January 2019 Issue: CPMA/013/2019

Industry Member Companies in the News Snippets CPMA (RIL) reported an 8.8 per cent rise Trading activity would likely be thin in most petrochemical in its consolidated net profit for the December quarter. product markets as the Lunar New Year holiday season Global financial services firm UBS said the Reliance is approaching. Fundamentals are mixed in the Asia Industries has the true potential to evolve from an petrochemical sector with the olefins markets expecting integrated energy company into a consumer giant like a slight rally as buyers return to replenish inventory Amazon or Alibaba. In a comprehensive 100-page report, ahead of the Chinese New Year holidays. UBS said Reliance Industries can become a market leader in telecom and media, while gaining a significant Meanwhile, in the aromatics market, stronger naphtha share in retail/e-commerce. prices is expected to help boost aromatics prices while the polymers markets turn bearish as trading activity (IOC) announced a total

BUZZ winds down ahead of the lunar new year. investment of Rs 16,641 crore in Tamil Nadu. The announcement was made at the Tamil Nadu Global For 2019, the US ethylene market is expected to see Investors Meet 2019. Indian Oil Corporation Ltd. reported a continuation of additional capacity coming online. a surprise profit in the third quarter despite lower gross The market will remain oversupplied and the added refining margin and sharp fall in crude oil prices. Net capacity would continue to lengthen the market, profit stood at Rs 717 crore in the October-December potentially putting additional downward pricing period, a 78 percent fall sequentially. pressure on the market. Petrochemicals Ltd (HPL). The Odisha The Asian butadiene market is likely to be stable to firm government has started the process of land identification in the first half of 2019 as tight supplies from heavy for a mega petrochemical complex proposed by plant maintenance may be offset by additional capacity Haldia Petrochemicals Ltd. HPL emerged the biggest expansions as well as bearish downstream markets. Greenfield investor at the second edition of Make in Odisha 2018, a biennial investors’ conclave, pledging Taiwan’s Oriental Petrochemical (Taiwan) Co. Ltd. Rs 70,000 crore investment. restarted its 1.5 million mt/year purified terephthalic acid line at Taoyuan Tuesday from a maintenance Gujarat State Fertilizers and Chemicals Ltd (GSFC) that lasted almost five weeks since end-November, a reported a 50.42 per cent drop in its standalone net profit company source said. continued on page 2

Growth in petrochemicals will be as high as 50% by 2040. The consumption for a country doesn’t speed of growth is without parallel. seem to be a welcome development Commentary Oil took almost 45 years to go in recent times. More consumption from 1% of global energy to 10%, means more waste generation and for the month and gas took more than 50 years, more carbon emission. Of late renewables are expected to do so on it and back home Maharashtra environment commitment has taken within 25 years. Govt has announced ban on single a central stage. According to one use plastics. Efforts are towards study by 2050, development of EV Germany is set to phase out all its decarbonisation of transportation, will reduce consumption of fossil coal-fired power stations by 2038. energy and manufacturing. We fuel and growth in petrochemical Germany would join a growing are also seeing an emergence consumption will require more use of number of countries around the world in number of conferences being feedstock i.e. crude or natural gas. that have decided to end the use of organised in India and abroad Use of crude for petrochemicals coal, a key source of greenhouse on subject covering sustainability, is likely to grow much faster than gas emissions. Germany finally circular economy and reducing growth in fuel consumption. Fuel has a road map towards becoming carbon emission. consumption is estimated to peak coal-free. Green campaigners insist around 2030-35 and then decline. How the future will unfold is that a speedy end to coal power is PETCHEM The plastic floating in oceans of interesting. Renewable energy necessary for Germany to meets it the world has already reached sources will be the world’s main climate change goals. Berlin has alarming proportions. source of power within two decades committed to reducing carbon and are establishing a foothold in dioxide emissions from the energy This is making the Govt, the global energy system faster than sector by more than 60 per cent by Monthly Newsletter Environmentalists and policy makers any fuel in history. Wind, solar and 2030, using 1990 as the baseline. from to sit back and have a fresh look other renewables will account for on ways to reduce consumption of On climate mitigation, India has about 30% of the world’s electricity plastics, increase recycling and ban made commitments through the supplies by 2040, from 10% today. use of certain single use plastics. The Paris agreement to reduce its carbon UNEP has already initiated action In regions such as Europe, the figure emission intensity by 35% by 2030.

1 | January 2019 PETCHEM BUZZ

Trade Statistics- Key Products Government Communications and Interactions 2017-18 2018-19 (Apr-Nov) Average monthly Imports Sr. NN Key Submissions for enhancing Product No. Imports Exports Imports Exports 2017-18 Apr-Nov 18 % chemical & petrochemical exports (KT) (KT) (KT) (KT) (KT) (KT) Change were made to DCPC in response to 1 PVC 1861 20 1307 11 155 163 5.3% their letter based on inputs received from members. 2 LLDPE+HDPE 1418 435 803 584 118 100 -15.1% NN CPMA delegation met Shri Sudhanshu 4 PP 939 552 557 6 78 70 -11.0% Pandey, Additional Secretary, and 5 SM 789 5 606 471 66 76 15.2% Dept of Commerce to once again 9 PTA 408 212 447 75 34 56 64.6% reiterate our concerns on RCEP and 3 MEG 931 137 433 214 78 54 -30.3% in particular with China. It was highlighted that offering tariff 6 EDC 713 45 368 10 59 46 -22.6% concessions on petrochemical products 8 VCM 398 0 210 135 33 26 -20.7% in RCEP will threaten the financial 7 LDPE 465 108 289 0 39 36 -6.7% viability of the projects. 10 ABS 82 0.3 80 0.3 7 10 45.9% NN CPMA made representation stating that Government of India should not 11 PS 50 69 36 44 4.1 5 9.6% consider granting tariff concession on 12 SAN 7 1 6 0 0.6 1 31.9% the key petrochemical items and retain 13 EPS 3 3 1 2 0.2 0 -54.9% the same in India’s Exclusion List under the CEPA with Korea. Industry’s views Source: DGFT were forwarded to DGTR on safeguard and other related issues for RCEP Key Economic Indicators subsequent to the meeting held with DG at DGTR.

UoM Oct End Nov End Dec End Jan 19 End NN Matter on inclusion of Polyethylene and Polypropylene under MEIS taken up Forex Reserves US $ Bn 393.5 392.8 393.4 397.0 with Ministry of Commerce & Industry for sustainable growth in India’s exports. Exchange rates 1 US$ 74.0 69.7 69.8 70.8

1 Euro 83.8 78.9 79.8 80.1 CPMA: Member Companies... continued from page 1 100 Jap Yen 65.6 61.4 63.4 64.0 to Rs 98.94 crore during the third quarter of 1 Pound Sterling 94.6 89.0 88.9 91.3 the current fiscal on higher expenses. The net profit had remained higher at Rs IIP %agePrev month end 8.4%* 0.5% 2.4% NA 199.57 crore in the year-ago period due to WTI Crude Oil US$/MT 65.3 50.9 45.3 54.2 one-time write-off of Rs 100 crore taxes.

Brent Crude Oil US$/MT 75.5 57.3 50.2 62.2 GAIL (India) Ltd reported a 33.2 percent jump in third-quarter profit, beating market Naphtha C&F SEA US$/MT 672 469 432 497 estimate, buoyed by a surge in revenue from its natural gas marketing segment. C2 C&F SEA UD$/MT 1032 906 823 898 Profit for the quarter ended Dec. 31 came C3 C&F SEA US$/MT 1,070 790 855 870 in at 16.81 billion rupees ($234.32 million), compared with a profit of 12.62 billion ** Quick Estimates PIB rupees last year.

Upcoming 2019

34TH ANNUAL WORLD [email protected] PETROCHEMICAL CONFERENCE Asia Petrochemical Industry Conference Events 19-22 MARCH 2019 | SAN ANTONIO, TX 16-17 May 2019 | TAIPEI, TAIWAN

CPMA Members

Chemplast Sanmar Ltd. l DCM Shriram Ltd. l DCW Ltd. l Engineers India Ltd. l Finolex Industries Ltd. l GAIL (India) Ltd. l Gujarat State Fertilizers & Chemicals Ltd. l Haldia Petrochemicals Ltd. l Corporation Ltd. l HPCL – Mittal Energy Ltd. l Indian Oil Corporation Ltd. l Indian Synthetic Rubber Private Limited l INEOS Styrolution India Ltd. l LG Polymers (India) Pvt. Ltd. l MCPI Pvt. Ltd. l Mangalore Refinery and Petrochemicals Ltd. l ONGC Mangalore Petrochemicals Ltd. l ONGC Petro Additions Ltd. l Reliance Industries Ltd. l Supreme Petrochem Ltd. l Tamilnadu Petroproducts Ltd.

Associate Members: Braskem SA l HPL Additives Ltd. l ICIS l Indorama Industries Ltd. l Jindal Poly Films Ltd. l SABIC India Pvt Ltd.

CHEMICALS AND PETROCHEMICALS MANUFACTURERS ASSOCIATION 708, 7th floor, Kailash Building, 26 Kasturba Gandhi Marg, New Delhi – 110 001. l Telephone: 011-43612198 l Email: [email protected] Forprivate circulation.

2 | January 2019