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INSIGHT: Spotlight on carbon footprint, Scope 3 emissions to intensify on road to net zero

NEW YORK (ICIS)–Scope 1 and 2 emissions are the ‘easy’ parts to address on the road to net zero greenhouse gas (GHG) emissions – reducing the emissions you produce (Scope 1) and the emissions from the energy you consume (Scope 2). The heavy lifting will come from Scope 3 emissions – all the rest that come from upstream and downstream that indirectly impact the value chain. Scope 3 is the hardest to both control and measure but will also have the greatest impact on overall emissions reductions. For the upstream part, a key aspect is ensuring the raw materials you buy, including the way they get to you, are also low carbon or carbon neutral. That is where substantial momentum is building. Chemical companies are increasingly being asked by customers about the carbon footprint of their products, which not only takes into account the direct emissions emitted to make that product and the energy required, but the carbon footprint of the raw materials used to make it. Regulatory pressure on Scope 3 emissions disclosures is building as well – particularly in Europe and the US. BROADENING OF INTEREST IN CARBON FOOTPRINTSSwitzerland-based Clariant is seeing a broadening of its customer base seeking carbon footprints of the products they buy. “Even six months ago I would have said consumer-facing customers are more likely to be asking for product carbon footprints but we’re seeing it now across all industries,” said Richard Haldimann, chief technology and sustainability officer at Clariant, in an interview with ICIS. “For tenders that are going into purely industrial applications and where you might think that the product carbon footprint is not going to play a significant role, we still have customers asking for this, for us to participate in a tender,” he added. Clariant aims to cut Scope 1 and 2 greenhouse gas (GHG) emissions by 40% and Scope 3 emissions by 14% by 2030 – targets validated by the Science Based Targets initiative (SBTi). It is one of the few chemical companies that have outlined a Scope 3 emissions target. Source: Clariant Germany-based Covestro in March announced a target of achieving net zero Scope 1 and 2 GHG emissions by 2035, with a 60% reduction by 2030. The company plans to set targets for Scope 3 emissions some time in 2023. Scope 3 emissions comprise about 80% of Covestro’s CO2 footprint. “Our biggest lever to reduce emissions is the inputs [Scope 3], along with the process energy [Scope 2],” said Thomas Toepfer, chief financial officer of Covestro, in an interview with ICIS. “If you want to be a relevant player, especially in Europe and the US, you have to move towards CO2 reductions or you will not be an accepted corporate citizen. We want to be at the forefront,” he added. SCOPE 3 THE LARGEST PART OF EMISSIONS PICTUREOn the journey to net zero GHG emissions, measuring and reducing Scope 3 emissions is critical as it is by far the largest part of the overall emissions picture. “For manufactured products, typically 60-80% of the total emissions will be Scope 3. When you start addressing Scope 3, you’re addressing the biggest part of your emissions,” said Arne Kaetelhoen, co-founder and CEO of life cycle assessment (LCA) company Carbon Minds, in an interview with ICIS. For chemical companies, Scope 3 typically represents the majority of total emissions. US-based Dow estimates its 2021 Scope 1 emissions were 28.3m tonnes of carbon dioxide (CO2) equivalent and Scope 2 emissions were 5.7m tonnes. That compares to estimated Scope 3 emissions of 77.6m tonnes, or 70% of the total. Of Scope 3, which includes upstream as well as downstream emissions, over 50% was from purchased goods and services. Dow had collected climate data from around 100 suppliers, representing 31% of its 2020 raw materials spend, and is targeting engagement with around 350 suppliers in 2022 and 500 in 2023, asking these suppliers to disclose carbon emissions data and reduction plans. The company plans to use the data to improve the accuracy of measuring its own Scope 3 emissions along with its ability to take action and track progress toward its emissions reduction goals. Dow is targeting a 15% reduction in net carbon emissions by 2030 from a 2020 baseline en-route to net zero by 2050. The magnitude of the challenge in Scope 3 is evidenced by the fact that very few chemical companies have outlined targets for these emissions thus far. They have predominantly focused on goals for reducing Scope 1 and 2 emissions. Driving down Scope 1 and 2 emissions to net zero is itself a big challenge, requiring substantial capital expenditures (capex). Dow plans to allocate around $1bn/year in capex – about a third of its total capex budget – to decarbonising its plants from now through 2050. Companies running world-scale crackers such as Dow will require significant capex to get to net zero. Other companies producing mostly specialties, intermediates and engineering plastics may need less. Covestro, which produces polyurethanes, polycarbonate and coatings materials, in March announced it will spend €250-600m by 2030 in a bid to achieve net zero Scope 1 and 2 emissions by 2035. Of course, chemicals companies’ Scope 1 and 2 emissions become part of their customers’ Scope 3 emissions through the products they sell. FOCUS ON SUPPLIER CARBON FOOTPRINTSMeasuring and comparing carbon footprints of raw materials and products is a monumental challenge and critical for chemical companies to meet the sustainability goals of their customers. ICIS recently partnered with Carbon Minds to launch Supplier Carbon Footprints, which provides carbon emissions data for 71 bulk chemicals and plastics by supplier, plant and region on a global basis. “This is a huge step forward for chemical companies in managing Scope 3 emissions. It will provide the information to create supply chains with lower climate impacts and find the right suppliers to achieve this goal,” said Kaetelhoen from Carbon Minds. As companies see the climate impact of their supply chains and compare suppliers’ carbon footprints, “changing just one supplier could make an immediate and significant difference to Scope 3 emissions”, said Alison Jones, strategy director at ICIS. Companies can also engage existing suppliers and help them implement sustainability initiatives, Kaetelhoen pointed out. For companies looking to quantify and reduce their Scope 3 emissions, getting a more complete picture by product and actual plant location is vitally important. “It’s always the life cycle perspective, including the entire upstream supply chain. For example, if you look at a polymer, the production process uses energy and has some direct emissions – together, this would be Scope 1 and 2,” said Kaetelhoen. “But the far bigger part of the emissions picture will be upstream Scope 3 – how the input materials for this polymerisation process are produced, the oil or gas that comes out of the ground and the transportation in between. The sum of these emissions is what we call the carbon footprint of this product,” he explained. Ultimately, these chemicals and polymers and their carbon footprints flow downstream to end market consumers, including brand owners and fast moving consumer goods companies (FMCGs) that are becoming hyper-focused on carbon impact. “If you look at the entire life cycle, the emissions of your supplier are your emissions. If the end-consumer facing company decides they need to improve this and has market power, everyone in the supply chain has to do it, because if there’s only one weak spot in the supply chain, the end product will still have a lot of emissions,” said Kaetelhoen. Chemical companies seeking to stay relevant through the next decade must be able to evaluate their suppliers’ carbon footprints as well as benchmark their plants and products versus competitors globally. “The status quo is that this data for many chemicals is typically only available on a country average level. The problem is that in the same country you might have the dirtiest producer and the cleanest producer in the world sitting right next to each other. In this case, the country average can be almost meaningless. This is what we are changing,” said Kaetelhoen. There can be wide ranges in the carbon footprints of the same chemicals, depending on process technology as well as feedstock. “If you compare not only the most emission-intensive producer, but also the average producer to the cleanest producer, it’s a substantial difference across all the chemicals that we cover,” said Kaetelhoen. CHALLENGES IN CALCULATING SCOPE 3 EMISSIONSAnother challenge in evaluating Scope 3 emissions is that companies use different methodologies and data sources. Often primary data (from suppliers) is not readily available. “We can now imagine hundreds of companies starting to calculate their carbon footprints. Some have specialised people and others don’t. At the moment, it’s a huge mess. People use different technology, different methodologies, different data sources. And right now, primary results are not comparable,” said Kaetelhoen. The data from Supplier Carbon Footprints, while secondary data, is methodologically consistent, allowing for fair comparisons, he pointed out. Carbon Minds also plans to adapt its carbon footprint model to new low-carbon process technologies as they are implemented. “Our aim is to always model the current status of the chemical industry as precisely as possible. If in the future a non-negligible amount is produced based on a certain new technology, we need to keep up with it and include the impact,” said Kaetelhoen. BASF, CLARIANT MAP OUT CARBON FOOTPRINTSHighlighting the importance of measuring carbon impact, the world’s largest chemical company – Germany-based BASF – has completed a massive project to measure carbon footprints for its entire product portfolio. The company uses 20,000 raw materials to make 45,000 chemicals produced in 700 plants around the world. The analysis includes the carbon used right up the chain to the exploration, production and refining of oil and conversion to naphtha or other upstream chemical feedstocks. BASF has developed a Product Carbon Footprint (PCF) tool to show customers how they can reduce their Scope 3 carbon footprint through the use of products made, for example, with recycled feedstocks or green energy. In June, BASF announced a range of chemical intermediates with carbon footprints well below the global market average. The company aims to help its supply chain as well as competitors develop a consistent approach to carbon measurement for a level playing field. It is sharing its proprietary PCF digital solution and methodology to third parties active in software through licensing agreements. “Although there are standards, there is room for interpretation of the standards. There is uncertainty about how you allocate emissions – for example when multiple products emerge from the same process – so if we want to benchmark companies we need more standardisation,” said Jan Schoeneboom, team lead, lifecycle assessment at BASF, in an interview with ICIS last year. Ultimately, he believes, a consistent algorithmic allocation will be required for every company that participates in carbon data exchange along the value chain, based on consensus methodology. “We realise we are quite a leader in this area of product carbon footprint quantification, but it will not be any good for us if we just keep this for ourselves. This is because the measurements will not be comparable, and hence, not useful along the value chain,” said Schoeneboom. After providing carbon footprint transparency to customers since earlier this year, BASF is now working with them to develop tailor-made low carbon and net zero carbon products. In March, BASF and Henkel announced an initiative to replace fossil carbon feedstock with renewable feedstock for most products in Henkel’s European Laundry & Home Care and Beauty Care businesses over the next four years. Fossil feedstock for around 110,000 tonnes/year of ingredients will be substituted with renewable feedstock using BASF’s certified biomass balance approach, resulting in the avoidance of around 200,000 tonnes of CO2 emissions, according to the companies. Clariant in April concluded a project to calculate its own product carbon footprints which includes Scope 3 plus its own Scope 1 and 2 emissions mapped onto the products. It is now working to make this information available to its customers to help them calculate their own Scope 3 emissions, said Haldimann. The accuracy of the carbon footprints of the products naturally relies on the accuracy of the carbon footprints of the raw materials. “As is the case for the whole chemicals industry, we still have a lot of gaps. The databases are only covering a fraction of the chemicals,” Haldimann pointed out. Clariant has product specific carbon footprints for at least 97% by weight of all the raw materials included in its products, he noted. While methodologies may differ, transparency for customers is critical. “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 Liam McCarroll, director of sustainability at US-based chemical distributor Univar Solutions, in an interview with ICIS. “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. IMPORTANT TO START NOWWhile not all information is available today to fully measure Scope 3 emissions, it is still important to get ahead of what is no doubt going to be a big priority for customers as they work to meet their sustainability goals. “There are a significant number of challenges remaining for an accurate measurement of Scope 3 emissions, but it doesn’t mean that we should not work towards reducing our Scope 3 already with what we have,” said Haldimann. “We are fully aware and are working to improve the quality of Scope 3 data, but we believe that it’s critical and mandatory that we work with what we have and start now rather than wait until we have the highest precision,” he added. Thus far there is no common agreement on how to best measure Scope 3 emissions in the chemicals industry, he pointed out. The second part of ICIS' in-depth look at carbon footprints in the chemicals sector will be published on Thursday. Insight article by Joseph Chang Additional reporting by Will Beacham For more information on Supplier Carbon Footprints launched by ICIS in partnership with Carbon Minds, visit here Thumbnail picture source: Shutterstock


India’s 2025 hydrogen output goal needs $360m government investment

MUMBAI (ICIS)–India needs to build 25 scalable green hydrogen projects and five national hydrogen hubs by 2025 for energy security and would require $360m in financial support from the government, according to the India Hydrogen Alliance (IH2A), The proposed 25/25 National Green Hydrogen Hub Development Plan is being pushed by IH2A, a coalition of firms, with Indian petrochemical major Reliance Industries Ltd (RIL), steel major JSW Steel and US-based Chart Industries – global manufacturer of equipment used in the hydrocarbon and industrial gases industries – as lead members. NITI Aayog, a public policy think tank of the Indian government is also a member of the IH2A. The plan focusses on creating green hydrogen projects and hubs that can grow to gigawatt-scale in three years. Twelve industrial decarbonisation projects in chemicals, refinery and steel industries; three heavy-duty transport projects; three hydrogen blending projects in city gas distribution (CGD) networks; and seven waste-to-hydrogen municipal projects would be built under the plan. Five states – Gujarat and Maharashtra in western India and Karnataka, Kerala and Andhra Pradesh in southern India -– were identified as potential hubs for the projects. At these hubs, multi-sectoral demand for green hydrogen can be produced and used without building expensive new infrastructure in the next three years, according to IH2A. As part of the plan, IH2A proposes building a green chemicals and ammonia fertilizer hub in Gujarat producing 8,000 tonnes/year of green hydrogen. The Bellary-Nellore belt spanning the two states of Karnataka and Andhra Pradesh can be developed as a green steel and chemicals corridor producing 5,000 tonnes/year of green hydrogen, the industry body stated. The government’s $360m capital outlay would go into electrolyzers and equipment for the green hydrogen projects, it added. In a separate report, the Indian government think tank, the NITI Aayog has proposed that by 2030, the refinery and fertilizer sectors should be mandated to use 50% and 100% green hydrogen, respectively. The report – Harnessing Green Hydrogen: Opportunities for Deep Decarbonisation in India released on 30 June – has proposed that the government should set up hydrogen corridors and provide grants for the production, storage and export of green hydrogen. In February, India announced a target of producing 5m tonnes/year of green hydrogen by 2030. The Indian government is currently in the process of holding consultations with stakeholders and is expected to launch a comprehensive green hydrogen mission which could announce purchase obligations for various industries, according to media reports. Focus article by Priya Jestin


OPEC secretary general Mohammad Sanusi Barkindo dies

MADRID (ICIS)–OPEC’s secretary general Mohammad Sanusi Barkindo died late on Tuesday in his home country of Nigeria, the crude oil producing cartel said on Wednesday. On Tuesday, Barkindo had delivered a speech to the Nigeria Oil and Gas (NOG) conference in Abuja, Nigeria. A spokesperson for OPEC confirmed to ICIS Barkindo’s passing at the age of 63. OPEC, headquartered in Vienna, published a post on social network Twitter at 8:06 local time on Wednesday: “OPEC Secretary General, Mohammad Sanusi Barkindo, passed away yesterday [Tuesday] in his home country Nigeria. “He was the much-loved leader of the OPEC Secretariat and his passing is a profound loss to the entire OPEC family, the oil industry and the international community.”


Video: Asia PVC spot supply to outpace demand in the near term

SINGAPORE (ICIS)–Watch ICIS  Editor Jonathan Chou discuss current developments in Asian PVC market and its outlook. Asia’s spot prices on general downtrend since late April Asia to see improved spot availability despite upcoming turnaround Demand may remain muted Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.


BLOG: China 2022 PE demand: latest data point towards a 2% contraction as confusion over outlook builds

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 has not 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 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.


PODCAST: UK chemicals fighting Four Horsemen of the Apocalypse – CIA CEO

LONDON (ICIS)–The UK chemicals industry is battling the quadruple challenges of Brexit, COVID-19, the cost of living crisis and the war in Ukraine, according to Stephen Elliott, CEO of UK trade group the Chemical Industries Association. UK chemicals facing Four Horsemen of the Apocalypse: Brexit, COVID-19, cost of living crisis, war in Ukraine UK no longer has access to Horizon Europe programme with EU scientists UK suffering academic brain drain Disagreement over Northern Ireland protocol threatening free chemicals trade Around 60% of UK chemicals exports go to EU, 75% imports from EU UK chemical exports to EU are recovering Consultation on extending UK REACH registration deadline published today Main deadline may be delayed from October 2023 to October 2026 CIA wants to diverge from “worst excesses” of future EU REACH developments UK chemicals CEOs report that it is more difficult now to pass on energy price increases to customers Signs that previously robust demand is now faltering UK CEOs expect sales to fall in Q3 2022 for the first time since 2020 Interruptions to German chemical supply could impact UK supply chains In this Think Tank podcast, Will Beacham interviews Stephen Elliott, CEO of the CIA. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here. Read the latest issue of ICIS Chemical Business.


PODCAST: Global weak demand for IPA, Asia exports becoming less attractive

LONDON (ICIS)–The isopropanol (IPA) market is seeing weak demand across regions, resulting in little interest in Asian import volumes despite the increase in trade flow between Asia and Europe earlier this year. Europe IPA report editor Nick Cleeve speaks to Asia-Pacific editor Julia Tan and US editor Larry Terry about global market conditions and the key influences on this commodity. * Podcast recorded 29 June before European propylene July contract price settled at decrease of €120/tonne.IPA is a solvent used in many industrial and consumer products and as an extractant. Applications include cosmetics, personal care products (hand sanitizers), de-icers, paints and resins, pharmaceuticals and inks and adhesives.


Canada’s Inter Pipeline commissions PP plant

TORONTO (ICIS)–Canadian midstream energy company Inter Pipeline has successfully commissioned a 525,000 tonne/year polypropylene (PP) plant at its Heartland Petrochemical Complex (HPC) complex in Alberta province, it said in an update on Tuesday. The PP plant has been producing pellets since late June, using polymer grade propylene (PGP) from a storage cavern at the company's Redwater olefinic fractionator in Alberta. HPC includes a propane dehydrogenation (PDH) unit, due to start up in Q3. PGP from the PDH unit will be the primary source of feedstock for the PP plant. The feedstock options from both the storage cavern and on-site PGP production would ensure “exceptional reliability” for customers, Inter Pipeline said. It did not comment on investment costs. Thumbnail shows rope made out of polypropylene. Image by Shutterstock.


VIDEO: Naphtha market to remain weak through summer

LONDON (ICIS)– Senior analyst Ajay Parmar explains how increased refinery runs during a period of poor demand has weakened the naphtha market. Petrochemical margins remain weak, especially in Asia Naphtha gasoline blending demand expected to remain poor over summer Strong refinery margins lead to increased runs, add excess naphtha supply to market


VIDEO: Crude markets to remain tight over the summer

LONDON (ICIS)–Senior analyst Ajay Parmar highlights how strong refinery margins and lack of OPEC+ supply capacity will support the oil market over the summer Record refined product prices will support oil demand in the near term Rising interest and persistently high inflation will soften oil demand growth from Q4 onwards Most OPEC+ producers are at or near maximum capacity, leaving few options for supply increases in the coming months


India June exports up 17%; trade deficit widens to record $25.6bn

MUMBAI (ICIS)–India’s merchandise exports in June rose by 16.8% year on year to $37.94bn, while strong prices of oil and other commodities led to a 51% surge in imports, causing the south Asian country’s trade deficit to widen to a record high. June trade deficit stood at $25.6bn, more than double the $9.61bn recorded in the same period last year, according to data from the Ministry of Commerce, as coal and oil imports surged amid soaring global prices and depreciation of the Indian rupee. In the April-June 2022 quarter, total merchandise exports grew 22.2% year on year to $116.7bn. Merchandise exports have been on a downtrend since March 2022 due to weakening demand from the US and EU. In June, shipments of petroleum products continued to surge, logging a 98% year-on-year increase to $7.83bn. This was due to the continued high exports of auto fuel by domestic refiners to recover the high costs of crude oil imports. Exports of organic and inorganic chemicals grew by 5 % to $2.8bn, while exports of pharmaceutical products fell by 1.3% to $1.99bn. Manmade fabrics and yarn exports dropped by nearly 23% to $952m, while plastics exports fell by 23.2% to $752m. Meanwhile, the south Asian country’s merchandise imports in June stood at $63.6bn, up by 51% year on year, while total imports during the April-June quarter showed a 47.3% increase to $187bn. Imports of crude petroleum and products for June rose 94.2% by to $20.7bn on high crude oil prices and the continued weakness of the Indian rupee. Organic and inorganic chemicals imports for the month increased nearly 37% to $3.4bn; while those of artificial resins and plastic materials were up by 46.7%% at $2.2bn. India continues to face a power crisis due to coal shortage with coal imports in June jumping to $6.4bn from $1.9bn in June 2021. In a bid to slow down the devaluation of the rupee against the US dollar, the Indian government recently hiked the import duty on gold to 15% from 10.75%. Gold imports for June nearly tripled to $2.61bn in June from $969m in the same period last year. India also imposed export tariffs on petrol, diesel, and jet fuel of Rs6/litre, Rs13/litre, and Rs6/litre respectively, on 1 July. Indian Finance Minister Nirmala Sitharaman said that the profits made by some oil refiners on exporting fuel at the expense of domestic supplies had prompted the government to introduce the export tax on petrol, diesel and jet fuel. The export tariffs will be reviewed every two weeks, to calibrate them if the need arises, Sitharaman had said on 2 July. The government is watchful and mindful of the impact of falling rupee on the country's imports, Sitharaman said, adding that India was facing a difficulty in importing crude oil at affordable prices. A weak rupee would have an immediate impact on imports, which would become expensive, she said, adding: "A lot of our industries depend on some essential goods to be imported upon for their production." The rupee was trading at Rs79.06 against the US dollar on Tuesday afternoon.


Shell to continue Singapore Group I base oil production; mulls Group II plant

SINGAPORE (ICIS)–Anglo-Dutch energy major Shell has overturned a previous decision to cease operations at its Group I base oil plant in Singapore amid supply concerns, a company spokesperson told ICIS on Tuesday. “Shell will extend operation of its Group I base oil manufacturing plant within the Pulau Bukom Manufacturing Site in Singapore, a strategic hub for Shell’s lubricant operations," the spokesperson said. The plant has a 380,422 tonne/year or 7,400 bbl/day capacity, according to ICIS data. "This decision is driven by Shell’s intent to safeguard the supply security for its customers in a market environment with increased supply disruption risks," the Shell spokesperson said. In May last year, Shell had announced that it will cease operations at the Singapore Group I base oil plant from July 2022 amid a global decline in demand for the product. Meanwhile, the energy giant is mulling building a Group II base oil plant in Singapore. "The Group II base oil plant is pending final investment decision (FID) and we will share more details in due course," the spokesperson said. In February, Shell listed the planned Singapore Group II base oil plant in its list of pre-FID projects. Group I and Group II base oils are interchangeable for some downstream applications. Global Group II capacity is projected to overtake Group I capacity by 2025 to become the dominant base oils group, according to ICIS Supply & Demand Database. Group II capacity growth has accelerated since 2019 following a slew of start-ups and expansions in China, while Group I capacity is expected to decline slightly due to upcoming closures such as Japan ENEOS’s Negishi unit in October 2022. Additional reporting by Matthew Chong Click here to read the Ukraine topic page, which examines the impact of the conflict on oil, gas, fertilizer and chemical markets.


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