Asian petrochemical shares fell along with oil prices on Thursday following warnings of an unprecedented global recession. Oil prices fell by more than $1/bbl, further weighed down by record-high crude inventory levels in the US. Oil prices were under pressure on Thursday after weekly data from the US Energy Information Administration showed an unexpected rise in oil inventories, reviving worries of a persistent glut due to weak demand.
The Asia Petrochemical Industry Conference (APIC) will now be held in May 2021 after it was postponed because of the coronavirus pandemic, organizer Chemicals & Petrochemicals Manufacturers’ Association (CPMA) India said. The event was originally scheduled for 28-29 May this year in New Delhi, India, with CPMA as the host.
Meanwhile Asia’s polybutylene terephthalate (PBT) resins market was stable while demand has not picked up in general. A revival in demand is possible in the third quarter, pending re-opening of economies within the region and in Europe.
Most US chemical shares fell, as the general market declined and the Federal Reserve voted to keep interest rates near 0%.
The latest World Bank economic forecast suggests that the current recession will be almost three times as steep as that in 2009, and the deepest since the Second World War.
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LATEST HEADLINES
Asia petrochemical shares, oil slump on renewed global recession worries
By Nurluqman Suratman 11-Jun-20 12:38 SINGAPORE (ICIS)--Asian petrochemical shares fell along with oil prices on Thursday following warnings of an unprecedented global recession. Oil prices fell by more than $1/bbl, further weighed down by record-high crude inventory levels in the US.
Oil prices were under pressure on Thursday after weekly data from the US Energy Information Administration showed an unexpected rise in oil inventories, reviving worries of a persistent glut due to weak demand.
Postponed APIC event now to be held in May 2021 - CPMA
By Nurluqman Suratman 11-Jun-20 15:28 SINGAPORE (ICIS)--The Asia Petrochemical Industry Conference (APIC) will now be held in May 2021 after it was postponed because of the coronavirus pandemic, organizer Chemicals & Petrochemicals Manufacturers’ Association (CPMA) India said. The event was originally scheduled for 28-29 May this year in New Delhi, India, with CPMA as the host.
Asia PBT market steady amid thin trade; demand yet to pick up
By Clive Ong 11-Jun-20 14:56 SINGAPORE (ICIS)--Asia’s polybutylene terephthalate (PBT) resins market was stable while demand has not picked up in general. A revival in demand is possible in the third quarter, pending re-opening of economies within the region and in Europe. Buyers and sellers remained quite far apart in terms of price ideas.
“Unless major economies re-open and their automotive sectors revive, PBT demand would remain weak,” said a distributor in Singapore.
US chem shares fall again with general market
By Al Greenwood 2020/06/10 HOUSTON (ICIS)--Most US-listed shares of chemical companies followed by ICIS fell, as the general market declined and the Federal Reserve voted to keep interest rates near 0%.
INSIGHT: Avoiding a second wave critical to recovery, allaying longer term damage
By: Nigel Davis 2020/06/10 LONDON (ICIS)--The latest World Bank economic forecast suggests that the current recession will be almost three times as steep as that in 2009, and the deepest since the Second World War.
It assumes countries emerging from coronavirus-induced lockdowns by mid-year. The downgraded forecasts would not be expected to make easy reading.
“With advanced economies contracting, China experiencing record-low growth, and EMDE [emerging market and developing economies] growth savaged by external and domestic headwinds, the global economy is expected to shrink by 5.2% this year in a baseline forecast,” the World Bank said.
In such an environmentm the stimulus injected into sectors of the economy points to where the coronavirus impact may be alleviated the fastest.
Poor margins to persist in 2020 amid collapse in demand and rising capacities
By: Will Beacham 2020/06/10 LONDON (ICIS)--Analysis of the ethylene margin cycle suggests challenging conditions for producers in 2020, as new capacity and poor demand forces the cancellation of new projects and global rationalisation of assets.
Source: ICIS Analytics
It is easy to forget that in the pre-coronavirus world the chemical industry was already under a lot of pressure. New waves of capacity were coming on stream just as the US-China trade war was dampening growth around the world.
There were multiple profit warnings in 2019 as conditions worsened during the year.
Into 2020, profitability is likely to be even more challenged as a vast amount of new ethylene capacity is due on stream from now into 2021. As the current shale gas-related capacity boom peters out, attention shifts to China. Here around 10m tonnes of new projects are forecast to come on stream during 2019-2021, according to the ICIS Supply and Demand database.
UK breakaway from EU chems regulations could shut off market access for some firms - CBA
By: Tom Brown 2020/06/10 LONDON (ICIS)--The decision by the UK government to abandon hopes of remaining tied to the EU’s chemicals regulatory framework Reach effectively shuts off access to the market for some UK-based companies and makes access for others far more expensive, trade group CBA said on Wednesday.
Despite mentions of the European Chemicals Agency (ECHA) in numerous draft texts on the UK’s post-Brexit trade relationship with its former partners, the country is no longer seeking to negotiate membership of the regulator, according to a letter from a government minister.
The chemicals, aerospace and pharmaceuticals sectors were the industries the UK had expressed hopes of remaining aligned with the EU on post-Brexit through negotiating some form of continued associate membership.
PODCAST: PP demand to fall in 2020 as applications split
By: ICIS Editorial 2020/06/10 LONDON (ICIS)--European polypropylene (PP) editor Linda Naylor talks to ICIS senior consultant Fabrizio Galié about the outlook for PP supply and demand in Europe for 2020.
Polypropylene (PP) is used for packaging, ropes, carpets, plastic parts, loudspeakers and automotive parts.
Click on the headline or scroll down to hear the podcast.
Asia petrochemical shares mixed, oil prices lower on oversupply concerns
By Nurluqman Suratman 10-Jun-20 12:14 SINGAPORE (ICIS)--Asian petrochemical shares were mixed on Wednesday as investors await the outcome of a US Federal Reserve meeting while oil prices fell on oversupply concerns. “The global equity market rally appears to be taking a breather after a record-breaking rally saw $21tr being added to stock markets and investors decided to reassess if the recent rally has run too far for now,” Singapore's OCBC Bank said in a note.
Mideast POP demand stays weak; offers from Europe, Korea lower than China
By Prateek Pillai 10-Jun-20 16:32 SINGAPORE (ICIS)--Demand for 10.0-13.5% polyether polyols in the Middle East is expected to stay weak even with lower-priced cargoes available from Europe and South Korea.
Prices had been falling in the previous weeks mostly as a result of weak demand and given availability of attractive offers from Europe and South Korea since the second half of May.
ICIS WEBINAR: Players gear up for chemical M&A resurgence in H2 2020 bankers By Joseph Chang 2020/06/09 NEW YORK (ICIS)--Chemical mergers and acquisitions (M&A) activity is poised to pick up in the second half of 2020 as lockdowns ease, and buyers and sellers prepare to get a start on making deals once again, investment bankers said on an ICIS Webinar on Tuesday.
US chem shares fall as general market takes break from rally
By Al Greenwood 2020/06/09 HOUSTON (ICIS)--Most US-listed shares of the chemical companies followed by ICIS fell on Tuesday along with the general market, after a string of rallies.
Limited new export-oriented global chems capacity growth expected to 2022 - Odfjell
By: Tom Brown 2020/06/09 LONDON (ICIS)--Limited new investment in export-oriented chemicals capacity is expected through to 2022 as a result of margin pressure from new supply coming onstream over the last few years add economic uncertainty after the pandemic, the Norwegian chemicals logistics and transport major Odfjell said on Tuesday.
Significant new capacity investments in the US and Middle East had contributed to strong shipping sector capacity demand, but depressed economic growth in 2019 has dampened investment appetite as players deal with margin pressure on the back of that supply growth.
Oversupply and uncertainty about the pace of recovery as a result of the pandemic is likely to limit new capacity investment over the next few years, according to Bjorn Kristian Roed, head of investor relations and research at Odfjell.
PODCAST: Ethylene cycle points to project cancellations, overcapacity
By: Will Beacham 2020/06/08 BARCELONA (ICIS)--Analysis of the ethylene margin cycle suggests challenging conditions for producers in 2020, as new capacity and poor demand forces the cancellation of new projects and global rationalisation of assets.
- Profitability under pressure in 2020 compared with 2019
- Ethylene margins were dipping before coronavirus outbreak
- Expect project delays/cancellation where no final investment decision (FID) has been made
- Shift in new projects from US to China (more than 10m tonnes 2020/21)
Click on the headline or scroll up to hear the podcast.
VIDEO: Asia glycerine market slowly rebalancing amid improving demand
By Jackie Wong 2020/06/09 SINGAPORE (ICIS)--Watch ICIS editor Jackie discuss the Asian glycerine market, which has been rebalancing after a sharp surge in demand amid the ongoing coronavirus pandemic.
Asia growth outlook still weak despite massive support measures
By Nurluqman Suratman 2020/06/09 SINGAPORE (ICIS)--Asia's economic growth outlook remains clouded despite injection of massive fiscal stimulus packages to counter the crippling impact of the coronavirus pandemic.
The pandemic is choking the global economy: unemployment is spiking, manufacturing activity has ground to a halt, some businesses are facing closures while governments will be incurring huge budget deficits to fund the massive stimulus packages.
Asian petrochemical shares mixed; oil rises on demand recovery hopes
By Nurluqman Suratman 2020/06/09 SINGAPORE (ICIS)--Asian petrochemical shares were mixed while oil prices rose on Tuesday on hopes of a quick global economic recovery as investors await further clues on policy measures in the US.
Investors are now eyeing outcome of the US Federal Reserve's two-day policy meeting, which ends on Wednesday.
Shift to disposable utensils boosts US PS demand
By Zachary Moore 2020/06/08 HOUSTON (ICIS)--Demand for US polystyrene (PS) is receiving a boost from increased use of disposable utensils in the restaurant sector amid increasing concerns over public hygiene.
Most US chem shares rise with general market
By Juhi Varma 2020/06/08 HOUSTON (ICIS)--Most US-listed shares of chemical companies rose on Monday, still riding high on Friday's surprising jobs report and news of easing lockdowns.
Asia petrochemical shares up on Wall St rally; oil rises on output cuts
By Nurluqman Suratman 08-Jun-20 12:33 SINGAPORE (ICIS)--Asian petrochemical shares rose on Monday, tracking Wall Street’s rally on 5 June, while oil prices gained after OPEC and its allies, including Russia, agreed to extend their record output cuts.
Most US-listed shares of chemical companies rose last Friday, buoyed by release of a better-than-expected May jobs report.
Asia naphtha prices touch three-month high on crude oil rally
By Melanie Wee 08-Jun-20 14:55 SINGAPORE (ICIS)--Asia naphtha prices rose to a three-month high, bolstered by strong gains in crude oil futures, with healthy demand and curtailed excess flows from Europe poised to lend market support. In afternoon Asian trade, open-specification naphtha prices for second-half July delivery averaged at $380.00/tonne CFR (cost and freight) Japan, climbing by $18.50/tonne from the previous session on 5 June.
Asia IPA snaps downtrend on firm acetone; fresh discussions to begin
By Yuanlin Koh 08-Jun-20 14:36 SINGAPORE (ICIS)--Asia’s isopropanol (IPA) market snapped a four-week downtrend as upstream acetone spiked on tightened supply from turnarounds. Discussions are expected to start afresh this week as suppliers revised their strategies and buyers check their existing inventories.
Latin America PP faces high degree of demand risks amid rising feedstocks
By Renato Frimm 05-Jun-20 18:03 Latin America polypropylene (PP) continues to face a high degree of uncertainty stemming from pandemic-related impacts.
US chem shares rise amid upbeat jobs report
By Juhi Varma 2020/06/05 HOUSTON (ICIS)--Most US-listed shares of chemical companies rose on Friday, buoyed by release of a better-than-expected May jobs report.
US industrial ethanol demand remains strong, expected to be a long-term trend
By Alex Snodgrass 2020/06/05 HOUSTON (ICIS)-- Heightened demand for sanitizers, and consequently industrial ethanol, is expected to be a long-term trend even if a coronavirus vaccine is made.
VIDEO: US benzene rebounds as economy reopens and crude prices strengthen
By Adam Burkin 2020/06/05 HOUSTON (ICIS)--Watch Markets Reporter, Adam Burkin, discuss the dynamics facing US benzene markets during the coronavirus pandemic.
BASF top claimant of UK's coronavirus recovery package with £1.0bn funding
By: Morgan Condon 2020/06/05 LONDON (ICIS)--BASF received the biggest bailout from the Bank of England’s (BoE) €16.2bn recovery fund, the UK’s central bank announced on Friday.
The Covid Corporate Financing Facility (CCFF) total financing stands at €16.2bn; it was rolled out by the UK’s Chancellor of the Exchequer Rishi Sunak to support companies impacted by lockdown measures.
The German major topped the list of 53 recipients receiving the biggest portion of the fund at £1bn, and while it was the only chemicals producer listed, companies linked to the sector also gained from the scheme.
VIDEO: European PVC prices higher in 2020 as June discussions begin
By: ICIS Editorial 2020/06/05 LONDON (ICIS)--Senior editor Chris Barker discusses price increases for polyvinyl chloride (PVC) in the first half of 2020, contract discussions for June and the ongoing impact of the coronavirus pandemic on demand
- Prices/tonne have risen against feedstocks from January-May
- Construction activity rebounds in some countries in June
- Producers independently attempt increases in line with feedstocks
Click on the headline to view the video.
PODCAST: Pandemic continues to pressure Europe demand for oxo-alcohols and derivatives
By: ICIS Editorial 2020/06/05 LONDON (ICIS)--Following the increase in upstream propylene costs for June, oxo-alcohols report editor Jane Massingham discusses the impact the pandemic continues to have on this market and its derivatives with glycol ethers editor Eashani Chavda, acrylate esters editor Katherine Sale and butyl acetate (butac) editor Nick Cleeve.
N-butanol (NBA) is a solvent with more than half if its production used as an intermediate chemical in the production of butyl acrylates for paints, coatings and adhesives, or acetates and glycol ethers. 2-ethylhexanol (2-EH) is used to make plasticizers, mainly dioctyl phthalate (DOP). Key end markets include the construction, appliance and automotive industries.
Divided in E-series and P-series, depending on whether they are made from ethylene oxide (EO) or propylene oxide (PO), glycol ethers are mainly used as a solvent for domestic and industrial applications such as paints and coatings.
Click on the headline or scroll down to hear the podcast.
VIDEO: Upstream chemicals prices glimpse recovery but derivatives still falling
By: Barbara Ortner 2020/06/05 LONDON (ICIS)--ICIS Head of Market Reporting, Barbara Ortner, discusses the factors influencing chemical prices at the start of June.
- Crude, aromatics and olefins prices up
- Downstream chemical prices still falling
- Automotive outlook remains bleak
- Chemicals stocks rising on recovery hopes economic hopes
- Diversity and inclusion, centre stage
Click on the headline to view the video.
Asia petrochemical shares mostly higher; oil mixed on supply concerns
By Nurluqman Suratman 2020/06/05 SINGAPORE (ICIS)--Asian petrochemical shares were mostly higher on Friday after the European Central Bank (ECB) unexpectedly opted to increase its stimulus package, boosting hopes for a global economic recovery.
Influx of deep-sea cargoes to weigh on Asian BD market in the near term
By Helen Yan 2020/06/05 SINGAPORE (ICIS)--A supply glut caused by an influx of deep-sea butadiene (BD) supply from Europe and the US is expected to weigh on the Asian BD market in the near term.
US chem shares rise, breaking from oil, general market
By Al Greenwood 2020/06/04 HOUSTON (ICIS)--Many US-listed shares of chemical companies rose on Thursday, even as the general stock market was mixed and oil prices rose slightly.
ICIS WEBINAR: PE demand surprisingly strong
By Stefan Baumgarten 2020/06/04 HOUSTON (ICIS)--North American polyethylene (PE) producers saw stronger demand amid the coronavirus crisis than producers of many other chemicals and resins, Zachary Moore, ICIS deputy managing editor, said on Thursday.
ICIS Top 100 Chemical Distributors
By Joseph Chang 2020/06/04 NEW YORK (ICIS)--In the 22 May issue of ICIS Chemical Business which contained the ICIS Top 100 Chemical Distributors, we mistakenly omitted OQEMA, with $881.3m (€875m) in sales in 2019.
UK May car sales collapse by 89% to 1952 levels as lockdown devastates industry
By: Will Beacham 2020/06/04 BARCELONA (ICIS)--UK new car sales collapsed by 89% year on year in May to levels not seen since 1952 as the coronavirus shutdowns and closure of most automotive production devastated the country’s market.Figures published on Thursday by the Society of Motor Manufacturers show that just 20, 247 vehicles were sold in May 2020 compared with 183,724 a year earlier.
The fleet business fared worst, falling by 93% whilst private sales dropped by 84%. Sales of all types of cars fell except for battery electric vehicles which grew by 21.5% to 2,424.
The Tesla Model 3 electric vehicle was the top-selling car in the UK in May 2020, demonstrating how quickly consumers are shifting away from conventional vehicles.
Europe chemicals to gain from EU green deal spending plans - bank
By: Tom Brown 2020/06/04 LONDON (ICIS)--European chemicals players are expecting to see increased business momentum on the back of the EU’s green deal expected to unlock hundreds of billions of euros of investment in sustainability projects, according to Credit Suisse.
A virtual conference organised by the bank hosted management teams from 20 chemicals, agriculture, packaging and cement firms address investors, with all chemicals firms present noting expectations for an increase in sales on the back of the mooted EU green investment plan.
However, little visibility on uplift from the measures is expected over the next 12-18 months.
The European Commission - the EU's executive body - has proposed a raft of green investment measures at the heart of a €750bn coronavirus recovery stimulus package.
Asia petrochemical shares mixed; oil falls on output cut extension doubts
By Nurluqman Suratman 04-Jun-20 12:44 SINGAPORE (ICIS)--Asia’s petrochemical shares were mixed on Thursday on fresh tensions between the US and China, while oil prices fell on worries about growing global oil supply amid weak demand if major producers fail to extend production cuts.
At 03:10 GMT, Asahi Kasei was up by more than 2% in Tokyo, PetroChina was down by more than 1% in Hong Kong and LG Chem rose by close to 3% in Seoul.
Singapore manufacturing headwinds set to continue after May contraction
By Nurluqman Suratman 04-Jun-20 14:41 SINGAPORE (ICIS)--Singapore's manufacturing sector will likely remain in the doldrums for the rest of the year following another month of contraction in May as the coronavirus pandemic wears on the economy.
The city-state’s manufacturing purchasing manager' index (PMI) for May rose by 2.1 points from the previous month to 46.8, according to data from the Singapore Institute of Purchasing & Materials Management (SIPMM).
INSIGHT: Global methanol operating rate cuts expected in second half
By Rachel Qian 04-Jun-20 11:14 SINGAPORE (ICIS)--Although demand is slowly picking up, the global methanol market will remain soft in the second half of the year with operating rate cuts expected globally. This is predominantly driven by oversupply, a weakened futures market in China, and lack of storage which puts pressure on second half prices.
INSIGHT: Chemicals industry faces volatile backdrop on road to recovery
By Joseph Chang 2020/06/03 NEW YORK (ICIS)--The coronavirus crisis may simply accelerate key macro trends already underway, creating a volatile backdrop for chemical companies to navigate on the road to recovery.
ICIS WEBINAR: Chinese coal-based PVC, MEG losing competitiveness to ethylene-based routes
By Zachary Moore 2020/06/03 HOUSTON (ICIS)--Chinese coal-based capacities for polyvinyl chloride (PVC) and monoethylene glycol (MEG) are losing competitiveness relative to ethylene-based alternatives in a lower priced ethylene environment.
ICIS WEBINAR: Pandemic to accelerate US chem differentiation
By Stefan Baumgarten 2020/06/03 HOUSTON (ICIS)--The coronavirus pandemic is set to accelerate the US chemical industry’s differentiation into specialties.
ICIS WEBINAR: Ethane remains the most favoured cracker feedstock
By Zachary Moore 2020/06/03 HOUSTON (ICIS)--Although the global ethylene cash cost curve has been flattened in recent weeks due to the impacts of the coronavirus outbreak, ethane remains the most favoured cracker feedstock.
ICIS WEBINAR: BD demand remains weak but markets to rebalance
By Juhi Varma 2020/06/03 HOUSTON (ICIS)--Demand weakness for butadiene (BD) will linger, but the changes experienced by the market are not structural in the long term. Much of the BD demand weakness is linked to the coronavirus, which created a drop-off in demand for automobiles, the main demand outlet for BD.
Eurozone economy starts to rebound in May from record contraction, years to full recovery
By: Will Beacham 2020/06/03 BARCELONA (ICIS)--The eurozone’s economy is slowly bouncing back from the most severe contraction on record, according to final purchasing manager index (PMI) numbers for May, published on Wednesday.
The IHS Markit composite index, which covers manufacturing and services, rose to 31.9 in May, up from 13.6 in April as coronavirus lockdowns were gradually eased and the region’s economy started to pick up. The figures show the eurozone’s economy is still contracting, but at a slower pace as a reading below 50.0 signifies shrinkage of economic activity.
There was an unusually large upwards revision from flash PMI numbers published in May.
The four largest euro area economies registered slower – albeit still severe – contractions in activity. Italy was the best-performing, followed by Germany and France. Spain remained the weakest-performing nation.
May Global IPEX flat from April but 37% lower year on year
By: Nigel Davis 2020/06/03 LONDON (ICIS)--A rebound in ethylene and propylene prices in northeast Asia and the much higher Europe May benzene contract price helped stabilise the global ICIS Petrochemical Index (IPEX) for the month.
The regional and global index values, however, remain sharply down compared to May 2019 as large parts of the world continue to suffer from the negative economic impact of lockdowns in the midst of the coranavirus pandemic.
Ethylene demand is stronger in China while supply has been tight for June cargoes. Downstream markets in China are performing better and higher naphtha costs, on the back of the rising crude oil price, helped drive market dynamics.
In Europe, the May benzene contract reacted to the upward push in crude.
Click on the headline or scroll down to see the interactive version.
VIDEO: June R-PET prices under downward pressure
By: ICIS Editorial 2020/06/03 LONDON (ICIS)-- European recycled polyethylene terephthalate (R-PET) senior editor Matt Tudball discusses what June may have in store for the R-PET market, including:
- Bearish sentiment across all grades
- Price discussions indicating reductions from May
- Low demand, increasing availability
Click on the headline to view the video.
Asia petrochemical shares up on recovery hopes; oil nears 3-month highs
Asian petrochemical shares were higher on Wednesday on hopes of a quick recovery in the world economy as coronavirus containment measures are eased further.
Expectations of extended cut in oil output sent crude prices to their highs in nearly three months, with Brent trading above $40/bbl.
Easing lockdown measures revs up Asia petrochemical markets
Petrochemical markets in Asia are coming back to life after about two months of general weakness as pandemic-induced lockdowns in most countries in the region are being lifted, boding well for demand from June onward.
ICIS WEBINAR: New trends show companies reshoring supply chains, sustainability on hold
By Juhi Varma 2020/06/02 HOUSTON (ICIS)--Recent supply chain disruptions have prompted companies to seek out raw material providers closer to home, said ICIS lead analyst Rhian O’Conner.
Most US chem shares rise amid easing lockdown measures, news of reopenings
By Juhi Varma 2020/06/02 HOUSTON (ICIS)--Most US-listed shares of chemical companies rose on Tuesday with the general stock market. Despite social unrest and race protests in many US states, the market found optimism in news of lockdown rollbacks and economies reopening.
ICIS Webinar: Improved margins for heavy cracking, weak demand pressure US BD prices lower
Author: Zachary Moore 2020/06/02 HOUSTON (ICIS)--Improved margins for cracking heavier feedstocks such as naphtha and liquefied petroleum gas (LPG) along with weaker demand have pressured prices for US butadiene (BD), ICIS Analyst Ciaran Healy said. He gave his remarks in a webinar, part of a series hosted by ICIS.
US May ethylene contracts settle up after six-month decline
By Michael Sims 2020/06/02 HOUSTON (ICIS)--US May ethylene contracts settled for the majority of participants at an increase of 3.5 cents/lb on higher spot prices and cash costs.The settlement puts May contracts at 24.0 cents/lb ($529/tonne), up from 20.5 cents/lb in April.
ICIS WEBINAR: Weak chem demand through 2020, but 2021 will be better
By Stefan Baumgarten 2020/06/02 HOUSTON (ICIS)--This year will be “a bit of a write-off” in terms of global chemical demand but 2021 should see a pickup - assuming there are no second waves of coronavirus (Covid-19) infections, Rhian O'Connor, ICIS senior analyst, said.
Europe chems stocks rally as lockdown easing trumps political tensions
By Tom Brown 02-Jun-20 18:54 LONDON (ICIS)--European chemicals stocks rallied on Tuesday amid jumps of nearly 4% for Germany’s DAX index and strong bumps for other bourses in the region as gathering economic momentum overpowered geopolitical unease and a week of protests in the US.
While economic activity across much of the world’s key economies with the exception of China remains in contraction, the easing of conditions compared to the lows seen in April and May are fuelling more bullish investor sentiment than has been seen in several months.
Germany’s DAX index closed up up 3.75% and France’s CAC 40 rallied over 2%, while gains for the UK’s FTSE 100 were trimmed by the impact of Brexit negotiation tensions weighing on the pound, standing at 0.87%.
Europe MEG contract sees first increase of 2020 for June
By: Melissa Hurley 2020/06/02 LONDON (ICIS)--The June monoethylene glycol (MEG) contract has been fully confirmed at €455/tonne, a €7/tonne increase from May.
An agreement between a buyer and seller emerged at the end of last week, shortly after the ethylene contract price was fully confirmed at a €60/tonne from May.
Crude oil and naphtha values were on the uptrend last month on the back of oil production cuts.
A minimum 2+2 producer-consumer configuration is required to consider the MEG contract agreements fully confirmed.
Asia petrochemical shares mostly higher on recovery hopes
By Nurluqman Suratman 2020/06/02 SINGAPORE (ICIS)--Asian petrochemical shares were mostly higher on Tuesday as muted action from US President Donald Trump on the dispute with China over Hong Kong raised further hopes of a global economic recovery.
Risk appetite in equity markets remained supported after global manufacturing data in May signaled some stabilisation from April lows as economies re-open.
Asia manufacturing remains weak; supply to recover faster than demand
By Nurluqman Suratman 2020/06/02 SINGAPORE (ICIS)--Asia's manufacturing sector outside of China remained in contraction mode in May despite re-opening of more economies from coronavirus-related lockdowns, with expectations that production will outpace demand in the near term.
The pace of pick-up in activity for the rest of Asia appears to be more gradual in contrast to China’s sharp rebound in March from a record low in February, when the country placed various cities under lockdown to contain the novel coronavirus outbreak.
Braskem expects to start-up new US PP plant in Q3 2020
By Zachary Moore 2020/06/01 HOUSTON (ICIS)--Braskem is continuing with construction activities and plans to start-up its new 450,000 tonnes/year polypropylene (PP) plant in La Porte, Texas, by Q3, a company spokesperson said on Monday.
US chem stocks rise with general market
By Al Greenwood 2020/06/01 HOUSTON (ICIS)--US-listed shares of chemical companies rose on Monday as the major indices also increased.
PODCAST: US BD demand challenges to continue in 2020 on coronavirus impact
By Amanda Hay 2020/06/01 HOUSTON (ICIS)--Demand challenges will be the biggest factor for the US butadiene (BD) market for the remainder of 2020.
PODCAST: Optimism for June/July may be misplaced, focus on remodelling business
By: Will Beacham 2020/06/01 BARCELONA (ICIS)--Hopes of a recovery in demand in June and July may not be realistic and the chemical industry should focus on steps to retool for different future market needs, senior chemicals commentators said on Monday.
- Set realistic expectations for June/July and rest of 2020
- Long term, global economy could be at 70-90% of previous levels
- EU’s €750bn rescue package and what that could mean for chemicals
- How a move to local supply chains could transform the chemical industry
- Revolution in Europe’s PMMA sheet market - from doldrums to new investments
- Fears about increasing social unrest in the US and globally
Click on the headline or scroll up to hear the podcast
Oil prices swept up in the risk-on rally
By: Richard Price 2020/06/01 LONDON (ICIS)--Investors have regained faith in riskier asset classes, pushing their money into commodities and stocks - liquidating positions in perceived safe havens.
The MSCI All-Country Global Equity Index (an index of small-to large-cap stocks from 23 developed and 24 emerging markets) is just 12% off pre-coronavirus levels, having collapsed by almost 35% in March.
Global oil markets are also basking in the glow of improved demand sentiment, with Brent up by 75% since April. However, with global daily new coronavirus cases hitting a record 135,000 on 30 May, is this meteoric rise stoked by sound fundamentals, or are investors getting ahead of themselves?
PHYSICAL MARKET
After a torrid April, the crude oil price recovery appears well under way. The supply cuts spearheaded by OPEC have improved fundamentals in the physical market. The discount of the Dated BFOE physical benchmark to ICE Brent futures has declined from almost $10.00/bbl in April, to below $2.00/bbl.
Asia petrochemical shares rise; crude oil slips on demand worries
By Nurluqman Suratman 01-Jun-20 12:24 SINGAPORE (ICIS)--Asian petrochemical shares rose on Monday after US President Donald Trump stopped short of introducing new sanctions on China over its new security law in Hong Kong.
Gains were capped by fresh data showing a further slowdown in factory activity across most of Asia in May as well as concerns over the riots happening in major cities in the US over the weekend.
Asia’s naphtha prices at over two-month high on steady demand
1 June 2020 10:11 am SINGAPORE (ICIS)--Asia’s naphtha prices are finding support from regional buying, which is anticipated to hold steady in the near term, keeping market fundamentals buoyant.
Naphtha prices tracked earlier gains in global crude oil futures amid reduced production and expectations of demand growth as countries emerge from coronavirus lockdowns.
India GDP growth slows to 4.2%; lockdown stays at manufacturing hubs
By Pearl Bantillo 01-Jun-20 15:48 SINGAPORE (ICIS)--India, an emerging market giant, posted its slowest growth in more than a decade, while yet to show the full impact of a nationwide lockdown that brought economic activity to a standstill for more than two months.
The nationwide lockdown was due to be lifted this week, but restrictions will remain in place until the end of June for areas considered as high risk - referring to those with elevated number of novel coronavirus infections.
US chem shares lessen losses after Trump speech excludes China trade
By Author: Al Greenwood 2020/05/29 HOUSTON (ICIS)--US-listed shares of chemical companies rose off of their lows on Friday after a speech by US President Donald Trump made no mention of tariffs or the country's phase-one trade deal with China - even though he criticised other aspects of Chinese policy.
US to keep China trade deal but withdraw Hong Kong exemptions
By Al Greenwood 2020/05/29 HOUSTON (ICIS)--The US will maintain its phase-one trade deal with China, but it will remove the special treatment it gives Hong Kong, President Donald Trump said on Friday in a speech.
VIDEO: US epoxy soft during pandemic, outlook cloudy amid restart
By Tarun Raizada 2020/05/29 HOUSTON (ICIS)--Watch Senior Editor Manager Tarun Raizada provide an update on US epoxy markets. Slower demand during the coronavirus coupled with a higher influx of imports have weighed on the market, with players watching the pace of recovery in Asia and the US as they gauge 2H fundamentals.
Asia’s VAM market may continue to languish amid ample supply
By Helen Lee 2020/05/29 SINGAPORE (ICIS)--Asia’s vinyl acatete monmer (VAM) market may continue to languish despite firmer upstream ethylene input costs in May as the lack of supply shortage amid a weakened state of demand continued to negate suppliers’ price hike initiatives.
Northeast Asia-based producers announced price hikes in their domestic and export offers in an attempt to pass on firmer ethylene input costs.
Japan April industrial production falls led by motor vehicles
By Pearl Bantillo 2020/05/29 SINGAPORE (ICIS)--Japan’s industrial production in April declined, led by motor vehicles, with further contraction expected in May as the world’s third-biggest economy is in the throes of a pandemic-induced recession.
The April production index on a seasonally adjusted month-on-month basis was down 9.1% , and down 14.4% on a year-on-year basis, data from Japan’s Ministry of Economy, Trade and Industry (METI) showed.
Asia petrochemical shares, oil prices fall amid growing US-China tensions
By Nurluqman Suratman 2020/05/29 SINGAPORE (ICIS)--Asian petrochemical shares and oil prices fell on Friday as risk sentiment continued to be weighed by ongoing tensions between the US and China.
US IPA price ranges narrow as supply increases, demand stays high
By Deniz Koray 2020/05/28 HOUSTON (ICIS)-- Isopropanol (IPA) price ranges continue to narrow as the high end of the market sees declining prices.The lower end is seeing either stable or slightly increased pricing, because demand is still much higher compared with pre-coronavirus levels.
PE price downturn an ‘over-correction’ - Dow CEO
By Joseph Chang 2020/05/28 NEW YORK (ICIS)--Polyethylene (PE) prices have over-corrected based on a sharp collapse in crude oil prices in late April. This could now reverse amid the upturn in crude and a continued recovery in demand as economies open up, the CEO of Dow said on Thursday.
Dow wants clarity on US, China trade before pursuing megaprojects
By Al Greenwood 2020/05/28 HOUSTON (ICIS)--Dow wants more clarity about how trade relations between the US and China will evolve before it pursues a large chemical megaproject, the CEO said on Thursday.
PODCAST: US PE demand better than expected in May, packaging industry a bright spot
By Zachary Moore 2020/05/28 HOUSTON (ICIS)--US polyethylene (PE) markets may be nearing a trough as demand improves and feedstocks move higher.
INSIGHT: US CO2 shortage persists amid lower ethanol, refinery rates
By Al Greenwood 2020/05/28 HOUSTON (ICIS)--Falling production at refineries and ethanol plants in the US has caused a shortage of carbon dioxide (CO2), leading to surcharges that can sometimes exceed the price of the gas.
Europe chems stocks rise on lockdown easings despite uphill struggle ahead
By Jonathan Lopez 28-May-20 18:29 LONDON (ICIS)--European chemicals stocks and bourses rose healthily on Thursday on the back of hopes the lockdown easings will revive economic activity and liquidity provided by central banks will soften the recession blow.
However, crude oil futures for delivery in July, which surpassed the $36/bbl mark earlier in the week, traded by Thursday afternoon closer to the $34/bbl mark.
As such, values for crude-linked petrochemicals like naphtha or styrene have also fallen slightly from prices earlier in the week.
Russia, key ally of the OPEC cartel, is showing signs of a faltering commitment to the output cut agreement with Saudi Arabia, which has put pressure on prices.
Another risk factors increasing is the US-China relationship, which is also showing growing tensions on the back of China’s security law on Hong Kong passed on Thursday.
German economy to contract by 6.6% in 2020, chems to recover in nine months
By: Morgan Condon 2020/05/28 LONDON (ICIS)--The German economy is anticipated to contract by 6.6% in 2020, leading to growth of 10.2% the following year from that lower level, according to analysis from the ifo Institute on Thursday.
The estimate was released in the institute’s updated economic forecast for 2020/21 – following a survey among companies in May – which outlines a 12.4% drop in the second quarter this year and a recovery expected by the middle of 2021.
While services remain more affected by the impact of the pandemic than manufacturing, the chemicals industry may be one of the slowest to recover, with normalisation in the sector likely to happen in 10 months’ time.
China must import more crude oil, expand storage amid low prices
By Fanny Zhang 28-May-20 12:13 SINGAPORE (ICIS)--China must take advantage of current low oil prices to import more volumes, with members of its parliament urging the government to boost storage capacity.
Members of the country’s National People’s Congress (NPC), whose sessions this year run from 22-28 May, have called on the government to make use of all facilities, including strategic reserve, commercial reserve, big tankers or refiner’s tanks to stockpile as much as possible to secure supply at low cost.
Asia petrochemical shares mixed on US-China worries; oil drops on US inventory build
By Nurluqman Suratman 28-May-20 12:11 SINGAPORE (ICIS)--Asian petrochemical shares were mixed on Thursday amid growing tensions between the US and China while oil prices fell after weekly data showed a surprise increase in inventories.
Investors are now worried that any punitive response by the US to China over Hong Kong could result in a tit-for-tat reaction from the Chinese government, but sentiment remains supported by news of further stimulus measures.
India’s antidumping probe into NBR imports to have limited impact
By Helen Yan 28-May-20 16:38 SINGAPORE (ICIS)--The impact of anti-dumping investigations into acrylonitrile butadiene rubber (NBR) imports into India will be limited as overall demand has shrunk due to the fallout from the coronavirus pandemic.
“Demand is weak everywhere due to the pandemic. It is the tendency of every country to protect their local economy and it will be difficult to redirect the sales to India to other countries,” an Asian NBR producer said.
US fuel ethanol prices rise, concerns around US-China trade tensions mount
By Alex Snodgrass 2020/05/27 HOUSTON (ICIS)--US spot fuel ethanol prices rose this week as demand continues to show signs of a recovery, although not as quickly as market participants had thought.
US May propylene contracts roll over on higher costs, lower demand
By Michael Sims 2020/05/27 HOUSTON (ICIS)--US May propylene contracts settled at a rollover from April, as rising feedstocks and less refinery production are being counter-balanced by coronavirus-softened demand.
Germany's VCI pulls 2020 forecast, expects ‘severe recession’
By: Stefan Baumgarten 2020/05/27 LONDON (ICIS)--Germany’s chemicals trade group VCI expects a “severe recession” with a significant drop in chemical and pharmaceutical production and sales because of the coronavirus pandemic, it said on Wednesday.
The group dropped its previous projection from March when it forecast a production decline of 1.5% this year and sales of €196bn. VCI expects to publish an updated 2020 forecast only after Q2.
A decline in orders, disrupted supply chains and a lack of transport capacities were causing problems for the industry, VCI said.
Pandemic could deepen petchems supply/demand imbalance - IEA
By: Tom Brown 2020/05/27 LONDON (ICIS)--The economic impact of the coronavirus pandemic could exacerbate the supply/demand imbalance for some petrochemicals brought on by huge capacity expansions in recent years, the International Energy Agency (IEA) said on Wednesday, as energy investment this year stands to drop to historic lows.
The impact of global economic collapse brought on by the coronavirus outbreak has led the agency to reverse its projections for energy sector investment growth this year, from a 2% increase to a 20% drop, representing an investment shortfall of $400bn compared to 2019, according to the agency’s energy investment report.
The IEA report traditionally looks at spending patterns the previous year, but the dramatic disruption this year led the agency to look at spending in 2020 so far and projections for the future.
Asia petrochemical shares mixed; oil falls on US-China tensions
By Nurluqman Suratman 2020/05/27 SINGAPORE (ICIS)--Asian petrochemical shares were mixed on Wednesday, while oil futures were lower amid concerns over rising tensions between the US and China.
Asia adipic acid trade subdued; June downstream demand weak
By Zhi Xuan Ho SINGAPORE (ICIS)--The Asia adipic acid (ADA) markets were weakly traded in May, with several key buyers in China and South Korea reducing contractual volumes and cutting back on spot purchases on consistently weak downstream demand.
Ongoing lockdowns and physical distancing measures in Asia to curb the spread of the coronavirus have caused most brick-and-mortar stores to remain closed, greatly reducing demand for PU, synthetic leather, and shoes.
VIDEO: China's domestic SM prices fluctuate in May amid strong fundamentals
By Veronica Zhang 2020/05/27 SINGAPORE (ICIS)--Watch industry analyst Tina Zhang discuss the latest developments in China's domestic styrene monomer (SM) market which have seen prices fluctuating amid strong supply and demand.
VIDEO: Asian chemical freight rates see support from improving demand
By Ai Teng Lim 2020/05/27 SINGAPORE (ICIS)--Watch ICIS editor Ai Teng discuss the latest developments in the Asian chemical shipping market.
US chem shares soar with stock market
By Al Greenwood 2020/05/26 HOUSTON (ICIS)--US-listed shares of chemical companies surged on Tuesday with the general market, amid news of another company proceeding with plans to develop a vaccine against the coronavirus (Covid-19).
ICIS Webinar: Debt ratio spikes in chemicals amid coronavirus likely to be transitory - Moody’s
By Joseph Chang 2020/05/26 NEW YORK (ICIS)--The expected increase in leverage ratios for US and European chemical companies amid the coronavirus crisis is likely to be transitory, analysts at credit ratings agency Moody’s Investors Service said on Tuesday.
INSIGHT: Europe PET demand outlook unclear as lockdowns ease, market remains in survival mode
By Caroline Murray 2020/05/26 LONDON (ICIS)--The polyethylene terephthalate (PET) industry in Europe had a surprisingly good run on sales during March’s pandemic shopping spree, but there is no getting away from the toll of a depressed economy.
Consumer focus was on essentials. And on the shopping list were 1l, 1.5l even 2l PET bottles of water and olive oil, for example.
Plastic-clad fruit and vegetables and other foods encased in packaging won over shoppers because of the hygiene aspect.
April demand was still good, particularly the first half, but the panic has since disappeared.
PODCAST: Global PVC export prices rebound in May as demand recovers, players sense end of dip
By ICIS Editorial 2020/05/26 LONDON (ICIS)--US and European polyvinyl chloride (PVC) export prices have rebounded in May after a severe slump in April, as demand has recovered and market players sense that the downtrend has come to an end.
US senior editor, manager Bill Bowen and UK senior editor Chris Barker discuss the outlook for the market in view of the coronavirus impact.
Click on the headline or scroll down to hear the podcast.
ANALYSIS AND RESOURCES
June 2020 Coronavirus presentation given by ICIS Analytics experts.
June 11, 2020 at 03:53PM
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TOPIC PAGE: Coronavirus, oil price crash - impact on chemicals - ICIS
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