Chemicals
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US PVC producers weigh cutbacks on lower margins
US PVC producers weigh cutbacks on lower margins
Houston, 30 January (Argus) — US polyvinyl chloride (PVC) producers are weighing operation cutbacks in February after grappling with deteriorating sales margins underpinned by elevated feedstock costs and stagnant end-product values. PVC producer profitability eroded in January as prices for key feedstock ethylene leapt to four-month highs by mid-January, various sources said. Ethylene is a main component in ethylene dichloride (EDC) manufacturing, which is then cracked into vinyl chloride monomer (VCM) before being converted into PVC. Some domestic PVC production is fully integrated and feature ethylene crackers, but many producers still purchase spot or contract ethylene and remain exposed to price fluctuations in the spot market. Spot US ethylene prices to-date in January have averaged 18pc higher than in December and 66pc higher than in January 2024, according to Argus data. Meanwhile, PVC spot values in Houston appreciated at a much slower rate between December and January, climbing by 1pc. Elevated ethylene spot prices are expected to persist in the near-term, maintaining pressure on PVC margins, due to planned maintenance and recovery from unplanned shutdowns in mid-January stemming from sub-freezing temperatures that gripped the US Gulf coast. The expectation for ethylene values to persist at current levels is anticipated to result in PVC production cutbacks, according to several exporters. Some producers, though, remain incentivized to maintain operating rates after bringing online expanded capacity last year. Formosa and Shintech collectively brought more than 500,000 metric tonne (t)/year of new PVC capacity on line during the second half of 2024. The ramp up in added capacity coincided with increasing trade barriers into key offshore destinations, which is expected to keep more volumes within the US while consumer demand outlooks this year remain cautiously optimistic . US buyers are unsure if domestic demand will be strong enough in 2025 to absorb additional volume, placing a ceiling on upward price direction. Exporters are even less optimistic operating in a global market increasingly defined by anti-dumping duties and plentiful Chinese supply. Domestic contract negotiations have highlighted the contrast between higher operating costs and a well-supplied PVC market. Producers cited higher operating costs to argue against lower contract negotiations in January, especially after prices fell in October and November. Several producers announced increases for February volumes, with some rising as high as 5¢/lb. But buyers said current demand does not support increases and instead view price hikes as to recapture lost margin. While producers sought price stability for January monthly contracts, they are also competing to lock in volume commitments through 2025 with aggressive annual contract discussions. Producers are trying to establish a price floor domestically by limiting price erosion among already-low-priced customers, but the additional capacity has made steeper price concessions difficult to avoid in other instances. One evolving upstream market variable is a firmer US Gulf coast spot export caustic soda market, which could encourage producers to maintain current rates and delay any cuts. Integrated PVC producers also manufacture chlorine and caustic soda through chlor-alkali units. Caustic soda is a co-product of chlorine — the latter a key feedstock in EDC production — and price swings in chlorine or caustic soda values can influence production decisions for PVC manufacturers. Caustic soda export prices from the US Gulf coast this week rose by $10/dry metric tonne (dmt) from the prior week and remains 8pc higher than the same week last year, according to Argus data. Tightened spot supply availability is a tailwind for spot values in the near-term, but values remain 24pc lower than peak levels in September when caustic soda prices last offset tighter PVC margins. By Aaron May and Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
US polystyrene recycling initiative launches
US polystyrene recycling initiative launches
Houston, 28 January (Argus) — The Plastics Industry Association is forming a group to expand US polystyrene recycling as states increasingly ban expanded polystyrene (EPS) foam because of low recycling rates. The group, called the Polystyrene Recycling Alliance, aims to improve consumer access to polystyrene recycling and to increase the number of applications for which recycled polystyrene can be used. The group plans to establish an investment fund to expand polystyrene recycling across the US. EPS food packaging, one of polystyrene's primary end uses, is difficult to collect, bulky and often contaminated with food, which has hampered recycling investment for the material. End uses for recycled polystyrene have also remained limited. As a result, polystyrene recycling has struggled to gain momentum in the US, which has led to state EPS bans . California this month banned EPS foam in food service under the state's extended producer responsibility law after the recycling rate failed to reach 25pc by 2025. AmSty and Agilyx's polystyrene recycling joint venture Regenyx, one of the few polystyrene-exclusive recycling companies, closed in March after five years of operation. The Oregon-based company lost $1.1mn in the first half of 2023 . By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Philippines’ JG Summit to shut petrochemical assets
Philippines’ JG Summit to shut petrochemical assets
Singapore, 28 January (Argus) — 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 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
India starts anti-dumping probe on e-PVC from EU, Japan
India starts anti-dumping probe on e-PVC from EU, Japan
Singapore, 28 January (Argus) — India's Ministry of Commerce and Industry (MCI) has started an anti-dumping investigation on imports of polyvinyl chloride paste resin, commonly referred to as emulsion PVC (e-PVC) resin, originating from the EU and Japan. The Gazette of India published a notice on this investigation on 24 January. India's MCI will investigate e-PVC imports into India from the EU and Japan between 1 April 2023 and 30 September 2024. The investigation will exclude PVC blending resin, PVC co-polymer paste resins, battery separator resins and PVC grades with a K-value below 60. This follows the ongoing implementation of provisional anti-dumping duties (ADDs) on e-PVC imports originating from China, South Korea, Malaysia, Norway, Taiwan and Thailand. The initial anti-dumping investigation on e-PVC imports from China, South Korea, Malaysia, Norway, Taiwan and Thailand is currently pending approval from the Finance Ministry, following recently suggested changes in preliminary ADDs. By Michael Vitiello Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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