Metor pauses Venezuela methanol production

Market: Natural gas, Petrochemicals
31/07/20

Mitsubishi-operated Metanol de Oriente (Metor) in eastern Venezuela has suspended methanol production as a health precaution.

The 750,000 t/yr Metor 1 plant will close from today through 15 August, and the 850,000 t/yr Metor 2 plant will close on 4-18 August.

Only strictly necessary workers will be allowed on site during this period, according to a company human resources notice seen by Argus.

Metor declined to comment.

Metor, located in the Jose oil and petrochemical complex, is one of the few industrial plants that continues to operate in Venezuela.

Mitsubishi and Mitsubishi Gas Chemical each hold 23.75pc stakes in Metor. Venezuela's state-owned Pequiven holds 37.5pc and International Petrochemical Holdings has 10pc. The International Finance Corporation (IFC), an arm of the World Bank, holds 1pc, and the remaining 4pc is treasury stock.

Italy's Eni has a 50pc stake in a separate methanol plant at Jose, Supermetanol, which is closed for maintenance. The other 50pc of the plant is owned by Pequiven.

By Patricia Garip

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07/11/24

Braskem eyes PE, PP gains from tariff hike

Sao Paulo, 7 November (Argus) — Brazilian petrochemical giant Braskem expects to increase its domestic share of polyethylene (PE) and polypropylene (PP) markets because of higher import tariffs that took effect last month. The Brazilian government's decision to increase import tariffs to 20pc, up from 12.6pc, effective from 15 October and valid for one year, is also expected to boost first-quarter sales by $30mn, the company said Thursday. Additionally, Braskem's operating rates for plastic resins, including polyvinyl chloride (PVC), are expected to rise in the first quarter from 64pc currently, following the seasonally weak fourth quarter. Braskem acknowledged that the higher import tariffs are a temporary government measure. The company is working to boost competitiveness in the petrochemical industry through conversion to renewables, improved technology and greater tax incentives for the industry, among other structural measures, Braskem chief financial officer Pedro Freitas said during the company's earnings call. To bolster the competitiveness of plastic resins made in Brazil, Braskem and fellow PVC producer Unipar Carbocloro have jointly requested the Brazilian government to increase the anti-dumping tariffs already imposed on PVC produced in the US, currently at 8.2pc. Both companies are also monitoring other polymers produced abroad for potential anti-dumping tariff requests. On the investment side, Freitas said Braskem may as much as double capacity at its petrochemical complex in Rio de Janeiro, where the company's cracker operates 100pc on ethane feedstock, and also increase capacity at its petrochemical complex in Bahia, which partially uses ethane. The company is monitoring the regulation of natural gas in Brazil to ensure greater availability of ethane present in the natural gas extracted from Petrobras' offshore operations in the country. The use of this ethane is in the company's plans, according to Freitas. Braskem also stated that it will invest around $60mn in a 30-40 day scheduled maintenance shutdown at its Mexican joint venture Braskem Idesa. The company's cracker in Duque de Caxias, Rio de Janeiro, also is expected to be shut for scheduled maintenance down next year. In the US, Braskem said it is studying potential investments to produce green PP. Looking ahead to next year, Braskem said Donald Trump's victory this week in the US presidential election could lead to greater protectionism in the US, which would be beneficial for Braskem's US operations, or it could lead to weakened domestic demand in Brazil if overseas products that would typically have gone to the US instead shift to Brazil. Freitas said that even with the better outlook for next year coming from the tariff hike on polymers in Brazil, the Trump factor and other global issues such as the currently low petrochemical cycle are causing Braskem to consider possible capacity rationalization, with a possibly decision next year. 3Q production and sales Braskem's domestic resin sales fell by 2pc in the third quarter from a year prior, with volumes also falling in the US, Europe and Mexico. Domestic sales declined mostly because of higher levels of PE and PVC inventories in the transformation chain, Braskem said. Domestic resin sales reached 869,000 metric tonnes (t) in the third quarter, down from 884,000t a year earlier. Compared to the second quarter, the company's Brazil resin sales were up by 6pc on higher volumes of PP after operations at the Rio Grande do Sul petrochemical complex resumed after severe flooding, and greater demand from the hygiene and cleaning sectors. PVC volumes were supported by greater commercial opportunities in the civil construction and sanitation sectors. In Mexico, PE sales through the Braskem Idesa joint venture fell by 3pc on the year to 208,000t because of lower demand. Sales declined by 17pc from the second quarter mainly on inventory management and the expectation of a reduction in PE prices in the international market in the following periods. Third-quarter PP sales were 501,000t, according to consolidated numbers for the US and Europe, down by 8pc from a year earlier and little changed from the previous quarter. The declines were mainly because of lower availability of products for sale in both regions. Braskem narrowed its third-quarter loss to $106mn from a $497mn loss in the same period last year. The loss was largely attributed to a negative exchange rate variation of R$1.2bn ($211mn). By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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German energy-intensive industry reduces output

07/11/24

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07/11/24

German energy-intensive industry reduces output

London, 7 November (Argus) — Production from Germany's energy-intensive industrial sectors was lower in September than a year earlier for the first time in seven months, driven by lower generation from the chemicals sector. Energy-intensive industrial production fell by about 3.3pc in September from August, according to data from German statistical office Destatis ( see data and download ). This was driven largely by a 4.3pc fall in output from the chemicals industry. And overall industrial output was about 1.8pc lower than in September 2023, falling year on year for the first time since February this year. The chemicals industry has warned of lower business confidence in the sector since the summer . Energy-intensive industrial branches previously showed signs of a slow recovery, but general manufacturing output across Germany has been on a consistent downward trajectory in recent months ( see manufacturing index graph ). Manufacturing output across all industrial sectors fell on the month by about 2.5pc, having risen on the month by 2.6pc in August. Third-quarter output as a whole was about 2pc lower than in the second quarter. Industrial economic activity has remained "very weak" recently, German economy and climate ministry BMWK said. But it expects a bottom to form in about the new year. BMWK has predicted that Germany will be in a technical recession in 2024 , before a return to 1.1pc GDP growth in 2025. The German economy started on a downward trajectory in 2022 , triggered by higher energy prices on the back of a halt to Russian gas deliveries to the country. And it has since been hampered by other structural factors such as labour shortages and a high bureaucratic burden. Higher gas prices could drive output lower A steady rise in gas prices in recent months could lead industrial firms to curtail domestic industrial production or use LPG instead of gas for some industrial processes. Argus assessed the German THE everyday price at an average of €40.68/MWh in October, about 56pc higher than the €25.98/MWh in February, the index's lowest point this year. Much higher gas prices since 2022 have driven a drop in Germany's industrial gas demand. Gas use in German industry of 256.5TWh in 2023 was about 22pc lower than the pre-crisis 2018-21 average of 327.6TWh, according to Destatis data released earlier this week ( see sector demand graph ). Firms either curtailed production in reaction to higher prices or switched to LPG in some processes in which gas is used as an energy carrier. But some processes, such as the production of ammonia through the Haber-Bosch-synthesis, use methane as a feedstock, which means they cannot shift to LPG as easily. Gas used as a feedstock reacted more strongly to the energy crisis than the gas used for energy. Gas use as a feedstock in the chemicals industry fell by 36pc in 2023 from 2021, while gas use for energy fell by only a quarter. Many fertiliser producers curtailed capacity in 2023, and Europe's largest fertiliser producer, Yara, expects its European gas costs to rise on the year this winter . The producer has already indicated it will shift its focus towards cheaper ammonia production in the US and away from Europe. Industrial gas use on track to rise in 2024 German industrial gas demand is on course to be higher this year than in 2023, based on daily data ending at the end of October. Industrial gas use for production processes other than space heating was 746 GWh/d in January-October, about 8pc higher than a year earlier, according to Argus estimates. But if September's industrial output drops extend to a multi-month trend, this would pull down the average for this year as a whole. Industrial demand typically falls in December when the holiday period limits economic activity, which could push down the average further. And the collapsed German governing coalition is unlikely to send strong recovery signals to the German economy. German market area manager THE publishes a combined dataset for gas demand by industry and the power sector. Argus splits out power-sector gas demand data by assuming operational efficiencies of 39-42pc, in line with fuel use data from Destatis, and factors out seasonal demand swings linked to space heating by looking at analogue trends in the residential and commercial sector ( see demand split graph ). Argus' estimates diverge from Destatis' annual demand data by only about 1-3pc, except for a 6pc gap in 2021 ( see Destatis vs Argus estimates graph ). By Till Stehr German manufacturing index index, 2021=100 German industrial gas demand by sector TWh German industry and power demand split GWh/d Destatis data vs Argus estimates GWh/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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German government collapse could delay energy policies

07/11/24

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07/11/24

German government collapse could delay energy policies

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Europe gas market shows muted reaction to US Trump win

06/11/24

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06/11/24

Europe gas market shows muted reaction to US Trump win

London, 6 November (Argus) — The European gas market showed only a limited downward reaction this morning to the US election result, and while some market participants expect a second Donald Trump presidency to ease geopolitical tensions, others see the potential for destabilising effects in the medium term. While vote counting was still ongoing at the time of publication and vice-president Kamala Harris has yet to concede defeat, the Associated Press and major US television networks have concluded that Trump secured enough votes in the Electoral College to win the presidency. European gas prices fell during morning trading, despite the US dollar strengthening by about two basis points against the euro. European gas prices typically move higher in euro terms when the US dollar strengthens to offset the higher cost of dollar-denominated LNG supply. Some market participants attributed the small price fall during morning trading to the expectation that a second Trump administration would seek de-escalation on several geopolitical fronts — such as in Ukraine and the Middle East — which, they say, had supported gas prices in recent weeks. But European gas prices reversed their limited gains by the 16:30 GMT market close. And the European gas price reaction was notably muted relative to the considerable volatility of less than a week ago when a media report had raised the prospect of an imminent deal between European buyers and Azerbaijan for gas transit through Ukraine. These European buyers later denied that a contract would soon be signed . Few market participants foresee a material effect on the gas market stemming from the US election result. "The impact is too vague to really price in," a trading firm said. "Given the tight global supply-demand balance, any setback will be short-lived," another market participant said. The result may fuel speculation that the war between Russia and Ukraine could come to an end sooner, but with the new president set to take office in late January, the change in presidency will have no effect on the possibility of reaching a deal that would allow Russian gas flows through Ukraine to continue beyond the expiry of the transit contract and interconnection agreements between the two countries at the end of this year. If a normalisation of relations with Russia leads a Trump administration to unblock sanctions preventing the use of the Novatek-led 19.8mn t/yr Arctic LNG 2 export terminal, this might bring more LNG supply to the market in 2025 than previously envisaged. Looking further ahead, Trump's pledge to reverse incumbent president Joe Biden administration's LNG licensing pause and speed up the approval of new liquefaction projects may have boosted expectations of global LNG supply towards the end of this decade. But other market participants expressed concern about a potential threat to US LNG exports to Europe in the medium term if the new administration opts not to co-operate with the EU on establishing a framework for monitoring, reporting and verifying methane emissions, which may hamper US-EU LNG trade flows once the EU methane emissions regulation is fully implemented. This, coupled with a "drill, baby, drill" policy in the US domestic market, may lead to a deeper gulf between the two markets, some said. Trump's pledge to impose tariffs on imports into the US, particularly against China, may trigger the risk of retaliation that could affect LNG flows from existing facilities — as was the case in 2019, when deliveries of US LNG to China fell to zero as a result of the trade war between the two countries, before rebounding sharply in 2021 after the two countries agreed on a preliminary trade deal. Only one Chinese buyer had US offtake at the time, but many more subsequently signed on for US LNG, totalling about 22mn t/yr from existing and planned liquefaction projects. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Q&A: French state auction for biomethane RGGOs

06/11/24

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06/11/24

Q&A: French state auction for biomethane RGGOs

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