Philippines’ JG Summit to shut petrochemical assets

Spanish Market: LPG, Petrochemicals
28/01/25

Philippine petrochemical producer JG Summit is expected to shut all its petrochemical assets indefinitely after its recent decision to halt operations at its petrochemical complex until the end of the first quarter of 2025.

The producer formally informed its employees on potential layoffs in a townhall meeting on 24 January.

Operations at Peak Fuel — the producer's wholesale LPG trading arm — will continue to cater for domestic fuel demand.

The producer plans to shut its naphtha cracker and downstream polyethylene (PE) and polypropylene (PP) plants in mid-December 2024 to end-March 2025 because of profitability concerns, it announced in November.

JG Summit operates a naphtha cracker, which can produce up to 480,000 t/yr of ethylene and 240,000 t/yr of propylene. It also operates a 70,000 t/yr butadiene extraction unit and an aromatics unit with output capacity of up to 90,000 t/yr of benzene, 50,000 t/yr of toluene and 30,000 t/yr of mixed xylenes.

Its downstream polymer assets include a 300,000 t/yr PP plant, a 160,000 t/yr linear low-density polyethylene (LLDPE) plant, a 160,000 t/yr high-density polyethylene (HDPE) plant and its newest 250,000 t/yr PE plant, which only began operations around July/August 2024.

Its 300,000 t/yr PP plant has been shut since late December 2024-early January 2025. Its 570,000 t/yr PE capacities will be shut by the end of this month. The producer will continue to supply polymer resins to its domestic customers until its inventory is depleted.

Philippines consumed around 170,000 t/yr of LLDPE, 240,000 t/yr of HDPE and around 440,000 t/yr of PP in 2024, according to Argus' estimates. The nation will be fully reliant on PE and PP imports after the indefinite closure of JG Summit's petrochemical complex.

Challenges for SE Asian producers

Southeast Asian polymer producers have been facing strong competition from imported resins and struggled with weak profitability since 2022.

PE and PP capacity additions in China since 2020 have led to oversupply of resins and strong global competition, weakening polymer production margins.

Chinese producers have been exporting PP to the global markets since 2021. The southeast Asian market is one of its main export outlets. China also achieved a PP self-sufficiency rate of around 95pc in 2024, up from 93pc in 2023, according to Argus estimates.

A lack of feedstock cost advantage when compared with producers in the Middle East and US led to weak margins for southeast Asian producers as they compete to retain regional market shares.

The indefinite shutdown by JG Summit — the sole PE producer in the Philippines — is expected to further tighten the availability of duty-free PE and PP supplies in the domestic market and the wider southeast Asian market in 2025.

Philippine refiner Petron has kept its 160,000 t/yr PP plant off line throughout 2024 and the plant will remain shut for an unspecified period, likely because of weak margins.

Vietnam's Long Son shut its new petrochemical complex in Ba Ria-Vung Tau in mid-October 2024 because of similar profitability concerns. The producer is expected to halt operations at its polymer plants until at least the end of first-half 2025 and anticipates slow margin recovery. But the restart of these plants will depend largely on market conditions, according to market sources.

Malaysian petrochemical producer Lotte Chemical Titan has also shut its No. 1 290,000 t/yr naphtha cracker and likely reduced production of selected PE and PP grades from mid-December 2024 to mitigate production losses. The restart timeline is unclear.

By Yee Ying Ang

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21/03/25

US ethane output, demand at records in 2024: EIA

Houston, 21 March (Argus) — US ethane production rose to a record last year on higher prices relative to natural gas, while exports and domestic consumption climbed to new highs on increased petrochemical demand, the US Energy Information Administration (EIA) said Thursday. US ethane output in 2024 rose by 6.8pc to an all-time high of 2.83mn b/d, up from 2.65mn b/d in 2023, according to EIA data. Most of the production increase came from the Permian basin, with Texas inland output increasing by 139,000 b/d to a record 1.58mn b/d and New Mexico refining districts rising by 9,000 b/d to 191,000 b/d, also a record. In the US east coast, the Appalachian No. 1 refining district, comprising much of the Marcellus shale formation in Pennsylvania and West Virginia, increased production by 37,000 b/d to a record 327,000 b/d, accounting for 12pc of total US production, up from 11pc in 2023. The production hike resulted from higher rates of ethane recovery from the natural gas stream, EIA said. Recovery was incentivized as ethane prices strengthened relative to natural gas. During 2024, Mont Belvieu, EPC ethane's premium to its fuel value — based on day-ahead natural gas at the Waha hub in west Texas — averaged 17.91¢/USG, up from 13.64¢/USG in 2023, even as outright ethane prices averaged 5.55¢/USG lower at 19.02¢/USG, according to Argus data. The increase in Permian ethane recovery resulted in large part from negative Waha gas prices for large swaths of the year. US consumption rises 8.4pc Product supplied of ethane, a measure of domestic consumption, rose last year by 8.4pc to a record 2.33mn b/d, up from 2.15mn b/d in 2023, according to EIA data. Consumption rose to records in the US east coast and Gulf coast regions, driven entirely by higher cracker operating rates, as no new ethane crackers came online during the year. Ethane consumption in the US Gulf coast rose by 109,000 b/d to 2.1mn b/d, while consumption in the US east coast nearly tripled to 103,000 b/d, up from 37,000 b/d in 2023. The east coast surge was driven by Shell's 1.6mn t/yr Monaca, Pennsylvania, ethane cracker ramping up production after coming online near the end of 2022 . Exports climb 4.5pc US ethane exports last year rose by 4.5pc to a record 492,000 b/d, up by 21,000 b/d from 2023, the EIA reported. China took the bulk of shipments and saw the largest increase in imports, spurred by increased petrochemical demand and ramped-up construction of import infrastructure. The US exported 227,000 b/d of ethane to China, up by 14,000 b/d from 2023. Ethane exports to Canada rose to 76,000 b/d, up by 11,000 b/d from 2023, while exports to India fell by 9,000 b/d to 65,000 b/d. Ethane shipments to Mexico averaged 21,000 b/d last year, up from 17,000 b/d in 2023. The Asia-Pacific region last year took nearly 60pc of US ethane exports, followed by the Americas at just over 20pc and Europe at just under 20pc. The Americas were broadly responsible for most of the growth in imports from the US year-on-year, with receipts up by 17,000 b/d and the proportion of the total rising for the first time since 2020. The proportion of exports going to the Asia-Pacific region fell for the first time since 2018, in part because attacks in the Red Sea slowed exports to India during the first half of 2024. Ethane exports from the US are poised to rise further in the next three years, as Enterprise Products' new Neches River terminal in Texas, which will be able to ship up to 360,000 b/d of ethane or propane, is scheduled for operations in starting in 2026. Energy Transfer's Marcus Hook, Pennsylvania, export terminal, which can ship 75,000 b/d of ethane, is adding refrigeration to boost its capacity to 90,000 b/d. By Joseph Barbour Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Commission to engage on future of EU chemicals industry

20/03/25

Commission to engage on future of EU chemicals industry

London, 20 March (Argus) — The European Commission said it will actively engage in strategic dialogue with the European chemicals industry to help it manage high energy prices and the costs of modernisation and transition. Calls for action and support have grown as more plant closures are announced and many businesses and assets are considered at risk. "I believe we will be able to develop a plan. It will take the necessary form, though I have no announcements to make at this stage," Stephane Sejourne, the EU commissioner responsible for prosperity and industrial strategy, told Argus. "We are starting at the level of the commissioners. That being said, the industry will, of course, be present, and we intend to develop sectoral plans with all stakeholders. We will need to examine with stakeholders how we can modernise this sector and invest in it, given the shrinking margins caused by international competition and the high energy prices in Europe," he said. Sejourne said the plan is to "define the key challenges and the possible shape of the relevant legislative texts, while maintaining the same approach as with other sectors". Business plans will be the priority of the discussions, rather than new sectoral regulations, he said, adding that the aim is to enhance the competitiveness of the sector. "Simplification, harmonisation, modernisation and financing will take precedence over regulation," he said. Sejourne said he has discussed with EU ministers "the urgent need to modernise steam crackers, which are over 40 years old in Europe". These units are "environmentally inefficient, underperforming and do not enhance the sector's competitiveness", he said. The chemicals industry will be "crucial" for other industries, Sejourne said. "As part of the reindustrialisation efforts that have been launched and the announcements made by the commission, we will need the chemical industry." Critical Chemicals Act Sejourne's comments came after eight European countries called for measures to support the production of key chemicals in the EU as the bloc faces pressure from rising costs and competition. The proposed "EU Critical Chemicals Act" would support the development and decarbonisation of existing chemical plants while fostering alternative carbon sources, the eight countries said. Signatory countries — the Czech Republic, Hungary, Italy, the Netherlands, Romania, Slovakia, Spain and France — highlighted 18 molecules as key to European strategic value chains, five of which they labelled as critical. The list includes ethylene, propylene, butadiene, benzene, toluene, xylene, phenol, styrene, ammonia, methanol, chlorine, sodium hydroxide, sulphur, silicon, sodium carbonates, hydrofluoric acid, methionine and lysine. Those singled out as critical were ethylene, butadiene, benzene, ammonia and sodium carbonates. The signatories welcomed the EU's recent "Clean Industrial Deal", a plan to turn decarbonisation into a driver of EU growth, but argued that the chemical industry needs support to successfully decarbonise. Full decarbonisation of a single steam cracker can cost more than €1bn, highlighting the scale of investment required, the eight countries said. The European Council adopted the Critical Raw Materials Act in March 2024, which aims to protect supply chains for rare metals. Similar measures are needed for the chemical industry because they are essential to core industries including defence, health and construction, argued the signatories. Plant closures have accelerated in Europe. Last year, ExxonMobil closed its Gravenchon cracker in France and Sabic closed one of its two crackers in Geleen in the Netherlands. Eni's Versalis subsidiary will close its two remaining crackers in Italy this year. And US firm Dow has idled one of its three crackers in Terneuzen in the Netherlands. At least three other crackers in the region have been put for sale by their owners. Besides steam crackers, many more chemical and downstream derivatives units have either been closed, are operating at low rates or are up for strategic review or sale. By Alex Sands Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US ethane cracking margins at 10-month low

20/03/25

US ethane cracking margins at 10-month low

Houston, 20 March (Argus) — US ethane cracking margins have fallen to the lowest in 10 months on rising ethane cash costs and falling spot ethylene prices at Mont Belvieu, Texas, according to an Argus generic model. Ethane cracking margins on Wednesday fell to 10.5¢/lb, the lowest level since May 2024. Margins have steadily narrowed from a peak of 24.75¢/lb two months ago, when a freeze took several US Gulf coast crackers off line and spiked ethylene prices to 35.25¢/lb in a trade at the Enterprise Products Partners (EPC) system at Mont Belvieu. The decline in cash margins largely follows falling domestic ethylene spot prices as US crackers have incrementally restarted and ramped up production since mid-January. US spot EPC ethylene traded Wednesday at 24.75¢/lb, the first trade below 25¢/lb since late November. The more than 10¢/lb decline in ethylene spot prices does not fully account for eroding ethane cracking margins. Ethane costs have risen by more than a third through February and into March, hitting an 18-month high last week of 31.1875¢/USG. Higher ethane costs have largely followed higher natural gas prices at the benchmark Henry Hub, which hit a two-year high at $4.491/mmBtu on 10 March stemming from tightening US gas inventories. Natural gas prices serve as a price floor for ethane because it is separated from raw natural gas during processing. The 60pc drop in ethane cracking margins over the past two months is unlikely to affect ethane-based ethylene production, as margins of at least 4-5¢/lb are generally still profitable for cracker operators. US ethane cracking margins in 2024 averaged 14-15¢/lb, according to Argus data. Ethane structurally remains the most advantaged feedstock on the US Gulf coast and was last surpassed briefly by a competing feedstock more than 18 months ago. Propane cracking margins are currently negative and the butane cracking margin has ranged from 3.5-8¢/lb this month. By Michael Camarda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Turkish lira at all-time low against dollar

19/03/25

Turkish lira at all-time low against dollar

London, 19 March (Argus) — Turkey's lira currency fell to record lows against the US dollar today, after the arrest of Istanbul's mayor provoked concern about instability. The depreciation could cause imports of dollar-denominated commodities to become more expensive, although reaction was mixed across markets. The lira went as low at 40/$1 in early trading, from below 37/$1 on Tuesday 18 March, before easing to around 38/$1 later in the day. The lira has been slowly depreciating against the dollar for many years, but the sharp fall today came after Ekrem Imamoglu, one of President Recep Tayyip Erdogan's main political rivals, was held on suspicion of corruption and aiding a terrorist organisation. Turkey is a significant importer of natural gas, crude and LPG, as well as coal and petcoke, although demand for many commodities will be muted currently because of the Islamic fasting month of Ramadan. Early indications from the coal and petcoke markets were that all import trades had halted as the lira hit the record low. In polymers markets the focus is on whether demand recovers after Ramadan ends on 30 March. But a trading source in Turkey said the fall is not enough for "massive changes" to imports of oil products. The OECD forecasts headline inflation in Turkey at 31.4pc this year, the highest among its members, easing to 17.3pc in 2026. The IMF has forecast Turkey's economy will grow by 2.6pc this year, after an expansion of 2.7pc in 2024. By Ben Winkley, Aydin Calik, Joseph Clarke, Amaar Khan and Dila Odluyurt Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Dangote suspends refined product sales in naira

19/03/25

Dangote suspends refined product sales in naira

London, 19 March (Argus) — Nigeria's independently-owned 650,000 b/d Dangote refinery has "temporarily halted" the sale of petroleum products in the country's naira currency, according to a statement seen by Argus today. The decision was taken to "avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars", the statement read. Dangote said refined product sales in naira "have exceeded the value of naira-denominated crude" the refinery has received, and it will resume naria-denominated product sales as soon as it receives a naira-denominated crude cargo. Nigeria's state-owned NNPC recently said it is in negotiations with Dangote refinery about extending a local currency crude sales arrangement. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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