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Here is the energy crisis writ large. The chart, from bp as it released its latest Statistical Review of World Energy this week, shows the sharp rebound in energy consumption as COVID-19 restrictions eased and global economic activity recovered. In this week’s podcast, ICIS analysts Jady Ma and Lucy Shuai discuss the recent developments and outlook of China’s polypropylene (PP) market amid concerns over COVID-19. Asia’s acrylic acid (AA) and acrylate esters spot discussions were under pressure, with market sentiment bearish amid a downtrend in China. The China domestic market was sluggish, with the economy impacted by earlier lockdowns. Meanwhile, the US ethylene market is seeing ample supply, lower margins but decent derivative demand heading into Q3. Updated on 1 July 2022 On this topic page we analyse the impact of coronavirus and oil price dynamics on chemical markets and bring together the latest news reported by ICIS.  Scroll down to see the latest interactive graphics, podcasts and videos.  Click here to register for regular updates to help you navigate these challenging times. LATEST HEADLINES (Last updated at 09:00 GMT on 1 July 2022) Mideast petchem market sentiment bearish on weak demand By Felicia Loo 01-Jul-22 11:30 SINGAPORE (ICIS)–Sentiment in the Middle East petrochemical markets is bearish, as demand is tepid against a backdrop of ample supply. The soaring inflation rates have led to a reduced purchasing power, weakening buyers’ appetites. Asia AA and acrylates largely lower; sentiment softer on China downtrend By Li Li Chng 29-Jun-22 21:20 SINGAPORE (ICIS)— Asia’s acrylic acid (AA) and acrylate esters spot discussions were under pressure, with market sentiment bearish amid a downtrend in China. PODCAST: China PP to face uncertainties in H2 ’22 amid high costs By Lucy Shuai 29-Jun-22 17:47 SINGAPORE (ICIS)–ICIS analysts Jady Ma and Lucy Shuai discuss the recent developments and outlook of China’s polypropylene (PP) market. PODCAST: Europe and Middle East isocyanates demand slows By ICIS Editorial 29-Jun-22 17:09 LONDON (ICIS)–Isocyanates Europe editor Zubair Adam discusses current demand and supply market trends for Europe with isocyanates Middle East editor Damini Dabholkar. US ethylene begins Q3 with ample supply, eroding margins By John Donnelly 29-Jun-22 05:45 HOUSTON (ICIS)–The US ethylene market is seeing ample supply, lower margins but decent derivative demand heading into Q3. INSIGHT: Energy demand rebound at a time of crisis, bp stats show By Nigel Davis 28-Jun-22 23:39 LONDON (ICIS)–Here is the energy crisis writ large. The chart, from bp as it released its latest Statistical Review of World Energy on Tuesday, shows the sharp rebound in energy consumption as COVID-19 restrictions eased and global economic activity recovered. PODCAST: Isocyanates face high costs, squeezed margins in H2 – ICIS analysts By Morgan Condon 28-Jun-22 21:02 LONDON (ICIS)–The isocyanates market is faced with steep production costs and weakening demand across downstream sectors, presenting the industry with a darkening outlook. European PVC shows signs of lengthening on demand, global trends By Chris Barker 28-Jun-22 17:29 LONDON (ICIS)–European polyvinyl chloride (PVC) contract prices for June have settled with rollovers to decreases compared to May, with indications that the outlook for availability has lengthened compared to earlier in the year. Asia ADA trade flows punch above weight in May By Josh Quah 24-Jun-22 13:57 SINGAPORE (ICIS)–Northeast Asia adipic acid (ADA) markets logged a large trade surplus in May, according to import-export data captured by ICIS Supply and Demand Database. Europe capro, nylon 6 markets face slow summer demand By Marta Fern 24-Jun-22 00:35 LONDON (ICIS)–European caprolactam (capro) and nylon 6 markets are facing persistent soft demand, which could weaken further in the coming months while the costs of production are on the rise. VIDEO: Asia MEG may face more challenges in H2 2022 By Judith Wang 23-Jun-22 17:16 SINGAPORE (ICIS)–Watch ICIS Senior Editor Judith Wang discuss current developments in Asia’s monoethylene glycol (MEG) market and its outlook. China’s NBR import offers plummet with domestic losses, soft demand By Ai Teng Lim 23-Jun-22 15:56 SINGAPORE (ICIS)–China’s import offers for acrylonitrile butadiene rubber (NBR) are at year-low levels, as sellers tried to chase deals with wider discounts. Tight tonnage and robust demand push Asian chemical tanker market, sentiment bullish By Luffy Wu 23-Jun-22 14:37 SINGAPORE (ICIS)–The Asian chemical tanker shipping market saw overall upward pressure amid high global bunker levels and regional tonnage tightness, drained by robust long-haul activities and clean petroleum product (CPP) markets. PODCAST: How may China respond to looming global energy crisis? By Bee Lin Chow 23-Jun-22 13:32 SINGAPORE (ICIS)–ICIS analysts discuss how China may respond to what seems like a looming global energy crisis. US SBR demand healthy from tyre sector, but tyre imports growing By Amanda Hay 23-Jun-22 05:34 HOUSTON (ICIS)–US styrene butadiene rubber (SBR) demand healthy for tyres, but North American tyre manufacturers face growing tyre imports. INSIGHT: Don’t stifle chemicals now in the face of energy uncertainty and climate reform – UK industry By Nigel Davis 22-Jun-22 22:20 LONDON (ICIS)-The UK chemical industry is now 6% larger than at the onset of the pandemic, chief executive of the country’s sector trade group, the Chemical Industries Association (CIA), said last week. PODCAST: China benzene prices hit 8-year high; cost and supply support to persist By Yoyo Liu 17-Jun-22 10:37 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Yoyo Liu discuss the recent developments and outlook of China’s benzene market. Asian BD buying slows as domestic China tumbles By Ai Teng Lim 17-Jun-22 09:48 SINGAPORE (ICIS)–Sentiment was duller in this week’s spot talks for Asian butadiene (BD) imports, as buyers retreated after the domestic China market suffered heavy losses early-week. PODCAST: Europe PET speculation rife in face of diverging upstream dynamics By Caroline Murray 17-Jun-22 00:07 LONDON (ICIS)–Mixed xylene prices are skyrocketing higher than PX prices and concerns over negative margins mount. PX June contract talks are ongoing. By contrast, MEG supply remains lengthy and demand has been low, pressuring down spot prices. The June MEG contract price also remains unconfirmed. INSIGHT: PET, politicians and TikTok – the industry’s battle for our attention By Matt Tudball 16-Jun-22 22:17 BRUSSELS (ICIS)–The battle for our attention is a fierce one. In the post-COVID-19 world, as employees we feel a sense of email overload and Zoom fatigue while as a consumer we face a constant bombardment of media telling us what we should be doing, thinking, eating, drinking and watching. Asian petrochemicals to rebound in June amid bumpy recovery – ICIS analysts By Ann Sun 16-Jun-22 12:12 SINGAPORE (ICIS)–Asian petrochemical market is expected to be generally firmer in June given higher crude prices and easing lockdowns in China, according to a latest Price Forecast by ICIS analysts. PODCAST: Global base oils supply and refinery margins to stay under pressure in H2 By Eashani Chavda 15-Jun-22 22:35 LONDON (ICIS)–ICIS editors Eashani Chavda, Samantha Wright and Amanda Hay are joined by ICIS analyst Mike Connolly to discuss the latest developments in Europe and US base oils markets. Key topics include: supply shortages, shifting trade flows, refinery margins and additive shortages. PODCAST: Chemical distributors see inflation hurting demand, downturn in prospect By Will Beacham 14-Jun-22 22:03 BARCELONA (ICIS)–Rising inflation is now hurting demand for chemicals, raising the prospect of a broad economic downturn later this year or in 2023, according to chemical distributors. China PE finds support from stimulus policies; eyes on demand performance By Sijia Li 14-Jun-22 14:57 SINGAPORE (ICIS)–China’s domestic polyethylene (PE) market entering June has found support from stimulus policies and costs. Looking ahead, players are focusing on demand recovery, with the easing of lockdowns in multiple regions amid decreasing COVID-19 infections. India domestic LAB prices rise; China demand improves as lockdowns ease By Clive Ong 10-Jun-22 11:53 SINGAPORE (ICIS)–India’s domestic prices for linear alkylbenzene (LAB) have spiked on the back of rising costs, but some players expect some headwinds with the monsoon season kicking off. Monsoon season to hamper India demand China demand sees uptick as COVID-19 restrictions ease China’s competitively priced cargoes still available in Asia (including India), Mideast Oil prices drop more than $1/bbl on partial lockdowns in China By Nurluqman Suratman 10-Jun-22 11:34 SINGAPORE (ICIS)–Oil prices fell more than $1/bbl on Friday on renewed demand fears after fresh COVID-19 lockdown measures were announced in China, but tight supply concerns capped losses. INSIGHT: Sustainability to remain the key driver for Asia recycled polymers By Arianne Perez 10-Jun-22 11:00 SINGAPORE (ICIS)–Capacity expansions of recycled polyethylene terephthalate (R-PET) and recycled polyethylene (R-PE) faced delays amid the onslaught of COVID-19, particularly last year, but overall growth of Asia polymers recycling is set to continue with sustainability as the main driver. PODCAST: European ACN market keeps a close eye on ammonia and propylene By ICIS Editorial 09-Jun-22 18:35 LONDON (ICIS)–The European acrylonitrile (ACN) market has good supply and some softening demand, but costs remain high. In this latest podcast, ICIS deputy managing editor Jane Massingham (Europe) talks to managing editor fertilizers, Julia Meehan and senior editor on olefins, Nel Weddle about the ammonia and propylene markets and what to expect in the months ahead. PODCAST: Asia benzene, styrene short-term outlook to hinge on demand-supply balance By Jasmine Khoo 09-Jun-22 11:35 SINGAPORE (ICIS)–Asia’s benzene prices have hit an all-time high on strong performance from the US amid the turnaround season, while styrene price gains have been lagging behind due to weak performance in the styrenics sector. In this podcast, Jasmine Khoo speaks with editors Angeline Soh and Trixie Yap on benzene and its key downstream styrene monomer (SM) and styrenics sectors. China PP exports may fall on narrow price gap with SE Asia By Lucy Shuai 08-Jun-22 17:09 SINGAPORE (ICIS)–With the lifting of COVID-19 lockdowns in China, as well as stimulus policies to boost the economy, China’s polypropylene (PP) prices have rebounded since late May. However, as PP prices have fallen in the southeast Asian market, China’s PP exports may fall in June due to a narrow price gap. VIDEO: China PP demand set to improve in June as restrictions ease By Lucy Shuai 08-Jun-22 16:21 SINGAPORE (ICIS)–Watch industry analyst Lucy Shuai share her insights on the rebound seen in China’s polypropylene (PP) market following the easing of strict COVID-19 curbs in the country. Asia Q3 biodiesel market sentiment to stay weak on poor European demand By Felicia Loo 07-Jun-22 12:13 SINGAPORE (ICIS)–The third-quarter market sentiment for southeast Asian palm methyl ester (PME) biodiesel is expected to remain weak amid poor buying requirements from Europe, a key importing region for southeast Asian material. Germany’s chemicals hit hard by China lockdowns, automotive sentiment improves – Ifo By Jonathan Lopez 03-Jun-22 16:49 MADRID (ICIS)–Lockdowns in China to contain the coronavirus pandemic have had a major impact on export-intensive industrial sectors in Germany such as chemicals, research institute Ifo said on Thursday. Asia MEG rebounds on higher crude, demand recovery expectations By Judith Wang 03-Jun-22 10:50 SINGAPORE (ICIS)–Asia’s monoethylene glycol (MEG) weekly prices rebounded during the week amid stronger crude values and expectations of demand improvement due to easing lockdowns in Shanghai. Global chem production fell 2.9% year on year in April By Stefan Baumgarten 03-Jun-22 01:57 HOUSTON (ICIS)–Global chemical production volumes in April fell 4.1% month on month and 2.9% year on year, and they were off 0.4% year on year for the first four months of 2022, ICIS senior economist Kevin Swift said in a report on Thursday. China methanol to face ample supply, mixed demand performance By Doris He 01-Jun-22 21:05 SINGAPORE (ICIS)–China’s methanol market is expected to face overall ample supply from domestic and overseas producers in the near term, while demand may be mixed from different downstream sectors. INSIGHT: China, India to be main drivers of PVC supply, demand in Asia By Jonathan Chou 01-Jun-22 11:00 SINGAPORE (ICIS)–The coronavirus pandemic has changed how we live our lives, upending also supply and demand dynamics for polyvinyl chloride (PVC) and its related markets. Over two years on since the pandemic hit, much of Asia has attempted “living with COVID-19” in 2022, with some starting to treat it as an endemic disease. China SM margins likely to be squeezed by higher costs, weak demand By Tina Zhang 31-May-22 11:55 SINGAPORE (ICIS)–Margins in China’s styrene monomer (SM) market are expected to continue to be squeezed in the near term, in view of rising feedstock benzene values and weak demand. China petrochemical market sentiment upbeat on Shanghai recovery plan By Fanny Zhang 30-May-22 13:27 SINGAPORE (ICIS)–China’s domestic petrochemical market sentiment is upbeat at the start of the week, with demand expected to recover when the two-month lockdown in Shanghai is lifted in June. Asian epoxy market stable, Chinese domestic market outlook ambiguous By Luffy Wu 27-May-22 11:54 SINGAPORE (ICIS)–The Asia epoxy resins market saw overall stable market sentiment while buyers exhibited improved price acceptability compared with in April. Asia nylon market cautious as Shanghai inches towards June reopening By Josh Quah 26-May-22 16:16 SINGAPORE (ICIS)–The lockdowns have been damaging for Asia’s nylon market, with prolonged demand loss particularly felt in the CFR (cost & freight) China market. There have been recent signs, however, that the worst may have passed in the lead up to the reopening of key cities in China. PODCAST: Weak demand from lubricants, China’s Group II base oil import margins to be negative By Whitney Shi 25-May-22 14:09 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Whitney Shi discuss the recent developments and outlook of China’s base oil market. INSIGHT: China crude consumption softens amid COVID-19 lockdowns By Pearl Bantillo 25-May-22 12:00 SINGAPORE (ICIS)–China’s consumption of crude has softened as industrial production is hit by pandemic-related restrictions in place since February, with no sign of the government giving up on its zero-COVID policy. INTERVIEW: China emergence from lockdowns, stimulus to recharge auto and construction – Covestro CFO By Joseph Chang 25-May-22 05:17 NEW YORK (ICIS)–China’s easing of and potential emergence from COVID-19 lockdowns along with government stimulus should spark a major recovery in its automotive and construction markets, the chief financial officer (CFO) of Germany-based Covestro said on Tuesday. Asian MMA peaks in May; outlook pending clarity amid easing restrictions in China By Li Li Chng 24-May-22 13:47 SINGAPORE (ICIS)–Asian methyl methacrylate (MMA) peaked in May, after increasing around 17% since H2 February. Market players are awaiting clearer picture on China’s lifting of COVID-19 lockdowns and restrictions. PODCAST: Europe PE and PP update and outlook By Ben Lake 23-May-22 23:42 LONDON (ICIS)–Senior editor, Vicky Ellis, and market editor, Ben Lake, join forces to discuss a distinct change in the polymers market. The frenzied activity in March and April has given way to a far more relaxed sentiment in May – on the buy-side, at least. Vicky and Ben give their outlook for June and take a look at events that could shake up the markets again. INSIGHT: China PE demand to rebound from June, but slow road ahead By Amy Yu 23-May-22 18:27 SINGAPORE (ICIS)—China polyethylene (PE) demand is expected to firm as COVID-19 containment measures ease, but the pace of recovery remains hindered by remaining lockdown measures. Asia BDO under pressure as tepid demand persists, economic uncertainty By Clive Ong 20-May-22 12:17 SINGAPORE (ICIS)–The Asian butanediol (BDO) market remains under downward pressure from prevailing soft demand in the region. Buying momentum could remain slow in the near term from economic headwinds from the Ukraine conflict and Russian sanctions, as well as the lockdown in China which looks set to ease. INSIGHT: US supply chain problems may continue for two more years By Al Greenwood 19-May-22 21:00 HOUSTON (ICIS)–US supply-chain problems could persist for another two years because new problems continue to pop up. Since the pandemic started more than two years ago, problems continue to compound problems, said Eric Byer, president of the National Association of Chemical Distributors (NACD). He participated in a conference call with the ACC. Markets sell-off drives down Europe chemical stocks By Tom Brown 19-May-22 19:28 LONDON (ICIS)–European chemical company stocks fell on Thursday amid a wider market sell-off as below-expectations US retail financials and high domestic inflation drive fears that falling consumer demand could result in a recession. PODCAST: China’s MMA demand recovery to lag despite Shanghai reopening By Olivia Dai 19-May-22 15:06 SINGAPORE (ICIS)–ICIS analyst Jady Ma and Olivia Dai discuss the recent developments and outlook of China’s methyl methacrylate (MMA) market. Asia fatty alcohols near-term demand may pick up on China lockdown easing By Helen Yan 18-May-22 12:14 SINGAPORE (ICIS)–Improved Chinese demand may lend support to Asia’s fatty alcohols market, as China gradually eases its COVID-19 lockdown restrictions. This is amid expectations that Shanghai, a major port and key financial and production hub, is likely to open up fully from 1 June. Increase of PP, PE imports from China in Pakistan due to lockdowns By Nadim Salamoun 17-May-22 23:29 DUBAI (ICIS)–Chinese polypropylene (PP) and polyethylene (PE) breakbulk and containerized cargoes have been increasingly available in the Pakistani market, directly competing with Gulf Cooperation Council (GCC)-origin material. The situation could be attributed to the increased lockdowns in China, which have negatively impacted domestic demand. PODCAST: Slowing China will hurt global economy, chemicals By Will Beacham 17-May-22 21:29 BARCELONA (ICIS)–As lockdowns, the Common Prosperity policy and lacklustre export markets cut growth in China’s economy, the global chemical industry should prepare for negative demand growth in 2022. Easing of lockdown provides limited support for Asian IPA By Julia Tan 17-May-22 19:31 SINGAPORE (ICIS)–Asian isopropanol (IPA) markets saw slightly mixed indicative prices in the week, although market sentiment continues to be weak. Market sources underlined on Tuesday that demand was not likely to pick up until mid-June. Despite news that Shanghai lockdowns would begin to ease in early June, a number of market participants were fairly sceptical that this would provide significant support to the Asian IPA markets. Asia petrochemical supplies rise as China exports grow amid weak yuan By Fanny Zhang 13-May-22 16:13 SINGAPORE (ICIS)–Asia’s petrochemical markets are being weighed down by growing supply, with China exporting more products – spurred by the weak yuan and poor domestic demand amid lockdowns. The Chinese yuan (CNY) lost nearly 7% against the US dollar from the start of April to 13 May, with the exchange rate at CNY6.79 to $1, data from the People’s Bank of China (PBoC) show. The yuan depreciation has caused a narrowing or closing of arbitrage windows for moving cargoes into China, while opening up better export opportunities. With a weaker yuan, the trading route “out of China” may stay for a while, traders said. The country’s domestic demand is significantly dented by tight restrictions on people movement and business activity following a strong resurgence of COVID-19 infections, consequently, exerting strong downward pressure on Asian markets. Asia fatty acids remain soft on China lockdowns and Indonesia export ban uncertainty By Helen Yan 13-May-22 15:05 SINGAPORE (ICIS)–Asia’s fatty acids market is likely to remain soft in the near term, due to the economic slowdown in China and the expected removal of Indonesia’s export ban on crude palm oil (CPO) sometime in May. China lockdowns are weighing on demand in Asia. “There is too much uncertainty, with the market not sure when China will lift its lockdowns and when Indonesia will lift its export ban on palm oil,” a regional supplier said. Market players are adopting a cautious stance and buyers are reluctant to commit to any large spot purchases, given the uncertainty and expectations that the export ban is likely to be removed soon. Container rates from China to US down by 20% since Shanghai lockdowns began By Adam Yanelli 13-May-22 05:23 HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to both US coasts have fallen by between 13-20% since COVID-19-related lockdowns began in Shanghai in March, and with China holding fast to its zero-COVID-19 policy, the trend could continue. The impact of the lockdown measures on China’s available exports has been significant, leading to the major ocean shipping alliances announcing cancellations of at least a third of their scheduled sailings out of Asia through early June. US considers dropping Chinese tariffs to fight inflation – Biden By Al Greenwood 11-May-22 06:09 HOUSTON (ICIS)–The administration of US President Joe Biden is discussing whether removing the tariffs imposed on Chinese imports would lower inflation, he said on Tuesday. The US imposed tariffs on billions of dollars’ worth Chinese imports – including plastics and chemicals – amid allegations of unfair trade policies on the part of China, which included unfair technology transfers and theft of intellectual property. INSIGHT: Can US, global economies avoid recession amid a whirlwind of headwinds? By Joseph Chang 12-May-22 01:10 NEW YORK (ICIS)–Can the US and major economies around the world avoid a recession in the face of what can only be called a whirlwind of headwinds? In the US, the Federal Reserve is moving to tame the inflation beast and engineer a soft landing for the economy. Fed chair Jerome Powell opened the FOMC (Federal Open Market Committee) press conference on 4 May by addressing the American people directly. “Inflation is much too high, and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down. We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses,” said Powell. Asian spot TiO2 to come under pressure from weak Chinese yuan in early May By Joson Ng 06-May-22 11:17 SINGAPORE (ICIS)–A depreciating Chinese currency against the US dollar could start to have an impact on the Asian titanium dioxide (TiO2) spot market starting in May. Turkey PE and PP prices stable, market quiet amid public holidays By Samantha Wright 05-May-22 23:53 LONDON (ICIS)–Turkish polyethylene (PE) and polypropylene (PP) values were steady this week due to a lack of activity following a public holiday. Europe ABS, SAN import challenge likely to persist By Yashas Mudumbai 05-May-22 19:20 LONDON (ICIS)–Acquiring imports from Asia for European styrene acrylonitrile (SAN) and acrylonitrile-butadiene-styrene (ABS) market players remains a challenge amid ongoing logistical constraints. There has been some tightness in supply due to reduced imports from Asia. INSIGHT: EU Russia oil ban will further drive global remapping of trade By Tom Brown 05-May-22 19:11 LONDON (ICIS)–The European Commission’s proposed ban on Russian oil imports by the end of the year is more likely to drive further remapping of global trade flows than drive a spike in crude prices, but the pain could be more substantial in refined products markets. Oil rises more than $1/bbl on supply worries; China woes cap gains By Nurluqman Suratman 04-May-22 12:54 SINGAPORE (ICIS)–Oil prices rose by more than $1/bbl on Wednesday on concerns over tight supply after industry data showed a drop in US crude and fuel inventories last week, but worries over poor manufacturing data from China capped gains. PODCAST: Europe chemicals could face short periods of gas rationing this winter By Will Beacham 03-May-22 22:12 BARCELONA (ICIS)–European chemical companies may be forced to cut gas use for short periods this winter if demand is very high and supply crimped, though steps are being taken to avoid this scenario. Margin pressure to persist in European ethanolamines market By Cameron Birch 03-May-22 21:33 LONDON (ICIS)–Two main questions dominate the European ethanolamines market as participants make forecasts for the rest of Q2 and into Q3. First, is the question of continued uncertainty linked to feedstock costs, and, second, is the uncertainty that surrounds the demand picture across the continent. ANALYSIS AND RESOURCES

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The China Beige Book, the independent economic analysis service, has found that: China services and manufacturing businesses saw a slowdown in the second quarter from the first quarter, reflecting the prolonged impact of COVID controls. · Orders for domestic consumption and overseas export mostly fell during Q2. Orders for textiles and chemicals processing were among the worst affected. This is in line with what our contacts have been saying and what the ICIS polyolefins data appears to be indicating. Based on the January-May numbers 2022, the outlook for full year polypropylene (PP)) and high-density polyethylene (HDPE) demand seems to have deteriorated. We worry that China’s options for turning its economy around in 2022 are narrowing. At least in low-density PE (LDPE),  as we discuss in, the outlook hasn’t got any worse. This is small consolation, as it had already become bleak before May. Our latest worst-case scenario is that LDPE demand may decline by 8% this year. LDPE stands out from the other grades of polyolefins because China CFR LDPE price spreads over CFR Japan naphtha costs have held up very well this year. In PP, HDPE and linear-low density PE (LLDPE), spreads have hit record lows. Why LDPE appears to be different is because supply has been reduced, thereby keeping prices relatively high, because ethylene vinyl acetate (EVA)/LDPE swing plants have swung to more EVA production as EVA demand seems to be booming. The EVA price premiums over LDPE are at or close-to record highs, depending on the ICIS price assessment. And LDPE film price premiums over C4 LLDPE film have also reached record highs in China in 2022. The two resins compete for many of the same end-use markets. LLDPE supply is much longer. So, it is not just the economy that LDPE players in China have to worry about, but these other dynamics as well. This may be the third year in a row of negative LDPE demand growth in China because of these other factors – and now an economy that could see a recession. Meanwhile, as with the other grades of polyolefins, LDPE exporters to China need to be also concerned about a potential significant fall in China’s LDPE imports. Our worst-case scenario sees China’s net imports in 2022 some 500,000 tonnes lower than in 2021. We are sorry it is so gloomy, and, hopefully, conditions will pick up. But hope is not a strategy. The chemicals industry industry needs to prepare for worst-case outcomes. 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.

SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) rose to 51.7 in June from 48.1 in May as factory activity recovered on the back of easing regional COVID-19 lockdowns, the Chinese media firm said on Friday. A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction. The June reading was the first expansion in fourth months and marked the strongest rate of increase seen since May last year, Caixin said in a statement. Chinese manufacturers registered the first expansion of output since February at the end of the second quarter. The rate of growth was the quickest seen since November 2020, with a number of firms linking the rise to the return to more normal operations and reopening of production lines as COVID-19 restrictions were eased. Total new orders likewise returned to growth in June, though the rate of increase was only modest. New export business also rose modestly. “Covid lockdowns and other restrictions eased in June, facilitating a gradual recovery in manufacturers’ operations. Supply and demand were on the rise, with supply improving more,” said Wang Zhe, senior economist at Caixin Insight Group. “Restoration in the post-pandemic era remained the focus of the current economy, yet its base was far from strong. Deteriorating household income and expectations caused by a weak labor market dampened the demand recovery,” Wang added. China’s official manufacturing PMI released on 30 June also showed expansion at 50.2 in June. The Caixin PMI mostly tracks smaller and private firms while the official PMI covers larger, state-owned companies.

HOUSTON (ICIS)–The National Weather Service is tracking three disturbances in the US Gulf and western Atlantic, one of which could bring large amounts of rainfall to the Houston area over the next two days. Source: National Hurricane Center (NHC) Disturbance No 1 is generating showers and thunderstorms near the south Texas coast and is forecast to move slowly northward and inland, meteorologists at the National Hurricane Center (NHC) said. Slow development of the system remains possible as it is still over water, meaning there remains a chance it could strengthen into a named storm. “Regardless of development, heavy rain is possible along portions of the Texas coast for the next two days,” the NHC said. A flash flood watch is in effect for southeast Texas, including the greater Houston area, which is home to several chemical plants, refineries and terminals that export oil, fuel, liquefied natural gas (LNG) and natural gas liquids (NGLs) such as ethane and liquefied petroleum gas (LPG). The Office of Emergency Management of Deer Park, Texas, said the watch is in effect through Friday night. Disturbance No 2 is located several hundred miles east of the Windward Islands and is producing disorganised showers and thunderstorms. The NHC only gives a 10% chance of this disturbance becoming a hurricane in the next five days. The third disturbance, referred to by the NHC as potential tropical cyclone No 2, is likely to generate heavy rainfall across Colombia today before moving west across Nicaragua and Costa Rica by Friday. Areas of life-threatening flash flooding and mudslides are expected. Hurricane conditions are possible within the watch area along the Caribbean coast of Nicaragua late on Friday. There is limited chemical production in the region, according to the ICIS Supply and Demand Database, with some caustic soda and chlorine produced in Costa Rica. The Gulf of Mexico hosts several offshore oil wells, accounting for 15% of the nation’s crude production, according to the Energy Information Administration (EIA), and federal offshore natural gas production in the Gulf accounts for 5% of total US dry production. The Atlantic hurricane season runs from 1 June to 30 November.

HOUSTON (ICIS)–The Fertilizer Institute (TFI) said it was praising the bipartisan leadership efforts of Congressmen Ralph Norman and Jim Costa for their work in organising a letter to the Surface Transportation Board (STB) regarding poor rail service. The trade group, which representing the domestic fertilizer industry, said ongoing failures by the railroad companies are having a negative impact on the industry and their movement of vital products, which as a result is have consequences for the overall agricultural sector. “With over half of all fertilizer moving by rail, we are grateful for the leadership of Congressmen Norman and Costa in bringing the issue of inconsistent rail service to the attention of the STB,” said Corey Rosenbusch, TFI President and CEO. “Their dedication to working with all stakeholders will help ensure that essential crop nutrient inputs reach farmers when and where they need them.” TFI said fertilizer shipments rely heavily on rail to reach farmers, but imposed restrictions, along with skeleton crews and railroad-led initiatives such as precision-scheduled railroading have forced fertilizer shipping reductions and potential production delays. “Fertilizer is attributable to half of all crop yields. With the world leaning on US farmers now more than ever before to feed our growing population, we must ensure strong yields and our food security,” Rosenbusch said. “Fertilizer must reach farmers in a timely manner and crop harvests also need to get to their destinations, including the kitchen table.” The letter to the STB was signed by 51 members of Congress and it noted that during the late April STB hearing on rail service a variety of industries, including grain and feed and fertilizer producers, reported severe service problems with most of the Class I rail carriers. It highlighted that TFI had said recent service problems, and imposed restrictions have forced shipping reductions and potential production delays. This not only can restrict supply but can raise costs on the farmers who rely on this necessary input for 50% of their crop yields. Warning about future and further consequences, the STB was told that by placing onerous restrictions on shippers without consulting customers that railroads may “run the risk of jeopardising family farms and increasing the cost of food for consumers.” The letter closed by stressing to the STB that “rail service must be improved, and we appreciate the STB’s attention to this matter. While we respect the challenges of operating a major railroad, communication is essential when taking steps to make the necessary improvements, including the imposition of service curtailments.” “As we work toward solutions to meet the ongoing supply chain challenges, carriers and the STB should also be mindful of essential commodities and our country’s best public interest.”

HOUSTON (ICIS)–US Koch Ag & Energy Solutions (KAES) announced it has successfully completed the acquisition of a 50% interest in Jorf Fertilizers Company III (JFC III) from fertilizer producer OCP thereby establishing a 50/50 joint venture between the two companies. JFC III owns and operates an industrial facility producing up to 1.1m tonnes/year of phosphate-based fertilizers. Koch said that through its advantaged location within the Jorf Fertilizer Complex, the world’s largest phosphate fertilizer production platform, JFC III benefits from a unique relationship with OCP’s broader industrial operations at the complex. “Our long-term partnership with Koch is reaching a new stage through the establishment of our Moroccan-based joint venture, which confirms our common goal to provide farmers with high quality and reliable Moroccan phosphate fertilizers,” said Mostafa Terrab, OCP Group Chairman and CEO. Koch said the acquisition marks Koch’s first substantial investment on the African continent. “KAES and OCP have a long-standing relationship, and we are excited to continue growing our relationship as we work together to secure JFC III’s long-term success,” said Mark Luetters, Koch Ag & Energy Solutions president.

LONDON (ICIS)–ICIS editors Eashani Chavda, Matthew Chong and Amanda Hay discuss their latest market insights with ICIS analyst Mike Connolly after an eventful World Base Oils and Lubricants Conference. Key topics discussed include: Asian arbitrage, record prices in Europe, the US hurricane season, refinery margins and sustainability.

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Some signs of stability creeping into regional markets Flake buyers see shift in sellers’ attitudes for July Hot weather, more tourism will help bottle supply

LONDON (ICIS)— The ICIS Power team presents the key drivers for Q3 ‘22 in the main electricity markets in Europe. (All graphs in the video are linked below) ICIS TTF front month likely to remain at new highs during Q3 ’22 Germany German 2022 power load falls to well below the norm German gas storages filling up fast UK UK becomes net power exporter from May NBP expected to retain a significant discount to TTF through the third quarter France Projected nuclear availability in Q3 will gradually rise French run-of-river hydropower generation stays below 2017-2021 average Italy Italian reservoir stocks remain below norms Italian gas plants poised for high margins in Q3 ’22 CEE/SEE Romanian and Serbian hydro stocks below 2021 levels Hungarian Q3 ’22 premium over Germany starts to widen Iberia Gas-for-power up year on year as hydro, wind outputs drop Iberian spot power prices remain high year on year

NEW YORK (ICIS)–US-based chemicals distributor Univar Solutions is working towards providing carbon footprints for the products it distributes to provide transparency to customers and enable them to meet sustainability goals, an executive said. “Ultimately, we need to meet our customers’ needs, so as we move forward it will be a mixed method approach of working with suppliers to get the most accurate data possible… but also looking at specific product families and product groups where that data is not currently available,” said Liam McCarroll, director of sustainability at Univar Solutions, in an interview with ICIS. “The conversations are not the same across every industry or with every supplier, but we certainly see much more information than even 24 months ago,” he added. The carbon footprints of the products Univar sources and distributes are not only part of its own Scope 3 emissions but part of its customers’ Scope 3 emissions. Scope 1 emissions are those that come directly from operations, Scope 2 from energy purchased and Scope 3 from purchased raw materials, logistics upstream and downstream, waste management and other factors throughout the value chain. MAPPING OUT SCOPE 3 EMISSIONSUnivar has mapped out Scope 3 emissions for its entire supply chain for the very first time, with results disclosed in its 2021 ESG report released in June 2022. Of its 10.1m tonnes of CO2 equivalent Scope 3 emissions in 2021, 9.9m tonnes, or 98%, came from purchased goods and services, using a life cycle analysis approach. For Univar to reduce its Scope 3 emissions, collaborating with suppliers will be key. “I don’t think there’s any getting away from the fact that with 98% coming from products, it will be largely working with the supply chain, much in the way we do with our Supplier Code of Conduct,” said McCarroll. Univar Solutions’ Supplier Code of Conduct stipulates that suppliers “actively pursue reduction of direct and indirect greenhouse gas (GHG) emissions in line with recognised standards”, among a number of other requirements. Univar itself aims to reduce Scope 1 and 2 emissions by 20% by 2025, 40% by 2030 and achieve net zero direct emissions by 2050. While no target for Scope 3 emissions has been announced, it is clearly an area of focus. “[Scope 3] is an exciting area. As that 98% [from products] comes down, the rest of our Scope 3 will of course become more relevant. So we will take a portfolio approach, working with other service providers and looking at our waste and resource use because that all plays back into our Scope 3 emissions,” said McCarroll. DEALING WITH INCOMPLETE DATAThe product carbon footprint side of Scope 3 presents a big challenge as there is often incomplete data as well as data from different methodologies. “We always prefer primary data… but it’s also about recognising that not all primary data is created the same. We should also be aiming for transparency – understanding methodologies and really working with suppliers and customers to support that transparency,” said McCarroll. “It’s important to them, as well as important to us. It’s not just about the number – it’s about how that number is achieved,” he added. Univar will work with suppliers to put forward products that contribute to more sustainable solutions, he noted. PART OF A HOLSITIC APPROACHReducing Scope 3 emissions and helping customers do the same is part of a holistic approach to sustainability. “Carbon footprint is very important, but we also want to ensure that we are leveraging our portfolio of existing products, services and practices to support our customers’ sustainability journeys, and sustainability is more than just carbon footprinting,” said McCarroll. “By understanding this product framework, we’re helping specific areas of that customer’s journey. For some customers and suppliers, their priorities differ. We want to be a distributor that is capable and ready to help them on their journey because not everyone’s looks quite the same,” he added. While Univar is not offering carbon footprints for all the products it distributes, as not every supplier provides that information, it is sharing select data with customers and working towards a standardised approach. “We have multiple engagements and projects with different customers where we are supplying data but right now it’s part of what we are building out… It’s not part of our standardised offering but what we’re moving towards,” said McCarroll. Credibility, reliability and transparency of data on carbon footprints is critical. “One of the most important things is making sure that it’s aligned with a methodology – not just an organisation saying, ‘here’s a number and we don’t want to back it up’,” said McCarroll. “If we want to bring people on the journey with us, it has to be credible and reliable but there are multiple methods in calculating product carbon footprints. Not all of them will get you the same answer but broadly will take you in the right direction,” he added. While Univar is not stipulating which particular methodologies should be used, they should be transparent and credible. “[We want to] make that information as clear and useful as possible to the customer because ultimately, we will use it in our emissions reporting but also want to make sure it doesn’t end there – that we’re able to support the full supply chain,” said McCarroll. TAKING EMISSIONS OUT OF TRANSPORTATIONAside from purchased materials or products, another important part of Scope 3 emissions is in transportation. On this front, Univar aims to transition its light and heavy fleet of vehicles over time. “We’re aiming to transition a very significant portion of our light fleet… by 2025, increasing the number of electric vehicles (EVs),” said McCarroll. Its light fleet includes passenger vehicles for employees, as well as some pickup trucks used for deliveries. The heavy fleet is comprised of trucks used to distribute most of its products. “Diesel will remain a significant part of [the heavy fleet] but we can do much more with it, so we’re looking at telematics, driving behaviours, eco-training and more streamlined trailers. We also have in the US a number of heavy duty EVs that we’ll be looking to introduce towards the end of this year,” said McCarroll. In May, Univar saw its first electric truck – the Nikola Tre – roll off Nikola’s assembly line. And in June, Univar successfully completed its pilot programme with the truck along with Nikola’s mobile charging trailer. That truck is now part of Univar’s fleet. “The initial trail worked well. The drivers were very responsive and as excited about it as we were,” said McCarroll, who also noted that Univar is exploring options with other electric truck manufacturers. Univar is also looking towards compressed natural gas, biodiesel, fuel additives and hydrogen fuel cells for its heavy fleet. Interview article by Joseph Chang