Chemical Trends H1 2023

Global butadiene demand is likely to turn the corner in the first half of 2023, with prices seen rising and export opportunities to the US set to emerge despite nagging fears of a recession. Butadiene prices globally have been depressed in 2022 amid global economic headwinds, but plant turnarounds in the US -- which would trigger export opportunities from Europe to the US -- as well as limited outflows from Asia may buttress the case for more resilient demand in 2023. US demand may improve amid turnarounds In the US, two large butadiene producers plan to shut for turnarounds in Q1 while a third key producer is expected to be out of the market in Q2, limiting the availability of product in the region. "There are some supply issues in the US so that means there is an outlet for European cargoes to go to the US in Q1. I think everybody is expecting the first half of the year to be much more depressed and gradually become better in the second half. It will be correlated to the economy," a butadiene producer in Europe said. European export prices crashed towards the end of 2022, as sellers desperately looked to other regions to place excess volumes. With the arbitrage wide open to the US as the new year starts, traders will be keeping a close eye on export opportunities due to the planned turnarounds. The US is expected to receive more imports from Asia, Europe as well as Brazil, a frequent exporter to the US. Since 2021, the US has seen a heavy influx of Brazilian, European and Asian cargoes, filling supply gaps in the domestic market, especially when domestic producers had limited availability due to turnarounds and maintenances. However, US butadiene import prices are expected to be capped by limited domestic consumption and wide international supply in the first half of 2023, as well as lower feedstock costs. "Everything is really slow right now. I'm betting the spot will follow the contract price soon. I think the demand is picking up a little bit on the C4 side though," said a market player in the US. "Turnarounds may result in an increase in demand for local C4 as I've had a few parties looking to purchase for the upcoming months," the source said, adding the price may see an uptrend if supply becomes an issue in the near future. Cracker runs remain lower in Europe, Asia In Europe, the supply and demand imbalance is expected to continue for most of H1 despite producers operating at reduced rates, as downstream demand continues to underperform in the region. In Asia, market participants expect overall supplies to remain heavy despite expected lower steam cracker operations, as new butadiene plants are due to start up in Asia in H1. An interest to move cargoes to the US may remain in H1 in Asia, but lower steam cracker operations, as well as high freight costs may limit such opportunities. Downstream sentiment remains gloomy Despite the positive cues, downstream players in Europe witnessed demand for key butadiene derivative -- such as SBR, ABS and adiponitrile -- decline across the final quarter of 2022, as recessionary fears across Europe pushed consumers to cut down on purchases of discretionary and high-ticket items, while high input costs stemming from Europe's energy crisis impacted the competitiveness of derivatives produced in the continent. And without an imminent solution to deal with Europe's energy needs, the picture remains gloomy for the downstream market. In the US, sources believe the market activity in Q2 2023 will depend on the renewal of consumer interest. "If the market continues tracking lower and producers return from their maintenances, supply will be more than sufficient making prices drop again," a regional trader said. Spot demand in Asia may pick up at the start of next year as cracker owners rush to fill supplies. Asian steam cracker owners were heard planning to keep operations lower for 2023 -- possibly an average of 70%-80% -- which would likely limit spot exports from key producers, such as South Korea. "Because of planned operating rate cut, the producers do not have much export quantity as they need to supply their local customers," said a market source in Asia. However, market sources said such demand in Asia would likely fade away quickly as China's buying appetite would remain scarce, in line with planned butadiene plant startups. Market participants are also closely monitoring possible butadiene demand from China following the inauguration of a new 400,000 mt/year ADN, plant by Invista in Shanghai. Butadiene is a key feedstock for ADN, which is further processed to produce nylon 6,6. Market sources, however, said it is still unclear whether the new plant would run at full capacity as demand outlook for nylon 6,6 for auto-used airbags is seen depressed amid lower automobile factory operations in Asia. Demand recovery in Asia also depends on China's COVID-19 regulations, as easing policy would help boost economic activities, which, consequently, would push chemical demand.

Global polyvinyl chloride markets face uncertainty going into 2023 with sluggish demand seen lingering across the regions. PVC prices in Asia and the US fell hard through much of 2022 and may enter 2023 having hit a bottom, market participants in both regions said. However, Chinese demand has yet to rebound from periodic shutdowns despite minor steps to ease its zero-tolerance COVID policies. The US may see more interest rate hikes to combat inflation, which have suppressed domestic PVC demand. Both regions stepped up exports amid thin global demand. And Europe enters the new year facing a recession amid high energy prices and inflation, and no end in sight to the Russia-Ukraine war. "We don't see anything in the next year that will have a sustainable margin recovery other than shutting down," said Rob Stier, senior lead of global petrochemical analytics at S&P Global Commodity Insights. "If there is a recovery, it will be led by the US." Europe faces recession impact Sentiment for European caustic soda and PVC in 2023 was expected to depend on the severity of the recession and its impact on demand. Along the chlorine chain, producer margins were driven by a balancing act between caustic soda and vinyls, with one compensating for the other's losses. Demand for both was strong in 2021 with PVC ahead, but in 2022, PVC demand softened amid economic pain and high energy costs that forced chlor-alkali production cutbacks amid surging caustic soda prices. Chlorine production issues tightened caustic soda availability, prompting hurried orders of US material that briefly pushed US export prices to an all-time high since Platts first began assessing the market in 2004. At the same time European spot PVC prices plunged but remained among the highest in the world going into 2023. Market participants expected further weakness for European caustic soda and PVC in the first half of 2023 as consumers rein in spending and shun big-ticket purchases. "High [caustic] prices are causing demand destruction," a caustic soda trader said in November. Another trader said "a kind of normalization" was emerging in 2023, while in the interim, European producers benefitted from high caustic prices that cross-subsidized PVC. US domestic demand slides prompting more exports Integrated US producers were also entering 2023 running chlor-alkali plants at high rates to capture strong caustic soda prices, while PVC prices and demand softness were expected to linger amid mortgage interest rates inching below 7%, but remained volatile, market sources said. US export PVC prices fell nearly 62% from May 2022, while export caustic soda prices climbed nearly 32% from May to November before retreating. US caustic soda capacity has fallen 9% since March 2021, largely on Olin's string of shutdowns, which has also supported caustic soda pricing. However, the strength in caustic soda prices was expected to soften as well going into 2023, though a decline could be slow. Caustic soda demand and pricing took months to catch up to rising prices in the PVC production chain that began in mid-2020. "It usually comes late to the party, and it stays a little longer," Westlake COO roger Kearns said in November. "We expect to see that again this time." Westlake is among resin producers that have reduced rates and hiked exports in response to softening demand for durable plastics. While a slowdown in US interest rate hikes could prompt an uptick in domestic demand, market participants said a global recovery depends on whether domestic Chinese demand rebounds. That would prompt China to reduce exports, giving US outflows less competition in global markets as customers enter 2023 having destocked inventories in the final months of 2022. "The real driver on this, though, is China. China demand is still quite slow," Kearns said in November. All eyes on potential China demand recovery Asia's PVC market could rebound in early 2023, but market sources said a comeback would likely be limited without a full demand recovery in China . Asian PVC prices dropped sharply through 2022, and December offers came at the lowest since June 2020. Market sources said those levels appeared to spur spot buying, raising expectations that the slide could have reached its bottom. Sources also pointed out spot Asian PVC supplies could hold at lower levels in 2023 compared with 2022 with operations running at reduced rates in line with lesser output by upstream steam crackers. Trading sources expected US-origin PVC flows to Asia to slow down in early 2023. However, US sources said those flows could increase if China's demand rebounds, leading to fewer Chinese PVC exports. China's PVC exports reached a record high 278,374 mt in April, according to customs data. Those outflows slowed later in the year as US PVC export prices fell in tandem with lower Asian PVC prices as well as plunging freight rates, which restored Asian PVC's global competitiveness. By October, China's PVC exports stood at 96,630 mt, the lowest since August 2021, the customs data showed. Some Asian market sources said China was expected to relax strict measures in 2023, but awaited any such official announcements beyond some minor changes in late 2022. Together with high utility costs, China's PVC plant operations declined from 70% to 56% in late 2022.

The global ethylene market is widely expected to come under pressure in 2023 from weak demand, thin margins and volatile energy costs, though some market participants see a return of some pre-COVID normalcy. While the US will look to increase its competitive advantage from lower feedstock costs, the European market's energy cost struggles are seen lingering within the more challenging global market that emerged in the second half of 2022. With recession and higher inflation key concerns, European ethylene and derivative margins may to come under further threat in 2023. Also putting pressure on Europe are US exports as supply chain disruptions, sharply lower freight costs and the lack of extreme weather events allow the US to be competitive in Europe's higher cost market. One European ethylene consumer said the surge in energy costs could be an existential threat to viability of the region's chemical production going forward. "The delta between different parts of the world, was making Europe more expensive and was expected to lead to even more imports of a variety of different products," the consumer and derivatives producer said. Asian ethylene also was expected to remain under pressure from feedstock volatility and weak derivative demand in 2023. The demand outlook for early Q1 2023 has been bleak amid an overall slowdown in finished goods exports due to a weak economy, several market participants said, but could improve in Q2 as the peak season for several derivative markets typically starts in March and April. Eyes also were on possible startups of new naphtha-fed steam crackers in China, as project delays amid manpower shortages and logistical issues due to the pandemic slowly clear up. "If new crackers start on time and run at maximum, key ethylene exporters in Asia will definitely feel the heat as China is currently the largest importer. This will definitely put Asian producers under pressure," said a China-based trader. Four new crackers with a cumulative capacity of 4.587 million mt/year were slated to come online in China in 2023. Increased ethylene export competition expected from US In addition, Asian producers could see increased competition from the US, where producers have seen less downstream domestic demand, leaving more for exports. "Ethane-based ethylene is simply more cost competitive, and with US producers looking to export material constantly, this will definitely impact trade flows in Asia if the US continues to ship ethylene over as naphtha is likely to remain volatile," said a trader based in Southeast Asia. However, US ethylene exports were expected to remain maxed out in the first half of 2023, as they have been for much of 2022. Enterprise Products Partners has operated its joint-venture 1 million mt/year ethylene export terminal at 120% to 125% of its nameplate capacity for much of the year. The company plans to expand that capacity by 50% in the second half of 2023, and double it to more than 2 million mt/year by 2025. Ethylene margins could improve slightly going into 2023 if derivative demand rises, but downstream oversupply could mute a rebound. Rob Stier, senior lead of global petrochemical analytics at S&P Global Commodity Insights, said the US ethylene market could see "a month or two of increased margins" in the first half of 2023 if derivative producers increase output to restock inventories after destocking through the end of 2022. Downstream MEG hit by weak demand, production cuts The global downstream monoethylene glycol price outlook remained mixed amid weak demand, economic uncertainty and rising costs, traders said. Suppliers were bullish and said prices needed to move up in line with rising oil costs. However, traders said production cuts would continue until margins strengthened. Demand in the downstream textile and polyethylene terephthalate bottle industries lagged behind MEG supply. Asian trade sources said China will continue to target exports to Europe, as prices remained high in Europe. "Europe and Asia, where naphtha is the dominant feedstock for crackers, will continue to see high production costs. Across the 2020-2023 time frame, global capacity grew by over 45 million tons versus a demand growth of just over 26 million tons. This is one of the main reasons behind the cyclical industry trough in 2023," according to Chemicals Insight APAC at S&P Global Commodity Insights. In the US, with domestic demand expected flat and hefty antidumping duties still levied on exports to Europe, US suppliers were looking to find new or additional outlets for MEG for 2023. In addition to confirming reduced run rates, Dow and Indorama Ventures said they would focus on higher-value applications than MEG for feedstock ethylene oxide, such as surfactants and polyurethanes. "MEG is the weak spot in EO," said CEO Jim Fitterling during Dow's October Q3 earnings call. In addition, in late October, India dropped its antidumping investigation on MEG imports from the US, Kuwait and Saudi Arabia, renewing attention for US export cargoes to the country.

Latin American polymer markets will remain key to US suppliers in the first half of 2023 amid strong competition from lower prices and plentiful supplies from Asia. Latin America's polyethylene prices typically inch up after US suppliers destock in the previous quarter. However, prices were not seen rising in Q1 2023 amid a combination of new PE capacity coming online in the US as well as continued competitive pressure from Asian exports and lower freight costs. "Low prices and margins for the next two years are expected," Robert Stier, senior lead of global petrochemical analytics for S&P Global Commodity Insights, said of Latin American PE and polypropylene. S&P Global sees PE prices starting Q1 2023 below $1,000/mt with LDPE slightly higher. For PP, S&P Global sees prices slightly above $1,100/mt in Q1. "Global supplies shift from tight to long as new capacity catches up with demand," said Jesse Tijerina, Chemical Insights, Americas Polyolefins Lead for S&P Global Commodity Insights. He said polyolefin demand growth was slowing as inflation, rising interest rates, Russia/Ukraine war-induced high energy prices, and lingering pandemic policies soften global consumer confidence. More US and Asia capacity to come online in 2023 also was seen pressuring margins. Regional traders expect prices in early 2023 to be in line with the end of 2022, while less demand expected could pressure spreads. "Political issues can and should affect the market in 2023, especially if the new Brazilian government resumes import taxes that were discontinued," a Brazilian trader said. In terms of spreads, the market is expected tighter next year. "[The] market is softening in 2023, I believe it'd be a hard year to pass by basically because margins to producers will be tight if not losing money at one point. I expect oil prices to fall so producers could make some margins, but I don't see it in the near future," a regional polypropylene producer said. US logistics snags seen lingering Logistics snags that have stymied US polymer exports since Q4 2021 were seen lingering through early to mid-2023, adding pressure to maintain market share in Latin America where buyers are increasingly eyeing Asian material. "Freight rates easing up in the second half of 2022 has increased import competition and improved supply reliability and lower prices," Tijerina said. US shipments to Brazil and the West Coast of South America face delays of four to six weeks in Q1, amid short supply of chassis and truck drivers at ports as well as holdups at transshipment sites in Panama and Colombia. Asian material typically takes up to three to four months to arrive. However, that timeline shrank as freight rates and demand softened in 2022, making Asian material much more competitive given delays in moving US material, particularly to WCSA markets. As a result, price and delivery reliability increasingly determine the winning supplier, and that competition is seen continuing in 2023. Latin demand seen retreating in 2023 Latin American polymer demand was seen softer in 2023 as the downturn that emerged in the second half of 2022 lingers, driven by higher inflation, exchange rates and slower GDP growth. The International Monetary Fund sees Latin American GDP growth at 1.7% in 2023, slowing from 3.5% in 2022, as financing becomes more scarce and costly with major central banks raising interest rates to combat inflation. Specifically, the IMF sees 2023 expectations in Brazil and Chile at 1%, the lowest in the region, and Peru with the highest at 2.6%. Uncertainty ahead of Brazil's new President Luiz Inácio Lula da Silva starting on Jan. 1 has investors on hold, awaiting direction. PE packaging demand for health, hygiene and other discretionary goods was seen slowing, while demand for PP and polyvinyl chloride in more durable automotive and home construction markets was also seen softer amid rising interest rates and inflation. "In the near-term, the region is vulnerable to recession -- rapid inflation, high interest rates, and weakening exports," Tijerina said. Exchange rate volatility also was expected to continue to influence local prices. Brazil's new government policies were still unclear, while other countries in the region have seen their currencies devalue since the start of the pandemic amid US dollar strength. Argentina has had the most struggles, as importers need permits and face US dollar restrictions, pushing local prices to the highest in Latin America. "For Latin America, these factors result in a deceleration in activity as higher borrowing costs weight on domestic credit, private consumption, and investment," the IMF said.

Platts, part of S&P Global Commodity Insights, will launch new instruments for European toluene and MX on the Platts Editorial Window, or eWindow, communication tool for the European toluene and MX CIF ARA Market on Close assessment processes effective Dec. 5, 2022. This will allow market participants to directly submit bids and offers for CIF ARA on an outright price basis and as spreads over Eurobob FOB ARA gasoline in the European toluene and MX MOC, through the eWindow communication tool or through an editor, who would then publish the information using the software. The assessments affected are: Assessment name Symbol Mixed Xylene CIF ARA Mo01 spread to EBOB FOB AR swap MXPRA00 Mixed Xylene CIF ARA Mo02 spread to EBOB FOB AR swap MXPRB00 Mixed Xylene CIF ARA Mo01 MXEAB00 Mixed Xylene CIF ARA Mo02 MXEAC00 Toluene CIF ARA Mo01 spread to EBOB FOB AR swap TLPRA00 Toluene CIF ARA Mo02 spread to EBOB FOB AR swap TLPRB00 Toluene CIF ARA Mo01 TLEAB00 Toluene CIF ARA Mo02 TLEAC00 Bids and offers for CIF ARA toluene and MX will generate headlines on Platts Petrochemical Alert. For bids and offers submitted directly through the eWindow communication tool, the cut-off time is 4.05.00 pm London time. Market participants will be able to improve their bids and offers by a minimum of $0.25/mt per 20 seconds and a maximum of $1/mt per 20 seconds right up until the close of the MOC at 4:30:00 pm London time. Following any trade, there will be 30 seconds to rebid or re-offer. A one minute extension period will be triggered by any price move or a rebid/re-offer in the 20 seconds prior to the close of the MOC. Bids and offers submitted through an editor for publication must be received by 4:00:00 pm London time. Market participants will be able to improve their bids and offers by a minimum of 25 cents/mt per 60 seconds and a maximum of $1/mt per 60 seconds until 4.28.00 pm London time. A three-minute extension period will be triggered by a rebid/re-offer in the last 20 seconds prior to the close of the MOC. Full information relevant to these assessments can be found in the European Petrochemicals specifications guide here: https://www.spglobal.com/commodityinsights/plattscontent/_assets/_files/en/our-methodology/methodology-specifications/petchemeuropemethodology.pdf Platts expects credit relationships that prevail inside its assessment environment to fully reflect relationships in the markets as a whole. The eWindow provides direct entry and management of credit filters which should mirror those normally applied in the marketplaces. Where Platts editors publish bids and offers on behalf of a company that submits data to an editor, counterparty credit settings are set to "open" for regular participants in the assessment process unless companies have notified Platts in advance of any restrictions. If a counterparty submitting information through an editor has not already notified Platts of any counterparty credit restrictions, it should notify Platts at least one hour prior to the start of the MOC if any counterparty credit filters need to be modified. Please send all feedback and comments to petchems@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

Austrian petrochemical maker Borealis does not plan to idle any production capacity next year and is focused on growing its operations globally despite natural gas shortages in Europe, high energy prices and softer demand in high growth markets such as Asia, the company's CEO told S&P Global Commodity Insights. "We are growing and not idling capacity," Thomas Gangl said in a recent interview. "We produce what we need, and we are changing the grades. We are increasing our market share continuously. We are producing products in segments that are more stable in pricing and margins." Borealis, in which Austrian energy company OMV has a 75% stake, saw the utilization rate of its steam crackers in Europe plunge to 63% in the third quarter, compared with 88% a year earlier. The company's polyethylene sales volumes, excluding those from its joint ventures, dropped 16% year-on-year in the third quarter, while polypropylene sales volumes, excluding those from its joint ventures, fell 19% during the same time period. Lower global production "We see also that some units from some companies are not producing anymore, so the demand reduction is having an impact on the operating rates also on Borealis," said Gangl. "We are coming out of a period where the demand was high and availability was sometimes not given, especially in Europe; prices for polymers increased significantly and that is something that cannot continue for a long time. Prices are coming down to a more normal level, and with less demand prices will be under pressure." European petrochemicals producer BASF on Oct. 26 lowered its expectations for global industrial and chemical production in 2022, saying the chemical sector in Europe needs to cut costs because of high energy prices. European gas prices, which spiked in August amid lower supply from Russia, has since eased amid a mild winter and high gas storage levels. Platts, part of S&P Global, assessed on Nov. 4 the European benchmark, the Dutch TTF month-ahead, at Eur114.85/MWh, easing 7.88% on the day. The marker, which started the year at Eur85.75/MWh, is down from Eur319.98/MWh reached on Aug. 26. High energy prices "In the long run the (energy) prices need to come down," said Gangl. "This is clearly indicating the disadvantage high gas prices have on the chemical industry." Borealis started in October charging an extra Eur180/mt for its European products to cope with the high gas and energy prices, Gangl said. "We introduced an energy price adder to our polyolefins because we cannot digest those high energy prices," he said. "For our assets I do not see any impact (of gas shortage) in that respect but of course in terms of demand, the high inflation and high energy prices are putting pressure on demand." Even in Asia, where most future growth is expected to come from, is showing signs of weaker demand. Additional capacity that is coming onstream during the down cycle is exacerbating the soft demand outlook, said Gangl. "What we see at the moment (in Asia), demand is not picking up as planned and additional capacities are coming onstream," he said. "It will take a few more years for these additional capacities to be digested by the market growth." Despite the dim outlook, Borealis is forging ahead with projects worldwide as part of plans to hit global production capacity of 600,000 mt in 2025 from 100,000 mt in 2019, said Gangl. Borealis is looking at both mergers and acquisitions and organic growth to achieve its 2025 target. Borouge 4 expansion Bayport Polymers has started commissioning Baystar, a one million mt/year ethane cracker at its Port Arthur, Texas site in the US. The project is a 50/50 joint venture between Borealis and TotalEnergies. "Products from the new unit will become available from next year," said Gangl. "With the existing units, you are not always running at 100%. It (ramp-up) depends on the market situation and the grades we are producing." Borouge 4, the latest expansion of Borealis' joint venture with Abu Dhabi National Oil Co. in the UAE, is on track for start-up in 2025, he said. Borouge raised its third-quarter production capacity by 7.9% on the year following the completion of its fifth polypropylene unit (PP5) in February. The $6.2 billion expansion project of the Borouge complex in the industrial hub of Ruwais includes the construction of a 1.5 million mt/year ethane cracker and two polyethylene plants, making the site the world's largest single-site polyolefin complex at 6.4 million mt/year. The completion of a delayed propane dehydrogenation plant being built at Kallo, Belgium, is still expected to be finished by mid-2024, Gangl said. Borealis had announced it would retender the majority of the project's construction contracts following termination of all contracts with the main contractor IREM Group. "As we are delayed in the project, the need for products will be even higher than before," said Gangl. "We see demand in this market for the volumes significantly increasing over the next year so there will be high demand and we will ramp up as soon as possible."

Monoethylene glycol major ME Global International FZE plans to introduce an independent pricing mechanism for its Indian customers for 2023 contracts as against a CFR China-based price being followed so far, Kamlesh Parwani, commercial director, ME Global told S&P Global Commodity Insights. The company, a subsidiary of Kuwait-based Equate Petrochemical Company, will announce India contract prices regularly as per the new plan. The rationale behind the step is to delink the country's MEG contract from Chinese prices, which according to many MEG producers in Asia, have fallen to unsustainable levels. All MEG contracts in India are currently priced on CFR China values and with the continuous fall in those prices, it has become unviable for producers to follow benchmarks where the fundamentals aren't strong. "We believe India is...poised for a breakout growth and justifying a benchmark and index of its own. There are many differences with China on the market dynamics, size, balances, inventories, etc. Hence, we are discussing with customers on a different approach driven by a combination of domestic and global dynamics, which would be more relevant to the entire Indian value chain," Parwani said. Platts MEG CFR China prices have dropped 29.2% so far in 2022 to stand at $450/mt as of Nov. 3. According to S&P Global Commodity Insights, MEG margins are expected to remain subdued in 2023 as capacity additions have significantly outweighed demand in recent years, leading to operating rates of below 60% in China. The coming year is poised to be one of the most challenging for MEG producers in specific and the petrochemicals industry in general, Parwani said. The company will assess the contract volume for India "based on the situation" as it finalizes discussions with all customers for 2023. With challenges in sustaining MEG margins, there has been market speculation over its supply in the coming year. "We are looking at global recessionary trends along with significant volatility combined with the issues in Europe, the continuing COVID challenges from China, etc. While we always run our assets in full capacities, we believe that the MEG market pricing will correct from the current unsustainable levels," Parwani said.

With global container shipping costs coming down, European polymer markets are seeing offers of material from the Far East rise, adding pressure to prices in an already oversupplied environment. S&P Global Commodity Insights petrochemicals editors Abdulaziz Ehtaiba, Hui Heng and Daniel Pelosi, and containers editor George Griffiths talk about the logistical landscape and the fallout it is causing in the polymer markets. Price assessments for this episode: PP Homo Inj FD NWE Spot Eur/mt - AALUR00 PP Inj CFR FE Asia - PHBIF00 Platts Container Rate 1 North Asia-UK Continent $/FEU - PCR0100 HDPE Film CFR Far East Asia - AATYE00 More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

How are recycled plastics developing to meet new challenges? Supply side challenges faced by recycling plastics, opportunities for the industry and the role of recycling regulations to foster circular economy discussed by Casper van den Dungen, Vice President of Plastic Recyclers Europe, here in conversation with Alexander Borulev, Senior Pricing Specialist from the EMEA Aromatics team at S&P Global Commodity Insights.

In this episode of the Commodities Focus podcast, S&P Global Petrochemicals Editor Abdulaziz Ehtaiba talks with Univar Solutions’ Nick Powell, board member at FECC , about events like Russia's war in Ukraine, as well as factors like inflationary pressures in Europe, and how they are impacting the chemicals distribution industry. Price symbols discussed in this episode: Ethylene CIF NWE - PHAJD00 Styrene FOB ARA Mo01 - MAVOQ00 More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

Construction on a major polyethylene terephthalate complex in Texas will resume in August after a pause of nearly five years, Mexico's Alpek and Thailand's Indorama Ventures said July 18. Alpek, Indorama, and their partner—Taiwan's Far Eastern New Century—expect to bring the complex online in early 2025. The complex near Corpus Christi, Texas, includes a 1.1 million mt/year PET unit and a 1.3 million mt/year upstream purified terephthalic acid facility. The partners bought the complex out of M&G Chemical's bankruptcy in 2018 after M&G halted construction in October 2017. The partners repeatedly delayed a final investment decision on the project while evaluating costs. Alpek CEO Jose de Jesus Valdez said in April that the partners had a "very clear definition" of costs going forward. Indorama said July 18 that throughout pandemic-related disruptions. the partners "firmly resolved to continue planning amid continued robust demand for PET packaging and the need for shorter supply chains." They had previously expected the PET plant to be completed first, followed by the PTA unit a year later. The schedule, announced July 18, has both plants completed by early 2025. The partnership, dubbed Corpus Christi Polymers LLC, will function as an independent tolling company in which each partner will procure its own raw materials and will receive one-third of PTA and PET produced at the site. Each partner also will sell and distribute that output independently of each other. Each partner will be responsible for producing 367,000 mt/year of PET and 433,000 mt/year of PTA. "The strategic location on the US Gulf Coast will facilitate competitive raw material procurement and distribution cost, as well as scalability across Alpek's sites in the Americas," Alpek said. The US is a net PET importer, and the new complex will reduce import needs, but not eliminate them. The latest data from the US International Trade Commission showed that the US imported nearly 2.25 million mt of PET in the first five months of 2022, up 43% from nearly 1.57 million mt in the year-ago period. Annual imports in 2021 reached nearly 4.39 million mt, up from 3 million mt in 2019, the data showed. PET is used to make plastic bottles and polyester fiber, and PTA is its immediate precursor. US subsidiaries of each partner make up Corpus Christi Polymers. Those are DAK Americas, a subsidiary of Alpek; Indorama Ventures Corpus Christi Holdings; and APG Polytech USA Holdings, a subsidiary of Far Eastern New Century.

Platts, part of S&P Global Commodity Insights, has launched FOB Rotterdam methanol assessments for two front months. First published on July 11, 2022, the new M1 and M2 assessments reflect the value of methanol based on spot pricing data for 1,000 mt barges loading during the front and second months on a Eur/mt FOB Rotterdam basis, up to the close of the assessment process at 4:30 pm London time. Platts has also started publishing the $/mt equivalent of these assessments on July 11, 2022. The new assessments complement Platts' existing suite of methanol assessments. Platts also currently publishes an assessment for methanol loading 5-30 days forward from the date of publication, from Rotterdam. The new assessments mirror the specifications of the existing FOB Rotterdam assessment for loading 5-30 days forward from the date of publication, and reflect T2 product conforming to the International Methanol Producers and Consumers Association (IMPCA) Reference Specification with a minimum purity of 99.85%, maximum water content of 0.1% by weight and maximum ethanol content of 50 mg/kg. The assessments roll over five business days (inclusive) before the end of the month. For example, in July 2022, the M1 assessment reflects material loading any time in July. On July 25, the M1 assessment will roll over to reflect methanol loading in August. The new assessments follow the London publishing schedule. Platts first proposed publishing these assessments in a subscriber note published May 5, 2022: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/050522-platts-proposes-new-m1-and-m2-methanol-fob-rotterdam-assessments . Platts also published a decision note on June 16, 2022: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/061622-platts-to-launch-fob-rotterdam-methanol-assessments-for-two-front-months . The new assessments are published in the Europe and Americas Petrochemicalscan and Solventswire publications, Platts Petrochemical Alert pages 1160, 346 and 432, on the Petrochemical service on Platts Dimensions Pro and in the Platts price database under the following codes: MEFRA01 Methanol FOB Rotterdam Eur/mt Mo01 EUR/MT MEFRA14 Methanol FOB Rotterdam Eur/mt Mo01 WAvg EUR/MT MEFRA13 Methanol FOB Rotterdam Eur/mt Mo01 MAvg EUR/MT MEFRB01 Methanol FOB Rotterdam $/mt Mo01 USD/MT MEFRB14 Methanol FOB Rotterdam $/mt Mo01 WAvg USD/MT MEFRB13 Methanol FOB Rotterdam $/mt Mo01 MAvg USD/MT MEFRA02 Methanol FOB Rotterdam Eur/mt Mo02 EUR/MT MEFRA24 Methanol FOB Rotterdam Eur/mt Mo02 WAvg EUR/MT MEFRA23 Methanol FOB Rotterdam Eur/mt Mo02 MAvg EUR/MT MEFRB02 Methanol FOB Rotterdam $/mt Mo02 USD/MT MEFRB24 Methanol FOB Rotterdam $/mt Mo02 WAvg USD/MT MEFRB23 Methanol FOB Rotterdam $/mt Mo02 MAvg USD/MT Please send any questions or comments to petchems@spglobal.com and pricegroup@spglobal.com For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

Platts, part of S&P Global Commodity Insights, has started publishing new daily assessments for styrene monomer on FOB China basis from July 1, 2022. This follows Platts observation of an increase in SM exports from Chinese ports over the last two years. Platts first proposed launching the new assessments in a subscriber note published May 11: http://plts.co/FLVf30skhqw. The new assessments, in $/mt, reflects 3,000-5,000 mt SM cargoes loading from Jiangyin, Nantong, Zhangjiagang and Changshu in East China in the second and third half-month forward cycles from the date of publication. The assessments also reflects bids, offers and trades on a letter of credit at sight basis, and quality specifications conforming to latest edition of international standard ASTM D-2827. Platts will take into consideration price information sourced from the market up to the close of the assessment process at 4:30 pm Singapore time (0830 GMT) for the new FOB China SM assessments. The assessments follows the Singapore publishing schedule. Platts will also take into consideration price information for cargoes of other sizes loading from other Chinese ports, including north China ports, as well as non-standard credit usance, and will normalize them to the standard for the assessment. The assessments and its associated symbols appear in Asian Petrochemicalscan, Platts Petrochemical Alert pages 340, 215, 412, 413, 542, 449 and 436, and in the Platts price database under the following codes: Assessment Code Styrene Monomer FOB China Marker STYFC00 Styrene Monomer FOB China Marker MAvg STYFC03 Styrene Monomer FOB China Marker WAvg STYFC04 Styrene Monomer FOB China W2 STYFD00 Styrene Monomer FOB China W3 STYFE00 Please send all comments, feedback and questions to petchems@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

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A number of Asian petrochemical markets were expected to be supported over June 13-17 by persistently high feedstock costs and tight supply. A flurry of arbitrage cargoes from Asia to the US and Europe due to wide price gaps were also expected to lend support, although this was likely to be countered by demand concerns, a stronger US dollar and inflation fears adding downward pressure. Toluene ** Asian toluene prices were seeing continued strength from strong buying interest from gasoline blenders in Southeast Asia, trading sources said. The rise in MTBE prices has further increased interest in toluene as its price continues to lag behind other solvents and mixed xylenes, industry sources said. ** The FOB Korea toluene marker extended its nine-year high to $1,300/mt June 10 while the FOB US Gulf price assessment was 703 cents/gal ($2,143/mt), resulting in a wide price spread of $843/mt between the two regions. ** Asian toluene prices enter the June 13-17 week at an all-time high against naphtha, with the spread between the two hitting $489.13/mt June 10 amid tight toluene supply and weak naphtha demand. MTBE ** The Asian MTBE FOB Singapore marker has been on an uptrend on the back of lucrative MTBE blending values amid bullish upstream crude and gasoline markets. The MTBE gasoline blending value was estimated at $322.51/mt June 10, according to S&P Global Commodity Insights data, softening from a near nine-year high of $377.63/mt on May 27, but still at a level deemed lucrative by the market. ** Malaysia's Pengerang Refining and Petrochemical, or PRefChem, restarted the 750,000 mt/year MTBE plant at its integrated RAPID refinery complex in Johor in early June after postponing earlier plans to restart it in the first quarter, a source close to the company said June 7. The plant was currently ramping up run rates, the source said, without providing further details. The MTBE plant was taken offline in March 2020 after full operations had been delayed since its startup in April 2019 due to glitches, including fires, at the integrated refinery. Methanol ** The Asian methanol market was seen long over June 13-17 as ample supply from Iran and the Middle East cargoes continued to weigh on prices. Shipping inquiries for around 100,000 mt of methanol loading from Saudi Arabia, Qatar and Oman in June to China, Taiwan and South Korea were heard in the week to June 10. ** However higher global crude oil prices and feedstock coal prices in China will cap the downside, and prices were expected to remain elevated in the near term as oil refineries globally grapple with the loss of Russian crude, market sources said. Propylene ** The Asian propylene market was expected to receive some support over June 13-17 from an increase in demand after lockdown restrictions in Shanghai were eased June 1. Some sellers said it would take time for the propylene market to recover fully, but increases in run rates by downstream producers was likely to lend some support in the near term. ** Propylene was assessed up $5/mt week on week at $1,030/mt CFR China June 10. PP ** After a week of cautious optimism, polypropylene market sentiment in China could be impacted by reports June 13 that authorities had reimposed some COVID-19 restrictions in several districts of Shanghai and Beijing, market sources said. Any bearish sentiment was expected to have a knock-on effect on prices in Southeast Asia as overall demand continues to lag. R-PET ** Recycled PET prices enter the June 13-17 trading week on a stable note as producers find it difficult to pass on higher production costs by raising prices amid buyer cautiousness and general stagflation. Bale supply remains tight, while export opportunities remain open between Southeast Asia and Europe.