Globalising LNG

As competition for LNG grows between buyers in Asia and Europe, timely and transparent insights on global prices are increasingly essential. Facing a complex global market, International market players forward-looking intelligence to adjust to the realities of the newly interconnected global gas industry.

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The LNG landscape is being redefined. Competition from buyers in Asia and Europe is growing as new players enter the market, intensifying price volatility. ICIS supports your decision making by providing a comprehensive view of historic, current, and future global market conditions. Make confident trading and investment decisions with a range of trusted European gas price benchmarks including the ICIS TTF.

The ICIS TTF Early Day enables Asian market participants to trade with the same assurance and on the same terms as their European peers. ICIS transparent prices, now accessible at the end of the day in Asia will support market development, fostering liquidity and hedging opportunities for those operating in the LNG marketplace.

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New Price Assessment: ICIS TTF Early Day

As competition for LNG grows between buyers in Asia and Europe, timely and transparent insights on global prices are increasingly essential. Facing a complex global market, Asian companies need forward-looking intelligence to adjust to the realities of the newly interconnected international gas industry. ​

Now, ICIS is adding a new price assessment to make the ICIS TTF gas benchmark more reflective of Asian market trading. ICIS transparent prices, now accessible at the end of the day in Asia will support market development, fostering liquidity and hedging opportunities for those operating in the LNG marketplace. ​

The ICIS TTF Early Day enables Asian market participants to trade with the same assurance and on the same terms as their European peers.​

Adapt to the new market realities with confidence and purpose using the ICIS TTF Early Day.​

Speak to an ICIS expert to learn more.

Latest news

China's Inner Mongolia Yitai Coal suspends construction of $2.4bn coal-to-chemicals plant

SINGAPORE (ICIS)–China’s Inner Mongolia Yitai Coal Co has temporarily suspended construction of a 1m tonne/year coal-to-chemicals plant in Xinjiang amid higher costs. The project is owned by Yitai Yili Energy, a 90.2%-owned subsidiary of the company. "Under the background of high cost of coal for coal chemical products, large fluctuations in international oil prices and significant uncertainty in taxes and fees, continuing to construct large-scale coal chemical projects based on the existing product structure exposes the company to relatively high economic risks," the Hong Kong-listed firm said in a bourse filing on 8 February. The yuan (CNY) 16.1bn ($2.4bn) project being built at the Yitai Yili industrial park has production capacities for alkylbenzene, high-carbon alcohols, high-quality light hydrocarbon, fischer-tropsch wax, normal C10-14, white oil, liquid paraffin, liquefied petroleum gas (LPG) and other products, as well as the by-production of mixed alcohol and sulphur. As of 31 December 2022, the project was still under construction and has not been put into operation, the company said. "Since the second half of 2020, the price of raw coal has reached new highs. The percentage of raw coal cost in the total cost of the Company’s existing coal chemical project has increased from 35% in 2018 to approximately 60% at present," Inner Mongolia Yitai Coal said. Reduced investment in fossil energy as the world pivots toward carbon neutrality and a further tightening of energy supply caused by the Russia-Ukraine conflict will continue to affect the coal markets in the medium- to long-term. "On the one hand, carbon neutrality has become a global consensus, the capital expenditure of fossil energy has decreased significantly, and more capital expenditure has been invested in renewable energy or non-fossil energy," it said. Meanwhile, the Russia-Ukraine conflict that broke out in late February 2022 has had a huge impact on the global supply chain and exacerbated the shortage of energy supply. "It is expected that the situation of tight international coal resources and high prices will continue in 2023," the company said. Inner Mongolia Yitai Coal is involved in the mining, production, transport, and sale of coal and coal-based products in China. It is a subsidiary of conglomerate Inner Mongolia Yitai Group Co, whose businesses include real estate development. ($1 = CNY6.79) Thumbnail image: China Inner Mongolia Railway Coal Transportation – 23 Nov 2021 (Source: Xinhua/Shutterstock) Click here to read the Ukraine topic page, which examines the impact of the conflict on oil, gas, fertilizer and chemical markets. Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.

09-Feb-2023

Lotte Chemical forms clean ammonia consultative body with RWE and Mitsubishi Corporation

HOUSTON (ICIS)–Lotte Chemical announced it has formed a clean ammonia global consultative body with RWE, a German energy company, and Japan’s Mitsubishi Corporation, with a goal to cooperate and jointly develop a large-scale clean ammonia production and supply chain in Asia, Europe and US. As part of this move the three companies on 7 February signed a joint study agreement (JSA) which will see the entities engage in joint research for the production and export project of clean ammonia, both blue and green, at the Port of Corpus Christi in Texas, where the largest energy export terminal in the US is located. The companies noted that the Corpus Christi region has abundant natural gas reserves and is easy to utilise renewable energy, which is advantageous for the production of clean ammonia. The project aims to produce up to 10m short tons of clean ammonia in stages, starting with the first production in 2030, and export ammonia to Asia and Europe through joint shipment facilities. “We expect that companies with strengths in each field will contribute to revitalising the global hydrogen ammonia economy and carbon neutrality by carrying out joint research for the production and supply of clean ammonia,” said Hwang Jin-gu, Lotte Chemical head of the hydrogen energy business unit. “For the success of the company, we will maximise our core competencies, such as production, distribution, utilisation, and technology development, and further strengthen our global network.”Lotte Chemical said it is carrying out a global clean hydrogen and ammonia production project in Sarawak, Malaysia, and is expanding its infrastructure network with Japanese trading companies such as Itochoo, Sumitomo, and Mitsubishi for timely distribution of hydrogen and ammonia. In addition, it has entered into a cooperative relationship with US-based Tallgrass to introduce clean ammonia into the country, and is strengthening cooperation with Korea Midland Power, South-East Power, and East-West Power to expand ammonia hybrid power generation infrastructure.

08-Feb-2023

USDA seeing higher ending stocks for corn and soybeans in February WASDE

HOUSTON (ICIS)–The US Department of Agriculture (USDA) is seeing higher ending stocks for both corn and soybeans according to the February World Agricultural Supply and Demand Estimate (WASDE) report. The agency said this month’s 2022-2023 US corn outlook is for there to be lower corn utilised for ethanol and overall larger ending stockpiles of the crop. Corn used for ethanol is being reduced 25m bushels, based on data through December from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of January. The USDA said that with no other use changes, corn ending stocks are up 25m bushels from last month. The season-average corn price received by producers is unchanged at $6.70/bushel. For soybeans, the WASDE is showing lower soybean crush and higher ending stocks as well. Soybean crush is being forecasted at 2.23bn bushels, which is down 15m bushels from last month based on lower domestic soybean meal disappearance and a higher soybean meal extraction rate. The USDA said that with soybean exports unchanged, ending stocks are forecasted at 225m bushels, up by 15m bushels. The season-average soybean price is forecast at $14.30/bushel, up 10 cents from last month. The next WASDE report will be released on 8 March.

08-Feb-2023

Masdar, Verbund sign MoU for renewable hydrogen production in Central Europe

LONDON (ICIS)–Masdar and Austrian utility Verbund have signed a memorandum of understanding (MoU) to explore renewable hydrogen generation for the Central European market, it was announced 8 February. The MoU was signed in Abu Dhabi and the two companies will cooperate on developing pathways to produce and export renewable hydrogen to Central Europe, specifically Austria and southern Germany. Masdar announced in 2022 that the company established a renewable hydrogen business with the goal of producing 1 million tonnes/year by 2030. The company is also involved in several renewable hydrogen projects globally, including a 2GW integrated offshore wind and renewable hydrogen project in Azerbaijan and the 2GW renewable hydrogen project in the Suez Canal Economic Zone. According to Verbund, over 95% of the electricity generated by the company comes from hydro-electricity power plants, which are supplemented by both wind turbines and solar farms. According to Austria's Hydrogen Strategy, the country is seeking to have 1GW of electrolyser capacity installed by 2030, and are following renewable hydrogen only with both low carbon hydrogen and hydrogen produced from nuclear are "not sustainable" and "do not constitute as climate-neutral hydrogen."

08-Feb-2023

India’s RBI hikes policy rate again, raises GDP growth forecast to 7%

MUMBAI (ICIS)–India’s central bank hiked its benchmark interest rate to 6.50% – sixth time it has done in the current fiscal year – and raised its GDP growth projection for the fiscal year ending March 2023 to 7% from 6.8%. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) raised its repo (repurchase) rate by 25 basis points (bps) to 6.50% while cutting its retail inflation forecast for the current fiscal year to 6.5% from the 6.7% it forecast in December 2022. The repo rate is the rate at which the RBI lends money to commercial banks. The central bank has now raised the repo rate six times since its first unscheduled hike in May. The RBI also projected India’s GDP growth at 6.4% for financial year 2023-24. In the latest economic survey released on 31 January, the Indian finance ministry forecast GDP to grow between 6% and 6.8% in 2023-24. “The global economic outlook doesn’t look as grim now as it did a few months ago. Growth prospects in major economies have improved while inflation is on a descent though inflation still remains well-above the target in major economies,” RBI Governor Shaktikanta Das said. The RBI has forecast retail inflation for the January to March 2023 quarter to be around 5.7% while expecting core inflation to remain high. The Consumer Price Index (CPI) based inflation or retail inflation, which RBI factors in while fixing its benchmark rate, stood at 5.72% in December 2022, which was the lowest recorded since January 2022. In line with its price stability mandate, RBI has a target of keeping inflation at between 2%-6%. The central bank has cut its retail inflation projection to 6.5% for 2022-23 from the 6.7% projected in its December report. Inflation in financial year 2023-24 is projected at 5.3% with the first quarter (April-June) expected to see an inflation of 5%, second (July-September) and third (October-December) quarter inflation at 5.4% and fourth (January-March) quarter inflation at 5.6%. “While inflation is expected to moderate in 2023-2024, it is likely to roll above the 4% target," Das said. Though the Indian economy remains resilient, the outlook is clouded by geopolitical tensions, volatility in oil prices and weak global demand and this economic environment could be a drag on domestic growth, Das added. The RBI “will continue to maintain strong vigil on the evolving inflation outlook so as to ensure that it remains within the tolerance band and progressively aligns with the target”, he added. Focus article by Priya Jestin

08-Feb-2023

BLOG: A flood of PP no matter how what the 2023-2025 demand growth

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Even if China’s 2023 polypropylene (PP) demand growth were to be 14% – double our forecast – followed by 8% and 5% increases in 2024 and 2025, respectively, and if demand growth was higher than we expect in other regions, we would still see: Global PP capacity in excess of demand at 18m tonnes this year and at a 2023-2025 annual average of 17m tonnes. This would compare with the 8m tonne/year average in 2000-2022. The global operating rate would be at 82% this year and a 2023-2025 average of 83%. This would compare with the 2000-2022 average of 87%. The outcomes from our base-case growth forecasts would be, of course, be even worse: Capacity exceeding demand is forecast to be at 21m tonnes in 2023 and at a 2023-2025 average of 21m tonnes/year. This year’s operating rate would be at 79% and a 2023-2025 average of 80%. It doesn’t take a rocket scientist to conclude the following: Our industry has built way too much PP capacity, regardless of the likely strength of the economic recovery. We’ve been warning we would eventually be in this place since 2014. What applies to oversupply in PP also applies to polyethylene (PE), as we shall discuss later. 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.

08-Feb-2023

First Phosphate receives positive final phosphate assays results for Quebec project

HOUSTON (ICIS)–Mineral explorer First Phosphate announced it has received the remaining phosphate assay results which continues to demonstrate positive outcomes for its Begin-Lamarche project in Quebec. The company said the results showed multiple high grade surface grab samples with a phosphate grade of up to 18.96% and 6.81% grade for titanium for the project site located in the region of Saguenay-Lac-St-Jean. In addition, the current results target one at the project which contains what is described as rich and thick layers of phosphate rock which extends within the original strike zone. Together with earlier surface sampling and magnetic surveying, the company said a strike zone containing these rich phosphate rock layers can now be selected within the sector, with First Phosphate having now identified promising targets for the upcoming drill program. “Extended analysis of the Begin-Lamarche property continues to reveal some of the highest grade phosphate samples ever produced in the Saguenay-Lac-St-Jean region of Quebec,” said Peter Kent, First Phosphate President. “Igneous anorthosite comprises only about 1% of total global phosphate reserves. These deposits have the potential to be highly desirable for the production of LFP battery material because they are devoid of high concentrations of deleterious elements.”

07-Feb-2023

Insurable losses from Turkey earthquake could exceed $4bn – CoreLogic

HOUSTON (ICIS)–The devastating earthquake and aftershocks that struck near the Turkey-Syria border on 5 February caused insurable losses that could top $4bn, according to real-estate information firm CoreLogic. In its latest update on the disaster, Turkey’s Ministry of Interior Disaster and Emergency Management (AFAD) estimated that 4,544 people have died, with 26,721 injured. The earthquakes disrupted flows of oil in the region, including operations at the Ceyhan oil terminal in Turkey, despite the Kirkuk-Ceyhan and Baku-Tbilisi-Ceyhan pipelines remaining undamaged. Media reports indicate that the terminal has resumed operations. Reuters reported that an oil tanker, the Vallesina, berthed at the terminal to load Iraqi crude oil on Tuesday evening local time. CHEMICALS USED IN CONSTRUCTION The damage and efforts to rebuild can translate to increased demand for many chemicals and polymers that are used in the construction sector. The white pigment titanium dioxide (TiO2) is used in paints. Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA). Blends of aliphatic and aromatic solvents are also used to make paints and coatings. For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation. Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols. High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes. Unsaturated polyester resins (UPR) are used to make coatings and composites. Vinyl acetate monomer (VAM) is used to make paints and adhesives. Additional reporting by Eloise Radley and Al Greenwood

07-Feb-2023

Warmer-than-average start to 2023 causes EIA to lower natgas forecast

HOUSTON (ICIS)–The US Energy Information Administration (EIA) said natural gas prices at the Henry Hub should average around $3.40/mBTU in 2023, 47% lower than in 2022. A warmer-than-normal start to the year has reduced natural gas consumption to below average, the EIA said in its latest Short-Term Energy Outlook (STEO), released 7 February. “US natural gas inventories fell by less than our expectations in January because of the warmer-than-average weather. With more natural gas in inventory, we reduced our forecast for natural gas prices over the coming year,” said EIA Administrator Joe DeCarolis. “There is still a lot of uncertainty, including the possibility of extreme weather later this winter that could increase demand and temporarily slow down production, but those possibilities decrease as we approach spring.” Increased natural gas production and less demand has allowed US natural gas inventories to rise after a period of below-average levels. EIA expects natural gas inventories to remain above average through the summer. Other key takeaways from the February 2023 STEO forecast include: EIA expects US electricity generation to decrease 2% in 2023, with even larger reductions in coal-fired generation. Less electricity generation largely stems from reductions in consumption in the residential and industrial sectors. EIA expects that US coal exports will increase by about 2% in 2023 and 9% in 2024, largely to supply growing demand in Europe and Asia. Europe has been using more coal for electricity generation as the region looks to limit its consumption of natural gas from Russia. Russia and China remain sources of uncertainty in EIA’s STEO forecasts. Global demand for jet fuel has increased as China’s economy has opened up following pandemic lockdowns. Russia’s crude oil exports have largely gone unchanged since the EU instituted a ban on seaborne crude oil imports from Russia.

07-Feb-2023

PODCAST: Start of year chemicals uptick may be a false dawn

BARCELONA (ICIS)–Signs of slight improvement in production and demand in early 2023 may not be proof that a real recovery is underway for the global chemicals industry. ICIS data shows mild pick up in pricing, production More optimism in chemical industry But no strong evidence of uptick in demand Persistent weakness in construction, automotive, electronics Rising production may simply be inventory building Global economy hit first by energy price shock, now inflation, rising interest rates Prospect of persistent downturn Tepid GDP forecasts for 2023 Flood of excess polypropylene (PP) threatens global market In this Think Tank podcast, Will Beacham interviews ICIS Insight Editor, Nigel Davis, ICIS Senior Consultant Asia, John Richardson, and Paul Hodges, chairman of New Normal Consulting. 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. Read Paul Hodges' and John Richardson's ICIS blogs.

07-Feb-2023

HyCC selects engineering contractor and technology supplier for H2eron renewable hydrogen project

LONDON (ICIS)–The Hydrogen Chemistry Company (HyCC) has contracted both Kraftanlagen Energies & Services and Nel as the engineering contractor and technology supplier respectively for its H2eron renewable hydrogen project in the Netherlands. The H2eron plant, which will have a capacity of 40MW and is slated to produce its first hydrogen in 2026, is located in Delfzijl in the northeast of the country near the German border. Kraftanlagen has been contracted by HyCC for the front-end engineering design (FEED) of the plant, as well as an order having been placed by HyCC to Nel for the supply of the electrolysis stacks. The stacks will be Nel's atmospheric alkaline electrolysers and will produce renewable hydrogen from a combination of renewable power and water. The hydrogen that will be produced at the plant will be used by SkyNRG for the production of sustainable aviation fuel. A final investment decision (FID) is due on the project in 2024, with the environmental permit having already been received. The National Climate Agreement in The Netherland plans for 3-4GW of renewable hydrogen production capacity by 2030, with the country also seeking to forge international partnerships to import hydrogen and/or hydrogen carriers (such as ammonia) into its ports for easy distribution to several industrial clusters.

07-Feb-2023

INSIGHT: Chemicals 'the alpha and omega' of industry, driving need for Transition Pathway legislation

LONDON (ICIS)–The chemicals sector was described as “the alpha and the omega” of industry by an EU Commissioner last week who outlined some near-term targets as part of the EU Chemical Industry Transition Pathway. Director General of DG Grow for the European Commission, Kerstin Jorna, said there is a strong case for policy making in the chemicals industry, because of its scale and the sustainability challenges surrounding it. “It is like the alpha and omega, because it is at the beginning of all the substances that are being used and it is at the end when it is being recycled, so there is a policy case for the chemicals industry,” said Jorna in an interview with Cefic Director General, Marco Mensink. “At the same time, it is important to see the business case because it is an industry that is totally connected into global value chains, so we need to find a process where the policy perspective and the business perspective can meet.” In a year’s time, Jorna hopes the pathway has enabled headway on renewable energy at the factory gate, that there is increased access and a decline in price, as well as an increase in hydrogen (both for use as a fuel and a feedstock in chemicals processes). If there is an identifiable trend in 12 months’ time, this will encourage investment decisions on the manufacturing side, as energy availability and security remain prescient concerns for European producers. Cefic has recently changed its statutes so that the industry body can carry out projects, not just research and advocacy for its members, to tackle the many challenges facing the sector, but more information is needed to enable progress. “The available information on electricity around Europe is where we need much more information, as some companies want to electrify but there is no copper wire,” Mensink cited as an example. Ultimately, the course of action boils down to going to Member States and asking what the national plan is for the chemicals industry, and then using the Transition Pathway document to work out the future with unions and other stakeholders. “That is the philosophy for going to the Member States. It is not that a technology is good or bad…we need to go from primes and models to countries and clusters, and maybe in the end have company and regional pathways,” he added. By laying the groundwork this will allow for all-round de-risking – of supply chains, inputs and regulation to allow companies to scale up innovation. “We talk about raw materials in Europe, but what is really our European business case is innovation, so how do we scale that quicker? It will require cooperation between the public and private sectors,” said Jorna. Taking this action will not just encourage investment but will challenge the industry to think about how to upgrade skills in the sector, and benefit society more broadly. SINGLE MARKET PERSPECTIVEWhile the single market has previously been seen as a ‘big regulatory machine’ according to Jorna, and in its 30th year, and the transition pathway can be used as an opportunity to declutter some of the bureaucracy. “We see the single market is not only about removing barriers, it is about making sure that there are critical inputs available – chips or raw materials – and it is the execution of the single market,” she added. A key part of this is in shoring up supply chains, the significance of which have been highlighted in the wake of the pandemic and the Russian invasion of Ukraine. The challenge in rolling this pathway out across member states corresponds to the challenge of viewing the single market as one entity rather than a group of 27 economies. While engagement on a macroeconomic level has varied between nations, Jorna believes that the Commission holds some responsibility in coordinating the implementation of the transition pathway. Mensink cited that thinking about the single market in an holistic way would benefit European competitiveness, as from a US perspective, “the difference between Antwerp and Rotterdam is one gate.” BIGGER PICTUREMensink acknowledged that when the Green Deal was launched, no one realised the extent of regulations, with the four transitions tackling climate neutrality, circularity, the chemicals strategy for sustainability, and digitalisation. “This will be the start of a long journey for us with our members to explain what comes out of Brussels. We have just dropped the rock in the pond, the ripples have started to move, before it is out there,” he said. “We have said that if we accept the Green Deal, you need to trust us that we will make it workable over time, as the initial reaction is to say, ‘make it go away’.” The challenge for both Cefic and the EU Commission is looking at the issues from an aggregate level and seeing how this break down into every company’s perspective for the business case: inputs, skills, investments, and markets in the future. The transitions facing the chemicals sector is long lasting and will not be covered by the current investment cycle but will endure over the next five to ten business cycles, according to Jorna. By having a longer-term perspective, Mensink advised that sequencing measures in the right order could prevent short-lived investments – in a boiler for a chemistry that would disappear, for instance – it would provide clarity. The chemicals industry is the second sector after tourism to get the Transition Pathway treatment from the Commission, and the previous rollout has highlighted the need for shared databases to enable more efficient policy making. PUBLIC PRIVATE PARTNERSHIPBoth Jorna and Mensink were keen on the longevity of the Transition Pathway as a way of sustaining meaningful changes. Jorna said good policy making should make sense on the ground and from a company perspective, and this has sometimes been where communication has broken down between public and private sectors. The legislative guide aims to breakdown the overall transition into operational steps to enable coordination between regulatory timelines and company investments to see clearly what the next steps should be. While the incoming of a new Commission or government has previously disrupted progress towards long-term goals due to legislative change, Jorna stated that changes in unions or companies can also interrupt work towards these targets. “If we can own the Transition Pathway to shape our future on the basis that there will be enough room to innovate, that would be a good ambition to have,” she said. Insight by Morgan Condon

07-Feb-2023

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