Latest market news

Petronas polymer delay boosts southeast Asian PP prices

  • : Petrochemicals
  • 19/04/18

An expected delay to Malaysian state-owned refiner Petronas' new 900,000 t/yr polypropylene (PP) unit is likely to support southeast Asian prices in April and May.

The explosion at the 140,000 b/d atmospheric residue desulphurisation unit at Petronas' Pengerang Integrated Complex (PIC) on 12 April is likely to delay on-specification polymer production.

PP prices firmed $20-30/t on the prospect of the delayed start-up. Raffia homopolymer traded at $1,140-1,160/t cfr southeast Asia and $1,110-1,140/t cfr China this week, according to Argus data.

The PP plant, with sizeable capacity, was initially expected to start supplying the market before the Muslim fasting month of Ramadan begins in early May, when operations in Malaysia are expected to slow down.

Major traders now expect polymer operations to hit full or near-full capacity in the third quarter or early fourth quarter this year.

Petronas is still expected to gradually ramp up test runs at its PP facility and may feed the plant with propylene sourced regionally.

Southeast Asian producers are expected to buy more supplies from the Middle East to meet the shortfall.

The Petronas delay adds to price hikes this year, most of which have been supply-led.

Asia-Pacific producers are planning a spate of shutdowns later in April and in May. India's Mangalore Refinery and Petrochemicals (MRPL) will shut its 440,000t/y PP plant for a scheduled turnaround this week. The planned shutdown is expected to last for around 45 days.

China, Asia's main import market, has three major scheduled shutdowns in the next few weeks, at Sinopec Luoyang, Zhongjing and Shenhua Ningxia. The affected units have a combined capacity of 1.92m t/y and the shutdowns are expected to tighten supply significantly.

PP demand in key southeast Asian hubs such as Thailand, Vietnam and Indonesia remains sluggish because of weak demand in the packaging and agri sectors.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/09/17

Duqm plans key to Oman’s LPG export outlook

Duqm plans key to Oman’s LPG export outlook

The revival of a major petrochemical project could cap exports despite rising production, writes Ieva Paldaviciute Dubai, 17 September (Argus) — Production from the new Duqm refinery has boosted Oman's LPG output this year, and driven an 89pc year-on-year rise in exports to 371,000t for the first eight months of 2024, according to data from analytics firm Kpler. But plans for new petrochemical facilities linked to the refinery could put a cap on export capacity in the near future. Oman's LPG output has more than doubled within the past decade, from 420,000t (13,400 b/d) in 2015 — the earliest year for which energy and minerals ministry data are available — to around 990,000t last year. That is due in large part to the start-up of state-owned OQ's Salalah LPG extraction plant in the southern Dhofar governorate. The first-of-its-kind gas treatment project in Oman and now contributes close to 300,000 t/yr to the country's LPG output. The majority of Oman's LPG production now comes from downstream facilities operated by OQ — around 62pc of last year's output came from its 198,000 b/d Sohar and 106,000 b/d Mina al Fahal refineries. Another 30pc came from the Salalah LPG plant, and just 8pc from the upstream Bukha and West Bukha, Saih Rawl and Wadi Aswad fields. Shortly before the Salalah plant came on line, OQ in early 2021 started up its Liwa Plastics Industrial Complex (LPIC), whose 880,000 t/yr ethylene steam cracker would fast become a major LPG consumer. Output from the steam cracker, in turn, feeds the complex's 880,000 t/yr polyethylene and 300,000 t/yr polypropylene units. This contributed to a near collapse in Omani LPG exports in the first quarter of 2021, as OQ started diverting the Sohar refinery's LPG output to feed LPIC. But once the Salalah LPG plant began to ramp up, Oman managed to gradually resume exports, this time from Salalah port. This has enabled Oman to export refrigerated LPG cargoes on larger tankers, with Sohar previously only able to accommodate pressurised or midsize carriers. Oman is now a net LPG exporter, but still imports the occasional cargo when Sohar is unable to provide sufficient feedstock supply to LPIC — Sohar port received 104,000t of LPG between January and August, according to data from analytics firm Kpler. Both the Sohar refinery and LPIC are in northern Oman, far from the sultanate's other LPG production points. Chemical ambitions Oman's LPG output and exports have been lifted this year by new supply from the 230,000 b/d Duqm refinery, which at full capacity can produce up to 15,000 b/d of LPG. The facility was inaugurated in February but appears to have exported its first LPG cargo in September 2023, according to Kpler data, although this is not recorded in government data. But future exports could be capped if a new planned petrochemical complex, fed with naphtha and LPG produced at Duqm, is built alongside the refinery. Operator OQ8 — a 50:50 joint venture between OQ and Kuwait's state-owned KPI — initially had plans to build a 1.6mn t/yr petrochemicals complex, but design works were suspended in 2020, during the early part of the Covid-19 pandemic, because of the uncertain demand outlook. Plans appeared to have been revived in 2022, when OQ and KPI welcomed Saudi chemical giant Sabic onboard to develop a jointly owned petrochemical complex in Duqm. This project envisaged construction of a steam cracker and derivative units, as well as a natural gas liquid extraction facility. The three parties signed a non-binding agreement in late 2022, but a final investment decision has not yet been made. Oman LPG infrastructure Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

BZ Credits near 5 year high after 2023 blending


24/09/12
24/09/12

BZ Credits near 5 year high after 2023 blending

Houston, 12 September (Argus) — Higher volumes of ethylbenzene (EB) into gasoline blending a year ago has led to a credit shortage, pushing prices to their highest levels since March 2021. In 2022 and 2023, US Gulf coast (USGC) naphtha inventories were long as US naphtha exports declined from 400,000-500,000b/d pre-pandemic to 100,000-200,000b/d. Over the same span of time, refiners and blenders dropped excess naphtha, a sub-octane blendstock, into the gasoline pool. This blend of gasoline spurred demand for high-octane blendstocks like EB, toluene and mixed xylenes into gasoline blending. The US Environmental Protection Agency (EPA) requires gasoline with benzene content above a certain threshold to be offset by a credit generated by refining compliant gasoline. The elevated blending of EB exhausted the supply of benzene credits on the open market, which bled into 2024. Credits traded near 100¢/USG early in 2024 and rose to as high as 190¢/USG over the summer. Values now span buyer interest at 160¢/USG and seller interest at 190¢/USG. The compliance deadline for benzene credit submission is set for 31 March 2025, in which refiners must mass-balance their production over a given year and either face a credit surplus for being over-compliant or a shortage and therefore will need to procure credits on the open market. By Jake Caldwell and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Norfolk Southern replaces CEO with CFO


24/09/12
24/09/12

Norfolk Southern replaces CEO with CFO

Washington, 12 September (Argus) — Eastern Class I railroad Norfolk Southern (NS) has appointed a new chief executive, replacing former executive Alan Shaw after determining he violated company policies by having a consensual relationship with the company's chief legal officer. NS' board announced late Wednesday that it had promoted chief financial officer Mark George to replace Shaw. The board said Monday it was investigating Shaw for potential misconduct in actions not consistent with NS' code of ethics and policies, but did not provide details. The railroad yesterday clarified that Shaw's departure was not related to the railroad's "performance, financial reporting and results of operations". Instead, the board voted unanimously to terminate Shaw with cause, effective immediately, for violating policies by engaging in a consensual relationship chief legal officer Nabanita Nag. She was also dismissed by NS. Shaw worked at NS for 30 years and was appointed chief executive in May 2021, following six years as chief marketing officer. Earlier this year he led NS through a proxy fight with a group of activist investors that sought his replacement. The overall effort failed but the challengers secured three seats on the board . The investors had been displeased with the railroad's financial performance and "tone deaf response" to the February 2023 derailment in East Palestine, Ohio . New chief executive George had served as NS' chief financial officer since 2019. Prior to that, he held roles at several companies including United Technologies Corporation and its subsidiaries. "The board has full confidence in Mark and his ability to continue delivering on our commitments to shareholders and other stakeholders," NS chairman and former Canadian National chief executive Claude Mongeau said. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

SEC fines Keurig $1.5mn for recyclability claims


24/09/10
24/09/10

SEC fines Keurig $1.5mn for recyclability claims

Houston, 10 September (Argus) — The US Securities and Exchange Commission has fined Keurig Dr Pepper $1.5mn for inaccurately claiming that its plastic coffee pods were recyclable in two of its annual financial reports. In its 2019 and 2020 annual reports, Keurig Dr Pepper claimed that it had verified that K-Cup pods could be recycled through testing. According to the SEC, Keurig did not disclose to investors that two of the largest recycling companies in the US said that they would not accept K-Cup pod waste, and believed that curbside recycling of the pods was unfeasible. The small size of coffee pods makes them difficult to sort at many older material recovery facilities (MRFs), which can prevent recycling. The SEC argued that Keurig therefore violated Section 13 of the Securities Exchange Act of 1934. Keurig agreed to a cease-and-desist order from the SEC and to pay a civil penalty of $1.5mn, without admitting or denying the SEC's findings. "Public companies must ensure that the reports they file with the SEC are complete and accurate," Boston Regional Associate Director of the SEC John Dugan said. In 2022, Keurig Dr Pepper settled a $10mn lawsuit with a California resident after the plaintiff alleged that marketing about the recyclability of its signature K-Cups was false or misleading. The plaintiff said that the pods were "inevitably" contaminated by foil and food waste, and that municipal recycling facilities could not effectively recycle the pods. By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Methanex to acquire OCI’s methanol business for $2bn


24/09/09
24/09/09

Methanex to acquire OCI’s methanol business for $2bn

Houston, 9 September (Argus) — Methanol producer Methanex announced Sunday that it will acquire OCI's international methanol business for $2.05bn. As part of the transaction, Methanex will acquire four primary assets, including a 910,000 t/yr methanol facility and 340,000 t/yr ammonia facility in Beaumont, Texas. Methanex will acquire OCI's 50pc interest in the 1.7m t/yr Natgasoline methanol plant in Beaumont. The acquisition of Natgasoline is subject to a legal proceeding between OCI and Proman, the other 50pc holder in Natgasoline, over certain shareholder rights. If the dispute is not resolved within a certain period, Methanex has the option to exclude the purchase of the Natgasoline joint venture and proceed with the rest of the transaction. The transaction also includes OCI HyFuels, a producer of green methanol products such as biomethanol and bio-MTBE, and trading and distribution capabilities for renewable natural gas (RNG) and ethanol. Additionally, Methanex will acquire an idled 1m t/yr methanol facility in Delfzijl, Netherlands. The purchase price includes $1.15 billion in cash, the issuance of 9.9 million shares of Methanex valued at $450 million and the assumption of about $450 million in debt and leases. The acquisition of fertilizer producer OCI began over a year ago, according to OCI officials. "We identified Methanex as the natural owner of OCI Methanol at the outset of our strategic process, which we initiated in the spring of 2023," OCI executive chairman Nassef Sawiris said. This acquisition moves Methanex, primarily a methanol maker, into the ammonia sector. "From an operating perspective, we have a shared culture of safety and operational excellence, and we expect the OCI team will help us build new skills in ammonia while enhancing our capabilities in the evolving business of low carbon methanol production and marketing," Methanex CEO Rich Sumner said. The deal is expected to close in the first half of 2025. The transaction has been approved by the boards of directors of the two companies and is now awaiting certain regulatory approvals and other closing conditions. The transaction is also subject to approval by a simple majority of the shareholders of OCI. The largest shareholder of OCI, has signed an agreement to vote for the transaction. By Steven McGinn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more