Image Description

ICIS Supply and Demand Database

Identify opportunities, mitigate risk and validate your growth strategies

An end-to-end view of supply and demand across multiple markets

Optimise sales planning, production and investment with a transparent view of the Chemicals supply chain showing capacity, balanced and integrated between upstream and downstream, as far ahead as 2050. Access supply, demand and trade flow data updated daily, with monthly and quarterly round-ups, for over 100 commodities in 175 countries.

Gain a clear understanding of the competitive landscape, with current and planned production capability segmented by plant, company, country or region. Import, export and consumption volumes are combined with short-term forecasts, margin analytics, pricing, plant cost evaluations and disruption tracking to help you stay one step ahead.

Identify new business opportunities with up-to-date information on plant ownership and technology, on a subsidiary and affiliate basis, from ICIS’ unrivalled network of chemicals experts embedded in key global markets.

Why use ICIS Supply and Demand Database?

Increase profitability and maximise ROI

Safeguard or increase margins and make better-informed purchasing decisions, with accurate and complete data on market dynamics and competitor behaviour.

Plan ahead with confidence

Discern long-term trends built on historical trade flow  data going back to 1978, and respond swiftly to market conditions if they change in unforeseen ways.

Optimise new business

Understand demand for your product, with a clear picture of competitors’ current and planned production capacity.

Validate targets with independent data

Support your investment decisions with ICIS’ reliable market data and insight.

Create agile purchasing strategies

Track changes in capacity, production and trade flows to keep ahead of market trends, and revise purchasing strategy accordingly.

Maximise efficiency

Save time strategy planning with all your market drivers, built on the latest outlook for supply and demand, visible in one place.

Quantify value

Understand value chain dynamics, with integrated analysis of upstream / downstream supply and demand.

Mitigate risk

Anticipate and minimise exposure to changes in imports, exports, supply and demand with forecasts and independent analysis.

ICIS News

AFPM '24: INSIGHT: Biden ending term with regulatory bang for US chems

HOUSTON (ICIS)–The administration of US President Joe Biden is proposing a wave of regulations before its term ends in 2025, many of which will increase costs for chemical companies in the US and persist even if the nation elects a new president later this year. The prospect of such consequential policies comes as delegates head into this year's International Petrochemical Conference (IPC), hosted by the American Fuel & Petrochemical Manufacturers (AFPM). Changes to the Clean Waters Act, the Risk Management Program (RMP) and the Hazard Communication Standard are among the most consequential policies being considered by US regulators. Electric vehicles (EVs) could receive more support from federal and state governments. This would increase demand for plastics used in EVs while discouraging refiners from making further investments, which could limit US production of benzene, toluene and mixed xylenes (MX). The failure of Congress to re-authorize the nation's chemical site security program could spell its end. REGULATORY PUSH DURING ELECTION YEARSuch a regulatory push by the Biden administration was flagged last year by the Alliance for Chemical Distribution (ACD), the new name for the National Association of Chemical Distributors (NACD). The group was not crying wolf. The next nine months could rank among the worst for the chemical industry in terms of regulatory change and potential issues, said Eric Byer, president of the ACD. "Whatever it's going to be, it will come done fairly aggressively." The Biden administration has proposed several consequential policies. For the Clean Water Act, the Environmental Protection Agency (EPA) is developing new requirements, which will require chemical producers and other companies to develop plans to address the worst possible discharge from their plants. The ACD warned that the new requirement would raise compliance costs while doing little to reduce the already small number of discharges by plants. The final rule is scheduled to be published in April 2024. For the RMP, changes could require chemical companies to share information that has been off limits since the 9/11 terrorist attacks, according to the American Chemistry Council (ACC). The concern is that the information will fall into the wrong hands, while significantly increasing costs to comply with the new requirements, according to the ACD. The Occupational Safety and Health Administration (OSHA) is introducing changes to its Hazard Communication Standard that could create more burdens for companies. The ACD warned that some of the changes will increase costs without providing a commensurate improvement in safety. The EPA has started the multiyear process that, under the regulator's current whole-chemical approach, will lead to restrictions imposed on vinyl chloride monomer (VCM), acrylonitrile (ACN) and aniline, a chemical used to make methylene diphenyl diisocyanate (MDI). This is being done through the nation's main chemical safety program, known as the Toxic Substances Control Act (TSCA). MORE POLICIES PROPOSED FOR EVsThe Biden administration is proposing additional polices to encourage the adoption of EVs. For chemical producers, more EVs would increase demand for plastics, resins and thermal management fluids that are designed to meet the material challenges of these automobiles. At the same time, the push towards EVs could limit sales of automobiles powered by internal combustion engines (ICEs), lowering demand for gasoline and diesel. Refiners could decide to shut down and repurpose their complexes if they expect demand for their main products will stop growing or decline. That would lower production of aromatics and other refinery chemicals and refined products. The Biden administration is moving on three fronts to encourage EV sales. The EPA is expected to decide if California can adopt its Advanced Clean Car II (ACC II), which would phase out the sale of ICE-based vehicles to 2035. If the EPA grants California's request, that would trigger similar programs in several other states. The EPA's light-duty vehicle proposal would impose stricter standards on tail pipe emissions. The US Department of Transportation (DOT) is proposing stricter efficiency standards under its Corporate Average Fuel Economy (CAFE) program. The AFPM opposes these measures. It said the EPA's light-duty vehicle proposal and DOT's new CAFE standards are so demanding, it would force automobile companies to produce a lot more EVs, plug-in hybrids and fuel-cell vehicles to meet the more ambitious requirements. LAX OVERSIGHT OF SHIPPING RATES IN WAKE OF HOUTHISThe ACD raised concerns that the US is not doing enough to address the possibility that shipping rates and delays have increased beyond what could be justified by the disruptions caused by the drought in Panama and by the Houthi attacks on vessels passing through the Red Sea to the Suez Canal. The ACD accepts that costs will rise, but it expressed concerns that shipping companies could be taking advantage of the situation by charging excessive rates on routes unaffected by the disruptions. These include routes from India and China to the western coast of the US, Byer said. "Why are you jacking up the price two or threefold?" LABOR NEGOTIATIONS FOR US EAST COASTThe work contract will expire this year for dockworkers and ports along the East Coast of the US. Byer warned of a possible strike if the talks become too contentious. On the West Coast, dockworkers and ports reached an agreement on a six-year work contract. CFATS ON LIFE SUPPORTByer expressed concerns about the future of the main chemical-site security program, called the Chemical Facility Anti-Terrorism Standards (CFATS). CFATS is overseen by the Cybersecurity & Infrastructure Security Agency (CISA), which is under the Department of Homeland Security (DHS). CISA lost authority to implement CFATS on 28 July 2023, when a bill that would have re-authorized it was blocked from going to a vote in the Senate. Without CFATS, other federal and state agencies could create their own chemical-site security regulations. This process has already started in the US state of Nebraska, where State Senator Eliot Bostar introduced LB1048. Other nearby states in the plains could introduce similar bills, because they tend to follow each other's lead, Byer said. Many of these state legislatures should wrap up sessions in the next couple of months, so lawmakers still have time to propose chemical-site security bills. The ACD is most concerned about larger states creating chemical-site security programs, such as California, Illinois, New Jersey and New York. SENATE RAIL BILL REMAINS PENDINGA Senate rail safety bill has been pending for more than a year after a bipartisan group of legislators introduced it following the train derailment in East Palestine, Ohio. Congress has about 10 months to approve the bill before it lapses, Byer said. For bills in general, action during an election year could happen around the Memorial Day holiday in May, the 4 July recess, the August recess or before the end of September. After September, legislators will be focused on campaigning for the 5 November election. TEXAS BRINGS BACK TAX BREAKS FOR INDUSTRIAL PROJECTSTexas has revived a program that granted tax breaks to new chemical plants and other large industrial projects. The new program is called the Texas Jobs and Security Act, and it replaced the lapsed Chapter 313 School Value Limitation Agreement. The old program was popular with chemical companies, and their applications were among the first public disclosures of their expansion plans. The new program has already attracted applicants. Summit Next Gen is considering a plant that would convert 450 million gal/year of ethanol into 256 million gal/year of sustainable aviation fuel (SAF). Hosted by the AFPM, the IPC takes place on March 24-26. Insight article by Al Greenwood Thumbnail shows a federal building. Image by Lucky-photographer

18-Mar-2024

VIDEO: Global oil outlook – five factors to watch in week 12

LONDON (ICIS)– A brightening demand outlook and tighter oil supply could support benchmark crude prices this week. However, investors will be closely watching central bank meeting across the globe for clues to future monetary policy. ICIS look at the likely factors that will drive oil prices in Week 12.

18-Mar-2024

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 15 March. US CPI inflation 'sticky' at 3.2%, may delay Fed rate cuts – ICIS economist US inflation, as measured by the consumer prices index (CPI), rose 0.4% month on month in February, leaving it up 3.2% year on year, the Bureau of Labor Statistics (BLS) reported on Tuesday. LyondellBasell sees signs of modest improvement in Q1 – CEO LyondellBasell is seeing some indications of modest improvement in its businesses, particularly in North America and Europe, with packaging being the strongest end market, its CEO said on Wednesday. US Trinseo seeks to sell stake in AmSty Trinseo has started the process to sell its 50% stake in Americas Styrenics (AmSty), the US-based engineered materials producer said on Wednesday. US outage to boost March Asia-Atlantic spot acetic acid, VAM trades Asia-Atlantic spot trades for acetic acid and vinyl acetate monomer (VAM) are expected to increase after supply gaps in the US and Europe emerged following an unexpected plant outage in the US. Potential for oil market deficit in 2024 as demand expectations grow – IEA Higher oil demand expectations and fresh production cuts from the OPEC+ alliance could push the 2024 crude market balance from a surplus to a slight deficit if the voluntary reductions remain in place for the rest of the year, according to the International Energy Agency. INSIGHT: US aromatics, refining output recedes as peak oil approaches Peak oil demand in the US could lead to a further decline in refining capacity, which will tighten supplies of benzene, toluene and xylenes (BTX) for downstream chemical producers. Unipar expects hardship in Argentina but Brazil PVC demand should recover Unipar’s operations in Argentina are set to face pressure from the current recession but a bright spot could appear in higher civil engineering activity in Brazil, propping up demand for polyvinyl chloride (PVC), the Brazilian chemicals producer said on Friday.

18-Mar-2024

ICIS EXPLAINS: What will happen after Ukraine's gas transit contract expires?

LONDON (ICIS)–Ukraine’s five-year gas transit contract expires at the end of the year, raising questions over whether it may be extended or scrapped. Although Ukrainian officials insist they would not negotiate with Russia as long as it continues its military aggression, some European companies which hold long-term contracts with Gazprom would like to continue offtaking the gas. ICIS responds to questions that are currently asked by traders as they seek to forecast their market positions beyond 2024. 1. When does Ukraine’s Russian gas transit contract expire? At 06.00am CET on 1 January 2025. 2. Will it be renewed? It’s unlikely Ukraine and Russia would enter direct talks for a possible extension or renewal of the existing five-year contract. Opening negotiations with Gazprom would be politically sensitive in Ukraine as long as Russia continues its military aggression. Nevertheless, there is pressure from central European companies which hold either long-term supply or transit contracts with Gazprom to continue Russian shipments. Ukrainian officials indicated the possibility of allowing companies to take the gas themselves at Sudzha on the Ukrainian-Russian border point. Even so, the capacity can only be offered if an interconnection agreement is signed by gas grid operators for the Sudzha point on the Ukrainian-Russian border. 3. How much capacity could GTSOU make available? The daily technical capacity at the Sudzha border point is 244 milion cubic meters (mcm). The existing interconnection agreement stipulates that 87mcm can be booked daily on a firm basis. Gazprom has booked 72mcm/day under the expiring five-year contract but uses only 42mcm/day currently. In the absence of a renewed contract after 2024, European companies looking to extend imports may be able to book capacity on a spot basis as part of annual, quarterly, monthly or daily auctions. Companies could start booking annual capacity as early as 1 July 2024 but only subject to a new interconnection agreement. 4. Is there an indication how much capacity could be booked? No. The minimal level where it is commercially viable for the gas transmission system operator, GTSOU, to provide transit services could be around 10 billion cubic meters (bcm)/year. Although the current transit contract is for 40bcm/year, it is unlikely similar levels would be booked, considering that some countries such as Austria are working to diversify away. 5. What are the risks of booking capacity and transiting gas via Ukraine? Risks are primarily linked to costs. Current transmission tariffs will expire at the end of the year and will have to be recalculated to reflect the new conditions following the expiry of the current transit agreement. The cost of transit will reflect the level of interest in capacity bookings. However, it’s difficult to gauge interest since the first auctions for annual capacity are not held until July and so far there is no indication that there would be an interconnection agreement. GTSOU and the regulator NERC are currently working on the new tariffs, reportedly using a no transit scenario. 6. How about war-related risk? Russia has refrained from attacking the gas infrastructure since it started its full-scale invasion of Ukraine in February 2022. Ukraine benefits from a vast network of pipelines, which would allow the rerouting of gas in case of attacks or accidents. 7. The Ukrainian gas network code says companies cannot book capacity with the grid operator if they have overdue debt. Considering that Gazprom is paying less than it is expected under its ship-or-pay contract, would this debt prevent it from renewing the transit? No, the contractual arrangements are between Gazprom and the Ukrainian incumbent Naftogaz, which books the capacity on behalf of Gazprom. Naftogaz initiated arbitration proceedings against Gazprom for paying less than contractually required. Gazprom owes Naftogaz $1.4bn for underdeliveries and sources close to GTSOU say no capacity should be allocated unless the Russian producer repays the debt. Under contractual arrangements, Gazprom was expected to ship 65bcm/year in the first year of transit in 2020 and 40bcm/year for the remaining four. However, in May 2022, GTSOU called force majeure amid fears gas entering via one of the two points that had been used for transit was diverted to Russian controlled territories. Gazprom closed the valve at the Sokhranivka interconnection point and GTSOU offered to reroute all flows via Sudzha. Gazprom refused and reduced the amount of gas it was supposed to ship to Europe. For the last two years, flows entering Ukraine at Sudzha have hovered around 42mcm/day, compared to 109.6mcm/day, which Gazprom had booked to transit via Sudzha and Sokhranivka. 8. Can the Ukrainian transmission system operate if there is no transit? Yes. The Ukrainian gas transmission system was initially built to operate from west to east as gas was supplied from the western parts of Ukraine to Moscow in the late 1960s. Flows were later reversed in the 1970s and the system has since then been used as the main transit route for Russian gas to Europe. Ukrainian stakeholders were preparing to work without transit even before the expiry of the previous contract in 2019. Domestic supplies are decoupled from transit and flows can be reversed from west to east. 9. Will storage injections and short-haul be affected if there is no transit? Many companies have been relying on short-haul to inject gas in storage. This meant that rather than physically moving the transit gas to EU countries and then reversing it into Ukrainian underground facilities, it was directly sent into storage. If there is no transit, the grid operators will have to provide physical reverse capacity. The total physical capacity on Ukraine’s borders with Hungary, Poland and Slovakia is 54mcm/day but there are plans to expand it further. GTSOU and the storage operator UTG have repeatedly invited companies to start injecting volumes earlier in the season to avoid congestion at the end of summer. 10. Who will be affected if there is no transit after 2024? On a scale of least to worst affected, Ukraine would arguably rank at the lower end and the Transnistria, an unrecognised separatist province of Moldova, at the higher end. In between there are Russia and the EU countries that continue to hold import or transit contracts. Ukraine will lose its transit revenue which stood at $800m last year and represented 0.46% of Ukrainian GDP. The money was mostly used to pay for essential operating costs and offset expenses involved. In case there is no transit it will have to find other sources of revenue, including importing gas in reverse via the Trans-Balkan pipeline and decommission a large part of its transmission system. Russia depends on Ukraine and Turkey to retain minimal market share and rebuild a stream of revenue which plunged more than 60% from €47.5bn in 2022. EU buyers such as Austria’s OMV, Hungary’s MVM and Slovakia’s SPP whose longer-term contracts expire in the upcoming years have already indicated an intention to diversify away. Slovakia’s gas grid operator Eustream has a ship-or-pay agreement with Gazprom which ends in 2028. Russia has historically relied on Ukraine and Slovakia to transit gas. If there is no transit via Ukraine, Gazprom may no longer see a point in paying for booked Slovak capacity. Even though transit flows are currently a fraction of those contracted, Slovakia expects to be paid in full for the remaining four years. This means Eustream is one of the most interested parties in the renewal of the Ukrainian transit contract. Finally, Transnistria continues to import 2bcm/year. Unlike Moldova, which has been able to secure volumes on European hubs, Transnistria is reliant on Russia for heavily subsidised gas deliveries. Diversifying away would mean paying for gas at market prices.

18-Mar-2024

Europe top stories: weekly summary

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 15 March. Europe ethylene and propylene sentiment cautiously optimistic for remainder of H1 Given the better-than-expected demand conditions, with improved sales volumes and higher prices lifting many out of the mire that was 2023, the question on everyone’s lips is how long can we expect this state of affairs to last. Potential for oil market deficit in 2024 as demand expectations grow – IEA Higher oil demand expectations and fresh production cuts from the OPEC+ alliance could push the 2024 crude market balance from a surplus to a slight deficit if the voluntary reductions remain in place for the rest of the year, according to the International Energy Agency. Surging PET bottle bale prices threaten to ‘destroy’ Europe’s R-PET market Feedstock bale prices hit €930/tonne ex-works in Poland on Monday, prompting recycled PET participants to suggest such price levels threaten to destroy the R-PET market as they fear a repeat of 2022’s disastrous price volatility. Europe acetic acid, VAM contract talks for March focus on supply disruption March negotiations are underway for European acetic acid and vinyl acetate monomer (VAM) contract pricing with security of supply a key influence on negotiations amid LyondellBasell’s force majeure in the US and other disruptions to global trade flows. Caution caps optimism as peak season arrives for Europe styrene market Spot activity in the Europe styrene market was moderate in the week ended 8 March, as players attended a key industry event, while cautious and conservative sentiment persisted alongside crosswinds from ongoing demand weakness and thin liquidity, high feedstock costs and reduced availability. Participants pointed to only slight improvements in demand and market optimism from levels seen in 2023. Europe cracker margins up on firmer ethylene, co-products pricing Cracker margins in Europe rose in the week on the back of firmer ethylene and co-product pricing, ICIS Margin Analysis showed on Monday.

18-Mar-2024

Singapore February petrochemical exports fall 1.8%; NODX slips 0.1%

SINGAPORE (ICIS)–Singapore's petrochemical exports in February fell by 1.8% year on year to Singapore dollar (S$) 1.06bn ($791m) , reversing the 8.7% expansion in the preceding month, official data showed on Monday. The country's overall non-oil domestic exports (NODX) slipped by 0.1% year on year to S$13.0bn in February, reversing the 16.7% expansion in the previous month, Enterprise Singapore data showed. Non-electronic NODX, which includes petrochemicals and pharmaceuticals, fell by 1.5% year on year to S$10.1bn in February, in sharp contrast with the 21.1% increase posted in January. Overall NODX to seven out of Singapore's top 10 markets fell in February, but shipments to Hong Kong, US and Indonesia rose. Source: Enterprise Singapore Singapore is a major manufacturer and exporter of petrochemicals in southeast Asia. Its petrochemicals hub Jurong Island houses more than 100 global chemical firms, including energy majors ExxonMobil and Shell. EXTERNAL HEADWINDS WEIGH ON MANUFACTURING The weaker trade data for February follows the drop in Singapore's manufacturing purchasing managers' index (PMI), which eased to 50.6 from 50.7 in January. The lower PMI reading was partly due to the Lunar New Year holidays in February, according to the Singapore Institute of Purchasing and Materials Management (SIPMM). A year-on-year recovery in Singapore’s manufacturing sector will be partly due to a low-base effect this year, given the downturn in 2023, according to UOB Global Economics & Markets Research. However, the month-on-month momentum could remain fundamentally weak in the first half of 2024 as external demand continues to be weighed down by global headwinds, it said in a note earlier this month. Tight financial conditions stemming from an elevated interest rate environment in the US and EU, and ongoing stresses in the property sector in China continue to dampen consumer and business sentiment. "Towards the middle of 2024, signs of a broader recovery in manufacturing could emerge as central banks in major advanced economies may begin to lower policy rates as inflation in their respective economies moderate and inch closer to the 2% objective, with the consequent easing of financial conditions supporting consumption and investment activity, implying a gradual recovery in external demand," UOB said. Focus article by Nurluqman Suratman ($1 = S$1.34) Thumbnail image: A view of Brani terminal port in Singapore, 22 November 2023. (HOW HWEE YOUNG/EPA-EFE/Shutterstock)

18-Mar-2024

BLOG: China average LLDPE net imports could be just 300,000 tonnes/yr in 2024-2030

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: In the third of series on China’s increasing petrochemicals self-sufficiency, I examine scenarios for the country’s linear-low density polyethylene (LLDPE) net imports in 2024-2030. The ICIS Base Case sees China’s LLDPE demand growth averaging 4% a year in 2024-2030 with the average annual operating rate at 73%. This would leave net imports at a healthy annual average of 6.5m tonnes. Last year, net imports were 5.9m tonnes. Demand growth at just 4% would compare with actual average annual demand growth of 13% in 1992-2023 and an operating rate of 91%. But I believe that because of China’s demographic and debt challenges, its petrochemicals demand growth is likely to fall to 1-3% per year. For argument’s sake, let’s assume 1.5% growth for LLDPE in 2023-2040, the middle of this range. Let’s also assume that China runs its plants at an annual average of 83% while adding 4.4m tonnes/year of unconfirmed capacity as part of its self-sufficiency drive. Under this Downside 1 Scenario, average annual net imports would fall to 1.8m tonnes. Downside Scenario 2 again sees demand growth averaging 1.5% per year and 4.4m tonnes/year of unconfirmed capacity coming onstream, but the operating rate averaging 91% a year – the same as the historic average. Net imports would fall to an annual average of just 300,000 tonnes. Under the two Downsides, China would remain in big net import positions in 2024-2026 before reaching close to balanced positions in 2027-2028 and then small net exports in the remaining two years of the decade. There are some people out there who argue that this is just another cyclical downturn, albeit an extended one. The ICIS data consistently suggests otherwise. I believe we are instead seeing a radical shift in how our industry behaves. This means an equally radical shift in business models to a greater focus on the end-users of petrochemicals, on sustainability and on growth opportunities in the developing world outside China. For details on the practical and detailed implications for your company, contact me at john.richardson@icis.com. 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.

18-Mar-2024

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 15 March 2024. INSIGHT: Indorama exit from PET feedstock markets to spur China PTA exports By Nurluqman Suratman 15-Mar-24 11:42 SINGAPORE (ICIS)–Demand for China’s purified terephthalic acid (PTA) will get a boost as Indorama Ventures Ltd (IVL), a global producer of downstream polyethylene terephthalate (PET), shifts away from expensive integrated operations. INSIGHT: Policies announced in China Two Sessions will impact domestic petchems market in 2024 By Jimmy Zhang 14-Mar-24 23:07 SINGAPORE (ICIS)–China's Two Sessions earlier this month – the yearly meetings where its legislature sets laws and its advisory body offers policy recommendations – attracted attention from the market for the growth targets set and announcements on expected future economic development. According to Premier Li Qiang, China's GDP growth target is “around 5.0%”. US outage to boost March Asia-Atlantic spot acetic acid, VAM trades By Hwee Hwee Tan 14-Mar-24 12:26 SINGAPORE (ICIS)–Asia-Atlantic spot trades for acetic acid and vinyl acetate monomer (VAM) are expected to increase after supply gaps in the US and Europe emerged following an unexpected plant outage in the US. Asia caustic soda market could be underpinned by snug supply, limited vessel space By Jonathan Chou 13-Mar-24 15:40 SINGAPORE (ICIS)–Asia's liquid caustic soda spot supply may remain snug in the near term, while demand could continue its gradual growth into the second quarter (Q2) of 2024. PODCAST: China Group III base oils market sees supply, demand changes By Whitney Shi 12-Mar-24 15:53 SINGAPORE (ICIS)–In this podcast, ICIS Senior Industry Analyst Whitney Shi and ICIS Assistant Industry Analyst Jady Ma talk about supply and demand changes in China’s Group III base oils market. Saudi Aramco '23 profit falls on softer crude; ’24 focus on downstream growth By Nurluqman Suratman 11-Mar-24 12:37 SINGAPORE (ICIS)–Energy giant Saudi Aramco's net profit in 2023 fell by 24.7% to Saudi riyal (SR) 454.8bn ($121.3bn), weighed by weaker crude oil prices as well as lower refining and chemical margins.

18-Mar-2024

ANALYST VIEW: Japanese LNG expectations for Q2 firm as colder weather weighs on inventory

SINGAPORE  (ICIS)–ICIS sees Japanese LNG demand firming in the short term compared to previous expectations. This follows pressure on LNG storage from a late winter cold snap and weak coal availability in Q2 ’24. Some restocking activity is therefore expected as utilities prepare for potentially high cooling demand in Q3 ’24 and weaker year-on-year (YoY) margins for nuclear availability. ·         Power demand to remain higher YoY through March ·         LNG storage for power generation falls close to 2022 levels ·         Restocking activity anticipated in preparation for Q3   WEATHER OUTLOOKRunning into its third week, the current cold snap has been the longest in an otherwise predominantly mild 2023-24 winter season. The weather forecast is showing close-to- normal temperatures in H2 March but heating demand is still expected higher YoY considering the exceptionally mild conditions of the same period in 2023. The Japan Meteorological Agency has forecast an overall 40% chance of above normal temperature occurrence in the main island of Honshu from 16 March to 15 April in its latest month-ahead forecast issued on 14 March. The northern island of Hokkaido however could see a 40% chance of colder than normal temperature occurrence overall. There is a 40% chance of colder than normal temperatures in Honshu from 16-22 March, and a 50% chance for Hokkaido in that period. POWER DEMANDPower demand rose to 18% higher YoY in the week ended 10 March and up 4% compared to the 2018-22 average for the same period, making it the most bullish week so far in 2024. Demand remained elevated in the first half of the current week but is expected to ease into the weekend. Still, higher YoY demand is forecast to continue through March. STORAGE Partly as result of the ongoing cold snap, LNG storage for power generation fell for a second consecutive week, to 1.83m tonnes on 10 March. This is down by 0.55m tonnes from 12 March 2023 and up by just 0.1m tonnes from 13 March 2022. As shown in October last year, stocks could rebound quickly in the shoulder season, but this would require higher LNG imports. NUCLEAR Kansai Electric has announced a restart date for its Takahama 4 reactor on 26 April. The reactor was originally scheduled to return from maintenance on 5 April, but the restart date was left undecided for over a month pending investigation into damage to steam generators. Nuclear generation is forecast higher on year by 15% in Q2 ’24 but could fall lower in Q3 ’24 depending on the timing of nuclear restarts. Chugoku Electric has indicated plans to restart its 820MW Shimane 2 in August and Tohoku Electric its 825MW Onagawa 2 in September, but risk of further delay remains. COAL Weak coal availability could also lift LNG demand in Q2 ’24. Plant availability for March is currently down by about 5% from last year, with JERA’s 1.07GW Taketoyo 5 offline since a fire incident on 31 January and J-Power’s 1.05GW Tachibana-wan 1 since 22 February. Restart dates have yet to be announced. There have also been reports of improving spark spreads over dark spreads, indicating coal plant operating rates should remain weak.

15-Mar-2024

INSIGHT: Indorama exit from PET feedstock markets to spur China PTA exports

SINGAPORE (ICIS)–Demand for China’s purified terephthalic acid (PTA) will get a boost as Indorama Ventures Ltd (IVL), a global producer of downstream polyethylene terephthalate (PET), shifts away from expensive integrated operations. IVL plant closures likely to focus on PTA – sources Tariff barriers dampen growth prospects for China PTA, PET exports China pins hopes on Belt and Road Initiative for new markets IVL cited overcapacity in China as one of the principal reasons for its new strategy – to procure cheaper feedstock from Asia, instead of running integrated facilities in the US. “A large portion of the refineries in the West are aged and losing their competitiveness. These facilities are expected to gradually close in the future,” ICIS senior analyst Jimmy Zhang said. The Thai company is the largest global PET resin producer with a 20% global market share and operates 147 production facilities in 35 countries, with its sales footprint covering over 100 countries in six regions – North America, Asia, Europe, the Middle East and Africa (EMEA), and South America. IVL 2.0 CALLS FOR SHUTDOWN OF SOME PTA UNITS Globally, IVL has a total production capacity of around 19m tonnes/year, the bulk of which or 67% are in combined PET business, which covers integrated PET, specialty chemicals and packaging, according to Thai investment research firm Innovest Securities. Integrated olefins derivatives account for 21% of the total capacity, while fibres have a share of 12%, it added. Market players said that in the US, IVL may prioritize shutting down PTA units over monoethylene glycol (MEG) units, whose production costs are still competitive compared with other global producers, thanks to their use of shale gas. “Given the current economic and market conditions, it is a wise decision to sell the assets which could not make money to ‘save its life’,” a trader in Asia said. In Asia, IVL currently operates three PTA assets – two in Thailand and one in Indonesia. According to market sources, the company could potentially mothball one of its less cost-effective PTA units in Thailand due to old age and technical issuSes. Its operations in Indonesia can better serve India, benefitting from competitive freight rates to IVL’s key market in Asia, they said. For now, IVL’s PTA plants in Asia still hold a unique export advantage in the south Asian country, as they are certified by the Bureau of Indian Standards (BIS). This certification was mandated by India late last year. Currently, no Chinese PTA producers have obtained BIS certification, reducing competition for IVL from Chinese imports. Origin swaps for PTA have taken place, with lower priced China cargoes being exported into southeast Asia as well as their downstream PET asset in Egypt. This enables Indorama to push for more exports to India at a much better price netback. This will unlikely change unless China PTA producers are able to obtain the BIS certification from India. Under its new masterplan dubbed “IVL 2.0”, IVL said that it will be reviewing six operating assets in the ‘West’ for potential shutdown, as it seeks to boost competitiveness. Including the Corpus Christi Polymers (CCP) joint venture project with Alpek and Far Eastern New Century (FENC) whose construction was halted, the number of projects under review total seven. IVL chief Aloke Lohia said that feedstock prices in Western markets are expected to increase over time as peak oil demand draws closer and refineries shut down, while the reverse will occur in emerging Asian markets as capacity rises, driving feedstock costs lower. The rise in refining capacity in China and India allows IVL to buy petrochemical feedstocks cheaper than they could produce them domestically,  Lohia had told ICIS. CHINA CAN FILL IN IVL PTA NEEDS China has the ability to export PTA at much lower cost amid a domestic oversupply, with the country’s annual production capacity now at more than 70m tonnes, only a small fraction of which – around 3m tonnes – are shipped abroad, according to the ICIS Supply & Demand Database. Over the years, China has continually increased its capacity across the entire polyester chain, granting Chinese producers a significant advantage in integration and scale for paraxylene (PX), PTA and PET, Zhang said. The country is now a major PTA exporter and has swung from being the world’s biggest net importer of polyester fibres and PET resins (bottle and film grade) to being the biggest net exporter, ICIS senior Asia consultant John Richardson said. But trade barriers in several countries hamper imports from China, raising the likelihood of “more barter trading activities” in the future, Zhang said. He is referring to a process in which Chinese cargoes will move to a duty-free country, which, in turn, will re-sell the volumes. With the change of origin, the cargoes can then be sold to markets with existing trade barriers to China duty free. “For example, it is likely that China will export more PTA to South Korea, while South Korea will export more PTA to other countries who set trading barriers for China,” Zhang said. CHINA CHANGES APPROACH TO TRADEWith anti-dumping investigations curtailing direct exports of PET to certain markets, China is moving away from western markets, shifting its focus on those covered by free-trade agreements within its Belt & Road Initiative (BRI). The country’s PET export market has shrunk since mid-2023 after the EU started anti-dumping investigations, with provisional duties on Chinese material activated in November of the same year. Anti-dumping investigations against Chinese PET, meanwhile, are ongoing in Mexico in North America and South Korea in Asia. China is expanding free-trade agreements (FTAs) with Belt & Road Initiative (BRI) and non-BRI member countries to counter growing geopolitical differences with the west, potentially leading to a shift in trading patterns as Chinese apparel and non-apparel production moves offshore to these nations, ICIS’ Richardson said. Overseas plants could be supplied by China-made polyester fibres, allowing the country to retain dominance in the global polyester value chain and offset rising labour costs, Richardson said. “Offshoring to the developing world may also enable China to make up for any lost exports of finished polyester-products to the West due to increased trade tensions,” Richardson added. China had signed 21 free trade agreements with 28 countries and regions as of August 2023, according to the Chinese state-owned Xinhua news agency. More than 80 countries and international organizations had subscribed to the “initiative on promoting unimpeded trade cooperation along the Belt and Road”, which is part of the BRI, it said. Source: Mercator Institute for China Studies (MERICS) Insight article by Nurluqman Suratman With contributions from Judith Wang and Samuel Wong Thumbnail image: Canal Container Transport, Huai'an, China – 12 March 2024 (Costfoto/NurPhoto/Shutterstock)

15-Mar-2024

Specialised analytics

Optimise outcomes with ICIS specialised analytics tools, seamlessly integrated into your workflows and processes via Data as a Service (DaaS). Support your supply and demand data with critical cost and margins data, using ICIS Cost Curves. Or gain access to recycled plastics with our innovative Mechanical and Chemical Recycling Supply Trackers. *Available for chemicals only

Contact us

Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on trusted data, insight and analytics, supporting our partners as they transact today and plan for tomorrow.

    We would like to keep you up-to-date with what’s happening at ICIS* and tell you about our latest products and other services. We may email you about information we think you’ll be interested in, including selected articles and reminders about forthcoming events. If you do not wish to receive such information please tick the box to opt out of these emails