Rising South Korean cracker rates to boost LPG demand

  • : LPG, Oil products, Petrochemicals
  • 24/03/05

South Korean crackers are running harder as margins recover, writes Toong Shien Lee

South Korean cracker operators are aiming to raise run rates this month because of recent gains in ethylene and butadiene prices, raising demand for LPG feedstock with propane and butane still at a discount to naphtha.

Hanwha Total will lift utilisation at its 1.55mn t/yr Daesan cracker to 100pc from 92pc in March, while KPIC has already raised its 800,000 t/yr Onsan cracker rates to 90pc from 80pc. LG Chem is also planning to increase run rates at its 1.15mn t/yr Yeosu 1 cracker to 70pc from 64pc, at its 800,000 t/yr Yeosu 2 cracker to 80pc from 73pc, and at its 1.27mn t/yr Daesan unit to 67pc from 64pc.

GS Caltex is mulling raising utilisation at its 700,000 t/yr Yeosu cracker this month, as is Lotte Chemical at its 1.2mn t/yr Yeosu and 1mn t/yr Daesan units. Hyundai Chemical may ramp up rates at its 900,000 t/yr Daesan cracker to 60pc from 55pc in March, market participants say. The increase in olefin supplies from South Korea is expected to be partially offset by turnarounds at crackers in Japan.

The plan to increase rates comes as cracker margins recover in line with rising ethylene and butadiene prices, although margins remain in negative territory. Naphtha cracking margins rose to -$104/t by 28 February from -$304/t at the start of 2024 — the highest since May 2023, Argus data show. Propane cracking margins have recovered more rapidly as propane prices have fallen relative to naphtha, climbing to -$2/t by 28 February from -$240/t on 3 January. Flexible Asian crackers have shifted to propane from naphtha since January to maximise production margins.

Expectations of tighter ethylene and butadiene supplies in the region have pushed up prices to multi-month highs. The ethylene fob northeast Asia price rose to $935/t on 21 February from $820/t on 3 January, the highest since March 2023. Butadiene fob northeast Asia values increased to $1,270/t on 23 February from $898/t on 5 January, the highest since July 2022.

NE Asian fob ethylene, butadiene

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24/05/09

Logistics, water access key for Braskem hub restart

Logistics, water access key for Braskem hub restart

Orlando, 9 May (Argus) — Brazilian petrochemical giant Braskem's plants at the Triunfo petrochemical hub have come to a standstill because of logistical and water access issues and the uncertainty surrounding when water levels will subside. Braskem had to shut down all of its operations in Rio Grande do Sul state after extreme flooding in recent days, but said its polymer inventories are safe and protected from the damage caused by heavy rainfall at its operations in southern Brazil during the past two weeks. At least 428 cities and 1.5mn people have been hit by the floods. So far, there are 107 confirmed deaths and 136 people missing, according to the state's last emergency service report. There has been no permanent damage to the industrial facilities, Braskem said today in an earnings call. But critical water intake and effluent treatment systems are submerged, rendering them inoperable. Additionally, the Santa Clara River terminal, which was preemptively closed by the local port authority, has also been flooded. "We can only assess the situation and evaluate losses once the water recedes," Braskem's chief financial officer Pedro Freitas said during the company's first quarter earnings call. Freitas said that part of the production of basic resins, such as polyethylene (PE) and polypropylene (PP), will be offset by increased production in other Brazilian states or in Mexico. Braskem has been operating under its nameplate capacity. The situation is different at Braskem's 260,000 t/yr bio-based PE plant. There is stock available abroad, as the majority of this product is earmarked for export, Freitas said. 1Q production and sales Braskem's domestic resin sales fell by 5pc in the first quarter from a year prior, with volumes also falling in the US and Europe but growing in Mexico. Domestic sales declined on the company's decision to prioritize sales with higher added value in the period, Braskem said in its preliminary first-quarter production and sales report. Domestic resin sales fell to 839,000 metric tonnes (t) in the first quarter, from 884,000t a year earlier. On the other hand, the company's Brazil resin sales rose by 7pc from the prior quarter on higher demand for polyethylene (PE) and polypropylene (PP) because of inventories rebuilding in the supply chain. In Mexico, polyethylene (PE) sales through the Braskem Idesa joint venture rose by 6pc to 209,000t in the period, primarily because of the higher availability of products for sale in the period. Sales rose by 17pc from the fourth quarter of 2023 mainly thanks to seasonality and replenishment of PE stocks in the fourth quarter of 2023. First quarter polypropylene (PP) sales hit 508,000t, according to consolidated numbers for the US and Europe. That is a 2pc drop from a year earlier and down by 1pc from the previous quarter. The declines are mainly because of better handling of inventory, which partially offset the lower availability of products for sale in the US thanks to an unscheduled shutdown in the region. Braskem reported a $270mn loss in the first quarter, swinging from a profit of $46.9mn in the same period last year, largely because of additional provisions related to the Alagoas state geological event . By Frederico Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Vertex to pause Mobile renewable fuels refining


24/05/09
24/05/09

Vertex to pause Mobile renewable fuels refining

Houston, 9 May (Argus) — US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker to produce what it says are wider-margin fossil fuel products. Vertex completed the conversion of the Mobile refinery and produced its first barrels of renewable diesel (RD) in May last year , having bought the refinery from Shell in 2022 . The company plans to use a third quarter turnaround to convert its renewable hydrocracker back to petroleum fuels production and to be up and running by the end of the year, after facing significant macro headwinds for renewable fuels, the company said on an earnings call today. The decision to return to full fossil fuels production is ultimately a near-term financial decision for the company which has an outstanding $196mn term loan, management said on an earnings call Thursday. The time line for a return to petroleum product production is contingent on permitting approvals and a successful completion of the turnaround and catalyst change in the unit. Vertex plans to sell its renewable feedstock inventories prior to the conversion. Vertex said it will retain the flexibility to return to renewable fuels processing should market conditions improve for the fuels, but does not believe headwinds to renewable markets will abate in at least the next year and a half. Conventional crude and other feedstock throughputs at the Mobile refinery were 64,000 b/d in the first quarter, down from 71,000 b/d in the same three months of 2023. Renewable throughputs were 4,000 b/d in the most recent quarter. The company expects 68,000-72,000 b/d of conventional crude and other feedstock throughputs in the second quarter and 2,000-4,000 b/d of renewable throughputs. Vertex reported a first quarter loss of $18mn compared to profits of $54mn in the first quarter of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Singapore's GCMD to test long-term biofuel shipping use


24/05/09
24/05/09

Singapore's GCMD to test long-term biofuel shipping use

Singapore, 9 May (Argus) — Singapore-based Global Centre for Maritime Decarbonisation (GCMD) and Japanese shipping firm NYK Line will trial the continuous use of a biofuel blend over six months. The study aims to evaluate the effects of the continuous use of B24 biofuel blend of 24pc fatty acid methyl ester (Fame) and 76pc of very low sulphur fuel oil (VLSFO) on a short-sea vehicle carrier that will call at multiple ports, allowing for the regular sampling and testing of fuels stored on the ship. Fame is a "promising" fuel alternative, the firms said, but added that there are concerns about the impact of its extended use on vessel operations. The study hence aims to study the long-term impact of biofuel usage on ship engine performance and fuel delivery system operations. It will also examine the total cost of ownership of using biofuel, including fuel costs and associated maintenance costs, as well as identify potential operating challenges and suggest mitigation strategies. B24 is the current blend of alternative marine fuel that is being used or trialled for bunkering at some key Asian ports like Singapore and Zhoushan. Its usage is expected to rise, especially because the industry is pushing for higher emission cuts from shipping. Participants in the shipping industry are exploring solutions to meet the International Maritime Organization's (IMO) net zero carbon emission target by 2050, with operational safety and costs surfacing as some of the key concerns of alternative fuel adoption . "This knowledge will empower stakeholders across the ecosystem, from shipowners and charterers to biofuels producers and regulators – to make more informed business and policy decisions," GCMD chief executive officer Lynn Loo said. "Ultimately, this pilot will lead to greater confidence for biofuels use at scale, accelerating progress towards decarbonising the maritime industry." Argus assessed B24 biofuel bunker prices at $744.25-759.25/t delivered on board (dob) Singapore on 8 May. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Produção de veículos aumenta em abril


24/05/08
24/05/08

Produção de veículos aumenta em abril

Sao Paulo, 8 May (Argus) — A produção brasileira de veículos subiu 24pc em abril, em um cenário de vendas crescentes no mercado interno. A produção de veículos atingiu 222.115 unidades em abril, em comparação com 178.853 no mesmo mês em 2023, informou a Associação Nacional dos Fabricantes de Veículos Automotores (Anfavea). Em relação a março, a produção cresceu 13pc. No acumulado desde janeiro, houve alta de 6,3pc, para 760.114 unidades. Já as vendas saltaram 37pc em comparação com o mesmo período do ano anterior. O licenciamento de veículos totalizou 220.840 unidades no mês, 17pc maior do que em março. O Brasil exportou cerca de 27.330 unidades em abril, queda de 19pc na base anual e alta de 16pc em relação ao mês anterior. "Temos pela frente alguns pontos de alerta, como a redução do ritmo de queda dos juros e os efeitos da calamidade no Rio Grande do Sul", disse o presidente da Anfavea, Márcio de Lima Leite. Leite acrescentou que as enchentes no estado já estão afetando fábricas de veículos, máquinas agrícolas e componentes usados por toda a cadeia automotiva. As chuvas já deixaram mais de 100 mortos, segundo a Defesa Civil do Rio Grande do Sul. Outras 128 pessoas estão desaparecidas e cerca de 164.000 perderam suas casas. Por Laura Guedes Participação de mercado de veículos leves por combustível % Abr-24 Abr-23 ± (pp) Gasolina 3,6 2,5 1,1 Elétricos 3,2 0,4 2,8 Híbridos 2,3 2,1 0,2 Híbridos Plug-in 1,7 0,7 1 Flex 79,5 83,4 3,9 Diesel 9,6 10,9 -1,3 Anfavea Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2024. Argus Media group . Todos os direitos reservados.

Polymers stocks safe in storm-hit Brazil: Braskem


24/05/08
24/05/08

Polymers stocks safe in storm-hit Brazil: Braskem

Orlando, 8 May (Argus) — Brazilian petrochemical giant Braskem said its polymer inventories are safe and protected from the damage caused by heavy rainfall at its operations in southern Brazil during the past two weeks. The inventories include polyethylene (PE), polypropylene (PP), ethylene and basic chemicals. Braskem had to shutdown all of its operations in Rio Grande do Sul state after the extreme weather event in recent days , the company told Argus on Wednesday, on the sidelines of the NPE Plastics fair in Orlando, Florida. The shutdown was completed safely, with no harm to the company's plants at the Triunfo petrochemical hub, which represents about 30pc of its ethylene production capacity in Brazil. Braskem is reevaluating its supply chain strategy to deal with the lack of production at the Trinfo hub. This includes serving its clients with PE produced at other company hubs in Brazil and Mexico, where it owns PE manufacturing joint venture Braskem Idesa. The same goes for PP and polyvinyl chloride (PVC), with other production hubs serving customers if the weather situation does not improve in the coming days. Operations at Braskem's 260,000 t/yr bio-based PE plant will restart as soon as conditions improve, the company said. No fatalities occurred at the company's operations, but part of its workforce has lost their homes and are being taken care of by Braskem, according to the company. State governor Eduardo Leite called the the flooding "the worst disaster in Rio Grande do Sul's history." There are 100 people dead and 128 missing, according to the state's civil defense. Braskem said it will resume its operations gradually, after weather conditions normalize and logistics in the state such as airports, railroads and flooded roads resume. Braskem is the largest producer of thermoplastic resins in the Americas and a leader in biopolymer production. By Frederico Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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