Heavy olefins
Overview
Global butadiene production and demand are dominated by northeast Asia. Although the region continues to add both supply and derivative projects, there have been market inefficiencies that have resulted in deep sea imports into the region. Accurate and timely analysis will help producers, consumers and traders navigate these turbulent times.
The C5 and hydrocarbon resins industry has experienced a fundamental shift in the past few years, going from several acute shortages to a glut of products in the markets. Producers, industrial chemicals companies, chemical distributors, traders and technology providers all need to understand how this will play out, especially in light of new entries into the global market. Argus’ C5 and Hydrocarbon Resins Service is the only global service of its kind.
Our experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global markets.
Latest heavy olefins news
Browse the latest market moving news on the global heavy olefins industry.
EU affirms 12-month deforestation delay
EU affirms 12-month deforestation delay
Brussels, 3 December (Argus) — Negotiators for the European Parliament and EU member states have provisionally agreed on delaying the implementation of the EU's 2023 deforestation regulation by one year. Fast-track adoption can now take place with a plenary vote expected on 16-19 December and later approval by EU ministers. The EU's council of ministers noted that the provisional agreement does not affect the substance of the existing deforestation rules. The final text, provisionally agreed, does not retain a "no risk" category, put forward by parliament's largest centre-right EPP party. Parliament had narrowly accepted the EPP proposal for the "no risk" category. Backing down on the amendment now allows the EU to proceed to EUDR adoption and publication in the bloc's official journal before the end of the year. Due diligence obligations set by the EU's 2023 deforestation regulation require operators and traders to ensure listed commodities and derived products, sold in or exported to the EU are "deforestation-free". Products include those made from cattle, wood, cocoa, soy, palm oil, coffee and rubber. The European Commission said it aims to finalise the country benchmarking system "as soon as possible but no later than 30 June 2025". And an information system where firms register due diligence statements will enter into operation on 4 December. Parliament's lead negotiator for the deforestation law, Christine Schneider, also pointed to a commitment by the commission to an "impact assessment and further simplification" for low risk countries or regions. "From 2028, countries practising sustainable forest management and showing no deforestation will have the opportunity to be exempted from unnecessary red tape," said Schneider, a member of the German centre-right EPP. The Centre-left S&D group said the system of "no risk" countries would have created an "unfair double standard", dividing EU member states into different risk categories. Negotiators firmly rejected this approach, the group said. "It was clear all along that their half-baked amendment proposals had no chance of success with the council and the commission," said Delara Burkhardt, German S&D negotiator for the deforestation law. Citing reasons of legal certainty, EU states quickly came out in favour of just a one year delay , agreeing with the commission's original proposal. Speaking to parliament on 3 December, the EU's director general for trade Sabine Weyand said robust commitments to halt deforestation in South America, as of 2030, and to ensure adherence to the Paris climate Agreement, are also "essential" elements of the EU's free trade agreement (FTA) with Mercosur countries — Brazil, Argentina, Paraguay, Uruguay, and now Bolivia. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Bridgestone, BB&G, Versalis partner on tire recycling
Bridgestone, BB&G, Versalis partner on tire recycling
Houston, 3 September (Argus) — Tire manufacturer Bridgestone has signed a joint agreement with BB&G and Versalis to develop a closed-loop tire supply chain. The companies agreed to collaborate on research and technical solutions to scale end-of-life tire (ELT) recycling for the production of new tires. In doing so, they aim to advance pyrolysis technology and market circular polymers for tires. This is part of a push to improve sustainability within the synthetic rubber sector. Technology firm BB&G transforms ELTs into renewable raw products using a thermal conversion process of pyrolysis. It inaugurated a commercial tire pyrolysis oil (TPO) unit, located in Fatima, Portugal, in July 2024. Chemical company Versalis will incorporate BB&G's pyrolysis oil over the next few months into expanding its range of products — including elastomers and polymers — derived from chemical recycling and bio-based feedstocks. With that, Bridgestone in Europe, the Middle East and Africa (EMEA) looks to employ these circular elastomers into manufacturing new tires. The first batch of tires is anticipated in early 2025. "At Bridgestone, we have set a goal of working with 100pc sustainable materials by 2050, and recycling and reusing products is an important part of this," said Bridgestone's EMEA president Laurent Dartoux, which also supports initiatives "on co-creating new and environmentally responsible ways to maximize the complete lifecycle of our tires." By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chemical markets prepare for Canadian rail strike
Chemical markets prepare for Canadian rail strike
Houston, 2 August (Argus) — Chemical industries in North America are bracing for a potential rail strike in Canada, but some markets expect greater impacts than others. Participants across a variety of industries have expressed greater certainty that a rail strike is now likely after momentum for a strike several months prior had fizzled out. The Canadian Industrial Relations Board (CIRB) is making considerations that are due to be posted no later than 9 August, with some market participants expecting a strike to be called somewhere within 72 hours thereafter. The CIRB is evaluating what, if any, materials would be constituted as essential to move even during a strike. Chlorine The chlor-alkali market has raised concerns about a potential strike, with some suppliers of chlorine and hydrochloric acid (HCl) in Canada pushing for a strike to be delayed or for its products to be considered essential. Chlorine and HCl are both used in water treatment, and suppliers have said a prolonged stoppage in rail service without proper considerations for such products could endanger some municipal water supplies. In the lead up to a potential strike, Canadian chlor-alkali producers and their US counterparts positioned close to the Canadian border have been trying to build up buyers' on-site inventories as a precaution. Producers have warned, however, that such contingency plans only work if the strike is not prolonged, as stoppages lasting longer than a few weeks could be problematic. Wildfires across central Canada have been complicating the efforts to ensure downstream inventories, as the fires have encroached on crucial rail lines and delayed or rerouted supply. Polymers In the polymers markets, polyethylene (PE) and polypropylene (PP) producers in Canada, including Nova Chemicals and Heartland Polymers, made advanced preparations for a rail strike back in May. Both companies had moved some inventories in advance to storage warehouses in the US to limit supply disruptions to US customers. In addition to storage on the US side, sources said the Canadian producers were also making plans for storage on the Canadian side so they could continue to operate, even if railcars were no longer moving. As long as a strike would not last more than a few weeks, most market participants said they believed there would be minimal disruption to the overall market. An extended strike would likely result in some shipping delays, but producers on the US side could raise operating rates and potentially help to fill in any supply gaps. Polyvinyl chloride (PVC) customers in Canada had stocked up on supply back in May as well, with minimal concerns of disruption so long as any stoppage did not drag on. Some pipe producers with plants in Canada have also said the need to stock up on inventory has been lessened due to Canada's weaker economy and construction sector. Polystyrene (PS) distributors have been positioning resin supply in the northeast and Midwest to quickly move across the border if need be, but warehouses in Canada were reportedly oversupplied on PS and turning away extra railcars. Recycled polymers market participants indicated that with current low demand and low volume trades, the rail strike will likely lead to more truck usage rather than completely halting trades altogether. Chemicals The butadiene (BD) market reported that a Canadian rail strike would impact cross-border trade flows of feedstock crude C4 and BD into the US. A BD producer in Sarnia, Ontario, primarily delivers BD to US customers in the Midwest — a fact that has prompted some concern from US customers about the impacts of a potential rail strike. Some BD buyers have worried that prolonged disruptions to Canadian volumes could add tightness to the domestic US market, especially in cases where consumers are unable to source volumes from the US Gulf coast. Concerns from the ethylene and aromatics markets were muted, and the isocyanate and polyurethane (PU) markets expressed little concern as most buyers were able to bring supply in by truck. Moreover, the vast majority of supply for the isocyanate chain comes from production in the US Gulf, meaning the majority of any transit would be conducted on lines not impacted by the strike. Methanol market participants also did not express significant concerns. By Aaron May, Michelle Klump, Joshua Himelfarb, Zach Kluver, and Catherine Rabe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Soaring freight costs hit LatAm polymers trade
Soaring freight costs hit LatAm polymers trade
Sao Paulo, 18 June (Argus) — Latin American plastic product manufacturers have been facing a significant surge in freight costs from Asia to the Americas since early April, with prices exceeding $10,000 per 40-foot container (FEU) heading into June, compared with approximately $1,170/FEU at the end of March. This high value was reported to Argus by polymer traders in the Manaus Free Trade Zone last week. It is the highest rate reported by market participants in the region. But data collected by Argus shows that average freight rates from Asia to the east coast of South America were between $6,800-$8,000/FEU on 31 May. In the two following weeks, prices hit $8,000-8,500/FEU. The phenomenon is connected to a logistics readjustment following disruptions on major global shipping routes since last year. But the current situation also has a unique cause: electric vehicles imports from China to Latin America. Chinese electric car manufacturers have been taking advantage of available space on vessels traveling the Asia-South America route before an increase in import tariffs on these vehicles. In Brazil, import duties are set to rise in July for all types of electrified vehicles, from 10pc to 18pc for fully electrified cars, from 12pc to 20pc for hybrid cars, and up to 25pc for non-rechargeable hybrid vehicles. This window of opportunity exploited by Chinese manufacturers has overloaded ships on the China-Brazil route, both for cars and containers filled with spare parts and components. Importers of other materials, such as polyethylene (PE) and polypropylene (PP), have been significantly affected. In the case of PP, some importers have stopped importing this resin from China and other Asian countries due to the substantial increase in freight costs. As a result, PP buyers in Brazil and the rest of South America are meeting their needs with material sourced from the Middle East (in Brazil's case) and the US (for countries on the west coast of South America), or from regional producers like Braskem in Brazil, Esenttía in Colombia, Petrocuyo in Argentina, and to a lesser extent, Petroquim in Chile. Logistical Disruptions The current higher maritime freight rates between Asia and South America follow logistical disruptions in two of the world's most important navigation channels, the Panama Canal and the Suez Canal. The Panama Canal faced challenges last year due to severe drought, resulting in a decrease in authorized vessel crossings between the Atlantic and Pacific oceans. The usual 30 transits dropped to around 18 in February. While the situation in the Panama Canal is gradually improving, it has had consequences for commercial flows between polymer producers in Asia and consumers on the east coast of South America, namely Brazil and Argentina. Similarly, disruptions occurred between European producers and consumers on the west coast of South America, like Colombia, Peru, Ecuador and Chile. Another critical maritime trade corridor, the Suez Canal, which connects the Mediterranean Sea to the Red Sea, continues to be impacted by armed actions from military groups. As a result, shipping companies have increasingly preferred the longer route around Africa's Cape of Good Hope, despite the longer distances and significantly elevated freight costs. 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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