Chemical Business MAKING SENSE of CHEMICAL PRICES

24-30 August 2018 Chemical Business MAKING SENSE OF CHEMICAL PRICES

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Untitled-1ICB_220618_024.inddICB_020318_302.indd 1 1302 23/08/201820/06/201828/02/2018 17:5512:5316:25 Chemical Business VOLUME 294 NUMBER 6 24-30 AUGUST 2018 CHEMICAL PROFILES 90 May 4 US MPG, Asia Styrene Zoey Chen/RBI Zoey 2017 24-30 August 2018 11 Europe Orthoxylene, US 6 June Chemical Business Polycarbonate MAKING SENSE OF CHEMICAL PRICES 2 Asia LAB, Latin America Ethanol 18 Europe Oxo-alcohols, Asia SBR 9 Europe POM & PBT, US Butyl 43 C 23 US MTBE, Asia TDI Acetate 98 June 16 Europe Polycarbonate, US MEK 1 US PA, Europe MTBE 8 Europe MPG, Asia Toluene 23 Asia Maleic Anhydride, Europe 15 Middle East MDI, US MMA MIBK 22 Middle East Polyethylene, Europe 30 US MEG, Europe LLDPE MEG 16 July 29 Europe MMA, Asia ABS 7 Asia VCM, Asia Isopropanol 108 July 21 US Nylon, Asia MIBK 13 US Isopropanol, Asia TiO2 28 Europe Polyols, US Orthoxylene 20 Europe MA, US Paraxylene 22 August 27 Asia MPG, Europe Methanol 11 Europe Polypropylene, Asia MTBE 114 August COVER STORY 18 Asia TDI, Latin America HDPE 10 Middle East/India Solvents, US This bonus issue of ICIS Chemical EDC 26 September Business brings you a complete 17 US Polyols, Europe LDPE 1 Europe Polystyrene, US Soda Ash directory of Chemical Profiles and Value Chains from Jun 2017 to Aug 2018. 8 Europe PTA, Asia Orthoxylene 15 US TDI, Asia MDI ICIS VALUE CHAINS 22 US TiO2, Europe Ethylene Oxide 16 Europe VAM, Asia Phthalic Anhydride 2017 29 Asia VAM, Europe PVC 23 US SBR, Europe VCM 118 September Chlorine 36 October 72 March 122 November Methanol 2 US Styrene 6 US VAM, Asia PBT 2018 9 US Propylene, Europe SBR 13 Latin America Polypropylene, 126 January Ethylene Europe R-PET 16 Europe Styrene, Latin America PVC 130 March Propylene 23 Middle East Polyols, US PVC 20 Asia Polyester, US ABS 134 May Butadiene 30 US PTA, Europe Plasticizers 27 Asia PMMA, Europe Propylene 138 June Benzene 82 April 142 August Paraxylene 44 November 6 Asia PTA, Europe Nylon 3 Europe Propylene Oxide, US Ethyl 13 US Ethylene Oxide, Asia Propylene Acetate REGULARS 20 US Polypropylene, Europe Phenol 147 What’s on 10 Asia Polyols, Europe SAN 21 Europe PET, Asia Caprolactam 149 Conferences & Events 17 Latin America Polystyrene, Asia PBR 24 US LDPE, Europe Titanium Dioxide elcome to this special bonus issue of ICIS Chemical Business, where we 52 December have gathered a complete directory 1 Middle East PET, Europe TDI W of Chemical Profiles and ICB Value Chains from 8 US Ethylene, Asia Plasticizers June 2017 up until August 2018. 15 Europe Acetic Acid, Asia Caustic WILL BEACHAM JOSEPH CHANG The Chemical Profiles – which reader BARCELONA NEW YORK Soda research tells us are highly valued – provide a [email protected] [email protected] 2018 snapshot of the fundamentals driving individual chemical markets – from 58 January olefins, aromatics, intermediates, polymers, inorganics, oleochemicals and other commodity chemicals. 5 US Fatty Acids, Europe Butyl Our Value Chains section takes it a step further, showing the Acetate relationships between products in one particular value chain. 12 Asia MEK, Europe Fatty Acids From your feedback highlighting the Chemical Profiles as a great value to 19 US LLDPE, Asia Epichlorohydrin your subscription, we aim to make this as user friendly as possible. 26 US VCM, Europe PMMA Profiles are listed in date order. You can also use the search button on 66 February the top left of your screen to locate the profiles. 2 Europe Toluene, Asia Fatty Acids www.icis.com 24-30 August 2018 | ICIS Chemical Business | 3 Critical market data, Critical market data,tools tools and expertiseand expertise

PricingCritical Intelligence market data, tools and expertise Access independent price assessments that meet IOSCO’s PRA Principles and which are widely trusted and used as benchmarks in the industry. ICIS coverage is unrivalled, publishing pricing data and market information for over 180 commodities, across all key regions. Make fast and confident decisions and determine the best time to buy or sell with access to: Pricing Intelligence l Spot and contract price assessments, including personalised alerts to notify you of changes Access l independentIn-depth analysis price and assessments price history that to meethelp youIOSCO’s track PRAand understand Principles and price which drivers are and widely trends trusted and lused Easy as benchmarks access to information, in the industry. with multipleICIS coverage delivery is optionsunrivalled, publishing pricing data and market information for over 180 commodities, across all key regions. Make fast and confident decisions and determine the best time to buy or sell with access to: l Spot and contract price assessments, including personalised alerts to notify you of changes l Analytics In-depth Solutions analysis and price history to help you track and understand price drivers and trends l Easy access to information, with multiple delivery options ICIS offers a unique combination of analytics tools designed to help you navigate and optimise opportunities in an ever-changing market, making complex analytics simple for you. Our solutions help you react quicker to market developments in a demand-led, price-sensitive global marketplace, enabling you to: Analytics Solutions l Spot opportunities and minimise risk ICIS l offers Shape a unique future combination strategy of analytics tools designed to help you navigate and optimise opportunities l Maintain in an a competitiveever-changing advantage market, making complex analytics simple for you. Our solutions help lyou Supplement react quicker your to marketin-house developments analytics in a demand-led, price-sensitive global marketplace, enabling you to: l Spot opportunities and minimise risk l Shape future strategy Supply l Maintain & Demand a competitive Database advantage Receive l Supplement an end-to-end your perspectives in-house analytics across the global petrochemical supply chain for over 100 petrochemical commodities. Data include import and export volumes, consumption, plant capacities, production and product trade flows – from 1978 up to 2040, providing you with a long-term view of the rapidly changing petrochemical market. The database enables you to: Supply & Demand Database l Determine the local or regional scenario in a global context to support your planning Receive l Identify, an end-to-end evaluate perspectives and optimise across opportunities the global petrochemical supply chain for over 100 petrochemical commodities. l Validate Data commercial include import and growth and export strategies volumes, consumption, plant capacities, production and product l Identifytrade flows and manage– from 1978 financial up to or2040, investment providing risks you with a long-term view of the rapidly changing petrochemical market. The database enables you to: l Determine the local or regional scenario in a global context to support your planning l Identify, evaluate and optimise opportunities Industry l Validate News commercial and growth strategies Our lextensive Identify global and manage network financial of local experts or investment report breaking risks news stories that impact chemical markets, influence commodity prices, and affect your daily business decisions. Alerts and our one-stop platform keep you fully informed and support your planning, with access to: l Industry Real-time News news round-the-clock l Market analysis and the likely impact on your markets Our lextensive Production global news network and forceof local majeures experts report breaking news stories that impact chemical markets, influence commodity prices, and affect your daily business decisions. Alerts and our one-stop platform keep you fully informed and support your planning, with access to: l Real-time news round-the-clock l Market analysis and the likely impact on your markets l Specialist Production Services news and force majeures The global team of ICIS experts brings extensive knowledge of the industry sectors through:

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Untitled-1ICIS-Market_intell_A4_ad.indd 1 1 23/08/201808/03/2018 17:5522:05 SPECIAL ISSUE 2017-2018 CHEMICAL PROFILES

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Zoey Chen/RBI Zoey

Welcome to the Chemical Profile and commodity chemicals covered by ICIS on a Value Chain special issue of ICIS regional basis. Value Chains take a broader Chemical Business where we have look at related products across all the main aggregated this content in an easy-to- product areas in commodity chemicals. access format. We list the articles in date order but the Inside, you will find a comprehensive digital magazine is also searchable using directory of all Chemical Profiles and Value the search box in the top left. Chains published in the magazine from There is also an A-Z directory of June 2017 through August 2018. We Chemical Profiles on the ICIS Chemical provide these snapshots of the main Business homepage.

www.icis.com 24-30 August 2018 | ICIS Chemical Business | 5 asia chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Izham Ahmad SINGAPORE LAB

USES ready well-developed, demand may be pla- ASIA/MIDDLE EAST LAB CAPACITY Linear alkylbenzene (LAB) is an organic teauing, with consumption growth there ex- ’000 TONNES/year compound used almost wholly as an inter- pected to be slower. Company Location Capacity mediate in the production of surfactant line- Jin Tung Nanjing, China 350 ar alkylbenzene sulphonate (LAS), which is PRICES Petrochemical also known as linear alkylbenzene sulphonic Despite the threat of oversupply, LAB prices Fushun Fushun, China 280 acid (LABSA). have made relatively decent gains over the last Petrochemical LAB is an important feedstock for biode- year, driven largely by higher feedstock costs. In Sinopec Jinling Nanjing, China 200 gradable detergents and other cleaners. early-March 2017, LAB import prices in India Petrochemical LAS is used widely for detergents. The rose to $1,375/tonne CFR India, their highest Isu Chemical Ulsan, South Korea 180 common form is as a sodium salt. since June 2015. This was linked to India’s plan Unggul Indah Merak, Indonesia 180 to impose anti-dumping duties on Qatar, Iran Cahaya SUPPLY/DEMAND and China, plus higher benzene prices. Prices Gulf Farabi Jubail, Saudi Arabia 140 Global LAB demand in 2016 was estimated at have now eased but remain around $1,300/ Petrochemical 3.68m tonnes, with Asia and the Pacific re- tonne CFR India. This is still about 22% higher Indian Oil Baroda, India 120 gion accounting for close to 49% of that, at than in January 2016, when LAB prices hit their Reliance Industries Patalganga, India 120 1.79m tonnes, according to the ICIS Supply- lowest levels since ICIS began tracking the data, Demand Database. of around $1,065/tonne CFR India. Tamilnadu Manali, India 120 Petroproducts LAB demand is expected to continue grow- ing in 2017, at an estimated annual rate of TECHNOLOGY Iran Chemical Esfahan, Iran 110 Ind. Invst. around 1.5% from 2016. N-paraffin and benzene are the main feed- In terms of production, global LAB output stocks for LAB. High-purity n-paraffin is ob- Egyptian Linear Ameriya, Egypt 100 Alkyl Benzene was estimated at 3.7m tonnes in 2016 and is tained by hydrotreating jet kerosene. This is forecast at 3.76m for 2017, with production in then dehydrogenated to form linear olefins, Great Orient Taicang, China 100 Chemical Asia and the Pacific expected to account for which are then exposed to benzene in the about 47% of that. presence of a catalyst to produce LAB. Labix Sri Racha, Thailand 100 Asia capacity exceeds 2.6m tonnes/year, There are three types of catalysts used in Nirma Baroda, India 100 with 13 manufacturers accounting for just producing LAB: hydrogen fluoride (HF) and SEEF Mesaieed, Qatar 100 over 2.0m tonnes per year. aluminium chloride, but this is being phased Formosan Union Lin Yuan, Taiwan 90 India is still considered an undersupplied out. The HF process was seen as the most Chemical market with production from the four main commercially viable but environmental con- JX Nippon Oil Kawasaki, Japan 80 domestic producers believed to still be insuf- cerns led its replacement since 1995 by a and Energy ficient to fully meet the growing demand for fixed bed catalyst system – for example, the Reliance Industries Vadodara, India 60 LAB and LAS there. DETAL process, which does not use HF. Bistun Kermanshah, Iran 55 But with many SE Asian economies al- Petrochemical OUTLOOK Amiriya Ameriya, Egypt 50 ASIA LAB LAB markets generally follow feedstock ben- Petroleum Refining zene and jet kerosene, which track crude oil. NOTE: Top 20 listed by capacity $/tonne, spot 1,400 However, LAB supply and demand are also CFR SE Asia important, as are economic factors. South Asia, CFR India 1,350 particularly India, is a key market for LAB and Yanbu, company sources said.Construction is LAS. India is seen as an undersupplied market, expected to start soon while commercial opera- 1,300 and imports are needed to supplement pro- tions are due in Q1 of 2020. India is not expect- duction by the four main Indian domestic pro- ed to have LAB for exports but it does continue 1,250 ducers. Sources said about 200,000 tonne/year to export LAS, to Pakistan, Africa and SE Asia. of imports are needed to meet India demand. China is also a key growth region but is be- 1,200 However, the introduction of anti-dumping lieved to be sufficiently supplied. The SE Asia duties on Qatar, Iran and China in April 2017 region is adequately supplied with Thai Oil 1,150 has upset some market fundamentals, though and Japan’s Mitsui & Co’s 100,000 tonne/year other suppliers could fill any supply gaps. Labix having started production in 2016. ■ 1,100 Jun May Saudi Arabia’s Farabi Petrochemical is plan- Keep track of price movements for a wide 2016 2017 ning to expand its production of LAB and feed- range of commodity chemicals by subscribing stock normal paraffin from a new complex at to ICIS pricing reports at icis.com

6 | ICIS Chemical Business | 2-8 June 2017 www.icis.com

ICB_240818_006-015 Profiles Jun17.indd 6 8/20/18 11:38 AM LATIN AMERICA chemical profile

Leela Landress de Perez Houston Ethanol

USES for ethanol for calendar year 2017 is forecast at TOP BRAZIL ETHANOL PLANTS In Brazil, the ethanol-use mandate has been 27.7bn litres/year, up 277m litres relative to the cubic metres/day mandatory since 1977 when the legislation re- revised figure for 2016. Brazil is an important Company Location Capacity quired a 4.5% blend of ethanol to gasoline. Ac- user of ethanol for fuel consumption. Total eth- Agro Energia Nova Alvorada 3,700 cording to the legislation, the ethanol blend anol consumption for use as fuel was estimated Santa Luzia Do Sul can vary from 18% to 27.5% and it is currently at 25.723bn litres/year for 2016, down 3.07bn BP Bioenergia Edeia 3,700 set at 27% (E27). Ethanol is also widely used in litres compared to the previous year. Tropical pharmaceutical and food and beverage appli- Brazilian drivers, many of whom own flex- Brenco - Companhia Alto Taquari 3,300 cations, such as hand sanitizers and vodka. fuel vehicles (FFVs) which allow switching Brasileira De from gasoline to ethanol, would only pick the Energia Renovavel SUPPLY/DEMAND latter if its price is less than 70% that of gasoline. Brenco - Companhia Mineiros 3,200 Total Brazilian ethanol production for 2016 was Brasileira De estimated at 30.372bn litres, similar to levels PRICING Energia Renovavel seen in 2015. Total 2016 ethanol for fuels pro- Ethanol pricing in Brazil is generally seasonal. Rio Claro Cacu 3,000 duction was estimated at 28.022bn litres, up 2% As the harvest/crush begins in April every year Agroindustrial from the previous year. Sugar-ethanol mills are prices decline on rising supply. As the harvest/ Pedra Buritizal 2,900 expected to divert less sugarcane to ethanol pro- crush winds down in November and Decem- Agroindustrial duction in the current crop – approximately ber every year prices rise. This year, prices Cerradinho Chapadao Do Ceu 2,800 55% of the sugarcane volume as opposed to have dropped from highs seen at the end of the Bioenergia 59% in 2015/16, due to favourable sugar prices previous harvest/crush. Iaco Agricola Chapadao Do Sul 2,750 in the international and domestic markets fa- Renuka Do Brasil Promissao 2,520 voured by the world deficit in sugar supply. TECHNOLOGY Sjc Bioenergia Ltda Cachoeira Dourada 2,480 Ethanol installed industrial capacity de- Ethanol is an alcohol made by fermenting Acucar E Alcool Guaira 2,470 pends on annual decisions made by individual sugar components of plant materials such as Oswaldo Ribeiro plants to produce sugar and/or ethanol. corn and wheat starch, sugarcane, sugar beet, De Mendonca The industry responds to the theoretical ratio sorghum and cassava. Sugarcane is virtually Usina Eldorado Rio Brilhante 2,450 of 40:60 to switch between sugar to ethanol pro- the sole source of feedstock for ethanol produc- Coplasa - Açucar Planalto 2,400 duction or vice versa from harvest to harvest. tion in Brazil. Ethanol can be produced either E Alcool Once producing units adjust their plants to by chemical or microbiological processes. The Central Energetica Luis Antonio 2,400 produce a set ratio of sugar/ethanol in a given chemical route is based on ethylene hydration, Moreno Acucar E year, there is much less flexibility to change it while the microbiological process is chiefly Alcool during the crushing season. According to in- carried out by yeast Saccharomyces cerevisiae. Adecoagro Vale Angelica 2,400 dustry sources, sugarcane represents between Currently, the main industrial route globally is Do Ivinhema 60-70% of the cost of producing ethanol. the microbiological process. Pedro Afonso Pedro Afonso 2,250 On the demand side, total domestic demand Acucar E Bioenergia OUTLOOK NOTE: Top 16 plants listed by capacity BRAZIL ETHANOL Hydrous ethanol has been uncompetitive with SOURCE: National Petroleum Agency (ANP) gasoline since the end of 2016 and with Bra- Reais/cbm 2,400 zil’s state-controlled oil company, Petrobras, uncharacteristically low for the time between Anhydrous, ex-works Sao Paulo lowering prices for diesel and gasoline at its the yearly harvest season. Hydrous, ex-works Sao Paulo domestic refineries, expectations are that sugar In response to the high volume of imports in 2,200 cane mills will prolong their preference for the first quarter, industry players have met sugar production over ethanol. with the Ministry of Agriculture, Blairo Maggi, 2,000 Petrobras adjusts domestic gasoline and die- to push for the reinstatement of the 20% im- sel prices on a monthly basis to keep them in port tax on ethanol. The government has begun 1,800 line with international levels. the process to reinstate the import tax, but a Anhydrous ethanol has seen lower pricing fixed start date has not been announced. Brazil

1,600 in recent months as large volumes of imported eliminated the import tax in 2010, in a meas- product are hitting Brazilian shores. ure the government called a goodwill action to Ethanol imports into Brazil hit record levels foster greater global biofuel trade. ■ 1,400 May May the first three months of this year, reaching an Subscribe to ICIS pricing reports to keep 2016 2017 estimated 600,000 cubic meters (cbm) and up with a wide range of chemical markets causing upheaval in the sector as prices were across the globe at icis.com

www.icis.com 2-8 June 2017 | ICIS Chemical Business | 7

ICB_240818_006-015 Profiles Jun17.indd 7 8/20/18 11:38 AM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Melissa Hurley London POM, PBT

Uses mained relatively stable in 2017 and demand Europe eNGINEERING PLASTICS Polyacetal, also known as polyoxymethylene and supply levels are largely balanced. Some ‘000 TONNES/year (POM), is a versatile thermoplastic used in market players view the market as lengthy. Company Location Capacity precision parts that require high stiffness, low BASF will close its European POM facility Ticona Frankfurt, Germany 140* friction and excellent dimensional stability. It and move production to South Korea at the end DuPont de Dordrecht, 95* has been particularly successful in replacing of 2018. BASF’s current POM facility at Lud- Nemours Netherlands metal parts. The automotive industry is the wigshafen, Germany has a nameplate capacity (Nederland) largest end-user. Other major outlets include of 55,000 tonnes/year according to ICIS data. BASF Ludwigshafen, 55* consumer and office appliances and electron- This follows the announcement that BASF Germany ics. Uses are varied and include gear drives, will establish a joint venture (JV) with South Ultraform (BASF) Ludwigshafen, 38* pumps, conveyor belts, bathroom fittings, Korea-based Kolon Plastics, to produce Germany hand tools, toys, construction equipment, 70,000 tonnes/year of POM in Gimcheon, Grupa Azoty Tarnow, Poland 14* watch parts and medical devices. South Korea. The 50:50 joint venture, named ** Polybutylene terephthalate (PBT), a heat- Kolon BASF innoPOM, will be located at the BASF Schwarzheide, 100 Schwarzheide Germany resistant plastic which shrinks very little dur- existing manufacturing site of Kolon Plastics ** ing forming, is primarily used in the automo- in Gimcheon that already includes a POM Lanxess/DuPont Hamm-Uentrop, 80 Germany tive, electronics and housing sectors. It is production facility. used to make items like car dashboards, rear DSM Engineering Emmen, Netherlands 30** view mirrors, showerheads and computer Prices Plastics Emmen keyboards. Although it is stretchy, it has less PBT quarterly contract prices increased in the NOTE: *Polyacetal **Polybutylene terephthalate stretch than some other polyesters like Lycra, first two quarters of 2017. Contract discus- making PBT a stiffer alternative. sions were delayed in some cases with key or dimethyl terephthalate (DMT). Some firms feedstock BDO applying price pressure on the are trying to modernise the production of PBT Supply/demand downstream PBT market. Second quarter by using bio-based BDO, which is made from Downstream PBT demand remains healthy BDO contracts settled at a significant increas- renewable feedstocks rather than petroleum. with the key automotive sector continuing to es, driven by a global tightening of supply, perform well. Butanediol (BDO) feedstock higher feedstock prices and solid demand. Outlook supply has been restricted so far in 2017. The After some pricing stability in quarterly The POM market is widely thought to remain higher feedstock prices remains the main POM contracts at the start of 2017, second- balanced. However, some expect changes in driver for the upward PBT pricing pressure, quarter POM contracts settled at an increase. production location, such as BASF moving with supply and demand also playing a role. This was largely driven by the firming of key their production facility out of Europe, to im- In the POM market, feedstock price move- feedstock methanol since mid-2016. Metha- pact the European market. ments are the central driver of rises in POM nol contract prices started on an upward tra- The European PBT market is expected to be quarterly contract prices rather than demand jectory in the middle of 2016, with POM pric- influenced by upstream BDO market dynamics, and supply dynamics. Conditions have re- es remaining stable throughout that period. which are particularly strong at the moment. The large increase in the first-quarter metha- With the BDO market experiencing tightness in EUROPE ENGINEERING PLASTICS nol contract intensified the upward pricing 2017, significant price increases have been fil- pressure in the POM market. The increase in tered downstream to the PBT market. €/kg, contract FD NWE 4.5 raw material prices were not widely passed Some PBT producers have experience tight- POM, natural grade PBT, lled PBT, ame-retardant PBT, un lled on to customers at the start of 2017, which ness in upstream BDO supply. The BDO spot 4.0 compressed POM margins for producers. market has been particularly tight. However, the majority of producers have been covered 3.5 Technology by contracted volumes and imported material. POM resins are made by the polymerisation Demand for PBT remains healthy with 3.0 of formaldehyde to produce the homopoly- strong levels of demand from the automotive mer. Copolymers are made by incorporating and construction sectors. If this downstream 2.5 other monomers. The process is capital inten- demand continues and upstream BDO supply sive. The resin is highly crystalline and the remains tight, the PBT market will continue 2.0 polymer chains have to be stabilised to pre- to be firm. ■ vent the resin breaking down during process- Additional reporting by Nick Cleeve 1.5 Jul Apr ing at elevated temperatures. Subscribe to ICIS pricing reports to keep 2016 2017 PBT is produced by the polycondensation up with a wide range of chemical markets of BDO with purified terephthalic acid (PTA) across the globe at icis.com

8 | ICIS Chemical Business | 9-15 June 2017 www.icis.com

ICB_240818_006-015 Profiles Jun17.indd 8 8/20/18 11:39 AM US chemical profile

Larry Terry Houston Butyl acetate

USES however, at declines ranging mostly from US BUTYL ACETATE CAPACITY Butyl acetate (butac) is a colourless, flamma- 1.5% to 7.1%. Even with declines, though, ’000 TONNES/year ble liquid, mostly used as an industrial sol- industry sources suggested demand for au- Company Location Capacity vent. Nearly 90% of this is used as a lacquer tomobiles is still at the high end of typical Oxea Bay City, Texas 100 solvent in automotive paint and surface coat- US auto sales. Dow Chemical Texas City, Texas 70 ings for wood furniture, and in a variety of On the import and export front, the most coating resins including epoxies, urethanes, recent data from the US International Trade Eastman Kingsport, Tennessee 70 Chemical cellulosics, acrylics and vinyls because it pro- Commission’s (ITC) indicated March butac vides good flow and brush-resistance when exports increased by 4.2% compared with the used with these resins. same month one year ago. could continue amid lengthening propylene Butac is also used as a synthetic fruit fla- March butac export volumes also were supply and some derivative maintenance that vouring in food products such as candy, ice higher from the previous month, rising by has softened propylene demand. Upstream cream, cheeses and baked goods, and as an 11.2% from February. NBA free-market prices also weakened by 2-5 odour enhancer in perfumes and pharmaceu- The top destination for US butac in March cents/lb for May, mostly on downward pres- ticals. It has also been used on a limited basis was Mexico, which took more than half of the sure from propylene. as a gasoline additive to boost octane levels. month’s export volume, followed by signifi- cantly smaller volumes to Canada, Brazil and TECHNOLOGY SUPPLY/DEMAND South Africa, the ITC data indicated. Butac is produced commercially by the esteri- Major US butac suppliers include Dow Fractionally smaller March import vol- fication of acetic acid with propylene deriva- Chemical, Eastman Chemical and Oxea, umes were higher by 36% compared with tive NBA in the presence of sulphuric acid, which have seen supply snug during the March one year ago. which acts as a catalyst. early part of 2017 and continuing into the The acetic acid, butanol and sulphuric acid second quarter. PRICES are heated in a reactor to 89˚C (192˚F). So far in 2017, butac demand has been Some butac contract values ended May at Vapours containing butac, butanol and healthy – stronger than during the first quar- rollovers, but most weakened from the April water are removed and condensed. The top ter of 2016, but not robust, however. range of 81-83 cents/lb ($1,786-1,830/tonne), layer is fed to a low boiler column, where un- Sources in the major downstream paint after a strong first-quarter run-up in contract reacted alcohol is flashed off and recycled to and coatings markets have said demand has and spot ranges driven principally by up- the reactor. improved by an average of 5% compared stream propylene and n-butanol (NBA). Capacities are highly flexible, meaning with the same time last year, with profits even Propylene increased sharply in January, other acetate esters can be produced in the more improved at about 7.5% year-on-year. February and March, pushing butac and most same units, depending on market need. Beyond the primary downstream archi- other derivatives prices sharply higher. But Capacities could be rated significantly tectural coatings sector are automotive coat- April saw a propylene decline of 6 cents/lb, higher if equipment were devoted solely to ings. The major automakers recently report- which pushed May butac prices lower. butac production. ed weaker-than-expected April sales; The previous month’s propylene contract movement – absent extenuating market con- OUTLOOK US BUTYL ACETATE ditions – typically heavily influences butac US butac is a mature market that generally price movement. tracks GDP growth and is expected to track Cents/lb, contract Del 85 But sources have said the domestic forecast economic growth between 2% and butac market has been driven as much or 3% during 2017. 80 more by supply-demand fundamentals Sources say current spring coatings de- than by cost factors. mand is higher compared with the spring of 75 In mid-April, only one of the three major 2016 on steady fair weather patterns in the 70 US producers proposed a May butac increase pivotal northeast US. of 3 cents/lb, but sources said that effort was Through the end of the year, butac demand 65 not successful. is expected to diminish gradually after peak

60 Price stability in May has surprised buyers, seasonal demand from the US paint and coat- but some sources say broadly snug supply ings markets this spring and summer. 55 persists, partly because of continued strong Buying interest typically slows in the last seasonal demand. quarter of the year. ■ 50 Jun Apr Weaker butac pricing, however, is likely in Keep track of price movements for a wide 2016 2017 June and beyond on the May propylene con- range of commodity chemicals by subscribing tract drop of 7.5 cents/lb. Upstream weakness to ICIS pricing reports at icis.com

www.icis.com 9-15 June 2017 | ICIS Chemical Business | 9

ICB_240818_006-015 Profiles Jun17.indd 9 8/20/18 11:42 AM europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Peter Gerrard London Polycarbonate

USES change. Production and logistics issues fea- EUROPE PC capacity Polycarbonate (PC) resins are tough thermo- tured and a stronger dollar meant European ’000 TONNES/year plastics with uses in optical media, the elec- PC producers might find more attractive op- Company Location Capacity trical, electronic and automotive industries portunities for exporting. Also, some suppli- Covestro Krefeld-Uerdingen, 330 and in glazing and sheet products. ers were experiencing very strong demand. Germany They are available in different grades and This resulted in a tight market, with some Sabic Bergen op Zoom, 260 can be extruded, blow- and injection-mould- converters struggling to acquire all the mate- Netherlands ed. PC is also used in compounds or blended rial they needed as supply became snugger. Sabic Cartagena, Spain 260 with other resins such as acrylonitrile-butadi- Covestro Antwerp, Belgium 240 ene-styrene (ABS) or polybutylene terephtha- PRICES late (PBT). In the second quarter of 2016 it was very Trinseo Stade, Germany 145 much a story of price stability and it became Kazanorgsintez Kazan, Russia 65 JSC (KOS) SUPPLY/DEMAND clear that supply was not sufficiently tight to By early 2016, there were signs that consum- bring about higher values for either extrusion ers were becoming more confident, and that or moulding grades. Subsequently, extrusion or other epoxides through catalytic reaction the condition of the European economy ap- grade prices slipped down a little in the last to aliphatic PC. This route has already been peared to be decidedly healthier than for three months of 2016, although moulding commercialised on a limited scale in China. some time. grade prices rolled over. The market lacked On the other hand, the European theatre any imbalance that could impart impetus to OUTLOOK is part of the global scene and the PC mar- attempts to raise prices. Looking ahead, many players in the PC market kets looked over-supplied. As far as possi- In 2017, because of the marked tightening view the prospects for demand quite positively. ble producers would try to shunt material of the market, initially prompted by supply, Recovery in the European economy has contin- around to where they might be able to ob- both quarterly moulding grade and monthly ued, bringing more confidence back into indus- tain the highest prices. extrusion grade numbers started to firm. try and perhaps supporting more optimistic as- As the year progressed, demand was As the year continued, healthy demand sumptions concerning forward plans. viewed on both sides of the market as gener- also contributed to the upward pressure on This outlook is dependent on specific sec- ally quite good across most sectors and re- prices, reflected in a sustained climb in extru- tors, with some such as water dispensers expe- gions, especially evident in the automotive sion grade values in each of the first five riencing something of a gentle decline, while sector, with indications of continued growth months of the year. Moulding contracts in- the consumption of PC in other sectors may for sales into that industry. Nevertheless, creased by an estimated average of €0.15/kg owe more to its comparative price against com- there was a readiness on the part of some sup- for the first quarter of the year, with an esti- petitive, alternative materials. The automotive pliers to ensure volumes as a priority, sup- mated increase of roughly €0.20/kg in the sec- industry continues to offer perhaps the greatest porting the belief that there was still over-ca- ond quarter. scope for increased consumption because of pacity in the industry. PC’s weight, strength and heat properties. In the first half of 2017, things began to TECHNOLOGY In the short term, the tightness of the mar- There are two processes to make PC: interfa- ket is expected by some to last until at least EUROPE PC cial and melt technology. In interfacial po- the end of the summer of 2017. A little further lymerization, alkali salts of BPA in aqueous out, consumption growth at an approximate €/kg, general purpose, contract FD NWE 3.0 solution are phosgenated in the presence of annual rate 5% might imply a lack of capacity Extrusion an inert solvent. Environmental and cost is- in the medium term. One producer suggests Moulding sues have forced producers to seek non-phos- that this could amount to around 200,000 2.8 gene routes. tonnes globally, in contrast to a situation of All take the same approach - where poly- over-capacity that dogged the industry only 2.6 merisation relies on the transesterification of very recently. Regardless of activity within diphenyl carbonate with BPA. This is the melt the European theatre, the Chinese economy 2.4 process, as the two-stage polymerisation takes still probably is among the most significant place without solvents. The melt process has factors for Europe. There is an export surplus

2.2 accounted for most of the new capacity in the from EU producers, and the appetite for their past five years - about 80% of melt-process output in China can influence how tight or plants are in Asia and the Middle East. long will be the European market. ■ 2.0 Jul May Development work is focusing on a new Keep up with all the latest developments 2016 2017 route, involving the copolymerisation of car- in the chemical industry including news, bon dioxide (CO2) and propylene oxide (PO) analysis and pricing at icis.com

10 | ICIS Chemical Business | 16-22 June 2017 www.icis.com

ICB_240818_006-015 Profiles Jun17.indd 10 8/20/18 11:47 AM US chemical profile

Lane Kelley Houston MEK

Uses April 2017 imports of MEK rose 6.4% year US enters its peak period for construction ac- Methyl ethyl ketone (MEK) is primarily on year, according to the most recent data tivity. Demand has been healthy in the US used as a low-boiling solvent for nitrocellu- from the US International Trade Commis- paint and coatings season so far, though lose, acrylic and vinyl surface coatings. sion (ITC). The increase stemmed from ship- sources say it has not been robust. Paint vol- Printing inks are the major application of ments from the Netherlands that more than umes are said to be higher this year by about MEK, due to its use as a solvent. Paint thin- doubled year on year – from about 1,500 5% compared with the spring of 2016. ners and resins are used as solvents in the tonnes, to almost 3,100 tonnes. Imports from pharmaceutical industry. More than 60% of two other top sources fell year on year, with Technology global MEK demand comes from the paints shipments from the UK dropping 32% and MEK’s main commercial route is the dehy- and coatings industry. from South Africa by 10%. drogenation of secondary butanol. Some MEK also can be used in rubber-based Shipments from the top three sources – companies make secondary butanol by hy- industrial cements and printing inks and is the UK, Netherlands and South Africa – ac- dration of n-butene with sulphuric acid. a required solvent for the polymerisation of counted for 77% of all MEK imports in April. The alcohol vapor is fed into a multi-tu- polystyrene (PS), acrylonitrile butadiene Imports from those three countries in- bular reactor containing zinc or copper ox- styrene (ABS) and styrene butadiene rub- creased about 9% year on year through the ides as catalysts. The reaction takes place at ber (SBR). first four months of 2017. Through April, 400-500˚C (752-932˚F) and pressures of less A derivative, methyl ethyl ketone perox- the UK has shipped 32% of all imports, than 4 bar. In Europe, liquid-phase technol- ide, is used as a hardening agent in rein- South Africa 25% and the Netherlands ogy is also employed using Raney nickel or forced polyester fibre glass. 23%. So far this year, US MEK imports have copper chromate at 150˚C reaction tempera- increased by 12%. ture. Hydrogen is flashed off and the con- Supply/demand Meanwhile, US exports of MEK, almost densate is dehydrated by fractionation. The Supply in the US remains somewhat tight, doubled year on year, though the actual gain MEK separates from the resulting water-ke- although there have been no price increase was just 300 tonnes. Exports fell by 47% from tone azeotrope that is obtained, and the announcements. Market sources say there is March with almost all of that drop stemming MEK is then distilled. no MEK made in the US – that all of US de- from fewer shipments to Mexico. So far this A newer technology involves direct oxida- mand is supplied by imports. ExxonMobil year, US exports have declined 23%. tion of n-butene in solution with palladium ceased production of MEK at its plant in Talk earlier this year that buyers have and cupric chlorides as catalysts. In addition, Baton Rouge, Louisiana, in 2014, sources begun importing more material from Asia MEK can be made as a by-product in acetic said. ExxonMobil said it has the capability to has proven true, mainly because MEK from acid manufacture from butane. make MEK at the plant, but market sources Japan has jumped 84% in the first four Shell has also developed a phenol process say the unit is off line. The company de- months this year. Imports from China and from which MEK could become available, clined to comment on the plant’s status. Taiwan have declined, though the actual along with acetone, as by-products. The pro- Major MEK suppliers include ExxonMobil, numbers are insignificant. cess offers the potential to change the ace- Sasol and Shell, which ship material to the In the bigger picture, the total US MEK tone/MEK ratio within reasonable limits to US from plants in Europe and South Africa. market appears to be growing slightly, de- meet varying market demands. spite import totals in 2016 that were the low- US MEK est in five years and exports barely half of Outlook what they were in 2012. Yet the net US mar- A recent report from HEXA Research pro- Cents/lb, spot ex-tank ket size (imports minus exports) was the jects that increasing demand from construc- 70 highest in five years in 2016, showing a gain tion and automotive sectors in Asia Pacific 65 of 9.5% over the total US market in 2012. and Latin America will fuel MEK market growth through 2024 at an annual rate of 60 Prices 4.6%. The report states that the global mar- US MEK prices began the year at their lowest ket now is primarily driven by demand of 55 levels since 2009. Multiple price hikes im- paints and coatings by the home furnishing, plemented by several producers in March infrastructure, and automotive sectors. 50 continue to hold. The global MEK market is expected to Supply tightened throughout Q1, which reach $3.26bn by 2020, according to a report 45 participants speculated was partially due to by Grand View Research. ■ ongoing production issues in Europe. NOTE – there are no MEK plants in the US 40 Jun Jun The market is waiting to see whether de- For more information on MEK 2016 2017 mand will get a boost from the paints and and hundreds of other chemicals, visit coatings sector in the warmer months, as the our extensive database at icis.com

www.icis.com 16-22 June 2017 | ICIS Chemical Business | 11

ICB_240818_006-015 Profiles Jun17.indd 11 8/20/18 11:47 AM ASIA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Amy tan Singapore Maleic anhydride

Uses are now acquiring cargoes on a need-to basis. ASIA MALEIC ANHYDRIDE CAPACITY Maleic anhydride (MA) occurs as colourless Buyers had been stockpiling cargoes in Q4 ’000 TONNES/year or white crystalline flakes with strong acrid 2016 in anticipation of higher feedstock bu- Company Location Capacity (pungent) odour. It is mostly used to make un- tane prices during the winter months. How- Changzhou Changzhou, China 125 saturated polyester resins (UPR), which are ever, buyers were not expecting weak de- Yabang Chemical used in a wide range of applications includ- mand for downstream UPR. As such, many Shanxi Taiyuan Taiyuan, China 125 ing bathroom fixtures and automobiles. found themselves overstocked with cargoes. Qiaoyou Chemical The second largest outlet for MA is 1,4 butan- Additionally, Malaysian and Indonesian Zibo Qixiang Zibo, China 100 ediol (BDO). Other uses are in derivatives tet- UPR producers have scaled down their pro- Tengda Chemical rahydrofuran (THF) and gamma-butyrolactone duction during the recent Ramadan period. Zhejiang Jiangshan Ningbo, China 80 (GBL), plasticizers, surface coatings, agrochemi- Consequently, demand for MA in the region Chemical cals, lubricants, fumaric acid and malic acid. is expected to be weak. Jiangsu Zhongchao Danyang, China 75 MA is available as liquid (molten) or solid New Material (flake) – the liquid form dominates and ac- Prices Technology counts for around 90-95% of the market. Since the start of 2017, Asia’s MA prices were Nan Ya Plastics Mailiao, Taiwan 60 However, it is not easily transportable. heard at a wide range amid uncertainty in Tangshan Baotie Coal Tangshan, China 60 feedstock butane prices and weak down- Tianjin Bohua Tianjin, China 60 Supply/demand stream demand. Zhonghe Chemical There were no significant plant start-ups or Even as MA demand is expected to remain Shanxi Gaoyi Xingjiang, China 50 closures in recent months. In Asia, excluding subdued, the price for MA has gained some Hengyu Chemical China, the bulk of MA facilities are butane- 11% since the year-low of $915/tonne CFR SE Shanxi Hengyu Xingjiang, China 50 based. Only two producers in Asia outside of Asia (mid-range) in 29 July, according to ICIS Chemical China – Japan’s Nippon Shokubai and Indo- data. This gain is largely supported by feed- Shanxi Hongdong Hongdong, China 50 nesia’s Justus Sakti Raya – produce MA using stock butane prices. Consequently, MA pro- Haoxin Chemical benzene as feedstock. Both account for ap- ducers and suppliers are reluctant to lower Shengyuan Puyang, China 50 proximately 11% of the total MA nameplate their offers to entice buyers. Instead, they Petrochemical capacity in Asia outside China, according to have largely maintained offers at above Yunnan Yunwei Qujing, China 50 ICIS data. $1,000/tonne CFR SE Asia. Group Demand in China is largely stable with Meanwhile, buyers continue to reiterate Shanxi Taiming Shanxi Taigu County, 46 most China-based producers focusing on the buying indications at below $1,000/tonne Chemical Industry China domestic market instead of exporting. CFR SE Asia as they are sitting on comforta- Huanghua Huanghua, China 40 There is currently an oversupply of MA in ble inventories. Hongcheng Business southeast Asia. This is largely due to weak de- MA is produced commercially by the oxi- Jiangsu Jiangyin Jianyin, China 40 mand from downstream UPR. Buyers in south- dation of benzene or butane. The butane- Shunfei Fine east Asia who typically procure cargoes monthly based process is considered to have superior Chemical economics and is the preferred route used by Kelamayi Jinyuan Karamay, China 40 ASIA MALEIC ANHYDRIDE most producers. Chemical Butane-based MA production can be done NOTE: Top 17 plants listed by capacity $/tonne, briquette, spot CFR SE Asia 1,400 by either the fixed-bed or fluidized-bed pro- cesses. The fluid-bed process has some ad- pendent on the construction industry and 1,300 vantages over the fixed-bed route, such as traditional manufacturing sectors such as lower air-to-hydrocarbon concentration in the pipe production, transportation (aerospace 1,200 feedstock and no need for pre-mixing. The and automotive) and footwear. disadvantages include abrasion of the catalyst, There are also some applications in the 1,100 conversion rates and by-product formation. wind energy industry, which is said to be ex- In the fixed-bed route, air is mixed with su- periencing good growth in China. These in- 1,000 perheated butane and fed to a reactor contain- dustries are closely linked to the general econ- ing a catalyst that consists of vanadium phos- omy in the region. Prices of feedstocks 900 phorous oxide supported on silica. benzene and butane are expected to be stable in the near term. ■ 800 Outlook Jun Jun Keep up with all the latest developments 2016 2017 Demand for MA is closely linked to the pro- in the chemical industry including news, duction and usage of UPR. This is in turn de- analysis and pricing at icis.com

12 | ICIS Chemical Business | 23-29 June 2017 www.icis.com

ICB_240818_006-015 Profiles Jun17.indd 12 8/20/18 11:48 AM Europe chemical profile

Chris Barker London MIBK

Uses On the contract market, sources see supply GLOBAL MIBK CAPACITY Methyl isobutyl ketone (MIBK) is used in as available at normal levels, with the tight- ’000 TONNES/year solvent applications, primarily for surface ness mostly confined to the spot market. Company Location Capacity coatings. It is also widely used as an anti- The MIBK spot market remained tight in Sasol Solvents Sasolburg, 60 ozonant in tyres, helping prevent or slow mid-June 2017, with sufficient demand for South Africa down degradation due to ozone exposure. material to maintain prices at generally Kumho P&B Yeosu, South Korea 55 It is also used in rare-metal extraction, as high levels. Chemicals a process solvent for pharmaceuticals and Celanese Mexicana La Cangrejera, 50 adhesives, and as a chemical intermediate. Prices Mexico MIBK’s dewaxing and separating properties European MIBK prices were mostly stable Shell Nederland Pernis, Netherlands 45 can be used to purify pharmaceuticals, min- in early-to-mid 2016. Several producers in- Chemie eral oils, tall oil, stearic acid and butanol. troduced small price increases to compen- Dow Chemical Institute, US 35 MIBK is very useful in developing high- sate for higher feedstock prices, but larger Dongying Yimeide Dongying, China 30 solid coatings. It is also used in the manu- increases mostly failed to materialize due to Chemicals facture of germicides, fungicides, pharma- the balanced-to-long market and structural- Jilin Chemical Group Jilin, China 30 ceuticals, electroplating solutions, and as a ly weak spot demand. Fine Chemicals denaturant in many ethanol formulations. However, towards the beginning Q3 Mitsui Chemicals Iwakuni, Japan 30 prices began to rise as the market became Rhodia Brasil Paulinia, Brazil 25 Supply and Demand somewhat tighter, before spiking from mid- For most of 2016, European MIBK was Q4 2016 to early 2017 due to limited avail- Zhenjiang LCY Zhenjiang, China 24 General Chemical balanced or balanced-to-long with produc- ability from Shell, the largest European ers’ attempted spot price increases failing producer. LCY Chemical Lin Yuan, Taiwan 20 to materialize despite the steady upward Prices continued to rise in Q1-Q2 2017, Mitsubishi Chemical Mizushima, Japan 20 trend in feedstock prices throughout although the range widened in late Q2/early Arkema La Chambre, France 15 the year. Q3 with at least one European producer of- KH Neochem Yokkaichi, Japan 15 However, the market tightened slightly in fering numbers in the mid-to-high €2,000s/ Ningbo Zhenyang Ningbo, China 15 Q3 2016 and then severely from Q4 2016- tonne FD, but material was also available in Taizhou Petrochemical Taizhou, China 15 Q1 2017 onwards because of limited supply the low €2,000s/tonne FD. Jiande Xinhua Hangzhou, China 10 at Shell, according to sources, combined Chemical with a rebound in domestic demand. Technology Eastman Chemical Kingsport, US 9 MIBK has a very limited number of sup- There are two main routes to produce MIBK. Carboclor Campana, Argentina 8.5 pliers in Europe, with only two major do- One is a three-step process via acetone con- mestic producers and one other major densation, which gives diacetone alcohol source in South Africa. As a result, the that readily dehydrates to give mesityl peak in late May. product is very vulnerable to supply shocks. oxide, which is then hydrogenated to MIBK. Prices will be strongly affected by feed- MIBK is also produced from isopropanol stock trends, with Brent crude oil prices EUROPE MIBK (IPA) in a mixed ketones process with di- falling to below $50/barrel for most of June. isobutyl ketone (DIBK) and acetone as co- This is likely to have a knock-on effect on €/tonne, spot FD NWE 3,000 products. Methyl isobutyl carbinol, DIBK feedstock propylene and acetone prices, and mesityl oxide are coproduced or recov- with both of the contract prices for these ered during the process. products trending downwards for June. 2,500 Feedstock IPA prices have also decreased Outlook month-on-month. 2,000 The European MIBK spot market is structur- Demand will see conflicting trends over ally quiet because the majority of sales are the summer period, with an increase in 1,500 carried out via the contract market. Prices downstream activity in the construction are also high above their average level for and paints and coatings sectors likely to be

1,000 2016, which has led to some sources to sug- counterbalanced by lower activity and holi- gest that they have reached a peak and are days in southern European countries from likely to decline. July-August onwards. ■ 500 However, any price reductions have only Jun Jun Subscribe to ICIS pricing reports to keep 2016 2017 been minimal so far with average prices in up with a wide range of chemical markets mid-June down only about 8% from their across the globe at icis.com

www.icis.com 23-29 June 2017 | ICIS Chemical Business | 13

ICB_240818_006-015 Profiles Jun17.indd 13 8/20/18 11:48 AM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

tarun raizada Houston MEG

Uses second quarter of 2017 due to two factors. US MEG CAPACITY In the US, monoethylene glycol (MEG) is First, prices in Asia fell sharply, closing the ’000 TONNES/year mainly used in the production of polyethyl- window for US exports to the region. Sec- Company Location Capacity ene terephthalate (PET) bottle resin and in ond, demand decreased as MEG entered a Shell Chemical Geismar, Louisiana 400 antifreeze/coolant. Unlike in Asia, use of lull period. The peak season for antifreeze Indorama Ventures Clear Lake, Texas 358 MEG in the production of polyester is only a wound down, while the PET sector was in small outlet in the US market. its off-season. Formosa Plastics Point Comfort, Texas 300 Additional applications for co-products di- MEG demand is expected to increase when Dow Chemical Seadrift, Texas 285 ethylene glycol (DEG) and triethylene glycol Mossi & Ghisolfi (M&G Chemicals) starts run- LyondellBasell Bayport, Texas 265 (TEG) include de-icing fluids, surface coatings, ning its PET resin plant at Corpus Christi, Huntsman Port Neches, Texas 255 unsaturated polyester resins (UPR), polyester Texas later this year. The plant will manufac- Eastman Chemical Longview, Texas 105 polyols and natural gas dehydrogenation. ture over 1m tonnes/year of PET resin.

Supply/demand Prices the TEG is produced on-purpose from EO US MEG supply was tight in the first quarter MEG contract prices decreased in May from and DEG. US May TEG contract prices were of 2017 as high prices in Asia created an ex- April on the back of a softer US market and a assessed at 57-72 cents/lb FOB and prices port opportunity, drawing down domestic bearish Asian market, and then rolled over in rolled over in June. supply. There was also increased demand in June. US MEG pricing often takes direction the antifreeze sector during the winter sea- from price trends in the Asian MEG market. Technology son, along with some turnaround activity. The US MEG contract price saw four con- Commercial production of EG is by the oxi- Significant volumes of MEG were export- secutive months of increases, before falling dation of ethylene in the presence of oxygen ed to China for the first four months this year. for two months in a row starting in April. (or air) and a silver oxide catalyst to produce Over 36,000 tonnes of MEG were exported to The US May MEG contract price was as- EO, the feedstock for EG. A crude EG mixture China in the period from January to April sessed at 35-41 cents/lb ($772-904/tonne) is then produced by the hydrolysis of ethyl- 2017, according to data from the US Interna- free on board (FOB), a decrease of 3 cents/lb ene oxide with water under pressure. tional Trade Commission (ITC). from the previous month. A typical production mix is 90% MEG, 9% Exports have also gone up to Mexico this There has been no notable increase in de- DEG and 1% TEG. Fractional distillation year as sources have spoken of a producer mand in June from the PET sector, despite under vacuum is used to separate the MEG there having problems with their upstream the peak summer drink season being under- from the higher glycols. ethylene oxide (EO) unit, which has impact- way. Also, PET production may be getting af- ed glycols production. The market continues fected somewhat by high isophthalic acid Outlook to remain tight and is likely to remain de- prices, according to participants. Isophthalic Demand for MEG is expected to be strong for pendent on imports in the near future to fill acid is a co-monomer used in the production the next couple of months. Summer is the in any supply gaps. of PET. Normally, it makes up just a small peak season for the PET market and PET de- The supply situation did improve in the portion of the total production cost of PET, mand is expected to pick up due to in- but large price increases can impact margins. creased bottled beverage consumption. US MEG Meanwhile, co-product US DEG contract US MEG prices could increase during the prices have seen seven consecutive months peak season, although Asian MEG pricing Cents/lb, contract FOB US Gulf 46 of increases. The DEG markets have re- trends will continue to have an influence. mained bullish this year due to snug-to-tight US exports to Asia will hinge on MEG 44 supply stemming from turnaround activity prices in the region, although recent prices 42 and exports, along with delayed and seasonal there have not been high enough to encour- demand from UPR in the construction indus- age exports. 40 try and from polyurethanes. The US May Huntsman is planning to conduct a main- 38 DEG contract price was assessed at 43-51 tenance turnaround at its EO/EG plant in

36 cents/lb FOB, an increase of 2 cents/lb. June Port Neches, Texas, during the second half of prices rose 1 cent/lb. the year. The company conducts the mainte- 34 Co-product TEG markets have largely nance once every four years and this round 32 been flat, although there has been a pickup should last for two months, with the cash in demand from the oilfield sector, which cost being $50m. ■ 30 has performed well this year. Prices have Jul Jun Keep up with all the latest developments 2016 2017 also gotten some upward momentum from in the chemical industry including news, the rise in co-product DEG prices, as some of analysis and pricing at icis.com

14 | ICIS Chemical Business | 30 June-6 July 2017 www.icis.com

ICB_240818_006-015 Profiles Jun17.indd 14 8/20/18 11:48 AM Europe chemical profile

Linda Naylor London LLDPE

USES/prices following a period of strong buying in the first EUROPE LLDPE CAPACITIES Linear low density polyethylene (LLDPE) is a quarter, when buyers built inventory. ’000 TONNES/year thermoplastic polymer used mainly in the In spite of some loss of spread between the Company Location Capacity film sector. More than 80% of global LLDPE ethylene contract price and LLDPE pricing, Dow Ternuezen, 610 is used as film for food and non-food packag- integrated producers still have good margins. Netherlands ing. Stretch film is used for industrial packag- Most LLDPE special grades- such as hex- Dow Tarragona, Spain 490 ing and LLDPE can be used for a wide range ene-based (C6) and octene-based (C8) LLDPE- ExxonMobil Notre Dame de 420 of other applications. are home-grown in Europe, but new C8 metal- Gravenchon, France LLDPE is manufactured by adding alpha- locene linear low density polyethylene SABIC Gelsenkirchen, 350 olefin co-monomers (butene, hexene or oc- (MLLDPE) production in South Korea is Germany tene) during ethylene polymerisation to pro- being offered, with many buyers saying pric- INEOS Grangemouth, UK 330 duce a number of different products with a es would have to be on the level of C6 MLL- range of densities depending upon the DPE or even below for it to gain ground under Nizhnekamskne- Nizhnekamsk, Russia 230 ftekhim (NKNK) amount of co-monomer added. This results in current circumstances. Dow Schkopau, Germany 210 a very wide range of final products with im- MLLDPE spot prices were lower again in the proved performance compared to traditional week ending 23 June, even though spot activity INEOS Cologne, Germany 230 low density polyethylene (LDPE) as a result was muted as sources waited for the settlement Versalis Dunkirk, France 140 of the more linear structure. of the July ethylene monomer contract. The Uzbekneftgas Shurtan, Uzbekistan 120 Solution, slurry or gas-phase processes are upstream contract was widely expected to be Borealis* Stenungsund, Sweden 145 used to produce LLDPE and many processes lower, mainly on lower naphtha costs. Month- Borealis Beek, Netherlands 120 can produce products with densities lower ly MLLDPE prices are also down by more than Borealis** Porvoo, Finland 120 than LDPE and into the high density polyeth- the €35/tonne drop in the June ethylene con- *thought to be swing ylene (HDPE) range. Usually, production tract, along with most of the wider polyethyl- **thought to be plastomers plants tend to be focused on either LLDPE or ene (PE) market. There was discrepancy be- NOTE: the above capacities are estimates and not HDPE but retain this inherent flexibility and tween buyers and sellers over how much always confirmed by the producer concerned often produce campaigns of either product. prices would finally fall by when retroactive The introduction of metallocene catalysts has settlements were done the following week. grades are well ensconced, leaving spare C8 enabled the production of resins with narrow MLLDPE volumes looking for a home. molecular weight distribution resulting in im- SUPPLY/DEMAND An increasing number of annual contracts proved product quality (performance) some- LLDPE in Europe is currently in oversupply are being made between importers and large times at the expense of the easy processability (June 2017). Increased capacity of MLLDPE in buyers, as shortages in 2015 continued to of traditional LDPE. Europe and elsewhere is leading to competi- have their effect on the market, but European LLDPE prices have been falling significant- tive offers of both C6 and C8 MLLDPE, as well producers continue to hold the lion’s share of ly during the second quarter of 2017, on as new volumes of standard LLDPE grades non-commodity volumes in the LLDPE sector. lower feedstock costs and subdued demand globally – either already on line or imminent. Most sources expect imports to move in to In India, Reliance’s 350,000 tonne/year Europe as Asian markets falter and new ca- EUROPE LLDPE new MLLDPE plant was expected to start up pacities start. in the second quarter 2017, and Chevron Phil- €/tonne, spot FD NWE lips will bring on stream a 500,000 tonne/year OUTLOOK 1,500 Butene C4 Hexene C6 MLLDPE plant ahead of the fourth-quarter New capacity coming on stream in North Metallocene C6 blown lm 2017 cracker, to run on purchased ethylene. America an d India is expected to keep supply 1,400 Butene based (C4) LLDPE has long been a net plentiful. Competition between grades and imported product into Europe, with little local- sellers is expected to put a cap on pricing. EU 1,300 ly produced volume remaining. Some high producers have moved towards specialities in density polyethylene (HDPE) has been convert- the LLDPE sector, minimising C4 LLDPE, but 1,200 ed to MLLDPE, as well as some C4 LLDPE imports are expected to be moving towards Eu- standard grade LLDPE. MLLDPE demand is rope in the coming months. Many of the new 1,100 growing rapidly, as downgauging becomes in- capacities are based on ethylene from shale gas creasingly important, but supply is outstrip- ethane, but the drop in naphtha has made Eu- ■ 1,000 ping demand, and C8 MLLDPE sellers in par- rope more competitive on feedstocks. Jul Jun ticular are finding it hard to place volumes. 2016 2017 Keep track of price movements for a wide Regular standard C8 LLDPE has an estab- range of commodity chemicals by subscribing lished position in Europe, and C6 MLLDPE to ICIS pricing reports at icis.com

www.icis.com 30 June-6 July 2017 | ICIS Chemical Business | 15

ICB_240818_006-015 Profiles Jun17.indd 15 8/20/18 11:48 AM ASIA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Patrick han Singapore VCM

Uses clining to $670/tonne CFR NE Asia in mid- ASIA VCM CAPACITY Vinyl chloride monomer (VCM) is a colour- June as buying interest in major markets such ’000 TONNES/year less gas with a characteristic mild, sweet as India and China weaker. VCM prices Company Location Capacity odour. Almost 98% of VCM is used exclusive- moved in tandem with PVC prices. Formosa Plastics Jen-Wu, Taiwan 1,865 ly in the manufacture of polyvinyl chloride Beiyuan Chemical Shenmu, China 1,600 (PVC). The remainder is consumed in PVC Technology Industry and chlorinated solvents. Rigid PVC resins Commercial production of VCM started in CNSG Changzhou Changzhou & 1,234 provide the most growth. the 1920s, based on the catalytic hydrochlo- Chemical Chenzhou, China rination of acetylene. However, that route suf- Anhui Chlor-Alkali Hefei, China 1,160 Supply/demand fered from high energy costs and has become Chemical Group In Asia, increased supply in the past 12 obsolete, except in China. Anhui Huasu Dingyuan, China 1,100 months has come mainly from Taiwan, China Nearly all production outside China is now and Indonesia. Taiwan VCM Corp has in- based on ethylene. Ethylene is first reacted Fangda Jinhua Huludao, China 1,060 Chemical creased its capacity to 450,000 tonnes/year with chlorine to make ethylene dichloride Anlong Heavy Anlong, China 1,000 from 420,000 tonnes/year after a debottleneck. (EDC). There are two routes commonly used to Chemical Indonesia’s Asahimas Chemical has in- make the necessary EDC – direct chlorination Baotou Sea Baotou, China 800 creased its production from 400,000 tonnes/ using pure chlorine and ethylene; and oxychlo- Level Polymer year to 800,000 tonnes/year by adding anoth- rination, in which the ethylene reacts with Befar Group Binzhou, China 800 er production line. In China, Qingdao Haijing chlorine in hydrogen chloride. The EDC is then opened its new VCM production line of converted to VCM by thermal cracking, and the Benxi Dongfang Benxi, China 800 Chlor-Alkali 400,000 tonnes/year at the end of 2016. hydrogen chloride byproduct can be recycled However, VCM import and export is limit- to an oxychlorination plant to make more EDC. PT Asahimas Cilegon, Indonesia 800 Chemical ed as a component of total production. Trade Many EDC/VCM complexes use an inte- is challenging as VCM is difficult to transport. grated chlorination-oxychlorination process Hanwha Chemical Ulsan, South Korea 800 More vinyls producers have become integrat- for economic reasons. This process happens Haohua Yuhang Jiaozuo & 800 ed players which produce VCM for their own in three stages: (1) the chlorination of ethyl- Chemical Qinyang, China PVC operations. Demand will be closely ene in the liquid or vapour phase to make Hebei Shenghua Zhangjiakou, China 800 linked with PVC demand. PVC demand is ex- EDC; (2) the thermal cracking of EDC to form Chemical Industry pected to be stable in the coming months, VCM and hydrogen chloride; and (3) the oxy- Binzhou Ocean Zouping, China 780 thus the demand for VCM as well. Price in- chlorination of ethylene with recycled hydro- Chemicals creases will be difficult as supply is sufficient gen chloride to make more EDC. Chemplast Karaikal, India 780 in this region, according to various sources. INEOS Vinyls (formerly EVC International) Sanmar VCM prices were on a roller-coaster ride in made a breakthrough a few years ago with its Chengdu Huarong Pengxian, China 750 Chemical the first half of 2017, with prices peaking at catalytic process for generating VCM directly $810/tonne CFR NE Asia in March before de- from ethane, following tests at a pilot plant at Dezhou Shihua Dezhou, China 560 Chemical Wilhelmshaven, Germany. The company ASIA VCM claims a 20-30% reduction in production costs Finolex Industries Ratnagiri, India 480 across the PVC chain for the process, which de- Gansu Xinchuan Jinchang, China 450 $/tonne, spot CFR NE Asia Chemical 850 couples VCM/PVC production from the cracker. Guangxi Liuzhou Liuzhou, China 450 Outlook Dongfeng Chemical 800 Looking ahead, there are no new VCM facili- Taiwan VCM Lin Yuan, Taiwan 450 ties coming on in the next year which means 750 supply in Asia should be stable. As more the most crucial price driver. PVC prices are vinyl producers become more integrated, spot expected to remain stable or fall slightly in 700 trades of VCM are expected to be thin in Asia. the coming months in Asia due to monsoon Some market players believe that with sta- season and the newly implemented good and

650 ble supply of upstream EDC to Asia, the price services tax (GST) in India, as well as lacklus- spread between EDC and VCM would widen tre buying interest in China due to high in- as EDC prices soften on increased supply ventory levels of buyers. ■ 600 while VCM prices remain stable. Jul Jun Subscribe to ICIS pricing reports to keep 2016 2017 On the demand side, PVC demand will de- up with a wide range of chemical markets termine the demand for VCM and will also be across the globe at icis.com

16 | ICIS Chemical Business | 7-20 July 2017 www.icis.com

ICB_240818_016-021 Profiles July17.indd 16 8/20/18 1:13 PM Asia chemical profile

Angeline Soh Singapore Isopropanol

Isopropanol (IPA) is a solvent that has usages tions. There was also a deal heard done with- ASIA IPA CAPACITIES in both industrial and personal care sectors. in the range of assessment in the week ended ’000 TONNES/year The major industrial outlets include adhesive, 30 June for July arrival. Market players ex- Company Location Capacity de-icers, inks, paints and coatings and phar- pected the momentum to speed up in July, maceuticals. The personal care sectors in- when the restocking activities are expected to Kellin Chemical Zhangjiagang, China 196 clude the hygiene products and cosmetics. pick up after the Eid holidays. Meanwhile, in LG Chem Yeosu, South Korea 150 For the de-icers, its usage is in cleaning and the domestic China market, prices were on Zhejiang Xinhua Hangzhou, China 100 drying during the manufacture of electronic the downtrend because there was weak de- Chemical parts and metals. For the pharmaceuticals, it mand amid the seasonal lull. CNPC Jinzhou Jinzhou, China 100 is used as an aerosol solvent in medical and Looking back, prices were on the climb in the Petrochemical veterinary products. first quarter of the year, in tandem with feed- LCY Chemical Lin Yuan, Taiwan 100 IPA is also used in the extraction and puri- stock acetone and propylene prices. Prices on a Super Chemical Shouguang, China 100 fication of natural products, such as vegetable FOB NE Asia basis peaked at $1,010/tonne FOB Mitsui Chemicals Takaishi, Japan 88 and animal oils and fats. NE Asia in H1 February. Prices on a CFR China JX Nippon Oil Kawasaki, Japan 85 basis peaked at $970/tonne CFR SE Asia in H2 and Energy SUPPLY/DEMAND March. Prices on a CFR SE Asia basis peaked at Chang Chun Panjin, China 84 In Asia, the total capacity is more than 1.5 $1,015/tonne CFR SE Asia in H1 March. Plastics million tonnes per year. In northeast Asia, the As the IPA prices lost its pillar of support Dongying Hi-Tech Dongying, China 80 capacity per annum is at nearly 1.4 million from the upstream markets, they moved Spring Chemical tonnes while yearly capacities in southeast downwards in Q2 onwards. This is against Industry Asia and India are at 75,000 tonnes and the historical trend of Q2 being the peak sea- Shell Eastern Bukom, Singapore 75 70,000 tonnes respectively. son due to the conducive weather for produc- Petroleum The yearly demand in northeast Asia is es- tion and downstream paint and coating usage. Deepak Fertilisers Taloja, India 70 timated at 540,000 tonnes. In southeast Asia, Spot IPA prices were mixed amid thin and Petrochemicals the yearly demand is more than 85,000 trades in recent weeks. With feedstock prices Tokuyama Tokuyama, Japan 70 tonnes while Indian’s demand per annum is on the rise, China preferred to sell domesti- Isu Chemical Ulsan, South Korea 60 at 110,000 tonnes. cally as more lucrative deals could be made, Dezhou Detain Dezhou, China 50 compared to exporting. Regional Asian pro- Chemical PRICES ducers also directed their attention to other Jiande Xinhua Yancheng, China 50 Spot IPA prices in Asia were assessed as sta- markets as the Chinese import price indica- Chemical ble in the week ended 30 June. In southeast tions were still deemed unattractive. Super Chemical Yancheng, China 50 Asia, the prices were rolled over as the mo- Southeast Asia spot offers, including cost mentum was slow during Eid ul-fitr in the and freight, were on the downtrend amid Tasco Chemical Lin Yuan, Taiwan 30 week in particular in Malaysia and Indonesia, ample supply in the market. In northeast Taixing Jianye Taixing, China 30 which have predominantly Muslim popula- Asia, prices, on a free on board basis, rose be- cause of the increase in feedstock acetone ■ Hydrogenation of acetone in the liquid phase ASIA IPA prices in China. Market players, monitoring ■ Indirect hydration of refinery-grade propyl- both the acetone and propylene market close- ene using sulphuric acid to form isopropyl $/tonne, spot 1,100 ly, were optimistic that IPA prices will be sta- sulphate, which is then hydrolysed with CFR SE Asia ble in the coming weeks. steam to form sulphuric acid and IPA. The CFR China In the meantime, sellers continued to work crude IPA is distilled to the desired purity. 1,000 on spot opportunities and negotiations were already underway for the coming months. OUTLOOK Some sellers went further infield, seeking out H2 2017 is cautiously stable to weak. The pes- 900 possible deals in India and arbitrages availa- simistic upstream outlook continues to weigh ble in the Middle East, and US Gulf markets. on IPA prices. Meanwhile, prices typically hit southwards in Q3 on the back of poor weather 800 TECHNOLOGY and slew of public holidays in the Asian re- Commercial production has been generally gion. As prices did not hit its peak in Q2, some reliant on the following three routes: players said the peak could manifest in Q3. ■ 700 ■ Direct hydration of chemical grade (90- Jun Jun Keep track of price movements for a wide 2016 2017 99%) propylene, where there is no need for range of commodity chemicals by subscribing sulphuric acid to ICIS pricing reports at icis.com

www.icis.com 7-20 July 2017 | ICIS Chemical Business | 17

ICB_240818_016-021 Profiles July17.indd 17 8/20/18 1:13 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Zachary Moore Houston Nylon

Uses around 2.5-3.5% by volume over the next few US NYLON 6 CAPACITY The two major forms of nylon (polyamide) are years. Specialty grades for niche applications ‘000 TONNES/year type 6 and type 6,6. Nylon 6 is made from may see even higher rates of growth. caprolactam (capro), which can be produced Global nylon operating rates on average are Company Location Capacity from benzene via cyclohexane or phenol. said to be between 70-80%, suggesting that AdvanSix Hopewell, Virginia 204 Approximately 24% of nylon 6 is con- little additional capacity will be needed over BASF Freeport, Texas 60 sumed in engineering resins, while the rest is the next few years. DSM Augusta, Georgia 15 used in nylon fibres. On the supply side, availability of feed- Custom Resins Henderson, Nevada 13.5 Nylon fibres are made into textile, carpet stock capro is said to be tight, which may re- Nylon Corp of Manchester, 12 and industrial yarns. Nylon resins are used sult in some limitations on nylon 6 availabili- America New Hapmshire in engineering plastics, with applications in ty. However, no major supply disruptions EMS-Grivory Sumter, 5 automotive, fabric, carpeting, sportswear, have been heard in the US recently. South Carolina recreational equipment, electronics and in- The nylon 6,6 market is more balanced, dustrial components, as well as films for with sources stating that supply and demand US NYLON 6,6 CAPACITY food packaging. balances are likely to remain balanced ‘000 TONNES/year Nylon 6,6 is made from adipic acid and through the second half. Company Location Capacity hexamethylene diamine (HMDA), which Ascend Pensacola, Florida 95 can be produced from adiponitrile (ADN) Prices Performance made from butadiene (BD) or, less often, Prices in the freely negotiated nylon 6 and Materials propylene. nylon 6,6 markets witnessed considerable in- DuPont Richmond, Virginia 50 Nylon 6,6 is used predominately in the creases in the first half of 2017, tracking sharp engineering plastics sector because it is upward movements in feedstock costs for DuPont Chattanooga, 25 tough and has good electrical insulating benzene, butadiene and propylene. Tennessee properties and noise dampening characteris- Although some fresh increase announce- tics. That is why it is widely used for auto- ments were recently announced for nylon 6, Ethanoic acid is mixed into a solution with motive applications. most participants are expecting freely negoti- the salt, and the mixture is heated to about ated prices for nylon 6 and nylon 6,6 to hold 500°K. As pressure develops, the temperature Supply/demand steady over the next few months now that is raised to 540°K, and the steam bled off. The Nylon demand continues to grow because of feedstock costs have begun to change direction. pressure is reduced, and the polymer is ex- its widespread use in the textiles, electronics, One participant stated that domestic prices truded under nitrogen to yield a lace, which packaging and automotive industries. Addi- in the US are likely to remain steady in the is then granulated. tionally, the push for vehicles to be more fu- next few months while sellers looking to ex- el-efficient and environmentally friendly is port to Asia may implement some reductions Outlook expected to continue driving nylon demand. on their prices to maintain competitiveness in Nylon demand is expected to remain large- Nylon consumption is expected to rise by their target export markets. ly steady into the second half of the year in The ICIS cost-plus methodology is mostly the US. US NYLON determined by monthly contract price move- The construction market has been robust ments of raw materials. throughout 2017, although this has been par- $/tonne, injection moulded unfilled, domestic DEL tially offset by a year-on-year slowdown in 4,000 Nylon 6, bulk Nylon 6,6, package Technology automotive demand. Nylon 6 is made from reacting capro with Participants, especially those looking to ex- 3,600 water and a molecular mass regulator, such as port material, will continue to track develop- ethanoic acid. These elements are poured ments in Asia to get an idea of the global de- 3,200 into a reaction vessel and heated under nitro- mand for nylon. gen at 500°K (227°C). An intermediate, ami- Inventories for nylon chip and yarn in Asia 2,800 nocaproic acid, is produced. The process were heard to be balanced at the start of the then undergoes condensation to polymerise third quarter while participants added that 2,400 the molecules. feedstock caprolactam supply may lengthen For nylon 6,6 production, ADN is made during the third quarter owing to some capac-

2,000 from BD or propylene and then converted ity expansion plans. ■ Jul Jul to HMDA. 2016 2017 Subscribe to ICIS pricing reports to keep Then, HMDA is mixed with adipic acid, up with a wide range of chemical markets which is made from benzene, to form a salt. across the globe at icis.com

18 | ICIS Chemical Business | 21-27 July 2017 www.icis.com

ICB_240818_016-021 Profiles July17.indd 18 8/20/18 1:18 PM Asia chemical profile

Angeline Soh Singapore MIBK

USES gapore and Malaysia, 14% at 4,000 tonnes; ASIA MIBK CAPACITIES Methyl isobutyl ketone (MIBK) is a colourless and Indonesia, 10% at 3,000 tonnes. Annual ‘000 tonnes/year solvent, with low density, medium evapora- demand has been slowing down. Company Location Capacity tion rate and high solvent activity. For instance, in China, Asia’s biggest mar- Dongying Dongying, China 30 Its main usages are for rubber tyre produc- ket, demand has been reduced from 150,000 Yimeide tion, which is commonly seen in China; and tonnes in 2010, to 110,000 tonnes in 2013 to Chemicals for the painting and coating sectors, particu- 90,000-100,000 tonnes in 2016. Jilin Chemical Jilin, China 30 larly in the marine industry in southeast Asia. This is largely due to the slowdown in Group Fine Chemicals MIBK can also be used as an extraction global economies, which reduced the usage Zhenjiang LCY Zhenjiang, China 24 agent in the dewaxing and deoiling of petro- in downstream rubber tyre production and General leum products, as well as in gold, silver and marine coatings. Chemical other precious metals from cyanide solutions. Many users expressed their inclination to Ningbo Ningbo, China 15 It is used in synthetic resins including cel- buy cheaper alternatives like butyl acetate Zhenyang lulosics, vinyl copolymers, acrylics, alkyds, whenever possible. Whilst the projections for Taizhou Taizhou, China 15 polyesters, and epoxies. Other applications China’s economy are strong in 2017, many Petrochemical include electroplating solutions, fungicides, market players are unconvinced the opti- Jiande Xinhua Hangzhou, China 10 germicides, pharmaceuticals, and as a dena- mism could trickle down to the MIBK sector. Chemical turant in ethanol formulations. Mitsui Iwakuni, Japan 30 PRICES Chemicals SUPPLY/DEMAND Spot MIBK prices in both China and south- Mitsubishi Mizushima, Japan 20 Chemical The capacity in Asia Pacific stands at more east Asia started off 2017 at their highest lev- KH Neochem Yokkaichi, Japan 15 than 260,000 tonnes/year. Of this figure, els since December 2014, but volatile move- China leads the highest contribution at more ments through Q1 soon gave way to a Kumho P&B Yeosu, South Korea 55 Chemicals than 100,000 tonnes/year, followed by Japan stable-to-soft Q2 in southeast Asia and a LCY Chemical Lin Yuan, Taiwan 20 at 65,000 tonnes/year and Korea at 55,000 weaker first half of Q2 in China, in line with tonnes/year. There is no capacity in south- similar trends in feedstock acetone. east Asia. MIBK prices in China were largely stable- It can also be made from isopropanol (IPA) On the annual demand front in northeast to-firm in the second half of Q2, but ample in a mixed ketones process with di-isobutyl Asia, China takes up more than 50% at supply in the domestic Chinese markets have ketone (DIBK) and acetone as coproducts. 100,000 tonnes; Japan, 17% at 30,000 tonnes; largely curtailed spot trade and resulted in South Korea, 14% at 26,000 tonnes and Tai- limited price movements towards the end of OUTLOOK wan, 13% at 24,000 tonnes. Q2. Going forward, there are concerns that The outlook for 2017 is cautiously pessimistic, In south and southeast Asia, India has the the commencement of commercial opera- due to recent dwindling usage. highest annual demand, 42% at 12,000 tions at Petro Rabigh’s phenol/acetone project In addition, the ongoing anti-dumping in- tonnes; Thailand, 17% at 5,000 tonnes; Sin- in Rabigh, Saudi Arabia, which has an ace- vestigations for south Korean, Japanese and tone nameplate capacity of 160,000 tonnes/ south African exports going to China are like- ASIA MIBK year, could weigh on acetone prices and also ly to further weigh on trade flows within downstream MIBK prices as a result. northeast Asia. $/tonne, spot CFR Spot prices for MIBK in Asia were assessed Producers were noted to be seeking alterna- 1,700 Asia SE China as stable in the week ended 11 July. Prices in tive markets, including southeast Asia and 1,600 China had been unchanged since late June India, where the emerging markets could

1,500 while prices in southeast Asia had been likely absorb the surplus. rolled over since early June. Market players However, these markets were unlikely to 1,400 attributed the standstill in prices to balanced match the trade activity of China, hence re- 1,300 demand and supply fundamentals. sulting in an overall negative mood in 2017.

1,200 Beyond 2020, MIBK consumption for anti- TECHNOLOGY ozonants is forecast to grow at a double digit 1,100 There are two ways to manufacture MIBK. It rate in the Asia-Pacific region for both pro- 1,000 can be manufactured from acetone via a three- duction and demand, as market players quot- ■ 900 step process. Acetone undergoes aldol con- ed from recent research. Jul Jul densation to give diacetone alcohol, which 2016 2017 Keep track of price movements for a wide dehydrates to give mesityl oxide. Mesityl range of commodity chemicals by subscribing oxide is then hydrogenated to produce MIBK. to ICIS pricing reports at icis.com

www.icis.com 21-27 July 2017 | ICIS Chemical Business | 19

ICB_240818_016-021 Profiles July17.indd 19 8/20/18 1:18 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Pavle Popovic London Polyols

Uses the market was also affected by the long-de- EUROPE POLYOLS CAPACITY Polyols are one of the components used to layed opening of German producer BASF’s ’000 TONNES/year make polyurethanes, the other being an isocy- Ludwigshafen TDI plant. The 300,000 tonne/ Company Location Capacity anate. There are two main types of polyols: year German facility began production in Sep- Dow Chemical Teureuzen, 530 polyether polyols and polyester polyols. tember 2016 only to be taken offline in Novem- The Netherlands Polyether polyols are the most widely used ber before coming back online in May 2017. Shell Chemicals Pernis, 300 with the main applications being rigid and In the meantime, polyols producers found The Netherlands flexible polyurethane foams. Rigid foams are it difficult to sell volumes as customers were Covestro Antwerp, Belgium 270 used mainly in insulation, refrigeration, pack- only willing to buy a limited amount while Covestro Dormagen, Germany 250 aging and construction while flexible foams TDI was tight. Consequently, the polyols mar- have applications such as upholstery, mat- ket in 2016 had periods of oversupply. In De- BASF Antwerp, Belgium 170 tresses and seats. Polyols can also be used in cember 2016 a force majeure by Covestro on BASF Schwarzheide, 150 elastomers, adhesives, coatings and fibres. polyester polyols production across Europe, Germany Polyester polyols compete with polyether which ended in the same month, passed Repsol Quimica Tarragona, 150 polyols but may be preferred in some rigid without creating availability issues. By Janu- Spain foam applications because of their low cost ary 2017, TDI supply difficulties eased allow- Covestro Fos, France 130 and improved flame retardant properties. Ad- ing polyols sellers to sell more stock. PCC Rokita Brzeg Dolny, Poland 110 ditionally, they can provide improved wear resistance, heat aging and chemical resistance Prices Oltchim Rimnicu Vilcea, 110 in elastomers, coatings, sealants and adhesives. Towards the end of 2016, polyols prices were Romania affected by feedstock propylene movements Dow Chemical Tarragona, Spain 90 Supply/demand and the shortage of TDI. These price drivers Huntsman Rozenburg, 86 Polyols supply and demand can be affected led to the value of polyols remaining stable International The Netherlands by trends in the toluene di-isocyanate (TDI) from August 2016 to the end of the year apart Repsol Quimica Puertollano, Spain 70 market. As flexible polyols combine with TDI from one price increase in November. to make flex foam, which is used in furniture, In January 2017, polyols suppliers said that Polyol Belgium Tertre, Belgium 55 bedding and transportation, trends in both TDI availability issues had eased, therefore, Dow Chemical Antwerp, Belgium 36 markets can be interconnected. they could increase prices. As polyols pro- The TDI market became tight at times in Eu- ducers had been under upwards propylene rope in 2016 due to multiple planned mainte- pressure for most of 2016, they looked to re- plant in Jubail, Saudi Arabia will add new ca- nance works and German producer Covestro’s gain margins at the start of 2017. A subse- pacity to the global polyols market. Sadara is force majeure in Europe on its TDI operations. quent upwards trend for the polyols price a joint venture between the US’s Dow Chemi- The force majeure was declared in October midpoint occurred in the first half of 2017. cal and Saudi Arabia’s Saudi Aramco. 2016, although Covestro recommenced Euro- There will be a 400,000 tonne/year poly- pean TDI production in December. Supply in Technology ether polyols unit at the plant with a 390,000 Polyether polyols are produced by the cata- tonne/year capacity for feedstock propylene EUROPE POLYOLS lysed addition of epoxides, mainly propylene oxide (PO) at the facility too. Propylene oxide oxide or ethylene oxide, to an initiator having output at the Sadara site is, however, expect- €/tonne, flexible slabstock conventional, contract FD NWE active hydrogens. The most common catalyst ed to only be used for captive use. 1,800 is potassium hydroxide. The reaction is car- Sources said that any polyols material from ried out by a discontinuous batch process at the Sadara facility will not arrive to Europe,

1,750 raised temperatures and pressures under an but instead will leave for regions such as the inert atmosphere. Middle East, Africa and Asia. After polymerisation, the catalyst is neu- Subsequently, they said less exports will 1,700 tralised and removed by filtration. The polyol leave Europe resulting in increased domestic is then purified. The choice of epoxides, ini- supply. The polyols unit was originally ex- 1,650 tiator, reaction conditions and catalyst deter- pected to open in mid-2017. However, at the mines the physical properties of the polyol, beginning of July 2017, Sadara Chemical 1,600 which can range from low-molecular-weight Company did not provide a status update on polyglycols to high-molecular-weight resins. the polyols unit. ■ 1,550 Aug Jul Keep up with all the latest developments 2016 2017 Outlook in the chemical industry including news, The opening of Sadara Chemical Company’s analysis and pricing at icis.com

20 | ICIS Chemical Business | 28 July-10 August 2017 www.icis.com

ICB_240818_016-021 Profiles July17.indd 20 8/20/18 1:18 PM US chemical profile

ROBBIE WILCOX Houston Orthoxylene

Uses with an 8.3% jump from May. The June rise AMERICAS OX CAPACITY Orthoxylene (OX) is the second largest of three follows three consecutive months of declines, ‘000 tonnes/year commercial isomers of xylene. Nearly all OX according to US Census Bureau data. Housing Company Location Capacity output is consumed in the manufacture of starts were up 2.1% from June 2016. Flint Hills Corpus Christi, 185 phthalic anhydride (PA). PA has three major US new auto sales in June 2017 fell 3.0% Resources Texas, US applications – as phthalate plasticizers used in from June 2016. June sales of new vehicles fell ExxonMobil Baytown, Texas, US 130 compounding polyvinyl chloride (PVC), in un- for the sixth consecutive month, according to Chemical saturated polyester resins (UPRs) for glass-re- AutoData. June sales of passenger vehicles LyondellBasell Houston, Texas, US 120 inforced thermoset engineering applications plunged by 13% from June 2016. Major OX Braskem Camacari, Brazil 62 and in alkyd resins used for surface coatings. producers in North America include BP Smaller outlets for OX are in solvents, Chemicals, Chevron Phillips, ExxonMobil, Braskem Capuava, Brazil 50 though that is declining, and in bactericides, and Flint Hills. Petroquimica El Palito, Venezuela 48 soybean herbicides and lube oil additives. A de Venezuela newer outlet is in the production of polyeth- Prices ylene naphthalate (PEN) polymer. OX monthly contract prices in the US market have been up and down since January 2017 lenes, which involves the high-severity catalyt- Supply/demand and have risen only 0.75 cents/lb through July ic reforming of naphtha. From this, a C8 stream Supply and demand for OX has been said to 2017. Prices have generally followed feedstock contains ortho-, meta-, and PX, as well as eth- be balanced so far this year. Buyers have not MX, which peaked with OX in February 2017. ylbenzene (EB). Xylenes are also obtained from been heard to have had trouble procuring The driver for this trend has been falling the pyrolysis gasoline stream in a naphtha needed supplies of OX, while sellers have not MX spot prices, which is driven by the North steam cracker and by toluene disproportiona- been heard having had trouble selling OX. America gasoline market. MX traded at a dis- tion (TDP). The xylenes are passed through a Upstream, OX is tied to mixed xylenes count to toluene for most of the second quar- splitter, and the bottom stream, which contains (MX) as its major feedstock. Demand for MX ter before regaining a premium over toluene a targeted amount of OX, is sent to an OX distil- was said to be steady heading into the tradi- late in the quarter. The US market typically lation column to produce high-purity product. tional summer high season for many MX de- bases its OX price negotiations on trends in rivatives. Demand for gasoline in the US was Asia, and OX contract price settlements drive Outlook disappointing during the second quarter due downstream PA contract settlements. Since OX comes out of the refining process to the summer driving season in the US. In July, northeast Asia orthoxylene (OX) with MX, it is affected by price movements in Downstream, OX demand is strongly tied to import prices continue to climb on the back of that market along with US crude oil prices. PA, and PA consumption is largest in the higher local Chinese prices and improve- Price movements of toluene and benzene downstream PVC market, whose major out- ments in downstream PA market conditions, also affect OX, as they come out of the gasoline lets include US housing and construction and a trend likely to continue through September. stream with MX. OX contract price settle- the automobile industry. PA domestic prices in Asia had firmed on ments will follow US spot MX prices, which US housing starts rebounded in June 2017 higher demand from the derivative markets may see some firmness at the start of the third that comprise phthalate plasticizers such as quarter given the narrow spread between feed- US ORTHOXYLENE dioctyl terephthalate (DOP) and diisononyl stock reformate. MX availability is likely to re- phthalate (DINP). Encouraged by the healthy main sufficient into the third quarter as most Cents/lb, contract FOB US Gulf margins, some PA makers in Asia were look- US refineries operated at high rates throughout 50 ing to buy additional raw material to maintain the second quarter even while this year’s sum- stable operations, leading to an improvement mer gasoline season has been disappointing. 45 in trading liquidity. The supply of OX through the rest of this Asia OX supply is expected to remain tight year is expected to be robust according to as key producers in South Korea and Japan market participants. No major outages for OX 40 are undergoing maintenance and will not plants are expected this year. Downstream, as have any spot cargoes until mid-August. PA demand declines with the move away Other OX makers are focusing production from phthalate plasticizers, so would demand 35 on the more lucrative co-product paraxylene for OX. ■ (PX) and have no additional cargoes after Additional contribution from Hazel Kumari meeting contractual and captive requirements. in Singapore 30 Jul Jul Keep track of price movements for a wide 2015 2017 Technology range of commodity chemicals by subscribing OX comes from the production of mixed xy- to ICIS pricing reports at icis.com

www.icis.com 28 July-10 August 2017 | ICIS Chemical Business | 21

ICB_240818_016-021 Profiles July17.indd 21 8/20/18 1:18 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Linda Naylor London Polypropylene

USES into the European Union (EU). New capacity EUROPE PP CAPACITY Polypropylene (PP) is used in a wide range of in the PP sector has come mainly from China ‘000 tonnes/year consumer and industrial products with applica- and India in recent months, with most new Company Location Capacity tions in packaging, fibres and automotive parts. North American capacity being concentrated Total Feluy, Belgium 900 on PE. Some PP capacities initially planned for Petrochemicals Technology North America have been shelved, while a SABIC Geleen, Netherlands 600 Main process licenses of PP technology in Eu- large swathe of PE output is imminent. Borealis Burghausen, Gemrnay 560 rope include Innovene and LyondellBasell. Czech producer Unipetrol is preparing the SABIC Gelsenkirchen, 510 The Innovene process employs gas-phase commissioning of an expansion at its Litvinov Germany technology in its PP process. LyondellBasell’s PP plant to bring annual capacity to 350,000 LyondellBasell Brindisi, Italy 445 licensing process technology is called tonnes/year. The company said it had invested Borealis Schwechat, Austria 435 Spheripol; which combines bulk-phase poly- Czech koruny (Kc) 100m ($4.54m) to modern- Repsol Tarragona, Spain 390 merisation in a tubular loop reactor with gas- ise its existing 275,000 tonne/year installation phase polymerisation for the production of in order to add a further 75,000 tonnes/year. Borealis Beringen, Belguim 385 block copolymers. The company has also de- Most sources expect supply and demand to LyondellBasell Berre, France 350 veloped multizone circulating reactor, called remain relatively balanced in in Europe. LyondellBasell Wesseling, Germany 350 Spherizone, which can generate different ma- LyondellBasell Tarragona, Spain 340 terials and extend the range of properties of Prices Braskem Schkopau, Germany 320 the PP produced. PP prices have been following movements in INEOS Olefins Geel, Belgium 310 In addition to this, Austria-headquartered the upstream propylene contract sector pretty and Polymers Borealis has adapted its Borstar bimodal poly- closely in the past months, and the spread has Borealis Kallo, Belgium 300 ethylene (PE) process to make PP. been fairly steady in 2017, with no change in Appryl (Total Lavera, France 300 the past three months as PP pricing has fol- and INEOS) Supply and demand lowed the propylene contract. Naphtha has INEOS Olefins Grangemouth, UK 285 and Polymers Supply and demand in Europe are well bal- softened so propylene and subsequently PP anced, with some grades now depending on pricing have followed. ExxonMobil Lillebonne, France 270 imports. Most imports are brought into Europe The UK PP sector has been impacted by the LyondellBasell Knapsack, Germany 250 by producers that already have installed capac- pound sterling which has had a rocky ride Polychim Dunkirk, France 230 ity within Europe, with less coming from trad- since the Brexit referendum in June 2016, Total Gonfreville, France 230 ers with product from the Middle East and Asia. when a small majority voted to exit the EU, Petrochemicals South Korean imports continue to benefit and this is still continuing. On 1 June 2016, the Braskem Wesseling, France 225 from 0% import duty into Europe, while most pound was worth around €1.30, but the aver- Asian countries and all GCC (Gulf Cooperation age for July was at €1.129, with the average for cated to PE, and not PP, supply and demand Council) countries have a 6.5% duty applied. August already lower. are expected to remain in balance in Europe. Indian PP has a 3% import duty applicable In recent months, UK buyers have faced New suppliers continue to see Asia as their more volatility than their European counter- preferred destination to sell to, and with Eu- EUROPE PP parts because of currency changes, and this ropean prices remaining relatively unattrac- could continue further, said sources. tive in global terms, this balance is expected €/tonne, homopolymer injection, spot FD NWE Europe integrated domestic PP margins to continue in the short-to-mid term. 1,300 fell during the week ended 28 July on higher New PDH units in Europe are expected feedstock costs, the ICIS margin report between 2019 (Grupa Azoty) and the early

1,200 showed on 31 July. Integrated PP margins for 2020s (Borealis and INEOS), and while PP naphtha fell by 6.6% as feedstock costs rose investment remains on the back burner by virtually the same percentage. New sup- for most, as ethane-based PE continues to 1,100 pliers continue to see Asia as their preferred grab the attention of most, a new PP unit is destination to sell to, and with European being considered by Grupa Azoty, to be in- prices remaining relatively unattractive in stalled alongside the new PDH unit. The de- 1,000 global terms, this balance is expected to con- cision will be made during the fourth quar- tinue in the short-to-mid term. ter of 2017. ■

900 Lane Kelley and Will Conroy contributed Aug Jul Outlook 2016 2017 Keep up with all the latest developments With most new polyolefin capacity coming in the chemical industry including news, on stream in 2017 and 2018 and beyond dedi- analysis and pricing at icis.com

22 | ICIS Chemical Business | 11-17 August 2017 www.icis.com

ICB_240818_022-025 Profiles August17.indd 22 8/20/18 1:37 PM ASIA chemical profile

TRIXIE YAP Singapore MTBE

Uses Indonesia. The Vietnamese market could ASIA, MIDDLE EAST MTBE CAPACITY At least 90% of methyl tertiary butyl ether open for blenders because of the new taxation ‘000 tonnes/year (MTBE) produced in Asia goes to the gasoline policies on gasoline cargoes loading from Company Location Capacity blending pool to boost octane levels – for ex- southeast Asia. SABIC Al-Jubail, 1,700 ample blending RON88 to 92 or RON92 to 95. Saudi Arabia Up to 3-5% of the market uses it as a blend- Prices Wanhua Chemical Shandong, China 780 ing component for some end products. Asia’s MTBE prices are assessed in tandem Nanjing Jinling Jiangsu, China 750 The remainder of MTBE usage is to pro- with RON92 FOB Singapore gasoline prices. Huntsman New duce methyl methacrylate (MMA) – this is The correlation between the two has re- Materials particularly prevalent in northeast Asia. mained high since the first half of 2017 and is Qatar Fuel Additives Mesaieed 610 MTBE can also be used to manufacture expected to continue until the end of the year. Industrial Estate, Qatar pure isobutene by back-cracking, and this Prices have been persistently volatile amid Lijin Petrochemical Shandong, China 530 product is in turn used to make isobutylene mixed gasoline supply and demand funda- Shandong Yuhuang Shandong, Chna 500 isoprene rubber. mentals for the first half of 2017. On the other Chemical hand, the MTBE factor, which is a measure- Emirates National Jebel Ali, Dubai 500 Supply/demand ment of MTBE prices relative to RON92 FOB Oil Company Changes in the supply of MTBE have mainly Singapore gasoline prices, has been between Yousen Technology Guangdong, 450 been dictated by the new start-ups in China, 1.12-1.25 for the first half of the year. This China since the market is relatively mature in the translates to a relatively stable market trend Panjin Heyun Liaoning, China 450 rest of Asia. Supply has been increasing since despite the volatility in gasoline prices. Industrial Group the start of 2017, with at least two new plants Some upside pressures on both FOB Singa- Heilongjiang Anruijia Heilongjiang, 410 coming up in China with a combined capaci- pore prices and the MTBE factor were the Petrochemical China ty of more than 800,000 tonnes/year. Produc- opened arbitrage window for exports to Shandong Shenchi Shandong, China 400 tion rates of some plants were not as high as China; stable buying activities in the key Sin- Chemical expected because of the lack of raffinate 1 or gapore import market; and the lack of exports Shandong Shandong, China 380 Shouguang Luqing raffinate 2 feedstock and squeezed margins – from China. Downside pressures were weak Petrochemical a situation particularly prevalent in China. gasoline fundamentals in southeast Asia since Shandong Dong Shandong, China 350 On the demand front, the usage of MTBE the early year. Ming Petrochemical continues to be focused on two types of gaso- Dongying Boyuan Shandong, China 350 line blending – for higher RON95 or RON97 Technology Liquefied or for lower RON88-92, which is mainly used The key process for producing MTBE in Asia Petroleum/Jiahao together with naphtha. is the reaction between isobutene and metha- Chemical From the upstream gasoline perspective, nol over a catalyst bed in either a liquid phase NOTE: Top 14 sites demand to fulfil higher-RON gasoline is still or mixed gas-liquid phase reactor. mainly from Malaysia, the Middle East and Sulphuric acid is sometimes used as the of ample supply and the slow growth rate ex- catalyst in these reactions. pected in the domestic gasoline sector. ASIA MTBE The dehydration of tert-butyl alcohol, which In addition, government-led structural is produced as a by-product in the making of changes to the domestic gasoline market in $/tonne, spot FOB Singapore propylene oxide (PO), is the second way of China are likely to dictate its import-export 800 producing MTBE. This technology, however, position. The likelihood of the government is limited within Asia to a few producers such limiting gasoline export quotas is high going 700 as Hunstman Jinling and Wanhua Chemical. into 2018 and there is the potential of China being more dependent on local production, Outlook instead of buying imported material. 600 Supply is likely to remain long until 2018, as Lastly, the Singapore market is not expect- several projects are still expected to start up in ed to see large fundamental shifts as it contin- the last quarter of 2017 and first half 2018 ues to remain a blending hub within south- 500 within northeast Asia, especially in China east Asia, with MTBE trade flows still likely and South Korea. The start-up of the new S to be mainly from the Middle East. ■ Oil PO/MTBE swing plant in early 2018 is ex- 400 Click here to explore an interactive Aug Jul pected to be a game changer for northeast 2016 2017 Asia, as South Korea is expected to switch map of methyl tertiary butyl ether (MTBE) from a net importer to a net exporter because plants in Asia and the Middle East

www.icis.com 11-17 August 2017 | ICIS Chemical Business | 23

ICB_240818_022-025 Profiles August17.indd 23 8/20/18 1:37 PM Asia chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Matthew Chong Singapore TDI

USES nificant pick up in demand to justify the ASIA TDI CAPACITY Toluene di-isocyanate (TDI) is used in flexible sharp increase in prices, the participants said. '000 TONNES/YEAR polyurethane (PU) foam, which has outlets in Company Location Capacity upholstery, mattresses and automotive seats. PRICES Covestro Caojing, 250 Other uses include rigid foams and adhe- Domestic TDI prices in China skyrocketed by China sives, paints, concrete sealers and as a a cumulative 40% in the short span of four Shanghai BASF Caojing, 160 crosslinking agent for nylon 6 and intermedi- weeks to hit a 2017-high in early August amid Polyurethane Co (SBPC) China ates in PU coatings and elastomers. tight local supply. BASF Yeosu, South 160 In early August, average domestic TDI pric- Korea SUPPLY/DEMAND es in east China stood at yuan (CNY) 31,250/ Cangzhou Dahua Cangzhou, 150 The spike in China domestic prices since tonne DEL (delivered), according to ICIS data. China early July was due to a sudden tightening of Before the price surge, average prices were Hanwha Chemical Yeosu, South 150 Korea supply as availability of domestic cargoes was at CNY22,550/tonne DEL east China in early Mitsui Chemicals & SKC Omuta, Japan 120 limited, market participants in China said. July, ICIS data showed. Polyurethanes Inc This was despite the fact that most produc- In the Asia spot import market, the extent of (MCNS) ers were running their plants normally, ex- the price increases was much more subdued Fujian Southeast Fuqing, China 100 cept for Gansu Yinguang’s plant located in relative to China domestic prices. Buying inter- Electrochemical Co northern China, which was shut for a turna- est remained muted, with buyers seemingly Gansu Yinguang Baiyin, China 100 round from mid-July to early August. not tempted to stock up on cargoes despite the Yantai Juli Yantai, China 80 Overall import availability from other north- sudden rise in China domestic prices. Beifang Jinhua Huludao, 50 east Asian TDI producing countries outside China China, namely Japan and South Korea, was TECHNOLOGY OCI Kunshan, 50 deemed ample although a South Korean pro- The main route is the nitration of toluene to South Korea ducer has been short of cargoes in recent weeks. dinitrotoluene, followed by catalytic hydro- Gujarat Narmada Valley Dahej, India 50 Buyers had little choice but to accept suppli- genation to toluene diamine (TDA), which is Fertilizers Co (GNFC) ers’ price hikes as their TDI stock inventories dissolved in an inert solvent and reacted with Karoon Petrochemical Bandar 40 were low. These buyers have been purchasing phosgene to produce a crude TDI solution. Mahshahr, TDI cargoes on a need-to-basis before the hikes TDI can also be produced directly from dini- Iran as prices were on a gradual downtrend for trotoluene by liquid phase carbonylation with Tosoh Corp Nanyo, Japan 25 most part of the year. Local producers said they o-dichlorobenzene. Gujarat Narmada Valley Bharuch, 17 have limited supply of cargoes despite that Germany’s Covestro, formerly Bayer Mate- Fertilizers Co (GNFC) India there are no major plant shutdowns in China, rialScience, developed a route that carries out market participants in China said. phosgenation in the gas rather than the liquid fundamentals unable to justify the sudden and Downstream demand has been especially phase. The technology was already commer- sharp increase in prices. Asia import prices look weak this year and there has not been any sig- cialised at its world-scale 250,000 tonne/year set to stabilise in the fourth quarter and may sof- TDI plant in Shanghai, China. ten if Sadara’s 200,000 tonne/year TDI start-up ASIA TDI Covestro has also been running a 30,000 in Saudi Arabia were to achieve on-spec pro- tonne/year pilot plant since 2004 and is duction within this year. Sadara’s TDI unit is $/tonne 4,500 thought to have used this technology in its new expected to come on stream around October, CFR SE Asia 300,000 tonne/year TDI plant in Dormagen, market sources said. Sadara is a joint venture CFR China and Hong Kong CIF India Germany, which came on stream in late 2014. between Dow Chemical and Saudi Aramco. 4,000 Looking further ahead to 2018, prices will OUTLOOK likely be on a downtrend as BASF’s 300,000 3,500 Asia TDI prices are expected to strengthen for tonne/year TDI unit in Ludwigshafen, Ger- the remainder of the third quarter, tracking many, is expected to be ramped up to full ca- 3,000 the surge in China domestic prices in July and pacity next year. The Ludwigshafen unit, August, while the onset of the traditional which was officially inaugurated in late 2015,

2,500 peak demand season in September will also has been running at low rates for most of 2017 provide further support to prices. due to technical trouble. ■ China domestic prices will likely hit a ceiling 2,000 Aug Aug in August/September and then begin to retreat 2016 2017 Click here to see an interactive map of as buying interest for higher priced cargoes had plant locations started to wane, with current supply-demand

24 | ICIS Chemical Business | 18-24 August 2017 www.icis.com

ICB_240818_022-025 Profiles August17.indd 24 8/20/18 1:37 PM Latin America chemical profile

George Martin Houston HDPE

USES sume the volumes generated in the first wave of LATIN AMERICA HDPE CAPACITY The major use for high density polyethylene plants, much less the second wave of crackers ‘000 TONNES/YEAR

(HDPE) is in blow-moulded products such as and plants, expected in the early to mid 2020s. Company Location Capacity milk bottles, packaging containers, drums, Braskem/Idesa Coatzacoalcos, 750 car fuel tanks, toys and household goods. PRICES Mexico Film and sheet are widely used in wrapping, The major changes for HDPE in recent months Braskem Triunfo, Brazil 400 refuse sacks, carrier bags and industrial lin- come from the capacity addition that Braskem Dow Chemical Bahia Blanca, 270 ers. Injection-moulded products include Idesa did in Mexico, starting in 2016. Argentina crates, pallets, packaging containers, house- Pemex does not have enough ethane/ethyl- Pemex Morelos, Mexico 180 wares and toys. Extrusion grades are used in ene for its plants since Braskem Idesa started Petrochemical pipes and conduit. operations. This has caused a change in Mexi- Braskem Camacari, Brazil 160 co’s PE market share conditions. Pemex has Poliolefinas El Tablazo, Venezeula 160 SUPPLY/DEMAND practically stopped the HDPE injection plant, Internacionales Even with the start of the worldscale Braskem running only the HDPE blow moulding plant (Polinter) Idesa plant in Mexico, Latin America demand when enough ethylene is on hand. for HDPE outstrips regional production. This PEMEX’s 300,000 tonne/year LDPE plant mand rising in developing countries such as situation has attracted imports from the US, and frequently runs with only two out of three pro- China, India and Brazil, according to market from other regions of the world. Asian products duction trains. The company gives priority to research by Mordor Intelligence. The Asia Pa- have frequently reached the Pacific coast of running the 300,000 tonne/year Morelos swing cific region should continue to lead global de- South America and products from the Middle plant, used only for production of LLDPE, the mand for HDPE, with North America’s share East are competing to gain market share, too. only product that competitor Braskem Idesa at 23% and Europe at 20%. Venezuela’s production of HDPE has encoun- does not produce. Braskem Idesa is also the Inexpensive shale gas in North America tered difficulties related to operational issues, reason for the decline of US exports to Mexico. has spawned a boom in new US PE plants lack of spare parts for industrial equipment, etc. Prices in Argentina and Brazil are protected and this, in turn, has caused many of the PE Uneven economic development in the re- by high import tariffs, and as such, HDPE prices projects planned in Latin America to cancel, gion, political turmoil, inflation, corruption are much higher than those of Chile or Peru – with the realisation that the US products may and lack of expertise have played a part in the two countries that have no local production, have an insurmountable cost advantage. regional slowdown. Demand for HDPE and therefore no need for import tariffs. The next potential PE project could materi- other plastic resins has been steady despite the Countries on the Pacific coast do not have alise in Argentina, considering that the alli- difficulties, and has even managed to grow industry to protect and allow imports from ance between Dow and YPF could increase with the demographic gains of the region. most places to enter the country unrestricted. natural gas production in the Vaca Muerta However, projected ethylene and PE supply Prices in those countries are very competitive, shale gas play, but it is not clear what grade of increases in the US Gulf are expected to fill the aligned with international prices. PE will have production priority when that PE needs of Latin America, and other places. US The overall trend is expected to be a gradual gas is available. domestic demand will not be enough to con- decline as production grows in the US, togeth- The eternal problem in Latin America has er with the need to export higher volumes. been the lack of resources such as ethylene LATIN AMERICA HDPE and propylene. TECHNOLOGY A second wave of new PE units in the US is $/tonne, blow moulding HDPE is produced by the catalytic polymeri- coming, also expected to raise capacity by 2,400 FD Argentina FOT Brazil FOT Mexico sation of ethylene in either slurry (suspen- double-digit percentages. Most of those vol- 2,200 sion) solution or gas-phase reactors. Some umes will be exported and this will continue processes can switch to produce LLDPE. to discourage the construction of new PE 2,000 The choice of catalyst and/or the use of bi- plants in Latin America. 1,800 modal processes is used to modulate the qual- With the new supply outstripping regional ity of the output. The development of metal- demand, HDPE prices will be under pressure 1,600 locene catalysts also allows slurry-loop in the next 18 months as US producers com- operators to enter the LLDPE sector. Bimodal pete to place volumes. Some producers are 1,400 processes claim to produce resins competitive still refusing to compete on price, but may 1,200 with those from metallocene. change their minds when their market share starts shrinking. ■ 1,000 Jul Jun OUTLOOK 2016 2017 Globally, the HDPE market is expected to Click here to see a more detailed version of this profile grow at 6.3% annually through 2022, with de-

www.icis.com 18-24 August 2017 | ICIS Chemical Business | 25

ICB_240818_022-025 Profiles August17.indd 25 8/20/18 1:38 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Vasiliki Parapouli London Polystyrene

USES the eyes of customers against PS. EUROPE POLYSTYRENE CAPACITY Polystyrene (PS) is used in a variety of con- Some buyers did manage to swap some '000 TONNES/YEAR sumer and commercial products with major volumes to these materials and reduce their Company Location Capacity applications in domestic appliances, con- cost, although some argued that the switch Styrolution Antwerp, Belgium 475 struction, electronics, toys and food packag- process was not easy in technical terms. Versalis Mantova, Italy 285 ing. Included in food packaging are food and A ray of light in PS demand only started Trinseo Tessenderlo, 265 dairy containers, closures, lids, produce bas- being obvious from late April onwards after Belgium kets, vending cups and fast food containers. the significant drops in feedstock styrene con- Styrolution Wingles, France 180 Two main types of PS are produced: crys- tract price that brought buying appetite back Total Carling, France 150 tal or general purpose polystyrene (GPPS), to the market as customers had been keeping Trinseo Schkopau, 130 which is a clear, amorphous resin with good their stock levels very low for several months. Germany stiffness and electrical properties but it is Volumes were looking quite reasonable in Gazprom Salavat, Russia 110 brittle; and medium and high impact poly- June and July while producers were firm in Total El Prat de 110 styrene (HIPS), which contains varying lev- their pricing, although customers still were not Llobregat, Spain els of polybutadiene to improve toughness buying material to rebuild stock levels. Synthos Kralupy, Czech 87 and impact resistance. Ahead of the summer break for the south- Republic ern part of the region, order books were look- Total Feluy, Belgium 80 SUPPLY/DEMAND ing busier before the traditional slowdown in Baser Yumurtalyk, 50 The beginning of 2017 proved to be particu- August with key markets like Italy likely to be Petrokimya Turkey larly difficult for the European PS industry on holiday for the whole month. Synthos Oscwiecim, 50 due to the dramatic price movements of the Poland European feedstock styrene barge contract, PRICES Total Gonfrevilee, 50 which was under upward pressure for nearly The European PS market followed the strong France six months, since November 2016. upward movement of feedstock styrene at the The volatility and the price level of styrene start of 2017 that took prices to historically re- high-purity polymers; the suspension route caused some serious headaches for European cord levels. Buyers had to change their strate- produces polymers of different molecular PS producers who faced big difficulties when gy and purchase strictly on a “need-to” basis weights and can thus make specialist crystal trying to pass on the consecutive feedstock as it proved particularly difficult to pass on and high-impact grades of PS; and mass (bulk) increases to their customers, while their de- the increases to their customers. polymerisation boasts the advantages of clarity mand was falling. The second quarter saw buying appetite and the excellent colour of the resins produced. Moreover, the PS market had to fight on an- coming back to the market as PS prices were other front as well and that was the competi- decreasing tracking the downward correction OUTLOOK tion against other materials such as polypro- of the styrene market. Nevertheless, produc- Upstream feedstock styrene price movements pylene or polyethylene terephthalate (PET), ers remained quite firm with their pricing as will remain the main factor to define Europe- which were more affordable and reliable to inventories had been low for quite some time an PS values as well as demand for the rest of and buyers were then in real need of material. 2017. Most players appear still cautious in EUROPE PS Import activity was quite subdued with only case styrene would turn volatile again as this a few Asian offers seen in the market. Players, could put demand in a downward spiral that €/tonne GPPS, spot ex-works Russia GPPS, domestic FD EU 3,000 however, were reluctant to commit to any vol- will be difficult to sustain. HIPS, spot ex-works Russia HIPS, domestic FD EU umes that would not be arriving until Septem- As the third quarter is drawing to a close, ber, given the volatility of the styrene market. supply in the European styrene market re- 2,500 mains tightly balanced amid concerns in- TECHNOLOGY duced by production disruption at a num- Three types of process are generally used: sus- ber of facilities. Players were seen to be 2,000 pension, solution and mass polymerisation. covering shortages, owing to the fresh dec- PS was first commercially produced by the laration of force majeure at Moerdijk, the polymerisation of styrene feedstock in the Ellba POSM plants running low due to the 1,500 1930s. The two main types of polymers pro- fire at Pernis, talk of a repair at the Maasv- duced are a clear, crystal amorphous resin lakte site in the Netherlands and US im- and an impact resin that contains varying lev- ports being delayed. ■ 1,000 Aug Aug els of polybutadiene. 2016 2017 We value your feedback! Please take a few The solution route has the advantages of minutes to participate in our ICB Customer producing low residual monomer content and Survey post relaunch. Click here

26 | ICIS Chemical Business | 1-7 September 2017 www.icis.com

ICB_240818_026-035 Profiles September17.indd 26 8/20/18 1:51 PM US chemical profile

AMANDA HAY Houston Soda ash

Uses US production was 5.82m tonnes for the first US SODA ASH CAPACITY Half of the world’s soda ash is used in glass half of 2017, up slightly from the same period ‘000 TONNES/YEAR manufacturing to reduce energy use in pro- in 2016. For the year, domestic output is ex- Company Location Capacity duction and lower viscosity of molten glass, pected to remain flat to 2016’s 11.8m tonnes. Tronox Green River, 3,220 providing increased flexibility in molding. Demand-wise, just over 55% of US soda Wyoming Flat glass, such as windshields and residen- ash is exported. Domestically, demand is ex- CINER Group Green River, 2,950 tial windows, comprises 25% of global de- pected to increase slightly in 2017 with Wyoming mand followed by container glass used for growth coming from the flat glass, fibreglass Solvay Green River, 2,690 beverages and perfume at 19%. and chemicals end markets. Container glass Wyoming Other types of glass, such as fibreglass and demand is expected to remain flat. Tata Chemicals Green River, 2,540 light bulbs, consume 6%. Wyoming Soda ash is also used as a sodium source Prices Nirma (Searles Argus, California 1,320 in the production of chemicals such as sodi- In 2017, US soda ash contract prices are Valley Minerals) um phosphates, sodium silicates and sodi- down slightly from 2016 to $202-222/short Tronox Granger, 1,180 um bicarbonate (baking soda). ton. The US market runs on annual con- Wyoming It is used as a raw material for chrome and tracts, which typically settle around the start photographic chemicals. These chemical of the year. the same as the Solvay process, but ammoni- uses account for about 18% of global soda US prices may increase for 2018 if the mar- um chloride supplants calcium chloride. ash demand. Chemical demand is experienc- ket remains steady. Some 2018 price indica- The byproduct ammonium chloride can be ing steady to slight growth. tions have emerged with early initiatives sep- refined, used as a fertilizer and may have Soda ash is also added to powdered arately seeking price hikes of $6/short ton. greater commercial value than calcium chlo- household detergents and soaps, functioning ride, thus reducing the extent of waste beds. as a surfactant carrier and alkali source for Technology pH adjustment as well as a filler. Detergents In the US, natural soda ash is mined from a Outlook account for 15% of global soda ash demand, trona ore deposit in Green River, Wyoming. Demand is strong both domestically and for but that is decreasing with greater movement The four big US producers are Tata, Ciner, US exports, particularly in the flat glass end toward liquid detergents. Solvay and Tronox. In August 2017, Tronox market. Steady to slow growth is expected to The remaining demand for soda ash announced the sale of its soda ash business continue for the US. comes from uses in water treatment, flue gas to Genesis Energy for $1.325bn. The global market remains tight as de- desulfurisation and pulp and paper. The deal is expecetd to close in the second mand continues to grow and ineffective half of 2017. India-based Nirma owns Sear- capacity has been rationalised because of Supply/demand les Valley Minerals. prohibitive production costs or due to envi- Because of strong global demand for natural Trona is mined with a bore miner, and the ronmental regulation. soda ash, particularly from China, US produc- ore is transported to the surface, where it is Chinese demand reached a record 24m ers are running their plants at full utilisation. converted into usable soda ash. tonnes in 2016 and continues to grow at mid- Natural soda ash accounts for 26% of glob- single-digit rates. US SODA ASH al capacity, with the US making up 20% of For natural soda ash, US and Turkish that. Natural soda ash is cost advantaged product are expected to remain sold out. $/short ton, dense, contract FOB 216 compared with synthetic soda ash. Synthetic Ciner’s new natural soda ash plant in Turkey, soda ash accounts for 74% of global capaci- which is expected to come online in Septem- ty, with China making up 42% of the world’s ber, will be key to the supply outlook. 215 synthetic capacity. The Turkish plant will have a total capaci- Synthetic soda ash can be produced via ty of 2.5m tonnes/year, with product to be 214 two different processes – Solvay (or Ammo- sold in the global market. nia Soda) or Hou. With Solvay, the major in- A Turkish source said it will increase glob- 213 puts are salt, limestone and thermal energy, al supply at a time when availability is ex- and the only major byproduct is calcium pected to lessen, especially in Asia.

212 chloride, which is sold as road salt. If start-up of the new capacity is phased in Calcium chloride is also used to increase through late 2018, it should be in line with the water hardness in swimming pools. Other demand growth, a US source said. ■ 211 Sep Jul uses can be found in food, medicine, concrete, We value your feedback! Please take a few 2016 2017 additives in plastics and fabric softeners. minutes to participate in our ICB Customer In the Hou process, the first few steps are Survey post relaunch. Click here

www.icis.com 1-7 September 2017 | ICIS Chemical Business | 27

ICB_240818_026-035 Profiles September17.indd 27 8/20/18 1:51 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Pavle Popovic London PTA

Uses soon after, in April, began an expansion of its europe PTA CAPACITY Purified terephthalic acid (PTA) occurs as a Rotterdam, the Netherlands, facility. It com- ‘000 TONNES/YEAR white, crystalline powder with a slightly acid- pleted the enlargement in July, which allowed Company Location Capacity ic odour. PTA is a low-risk hazard to health the plant to produce 700,000 tonnes/year. The BP Chembel Geel, Belgium 1,400 but prolonged exposure should be avoided. In firm said that the plant previously produced Artlant PTA Sines, Portugal 700 addition, PTA dust can be explosive, and it 380,000 tonnes/year and that, after the expan- Indorama Holdings Rotterdam, 700 reacts strongly with oxidants. The substance sion, the company was producing 1m tonnes/ Rotterdam Netherlands can irritate the eyes and skin. Nearly all PTA year of PTA including its Spanish site. PKN Orlen Wloclawek, Poland 600 is consumed in polyester production includ- Around the same time in June, anti-dump- Indorama Ventures San Roque, Spain 350 ing polyester fibre, polyethylene terephthalate ing investigations into South Korean PTA im- Quimica (PET) bottle resin and polyester film. ports to the EU were terminated with no du- Indorama Ventures San Roque, Spain 325 Modern technologies produce PTA by the ties imposed by the European Commission. Quimica catalytic liquid phase oxidation of parax- Sources said in June that South Korean im- OAO Polief Blagoveshchensk, 272.6 ylene (PX) in acetic acid, in the presence of port purchases increased having decreased in Russia air. The process uses manganese or cobalt ac- April as market participants awaited a deci- PCK Raffinerie Schwedt, Germany 85 etate as a catalyst. sion on the investigation. Petkim Petrokimya Aliaga, Turkey 70 Originally, European PTA sources said that Holding Supply/demand they expected the market to tighten if EU anti- The PTA market was disrupted by force ma- dumping duties were imposed on South Ko- in a solvent recovery system. Acetic acid from jeures in late 2016 and early 2017. In October rean imports. They anticipated that Mexican this is returned to the reactor together with the 2016, Polish energy major PKN ORLEN de- imports would fill in any potential gap made oxidation catalyst. The resulting PTA is puri- clared a force majeure on its 600,000 tonne/ by the absence of South Korean material. fied in a crystallizer, where the unreacted xy- year Wlocklawek PTA plant, which then re- Mexico has a free trade agreement with the lene and water are flashed off. Some plants started in November 2016. At the time, an ar- EU. However, it has been mentioned that have been modified to also produce isophthal- bitrage window between Asia and Europe Mexican companies are not interested in sell- ic acid by substituting metaxylene for PX. opened in response. ing PTA to Europe primarily as they instead After this, UK energy major BP announced deal mostly with the Americas. Consequent- Outlook a force majeure in February 2017 at its site in ly, Mexican PTA is not as competitive as Much market attention will be focused on Geel, Belgium, which produces a total capaci- South Korean PTA in the EU. whether Artlant PTA’s 700,000 tonne/year ty of 1.4m tonnes/year. The force majeures Eurostat data in July 2017 showed that tere- plant in Sines, Portugal will restart having were caused by two separate and unconnected phthalic acid (TA) imports from South Korea been shut down due to financial difficulties. machinery failures. The European PTA and increased from March to April 2017 by There was market talk of the situation becom- downstream PET markets tightened in re- around 4% but decreased from April to May ing clearer in October 2017 potentially. sponse with the force majeure lifted in April. 2017 by roughly 4% as well. While, the European and Asian PTA mar- Thai producer Indorama Ventures Ltd (IVL), Furthermore, April 2017 imports from kets could also be affected by downstream South Korea remained at similar levels year PET regulatory changes. Japan began an anti- EUROPE PTA on year while in May, in the same year, they dumping investigation into Chinese PET im- dropped year on year. ports in September 2016. €/tonne, contract, FD NWE 740 In August 2017, Japan found that Chinese Prices imports were sold at prices 40.41-53.85% 720 PTA contract prices are assessed based on the below domestic market rates. A decision on movements of upstream PX. Consequently, be- the duties is expected by market sources in 700 tween November 2016 to February 2017, PTA late 2017. If duties are imposed on Chinese prices increased in line with settlements for PET, this could lead to more imports to the 680 the raw material. After stabilising in March, the European market. contract softened continuously to July 2017. Additionally, EU anti-subsidy duties are 660 set to expire on Indian PET in May 2018, un- Technology less an expiry review is initiated. This too, 640 Modern technologies produce PTA by the cat- could result in an increase of PET imports to alytic liquid-phase oxidation of PX in acetic the European market. ■ 620 Oct Aug acid, in the presence of air, using a manganese 2016 2017 or cobalt acetate catalyst. The reaction is exo- Access the archive of the Chemical Profiles thermic, producing water, which is removed A-Z at icis.com/subscriber/icb

28 | ICIS Chemical Business | 8-14 September 2017 www.icis.com

ICB_240818_026-035 Profiles September17.indd 28 8/20/18 1:55 PM ASIA chemical profile

HAZEL KUMARI Singapore Orthoxylene

Uses isomer-grade xylene costs. According to a ASIA ORTHOXYLENE CAPACITY Orthoxylene (OX) is the second largest of the trader, there were no spot cargoes available ‘000 TONNES/YEAR three commercial isomers of xylene. The ma- from Japan as two main producers, JX Nippon jority of OX is used to make phthalic anhy- and TonenGeneral, were manufacturing just Company Location Capacity dride (PA), to manufacture flexible polyvinyl enough OX to meet contractual and domestic Reliance Industries Jamnagar, 512 chloride (PVC) and unsaturated polyester res- obligations because of eroded margins. India ins and alkyd resins. Minor uses of OX in- In Taiwan, Formosa Chemical and Fibres Formosa Chemicals and Mailiao, 475 Fibre Corp Taiwan clude solvent applications, soya bean herbi- Corp (FCFC) has ceased exports of spot OX ExxonMobil Chemical Jurong Island, 326 cides, bactericide lubricant additives and since March due to a turnaround. Similarly, Singapore polyethelene naphthalate. spot supply from South Korea saw a reduc- Yangzi Petrochemical Nanjing, China 260 tion due to a month-long turnaround from SK Co (YPC) Supply/demand Global Chemical (SKGC) in June and lowered Lotte Chemical Ulsan, South 250 China, with 34 end-users, is Asia’s largest im- output from Lotte Petrochemical. Korea porter of OX. However, the prolonged weakness SK Global Chemical Ulsan, South 200 in the overall plasticizer markets have led some Prices Korea PA producers to cap their long-term plant utili- Discussions on a CFR NE Asia basis were on Zhenhai Refining and Ningbo, China 160 sation rate at around 50%. Thereafter, domestic an uptrend for most of January and February Chemical Co (ZRCC) Chinese producers were facing mounting OX because of pre and post Lunar New Year re- Jilin Petrochemicals Jilin City, 120 supply amid limited downstream demand. stocking activities and strength in the domes- China OX started the year on a strong note as Chi- tic China market. JX Nippon Oil and Kawasaki, 100 Energy Japan nese PA makers were actively seeking feed- On 9 July, a bulk carrier Tian Sheng 18 col- Sinopec Hainan Yangpu, China 100 stock ahead of the Lunar New Year holiday. lided with petrochemical tanker Shuang Long Refining & Chemical China’s OX imports saw a 91% month-on- Hai, which was transporting 2,580 tonnes of Dalian Fujia Dahua Dalian, China 100 month jump in January at 48,484 tonnes. OX, in Changzhou along the Yangtze river, Petrochemical However, northeast Asian demand slowed causing a fire at the pipelines and the closure Sinopec Jinling Nanjing, China 100 as consumption dropped amid lower PA oper- of operations at the jetty. Thereafter, the end- Petrochemical ating rates and government enforced plant clo- user was purchasing cargoes from the local PTT Aromatics and Map Ta Phut, 86 sures in China. By June, Chinese OX imports China market, citing shorter delivery time- Refining Thailand fell to 29,914 tonnes. Most end-users deemed frame and limited regional spot availability, CNOOC-Kings Group Huizhou, 80 trading conditions in the plasticizer chain as pushing domestic discussions higher. Howev- China weak. Moreover, Chinese appetite for import er, prices fell by the end of July, weighed by Liaoyang Petrochemical Liaoyang, 60 cargoes was hampered by consistently high in- weak demand in China – in part a conse- China ventories at shore tanks along east China. quence of the government’s crackdown on pol- NOTE: Top 15 plants listed by capacity Key OX makers in Japan have scaled back lution, as well as softening downstream prices. rates to limit losses amid expensive feedstock buyers remain cautious amid an uncertain out- Technology look. Some players raised concerns that despite ASIA ORTHOXYLENE OX comes from the production of mixed xy- curtailed supply stemming from reduced oper- lenes, which involve the high-severity catalytic ating rates and firm co-product paraxylene (PX), $/tonne, spot reforming of naptha. From this comes a C8 end-users are adequately covered by term vol- 1,000 stream containing orthoxylenes, methaxylenes umes and will have no spot requirements. and paraxylenes, as well as ethylbenzene. Singapore’s Jurong Aromatics was acquired

900 Xylenes are also obtained from the pyroly- by ExxonMobil which is looking to increase sis gasoline stream in a naphtha stream crack- the premiums for August to December term er and by toluene disproportionation (TDP). volumes. On that basis, some traders will be 800 The xylenes are passed through a splitter holding out for “a certain price”. where the bottom stream, with a targeted Outside of China, firm demand for PA from amount of OX, is sent to a distillation column India and the Middle East would encourage 700 to produce high-purity product. end-users to maintain high operating rates. CFR NE Asia CFR India Some suppliers have started stockpiling in CFR SE Asia FOB NE Asia ■ 600 Outlook anticipation of improving demand. Aug Aug Asia OX might strengthen in Q3 on seasonal de- 2016 2017 mand for plasticizer material. However, others Access the archive of the Chemical Profiles expect the price hike to be minimal as Chinese A-Z at icis.com/subscriber/icb

www.icis.com 8-14 September 2017 | ICIS Chemical Business | 29

ICB_240818_026-035 Profiles September17.indd 29 8/20/18 1:55 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Zachary Moore Houston TDI

Uses 53 cents/lb ($1,168/tonne) since the begin- GLOBAL TDI CAPACITY Toluene di-isocyanate (TDI) is used in flexi- ning of 2017 and prices are up by a total of 75 ‘000 TONNES/YEAR ble polyurethane (PU) foam, which has out- cents/lb since November 2016. Company Location Capacity lets in upholstery, mattresses and automotive Suppliers have nominated a series of price Covestro Dormagen, 375 seats. Other uses include rigid foams and ad- increases throughout 2017, most of which Germany hesives, paints, concrete sealers and as a have seen full or at least partial implementa- BASF Ludwigshafen, 300 crosslinking agent for nylon 6 and intermedi- tion as supply limitations have left buyers Germany ates in PU coatings and elastomers. with little room to negotiate, especially given Covestro Caojing, China 250 healthy demand for downstream polyure- Covestro Baytown, Texas, 220 Supply/demand thane systems. US TDI supply has been tight across the globe Buyers complain that persistently rising Sadara Al Jubail, Saudi 200 throughout the past 12 months. BASF’s raw material costs have compressed con- Arabia 300,000 tonne/year plant in Ludwigshafen, verter margins. Some buyers able to do so BASF Yeosu, South 160 Korea Germany has either been shut down or run- have experimented with substituting me- ning at reduced rates since November 2016. thyl di-p phenylene isocyanate (MDI) for BASF Geismar, 160 Lousiana, US The main reactor at the plant had to be re- TDI, although this is not possible in all TDI BorsodChem Kazincbarcika, 160 placed and the company has been running applications. Additionally, prices for MDI Hungary the plant at reduced rates with a smaller re- have also shown significant year-on-year Shanghai BASF Caojing, China 160 actor for some time. price increases. Polyurethane Co In addition, Sadara’s new 200,000 tonne/ (SBPC) year TDI plant in Saudi Arabia started up in Technology Cangzhou Dahua Cangzhou, China 150 August 2017 after an extended delay. Sourc- TDI has two isomers: 2,4-TDI and 2,6-TDI. Group es said that commercial production from the The most common form of TDI offered com- Vencorex Pont-de-Claix, 125 new plant has yet to be achieved. Supply mercially is an 80/20 mixture of the 2,4- and France tightness worsened following the landfall of 2,6-isomers, but it is also ava ilable as a Mitsui Chemicals & Kashima, Japan 120 SKC Polyurethanes Hurricane Harvey in the US Gulf Coast, 65/35 mixture and as a pure 2,4-isomer. (MCNS) which lead to Covestro declaring force ma- The main route is the nitration of toluene Mitsui Chemicals & Omuta, Japan 120 jeure on TDI supplies from its 220,000 to dinitrotoluene, followed by catalytic hy- SKC Polyurethanes tonne/year plant in Baytown, Texas. drogenation to toluene diamine (TDA), (MCNS) which is dissolved in an inert solvent and Fujian Southeast Fuqing City, 100 Prices reacted with phosgene to produce a crude Electrochemical China Driven by persistent supply tightness, North TDI solution. TDI can also be produced di- (SEEC) American TDI prices have increased signifi- rectly from dinitrotoluene by liquid phase Gansu Yinguang TDI Baiyin, China 100 cantly over the past 12 months. ICIS has carbonylation with o-dichlorobenzene. NOTE: Top 15 companies raised its TDI assessments by a cumulative Germany’s Covestro, formerly Bayer Ma- terialScience, developed a route that carries As supply normalises, buyers are likely to US TDI out phosgenation in the gas rather than the push for lower prices in an effort to repair liquid phase. The technology was already margins, which have seen considerable com- Cents/lb, 80:20, domestic bulk DEL 240 commercialised at its worldscale 250,000 pression in 2017 owing to significant price tonne/year TDI plant in Shanghai, China. increases for TDI as well as other polyure- Covestro has also been running a 30,000 thane feedstocks. 220 tonne/year pilot plant since 2004 and is TDI demand growth has been healthy in thought to have used this technology in its the US for much of 2017, although there has 200 new 300,000 tonne/year TDI plant in Dor- been some slowdown in demand for new ve- magen, Germany, which came on stream in hicles. Clean-up efforts following Hurricane 180 late 2014. Harvey, which may prove to be the most eco- nomically devastating natural disaster in US

160 Outlook history, may give a boost to TDI demand in TDI prices are likely to see further increases the construction, furnishing and automotive over the medium term, but prices may start to sectors over the next several months. ■ 140 Sep Aug move lower in late 2017 or early 2018 as new 2016 2017 capacities start to come online while existing Access the archive of the Chemical Profiles plants begin to return to normal operations. A-Z at icis.com/subscriber/icb

30 | ICIS Chemical Business | 15-21 September 2017 www.icis.com

ICB_240818_026-035 Profiles September17.indd 30 8/20/18 1:57 PM Asia chemical profile

Izham Ahmad Singapore MDI

USES was the only Middle Eastern PMDI produc- MIDDLE EAST AND ASIA MDI CAPACITIES About 80% of the global consumption of er, although it produced PMDI mainly for ’000 TONNES/YEAR methyl di-p-phenylene isocyanate (MDI) is its domestic market from a 40,000 tonne/ Company Location Capacity used in polyurethane (PU) foams. The larg- year installation in its southwestern Mah- Wanhua Chemical Ningbo, China 1,200 est outlet is in rigid foams used in construc- shahr petrochemical special economic zone. Wanhua Chemical Yantai, China 600 tion, refrigeration, packaging and insulation. Sadara’s PMDI production, which was offi- Bayer Caojing, China 500 MDI is also used to make binders, elasto- cially announced in June, will add an addi- MaterialScience mers, adhesives, sealants, coatings and fi- tional 400,000 tonnes/year of capacity into Sadara Chemical Jubail, Saudi Arabia 400 bres. Other outlets include binders and mi- the PMDI market. Tosoh Nanyo, Japan 400 crocellular products. Kumho Mitsui Yeosu, South 200 Polymeric MDI (PMDI), when combined PRICES Chemicals Korea with rigid polyols, is used in refrigerators, In the Middle East, PMDI prices started the Huntsman Caojing, China 160 as well as insulation in the construction year on an uptrend and within the first Polyurethanes sector. Monomeric MDI (MMDI) or pure three months, prices had hit their highest Shanghai MDI, when combined with adipic acid, bu- levels since ICIS began tracking the pricing Shanghai BASF Caojing, China 160 tanediol (BDO) and methyl ethyl ketone data in August 2011. Polyurethane (MEK), is used as a pre-polymer for applica- The trend was mirrored some extent by Sumika Bayer Niihama, Japan 70 Urethane tions in shoe soles, adhesives, thermoplas- prices in China and southeast Asia. Since tic polyurethane (TPU) resins, spandex and then, prices have eased but are still well Tosoh (Ruian) Ruian, China 70 Polyurethane synthetic leather. above where they had started in 2017. Karoon Bandar Mashahr, 40 Taking prices in the Gulf Cooperation Petrochemical Iran SUPPLY/DEMAND Council (GCC) as representative of the In the Middle East, demand is believed to broader Middle East region, PMDI prices be primarily for PMDI, used largely in the started the year around $1,950/tonne CFR OUTLOOK construction industry. 2017 has been a roll- GCC before rising a full $1,000/tonne to hit The outlook for PMDI is somewhat hazy as er-coaster year for PMDI so far and possibly $2,950/tonne CFR GCC by around mid- Sadara is believed to be ramping up pro- more swings are expected over the remain- March. GCC prices began to ease from late- duction but as yet is not heard to have der of the year as supply gets a bump from March and the decline picked up pace over achieved on-spec output nor have full- the entry of Sadara’s operations. the April/May period. scale commercial operations believed to Currently over half of the world’s PMDI In July, CFR GCC prices stayed largely in have started. is produced in northeast Asia and the a $2,525-$2,575/tonne CFR GCC range be- Tight supply conditions in Europe and world’s major producer is currently China’s fore rising again in August, to hit a high so the potential for higher prices tend to drive Wanhua Chemical, which has a total pro- far of $2,750/tonne CFR GCC amid talk of producers to direct cargoes to these regions duction capacity of 1.8m tonnes/year. Prior tighter supply and as prices in other regions instead of the Middle East and inadvert- to June 2017, Iran’s Karoon Petrochemical such as Asia rebounded again. ently causing Middle East supply to short- en as well. MIDDLE EAST MDI TECHNOLOGY Northeast Asia and Europe are expected $/tonne, polymeric, spot MDI is made primarily from nitrobenzene, to account for about 68% of global PMDI 3,200 which is produced by the nitration of ben- consumption in 2017, according to the ICIS CFR GCC CFR Iran CFR E Med zene in a continuous or batch process. Ni- Supply and Demand Database, while the 3,000 trobenzene is then hydrogenated to aniline, Middle East is expected to account for just 2,800 which is condensed with formaldehyde to 2% of total global consumption. Sadara is 2,600 form diphenylmethane diamine. This is re- eventually expected to market its PMDI car-

2,400 acted with phosgene in solvent to yield an goes to the Middle East but for the moment isocyanate mixture, then MMDI is distilled sales efforts led by Dow are believed to be 2,200 under reduced pressure. focused on regions such as NE Asia and Eu- 2,000 An MDI plant’s output is 70-80% rope, according to market sources. Longer- 1,800 PMDI and 20-30% MMDI. This ratio moves term however, PMDI production is still ex-

1,600 within a narrow range and is not easily pected to outpace consumption globally and adjustable, according to industry sources. the Middle East will be no exception. ■ 1,400 Sep Sep Sadara’s Jubail plant however is believed to 2016 2017 be producing only PMDI, industry sources Access the archive of the Chemical Profiles have said. A-Z at icis.com/subscriber/icb

www.icis.com 15-21 September 2017 | ICIS Chemical Business | 31

ICB_240818_026-035 Profiles September17.indd 31 8/20/18 2:03 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Larry Terry Houston TiO2

Uses paint market said buying interest increased in TIO2 CAPACITY Titanium dioxide (TiO2) is a white powder mid-summer to more typical seasonal levels. ‘000 TONNES/YEAR pigment highly desired for its brightness and The paint maker attributed that partly to Company Location Capacity high refractive index. It is used in paints and lower-than-usual paint inventory levels and Chemours New Johnsonville, 400 coatings, including glazes and enamels, plas- labour shortages among paint contractors that Tennessee, US tics, paper, inks, fibres, foods, pharmaceuti- may have spurred some pent-up demand. Chemours Altamira, Mexico 360 cals and cosmetics. While some sources say extenders or Chemours DeLisle, Mississippi, 400 TiO2 is also resistant to discolouration opaque polymers that lessen the need for US under ultraviolet light in exposed applica- TiO2 are gaining traction, other sources sug- Tronox Hamilton, 225 tions, and is used in plastics and sunscreens. gest TiO2 prices would have to rise substan- Mississippi, US It is also used in photocatalysts, found in tially higher for the use of extenders to esca- Cristal Ashtabula, Ohio, US 245 light-emitting diodes (LEDs), liquid crystal late seriously. Louisiana Lake Charles, 156 displays (LCDs) and electrodes for plasma Economic factors that could inhibit TiO2 Pigment Louisiana, US displays. Because the major use of TiO2 is in demand include recent declines in US August the mature paints and coatings market, as auto sales and construction spending, both of acid treatment, a sulfate-route plant is more ex- well as the plastics compounding, paper and which help drive the domestic TiO2 industry. pensive to build than a chloride-route plant. paperboard industries, consumption tends to The chloride process, however, may re- follow general economic trends. Prices quire the construction of a chlor-alkali unit. Quarterly contract prices have increased from a The chloride route produces a purer product Supply/demand mid-range of $1.20/lb in Q1 2016 to $1.45/lb in with a tighter range of particle sizes, and is In North America, supply has been constrained Q3 2017. Prior to that, prices had been falling preferred by North American customers, but since global capacity rationalisation by some of due to oversupply, competition from imports anatase pigments (used in acetate fibres, for the US-based producers ensued in Q2 2016, and and plentiful, low-priced raw material ilmenite. example) can be produced only via the sul- by increased demand in early 2017. Separate Q4 increase initiatives from four of fate route. Among domestic capacity reductions was the five largest domestic producers are as follows: Milling and surface treatment of the base Chemours’ 2016 shutdown of its 150,000 ■ Huntsman’s spinoff Venator Materials seeks pigment can account for up to a third of the tonne/year Edgemoor plant outside Wilming- an 8 cent/lb increase, effective 1 June. cost of a TiO2 plant, but it maximises optical ton, Delaware, US. That and separate meas- ■ Chemours seeks a gain of 6 cents/lb for its properties, improves durability, reduces yel- ures by other producers were designed to ease standard TiO2 products, with an effective lowing and improves dispersibility. chronic oversupply in the domestic TiO2 date of 1 July. market. The capacity cuts, combined with im- ■ A Kronos customer said the producer plans Outlook proved demand, tightened supply. to increase its price by 6 cents/lb, effective 1 Recovery from Hurricane Harvey will create a Although peak spring 2017 demand dimin- July. spike in North American TiO2 demand, ished partly on weather conditions as summer ■ A Cristal customer said the producer is sources on both sides of the market conceded. began, a producer in the primary downstream seeking a 6 cent/lb ($132/tonne) increase for Some say it may surface unseasonably before its regular grades of TiO2, effective 1 July. the end of the year, but others say it will NORTH AMERICA TIO2 Opinions about the success of Q4 price ef- heighten typically resurgent Q1 buying inter- forts vary. Some sources predict seasonal de- est and upward price pressure amid ongoing $/lb, contract FD 1.50 mand weakness and said steady price gains snug supply. for more than a year will stymie Q4 price ef- While the domestic TiO2 market may have forts until early 2017 but that the eventual ef- been only moderately affected by storm-dis- 1.45 fects of Hurricane Harvey are not yet known. rupted logistics, paint and coatings markets will see interest spike from new construction, 1.40 Technology rebuilds and the need for other items that em- TiO2 can be produced from ilmenite ore, ru- ploy pigment, including tarps, trash bags and 1.35 tile or titanium slag. Titanium pigment is ex- window profiles. tracted by using either sulfuric acid (the sul- But countering that heightened demand

1.30 fate process) or chlorine (the chloride route). will reduce availability – at least short term – The sulfate process employs simpler technol- as it is expected to take several months for the ogy than the chloride route and can use US Gulf Coast to recover from Harvey. ■ 1.25 Sep Sep cheaper, lower-grade ores. 2016 2017 However, sulfate-based material is generally Access the archive of the Chemical Profiles more expensive to produce. With the sulfuric A-Z at icis.com/subscriber/icb

32 | ICIS Chemical Business | 22-28 September 2017 www.icis.com

ICB_240818_026-035 Profiles September17.indd 32 8/20/18 2:04 PM Europe chemical profile

Melissa Hurley London Ethylene oxide

Uses noted to be performing well with a minor dip ETHYLENE OXIDe CAPACITY Nearly all ethylene oxide (EO) produced by in demand seen over summer. ‘000 TONNES/YEAR the direct oxidisation of ethylene air of oxy- Earlier in 2017, Huntsman and Clariant an- Company Location Capacity gen. EO is primarily used as an intermediate. nounced a planned merger of equals. Hunts- BASF Antwerp, 500 The majority of EO output is used in the pro- manClariant, are proceeding as planned with Belgium duction of ethylene glycol. an unchanged closing target for December INEOS Antwerp, 420 About 65% of global output is converted to 2017/January 2018. Earlier in the year, Clari- Belgium monoethylene glycol (MEG) for polyester fibers, ant’s CFO conceded that the firm’s Care BASF Ludwigshafen, 345 resins and antifreeze formulations and PET film Chemicals division is strong in emerging mar- Germany for packaging. More than 7% is used in diethyl- kets like Brazil or India but has little access to Shell Moerdijk, 305 ene glycol (DEG) and triethylene glycol (TEG). the US market. With Huntsman’s presence in Netherlands DEG is used in polyols, unsaturated polyes- that market, the merger also makes sense for SIBUR Dzerzhinsk, 300 Russia ter resins and plasticisers. TEG’s main use is in Clariant to make an entrance into the US for INEOS Oxide Cologne, 290 natural gas dehydration and as a dehumidifier. its products there. Germany The second largest derivative production is Nizhnekamskneftekhim Nizhnekamsk, 270 ethoxylates used in applications such as Prices Russia shampoo and kitchen cleaners. The vast majority of EO contracts are formula- INEOS Lavera, France 250 Other derivatives include glycol ethers based, with price movement comprising 80- Clariant Gendorf, 240 (used in solvents and fuels), ethanolamines 85% of the change in the monthly ethylene Germany (used in surfactants and personal care prod- contract price. ICIS uses an average of 82% for Sasol Marl, Germany 215 ucts), polyols for polyurethane systems, poly- the ethylene contract price in its calculations. Dow Terneuzen, 195 ethylene glycol (used in toothpaste and medi- The EO price includes a conversion fee Netherlands cines) and polyalkylene glycols (used in over the cost of ethylene, which is negotiated IQOXE Tarragona, 140 antifoam agents and hydraulic lubricants). at the beginning of the year. Depending on Spain EO is very explosive and difficult to transport the terms of individual contracts, the fee can AkzoNobel Stenungsund, 100 over long distances. be revised annually or fixed for several years Sweden at a time. 2017 adder negotiations took place Supply/demand at the end of last year. Some producers tar- and TEG. During the heavier turnaround period at the geted small increases over 2016 levels and Japan’s Mitsubishi Chemical developed a beginning of summer 2017, supply was the assessed range widened in line with mar- catalytic process that employs a phosphorus- viewed as balanced-to-tight. Supply and de- ket feedback from players on both sides of based catalyst for converting EO to MEG with mand levels are currently in line with expec- the market that suggested a mix of rollovers very little formation of the higher glycols. The tations; however, supply could tighten with a and slight increases were achieved for 2017 UK’s Shell Chemicals acquired exclusive couple of planned turnarounds happening in adder levels. rights to this process and licenses a combined Q3/Q4 2017. EO derivative demand was In the first two months of 2017, the Euro- EO/MEG technology as an integrated Omega pean MEG market saw two consecutive triple (only MEG advanced) package. In China, a EUROPE ETHYLENE VERSUS EO digit increases in MEG contract prices, while coal-based technology via synthesis gas and spot prices reached their highest levels since oxalic acid has been commercialised. €/tonne, contract June 2015. MEG contract prices dropped after Eastman Chemical and Johnson Matthey 1,400 that but returned to an upward trend during Davy previously developed a two-step MEG the summer along with spot prices. Several process based on synthesis gas and methanol 1,300 factors such as higher ethylene feedstock that does not go via an oxalate intermediate. costs, climbing prices in Asia and squeezed 1,200 supply contributed to the latest upward mo- Outlook mentum in prices. European EO sources do not foresee vast 1,100 changes from the current dynamics seen in Technology the market and demand is expected to remain 1,000 EO is produced by the direct oxidation of eth- at a good level. Despite a couple of turna- Ethylene, FD NWE ylene in the presence of oxygen or air over a rounds still set to take place, the year should Ethylene oxide, FD Med 900 Ethylene Oxide, FD NWE silver oxide catalyst. A crude EG mixture is finish in a balanced state of supply. ■ Oct Sep then produced by the hydrolysis of EO with 2016 2017 water under pressure. Fractional distillation Access the archive of the Chemical Profiles under vacuum separates the MEG from DEG A-Z at icis.com/subscriber/icb

www.icis.com 22-28 September 2017 | ICIS Chemical Business | 33

ICB_240818_026-035 Profiles September17.indd 33 8/20/18 2:04 PM ASIA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

HELEN LEE Singapore VAM

Uses sions in the country. Jiangsu Sailboat Petro- ASIA VAM CAPACITY Vinyl acetate monomer (VAM) is used in wa- chemical commenced EVA production at its ‘000 TONNES/YEAR ter-based paints, adhesives, acrylic fibres, 300,000 tonne/year EVA/LDPE plant in Lian- Company Location Capacity paper coatings and nonwoven binder applica- yungang, Jiangsu province on 12 July 2017. The tions. Approximately 47% of VAM production producer planned to produce EVA grades with Dairen Chemical Mailiao, Taiwan 650 goes into polyvinyl acetate (PVA), which is a vinyl acetate (VA) content of above 18% from Sichuan Vinylon Plant Chongqing, 500 primary molecule in paints, adhesives and the second half of September 2017 onwards. China other coatings. Around 30% of VAM output The new demand along with ongoing pro- Sinopec Great Wall Yinchuan, China 450 Energy and Chemical goes into polyvinyl alcohol (PVOH), which is duction issues at two VAM plants in China, used in packaging film and glass laminates. which curtailed the availability of spot lots for Inner Mongolia Wulancha, China 450 Mengwei Technology The remaining percentage of VAM volumes export to southeast Asia and India, may con- Dairen Chemical Jurong Island, 350 goes into ethylene vinyl acetate (EVA) poly- tinue to bolster the sentiment of suppliers. De- Singapore mers, ethylene vinyl alcohol (EVOH) barrier res- mand in Asia outside China is mainly stable. Celanese (Nanjing) Nanjing, China 300 ins and polyvinyl butyral (PVB), which is used Chemical in automobile windows. EVA and EVOH are Prices Inner Mongolia Erdos, China 270 providing new areas for usage in co-polymers Spot prices in Asia were lifted to multi-month Shuangxin Chemical for specialty adhesives and packaging films. highs by late April to May 2017 due to tight sup- Ningxia Dadi Shizuizhan, 260 ply and escalating prices in the Europe market. Chemical China Supply/demand Supply was curtailed during Q2 2017 due to Lotte BP Chemical Ulsan, South 210 VAM supply in Asia tightened during Febru- plant maintenance shutdowns in Asia and the Korea ary-May 2017 as seven out of 13 plant turna- US, coupled with production issues at the Sin- Celanese Singapore Sakra, Singapore 210 rounds scheduled for the year to date oc- gapore- and Saudi Arabia-based plants. Hunan Xiangwei Dajiangkou, 200 curred during that time. Monthly export The supply of spot VAM cargoes from China China volumes from Singapore to Europe, the US was initially limited for May-June due to in- Beijing Eastern Beijing, China 180 and India in Q2 2017 meanwhile registered creased captive consumption for the production Petrochemical year-on-year growth in the range of 25-40%. of PVOH but this eased by early May. The avail- Nippon Gohsei Mizushima, 180 Japan Concerns about the global supply balance ability of lower-priced non-ethylene based VAM Showa Denko KK Oita City, Japan 175 heightened in late August as the impact on cargoes from China subsequently weighed on VAM production in the US in the aftermath of the sentiment of buyers in India and southeast Anhui Vinylon Plant Chaohu, China 170 Hurricane Harvey led to expectations that sup- Asia, resulting in reduced discussion levels for Japan VAM & Poval Sakai, Japan 150 plies from Asia would be directed to Europe in July deliveries of ethylene-based VAM. Dairen Chemical Tasheh, Taiwan 120 light of the shortage of US origin cargoes. Firming feedstocks ethylene and acetic acid In the longer term, demand growth will stem costs in Q3 prompted a major producer to seek tonnes/year. However, it remains to be seen mainly from the downstream EVA sector in price hikes in mid-August. Several buyers, how- how much of these capacities eventually China, which may lead to VAM capacity expan- ever, were of the opinion that the current state of come through. Challenges posed to the de- supply was sufficient to meet demand in Asia mand side include the price of substitutes ASIA VAM and so they were largely resistant to price hikes. such as butyl acrylate for the production of paints. Besides price considerations, butyl $/tonne, spot Technology acrylate was deemed by downstream paint 1,100 CFR NE Asia CFR S Asia VAM is usually produced by the catalysed, manufacturers to offer better quality for water- CFR SE Asia FOB China vapour phase reaction of acetic acid with eth- based paints and better performance. 1,000 ylene and oxygen in a fixed bed tubular reac- India’s VAM import demand grew 13% tor using a supported noble metal catalyst. year on year in 2016. In the first five months of 900 The VAM is recovered by condensation and 2017, India imported around 43% of the pre- scrubbing, and purified by distillation. vious year’s total annual import volumes. 800 In southeast Asia, the import volumes in Outlook the first half of 2017 suggested a stable de-

700 The demand growth in Asia stems mainly mand outlook. In the first six months of 2017, from the downstream EVA sector. There are Thailand has imported around 49% of the 11 new EVA projects in the pipeline sched- previous year’s total import volume. ■ 600 Sep Sep uled to come onstream in China from 2018- 2016 2017 2020 and beyond. These EVA projects have Access the archive of the Chemical Profiles combined production capacities of 1.7m A-Z at icis.com/subscriber/icb

34 | ICIS Chemical Business | 29 September-5 October 2017 www.icis.com

ICB_240818_026-035 Profiles September17.indd 34 8/20/18 2:05 PM Europe chemical profile

Chris Barker London PVC

USES However, consumption appeared to stabi- EUROPE PVC CAPACITIES Polyvinyl chloride (PVC) is available in rigid lize then increase slightly in the first half of ‘000 TONNES/YEAR or flexible form. Rigid has the largest demand, 2017 with notable increases in Russian, South Company Location Capacity particularly in construction where it is used Korean, Hungarian and German imports com- INOVYN Jemeppe, Belgium 470 for pipes and fittings and in window profiles. pared to the previous year. Shin-Etsu Pernis, Netherlands 450 Flexible PVC, which contains a large amount The global market has tightened in the (CIRES) of plasticizer, has outlets in calendared sheet, wake of American and Mexican production Vestolit Marl, Germany 430 wire and cable coating, flooring and furniture. issues, following storm damage in the south- BorsodChem Kazincbarcika, Hungary 400 ern USA. This has temporarily tightened Eu- VYNOVA Wilhelmshaven, 380 SUPPLY/DEMAND ropean export markets and limited imports Germany The European PVC market has moved in a more into Europe. Anwil Wloclawek, Poland 340 balanced direction after being structurally long INOVYN Rheinberg, Germany 320 for most of the decade following the financial PRICES INOVYN Tavaux, France 320 crisis. Demand has recovered in parallel with PVC prices have been generally firm in 2017, Kem One Balan, France 300 the rosier economic outlook in many areas of with NWE PVC contract price rising overall INOVYN Newton Aycliffe, UK 290 the Eurozone including Spain and France. by slightly more than €90/tonne against the Kem One Berre, France 290 Domestic demand has also been strong in feedstock ethylene cost increase this year. Vinnolit Burghausen, Germany 260 NWE. Germany in particular saw a surge in This was due to healthy demand in the Eu- VYNOVA Mazingarbe, France 255 construction in 2017 due to economic confi- rozone combined with strong export prices in INOVYN Martorell, Spain 240 dence combined with increased profile de- H1 2017, as well as limited supply from major mand due to greater construction of housing. European producers during the same period. VYNOVA Beek, Netherlands 225 Demand in the UK has been lukewarm for For the September contract, the outcome is Cires Estarreja, Portugal 215 the year so far but not strongly affected by un- so far uncertain with producers aiming for a Kem One St Fons, France 210 certainty surrounding Brexit and the econom- price increase of more than the cost increase Vinnolit Cologne, Germany 210 ic situation. for feedstocks. INOVYN Stenungsund, Sweden 202 Export demand has been weak since ap- In the UK, producers also aimed to regain Ercros Vilaseca, Spain 200 proximately 2014 due to economic issues in margins due to the depreciation of the pound Vinnolit Knapsack, Germany 160 Turkey, the largest European export market. against the Euro, although the strengthening INOVYN Porsgrunn, Norway 150 Demand in Turkish plastics markets has been of the pound in mid-month presents an obsta- Spolana Neratovice, Czech 135 structurally weak since 2014 due to the Syrian cle for larger price increases. Republic and Iraqi wars affecting the country’s access to Vinnolit Gendorf, Germany 120 export markets, the collapse of the lira against TECHNOLOGY KEM ONE St Auban, France 70 the dollar and political turmoil related to a coup Suspension polymerisation is the most com- attempt in 2016. Turkish PVC demand has fall- mon process because the resins are the most ing capacity in Spain and the central/eastern en between 10-10% since 2015-2016. versatile. Europe with no cell basis. Emulsion polymerisation is used to form la- However, possible external sources for EDC EUROPE PVC texes with a fine particle size more suitable for are still available in the Middle East and the US. paints, paper, fabric finishes and printing inks. On a global scale, the Chinese carbide poly- €/tonne, contract FD NWE 1,450 Mass polymerisation gives a powder resin vinyl chloride market has tightened in the that produces high-clarity film. second half of 2017 due to stronger environ- 1,400 mental regulation. OUTLOOK Combined with consistently strong de- 1,350 European PVC is a mature market with no mand growth in India, averaging over 10% major changes in capacity announced over per year between 2005-2015, as well as limit- 1,300 the next year. ed capacity expansion in India, this is likely From 2018 onwards, there is the potential to tighten the overall global market. 1,250 for a bottleneck in PVC feedstock ethylene di- However, due to the expansion of US capac- chloride (EDC) due to the closure of almost of ity combined with increased integration with 1,200 million tonnes of chlorine capacity in Europe, ethylene, any European exports would face which combined with ethylene is the major strong competition. ■ 1,150 Oct Aug feedstock for EDC. 2016 2017 The global EDC market will become tighter, Access the archive of the Chemical Profiles which could pose a challenge for the remain- A-Z at icis.com/subscriber/icb

www.icis.com 29 September-5 October 2017 | ICIS Chemical Business | 35

ICB_240818_026-035 Profiles September17.indd 35 8/20/18 2:05 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

LANE KELLEY Houston VAM

Uses ity and have become key suppliers of Euro- us vam capacity Vinyl acetate monomer (VAM) is a chemical pean imports. ‘000 TONNES/YEAR building block used in a wide variety of in- Global VAM plant capacity totals about Company Location Capacity dustrial and consumer products. VAM is a 8.5m tonnes/year, with more than half of the LyondellBasell La Porte, Texas 385 key ingredient in emulsion polymers, resins, capacity at plants in the US and China. DowDuPont Texas City, Texas 365 and intermediates used in paints, adhesives, US-made VAM has a price advantage over coatings, textiles, wire and cable polyethyl- material made in Europe because of the Kuraray La Porte, Texas 335 ene (PE) compounds, laminated safety glass cheaper cost of natural gas. Celanese Clear Lake, Texas 310 (used in automotive windshields), packag- Celanese Bay City, Texas 300 ing, automotive plastic fuel tanks and acrylic Prices fibres. It is also used in furniture glue and US September VAM contracts rolled over removed and replenished, which is said to chewing gum. from August, largely reflecting market senti- give the process much longer run times com- Most end-use markets for VAM are mature, ment before Hurricane Harvey hit the US pared with the fixed-bed route. with growth in the largest applications – ad- Gulf Coast, because many negotiations for Celanese’s VAntage process is said to raise hesives, paints, paper coatings and textiles – September contracts concluded before the production efficiency and lower operating expected only to track or trail GDP slightly. storm struck. Most sources said there had costs. The technology is claimed to add pro- However, there are strong growth areas for been no change in contract prices for Sep- duction capacity equivalent to a worldscale VAM such as ethylene vinyl alcohol (EVOH) tember VAM; one source noted a small in- plant at 10-15% of the cost of building a barrier resins, ethylene vinyl acetate (EVA) crease but it could not be confirmed. But two grassroots unit. polymers and polyvinyl butyral (PVB). producers – Dow and Celanese – have sepa- Meanwhile, Praxair received a patent for rately nominated double-digit price increas- a technique using 99.95% oxygen to reduce Supply/demand es for October. catalyst losses and undesirable reaction by- Hurricane Harvey struck the Texas coast in Historically, VAM demand often drops in products, while boosting VAM yields by up late August 2017 and disrupted many chemi- the third quarter after the end of the US paint to 5%. cal markets, including US VAM. season, because it is a key ingredient in ar- Celanese and LyondellBasell declared chitectural coatings. Outlook force majeure on US VAM because of Har- Latin American VAM prices are expected Looking ahead, domestic demand for VAM vey, with LyondellBasell also announcing to rise in October because trade flows have from the paints and coatings sector is likely allocations. Dow issued sales control orders been negatively impacted by limited supply to slow down with the end of the peak paints on several monomers as well, including in the US as the year-end peak season in that and coatings season, though production is VAM. Dow also increased lead times for region begins. expected to improve gradually in the fourth VAM supplied in North America because of quarter as plants come back online from out- logistics constraints following the storm. Technology ages caused by Harvey. Five US VAM plants – all in the Houston Acetylene-based technology was used first in However, supply constraints from force area – account for about 20% of global capac- the commercial production of VAM with the majeures and sales allocations could reduce gas phase process preferred to the liquid domestic supply over the short term and US VAM phase reaction. Ethylene has now become provide support for what are expected to be the preferred feedstock with the gas phase significant – if not severe – spot price in- Cents/lb, contract DEL 56 route used due to problems of corrosion and creases in Q4. by-product formation when using the liquid Severe logistical and feedstock challenges 54 phase process. This is why ethylene figures stemming from the hurricane could also 52 are so prominently in contract formulas. push prices higher as the VAM market faces Acetic acid is catalysed in the gas-phase extraordinary difficulties in transportation 50 reaction with ethylene and oxygen in a fixed and distribution logistics in the US Gulf 48 bed tubular reactor at 175-200˚C (347-392˚F) Coast region. Market observers expect logis- and 5-9 bar pressure. The VAM is then recov- tical problems to remain in place during Oc- 46 ered by condensation and scrubbing, and is tober and into November. 44 purified by distillation. Meanwhile, feedstock ethylene prices 42 UK-based BP developed Leap, a fluidised have been moving up due to supply issues bed technology that is said to cut investment and strong downstream demand. ■ 40 Oct Sep costs by 30%. Essentially, the chemistry is 2016 2017 the same as the existing technology. The dif- Access the archive of the Chemical Profiles ference is that the catalyst is continuously A-Z at icis.com/subscriber/icb

36 | ICIS Chemical Business | 6-12 October 2017 www.icis.com

ICB_240818_036-043 Profiles October17.indd 36 8/20/18 2:15 PM Asia chemical profile

Jasmine Khoo Singapore PBT

Uses it was likely for spot prices to register gains. Global PBT CAPACITY Polybutylene terephthalate (PBT) is a semi- However, towards the end of the year, logistical ‘000 TONNES/YEAR crystalline thermoplastic polyester that is clas- difficulties in transportation due to harsh win- Company Location Capacity sified as a medium performance engineering ter conditions in some areas are typically ex- Yingkou Kanghui Gaizhou, China 120 polymer. It has excellent electrical and chemi- pected to weigh on trading activity. Petrochemical cal resistance properties, and when glass-filled Fluctuations in demand patterns are gener- Sabic Innovative Mount Vernon, 120 to improve stiffness and strength, probably of- ally not expected as PBT is a monthly-traded Plastics USA fers the best overall performance profile for product for some, whereas other buyers pur- BASF Schwarzheide, 100 electrical/electronic applications. chase PBT on a quarterly basis. New start-ups Germany Between 80-90% of all PBT sold commer- in the next six months are scarce, especially Henan Kaixiang Yima, China 100 Chemical cially is compounded with various fillers and since certain regions in Asia such as China are Lanxess/DuPont Hamm-Uentrop, 80 additives (UV protection agents, flame retard- already seeing supply overhang. Germany ants) to tune its properties. PBT is also found in Yizheng Chemical Yizheng, China 80 various polymer blends, eg with polycarbon- Prices Fibre ate. Typical uses include connectors, capaci- Spot prices of PBT in the Asian market regis- Nantong Xingchen Nantong, China 70 tors and cable enclosures, and it has become tered steady hikes in the quarter of 2017, Synthetic Material the material of choice for distributor caps, ro- buoyed by surges in upstream 1,4-butanediol (Blue Star group) tors and related under-the-hood ignition com- (BDO) prices and healthy cargo uptake. Snug Mitsubishi Chemical Yokkaichi, Japan 70 ponents. It is also used for exterior parts such spot availability of BDO in the Asian region Saudi International Jubail, Saudi 63 Petrochemical Arabia as door handles, wing mirror assemblies and lent upward support to BDO, which led to (Sipchem) wiper arms. PBT is also used in hot appliances increased production costs for Asia-based WinTech Polymer Matsuyama, 62 such as kettles and irons. PBT makers. Japan However, the steep gains in PBT prices were Chang Chun Changshu, China 60 Supply/demand soon met with increasing resistance from re- Chemical Jiangsu Going forward in the near term, overall supply gional buyers, who were said to be struggling Chang Chun Plastics Jen-Wu, Taiwan 60 and demand conditions in the Asian region are with increased costs and squeezed margins for Jiangyin He Shili Jiangyin, China 60 expected to be largely balanced, with demand end-user products. As such, prices were most- Toray BASF PBT Kuantan, 60 for PBT spot cargoes improving following the ly stable-to-soft going into April to June, before Resin Malaysia end of the seasonal demand lull period in early remaining largely flat throughout June to Sep- Meizhouwan Quanzhou, China 60 September. For the key northeast Asian market, tember. With seasonal demand picking up in Chloralkali Chemical Industry the seasonal slow demand period usually spans September, spot prices once again gained NOTE: Top 15 companies from early summer in June to early September. ground, and register gradual increase with Spot cargo uptake for October was described firmer offers for October-lifting cargoes. by Asian producers as being stronger than Sep- with market players saying that the outlook tember, with some buyers acknowledging that Technology for engineering plastics’ growth is one of the PBT is produced in a two-step process. The strongest among plastic products. Industry ASIA PBT first step involves the transesterification of -di sources showed that the expected compound methyl terephthalate (DMT) with BDO to annual growth rate (CAGR) for engineering $/kg, natural grade, spot 1.8 form hydrobutyl terephthalate (bis-HBT) at a plastics stand at 5.7% in the forecast period CIF Asia NE CIF India temperature of around 200°C. The second from 2016 to 2026. 1.7 step involves the polycondensation of bis- End user industries, such as automotive, HBT (and other oligomers) at 250°C to form transportation, and medical industries are 1.6 PBT. Both continuous and batch processes expected to drive global demand going for- operate today. Purified terephthalic acid ward. One of the largest end user sector 1.5 (PTA) can be used instead of DMT and has the would be automotive, with significant advantage of not requiring methanol recovery. growth poised to come from China, India 1.4 However, the transesterification reaction must and South Korea. be carefully controlled to avoid BDO losses As for supply, growth is also forecasted 1.3 through conversion to tetrahydrofuran. close to 10% in terms of global volumes for engineering plastics in the next decade. ■ 1.2 Sep Sep Outlook 2016 2017 Long-term growth remains forecasted for PBT Access the archive of the Chemical Profiles in the global market for the next 10 years, A-Z at icis.com/subscriber/icb

www.icis.com 6-12 October 2017 | ICIS Chemical Business | 37

ICB_240818_036-043 Profiles October17.indd 37 8/20/18 2:15 PM LATIN AMERICA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

GEORGE MARTIN Houston Polypropylene

Uses slowly coming out of a serious political crisis LATIN AMERICA PP CAPACITY Polypropylene (PP) is used in a wide range of that started with a corruption investigation ‘000 TONNES/YEAR consumer and industrial products. Three that has touched the highest levels of govern- Company Location Capacity forms of PP can be produced: isotactic, syndio- ment, including three presidents. Braskem Triunfo, Brazil 760 tactic and atactic. Isotactic PP is the main form Argentina seems to be in the right track Indelpro Altamira, Mexico 590 manufactured. The largest outlet is injection with overall improvements in the economy, ESENTTIA Cartagena, 500 moulding applications, which include packag- but its reputation with investors is still recov- Colombia ing, parts for electronic and electrical appli- ering. Another troubled economy is Venezue- Braskem Maua, Brazil 450 ances, caps and closures, toys, luggage and a la’s, which is facing diminishing production Braskem Paulinia, Brazil 350 variety of household goods. The second largest from lack of feedstocks, recurring power out- Braskem Duque de 310 outlet is in fibres, where carpet face yarn for ages, and severely contracted demand in an Caxias, Brazil carpet backing has been a growth market for PP. environment of high inflation. Production has Petroken Ensenada, 180 been steady in Chile, Colombia and Mexico. Argentina Supply/demand Propilven El Tablazo, 144 PP supply has been stable in Argentina for Prices Venezuela many years, with only minor capacity addi- PP prices in Latin America come in different Petroquim Talcahuano, 140 tions in some plants and no new projects. flavours. On one side, Argentina and Brazil Chile Ownership of some plants has also changed: have very high prices because those are pro- Petroquimica Cuyo Lujan de Cuyo, 130 Petroquimica Cuyo in Argentina bought its tected markets. A 14% tariff on imports pro- Argentina competitor Petroken. Brazil’s Braskem has ab- vide enough cushion for local producers to set Braskem Camacari, Brazil 125 sorbed its competitors in the country. The last prices at the import parity, and sometimes company purchased was Quattor, which had higher, knowing that transformers would proved, allowing for the introduction of gas itself been buying competitors before being have a hard time importing product and phase technology. Work is underway to devel- acquired by Braskem. would be forced to keep larger inventories to op the use of metallocene catalysts in PP pro- Small capacity additions have happened in protect themselves from delivery delays. duction to improve resin properties. Chile and Venezuela. Availability of feedstock In the second group we find Chile, Peru, Co- propylene is the main obstacle for construc- lombia and Mexico which have PP prices quite Outlook tion of new plants or expansions of existing competitive with international alternatives from A new propane dehydrogenation (PDH) ones. There is one project in Bolivia that Asia, the Middle East and the US. If we average plant on the US Gulf Coast – planned to start could start up in the early 2020s with produc- the domestic prices of these countries, we get production in Q4 2017 – paints a bearish tion of propylene and PP. However, the pro- the result in the graph shown, which depicts the outlook for prices towards the end of this ject is encountering some contractual difficul- average price for the past five years. The main year. However, the impact on PP could be ties that may delay construction. point to notice is that prices plunged in 2014 less severe than expected for PE markets. Demand has also run into trouble because when crude oil prices plummeted. From that The reason for this outlook is that there is no of unstable economies in the region. Brazil is point, prices have been in gradual decline, with proliferation of PP plants, as producers aim spikes only coming from supply disruptions of to use existing idle capacity first, before in- LATIN AMERICA POLYPROPYLENE feedstock propylene, or PP plant outages. vesting in new PP plants. Venezuela has established PP production Formosa has announced a new PP unit in Texas, $/tonne, average of region with its 144,000 tonne/year plant, but the politi- and Braskem and LyondellBasell have said they 1,700 cal and economic crisis in this country is driv- are studying building new US plants. There are 1,650 ing supply down, and demand has also plum- no additions expected in Latin America, with meted. Venezuelan prices were not included in the exception of the Bolivia project. Besides, 1,600 the graph, because prices are government-con- other propylene derivatives such as propylene 1,550 trolled and not related to international markets. oxide (PO) and solvents will have new plants in the US that will help consume the additional 1,500 Technology propylene supply from the PDH plants.

1,450 Current bulk technologies, such as the Spherip- PP prices should rise along with oil and pol- ol process developed in 1982 by Himont (later ymer-grade propylene (PGP) as crude supply 1,400 Basell, now LyondellBasell) and the Borstar bi- adjusts to the demand rebalance after the end ■ 1,350 modal polyethylene (PE) process developed in of the summer driving and vacation season. Sep Sep the mid-1990s by Borealis, replaced the solvent 2016 2017 in an older process with liquid propylene. Cata- Access the archive of the Chemical Profiles lyst activity from the older process was also im- A-Z at icis.com/subscriber/icb

38 | ICIS Chemical Business | 13-19 October 2017 www.icis.com

ICB_240818_036-043 Profiles October17.indd 38 8/20/18 2:20 PM Europe chemical profile

Luke Milner London R-PET

Uses R-PET flakes has driven demand for post-con- an additional factor to R-PET business. Im- Recycled polyethylene terephthalate (R-PET) in sumer PET bottles, with supply and demand ports have arrived to the virgin PET market, Europe is used in a range of applications such as dynamics dividing market participants’ opin- thereby lessening availability issues experi- fibre and the production of sheets and film for ions, as some saw better post-consumer PET enced in August and September with con- use as insulation, strapping, packaging and for bottle availability following strong PET bottle sumers saying that they have a sufficient use in industries such as the automotive sector. consumption in the early summer months. amount of material heading into October. R-PET is used for food packaging, including Others in the market contend that post-con- drinks bottles, which is arguably the most sumer PET bottle availability failed to meet Technology high-profile usage of R-PET and the one which expectations over the summer. Bales are created when recycled material is places R-PET in the general public’s conscious- Although post-consumer PET bottle availa- taken to a Materials Recovery Facility. Once ness. However, the use of R-PET is continuing bility improved, the strength of colourless at the facility, post-consumer PET is then typ- to evolve as international companies launch R-PET flake demand has surprised many in the ically sorted and separated into mixed col- new schemes, such as the Swedish furniture market. Where buyers of both virgin polyethyl- oured and colourless and material that is un- retailer Ikea’s R-PET kitchen unit fronts. ene terephthalate (PET) and R-PET have had usable or not recyclable is discarded. The the ability to switch between products, de- remaining material is condensed into giant Supply/Demand mand for R-PET has been helped by the bales, which makes it easy to transport. After During 2017, demand in the colourless R-PET strength of virgin PET prices throughout 2017. the bales are sold, they are then used to make flake market has been stronger than in 2016, R-PET competes directly with virgin PET flakes. Flakes are created by feeding material as investments in the use of R-PET in down- in certain applications, although depending into a shredding machine, which then breaks stream markets, such as film, have contribut- on cost and application switching between the material into particles. ed to underlying demand. This demand was the two is often not possible to avoid short- The flakes are then washed, using either largely maintained even during the summer term price spikes in either market. hot or cold water. The flake material with the period when holidays and shutdowns tradi- highest value tends to be hot-washed, as the tionally weaken demand. Prices washing tends to decontaminate the material. However, while the colourless R-PET flake Colourless R-PET flake prices strengthened in To make pellets, the flakes are then sent to a market has experienced strong demand, with 2017, following a declining price trend in late machine called an extruder, which then melts supply remaining tight through much of 2015 and through much of 2016. However, them. The melted material is then filtered and 2017, the mixed-coloured R-PET flake market mixed-coloured R-PET flake prices have seen pushed into a pelletiser. The material is then has not seen the same imbalance in supply relative stability in much of 2017 after weaken- cut into pellet form. Some producers also cre- and demand. Demand for mixed-coloured ing through 2016. R-PET food grade pellets, ate pellets direct from colourless bales. R-PET flake has been steady in Europe in much like colourless R-PET flakes, were able 2017 but not high and mixed-coloured R-PET to recover ground in 2017 and rise. Outlook flake availability has been ample, maintaining Strong virgin PET prices in 2017 have al- The healthy demand seen in much of 2017 in availability above demand. lowed for R-PET prices to rise, without nega- the R-PET market is expected to continue. Con- The strength of demand for colourless tively impacting the competitiveness of tinued interest in recycling and schemes such as R-PET. Nevertheless, recyclers still see pres- Coca-Cola’s plans to double the amount of recy- EUROPE R-PET sure on margins as post-consumer PET bottle cled plastic used in its bottles in Great Britain by prices have also increased during 2017. 2020 are also expected to bolster demand. €/tonne, domestic and export FD NWE In the days leading up to 9 October, availa- However, market participants have also 900 Colourless akes bility issues in the post-consumer PET bottle pointed to the need to develop and improve Mixed coloured akes 850 market resulted in upward pressure on other collection schemes in order to improve the products such as colourless R-PET flakes. The quality and quantity of post-consumer PET 800 food grade pellet market has been affected, in available for recycling. It remains to be seen part, by virgin PET movements; however, whether improved demand can be sustained 750 mixed price directions have been revealed by and whether this will allow for an uncoupling participants so far for October. Some expected of R-PET and virgin PET’s pricing trends, as 700 that the end of the peak summer season in the competition between R-PET and virgin PET virgin PET market would result in quieter de- in certain applications has led to virgin PET 650 mand for the R-PET market eventually. None- price trends influencing developments in theless, others argue that consumption will be R-PET pricing. ■ 600 Sep Sep steady with the end of year holiday season 2016 2017 also potentially providing a boost to demand. Access the archive of the Chemical Profiles Softening virgin PET prices, of late, do pose A-Z at icis.com/subscriber/icb

www.icis.com 13-19 October 2017 | ICIS Chemical Business | 39

ICB_240818_036-043 Profiles October17.indd 39 8/20/18 2:20 PM Asia chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Eric Su Singapore Polyester

USES 150D prices were at $1.095/kg FOB NE Asia in ASIA POLYESTER FIBRE PLANTS Polyester fibre and filament yarn is used for the end January and climbed to $1.140/kg FOB NE ‘000 TONNES/YEAR manufacturing of textiles for industrial and con- Asia by mid-February. The uptrend was driven Company Location Capacity sumer sectors. Polyester-based fabrics are used by bullish market sentiment stemming from a Tongkun Group Tongxiang, China 2,000 extensively in apparel and home furnishing surge in feedstock prices. Over-procurement of Jiangsu Shenghong Wujiang, China 1,800 such as shirts, jackets, pants, socks, upholstered cargoes in January and February led to a slow- Chemical Fiber furniture and bed sheets. Applications of poly- down in March and April as prices POY150D Jiangsu Hengli Chem. Wujiang, China 1,403 ester fibre include electrical insulation, convey- prices began to trend down to $1.01/kg FOB Fiber or belts, safety belts and car tyre reinforcement. NE Asia by end April. Prices were further de- Sanfangxiang Group Jiangyin, China 1,200 pressed amid the seasonal lull, falling to Reliance Hazira, India 1,150 SUPPLY/DEMAND $0.915/kg FOB NE Asia in mid-May. Subse- Zhejiang Tongxiang, China 1,150 Demand for polyester fibre and filament yarn quently, recovery of prices began to take place Xingfengming Chem. generally picked up in 2017, maintaining the in June and July, driven by a strong uptick in Fibers uptick in 2016 Q4. Polyester producers have downstream demand and improvement mac- Rongsheng Hangzhou, China 1,000 managed to maintain a healthy production rate roeconomic conditions in China. Later, POY Petrochemical and sales volume largely through 2017. March 150D prices settled at $1.055/kg FOB NE Asia Hengyi Petrochemical Hangzhou, China 970 and April were slower months for polyester in end July. In September, another surge in Jinlun Pc Fiber Changle, China 850 sales amid volatility in the China petrochemical prices took place, with POY150D rising to Reliance Ind. Patalganga, India 525 markets. Nonetheless, demand picked up in $1.075/kg FOB NE Asia in end September, Nan Ya Plastics Linkou, Taiwan 480 June and was maintained throughout Q3 2017. prior to the seasonal manufacturing peak peri- Hengyi Petrochemical Caojing, China 400 Supply of polyester grew from 2016 to 2017 od in downstream markets. Tongkun Group Jiaxing, China 400 as production rates for polyester fibre and yarn Reliance Ind. Silvassa, India 390 were generally higher throughout 2017. The TECHNOLOGY Reliance Ind. Dahej, India 290 increase in supply was generally backed up by Polyester is a synthetic polymer made of pu- Jiangsu Hengli Chem. Dalian, China 200 improvement in demand as subsequently, de- rified terephthalic acid (PTA) and monoeth- Fiber mand and supply fundamentals were main- ylene glycol (MEG). Polyester is manufac- Reliance Hoshiarpur, India 100 tained as balanced. There were also increased tured by one of several methods. The one Nan Ya Plastics Kunshan, China 40 capacities as previously idled smaller-scaled used depends on the form the finished poly- polyester plants were acquired by larger poly- ester will take. ester producers and restarted. The four basic forms are filament, staple, ised into drawn texturised yarn (DTY). tow and fibrefill. PSF is spun into yarn then woven into fab- PRICES In the filament form, each individual ric for apparel. Common lengths are 38 mm or Polyester prices were largely volatile through- strand of polyester fibre is continuous in 40 mm. It can also be used as stuffing for toys out the year, tracking volatility from upstream length, producing smooth-surfaced fabrics. and pillows and as insulation and wadding feedstock prices. Partially oriented yarn (POY) In staple form, filaments are cut to short, for bedding and furniture. predetermined lengths. In this form polyester This grade is called hollow conjugate ASIA POLYESTER FIBRE is easier to blend with other fibres. fibre, or fibrefill. PFY is spun and knitted Tow is a form in which continuous fila- into fabric for upholstery and curtains. POY $/kg, POY 150D, spot FOB NE Asia 1.2 ments are drawn loosely together. Fibrefill is is a feedstock for DTY, which is in turn used the voluminous form used in the manufac- for textiles. ture of quilts, pillows and outerwear. The 1.1 two forms used most frequently are filament OUTLOOK and staple. Expectations by market participants is for de- Polyester staple fibre (PSF) is of a short length mand and supply balance to remain relatively 1.0 and is derived either directly from the polymeri- balance in Q3 2017 while late Q4 will see a sation of PTA and MEG or from PET fibre chips. traditional slowdown of demand because of Polyester filament yarn (PFY) is of a long year-end holidays and festivities. Movement 0.9 length and is extruded directly from the poly- of feedstock prices will likely continue to merisation of PTA and MEG (this becomes drive price movement of polyester going for- spin drawn yarn) or indirectly from fibre ward, market sources said. ■ 0.8 Oct Oct chips (which results in fully drawn yarn). 2016 2017 POY is derived from melting and spinning Access the archive of the Chemical Profiles fibre chips. POY is then extruded and textur- A-Z at icis.com/subscriber/icb

40 | ICIS Chemical Business | 20-26 October 2017 www.icis.com

ICB_240818_036-043 Profiles October17.indd 40 8/20/18 2:20 PM US chemical profile

David Love Houston ABS

Uses they were sold out on various grades through North America ABS capacity Acrylonitrile butadiene styrene (ABS) is the the end of the year. After a strong 2016 in ’000 TONNES/year largest volume engineering thermoplastic which US imports jumped by 8.2% year on Company Location Capacity resin. ABS exhibits a wide range of proper- year, imports remained high in 2017. Im- SABIC Ottawa, Illinois, US 215 ties, which makes it useful in diverse appli- ports during the first eight months of 2017 Styrolution Addyston, Ohio, US 190 cations. Major uses are in the automotive were up by 9% year on year. and electronics sectors. During that timespan, imports from South Styrolution Altamira, Mexico 130 Other applications include appliances, Korea, the largest ABS supplier to the US mar- SABIC Bay St Louis, 125 Mississippi, US pipes, fittings and other construction prod- ket, jumped by 13% year on year. Imports Trinseo Midland, Michigan, US 90 ucts, as well as recreational items such from South Korea comprised 44% of total US as boats, mobile phones and games con- imports from January through August. Trinseo Hanging Rock, Ohio, US 65 soles. One particularly demanding applica- Demand was boosted by reconstruction ef- A Schulman Akron, Ohio, US 52.5 tion has been the moulding of Lego forts following the hurricanes that hit Texas Trinseo Allyn’s Point, 30 bricks to a tolerance of five thousandths of and Florida in August and September. Connecticut, US a millimetre. In October, demand was described as bal- ABS can also be blended with other poly- anced, but higher cost import prices will spur The continuous mass process is the pre- mers such as polycarbonate (PC) or polyvi- domestic demand over the next few months ferred route because the reaction does not nyl chloride (PVC) for use in injection as lower cost inventories are depleted. take place in an aqueous phase. This cre- moulding applications. ates less effluent for disposal and requires Prices less energy. Supply/demand US ABS prices for freely negotiated busi- The emulsion polymerisation process, Overall supply and demand fundamentals in ness followed the lead of key feedstocks in commonly used in plants built before the the domestic market were relatively stable 2017. Prices during the first quarter were mid-1980s, provides more flexibility in its for most of 2015, although suppliers saw a largely affected by the sharp increase on sty- product range. lot of competition because of less expensive rene spot prices, which hit historic highs Batch emulsion is used in the production imports for much of the year. due to tight market conditions. of high-impact grades. Asian suppliers are seeing demand from General purpose ABS prices from 27 Jan- A hybrid emulsion/mass process has also China as the reason for the higher Asian ABS uary through 3 March jumped by 19%. been developed that permits the production prices at the start of the fourth quarter. Asian However, since 3 March, prices moved of a wide range of ABS products. suppliers are not interested in selling to US within a narrow band of 7 cents/lb. customers at lower prices than they can sell As autumn began, US producers were re- Outlook into China. Demand in China is very strong. luctant to raise prices, despite consistently Players expect the market in 2018 to be sim- Late summer turnarounds limited ABS higher prices for Asian imports. Some higher ilar to that in 2017. Overall supply and de- supply in Asia. As a result, some Asian sup- ABS prices were seen for domestic supply at mand fundamentals are expected to remain pliers in August informed US customers that that time, but there were no formal price in- relatively stable, with plenty of availability crease nominations in the marketplace. and good levels of consumption. US ABS Meanwhile, ICIS price assessments were Traditionally, demand in October finish- made based on overall raw material cost es strong, but sales fall off in November and Cents/lb, injection medium, domestic FD changes. Styrene comprises about 60% of December due to the holiday shutdowns. 140 ABS, with butadiene (BD) and acrylonitrile The downstream automotive industry (ACN) each at about 20%, but that could saw strong growth in September after the 130 change depending on the amount of flexi- hurricanes. Automobile sales in September bility needed. reached the highest level in any single- More flexibility would necessitate more month in 12 years, but it was unclear how 120 BD and less ACN. long the uptrend would continue. The price and availability of ABS imports Technology from Asia will go a long way toward deter- 110 ABS was patented in 1948 and introduced mining how demand for domestic product commercially by US-based BorgWarner will look during the fourth quarter of 2017 in 1954. The three main polymerisation and during 2018. ■ 100 Oct Oct processes used are the emulsion process, 2016 2017 suspension process and continuous mass Access the archive of the Chemical Profiles process. A-Z at icis.com/subscriber/icb

www.icis.com 20-26 October 2017 | ICIS Chemical Business | 41

ICB_240818_036-043 Profiles October17.indd 41 8/20/18 2:20 PM asia chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

LOY KHENG WEE Singapore PMMA

Uses mand for PMMA remained mostly steady for ASIA PMMA CAPACITY Polymethyl methacrylate (PMMA) is the most general purpose and optical grades, in view of ‘000 TONNES/YEAR important application for methyl methacrylate limited spot supply and rising spot prices. Company Location Capacity (MMA), consuming about half of Asia’s MMA PMMA buyers were largely heard to be under Chi Mei Jen-Te, Taiwan 175 output. It is an economical alternative to poly- growing pressure, being unable to pass on Sumitomo Jurong Island, 150 carbonate (PC) when extreme strength is not such strong costs to their customers quickly. Chemical Singapore required. PMMA comes mainly in two grades As such, most held a cautious approach, pur- LG MMA Yeosu, South Korea 123 – general purpose (GP) and optical grade. chasing small amounts to fulfil business obli- Lotte MCC Yeosu, South Korea 110 GP-grade PMMA is widely used in many gations. China and India are among countries Kuraray Nakajo, Japan 60 industries and in a large number of everyday/ that are net importers of PMMA. Mitsubishi Rayon Nantong, China 60 household applications, such as souvenirs, il- Altuglas (Arkema) Jinhae, South 50 luminated signs and bathtubs. Its automotive Prices Korea applications include car tail lights and speed- PMMA spot prices have been on the rise since Chi Mei Zhenjiang, China 50 ometer covers. Optical-grade PMMA is used early 2017, tracking upstream MMA prices Asahi Kasei Chiba, Japan 40 to make TV screens for large LED (light emit- closely. In October 2017, PMMA prices Evonik Caojing, China 40 ting diode) TVs, light guide panels and com- climbed to a one-year high at $2,630/tonne CFR Evonik Taichung, Taiwan 40 puter monitors. It is also found in application (cost and freight) China and $2,630/tonne CFR Mitsubishi Rayon Toyama, Japan 27.5 screens for smaller electronics items such as SE (southeast) Asia, rising by 45% and 36% on mobile phones, and MP3 and media players. a year-on-year basis, respectively. Feedstock Mitsubishi Rayon Otake, Japan 20 MMA prices were on an uptrend in the same Shanghai Jing Qi Shanghai, China 20 Polymer Science Supply/demand period, amid tight supply and various plant dis- Heilongjiang Anda, China 15 PMMA supply has stayed tight in Asia ruptions. Spot prices increased by 40% year- Longxin Chemical throughout 2017, on the back of prolonged on-year, closing at $2,610/tonne CFR SE Asia in TPI Polyacrylate Muang, Thailand 13 supply shortage, high upstream costs, as well October 2017. The spread between PMMA and Gujarat State Baroda, India 2 as multiple plant outages and scheduled turn- upstream MMA prices climbed above the zero Fertilizers & arounds in the region. Spot trade for bulk car- mark in October 2017 and reached a positive Chemicals - (GSFC) goes slowly reduced, as most producers had level for the first time since March 2017. low inventories and could not offer much NOTE: Top 17 plants listed by capacity spot material on the market. Other disrup- Technology tions such as Hurricane Harvey in the US Chemically, PMMA is the synthetic polymer significantly eases in the near term. With caused global spot supply to further constrict of MMA. PMMA is routinely produced by new Middle East plants set to come on in 2017. Price hikes were initiated by key emulsion polymerisation, solution polymeri- stream, most players believe regional supply manufacturers such as Sumitomo and sation, suspension polymerisation and bulk will increase. One addition is the joint ven- Chimei, in order to reflect strong MMA costs polymerisation. For glazing, some MMA can ture between Mitsubishi Rayon and SABIC, and maintain PMMA production levels. De- be pre-polymerised in a continuous stirred which involves an integrated 40,000 tonne/ tank reactor and the resulting viscous liquid is year PMMA plant and a 250,000 tonne/year ASIA PMMA fed into a series of flat glass plate-like moulds. MMA plant in Saudi Arabia. However, pro- This type of batch operation is cumbersome, duction may be delayed as some facility is- $/tonne, GP, spot (average) CFR container so continuous polymerisation/cast technolo- sues were heard in late Q3 2017. 2,800 SE Asia gies are also in operation. In belt polymerisa- A new 50,000 tonne/year project is on the China tion processes, the MMA/PMMA syrup is in- horizon in Saudi Arabia. The Petro Rabigh 2,600 jected between continuous highly polished venture between Sumitomo and Saudi Aram- metal belts. Continuous and batch processes co is expected to come on stream in early 2018. 2,400 are also possible. Japan’s Mitsubishi Rayon Assuming no further disruptions, existing developed a recycling process that produces sellers affected by recent planned and un- 2,200 MMA monomer from waste PMMA using planned shutdowns would be able to build sand as a thermal catalyst. It then produces up production and inventory levels gradually. 2,000 PMMA from the monomer. PMMA demand is expected to remain re- stricted until buyers see that regional supply ■ 1,800 Outlook is more abundant and spot prices are softer. Oct Oct The market outlook will largely depend on 2016 2017 the availability and costs of feedstock MMA, Access the archive of the Chemical Profiles as well as whether PMMA supply in Asia A-Z at icis.com/subscriber/icb

42 | ICIS Chemical Business | 27 October-2 November 2017 www.icis.com

ICB_240818_036-043 Profiles October17.indd 42 8/20/18 2:21 PM Europe chemical profile

Nel Weddle London Propylene

Uses derivatives operations, but left length in inland EUROPE PROPYLENE CAPACITY The primary outlet for propylene is polypro- pockets. The propylene pipeline was back in ‘000 TONNES/YEAR pylene (PP), accounting for about two thirds of operation as of August 2017. Company Location Capacity propylene consumption globally but closer to 57% in Europe. Other important derivatives Prices Total Antwerp, 675 include propylene oxide (PO) which con- Contract prices rollercoastered throughout Belgium sumes around 13% in Europe and 8% of 2015-2017 in line with feedstocks. Contract INEOS Cologne, 655 Germany cumene, while other derivatives, the oxo alco- prices peaked in June 2015 and then fell hard in BASF Sonatrach Antwerp, 650 hols, acrylonitrile (ACN), acrylic acid and iso- July-September 2015 as adjustments were PropanChem SA - (BSP) Belgium propyl acetate (IPA) together consume around needed to align Europe’s derivatives competi- OMV Burghausen, 560 22% of European propylene production. tiveness with the rest of the world where prices Germany Propylene can also be used to make high were much lower. After reaching a low in Feb- Naphtachimie Lavera, France 540 octane gasoline blendstocks and can also be ruary-March 2016, prices showed a steady in- Shell Moerdijk, 500 blended into propane. crease through the rest of 2016. Netherlands Spot prices have shown considerable Versalis Priolo, Italy 440 Supply/demand swings over 2015-2017 – reflecting supply and SABIC Wilton, UK 400 According to Petrochemicals Europe, in 2015 demand imbalances. Double-digit percentage Dow Tarragona, 370 Western Europe (EU15 + Norway + Turkey) premiums and discounts to the prevailing con- Spain produced just over 10m tonnes of propylene tract prices were seen. Spot propylene saw a LyondellBasell Berre, France 360 from steam crackers, and about 4m tonnes return to high premiums in the first half of BASF Sonatrach Tarragona, 350 from refineries. Total propylene output has 2017 because of strong demand, planned turn- PropanChem Spain steadily increased over the past three years arounds and a series of unexpected events. SABIC Geleen, 350 from improved operating rates at crackers and Netherlands refineries with the advent of the low oil price Technology LyondellBasell Wesseling, 335 from the latter part of 2014. The two main sources of propylene are as a Germany Events which shaped the supply/demand by-product from the steam cracking of liquid Dow Terneuzen, 325 picture in 2014-2015 were worked though – the feedstocks such as naphtha, and from offgases Netherlands derivative/cracker issue at Moerdijk, the Nether- produced in fluid catalytic cracking (FCC) lands in 2014 where Shell’s cracker came back units in refineries. The remainder is produced growth registered for 2015. PP has led the online in 2015 and Ellba’s PO in Q1 2016. But using on-purpose technologies such as pro- way with estimated demand growth in 2016 then other issues emerged – a strike in France pane dehydrogenation (PDH) and metathesis. of at least 5.6%. The ACN, butyraldehyde, impacted refinery and cracker operations in Q2 As demand for propylene (4%/year) contin- PO and acrylic acid chains are the other 2016, tightening supply. Then the October 2016 ues to outpace that for ethylene (3.6%) and main contributors. Through 2019, global incident at BASF’s site in Ludwighafen, Germa- more ethane crackers (which produce no pro- propylene demand growth is expected to ny destroyed a propylene pipeline and reduced pylene) are being built, on-purpose production continue to increase at more than 4%/year. is growing. The main on-purpose process is In Europe (including Turkey), propylene de- EUROPE PROPYLENE PDH. In September 2016, Borealis announced mand for 2016 has been flat following a feasibility study to build a 740,000 tonne/ growth of 0.3% and 1.1% in 2015 and 2014, €/tonne 1,200 year PDH plant at Kallo, Belgium, for start-up respectively. PP production in Europe de- Chemical grade, spot FD NWE Contract FD NWE Polymer grade, spot CIF NWE in 2020. Poland’s Grupa Azoty is also devel- clined by 0.3% in 2016 and is likely to grow Polymer grade, spot FD NWE oping a 400,000 tonne/year PDH unit with a by 2%/year through 2019 which will imply 1,000 start date in late 2019. INEOS plans to build a larger import requirements . 750,000 tonne/year PDH unit in Europe, with Demand is expected to remain above sup- Antwerp, Belgium, as a potential location. ply, resulting in a larger imbalance in the pro- 800 France’s Total, working with US-based UOP, pylene market than in the recent past. Produc- has developed an olefin cracking process tion capacity is anticipated to increase by less which takes the heavier olefins from the meth- than 3% from 2016 to 2019 and, at the same 600 anol-to-olefins (MTO) unit and converts them time, consumption will rise by about 4.5%. into lighter olefins – in particular propylene. Operating rates are projected to average 87% between 2017 and 2019. ■ 400 Oct Oct Outlook 2016 2017 Global propylene demand for 2016 in- Access the archive of the Chemical Profiles creased by around 4.5%, below the 6.5% A-Z at icis.com/subscriber/icb

www.icis.com 27 October-2 November 2017 | ICIS Chemical Business | 43

ICB_240818_036-043 Profiles October17.indd 43 8/20/18 2:21 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Heidi Finch London Propylene oxide

USES there was the Hurricane Harvey impact in the EUROPE PO CAPACITY The largest consumer of propylene oxide US at this time, which affected PO and deriva- ‘000 TONNES/YEAR (PO) is polyether polyols, which are used to tives for some players, there was little-to-no Company Location Capacity make polyurethanes (PU); this sector ac- direct effect on PO supply in Europe. counts for 55-60% of PO consumption. Dow Chemical Stade, Germany 630 The second largest derivative is monopro- Prices LyondellBasell Bayer Maasvlakte, 315 pylene glycol (MPG) at 25-30%. The remain- The majority of European PO monthly con- Manufacturing Netherlands Maasvlakte ing 10-20% comprises of propylene glycol tract prices are formula related and follow BASF/Dow Antwerp, Belgium 300 ethers, flame retardants, synthetic lubricants, 80% of the upstream propylene monthly con- LyondellBasell Botlek, 260 oilfield drilling chemicals, butanediol tract price movement. Netherlands (BDO), propylene carbonate, allyl alcohol, During Q1 2017 and into early Q2 2017, PO Ellba (Shell/BASF) Moerdijk, 250 isopropanolamines, modified starches and contract prices trended up, on the back of Netherlands textile surfactants. firmer upstream propylene contract costs. Shell Moerdijk, 210 In early August, the hybrid PO contract and Netherlands SUPPLY/DEMAND freely negotiated price assessment was dis- INEOS Oxide Cologne, 210 During the first half of 2017, PO supply in continued and replaced by the monthly for- Germany Europe was reduced. This was mainly linked mula only contract price range, which had LyondellBasell Fos, France 210 to LyondellBasell’s planned, albeit lengthy, been added in July 2017, to reflect the majori- Repsol Chemicals Tarragona, Spain 200 maintenance turnaround at its Botlek site in ty of business concluded. BASF Ludwigshafen, 125 the Netherlands during the spring of 2017 Germany and the force majeure on Shell/BASF’s joint Technology Oltchim Rimnicu Vilcea, 110 venture PO/styrene monomer 2 (SM2) unit at There are various types of PO production Romania Ellba in June/July. technology. The two older more traditional PCC Rokita Brzeg Dolny, 40 PO supply has not only been impacted by a PO production routes are either by chlorohy- Poland spate of PO related output issues, but tight- drin or by epoxidation. The propylene chloro- ness in the upstream propylene market also hydrin route involves converting propylene tives such as 3-4% for downstream polyols had a bearing on PO availability. to propylene chlorohydrin and then the chlo- and around 2% for MPG. While there is the On top of output constraints, PO demand rine is removed. This process is highly pollut- new Sadara PO capacity in the Middle East, has been healthy, particularly from the main ing from a waste perspective and it also uses a which started in Q3 2017, and MOL also downstream polyurethanes market, among significant amount of chlorine. plans to build some new PO capacity in east- others, which has further compounded A main example of the epoxidation process ern Europe, these are expected to be for cap- an already tight PO market in the first half is the PO/styrene monomer (SM) route, but tive downstream polyols and MPG usage. of 2017. this route often leads to imbalances between It is also expected that the Sadara PO vol- By mid September 2017, there were signs these products amid differing rates of growth. umes are mainly intended for the Asian and the market became more balanced. While An alternative PO production route uses Middle East markets rather than for Europe. isobutene, which makes a tertbutyl alcohol While the Sadara capacity is unlikely to EUROPE PO (TBA) co-product that can convert to methyl have a direct effect on PO supply in Europe, tertiary butyl ether (MTBE) particularly as PO is not easy to transport, €/tonne, contract FD NWE There are also other newer PO only pro- there may be an indirect impact on PO sup- 1,380 duction methods, which are said to be more ply in Europe through its derivatives. 1,370 efficient. There is the cumene-hydroperox- LyondellBasell plans to build the world’s ide based propylene oxidation route, which largest PO/tertiary butyl alcohol (TBA) plant in 1,360 allows for the recapture of cumene. There is Texas, by mid-2021. This is being driven by ris-

1,350 the direct propylene hydro-oxidation with ing global demand for urethanes and cleaner- oxygen and hydrogen direct propylene oxi- burning oxyfuels. 1,340 dation with oxygen technology and propyl- One company source said that options for ene oxidation using hydrogen peroxide, this new capacity are being considered, adding 1,330 which has no co-products other than water. that this new capacity is likely to be used to 1,320 supply PO and derivative customers domesti- Outlook cally and in other regions. ■ 1,310 Jul Oct PO demand in Europe is expected to grow 2017 2017 around 3% on average per year, taking into Access the archive of the Chemical Profiles account growth estimates for its main deriva- A-Z at icis.com/subscriber/icb

44 | ICIS Chemical Business | 3-9 November 2017 www.icis.com

ICB_240818_044-051 Profile November17.indd 44 8/20/18 2:27 PM US chemical profile

Jessie Waldheim Houston Ethyl acetate

Uses etac in 2016 and 13,000 tonnes in the first six AMERICAS ETAC CAPACITY Ethyl acetate (etac) is used in coating formula- months of 2017, putting exports at about half ‘000 TONNES/YEAR tions like epoxies, urethanes, cellulosics, the level of imports. Company Location Capacity acrylics and vinyls, and is also used in solvent Import levels in the first six months of 2017 Celanese Cangrejera, Mexico 139 applications for inks, pharmaceuticals, food, had fallen by about 15% from the first six Eastman Longview, Texas, US 32 and herbicides. High-purity etac can be used months of 2016, while export levels had fall- Chemical as a viscosity reducer for resins. en by about 18% over the same time period. Eastman Kingsport, 27 More recently, US etac supply has been Chemical Tennessee, US Supply/demand disrupted by multiple issues. Eastman Springfield, 14 Etac in North America is supplied by five In late August, Hurricane Harvey impact- Chemical Massachusetts, US plants – four in the US are owned by East- ed the US Gulf coast and caused logistical Eastman Trenton, Michigan, US 11 man Chemical and the fifth, in Mexico is issues and outages for upstream acetic Chemical owned by Celanese. acid. Both Celanese and Sasol had issued According to US import data, the US re- sales controls. acetaldehyde with alkoxides. ceived about 34,000 tonnes of etac from In September, earthquakes in Mexico In the main esterification process, a mix- Mexico in 2016, about 25% of the plant’s caused further logistical issues. In early Octo- ture of acetic acid and ethanol is preheated annual capacity. As of June 2017, the US ber, a fire at Eastman’s facility in Kingsport with a small amount of sulphuric acid. This is had received about 16,000 tonnes of etac shut down upstream units at the plant. fed to an esterifying column for reflux. from Mexico. On the demand side, etac is used to pro- The mixture removed from there goes into However, Sasol’s 55,000 tonne/year plant duce inks, coatings, adhesives and cosmet- a second refluxing column where etac is re- in Secunda, South Africa is also a major sup- ics. Etac demand is affected by seasonality moved. A third refluxing column is used to plier to the US market. in the construction sector, which has its remove impurities. US imports from South Africa in 2016 were strong season in the spring and summer in A number of newer technologies have 14,000 tonnes, also about 25% of the plant’s North America. been commercialised in China and South annual capacity. As of June 2017, the US had Africa. Sasol, which is based in South Africa, received about 5,000 tonnes of etac from Prices had a process developed by Norwegian engi- South Africa. US etac prices rose throughout the beginning neering and construction company Aker US etac imports from countries other than of the year amid tight supply and increasing Kvaerner at its 50,000 tonne/year plant in Mexico and South Africa in 2016 totalled demand as the downstream construction sec- Secunda, South Africa, that uses only etha- about 6,000 tonnes, of which most came from tor ramped up. nol feedstock. Brazil, India and China. In the first six months Supply tightened as Celanese scheduled a Chinese National Petroleum developed a of 2017, US etac imports from countries other turnaround at its upstream acetyls units in one-step ethanol process where ethanol is than Mexico and South Africa totalled about Clear Lake, Texas in the first half of the year. partially oxidized to acetic acid and then es- 2,500 tonnes. Additionally, tight upstream ethylene supply terified with excess ethanol. The US exported about 30,000 tonnes of had limited production of ethylene-based etac during the second quarter. Outlook US ETAC Mid-way through 2017, prices were steady In the coming weeks, etac supply is expected to softer as supply levels improved and as to remain tight as logistical systems and up- Cents/lb, spot NE/Midwest distribution DEL 90 the summer peak construction season was stream production return to normal following under way. Hurricane Harvey, the Mexico earthquakes Prices began climbing again in September, and the fore at Eastman Chemical’s Kingsport, 80 following disruptions from Hurricane Har- Tennessee facility. Supply levels should nor- vey. Two producers put customers on tight mailse late in 2017. allocations amid shipping problems and up- Meanwhile, demand could remain strong 70 stream shortages. in the coming weeks as the construction sec- Prices are expected to moderate once logis- tor is bolstered by repairs from several hurri- tical systems and upstream supplies normal- canes and earthquakes. 60 ise in the future. However, that demand is expected to ease during North American winter, which is the Technology off-peak season for the construction sector. ■ 50 Oct Oct Etac is mainly produced by the esterification 2016 2017 of ethanol or ethylene with acetic acid. Some Access the archive of the Chemical Profiles is produced by the catalytic condensation of A-Z at icis.com/subscriber/icb

www.icis.com 3-9 November 2017 | ICIS Chemical Business | 45

ICB_240818_044-051 Profile November17.indd 45 8/20/18 2:27 PM ASIA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Matthew Chong Singapore Polyols

Uses polyols plant in Jilin province, China, is set to ASIA/MIDdle EAST POLYOLS CAPACITY The major use of polyols is in polyurethane achieve on-spec production in November. ‘000 TONNES/YEAR (PU) foams, flexible or rigid, which are pro- Sadara’s 400,000 tonne/year polyether pol- Company Location Capacity duced by the reaction of a polyol with an iso- yols unit in Saudi Arabia came on stream in Jurong Ningwu Jurong, China 400 cyanate, usually toluene di-isocyanate (TDI) mid-July and its first batch of flexible polyols New Material or methyl di-p-phenylene isocyanate (MDI). cargoes arrived in China in late October. Development There are two main types of polyols: poly- Meanwhile, the three main South Korean Sadara Al Jubail, Saudi 400 ether polyols and polyester polyols. The price polyols producers, namely KPX, Kumho Pet- Arabia assessments for the ICIS Asia polyols report rochemical and Mitsui Chemicals & SKC Pol- Shell Eastern Pulau Seraya, 360 Petrochem Singapore are for polyether polyols only. yurethanes (MCNS), have been running their Polyether polyols are the more widely used plants at reduced rates since the third quarter Zibo Dexin Zibo, China 350 Lianbang of the two types of polyols, with the main ap- because of a shortage of feedstock PO follow- Shandong Zibo, China 300 plications being rigid and flexible polyure- ing the surge in PO import prices. Dongda thane foams. Rigid foams are used mainly in On the demand side, downstream foam Wudi Dexin Wudi, China 300 insulation, refrigeration, packaging and con- makers have been lukewarm in their polyols Chemical struction, while flexible foams have applica- purchases throughout the year, partly due to CNOOC and Shell Huizhou, China 280 tions such as upholstery, mattresses and seats. the firm prices of other feedstock TDI. Polyols Petrochemicals Polyols can also be used in elastomers, adhe- and TDI are the two main components used Co (CSPC) sives, coatings and fibres. in the production of PU foam. Wanhua Chemical Yantai, China 270 Shandong Zibo, China 260 Supply/demand Prices Longhua The oversupply of polyols in Asia, especially Polyols prices have been tracking feedstock KPX Ulsan, South 230 in China, has resulted in the consolidation of PO prices closely, with polyols producer Korea the polyurethane (PU) industry, with the clo- margins being tightly squeezed. Prices of US NOTE: Top 10 listed. sure of smaller standalone polyols plants dollar denominated flexible slabstock grade without their own upstream propylene oxide of polyols in China hit a 10-month high in Outlook (PO) feed and a shift away from base flexible the second half of August 2017, along with a The expected influx of Sadara’s flexible slab- polyols production to other specialty polyols spike in China PO prices, before retreating stock polyols into Asia and the Middle East in grades in the past few years. in September. 2018 will likely weigh on polyols prices, mar- Sinopec Shanghai Gaoqiao permanently Polyols spot import prices in southeast ket participants said, although the price shut down its 200,000 tonne/year polyether Asia and India were much less volatile and movement of feedstock PO will remain an im- polyols plant in Shanghai in May 2017 due to had been generally range-bound in the year, portant factor in determining the polyols suppressed margins amid stiff competition. with prices having inched up in August and price direction. As for new start-ups in 2017, Juyuan Chem- September on supplier price hikes, amid As such, the PU industry looks set to con- ical’s 185,000 tonne/year Phase I polyether the rise in feedstock costs and tighter tinue on its path of consolidation, with regional supply. producers operating integrated facilities that ASIA POLYOLS produce upstream propylene to downstream Technology polyols taking centre stage. $/tonne, flexible foam slabstock, spot Polyether polyols are produced by the cata- Polyols consumption in the Middle East is 2,000 CFR SE Asia lysed addition of epoxides, mainly PO or projected to be relatively healthy, as the CFR India ethylene oxide (EO), to an initiator having Sadara start-up will likely provide a boost to DEL China 1,800 active hydrogens. The most common catalyst the development of the PU value chain in the is potassium hydroxide. The reaction is car- region, according to the ICIS Supply and De- 1,600 ried out by a discontinuous batch process at mand Database. raised temperatures and pressures in an inert India may also be seen as a bright spot for 1,400 atmosphere. polyols exporters, with demand for imports After polymerisation, the catalyst is neu- set to grow in the coming years, as consump- 1,200 tralised and removed by filtration. The polyol tion is expected to continue to outstrip ca- is then purified. The choice of epoxides, initi- pacity, the ICIS Supply and Demand Data- ■ 1,000 ator, reaction conditions and catalyst deter- base showed. Nov Oct mines the physical properties of the polyol, 2016 2017 which can range from low-molecular-weight Access the archive of the Chemical Profiles polyglycols to high-molecular-weight resins. A-Z at icis.com/subscriber/icb

46 | ICIS Chemical Business | 10-16 November 2017 www.icis.com

ICB_240818_044-051 Profile November17.indd 46 8/20/18 2:27 PM Europe chemical profile

Ciaran Tyler London SAN

USES efficiency for vehicles, compounding grade EUROPE SAN CAPACITY Styrene-acrylonitrile (SAN) copolymer ranks SAN has seen healthy growth, especially in the ‘000 TONNES/YEAR among the hard engineering plastics. Its prop- second-half of 2017. Company Location Capacity erties are influenced both by its molecular Due to the strengthening of the euro against ELIX Polymers Tarragona, Spain 115 weight and by its acrylonitrile (ACN) content. the dollar – it saw a two-and-half year high in INEOS Ludwigshafen, 60 If the two parameters are increased simultane- August – Asian material started to become Styrolution Germany ously, this will raise the strength, rigidity, more competitive and some buyers in the do- Trinseo Terneuzen, 35 impact strength, heat resistance and stress mestic market sought to purchase greater vol- Netherlands Netherlands cracking resistance. umes from parts of Asia. Suppliers in South Versalis Mantova, Italy 35 Key end uses for SAN are household and Korea were particularly prevalent in the do- sanitary applications, office articles, cosmetic mestic market, as South Korea has a free trade February and March helping to push SAN packaging, electrical, transparent covers, light- agreement with the EU, with zero import duty prices to record levels. ers, medical applications and battery housings. paid on SAN imports. That, at certain times The flooding in Houston, Texas caused by throughout the year, has allowed South Korean Hurricane Harvey significantly hit the global SUPPLY/DEMAND producers to price their material lower than styrene market, leading to increases of €130- In 2017, the European SAN market was European suppliers. 150/tonne for September SAN contracts in healthy in terms of availability, with no plant Although the arbitrage window between Europe. closures or major outages causing disruption Europe and Asia widened slightly amid the Players in the European styrene-acryloni- to supply. Routine maintenances and strengthening value of the euro, imports into trile (SAN) market expect November contracts planned turnarounds by some producers in the domestic market have dropped com- to decrease by double digits for the second the second-half of the year concluded without pared with last year through most of 2017 so month in a row, following a fall in the up- any problems and buyers were aware enough far. During the first half of the year, imports stream styrene barge contract price by €90/ of the turnarounds that availability was un- of SAN into Europe dropped by 21.72%, ac- tonne. According to both sides of the market, hampered in the European market. cording to data from Eurostat. August im- such a substantial reduction in styrene will put Demand levels remained healthy through- ports of SAN dropped by 17.35% year on hefty downward pressure on SAN prices, al- out much of 2017, particularly from the pro- year to 1,987 tonnes. though expected upward movement in the up- ducers’ point of view. A steadily growing Strong demand in China and rising SAN stream acrylonitrile (ACN) market is likely to economy in Europe spurred buying appetite in prices in Asia during the second half of the mean that the full styrene decrease is not most downstream sectors. Compounding- year contributed to fewer volumes being im- passed through to buyers. grade SAN in particular saw strong demand, as ported into the European market. industrial compounding players in the down- Exports of SAN out of the EU in August, TECHNOLOGY stream acrylonitrile-butadiene-styrene (ABS) while still small in volume, were the highest SAN is made by the polymerisation of styrene market saw high demand in the automotive monthly total in 2017 so far, growing by with acrylonitrile. It is an optically clear resin sector. With the automotive industry continu- 74.51% to 979 tonnes, according to data from which when compared with general-purpose ing to seek weight cuts to improve fuel Eurostat. The quiet summer season in Europe polystyrene (GPPS) has improved toughness likely contributed to sellers looking for buyers and rigidity, better solvent and chemical resist- EUROPE SAN outside of the region to fulfil order entries for ance, and somewhat greater heat resistance. the month. €/tonne, contract FD NWE domestic According to some European producers, de- OUTLOOK 2,900 mand into 2018 is looking stable, partly driven As a mature market, European SAN supply by falling exports from Asia. and demand levels are not expected to see 2,700 any drastic change for the rest of 2017 and PRICES into 2018. 2,500 SAN prices in 2018 are likely to be driven by The dominant influencing factor will likely feedstock and upstream movement, rather continue to be upstream styrene prices. One 2,300 than supply and demand fundamentals. Sty- area of uncertainty will be how suppliers rene will be the key driver ahead of acryloni- react and adjust to the changing exchange rate 2,100 trile, as it makes up roughly 80% of SAN. In and whether Asian imports into Europe will Commercial grade turn, the feedstock prices will be influenced by increase if the euro continues to strengthen Compounding grade ■ 1,900 a combination of benzene and naphtha prices, throughout the rest of the year. Nov Nov as well as supply and demand dynamics. 2016 2017 Styrene experienced significant volatility Access the archive of the Chemical Profiles throughout 2017, with triple-digit rises in A-Z at icis.com/subscriber/icb

www.icis.com 10-16 November 2017 | ICIS Chemical Business | 47

ICB_240818_044-051 Profile November17.indd 47 8/20/18 2:27 PM Latin America chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

George Martin Houston Polystyrene

Uses down production to avoid oversupply. BASF LATIN AMERICA PS CAPACITY Polystyrene (PS) is one of the world’s oldest and Dow sold their Brazilian PS production ‘000 TONNES/YEAR and most widely used thermoplastic poly- to local companies. In Argentina, the main Company Location Capacity mers. It can be solid or foam, and it is made local producer is Pampa Energia, which has a Unigel Sao Jose dos 180 from styrene monomer. PS is available in sev- 66,000 tonne/year plant in Zarate, Buenos Campos, Brazil eral forms – general purpose (GPPS), medium Aires province. Colombia has two producers Gaxetas e Perfis Guaruja, Brazil 180 impact and high impact (HIPS). – America Styrenics and Dexton. The latter do Brasil PS has good processing properties and is consumes most production internally. INEOS Styrolution Altamira, Mexico 175 used in many applications, including food Mexico has two large producers in Resirene Resirene Xicohtzinco, Mexico 150 packaging, domestic appliances, electronic and INEOS Styrolution, which cater mainly Videolar-Innova Triunfo, Brazil 135 goods, toys, household items, furniture and to the local market while exporting some vol- Videolar-Innova Manaus, Brazil 120 foams for construction. umes to the US, Central America and the Car- Americas Cartagena, 77 It faces competition from other plastics as ibbean. Venezuela’s Estirenos del Zulia (Esti- Styrenics Colombia substitutes. For example, in food packaging zulia) has not been operational in 2017 Pampa Energia Zarate, Argentina 66 some producers have switched to alternatives because of raw material shortages. Estireno del Zulia El Tablazo, 47 such as paper. Polypropylene (PP) is also Venezuela mounting a challenge. In consumer electron- Prices Dexton Cartagena, 28 ics, other plastics such as acrylonitrile butadi- At the end of August, Hurricane Harvey cre- Colombia ene styrene (ABS) and polycarbonate (PC) ated new shortages in the US Gulf that sent International Buenos Aires, 12 have replaced a portion of PS usage. prices up in Latin America. Prices appear to Plastics Argentina have peaked at the end of October 2017 and Resinor Joao Pessoa, Brazil 2 Supply/demand are poised to stabilise or decline gradually. Peak demand in the Latin America PS market Usually, prices in Mexico follow the same make specialty crystal and high-impact grades; is typically encountered during the summer pattern as those in the US because both markets and mass (bulk) polymerisation, the advantages months, when consumption of disposable are connected with the NAFTA treaty. Produc- of which are clarity and excellent colour. packaging for food and beverages grows. ers in both countries are forced to compete on However, in several countries demand from price. Prices in Brazil, Colombia and Argentina Outlook appliances has been outstripping demand for follow the trends in the US Gulf, but with local A new PS plant is unlikely to be built in Latin disposables in a consistent manner. variations provided by import tariffs and spe- America as the main obstacle is availability of In Latin America, only Mexico, Colombia, cific supply/demand issues in each country. raw materials. The same applies to refineries, Venezuela, Brazil and Argentina have domes- Net importers such as Chile, Peru and Ec- which are the main source of benzene, used tic PS production. Brazil’s producers are Vide- uador entertain offers from Asia, in addition for styrene production. Most countries appear olar-Innova and Unigel and production out- to those from the US Gulf or from regional to be content with importing volumes. strips demand by a large margin. When producers. US exports have traditionally covered sup- exports are not possible, producers slow These importers have no trade barriers and ply gaps in Latin America, but there is also buy frequently on price. PS prices typically competition from other regions. US exports LATIN AMERICA POLYSTYRENE* follow the direction of US benzene/styrene are expected to continue to climb in order to contract prices closely, but other factors such meet the rising demand from Latin America. $/tonne, GPPS, spot as supply/demand and status of local econo- PS recycling is expected to open new 2,200 mies also help determine prices. growth opportunities for the industry. How-

2,100 ever, environmental concerns, fluctuating raw Technology material prices and the increased use of sub- 2,000 PS was first commercially produced by poly- stitute materials could bring challenges to the 1,900 merisation of styrene in the 1930s. The two PS industry. main types of polymers produced are a clear, However, expandable polystyrene (EPS) 1,800 crystal amorphous resin, known as GPPS and has shown rapid growth in recent years with an impact resin, known as HIPS, which con- new applications of the material in the con- 1,700 tains varying levels of polybutadiene rubber. struction and architectural sectors, making 1,600 Three processes generally used are the solu- good use of the insulating properties and light tion route, with the advantage of producing low weight of this material. ■ 1,500 Nov Oct residual monomer content and high-purity pol- 2016 2017 ymers; the suspension route, which produces Access the archive of the Chemical Profiles *Average prices across countries in Latin America polymers of different molecular weights, thus A-Z at icis.com/subscriber/icb

48 | ICIS Chemical Business | 17-23 November 2017 www.icis.com

ICB_240818_044-051 Profile November17.indd 48 8/20/18 2:31 PM ASIA chemical profile

HELen Yan Singapore PBR

USES Deep-sea supplies from Europe and the ASIA PBR Capacity Polybutadiene rubber (PBR) is polymerized Middle East are also expected to head to Asia ‘000 TONNES/YEAR butadiene (BD). One of the first types of synthet- to help meet the strong demand. Company Location Capacity ic elastomer, or rubber, to be invented, it is very Korea Kumho Yeosu, South 360 similar to natural rubber (NR) polyisoprene. PRICES Korea The main use for PBR is in tyres, with a Asia PBR prices are likely to hold steady-to- LG Chem Daesan, South 185 high proportion of the polymer that is pro- firm in December due to limited supplies and Korea duced going into treads and sidewalls. Its key strong demand. Sinopec Shanghai, China 180 properties include high elasticity, good wear However, the upside potential may be Huayu Rubber Haze, China 160 resistance, excellent abrasion resistance and capped by the soft natural rubber (NR) price. PetroChina Daqing, China 160 good flexibility at variable temperatures. Ample supplies of NR had dampened buying PetroChina Chengdu, China 150 PBR also has a major application as an im- sentiment for PBR, with the downstream tyre Sinopec Yanshan, China 150 pact modifier for polystyrene (PS) and makers reluctant to accept any significant price Yanshan acrylonitrile butadiene styrene (ABS) resin. hike for PBR in November and December. Lanxess Singapore 140 Apart from tyre treads, belts, hoses, gaskets NR and PBR are substitute raw materials for SABIC Al-Jubail, Saudi 100 and other automobile parts are made from PBR the production of tyres in the automotive indus- Arabia as it resists cold temperatures better than other try and their prices tend to impact each other. Maoming PC Guangzhou, 100 elastomers. Another factor that may temper any PBR China price increase is the feedstock butadiene Shandong Shandong, China 100 SUPPLY/DEMAND (BD) price. Huamao Demand is expected to strengthen in Novem- The feedstock BD price had plummeted to Zhejiang Zhejiang, China 100 Transfar ber and remain strong for the rest of the year around the $1,000/tonne CFR NE Asia level in in 2017. late October and is expected to bottom out by YPC-GPRO Jiangsu, China 100 The derivative tyre makers in China tend to mid-November. Chi Mei Kaohsiung, 90 Taiwan run at high rates or build up their tyre invento- In light of the anticipated rebound in the Note: Top 14 plants listed ries towards the end of the year, ahead of the feedstock BD price from mid-November, Asian Lunar New Year, which usually falls either in PBR producers are holding out for an upward January or February. adjustment for December PBR cargoes. therefore higher mechanical strength) and a Asia is a growing automotive market, with However, deep-sea supplies from Europe higher percentage of 98% cis. Other less used China, India and southeast Asia all witnessing and the Middle East may limit any significant catalysts include nickel and titanium. reasonable year-on-year growth in the automo- hike in the PBR price. tive sector and so growing demand for tyres. OUTLOOK On the supply side, the PBR plants in Asia TECHNOLOGY Market players expect the PBR price to rebound are running at full rates to meet the strong PBR is polymerized BD. Polybutadiene forms in late November or early December, on the demand. by linking many 1,3-butadiene monomers to back of an uptick in the feedstock BD price. make a much longer polymer chain molecule. The feedstock BD price is expected to bot- ASIA PBR In terms of the connectivity of the polymer tom out in November and rebound in late chain, BD can polymerize in three different November or early December. $/tonne, high-cis grade, spot CFR NE Asia ways, called cis, trans and vinyl. Demand for PBR is also expected to pick up 3,500 High-cis polybutadiene has a high elasticity in December, with the derivative tyre makers and is very popular, whereas the so-called in China building up their inventories ahead of 3,000 “high trans” is a plastic crystal with few useful the Lunar New Year in February 2018. applications. The vinyl content of polybutadi- Demand for PBR had been sluggish in Octo- 2,500 ene is typically no more than a few percent. In ber due to the National Day and mid-Autumn addition to these three kinds of connectivity, festive holidays in China and Diwali festive 2,000 polybutadienes differ in terms of their branch- holiday in India. ing and molecular weights. However, the NR price is also a key factor 1,500 The catalyst used in the production deter- in determining the price outlook for PBR as mines the type of polybutadiene product. both their price movements tend to impact ■ 1,000 Using cobalt gives branched molecules, result- each other. Nov Nov ing in a low-viscosity material that is easy to 2016 2017 use, but its mechanical strength is low. Neo- Access the archive of the Chemical Profiles dymium gives the most linear structure (and A-Z at icis.com/subscriber/icb

www.icis.com 17-23 November 2017 | ICIS Chemical Business | 49

ICB_240818_044-051 Profile November17.indd 49 8/20/18 2:32 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Zachary Moore Houston LDPE

Uses with supplies only beginning to normalise US LDPE CAPACITY Low density polyethylene (LDPE) is used again around the month of November. ‘000 TONNES/YEAR predominantly as a packaging film, either The US is adding additional LDPE capaci- Company Location Capacity on its own or blended with linear low den- ty as part of the first wave of new crackers ExxonMobil Baton Rouge, 431 sity polyethylene (LLDPE) to improve me- and ethylene derivative plants coming on- Chemical Louisiana chanical properties. line in the region. DowDuPont’s new Westlake Lake Charles, 385 Films account for more than 60% of total 350,000 tonne/year LDPE plant in Plaquem- Chemical Louisiana demand. LDPE also is used to make bags of ine, Louisiana, reached mechanical comple- Westlake Longview, Texas 315 many varieties – for newspapers, dry cleaning tion in the third quarter of 2017 and is on Chemical and frozen foods, to name a few examples – track for start-up in the first quarter of 2018, Chevron Phillips Cedar Bayou, Texas 280 which rank as the next largest use. LDPE also according to the company. Chemical is used for bottles, tubing and moulded labo- In 2018, Formosa is expected to start up a LyondellBasell Morris, Illinois 275 ratory equipment. 400,000 tonne/year LDPE plant in Point Com- DowDuPont Victoria, Texas 250 fort, Texas. Sasol intends to start up a new DowDuPont Orange, Texas 235 US LDPE shortened significantly in 420,000 tonne/year LDPE plant in Lake ExxonMobil Beaumont, Texas 235 August of 2017 following the impact of Charles, Louisiana, in 2019. Chemical Hurricane Harvey on the US Gulf Coast LDPE in the US is considered a mature DowDuPont Seadrift, Texas 225 market and little major domestic demand LyondellBasell Clinton, Iowa 220 growth is anticipated over the next several DowDuPont Freeport, Texas 202 Blown LDPE film has good processability years. As such, the bulk of the new US capac- LyondellBasell La Porte, Texas 200 due to a strain hardening effect of the polymer ity set to come online over the next few years DowDuPont Plaquemine, 185 melt caused by the long-branched, long-chain will need to be exported. Louisiana structure of the polymer. US producers are gearing up to increase It can be used in food and medical/pharma- their export activities in the coming years, ceutical packaging as well as in agricultural aiming to expand their presence in Asia. They LDPE prices stood around 2.5 cents/lb high- film and disposable nappies. are also aiming to increase their existing dom- er compared with the start of the year. ination of the Latin American import market. Supply/demand Traditionally, the US exported most of its Technology US LDPE supply shortened significantly in excess LDPE capacity to Latin America, but LDPE is a thermoplastic made from the poly- August of 2017 following the impact of Hurri- sellers in the US will need to find some alter- merisation of ethylene in autoclave or tubular cane Harvey on the US Gulf Coast. ICIS esti- native outlets as Latin America is not expect- reactors at very high pressures (up to 50,000 mated that 31% of US PE capacity was shut- ed to grow quickly enough to absorb all the lb/square inch). tered by the hurricane, leading to a large loss of new PE capacity coming online in the US. The autoclave process is expensive and production. Logistics disruptions stemming is being replaced by tubular technology, from the hurricane also impacted the market, Prices which is preferred because of its higher US LDPE contract prices rose throughout ethylene conversion rates. The process can US LDPE most months of the year, rising by a cumula- be used to make copolymers with polar co- tive amount of 15 cents/lb ($331/tonne) be- monomers, such as ethylene vinyl acetate Cents/lb tween January and October 2017. (EVA) polymer. 100 Film, spot FOB US Gulf export Contract prices were anticipated to stabi- Liner grade, contract DEL lise heading into the closing months of the Outlook 90 year as demand is experiencing a seasonal US LDPE prices are expected to face down- slowdown while supply concerns are easing ward pressure in 2018 as sellers bringing on 80 as plants come back online post-Harvey. additional capacity will have to engage in Export prices, meanwhile, weakened price competition in order to place volumes. 70 throughout the summer months before spik- Export prices will also come under pres- ing sharply following Harvey. Export prices sure as US sellers will need to be placing

60 peaked in late September and have since been larger volumes into overseas markets, there- coming back down as supply concerns ease fore, will need to maintain competitive pric- and US sellers find themselves pressured to ing in price sensitive global markets. ■ 50 Nov Nov reduce their offers in order to move material 2016 2017 into overseas markets. Access the archive of the Chemical Profiles As of the middle of November, export A-Z at icis.com/subscriber/icb

50 | ICIS Chemical Business | 24-30 November 2017 www.icis.com

ICB_240818_044-051 Profile November17.indd 50 8/20/18 2:32 PM Europe chemical profile

Heidi Finch London Titanium dioxide

USES in Europe in Q4 2017, there are initial signs of EUROPE TIO2 CAPACITY Titanium dioxide (TiO2) is mainly used as a supply starting to ease in Q4 on the seasonal ‘000 TONNES/YEAR white powder pigment because of its bright- slowdown from the paints sector. Company Location Capacity ness and high refractive index. It is mainly used in paints and coatings, including glazes Prices Cristal Stallingborough, 165 and enamels, plastics, papers, inks, fibres, While there was a significant slide in European UK foods, pharmaceuticals and cosmetics and TiO2 contract prices between Q4 2014 and Q1 Venator Greatham, 150 Materials UK other personal care products such as sun- 2016, amid a structural global supply glut, Eu- Venator Pori, Finland 130 creams and toothpastes. ropean TiO2 contract prices showed a sharp Materials Close to 60% of TiO2 consumption goes change in direction from Q2 2016 due to a re- Venator Krefeld-Uerdingen, 107 into the paints/coatings sector, around 25% versal in the supply situation. The latter was Materials Germany into the downstream plastics sector, 12% in due to a series of restructuring measures in Eu- Tronox Kreieke, Germany 105 the downstream paper sector and 6% is used rope and globally and producers’ strict inven- Venator Scarlino, Italy 80 in specialty applications, according to TiO2 tory management over the past few years. Materials manufacturers Association (TDMA) data. Europe TiO2 contract prices increased suc- Venator Huelva, Spain 80 cessively by close to 44% on average between Materials Supply/demand Q2 2016 and Q4 2017 amid tight supply, with Tronox Botlek, 76 European TiO2 supply became tight in the prices reaching the highest level since the the Netherlands second quarter of 2016 and this tightness has ICIS Quarterly contract began in Q4 2013. Kronos Nordenharom, 60 persisted for well over a year. European TiO2 contract prices were as- Germany Venator’s (former Huntsman TiO2 busi- sessed in Q4 2017 at €2.74-2.95/kilogram Kronos Ghent, Belgium 55 ness) extended disruption at its Pori plant in (KG), which typically reflects standard grade Cristal Thann, France 32 Finland, following a fire in early 2017 also ex- TiO2 – that is mainly used in the downstream Kronos Frederikstad, Norway 31 acerbated an already tight market in Europe. paints and coatings sectors. Precheza Prerov, 25 Demand has been solid, buoyed by some Czech Republic economic recovery in Europe. Demand in Eu- Technology Kronos Leverkusen, Germany 16.5 rope has also been boosted by some pre-buying TiO2 is produced from ilmenite, rutile or tita- Venator Duisburg, Germany 10 activity over recent months. There has also nium slag. Titanium pigment is extracted by Materials been some fluctuation in imports from China using either sulphuric acid (sulphate process) to Europe during 2017. There was an improve- or chlorine (chloride process). The sulphate mance from downstream decor and plastics ment in import availability from China into process employs simpler technology and can sectors, and solid performance from down- Europe during the second half of 2017, driven use lower-grade, cheaper ores. The chloride stream paints sector. TiO2 players will watch by the appreciation of the euro against the US route produces rutile-form TiO2, a purer the ramp-up of enator’s Pori operations in Fin- dollar and lacklustre demand in China. product with a tighter range of particle size land during 2018. They are also tracking Asia, While there is still some residual tightness using rutile as feedstock ore. The sulphate in view of the China’s environmental clamp- process tends to use ilmenite as feedstock ore down on production. China supply is likely to EUROPE TIO2 and produces rutile-form or anatase pigments. tighten and the industry is likely to consoli- RD Titan Group is involved in a 3-year re- date, said Simon Turner, CEO of Venator. €/kg, contract FD NWE 3.0 search project on its TiO2 or i-TiO2 pigment Tronox’s proposed acquisition of Cristal’s process, which is expected to reduce produc- TiO2 business is on track to close by Q1 2018. tion costs and have practically no waste gen- Tronox interim CEO Peter Johnston expects 2.8 eration. Argex said it has developed a chlo- the tightness in the global TiO2 market to con- ride-based technology allowing for lower-cost tinue into 2018. Argex is expected to start 2.6 production of TiO2 due to energy savings and commercial operations of its first 30,000 a flexible feedstock slate. tonne/year TiO2 train in Canada by 2020. 2.4 TNG Limited is working on its Mount Peake Outlook Vanadium-Titanium and Iron project in Aus-

2.2 Global TiO2 pigments demand is expected to tralia, which is expected to produce high grow by 4%/year, taking volumes to over 8.8m quality TiO2 grade product through the chlo- tonnes by 2025, said consultant Reg Adams ride process. ■ 2.0 Oct Oct from Artikol. He estimates China will account 2016 2017 for around 41% of global demand. He also ex- Access the archive of the Chemical Profiles pects the growth to be driven by strong perfor- A-Z at icis.com/subscriber/icb

www.icis.com 24-30 November 2017 | ICIS Chemical Business | 51

ICB_240818_044-051 Profile November17.indd 51 8/20/18 2:32 PM middle east chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Ruth Loh Singapore PET

Uses the extra stock fed into the overall supply middle east PET capacity Polyethylene terephthalate (PET) has a crys- stream will regulate the current market situa- ‘000 TONNES/YEAR talline structure; good chemical resistance to tion, stabilising the supply/demand balance Company Location Capacity mineral oils, acids and solvents; good electri- that is now heavier on the demand side. SABIC Yanbu, Saudi 750* cal resistance; low moisture absorption; re- This will alleviate depleted supply and re- Arabia sists combustion; and is self-extinguishing. It plenish it so the market’s supply/demand bal- Octal Salalah, Oman 450** can be recycled for other applications or re- ance will tilt over into higher supply while JBF Ras Al Khaimah, 400*** turned to its constituent monomers. demand is not expected to undergo any major UAE PET exists both as an amorphous (trans- changes. This may impact prices. *SABIC in August 2017 reduced its operating rate to 420,000 parent) and a semi-crystalline (opaque and tonnes/year **The Octal site also has 1m tonnes/year of PET bottle sheet white) thermoplastic, and can be made into Prices and sheet production capacity either a resin, fibre or film. The semi-crystal- Bottle grade PET is currently experiencing a ***Shut down in June 2017 with plans to reopen for business line PET has good strength, stiffness and global supply crunch because of the recent in January 2018 hardness while the amorphous PET has bet- plant production issues in regions such as ter ductility. Europe and the US, forcing western buyers Outlook The largest outlet is for synthetic fibres, fol- into Asia, including India (a supplier for the Bottle grade PET prices in the Middle East are lowed by bottle resin. PET film is used in elec- Middle East) for material. Bottle grade PET likely to hold stable for now, even though pro- trical applications and packaging. prices are impacted by feedstock prices, ducers in areas such as China are selling at namely purified terephthalic acid (PTA) and much lower prices. Supply/demand monoethylene glycol (MEG), along with Buyers in the GCC regions will still con- The Middle East’s bottle grade PET capacity crude oil prices. tinue to buy from GCC and Indian producers decreased this year when SABIC in Yanbu, Because of global supply disruptions and because the shipping time is much more Saudi Arabia reduced production capacity feedstock price changes, the prices for bot- manageable and this makes inventory man- from 750,000 tonnes/year to a 420,000 tle grade PET have been volatile in China agement easier. Unless they can afford to tonne/year operating rate for cost optimisa- and other parts of Asia towards the end of wait, they may not buy from China despite tion. JBF’s 400,000 tonne/year Ras Al Khaim- 2017. However, Middle Eastern bottle grade the better prices. ah facility in the UAE stopped production in PET prices have not been volatile. Towards Saudi Arabia’s SABIC, a major producer, June for a number of reasons. Octal’s produc- the end of 2017, prices have stayed stable- has already dropped operating rates. Oman- tion was steady through the year, but the to-soft. based Octal is debottlenecking now to reach supply crunch meant demand was height- Middle East PET prices were assessed 650,000 tonnes/year of PET. ened. Gulf Co-operation Council (GCC) buy- lower in the week ended 23 November, with There is talk in the market that JBF in the ers began looking at PET from Asia, namely prices dipping to $1,045-1,080/tonne FOB UAE is hopeful about restarting as soon as India and China. (free on board) GCC and $1,080-1,090/tonne possible. When JBF restarts, however, it is It is expected that when JBF resumes op- CFR (cost & freight) GCC. Market players said possible that the renewed supply might not erations – it aims to restart in early 2018 – this was because of uncertainty in the crude affect currently operating suppliers as much, oil market and weaker MEG prices. at least for the first few months, because cur- MIDDLE EAST PET In 2018, with the influx of bottle grade PET rent customers may not be willing to entrust resin from JBF, the extra supply from Octal, their PET needs to JBF until the company $/tonne, bottle grade, spot 1,150 and the foreseeably stable demand, prices has regained their trust in terms of certainty CFR GCC might experience downward pressure and of supply. Thereafter, the extra supply is ex- FOB GCC 1,100 not fluctuate as much on the upside. pected to regulate the market demand/sup- ply balance. 1,050 Technology The Middle Eastern PET market in 2018 To make PET resins, PTA and MEG are re- should not experience any major price fluctu- 1,000 acted to make a basic ester which is polymer- ations if the following conditions hold – glob- ised in a melt phase, polycondensation al and local demand are stable; JBF in Ras Al 950 finishing reactor. Khaimah, UAE, opens and begins running its Dimethyl terephthalate (DMT) is an alter- lines again; and Octal debottlenecks success- 900 native feedstock to PTA, but the PTA route is fully to ramp up production capacity to its preferred. The molten polymer is processed full 650,000 tonnes/year. ■ 850 Dec Nov either into fibres/filaments or sent to the 2016 2017 solid state polycondensation unit to make Access the archive of the Chemical Profiles bottle grade chips. A-Z at icis.com/subscriber/icb

52 | ICIS Chemical Business | 1-7 December 2017 www.icis.com

ICB_240818_052-057 Profiles December17.indd 52 8/20/18 2:39 PM europe chemical profile

Pavle Popovic London TDI

Uses above its standard impurity levels. This result- EUROPE TDI CAPaCITY Toluene di-isocyanate (TDI) is mainly used in ed in several polyurethane foam manufactur- ‘000 TONNES/YEAR flexible polyurethane (PU) foam, which has ers temporarily stopping production. Company Location Capacity outlets in upholstery, mattresses and automo- The German supplier eventually took back, at Ludwigshafen, 300 BASF tive seats. Other uses include semi-rigid its own cost, some unprocessed TDI still in cus- Germany foams and adhesives, paints, concrete sealers tomers’ tanks and changed its production pro- Dormagen, 300 Covestro and a crosslinking agent in PU coatings and cess to prevent further fluctuations in quality. Germany Kazincbarcika, 160 elastomers. In October, sources said that details on the BorsodChem issue were too unclear for them to fully com- Hungary Supply/demand prehend the impact it would have on the mar- Point-de-Claix, 125 Vencorex * Availability issues have been persistent in the ket. Some said that, as both products combine France Schwarzheide, 80 European TDI market both in 2016, when mul- to make flex foam, poylols supply might BASF Germany tiple production difficulties affected supply, lengthen if there was any TDI tightness due to *Vencorex’s Point-De-Claix facility no longer produces T80 TDI. and in 2017. Although at the start of 2017 BASF’s difficulties. It manufactures, instead, a specialty grade of TDI with availability levels were said to have lengthened Nonetheless, in November, most polyols operating rates unclear by some, the TDI market continued to have dif- market participants did not notice any change ficulties in sourcing volumes even after BASF in conditions, although a few TDI sources said dissolved in an inert solvent and reacted with brought its Ludwigshafen plant online. material was scarcer following the BASF news. phosgene to produce a crude TDI solution. The German supplier originally took the Additionally, during this time, between TDI can also theoretically be produced direct- 300,000 tonne/year facility offline in November September and November, Hungarian suppli- ly from dinitrotoluene by liquid phase car- 2016 due to a damaged reactor, but brought it er BorsodChem was on strict allocation fol- bonylation with o-dichlorobenzene. back online in May 2017. At first, sources had a lowing planned maintenance at its 160,000 Germany’s Bayer MaterialScience (BMS) de- muted reaction to the development mostly as tonne/year Kazincbarcika plant that began in veloped a route that carries out phosgenation BASF said that the facility would operate at re- July. In November, a company source said in the gas rather than the liquid phase. BMS duced rates with full repairs finishing in 2018. that the firm would complete a stock ramp-up started a 30,000 tonne/year pilot plant in 2004. The firm added that the plant would run in December. The technology was first commercialized at its with a back-up reactor in the meantime. What world-scale 250,000 tonne/year TDI plant in rates the site produced at were, therefore, un- Prices Shanghai, China and it has also used technolo- clear throughout 2017 and this was said to In the TDI market contract price increases gy in its new 300,000 tonne/year TDI plant in have caused issues for TDI business. BASF were the norm in 2016 and 2017. The price Dormagen, Germany, which came onstream in then had further difficulties in October when it midpoint of TDI firmed every month between late 2014. The firm since operates under the informed its customers that a grade of TDI March 2016 and August 2017. In 2017, up- name of Covestro for these products. manufactured at its Ludwigshafen plant in Au- stream toluene movements were not consid- gust and September may have contained con- ered a price driver by sources with supply Outlook centrations of dichlorobenzene significantly and demand dynamics playing more of a role Sadara Chemicals, a joint venture between in contract negotiations. Dow Chemical and Saudi Aramco, started up EUROPE TDI As a result, some polyurethane foam manu- a 200,000 tonne/year TDI facility in Jubail, facturers have spoken about their concerns re- Saudia Arabia in September. In November €/tonne, contract FD W Europe 3,200 garding price increases and mentioned that Middle East sources said material was being customers were looking to use cheaper, alter- sent to customers in Saudi Arabia for testing. native products. In August, prices rolled over The consensus among European market par- 3,100 due to the holiday season as participants ticipants is that volumes from the site will be looked to conclude deals before the summer mostly sent to the Middle East and Africa. 3,000 vacation period began. However, the aforemen- Whether this will translate to fewer exports tioned upwards price trend continued once from Europe to those regions and, therefore, 2,900 more from September and in October the price increased domestic supply is less agreed upon. midpoint rose to reach €3,140/tonne FD (free The Ludwigshafen plant is more of a focus for

2,800 delivered) W (west) Europe. sources. Many participants see the eventual full repair of the unit as a factor that could re- Technology lieve tightness in the TDI market. ■ 2,700 Dec Oct The main route is the nitration of toluene to 2016 2017 dinitrotoluene, followed by catalytic hydro- Access the archive of the Chemical Profiles genation to toluene diamine (TDA), which is A-Z at icis.com/subscriber/icb

www.icis.com 1-7 December 2017 | ICIS Chemical Business | 53

ICB_240818_052-057 Profiles December17.indd 53 8/20/18 2:39 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Jessie Waldheim Houston Ethylene

Uses Prices US ethylene capacity Ethylene is used in the manufacture of poly- Prices peaked in 2017 during Q1, amid turna- ‘000 TONNES/YEAR ethylene (PE), polyester, polyvinyl chloride rounds and outages at several US Gulf crack- Company Location Capacity (PVC), polystyrene (PS) and ethylene oxide ers and strong downstream consumption. In DowDuPont Freeport, Texas 3,155 (EO), as well as fibres and other organic chem- February, spot prices had risen to to a high of ExxonMobil Baytown, Texas 2,200 icals. PE accounts for 60% of global ethylene 36-38 cents/lb and contract prices to a high of Chevron Phillips Sweeny, Texas 1,966 demand. 35.75 cents/lb. INEOS Chocolate Bayou, 1,907 Prices moderated in Q2 as outages resolved Texas Supply/demand and continued falling into the middle of the LyondellBasell Channelview, Texas 1,859 US ethylene supply is expected to tighten late year as the several expected downstream pro- DowDuPont Plaquemine, 1,507 in 2017 as new downstream capacity has jects had not started up by mid-year. Louisiana come online ahead of expected new ethylene Hurricane Harvey in Q3 pushed prices Formosa Point Comfort, 1,496 capacity. Three new crackers and one idled higher, although the post-hurricane high in Plastics Texas cracker had been expected to come online late late September remained below the peak in Shell Norco, Louisiana 1,420 in 2017. One cracker started up in September, February. Westlake Lake Charles, 1,356 but the others are now expected in early 2018. Louisiana Some of the companies building these pro- Technology LyondellBasell La Porte, Texas 1,152 jects cited Hurricane Harvey for the delays. Commercial production of ethylene is carried LyondellBasell Corpus Christi, 1,134 The hurricane in late August caused ethyl- out by steam cracking hydrocarbon feed- Texas ene outages along the Texas coast into stocks. Natural gas liquids (NGLs) ethane and BASF Total Port Arthur, Texas 1,040 Louisiana. While most units were back online propane are the primary feedstocks in the US ExxonMobil Baton Rouge, 1,000 within weeks, several outages continued into due to their abundance from shale gas, while Louisiana Q4. The hurricane also caused outages in oil-based naphtha is the primary feedstock in DowDuPont Taft, Louisiana 990 downstream markets, which took some pres- Europe and Asia. ExxonMobil Beaumont, Texas 900 sure off supply levels during Q3. NOVA Chemicals Geismar, Louisiana 885 Ethylene inventory levels at the close of Q3 Outlook Shell Deer Park, Texas 835 had increased from the prior quarter and from With the delay of several cracker projects into Chevron Phillips Cedar Bayou, Texas 803 the prior year, according to the American Fuel early 2018, ethylene supply is expected to be Chevron Phillips Port Arthur, Texas 803 & Petrochemical Manufacturers (AFPM). tight early in the year. While Dow started up DowDuPont Orange, Texas 680 Earlier in 2017, ethylene supplies also had its cracker in Freeport, Texas, in September, Eastman Longview, Texas 640 tightened due to a combination of offline crack- the start-up of three other projects was post- Flint Hills Port Arthur, Texas 621 ers and strong consumption into PE during Q1 poned. These are: Resources and part of Q2. However, ethylene supplies ■ ExxonMobil at Baytown, Texas (1.5m LyondellBasell Morris, Illinois 549 lengthened in the middle of the year as outages tonnes/year expected mid-2018, previously Occidental Ingleside, Texas 544 resolved and as PE consumption eased. end 2017) Chemical/ ■ Chevron Phillips Chemical at Cedar Bayou, Mexichem US ETHYLENE Texas (1.5m tonnes/year expected Q1 2018, Sasol Lake Charles, 482 previously end 2017) Louisiana Cents/lb ■ NOTE: Top 25 listed 40 Indorama at Lake Charles, Louisiana Pipeline, spot DEL (370,000 tonnes/year expected early 2018, Contract DEL previously end 2017) ■ Sasol at Lake Charles, Louisiana (1.5m 35 As these and other projects come online, tonnes/year, expected H2 2018) supply could move into a more balanced or Supply is not expected to be constrained by 30 even a long position. Ethylene capacity is feedstock ethane supply, which is expected to expected to expand by more than five mil- remain adequate. However, crude oil values 25 lion tonnes/year by mid-2018 with another are lower now than when many of these eth- three million tonnes/year planned by the ylene and related downstream projects were

20 end of 2018. planned, which has narrowed the cost advan- Other 2018 ethylene projects include: tage US production receives from using ■ Formosa Plastics at Point Comfort, Texas ethane as a feedstock. ■ 15 Dec Nov (1.2m tonnes/year, expected Q2 2018) 2016 2017 ■ Shintech at Plaquemine, Louisiana Access the archive of the Chemical Profiles (500,000 tonnes/year, expected early 2018) A-Z at icis.com/subscriber/icb

54 | ICIS Chemical Business | 8-14 December 2017 www.icis.com

ICB_240818_052-057 Profiles December17.indd 54 8/20/18 2:39 PM Asia chemical profile

Joson Ng Singapore Plasticizers

USES year. In the middle of the year, Asian exports ASIA PLASTICIZERS CAPACITY Plasticizers – phthalate and non-phthalate- of diisononyl phthalate (DINP) increased to ‘000 TONNES/YEAR based – are used in flexible polyvinyl chlo- ease production losses in Europe after Evon- Company Location Capacity ride (PVC) to provide plasticity or elasticity ik declared force majeure on its plasticizers Nan Ya Plastics*** Mailiao, Taiwan 350 to PVC film, roofing, flooring and wall cover- in Europe after an explosion and fire at its Shandong Qilu Zibo, China 300 ings. As additives, they increase the flexibil- Antwerp facility. Plasticizers*** ity and durability of the products. In the third quarter, exports of DINP in- Zhenjiang Union Zhenjiang, China 210- Along with its use as a plasticizer, dioctyl creased once again, this time to the US in the Chemical 240 phthalate (DOP) can also be used as a hydrau- aftermath of Hurricane Harvey. Industrial*** lic fluid, a dielectric fluid and a solvent. Dioc- Demand from the US has remained Aekyung Ulsan, South 200 *** tyl terephthalate (DOTP) is a non-phthalate healthy from the northeast Asian producers’ Petrochemical Korea plasticizer used in products including plastic point of view since then and will continue Shandong Qilu Zibo, China 200 Plasticizers** films, home flooring and automotive parts, as until the seasonal lull at the end of the year. Taizhou Union Taizhou, China 200 well as some adhesives, coatings and sealants. Chemical Industrial* PRICES Zhuhai Union Zhuhai, China 190 SUPPLY/DEMAND With the year winding down to a close, plas- Chemical The supply and demand situation has been ticizers markets will enter into a traditional Industrial*** largely balanced in northeast Asia during the lull season. Plasticizers prices in the Chinese LG Chem *** Naju, South Korea 160 year, but there were occasional upticks in domestic market were generally weak since Shandong Shandong, China 150 prices, namely in July, caused by short supply late October as demand from the down- Hongxin*** in China. The short supply was attributed to stream PVC market fell. Prices in the import Zhejiang Qingan*** Zhejiang, China 150 environmental inspections by the authorities market took a hit as well. *DINP; **DOTP; ***DOP as some plants were shut or running at lower DINP and DOTP, however, enjoyed some operating rates. Supply in the domestic China support at the start of the third quarter as Click here to see an interactive plant market was largely snug until the middle of markets in North America show more de- map October, when prices started their downtrend mand compared to Asian markets. in line with the end-of-the-year lull. Late in November, one northeast Asian Plasticizers prices were also impacted by producer of 2-ethylhexanol (2-EH) decided is expected to pick up in Japan from the developments in Europe and in the US this to bring forward and extend its turnaround, housing sector. and that may have some impact on DOP and There is at least one northeast Asian pro- One northeast Asian producer of 2-EH DOTP spot prices. ducer looking to purchase more feedstock decided to bring forward and extend its isononanol (INA) in 2018 to capitalise on this turnaround, and that may have some TECHNOLOGY increase in demand. impact on DOP and DOTP spot prices DOP and DINP are produced by the esterifi- Meanwhile in Malaysia, one producer is cation reaction of an alcohol with phthalic aiming to open a new plasticizer plant with a anhydride (PA), using a catalyst. For DOP, combined capacity of about 120,000 tonnes/ ASIA PLASTICIZERS 2-EH is used, while isononyl alcohol is used year some time at the start of 2018. The plant is for DINP. After esterification, excess alcohol expected to house DINP and DOTP units and $/tonne, spot is removed and the plasticizer is filtered. one unit producing speciality plasticizers. 1,300 DINP CFR China This is typically done in a batch reactor. Elsewhere, in Turkey antidumping duties DINP FOB Asia NE DOP CFR Asia E Regulatory restrictions and evolving con- (ADDs) on South Korean imports of DOP and DOTP CFR China 1,200 sumer preferences have prompted many DOTP have been imposed. plasticizers users to remove phthalates from Imports of these plasticizers will incur a formulations. duty of 7.99-12.57% over the cost, insurance 1,100 Environmental problems with the low mo- and freight (CIF) value, according to sources. lecular weight phthalate-based plasticizers While the latest ADD may come as a blow have continued to prompt development of new to South Korean producers, they were gener- 1,000 plasticizers based on renewable resources. ally confident that demand from other re- gions could offset any potential loss of ex- ■ 900 OUTLOOK ports to Turkey. Nov Nov Demand in the final quarter is expected to 2016 2017 weaken in Asia during the festive season. Access the archive of the Chemical Profiles Looking ahead into 2018, demand for DINP A-Z at icis.com/subscriber/icb

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ICB_240818_052-057 Profiles December17.indd 55 8/20/18 2:40 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Peter Gerrard London Acetic acid

USES higher prices towards the end of the year, and EUROPE ACETIC ACID CAPACITY The largest outlet for acetic acid is the manu- it is expected the Eastman outage will contin- ‘000 TONNES/YEAR facture of vinyl acetate monomer (VAM), ue to exert pressure on prices in the earlier Company Location Capacity used principally in paints and coatings. months of 2018, after which the recent decou- BP Hull, UK 532 VAM is a mature product with growth of pling of acetic acid from methanol prices is Azot Severodonetsk, 150 around GDP levels. likely to disappear. Severodonetsk Ukraine The second-largest derivative, purified EuroChem Nevinnomyssk, 150 terephthalic acid (PTA), a precursor for poly- TECHNOLOGY Russia ethylene terephthalate (PET), is itself used for The dominant process is methanol carbonyla- Metanolsko- Kikinda, Serbia 100 bottle resins and polyester fibres, although a tion, which accounts for more than 65% of Sircetni Komplex potentially large European producer of PTA world capacity. Other processes include the – (MSK) has not found it possible up to now to enter oxidation of acetaldehyde and the liquid- Lenzing AG Lenzing, Austria 25 into commercially viable production. phase oxidation of n-butane or naphtha. Sekab Domsjo, Sweden 23 Acetic anhydride and solvents (ethyl ace- One producer uses a different process, tate, butyl acetate) are the third- and fourth- making acetic acid from beechwood. This is with contractual obligations, supply to the do- largest applications, respectively. not a commonly adopted method. It is be- mestic US market. Any surpluses usually lieved that acetic acid can also be created as a available to European consumers were there- PRICES byproduct of a process of acetylation applied fore eliminated, rendering the market untypi- European prices have generally risen during to certain woods. This is an innovative tech- cally tight in the last quarter. 2017, although there was a noticeable soften- nology that may lead to some marginal in- ing in the third quarter, principally in contract crease in output, but is unlikely to contribute OUTLOOK values, with a more short-lived dip in spot significantly to overall production. The first part of 2018 will probably continue numbers for truck business. The gains made to be dominated by the fallout from the East- in the first half of 2017 were on the back of SUPPLY/DEMAND man outage. While the plant may be in opera- higher methanol costs. The European acetic acid market was fairly tion again at the beginning of the year, a re- Softer prices for the feedstock in quarter balanced for the first half of 2017. There had sumption of full capacity production may three were similarly responsible for a down- been an expectation of tightness in the early take longer and yet more time be required for ward inflection in the same period. Hurricane months of the year because of planned main- the producer to replenish normal inventory Harvey at the beginning of the autumn trig- tenance work, and prices were rising in Asia, levels. Normalisation of the world market gered a rise in prices and, just as the effects of specifically China, but the market was not should not be a protracted process but should that event were receding from the market, a troubled by these events, and there was no take a little longer to be accomplished. major fire in the Eastman plant in the US rein- shortage of material. This development aside, participants in forced the strength of prices. MSK’s 100,000 tonne/year plant in Kikin- the European market do not foresee major Larger spot parcels (not specifically as- da, Serbia, had come back up, adding to Euro- events that could effect a significant change sessed by ICIS) were especially subject to pean supply in 2017. However, Russian pro- from this year. Some feel that it will again be- ducer EuroChem kept to its policy of selling come balanced to long, with a concomitant EUROPE ACETIC ACID only within its own territory. adjustment to prices to bring them back in Data from statistics agency Eurostat re- line with where they were before the crises €/tonne, contract FD NWE 600 vealed there were significantly fewer imports of autumn 2017. in the first half of the year than in 2016, and Others consider that the market will not the volume began to reach higher levels only be subject to deflationary conditions. So far 590 from June. The tonnage again fell sharply in as can be judged, the price of feedstock September in response to events on the other methanol will be firm, and high input costs 580 side of the Atlantic. and increasingly stringent environmental Hurricane Harvey had devastating effects, controls in Asia will militate against sub- 570 chiefly on logistics, in the main area of pro- stantial imports from that continent. These duction for export of acetic acid from the US. factors can also be seen against a generally

560 The hurricane occurred at the end of August, benign economic background. and this led to smaller cargoes to Europe in Acetic acid is expected to move more or September. Added to that, an explosion at the less in line with GDP growth. ■ 550 Jan Oct Eastman acetic acid plant in Kingsport, Ten- 2017 2017 nessee radically affected the global flow of Access the archive of the Chemical Profiles product. Producers prioritised, consistent A-Z at icis.com/subscriber/icb

56 | ICIS Chemical Business | 15 December 2017-4 January 2018 www.icis.com

ICB_240818_052-057 Profiles December17.indd 56 8/20/18 2:40 PM ASIA chemical profile

Patrick Han Singapore Caustic soda

Uses gration and closures of smaller plants which ASIA CAUSTIC SODA CAPACITY Globally, the largest end use of caustic soda is do not meet environmental standards. ‘000 TONNES/YEAR from the alumina industry followed by the Company Location Capacity manufacture of pulp and paper and the pro- Prices Formosa Plastics Mailiao, Taiwan 1,330 duction of organic and inorganic chemicals, Prices have gone up dramatically since Sep- Xinjiang Zhongtai Urumqi, China 1,200 the textiles industry, and manufacture of tember 2017 in Asia due to extremely tight Chemical Industry soaps and detergents. supply and booming demand from buyers in Tosoh Nanyo, Japan 1,125 In 2017, it is the alumina industry’s demand the region. Prices in China have largely affect- Dongying Jinling Dongying, China 800 for caustic soda which has driven the surge in ed the regional prices. Prices of chlorine, of Chemical Industry global prices. Major alumina refiners are con- which caustic soda is the co-product, has been Ciping Xinfa Huayu Shandong, 800 centrated in Asia, with countries such as hovering around negative territory for most of Alumina China China, Australia, India, Vietnam and the Phil- the year, which leave chlor-alkali producers in Beiyuan Chemical Shenmu, China 800 ippines all having major alumina producers. China seeking better returns from caustic soda. Industry Tight environmental inspections in China Dongying Huatai Shandong, 750 Supply/demand from September to October led to low operat- Chemical Group China The top five end-use industries of caustic ing rates of producers which further limited Hanwha Chemical Yeosu, South 730 Korea soda are alumina, organic chemicals produc- supplies in the market. Shanghai Chlor-Alkali Caojing, China 720 tion, textiles and detergents, pulp and paper Producers in Japan and South Korea both Chemical (SCAC) and inorganic chemical production. reported extremely tight spot situations PT Asahimas Cilegon, 700 The northeast Asia region is a net exporter to throughout much of 2017, which saw most of Chemical indonesia Australia, India, southeast Asia and the US the international spot demand from China. Shandong Haili Zibo, China 640 West Coast. Southeast Asia has some local pro- When domestic prices in China were higher Chemical duction in Indonesia and Thailand, but overall than export prices, Chinese producers were Tianjin Dagu Tianjin, China 600 demand in the region far outweighs its supply, very reluctant to spare any volumes for ex- Befar Group Binzhou, China 600 therefore requiring caustic soda users constant- port, which further spiked export prices. LG Chem Yeosu, South 500 ly sourcing cargoes from northeast Asia. Prices have shown softening signs since the Korea Australia has become a prominent buyer of end of November as production cuts of 30% Wanhua Chemical Ningbo, China 500 caustic soda due to the presence of multiple from 15 November to 15 March ordered by Ningbo Donggang Ningbo, China 500 alumina refineries. It has been sourcing cargoes the Chinese government on alumina refiner- Electrochemical both from northeast Asia and the US Gulf. ies has diminished domestic demand and Tokuyama Tokuyama, 490 China has the largest caustic soda produc- prices in China, which led producers to soften Japan tion capacity in the world at more than 45% their export prices too. Juhua Group Quzhou, China 460 share compared to any other country or re- NOTE: Top 18 sites by capacity gion. Currently it has no expansion plans as it Technology consolidates domestic production with inte- Nearly all caustic soda is generated by the end-users of caustic soda. In Asia, demand electrolysis of sodium chloride solution using from new textile and rayon facilities in south- ASIA CAUSTIC SODA mercury, diaphragm or membrane cells. For east Asia and alumina capacities in the Mid- every 1 tonne of chlorine, 1.1 tonnes of 100% dle East will further increase demand for the $/dmt, liquid, spot FOB Asia caustic soda is generated. In Asia, the domi- cargoes. Supply in Asia is heard to be stable 750 nant technology is membrane cells, followed with no major new capacities to be launched 700 by diaphragm cells and lastly mercury cells. in the next year. Therefore tight supply/de- Membrane cells hold many advantages mand dynamics are likely to continue in Asia, 650 over the other cells, including being the most including Australia. 600 cost competitive, one of the most environ- Chinese domestic demand is likely to further mentally friendly and having the ability to increase on integrations of smaller alumina pro- 550 produce highly concentrated caustic soda. ducers with larger state-owned enterprises. And Future chlor-alkali projects in Asia will most the impact of environmental inspections in 500 likely be of the membrane cell process. China will be closely watched as they impact 450 supply/demand balances of caustic soda in the Outlook country, which also influences global prices. ■ 400 Dec Dec Growth in caustic soda demand and trade 2016 2017 flow in Asia is, and will, still be led by the alu- Access the archive of the Chemical Profiles mina industry, which is one of the largest A-Z at icis.com/subscriber/icb

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Leela Landress Perez Houston Fatty acids

Uses ­renderer-grade bleachable fancy tallow (BFT) us fatty acids plants Fatty acids and their chemical derivatives or packer-grade­ BFT average from the Company Location have a place in almost every phase of modern ­previous month and an adder number as a VVF North America Montgomery, Illinois living. Fatty acids are largely used in key component­ for the monthly contract Emery Oleochemicals Cincinnati, Ohio ­cosmetics and toiletries such as shampoos, ­calculation. Some addition of lower-priced PMC Biogenix Memphis, Tennesee liquid detergents, fabric softeners and body choice white grease (CWG) is also being used lotions. They are also used as lubricants and in the feedstock mix. Twin Rivers Quincy, Massachusetts Technologies plasticizers in rubber and polymer process- C18 stearic rubber-grade prices on a DEL Vantage Chicago, Illinois ing as they improve the performance of basis in early December 2017 were assessed at Oleochemicals paints, plastics, lubricants, textiles­ and rub- 40.75-45.75 cent/lb, down by 1.5 cents/lb P&G Chemcials Cincinnati, Ohio ber ­products. from November. C18:1 oleic fatty acids were NOTE: Capacities not available Additionally, fatty acids add wanted at 57.75-61.25 cents/lb DEL for December­ ­qualities to foods – mainly to modify other 2017 business, also down 1.5 cents/lb. well-known materials. Meanwhile, C16 palmitic fatty acids on a ­feedstock price variation through 2018. Over- US DEL basis were at 59-63 cents/lb for capacity will remain an issue as rationalisa- Supply/demand ­December 2017, down 1 cent/lb from tion and new uses both remain distant targets. The global oleochemicals industry is facing ­November. The basis for the C16 palmitic The fatty acids market globally likely has 10 years of overcapacity and supply at about acids on a DEL basis in the US Midwest about 2m tonnes/year of excess capacity. There 2m tonnes of excess capacity while fatty spread is formed by the FOB southeast Asian is talk about consolidation and shutdowns as ­alcohols supply is at about 1m tonnes of prices plus freight and storage. the solution to the oversupply. However, some ­overcapacity. In Asia, fatty acids suppliers mostly industry experts­ do not agree as some of the In recent years, global fatty acids demand ­maintained their offers in mid-December even most ­profitable plants are the oldest. has increased as a result of end-use with buyers lowering their buying indications­ On the mergers and acquisitions (M&A) ­consumption growth, as well as strong growth due to further falls in feedstock palm oil prices. front, US-based vertically integrated producer of oleochemicals­ supply (fatty acids, fatty Asia palm oil prices have been on a general Vantage Specialty Chemicals was acquired by ­alcohols, glycerine). ­decline since early November,­ with lower private equity firm H.I.G. Capital in ­exports and increased stock in November ­September 2017 from another private equity Prices ­asserting further ­downward pressure. firm, The Jordan Company. It is H.I.G.’s sec- The tallow-based fatty acids market in the US Some suppliers in Asia maintained they ond time buying Vantage, as it bought Croda’s follows feedstock trends. US C18 tallow- were comfortable with their inventories and US oleochemicals business in 2008 (forming based triple-pressed stearic acid (TPSA) believed there was little need to adjust their Vantage), which it then sold to The Jordan ­prices were assessed at 46.25-50.25 cents/lb ­offers with the year-end holiday approaching. Company in 2012. DEL US in early December 2017, down by 1.5 Another possible solution to overcapacity cents/lb from the previous month. Feedstocks is new uses, but the sector has not seen any Many formula-based buyers use the Fatty acids are derived primarily from large new uses arise in recent years. ­vegetable oils such as palm and coconut oil. In previous years, the oleochemicals sector US FATTY ACIDS Most fatty acids production is in southeast looked to demand in China as the solution to Asia, particularly Malaysia, Indonesia and the overcapacity. However, that scenario looks to $/tonne, contract DEL Philippines. Palm oil is the raw material used have changed. China’s economy will continue 1,600 C18 oleic acid C18 stearic acid, rubber grade C18 stearic acid, triple pressed in Malaysia and ­Indonesia, while coconut oil is to grow at slower rates in coming years as it 1,500 used in the Philippines. rebalances from a manufacturing model In North America, fatty acids are produced ­towards consumption and services. 1,400 primarily from tallow fats. The basic acids The outlook for oleochemicals also looks 1,300 from this production are the C18 stearic acids. bearish as feedstock prices are forecast to The production process in the US utilises ­remain low. Historically, low feedstock prices 1,200 bleachable fancy tallow (BFT) for the main also equate to low margins for the sector. feedstock, which is rendered from cattle and ­Experts believe that fats and oils prices will 1,100 hog material after slaughter. Glycerine is a remain low in the foreseeable future. ■ 1,000 ­co-product of fatty acid production. Additional contribution from Jackie Wong in Singapore and Joseph Chang in New York 900 Jan Dec Outlook 2017 2017 US tallow-based fatty acids supply is likely to Access the archive of the Chemical Profiles remain long and pricing in line with A-Z at icis.com/subscriber/icb

58 | ICIS Chemical Business | 5-11 January 2018 www.icis.com

ICB_240818_058-065 Profiles January18.indd 58 8/22/18 3:12 PM EUROPE chemical profile

Nick Cleeve London Butyl acetate

Uses return to a balanced situation. europe and russia butac capacity Four butyl acetates exist, but only normal BASF also lifted its almost year-long force ‘000 TONNES/YEAR butyl acetate (n-butyl acetate) and iso-butyl majeure in August, though production re- Company Location Capacity acetate are of commercial importance. The mained at reduced rates. Oxea Marl, Germany 100 major outlet for n-butyl acetate (butac) is as a Market conditions returned to stability dur- INEOS Antwerp, Belgium 95 solvent for lacquers because it gives good ing the fourth quarter, with balanced supply BASF Ludwigshafen, 90 flow and brush resistance when used in and demand largely within the expectations Germany film-coating resins such as cellulose nitrate, of market players. Dmitrievsky Kineshma, 36 cellulose acetate butyrate, ethyl cellulose, It was confirmed in early December that Chemical Plant Russia polystyrene (PS) and methyl methacrylate production of butac at Ludwigshafen had re- Solvent Wistol Oswiecim, 18 (MMA) resins. turned to normal rates. Poland It is also widely used as a solvent in the Azot Nevinnomyssk, 18 preparation of artificial leathers, textiles and Prices Nevinnomyssk Russia plastics, as an extractant for oils and pharma- In February, butac prices surged to their high- Carbohim Moloma, Russia 6 ceuticals, and as an ingredient for perfumes est levels since ICIS records of its price in and synthetic flavours. euros began in November 1999, on news of OXEA) are all producing at normal rates. Butac and butanol can be used as a dehy- OXEA’s declaration of force majeure and a This situation has the potential to cause drating agent because they form a ternary aze- subsequent tightening of supply. supply in Europe to become long, which otrope with water. Feedstock NBA costs also surged to record would put downwards pressure on prices. levels in the first half of the year on tightness The main question for 2018 is whether, de- Supply/demand largely caused by BASF declaring force ma- spite this lengthening of supply and demand European supply of butac was limited for jeure on NBA from Ludwigshafen following likely to remain stable, prices will remain at much of 2017 due to a force majeure declared the explosion in October 2016. BASF is the levels consistent with 2012-2014 or will fall to by BASF in October 2016 following an explo- largest producer of NBA in Europe. This incen- the lower levels seen in 2015-2016. sion and shutdown of its plant in Ludwig- tivised producers to sell additional NBA rather Several sources said that they expect some shafen, Germany. than using it to produce butac and supported downward pressure on pricing in early 2018, In addition, OXEA had an unplanned shut- continued high downstream price levels. though they did not believe that prices would down and declared force majeure in Febru- Prices steadily decreased throughout the return to the levels seen immediately before ary, following a technical issue at their plant second half of 2017 as availability of butac BASF declared force majeure in 2016. in Marl, Germany. This further tightened Eu- and NBA eased, but remained significantly A buyer said that it expected pressure from ropean supply. above levels seen in 2016 before BASF de- its downstream customers to reduce prices now Limited imports, tightness in feedstock n- clared force majeure. that BASF’s force majeure has ended, which butanol (NBA) and the absence of BASF kept would put pressure on the prices it is paying for the market tight until July-August, when sea- Technology butac in order to maintain its margins. sonally weaker demand allowed supply to Butac is produced by esterifying acetic acid The source also said that it expected com- with butanol in the presence of sulphuric petition on pricing from Russian and Polish EUROPE BUTAC acid, which acts as a catalyst. The acetic acid, producers, who were more active than usual butanol and sulphuric acid are heated in a in northwest Europe during BASF and OX- €/tonne, spot FD NWE reactor to 89˚C (192˚F). EA’s production issues. 1,600 Vapours containing butac, butanol and water However, upstream factors will also be a 1,500 are removed and condensed. The top layer is strong influence, with higher crude oil and fed to a low boiler column where unreacted al- propylene prices opposing the downwards 1,400 cohol is flashed off and recycled to the reactor. pressure caused by the normalised supply 1,300 The crude ester mixture undergoes a sec- situation. ond distillation to separate the butac from Price movements for key feedstock NBA 1,200 other byproducts. could also be influential on butac prices. NBA is expected to be stable to soft but supply limi- 1,100 Outlook tations caused by scheduled shutdowns may 1,000 BASF’s resumption of normal production rates limit further price decreases which could be at Ludwigshafen has returned the European passed through to butac. ■ 900 Dec Dec butac market to the structurally long situation 2016 2017 last seen in September 2016 where the three Access the archive of the Chemical Profiles major European producers (BASF, INEOS and A-Z at icis.com/subscriber/icb

www.icis.com 5-11 January 2018 | ICIS Chemical Business | 59

ICB_240818_058-065 Profiles January18.indd 59 8/22/18 3:12 PM ASIA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

YUANLIN KOH Singapore MEK

Uses small domestic Chinese plants were forced to ASIA MEK CAPACITY Methyl ethyl ketone (MEK) is mainly used as a shut when authorities cracked down on them ‘000 TONNES/YEAR low-boiling solvent for nitrocellulose, acrylic amid stricter environmental regulations. Other Company Location Capacity and vinyl surface coatings. More than half of major Chinese MEK plants, which mainly Maruzen Ichihara, Japan 170 global demand is derived from the paints and focus on exports, were also heard to be running Tasco Chemical Lin Yuan, Taiwan 120 coatings industry. MEK can also be used in on reduced capacities due to ongoing environ- Zibo Qixiang Zibo and 100 rubber-based industrial cements, low-tempera- mental inspections or logistical issues which Shandong, China ture bonding agents and as an azeotropic sepa- prevented them from exporting. JXTG Kawasaki, Japan 90 ration solvent for printing inks. It is also a com- In the tight market, Japanese suppliers were Tonen Kawasaki, Japan 90 ponent of the solvent system used in producing only concentrating on fulfilling contractual obli- CNPC Lanzhou Lanzhou, China 60 magnetic tape. MEK is also a solvent required gations and catering to their domestic market. Chemical for the polymerisation processing of polysty- There was little to no spot cargoes available. Fushun Fushun, China 55 rene (PS), acrylonitrile butadiene styrene (ABS) Traders for Japanese MEK manufacturers had Petrochemical and styrene butadiene rubber (SBR). only limited lots to sell every few months. At Hebei Zhongjie Cangzhou and 42 the end of 2017, only one supplier was heard to Petrochemical Daqing, China Supply/demand be offering any spot cargoes in the Asian market. Isu Chem Shandong Shangdong, 40 2017 found Asian suppliers banking on the Dongming China open arbitrage window to Europe when Prices Xinjiang Dushanzi Dushanzi, China 40 Shell’s refinery and petrochemical site in Asian MEK spot prices trended up in August Tianli Pernis, the Netherlands, declared a string of 2017 on tight supply after Asian suppliers sold Ningbo Haiyue Zhejiang, China 40 force majeures across its production lines, in- the majority of cargoes to Europe and the US. Idemitsu Kosan Tokuyama, Japan 40 cluding MEK, after suffering a fire and power Spot prices spiked from November, with no NOTE: Top 12 plants listed by capacity outage on 29 July 2017. signs of slowing down with demand outstrip- A full list of plants and projects capacities, The arbitrage window to the US opened ping supply. Towards the end of 2017, north- forecasts, production volumes and after Hurricane Harvey swept in late August. east Asian buyers were heard to be securing operating rates are available on the As no North American plant produces MEK, material at least two months in advance. A ICIS Supply and Demand database consumers depend completely on imported deal for a February cargo was heard at $1,690/ material. With the ongoing situation in Eu- tonne CFR (cost and freight) NE (northeast) reduced operating rates in larger plants. rope, MEK went on allocation, even after the Asia. Offers for February cargoes to the same Japanese plants will also be undergoing bi- force majeures were lifted. region were heard around the range. ennial scheduled turnarounds, with very lim- These factors have led to a tightening in the Between June and December, prices rose by ited spot cargoes to offer the wider market. Asian MEK market, as Asian suppliers divert- about 60% on an ever-tightening supply. Buy- With the majority of suppliers giving priori- ed their cargoes to Europe and the US, seeking ers may be forced to accept higher offers if this ty to their domestic customers and fulfilling lucrative margins. market condition persists. their contractual obligations in 2018, the tight The market became even tighter after several market situation is not likely to ease anytime Technology soon. As a result, sources agree that prices are ASIA MEK The main commercial route is the dehydro- not likely to see a downturn at least in the near genation of secondary butanol. The alcohol term, on the back of stable-to-strong demand. $/tonne, spot CFR 1,800 vapour is fed into a multi-tubular reactor Some sources said that end-users are feel- NE Asia SE Asia CFR India containing zinc or copper oxides as catalysts. ing the heat and have turned to other solvents The reaction occurs at 400-500˚C (752-932˚F) like ethyl acetate (EA) to replace part of MEK 1,600 and pressures of less than 4 bar. A newer without impacting the quality of the end- technology involves the direct oxidation of products. The end-users will have to look for 1,400 n-butene in solution using palladium and other alternatives to replace MEK if tight sup- cupric chlorides as catalysts. MEK can also ply and high prices continue. 1,200 be made as a by-product in butane-based Southeast Asia and South Korea are entire- acetic acid manufacture. ly dependent on northeast Asia supply. Any

1,000 disruption in the regular flow of supply will Outlook hit them hard, which the latter part of 2017 Asia spot availability is expected to be tight in had shown. ■ 800 Jan Dec the near term with ongoing environmental in- 2017 2017 spections in China, which have forced clo- Access the archive of the Chemical Profiles sures of several smaller domestic plants, and A-Z at icis.com/subscriber/icb

60 | ICIS Chemical Business | 12-18 January 2018 www.icis.com

ICB_240818_058-065 Profiles January18.indd 60 8/22/18 3:32 PM Europe chemical profile

Melissa Bartlett London Fatty acids

USES SUPPLY/DEMAND cause of tighter availability, driven by a short- Fatty acids and their chemical derivatives are The global oleochemicals industry is facing age in feedstock tallow or animal fat, due to largely used in cosmetics and toiletries such 10 years of overcapacity and supply at about continuing heavy use in the biodiesel indus- as shampoos, liquid detergents, fabric soften- 2m tonnes of excess capacity while fatty alco- try, and the subsequent reduction in the sup- ers and body lotions. hols supply is at about 1m tonnes of overca- ply pool available for the oleochemical sector. They are also used as lubricants and plasti- pacity. In recent years, global fatty acids de- In the third quarter, prices in Europe were cizers in rubber and polymer processing be- mand has increased as a result of end-use assessed down again for both tallow and palm- cause they improve the performance of consumption growth, as well as strong growth based material. Trends in upstream and global paints, plastics, lubricants, textiles and rubber of oleochemicals supply (fatty acids, fatty al- pricing influenced price discussions in the products. cohols, glycerine). quarter, with market participants adding that Additionally, fatty acids add qualities to In the European market, supply and demand they had noted greater decreases in palm- foods – and other materials. remained fairly well balanced and stable based product while tallow-based acids gained through much of 2017, after starting the year some premium over vegetable-based material FEEDSTOCKS with somewhat tighter conditions on the back although still registered some softer sentiment. Fatty acids are derived primarily from vegeta- of limited feedstock availability and high prices. In the fourth quarter, prices were again ble oils such as palm and coconut oil. Palm There remains some differences between dif- stable to slightly soft amid largely steady oil and palm kernel oil are the raw material ferent acids. In particular availability of oleic fundamentals. used for fatty acid production in Malaysia and acid in Europe was consistently described as Indonesia, while coconut oil is used in the tighter than other fatty acids in Europe. OUTLOOK Philippines. Typical season trends continued to be ob- An uncertain raw material price outlook will Fatty acid production in Asia, particularly served through the year with the market seen continue to affect both buying and selling sen- in southeast Asia, accounts for around 80% of as relatively quiet amid the traditional summer timent globally in 2018. global fatty acids production. slowdown, particularly in the south of Europe. With palm oil prices remaining volatile From 2010-2015, global fatty acids capacity throughout 2017 and at times, moving against more than doubled, and it nearly tripled in PRICES seasonal patterns and market expectations, southeast Asia, with Indonesia seeing five- Prices in Europe ended 2016 under consider- buyers in Asia have been particularly cau- fold growth. able upward pressure, amid tight conditions. tious with restocking activities and operated With capacity growth outpacing demand, In the first quarter of 2017, contract prices in- mostly hand-to-mouth. the global market is expected to remain over- creased without exception, due to a feedstock After palm oil production was severely af- supplied for some time. supply shortage in Europe, albeit amid mini- fected by the El Nino in 2016, many had ex- In Europe, fatty acids are also produced mal purchases as buyers wait for softer prices. pected 2017 to be a year of recovery, but data from tallow fats. The basic acids from this Feedstock tallow prices were on the rise be- showed that while production volume in production are the C18 stearic and oleic acids. cause of competitive demand from the energy 2017 was better than 2016, it still fell short of Glycerine is a co-product of fatty acid sector, supply issues from inefficient produc- 2015 levels. production. tion and on the back of a spike in alternative In terms of global supply, the issue of feedstock, vegetable oils. chronic overcapacity persists and most pro- EUROPE FATTY ACIDS Palm prices were also on an upward trajec- ducers have been countering it by reducing tory, driven by market shortage. Heat from El their output to protect their margins. €/tonne, contract FD NWE Nino in 2016 had adversely affected palm pro- Looking to the European market, several 1,500 C18 oleic acid standard palm oleic C18 stearic acid triple pressed palm stearic duction and yields in Indonesia and Malaysia. players have said they expect limited change C18 tallow distilled standard, oleic 1,400 C18 tallow fully hydrogenated stearic There was stiff competition between tallow in the market in the first quarter of 2018. and palm fatty acids, with some customers Contracts settled for Q1 2018 ahead of the 1,300 choosing to buy the cheaper tallow-based end of 2017 were broadly stable. Domestic de- 1,200 products. This, in some instances, offset some mand fundamentals are also expected to re- of the upward pressure on palm-based prod- main largely steady through the start of the 1,100 uct, especially on palm oleic acid. year, and as yet, players are not anticipating

1,000 By the second-quarter, contract prices were any similar issues with supply as those seen stable to soft compared with the previous in late 2016 and early 2017. ■ 900 quarter, primarily on the back of significant Additional reporting by Leela Landress, price drops in feedstock crude palm oil (CPO) Jackie Wong and Cuckoo James. 800 Jan Oct and palm kernel oil (PKO) in the first quarter. 2017 2017 Tallow oleic Q2 fatty acid contract prices Access the archive of the Chemical Profiles were the only exception as these increased be- A-Z at icis.com/subscriber/icb

www.icis.com 12-18 January 2018 | ICIS Chemical Business | 61

ICB_240818_058-065 Profiles January18.indd 61 8/22/18 3:23 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

zachary moore Houston LLDPE

Uses sellers are likely to try to place most of their new US LLDPE capacity Linear low density polyethylene (LLDPE) is a volumes. US sellers have traditionally directed ‘000 TONNES/YEAR thermoplastic polymer used mainly in the film most of their exports to Latin America and are Company Location Capacity sector. More than 80% of global LLDPE is used likely to try to expand their market share in the ExxonMobil Mont Belvieu, 2,400 as film for food and non-food packaging. region, although demand from Latin America is Texas Stretch film is used for industrial packaging not expected to grow fast enough to absorb all DowDuPont Freeport, Texas 800 and LLDPE can be used for a wide range of the additional capacities coming from the US. DowDuPont Taft, Louisiana 760 other applications. ExxonMobil Beaumont, Texas 727 LLDPE is manufactured by adding alpha- Prices DowDupont Plaquemine, 666 olefin co-monomers (butene, hexene or octene) US LLDPE prices moved higher during the Louisiana during ethylene polymerisation to produce a second half of 2017, pushed up by supply Chevron Phillips Cedar Bayou, 520 number of different products with a range of constraints and logistical disruptions stem- Texas densities depending upon the amount of co- ming from the impact of Hurricane Harvey on Chevron Phillips Sweeny, Texas 500 monomer added. This results in a very wide the US Gulf Coast. Between August and Octo- DowDuPont Seadrift, Texas 450 range of final products with improved perfor- ber, domestic contract prices for LLDPE rose Formosa Point Comfort, 365 mance compared to traditional low density by a cumulative 10 cents/lb ($220/tonne). Plastics USA Texas polyethylene (LDPE) as a result of the more However, prices started to moderate in No- LyondellBasell Morris, Illinois 320 linear structure. vember as Harvey’s effects dissipated, while Note: Top 10 plants additional capacities contributed to a lengthen- A full list of plants and projects capacities, Supply/demand ing of supply. Prices began to come down in forecasts, production volumes and The US added a large volume of LLDPE capaci- December and buyers are hoping to reclaim the operating rates are available on the ty in 2017 and additional capacity additions are full 10 cents/lb post-Harvey hike seen in do- ICIS Supply and Demand database anticipated for 2018. In 2017, ExxonMobil start- mestic contract prices. ed up a 1.3m tonne/year LLDPE facility in Mont Export LLDPE prices also moved higher to produce LLDPE and many processes can pro- Belvieu, Texas while Chevron Phillips Chemi- following Hurricane Harvey’s landfall, rising duce products with densities lower than LDPE cal (CP Chem) started up a 500,000 tonne/year 8.5 cents/lb from mid-August to late Septem- and into the HDPE range. Usually, production LLDPE plant in Old Ocean, Texas. In 2018, ber, when export prices reached their 2017 plants tend to be focused on either LLDPE or Sasol is expected to start up a 470,000 tonne/ peak. Export prices began to decline from HDPE but retain this inherent flexibility and year LLDPE plant in Lake Charles, Louisiana. mid-October through the end of the year as often produce campaigns of either product. While supply is increasing in the US, domes- supply concerns eased. The introduction of metallocene catalysts tic demand for LLDPE is considered mature is In January, several polyethylene (PE) produc- has enabled the production of resins with nar- not expected to expand beyond GDP growth. As ers separately announced initiatives calling for row molecular weight distribution resulting such, the large majority of material from new price hikes of 4 cents/lb, effective 1 February or in improved product quality (performance) LLDPE plants will need to be exported. US ex- as contracts allow. Sellers commented that sup- sometimes at the expense of the easy process- porters have been building up sales and market- ply has tightened and demand has increased, as ability of traditional LDPE. ing networks overseas, especially in Asia, where buyers are starting to come back to the market to secure material. Outlook US LLDPE Buyers, on the other hand, are still carrying The US LLDPE market is expected to see some some of the price increases accumulated in the decreases in both domestic and export prices Cents/lb, butene C4 aftermath of Hurricane Harvey. In addition, during the first quarter of 2018 on lengthening 90 Bagged, spot FOB US Gulf some buyers commented that price increases supply. Domestic demand for LLDPE is not ex- Film, bulk, contract cannot be justified, given the significant volumes pected to grow quickly enough to absorb all the 80 of additional capacities brought on line late in new capacity additions coming online, ensur- 2017, along with the fact that US PE prices re- ing that sellers will be looking to expand their 70 main higher than prices seen in other major presence in external markets. global regions. Buyers also pointed to higher in- This may also put some downward pressure 60 ventory levels for both high density polyethyl- on prices in the coming year as new plants ene (HDPE) and LLDPE. may need to maintain an aggressive pricing

50 ICIS assessed December contracts for policy in order to win market share from exist- LLDPE butene (C4) film at 81-83 cents/lb. ing suppliers. ■

40 Jan Jan Technology Access the archive of the Chemical Profiles 2017 2018 Solution, slurry or gas-phase processes are used A-Z at icis.com/subscriber/icb

62 | ICIS Chemical Business | 19-25 January 2018 www.icis.com

ICB_240818_058-065 Profiles January18.indd 62 8/22/18 3:33 PM Asia chemical profile

Amy Tan Singapore Epichlorohydrin

USES ECH output, based on industry ­estimates. While Asia ech capacity The primary market for epichlorohydrin the supply of ECH has shrunk in the past year, ‘000 TONNES/YEAR (ECH) is epoxy resins. About 90% of ECH some buyers are hesitant­ to import cargoes. Company Location Capacity ­output goes into the manufacture of epoxy Amid the current tight supply, offers for Asian Shandong Haili Shandong, China 320 resins for surface coatings, castings, laminates origin spot ­import cargoes have been increasing Chemical and adhesives, as well as specialty resins for in ­tandem with domestic prices in China. Shandong Haili Jiangsu, China 130 water treatment, paper treatment and ion Key ECH producers in South Korea say Chemical ­exchange, to purify air and water. they have no incentive to sell to China as they Samsung Fine Ulsan, South 120 ECH is also used as a raw material in the can achieve better netbacks by diverting Chemical Korea manufacture of a multitude of glycerine ­cargoes to Europe. South Korean ECH has Advanced Rayong, Thailand 100 ­derivatives used as plasticizers, stabilisers, steadily made inroads into ­Europe because of Bio-chemical Thailand (Solvay) solvents, dyestuff intermediates, surface a free trade agreement (FTA) between the two. Formosa Yunlin, Taiwan 100 ­active agents, pharmaceuticals and as Demand from downstream epoxy resins in Yihai Kerry (Wilmar) Jiangsu, China 100 ­intermediates for further synthesis. Asia was largely stable in the first half of 2017 but gained momentum in the second half. Chang Chun Liaoning, China 96 Chemical SUPPLY/DEMAND Like ECH, many epoxy resins plants in China Jiangsu Yangnong Jiangsu, China 90 The implementation of stricter ­environmental were forced to shut due to the stricter Chemical regulations by the Chinese government has ­environmental regulations. Triplex Chemical Taoyuan, Taiwan 72 resulted in several ECH plant shutdowns in Most epoxy resins plants in China have Tianjin Chemical Tianjin, China 60 the past two years. The laws were introduced been running at full capacity since 2017. As Plant as part of China’s effort­ to fight pollution. demand outstripped supply, buyers and NOTE: Top 10 plants ­Existing plants are running at rates estimated ­producers in China also sourced epoxy resins A full list of plants and projects capacities, to be at 50% or less. from the region to meet demand. forecasts, production volumes and At the same time, producer margins were operating rates are available on the being squeezed by firmer feedstock propylene PRICES ICIS Supply and Demand database costs. As a result, smaller producers, which A persistent buy-sell gap has impeded spot im- are less cost-efficient, either shut down plants port demand in China for most of 2016 and routes used to produce ECH at an industrial or ran them at lower rates. 2017. From January to early September 2017, commercial level – via allyl chloride, allyl Elsewhere, ECH producers that use ECH prices hovered around $1,125-1,150/tonne ­alcohol and the newer glycerine route. ­alternate feedstock glycerine have been CFR (cost & freight) CMP (China Main Ports). ­running their plants at full capacity. However, As a result, northeast Asian producers and OUTLOOK some end-users and buyers said that there has suppliers based outside China focused on Supply of ECH is expected to remain tight in not been a constant supply of glycerine-based selling cargoes in their respective domestic­ the near-term. There are no signs that the Chi- ECH in the key China market. markets. Some of them also sold cargoes in nese government will ease environmental China produces nearly 60% of Asia’s total the US, Europe and India. However,­ demand regulations. At the same time, ECH producers for spot cargoes in these markets was sporad- based in South Korea and Japan are seeing ASIA ECH ic. Demand for spot import cargoes into China strong domestic demand in their respective picked up around September, when domestic markets. In addition to contractual volumes, $/tonne, spot CFR China ISO tank truck prices rose amid tight supply. they have received more spot enquiries from 2,100 Around this time, Asian ECH producers their home markets. ­increased their offers into China as they could One southeast Asian producer and one 1,900 easily divert their cargoes to the US and northeast Asian producer revealed that they ­Europe where they could achieve better do not have any spot availability for January 1,700 ­netbacks. Amid tight supply, ECH prices in and February amid contractual obligations. the China domestic market and spot import An anticipated pick-up in re-stocking 1,500 market faced upward pressure. ­activity is expected in January ahead of the Lunar New Year in mid-February.Against 1,300 TECHNOLOGY this backdrop, domestic ECH ­prices and spot ECH is essentially a derivative of propylene import offers into China ­continue to face up- and chlorine that combines the reactivity of ward pressure. ■ 1,100 Jan Jan an epoxide group with the additional 2017 2018 ­reactivity of a chloro-group on to a propylene Access the archive of the Chemical Profiles backbone. There are currently three process A-Z at icis.com/subscriber/icb

www.icis.com 19-25 January 2018 | ICIS Chemical Business | 63

ICB_240818_058-065 Profiles January18.indd 63 8/22/18 3:33 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Bill Bowen Houston VCM

Uses ended with an explosion at the 330,000 US VCM CAPACITY Vinyl chloride monomer (VCM) is a colour- tonne/year plant early in 2016. ‘000 TONNES/YEAR less gas with a mildly sweet odour that is Late in 2017, word came that the plant Company Location Capacity toxic and a human carcinogen. It is used al- will not be repaired and returned to produc- Shintech Plaquemine, 1,900 most exclusively (90% plus) in the manufac- tion. In early 2017, the Mexichem 50/50 joint Louisiana ture of polyvinyl chloride (PVC), though venture with Occidental Chemical (Oxy- Oxy Vinyls La Porte, Texas 1,090 some goes to produce polyvinylidene and Chem) launched production at their 544,000 OxyMar Ingleside, Texas 1,090 several chlorinated solvents. The majority of tonne/year ethane cracker at Ingleside, Westlake Lake Charles, 1,050 PVC, a durable and widely adaptable plastic, Texas. It is operated by OxyChem to produce Chemical Louisiana goes to end-uses with demand connected to VCM for Mexichem’s PVC plants in Mexico Westlake Plaquemine, 725 construction. VCM demand is directly relat- and Colombia through a contracted sales Chemical Louisiana ed to PVC demand and construction activity. agreement. That has lifted US VCM exports Oxy Vinyls Deer Park, Texas 600 with additional US shipments. Formosa Point Comfort, 560 Supply/demand Plastics Texas Global production capacity of VCM is about Prices Westlake Geismar, 285 55m tonnes/year with about half of global US VCM prices pushed higher in early 2018, Chemical Louisiana production and demand in Asia. Europe has as they tend to follow the value of derivative Westlake Calvert City, 590 Chemical Kentucky production capacity of more than 10m PVC rather than raw materials costs for feed- tonnes/year, the Middle East about 2m stock ethylene dichloride (EDC), as is the case A full list of plants and projects capacities, tonnes/year and Latin America approximate- with most chemical commodities. Most VCM forecasts, production volumes and ly 3m tonnes/year. is used internally by back-integrated produc- operating rates are available on the Additional capacity in the US is being ers of PVC with little spot sales activity. ICIS Supply and Demand database added to the current 8.55m tonnes/year to VCM spot prices have fluctuated with capitalise on cheap shale gas feedstock from crude oil, a key price driver for PVC in global ride. The EDC is then converted to VCM by ethane. Demand growth has been pretty markets because most PVC in Asia and Eu- thermal cracking, and the hydrogen chloride steady at about 3% as US and global con- rope is made from feedstock naphtha, de- byproduct can be recycled to an oxychlorin- struction activity continues to recover to- rived from crude. US VCM prices fell to the ation plant to make more EDC. wards levels prior to the 2008-2009 real es- low $600s/tonne mid-year, and then rose to INEOS Vinyls made a more recent break- tate construction bubble. almost $690/tonne at the beginning of 2018. through with its catalytic process for generat- Shintech expanded capacity by 300,000 Rising PVC demand domestically is expected ing VCM directly from ethane, following tests tonnes/year at its 1.6m tonne/year VCM to help push prices up during 2018, as well. at a pilot plant at Wilhelmshaven, Germany. plant site in Plaquemine, Louisiana, in 2016. In the US, ethylene feedstock is mainly The company claims a 20-30% reduction Efforts by Mexichem, in partnership with derived from ethane from new and existing in production costs across the PVC chain for Mexican state oil company Pemex to boost crackers. That gives US producers a global the process, which decouples VCM/PVC pro- VCM output at its plant in Veracruz, Mexico, production cost advantage, along with pro- duction from the naphtha cracker. ducers in the Middle East. GLOBAL VCM Outlook Technology The construction industry is a key consumer $/tonne, spot 900 Commercial production of VCM began in the of VCM through its derivative product PVC, CFR SE Asia FOB US Gulf 1920s based on the catalytic hydrochlorina- and it continues to recover globally, forecast FOB NWE 850 tion of acetylene. That route suffered from to expand by 2.8-3.5% in 2018. high energy costs and is now obsolete every- But revisions to that forecast have been 800 where but in China, where ample coal sup- more bullish after nearly flat GDP growth plies have kept the cheap alternative going. in several global regions and key high- 750 Nearly all production outside of China is growth countries, including Brazil, Russia based on ethylene. Ethylene is first reacted and China. 700 with chlorine to make EDC and then thermal- The short-term outlook is that VCM ly cracked to make VCM. demand will continue to grow at slightly bet- 650 Today there are two routes commonly ter than macroeconomic growth, or about used to make the necessary EDC – direct 3-3.5% annually. ■ 600 Jan Jan chlorination using pure chlorine and ethyl- 2017 2018 ene; and oxychlorination, in which the eth- Access the archive of the Chemical Profiles ylene reacts with chlorine in hydrogen chlo- A-Z at icis.com/subscriber/icb

64 | ICIS Chemical Business | 26 January-1 February 2018 www.icis.com

ICB_240818_058-065 Profiles January18.indd 64 8/22/18 3:33 PM Europe chemical profile

Katherine Sale London PMMA

USES Players are eagerly awaiting new capacity in europe pmma capacity Polymethyl methacrylate (PMMA) is an acryl- the Middle East, with production now expect- ‘000 TONNES/YEAR ic polymer that has high ultraviolet (UV) re- ed online in the first half of 2018. Company Location Capacity sistance and is available as resin or sheet. An additional 40,000 tonnes/year additional Evonik Worms, Germany 140 About two-thirds of consumption is in sheets PMMA capacity is expected to come online for Polycasa Mainz, Germany 40 produced by extrusion or casting, while the Saudi Methacrylates, along with MMA. The Altuglas Rho, Italy 35 remainder is moulded into various shapes. 250,000 tonne/year MMA plant is a joint ven- International PMMA’s primary use is in car headlamps ture between Mitsubishi Chemical (MCC) and Lucite Rozenburg, 23 and tail lights. The second largest use is in con- newcomer to the market SABIC. International Netherlands struction (pool and sanitary ware, architectural There will also be an additional 50,000 A full list of plants and projects capacities, fittings) and glazing/signage. Other uses are tonne/year PMMA facility for Petro Rabigh, forecasts, production volumes and household appliances, optical media, electron- with the 90,000 tonne/year MMA plant ex- operating rates are available on the ics, mobile phone displays, cosmetics packag- pected on line in the first half of 2018, after a ICIS Supply and Demand database ing, toys, pens and furniture. numbner of delays to the project. Petro Rab- igh is the joint venture between Japan’s Su- batch operation is very cumbersome, so con- SUPPLY/DEMAND mitomo Chemical and state-owned energy tinuous polymerization/cast technologies also Demand for PMMA was healthy throughout firm Saudi Aramco. operate. In belt polymerization processes, the 2017, with strong performances from the au- MMA/PMMA syrup is injected between con- tomotive and construction sectors. PRICES tinuous highly polished metal belts. Continu- Overall demand is expected to grow above European PMMA prices increased by 34% last ous and batch solution processes also exist. GDP, but there will be some applications that year, with further triple-digit increases being are expected to significantly outperform this. discussed for first-quarter contracts for 2018. OUTLOOK As the automotive sector continues a shift The extreme MMA shortage has altered the There is a major stoppage approaching for Lu- toward lightweight vehicles, then the demand makeup of the downstream market, with con- cite International at its 200,000 tonne/year for PMMA continues to grow, with a double- tract terms changing and some buyers leaving MMA facility in Cassel, UK. The overhaul will digit percentage increase expected in 2018. the market for supply security. take place at the end of the first quarter, and is Producers continue to develop methods to This is expected to continue into 2018, with expected to take approximately two months. increase the impact-resistance for PMMA, both MMA and PMMA expected to remain un- There will also be a series of upstream MMA which means it can be used in more parts of a balanced for at least the first half of the year. stoppages in Asia in 2018, which are likely to vehicle, including bumpers. The monthly European MMA contract rose impact the flow of PMMA to Europe. There are also further opportunities in the 68% between January and December, signifi- Imports were low level for the bulk of 2017, construction sector. cantly increasing costs for PMMA producers. with buyers also unable to pay the higher prices The main concern, especially after a year of A number of quarterly contracts were for Asian product. global shortage in 2017, is whether there will be changed to monthly, and even the large auto- There are worries over margins for buyers, as the material to meet the growth in the industry. motive players had to compromise to quarterly many have been unable to pass on the sharp contracts from six-monthly. increases, with prices fixed on an annual basis. EUROPE PMMA PRICES Although the vast majority of business is Buyers in the extruded sheet sector in par- still on a quarterly basis, shorter-term con- ticular are citing poor and in some cases nega- €/kg, FD NWE tracts will remain a factor in the market until tive margins, with PMMA prices at their cur- 3.0 supply rebalances. rent level. In the long term, the current price With MMA prices at an historical high at the level for MMA is not seen as sustainable, with 2.8 start of 2018, many PMMA players are ques- prices at an all-time high. tioning if 2018 will show an improvement, and However, prices are also not expected to fall 2.6 how long can the shortage continue before it to the lows of 2016, as it was the low margins of has long-term damage on the sector. then that in part led to the series of production 2.4 outages, with a lack of investment in facilities. TECHNOLOGY Although the second half of 2018 may bring

2.2 PMMA is produced from polymerizing MMA relief to the market, turbulence is expected and several processes are in operation. until then, as players battle with further outages For glazing uses, some MMA can be pre-po- and strong demand. ■ 2.0 Dec Dec lymerized in a continuous stirred tank reactor 2016 2017 and the resulting viscous liquid is fed into a se- Access the archive of the Chemical Profiles ries of flat glass plate-like moulds. This type of A-Z at icis.com/subscriber/icb

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ICB_240818_058-065 Profiles January18.indd 65 8/22/18 3:33 PM EUROPE chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Vasiliki Parapouli London Toluene

USES demand coming from the big markets, such as europe toluene capacity The primary use of toluene, an aromatic, is as TDI or gasoline blending, the volumes moved ‘000 TONNES/YEAR an octane booster in gasoline, but much of should be considered relatively small. Company Location Capacity that portion remains in the refinery streams. On the supply side, the toluene market – ExxonMobil Botlek, 350 On the chemical side, toluene is used mainly which had been over-supplied – felt a bit more Netherlands for downstream toluene di-isocyanate (TDI) in balanced from last September, after hurricane Dow Bohlen, Germany 295 polyurethane (PU) production. It is also sold as Harvey hit the US Gulf coast, an event that PKN Orlen Plock, Poland 280 a solvent on the distribution market. caused serious production problems in the re- CEPSA Algeciras, Spain 270 Toluene is used to produce other aromatics. gion and prompted a surge in export activity Slovnaft Bratislava, 195 Toluene hydrodealkylation (HDA) produces from Europe. Slovakia benzene, and toluene disproportionation Overall, toluene supply has been facing no BP Gelsenkirchen, 175 (TDP) produces both paraxylene (PX) and ben- real restrictions, while it frequently adjusts to Germany zene. These processes depend on the relative meet demand, with refineries and crackers INEOS Dormagen, 170 pricing of toluene to benzene and PX. Histori- alike choosing not to extract toluene from Germany cally they have been the most significant driver reformate or pygas if the economics do not Unipetrol Litvinov, Czech 165 of the spot toluene market. stack up. Republic CEPSA Huelva, Spain 165 SUPPLY/DEMAND PRICES Galp Porto, Portugal 150 In the last quarter of 2017, the European tolu- Toluene spot and contract prices have risen in *Note: Top 10 listed ene market saw a short period of healthy de- recent months and continue to do so, in line A full list of plants and projects capacities, mand due to increased interest for mixed aro- with the strength seen in the global energy forecasts, production volumes and matics and blending components from China. market, where crude oil values have been on operating rates are available on the Players are confident that demand will be an uptrend for six months now. ICIS Supply and Demand database boosted in 2018 as soon as Germany’s BASF If it had not been for the firmness of the ramps up production at its 300,000 tonnes tolu- crude market, toluene prices might have seen a OUTLOOK ene di-isocyanate (TDI) plant in Ludwigshafen. different start to the year since market funda- European toluene players feel that the market Once this plant is fully operational, toluene mentals are slow with subdued demand and will continue to be driven by price develop- prices might increase and could stop tracking ample availability. ments in the energy sector in the short-term, Eurobob gasoline values exclusively. The European toluene contract price is set- although they find it difficult to predict when According to estimates, BASF’s TDI plant tled between major producers and buyers for the widely-discussed price correction in the should become fully operational sometime in the TDI industry and tends to follow spot pric- crude oil market will be felt. the second quarter of 2018 but, according to es closely. At the start of 2018, Brent crude, the global some sources in the market, it could be earlier. The spot price has been driven primarily by benchmark, surpassed $70/bbl, the highest level Distribution demand for the solvents market Eurobob gasoline valuations, but players are since December 2014, and some estimates ex- is relatively constant, but when compared to optimistic that if demand from the TDI side in- pect it to remain robust throughout 2018. creases later in the year, toluene prices will in- The main drivers for oil prices have been EUROPE TOLUENE crease and will stop tracking Eurobob values better-than-expected demand, last autumn’s exclusively. major OPEC group of oil-producing nations, $/tonne, contract FOB NWE 700 along with Russia’s decision to extend produc- TECHNOLOGY tion cuts, as well as geopolitical tensions 680 Toluene and other aromatics are largely a by- around the globe. product of either the refining of crude oil or An increase in US supply is probably the 660 petrochemical steam cracking. main reason that could drive crude oil values Within the refinery, a catalytic reformer lower later in 2018, but this cannot be said 640 transforms petroleum refinery naphtha into with certainty given the persistent uptrend of high octane reformates. In a steam cracker, aro- the past six months. 620 matics rich pyroloysis gasoline (pygas) are a by- Any possible growth in US production product of ethylene or propylene production. might well be counterbalanced by geopolitical 600 Benzene is then extracted from the refor- tensions in Venezuela, the Middle East as well mate, or pygas. Toluene can be left in combina- as Africa. ■ 580 Feb Jan tion with other aromatics such as xylenes in a 2017 2018 toluene rich aromatic stream (TX), or purified Access the archive of the Chemical Profiles via either distillation or solvent extraction. A-Z at icis.com/subscriber/icb

66 | ICIS Chemical Business | 2-15 February 2018 www.icis.com

ICB_240818_066-071 Profiles February18.indd 66 8/22/18 3:42 PM ASIA chemical profile

Jackie Wong Singapore Fatty acids

Uses China, a key consumer market, has been slow- ASIA FATTY ACIDS capacity Fatty acids are used in diverse consumer-re- ing down. To limit risk, fatty acids producers ‘000 TONNES/YEAR lated end applications such as soaps, deter- have been controlling output, with some run- Company Location Capacity gents, personal care products, and the food, ning based on orders, to protect against fluc- PT Musim Mas Medan, Indonesia 800 flavouring and fragrance sectors. It is also tuations in raw material prices and to safe- KLK Klang, Malaysia 450-550 used in industrial applications for the phar- guard their margins. maceutical, lubricant, textile, plastic, paint Wilmar Medan, Indonesia 450 and rubber sectors. Prices Wilmar Surabaya, Indonesia 450 Price movements had been mimicking palm IOI Group Pasir Gudang, 350 Malaysia Supply/demand oil price trends closely in 2016 and 2017. Production capacity in Asia has grown signifi- Palm oil yields were significantly hit by the KLK Rawang, Malaysia 300-400 cantly over the last five years as a result of a extreme dry and hot weather brought about IOI Group Penang, Malaysia 330-350 series of aggressive expansion projects which by El Nino. Since October 2015, palm kernel Shuangma Rugao, China 300 were mostly completed by 2016, especially in oil (PKO) production in Malaysia has been on Dongma Guangzhou, China 200-210 southeast Asia which accounts for around a steady decline. (Kwantas) 80% of global fatty acids production. Palm oil production recovered in 2017 and Emery Klang, Malaysia 200 Since 2010, global fatty acids capacity grew stock levels in Malaysia and Indonesia have Kerry/Wilmar Shanghai, China 200 by 140%. During that period, capacity in been on the rise ever since. A full list of plants and projects capacities, southeast Asia rose 195%, driven by 400% In January 2018, Malaysia suspended its forecasts, production volumes and growth in Indonesia, while capacity in China export tariff on crude palm oil (CPO) for three operating rates are available on the and India grew by 120% and 150%, respec- months or until the country’s CPO stock ICIS Supply and Demand database tively. The growth in capacity has far outpaced drops to 1.6m tonnes. demand growth. As a result, the market is fac- With most fatty acids producers operating stearic acids (TPSA). Outside Asia, C18 fatty ing chronic overcapacity, which is expected to at lower rates, fatty acids prices received up- acids are produced from animal fats or crude persist for at least the next five to eight years. ward support in 2017 from tighter supply. tall oil. In 2016, palm oil production was signifi- C14 myristic acids, whose premium over cantly affected by the El Nino weather phe- C12 lauric acids almost completely eroded in Outlook nomenon, resulting in the lowest yield in the 2016, saw significant gain in value due to Fatty acids producers will continue to limit last 10 years. This caused an upsurge in palm short supply. Prices of C14 myristic acids their production to protect margins. oil prices and squeezed the margins of fatty were around $50-100/tonne higher than C12 Demand for C12 lauric acids is not expect- acids producers further. lauric acids for most of 2017, and the premi- ed to increase significantly in the near future, Demand for fatty acids in Asia softened in um is expected to grow further in 2018. which means C14 myristic acid output will 2014-2015 as a result of a slowdown in the C12 lauric acids and C14 myristic acids are continued to be limited, allowing the premi- global economy, but recovered somewhat in co-products of PKO-based production lines. um that C14 myristic acids enjoy over C12 2016-2017. However, demand growth in The output ratio of C12 lauric acids and C14 lauric acids to grow further. myristic acids is typically 3:1. Prices of C10 capric acids and C8-10 capryl- ASIA FATTY ACIDS Since the start of 2017, supply of C10 ca- ic-capric acids will continue to face pressure pric acids and C8-10 caprylic-capric acids from stock accumulation, although some pro- $/tonne, spot FOB SE Asia have been getting longer, which asserted ducers have been reluctant to reduce their of- 3,000 C12 Lauric Acid C18 Oleic Acid downward price pressure. On the other hand, fers. The short chain fatty acids provide the C14 Myristic Acid C18 Stearic Acid, Rubber Grade C16 Palmitic Acid C18 Stearic Acid, Triple Pressed demand for C8 caprylic acids has been rela- highest margin among all fatty acid cuts. 2,500 tively stable. Palm oil production is expected to contin- ue to recover in 2018 and growing stock levels 2,000 Feedstocks may result in the softening of palm oil prices, Malaysia and Indonesia are the major pro- which would in turn put downward pressure 1,500 duction hubs for global fatty acids because of on fatty acids prices. Fatty acids demand in raw material availability and government in- Asia will grow further, with higher popula-

1,000 centives for value-added palm industries. tion and increasing disposable income from The major feedstock is palm oil, while coco- developing economies such as Indonesia, off- nut oil is sometimes used for certain fatty setting any slowdown in China. ■ 500 Jan Dec acids production. 2016 2017 NOTE: All prices are for container, except C18 Oleic Acid which is drummed. The major products for Asia fatty acids are Access the archive of the Chemical Profiles C18 Stearic Acid triple pressed is hybrid spo/contract C12 and C14 fatty acids, and triple pressed A-Z at icis.com/subscriber/icb

www.icis.com 2-15 February 2018 | ICIS Chemical Business | 67

ICB_240818_066-071 Profiles February18.indd 67 8/22/18 3:42 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Peter Gerrard London VAM

USES able to raise contract prices in successive EUROPE VAM CAPACITY Vinyl acetate monomer (VAM) is used in water- steps in the first half of 2017, generally antici- ‘000 TONNES/YEAR based paints, adhesives, acrylic fibres, paper pated by rising spot numbers, which in- Company Location Capacity coatings and non-woven binder applications. creased more steeply. By the middle of the Celanese Chemicals Frankfurt, 305 Around half of VAM production volumes go year, with supply again outstripping demand, Europe Germany into polyvinyl acetate (PVA), which is a primary spot prices dropped off more rapidly than Wacker-Chemie Burghausen, 200 molecule in paints, adhesives and other coat- contract prices, although both reached their Germany ings. Approximately 30% of VAM output goes lowest level in August. Stavrolen Budyonnovsk, 60 into polyvinyl alcohol (PVOH), which is used in The hurricane threw the gears into the oppo- Russia packaging film and glass laminates. site direction once more, with contract prices Azot Severodonetsk* Severodonetsk, 35 responding rather more sluggishly than spot to Ukraine SUPPLY/DEMAND the implications of market tightness originating *Not operational Hurricane Harvey, which hit the US Gulf re- in the US Gulf region. The upturn in prices was A full list of plants and projects capacities, gion at the end of August, radically reduced quite sharp but proved to be relatively short- forecasts, production volumes and VAM production, with continuing logistical lived, with the Harvey-induced concerns about operating rates are available on the difficulties exacerbating the shorter term supply receding from November onwards. ICIS Supply and Demand database problems that initially afflicted the plants in Despite three months in which values the petrochemical complexes in the region. slipped down by January they were still high- material. The plant capacities listed above Supply to Europe was not immediately re- er than they had been in the softer periods of cannot describe the total volumes available duced because the continent had adequate the previous year, hovering around €1,000/ for consumption; evidently, much of what stocks and some exports were already in tran- tonne FD. The decline in January 2018 was is produced in other regions will be used lo- sit. Towards the end of the year and in the smaller than would be reflected by a full pass- cally and the proportion sold elsewhere, or opening weeks of 2018 the market was more through of the duty suspension and suppliers specifically exported to Europe, will vary balanced, partly because supply appeared to were confident that prices would rise immi- according to several factors, some of which be more plentiful again and partly on account nently. In February, prices rose modestly. At will be completely independent of Europe- of a normal slowing in consumption during the time of writing it is not clear if that will an requirements. the low season in paintings and coatings. prove to be a pivot point. That said, what is known is that the im- port duty into the EU was suspended once PRICES TECHNOLOGY again on 1 January 2018. It will be the same The European VAM market saw a steady rise Ethylene is the preferred feedstock, replacing quota as for 2017, i.e. 350,000 tonnes. in prices from the beginning of 2017 almost to the original acetylene route. VAM is usually As seen in 2017, the quota was not expect- the middle of the year. produced by the catalysed vapour phase reac- ed to have a significant impact on the market Values by the end of 2016 had been at a rel- tion of acetic acid with ethylene and oxygen in the month of introduction. Since the quota atively low point, not considered by produc- in a fixed-bed tubular reactor, using a sup- is expected to last until summer, a rush of im- ers to deliver realistic margins. They were ported noble metal catalyst. ports was unlikely in the first weeks. INEOS developed a fluidised bed technol- One potential development that could have EUROPE VAM ogy, LEAP, where the catalyst is continuously substantial implications for the whole Europe- removed and replenished, giving much long- an market, would be the awaited announce- €/tonne, contract FD NWE 1,200 er run times. Celanese developed its Vantage ment by INEOS of the intended location of its process that it claims adds capacity equiva- new VAM plant because, if the company’s lent to a world-scale plant at 10-15% of the plans go ahead, the new facility would bring 1,150 cost of a grassroots facility. an additional 300,000 tonnes of annual pro- US-based Praxair has patented the use of duction capacity into being within Europe. 1,100 99.95% oxygen to lower the amount of inerts There could be upward momentum from in the reactor, reducing catalyst losses and the planned turnaround of one producer in 1,050 boosting yields by up to 5%. US producer the spring and from higher upstream raw ma- Eastman Chemical has developed a three-step terial costs. The tighter environmental regula-

1,000 liquid-phase process based solely on acetic tions in China may continue to lead to lower acid that can give yields as high as 95%. utilisation rates and less product availability for exports from Asia to Europe. ■ 950 Mar Jan OUTLOOK 2017 2018 The European VAM market will continue to Access the archive of the Chemical Profiles be predominantly dependent on imported A-Z at icis.com/subscriber/icb

68 | ICIS Chemical Business | 16-22 February 2018 www.icis.com

ICB_240818_066-071 Profiles February18.indd 68 8/22/18 3:43 PM ASIA chemical profile

Amy tan Singapore Phthalic anhydride

Uses they will only offer March allocations after the ASIA PA CAPACITY Phthalic anhydride (PA) is produced in two Lunar New Year holiday. In Japan, major pro- ‘000 TONNES/YEAR grades – flake (white solid) or molten (clear liq- ducers are focusing on domestic demand and Company Location Capacity uid). Its characteristics include: irritating odour, have not been active in the CFR southeast Asia Nan Ya Plastics Mailiao, Taiwan 280 lightly soluble in hot water, hydrolysing to market. In Taiwan, major producers have sold Aekyung Ulsan, South 210 phthalic acid, soluble in alcohol and carbon di- out February-loading cargoes and are running Petrochemical Korea sulphide. It reacts with strong oxidants and re- low on March-loading cargoes. Shandong Hongxin Zibo, China 180 acts violently when heated with copper oxide or Demand is largely driven by India as key do- Chemical sodium nitrate, posing an explosion hazard. mestic producers have limited inventories and Anhui Tongling Tongling, China 120 The major outlet for PA is the manufacture are only catering to contractual customers. Chemical of phthalate plasticisers. This accounts for While demand in southeast Asia is also robust, IG Petrochemicals Taloja, India 120 more than half of production. The main plas- some PA producers are diverting their cargoes Zhenjiang Union Zhenjiang, China 120 ticiser in which it is used is dioctyl phthalate into India amid better netback. On the other Chemical (DOP), which goes into polyvinyl chloride hand, demand in the key China market has Taizhou Union Taizhou, China 115 (PVC). The second largest outlet is unsaturat- been subdued as domestic cargoes are cheaper Chemical ed polyester resins (UPR), which are usually than spot import cargoes. As such, PA suppli- Thirumalai Chemicals Ranipet, India 115 blended with glass fibres to produce fibreglass ers note that buyers in China have to increase Changzhou Yabang Changzhou, 100 reinforced plastics. The third largest outlet is their bids in order to procure spot volumes. Chemical China PA-based alkyd resins, which are used in sol- Jiangsu Sanmu Group Yixing, China 100 vent-based coatings. Prices Shanghai Coking & Shanghai, China 100 Principal end-markets for PA are the con- Spot prices for PA in the key China market Chemical struction, marine and transportation industries, has been stable-to-soft in recent weeks amid a Zhuhai Union Zhuhai, China 100 Chemical Industry and architectural, machinery, furniture and fix- persistent buy-sell gap. In southeast Asia, spot Note: Top 12 listed by capacity ture applications. Small volume uses for PA in- prices face upward pressure amid strong de- clude dyes, pigments, detergents, herbicides, mand from India. PA suppliers have limited A full list of plants and projects capacities, insecticides, fire retardants and saccharin. inventories and prefer to focus on the Indian forecasts, production volumes and market amid better netback. As such, buyers operating rates are available on the Supply/demand in southeast Asia find themselves increasing ICIS Supply and Demand database Supply from South Korea, Japan and Taiwan their bids to acquire cargoes. has been tight in recent months and this is an- Feedstock orthoxylene (OX) prices are al- Today, most PA producers use OX, which ticipated to persist in the near term. In South most on par with PA prices. This unusual has superseded naphthalene as the feedstock. Korea, supply is short as most February-load- phenomenon of OX being higher than PA oc- The proportion of naphthalene to OX- ing cargoes have already been sold out. A curred due to upstream producers producing based Chinese producers in terms of name- major producer said its cargoes for March-load- more paraxylene (PX) as compared with co- plate capacity in 2013 is 20/80. Naphthalene ing are almost sold out. Other producers said product OX. Most PA producers have their prices have climbed by 20% in recent months OX requirements fulfilled through contracts. so it is beginning to lose its competitiveness. ASIA PHTHALIC ANHYDRIDE Spot availability is limited and PA producers South Korea’s OCI is running only its naph- source spot quantities on a need-to basis. thalene-based line. $/tonne, spot 1,200 CFR SE Asia CFR China Main Ports Technology Outlook 1,150 PA was first made through the oxidation of Most players anticipate PA prices to continue 1,100 naphthalene in concentrated sulphuric acid on an uptrend amid tight supply in Japan, South and in the presence of mercury sulphate. A Korea and Taiwan. Three PA producers have 1,050 catalytic vapour-phase oxidation of naphtha- also announced turnaround schedules for April. 1,000 lene later replaced this route. The latter pro- Meanwhile, demand in India is expected to re- cess is done in air and in the presence of a va- main strong in the near-term as some down- 950 nadium oxide catalyst. stream buyers are ramping up production ahead 900 The process technology has changed little, of India’s close of financial year in March. 850 although catalysts have a longer life of three In southeast Asia, demand is projected to re- years and yields have improved. One devel- main stable, supported by downstream DOP. ■ 800 Feb Feb opmental improvement was the lowering of 2017 2018 the air-to-OX weight ratio to 9.5:1, allowing Access the archive of the Chemical Profiles energy savings and reduced capital costs. A-Z at icis.com/subscriber/icb

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ICB_240818_066-071 Profiles February18.indd 69 8/22/18 3:42 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

John Dietrich Houston SBR

Uses prices are formula-based and tied to same- US SBR capacity Styrene butadiene rubber (SBR), the largest month BD movements, with some allowance ‘000 TONNES/YEAR volume synthetic rubber, is predominantly for styrene movements as necessary. Company Location Capacity consumed in the manufacture of tyres and tyre Prices rebounded to start 2018 on upstream Goodyear Tire Houston, Texas, 250 products. Other non-tyre uses including appli- tightness and rebounding demand, but could and Rubber US cations in conveyor belts, gaskets, hoses, floor reverse course because of ample NR supply in Grupo Dynasol Altamira, Mexico, 220 tiles, footwear and adhesives. Asia. Long supply in the region in the fourth US quarter of 2017 pushed SBR contract prices Lion Copolymer Port Neches, 180 Supply/demand down 9 cents/lb in November and December. Texas, US US supply has been balanced to long, even Spot SBR prices have moved to a slight pre- Bridgestone Lake Charles, 134 with the shutdown of East West Copolymer’s mium to contract volumes because of the rising Firestone Louisiana, US Baton Rouge plant in Louisiana in March 2017. Asian market, but long supply could also re- Goodyear Tire Beaumont, 125 and Rubber Texas, US Supply of imported material from Asia has verse that situation. TSRC Plaquemine, 62 covered the gap, especially as a large crop of SBR prices in China may face downward Louisiana, US competing natural rubber (NR) in Asia has pressure after the Lunar New Year holiday if Bridgestone Orange, Texas, 25 pushed SBR producers to increase overseas the NR price remains weak. Spot prices of non- Firestone US sales volumes. oil grade 1502 SBR were assessed stable at A full list of plants and projects capacities, SBR demand remains steady to slightly $1,650-1,700/tonne CIF (cost, freight and insur- forecasts, production volumes and higher, driven by the US tyre and automotive ance) China on 14 February, ICIS data showed. operating rates are available on the sector. While automotive driving activity has NR inventories remain abundant in warehous- ICIS Supply and Demand database increased on lower gasoline prices, tyre sales es in Qingdao, China, traders said. Tyre makers have been down slightly. in Asia have more flexibility in feedstock sub- Process modifications can produce higher Non-automotive uses for SBR have experi- stitution in their product formulations. performance polymers. Companies like Asahi enced strong demand, owing to a healthy US In Europe, SBR contracts for February were Chemical of Japan are pursuing the develop- construction sector. agreed at varying double-digit increases, due to ment of premium products by such means. the rise in feedstock prices. February contracts Prices for dry (1500) grade material increased by €50/ Outlook US January contract prices for 1502 non-oil tonne at the low end of the range and rose by Global and US SBR supply is expected to trend grade SBR were in the high-60s cents/lb to €65/tonne at the high end, bringing prices to toward a long position, given ample capacity high-70s cents/lb, while 1712 oil-extended €1,460-1,555/tonne FD (free delivered) NWE in Asia and the potential for long supply of contract prices were in the low-70s cents/lb to (northwest Europe). competing NR. high-70s cents/lb. Oil extended 1723 and 1783 grade con- Demand growth remains somewhat limited February contracts are expected to increase tract prices for February increased by €40/ by the automotive industry, which has experi- 3.25-3.50 cents/lb ($72-77/tonne), tracking up- tonne at the low end and by €55/tonne at the enced stagnant growth levels for the past sev- stream butadiene (BD) levels. SBR contract high end, bringing prices to €1,300-1,485/ eral years. While new auto sales have experi- tonne FD NWE. enced growth, the replacement tyre market US SBR continues to lag behind. Technology However, tyre production in the US is grow- Cents/lb, contract SBR is produced by the copolymerisation of ing, which could boost the need for domestic 130 SBR 1502 BD with styrene in the approximate proportion production or, more likely, imported rubber. SBR 1712 120 of 3:1 by weight. Trade actions to add tariffs and duties to im- The emulsion process, which produces gen- ported SBR have been discussed and could 110 eral-purpose grades, uses feedstocks suspend- lead to increased imports from non-affected ed in a large proportion of water in the pres- countries, especially Canada. 100 ence of an initiator, or a catalyst, and a Non-automotive uses for SBR will likely re- stabiliser. This employs continuous process main a small portion of overall sales, although 90 production. growth levels in these sectors is likely to be In the solution process, the copolymerisa- higher than that of tyre production. ■ 80 tion proceeds in a hydrocarbon solution in the Additional information from Helen Yan and presence of an organometallic complex. This Melissa Hurley 70 Mar Jan can be either a continuous or batch process. 2017 2018 Some manufacturing facilities have swing ca- Access the archive of the Chemical Profiles pacity with polybutadiene rubber (PBR). 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70 | ICIS Chemical Business | 23 February-1 March 2018 www.icis.com

ICB_240818_066-071 Profiles February18.indd 70 8/22/18 3:43 PM Europe chemical profile

Chris Barker London VCM

Uses Prices EUROPE VCM CAPACITY More than 98% of vinyl chloride monomer European VCM prices are driven primarily by ‘000 TONNES/YEAR (VCM) in Europe is used to produce polyvinyl upstream ethylene and downstream PVC Company Location Capacity chloride (PVC). The rest is consumed in polyvi- trends. There was very little spot business in VYNOVA Tessenderlo, Belgium 740 nylidene chloride and chlorinated solvents. Europe in 2017 and early 2018, although buying Shinetsu Botlek, the 620 There is only a small spot market for VCM in interest did increase in the first quarter of 2018 Netherlands Europe, except in the event of planned or as a result of the upcoming shutdown season for INOVYN Bamble, Norway 530 unplanned maintenance shutdowns. chlor-alkali and vinyls producers. KEM ONE Lavera, France 450 Estimated achievable VCM prices trended Vestolit Marl, Germany 400 Supply/demand upwards in the first half of 2017, in line with VYNOVA Wilhelmshaven, 400 European producers closed a considerable upstream and downstream trends, before reach- Germany amount of upstream chlorine capacity in the ing a low point in the middle of the third quar- KEM ONE Fos, France 375 second half of 2017 due to the phasing out of ter, due to the global decrease in PVC and feed- Vinnolit Knapsack, Germany 370 mercury cell production in December. stock prices. However, spot prices recovered Anwil Wloclawek, Poland 340 However, this is not likely to affect the later in the fourth quarter and in early Q1 2018 Dow Schkopau, Germany 330 production of VCM in Europe for the short term, as global PVC prices rebounded and feedstock because producers have switched to importing prices also trended upwards. A full list of plants and projects capacities, intermediate ethylene dichloride (EDC) on a forecasts, production volumes and contractual basis to continue producing PVC. Technology operating rates are available on the As a result, potential VCM capacity has so far Most commercial production in Europe is based ICIS Supply and Demand database remained constant in 2018. on ethylene, which is reacted with chlorine to Inclement weather in the first quarter of 2018 make EDC. This is converted into VCM using balanced situation regarding EDC. European has negatively impacted VCM availability for thermal cracking. Hydrogen chloride byproduct producer INOVYN also announced a VCM producers and introduced logistical complica- can be recycled to an oxychlorination plant to capacity expansion of 70,000 tonnes/year at tions. Two of KEM ONE’s PVC plants in France make more EDC. Rafnes, Norway for 2019, supported by new had production limitations due to high water The acetylene route dominates in China be- membrane-based chlorine capacity. levels making feedstock transport difficult. cause of the abundance and cheap cost of coal The forecast for PVC is for a balanced market Downstream PVC demand is expected to be feedstock. Several attempts have been made to in the first half of the year and steady growth on healthy in 2018, on the back of the healthier develop ethane-based processes, but without the back of the forecast for the European econo- growth forecast for the European economy, commercial success. my to return to GDP growth of close to 2% per with GDP growth predicted to be close to 2% year. The current high price of chlorine co-prod- by the European Commission. PVC demand is Outlook uct caustic soda is likely to incentivise the pro- driven by construction and technical applica- VCM prices and demand are expected to track duction of chlorine in Europe for at least the first tions and is therefore strongly connected to the trends in downstream PVC and upstream quarter of 2018, which could lengthen the mar- overall GDP growth. ethylene from 2018 onwards due to the lack of ket for derivatives such as EDC and VCM, at any significant spot market for the product and least in local areas of high caustic soda demand EUROPE VCM the heavily integrated European market. Feed- such as the Mediterranean. stock prices are expected to be slightly firm Overseas VCM markets such as the US are $/tonne, spot FOB western Europe compared to 2017 because of an upward trend becoming more integrated, with limited spot 750 in crude oil prices. business expected in 2018. The US market is Europe will change from a net exporter of balanced for domestic production, with very 730 EDC to a net importer from 2018 onwards; how- little spot export business taking place. Ship- ever, any volumes lost for PVC production have ments from the US to Australia are no longer a 710 been structurally replaced by contracted im- factor due to production in the latter closing in ports from European and non-European sourc- late 2015. Global PVC demand, which con- 690 es. Dow’s EDC/VCM plant at Schkopau, Ger- sumes the vast majority of VCM production, is many lacks an accompanying PVC plant, which expected to continue to grow healthily on the

670 leaves some spare capacity available in Europe. back of the expanding market in India, as well As a result, VCM availability is not expected as the relatively strong outlook for construction to shrink significantly in 2018. There have been and manufacturing in Europe. ■ 650 Feb Feb new membrane-based chlorine plants 2017 2018 announced by several producers, which might Access the archive of the Chemical Profiles ultimately return the European market to a more A-Z at icis.com/subscriber/icb

www.icis.com 23 February-1 March 2018 | ICIS Chemical Business | 71

ICB_240818_066-071 Profiles February18.indd 71 8/22/18 3:44 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

David Love houston Styrene

Uses round in early January at its 770,000 tonne/ US STYRENE CAPACITY Styrene’s main outlet is in polystyrene (PS) year Bayport styrene plant in Baytown, Texas. ‘000 TONNES/YEAR and expandable polystyrene (EPS), which The plant is expected to be down until the Company Location Capacity together account for about two-thirds of first half of March. LyondellBasell Channelview, Texas 1,250 global consumption. Other major uses The US is a net styrene exporter, with Mex- CosMar Carville, Louisiana 1,100 are in styrene butadiene rubber (SBR), acry- ico, China and South Korea being the largest Americas St James, Louisiana 950 lonitrile butadiene styrene (ABS) and sty- destinations for shipments. Exports in 2017 Styrenics rene acrylonitrile (SAN) resins, with small- fell by 11% due to constrained domestic sup- INEOS Bayport, Texas 770 er uses in unsaturated polyester resins ply as a result of heavy turnarounds during Styrolution (UPR), styrene butadiene (SB) latex and sty- the first two quarters of the year. INEOS Texas City, Texas 450 renated polyesters. The US imports about one-fourth of the vol- Styrolution Pure styrene is a colourless to yellow, oily ume that it exports. Canada is typically the only Westlake Lake Charles, 259 liquid that evaporates easily and has a sweet source of styrene imports due to the close prox- Chemical Louisiana smell. Styrene is highly flammable, forms ex- imity of two styrene plants to the US. However, A full list of plants and projects capacities, plosive mixtures in air and is dangerous last year South Korea, Spain, the Netherlands forecasts, production volumes and when exposed to flame, heat or oxidants. On and France exported styrene to the US when operating rates are available on the decomposition, styrene emits acrid fumes. prices hit historic highs in February. ICIS Supply and Demand database

Supply/demand Prices the US that utilises POSM units. Supply in the US styrene market is tight amid The US styrene market has two primary feed- two plant outages – one planned and the stocks – benzene and ethylene – but styrene Outlook other unplanned. SABIC notified customers typically takes its pricing cues from benzene. Seasonal demand for US styrene typically in mid-February that it could be mid-April be- Prices in the US styrene market are poised picks up in the spring, ahead of the summer fore full production has been restored at the to peak in Q1 amid peak turnaround season. packaging season, and again in the autumn, 1.18m tonne/year CosMar styrene plant in Spot prices have jumped from 56.92 cents/lb ahead of the winter holiday shopping season. Carville, Louisiana. The new timeline is two in early January to 74.27 cents/lb in mid-Feb- After peaking in Q1, US styrene prices months later than originally expected. SABIC ruary because of tight supply. should weaken from May through August be- and Total jointly own styrene operations at Prices in 2017 peaked from mid-February fore hitting a second, smaller peak at the end the CosMar complex. through early March to the highest levels of Q3. The second peak will largely be the re- In late January, SABIC notified customers since prior to 2000 as simultaneous turna- sult of a busy turnaround schedule in Asia. that an equipment failure caused by unusual- rounds were being conducted at three US China has imposed antidumping duties ly cold temperatures led to polymerisation Gulf styrene plants. Two of the turnarounds (ADD) on styrene of US, South Korean and plugging in the purification units, which se- had to be extended. Taiwan origin starting 13 February, in a pre- verely impacted styrene production. January US integrated spot styrene margins liminary decision. INEOS Styrolution began a planned turna- based on ethane rose by 27% month on The global styrene market was being im- month while naphtha-based margins rose by pacted by China’s antidumping investiga- US STYRENE almost 46%. Integrated contract margins tions long before an initial decision was based on ethane rose by 3.1%, while those rendered in February. US styrene sellers in Cents/lb based on naphtha rose by 9.6%. Q4 largely began to avoid selling spot mate- 90 Spot FOB US export rial to China because of the investigation, Contract FOB Technology and the uncertainty of what the outcome 80 The conventional method of producing sty- would be. rene involves the alkylation of benzene with Styrene from the Middle East, which typi- 70 ethylene to produce ethylbenzene, followed cally moved to Europe, began moving instead by dehydrogenation of ethylbenzene to sty- to China. As a result, the US began to ship 60 rene. Styrene undergoes polymerisation by all more material to Belgium, France and Turkey, the common methods used in plastics tech- which found themselves short of supply.

50 nology to produce a wide variety of polymers Styrene exports from the US to China last and copolymers. Commercially, styrene is year fell by 29% year on year, which amount- also co-produced with propylene oxide (PO) ed to a drop of 111,249 tonnes. ■ 40 Jan Feb within POSM (PO/styrene monomer) units. 2017 2018 Although POSM units are widely used in Eu- Access the archive of the Chemical Profiles rope, LyondellBasell is the only producer in A-Z at icis.com/subscriber/icb

72 | ICIS Chemical Business | 2-8 March 2018 www.icis.com

ICB_240818_072-081 Profiles March18.indd 72 8/22/18 3:48 PM ICIS price forecast reports Supply, demand and price trends at a glance

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jessie waldheim houston Propylene

Uses stream derivative prices to rise as well, which US PROPYLENE CAPACITY Propylene is mainly used to make polypro- caused domestic derivatives to be less com- ‘000 TONNES/YEAR pylene (PP), which accounts for about half of petitive against imported derivatives. Operat- Company Location Capacity propylene consumption in the US. Other out- ing rates for downstream polypropylene (PP) LyondellBasell Channelview, Texas 1,905 lets for propylene include acrylonitrile fell as imports rose. ExxonMobil Baytown, Texas 1,700 (ACN), propylene oxide (PO), a number of al- The lower propylene consumption allowed Chemical cohols, cumene and acrylic acid. supply levels to recover and inventory levels DowDuPont Freeport, Texas 1,430 began ticking higher in mid-January and con- ExxonMobil Baton Rouge, 1,275 Supply/demand tinued to recover through much of February. Chemical Louisiana US propylene supplies had been tight in early Shell Chemicals Norco, Louisiana 1,065 2018 amid production issues and low inven- Prices Flint Hills Houston, Texas 790 tory levels. Inventory levels had been low Propylene spot and contract prices rose sharp- Resources since late 2017, following the impact of Hur- ly at the start of 2018, and in January reached Enterprise Mont Belvieu, Texas 750 ricane Harvey on production in the US Gulf their highest points since December 2014. The Products coast. Multiple production units, both includ- high prices were due largely to tight supplies BASF Total Port Arthur, Texas 635 ing crackers and refineries, were taken off line following production issues. Spot prices for Formosa Point Comfort, Texas 575 during the late-August hurricane. Supplies polymer-grade propylene (PGP) had diverged Plastics USA were not immediately tightened as the hurri- from refinery-grade propylene (RGP), as the Chevron Phillips Sweeny, Texas 545 cane also affected downstream plants. production issues had centred around propane Chemical Many outages were resolved by late Septem- dehydrogenation (PDH) units, which produce Note: Top 10 sites ber. However some cracker outages continued PGP. RGP is rarely used for chemical deriva- A full list of plants and projects capacities, into the fourth quarter and refinery operating tives, but is commonly used to produce PGP. forecasts, production volumes and rates remained below pre-Harvey levels into late Historically, spot PGP has been valued operating rates are available on the November. As consumption levels had normal- about 10 cents/lb above spot RGP. However, ICIS Supply and Demand database ised by the fourth quarter, propylene supply amid a tight market for PGP and relatively bal- was snug and inventory levels remained low. anced market for RGP, the spread widened to tonne/year PDH units were recently built in Meanwhile, the propylene market contin- 30.5 cents/lb in late January. As the high-cost the US Gulf, one which started up in Decem- ued to await the start-up of a new propane de- propylene affected downstream demand, con- ber 2015 and the other which was ramping up hydrogenation (PDH) unit, which had faced sumption rates fell and propylene prices began to full production as of late February. several delays. A production outage for an- to moderate. Propylene contract prices in Feb- other PDH unit in late December, followed by ruary fell by 6 cents/lb, while spot PGP prices Outlook a days-long outage for a third PDH unit in dropped by about 20 cents/lb in the three The US propylene market is expected to mid-January, further tightened supplies and weeks following the late-January high point. lengthen as several production projects are caused propylene prices to spike. scheduled to be complete by the end of 2018, Those high propylene prices caused down- Technology while no consumption projects are expected Propylene comes in three grades: polymer over the same timeline. This is a shift from re- US PROPYLENE grade (99.5% minimum purity), chemical cent years as propylene supply has been tight grade (93-94% minimum purity) and refinery due to a move in the US towards lighter crack- Cents/lb, DEL grade (60-70% purity). er feedstocks like ethane. Despite light feed- 80 Polymer grade, contract Polymer grade, pipeline, spot There are several routes to produce propyl- stocks continuing to be favoured, several new Re nery grade, pipeline, spot 70 ene, most commonly as a by-product of gasoline cracker projects are expected to expand the production in fluid catalytic cracking (FCC) volume of propylene produced. 60 units in refineries. Propylene also is a by-prod- In addition, a new 750,000 tonne/year PDH uct steam cracking of liquid feedstocks such as unit in the US Gulf is expected to be operating at 50 ethane and naphtha. More than half the propyl- full capacity. Another new 750,000 tonne/year ene produced in the US comes from refineries, PDH unit had started up in December 2015. 40 while about a third comes from steam cracking. Meanwhile, strong demand for US gasoline On-purpose routes for propylene include exports is continuing to encourage strong oper- 30 metathesis, which converts ethylene into pro- ating rates for US refineries, which is resulting pylene, and PDH, which converts propane in good propylene production from refineries. ■ 20 Mar Feb into propylene. While on-purpose systems 2017 2018 have been a small part of domestic propylene Access the archive of the Chemical Profiles production, it has been growing. Two 750,000 A-Z at icis.com/subscriber/icb

74 | ICIS Chemical Business | 9-15 March 2018 www.icis.com

ICB_240818_072-081 Profiles March18.indd 74 8/22/18 3:49 PM Europe chemical profile

Melissa Hurley London SBR

Uses Trinseo recently increased its S-SBR capacity EUROPE SBR CAPACITY The largest use for styrene butadiene rubber by 50,000 tonnes/year in Schkopau, Germany, ‘000 TONNES/YEAR (SBR) is in the manufacture of tyre products. bringing S-SBR capacity to 200,000 tonnes/year. Company Location Capacity The replacement tyre market drives the majority The additional supply was expected to reach the of SBR demand, along with the original equip- market in 2018. Trinseo also opened a new Trinseo Schkopau, Germany 330 ment manufacturer (OEM) market. S-SBR pilot plant at the same location in Germa- Synthos Dwory Oswiecim, Poland 270 The two main types of SBR include solu- ny for developing new performance tyre innova- Michelin Bassens, France 130 tion SBR (S-SBR) and emulsion SBR (E-SBR). tions. Through a joint venture with JSR Corpora- Grupo Dynasol Santander, Spain 120 S-SBR demand for higher performance tyres tion (JSR), MOL Group planned to construct a Versalis Ravenna, Italy 120 in Europe has increased in recent years. new 60,000 tonnes/year S-SBR plant in Tiszauj- Voronez Rubber Voronezh, Russia 120 varos, Hungary. Hungary’s MOL is on schedule (Sibur) Supply/demand to announce a 2018 launch date for its planned Synthos Kralupy Kralupy, Czech 105 The SBR market witnessed price swings in ei- S-SBR plant, the company said in February. Republic ther direction and volatility was a key focus in Voronez Rubber Togliatti, Russia 60 (Sibur) 2017. There were periods of sustained tight- Prices Versalis Grangemouth, UK 60 ness in the spot market, as suppliers focused 2017 was a year of monumental peaks and on sending non-contractual European volumes troughs with contract prices exposed to the ris- Hip Petrohemija Zrenjanin, Serbia 40 to Asia, due to the widening arbitrage between ing and falling movements in the upstream Arlanxeo Port Jerome, France 40 the two regions. This year started in a more bal- butadiene market. The largest month-on-month Note: Top 11 plants listed anced supply situation compared to last year. increase since contracts moved from a quarterly A full list of plants and projects capacities, First quarter E-SBR imports in 2017 dipped to a monthly basis happened in February 2017. forecasts, production volumes and year on year because EU suppliers focused on At the beginning of 2018, contract price rises operating rates are available on the sending more export material to Asia to maxim- were more moderate compared to the start of ICIS Supply and Demand database ise the open arbitrage between Europe and Asia. 2017. Spot prices have remained fairly stable on The increased pull for export material into Asia rather uninspiring demand, compared to last technology and bio-based chemistry. at the start of 2017 resulted in tightening spot year. The styrene contract price also plays a role Previously, US renewable technology firm supply in Europe, sending prices soaring. in SBR contract discussions and the February Genomatica and Italy-based Versalis devel- In 2017, there was a drop in S-SBR imports styrene contract price emerged at a notable oped an end-to-end process for bio-butadiene into the EU of around 14%. This could be be- three-digit hike compared to the month before. production for E-SBR. As of 2018, the produc- cause of increased European investment in In February, some SBR contracts were tion process is still under development. S-SBR production in order to meet certain agreed before the sizable styrene increase tyre industry requirements. S-SBR improves emerged, so margin recovery is a focus for Outlook grip on wet roads, reduces rolling resistance some sellers for March after the upstream There is some expectation that European SBR in cars. In 2016, imports rose due to better de- monthly butadiene (BD) contract price settled demand could rise at the end of the first quar- mand for high performance tyres. at a double-digit increase. ter. This is due to an increase in enquiry levels seen for March volumes from Europe to Asia EUROPE SBR Technology compared to earlier in the year. SBR is produced by the copolymerisation of After last year’s antidumping rules and in- €/tonne, spot FD NWE butadiene and styrene in the approximate pro- vestigations, European players have been con- 3,000 SBR 1500, non-oil grade portion of 3:1 by weight in a continuous pro- templating if imports from countries not in- SBR 1723 cess. In the emulsion process, producing gener- volved in the rulings will increase into the SBR 1783 2,500 al-purpose grades, the feedstocks are suspended US, Mexico and India. in a large proportion of water in the presence of European SBR market players are expect- an initiator or a catalyst and a stabiliser. ing single-digit growth of varying degrees in 2,000 In the solution process, the copolymerisa- 2018. On average, canvassed market players tion proceeds in a hydrocarbon solution in are expecting 1-3% growth in the EU market. the presence of an organometallic complex. The tax incentives in China drove high lev- 1,500 This can either be a continuous or batch pro- els of growth in 2016 and spurred on demand cess. Some manufacturing facilities have in the region ahead of the expiration of the tax swing capacity with polybutadiene rubber. incentives in 2017. ■ 1,000 Mar Feb In terms of S-SBR, producers are looking at 2017 2018 developing technology used to manufacture Access the archive of the Chemical Profiles top performance tyres, including “green tyre” A-Z at icis.com/subscriber/icb

www.icis.com 9-15 March 2018 | ICIS Chemical Business | 75

ICB_240818_072-081 Profiles March18.indd 75 8/22/18 3:49 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Vasiliki Parapouli London Styrene

USES were under pressure in February following europe styrene capacity Styrene’s main outlets are polystyrene (PS) the significant monthly feedstock barge con- ‘000 TONNES/YEAR and expandable polystyrene (EPS), which to- tract increase. EPS demand was also weak in Company Location Capacity gether account for about two-thirds of global March after styrene recorded another-higher LyondellBasell/ Maasvlakte, 680 consumption. Other major uses are in styrene- than expected-increase Covestro Netherlands butadiene rubber (SBR), acrylonitrile-butadi- Polystyrene (PS) volumes were impacted Total Gonfreville, 600 ene-styrene (ABS) and styrene-acrylonitrile more evidently by styrene’s increased volatili- France (SAN) resins, with smaller uses in unsaturat- ty, while some players have already decided to Versalis Mantova, Italy 595 ed polyester resins (UPR), styrene butadiene switch to other, more competitive, materials BASF Ludwigshafen, 550 (SB) latex and styrenated polyesters. like polypropylene (PP) by the end of the year. Germany ELLBA Moerdijk, 550 SUPPLY/DEMAND PRICES Netherlands Following the closure of INEOS Styrenics’ To the surprise of most market players, Janu- Trinseo Terneuzen, 500 Netherlands 350,000 tonne/year styrene unit in Marl, Ger- ary started with a smaller than anticipated in- many in late 2012, the European market has crease for the styrene contract price, while Styrolution Antwerp, Belgium 500 been more finely balanced. February ended up in a bigger one than what Repsol Tarragona, Spain 450 The European styrene market was poised was initially expected. Shell Moerdijk, 440 Netherlands for a rather challenging supply situation at the Unplanned production disruptions in the start of 2018, given the heavy schedule of US was the main reason that took the Europe- Trinseo Boehlen, 300 Germany planned maintenance turnarounds in the re- an spot market in the high $1,500s/tonne, al- gion, but also in the US and the Middle East, though the supply status of the domestic mar- A full list of plants and projects capacities, forecasts, production volumes and which was expected to take out significant ket could not justify such a high level. operating rates are available on the capacity during most of the first quarter. European players are convinced the market ICIS Supply and Demand database Several shutdowns are underway globally, will soon correct itself more manifestly, proba- some also unplanned, and even if European bly from April, once the planned turnaround OUTLOOK prices nearly reached $1,600/tonne in the season is close to the end and all restarts will As activity in the Asian market resumes after course of February, supply does not seem to have gone according to schedule. The volatility the Chinese Lunar Year, global styrene players be a problem for the market. of the spot market, which was rather similar to await to see what the impact of the recently Players are cautious about availability and the same period in 2017, had been more diffi- announced preliminary antidumping duties probably pay a higher price when in-need of cult for some of the downstream styrenics mar- (ADD) from China on cargoes of South Korean material, but it seems that most of them have kets to manage, as it impacted their demand. origin, as well the US and Taiwan, will be. been rather well prepared. The EPS market was not so much affected, The levy to be imposed on imports from On the demand side, the European expand- although volumes were pushed lower by the South Korea ranges from 7.8% to 8.4%, US able polystyrene (EPS) market experienced high price in February, while the impact was faces 9.2-10.7% and Taiwan 5%. good order entry in January, but volumes more evident in the PS market that was ex- Based on initial estimates, the ADD will pecting March demand to be 10-15% lower most likely change trade flows between the EUROPE STYRENE MONOMER than an already weak February. regions and countries involved, with, while even ahead of the ADD announcement, trade €/tonne, contract FOB ARA barges TECHNOLOGY flows had begun to shift. It is likely that more 1,500 The dominant route uses ethylbenzene (EB), US material will be arriving into Europe, which is dehydrogenated to styrene in the while some traders are even looking at taking 1,400 presence of steam. more cargoes from Europe into China. Styrene is also co-produced with propyl- The ADD announcement is a part of Chi- 1,300 ene oxide (PO). Following the closure of the na’s target for self-sufficiency by 2020 as a Marl plant in Germany in late 2012, Europe- slew of plant expansions and new builds is 1,200 an styrene volume has been increasingly expected to almost double current plant ca- supplied by propylene oxide /SM (styrene pacity. New capacity builds in China could 1,100 monomer) units, with approximately 40- reach up to 5m tonnes/year in two years 45% of regional capacity now produced time2020, bringing total nameplate capacity through this route. to 13.5m tonnes/year. ■ 1,000 Apr Mar There is a renewed focus among styrene 2017 2018 players to understand and anticipate the dy- Access the archive of the Chemical Profiles namics of the propylene oxide market. A-Z at icis.com/subscriber/icb

76 | ICIS Chemical Business | 16-22 March 2018 www.icis.com

ICB_240818_072-081 Profiles March18.indd 76 8/22/18 3:49 PM Latin America chemical profile

ron coifman houston PVC

Uses zil’s PVC demand could remain slow until a LATIN AMERICA PVC Polyvinyl chloride (PVC) is a widely used significant construction inventory overhang ‘000 TONNES/YEAR plastic as either rigid or flexible resin. Rigid is reduced. Company Location Capacity PVC can be used in pipes and accessories for In Mexico, PVC demand in 2017 was Mexichem Altamira, Mexico 690 construction and agriculture, window and steady, though not considered stellar. Braskem Maceio, Brazil 460 door profiles, conduits and automotive parts. PVC demand is generally expected to im- Mexichem Mamonal, 400 Flexible PVC contains plasticizers and is used prove in 2018 on positive GDP growth pro- Colombia in calendering applications, vinyl floor cover- jected for the major economies in Latin Amer- Unipar Indupa Santo Andre, 300 ing, upholstery, electrical cable insulation, ica, with the exception of Venezuela because Brazil inflatable products, containers for intrave- of the country’s continuing recession amid Braskem Camacari, Brazil 250 nous solutions and packaging and bottles. political uncertainty. Unipar Indupa Bahia Blanca, 222 Seasonality also tends to drive PVC de- Argentina Supply/demand mand throughout Latin America. PVC busi- Cloro Vinilos Del El Tablazo, 155 Argentina, Brazil, Colombia and Mexico pro- ness generally weakens as construction activ- Zulia Venezuela duce PVC for domestic consumption and for ity slows with cold weather. On the other NOTE: Top 7 sites export. Colombia and Mexico will first service hand, building, along with PVC activity, picks A full list of plants and projects capacities, the domestic market, but usually have suffi- up with rising temperatures. forecasts, production volumes and cient supply for exports to South America, operating rates are available on the Europe, Turkey or India. Argentina may offer Prices ICIS Supply and Demand database moderate PVC volumes to neighbouring PVC prices in Latin America are generally countries. Brazil is a net importer of PVC, but driven by developments in other regions – for from naphtha in other regions, giving US pro- has occasionally had some availability for ex- example, by Asia with Taiwan’s Formosa ducers a significant cost advantage. port because of weak domestic demand. Non- Plastics Corp (FPC) benchmark price an- producing countries along the Pacific coast of nouncements every month and by US pricing. Outlook South America will import from the US, Co- PVC prices in Latin America rose in early PVC demand in Latin America is expected to lombia and Mexico. 2018 in line with increasing prices in Asia. increase in 2018 in line with rising GDP pro- PVC demand in Argentina and Brazil re- However, the magnitude of the price change jections and with demographics, as the region mained weaker than expected in 2017, as the in Latin America may not be an exact reflection is considered a developing market in compar- construction sectors gradually recovered of the change in other regions, and implemen- ison with a more mature US market. from the recessions of 2016 in the two coun- tation would likely be at a lag of one or two More stable politics in 2018 in most coun- tries. While greater optimism was noted in months. Additionally, PVC domestic prices in tries in the region should contribute to im- Argentina as the economy recovers from the Brazil are generally high compared with other proving economies and to general demand, country’s recession of 2016, projections in regions, because of significant import duties following earlier disruptions from charges of Brazil were more cautious in the aftermath of and other barriers to lower-priced imports that corruption. However, continuing political the Lava Jato corruption scandal. Also, Bra- protect domestic resin production. and social discontent in Venezuela should Price changes in Mexico generally track limit the country’s growth. Also, recent oppo- LATIN AMERICA PVC price fluctuations in the US. Prices in non-pro- sition to President Pedro Pablo Kuczynski ducing countries along the Pacific coast of could dampen the outlook in Peru. $/tonne, pipe South America that depend on imports are the As Argentina and Brazil place greater dis- 1,300 CFR Chile DEL Argentina quickest to react to changes in other regions. tance from the recessions of 2016, the recover- DEL Brazil DEL Mexico ing economies in the two countries will lend 1,200 Technology support to rising demand. The outlook in Brazil Most PVC is produced through the polymerisa- and Mexico will also depend on the results of 1,100 tion of vinyl chloride monomer (VCM) feed- elections to be held in the two countries in 2018. stock in a liquid state. The majority of PVC in The next President in Mexico to be deter- 1,000 China is carbide- or acetylene-based using mined in the July election will unlikely over- feedstock calcium carbide, while other coun- turn Mexico’s recent energy reforms, which 900 tries use upstream ethylene to produce PVC. opened up the country to outside investment. PVC can be produced by suspension poly- Before, only state company Pemex was allowed ■ 800 merisation (the most common), emulsion to produce oil, fuels and natural gas. Feb Feb polymerisation and bulk polymerisation. 2017 2018 In the US, most ethylene is obtained from Access the archive of the Chemical Profiles ethane, and is cheaper than ethylene derived A-Z at icis.com/subscriber/icb

www.icis.com 16-22 March 2018 | ICIS Chemical Business | 77

ICB_240818_072-081 Profiles March18.indd 77 8/22/18 3:49 PM Middle East chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Izham Ahmad Singapore Polyols

USES difficulties securing sufficient PO to run their asia and middle east polyols capacity The major use of polyols is in polyurethane plants at full capacity. ‘000 TONNES/YEAR (PU) foams, flexible or rigid, which are Chinese producers have also been affected Company Location Capacity ­produced by the reaction of a polyol with an by PO prices and few have been able to offer Jurong Ningwu Jurong, China 400 isocyanate, usually toluene di-isocyanate (TDI) polyols to Middle East buyers due to high New Material or methyl di-p-phenylene isocyanate (MDI). ­production costs and eroding profit margins. Development Polyether polyols are more widely used, On the demand side, downstream foam Sadara Al Jubail, Saudi Arabia 400 with the main applications being rigid and flex- makers have also been under pressure due to Shell Eastern Pulau Seraya, 360 Petrochem Singapore ible polyurethane foams. Rigid foams are main- dwindling inventories, but have shown a Zibo Dexin Zibo, China 350 ly used in insulation, refrigeration, packaging­ muted response to the higher prices because of Lianbang and construction, while flexible foams have ap- the higher TDI and MDI prices. Shandong Dongda Zibo, China 300 plications in upholstery, mattresses­ and seats. Wudi Dexin Wudi, China 300 Polyols can also be used in elastomers, adhe- PRICES Chemical sives, coatings and fibres. Polyols prices have been tracking feedstock PO CNOOC and Shell Huizhou, China 280 prices closely, with polyols producer margins­ Petrochemicals Co (CSPC) SUPPLY/DEMAND tightly squeezed. The oversupply of polyols in Asia, especially­ in Prices of 10-13.5% polymer polyols (POP) in Wanhua Chemical Yantai, China 270 China, has resulted in the ­consolidation of the the Middle East have mostly been firmer over Shandong Longhua Zibo, China 260 PU industry,­ while the price and availability­ of the last few months as sellers tried to push the KPX Ulsan, South Korea 230 ­feedstock propylene oxide (PO) has been a key higher production costs on to their customers, A full list of plants and projects capacities, driver behind the recent rise in polyols prices in but with limited success. forecasts, production volumes and the ­Middle East. In the past few years, there has In the week ended 1 March, POP prices hit operating rates are available on the also been a shift away from base ­flexible polyols their highest level since ICIS began tracking the ICIS Supply and Demand database production to other ­specialty polyols grades. data in August 2015, while prices of conven- In terms of start-ups, Sadara’s 400,000 tonne/ tional polyols have largely tracked the move in ethylene oxide (EO), to an initiator having year polyether polyols unit in Saudi Arabia, POP prices. ­active hydrogens. The most common catalyst is came on stream in mid-July 2017 and its first Buyers have been apprehensive about the potassium hydroxide. batch of flexible polyols cargoesarrived ­ in price gains. Many were believed to be buying The reaction is carried out by a discontinu- China in late October. However, supply to the on a need-to basis and few were willing to stock ous batch process in an inert atmosphere. After Middle East has been limited, in part because up on inventories due to the high ­prices. polymerisation, the catalyst is removed. The ­Sadara is believed to be only offering­ Prices of rigid grade polyols have been largely polyol is then purified. ­conventional grade polyols at the ­moment. steady over the last few months mainly­ due to Meanwhile, the three main South Korean limited buying interest and a lack of firm deals OUTLOOK polyols producers, namely KPX, Kumho for this particular­ grade. Rigid polyols prices The expected influx of Sadara’s polyols into ­Petrochemical and Mitsui Chemicals & SKC have, however, also seen ­sporadic price increas- Asia and the Middle East in 2018 will likely Polyurethanes (MCNS), have at times run into es in line with the increase­ in POP and conven- weigh on polyols prices, although the price tional polyols as well as tracking Asian prices. movement of feedstock PO will remain a key MIDDLE EAST POLYOLS In related Asian markets, prices of US dollar­ factor in determining direction. denominated flexible slabstock grade of polyols The PU industry looks set to continue on its $/tonne, spot CFR Middle East, drummed in China hit a 10-month high in the second half path of consolidation, with producers 2,100 Polymer grade 10.0-13.5% of August 2017, along with a spike in China PO ­operating integrated facilities that produce Polyether conventional 2,000 prices. They jumped again in early 2018 before ­upstream propylene and downstream polyols. Polyols polyether rigid retreating again. Polyols consumption in the Middle East is 1,900 Polyols spot import prices in ­southeast Asia projected to be relatively healthy as the Sadara­ 1,800 and India were much less volatile­ and generally start-up is likely to boost to the ­development of range-bound during the year, with prices inch- the PU value chain, according to the ICIS Sup- 1,700 ing up in August and September on supplier ply and Demand Database. But many are also

1,600 price hikes amid the rise in feedstock costs and concerned about a recent gain in the price of tighter regional supply. isocyanates, which has dampened demand for 1,500 polyols in the Middle East. ■

1,400 TECHNOLOGY Mar Mar Polyether polyols are produced by the Access the archive of the Chemical Profiles 2017 2018 ­catalysed addition of epoxides, mainly PO or A-Z at icis.com/subscriber/icb

78 | ICIS Chemical Business | 23-29 March 2018 www.icis.com

ICB_240818_072-081 Profiles March18.indd 78 8/22/18 3:50 PM US chemical profile

Bill Bowen houston PVC

Uses a rate of 3.8% – a healthy rate, but slightly US PVC CAPACITY Polyvinyl chloride (PVC) is a rigid and du- slower than in 2016. ‘000 TONNES/YEAR rable thermoplastic with a broad variety of US housing starts have risen steadily in Company Location Capacity applications, especially in the construction recent years, from 1.06m units in 2014, to Shintech Freeport, Texas 1,450 industry, which consumes about 70% of US 1.11m in 2015, 1.21m in 2016 and 1.26m in Shintech Addis, Louisiana 960 PVC production. With the addition of plas- 2017, according to US government figures. OxyVinyls Pasadena, Texas 950 ticizers and other additives, PVC can be February 2018 US housing starts came in at Westlake Plaquemine, 750 made clear and flexible enough to make a seasonally adjusted annual rate of 1.24m Louisiana clear film to package food or for medical units, down from 1.33m in January 2018. Formosa Point Comfort, 690 uses, such as blood bags. It is also made into Plastics Texas fibres used in clothing, upholstery, or vinyl Prices Westlake Calvert City, 592 floor covering and electrical wire insula- US domestic prices rose by a net 2 cents/lb Kentucky tion. It is the third largest plastic produced in 2017 and have started 2018 with a 3 Shintech Plaquemine, 590 in the US by volume after polyethylene (PE) cents/lb increase, with more on the table for Louisiana and polypropylene (PP). the first quarter. Formosa Baton Rouge, 470 Spot export prices rose steadily through Plastics Louisiana Supply/demand December 2017 and the first two months of Westlake Aberdeen, 454 Mississippi US PVC domestic demand grew by 4.6% 2018 before levelling off in March. during 2017 as US construction activity Domestic ethylene prices are expected OxyVinyls Deer Park, Texas 307 gained momentum. US production was up to soften in the second quarter as greater A full list of plants and projects capacities, more than 2.7% and sales rose 4.6%. Ex- production capacity enters the market in forecasts, production volumes and ports, though, grew by only 0.1% because of the Texas Gulf Coast region. Cheaper ethyl- operating rates is available on the the greater domestic demand. Stable and ene prices through most of 2017 were made ICIS Supply and Demand database growing ethylene feedstock supplies have volatile by Hurricane Harvey’s arrival in allowed US producers to increase margins late August. and extensive damage from wildfires in the on the lower prices for raw material. western US that have destroyed more than Ethylene feedstock supply should be Technology 10,000 structures. more stable in 2018, with a number of Most PVC is produced through the poly- Single-family residential construction is ethane crackers having launched produc- merisation of vinyl chloride monomer expected to grow after a couple of years of tion after output constraints in 2017. (VCM) feedstock in a liquid state. strong apartment growth. Multi-family Healthy US economic growth is expected The so-called process of suspension poly- structures have less wiring, fewer exterior to continue in 2018 after GDP rising to 2.3% merisation accounts for almost 90% of PVC walls and exterior features than single-fami- in 2017, according to preliminary data. That manufacture. Other processes include emul- ly residences and use less PVC for pipes, is up from 1.6% GDP growth in 2016. That sion polymerisation and mass polymerisation. doors and window profiles, fixtures and -ar helped US construction spending to grow at Most global PVC producers produce or chitectural features. buy ethylene derived from naphtha, which US President Donald Trump’s planned US PVC is in turn derived from oil refining. infrastructure programme, while appearing But in the US, most ethylene comes from far from being agreed upon by Congress, $/tonne, spot FOB US Gulf export ethane, a natural gas liquid and a cheaper al- would boost construction activity further 950 ternative that gives US producers a signifi- if implemented. Although this would cant production cost advantage, helping not be housing related, PVC pipes could 900 maintain an open arbitrage to global markets. come in for greater use in electrical and water infrastructure. Outlook Rising home values in the US are also ex- 850 Most market participants anticipate a year pected to increase equity lending and re- of growing demand amid a strengthening modelling activity. construction sector in the US. Estimates With lower feedstock costs, PVC prices 800 hold that PVC demand will growth by an are expected to continue to fall in the first average 3.8%/year through 2020. quarter of 2018, but then level off through US residential construction rose through the rest of the year. ■ 750 2017 and is expected to continue to build Mar Mar 2017 2018 during 2018 on efforts to repair damage Access the archive of the Chemical Profiles from three major hurricanes during 2017 A-Z at icis.com/subscriber/icb

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Amanda hay houston PTA

Uses US PET capacity remains restricted as the us pta capacities Nearly all of the output of purified terephthalic West Virginia plant is still idled and the Corpus ‘000 TONNES/YEAR acid (PTA) is consumed in the production of Christi plant is unfinished. Taiwanese PET Company Site Capacity polyester, including polyester fibre, polyethyl- producer Far Eastern New Century purchased BP Chemicals Cooper River, 1,350 ene terephthalate (PET) bottle resin and poly- the West Virginia plant, but plans for a restart South Carolina ester film. Other, smaller outlets for PTA are are not yet known. Indorama Ventures Decatur, 1,115 cyclohexanedimethanol, terephthaloyl chlo- In March, a consortium led by Mexico’s Alabama ride, copolyester-ether elastomers, plasticizers Alpek and Thailand’s Indorama Ventures DAK Americas Cape Fear, 550 and liquid crystal polymers. In the US, de- agreed to buy M&G USA Corp’s PTA and PET North Carolina mand primarily comes from the production of plant in Corpus Christi for $1.125bn through a DAK Americas Columbia, 425 PET bottle resin. joint venture, CC Polymers. Another partner in South Carolina the venture is Far Eastern Investment, a subsidi- DAK Americas Port Bienville, 275 Mississippi Supply/demand ary of Far Eastern New Century Corporation. Eastman Chemical Kingsport, 225 US PTA plants are in North and South Carolina, Each stakeholder will have the right to re- Tennessee Alabama, Mississippi and Tennessee, so pro- ceive a third of the PET and PTA produced at Invista Wilmington, 180 duction was not disrupted in August 2017 by the site, with capacity estimated at 1.1m North Carolina Hurricane Harvey. No interruptions to produc- tonnes/year and 1.3m tonnes/year, respective- A full list of plants and projects capacities, tion were known despite the storm’s impact on ly, making it the largest facility of its kind in forecasts, production volumes and production of feedstock paraxylene (PX). the world. A timeline for the completion of the operating rates are available on the Demand for PTA in the US was muted in the plant will be communicated at a later date, the ICIS Supply and Demand database second half of 2017 along with feedstock PX. companies said. Before the announcement, Lower demand was attributed to reduced PET market sources had anticipated the plant to op- The US PTA price is not freely negotiated production capacity throughout the Americas, erate by late 2019 at the earliest. This will great- and, for the purpose of the ICIS assessment, its which carried into 2018. ly impact future PTA consumption in the US. movement is equivalent to 67% of the US PX Italy-based PET producer Mossi & Ghisolfi M&G’s Mexico plant has restarted its opera- price delta for the month in which it was settled. (M&G) was forced to shutter its PET resin plant tions, although it is running at reduced rates. in West Virginia and to temporarily stop PET The US PET market is approaching the sum- Technology resin production in Altamira, Mexico, in au- mer peak consumption season, which could Initially, PTA was produced by the oxidation tumn 2017 amid financial difficulties. increase demand for PTA. of PX using dilute nitric acid and, later, air. It The company became saddled with $1.7bn In Asia, the market outlook also became un- was the first product to be made commercially of debt because of the construction of its giant certain, with a change in sentiment from bullish this process. PET/PTA complex in Corpus Christi, Texas. to bearish in March. The fluctuations in up- Modern technologies produce PTA by the M&G subsequently filed for bankruptcy protec- stream crude and the possibility of implications catalytic liquid-phase oxidation of PX in acetic tion in October 2017 and started a sales process for petrochemical trades stemming from the US acid, which is done in the presence of air and for its US plants. plan to impose tariffs on steel and aluminium uses manganese or cobalt acetate as a catalyst. imports added uncertainty to the PTA market. PTA is purified in a crystalliser, where unre- US PTA acted xylene and water are flashed off. Prices PTA technology has been led by BP and fi- Cents/lb, contract 50 PTA contract prices have been on an uptrend bres producer Advansa. BP claims to have sim- since August 2017, tracking rising prices for PX. plified the process, offering savings in capital Initially, prices spiked in response to Har- and operating costs with the optimal plant size 48 vey’s direct hit on the Texas Gulf Coast. The at 700,000 tonnes/year. storm knocked more than 40% of US PX pro- Processes have also been developed by US- duction off line and impeded logistics, delay- based Dow and Eastman, as well as Japan’s 46 ing shipments to PTA producers. Production of Mitsubishi Chemical and Mitsui Chemicals. PX began to normalise in November. PTA prices settled downward somewhat in Outlook 44 October, but then began climbing with crude There is some uncertainty for the US PTA mar- prices. PX and PTA prices remain at their high- ket. Much will hinge on when reduced US ca- est levels since August 2015. pacity will return after the M&G asset sales. ■ 42 Apr Feb For US February contracts, ICIS assessed 2017 2018 PTA prices at 48.87 cents/lb ($1,077/tonne), Access the archive of the Chemical Profiles tracking rising prices in February for PX. A-Z at icis.com/subscriber/icb

80 | ICIS Chemical Business | 30 March-5 April 2018 www.icis.com

ICB_240818_072-081 Profiles March18.indd 80 8/22/18 3:57 PM Europe chemical profile

Jane Massingham London Plasticizers

USES supply still in evidence. The focus on non- EUROPE PLASTICIZERS CAPACITY Plasticizers are added to polyvinyl chloride phthalate plasticizers due to legislation and par- ‘000 TONNES/YEAR (PVC) and other materials to give them more ticular growth in DOTP, has resulted in a num- Company Location Capacity flexibility and durability. DOP is used in tub- ber of announcements regarding new/increased BASF Ludwigshafen, 300 ing and hoses, flooring, construction materi- DOTP capacity later in 2018 and in 2019. Germany als, electrical cables and wiring and moulded Evonik Marl, Germany 220 plastic products. It can also be used as a hy- PRICES Polynt San Giovanni, Italy 110 draulic fluid, a dielectric fluid and a solvent. There were big jumps in pricing in the first half Exxon Botlek, Netherlands 90 DINP is used in vinyl products for housing of 2017. DOTP saw triple digit rises at the end of Perstorp Stenungsund, Sweden 70 and construction material, flexible PVC prod- Q1 on the back of force majeure declarations re- Ela Kimya Tuzla, Turkey 60 ucts, coatings and durable goods made from sulting in tight supply pressure noted from Deza Valasske Mezirici, 50 moulded plastics. healthy demand and upstream cost pressure. Czech Republic DOTP is a non-phthalate plasticizer used in For May, it was DINP in particular that Grupa Azoty ZAK Kedzierzyn-Kozle, 50* an array of products including plastic films, struggled with supplies and saw the biggest Poland home flooring and wall coverings, wires and hikes and this was largely due to another force INEOS Verdun, france 50 cables, automotive parts, and some adhesives, majeure declaration. By mid-June, many buy- Plastifay Istanbul, Turkey 40** coatings and sealants. Dipropyl heptyl phtha- ers on the spot market had absorbed close to *Grupa Azoty Zak to increase nameplate capacity to 65,000 late (DPHP) is used to enhance the durability triple digit rises for all grades. The markets sof- tonnes/year in Q3 2018 **Plastifay to increase nameplate capacity to 46,000 tonnes/ of PVC applications such as cables, wires and tened into July on the back of improved availa- year mid 2018 roofing membranes. bility and downward pressure from feedstocks. NOTE: Oxea to start production of 65,000 tonnes/year in 2H The only production issue was the ongoing re- 2019 in Germany SUPPLY/DEMAND duced output at BASF, which had been the A full list of plants and projects capacities, Availability of European plasticizers varies case since the explosion at the Ludwigshafen, forecasts, production volumes and depending on grade. The market experienced Germany, site in October 2016, but this too re- operating rates are available on the a number of production issues in 2017, both turned to normal production at the start of Q4. ICIS Supply and Demand database planned and unplanned and prices soared Overall in Q4, planned and unplanned during the traditional peak demand period of supply restrictions, although not as severe as are due to remain fairly strong and buyers ex- Q2 with supply tight. earlier in the year, kept the market well sup- pect it will be a smoother ride in terms of sup- Although improved supplies were seen mid- ported and prices steady. Good demand later ply compared to that experienced in 2017. year, the market is quite precariously balanced in January and into February combined with Looking ahead, there is new capacity of and any small unexpected hiccups in produc- some reduced imports of DOTP and upstream DOTP due on stream from Grupa Azoty Zak, tion tend to be felt quite quickly. DOTP in par- cost pressure from stronger than expected Plastifay, Oxea and Sibur. ticular is reliant upon imports to satisfy Europe- propylene have kept prices steady to firm. Certain sources said there will be the inevi- an demand and with some reduction of table conversion to phthalate-free plasticizers volumes early 2018, there are pockets of snug TECHNOLOGY in the years ahead and most feel that by 2020 DOP and DINP are produced by the esterifica- there will be far fewer applications using EUROPE PLASTICIZERS tion reaction of an alcohol with phthalic anhy- DINP and a natural switch to DOTP is the dride (PA), using a catalyst. For DOP, 2-ethyl- most likely trend. However, in March 2018, it €/tonne, spot FD NWE hexanol (2-EH) is used, while isononyl alcohol was revealed that DINP does not require clas- 1,600 DINP DOP DOTP DPHP is used for DINP. After esterification, excess al- sification for reprotoxic effects, the European cohol is removed and the plasticizer is filtered. Chemicals Agency (ECHA) said. In February

1,500 DOTP is produced by reacting 2-EH with 2015, Denmark had submitted the proposal either dimethyl terephthalate (DMT) or tere- for the classification of DINP to ECHA. phthalic acid (PTA) at elevated temperatures There is little price advantage of using DINP 1,400 and pressures, with the reaction time twice as at the time of publication and with a more di- long as DINP or DOTP. Feedstocks for DPHP verse number of DOTP suppliers, some said include phthalic anhydride (PA) and 2-propyl the consumer pull towards DOTP was already 1,300 heptanol (2-PH). being seen at some accounts. The market is ex- pected to remain balanced to tight until the ■ 1,200 OUTLOOK new planned capacity comes online. Mar Mar European plasticizer markets are largely ex- 2017 2018 pected to have a positive 2018, with growth Access the archive of the Chemical Profiles rates around 3-5%. Economies and demand A-Z at icis.com/subscriber/icb

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ICB_240818_072-081 Profiles March18.indd 81 8/22/18 3:57 PM ASIA chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

hazel goh singapore PTA

Uses There were expectations for some of the ASIA PTA CAPACITY Purified terephthalic acid (PTA) occurs as a idled PTA plants to restart in mid-2017, but ‘000 TONNES/YEAR white, crystalline powder with a slightly acid- that did not happen until Q4 2017. Hence, Company Location Capacity ic odour. Nearly all PTA is consumed in poly- PTA supply tightness continued even when Hengli Petrochemical Changxing 6,600 ester production including polyester fibre, there was a slight slowdown in the polyester Island, China polyethylene terephthalate (PET) bottle resin sector before and after the Lunar New Year in Yisheng Dahua Dalian, China 5,950 and polyester film. February 2018 when polyester operating rates Petrochemical PTA and monoethylene glycol (MEG) are slowed for about a month. PTA inventories Yisheng Ningbo, China 5,100 reacted to make a basic ester which is poly- remained generally low. Petrochemical merised in a melt phase, polycondensation PX-PTA spreads widened amid the supply/ Jiaxing Jiaxing, China 3,700 finishing reactor to make polyester. demand tightness and there was improved Petrochemical PTA is also the feedstock for dioctyl tereph- margins for PTA producers. The favourable Xiang Lu Zhangzhou, 3,000 Petrochemical China thalate (DOPT) and polybutylene terephtha- conditions allowed PTA producers to run Hanbang Jiangyin Jiangyin, China 2,800 late (PBT) production. their plants at high operating rates. South Petrochemical Korea, Thailand, Taiwan and China have spot Jiangsu Hailun Jiangyin, China 2,400 Supply/demand export volumes. Chemical Generally solid performance in the down- BP Zhuhai Chemical Zhuhai, China 2,350 stream polyester industry since 2017 contrib- Prices Reliance Industries Dahej, India 2,300 uted to positive sentiment and kept PTA sup- Both PTA and feedstock paraxylene (PX) pric- Yisheng Yangpu, China 2,000 ply/demand fundamentals on the tight side for es have been on the uptrend since the second Petrochemical most of the first quarter of 2018. With the sup- half of 2017. Oriental Kwan Yin, Taiwan 2,000 portive downstream market situation, several The generally tight PTA supply/demand Petrochemical idled PTA plants restarted. Plus, new PTA fundamentals during this period drove PTA (Taiwan) Co plants started up in the fourth quarter of 2017. prices to increase faster than PX prices. A full list of plants and projects capacities, Hanbang Petrochemical’s No 1 PTA unit of The PX-PTA spreads widened and mar- forecasts, production volumes and 600,000 tonnes/year and part of Fuhua Gulei gins improved for PTA producers, encourag- operating rates are available on the Petrochemical’s No 2 unit of 1.5m tonnes/year ing PTA producers to run their plants at high ICIS Supply and Demand database – both in China – restarted in the fourth quar- operating rates. PX-PTA spreads increased ter of 2017. from around the $80s/tonne range for most PTA producers should be able to achieve Jiaxing Petrochemical’s No 2 unit with of 2017, to around the $90-100s/tonne range solid margins and high operating rates as 2.2m tonnes/year capacity in China, and Ori- in Q4 2017, and are now around the $120s/ there were more than 1m tonnes/year of new ental Petrochemical Taiwan Co’s (OPTC) Line tonne level. downstream polyester capacity in China in 3 with 1.5m tonnes/year capacity in Taiwan the first quarter of 2018, and more than 4m were the new plants that started up in the Technology tonnes/year of upcoming new downstream fourth quarter of 2017. Modern technologies produce purified tere- polyester capacity expected in China for the phthalic acid by the catalytic liquid phase ox- rest of 2018. ASIA PTA idation of PX in acetic acid, in the presence of Meanwhile, there are no firm plans for new air. The process uses manganese or cobalt ac- PTA plants this year. $/tonne, spot CFR China Main Ports etate as a catalyst. On a global basis, upcoming PTA projects 800 PTA is a low-risk hazard to health but pro- are the JBF Industries 1.25m tonne/year plant longed exposure should be avoided. In addi- in India, Oman International Petrochemical 750 tion, PTA dust can be explosive, and it reacts Industries Company’s (OMPET) 1.1m tonne/ strongly with oxidants. The substance can ir- year unit in Oman and Corpus Christi Poly- ritate the eyes and skin. mer’s (in progress of acquiring the under-con- 700 struction plant from Mossi & Ghisolfi) of 1.3m Outlook tonne/year plant in Texas, US. The balancing of run rates against margins A couple of existing Chinese producers, 650 will likely be a key point for Asia PTA pro- Hengli Petrochemical and Yisheng Petrochem- ducers. With a wide PX-PTA spread, PTA pro- ical, were heard to have plans to expand capac- ducers will target high operating rates. How- ity, but more details have not been revealed. ■ 600 Mar Mar ever, operating rates need to be controlled to 2017 2018 avoid a supply overhang which would jeop- Access the archive of the Chemical Profiles ardise margins. A-Z at icis.com/subscriber/icb

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ICB_240818_082-089 Profiles April18.indd 82 8/22/18 4:08 PM Europe chemical profile

Ciaran Tyler London Nylon

USES broadly unchanged although a plethora of EUROPE NYLON 6 CAPACITY The two major forms of nylon (polyamide/ production issues in the upstream ADN and ‘000 TONNES/YEAR PA) virgin polymer are nylon 6, based on cap- HMDA markets have meant that nylon 6,6 Company Location Capacity rolactam (capro) and nylon 6,6, based on adi- availability remains extremely tight. ponitrile (ADN), adipic acid and hexamethyl- BASF Germany, 241 Ludwigshafen ene diamine (HMDA). Most nylon 6 PRICES Dow Chemical Germany, Uentrop 145 production is used for clothing, carpets and Nylon prices have fluctuated quite significant- LANXESS Germany, Krefeld 140 engineering plastics for automotive, electrics ly over the last year with volatility in upstream and electronics. Nylon 6,6 is used predomi- benzene remaining a significant cause. The Grupa Azoty Poland, Tarnow 125 nantly for engineering plastics. macroeconomic situation in Europe has been DSM The Netherlands, 125 Emmen broadly healthy, and demand in most sectors Solvay France, St.Fons 98* SUPPLY/DEMAND and grades has remained buoyant, helping to The nylon 6 market in Europe is structurally keep prices and margins mostly positive. Radici Group Italy, Novara 90* oversupplied by hundreds of thousands of Some nylon producers have bemoaned the LANXESS Belgium, Antwerp 90 tonnes. New nylon capacity has continued to spread between capro and nylon as too large Ube Industries Spain, Castellon 70 come onstream in part to alleviate structural and described the margins for nylon produc- *Nylon 6,6 oversupply of capro in Europe, which is more ers as relatively low. This has become less of A full list of plants and projects capacities, acute as fewer volumes are exported into an issue for some with more players now inte- forecasts, production volumes and Asia, partly due to China’s substantial capro grated capro producers. operating rates are available on the capacity construction over the last decade. Nylon 6 prices in Q1 2018 have remained ICIS Supply and Demand database The most recent nylon 6 expansions in Eu- steady with fundamentals balanced and up- rope were carried out by Grupa Azoty in Po- stream costs less volatile than expected. porting that additional volumes from the new land and UBE in Spain. Both units came on- Nylon 6,6, however, has seen further sizeable capacity are yet to be on offer in sizeable line in late-2017. Combined, the expansions increases throughout Q1 2018, following multi- amounts. With demand remaining robust in add 120,000 tonnes/year to Europe. ple issues in the upstream markets which led to most sectors and availability not lengthening The nylon 6 market in Q1 2018 has wit- a number of players in Europe and around the as quickly as some have anticipated, nylon nessed mostly healthy demand, especially in world declaring force majeure on 6,6 produc- fundamentals are expected to continue to be the engineering plastics and compounding tion and ever-tightening market conditions. mostly balanced in the shorter-term with po- sectors. The exception is nylon-made bulk With nylon 6,6 prices continuing to rise, tential lengthening in the long-term. continuous filament (BCF) carpets thanks to some players have questioned how sustainable Overall growth in Europe for 2017 stood changing fashions and alterative BCF poly- the spread between the two nylons is, standing above inflation at around 3%. On a global mers such as polyester. at over €1.00/kg (€1000/tonne) currently. scale, nylon demand grew by an estimated High quality nylon textiles for fashion and 6% in 2017, with much of that coming from sportswear in Europe, however, has contin- TECHNOLOGY buying appetite in China. ued to grow. Nylon 6,6 capacity has remained Nylon 6 is made from reacting capro with These growth trends are expected to con- water and a molecular mass regulator, such as tinue for 2018, with the engineering plastics EUROPE NYLON ethanoic acid. These elements are poured into and compounding sectors anticipated to drive a reaction vessel and heated under nitrogen at much of the growth market in Europe for the €/kg, virgin polymer, spot FD NWE 4.0 227°C. An intermediate, aminocaproic acid, is year. Meanwhile, nylon 6,6 demand is also produced. The process then undergoes con- expected to grow at a similar level with some Nylon 6 Nylon 6,6 densation to polymerise the molecules. small expansions expected in the US to help 3.5 For nylon 6,6 production, ADN is made from meet this growth. butadiene or acrylonitrile and then converted to Furthermore, BASF’s purchase of Solvay’s HMDA. Then, HMDA is mixed with adipic acid global polyamide business in H2 2017 is 3.0 to form a salt. Ethanoic acid is mixed into a solu- expected to conclude by the summer of tion with the salt and the mixture is heated and 2018. If the deal is concluded as planned, the steam bled off. The pressure is reduced, and players expect BASF to potentially reorgan- 2.5 the polymer is extruded under nitrogen to yield ise its upstream facilities to better ensure a lace, which is then granulated. a stable, more efficient supply of nylon 6,6 in Europe. ■ 2.0 Mar Mar OUTLOOK 2017 2018 Q1 2018 has seen supply remain balanced Access the archive of the Chemical Profiles amid healthy demand and some buyers re- A-Z at icis.com/subscriber/icb

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tarun raizada houston Ethylene oxide

Uses ­market was boosted by winter weather, which us ethylene oxide capacity Ethylene oxide (EO) is mainly used to make drove antifreeze sales. ‘000 TONNES/YEAR ethylene glycol (EG), which accounts for three- Sasol’s $11bn Lake Charles Chemicals Company Location Capacity quarters of global EO consumption. The ­Project (LCCP) in the US is 81% complete, Shell Chemicals Geismar, 715 ­second largest outlet is in surface active agents, and the company is scheduled to start up its Louisiana including non-ionic alkylphenol ethoxylates first units at the site in the second half of Dow Chemical Taft, Louisiana 700 and detergent alcohol ethoxylates. 2018. LCCP consists of a 1.5m tonne/year Huntsman Port Neches, 580 Monoethylene glycol (MEG) is used in ethane cracker, as well as six downstream Texas ­polyester fibres, resins and antifreeze ­facilities. The EO/EG unit will have a capacity Indorama Clear Lake, Texas 435 ­formulations, and polyethylene terephthalate of 300,000 tonnes/year of crude EO and Ventures (PET) film for packaging.Diethylene ­ glycol 250,000 tonnes/year of MEG and associated Dow Chemical Seadrift, Texas 420 (DEG) is used in polyols, unsaturated polyes- higher glycols. US cracker capacity is expect- Equistar Bayport, Texas 380 ter resins and plasticizers. Triethylene glycol ed to increase by 35% by 2019, taking into Chemicals (TEG) is used in natural gas dehydration and ­account new cracker projects and expansions Dow Chemical Plaquemine, 270 as a dehumidifier. of existing crackers. Louisiana Other EO derivatives include glycol ethers In Mexico, Pemex’s output of EO reached NOTE: Top seven listed (used in solvents and fuels), ethanolamines 218,000 tonnes in 2017, down from 294,000 A full list of plants and projects capacities, (used in surfactants and personal care tonnes in 2016. The state giant is struggling to forecasts, production volumes and ­products), polyols for polyurethane (PU) supply feedstock ethylene to its downstream operating rates are available on the ­systems, polyethylene glycols (used in units following its contractual pledge to ­deliver ICIS Supply and Demand database ­toothpaste and medicines) and polyalkylene ethane to Ethylene XXI, a $5.2bn JV between glycols (used in antifoam agents and Brazil’s Braskem and Mexico’s Grupo Idesa. ­Ethylene, compressed oxygen and recycled ­hydraulic lubricants). Surfactants producers in Asia and ­elsewhere gas are mixed and fed to a multitubular EO is very explosive and difficult to in the world may be in for a tough time on ­catalytic reactor. The mixture is passed over a ­transport over long distances. ­account of lacklustre demand growth, global silver oxide catalyst at 200-300°C and 10-30 overcapacity and an increasingly stringent bar. The resulting gases from the reactor are Supply/demand ­regulatory environment, ­especially in China. cooled and then passed through a scrubber US EO supply is somewhat tight due to recent where the EO is absorbed, and can go straight production issues in the first quarter and the Prices to glycol production or be purified to produce impending start of the peak season in the EO contract prices for March fell from other EO derivatives. downstream surfactants and PET sectors. The ­February following a decline in the feedstock A crude EG mixture is produced by the anticipated pick-up in demand from the down- ­ethylene contract for March. The ethylene ­hydrolysis of EO with water under pressure. stream ­sectors will run from April to August. contract typically settles at the beginning of Fractional distillation under vacuum Demand was also at a healthy level during the month for the previous month, and the EO ­separates the MEG from DEG and TEG. the winter season as the downstream EG contract price moves in tandem with ­ethylene. The majority of EO contracts are Outlook US ETHYLENE OXIDE formula-based, and price movement compris- EO supply is expected to be tighter by the start es 80% of the change in the ethylene price of summer, driven by several EO/EG turna- Cents/lb, contract FOB and an ­additional conversion fee, or adder. rounds and higher demand from the onset of 62 The March EO contract settled at 51.60- the peak downstream surfactants ­season. Turn- 61.10 cents/lb free on board (FOB), a decrease arounds are generally scheduled after the peak 61 of 1.40 cents/lb from February. antifreeze season since demand tends to be US spot feedstock ethylene prices have slower. In addition, demand from downstream 60 fallen to their lowest point in nine years as EG is also expected to see a pick-up from the ­production continues to be bolstered by new PET market, which has its peak season from 59 crackers and demand is hampered by April to August. PET is a major outlet for EG. ­downstream outages. Feedstock ethylene supply may become

58 more snug as downstream polyethylene (PE) Technology outages wrap up and as new PE plants EO was first manufactured using ethylene ­increase production. ■ 57 Apr Feb chlorohydrin as an intermediate, but this 2017 2018 route has been superseded by the direct Access the archive of the Chemical Profiles ­oxidation of ethylene with air or oxygen. A-Z at icis.com/subscriber/icb

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ICB_240818_082-089 Profiles April18.indd 84 8/22/18 4:09 PM Asia chemical profile

Joson Ng Singapore Propylene

USES PRICES northeast asia propylene capacity* Propylene is mainly used to make polypro- Spot propylene prices rose some 8.6% from ‘000 TONNES/YEAR pylene (PP), which accounts for nearly two- December 2017 to an average of $1,105/ Company Location Capacity thirds of global propylene consumption. tonne CFR (cost & freight) NE (northeast) Formosa Mailiao, Taiwan 2,400 Other outlets include acrylonitrile (ACN), Asia by mid-February. If that is an indication SKGC Ulsan, S. Korea 1,000 propylene oxide (PO), cumene, acrylic acid of things to come – bearing in mind most YNCC Yeosu, S. Korea 950 (AA) and a number of alcohols such as production losses are expected in the sum- Hanwha Total Daesan, 860 ­2-ethylhexanol (2-EH), n-butanol (NBA) and mer months – spot prices may continue to S. Korea isopropanol (IPA). enjoy further support. That said, spot prices LG Chem Yeosu, S. Korea 760 in the region have been bearish after the LG Chem Daesan, 600 SUPPLY/DEMAND Lunar New Year due to the weak performing S. Korea Chinese demand for import cargoes is not Chinese ­domestic markets. SK Advanced Ulsan, S. Korea 600 ­expected to change drastically in 2018. For the week ending 6 April, spot CPC Linyuan, Taiwan 560 ­Import volumes have been hovering be- ­propylene prices in the northeast Asian *Top eight listed (excludes mainland China) tween the mid to high-2,000,000s tonnes/ ­import markets were assessed firmer on year to the low-3,000,000s tonnes/year level ­improved sentiment in the Chinese domestic A full list of plants and projects capacities, since 2013. market. The Chinese domestic market saw forecasts, production volumes and In South Korea, KPIC expanded its cracker higher prices as downstream buyers returned operating rates are available on the in mid-2017 and increased propylene to the spot market while propylene invento- ICIS Supply and Demand database ­production from around 350,000 tonnes/ ries were heard to be lower with planned year to approximately 510,000-520,000 maintenance work taking place in the steam cracking of liquid feedstocks such as tonnes/year. ­Shandong region. naphtha and liquefied petroleum gas (LPG), There is potential for more spot cargoes The import market experienced improved as well as off-gases produced in fluid catalytic available in the second half of 2018 as S-Oil sentiment in the week, buoyed by rebound- cracking (FCC) units in refineries. will expand propylene capacity by adding ing domestic market prices. Concrete discus- It is also made via on-purpose technologies a new fluid catalytic cracking (FCC) unit. sions were, however, fewer week on week as such as metathesis and propane dehydroge- On paper, some 100,000 additional tonnes the ­assessment week was cut short in China nation (PDH), which is becoming the of propylene may be available to the mer- and the region of Taiwan due to the holidays. ­preferred production route in China. chant market. ­Certain buyers were still in a wait and see In southeast Asia, Lotte Chemical Titan is mode in the holiday shortened week. Sellers, OUTLOOK expected to be in a long position in the second on the other hand, were keen to increase Chinese demand for propylene import half of 2018 after starting up a catalytic olefin their offer prices. ­cargoes is expected to see limited changes cracking unit in late 2017. The company may While the uptick in prices gave some from 2017. For PP, the outlook in Asia is ex- return to a buy position after its new PP plant ­producers in the region reasons to smile, pected to be strong on tight deep-sea supply starts up in H2 2018. ­Chinese buyers cautioned that the buying into the ­Chinese import market. ­activity in the week was purely on a need-to For propylene oxide (PO), the first half of ASIA PROPYLENE basis as buyers have been out of the market in 2018 could see Hong Bao Li start up its new the last few weeks. 120,000 tonne/year PO plant in Nanjing. As it $/tonne, spot CFR Asia NE As such, there might not be too much is not expected to make an immediate impact 1,200 ­support in the coming week. Spot negotia- on the market, PO margins are therefore tions are expected to move onto May arrivals ­expected to be healthy.

1,100 in the week after that, and it is not likely Acrylonitrile (ACN) reached a 3-year high ­sellers will be under any pressure. As a result, in the CFR NE Asia spot market in 2017 due the potential for a downtrend could be to tight US supply. In 2018, the market is still 1,000 ­limited barring a significant drop in domestic expected to perform strongly especially China prices. ­during the turnaround season in the first half of the year. Oxo-alcohols production in China 900 TECHNOLOGY is estimated to be 3.9m tonnes in 2018 and de- Propylene comes in three grades: polymer mand for propylene is estimated to be 2.5m ■ 800 grade (99.5% minimum purity), chemical tonnes, compared to 2.4 m tonnes in 2017. Mar Mar grade (93-94% minimum purity), and refinery 2017 2018 grade (60-70% purity). Access the archive of the Chemical Profiles Propylene is produced as a by-product of A-Z at icis.com/subscriber/icb

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zachary moore houston Polypropylene

Uses PDH plants will stabilise and that this will US PP CAPACITY Polypropylene (PP) is used in a wide range of help keep supply and demand dynamics for ‘000 TONNES/YEAR consumer and industrial products. Three both feedstock propylene and PP more bal- Company Location Capacity forms of PP can be produced – isotactic, syn- anced following significant ups and downs Total Petrochemicals La Porte, Texas 1,200 diotactic and atactic. Isotatic PP is the main during the first quarter. Formosa Plastics Point Comfort, 740 form manufactured. The largest outlet is injec- A larger volume of import material had USA Texas tion moulding applications, which include been ordered for January and February but Braskem Marcus Hook, 414 packaging, parts for electronic and electrical imports started to come back down in March Pennsylvania appliances, caps and closures, toys, luggage and April as domestic material grew more Pinnacle Polymers Garyville, 410 and a variety of household goods. The second competitive relative to imported material. Louisiana largest outlet is in fibres, where carpet face The arbitrage window between Asia and INEOS Chocolate Bayou, 400 yarn has been a growth market for PP. the US has been open on paper for the better Texas part of the past year, but US buyers are gener- ExxonMobil Chemical Baytown, Texas 396 Supply/demand ally reluctant to purchase large volumes of Phillips 66 Linden, New 352 US PP supply has been improving in recent imports given the long transit time between Jersey months following a period of reduced operat- Asia and the US. Cargoes shipped from Asia ExxonMobil Chemical Baton Rouge, 335 ing rates during the first months of the year. generally require six to eight weeks to be de- Louisiana Severe winter weather along the US Gulf livered into the US. Flint Hills Resources Longview, Texas 330 along with a sharp spike in propylene had Braskem Seadrift, Texas 225 pushed operating rates lower during January Prices A full list of plants and projects capacities, and February, with one major US producer US PP prices have come down over the past forecasts, production volumes and declaring force majeure due to production is- two months after hitting a 26-month high in operating rates are available on the sues caused by winter weather. January. The jump in January contract prices ICIS Supply and Demand database Operating rates have been picking up in was spurred by a significant rise in feedstock March and April as propylene costs have propylene costs stemming from tighter pro- Technology come down and US Gulf Coast plants resumed pylene supply. Current bulk technologies such as the operations following disruptions in January US PP contracts are generally formula- Spheripol process developed in 1982 by Hi- and February. Operating rates are expected to based and are set at polymer grade propylene mont, replaced the solvent in an older process remain healthy during the coming months as- (PGP) prices plus an adder. with liquid propylene. Catalyst activity from suming new propane dehydrogenation (PDH) Domestic contract prices for February and the older process was also improved, allowing units manage to stabilise their operations. March moved lower, tracking reductions in for the introduction of gas phase technology. PDH units, which produce feedstock pro- propylene feedstock costs. Producers have Work is underway to develop the use of pylene on-purpose, have exhibited a tenden- separately announced price increases of 3-5 metallocene catalysts in PP production to im- cy towards uneven operations over the past cents/lb ($66-110/tonne) on top of any chang- prove resin properties. Borealis’ Borstar bi- few years, although the market is hopeful that es in PGP contracts prices for April. modal polyethylene (PE) process developed Sentiment is divided as to whether or not in the mid-1990s has also been adopted for US POLYPROPYLENE sellers will be able to achieve any margin expan- the production of PP. sion in the coming months, with participants Cents/lb, bulk, DEL 85 anticipating April contracts either to move with Outlook Block copolymer, contract the change in PGP contract prices or see an ad- US PP demand is expected to gradually gain Homopolymer injection 80 ditional 1-2 cents/lb margin expansion. ground later in 2018 following a period of slug- Sellers had previously attempted margin gish buying activity during the first quarter. 75 expansions in the second half of 2017. These Greater import volumes may be needed over margin expansions met with some initial suc- the short term until new US PP capacity begins 70 cess, but were ultimately rescinded as a sharp to come online. Braskem is building a 450,000 rise in feedstock propylene costs which tonne/year PP project in La Porte, Texas, 65 prompted mounting resistance from buyers scheduled for completion in the first quarter of towards paying any additional margins. 2020. Inter Pipeline and Formosa are both 60 Export prices have remained at elevated moving ahead with new PDH and downstream levels throughout the first quarter but over- PP units in Canada and the US, respectively. ■ 55 May Mar seas buyers have shown little interest as US 2017 2018 material has been relatively uncompetitive Access the archive of the Chemical Profiles compared to other exporting regions. A-Z at icis.com/subscriber/icb

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Pavle Popovic London Phenol

USES conditions, which led to market talk of a po- europe phenol capacity Phenol’s main downstream use is in bisphe- tential cut in operating rates. ‘000 TONNES/YEAR nol A (BPA). Other primary uses for phenol Strong phenol demand was mostly seen in Company Location Capacity include use in phenolic resins and caprolac- contractual business. Although, there was an INEOS Phenol Antwerp, Belgium 680 tam (capro), as well as alkylphenols, aniline atypical jump in order book volumes for spot INEOS Phenol Gladbeck, 650 and adipic acid. BPA is used to produce poly- business as well. Germany carbonates (PC) and epoxy resins. Cepsa Quimica Huelva, Spain 450 Phenolic resins have a range of applica- PRICES Versalis Mantova, Italy 300 tions including moulding applications, lami- The phenol contract price follows the move- Borealis Porvoo, Finland 195 nates, coatings and adhesives. ment of upstream benzene with an adder or fee Novapex Peage, France 175 Capro is used to produce nylon 6, which is on top. In 2017 the contract price midpoint hit Domo Leuna, Germany 150 itself used to create nylon fibres and engineer- a peak for the year in February when the ben- Caproleuna ing resins. zene settlement had a triple-digit jump. In PKN Orlen Plock, Poland 55 August it slumped to a low for the year after a Deza Valasske 30 SUPPLY/DEMAND €50/tonne benzene decrease. Mezirici, Czech There was tightness in quarter four of 2017 for 2017 annual adder levels were reflected in Republic the European phenol market due to produc- the January contract with fees rolling over on Total Marienau, France 5 tion issues at Spanish producer CEPSA and the low end of the range and reducing by €5/ Petrochemicals Italian seller Versalis. tonne on the high. A full list of plants and projects capacities, CEPSA declared a force majeure on acetone In 2018, annual adders were negotiated large- forecasts, production volumes and and phenol in September after a technical ly with rollovers and slight increases of up to operating rates are available on the problem at its Huelva site. The force majeure €10/tonne, which was also reflected in the Janu- ICIS Supply and Demand database was lifted in October. ary contract price. However, in October, Versalis also an- Otherwise, strong demand for contractual leen, the Netherlands. Planned maintenance nounced a force majeure on phenol at its volumes in 2018 and a weak acetone trend put at the 270,000 tonne/year plant is set to begin 300,000 tonne/year Mantova, Italy unit, upward pressure on spot phenol pricing at the in May and finish in June, which will have an which ended in November. start of the year. effect on consumption. Lack of product consequently persisted As the first quarter continued, suppliers said Regarding long-term changes, the Chinese into December and then balanced due to sea- they had no material to offer and were only Ministry of Commerce announced in late sonally low demand at year end. looking to sell product at a premium. March that it had begun investigations for an- At the start of 2018 high consumption lev- tidumping duties (ADDs) on phenol imports els diminished availability, with sellers strug- TECHNOLOGY from the US, the EU, South Korea, Japan and gling to offer any extra material to the market. The primary synthetic route is a cumene- Thailand. There was a downward trend for co-prod- based technology in which benzene and pro- The probe is expected to finish by March uct acetone at the time as a result of lengthy pylene are reacted to form cumene, which is 2019 and sources were initially unsure about then oxidised to hydrogen peroxide, followed the potential impact of the investigation. EUROPE PHENOL by acid-catalysed cleavage. Market participants did say that if duties The resulting products are phenol and ace- were imposed, trade flows could change as €/tonne contract FD NWE tone. Over the years, there have been refine- suppliers look to redirect their material 1,500 ments to cleavage, distillation and purification, from China. but the basic technology is little changed. Exports from the US would specifically also 1,450 Other technologies include the oxidation of be affected by the idling of Shell’s Phenol 3 1,400 toluene and hydrolysis of chlorobenzene. unit at its Deer Park, Texas plant. The process began and was completed in late February. 1,350 OUTLOOK Italian seller Versalis announced at the ICIS In terms of planned outages, Borealis sched- World Olefins conference in March that it was 1,300 uled maintenance at is 195,000 tonne/year Por- looking into a feasibility study for a feedstock voo, Finland site in April with a finish date at cumene plant in Mantua, Italy. The 400,000 1,250 the start of May. This turnaround was expected tonne/year facility would be for integrated ■ 1,200 to tighten the market in a period of low availa- phenol and acetone production. Apr Apr bility due to strong contractual demand. 2017 2018 There is also a scheduled shutdown at Access the archive of the Chemical Profiles downstream capro producer Fibrant in Ge- A-Z at icis.com/subscriber/icb

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Caroline Murray London PET

USES By October’s low season, consumption has EUROPE, RUSSIA PET CAPACITY Polyethylene terephthalate (PET) has a crys- dropped. M&G declared chapter 11 bankruptcy ‘000 TONNES/YEAR talline structure and good chemical resistance in the US and Concordato preventivo in Italy, Company Location Capacity to mineral oils, acids and solvents but not to and the US began antidumping investigations JBF-RAK Geel, Belgium 432 bases. It has good electrical resistance and low on five countries. Chinese material flowed into Indorama Ventures Rotterdam, The 410 moisture absorption. It resists combustion Europe, and JBF restarted one of its lines at Geel Netherlands and is self-extinguishing. with the financial support of MB Barter. Lotte Chemical Wilton, UK 381 PET exists both as an amorphous (transpar- November saw Poland’s PKN Orlen declaring Equipolymers Schkopau, 335 ent) and a semi-crystalline (opaque and two force majeures, and the US antidumping in- Germany white) thermoplastic, and can be made into vestigation finds PET imports harm the market. Neo Group Klaipeda, 320 either a resin or a film. The semi-crystalline The year ends with JBF restarting its second Lithuania PET has good strength, stiffness and hardness line at Geel. UAB Orion Global Klaipeda, 274 while the amorphous PET has better ductility. The first quarter of 2018 was still fraught PET* Lithuania PET can be made into a resin, fibre or film and with tension, as buyers scrambled to find ad- Novapet Barbastro, Spain 260 has good processability that allows it to be re- ditional volumes for the upcoming peak sea- Indorama Ventures Corlu, Turkey 252 cycled for other applications or returned to its son. Three planned, domestic shutdowns in Alco-Naphta Kaliningrad, 220 constituent monomers. March helped to maintain a precarious de- Russia The largest outlet is synthetic fibres, fol- mand/supply balance. Koksan Gaziantep, 216 lowed by bottle resin, which dominates the The PET market is tight and there are ongoing Turkey * European market. PET film is used in electrical problems at BP’s upstream purified terephthalic Owned by Indorama Ventures applications and packaging. acid (PTA) plant in Belgium. This has led to A full list of plants and projects capacities, nervousness on both sides of the PET market, forecasts, production volumes and SUPPLY/DEMAND and there was talk of some PET customers re- operating rates are available on the 2017 was a year of unpredictability, as unex- ceiving less material than expected. Producers’ ICIS Supply and Demand database pected plant shutdowns and subsequent vari- margins looked set to increase again in April, ation on traditional, global trade flows played following the decrease of the monoethylene gly- ferred. The molten polymer is extruded, cut into havoc on supply. August was extremely tight col (MEG) contract price. chips and cooled. The chips pass to a solid state in Europe. Lotte Chemical UK declared force polycondensation unit to form the PET resin. majeure and financial difficulties were -re PRICES vealed at JBF RAK, which resulted in it taking The turmoil of a market defined by the unreli- OUTLOOK the Geel plant in Belgium plant off line. ability of supply resulted in a fresh approach to The challenge for customers is to know when Japan imposed preliminary antidumping pricing in 2018. Accounts are now mostly sup- to buy and where from. Imports form a signifi- duties on Chinese material from September plied under contract, as opposed to most deals cant part of the European PET psyche, but they 2017. At this point M&G disclosed it too, was being concluded on a spot or domestic basis. have been scarce. Those who are now in need in financial distress. Contract prices are calculated using raw ma- of material have little choice but to opt for Eu- terial movements and/or index benchmarks. ropean product, most of which is contracted EUROPE PET As supply or rather the lack of it, has been out and therefore producers are selling out fast. key, the value of spot PET has often far sur- Much will depend on how much import was €/tonne passed contract prices, resulting in improved bought through the first quarter, when imports 1,150 margins for producers. appeared to be uncompetitive, but customers Customers usually have plenty of chances to were keen to secure PET for the high season.

1,100 buy imports, but exchange rate volatility and By April, the delivery lead time was drag- the change in import flows, means there are ging into May and even June. The height of the fewer opportunities to grab a bargain. summer is normally when prices start to flag, 1,050 although 2017 was an exception. TECHNOLOGY The EU has a history of multiple, active anti- In the manufacture of PET resins, purified dumping and anti-subsidy duties, but with the 1,000 terephthalic acid (PTA) and monoethylene expiry of anti-subsidy measures on PET from glycol (MEG) are reacted to make a basic ester India in May, Europe will continue to be the which is polymerised in a melt phase, poly- most open market in the world. ■ 950 Apr Mar condensation finishing reactor. 2018 2018 Dimethyl terephthalate (DMT) is an alterna- Access the archive of the Chemical Profiles tive feedstock to PTA but the PTA route is pre- A-Z at icis.com/subscriber/icb

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ICB_240818_082-089 Profiles April18.indd 88 8/22/18 4:10 PM Asia chemical profile

ho zhi xuan singapore Caprolactam

Uses ity in China by 2020 if plans proceed smooth- ASIA CAPROLACTAM CAPACITY Caprolactam (capro) is mainly used to make ly. This will increase supply of capro region- ‘000 TONNES/YEAR nylon 6 (or polyamide 6) fibres and engineer- ally and alleviate the tight supply situation. Company Location Capacity ing plastics. Nylon 6 fibres are used extensive- European and US export volumes to north- ly in textiles, carpets, and industrial yarns. east Asia have also been reduced, further sup- Hengshen Lianjiang, China 400 Technology Nylon resins are the basis of engineering plas- porting the supply crunch. Fujian Shenyuan Lianjiang, China 400 tics, used in electronic and electrical compo- In Europe last year, capro suppliers started New Materials nents, automobiles and oriented nylon films, exporting volumes to China, Taiwan and Fibrant Nanjing, China 400 which are used widely in food packaging. Japan, which appeared to be either short or Jiangsu Haili Yancheng, China 400 tight of material from January onwards. That Chemical Supply/demand limited European availability while increas- Zhejiang Baling Hangzhou, China 300 Supply of caprolactam in Taiwan and China ing supply in northeast Asia. Hengyi is limited amid upcoming and ongoing turna- The downstream nylon 6 market in Europe is Luxi Chemical Group Liaocheng, China 300 rounds. Many major producers are sold out of structurally oversupplied by hundreds of thou- Sinopec Baling Yueyang, China 300 stock through contracts and have little to no sands of tonnes. New nylon capacity has contin- Petrochemical cargo to offer for spot trade. ued to come onstream in part to alleviate struc- Sinopec Shijiazhuang, 265 Increases in benzene prices led producers to tural oversupply of capro in Europe, which is Shijiazhuang China hike capro offers. The rising prices dampened more acute as fewer volumes are exported into Refining & Chemical demand for spot cargo, with buyers increasingly Asia, partly due to China’s substantial capro ca- A full list of plants and projects capacities, buying cargo only to meet immediate needs. pacity construction over the last decade. forecasts, production volumes and Demand for downstream nylon 6 has not The European nylon 6 market in Q1 2018 operating rates are available on the been high. Producers have been trying to in- has witnessed mostly healthy demand, espe- ICIS Supply and Demand database crease operating rates at nylon polymerisa- cially in the engineering plastics and com- tion plants in anticipation of a traditional pounding sectors. The exception is in nylon- this route also produces large volumes of am- demand season, but producers have been un- made bulk continuous filament (BCF) carpets monium sulphate and work is ongoing to re- able to pass on the higher costs of capro to thanks to changing fashions and alterative duce or eliminating the co-product. their buyers. BCF polymers such as polyester. Trade momentum for capro has been slug- Outlook gish, with sustained tight supply in the north- Prices The growth of capro capacity in northeast east Asia region lending support to higher In the second quarter of 2017, the large gap in Asia is expected to slow, with only a few prices. However, with turnarounds coming buy-sell ideas hampered discussions and major producers in the region of China evalu- up in Taiwan and China, demand is expected trade for spot caprolactam cargoes. This led to ating expansion plans. There is a projected to make a rebound amid constrained supply a downtrend in prices, and prices hit an all- increase of at least 600,000 tonnes/year across of the material. Projected capro expansions time low in mid-May. various plants, including Shanxi Jintaoyuan will add 400,000-600,000 tonnes/year capac- Since then, however, prices have been on a and Hengshen Technology. steady uptrend, with trade activity in late Jan- Luxi Chemical started its new 100,000 ASIA CAPROLACTAM uary to early March limited due to the Lunar tonne/year capro line at Liaocheng in Shan- New Year holidays in much of Asia. dong province in February 2018. The new $/tonne, spot CFR NE Asia 2,400 In Europe, nylon 6 prices in the first quarter line is the second phase of the company’s of 2018 have remained steady with fundamen- 200,000 tonne/year capro project at the site. tals balanced and upstream costs less volatile Some market players are sceptical on de- 2,200 than expected, despite fluctuations over the mand from the yarn and textile sectors. With last year due to the volatility of upstream ben- buyers reducing quantities, producers are 2,000 zene prices. This expected to support capro pressured to increase prices in order to cover prices and help keep margins healthy. margins. Many nylon polymerisation plants 1,800 are not operating at maximum operating rates, Technology with the lowest at 65%. Seasonal demand is

1,600 Most capro is produced from cyclohexane expected to boost the market, although trade (CX), but can also be made from phenol or volumes are not expected to increase much toluene. CX is oxidized to cyclohexanone, due to tightening supply in northeast Asia. ■ 1,400 Apr Apr then reacted with hydroxylamine sulphate to 2017 2018 cyclohexanone oxime, followed by a Beck- Access the archive of the Chemical Profiles man rearrangement to yield capro. However, A-Z at icis.com/subscriber/icb

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Adam yanelli houston MPG

Uses sources for imports this year, accounting for NORTH AMERICA mpg CAPACITY Monopropylene glycol (MPG), also referred to 92% of all material shipped to the US. A re- ‘000 TONNES/YEAR as propylene glycol (PG), is a clear, colourless, cord breaking cold winter led to strong de- Company Location Capacity odourless, hygroscopic, viscous liquid. It is mand from the antifreeze and deicing sectors. relatively non-toxic, but is a mild irritant and There was additional demand in the Houston LyondellBasell Bayport, Texas, US 280 defatting agent. MPG is combustible, but not area of Texas, as many plants used de-icing Dow Chemical Plaquemine, 190 flammable at room temperature. fluids to cope with the cold weather. Louisiana, US MPG is used in the manufacture of high Demand was steady through the end of the Dow Chemical Freeport, Texas, US 180 performance unsaturated polyester resins quarter, and a buyer said its March business ADM Decatur, Illinois, US 100 (UPR), as well as engine coolants; antifreeze has been higher than March 2017. Dow Chemical Candeias, Brazil 95 applications; aircraft wing and runway de-ic- Availability was generally good throughout Huntsman Port Neches, Texas, 66 ers; food, pharmaceuticals and personal care 2017. However, supply tightened in Septem- US products; and paints and coatings. ber and October, due to Hurricane Harvey se- Monument Brandenburg, 35 The manufacture of plasticizers and hy- verely impacting production along the US Chemical Kentucky, US draulic brake fluids consumes considerable Gulf Coast. There were some regional supply A full list of plants and projects capacities, quantities. It is also used in the petroleum, constraints in certain areas, but generally forecasts, production volumes and sugar refining and paper making industries, there is a lot of overall capacity. operating rates are available on the and in the preparation of toiletries, non- ICIS Supply and Demand database ionic detergents, antibiotics and liquid Prices washing formulations. MPG prices stayed firm relative to propylene small quantities of higher glycols. pricing, and have risen steadily since Septem- MPG production is driven by PO availabil- Supply/demand ber 2017. Monthly contracts are typically in- ity and extra MPG can be produced to balance US exports in January through February 2018 fluenced by the delta of the previous month’s PO. There has been a lot of interest in produc- totalled 15,319 tonnes, 18% lower than the propylene contract price and generally follow ing MPG from renewable resources such as 18,721 tonnes in the year-ago period, accord- formula-based pricing. Monthly MPG trends glycerine, a by-product in biodiesel manufac- ing to trade data from the US International also take into account pricing based on nego- ture. Hong Kong-based Global BioChem Tech- Trade Commission (ITC). tiations between buyers and sellers that are nology Group and US-based Archer Daniels Mexico has been the top destination for US not dependent on the formula pricing. Midland (ADM) are the two companies that exports, taking over 26% of all exported mate- March contracts were assessed at a de- produce MPG from renewable resources. rial, followed by Canada (17.6%), Singapore crease of 4 cents/lb ($88/tonne), following the Global BioChem started bio-based MPG pro- (17.5%), Taiwan (15%) and Colombia (8.9%). decrease in February propylene contracts. duction in 2008 and ADM began production US imports through February totalled 3,798 US April MPG contracts settled lower, fol- in March 2011. tonnes, almost three times higher than the lowing feedstock propylene, as upstream same period in 2017, according to the ITC data. prices have softened on improved supply. Outlook Brazil and South Korea are the top two MPG was assessed down by 4 cents/lb. April Demand for MPG is likely to increase in the MPG contracts as assessed by ICIS are at second quarter of 2018 as production of UPR US MONOPROPYLENE GLYCOL 82.67-86.67 cents/lb FOB east of the Rockies ramps up. for industrial grade and at 91.67-97.67 cents/ One producer said it expects UPR demand Cents/lb, contract FOB East of Rockies lb for pharmaceutical grade. to be fairly typical as compared to previous 110 PGI (industrial grade) US March propylene contracts settled at a years. However, another producer said UPR Pharmaceutical grade decrease of 6 cents/lb. Upstream propylene, producers at a recent industry event were op- 100 and, in addition, crude oil price trends, will timistic about demand for the coming season. ultimately influence price direction of MPG A market source said there could be slight- 90 contracts. To that extent, US propylene April ly less demand from distribution channels. contract negotiations are ongoing, and discus- Supply is expected to be good into the sec- 80 sions are ranging from a rollover to a 1 cent/lb ond quarter of 2018 as it comes out of the high decline. This would indicate that May MPG demand de-icing season and is yet to enter the

70 contracts could stay flat to April. spring UPR season. A producer said there is ample supply of feedstock PO, which should Technology contribute to MPG supply availability. ■ 60 Apr Apr MPG is produced by the hydration of propyl- 2017 2018 ene oxide (PO). The reaction also produces Access the archive of the Chemical Profiles dipropylene glycol, tripropylene glycols and A-Z at icis.com/subscriber/icb

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ICB_240818_090-097 Profiles May18.indd 90 8/22/18 4:24 PM Asia chemical profile

Deborah Lee Singapore Styrene

Uses capacities is planned to start up over the next ASIA STRYENE CAPACITY Pure styrene (SM) is a colourless to yellow, oily couple of years, which will greatly reduce the ‘000 TONNES/YEAR liquid that evaporates easily and has a sweet import demand from the region’s largest buyer Company Location Capacity smell. Styrene is mainly used in the manufac- of SM. A number of new plants have already ture of homopolymers and copolymers. started up since 2017, with the most recent Formosa Chemicals Mai Liao, Taiwan 1,320 and Fibre These include polystyrene (PS), expandable being Qingdao Soda Ash’s 500,000 tonne/year Hanwha-Total Daesan, South 1,050 polystyrene (EPS), styrene copolymers (such plant in China started up in January 2018. Korea as acrylonitrile-butadiene-styrene (ABS) res- Changzhou New Changzhou, China 850 ins, styrene-acrylonitrile (SAN) and styrene- Prices Solar Chem butadiene latexes), styrene-butadiene rubber The CFR China benchmark largely trended CNOOC And Shell Huizhou, China 700 (SBR) and unsaturated polyester resins. higher after bottoming out in May 2017. Later Shanghai Secco Caojing, China 670 in the year, prices peaked in September amid Zrcc Lyondell Zhenhai, China 620 Supply/demand concerns that short term supply would be cut Chemical Demand in the second quarter of the year is off due to vessel restrictions in China. Lotte Chemical Daesan, South 580 expected to pick up due to the seasonal uptick Prices rose in February 2018, urged along by Korea in manufacturing activity. Downstream mar- an ongoing ADD probe in China, as well as an Ellba Eastern Pulau Seraya, 550 gins have been lackluster the first quarter of overall stronger petrochemical complex amid Singapore the year on growing feedstock costs, but that firming crude prices. But talk of a potential trade Lg Chemical Yeosu, South 525 is likely to improve amid growing buying in- war with the US, compounded with a credit Korea terest in styrenic resins. crunch in China, added downward pressure to Qingdao Haiwan Qingdao, China 500 On the supply front, cargo availability has the market. Sentiment, however, remains on the Group been limited in H1 2018 due to the introduc- bullish side as fundamentals were supportive Dagu Chemical Tianjin, China 500 tion of antidumping duties (ADD) on cargoes with expectations of tight supply and stronger A full list of plants and projects capacities, imported from South Korea, Taiwan and the demand over the second quarter. forecasts, production volumes and US into China in February. This, compound- For the week ending 27 April, the Asian SM operating rates are available on the ed with a slew of production issues in US and market was overall softer week on week, but ICIS Supply and Demand database Europe, has deterred many traders from bring- sentiment remained bullish on firm supply and ing SM cargoes from these regions into Asia. demand fundamentals. Tight supply concerns worried about the country’s increasing self- Meanwhile, SM production in Asia is expect- further exacerbated by an issue at Abel’s plant in sufficiency and oversupply in the global mar- ed to remain limited in the near term on the Jiangsu, China. Demand, on the other hand, was ket. Almost 5m tonnes/year of additional ca- back a heavy maintenance schedule over the still steady, with expectations that end-user de- pacity is expected to be added by the end of period. Import demand in China is likely to mand will improve further in May and June. 2020, with the bulk of that to be within China increase with the bulk of the turnarounds tak- itself. With China by far the biggest importer ing place in the country. Technology of SM in Asia, with over 3m tonnes/year of its In the longer term, a slew of new production Styrene is produced predominately by ethylb- domestic requirements met by SM from other enzene (EB)-based technology. EB is first made countries, market participants pointed to in- ASIA STYRENE by the catalytic alkylation of benzene with eth- creasing length in the region. ylene and then dehydrogenated to styrene. An- Meanwhile, downstream plant capacity is $/tonne, spot CFR China 1,500 other method becoming increasingly popular not projected to grow as quickly as SM. Mar- is the co-production of styrene with propylene gins for key styrenic resins PS and EPS have oxide (PO) by the PO/SM process. been lackluster in recent years, limiting inter- 1,400 est in additional investments in production. Outlook ABS has drawn more attention with margins 1,300 In the near term, the market will be waiting on outperforming the other downstream materials China’s final decision on the ADD in June, over the past year. But with a number of plant 1,200 after the preliminary results were released in expansions within Asia already laid out, in- February. Most market participants are ex- dustry sources saw limited opportunities in

1,100 pecting the ADD decision to remain un- further investments in similar plants, with con- changed, but some were concerned that the cerns that end-user demand would be unable quantum imposed could be adjusted. to keep pace with the additional output. ■ 1,000 Apr Apr Further out, a slew of new SM projects in 2017 2018 China scheduled to come online over the next Access the archive of the Chemical Profiles couple of years has producers and traders A-Z at icis.com/subscriber/icb

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Helena Strathearn London Orthoxylene

USES ruption in Europe. BP has declared force ma- EUROPE/RUSSIA/MIDDLE EAST OX capacity Orthoxylene (OX) is the second largest of the jeure on production of OX at its Gelsenkirchen ‘000 TONNES/YEAR three commercial isomers of xylene. The ma- facility in Germany. Two planned maintenanc- Company Location Capacity jority is used to make phthalic anhydride es in April have had no impact on availability. Gazpromneft- Omsk, Russian 165 (PA), which is used in phthalate plasticizers. Demand is expected to pick up slightly Omsk Federation Minor uses include solvents, soya bean through the second quarter. Supply and de- Exxonmobil Botlek, 135 herbicides, bactericide, lubricant additives mand at present are balanced to long. Chemical Netherlands and polyethylene naphthalate. Total Gonfreville, 115 PRICES Petrochemicals France SUPPLY/DEMAND OX contract prices are traditionally agreed in BP Refining and Gelsen. Buer, 70 Supply for OX continues to be predominantly the first week of the month between key buy- Petrochem Germany driven by production of primary co-product PX. ers and sellers. This is usually more timely Gadiv Pc Haifa, Israel 60 PX demand has been weak in Europe due to poor than the PX talks which are often protracted, Kinef Kirishi, Russian 60 Federation polyester volumes. There has been no fresh OX but OX contracts are also occasionally agreed capacity in Europe for several years and utilisa- later in the month. Talks are influenced by Shell Deutschl. Wesseling, 60 Oil Germany tion rates in 2018 were assessed at around 80%. supply, demand, global prices, upstream Mol Hungarian Szazhalombatta, 45 Almost all OX output is consumed in the price movements and exchange rates. Oil and Gas Hungary manufacture of PA. PX is the largest commer- Some attribution of the difficult talks is Cepsa Algeciras, Spain 40 cial volume isomer of the mixed xylenes. placed on the disappearance of some players Petkim Aliaga, Turkey 40 Around 98% of PX demand comes from the from the market because of consolidation of Petrokimya polyester chain via one of its intermediates, the downstream industry. The European purified terephthalic acid (PTA) or dimethyl April OX contract price settled at an increase A full list of plants and projects capacities, forecasts, production volumes and terephthalate (DMT). over March. Prices have been steadily rising operating rates are available on the Indorama Ventures Portugal is no longer in 2018, after declining for H2 2017. ICIS Supply and Demand database idled, and has been undergoing maintenance. The Europe May OX contract price has been A restart date has not been verified, although fully confirmed at a €30/tonne increase, three return of more prompt and definitive contract producing in time to negotiate for 2019 deliver- buyers and two sellers said. An increase had settlements. OX spot is likely to carry on gen- ies would make sense. The plant formerly been widely expected given the higher energy erally following the trend of the more active known as Artlant PTA came up originally in costs in recent weeks and on slightly firmer sup- Asian markets, upstream crude oil move- 2012 but closed in 2014 for financial reasons, ply and demand fundamentals, with offtake tra- ments, and reacting to USD/EUR exchange and bar a brief period in operation, was subse- ditionally picking up in the spring months. rate fluctuations. quently idled. Thailand-based Indorama ac- Prices have been on an uptrend since December. Some players across the supply chain are quired the company in Q4 2017. It remains to Spot volumes are thin as producers choose to facing higher freight rates due to the structural be seen how overall OX supply might be af- blend xylenes into gasoline and adjust the rates shortage of truck drivers that had caused sig- fected on the back of the potential supply dis- at plants to cover contractual demand. This nificant transport disruption in 2017. leaves limited volumes for spot business. The PA market anticipates good growth EUROPE OX In the absence of fresh spot price assess- and demand in 2018, with demand into the ments, spot is considered to be at a discount polyester polyol market estimated by some to €/tonne, contract FD NWE of a few percent to contract or a netback price grow by around 10%. Plasticizers is expected 1,000 from Asian numbers minus freight. to have low single-digit growth. In the years ahead, PA is facing substitution 900 TECHNOLOGY with more environmentally friendly chemi- OX is produced by high-severity catalytic re- cals due to a desire to move away from phtha- forming of naphtha from which the C8 stream lates in consumer products. 800 contains mixed xylenes (MX) and ethylbenzene Non-phthalate plasticizers have been de- (EB). OX is usually separated from primary veloped by Eastman Chemical and BASF. The product PX using distillation of the MX stream. substitution of what used to be the main 700 Xylenes are also obtained from the pyrolysis phthalate plasticizer, dioctyl phthalate (DOP), gas (pygas) stream in a naphtha steam cracker by alternative phthalates and other plasticizer ■ 600 and by toluene disproportionation (TDP). types is virtually complete in Europe. November May 2016 2018 OUTLOOK Access the archive of the Chemical Profiles Players are hoping that the market will see the A-Z at icis.com/subscriber/icb

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ICB_240818_090-097 Profiles May18.indd 92 8/22/18 4:24 PM US chemical profile

John Dietrich Houston Polycarbonate

Uses downs in the third quarter of 2017 as a re- us polycarbonate capacity Polycarbonate (PC) is an engineered plastic sult of the fallout of Hurricane Harvey on ‘000 TONNES/YEAR produced from bisphenol A (BPA) through the US Gulf. Company Location Capacity building blocks benzene and propylene that There has been little to no loosening of SABIC Burkville, 270 offers clarity and high-impact resistance. supply from imported product, as volumes Alabama Aside from the automotive segment, mar- from Asia have been limited, on tight supply Covestro Baytown, Texas 260 ket strength has come from two other major in the region. SABIC Mount Vernon, 245 market areas – the electrical/electronic, and Additionally, prices in Asia have surged Indiana glazing and sheet segments. in 2018, allowing exporters to raise prices on A full list of plants and projects capacities, Polycarbonate weighs much less than glass US buyers while not losing overall volumes. forecasts, production volumes and and can be injected or moulded to produce This has curbed imports into the US. operating rates are available on the various shapes for an assortment of purposes. Demand growth has been steady at slightly ICIS Supply and Demand database It is used in optical media such as CDs and above GDP levels in the US, driven mostly by DVDs, housing components, aircraft and mis- consumer electronics and construction. Auto- phosgene, which was initially used in the sile components, water cooler bottles, safety motive demand has also been strong, as more process. US producers include Covestro and helmets, medical equipment and eyeglasses. and more polycarbonate is being used, al- SABIC. A former US producer was Styron. ICIS monitors the general purpose (GP) though auto sales have been slightly sluggish. Other global producers include Asahi, LG moulding and GP extrusion grades in the US, Chemical and Mitsubishi. Europe and Asia-Pacific, and tracks prices for Prices Polycarbonate can also be blended, or com- optical grade PC in the Asia-Pacific report. ICIS polycarbonate prices are strictly formu- pounded, with other materials such as acry- la-based and tied to same-month feedstock lonitrile butadiene styrene (ABS) to form al- Supply/demand costs for phenol and acetone. These prices loys that meet specific downstream needs. The US polycarbonate market has been in a are $1.60-2.00/lb on a DEL (delivered) basis. position of tight supply and growing de- April prices rolled over, and May prices Outlook mand since the fourth quarter of 2016. are expected to fall slightly on weaker phe- Sources expect US supply to remain con- Unplanned logistics issues at one major nol. However, acetone prices could increase strained throughout 2018 and into 2019, espe- US producer started in the fourth quarter of enough to balance the weaker phenol, lead- cially as consumption ramps up in the second 2016 and persisted through the majority of ing to another rollover. and third quarters on seasonal factors. 2017. The lost production created strong lev- In the freely negotiated sector, polycarbon- Asia supply of imports is also expected to els of pent-up demand that have remained ate prices have been climbing since the start remain tight, as the region itself is tight and into the first half of 2018. of the fourth quarter of 2017. high prices are making it more attractive to Further, production was lost at the same This has been largely driven by less compe- sell domestically than to export to the US. producer in the first half of 2017 at one of its tition from Asian imports, as well as tight do- Formula-based polycarbonate prices are two plants because of a production issue. mestic supply and persistent pent-up demand. likely to come down in the second and third A second producer experienced shut- In March, one producer nominated an in- quarters on weaker feedstock costs, but could crease of 7 cents/lb, and sources said about also stay largely steady. US POLYCARBONATE 4-5 cents/lb of the nomination found traction. Sources said that as long as a wide spread Currently, US domestic freely negotiated continues between imported and domestic $/lb, extrusion grade, spot DEL bulk prices are about 25 cents/lb below import PC, domestic sellers are likely to seek higher 2.0 pricing levels, which could lead to increase prices to capitalise and boost margins. nominations for June/July, sources said. Demand-wise, the automotive sector re- 1.9 In Europe, prices further increased in mains the largest growth opportunity for US April by €0.10/kg on either end of the range, polycarbonate, as the product works to re- 1.8 in line with moulding-grade PC quarterly place glass in rear and side windows and settlements. Strong demand in China contin- possibly the front windshield. In the short 1.7 ues to draw material from other regions. term, however, most demand growth is com- ing from the construction and consumer ■ 1.6 Technology electronic sectors. The engineered plastic has been in use since Additional reporting by Morgan Condon in the 1950s, when Bayer and GE started pro- London 1.5 May Apr duction processes to make polycarbonate 2017 2018 from BPA. Changes were made to the process Access the archive of the Chemical Profiles to respond to environmental restrictions on A-Z at icis.com/subscriber/icb

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ICB_240818_090-097 Profiles May18.indd 93 8/22/18 4:24 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Jane Massingham London Oxo-alcohols

USES days and the extended cold snap seen in europe oxo-alcohols capacity The oxo-alcohols chain consists of n-butanol much of Europe this year. ‘000 TONNES/YEAR (NBA), isobutanol (IBA), and 2-ethylhexanol Demand is good, but not as robust as some Company Location Capacity (2-EH). Around 50% of 2-EH is used to make predicted. There is still confidence that con- 2-EH plasticizers, mainly dioctyl phthalate (DOP) sumption will strengthen later in Q2. There Oxea Oberhausen, 300 and dioctyl terephthalate (DOTP). could be less spot volume as outages take Germany NBA, IBA and 2-EH have uses as solvents place for Oxea later in Q2 and then Zak in Grupa Azoty Kedzierzyn, 170 but are primarily used as feedstock for other July, BASF from mid-August and Perstorp in Poland products. NBA is a solvent with a variety of September. INEOS already completed its six- INEOS/ Lavera, France 125 chemical, industrial and retail end-uses. More week maintenance in Q1. Oxochemie than half of the production is used as an Perstorp Stenungsund, 120 intermediate chemical in the production of PRICES Sweden butyl acrylates for paints, coatings and adhe- The majority of oxo-alcohol business is NBA sives or to formulate acetates and glycol agreed on a formula-related basis which fol- BASF Ludwigshafen, 450 ethers, as well as being used directly as an in- lows the cost of feedstock propylene. Freely Germany dustrial solvent. negotiated business peaked in Q2 2017 when INEOS/ Lavera, France 160 Oxochemie Key drivers for oxo-alcohols are construc- the market was tight amid a long-term force Oxea Oberhausen, 130 tion (home and commercial), appliances, au- majeure declaration from BASF due to its fire Germany tomotive and industries that need imperial in Ludwigshafen, Germany, in October 2016. IBA coating material. Prices adjusted back to what was consid- BASF Ludwigshafen, 50 ered a more normal level during H2 2017, and Germany SUPPLY/DEMAND 2-EH reverted back to its usual premium over INEOS/ Lavera, France 30 Oxo-alcohols traditionally hit peak consump- NBA once supplies of NBA became balanced Oxochimie tion during Q2, and 2018 has a heavy shut- again in the latter months of 2017. Grupa Azoty Kedzierzyn, 20 down schedule, with at least two of the five Prices in 2018 have firmed for 2-EH against Poland producers in Europe undergoing their five- snug supplies and good demand both domes- Oxea Oberhausen, 10 yearly outage programmes. tically and for export. A largely balanced NBA Germany This maintenance takes six weeks and the market has held steady while the smaller bi- A full list of plants and projects capacities, producers have been or will be preparing product IBA has seen some softening. forecasts, production volumes and stocks accordingly to cover contractual com- With higher propylene prices, suppliers in- operating rates are available on the mitments. tend to recover some costs through the bal- ICIS Supply and Demand database The initial order books are not as strong as ance of Q2 for freely negotiated business. expected for the start of Q2 for NBA and IBA, programmes extends past the forecasted time- with a stronger picture seen on 2-EH. This is TECHNOLOGY frames, then there could be consequences of a mostly attributed to the timing of public holi- The main commercial route is the oxo pro- tighter market and therefore firming prices. cess, comprising the catalytic hydroformyla- Propylene supply should improve in Q2 as EUROPE OXO-ALCOHOLS tion of propylene with carbon monoxide and turnarounds come to an end. syngas, followed by the hydrogenation of the The summer lull may not be felt as much €/tonne, spot FD NWE aldehydes formed to give a mixture of NBA this year, with Grupa Azoty Zak going into its 1,400 2-EH Isobutanol (IBA) and IBA. Most global production is based on planned shutdown in July and increased N-butanol (NBA) the low-pressure process developed by the downstream capacity taking a little more 1,300 UK’s Davy Process Technology. LP Oxo Tech- 2-EH out of the market. The increased capaci- 1,200 nology has been developed and marketed in ty downstream will be for DOTP. cooperation by US-based Dow and Davy for BASF also has maintenance from mid-Au- 1,100 more than 40 years. More than 70% of all gust to early October, and Perstorp has a global propylene-based oxo capacity and 90% planned outage in September. 1,000 of all licensed propylene-based oxo capacity While suppliers have been preparing for utilises LP Oxo Technology. these and say contractual commitments 900 should be covered, it is likely to impact the ■ 800 OUTLOOK amount of spot volume available. Apr Apr Provided plants restart as planned, the market 2017 2018 should remain well supported moving forward Access the archive of the Chemical Profiles through Q2 and Q3. If one of the maintenance A-Z at icis.com/subscriber/icb

94 | ICIS Chemical Business | 18-24 May 2018 www.icis.com

ICB_240818_090-097 Profiles May18.indd 94 8/22/18 4:25 PM Asia chemical profile

Helen yan Singapore SBR

Uses world’s largest Muslim population. Market asia sbr capacity Styrene butadiene rubber (SBR) is the most activities in these countries are expected to ‘000 TONNES/YEAR widely used synthetic rubber. Emulsion SBR wind down for the mid-June festive holiday. Company Location Capacity (E-SBR) contains 23.5% styrene (SM) and Demand had been lacklustre in Asia in Korea Kumho Ulsan, 387 76.5% butadiene (BD). March and April due to the much cheaper Petrochemical South Korea E-SBR is predominantly used for the pro- natural rubber (NR) price. Tyre makers in Asia Sinopec Qilu Zibo, China 250 duction of car and light truck tyres and truck had switched to using more NR in formula- Petrochemical tyre retread compounds, which accounts for tions, thus capping demand for SBR. JSR Yokkaichi, Japan 210 more than 75% of global consumption. NR and SBR are competing feedstocks in PetroChina Fushun, China 200 Mechanical goods account for 15%, auto- the production of tyres for the automotive in- Fushun motive goods 5% and others such as adhe- dustry. Tyre makers in Asia have more flexi- Petrochemical sives, floor tiles and shoe soles, account for bility in feedstock substitution in their prod- Shen Hua Nantong, China 180 Chemical about 4%. Adhesives and chewing gum have uct formulations. Industrial been identified as two growing markets for In India, demand for SBR had also dwin- LG Chem Daesan, 160 SBR applications. dled in March and April due to the closure of South Korea the fiscal year in end March. India also im- PetroChina Jilin Jilin, China 150 Supply/demand ported more SBR in February to cover its re- Petrochemical Asia SBR demand is likely to pick up in May in quirements for March and April. PetroChina Lanzhou, China 150 China as tyre factories ramp up operating rates India’s SBR imports in February increased Lanzhou to build inventories ahead of a conference in by 42% month on month to 9,014 tonnes, ac- Petrochemical June in Qingdao. Logistical issues such as road cording to India Customs. On a year-on-year Reliance Hazira, India 150 Industries blocks or factory closures are not unusual dur- basis, the country’s imports of SBR increased Limited ing major international conferences in China. by 34% in February. Indian Synthetic Panipat, India 120 Chinese president Xi Jinping will host the Rubber Ltd Shanghai Co-operation Organisation (SCO) Prices Zeon Tokuyama, Japan 110 summit in Qingdao in June. Qingdao is a port SBR non-oil grade 1502 prices have seen up- TSRC Ta-Sheh, Taiwan 100 in the Shandong province where many tyre ward pressure since mid-April due to soaring factories are sited. The summit has China, Rus- feedstock butadiene (BD) costs. A full list of plants and projects capacities, sia, Kazakhstan, Kyrgyzstan, Tajikistan, Uz- BD prices surged by 15% within a month forecasts, production volumes and operating rates are available on the bekistan, India and Pakistan as full members. since early April, prompting Asian SBR mak- ICIS Supply and Demand database In southeast Asia, tyre factories are also ex- ers to hike their offers, given the continued pected to build inventories in May ahead of erosion in margins. in Germany. It was created through an emul- the Muslim Eid festival. Spot offers for fresh May shipments of non- sion procedure that used polymerisation to Malaysia and Indonesia are majority Mus- oil grade 1502 were hiked by about $100/ produce a material with a low reaction viscos- lim countries, with Indonesia having the tonne to $1,800/tonne CFR SE Asia, in line ity but had all the attributes of natural rubber. with the upswing in BD. ASIA SBR However, cheaper NR, at about $300-400/ Outlook tonne less than SBR, weighed on demand. SBR non-oil grade 1502 prices will likely see $/tonne, non-oil grade 1502, spot Uncertainty over the sustainability of the upward pressure in the third quarter from im- 1,900 CFR SE Asia CFR India Main Ports feedstock BD price upsurge also curbed spot proved demand on restocking activities. Tyre CIF China interest in SBR. makers usually ramp up their operating rates 1,800 in the third quarter to build up inventories 1,700 Technology ahead of the seasonally robust demand season SBR is one of the most versatile copolymer towards the end of the year. 1,600 rubber compounds. It consists of the organic The natural rubber price may also see fur- compound styrene and BD, with the amount ther upward pressure from May onwards on 1,500 of BD usually about three times more than the tight supply amid the winter season in south- amount of styrene. east Asia. This will help to bolster SBR, as its 1,400 This compound is produced either through price tends to move in tandem with that of ■ 1,300 ionic polymerisation of a solution or as an natural rubber. May May emulsion through free radical polymerisation. 2017 2018 Also known as E-SBR, this product was first Access the archive of the Chemical Profiles developed in the 1930s by I.G. Farbenindustrie A-Z at icis.com/subscriber/icb

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ICB_240818_090-097 Profiles May18.indd 95 8/22/18 4:25 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Steven mcGinn Houston MTBE

Uses production sites in Venezuela and Mexico US MTBE CAPACITY Methyl tertiary butyl ether (MTBE) is a fuel have also added to demand growth in those ‘000 TONNES/YEAR additive used to boost the octane value in countries. Company Location Capacity gasoline, helping it burn more completely and Market sources said suppliers are bringing Huntsman Port Neches, 650 reducing particle emissions from tailpipes. product from Europe and blending with gaso- Texas MTBE can also be used to make high-purity line in the US Gulf Coast for distribution to Enterprise Mont Belvieu, 640 isobutylene, which can be further processed Mexico and Latin America. Middle East-pro- Products Texas to make butyl rubber, highly reactive poly- duced material is also heard to be making its LyondellBasell Bayport, Texas 550 isobutylene, methyl methacrylate (MMA) and way to the Americas region. Industries other smaller derivatives. MTBE is also used US producers tend to maximise MTBE pro- TPC Group Port Neches, 400 as a solvent and extractant. duction capacity due to favourable margins. Texas TPC Group Houston, Texas 280 Supply/demand Prices LyondellBasell Channelview, 200 Industries* Texas US production of MTBE sank to around 17m US MTBE prices track movement in the Am- *Reflects total oxygenate production bbl in 2017 from over 45m bbl in 2005 due to sterdam/Rotterdam/Antwerp market, with US its phase-out in the US domestic gasoline pool pricing at around a 10-15 cents/gal premium to A full list of plants and projects capacities, in favour of corn-based ethanol. US-produced the ARA market. ICIS assessed MTBE at 239.25 forecasts, production volumes and material is primarily exported to international cents/gal on 11 May, closing at a three-year operating rates is available on the gasoline markets, with chief destinations being high on multi-year highs in the upstream crude ICIS Supply and Demand database Mexico, Chile and Venezuela. oil and gasoline futures complex. In March, the US exported 120,860 tonnes The European market is the key driver of Neches, Texas), TPC Group (Houston, Texas), of MTBE, with Mexico accounting for around prices in the US Gulf production region since Enterprise Products (Mont Belvieu, Texas), 96,000 tonnes and Chile taking in 24,845 US market demand for MTBE is virtually non- and LyondellBasell (Channelview, Texas). tonnes. Through the first quarter of 2018, the existent. Asia MTBE prices rose to above Producers are looking to capitalise on the US exported 392,145 tonnes, down by 9% $860/tonne FOB (free on board) Singapore in long-term needs of the global market, setting from last year due to a turnaround at Lyon- mid-May, a level unseen in the past three up export growth expansion. LyondellBasell dellBasell. years, on firmer gasoline prices and higher announced plans to double its butyl ether Supply in the US has steadily increased bids in the open trading market. production at its Channelview site. The com- since 2010, as production margins remained pany is building a $2.4bn propylene oxide/ favourable due to exports from the remaining Technology tertiary butyl alcohol (PO/TBA) project in producers. MTBE is manufactured by the chemical reac- Channelview for completion in 2021. With virtually zero demand in the US – tion of methanol and isobutylene. The reac- It will have capacities of 470,000 tonnes/ save for specialty fuels – demand has in- tion can take place in either a liquid phase or year of PO and 1m tonnes/year of TBA. The creased in Asia and Mexico due to population mixed gas-liquid-phase reactor that contains TBA will be converted to MTBE and ethyl ter- growth. Refinery outages and problems at an acidic ion exchange resin. Alternatively, tiary butyl ether (ETBE) at its Bayport Com- sulphuric acid can be used as a catalyst. plex near Pasadena, Texas. US MTBE The reaction takes place at a temperature Enterprise Products is building up its high- range of 50-90˚C (122-194˚F) and a pressure of purity isobutylene production at its Mont Cents/gal, spot FOB US Gulf 20 bar. The resulting product mixture is then Belvieu site by installing a new 425,000 250 distilled to get high-purity MTBE. tonne/year isobutene dehydrogenation 240 (iBDH) unit. 230 Outlook The iBDH plant is expected to be complet- US MTBE spot prices are expected to remain ed by the end of 2019. Company officials in 220 firm heading into the summer driving season, 2017 said the iBDH facility is designed to in- 210 as the gasoline and crude oil futures complex crease production of isobutylene for the pro- continues to lead the oxygenate market up- duction of lubricants, rubber products and 200 wards. Octane supply remains tight, adding alkylate for gasoline blendstock, as well as 190 further upward pressure. MTBE for export. ■ 180 MTBE’s phase-out in the US led to produc- Additional reporting by Trixie Yap in ers finding new global markets for material. Singapore and Joseph Chang in New York 170 May May The US local ban shortened supply but has 2017 2018 led to favourable margins. Access the archive of the Chemical Profiles US producers include: Huntsman (Port A-Z at icis.com/subscriber/icb

96 | ICIS Chemical Business | 25-31 May 2018 www.icis.com

ICB_240818_090-097 Profiles May18.indd 96 8/22/18 4:25 PM Asia chemical profile

Matthew Chong Singapore TDI

USES Demand has been subdued in recent months ASIA TDI CAPACITY (‘000 TONNES/YEAR) Toluene di-isocyanate (TDI) is used in flexible as buyers were lukewarm to the excessive pric- Company Location Capacity polyurethane (PU) foam, which has outlets in es that were hovering near their peaks in Janu- Covestro Caojing, China 250 upholstery, mattresses and automotive seats. ary. Downstream foam makers were buying on Shanghai BASF Caojing, China 160 Other uses include rigid foams and adhesives, a need-to basis and some had resorted to cut- Polyurethane Co paints, concrete sealers and as a crosslinking ting their plant production as they were not (SBPC) agent for nylon 6 and intermediates in PU able to pass on cost increases to their custom- BASF Yeosu, South 160 coatings and elastomers. ers. This is despite April to May being the tra- Korea ditional peak demand season for TDI. Cangzhou Dahua Cangzhou, China 150 SUPPLY/DEMAND Hanwha Chemical Yeosu, South 150 Supply was overall stable in the first quarter, PRICES Korea with shorter supply from January to around Average domestic prices in China held up at Mitsui Chemicals Omuta, Japan 120 mid-February having turned longish by the Chinese yuan (CNY) 38,500/tonne DEL (deliv- & SKC Polyurethanes Inc end of March in the domestic China market. A ered) east China and above in January and Feb- couple of major eastern China-based produc- ruary, according to ICIS data. Prices were subse- Fujian Southeast Fuqing, China 100 Electrochemical ers’ plants recovered normal production by the quently on a steady downtrend from early Gansu Yinguang Baiyin, China 100 end of February after running at reduced rates. March to the end of April to hit a 10-month low Yantai Juli Yantai, China 80 Small volumes of TDI from Sadara were heard of CNY26,300/tonne DEL east China, ICIS data being exported to northeast Asia and southeast showed, losing one third of their value in the Beifang Jinhua Huludao, China 50 Asia since early this year, but the entry of Sad- process. The downtrend was halted, at least mo- A full list of plants and projects capacities, ara to the region did not dampen generally mentarily, in early May as prices rebounded forecasts, production volumes and steady TDI prices in the first quarter. Export slightly on news that a major eastern China- operating rates is available on the availability from Japan and South Korea has based plant will be shut in H2 May for a turna- ICIS Supply and Demand database declined in the second quarter due to turna- round for two weeks, market sources said. In the rounds in these two countries, including Mit- Asia spot import market, prices largely tracked Covestro has also been running a 30,000 tonne/ sui Chemicals & SKC Polyurethanes Inc’s China domestic prices and have stayed above year pilot plant since 2004 and is thought to (MCNS) Omuta unit from May to June and $4,000/tonne CFR (cost & freight) China/Hong have used this technology in its new 300,000 Hanwha Chemical’s Yeosu units in April. Kong/southeast Asia and CIF (cost, insurance & tonne/year TDI plant in Dormagen, Germany, In May, there were supply concerns follow- freight) India since H2 August 2017. Buyers which came on stream in late 2014. ing a fatal blast at Shanghai SECCO’s facilities were lukewarm in their restocking activities as on 12 May. Chlorine raw material suppliers of sellers had been staunch on their offers. OUTLOOK some eastern China-based methyl di-p-phe- In China, domestic prices of drummed TDI TDI prices are expected to come under pressure nylene isocyanate (MDI) and TDI plants rose sharply in mid-May as producers raised in H2 2018 following the completion of the source their feedstock from SECCO, market their prices due to concerns over raw material turnaround season for northeast Asian plants in sources said. supply disruption to eastern China-based the second quarter. Price declines may acceler- plants following the blast at Shanghai Secco. ate in the second half of the year depending on ASIA TDI Prices have since stabilised in the week follow- when BASF is able to run its 300,000 tonne/ ing the incident as the eventual impact on TDI year Ludwigshafen plant at full capacity. The $/tonne, spot production seems to be limited. unit has been running at reduced rates in the 5,000 CFR Asia SE past couple of years due to technical issues and CIF India TECHNOLOGY is not expected to resume full production until

4,500 The main route is the nitration of toluene to di- June, after a new reactor is installed. nitrotoluene, followed by catalytic hydrogena- Additional supply could also come from tion to toluene diamine (TDA), which is dis- China, with Wanhua Chemical scheduled to 4,000 solved in an inert solvent and reacted with start up a 300,000 tonne/year TDI plant in Yan- phosgene to produce a crude TDI solution. TDI tai in September/October 2018. Players do not can also be produced directly from dinitrotolu- rule out a sharp drop in prices in the latter half 3,500 ene by liquid phase carbonylation with o-di- of the year, but most are doubtful prices will chlorobenzene. Germany’s Covestro developed re-visit the lows of early 2016, at least not until ■ 3,000 a route that carries out phosgenation in the gas Wanhua’s TDI plant comes on stream. May May rather than the liquid phase. The technology 2017 2018 was already commercialised at its 250,000 Access the archive of the Chemical Profiles tonne/year TDI plant in Shanghai, China. A-Z at icis.com/subscriber/icb

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Amanda Hay houston PA

Uses Altogether, the three companies account for US phthalic anhydride capacity Phthalic anhydride (PA) occurs as white solid about 326,000 tonnes/year of PA capacity. ‘000 TONNES/YEAR flake or clear molten liquid. It is slightly solu- The US PA market is mature and largely Company Location Capacity ble in hot water, hydrolysing to PA, and is self-contained, with trade having little impact ExxonMobil Baton Rouge, 136 soluble in alcohol and carbon disulphide. It on the domestic market. The US exports very Chemical Louisiana reacts with strong oxidants and violently on small amounts of PA, under 1,000 tonnes/ Koppers Stickney, Illinois 100 heating with copper oxide or sodium nitrite, month. Imports are a larger portion of the Stepan Millsdale, Illinois 90 causing an explosion hazard. market, at about 2,000-3,000 tonnes/month. Chemical The largest downstream application of PA, Import volumes in the first half of 2018 accounting for just over half of production, is have trended higher versus the same period A full list of plants and projects capacities, the manufacture of phthalate plasticizers, pri- in 2017. This is due to issues at overseas forecasts, production volumes and operating rates are available on the marily dioctyl phthalate (DOP) which is used plants that have been resolved. The largest ICIS Supply and Demand database as a plasticizer in polyvinyl chloride (PVC), sources of product in 2018 have included and di-isononyl phthalate (DINP). South Korea, Italy, Israel and Mexico. The second largest outlet is in unsaturated US supply is returning to normal levels after in early 2018. Pressure will likely continue if polyester resins (UPR), which are blended a spring plant outage. Koppers returned to pro- crude prices remain around $70/bbl. with glass fibres to produce fibreglass rein- duction on schedule in early May after a six- PA prices experienced an unusual spike in forced plastics. Principal end markets are con- week planned recatalysation of its plant. No October 2017 following Hurricane Harvey’s struction, marine and transportation. supply disruption resulted from the outage. blow to the Texas Gulf coast petrochemical sec- The third largest outlet is PA-based alkyd Demand has generally been stable in the tor. The storm disrupted production and logis- resins, which are used in solvent-based coat- last year. Spring/summer and early autumn tics for a wide swath of refineries and chemical ings for architectural, machinery, furniture are generally stronger seasons in the down- plants, affecting OX and ultimately PA prices. and fixture applications. stream plasticizers market. Market partici- Small volume uses for PA include the man- pants have noted steady demand that follows Technology ufacture of dyes and pigments, detergents, her- typical seasonality with little change. PA was first made through the oxidation of bicides and insecticides, fire retardants, sac- Rebuilding efforts across the US after fires naphthalene in concentrated sulphuric acid charin and polyester resin cross-linking agents. in California and hurricanes in Texas and and in the presence of mercury sulphate. A Florida in late 2017 have lingered into 2018. catalytic vapour-phase oxidation of naphtha- Supply/demand Additional demand in the plasticizers market lene later replaced this route. The latter pro- Supply is balanced with demand in the US PA has stemmed from this. cess is done in air and in the presence of a va- market. Two US producers, Stepan and Kop- nadium oxide catalyst. Today, naphthalene pers, sell product to the market, while Exxon- Prices provides only about 16% of feedstock needs. Mobil produces PA for captive use in its pro- PA prices have been relatively stable in the last In the US, Stepan produces all of its PA from duction of DINP. Koppers is the only US three years. PA price movements track the OX feedstock. Koppers uses a mixed feed of producer that makes both flake and molten PA. movements of feedstock orthoxylene (OX). OX and internally produced naphthalene. There have not been any initiatives to increase The process technology has changed little, US PHTHALIC ANHYDRIDE the conversion adder this year, and market par- although catalysts have a longer life of three ticipants do not expect any new efforts. years and yields have improved. One devel- Cents/lb, contract OX, which is made from mixed xylenes opmental improvement was the lowering of 64 Flake Molten (MX), has not been pressured higher in the last the air-to-OX weight ratio to 9.5:1, allowing three years by summer cost pushes in the MX energy savings and reduced capital costs. 62 market when demand is higher for MX in gaso- line blending. Most chemical demand for MX Outlook 60 comes from paraxylene (PX) rather than OX. As the PA market is mature in the US, supply This year, however, OX and PA prices have and demand should remain relatively stable 58 trended higher amid tight supply and unsea- in the near term. Looking ahead, demand may sonably high demand for MX in the gasoline wane in the largest downstream outlet, phtha-

56 blending pool and firming crude values. PA late plasticizers. That market is declining in contract prices spiked in March and are likely the US amid growing concerns over the to move higher again in June, tracking higher health risks of phthalates. ■ 54 May May OX contract prices in May. 2017 2018 Crude prices, which have topped $70/bbl, Access the archive of the Chemical Profiles have kept pressure on downstream products A-Z at icis.com/subscriber/icb

98 | ICIS Chemical Business | 1-7 June 2018 www.icis.com

ICB_240818_098-107 Profiles June18.indd 98 8/22/18 4:33 PM Europe chemical profile

Samantha Wright London MTBE

Uses vey in the US, with many plants in force ma- europe mtbe capacity Around 95% of methyl tertiary butyl ether jeure in the country. As a result, imports to the ‘000 TONNES/YEAR (MTBE) produced is used as an octane booster EU slipped in October, with rising US prices Company Location Capacity and oxygenate in gasoline. making it a more attractive export destination. LyondellBasell Botlek, 590 MTBE can also be used to make high-purity Strong buying interest from the US continued Netherlands isobutylene, which can be further processed into 2018 with several turnarounds noted in the Evonik Marl, Germany 325 to make butyl rubber, highly reactive poly- nation, though this had mostly dried up by Evonik Oxeno Antwerp, Belgium 315 isobutylene, methyl methacrylate (MMA) and March. EU imports of MTBE were generally Antwerpen other smaller derivatives. higher in 2017 than 2016, according to EU trade Shell Pernis, 165 MTBE is also a solvent and extractant, as data, though there were significantly less im- Netherlands well as a pharmaceutical agent to dissolve ports in July, August and October than in 2016. Esso Petroleum Fawley, UK 125 gallstones. In the first two months of 2018 there was a defi- Neste Oil Porvoo, Finland 123 nite increase in imports of MTBE to the EU. Total Lindsey Oil Immingham, UK 100 Supply/demand Refinery 2017 demand levels, as is traditional, gener- Prices BP Nerefco Rotterdam, 100 ally depended on seasonality. Buying interest MTBE prices fluctuated in line with Eurobob Netherlands sees a boost in the summer, with the driving gasoline in 2017 and into 2018, with gasoline in Unipetrol Kralupy, Czech 90 Republic season between June and August providing turn tracking crude oil prices. There was a typi- the biggest lift in demand. cal lift in MTBE values in summer, particularly OMV Schwechat, 70 Austria Q2 of 2018 saw less demand than is typical in July and into August, with a large uptick seen *Top 10 plants by capacity heading towards summer, attributed mainly in September, during the aftermath of Hurricane to healthy stocks having been built up in win- Harvey and the resulting extra demand from the A full list of plants and projects capacities, ter in preparation for the high demand season. US. The factor against Eurobob gasoline stayed forecasts, production volumes and Increased offtake was noted from Mexico relatively strong for the majority of 2017, before operating rates are available on the through most of 2017 and into 2018. Though a tumbling down in October and November, amid ICIS Supply and Demand database lot of Mexican demand is fulfilled by US pro- a spike in crude and gasoline prices. ducers, European players saw an uptick in ma- There was a lift in the factor again in ply expected to be consumed by rising buying terial leaving the continent for South America. March, amid robust trading activity, though interest during the peak driving season. A spate of planned maintenances and un- this fell back down to generally low levels Strong demand is anticipated to remain planned production issues in the second and again after the switch to typically more ex- until the end of Q3, when demand typically third quarters of 2017 meant MTBE supply was pensive summer grade gasoline. begins to wane with the approaching switch fairly tight for a large portion of the year, though Outright prices spiked in early May follow- to winter grade gasoline. healthy supply has so far been noted in 2018. ing the announcement that the US plans to In the mid- to long term, European coun- There was also a spike in European MTBE pull out of the joint Iran nuclear deal. This led tries’ shift away from diesel powered cars demand in September following Hurricane Har- to a spike in crude oil prices which in turn could have a positive effect on the MTBE in- pushed up gasoline and MTBE values. dustry, with gasoline powered cars anticipat- EUROPE MTBE ed to see more demand as a result. Technology In the long term, the increasing focus on $/tonne, spot FOB Rotterdam-Amsterdam 850 MTBE is produced when isobutene reacts electric vehicles (EVs) is calling into question with methanol over a catalyst bed. Either a the future of the gasoline market, particularly 800 liquid-phase reactor or a mixed gas-liquid- with bans on new petrol and diesel vehicles phase reactor containing an acidic ion ex- coming into force in countries including the 750 change resin can be used for the process. Sul- UK and France from 2040, as well as plans for phuric acid can be also used as a catalyst. similar bans in other European countries. 700 The mixture obtained from the reaction is MTBE demand is heavily dependent on the distilled to produce high-purity MTBE. gasoline industry, with gasoline blending the 650 MTBE can also be created as by-product from most popular application for the octane boost- the propylene oxide (PO) process when ter- er in Europe. Any ban on gasoline powered 600 tiary butyl alcohol is dehydrated to isobutene. vehicles would have a large impact on MTBE buying interest. ■ 550 May May Outlook 2017 2018 Players are hoping for an uptick in demand in Access the archive of the Chemical Profiles the summer months, with the current oversup- A-Z at icis.com/subscriber/icb

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ICB_240818_098-107 Profiles June18.indd 99 8/22/18 4:33 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

heidi Finch London MPG

Uses round for Repsol during Q1 2018 at its PO and EUROPE MPG CAPACITY Monopropylene glycol (MPG), also referred to derivatives operations at Tarragona, which ‘000 TONNES/YEAR as propylene glycol (PG), is a clear, colourless, added to the MPGI spot supply constraints. Company Location Capacity odourless, hygroscopic, viscous liquid. It is However, once the winter season drew to a Dow Chemical Stade, Germany 290 relatively non-toxic, but is a mild irritant and close in April and Repsol’s maintenance turn- INEOS Dormagen, Germany 120 defatting agent. MPG is combustible, but not around at Tarragona ended, the MPGI spot LyondellBasell Botlek, Netherlands 95 flammable at room temperature. market has become more balanced to well- LyondellBasell Fos, France 85 MPG is used in the manufacture of high supplied. Demand from the downstream UPR performance unsaturated polyester resins sector was healthy into Q2, but was not suffi- BASF Ludwigshafen, Germany 80 (UPR), as well as engine coolants; antifreeze cient to compensate for the end of the winter Sadara Al Jubail, Saudi Arabia 70 applications; aircraft wing and runway de-ic- de-icer season. MPGI spot prices began to sta- Repsol Tarragona, Spain 63 ers; food, pharmaceuticals and personal care bilise during May on the back of a better bal- Oleon* Ertvelde, Belgium 20 products; and paints and coatings. anced market and healthy demand from other Oltchim Rimnicu Vilcea, 9 The manufacture of plasticizers and hydrau- sectors outside the de-icer/antifreeze sectors. Romania lic brake fluids consumes considerable quanti- MPG US pharmaceutical (MPG USP) spot PCC Rokita Brzeg Dolny, Poland 4 ties. It is also used in the petroleum, sugar re- availability was fairly balanced over the past *Bio-based MPG fining and paper making industries, and in the year, although there were some periods of A full list of plants and projects capacities, preparation of toiletries, non-ionic detergents, tighter spot supply when MPGI winter de- forecasts, production volumes and antibiotics and liquid washing formulations. mand was particularly strong. operating rates are available on the Dipropylene glycol (DPG) demand has out- ICIS Supply and Demand database Supply/demand paced DPG spot supply over the past year, In July 2017, MPG industrial grade (MPGI) which has led to prolonged tightness. Even Technology spot supply tightened because of an un- during the high MPG run rates during the MPGI and MPG USP are produced by the hy- planned issue at the propylene oxide (PO)/ winter, there was little-to-no relief in DPG dration of PO. The reaction also produces styrene monomer (SM) Ellba facility in the spot supply, because DPG demand remained DPG and tri-propylene glycol (TPG) and a Netherlands, which restricted upstream PO strong. DPG is produced in a structurally small quantity of higher glycols. supply and led to stricter optimisation of PO lower yield to MPGI or MPG USP during the into better performing derivatives. During the MPG production process. Outlook winter of 2017 and into early 2018, MPGI MPGI demand growth particularly in sectors tightened significantly, because of surge in Prices such as UPR/construction is likely to be close winter de-icer demand, resulting from cold Prices moved up by €360/tonne on average ly linked to GDP, although also affected by de- snaps in Europe. during November until the first half of Janu- icer and antifreeze activity gaining momentum Upstream PO supply has also been tight for ary 2018, driven by strong winter de-icer de- during the winter and UPR picking up during structural and demand related reasons and mand. MPGI spot prices hit a high of €1,750/ the spring/early summer. There is some talk there was also a lengthy maintenance turna- tonne on 12 January 2018. From the second that certain MPGI and DPG applications such half of January 2018 and into April, prices as personal care products are likely to grow EUROPE MPG came off the highs as supply improved. Prices slightly above GDP over the coming years. decreased by €180/tonne between the second There is some expectation that DPG supply €/tonne, spot FD NWE half of January to mid-April, taking MPGI spot could remain tight structurally in the short to 1,800 to €1,520/tonne. MPG US pharmaceutical medium term, if there is no new MPG/DPG spot prices followed a similar trend to MPGI capacity and provided demand remains

1,600 over the past year, albeit to a lesser extent. healthy. While the underlying growth poten- DPG spot prices have been trading at high tial is expected to be robust for DPG, the risk levels over the past year, amid structural sup- of demand being jeopardised by high price 1,400 ply limitations and robust demand. Prices levels and players looking for substitutes re- were quoted closely either side of €3,000/ mains a consideration. tonne FD, reaching a peak in the low €3,000s/ However, there is some talk that it is not 1,200 tonne FD in late 2017 and into Q1 2018. DPG easy to find a substitute for DPG and for cer- spot prices came off in early Q2 on slight eas- tain applications, substitution is not seen to ■ 1,000 ing in supply. Possible reasons for the slight be an option at all. May May improvement in DPG spot supply was be- 2017 2018 lieved to be due to imports or demand not Access the archive of the Chemical Profiles being as strong as before. A-Z at icis.com/subscriber/icb

100 | ICIS Chemical Business | 8-14 June 2018 www.icis.com

ICB_240818_098-107 Profiles June18.indd 100 8/22/18 4:34 PM Asia chemical profile

Trixie Yap Singapore Toluene

USES Supply has been generally long between ASIA TOLUENE CAPACITY Toluene is used to produce synthetic drugs, January and end-April, owing to the stable ‘000 TONNES/YEAR pesticides, toluene di-isocyanate, benzene, operating plant rates and overall sufficient Company Location Capacity both mixed and paraxylenes, benzyl chlo- availability in southeast Asia which is a key SK Global Ulsan, South 1,100 ride and benzoic acid. It can be used directly net exporter within the region. Availability Chemicals Korea as a common solvent such as in paints, thin- of northeast Asian cargoes was curtailed at GS Caltex Yeosu, South 700 ners, adhesives and disinfectants – mainly times because of turnarounds. Korea within southeast Asia. Toluene is used as an However, southeast Asia-origin cargoes ExxonMobil Singapore 690 octane booster for higher-RON gasoline. made up for the loss in production in the Chemical other side of the hemisphere. Spot exports Sinopec Yangzi Jiangsu, China 580 DEMAND/SUPPLY from Malaysia have been particularly preva- Petrochemical At the start of 2018, demand was robust lent, a trend that emerged only in 2018, Dalian Liaoning, China 486 Petrochemical from Chinese and Indian importers because because of the debottlenecking at Lotte Shanghai Shanghai, China 480 of stocking up before the Lunar New Year Chemical Titan’s unit and lower domestic Petrochemical and replenishment amid positive distributor obligations. Guangxi Ruanzhou Guangxi, China 480 margins. Buyers took a break in H2 March Jilin Petrochemical Jilin, China 470 and April to digest their cargoes at the pub- PRICES Formosa Mailiao, Taiwan 470 lic shoretanks in both regions. Demand re- Prices have been volatile in all markets Chemicals & Fibre gained momentum from May, in line with within Asia. The overarching price trend in Corp the crude uptrend, because of restocking the first three months was up. Subsequently, Sinopec Zhenhai Zhejiang, China 410 after inventory levels hit lower-than-usual the market fell back down after all replen- Refining & levels in both India and China. ishing activities were completed, with FOB Chemical Company Demand from the key downstream tolu- Korea prices falling to the lowest point at A full list of plants and projects capacities, ene disproportionation (TDP) units was $673/tonne. forecasts, production volumes and strong through January and April because After hitting the lowest point for the first operating rates are available on the of positive spreads for benzene and xylenes half of 2018, prices found support, with buy- ICIS Supply and Demand database production. The healthy margins for parax- ers starting to procure competitively priced ylene products provided impetus for stock- cargoes since they believed the overall mar- increase gasoline production and cover ing up on toluene cargoes as well from ket was hitting a bottom. This was against a their shortfall, since private blenders may the selective TDP units in South Korea and backdrop of a narrow toluene-naphtha become obsolete. Thailand. However, a reversal in the spread – below $80/tonne. Downstream TDI demand-supply funda- demand trend emerged in May after mentals may also result in potential market benzene demand remained lacklustre and TECHNOLOGY shifts as well. With new plants like Wan Hua spreads were close to falling beyond the In Asia, there are two key production meth- Chemical and restarts such as BASF’s Lud- breakeven level. ods for toluene. The first is extraction from wigshafen expected by the third quarter of pyrolysis gasoline (pygas), which is pro- 2018, there is a possibility that demand in ASIA TOLUENE duced from steam cracking of light naphtha. Asia could go either way. Demand may go The second is the extraction method from up because of the need for these plants to $/tonne, FOB Korea 900 reformate, which is produced from a reform- run, but it will act as a double-edged sword er via the cracking of heavy naphtha. since TDI supply will increase and it may re- sult in an imbalance in this market. 800 OUTLOOK Narrower or continuously narrow TDP Chinese domestic demand-supply will be spreads will be a third key determinant in the key game changer going forward into demand-supply changes. Already, smaller- 700 2019, as government taxation reforms in sized TDP plants have been shut or looking the gasoline market will likely result in to cut rates since mid-May because of changes with overall trader and end-user squeezed producer spreads and expectations 600 perceptions. The country implemented a that benzene demand-supply is unlikely to new online tax (consumption and VAT) fil- improve in the short run. ■ ing system for gasoline and this could effec- 500 May May tively swing the market both ways. Click here to see an interactive map of 2017 2018 Domestic toluene supply could be limited Asia toluene turnarounds from state-owned refineries if they need to

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ICB_240818_098-107 Profiles June18.indd 101 8/22/18 4:34 PM Middle East chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Izham Ahmad Singapore MDI

USES produced in northeast Asia and the world’s middle east and Asia mdi capacity About 80% of the global consumption of me- major producer is currently China’s Wanhua ‘000 TONNES/YEAR thyl di-p-phenylene isocyanate (MDI) is used Chemical, which has a total production capac- Company Location Capacity in polyurethane (PU) foams. The largest outlet ity of 1.8m tonnes/year from its three units. Wanhua Chemical Ningbo, China 1,200 is in rigid foams used in construction, refrig- There were supply concerns following a fatal Wanhua Chemical Yantai, China 600 eration, packaging and insulation. MDI is also blast at Shanghai SECCO’s facilities on 12 Covestro Caojing, China 500 used to make binders, elastomers, adhesives, May. Chlorine raw material suppliers of some BASF/Chongqing Chongqing, 400 sealants, coatings and fibres. Other outlets in- eastern China-based methyl di-p-phenylene Chemical and China clude binders and microcellular products. isocyanate (MDI) and TDI plants source their Pharmaceutical Polymeric MDI (PMDI), when combined feedstock from SECCO, market sources said. Holding with rigid polyols, is used in refrigerators, as In the Middle East, Sadara started PMDI pro- Sadara Chemical Jubail, Saudi 400 well as insulation in the construction sector. duction in June 2017 and the plant has the ca- Arabia Monomeric MDI (MMDI) or pure MDI, when pacity to produce 400,000 tonnes/year of PMDI. Tosoh Nanyo, Japan 400 combined with adipic acid, butanediol (BDO) Iran’s Karoon Petrochemical is the only BASF Yeosu, South 250 and methyl ethyl ketone (MEK), is used as a other Middle Eastern PMDI producer al- Korea pre-polymer for applications in shoe soles, though it mainly produces PMDI and MMDI Huntsman Caojing, China 240 Polyurethanes adhesives, thermoplastic polyurethane (TPU) for its domestic market from a 40,000 tonne/ Shanghai / resins, spandex and synthetic leather. year installation. BASF JV Kumho Mitsui Yeosu, South 200 SUPPLY/DEMAND PRICES Chemicals Korea In the Middle East, demand is believed to be In the Middle East, PMDI prices started 2018 Shanghai BASF Caojing, China 160 largely for PMDI, used mainly by the con- on a downtrend, retreating from the record Polyurethane struction industry as insulation panels. Buy- highs traded in November 2017. Supply A full list of plants and projects capacities, ers are mainly system houses in the Middle increased after some plants resumed produc- forecasts, production volumes and East, some of whom bundle and sell the tion following maintenance shutdowns. The operating rates are available on the PMDI with polyols. The first half of the year downtrend continued through the first half of ICIS Supply and Demand database is typically a slower period for PMDI de- this year and in the week ended 10 May, PMDI mand in the Middle East but demand in- prices sank to their lowest since March 2017. sufficient over the next few months. Demand creases after the end of the Eid holidays, The trend was mirrored to some extent by is widely expected to be in a typically slow with the peak season usually seen during the prices in China and southeast Asia. season due to Ramadan and the Eid holidays third or fourth quarter. Prices have been on a stable trend, as the following that, so prices are expected to re- However, buyers have been largely sanguine Muslim fasting month of Ramadan started in main under downward pressure. about purchasing large orders while prices are mid-May. Trade activity is expected to be Sadara is believed to be largely focused on declining, as they eyed further price erosion. muted over the next few weeks and beyond. Asian markets for its isocyanates, and as Currently over half of the world’s PMDI is such actual volumes available to Middle East TECHNOLOGY buyers are unclear. MIDDLE EAST MDI MDI is made primarily from nitrobenzene, Karoon is largely driven by the domestic which is produced by the nitration of benzene in market in Iran, although it also hopes to be $/tonne, polymeric, spot CFR GCC a continuous or batch process. Nitrobenzene is able to export material in future. Iran, how- 3,500 then hydrogenated to aniline, which is con- ever, is expected to struggle to cope with the densed with formaldehyde to form diphenyl- threat of renewed sanctions after the US 3,200 methane diamine. This is reacted with phosgene withdrew from the nuclear deal in May. in solvent to yield an isocyanate mixture, and Elsewhere, PMDI capacity expansions for 2,900 then MMDI is distilled under reduced pressure. 2018 are limited, with no known plans in An MDI plant’s output is 70-80% PMDI the Middle East and only one expected in 2,600 and 20-30% MMDI. This ratio moves within a China this year. narrow range and is not easily adjustable, ac- Longer term, however, PMDI production 2,300 cording to industry sources. Sadara’s Jubail is still expected to outpace consumption plant however is believed to be producing globally and the Middle East will be no ■ 2,000 only PMDI, industry sources have said. exception. Feb May 2017 2018 OUTLOOK Access the archive of the Chemical Profiles Supply to the Middle East is expected to be A-Z at icis.com/subscriber/icb

102 | ICIS Chemical Business | 15-21 June 2018 www.icis.com

ICB_240818_098-107 Profiles June18.indd 102 8/22/18 4:34 PM US chemical profile

ADam yanelli Houston MMA

Uses Lucite implemented sales control, effective us mma capacity Methyl methacrylate (MMA) is a liquid mon- immediately. It said both its US plants are op- ‘000 TONNES/YEAR omer used primarily to produce resins and erational and running to plan, but the move Company Location Capacity acrylic polymers. It brings durability, stability was made “to protect Lucite’s contract cus- Dow Chemical Deer Park, Texas 475 and UV resistance to products such as point- tomers and shield limited inventory from in- Evonik Fortier, Louisiana 160 of-sale displays for cosmetics and other prod- cremental order requests beyond forecasts Industries ucts; baths and spas; dental prosthetics; auto- provided by contract customers”. Lucite Beaumont, Texas 155 motive and other lighting fixtures; and US MMA demand has seen increased con- International flat-screen monitors as well as industrial coat- sumption in the plastics sector, and primarily Lucite Memphis, 155 ings on roads and heavy equipment, and the coatings sector, as many paint companies International Tennessee acrylic architectural paints and adhesives. are using more acrylic formulations. There Altuglas Clear Lake, Texas 45 A large percentage of MMA goes into poly- has also been increased demand from con- International methyl methacrylate (PMMA), which can be struction activity related to disaster recovery A full list of plants and projects capacities, cast or extruded. PMMA is a transparent from hurricanes, wildfires and landslides in forecasts, production volumes and thermoplastic, often used as a lighter, shatter- Texas, Florida and California. operating rates are available on the resistant alternative to glass. US exports of MMA are up by 25% year on ICIS Supply and Demand database Most PMMA demand emanates from Asia, year through Q1 2018, with almost a third of due to TV manufacturing there and the use of all exports going to Belgium. come less available with the reduction in co- PMMA in flat-panel TV screens. product phenol demand and production over Prices the past two years. An alternative method pio- Supply/demand May contracts for US MMA settled at a new neered by Lucite – its Alpha process – uses Supply of MMA has been tight regionally and all-time high on 30 May. Formula buyers also ethylene rather than acetone, thus lowering globally throughout most of 2017 and into saw an increase, owing to higher costs for raw variable and capital costs and eliminating the 2018. Part of the supply crunch was attributed materials, specifically acetone. Prices have need for a spent acid recovery system because to an almost year-long force majeure by Lucite soared to their current levels after jumping by there is no use of sulphuric acid. International. Lucite’s two plants account for around 70% in 2017. Contract prices have Another method of MMA production is the 33% of US MMA capacity. risen in 10 of the last 11 months. I-C-4 process used in most of Asia and Eu- Tightness is likely to persist, as two US MMA Some market sources think MMA prices rope, which involves the direct oxidation of producers separately put customers on sales are likely to continue rising, as demand is not isobutylene. Lastly, Evonik’s Aveneer process control recently. Evonik is implementing sales expected to diminish. Two producers have is an ACH route that also avoids the use of control immediately due to raw material supply separately announced increases for June. feedstock sulphuric acid. and lead times will be increased to three weeks There is support for the June increases – in plus transit time. It is unclear which raw materi- addition to the existing supply/demand situa- Outlook als were causing the problem, but the company tion – from upstream raw material costs. In the near term, supply could ease a bit in said it is working to address the issues. US May barge acetone contracts fully set- mid-2018 once the majority of global turna- tled up by 10%. Demand was described as rounds are complete. Longer term, a producer US MMA slowing in May, owing to downstream pro- said it anticipates global tightness to extend at duction issues. Supply is expected to tighten least into mid-2019. Cents/lb, contract FD by July/August, and is long now because of New supply from Saudi Methacrylates 200 high inventory levels, rather than production (SAMAC), a joint venture between Mitsubishi Rail Truck outpacing consumption. Chemical Corporation (MCC) and SABIC, Discussions for June barge contracts have could help ease the tight market. There has 175 gone back and forth from a rollover to a possi- been little impact so far from the 250,000 ble reduction, although one player sees a roll- tonne/year plant. The plant went off line in over or a slight increase. May amid a production hiccup, after starting commercial operations at the beginning of 150 Technology April, then restarted after a few days. MMA was first produced in the mid-1930s by One producer anticipates MMA demand an acetone cyanohydrin (ACH) route still growth of about 5% annually over the next used in many plants today, primarily in North couple of years. ■ 125 Jun May America and Europe, and in about 40% of the 2017 2018 plants in Asia. It is dependent upon sulphuric Access the archive of the Chemical Profiles acid and acetone, the latter of which has be- A-Z at icis.com/subscriber/icb

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ICB_240818_098-107 Profiles June18.indd 103 8/22/18 4:35 PM Middle East chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Veena Pathare Singapore Polyethylene

Uses Qatar-origin PE within the GCC. The East Med middle east pe capacity Low density polyethylene (LDPE) is used as a continues to source material from Qatar via ‘000 TONNES/YEAR packaging film, either on its own or blended sea following the closure of Qatar’s borders Company Location Capacity with linear low density PE (LLDPE) to make with GCC countries other than Oman. Saudi Polymers Jubail, Saudi 1,100 bags, bottles, tubing and moulded laboratory Demand in the GCC and East Med is pri- Arabia equipment. LLDPE is used as film for food marily driven by food packaging which Qatar Chemical Mesaieed, Qatar 865 and non-food packaging, shrink and stretch strengthens ahead of the fasting month of Yansab Yanbu, Saudi 400 film, injection moulding products, wire and Ramadan. Demand is also stronger ahead of Arabia cable, and rotomoulding applications. the Eid ul-Adha holiday and is soft during the Saudi Kayan Jubail, Saudi 400 High density PE (HDPE) is used in blow- summer holiday months of July and August. Arabia moulded products such as milk bottles, pack- Saudi Ethylene Jubail, Saudi 400 aging containers, drums, car fuel tanks, toys Prices and Arabia Polyethylene and household goods. Film and sheet are Prices to the Middle East are often driven by Jam Asaluyeh, Iran 300 used in wrapping, refuse sacks, carrier bags suppliers’ netbacks in other markets such as Petrochemical and industrial liners. Injection moulded prod- Asia. HDPE prices have risen since early 2018 Ilam Ilam, Iran 300 ucts include crates, pallets, packaging con- following the steep rise in demand for HDPE Petrochemical tainers and housewares. Extrusion grades are pipe in China, driven by its move from coal to Arya Sasol Asaluyeh, Iran 300 used in pipes and conduit. gas as the source of energy. A number of GCC- Polymers based sellers switched to producing more pipe, Kermanshah Kermanshah, 300 Supply/demand in view of significantly higher netbacks and cut Polymer Iran The Middle East is a major producer and ex- back on HDPE film and blow moulding. Marun Mahshahr, Iran 300 porter of PE. Buyers in the Gulf Cooperation This has led to HDPE film and blow mould- Petrochemical Council (GCC) source the bulk of material ing prices remaining high since early this Petro Rabigh Rabigh, Saudi 300 from suppliers based within the region, with year. LDPE film prices in the region initially Arabia cargoes transported to buyers’ warehouses saw upward gains in mid-2017, prompted by Mehr Asaluyeh, Iran 300 Petrochemical via trucks. Imports into the East Mediterra- the absence of Qatar-origin product within the NOTE: Does not include swing HDPE/LLDPE plants nean market of Jordan also go by trucks from GCC. However, a typically small market for Saudi Arabia and the UAE, while buyers in this grade, coupled with buyer resistance, A full list of plants and projects capacities, Lebanon source PE cargoes via sea from GCC limited any sustained increase. Ample supply forecasts, production volumes and ports. The difficult political landscape in from regional producers has capped LLDPE operating rates are available on the Iraq and Syria has led to PE imports remain- film gains, despite the absence of Qatar-origin ICIS Supply and Demand database ing weak in these regions. cargoes in the GCC. The standoff between Qatar and the rest of Outlook the GCC countries led by Saudi Arabia and Technology Polyolefins demand in the Middle East is like- the UAE since June 2017 has led to a ban on LDPE is made from the polymerisation of eth- ly to be limited going into Q3, though an up- ylene in autoclave or tubular reactors at very tick is possible in late Q3 or early Q4 on- MIDDLE EAST PE high pressures (up to 50,000 lb/square inch). wards. Summer holidays and high daytime The process can be used to make copolymers temperatures seen in July and August are $/tonne, film, spot CFR GCC with polar comonomers, such as ethylene likely to cap purchasing as many people trav- 1,400 HDPE LDPE LLDPE vinyl acetate (EVA) polymer. el outside of the GCC for a break. 1,350 HDPE is produced by the catalytic polymeri- Players in the GCC are also uncertain of sation of ethylene in three types of processes: HDPE prices sustaining, as a slowdown in 1,300 slurry (suspension), solution and gas-phase re- China piping projects from delays in govern- actors. LLDPE is produced by adding alpha ment funding has been the trend since May. 1,250 olefins (butene, hexene or octene) during ethyl- If China pipe demand remains sluggish, ene polymerisation to produce a resin with a suppliers would be pushed to switch to other 1,200 similar density to LDPE, but with the linearity HDPE grades. of HDPE. Many processes can swing between Demand in the East Med remains weak be- 1,150 LLDPE and HDPE production. cause of political instability in Iraq and Syria, The development of metallocene catalysts also and poor finished goods sales. ■ 1,100 May Jun allows slurry-loop operators to enter the LLDPE 2017 2018 sector. Bimodal processes claim to produce res- Access the archive of the Chemical Profiles ins competitive to those from metallocene. A-Z at icis.com/subscriber/icb

104 | ICIS Chemical Business | 22-28 June 2018 www.icis.com

ICB_240818_098-107 Profiles June18.indd 104 8/22/18 4:35 PM Europe chemical profile

Melissa Hurley London MEG

Uses Europe because Asia was a more attractive europe meg capacity Monoethylene glycol (MEG) is predominantly destination for product due to higher prices ‘000 TONNES/YEAR used in the production of polyester fibres, res- in the region. In the fourth quarter, import Company Location Capacity ins and films, which accounts for roughly levels were higher year on year as supply lev- BASF Antwerp, Belgium 325 80% of global MEG consumption. Polyester els eased in Europe, which coincided with INEOS Oxide Antwerp, Belgium 290 fibres is the main consumer and the second MEG prices in Asia also coming under pres- INEOS Oxide Dormagen, 160 largest use is in polyethylene terephthalate sure during the last quarter of 2017. Germany (PET) resin. The next major outlet is in auto- DEG demand has been rather lacklustre in Shell Chemicals Moerdijk, 155 motive antifreeze. Additional EG applications 2018 and has fallen short of expectations. Netherlands include de-icing fluids, surface coatings, un- Demand in the second quarter is usually Clariant Gendorf, 140 saturated polyester resins (UPR), polyester higher especially in the construction sector Germany polyols and natural gas dehydrogenation. Di- but the market has been consistently quiet Petkim Aliaga, Turkey 90 ethylene glycol (DEG) is used in polyols, un- for some weeks. Petrokimya saturated polyester resins and plasticisers. This largely stems from shortages seen last PKN Orlen Plock, Poland 85 Triethylene glycol (TEG) is mainly used in year in the methyl di-p phenylene isocyanate Industrias Tarragona, Spain 75 natural gas dehydration and as a dehumidifi- (MDI) market, which impacted polyol de- Quimicas Del Oxido De Etileno er. DEG and TEG are by-products of MEG. mand. MDI demand is lower year on year for AkzoNobel Stenungsund, 20 crude MDI with participants attributing this Sweden Supply/demand to a switch by end users to alternative prod- MEG demand from the downstream PET ucts after upward price trends in 2017. A full list of plants and projects capacities, forecasts, production volumes and sector is expected to improve during peak TEG supply was tighter earlier in the year operating rates are available on the summer season once the shortages ease and but the market has balanced out more to- ICIS Supply and Demand database run rates return to more normal levels. The wards the middle of the year. coolant sector traditionally restocks in early Japan’s Mitsubishi Chemical developed a summer in preparation for peak winter de- Prices catalytic process while in China, a coal-based mand. Availability in the bulk spot market European prices were firm at the beginning of technology via synthesis gas and oxalic acid. has not been ample and previously the US 2018 but saw a substantial correction around market proved more attractive. the end of the first quarter, in line with the Outlook EU imports and exports of EG dropped drops seen in Asia. Price rises fell short of sell- MEG demand in the short term is likely to year on year in 2017, which tightened Euro- er expectations in the first quarter, mainly due improve as PET production run rates are set pean supply in the first half of the year. Eu- to lacklustre demand. European seller fortunes to return to normal after various supply dis- rope is a net importer of glycols and is reliant reversed towards the beginning of April and ruptions, specifically in the PTA market. on volumes from other regions. At the start of prices started shooting up once again. PTA is consumed in polyester production 2017, prices soared amid increasingly tight The declines in Asia corresponded with a including polyester fibre, PET bottle resin conditions caused by a lack of imports into noticeable influx of imported cargoes in Asia, and polyester film. which weighed on supply. Europe is a net im- Several planned EO turnarounds are hap- EUROPE MEG porter and is sensitive to market develop- pening at the end of the third quarter or begin- ments in other regions so this development ning of the fourth but this is not expected to €/tonne, contract FD NWE 1,200 also affected European pricing levels. To- impact glycol supply significantly. wards the end of May, Europe spot prices sta- The real long-term challenge facing the Eu- bilised with further price rises were some- ropean market is the onset of new capacity in 1,100 what capped due to downstream PET and China, the Middle East and the US from next PTA supply constraints dampening MEG year. China is the likely destination for addi- feedstock demand in the second quarter. tional MEG, with the largest appetite for MEG 1,000 due to 60% of global polyester capacity, but Technology Saudi Arabia capacity expansions are likely Ethylene oxide (EO) is produced by the direct to place pressure on the China market. Equal- 900 oxidation of ethylene in the presence of oxy- ly, it looks unlikely that the US will be able to gen or air over a silver oxide catalyst. A crude absorb all the new MEG capacity set to enter EG mixture is then produced by the hydroly- the market and could shift to a net exporter. ■ 800 Jun Jun sis of EO with water under pressure. Fraction- 2017 2018 al distillation under vacuum separates the Access the archive of the Chemical Profiles MEG from DEG and TEG. A-Z at icis.com/subscriber/icb

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ICB_240818_098-107 Profiles June18.indd 105 8/22/18 4:35 PM Europe chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Katherine Sale London MMA

Uses ports from other regions. However, this then europe mma capacity The largest use for methyl methacrylate exerted pressure on the exporting destina- ‘000 TONNES/YEAR (MMA) is to make polymethyl methacrylate tions, with supply squeezed in the US and Company Location Capacity (PMMA), which once cast or moulded is Asia, highlighting the fragility of the global Evonik Worms, Germany 225 clear, hard, UV transparent and resistant to supply/demand balance. Lucite Billingham, UK 200 gamma rays. Another major application is in Lower coatings demand also helped to International surface coatings. Methacrylate butadiene sty- ease tightness in Europe, with poor weather Evonik Wesseling, 95 rene resins are used as a modifier for polyvi- and over-inflated growth targets resulting in Germany nyl chloride (PVC) and in food and pharma- a disappointing start to the coatings season. Arkema Rho, Italy 90 ceutical packaging. Plastics demand continues to perform well, Basf Ludwigshafen, 36 with good levels from the automotive and Germany Supply/Demand construction sectors. DOS Dzerzhinsk, 25 Supply in the European MMA market has Russian been on a path to shortness since April 2016, Prices A full list of plants and projects capacities, with constraints in Asia starting a global crisis. European monthly MMA contract prices in- forecasts, production volumes and A series of planned and unplanned outages creased 68% in 2017, amid global supply con- operating rates are available on the came when demand in the region was higher straints, good demand and low imports. ICIS Supply and Demand database than expected, particularly in South Korea Production problems in Asia were a key and India. driver of the shortage, with spot prices in Lucite, part of Japan’s MCC, developed its This was the start of an unprecedented num- Asia increasing 112% between April 2016 Alpha process based on ethylene, methanol ber of outages for MMA producers globally, and May 2018. With prices at a historic high and carbon monoxide. The 250,000 tonne/ with prices reaching a historic high at the start of at the start of 2018, decreases were widely year plant that came on stream in April 2018 2018. Players expected relief from the new ca- expected, once supply stabilised and nor- uses this technology, with a further plant ex- pacity in the Middle East, with 340,000 tonnes/ mality resumed in the market. pected post 2020 by the producer. year of MMA coming on stream in 2018. Both April and May contracts in Europe Evonik also announced in late 2017 that is The Saudi Methacrylates (SAMAC) plant, a settled at a stable-to-soft level, with supply would be working on an ethylene based joint venture between Mitsubishi Chemical constraints easing amid lower demand. MMA production method. (MCC) and Sabic, was initially expected on However, further production outages and Some Japanese plants use isobutylene or line in 2017, but commercial operations were forces majeures in May slowed any decreas- tertiary butanol (TBA). Evonik is using tech- achieved in April 2018. The delays to the new es. Lucite International declared force ma- nology based on isobutylene in a plant in capacity, and the continued production out- jeure at its Cassel, UK facility after an unsuc- China. In the US, Eastman Chemical, Bechtel ages for other producers, elongated global cessful restart of the plant after a two-month and the Research Triangle Institute developed constraints well into mid-2018. maintenance shutdown. Prices are not at a a three-step synthesis gas process. European supply eased at points in the first sustainable long-term level, with prices glob- half of 2018, with higher prices attracting im- ally at historical highs in 2018. Outlook Although prices may be close to the top of Supply remains the main driver in the market EUROPE MMA the pricing cycle, they are not expected to fall for the rest of 2018, although there has been to the historical lows seen in 2016. It was the some relief in comparison to levels in 2017. €/tonne, spot FD NWE 3,500 very low prices in 2016 that contributed to the There will be planned stoppages at Wes- many production outages, with reinvestment seling for Evonik and Arkema at Rho, in H2 in the plants not taking place. 2018. However, outages outside of the region 3,000 are the main factor to watch for European play- Technology ers, with heavy stoppages in the US and Asia. 2,500 Many plants are based on the acetone cyano- Supply is expected to tighten in the US and hydrin (ACH) route, but with problems in dis- Asia during the stoppages, which could divert 2,000 posing the bisulfate waste, much effort has product away from Europe, which requires been spent on finding alternatives. imports to remain balanced.

1,500 Japan’s Mitsubishi Gas Chemical commer- Demand traditionally grows at approximate- cialized an ACH route that produces a hydro- ly 3% globally for MMA each year, although cyanic acid by-product that can be recycled. some applications have higher levels. ■ 1,000 May Jun Germany’s Evonik Industries has further de- 2016 2018 veloped the ACH route by using a new cata- Access the archive of the Chemical Profiles lyst and removing the need for sulphuric acid. A-Z at icis.com/subscriber/icb

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ICB_240818_098-107 Profiles June18.indd 106 8/22/18 4:36 PM Asia chemical profile

Danielle Goh Singapore ABS

USES Market sentiment was dampened in asia abs capacity Acrylonitrile butadiene styrene (ABS) is used to March, forcing ABS makers to sell their stocks ‘000 TONNES/YEAR make items that require impact strength, rigidi- at lower prices, given weak end-user demand Company Location Capacity ty, chemical resistance and a glossy surface. and falling key feedstock styrene monomer Chi Mei Tainan Hsien, 1,250 Its biggest application is in the automotive (SM) prices. Makers and buyers also took a Taiwan industry, followed by the electronic sector. cautious stance to discussions amid fears of a LG Chemical Yeosu, 850 Other applications include consumer elec- trade war between the US and China. South Korea tronics, toys, pipes and domestic appliances. Environmental checks in China have also Zhenjiang Zhenjiang, China 820 ABS resins are also combined with other hampered end-user demand. Chimei Chem. polymers such as polycarbonate or polyvinyl Demand for ABS has improved gradually Lg Yongxing Ningbo, China 800 chloride (PVC) to form alloys such as poly- since April, marking the start of the produc- Chemical carbonate (PC)-ABS for the consumer elec- tion season in the second quarter. However, a Lotte Advanced Yeosu, 590 Materials South Korea tronics sector. spike in feedstock SM prices has impeded PetroChina Jilin Jilin, China 580 ABS is used in many diverse applications any further uptake of demand in June. due to its flexibility of composition and struc- ABS supply has tightened in June due to Formosa Ningbo, China 450 Plastics ture. ABS is composed of 50% styrene and limited feedstock SM supplies and rising SM Formosa Hsinkang, Taiwan 410 varying amounts of butadiene and acryloni- costs. Suppliers are under pressure to hike Chemicals trile. Styrene provides rigidity and ease of ABS prices due to the rising feedstock prices. & Fibre processing, acrylonitrile gives chemical resist- In June PetroChina Jilin Petrochemical shut Dagu Chemical Lingang, China 400 ance and heat stability, and butadiene offers its 100,000 tonne/year ABS plant for annual Toray Plastics Penang, 350 toughness and impact strength. maintenance. As a result, demand has tapered Malaysia Malaysia off, as buyers were reeling from the rising A full list of plants and projects capacities, SUPPLY/DEMAND ABS prices. forecasts, production volumes and ABS demand was fairly strong at the start of operating rates are available on the the year but demand fell in March and subse- PRICES ICIS Supply and Demand database quently picked up in April. ABS prices were largely stable throughout the There was an increase in ABS consump- first quarter, as spot prices have largely re- demand in the key China market expected to tion in northeast Asia after China announced mained above $2,000/tonne CFR NE Asia. grow by about 5-6% this year. China is the key a ban on scrap plastics imports on 1 January. Spot prices had a slight uptick in January market for ABS, with about one-third of glob- For the first quarter, there has been about a and February, on stronger demand after the al capacity, and makes up about more than 5-6% increase in total consumption of ABS, ban on scrap plastic imports in China and rel- half of global consumption. compared with the previous quarter. atively stable feedstock SM prices. Out of all the sectors, the automotive and Demand was expected to strengthen in However, in March and April, ABS spot consumer electronics are expected to drive March after the Lunar New Year, which was prices dipped below $2,000/tonne CFR NE ABS demand growth. in February, but it did not materialise. Asia due to weak demand and cautious buy- ABS demand in Asia is expected to remain ing amid the US proposal in March to impose healthy. Capacity additions are projected for ASIA ABS VERSUS SM tariffs on imports from China. China and South Korea this year. Prices strengthened in late April, reaching LG has announced that it will expand the $/tonne, spot a peak of $2,085/tonne CFR NE Asia in June. capacity of its ABS Huanan plant in Guang- 2,400 ABS, general purpose, injection grade, spot CFR Asia NE ABS spot prices surged in June, on a spike in dong, China, by 150,000 tonnes/year by the Styrene monomer, spot CFR China 2,200 feedstock SM prices due to tight supply. end of 2018. With this expansion, output will be doubled from its current capacity of 150,000 2,000 TECHNOLOGY tonnes/year to 300,000 tonnes/year. 1,800 ABS is a thermoplastic polymer. It is made by Several producers in China are also expect- polymerisng styrene and acrylonitrile in the ed to increase their capacity, with Keyuan 1,600 presence of butadiene. and Shandong Haili Chemical planning to ABS resins are classified under terpolymer, build new plants this year. 1,400 as they are made from three monomers. ABS Margins for ABS have generally been posi- 1,200 resins consist of around 60% styrene, 25% tive, but the recent spike in feedstock SM acrylonitrile and 15% butadiene. costs could temporarily narrow margins. ■ 1,000 Jun Jun 2017 2018 OUTLOOK Access the archive of the Chemical Profiles ABS capacity in Asia continues to grow, with A-Z at icis.com/subscriber/icb

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ADAM YANELLI HOUSTON Isopropanol

Uses ports, has fallen by 27% over the first four AMERICAS IPA CAPACITY Isopropanol (IPA) is a clear, colourless, mobile months of this year compared to the same ‘000 TONNES/YEAR liquid with an alcoholic odour. It is miscible time period last year. Company Location Capacity with water and ethyl alcohol and reacts with The US is a net exporter of IPA. April ex- Dow Chemical Texas City, 430 strong oxidants. ports fell by over 34% year on year, largely Texas, US IPA, also known as isopropyl alcohol, is a because of a steep decline in product sent to ExxonMobil Baton Rouge, 380 low-cost solvent used in many industrial and Belgium, the top destination for US IPA. Louisiana, US consumer products and as an extractant. Out- Mexico and Brazil also took significantly Shell Sarnia, 95 lets include cosmetics and personal care less material year on year. Ontario, Canada products, deicers, paints and resins, pharma- The decreases were partially offset by in- Carboclor Campania, 48 ceuticals, food, inks and adhesives. It is also creased volumes to Venezuela, Germany, Ar- Argentina used as a solvent for oil and gums and in the gentina and the Dominican Republic. Year to LyondellBasell Channelview, 30 Texas, US manufacture of fishmeal concentrates. Low- date, exports are up by 5%. grade IPA is used in motor oils. Because IPA is used in paints and resins, A full list of plants and projects capacities, Other applications include as a cleaning there can sometimes be increased demand at forecasts, production volumes and and drying agent in the manufacture of elec- the start of the summer construction season. operating rates are available on the tronic parts and metals, and as an aerosol sol- So far this year, some market participants ICIS Supply and Demand database vent in medical and veterinary products. It have said they have yet to see an uptick in de- can also be used as a coolant in beer manufac- mand from the construction season. and IPA. The crude IPA is then distilled to the ture, a coupling agent, a polymerisation modi- desired purity. fier, a deicing agent and a preservative. Prices The second route uses the direct hydration Some chemical compounds are manufac- With supply and demand fundamentals in bal- of CGP (90-99%). This method eliminates the tured from IPA, in particular derivative ke- ance, IPA values have been tied more directly need for sulphuric acid. Instead, propylene tones, such as methyl isobutyl ketone (MIBK), to feedstocks. Propylene is the primary feed- and water are heated and the liquid-vapor isopropylamines and isopropyl esters. stock for IPA and a primary driver of prices. mixture is pressurised, and passed into a US IPA prices are almost 7% lower than trickle flow reactor containing sulphonated Supply/demand recent highs seen in the first quarter of the polystyrene (PS) ion-exchange resins. Demand for US IPA has been steady to strong, year. The steady decrease has been largely in Alternatively, the reaction can be carried with supply readily available. US April im- line with upstream costs for chemical grade out in a gas phase over a phosphoric acid- ports rose by 5.8% year on year, largely on in- propylene (CGP). based fixed-bed catalyst. creased material from Germany and South But IPA producers are pushing for higher There is also a liquid-phase route employ- Korea, according to the latest data from the prices as the third quarter begins. After three ing a soluble tungsten catalyst. The IPA is dis- International Trade Commission (ITC). months of falling propylene contracts, May tilled from the aqueous solution. Year to date, imports are up by 6%. Materi- propylene settled up by 5 cents/lb, and June al from Canada, the top source for IPA im- propylene contracts settled higher by 8 Outlook cents/lb. The IPA market is expected to remain steady US IPA Talks of a drastic increase in propylene throughout the summer and into the fall. With caught many market participants by surprise, supply and demand expected to remain large- Cents/lb and the IPA increase initiatives are likely in- ly in balance, IPA prices are likely to continue 85 dicative of producers getting out ahead of the following upstream propylene values. 80 higher upstream costs. Propylene demand had been strong in re- Buyers could point to ample supply to cent months since rebounding in March after 75 push back against the increases. It is too early an early 2018 slump due to a previous spike in to tell whether all or part of the increases will propylene prices. Production in recent months 70 go through. had been limited from crackers due to a move to lighter feedstocks amid low ethylene prices, 65 Technology and from refineries due to spring turnarounds. There are two commercial routes used in The combination had tightened propylene 60 Consumer, domestic DEL US Gulf manufacturing IPA. One is an older method supplies and pushed prices higher heading Spot, FOB US Gulf export Tank truck, spot FOB US Gulf based on indirect hydration of refinery-grade into June. ■ 55 Jun Jun propylene (RGP). This process uses sulphuric 2017 2018 acid to form isopropyl sulphate, which is then Access the archive of the Chemical Profiles hydrolysed with steam to form sulphuric acid A-Z at icis.com/subscriber/icb

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ICB_240818_108-113 Profiles July18.indd 108 8/22/18 4:47 PM Asia chemical profile

Leanne Tan Singapore TiO2

USES domestic demand. In other parts of Asia, de- asia tio2 capacity Titanium dioxide (TiO2) is primarily used as mand is expected to remain weak in the near ‘000 TONNES/YEAR a white powder pigment because of its bright- term as the market remains in its seasonal lull. Company Location Capacity ness and high refractive index. It is used in Lomon Billions Chengdu, China 700 paints and coatings, including glazes and PRICES CNNC Huayuan Lanzhou, China 200 enamels, plastics, paper, inks, fibres, foods, Asia’s TiO2 prices have been on a consecutive Titanium pharmaceuticals and cosmetics. rise since early 2016, as producers sought to Dioxide TiO2 resists discolouration under ultraviolet recoup lost profitability following previous Shandong Zibo, China 160 light and is often used in plastics and sun- price erosion. The situation was exacerbated Dongjia Group screens. It is used in photocatalysts found in in 2017, with suppliers implementing price Ishihara Sangyo Yokkaichi, Japan 155 light-emitting diodes (LEDs), liquid crystal dis- hikes throughout the year on the back of tight Kaisha Ltd - (ISK) plays (LCDs) and electrodes for plasma displays. global supply of the pigment. Chemours Kuan Yin, Taiwan 140 Quarterly TiO2 contract prices in Asia are Taiwan SUPPLY/DEMAND approximately 28% higher than in January Bluestar Jinan Jinan, China 100 Asia’s TiO2 supply continues to be profound- 2017, according to ICIS data. While spot pric- Yuxing Chemical ly impacted by production cuts taking place es of Chinese TiO2 exports have experienced Shandong Dawn Yantai, China 100 in China, brought about by an unprecedented more volatility, current weekly spot prices on Group clampdown on industrial polluters. a free on board (FOB) China basis have risen Panzhihua Panzhihua, China 100 The Chinese government recently has made by 15% since the start of 2017. Dongfang significant changes to its environmental super- Titanium Industry vision systems, promising tougher targets on in- TECHNOLOGY NOTE: Selected plants ordered by capacity dustrial polluters, and the TiO2 industry has not TiO2 is produced from ilmenite, rutile or tita- been spared. The push to cut air pollution and nium slag. Titanium pigment is extracted by A full list of plants and projects capacities, wastewater levels has been effective thus far, using either sulphuric acid (sulphate process) forecasts, production volumes and operating rates are available on the with the shutdown of inefficient factories and or chlorine (chloride route). The sulphate pro- ICIS Supply and Demand database detailed government-led inspections. cess employs simpler technology than the The Chinese government has not forced the chloride route and can use lower-grade, cheap- line with anti-pollution requirements, or face more established and modern TiO2 production er ores. It generally has higher production costs the prospect of being shut indefinitely. plants with good emissions standards to shut. and with acid treatment is more expensive to Sulphate-based TiO2 production plants are However, smaller producers with high emis- build that a chloride plant. But the latter may especially susceptible. Production via the sul- sions face fines and temporary plant closures. require construction of a chlor-alkali unit. phate-route can produce wastewater which re- Operating rates of downstream paint manu- The chloride route produces a purer prod- quires treatment to eliminate traces of sulphu- facturers and other factories that buy TiO2 pig- uct with a tighter range of particle size, but ric acid. Some smaller Chinese producers ments have also been impacted by the environ- anatase pigments can only be produced by the could face difficulties passing down the extra mental clean-up measures, resulting in declining sulphate route. cost required to manage waste disposal, lead- Most production plants in China continue ing to a reduction in overall capacity. TiO2 pro- ASIA TITANIUM DIOXIDE to use sulphuric acid as the solvent in produc- duction growth in China via the sulphate route ing TiO2. However, chloride-based TiO2 pro- is expected to be limited, as it becomes increas- $/tonne, spot FOB China duction looks set to be the main driver behind ingly difficult to obtain permissions. 3,000 China’s potential capacity expansions in the Chloride-based production will be the main future. More producers in China have ac- driver behind China’s capacity expansions in 2,800 quired infrastructure for chloride-based pro- the future. TiO2 Chinese major Lomon Billions duction in the last few years. plans to construct two chloride lines at its exist- ing production site in Jiaozuo, Henan province. 2,600 OUTLOOK Capacity is around 200,000 tonnes/year, with With the government’s embrace of a more en- commercial production expected in 2019. vironment-friendly approach to manufactur- Snug global supply is likely to be offset by 2,400 ing, TiO2 supply in the key Chinese market is lacklustre demand. Buy-side resistance has likely to remain curtailed in the short-to-me- grown, as downstream margins for TiO2 users dium term. With further waves of environ- become increasingly squeezed. ■ 2,200 Jan Jun mental inspections set to come, smaller, less 2017 2018 efficient manufacturers will have to upgrade Access the archive of the Chemical Profiles existing pollution-control equipment to be in A-Z at icis.com/subscriber/icb

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Jane Massingham London MA

USES was not as healthy as expected, as typically Europe maleic anhydride capacity Maleic anhydride (MA) is mostly used to the market is building up to its strongest peri- ‘000 TONNES/YEAR make unsaturated polyester resins (UPRs), od in the second quarter. Company Location Capacity which are used in a wide range of applica- Part of this was attributed to the cold snap Sasol Moers, Germany 105 tions, including pleasure boats, bathroom fix- across much of Europe, which saw down- Huntsman tures, automobiles, tanks and pipes. stream demand hampered. Polynt Ravenna, Italy 66 Other outlets for MA include 1,4- butanedi- Although Q2 demand levels were good, Polynt Bergamo, Italy 36 ol (BDO), tetrahydrofuran (THF) and gamma- various sources noted that offtake was not as Esim Chemical Linz, Austria 36 butyrolactone (GBL). MA is available in liquid strong as had been predicted for 2018. Mol Hungarian Szazhalombatta, 22 (molten) and solid (flake) forms. Liquid ac- Nevertheless, June volumes had shown im- Oil And Gas Co Hungary counts for 90-95% of all material sold. provement compared to April and May for Cepsa Algeciras, Spain 13 MA is produced commercially by the oxida- some players. Gikil Lukavac, Bosnia/ 10 tion of benzene or butane. The butane-based Herzegovina process is considered to have superior econom- PRICES Lanxess Uerdingen, 10 ics and is preferred by most Europe producers. Those customers agreeing quarterly contracts Germany incurred large rises in the first half of 2018. BASF Ludwigshafen, 6 SUPPLY/DEMAND Triple-digit jumps were seen for many in the Germany 2018 started with supply restrictions. A com- first quarter, due to supply restrictions, and Ostend Basic Ostend, Belgium 3 bination of both planned and unplanned pro- the momentum continued for the second Chemicals duction issues along with reduced imported quarter, but to a lesser extent. Orgachim Ruse, Bulgaria 2 volumes saw a tight spot market in particular, This lesser move was both on the back of though contractual obligations were covered. slightly better supply, but also due to strong A full list of plants and projects capacities, forecasts, production volumes and While overall availability was improved resistance from some customers that had in- operating rates are available on the compared to the start of the year, spot volume curred the steepest Q1 rises. ICIS Supply and Demand database remained limited in April, but increased Spot prices also followed an upward trajec- through the course of May and June, with tory, peaking around April/May before easing OUTLOOK fresh imports arriving from Asia and im- was seen in June, on improved supply for There was planned maintenance for MA due proved output at European plants. both domestic and imported product. in the third quarter from ESIM for a catalyst There was no planned maintenance within Q3 talks tended to focus on a rollover in change, and Polynt and Gikil for regular sum- Europe during the second quarter, though a many cases, though in some instances small mer turnarounds. All contractual obligations couple of producers were preparing for Q3 moves up and down were also agreed. Pro- were expected to be met during that time, but turnarounds. ducers felt pressure from higher prices for would reduce spot volume. Demand was fairly robust early in the year, feedstock butane, while customers described Fresh imports are expected in July and in part exacerbated by supply restrictions. By a much improved demand/supply balance. with the summer season kicking in, good Q3 the end of the first quarter, demand for some availability is anticipated, pending any un- TECHNOLOGY planned issues. Decent demand is expected to EUROPE MALEIC ANHYDRIDE MA is produced commercially by the oxida- remain through most of July, but then the sea- tion of benzene or butane. The butane-based sonal slowdown is expected, as various cus- €/tonne, liquid, spot FD NWE process is considered to have superior eco- tomers have summer closures. 1,600 nomics and is the preferred route used by September, though, can be a fairly strong 1,500 most producers in Europe. month, as sources replenish inventories, so Butane-based MA production can be done some were confident of a buoyant end to the 1,400 by either the fixed-bed or fluidised-bed pro- quarter and a good start to the fourth quarter. 1,300 cesses. The fluid-bed process has some ad- Manufacturers stated margins were under vantages over the fixed-bed route, such as pressure and were determined to avoid any 1,200 lower air-to-hydrocarbon concentration in the further erosion through the second half of feedstock and no need for premixing. The dis- the year. Customers felt good supply against a 1,100 advantages include abrasion of the catalyst, natural pattern of demand would allow for 1,000 conversion rates and by-product formation. some respite from the higher prices they in- In the fixed-bed route, air is mixed with su- curred during the first half of the year. ■ 900 perheated butane and fed to a reactor contain- Jul Jun 2017 2018 ing a catalyst of vanadium phosphorous oxide Access the archive of the Chemical Profiles supported on silica. A-Z at icis.com/subscriber/icb

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ICB_240818_108-113 Profiles July18.indd 110 8/22/18 4:48 PM US chemical profile

Amanda Hay Houston Paraxylene

Uses Demand was high during the quarter amid US PX capacity Paraxylene (PX) is predominantly used to pro- the tight supply situation. The second quarter ‘000 TONNES/YEAR duce purified terephthalic acid (PTA). Other also marked the start of peak consumption Company Location Capacity outlets include dimethyl terephthalate (DMT), season in the downstream PET market, which BP Galveston Bay, 1,200 di-paraxylene, herbicides and solvents. Both was experiencing higher-than-usual demand Texas PTA and DMT are used to make polyethylene amid PET resin supply insecurity. Indorama Decatur, 1,000 terephthalate (PET). DMT is also used to manu- Reduced PET resin production capacity in Ventures Alabama facture polybutylene terephthalate (PBT) resin. the US amid the continued outage of a Flint Hills Corpus Christi, 590 Approximately 97% of PX demand comes 360,000 tonne/year plant in West Virginia off- Resources Texas from the polyester chain via PTA or DMT. The set the PX supply crunch, as there was muted ExxonMobil Baytown, Texas 545 breakdown for polyester demand is 65% from demand for PTA in the US. Chemical fibre, 27% from PET bottle resin and 8% from As the quarter closed, PX supply length- Chevron Phillips Pascagoula, 495 Chemical Mississippi film and other plastic end-uses. ened when BP’s PX unit returned to produc- ExxonMobil Beaumont, 275 tion at the end of June. Demand was some- Chemical Texas Supply/demand what muted despite the peak PET season The largest PX producers in the US are BP because a BP acetic acid force majeure caused A full list of plants and projects capacities, forecasts, production volumes and Chemicals and Indorama Ventures, which a chain reaction for PTA, which was put on operating rates are available on the produce PX for internal use in the production sales allocation through July. ICIS Supply and Demand database of PTA to be used in the manufacture of PET bottle resin. ExxonMobil, Flint Hills Resourc- Prices Processes have also been developed using a es and Chevron Phillips Chemical also pro- US PX contract prices are at their highest lev- zeolite catalyst for the alkylation of toluene duce PX to sell to the merchant market. els since 2015 amid tightened supply, higher with methanol to produce PX without a ben- US PX supply tightened significantly in the feedstock costs and firm crude values. zene co-product. second quarter of 2018 when a BP PX unit in PX contract prices began rising in February, The Cyclar process by US-based technolo- Texas City, Texas, experienced an unplanned pressured by a tight MX market. The refinery gy company UOP converts propane and bu- outage in early April and was down until the turnaround season added pressure. Rising tane to PX and benzene. A bio-based route to end of June. The unit’s capacity is 450,000 crude prices also helped to keep prices firm. making PX has also been developed. tonnes/year. The outage pushed BP into the Spot PX prices have risen sharply since spot market to buy product. the beginning of the year – by about $100/ Outlook Additionally, it became cheaper to pur- tonne – amid the same factors that drove up PX should be well supplied with the restart of chase PX than to produce it, as prices for feed- contract prices. BP’s Texas City unit, and supply is expected stock mixed xylenes (MX) soared during the Tight supply sent BP into the spot market to lengthen in Asia as a number of turna- quarter on tight supply. STDP (selective tolu- to buy product, which resulted in US spot val- rounds are completed. ene disproportionation) units were largely ues peaking in early June. Demand in the US will remain muted uneconomic to run during the quarter. Under normal conditions, US spot prices through July as PTA is expected to remain on are usually around Asia prices minus ship- sales allocation through the month. US PARAXYLENE ping rates. The tight US market caused a dis- MX prices are falling, which has created connect from Asia that has yet to resolve. more favourable margins for PX producers. Cents/lb, contract Contract prices came down slightly in June, The PX-MX spread is above the $125/tonne 52 while spot prices have fallen by about $50/ break-even threshold. 50 tonne. Spot prices remain firm, tracking gains Peak PET season remains in full swing, and in Asia. Far Eastern New Century (FENC) was expect- 48 ed to start up its West Virginia PET plant by 46 Technology mid-July, creating additional demand. Conventional technology is based on the isom- The US PET market will remain tight 44 erisation of MX from refinery reformate streams through late 2019, when the integrated PET/ or from pyrolysis gasoline (pygas). High-purity PTA project begun by bankrupt US PET pro- 42 product can be obtained using crystallisation or ducer Mossi & Ghisolfi (M&G) is expected to 40 selective adsorptive separation. start up under new owners CC Polymers, a Alternative methods are toluene dispropor- joint venture of Alpek, Indorama and FENC. ■ 38 Jun Jun tionation (TDP) and STDP. STDP produces a 2017 2018 PX-rich stream of MX – over 90% purity. TDP Access the archive of the Chemical Profiles and STDP co-produce benzene. A-Z at icis.com/subscriber/icb

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Matthew chong Singapore MPG

Uses tonnes/year in the fourth quarter of 2017, asia/middle east PG capacity The primary outlet for industrial grade but the unit has not been running at full ‘000 TONNES/YEAR ­propylene glycol (PGI) is unsaturated poly- ­capacity since the expansion due to a short- Company Location Capacity ester resin (UPR), which is used in the age of PO in the country. Dow Chemical Map Ta Phut, 150 ­manufacture of a wide range of products, Sadara Chemical – the only MPG produc- Thailand ­including surface coatings and glass fibre er in the Middle East – is a joint venture SK Chemicals Ulsan, 150 ­reinforced resins.­ End-user segments are in ­between US-based giant DowDuPont and South Korea the pipes and tanks, sanitaryware and state energy firm Saudi Aramco. It started Shell Eastern Seraya, 80 ­marine industries. Other downstream up its 70,000 tonne/year PG and upstream Petroleum Singapore ­segments comprise industrial coolants and PO plants in Al Jubail, Saudi Arabia, in Sadara Al Jubail, Saudi 70 antifreeze, de-icing fluids, hydraulic brake the ­second half of 2017. The bulk of Sad- Chemical Arabia fluids, heat transfer fluids, paints and coat- ara’s PGI export cargoes appear to be head- CNOOC & Shell Huizhou, China 60 Petrochemicals ings and detergents. ed to China. (CSPC) US pharmaceutical grade propylene Demand was largely lower in the second NOTE: Top five listed (does not include China plants using ­glycol (USP) has a variety of uses in quarter due to the traditional lull in demand­ DMC process) ­solvents, emulsifiers and humectants. Final season which takes place every May and A full list of plants and projects capacities, end-user segments­ include food and June. Buyers were non-committal in their forecasts, production volumes and ­flavourings, ­pharmaceuticals, fragrances, purchases and bought on a need-to basis. operating rates are available on the cosmetics, personal­ care and animal food- Market activity was especially subdued in ICIS Supply and Demand database stuffs. southeast Asia due to Ramadan. The Muslim fasting month, which started in mid-May the plant capacity table. PGI produced this Supply/demand and continued until the Eid ul-Fitr holiday way has a narrower range of sales outlets MPG supply increased in the second ­quarter. in mid-June, is widely celebrated in Malay- and clientele because it is unable to be used This was the result of a restart at a major sia and Indonesia. by certain downstream segments which southeast Asia-based producer in April have more stringent specification require- ­following a turnaround. Supply from other Prices ments on final products,according ­ to mar- Asian producers­ in South Korea, southeast MPG prices have been on a steady uptrend ket participants. Asia and a Middle­ East-based producer was since August 2017, supported by firm PO ­relatively stable. However, import availabil- prices in China. The gap between USP and Outlook ity from the US was reduced because a regu- PGI prices widened as USP prices rose faster MPG prices are expected to be stable to lar exporter­ of MPG into Asia cut export than PGI prices. The average price of both ­softer in the third quarter of 2018, with ­volumes due to a shortage of feedstock USP and PGI peaked in March/April amid the extent of any downside curbed due ­propylene oxide (PO) in the US. tighter supply before retreating as supply to generally strong feedstock PO prices South Korea’s SKC expanded its propyl- ­recovered. This coincided with the onset of in China. ene glycol (PG) capacity by 50% to 150,000 the traditional lull in demand season. Overall supply is likely to continue to be In China, PGI prices produced via the ample in the third quarter as there are no ASIA MPG ­dimethyl carbonate (DMC) process hit year- known scheduled plant turnarounds for highs in early January and May, in tandem major Asian producers scheduled during $/tonne, spot 1,800 with the rise in PO prices during this period. this period. PGI import volumes from Sadara are expected to remain constant as the Technology ­majority of its Asian exports will continue to 1,600 MPG is produced by the hydration of PO. be China-bound. The reaction also produces dipropylene Demand is expected to improve slightly in ­glycol (DPG), tripropylene glycol (TPG) and the third quarter with the onset of the tradi- 1,400 small quantities of higher glycols. MPG tional peak demand season in August/Sep- ­production is typically driven by PO availa- tember. The gradual decline in MPG prices bility and extra MPG can be produced to since the second half of May may also entice 1,200 MPG PGI, CFR NE Asia ­balance PO. MPG can also be produced from buyers to replenish stocks as they have been MPG, PGI, CFR SE Asia renewable resources such as glycerine – a purchasing on a need-to basis since the first MPG, US Pharmaceutical Grade, CFR NE Asia MPG, US Pharmaceutical Grade, CFR SE Asia by-product in biodiesel manufacture. quarter when prices were firm.■ 1,000 Jul Jul Most local producers in China produce 2017 2018 PGI as a by-product of DMC. Plants produc- Access the archive of the Chemical Profiles ing PGI via this process are not included in A-Z at icis.com/subscriber/icb

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ICB_240818_108-113 Profiles July18.indd 112 8/22/18 4:48 PM Europe chemical profile

Vicky ellis London Methanol

Uses Helm’s European methanol team relocated to Europe methanol capacity Methanol’s main derivatives are formalde- Switzerland in a new venture with Proman ‘000 TONNES/YEAR hyde, acetic acid, methyl tertiary butyl ether and SCC, and were understood to have carried Company Location Capacity (MTBE), dimethyl ether (DME), biodiesel and, over their activities into the new business. Metafrax Gubakha, Russia 1,100 in China, direct methanol blending and meth- Traditional chemical consumers of methanol Togliatti Azot Togliattigrad, 1,000 anol-to-olefins (MTO) production. Other de- such as formaldehyde and acetic acid march a Russia rivatives are dimethyl terephthalate (DMT), steady beat in Europe. An international trade Equinor Tjeldbergodden, 900 methyl methacrylate (MMA), methylamines, battle over biodiesel duties was the lone dark Tjeldbergodden Norway chloromethanes, glycol ethers and methyl spot amid steady European economic growth. Tomskneftekhim Tomsk, Russia 750 mercaptan. It also has many general solvent SOCAR Karadagh, 720 and antifreeze uses. Prices Azerbaijan Prices were supported in 2018 as European Mider Helm Leuna, Germany 660 Supply/demand methanol supply was unexpectedly squeezed. Methanol Europe remains reliant on overseas methanol, Unusually low stock levels in Rotterdam were BioMCN Delfzijl, 500 and consequently is at the mercy of increasingly blamed, following vessel delays and a hangover Netherlands volatile global trends led by China’s giant metha- from Saudi outages in late 2017, delayed extra Shchekinoazot Shchekino, 450 Russia nol consumption and crude oil price swings. capacity in the US, Russia and Iran, and optimi- Shell Wesseling, 400 This affects European pricing, which must adjust sation towards Asia which diverted or drew Germany to attract spot material. Local supply squeezes molecules out of Europe. A lull midway through BASF Ludwigshafen, 350 can outweigh China in times of tightness. the first quarter came from China’s Lunar New Germany Net EU imports fell 8.5% to roughly 6.2m Year holiday, reducing global demand. tonnes in 2017 according to Eurostat. Greater European Q2 methanol prices were rolled A full list of plants and projects capacities, forecasts, production volumes and flows from Egypt, Norway and Trinidad & Toba- over. Quarterly pricing was eclipsed by spot operating rates are available on the go could not pick up the slack of dented imports values amid World Cup chemical movement ICIS Supply and Demand database from Saudi Arabia (hit by a major unplanned restrictions temporarily freezing methanol ex- shutdown), Equatorial Guinea and the US. ports from Russia, despite OCI’s joint venture tion at OCI’s new methanol plant in Texas, US in The Mediterranean was a pinchpoint in the 1.285m tonne/year Natgasoline plant in the the third quarter, once material arrives in Europe. first half of 2018, on patchy output at some US hitting commercial production in the last Domestic production is also set to rise with local plants. Methanex’s Damietta plant in days of June. new Russian capacity at Tschekinoazot. And Egypt is currently one of the plants believed late in 2018 BioMCN will roughly double ca- to have steady output. Technology pacity by reviving a mothballed Dutch unit. Mergers and acquisitions (M&A) activity has Most production of methanol is based on natu- Traditional downstream demand in seg- not had a major impact. In February 2017, Ja- ral gas, naphtha or refinery light gas (excluding ments such as formaldehyde are expected to pan’s Sojitz agreed to buy Germany’s Solvadis, China, where coal is the primary feedstock). be healthy in line with EU growth. After a de- a key methanol distributor. In July 2018 all of The two main processes are from synthesis gas pressed first half of 2018 for biodiesel, there is (syngas) in a reformer and from methane by renewed optimism following EU moves to re- EUROPE METHANOL steam and catalytic autothermal reforming. duce the impact of newly lower-duty imports. Plants of 5,000-10,000 tonnes/day based on China’s growing methanol appetite remains €/tonne, FOB Rotterdam cheap gas are being developed to produce a key driver globally. Volatility comes from 450 Spot low-cost methanol for fuel uses and light ole- global energy prices. Crude prices affect Chi- Contract fins production. Such developments tend to na’s methanol-to-olefins (MTO) prices due to 400 be restricted to Asia, however, while Europe the so-called MTO ceiling, which puts metha- remains focused on traditional applications. nol in competition with oil-derived naphtha as Netherlands-based producer BioMCN has a feedstock. Burgeoning trade disputes be- 350 developed a process for making biomethanol tween the US and nations such as China and from glycerin, which is a by-product in the Iran could shift trade flows. If China blocks US production of biodiesel. methanol, it may need to seek the shortfall 300 elsewhere. The US would have to find other Outlook markets, potentially filling in a gap left by Mid- Tighter factors on supply, from local European dle Eastern volumes in Europe. ■ 250 Jul Jul methanol turnarounds in the second quarter and 2017 2018 a hangover from low stocks in early 2018, are ex- Access the archive of the Chemical Profiles pected to be countered by commercial produc- A-Z at icis.com/subscriber/icb

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ICB_240818_108-113 Profiles July18.indd 113 8/22/18 4:48 PM Middle East/India chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Angeline Soh Singapore Solvents

USES import market is split into usage within India MIDDLE EAST/ASIA ACETONE CAPACITY Isopropanol (IPA) is used as a solvent in both and overseas. For usage within India, buyers ‘000 TONNES/YEAR industrial and personal care sectors. For indus- prefer to seek imports with no or low ADD. This Company Location Capacity trial usage, IPA is used in pharmaceuticals, market takes up 70% of the acetone demand. Kumho P&B Yeosu, S Korea 330 paints, inks and coatings. For personal care For use outside India, buyers can seek imports PTT Phenol Map Ta Phut, 309 usage, it is used in hygiene and cosmetics with high ADD, as they are reimbursed after the Thailand products. Acetone is used as a feedstock for finished products are exported. This market, Formosa Mailiao, Taiwan 250 IPA. It is similarly used as a solvent in pharma- termed the advance licence market, takes up Chemicals ceuticals, laboratories, and hygiene and cos- 30% of acetone demand. Taiwan Prosperity Kaohsiung, Taiwan 220 metics. It is commonly associated with chemi- In the Middle East, imports of IPA, acetone Mitsui Phenols Pulau Sakra, 188 cal peeling and nail polish removers. and etac are largely subdued as the region has Singapore Singapore Other than IPA, its downstream products in- sufficient from its own production. For IPA Chang Chun Kaohsiung, Taiwan 186 clude bisphenol A (BPA), methyl methacrylate and acetone, demand is further curbed by the Plastics (MMA) and methyl isobutyl ketone (MIBK). In absence of pharma manufacturing companies. Chang Chun Changchun, China 180 the Middle East, IPA, acetone and ethyl acetate Acetone and etac are capped at less than Plastics (etac) are used for paints, coatings and inks. 30,000 tonnes/year each and IPA is at less than LG Chem Daesan, S Korea 180 40,000 tonnes/year. LG Chem Yeosu, S Korea 180 SUPPLY/DEMAND Since regional producer Sipchem started up Mitsubishi Kashima, Japan 150 IPA demand is about 140,000-150,000 tonnes/ in 2015, the need for etac imports has fallen. It Chemical year in India. It may hit above 170,000 tonnes/ is a swing plant which can produce 100,000 Petro Rabigh Rabigh, S Arabia 150 year in 2019 and beyond. tonnes/year of etac or butyl acetate (butac). A full list of plants and projects capacities, Local producer Deepak Fertilisers & Petro- Prior to this, China and India had regularly ex- forecasts, production volumes and chemicals, with its nameplate capacity of ported to the Middle East. operating rates are available on the 70,000 tonnes/year, supplies about half of the ICIS Supply and Demand database country’s demand. It is set to expand its capac- PRICES ity to 170,000 tonnes/year in the first quarter of Price trends in India are influenced by China. chemical grade (90-99%) propylene, where 2019. In the meantime, 50% and more of de- As of the second half of July 2018, acetone there is no need for sulphuric acid; and a third mand is met by imports. Acetone demand is prices in China were at their lowest for more method which is older and less commonly slightly above 180,000 tonnes/year in India. than two years. used. It involves indirect hydration of refinery- There are two domestic producers in India – Local acetone producer Deepak Phenolics, grade propylene using sulphuric acid. Propyl- SI Group produces 20,000 tonnes/year, and with a nameplate capacity of 120,000 tonnes/ ene and benzene are used to produce cumene, Hindustan Organic Chemicals produces about year, is due to start up in early August. Many which in turn produces phenol and by-prod- 25,000 tonnes/year. The acetone market is heav- players have waited for the plant and abstained uct acetone. About 0.62 tonnes of acetone is ily reliant on imports. There are anti-dumping from import trades. made with each tonne of phenol produced. duties (ADDs) imposed on many origins. The The monsoon weighed on downstream In China and India, producers use the es- paint, ink and coating consumption. A weak- terification of ethanol with acetic acid to pro- MIDDLE EAST/INDIA SOLVENTS ened India rupee against the US dollar also duce etac. kept importers on the sidelines. Domestic pric- $/tonne, spot es were at their lowest since the quote was OUTLOOK 1,200 Acetone, CFR India Isopropanol, CFR India Ethyl acetate, CFR Middle East launched by ICIS on 1 March 2017. India’s IPA import prices are expected to pick 1,100 Etac prices have been largely stable to soft up after September, marking the end of the 1,000 since the start of the year. Import trades have monsoon lull. Downstream paint, ink and coat- been minimal in the Middle East, and largely ing demand typically strengthens for year-end 900 followed FOB China prices as a price direction, purchases ahead of next year. 800 since there used to be Chinese producers ex- For feedstock acetone, prices are set to be low porting to the region. from August, as Deepak Phenolics starts up. The 700 Etac prices also took direction from feed- stronger demand post-monsoon is not likely to 600 stock acetic acid and ethanol prices. offset the increase in supply. Etac import trades 500 in the Middle East are subdued and prices TECHNOLOGY would depend on export prices from Asia. ■ 400 Jan Jul IPA can be produced via acetone or propylene. 2015 2018 There are three methods: hydrogenation of ac- Access the archive of the Chemical Profiles etone in the liquid phase; direct hydration of A-Z at icis.com/subscriber/icb

114 | ICIS Chemical Business | 10-16 August 2018 www.icis.com

ICB_240818_114-117 Profiles August18.indd 114 8/22/18 4:57 PM US chemical profile

Bill Bowen Houston EDC

Uses end of 2018 and others are in the pipeline. US EDC CAPACITY Ethylene dichloride (EDC) is an intermediate The US produces about 27% of total global ‘000 TONNES/YEAR chemical toward the production of polyvinyl EDC output, estimated at about 37m tonnes in Company Location Capacity chloride (PVC), with some incidental uses. It 2015, according to a report by Merchant Re- Westlake Chemical Lake Charles, 1,550 is a clear colourless liquid with a sweet search Consulting. Europe produces about Louisiana odour. More than 98% of production goes to 30% and Asia-Pacific countries contribute OxyMar Ingleside, Texas 1,350 the manufacture of vinyl chloride (VCM) to about 20%. The US exported 1.35m tonnes of Olin Freeport, Texas 1,180 make PVC. Other outlets for EDC include the EDC in 2017, mostly to markets in Asia, where OxyVinyls La Porte, Texas 1,180 production of chlorinated solvents, includ- almost half of demand resides. That was up OxyVinyls Deer Park, Texas 805 ing trichloroethylene (TCE), ethylene from 766,000 tonnes in 2008, according to the Occidental Chemical Ingleside, Texas 750 amines, vinylidene chloride and trichloro- US International Trade Commission. Westlake Chemical Calvert City, 700 ethane. It is an intermediate in the produc- Higher production in Asia has reduced US Kentucky tion of perchloroethylene and used as a cata- exports to that region. But the closure of some Westlake Chemical Geismar, 550 lyst in hexachlorophene production. EDC chlor-alkali plants in Europe have created de- Louisiana gas is also used as a solvent in the textile, mand for US EDC in that market to support Formosa Plastics Baton Rouge, 530 metals and adhesives industries. PVC production in some Mediterranean mar- USA Louisiana kets. That region is also receiving EDC from Occidental Chemical Geismar, 315 Supply/demand the Middle East, where plentiful natural gas Louisiana EDC is mostly produced at integrated plants that production has given that market a significant A full list of plants and projects capacities, make PVC. Because of the close connection to low-cost production advantage. forecasts, production volumes and PVC, with its many uses in construction appli- operating rates are available on the cations, EDC demand is also closely tied to con- Prices ICIS Supply and Demand database struction activity. Demand for EDC is expected Global ethylene prices declined through the to increase at 4-5%/year through 2020 on last half of 2017 as prices for liquid caustic closely tied to PVC. US PVC and EDC were growth and construction demand for PVC in de- soda rose sharply. US producers capitalised caught up in escalating tariff threats between veloping countries and continued, but matur- on high caustic soda prices by ramping up the US and China during Q2 2018, clouding ing, demand growth in developed countries. production of chlorine, of which caustic soda the outlook, as China is the largest buyer of Supply growth is expected to continue is a byproduct. The excess chlorine was ex- US EDC exports. with the US being the low-cost producer on ported in EDC, sending global values lower Meanwhile, US producers are incremen- inexpensive ethane from shale-derived natu- on long supply. Prices recovered slightly dur- tally expanding US PVC production capacity ral gas. Five ethane crackers are now under ing the first half of 2018 to about $300/tonne to keep up with global export demand. That construction or just completed in the US with FOB US Gulf. Greater domestic demand for long-term, overarching trend is likely to also total additional capacity of more than 6.5m PVC is helping to firm EDC in global markets. maintain moderate upward pressure on EDC tonnes/year. Most of the new production ca- prices in global markets as US producers pacity is expected to be up and running by the Technology work to serve the domestic market where they EDC is usually produced through one of two get greater returns, leaving less EDC available US ETHYLENE DICHLORIDE main production methods: direct chlorination for spot export. of ethylene and pure chlorine or oxychlorina- Environment concerns about some of the $/tonne, spot FOB US Gulf 350 tion, where ethylene is introduced to anhy- plasticizers used in PVC may also tend to drous hydrogen chloride. Many EDC plants hamper demand growth, but newer and safer use a combination of the processes to con- plasticizers are being introduced to counter 300 sume the HCl byproduct made in the poly- those concerns. merisation of EDC to make VCM. Demand for plastic pipe made from PVC is 250 EDC is toxic and flammable in both its liq- expected to grow at 5% or more a year as de- uid and vapour forms. Incidental contact in- veloping countries update water utilities and 200 duces eye, skin and throat irritation. It is a irrigation systems, likely leading to greater carcinogen with prolonged and repeated ex- EDC consumption.

150 posure and can cause death if inhaled in con- Any significant change in global construc- centration. Production is conducted in closed tion activity would have a direct impact on loop systems to prevent worker exposure. PVC demand and prices. ■ 100 Jul Jul 2017 2018 Outlook Access the archive of the Chemical Profiles The price and demand outlook for EDC is A-Z at icis.com/subscriber/icb

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ICB_240818_114-117 Profiles August18.indd 115 8/22/18 4:57 PM US chemical profile For up-to-date information on more than 120 global commodities, visit: icis.com/about/price-reports

Zachary moore Houston Polyols

Uses likely to lead to an increase in polyols con- US POLYOLS CAPACITY The primary use for polyols is in the produc- sumption in the second half of 2018. ‘000 TONNES/YEAR tion of polyurethane (PU) foams. Polyure- Trade tensions between the US and China Company Location Capacity thane foams are produced by the combina- may alter the supply picture as polyols are Dow Freeport, Texas 535 tion of a polyol and an isocyanate. The two ­included among the items listed for the ap- Chemical most common commercial isocyanates are plication of additional tariffs. The US im- BASF Geismar, Louisiana 350 methyl di-p phenylene isocyanate (MDI) and ports polyols from China. Covestro Channelview, Texas 340 toluene di-isocyanate (TDI). Demand for PU foams has seen healthy Covestro South Charleston, 180 Rigid PU foams are used mainly in insula- growth in North America in recent years as West Virginia, US tion, refrigeration, packaging and construc- the insulating properties of PU foams pro- Carpenter Bayport, Texas 125 tion, while flexible PU foams have applica- vide energy efficient solutions. According to Monument Brandenburg, 120 tions such as upholstery, mattresses and a survey from IAL Consultants, PU produc- Chemical Kentucky seats. Polyols can also be used in elastomers, tion in the countries comprising the North Covestro New Martinsville, 50 ­adhesives, coatings and fibres. American Free Trade Agreement (NAFTA) West Virginia There are two main types of polyols – pol- rose 4.4% from 2014 to 2016 to eclipse levels A full list of plants and projects capacities, yether polyols and polyester polyols, with last seen prior to the 2008 recession. forecasts, production volumes and ­polyether polyols more widely used. Polyes- operating rates are available on the ter polyols compete with polyether polyols Prices ICIS Supply and Demand database and may be preferred in some rigid foam ap- US polyether polyols have been firming in plications because of their low cost and im- ­recent months, driven by higher prices for pressures in an inert atmosphere. After poly- proved flame retardant properties. In addi- propylene feedstock. During May and June, merisation, the catalyst is neutralised and re- tion, they can provide improved wear propylene contracts posted a cumulative moved by filtration. The polyol is then purified. ­resistance and chemical resistance in elasto- jump of 13 cents/lb ($287/tonne), prompting The choice of epoxides, initiator, reaction mers, coatings, sealants and adhesives. increase initiatives for polyols ranging from conditions and catalyst determines the physi- 8-13 cents/lb. cal properties of the polyol, which can range Supply/demand US prices for polyether polyols are largely from low molecular weight polyglycols to The North American polyols market is struc- driven by feedstock costs and typically fol- high molecular weight resins. turally long, with usage capped by the avail- low movements in propylene contract prices ability of PU co-feedstock such as isocy- with a lag of one to two months. Outlook anates rather than polyol supply issues. Prices may find support throughout the US polyols demand is expected to continue Persistent supply shortages for MDI and second half of the year as propylene feed- to gain ground in the coming years along TDI during 2017 and the first quarter of 2018 stock supplies are expected to remain tight with the anticipated rise in demand for poly- along with a steep escalation of prices led to given the shift to lighter cracker feedslates urethane systems. some slowdown in polyols demand. How- and operational­ issues at propane dehydro- The excellent insulating properties of pol- ever, improving supply for MDI and TDI is genation (PDH) plants. yurethane foams are likely to ensure demand Higher logistics costs are also supporting increases as end-users seek more energy effi- US POLYETHER POLYOLS higher polyols prices. An acute shortage of cient products while new polyurethane truckers has prompted US trucking compa- foams are being developed for applications Cents/lb, flexible foam - high resilience, bulk domestic DEL nies to implement multiple freight increases in athletic shoes and liners for truck trailers. 170 while several chemical producers have ei- Polyols production technologies may also ther raised their freight adders or cited rising witness some changes as newer and more 165 transportation costs as a factor in announced sustainable production methods are being ­product price increases. pioneered by several companies. Saudi Ara- 160 mco and Covestro are working on commer- Technology cialising processes to produce polyols from 155 Polyether polyols are produced by the carbon dioxide, while Emery Oleochemicals ­catalysed addition of epoxides, mainly has launched a new line of polyols with a

150 ­propylene oxide (PO) or ethylene oxide high level of bio-based content. (EO), to an initiator having active hydro- No new polyols plants have been an- gens. The most common catalyst is potassi- nounced in the North American market. ■ 145 Aug Aug um hydroxide. 2017 2018 The reaction is carried out by a discontinu- Access the archive of the Chemical Profiles ous batch process at raised temperatures and A-Z at icis.com/subscriber/icb

116 | ICIS Chemical Business | 17-23 August 2018 www.icis.com

ICB_240818_114-117 Profiles August18.indd 116 8/22/18 4:58 PM Europe chemical profile

Linda Naylor London LDPE

USES imported chemicals to be given a 25% tariff europe ldpe capacity Low density polyethylene (LDPE) is used from 23 August. However, most grades of ‘000 TONNES/YEAR principally in film and sheet applications, LLDPE were included. Company Location Capacity and extrusion coating and injection moulding SABIC Geleen, 645 applications. It is used mainly as a packaging PRICES Netherlands film either on its own or blended with linear Spot LDPE prices are slightly up from their ExxonMobil Meerhout, Belgium 500 low density PE (LLDPE) to improve mechani- very low point in May, but still low compared LyondellBasell Wesseling, 430 cal properties. with prices in the past three years. Germany Blown film can be easily processed and Shortages and the swift upward price SABIC Wilton, UK 400 can be used in food, medical and pharma- moves of 2015 are a distant memory, and INEOS Cologne, Germany 400 ceutical packaging, as well as in agricultural there are no supply shortages in Europe. The Petkim Aliaga, Turkey 355 films. LDPE is also used in sheathing for monomer/polymer spread for gross LDPE Borealis Stenungsund, 350 wires and cables, extrusion coating of paper pricing has fallen to what some producers say Sweden and boards for packaging liquid and in mois- is unsustainable long term. LyondellBasell Aubette, France 320 ture barrier applications. Net spot numbers are now trading at levels ExxonMobil Antwerp, Belgium 300 not far from the current ethylene contract, Dow Terneuzen, 260 SUPPLY/DEMAND while cracker margins remain relatively strong. Netherlands LDPE has been increasingly replaced by A full list of plants and projects capacities, LLDPE. New LDPE investments globally are TECHNOLOGY forecasts, production volumes and overshadowed by those in LLDPE and in Two processes are available – stirred auto- operating rates are available on the high density polyethylene (HDPE), but there clave or tubular. Both can produce LDPE as ICIS Supply and Demand database have been major investments in recent well as copolymer with polar co-monomers months, and a couple are still due on stream like ethylene vinyl acetate (EVA). The two Less efficient capacity has been closed, in North America. polymerisation techniques differ in terms of being replaced by plants of 300,000 tonnes/ Additionally, over 500,000 tonnes of LDPE maximum capacity per line, operating condi- year and more. Tubular processes offer better capacity was brought on stream in China in tions, yields and properties. economic return and technical advantages 2017, using mainly the coal- or methanol-to- Autoclave was the first LDPE process, but it that allow easier processing in extrusion. gas technologies. is more expensive in terms of power consump- Sources perceive some oversupply in the tion and maintenance costs. The share of auto- OUTLOOK LDPE sector in Europe, but not enough to lead clave LDPE in the world is declining, and the LDPE prices are closely linked to grades in to significant impact on pricing. capacity of a line is low, typically 50,000- the wider polyethylene (PE) market, with The tit-for-tat tariff battle between the US 60,000 tonnes/year. They are able to produce upstream ethylene and naphtha the main and China has had no impact in Europe so premium polymer grades, with consistent price drivers. far, but this cannot be ruled out in future. quality, good clarity and toughness, appreciat- Imports from North America are expected LDPE was removed from China’s list of US ed for heavy-duty film. Grades from these in volume only in 2019, but it is in the LLDPE plants are also suitable for extrusion coating. and HDPE sectors that most volumes are ex- EUROPE LDPE pected. Prices in these markets will inevitably affect sentiment in LDPE, however. €/tonne, GP film LDPE PROJECTS BOOST SUPPLY Capacity Some sources point to the arrival of materi- 1,800 Spot FD NWE Company Location/start-up ('000 tonnes/year) al from the Middle East, when a tsunami was Domestic FD EU 1,700 Sadara Saudi Arabia/ 350 expected but imports arrived in a more order- Q4 2016 1,600 ly fashion, nonetheless changing the Europe- Slovnaft Bratislava, 40 (net an market definitively. Some sources expect a 1,500 (Mol) Slovakia/2017 increase) sedate introduction of North American mate- Dow Plaquemine, 350 1,400 rial to Europe, with a reduction of cracker Louisiana, US/ 1,300 Q4 2017 rates to accommodate new capacity. Reliance Jamnagar, 400 As trade tensions rise between the US and 1,200 India/2017 China, the prospect of a trade war has wide- 1,100 Formosa Point Comfort, 400 ranging implications for the chemical indus- Plastics Texas, US/H2 2018 ■ 1,000 try, including polyethylene. Jun Jan Jan Jan Jan Aug Sasol Lake Charles, 420 2014 2015 2016 2017 2018 2018 Louisiana, Click here to see the latest news and USA/2019 analysis on the US China trade war

www.icis.com 17-23 August 2018 | ICIS Chemical Business | 117

ICB_240818_114-117 Profiles August18.indd 117 8/22/18 5:01 PM VALUE CHAIN chlorine Sign up to receive free ICIS updates VALUE CHAIN chlorine by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch 29% Co-Product isocyanates Caustic Soda US CHLORINE PRICES isocyanates $/tonne, contract FOB FEEDSTOCK ■ Methyl di-p-phenylene (MDI) and ■ GLOBAL ISOCYANATES PRICES GLOBAL CAUSTIC SODA Used for pulp and paper; to refine 240 toluene di-isocyanate (TDI) for polyure- alumina; to neutralise acid; and for thane (PU) foams for automotive, $/tonne $/dmt, liquid, spot chlorine water treatment 230 construction, furniture 5,000 500 ■ Lower production in Europe and fewer ■ Prices soared due to global supply FOB NE Asia ■ Derived from salt, it is a key FOB NWE exports from China on greater domestic tightness caused by production issues. 4,000 FOB US Gulf, export ingredient in vinyls, isocyanates, 220 450 demand are cutting global supply, pushing Supply should recover on new capacity prices up and epichlorohydrin ■ Demand growing in line with GDP growth 3,000 ■ ■ Cheap production in the US will provide Chlorine and caustic soda are 210 ■ MDI is gaining market share from TDI 400 more to Europe and Asia co-products of the electrolysis of brine. ■ Europe MDI prices driven by supply and 2,000 ■ Demand growth slow in developed coun- The process creates 1.1 tonnes of TDI, spot CFR E Med MDI, polymeric/ 200 demand following production issues TDI, CFR SE Asia crude, DEL US 350 tries; rising faster in Africa, Latin America, caustic for every 1 tonne of chlorine Aug Aug ■ 1,000 2016 2017 Low operating rates at BASF’s TDI Lud- MDI CFR China MDI, pure, contract produced TDI, 80:20, FOB FD W Europe India and southeast Asia wigshafen, Germany, plant in 2017 helped US Gulf export ■ The technology is membrane 0 ■ Europe tight in 2017 on lack of arbi- CHLORINE PROJECTS firm Europe prices Aug Aug 300 2016 2017 Aug Aug trage from US plus H1 production issues (newest and most efficient), ■ 2016 2017 Company, location Capacity* Start-up Asia import prices may rise in Q4 with ■ Europe mercury closures expected to diaphragm, and mercury cell (being surge in China prices on tight supply phased out in Europe) Vencorex, Pont de Claix, 169 Ramping up isocyanates Projects CAUSTIC SODA PROJECTS tighten market from Q4, especially in the France Q3 2017 ■ Short supply of MDI in Asia will likely ■ Company, location Capacity* Start-up Mediterranean Production often located next to ease with new capacity from Huntsman Company, location Capacity* Start-up Karpatneftekhim, 163 Q3 2017 MDI projects ■ Supply to be tight in northeast Asia with derivative production and moved by pipe Ukraine Polyurethanes Shanghai and Kumho Vencorex, Pont de Claix, 190 Ramping up ■ Huntsman, China 240 Q4 2017 France Q3 2017 no new capacity expansions Demand comes from construction Ercros, Vila-seca, Spain 28 2017 Mitsui Chemicals expected by end-2017 activity and demand for polyvinyl Kumho Mitsui, S. Korea 100** End 2017 Karpatneftekhim, Ukraine 180 Q3 2017 ■ Demand strong from Australia alumini- Ercros, Sabiñánigo, 12 Before ■ Asia supply set to lengthen further as chloride (PVC), a derivative plastic with Covestro, Germany 400 End 2018 Ercros, Vila-seca, Spain 30 2017 um producers and southeast Asia buyers Spain 2020 Sadara starts sales of polymeric MDI ■ many uses in construction Wanhua, Louisiana,US*** 400 Q2 2020 Ercros, Sabinanigo, Spain 15 Before Chinese export volumes and prices de- (PMDI) in Q4 2017, TDI in end-2017 or ** 2020 pendent on its domestic market conditions early 2018 BASF, Louisiana, US 300 Q2 2020 TDI projects Wanhua Chemical, China 300 2018 Gansu Yinguang, China 80 2018 5% 34% ** Expansions; *** Final location undisclosed derivative derivative epichlorohydrin PVC

■ ■ EU, ASIA EPICHLOROHYDRIN About 90% of epichlorohydrin (ECH) out- Polyvinyl chloride (PVC) is used to make GLOBAL PVC put goes into the manufacture of epoxy water pipes, seat covers,intravenous bags $/tonne resins as well as specialty resins for water for hospitals, siding, flooring, decking plus $/tonne, spot Spot CFR China, ISO tank truck 2,200 and paper treatment and ion exchange door and window profiles 1,100 Contract FD NWE bulk FOB NE Asia Spot DEL E China bulk ■ In Asia demand for ECH is largely de- ■ Half of PVC goes to construction FOB NWE export 2,000 ■ FOB US Gulf export pendent on downstream epoxy resins. Rising construction in North America 1,000 1,800 End uses of epoxy resins include coat- has constrained US exports, where 37% 1,600 ings, paint and adhesives as well as appli- of North American production is sold cations in electronics ■ The European PVC market has been 900 COORDINATED By: Global lead 1,400 ■ In China, domestic prices have been balanced to tight for most of 2017 with Bill Bowen Houston 1,200 softening amid weak demand prices increasing relative to feedstocks 800 Chlorine ■ Demand for spot import cargoes into ■ Strong domestic demand has balanced Bill Bowen Houston 1,000 China has also stagnated amid a persis- relatively weak import demand in Turkey Caustic soda 700 800 tent buy-sell gap ■ Carbide-based PVC from China surged Aug Aug Chris Barker london Aug Aug 2016 2017 2016 2017 ■ In Europe higher glycerine prices have in price due to shortages of feedstock Patrick Han Singapore Bill Bowen Houston applied upward price pressure calcium carbide, which drove up overall PVC PROJECTS Epichlorohydrin ■ European prices have strong correlation Asian PVC prices Company, location Capacity* Start-up AMY TAN Singapore ■ LUKE MILNER LONDON to key feedstock propylene Stricter environmental inspection Jinchuan Group, China 300 Q3 2017 expected in China throughout the rest of Isocyanates Karpatneftekhim, Kalush 300 Q3 2017 the year, which will put pressure on feed- Pavle Popovic london Qingdao Haiwan, Expected Zachary Moore Houston stock supply, and is likely to sustain high Shandong, China 300 2019 Matt Chong Singapore prices in China POLYVINYL CHLORIDE ■ Demand in India expected to be good Chris Barker london after the monsoon season Patrick Han Singapore Bill Bowen Houston

*Capacity ’000 tonnes/year CHLORINE

118 | ICIS Chemical Business | 1-7 September 2017 www.icis.com www.icis.com 1-7 September 2017 | ICIS Chemical Business | 119

ICB_240818_118-129 VC SepNov17 Jan18.indd 118 8/23/18 7:38 AM ICB_240818_118-129 VC SepNov17 Jan18.indd 119 8/23/18 7:38 AM VALUE CHAIN CHLORINE Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

chlorine value chain – regional price breakdown

CHLORINE VALUE CHAIN - US PRICES

5,000 $/tonne, chlorine, contract FOB US $/DMT, caustic soda, liquid, spot FOB US Gulf, export $/tonne, MDI, polymeric/crude, DEL US

$/tonne, TDI, 80:20, FOB US Gulf export $/tonne, PVC, FOB US Gulf export 4,000

3,000 88% Hike in US TDI prices 2,000 during the period, peaking at $3,945 on 1,000 global shortages

0 Aug Aug 2016 2017

CHLORINE VALUE CHAIN - ASIA PRICES

5,000 $/DMT, caustic soda, liquid, spot FOB NE Asia $/tonne, MDI CFR China $/tonne, TDI, CFR SE Asia $/tonne, PVC, FOB NE Asia $/tonne, epichlorohydrin, spot DEL E China bulk $3,150 4,000 3,000 Peak price in the period for

Asia MDI from lows of 2,000 $1,825 in August 2016

1,000

0 Aug Aug 2016 2017

CHLORINE VALUE CHAIN - EUROPE PRICES

5,000 $/DMT, Caustic soda, FOB NWE $/tonne, MDI, pure, contract FD Europe W $/tonne, TDI, spot CFR Med E $/tonne, PVC, FOB NWE export $/tonne, Epichorohydrin, contract FD NWE bulk 4,000

3,000 $4,050 Europe TDI peaks 2,000 twice at this price as supply shortages rock 1,000 the global market

0 Aug Aug 2016 2017

120 | ICIS Chemical Business | 1-7 September 2017 www.icis.com

ICB_240818_118-129 VC SepNov17 Jan18.indd 120 8/23/18 7:38 AM VALUE CHAIN CHLORINE

Supply & Demand forecast for Chlorine Value Chain

EPICHLOROHYDRIN SUPPLY & DEMAND FORECAST PVC SUPPLY & DEMAND FORECAST

m tonnes Percentage m tonnes Percentage 5 100 75 100 Total Production (m tonnes) Capacity Utilisation Rate (%) Total Production (m tonnes) Capacity Utilisation Rate (%) Total Capacity (m tonnes) Total Capacity (m tonnes)

4 90 60 90

3 80 45 80

2 70 30 70

1 60 15 60

0 50 0 50 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 SOURCE: ICIS Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ Over the period production increases by ■ Production reaches 54.13m tonnes/year 39% to reach 2.08m tonnes/year by 2022 from 44.86m tonnes/year in 2017 58% ■ Capacity declines gently to plateau at 67% ■ Capacity is forecast to rise only 7% from 2013 operating rate for 2.48m tonnes/year 2017-19 before in- PVC capacity utilisation 2017 until 2022 to reach 68.8m tonnes/ global epichlorohydrin slumped to this level in creasing to reach 2.53m tonnes in 2022 year before steady rise to 82% 2015/16 then will rise gently

MDI SUPPLY & DEMAND FORECAST TDI SUPPLY & DEMAND FORECAST

m tonnes Percentage m tonnes Percentage 10 100 5 100 Total Production (m tonnes) Capacity Utilisation Rate (%) Total Production (m tonnes) Capacity Utilisation Rate (%) Total Capacity (m tonnes) Total Capacity (m tonnes)

8 90 4 90

6 80 3 80

4 70 2 70

2 60 1 60

0 50 0 50 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ Production peaks at 7.23m tonnes/year ■ Production rises by 37% from 2012 to in 2022 following a steady rise from 5.91m 2022 as it increases from base of 1.83m 74% tonnes/year in 2017 80% tonnes/year MDI operating rate slumps ■ Capacity rises strongly from 2012 to reach TDI operating rate peaked ■ 2015 collapse in operating rate was in 2017/18 before in 2016 and is forecast to 8.6m tonnes/year in 2019/20 caused by a 13% hike in capacity that year recovering to 82% in 2022 slump to 73% in 2018

ICIS SUPPLY AND DEMAND DATABASE The ICIS Supply and Demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 1-7 September 2017 | ICIS Chemical Business | 121

ICB_240818_118-129 VC SepNov17 Jan18.indd 121 8/23/18 7:38 AM VALUE CHAIN methanol Sign up to receive free ICIS updates VALUE CHAIN methanol by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch 14% 9% derivative derivative Gasoline blending GLOBAL METHANOL PRICES acetic acid $/tonne, spot FEEDSTOCK ■ Used in the production of vinyl acetate GLOBAL ACETIC ACID PRICES ■ China methanol consumption in the 450 monomer (VAM), ethyl acetate, butyl ace- gasoline sector was around 7.95m METHANOL tate, purified terephthalic acid (PTA), ace- $/tonne, spot tonnes in 2016, up by 7% YOY 400 800 tic anhydride and monochloroacetic acid CFR Asia SE FD NWE truck ■ ■ Apart from the uses listed, formalde- Use of methanol as a blending additive ■ European prices are mainly influenced FOB US export hyde (a precursor for adhesives and res- 350 remains only significant in the provinces by the regional methanol contract 700 ins) consumes 30% of global production of Shanxi, Shaanxi, Jiangsu, Guangdong ■ Damage to US production means sup- ■ Europe is a net importer, new pro- 300 600 and Shandong. Market players do not ex- ply to Europe will be limited in near term jects due onstream in US, Russia, Iran pect provincial governments to encourage 250 ■ Europe relies on imports. More Saudi and Netherlands CFR Asia SE Singapore, Malaysia W, Dumai 500 more methanol to be blended into gaso- product could enter the market in 2018 ■ Europe prices closely driven by FOB Rotterdam T2 FOB US barges line in the near term 200 ■ Spot prices started to decline after the China, an alternative destination for Oct Oct 400 ■ Market players expect to see stagnant 2016 2017 spikes caused by Hurricane Harvey key producers such as Middle East growth for methanol blended into gasoline ■ Onset of the winter wash and anti-freeze 300 ■ Europe consumption healthy in Oct Oct for the near future due to a lack of clear METHANOL projects season should keep Europe stable 2017 and modest growth expected in 2016 2017 support from the Chinese government. ■ The main price drivers in Asia are 2018, led by eastern Europe Company, location CAPaCITY* start-up Gasoline blending policies for methanol caused by tight supply, plant shutdowns, ■ US production poised to hit 7.5m ACETIC ACID PROJECTS have been unchanged since 2015 OCI, Beaumont, Texas, 1,750 Q1 2018 planned and unplanned, and spikes in tonnes/year after OCI project starts up US * ■ The National Standard for M15 Metha- methanol feedstock costs Company, location CAPaCITY start-up ■ US methanol exports continue to nol Gasoline remains in limbo, and market Shchekinoazot, Russia 450 Q1 2018 ■ Extended price rally in China and tight Bushehr Petrochemical, 300 2018 grow while imports fall (expansion) Iran players are unsure of when the unified export availability, despite fewer plant ■ Natural gas has made US methanol technical indicators for M15 methanol Kaveh Methanol, Iran 2,400 H1 2018 outages compared to previous years, competitive to Middle East gasoline will be implemented, if ever Marjan Methanol, Iran 1,700 H1 2018 suggests sustained demand growth from ■ China is the largest Asia consumer, BioMCN, Netherland 430 Nov-18 the downstream PTA and acetic-to- Asia prices tend to track China US Methanol (Liberty 195 H2 2018 ethanol sector ■ Price direction in China dictated by One), West Virginia, US futures when supply/demand stable 13% 9% derivative derivative MTBE Methanol-to-olefins ■ Europe MTBE consumption guided by GLOBAL MTBE PRICES ■ There are nine methanol-to-olefins (MTO) fuel market, as it is blended into gasoline MTO PROJECTS plants in China, with a combined capacity $/tonne, spot as an octane booster of around 4.455m tonnes/year as of Octo- Company, location CAPaCITY start-up 850 ■ Key driver is switch between summer (C2/C3)* CFR China FOB US Gulf ber 2017, according to ICIS China. Their FOB Rotterdam-Amsterdam T2 and winter gasoline with less MTBE Shandong Luxi, Shandong, 200 Nov,2017 consumption of methanol was estimated ■ Europe drivers include tighter feedstock China 750 at 9.254m tonnes/year in 2016 Raffubate-1, turnarounds, higher demand ■ Four MTO projects in China with capaci- Jilin Connell, Jilin, China 300 Nov,2017 in Latin America and fellow octane boost- 650 ty of 1.27m tonnes/year are under con- er ethyl tertiary butyl ether (ETBE) struction. If completed, MTO capacity will ■ In US, used as gasoline additive, mostly

reach 5.725m tonnes/year in 2017, lead- 550 exported, so driven by global factors ing to 11.3m tonnes/year of methanol ■ US MTBE exported to Mexico, Venezue- consumption, or 45% of the China total. 450 la, Chile and Europe, especially Belgium Oct Oct ■ The MTO industry is the single largest ■ Hurricane Harvey affected US production 2016 2017 consumer of methanol in China. Near at the end of August and early September term consumption growth is expected to ■ Chinese MTBE supply affected by feed- MTBE Projects be led along by the MTO industry, with stock costs, environment inspections * other industries only expected to see Company, location CAPaCITY start-up ■ Chinese demand driven by gasoline COORDINATED By: modest growth. Global Lead S-Oil, Onsan, South Korea 350 by Q2 blending which absorbs 90% of production 2018 ■ Persistently high import methanol pric- Kite Chong singapore ■ Elsewhere in Asia, demand is driven by contributors FPCC, Mailiao, Taiwan 200 end-Q3 es in China seen since Q3 2016 were gasoline blending in Singapore and prices Vicky Ellis london 2018 supported by new MTO capacities that of other blendstocks such as aromatics Peter Gerrard london Luoyang Hongli, Henan, 100 by Q2 came online in 2016 and 2017. Lane Kelley houston China 2018 products. Asia supply determined by price spread to Europe Steven McGinn houston Shandong Huachao, 200 by Q2 Helen Lee singapore Shandong, China 2018 Trixie Yap singapore Sinochem Quanzhou, Fujian, 80 by Q3 Rachel Qian singapore China 2018 *Capacity ’000 tonnes/year Sinopec Yanshan 100 by Q3 **Total ethylene and propylene capacity combined Petrochemical, Hebei, China 2018 METHANOL

122 | ICIS Chemical Business | 10-16 November 2017 www.icis.com www.icis.com 10-16 November 2017 | ICIS Chemical Business | 123

ICB_240818_118-129 VC SepNov17 Jan18.indd 122 8/23/18 7:46 AM ICB_240818_118-129 VC SepNov17 Jan18.indd 123 8/23/18 7:46 AM VALUE CHAIN METHANOL Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

Methanol value chain – regional breakdown

METHANOL VALUE CHAIN - ASIA PRICES

$/tonne, spot 800 Acetic acid, CFR Asia SE Methanol, CFR Asia SE Singapore, Malaysia W, Dumai MTBE, CFR China 700 600 16% 500 increase in Asia

400 MTBE prices from mid-period lows to 300 reach $697/tonne

200 Oct Oct 2016 2017

EUROPE PRICES - METHANOL VALUE CHAIN

$/tonne, spot 800 Acetic acid, FD NWE truck Methanol, FOB Rotterdam T2 MTBE, FOB Rotterdam-Amsterdam T2 700

$430 600

Peak Europe 500 methanol price, rising from $233/ 400 tonne at the start of the period 300

200 Oct Oct 2016 2017

METHANOL VALUE CHAIN - US PRICES

$/tonne, spot 1,000 Acetic acid, FOB US export Methanol, FOB US barges MTBE, FOB US Gulf 800 $600 600 US acetic acid price remains range-bound 400 for 12 months on an FOB US export basis

200 Oct Oct 2016 2017

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Methanol value chain – supply & demand forecasts

ACETIC ACID GLOBAL FORECAST GLOBAL METHANOL FORECAST

m tonnes Percentage m tonnes Percentage 25 100 250 100 Total production (m tonnes) Capacity utilisation rate (%) Total production (m tonnes) Capacity utilisation rate (%) Total capacity (m tonnes) Total capacity (m tonnes)

20 80 200 80

15 60 150 60

10 40 100 40

5 20 50 20

0 0 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

SOURCE: ICIS SUPPLY & DEMAND WINDOW, ICIS DASHBOARD SOURCE: ICIS SUPPLY & DEMAND WINDOW, ICIS DASHBOARD

■ Capacity edges up from 16.7m tonnes in ■ Production is 98.4m tonnes in 2017 2018 to reach 17.5m tonnes in 2022 and then jumps rapidly to 108.9m tonnes 94% ■ From 2012, production goes from 11.7m 69% in 2019 Acetic acid global tonnes to 16.4m tonnes leading to a tighter Operating rate in 2017, ■ Capacity also advances quickly during the operating rate in 2022 advancing to 76% in 2022 supply/demand balance same period, from 143.5-154.3m tonnes from 85% in 2017 Imaginechina/REX/Shutterstock

ICIS SUPPLY AND DEMAND DATABASE The ICIS supply and demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 27 July-9 August 2018 | ICIS Chemical Business | 125

ICB_240818_118-129 VC SepNov17 Jan18.indd 125 8/23/18 7:53 AM VALUE CHAIN ethylene Sign up to receive free ICIS updates VALUE CHAIN ethylene by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch 66.5% 10.9% derivative derivative Polyethylene GLOBAL ETHYLENE ethylene dichloride $/tonne, spot FEEDSTOCK ■ 1,600 ■ GLOBAL POLYETHYLENE Used in packaging such as plastic Europe market to become structurally GLOBAL EDC bags, films, containers and bottles and CFR NE Asia DEL US FD NWE tighter on mercury cell, therefore feed- Ethylene 1,400 $/tonne also in agriculture. stock chlorine, closures. $/tonne, spot 1,500 ■ Europe reliant on imports, expecting 1,200 ■ Increased level of imports to Europe 400 LLDPE (C4), bagged, FOB US Gulf CFR NE Asia FOB Europe FOB US Gulf LLDPE lm, CFR SE Asia more from new North America capacities. ■ Europe market buoyed by low oil expected from the Middle East and US. LLDPE (C4) minus duties and extra costs, FD NWE 1,400 Impact on pricing expected in 2018. prices, healthy cracker margins and 1,000 ■ Most global EDC demand driven by 350 ■ robust demand, but benefits could US PE sellers gearing up for greater 800 downstream polyvonyl chloride (PVC). 300 1,300 exports in 2018 after 3.6m tonnes/year diminish in 2018 on higher oil prices ■ Asia demand for imported EDC hinges of new capacity in 2017. and US start-ups. 600 on profitability of caustic soda for 250 1,200 ■ Ethane cost advantage keeps US plants ■ Demand for ethylene derivatives in regional producers. 400 200 competitive although costs may rise on Europe could be boosted in the short Nov Nov ■ Southeast Asia buyers may face 1,100 2016 2017 higher demand. to medium-term following Hurricane higher prices versus their northeast Asia 150 Harvey in the US. ■ Limited new capacity growth in Asia ETHYLENE PROJECTS counterparts due to closure of Europe 1,000 ■ Hurricane Harvey in late August 100 Nov Nov in 2018 as most projects are to be * mercury cell capacity. Dec Nov 2016 2017 Company, location Capacity Start-up completed in 2020 and beyond. caused multiple outages in the US ■ 2016 2017 Indorama, US 440 Early Much of global PVC demand driven by ■ Gulf region with most resolved by the POLYETHYLENE PROJECTS Middle East PE exporters poised to see 2018 construction activity and demand for resin EDC PROJECTS end of Q3 and some extending into * increased competition, market shares in to make PVC construction materials. Company, location Capacity Start-up CNOOC/Shell 1,000 Q1 2018 Company, location Capacity* Start-up Asia to come under pressure. November. Several projects delayed (CSPC), China ■ US producers exported 1.3m tonnes of INEOS Sasol, US 470 End 2017 Shintech, US Unspec 2020 ■ US supply to be main driver for Latin into 2018. DowDuPont, US 350 Q1 2018 Chevron Phillips, US 1,500 Q1 2018 EDC in 2016 and sales to international America with prices expected to drop. ■ Asia market expected to be markets were running about 3% ahead of Formosa Plastics, US 800 H2 2018 S-Oil, South Korea 200 Q2 2018 ■ structurally tight in 2018 on heavy US exports may hurt integrated PE Formosa Plastics, US 1,200 Q2 2018 that pace for 2017. Sasol, US 470 H2 2018 turnaround schedule in Japan and operations in Asia from H2 2018. Shintech, US 500 Q2 2018 DowDuPont, US 125 2018 new downstream capacities in LyondellBasell, US 500 Mid-2019 Thailand, South Korea and China. ExxonMobil, US 1,500 Mid-2018 Sasol, US 420 2019 Sasol, US 1,500 H2 2018 Zhong'an Lianhe Coal 350 H2 2018 16.0% Chemical, China 6.6% derivative Lotte, South Korea 200 Dec 2018 derivative ethylene oxide Styrene

■ ■ GLOBAL ETHYLENE OXIDE In Europe, EO typically reflects 80-85% Europe poised for short supply in Q1 GLOBAL STYRENE of the ethylene price movement. ICIS 2018 until April due to a heavy local and $/tonne, contract uses an average of 82%. An adder or US, Middle East maintenance schedule. $/tonne, spot 1,600 ■ 2,000 conversion fee is included. Europe players concerned about ongo- FOB Rotterdam FOB South Korea FD NWE FOB US ■ Main derivative MEG prices soared at ing anti-dumping investigation for imports FOB US 1,800 the start of 2017 on limited supply. Sta- coming from the US, Taiwan and South e 1,500 ble-to-soft Europe pricing seen in Q4 on Korea into China while a preliminary rate 1,600 easing import supply. could be announced as soon as February. 1,400 1,400 ■ Most US EO contracts are formula ■ China’s anti-dumping investigation is

n based on 80% of the change in ethylene impacting US styrene exports to Asia. The 1,200 1,300 plus an adder. US will ship more styrene to Europe until ■ US contract prices started to decline the investigation is completed in Q1. 1,000 recently as the markets normalise after ■ Downstream EPS and PS players do not e 800 1,200 Nov Nov Dec Nov Hurricane Harvey. expect big changes in demand in 2018. 2016 2017 2016 2017 ■ US demand was soft in Q2 but picked ■ China remains the largest importer of COORDINATED By: GLOBAL, ethylene EO/MEG PROJECTS up in Q3, driven by the peak MEG/PET styrene at over 3m tonnes/year and is STYRENE PROJECTS NEL WEDDLE LONDON Company, location Capacity* Start-up season and higher exports to Asia. expected to import at these levels in Company, location Capacity* Start-up polyethylene ■ Linda naylor loNdon Sasol, US 300 Late US MEG margins improved, particularly 2018 despite the increase in local Qingdao Soda Ash 500 Early (crude EO) 2018 from H2 2017 onwards amid strong China capacity with three projects. Industry, China 2018 EO/EG melissa hurley loNdon MEGlobal, US 750 (MEG) H1 2019 polyester growth rates. ■ Downstream PS and EPS margins may Anhui Haoyuan 260 2018 ■ EDC Lotte/Westlake, US 700 (MEG) 2019 MEG demand improved in 2017 on be threatened by rising styrene prices, Chemicals, China chris barker loNdon PTT Global 500 (MEG) 2021 higher import levels into China. although ABS margins are wide enough Dalian Hegli 720 2018 Styrene Chemicals, US ■ Reliance started up 750,000 tonnes/ to cushion a styrene spike. Petrochemicals Vasiliki parapouli loNdon year of capacity in India in Oct 2017. ■ No new production capacity is being SUPPLY & DEMAND FORECASTS planned for North America. Paolo Scafetta VERGIATE, ITALY

thyl James WILSON london

NOTES: *Capacity ’000 tonnes/year e

126 | ICIS Chemical Business | 27 July-9 August 2018 www.icis.com www.icis.com 27 July-9 August 2018 | ICIS Chemical Business | 127

ICB_240818_118-129 VC SepNov17 Jan18.indd 126 8/23/18 7:58 AM ICB_240818_118-129 VC SepNov17 Jan18.indd 127 8/23/18 7:58 AM VALUE CHAIN ethylene Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

ETHYLENE VALUE CHAIN – REGIONAL PRICES

ETHYLENE VALUE CHAIN - NORTH AMERICA

$/tonne, spot 1,800 Ethylene, DEL US LLDPE (C4), bagged, FOB US Gulf Styrene, FOB US 1,600

1,400

1,200 $1,312

1,000 Peak price for US LLDPE in 2017, 800 which was 20% 600 higher than its low

400 Nov Nov 2016 2017

ETHYLENE VALUE CHAIN - EUROPE

$/tonne, spot 1,800 Ethylene, FD NWE LLDPE (C4) minus duties and extra costs, FD NWE Styrene, FOB Rotterdam

1,600

56% 1,400

Increase in Europe 1,200 ethylene prices at their peak of $1,236/tonne 1,000 in Oct 2017 from the low in Dec 2016 800

600 Nov Nov 2016 2017

ETHYLENE VALUE CHAIN - ASIA

$/tonne, spot 1,600 Ethylene, CFR NE Asia LLDPE lm, CFR SE Asia Styrene, FOB South Korea 1,500

1,400

1,300 34%

1,200 Plunge in Asia styrene prices from their peak 1,100 in Feb 2017 to the low 1,000 in May 2017

900 Nov Nov 2016 2017

128 | ICIS Chemical Business | 27 July-9 August 2018 www.icis.com

ICB_240818_118-129 VC SepNov17 Jan18.indd 128 8/23/18 7:58 AM VALUE CHAIN ethylene

ICIS Ethylene Value Chain supply & demand forecast

ETHYLENE SUPPLY & DEMAND FORECAST HDPE SUPPLY & DEMAND FORECAST

m tonnes Percentage m tonnes Percentage 250 100 75 100 Total Production (m tonnes) Capacity Utilisation Rate (%) Total Production (m tonnes) Capacity Utilisation Rate (%) Total Capacity (m tonnes) Total Capacity (m tonnes)

200 95 60 95

150 90 45 90

100 85 30 85

50 80 15 80

0 75 0 75 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ Excessive capacity additions scheduled ■ Production increases steadily from 43m by the US, the Middle East and China are tonnes/year in 2017 to hit 54m tonnes/ 87% responsible for the drop in operating rates 87% year in 2023 Average operating rate ■ Asia will see highest increase in demand Flat operating rate from ■ 22% hike in production capacity from between 2017-2021, 2017 until 2020 then for plastics while Europe remains weak 2013 to reach 58m tonnes/year in 2023 down 2% on 2016 decline to 86% to 2022

ETHYLENE OXIDE SUPPLY & DEMAND FORECAST STYRENE SUPPLY & DEMAND FORECAST

m tonnes Percentage m tonnes Percentage 50 100 50 100 Total Production (m tonnes) Capacity Utilisation Rate (%) Total Production (m tonnes) Capacity Utilisation Rate (%) Total Capacity Total Capacity (m tonnes)

40 95 40 95

30 90 30 90

20 85 20 85

10 80 10 80

0 75 0 75 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ Production ramps up to 31.5m ■ Production rises steadily from 28m tonnes/year in 2022 from 26m tonnes/ tonnes/year in 2013 to peak at 33m 77% year in 2017 83% tonnes/year in 2023 Flat operating rate from ■ Capacity peaks at 39m tonnes/year from Operating rate declines ■ By 2018 capacity increases from 35m 2017-2020 followed by from 2017 to bottom out lows of 27m tonnes/year in 2012 tonnes/year to hit 39m tonnes/year in ‘23 gentle rise to 80% at 83% in 2022

ICIS SUPPLY AND DEMAND DATABASE The ICIS Supply and Demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 27 July-9 August 2018 | ICIS Chemical Business | 129

ICB_240818_118-129 VC SepNov17 Jan18.indd 129 8/23/18 7:58 AM VALUE CHAIN PROPYLENE Sign up to receive free ICIS updates VALUE CHAIN PROPYLENE by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

64% 7% derivative derivative Polypropylene GLOBAL PROPYLENE Acrylonitrile $/tonne, spot FEEDSTOCK ■ Polypropylene (PP) is used in consumer 1,800 ■ Used for polyacrylonitrile, acrylonitrile GLOBAL PP PRICES CFR NE Asia Polymer grade, DEL US Gulf pipeline GLOBAL ACN PRICES and industrial products, key applications CFR SE Asia Polymer grade, FD NWE butadiene styrene (ABS), SAN and Propylene 1,600 $/tonne, injection in packaging, fibres and automotive parts synthetic rubber $/tonne, spot 1,800 ■ ■ Spot CFR China Main Ports Europe PP demand to remain healthy 1,400 European acrylonitrile (ACN) supply tight 2,000 CIF W Europe Homopolymer, spot FD NWE ■ ■ Europe producers confident for at least Europe maintenance to keep supply with little relief expected until summer CFR China Main Ports Homopolymer, contract DEL US bulk 1,900 1,600 H1 2018 balanced-to-tight through May 1,200 following repeated production problems FOB US export ■ ■ Derivative maintenance will offset a 1,800 US propylene supply disruptions result 1,000 at INEOS’s Seal Sands plant 1,400 in volatile PP prices little but robust demand to persist ■ Europe maintenance in March/April 1,700 ■ US producers hope to expand margins ■ US imports could ease tight supply 800 leave little extra material available and 1,600 1,200 after flat 2017 ■ US production expanding as new spot tight 600 ■ US imports may rise if domestic prices PDH ramps up Mar Mar ■ Demand strong in early 2018 likely to 1,500 1,000 ■ US demand set to rise as prices fall 2017 2018 continue to rise persist until summer as buyers try to 1,400 ■ Asia PP rises above linear low-density from highs PROPYLENE PROJECTS catch up from 2017 shortages 800 ■ 1,300 Mar Mar polyethylene (LLDPE) in Asia because of Heavy US turnaround season may ■ Company, Location Capacity* Start-up US supply expected to remain snug Mar Mar 2017 2018 scarce Middle East supply slow inventory recovery ■ 2017 2018 Enterprise, Mont Belvieu, 750 Now Global demand expected to see ■ ■ In Asia heavier turnaround schedule POLYPROPYLENE PROJECTS China capacity to grow as country Texas continued strength Acrylonitrile PROJECTS * strives for self-sufficiency expected to support spot prices ■ Company, Location Capacity Start-up CNOOC, Shell, Guang 580 Q1 2018 Asia prices gain support from supply * ■ Company, Location Capacity Start-up ■ Southeast Asia upbeat on growth in Production losses up 8.6% year-on- Dong, China constraints. Heavy turnaround season CNOOC Huizhou, China 400 Mar-18 Shandong Haili 130 2017, demand from untapped markets like year in northeast Asia (excluding Haiwei, Hebei, China 200 Mar-18 Connell Chemical, Ji Lin, 150 Early in April-May Chemical, China delayed Cambodia, Laos and Myanmar China) peak in October but March, China 2018 ■ Tight global supply limits deep-sea Nghi Son, Vietnam 400 H1 2018 June losses high Borealis, Antwerp, 740 2020 imports to Asia so no respite to tight supply Huating Coal, China 200 Jun-18 ■ China imported 3.01m tonnes in Belgium ■ Demand is expected to hold steady. Yanchang Yan'an, China 250 Jul-18 2017. 2018 expected similar Grupo Azoty, Police, 400 2022 Chandra Asri, Indonesia 80 Q3 2018 ■ China imports from southeast Asia Poland Hengli Petrochemical, China 440 Nov-18 grow, Japan to slow Zhong'an Lianhe Coal, China 350 Nov-18 Lotte Titan, Malaysia 200 2018 8% 4% derivative derivative Propylene Oxide Acrylic acid

■ ■ GLOBAL PROPYLENE OXIDE Europe demand expected to closely Used in paints and coatings, adhesives, GLOBAL ACRYLIC ACID PRICES follow GDP (gross domestic product) super-absorbent polymers (SAP) plus wa- $/tonne and seasonality ter-treatment chemicals $/tonne, spot ■ ■ 1,800 2,200 Contract FD Europe Despite Sadara propylene oxide (PO) Europe demand flat to slightly up largely Contract FOB US and MPG coming on stream in mid-2017, in line with GDP (gross domestic product) Spot DEL China 2,000 Europe has not seen new volumes ■ Nippon Shokubai is bringing a 100,000 1,600 ■ 2018 contract adders higher, because tonne/year acrylic acid (AA) plant on line 1,400 1,800 PO is expected to be finely balanced to at Antwerp in 2018, along with an SAP tight, structurally, in 2018 thanks to robust plant of the same capacity 1,200 1,600 demand and higher captive requirements ■ Europe market largely balanced ■ ■ Polyether polyol demand expected to US demand moderately outpacing do- 1,000 1,400 grow in excess of GDP mestic supply, imports are competitive Glacial, DEL E China bulk FD NWE Glacial, FOB US Gulf export ■ Propylene glycol demand strong at the ■ US seasonal and pent-up demand will 800 1,200 Mar Mar Mar Mar start of the year during the antifreeze and peak in the second and third quarters 2017 2018 YLENE 2017 2018 de-icing season ■ US contract, spot pricing will largely PROPYLENE oxide PROJECTS ■ China’s domestic prices likely to find track major feedstock propylene trends Acrylic acid PROJECTS COORDINATED By: * support in H1 as Q2 plant turnarounds ■ Asia suppliers bullish on pricing, cite * Company, Location Capacity Start-up Company, Location Capacity Start-up GLOBAL LEAD/Polypropylene

P Nanjing Hong Bao Li, China 120 H1 2018 tighten supply upward cost pressure Wanhua, Shandong, China 100 2018 Zachary Moore Houston ■ Sumitomo Chemical and Asahi Glass ■ Supply/demand largely balanced in S-Oil, South Korea 300 Q3 2018 Shandong Nuoer, Shandong, 80 2018 propylene have turnarounds in May and June so southeast Asia Jessie Waldheim houston Blue Planet Eco New 400 2018 China Saudi-origin material will be diverted ■ Amid talk of planned maintenance in acrylonitrile Materials, China Shandong Hongxin, Shandong, 80 2018 Lucas Hall houston ■ Regional tight supply in Asia is expected Asia, supply concerns loom China Jinling Chemical, China 200 2018 Propylene Oxide to be alleviated in the second half of the Jiangsu Yida Chemical, China 220 2018 or Shengke Chemical, Jiangsu, 160 2018 Tarun Raizada houston later year from additional capacity from South China Acrylic Acid Korea’s S-Oil, which is due to come on Jiangsu Sanmu, Jiangsu, China 160 2018 Larry Terry houston

RO Tianjin Dagu, China 200 2018 or later stream in late-Q2 or Q3 Gazprom Neftekhim Salavat, 80 2018 * Fujian Lianhe Chemical, China 300 2019 or Bashkortostan, Russia Capacity ’000 tonnes/year later P

130 | ICIS Chemical Business | 23-29 March 2018 www.icis.com www.icis.com 23-29 March 2018 | ICIS Chemical Business | 131

ICB_240818_130-141 VC MarMayJun18.indd 130 8/23/18 8:20 AM ICB_240818_130-141 VC MarMayJun18.indd 131 8/23/18 8:20 AM VALUE CHAIN PROPYLENE Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

regional breakdown of propylene value chain prices

PROPYLENE VALUE CHAIN - ASIA

$/tonne, spot 2,500 PO, DEL China PP, CFR China Main Ports ACN, CFR China Main Ports Acrylic acid, glacial, DEL China E bulk Propylene, CFR Asia NE Propylene, CFR Asia SE 2,000 64% 1,500 Hike in China PO prices from lows of 1,000 $1,311.65 to reach $2,153.77/tonne

500 Mar Mar 2017 2018

PROPYLENE VALUE CHAIN - EUROPE

$/tonne, spot 2,000

1,700

$886 1,400 Lowest Europe propylene

price followed by rise to 1,100 $1,158.45/tonne as oil

prices increased 800 PO, contract FD Europe PP, homopolymer, spot FD NWE ACN, spot CIF Europe W Acrylic acid, spot FD NWE Propylene, polymer grade, spot FD NWE 500 Mar Mar 2017 2018

PROPYLENE VALUE CHAIN - US

$/tonne 2,000

1,700

1,400 $1,925 Peak ACN price 1,100 following steep rise from $1,345/tonne 800 Propylene oxide, contract FOB US PP, homopolymer, contract DEL US bulk ACN, spot FOB US export Acrylic acid, glacial, spot FOB US Gulf export Propylene, polymer grade, spot DEL US Gulf pipeline 500 Mar Mar 2017 2018

132 | ICIS Chemical Business | 23-29 March 2018 www.icis.com

ICB_240818_130-141 VC MarMayJun18.indd 132 8/23/18 8:21 AM VALUE CHAIN PROPYLENE

Supply & Demand trends for propylene value chain

GLOBAL PROPYLENE SUPPLY & DEMAND GLOBAL PP SUPPLY & DEMAND

‘000 tonnes Percentage ‘000 tonnes Percentage 100,000 100 200,000 100 Total production (‘000 tonnes) Total production (‘000 tonnes) Capacity utilisation rate (%) Total capacity (‘000 tonnes) Total capacity (‘000 tonnes) Capacity utilisation rate (%) 80,000 95 160,000 95

60,000 90 120,000 90

40,000 85 80,000 85

20,000 80 40,000 80

0 75 0 75 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ Capacity peaks at 150m tonnes/year by ■ PP capacity is 81.5m tonnes/year in 2023 after a steady rise from just 105m 2018 as it increases steadily to reach 1% tonnes/year in 2013 94% 97.5m tonnes/year by 2023 dip in operating rate from ■ 20% rise in production from 2018 to reach capacity utilisation in ■ Production is 75.4m tonnes/year in 2018, 2017 to 84% in 2018 from 2023 as polypropylene 131m tonnes/year in 2023 up from just 57.5m tonnes in 2013 lows of 81% in 2013 gets tighter

GLOBAL PROPYLENE OXIDE SUPPLY & DEMAND FORECAST GLOBAL ACN SUPPLY & DEMAND FORECAST

‘000 tonnes Percentage ‘000 tonnes Percentage 20,000 100 10,000 100 Total production (‘000 tonnes) Capacity utilisation rate (%) Total production (‘000 tonnes) Capacity utilisation rate (%) Total capacity (‘000 tonnes) Total capacity (‘000 tonnes) 16,000 95 8,000 95

12,000 90 6,000 90

8,000 85 4,000 85

4,000 80 2,000 80

0 75 0 75 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ 24% increase in capacity from 2018 until ■ Capacity is stable at 7.1m tonnes 2023 to reach 14.2m tonnes/year 2017-2019 with rise to 7.7m tonnes/ 81% ■ Production rises from 9.8m tonnes to 81% year by 2023 Operating rate in 2022-23 reach 11.7m tonnes/year in 2023 lowest operating rate for ■ Production rises by 14% between 2018 following an uneven global ACN followed by and 2023 to peak at 7m tonnes decline from 88% in 2017 gentle rise to 91%

ICIS SUPPLY AND DEMAND DATABASE The ICIS Supply and Demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 23-29 March 2018 | ICIS Chemical Business | 133

ICB_240818_130-141 VC MarMayJun18.indd 133 8/23/18 8:21 AM VALUE CHAIN Butadiene Sign up to receive free ICIS updates VALUE CHAIN Butadiene by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch 36% 12% derivative derivative SBR ABS FEEDSTOCK ■ GLOBAL BD PRICES ■ GLOBAL SBR PRICES Main use is tyre products. Other uses Acrylonitrile-butadiene-styrene (ABS) is GLOBAL ABS PRICES include conveyor belts, gaskets, hoses, butadiene $/tonne, spot used in consumer electronics, toys and $/tonne, spot non-oil floor tiles, footwear and adhesives $/tonne 1,800 car components 3,000 ■ CFR NE Asia FOB ARA Europe CIF US Gulf ■ SBR 1500, FD NWE Asia styrene butadiene rubber (SBR) US ABS contracts down in Q2 linked to 4,000 General purpose, injection grade, spot CFR NE Asia ■ SBR 1502, CIF China prices to stay firm in Q2 on demand Asia BD supply constrained by spate 1,600 lower upstream, weaker Asia prices Compounding grade natural, domestic FD NWE Inj high, domestic FD US package SBR 1502, US Gulf ■ Higher feedstock butadiene (BD) costs of plant turnarounds ■ Demand in China not recovered after 3,500 2,500 1,400 to bolster SBR price ■ Regional and deep-sea cargoes Lunar New Year, more exports to US ■ Rising natural rubber price to support from Europe diverted to the US 1,200 ■ US imports and exports climbed in 3,000 2,000 SBR demand ■ CSPC’s new 180,000 tonne/year BD 2017 led by South Korea and Taiwan ■ Poor export opportunity to Asia in first plant to ease supply in May 1,000 (together 64% of total) 2,500 ■ Europe supply constrained through ■ 1,500 quarter of 2018 800 Northeast Asia consumption rose after ■ Increased Europe exports to South planned and unplanned outages and China scrap plastic ban. China demand 2,000 Africa following closure in April light feedstock cracking 600 expected to grow 5-6% this year, lower 1,000 ■ ■ European domestic demand healthy, Apr Apr 1,500 Apr Apr 2018 domestic supply in Europe is 2017 2018 than last year (11%) Apr Apr 2017 2018 more balanced than in 2017 but export focus shifts to US ■ China plants to maintain high operating 2017 2018 ■ ■ European spot prices expected to Global butadiene projects Global sbr Projects US SBR prices facing upward pressure, rates on good margins. Asia capacity set Global ABS PROJECTS remain firm and on steady uptrend Company, location Capacity* Start-up * little demand destruction from surging BD to rise on China projects Company, location Capacity Start-up Company, location Capacity* Start-up ■ SBR demand from automotive sector ■ US – snug supply form lighter CSPC (CNOOC Shell JV), 180,000 Late April ■ Europe April contracts drop on raw SRI (Michelin Chandra 120 Q2 2018 Huizhou, China LG, Guangdong, China 150 End 2018 Asri JV), Cilegon, mixed: new equipment strong, replace- cracking as crude oil rises material declines Keyuan, Guangxi, China 100 Q2 2018 Indonesia ment steady to soft ■ Steady but low demand growth in US ■ Further decreases expected for Europe ■ US producers running hard, import vol- ■ Continued need for imports of BD to in May if styrene falls Shandong Haili Chemical, 200 2018 Shandong, China umes at attractive prices, but activity thin US, crude C4 from Europe ■ European supply expected to remain healthy ■ Sellers in Europe see strengthening demand in May, other views vary 27% derivative PBR

■ ASIA PBR PRICES Polybutadiene rubber (PBR) is used for tyre treads, as well as belts, hoses, $/tonne, low-CIS grade, spot CFR SE Asia gaskets and other automotive parts, as it 2,400 resists cold temperatures better than other elastomers ■ 2,200 Asia PBR prices to stay firm in Q2 on demand ■ Higher feedstock BD costs to bolster 2,000 PBR price ■ Rising natural rubber price to support 1,800 PBR demand

1,600 COORDINATED By: Apr Apr 2017 2018 Us Butadiene John dietrich Houston Europe ABS Ciaran Tyler London Europe SBR Melissa Hurley London Europe Butadiene Nel Weddle London Asia abs Danielle Goh Singapore Asia BUtadiene & SBR Helen Yan Singapore Us abs

utadiene David Love Houston

*Capacity ’000 tonnes/year B

134 | ICIS Chemical Business | 4-10 May 2018 www.icis.com www.icis.com 4-10 May 2018 | ICIS Chemical Business | 135

ICB_240818_130-141 VC MarMayJun18.indd 134 8/23/18 8:27 AM ICB_240818_130-141 VC MarMayJun18.indd 135 8/23/18 8:27 AM VALUE CHAIN Butadiene Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

Regional prices – butaDIENE VALUE CHAIN

GLOBAL VALUE CHAIN: ASIA

$/tonne, spot 2,500 2,000 $1,595 1,500 Peak price for Asia BD before a slump to 1,000 lows of $975/tonne

PBR, low-CIS grade, CFR SE Asia ABS, general purpose, injection grade, CFR NE Asia BD, CFR NE Asia SBR non-oil 1502, CIF China 500 Apr Apr 2017 2018

BUTADIENE VALUE CHAIN: EUROPE

$/tonne 3,500 BD, spot FOB ARA Europe SBR non-oil 1500, spot FD NWE ABS, compounding grade natural, domestic FD NWE 3,000

$3,386 2,500

Top price for Europe ABS 2,000 followed by decline to $3,295 in April 2018 1,500

1,000

500 Apr Apr 2017 2018

BUTADIENE VALUE CHAIN: US

3,500 BD, spot CIF US Gulf SBR non oil 1502, spot US Gulf ABS, Inj high, domestic FD US package 3,000 2,500 $1,742 2,000 Spread between US

1,500 ABS and butadiene in April 2018 1,000

500 Apr Apr 2017 2018

136 | ICIS Chemical Business | 4-10 May 2018 www.icis.com

ICB_240818_130-141 VC MarMayJun18.indd 136 8/23/18 8:27 AM VALUE CHAIN Butadiene

Supply & demand outlook for butadiene value chain

GLOBAL BUTADIENE SUPPLY & DEMAND GLOBAL SBR SUPPLY & DEMAND

‘000 tonnes/year Percentage ‘000 tonnes/year Percentage 20,000 100 15,000 100 Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Capacity (‘000 tonnes/year) Total Capacity (‘000 tonnes/year)

16,000 95 12,000 93

12,000 90 9,000 86

8,000 85 6,000 79

4,000 80 3,000 72

0 75 0 65 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SOURCE: ICIS Supply & Demand window, ICIS Dashboard SOURCE: ICIS Supply & Demand window, ICIS Dashboard

■ Capacity peaks at 17.85m tonnes/year in ■ Production reaches 7.8m tonnes/year in 2023 from 13.8m tonnes in 2013 2018, rising from 6.9m tonnes in 2013 77% ■ Production reaches 15.3m tonnes/year in 83% ■ Capacity is 10.1m tonnes in 2018 after Trough operating rate for 2023 from 11m tonnes in 2013 Peak operating rate in steady increase from 8.6m tonnes in 2013 global BD in 2015 before 2022 after steady rise from reaching 83% in 2018 78% in 2018

GLOBAL PBR SUPPLY & DEMAND GLOBAL ABS SUPPLY & DEMAND

‘000 tonnes/year Percentage ‘000 tonnes/year Percentage 6,000 100 15,000 100 Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Capacity (‘000 tonnes/year) Total Capacity (‘000 tonnes/year)

5,000 93 12,000 93

4,000 86 9,000 86

3,000 79 6,000 79

2,000 72 3,000 72

1,000 65 0 65 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SOURCE: ICIS Supply & Demand window, ICIS Dashboard SOURCE: ICIS Supply & Demand window, ICIS Dashboard

■ Capacity rises 9% in total from 2018 to ■ ABS capacity is 11.6m tonnes/year in 2023 to reach 5.6m tonnes/year 2018 and remains stable until 2021 71% ■ Production reaches 3.7m tonnes/year in 69% ■ Production is 8.9m tonnes/year in 2018 Bottom capacity utilisation 2018, then rises steadily to 4.4m tonnes/ Operating rate for ABS in and rises to 9.8m tonnes/year in 2021 2015-2017, followed by 2013, then gradual rise to year in 2023 steady rise to 79% in 2023 peak at 85% in 2021

ICIS SUPPLY AND DEMAND DATABASE The ICIS Supply and Demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 4-10 May 2018 | ICIS Chemical Business | 137

ICB_240818_130-141 VC MarMayJun18.indd 137 8/23/18 8:27 AM VALUE CHAIN Benzene Sign up to receive free ICIS updates VALUE CHAIN Benzene by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch 51% 21% derivative derivative styrene cumene FEEDSTOCK ■ GLOBAL BENZENE ■ GLOBAL STYRENE PRICES Main uses polystyrene and expandable Around 98% of cumene is used to pro- US CUMENE polystyrene, about two-thirds of global Benzene $/tonne, spot duce phenol and its co-product acetone. $/tonne, spot consumption. Also styrene butadiene rub- CIF ARA $/tonne, contract FOB US 1,100 DDP US Gulf However, the outlook for cumene is largely 1,600 ber, acrylonitrile-butadiene-styrene and FOB South Korea dependent on the performance of phe- 1,100 styrene acrylonitrile resins. ■ Demand in Europe from down- nol’s derivatives which have resulted in ■ Supply improves in Europe as planned stream styrene to pick up once turna- 1,000 healthy growth rates for cumene. The larg- 1,000 1,400 turnaround season finishes; US imports round season ends. est phenol derivative is bisphenol-A (BPA), ■ to support supply. Crude oil at multi-year highs, little 900 which supplies the growing polycarbonate ■ Demand picks up in summer for con- impact on benzene due to long supply. (PC) sector. 900 struction; packaging flat. ■ Prices expected to strengthen from ■ US production will likely remain at levels 1,200 800 FOB US ■ June’s Europe backwardation suggests end of Q2. designed to closely match consumption. 800 FOB South Korea ■ FOB Rotterdam prices could correct; Q3 outlook unclear. US benzene prices softened over the Structurally, supply will remain long given all origins ■ US restricted all year with two plants first quarter of 2018 on lengthening 700 downstream capacity rationalisation in 1,000 Jun Jun 700 Jun Jun down in January and back on line by May. global supply 2017 2018 the past three to four years. Jun May 2017 2018 2017 2018 ■ US demand strong due to peak season ■ US contract prices see five consecu- ■ Demand is expected to grow slightly in benzene projects styrene projects in EPS and ABS. tive months of decreases after hitting the coming months, but only domestically. ■ a 2017 peak in December. Company, location Capacity* Start-up Company, location Capacity* Start-up Asia to see expansion, mostly in China, Export opportunities for US cumene will be ■ First-quarter US consumption sub- Nghi Son Refinery and 250 Jun-18 Anhui Hao Yuan 260 2018 which reduces reliance on imports. limited by ample supply in other regions. ■ China antidumping on South Korea, US, dued amid a number of downstream Petrochemicals, Thanh Chemicals, Fuyang, Hoa Province, Vietnam Anhui, China Taiwan since February. styrene shutdowns. Dragon Aromatics, Fujian 520 H2 2018 ■ ■ Long supply in Asia to persist in the YNCC, China 80 H1 2018 New Asia downstream capacities Province, China near term; inactive east-west arbitrage Zhejiang Petrochemical 1,200 2018/19 planned for products like ABS. Sichuan Petrochemicals, 130 H2 2018 phase 1, Zhousan, worsens supply glut. Sichuan Province, China Zhejiang, China ■ Weak demand in China, Taiwan and Maoming Petrochemicals, 100 End May Maoming Shihua, Beihai, 250 2018-19 southeast Asia. Guangdong Province, 2018 Guangxi, China China Fujian Gulei Chemicals, 600 2018-19 12% Zhangshou. Fujian, China derivative Abel Chemicals No. 2 250 2019 line, Taixing, Jiangsu, Huizhou, China Cyclohexane

US AND EUROPE CYCLOHEXANE ■ The vast majority of cyclohexane (CX) is used to produce nylon intermediates cap- $/tonne, contract rolactam (capro) and adipic acid, which are 1,250 in turn made into nylon 6 and nylon 6,6. ■ Northeast Asia remains the largest con-

1,150 sumer of CX, driven mostly by China, fol- lowed by Europe and then the US. ■ Consolidation in the European market 1,050 over the last two years has led to structur- al undersupply, with imports from the US 950 and Middle East making up for the re- Contract duced capacity. NWE ■ Production issues in various units in the 850 Jun Jun US and Europe have led to tightening sup- 2017 2018 ply in Europe. COORDINATED By: ■ cyclohexane projects Downstream nylon 6 and 6,6 demand is global lead Company, location Capacity* Start-up expected to increase globally, especially in vasiliki parapouli London benzene Hengshen Technology, 420 2018 the engineering plastics sector, which is China likely to increase demand for CX, although clive ong singapore competing feedstock phenol is likely to zachary moore houston Sinopec Baling Pc, China 230 2018 styrene Shanxi Jintaoyuan, China 210 2019 make up much of the additional demand. deborah lee singapore ■ Abel Chemical 110 2019 In Europe, demand is expected to re- david love Houston main broadly stable with 2017 levels. Fujian Jinjiang Pc Comp. 220 2020 cumene Lim, China john dietrich houston CYCLOHEXANE Hengshen Technology, 630 2020 ciaran tyler london China

*Capacity ’000 tonnes/year Benzene

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ICB_240818_130-141 VC MarMayJun18.indd 138 8/23/18 8:40 AM ICB_240818_130-141 VC MarMayJun18.indd 139 8/23/18 8:40 AM VALUE CHAIN Benzene Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

Benzene value chain – regional breakouts

BENZENE VALUE CHAIN – ASIA

$/tonne, spot 1,600 Benzene, spot FOB South Korea Styrene, spot FOB South Korea

1,400

1,200 $1,510 Peak styrene price in 1,000 June 2018 from lows of $1,082/tonne a 800 year earlier

600 Jun Jun 2017 2018 NOTE: ICIS does not report Asia cumene or CX prices

BENZENE VALUE CHAIN – EUROPE

$/tonne 1,600

1,400

19% 1,200 Jump in Europe CX in

December following steep 1,000 rise in benzene prices

800

Cyclohexane, contract ex-works NWE Styrene, spot FOB Rotterdam Benzene, spot CIF ARA 600 Jun Jun 2017 2018 NOTE: ICIS does not report Europe cumene prices

BENZENE VALUE CHAIN – US

$/tonne 1,800 Cumene, contract FOB US Benzene, spot DDP US Gulf Cyclohexane, contract FOB US Gulf Styrene, spot FOB US 1,600 1,400 $983 1,200 Peak benzene price in

1,000 the period, from earlier lows of $739/tonne 800

600 Jun Jun 2017 2018

140 | ICIS Chemical Business | 15-21 June 2018 www.icis.com

ICB_240818_130-141 VC MarMayJun18.indd 140 8/23/18 8:34 AM VALUE CHAIN Benzene

Supply and demand forecast for benzene value chain

GLOBAL BENZENE SUPPLY AND DEMAND GLOBAL STYRENE SUPPLY AND DEMAND

‘000 tonnes/year Percentage ‘000 tonnes/year Percentage 100,000 90 50,000 100 Total Production (‘000 tonnes) Capacity Utilisation Rate (%) Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Capacity (‘000 tonnes) Total Capacity (‘000 tonnes/year) 80,000 84 40,000 95

60,000 78 30,000 90

40,000 72 20,000 85

20,000 66 10,000 80

0 60 0 75 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ 14% rise in global benzene capacity from ■ 13% hike in styrene capacity globally from 2018 to 2023 to reach 78m tonnes/year 2018 to 2023 to reach 39.3m tonnes/year 73% ■ Production rises by just 13% during the 83% ■ Only 10% increase in production over the Flat operating rate globally same period to reach 56m tonnes/year Operating rate dips in same period, helping to explain the drop in from 2016-2019, with 2022 from 87% peak operating rates further drops beyond that between 2015 and 2018

GLOBAL CUMENE SUPPLY AND DEMAND GLOBAL CYCLOHEXANE SUPPLY AND DEMAND

‘000 tonnes/year Percentage ‘000 tonnes/year Percentage 25,000 100 15,000 90 Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Production (‘000 tonnes/year) Capacity Utilisation Rate (%) Total Capacity (‘000 tonnes/year) Total Capacity (‘000 tonnes/year) 20,000 95 12,000 84

15,000 90 9,000 78

10,000 85 6,000 72

5,000 80 3,000 66

0 75 0 60 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SOURCE: Supply & Demand Window, ICIS Dashboard SOURCE: Supply & Demand Window, ICIS Dashboard

■ Just a 6% rise in capacity from 2018 to ■ No new capacity planned globally from 2023 to reach 19.7m tonnes/year 2018 to 2021 – flat at 10m tonnes/year 79% ■ Production increases by 12% over the 70% ■ However, production rises by 19% over the operating rate bottoms out same period, leading to a tightening in ca- Lowest operating rate same period, tightening the market consid- during 2019-2020 before in the period followed by pacity utilisation erably and pushing up operating rates recovering quickly to 84% peak of 81% in 2021

ICIS SUPPLY AND DEMAND DATABASE The ICIS Supply and Demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 15-21 June 2018 | ICIS Chemical Business | 141

ICB_240818_130-141 VC MarMayJun18.indd 141 8/23/18 8:34 AM VALUE CHAIN Paraxylene Sign up to receive free ICIS updates VALUE CHAIN Paraxylene by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch 65% FEEDSTOCK 97% derivative Paraxylene (PX) derivative polyester fibre derivative/FEEDSTOCK ■ PTA is primarily used in polyester fibre and PET resin for packaging, ■ About 97% of PX demand comes from GLOBAL PARAXYLENE bottle and film applications. ■ the polyester chain via intermediate PTA. PURIFIED Polyester stable fibre (PSF) is derived ASIA POLYESTER FIBRE ■ Europe prices based on raw material $/tonne, spot The polyester demand breakdown is 65% from the polymerisation of PTA and MEG, or TEREPHTHALIC plus conversion fee lagged behind spot from PET fibre chips, as is polyester $/tonne, FOB NE Asia 1,100 from fibre, 30% from PET resin and the FOB Rotterdam CFR China Main Ports in H1 2018. filament yarn (PFY). Partially oriented yarn 1,600 FOB US Gulf rest from film and other plastic end-uses. ACID (PTA) ■ Exceptional tightness in Europe (POY) is derived from melting and spinning 1,000 ■ Europe and US spot generally a netback 1,500 through H1 2018. Suppliers may seek from Asia, follow Asia price movements. fibre chips.PO Y is then extruded and GLOBAL PTA to increase margins in 2019 contracts. 1,400 900 ■ Europe spot availability limited by tight texturised into drawn texturised yarn (DTY). ■ Globally tight market should PSF is spun into yarn, then woven into fabric 1,300 supply conditions and a large proportion $/tonne 800 lengthen in H2 2018, as new for apparel, upholstery and curtains. It is of business is covered by contracts. 1,200 1,200 Spot CFR China Main Ports capacities start up in Asia, PTA plant ■ Europe supply to tighten when Indora- also used as stuffing for toys and pillows Contract DEL US 1,100 700 1,100 in Portugal reopened in July. and in bedding and furniture. ma PTA plant in Sines, Portugal, restarts Contract FD NWE (Europe) ■ US contract and spot prices driven up ■ in July (largely idle since 2014). Asia polyester demand growth will remain 1,000 600 1,000 by tight supply, higher upstream costs moderately strong and will largely be driven PSF 1.4D POY 150D DTY 150D Jul Jul ■ Tight US supply easing after BP outage 900 2017 2018 and firm crude. Jul Jul in Q2; downstream capacity to increase 900 by growth in the China market with new pol- ■ US supply tightened amid BP acetic 2017 2018 with FENC PET resin plant restart. yester capacities coming onboard in China. PX PROJECTS 800 acid force majeure. ■ ■ Price difference between Asia PX and Asia polyester operating rates largely Company, Location Capacity* Start-up ■ US downstream demand to increase stabilised at above 80% in 2017, expected POLYESTER FIBRE PROJECTS naphtha narrows to around $300-350/ 700 Fuhaichuang PC, China 1,600 Q3/Q4 with FENC PET resin plant restart. to be maintained in 2018. Company, Location Capacity* Start-up 2018 tonne on oversupplied conditions. 600 ■ Asia tight market to ease, with ■ Asia polyester inventory levels have been Yizheng, China (PSF) 100 H2 2018 ■ China to require around 1.3-1.4m Jul Jul Hengli PC, China 4,000 H1 2019 majority of units back in operations. Xin Feng Ming, China (PFY) 300 H2 2018 tonnes/month of imports, until new local 2017 2018 managed at moderately low levels in 2018 Zhejiang PC, China 4,000 H1 2019 ■ China polyester demand growth Tongkun, China (PFY) 300 H2 2018 units start up. which have lent support to polyester prices Saudi Aramco, Saudi 800 Q2 2019 PTA PROJECTS estimated at 6-7% for 2018. and kept margins at generally healthy levels. Yizheng, China (PSF) 100 H2 2018 Arabia ■ Company, Location Capacity* Start-up Non-China PTA margins positive, HuaHong Chemical Fibre, 100 H2 2018 China (PSF) Sichuan Chengda, China 1,000 end 2018 keeping run rates at high levels. ■ Weakening rupee, credit tightening Xin Feng Ming, China (PFY, 300 H2 2018 JBF, India 1,250 end 2018 in India limits demand growth. fibre chip) Xinfengming, China 2,200 Q3 2019 Tongkun, China (PFY) 600 H2 2018 Hengli, China 2,500 Q4 2019 30% Hua Xi Cun, China (PSF) 200 H2 2018 CC Polymers, US 1,300 Q4 2020 derivative Lu Yu, China (fibre chip) 100 H2 2018 POLYETHYLENE TEREPHTHALATE (PET) ■ GLOBAL PET PET can be made into a resin, fibre or film. Largest outlet is synthetic fibres $/tonne, bottle grade followed by bottle resin. Film is used in

1,700 Domestic FD Europe electrical applications and packaging. Spot FOB China 1,600 ■ Europe PX and MEG drive PET price Domestic SBM DEL US when market is balanced. 1,500 ■ Exchange rates, global supply/demand

1,400 determine PET flows into Europe. 1,300 ■ Security of supply in Europe paramount 1,200 after period of availability difficulties, 1,100 mostly stemming from PTA outages. ■ 1,000 New trade restrictions in Europe unlikely to be imposed in medium term. Coordinated by: 900 Jul Jul ■ US prices pressured higher amid Global Lead 2017 2018 reduced domestic production capacity on Amanda Hay Houston PET PROJECTS M&G bankruptcy, import probe. Contributors Samuel Wong Singapore Company, Location Capacity* Start-up ■ US supply relief expected on FENC Hazel goh Singapore Far Eastern 400 Jul 2018 restart of former M&G project. eric su Singapore Petrochemical, Vietnam ■ Asia PET driven up by global tight supply Nick cleeve London CC Polymers, US 1,100 Q1 2020 and producers achieving good margins. Caroline murray London ■ New and restarting plants in Asia soften PX, PTA Supply & Demand Michele Bossi Vergiate buying sentiment. PET, Polyester Supply & Demand Susan Mair London

*Capacity ’000 tonnes/year Paraxylene

142 | ICIS Chemical Business | 10-16 August 2018 www.icis.com www.icis.com 10-16 August 2018 | ICIS Chemical Business | 143

ICB_240818_142-145 VC Aug18.indd 142 8/23/18 8:51 AM ICB_240818_142-145 VC Aug18.indd 143 8/23/18 8:50 AM VALUE CHAIN Paraxylene Sign up to receive free ICIS updates by email, tailored to the markets you are interested in. Visit icis.com/keep-in-touch

regional prices – paraxylene value chain

ASIA PARAXYLENE CHAIN

$/tonne 1,500 PX, spot CFR China Main Ports PTA, spot CFR China Main Ports PET, bottle grade, spot FOB China Polyester staple bre 1.4D, spot FOB NE Asia 1,200 $1,235 52-week high for Asia

900 polyster staple fibre prices, 22% higher from their low

600 21 Jul 13 Jul 2017 2018

EUROPE PX CHAIN

$/tonne 2,000

PX, spot FOB Rotterdam PTA, contract FD NWE (Europe) PET, bottle grade, domestic FD Europe 34% 1,500 Surge in Europe PET price from 52-week low of $1,212 to the 1,000 recent $1,619

500 21 Jul 13 Jul 2017 2018

US PARAXYLENE CHAIN

$/tonne 2,000

PX, spot FOB US Gulf PTA, contract DEL US PET, bottle grade, domestic SBM DEL US 1,500 $1,111 52-week high for US

1,000 PTA prices, up 18% from their low

500 21 Jul 13 Jul 2017 2018

144 | ICIS Chemical Business | 10-16 August 2018 www.icis.com

ICB_240818_142-145 VC Aug18.indd 144 8/23/18 8:50 AM VALUE CHAIN Paraxylene

Supply & Demand outlook for paraxylene value chain

GLOBAL PARAXYLENE SUPPLY & DEMAND GLOBAL PTA SUPPLY & DEMAND

‘000 tonnes Percentage ‘000 tonnes Percentage

100,000 100 100,000 100 Total production (‘000 tonnes) Capacity utilisation rate (%) Total production (‘000 tonnes) Total capacity (‘000 tonnes) Total capacity (‘000 tonnes) Capacity utilisation rate (%) 80,000 93 90,000 95

60,000 86 80,000 90

40,000 79 70,000 85

20,000 72 60,000 80

0 65 50,000 75 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021

SOURCE: ICIS Supply & Demand Database SOURCE: ICIS Supply & Demand Database

■ Paraxylene production to rise steadily to ■ PTA production to rise to around 77m over 52m tonnes by 2021 tonnes by 2021 70% ■ Paraxylene capacity to jump in 2019, 80% ■ PTA capacity to increase at a much higher Projected operating rate by and continue rising to almost 75m tonnes Projected operating rate by rate, especially in 2018, reaching almost 2021, falling precipitously 2021 after peaking at 89% by 2021 97m tonnes by 2021 from 86% in 2018 in 2017

GLOBAL PET SUPPLY & DEMAND GLOBAL POLYSTER FIBRE SUPPLY & DEMAND

‘000 tonnes Percentage ‘000 tonnes Percentage

150,000 100 100,000 100 Total production (‘000 tonnes) Capacity utilisation rate (%) Total production (‘000 tonnes) Capacity utilisation rate (%) Total capacity (‘000 tonnes) Total capacity (‘000 tonnes) 120,000 90 80,000 93

90,000 80 60,000 86

60,000 70 40,000 79

30,000 60 20,000 72

0 50 0 65 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021

SOURCE: ICIS Supply & Demand Database SOURCE: ICIS Supply & Demand Database

■ PET production to grow strongly to reach ■ Polyster fibre production to rise nearly 106m tonnes by 2021 consistently to over 69m tonnes by 2021 71% ■ PET capacity to increase at a slower pace, 91% ■ Polyester fibre capacity to increase much Projected operating rate by especially after 2018, to around 124m Projected operating rate by more gradually after 2018, reaching almost 2021 after multiple years 2021 after multiple tonnes by 2021 76m tonnes by 2021 of steady gains consecutive years of gains

ICIS SUPPLY AND DEMAND DATABASE The ICIS Supply and Demand database provides a comprehensive picture of global supply and demand for the full spectrum of products from oil to chemical intermediates. Its range of product selection options help explain historical price movements, changes in company ownership and illustrates changing supply patterns in the future. It allows you to refine, sort, slice and export data, or create graphs and charts to illustrate your findings more easily and support your strategic planning. For more information or to request more information, please visit www.icis.com/supplydemand

www.icis.com 10-16 August 2018 | ICIS Chemical Business | 145

ICB_240818_142-145 VC Aug18.indd 145 8/23/18 8:51 AM The 3rd ICIS Pan American Oleochemicals Conference

October 25 - 26, 2018 // Fontainebleau, Miami Beach // USA

Analysing the role of the Pan American market within shifting dynamics in global oleochemicals supply and demand

KEY TOPICS FOR 2O18 CONFIRMED SPEAKER INCLUDE:

Analysing trends in US glycerine and what Deborah Baldwin, Product Manager - Glycerine, this means for the market going forward Vantage Group Looking at the role of South American Ravi Shaheed, Business leader, Acme- glycerine in the Pan American region Hardesty Co End-Users and the role they play within Dan Strechay, US Representati ve, Outreach and the industry Engagement, RSPO Updates on feedstocks and their Joe Emuang, Vice President, Acidchem (USA) implicati ons on the market Caroline Midgley, Director of Bio-based Overview of oleochemical trends Chemicals Research, LMC Internati onal

THE LAST OVER OVER CONFERENCE 12 100 80 COUNTRIES IN NUMBERS: ATTENDEES COMPANIES

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For more details, contact Elizabeth Bailey For more details, contact EPCA The 2nd ICIS Indian Surfactants at ACC Tel: +32 2 741 86 60 Conference Tel: +1 202 249 6605 Email: [email protected] 11-12 October Email: [email protected] Mumbai, India polyurethane.americanchemistry.com www.epca.eu Tel: +44 20 8652 4627 Email: [email protected] www.icisevents.com/indiansurfactants Training Global LNG Markets & Pricing 4 September Singapore Advanced Purchasing Skills 4-5 September Boston, US Petrochemicals: An In-Depth Introduction 10-11 September Fundamentals of Petrochemical Plant 38TH LATIN AMERICAN 13TH ANNUAL Economics & Forecasting 12 September Fundamentals of the Polymers Business PETROCHEMICAL ANNUAL GPCA FORUM 13-14 September Surfactants Business Essentials MEETING 18 September 26-28 November 2018 Amsterdam, the Netherlands Madinat Jumeirah, Dubai, UAE 10-13 November 2018 Petrochemicals: An In-Depth Introduction Grand Fiesta Americana Coral Beach 17-18 September The theme of this year’s meeting Fundamentals of Petrochemical Plant Hotel, Cancun, Mexico is “Executing transformation Economics & Forecasting and investing in growth”. It will 19 September APLA’s Annual Meeting is a focal point Fundamentals of the Polymers Business for leaders and decision-makers in the build on the 2017 theme of the 20-21 September Mumbai, India petrochemical and chemical industry imperative for transformation in Latin America. Over the years it has in the chemical industry and Advanced Purchasing Skills 9-10 October established itself as the venue in which examine strategies, case studies London, UK to develop and consolidate business, and the steps companies exchange knowledge and make valuable can take to enhance their Surfactants Business Essentials contacts, as well as learn about market 10 October transformational journey. Mumbai, India trends, challenges and solutions. For more details, contact Jill Raine at Tel: +65 6780 4809 Email: [email protected] For more details, contact APLA co-organiser ICIS Tel: +54 11 4325 1422 Tel: +44 20 852 3233 For more information: Email: [email protected] Email: [email protected] icis.com/conferences and www.reunionesapla.lat www.gpcaforum.net icis.com/training

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