Energy and chemicals consulting

Leveraging deep industry expertise to drive sustainable growth and innovation

Strategy & transactions advisory

Driven by the global shift towards cleaner energy and circular materials, sustainable practices are increasingly being adopted throughout the energy and chemical industries. With the shift towards low-carbon product life cycles, business operations and innovation are being fundamentally altered.

This transformation in both the business and regulatory landscape is challenging businesses to adapt without sacrificing competitive advantage, particularly in consumer sectors such as agriculture, textiles, automobiles, packaging, construction and personal care.

Lower your carbon footprint and improve resource and operational efficiency with specialist strategic consultancy. Our dedicated energy, chemicals and sustainability consultants specialise in corporate strategy and investment due diligence across Europe, the Middle East, Africa, Asia Pacific and the Americas. We advise on all aspects of strategic planning, from accessing recycling materials or implementing more sustainable product development, to gas monetisation, refining integration, hydrogen or M&A and project finance.

How we can help you

With our deep understanding of the key trends shaping energy, chemicals and sustainability we can guide you through every aspect of strategic planning, from early-stage development to new investments and asset evaluations.

Energy transition

How can the chemicals industry achieve climate neutrality?
What is the role of hydrogen in low-carbon chemicals?
Which feedstocks will support the energy transition?

Strategy

How can a country develop its petrochemical industry?
Which products will maximise value from local feedstock?
Is a strategy robust enough in different demand scenarios?

Sustainability

What is CBAM’s impact on industry competitiveness?
What are the carbon emissions per tonne of a product?
Which technology innovations will drive recycling advancements?

Transactions

What are the project risks and mitigants for lenders?
Is a target asset a risky acquisition?
What opportunities for value creation does a transaction present?

Value chain integration

What strategy will best monetise gas feedstock?
How can a refinery mitigate demand risks?
Which solution will maximise refinery-petrochemical integration?

Industry intelligence

What strategy will retain cost competitiveness in global markets?
Which regions offer optimal investment opportunities?
How will future trade patterns impact profitability?

Our leadership

ICIS consultants are industry leaders who have been advising key energy and chemicals stakeholders on the energy transition, sustainability, strategy, transactions, litigation and expert witness services over the last three decades.

To get in touch with the team, please email consulting@icis.com.

Tin Nguyen
Global Head of Consulting, London

Tin is a senior advisor and business leader to a broad range of global clients within the energy and chemicals industry, with a track record spanning more than 20 years. He has a MEng in Biochemical Engineering from University College London.

Stefano Zehnder
Vice President, Consulting, Milan

Stefano has over 35 years’ experience in refining and petrochemical feedstocks, and leads on energy transition projections and scenario modelling. He supports strategy development for energy and chemical majors and the lending community.

Dr. Nuno Faísca
Vice President Consulting, London

Nuno specialises in project finance and M&A, with a focus on technical and commercial due diligence, technology evaluation and strategy development. He holds a PhD in Chemical Engineering from Imperial College London.

Bala Ramani
Vice President, Consulting, Singapore

With a degree in Chemical Engineering and a Global MBA, Bala specialises in thought leadership and strategic decision-making in the petrochemical sector. He covers project screening, investment evaluation and strategic roadmaps, focusing on sustainability and plastics circularity.

Dr. Regan Hartnell
Principal, Consulting, Singapore

Regan designed ICIS’ price forecasting methodology, and specialises in supporting chemical majors and the lending community on due diligence and strategy development. He holds a PhD in Chemistry from QUT, Australia.

James Ray
Vice President, Consulting, Houston

James’ expertise spans supply chain, purchasing advisory, litigation & expert witness for chemical majors and financial institutions. He has a particular emphasis on plastics, sustainability and recycling.

Case studies

Here are a selection of case studies showcasing our consultancy expertise.

A European refinery wanted to evaluate strategic options along the energy and chemicals value chain, to mitigate the risks presented by the energy transition and sustainability policies, while increasing business resilience.

A global chemical association asked us to develop different pathways for the industry to achieve climate neutrality, factoring in uncertainty over future availability of key resources and the roll-out of alternative technologies.

A European recycling industry association engaged us to deliver several studies on collection, sorting and end-use applications of recycled plastics, exploring various scenarios within the announced EU legislative framework.

A Middle Eastern chemicals producer needed assistance in planning its next investment cycle to retain a competitive edge, focusing on proximity to primary consumption markets, with a clear understanding of costs and margins.

An Eastern European company with access to natural gas and regional refinery output partnered with us to develop an investment roadmap that would better monetise gas liquids and maximise value retention within the country.

An investment fund asked us to perform buy-side technical and commercial due diligence on a chemical recycling asset, determining an investment case against a backdrop of multiple technologies and routes under development.

Why use ICIS Consulting?

Single point of contact

Streamline processes with our specialised team combining a wealth of experience in the technical and commercial aspects of the energy and chemical industries. We work as one team to assess risks and opportunities for value creation.

Unrivalled industry intelligence

Gain a competitive edge, with accurate forecasting and strategic planning based on unparalleled industry expertise. ICIS has been a leader in chemical and energy industry intelligence for over 150 years.

Timely, in-depth insights

Act with confidence, knowing that our advice is based on daily, first-hand industry updates and analysis. Our global team of over 300 energy and chemical subject matter experts report on markets around the clock.

Local expertise across the globe

See the full picture across commodities, countries and regions with insights from our network of ICIS energy and chemicals subject matter experts embedded in key markets around the world.

Improved stakeholder credibility

Strengthen your negotiating position and build stakeholder confidence with a trusted advisor by your side. ICIS is recognised as a leading provider to the energy and chemical industries.

Deep techno-economic expertise

Navigate the impact of disruptive technologies on future supply and value chain competitiveness with a team skilled in evaluating intellectual property and techno-economic risks.

ICIS News

SHIPPING: Asia-US container rates tick lower; shippers frontloading cargoes on tariff pause

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US ticked lower this week, although they could see upward pressure from shippers pulling forward volumes ahead of the 30-day tariff freeze, while rates for liquid chemical tankers held steady. Global average rates fell by 3%, according to supply chain advisors Drewry and as shown in the following chart. Global average rates are down by almost 18% from 1 September, and down by almost 45% from the high of the year in mid-July. Rates from Shanghai to both US coasts fell by 1%, as shown in the following chart. Drewry expects spot rates to decrease slightly in the coming week due to the increase in capacity as container ship order books are at record highs. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said his company is already seeing some upward pressure on prices although some could be because of shippers frontloading volumes to beat the 30-day pause before tariffs are enacted. ‘We could expect frontloading ahead of tariffs – which has been a major factor keeping US ocean import volumes and transpacific container rates elevated since November – to intensify until the new tariffs are introduced or called off,” Levine said. Levine said it is hard to determine the impact from volumes being pulled forward since this has likely been happening for several months, and with the market in the lull surrounding the Lunar New Year (LNY) holiday. “But we could expect demand and rates to increase post-LNY,” Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES STEADY US chemical tanker freight rates as assessed by ICIS were unchanged this week with contract of affreightment (COA) nominations steady for most trade lanes. For the cargoes in the South American trade lane, COAs remain strong leaving very little spot availability. A large parcel of ethanol fixed USG to San Luis, and several others were quoted for second half of February. Similarly, for the USG to ARA trade lane, it was another off week with only a few reported fixtures. However, there were some unusual cargoes fixed for products like caustic soda and ethanol. Some styrene was reported fixed from Lake Charles to ARA. Overall, rates seem to be maintaining current levels particularly for the 3,000- and 5,000-tonne parcels. There was no difference along the USG to Asia routes, as it was another quiet week on this trade lane. Spot rates remain steady as the H1 February space across the regular carriers is sold out. Some of the larger players should have space in the second half of February depending on COA nominations. The chemical COAs have been steady through H1 March, but still in the tentative phase. Several inquiries were seen for methanol, ethanol, vinyl acetate monomer (VAM), styrene and MEG. On the other hand, bunker prices were unchanged this week but overall remain strong. PANAMA CANAL UPDATE Panama’s president said the country will not renew its agreement with China’s Belt and Road Initiative (BRI) after a visit from US Secretary of State Marco Rubio. President Donald Trump surprised some when he said that the US should reclaim the Panama Canal, and a US congressman has since introduced a bill that would authorize the purchase of the vital waterway. The actions taken by Panama’s president, Jose Raul Molino, may slow action by the Trump administration to take back control of the canal. Additional reporting by Kevin Callahan

07-Feb-2025

Japan's Mitsubishi Chemical to sell pharma business for $3.4 billion

SINGAPORE (ICIS)–Mitsubishi Chemical on Friday said that is selling its pharmaceutical unit Mitsubishi Tanabe Pharma Corp (MTPC) to US private equity firm Bain Capital for around yen (Y) 510 billion ($3.4 billion) as it seeks to focus on its core chemical business. The sale is expected to be completed in April-September 2026, pending shareholder approval at Mitsubishi Chemical's annual meeting scheduled in late June 2025. "Changes in the industry and business structure have reduced the potential for synergies," the company said. "Large-scale investment is essential to strengthen Mitsubishi Tanabe Pharma’s R&D capacity and further growth, but such investment would not be a feasible option under our ownership." Proceeds from the sale of between Y200 billion-250 billion will be directed toward a combination of strategic priorities: new growth investments, returning value to shareholders, and reducing debt. Some Y250 billion-300 billion has been designated for capital and financial investments focused on five key business areas under the company's "KAITEKI Vision 35" initiative. KAITEKI, a Mitsubishi Chemical concept, proposes a path to sustainable development, guiding solutions to environmental and social problems. Among these priorities is the establishment of a stable supply platform for green chemicals, a goal that will be pursued through expanded collaboration with global partners. Mitsubishi Chemical is also prioritizing eco-conscious mobility, focusing on development of a high-value-added carbon fiber chain to meet increasing demand for sustainable transportation solutions. To facilitate progress in advanced data processing and telecommunications, the company plans to bolster the global expansion of its semiconductor precision cleaning technology. It is also increasing the global capacity of its engineering plastic products to support the development of groundbreaking therapies.

07-Feb-2025

India central bank cuts interest rates to rev up slowing economy

MUMBAI (ICIS)–India’s central bank on Friday reduced its benchmark interest rate for the first time in nearly five years, to address slowing economic growth amid heightened global geopolitical uncertainty and continued weakness in the Indian rupee (Rs). Benchmark interest rate cut by 25 basis points to 6.25% Monetary policy stance kept at "neutral" Year-to-March ’26 GDP growth forecast at 6.7%; inflation at 4.2% In its monetary policy decision, the Reserve Bank of India (RBI) cut its policy interest rates to 6.25% from 6.50% previously and retained its monetary policy stance at “neutral”. Meanwhile, it has maintained the repurchase (repo) rate at 6.50% since February 2023. The last time it reduced this repo rate was in May 2020. India is a giant emerging market in Asia, whose economy ranks among the fastest growing in the world in recent years. The country is also a major importer of petrochemicals. RBI’s monetary policy meeting, the first under its new governor Sanjay Malhotra, was conducted days after India’s budget for the fiscal year 2025-26 was presented to parliament, in which the government cut personal income tax in a bid to boost consumption and growth. “While inflation has declined and is expected to further moderate in the next financial year, and economic growth is expected to recover, it is still much lower than the last fiscal. This has opened up the space for easing the repo rate,” Malhotra said. Malhotra assumed the RBI governor post in December 2024. While the central bank remains optimistic about India’s growth outlook, following a good monsoon season and an anticipated revival of capital expenditure, global factors could slow down growth, he said. “The world economic landscape remains challenging with slower pace of disinflation, lingering geopolitical tensions and policy uncertainties,” the RBI said in its official statement. “The strong [US] dollar also continues to strain emerging market currencies and enhance volatility in financial markets,” it added. At 08:30 GMT, the Indian rupee was trading at Rs87.40 to the US dollar. It plunged to an all-time low of Rs87.58 against the US dollar on 6 February. RBI has projected India’s GDP growth rate for the next fiscal year ending March 2026 at 6.7% – near the high end of the finance ministry’s growth forecast of 6.3% to 6.8%. In fiscal Q2 (July-September 2024), the south Asian country’s actual GDP growth slowed to 5.4%, the weakest in almost two years due to sluggish manufacturing growth and weak consumption. It was also significantly lower than the RBI's projection of a 7% growth for the quarter. The government will release its third quarter GDP data on 28 February. RBI GDP Forecasts FY 2025-26 April-June (Q1) 6.7% July-September (Q2) 7.0% October-December (Q3) 6.5% January-March (Q4) 6.5% Meanwhile, inflation forecast for the current fiscal year has been retained at 4.8%, with fiscal Q4 (January-March 2025) inflation revised down to 4.4% from 4.5% previously on easing food inflation. The RBI has projected retail inflation to be at around 4.2% in the next fiscal year. “Headline inflation after moving above the upper tolerance band in October, has since registered a sequential moderation in November and December,” Malhotra said. While food inflation is expected to soften further over the next few quarters, core inflation is expected to rise but remain moderate, he added. However, rising uncertainties in global financial markets, coupled with continuing volatility in the global energy prices and adverse weather events could present upside risks to the RBI’s inflation projections, the RBI said. In December, consumer inflation eased to a four-month low of 5.22% on easing food prices RBI inflation forecasts FY 2025-26 April-June (Q1) 4.5% July-September (Q2) 4.0% October-December (Q3) 3.8% January-March (Q4) 4.2% Focus article by Priya Jestin

07-Feb-2025

Japan's Mitsubishi Motors to invest $121 million in the Philippines

SINGAPORE (ICIS)–Japanese carmaker Mitsubishi Motors Corp (MMC) is set to invest Peso (Ps) 7 billion ($121 million) in the Philippines over the next five years. MMC president and CEO Takao Kato announced the plan during a meeting with Philippine President Ferdinand Marcos Jr on 6 February. The plan includes adding a new production model at the Mitsubishi Motors Philippines Corp (MMPC) plant in Laguna province, according to a statement issued by the Presidential Communications Office (PCO). Kato said the Philippines is MMC’s most important investment in southeast Asia, citing its good and stable economy. MMPC operates a manufacturing plant in Santa Rosa, Laguna, with an annual production capacity of 50,000 units, which can be doubled, it stated. As of November last year, MMPC had a 19% share of the domestic market, trailing behind Toyota's 46% share. Marcos also announced that MMC will be part of the government's Revitalizing the Automotive Industry for Competitiveness Enhancement (RACE) program which aims to boost the competitiveness of the local automotive industry. “In the ASEAN, (the) Philippines is our number one market,” MMC’s Kato said. Within southeast Asia, MMC also has production facilities in Thailand, Indonesia and Vietnam. The Japanese carmaker also has manufacturing plants in China and Russia. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). ($1 = Ps58)

07-Feb-2025

INSIGHT: South Korea broadens aid for struggling petrochemical industry

SINGAPORE (ICIS)–South Korea is streamlining regulations to make it easier for regions densely populated by petrochemical companies to qualify as "industrial crisis response areas", a designation that unlocks government support and financial assistance to mitigate impact of market downturns. Yeosu, Ulsan, Daesan petrochemical hubs to benefit Focus shifts to manufacturing for crisis designation Voluntary business restructuring encouraged This designation also unlocks access to tailored assistance in areas like employment stability, R&D, commercialization, market access, and consulting, according to a Ministry of Trade, Industry and Energy (MOTIE) administrative notice released on 5 February. The new regulation follows a wide-ranging support package unveiled by the government on 23 December 2024, aimed at bolstering the competitiveness of its domestic petrochemical industry, which is facing a global oversupply driven by expansions in China and the Middle East. This policy shift is expected to benefit major petrochemical hubs such as Yeosu, Ulsan, and Daesan, providing them with greater access to resources designed to mitigate economic downturns and to support continued growth within the sector. Previously, the high proportion of the services sector in cities like Yeosu hindered their ability to be designated as industrial crisis response areas. The revised regulations will now assess "regional stagnation" based solely on the manufacturing sector, excluding service industries. This change will allow regions heavily reliant on manufacturing, particularly petrochemicals, to meet the designation criteria more readily. MULTI-PRONGED STRATEGY A cornerstone of the government's latest plan is encouraging voluntary business restructuring, encompassing facility closures, sales, joint ventures, efficiency improvements, and new business acquisitions. To facilitate these changes, the government will implement legal reforms and offer a range of financial and tax incentives. These include extending the grace period for acquiring 100% of holding company shares from three to five years and streamlining merger reviews with the Korean Fair Trade Commission (FTC), the country's regulatory authority for economic competition. A dedicated consultation channel between MOTIE and the FTC will further expedite reviews and support restructuring efforts. Separately, the government plans to provide up to Korean won (W) 3 trillion ($2.1 billion) in financing packages for petrochemical companies seeking to revamp their business portfolios, including expanded access to a W1 trillion business restructuring fund managed by the Korea Development Bank. For designated Industrial Crisis Response Areas, existing loan maturities from policy financial institutions will be extended, principal repayments deferred; national tax payment deadlines extended; and seizure and sale deferred for up to one year. Beyond restructuring, the government is targeting cost reduction. The duty-free period for crude oil used in naphtha production will be extended by a year until the end of 2025 and import surcharges on liquefied natural gas (LNG) used as industrial raw materials will be refunded. A "fast-track" approval process will be implemented for ethane terminal and storage tank construction to facilitate access to cheaper raw materials. Additional cost-saving measures include expanding electricity rate options through distributed power trading and rationalizing safety regulations. The plan will also support R&D focused on shifting production from general-purpose petrochemicals to specialized, high-value-added products. An "R&D Investment Roadmap for 2025-2030" will be unveiled in the first half of this year, and preliminary feasibility studies for high-value and eco-friendly chemical material technology development will be conducted. The support ratio for regional investment subsidies in Industrial Crisis Response Areas will be increased, national strategic and new growth technologies will be identified, and a W50 billion "High-Value Specialty Fund" will be established to promote production of specialty chemicals. DOMESTIC PRODUCERS STRUGGLE South Korea's four largest petrochemical manufacturers – LG Chem, Lotte Chemical, Kumho Petrochemical and Hanwha Solutions – faced continued challenges in 2024. LG Chem reported a net loss of W899.2 billion in the fourth quarter, reversing the net profit of W128.5 billion a year ago due to decreased demand for both petrochemicals and battery materials. It also reported an operating loss of W252 billion in the same period. The company has revised down its capital expenditure plan for the year to W2 trillion-3 trillion from W4 trillion previously as it navigates the market downturn. Separately, as part of its global expansion strategy, LG Chem has secured a deal to supply cathode materials to Prime Planet Energy and Solutions (PPES) – a joint venture of Japanese carmaker Toyota and appliance maker Panasonic – starting 2026. The company will focus on developing eco-friendly materials and technologies that align with PPES' low-carbon vision. Meanwhile, major ethylene producer Lotte Chemical in Q3 2024 reported a loss of W514 billion, on "delayed demand recovery, lower product spreads due to currency depreciation, one-time costs from maintenance at overseas subsidiaries, and rising shipping costs". The company is now pursuing an asset-light strategy, which involved liquidation of its Malaysian synthetic rubber production subsidiary Lotte Ube Synthetic Rubber (LUSR) – a joint venture with Japan’s Ube Elastomer. Based in Johor, Malaysia, LUSR produces 50,000 tonnes/year of polybutadiene rubber (PBR). Lotte Chemical also plans to generate W1.4 trillion in proceeds from sale of stakes in overseas subsidiaries. Synthetic rubber major Kumho Petrochemical Co reported on 4 February a Q4 net income of W61.3 billion, down 33% year on year, due to weak market demand due to a year-end drop in raw material prices; with operating profit shrinking by about 72% to W10 billion despite a 19% increase in sales to W1.8 trillion. Insight article by Nurluqman Suratman ($1 = W1,446) Thumbnail image shows an aerial view of a container pier in South Korea's southeastern port city of Busan. (YONHAP/EPA-EFE/Shutterstock)

07-Feb-2025

Dutch regulator fires energy market manipulation warning shot

Dutch regulator 'reprimanded' company over possible market manipulation on TTF gas hub Price manipulation on major benchmark hub can cost other participants, consumers Company in question to be 'closely watched', trader committed to 'no longer engage' in such behaviour Additional reporting by Jamie Stewart LONDON (ICIS)–The Dutch energy regulator has "reprimanded” an international company for "possible market manipulation" at the TTF gas hub, according to a statement released 6 February. The statement was clearly intended to deter market participants from attempting to "mark the close", as it termed the behaviour, adding such behaviour was "an illegal trading practice". It did not reveal the company in question and did not cite any specific penalty. The Dutch Authority for Consumers and Market (ACM) added it would "continue to keep a close watch on the company" and that the trader had pledged to no longer "engage in this conduct". MARKET INFLUENCE According to ACM, the practice of "marking the close" can occur if a market participant influences the reference price on a wholesale energy market by buying or selling close to the moment that a settlement price is determined. This can involve bidding for orders with a much higher asking price or buying excessively large volumes on offer right before the market close, as a result of which the price spikes up. The reverse can also be true, with the price range pushed down by repeatedly offering volumes at a lower price or selling excessively large volumes. As a result of a closing value that does not otherwise reflect market fundamentals or the prevailing price range, other traders, as well as Dutch and other European energy consumers, foot the bill for forward contracts that later settle at this closing price. IMPLICATIONS The cases cited by ACM concerned the short-term Day-ahead contract at the Dutch TTF gas hub. The ICIS TTF Day-ahead is a benchmark price commonly used across the energy industry. The TTF is by far the most traded hub in Europe, and market moves would affect other hubs not only locally but across the continent. Rules across Europe governing energy market trade are laid out in the EU’s Regulation on Wholesale Energy Market Integrity and Transparency which covers market abuse including market manipulation and insider trading. ICIS POSITION Richard Street, international regulatory affairs head at ICIS’ parent company LexisNexis Risk Solutions, said: “We were aware of the issues referred to by ACM. We have strict data standards that allow us to remove any off-market trades. "Market participants who make trades they know are off-market can pre-empt any issues by marking these deals as ‘P&C’ or contact us confidentially to make us aware of the circumstances surrounding unusual activity." Street added it was "clearly disappointing that ACM has had to publicly reprimand certain traders for their behaviour" but he was hopeful that this "sends a clear message that regulators are watching and will take action where necessary”. The Dutch regulator added: it was "calling on market participants and other relevant stakeholders on the wholesale energy markets to share information about possible illegal trading activities. They can do so using ACER’s Notification Platform. See also ACM’s website: Reporting suspicious energy trading." Eduardo Escajadillo EDITOR'S VIEW How price reporting is done is of vital importance to maintain trust in the integrity of commodities markets, and in the price formation process itself. This is important because these markets, in some way, touch all of our lives. Price reporting agencies (PRAs) such as ICIS welcome the support of regulators in ensuring a robust price discovery environment. In this case the Dutch regulator ACM has flexed its muscles, reminding all market participants of their obligations, as well as its own as a watchdog with a duty to consumers. Best practice in the discipline of price reporting is defined by the EU Benchmarks regulation, which as a benchmark administrator ICIS aligns its practices to, as well as the long-standing IOSCO principles of best price for price reporting in commodities markets. ICIS has long been a voluntary signatory to the IOSCO principles and is audited against these principles every year. PRAs best-practice models also lay out how to deal with unusual trading patterns. Central to the approach is transparency if transactions are deleted from a price assessment process, which does happen from time to time. For example, this British NBP gas market comment published by ICIS as recently as 30 January, said: “February '25 trades recorded at the time of the close at the value of 130.500p/th were deemed to be outside of the prevailing range of verified market information reflecting the value of the contract at that time and were therefore excluded from the assessment and ICIS indices.” Our publicly available pricing methodologies, for example our gas methodology, give more details regarding ICIS price reporting practices. Jamie Stewart

06-Feb-2025

BP puts Gelsenkirchen, Germany refinery, crackers up for sale

BARCELONA (ICIS)–BP plans to sell its to sell its Ruhr Oel refinery, crackers and downstream assets at Gelsenkirchen in Germany. The company will start marketing the assets immediately, with the aim of completing the sale this year, according to a statement published on 6 February by the UK headquartered energy giant. According to the ICIS Supply & Demand Database BP operates a refinery and two crackers with combined capacity of 1.065 million tonnes/year of ethylene, as well as units with 645,000 tonnes/year propylene, 430,000 tonnes/year benzene plus cumene, cyclohexane, methanol, toluene and ammonia facilities. BP said the assets for sale include DHC Solvent Chemie in Mulheim an der Ruhr. All refinery owners in Europe are under pressure to rationalise their portfolios thanks to the shift to vehicle electrification and high cost base. There is also intense competition from new refineries starting up in Asia and the Middle East. BP said the move is in line with its strategic drive to deliver a simpler, more focused, higher value company. The company said that it has implemented numerous projects to modernize the infrastructure of the refinery in Gelsenkirchen in recent years.  This includes renewing the power grid and establishing an independent steam supply. The refinery can process crude oils from around the world, produce fuels and also has the potential to manufacture biofuels and process recycled plastics, said bp. Michael Connolly, ICIS principal refining analyst pointed out that the refinery is configured to give a moderately high yield of gasoline, meaning it is not really suited to the future of the European market, where vehicle electrification is hurting demand. He said BP already had plans to reduce the capacity of the refinery from 260,000 bbl/day to 155,000 bbl/day in 2025. “Undoubtedly it would have used Russian crude, but despite having access to seaborne crude, the loss of Russian crude through sanctions would have impacted financials,” he said. The economics of the facility will also be more challenging, as for all European refiners, because cracks or margins for gasoil production have declined to pre-Ukraine war levels, added Connolly. ICIS expects German crude refining capacity to fall from 2.1 million bbl/day in 2020 to 1.8 million bbl/day by 2026 and well off their peak refining capacity of 2.4 bd in 2007. Emma Delaney, BP executive vice president, customers & products said, “BP needs to continually manage its global portfolio as we position to grow as a simpler, more focused, higher-value company. After a thorough review, we have concluded that a new owner would be better suited for the site to take it forward. We are convinced that the refinery can unlock its full potential under new ownership.” Focus article by Will Beacham Graphics by Miguel Rodriguez-Fernandez Thumbnail photo: bp's refinery site in Gelsenkirchen, Germany (Source: BP) Clarification: recasts to explain BP has two crackers at the site.

06-Feb-2025

Eurozone, EU chem producer prices flat in December 2024 from previous month

LONDON (ICIS)–Chemicals producer prices in the eurozone and EU were flat in December from the previous month, official data showed on Thursday. Spain (-0.2%), Italy (-0.2%), the Netherlands (-0.5%) and Poland (-0.1%) all posted declines while Germany, Europe’s biggest chemicals producer, recorded zero price growth. France (+0.2%) was the only major EU country to report a rise in chemicals producer prices. General industrial producer prices in December rose by 0.4% month on month in both the eurozone and EU, statistics agency Eurostat said in a first estimate that is subject to revision. The annual industrial producer price average for the whole of 2024 fell by 4.2% in the eurozone and by 4.0% in the EU from 2023.

06-Feb-2025

Polystyrene foam ban comes into effect in Oregon, US

HOUSTON (ICIS)–Senate Bill 543 was passed in 2023, but it was not until 1 January 2025 that the ban on polystyrene foam was implemented. According to The Oregon Department of Environmental Quality (DEQ), “[The] 2023 Senate Bill 543 (ORS 459.465 to 459.477) prohibits food vendors from using polystyrene foam containers for prepared food, prohibits the sale of polystyrene foam containers or polystyrene foam packing peanuts, and prohibits the sale of foodware containers with added perfluoroalkyl or polyfluoroalkyl substances (PFAS)." “PFAS are a group of chemicals that are considered “emerging environmental contaminants” because public knowledge about their harmful effects and how they are regulated are relatively new or undeveloped. PFAS are water soluble and highly mobile, and can accumulate in living organisms. Many newer PFAS transform into highly persistent perfluorinated chemicals in the environment, and can last for hundreds to thousands of years, depending on the PFAS compound,” according to The Oregon DEQ. What does this mean for polystyrene in Oregon? Well, the bill states that food vendors must not use polystyrene foam containers when selling, offering for sale, serving or dispensing prepared food to a consumer. Examples of this include to-go containers that many use to take home leftovers or to pick up food-orders. This also applies to polystyrene foam plates and cups. Although food vendors must not use polystyrene foam, the bill also states that a person may not sell, offer for sale or distribute in or into the state polystyrene foam containers or polystyrene foam packaging peanuts. Also, a person may not sell, offer for sale or distribute in or into the state a foodware container containing intentionally-added PFAS. The Oregon DEQ noted that businesses with existing inventory of the examples above may not use or sell the material after 1 January 2025.

05-Feb-2025

Brazil chemicals deficit hits $49 billion in 2024 despite higher tariffs by year-end

SAO PAULO (ICIS)–Brazil's chemical industry posted a $48.7 billion trade deficit in 2024 as imports surged to $63.9 billion, driven by “predatory pricing” from US and Asian suppliers, the country’s chemicals trade group Abiquim said. Asian suppliers, moreover, benefited from discounted Russian raw materials and, in China’s case, from heavy subsidies from the state, the trade group added. The overall deficit, while substantial, remained below the 2022 record of $63 billion, though Abiquim noted this was primarily due what it described as “predatory import pricing” which cushioned the “real imbalance” in the trade balance." Import volumes rose 11.5% to 65.3 million tonnes of chemicals, with fertilizer intermediates accounting for 41.1 million tonnes, up 7.4% from 2023. This marked the highest import volume since records began in 1989, as Asian suppliers leveraged cheaper Russian materials amid the war in Ukraine. Abiquim’s CEO said 2024 had been challenging for Brazil’s chemicals producers, although the year was also marked by the higher import tariffs approved for 30 chemical products, which gave the sector a boost in November and December, said Andre Passos. Following October's tariff implementation, domestic production rose 6.35% in the final two months, he added. The trade group’s CEO said higher tariffs were a welcome step but much more needed to be done to protect Brazil’s chemicals producers’ operations and their transition to the green economy. “We know that this [higher tariffs] is just the first step and it is essential to keep facing up to the extremely adverse international scenario, with excess production capacity for chemical products in the world and heavy subsidy programs in the world’s main chemical producers,” said Passos. “We are crossing the gateway to the low-carbon economy and the chemical industry is ready to lead this transition. Low-carbon chemistry is related to the use of technologies that reduce or neutralize greenhouse gas emissions. “Renewable chemistry, carbon capture and storage, and chemical recycling are some examples of this leadership that can be exercised by the Brazilian chemical industry,” he concluded. ASIA DOMINATES Asian suppliers, excluding the Middle East, dominated imports with a 31% share worth $19.6 billion, creating an $18 billion regional trade gap. The deficit with Asia has steadily worsened from $10bn in 2020 to $16.2bn in 2023, said Abiquim, reflecting China’s overcapacities and the country’s switch from net importer to next exporter for most chemicals. Domestic manufacturers faced increased competition across all segments, with imports of resins and elastomers jumping 32.4%, organic chemicals 14.3%, inorganics 9.1%, and other industrial chemicals 9.3%. Import prices averaged 6.3% lower than 2023, leading to domestic plant closures, said Abiquim. Brazilian chemical exports rose 4.3% to $15.2 billion, though volumes dipped 0.2%. The sector maintained its position as the country's third-largest manufacturing exporter, behind food products at $66.5 billion and base metals at $23.2 billion, said Abiquim.

05-Feb-2025