, a
youthful population and the world’s
biggest-ever economic stimulus package.
China’s births per woman fell below the
population replacement rate in 2001 and have
remained there ever since. The growth in family
formations has been declining since 2013.
The decline in the growth of new families is
affecting housing demand, as is the end of the
old government “put option” for real estate
investments.
Beijing had guaranteed that property prices
would never fall, making investments in
multiple properties a gamble worth taking. But
since 2021, real estate prices have fallen,
badly denting confidence in a sector that’s
worth some 30% of China’s GDP.
There must surely be pressure to save more to
cover rising pension and healthcare costs
resulting from an ageing population during a
period when, as Sharma also wrote in the FT,
excess savings in China were equal to only 3%
of GDP compared to 10% in the US.
The tried and tested approach to boosting GDP
was investment on infrastructure. But now local
governments, which are responsible for 70% of
total government spending, are struggling to
raise money for new bridges and roads because
local government financing depends on rising
land prices. Land prices are falling.
This explains why China’s PP demand growth
could decline by 1% this year following 2%
growth in 2022.
And the above explains why have likely entered
a period of pretty much permanent low single
digit or even negative growth in China’s
chemicals and polymers demand.
The chemicals companies that started planning
for this outcome 12 years ago will be in
extremely strong positions.
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.
26-May-2023
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