Enterprise Products Partners co-CEO Jim Teague, and Chris D’Anna, senior vice president of petrochemicals, discuss the energy storage and transportation titan’s push into upstream petrochemicals…
Jan 04, 2022
Enterprise Products Partners co-CEO Jim Teague, and Chris D’Anna, senior vice president of petrochemicals, discuss the energy storage and transportation titan’s push into upstream petrochemicals that will feed growing plastics demand over the next decade.
The company is a key delivery point for physically settled futures markets, with global hydrocarbon risk management from the wellhead to waterborne markets. Enterprise’s reach includes 50,000 miles of natural gas liquids, crude oil, natural gas and refined products pipelines as well as 260 million barrels of NGLs, crude, refined products and petrochemicals storage. Petrochemicals is not new to Enterprise, but the company is expanding that reach with export growth, storage and olefin production facilities, including serious consideration of a cracker that could serve downstream plastics producers.
Kristen Hays, S&P Global Platts’ global market lead for polymers, recently sat down with Teague and D’Anna to discuss the company’s growing focus on petrochemicals.
This Commodities Focus podcast was produced by Jennifer Pedrick in Houston.
Dec 16, 2021
The UK plastics industry faces numerous challenges, from short-term supply chain disruptions to a changing landscape with how the public — and governments — view plastic in a world looking to go green and fight climate change.
There is, of course, also the UK’s changing relationship with its closest trading partner — the EU. Indeed, Brexit has become all too easy to forget during the global COVID-19 pandemic and wider supply chain issues.
To discuss the challenges and opportunities for the UK plastics industry, S&P Global Platts spoke with Philip Law, director general of the British Plastics Federation.
Platts: Global logistics is a key issue for all industries. What are the challenges for the UK plastics industry and how is the industry overcoming them?
Law: Global logistics cannot be separated from Brexit. There are specific issues with global freight but with the UK, they have been compounded by teething problems by Brexit bureaucracy.
British plastics had moved to just-in-time deliveries. That pattern has been disrupted and now long delivery times have forced companies to hold more stock.
Now the question of warehouse availability has come to the fore.
Platts: The impact of Brexit has the potential to last far longer than current supply chain issues. What are the challenges and opportunities the UK plastics industry is facing and will face regarding Brexit?
Law: The EU remains a major export destination. We hope that customers there flourish. There are teething problems as mentioned but, more so than Brexit, the regulatory environment for plastics does not seem auspicious.
The EU acknowledges that plastic has valuable uses but there is still negativity around plastic.
In spite of this, there is investment particularly in chemical recycling. This presents big opportunities for the UK.
Platts: What is your view on the role of plastic in a sustainable future when we see so much negative press about plastic?
Law: The future has got plastics written all over it. There is a positive plastics story attached to Boris Johnson’s ten-point plan for a green industrial revolution — electric vehicles, renewable energy, wind power, green buildings.
Plastic is durable and light-weight so there are energy savings you can achieve from using plastics, including transportation and preventing food waste.
The challenging net zero carbon target from the UK government would be difficult to get anywhere near without plastics.
Despite this, there is a lot of legislation under debate (plastic packaging taxes, consistent collection, deposit return scheme (DRS)). This arose off the back of programs like David Attenborough.
The consequence of this is more recycling. This has been the focus of government and industry targets.
But now, concerns have turned to climate change and carbon emissions. Recycling as the most pressing question has been pushed to one side.
Recycling can assist with net zero. What is missing is a two-pronged approach on circularity (and recycling) and net zero carbon.
Platts: Recycling is the obvious route to plastic sustainability. The UK has set an ambitious target of 30% recycled content in plastic packaging from April 2022. What are the challenges the industry will face?
Law: Supply. UK recycling capacity has ramped up — around 150,000 mt will come onstream in 2021 — but supply still remains challenging.
Another aspect is that new financial requirements to support extended producer responsibility (EPR) will be introduced. The hope is that they will be equally apportioned in a fair way and not prove to be an unfair burden on any one link in the value chain.
Overall, everybody is concerned about their liabilities. I think the government did not appreciate how complex the market is and how difficult it has been to implement.
Platts: Will it be delayed?
Law: No. They are under a target to deliver. It will go ahead and one hopes things will be handled properly.
I think the government has infinite faith in the ability of industry to innovate. But to innovate we need consistent waste collection.
Platts: Deposit return schemes have been an effective way to boost supply but have been delayed across the UK. Do you think it’s the right route to go down and what about polyolefin collection, since DRS is focused on PET bottles?
Law: The big problem in the UK is local authorities accept different types of plastic. For example, plastic film is mostly not collected by local authorities. But there are much-needed legislative proceedings to bring about consistent collections.
For now, retailers are stepping up to provide film collection bins. This will continue to happen and if it boosts supply then it’s a good thing.
The more pressing issue is organizations pushing to ban things like polyvinyl chloride (PVC) and polystyrene (PS) packaging. We are against this. It’s like throwing the baby out with the bath water. You are denying the possibility of a future innovation.
Platts: Retailer film collection is industry led. What role should the government play?
Law: There’s this tax, which is certainly going to bring in revenue for the government. That money should be invested in recycling infrastructure, namely collection and sorting. Governments are reluctant to hypothecate taxes but they must be careful not to have the appearance of a smash-and-grab raid.
Platts: You mentioned plastic can help reach net zero. We’ve also spoken about plastic’s negative publicity. What is the industry doing on these fronts?
Law: One thing that has been happening for years, which industry hasn’t got credit for, is the reduction and minimization of plastics used in products, i.e. lightweighting. Today’s PET bottle — because of design innovation and technical advances — is lighter than a PET bottle produced years ago. Similarly for yoghurt pots and many other products from vehicles to building materials.
This has been a consistent theme from the origins of the industry because it also made commercial sense.
This all happened before sustainability was christened but was nevertheless a major theme of sustainability.
-Benjamin Brooks, firstname.lastname@example.org
-Edited by James Leech, email@example.com
Platts Petrochemical Alert
Jan 24, 2022
S&P Global Platts will launch daily spot carbide-based and ethylene-based polyvinyl chloride assessments on FOB China basis, effective March 1, 2022.
The decision follows extensive market research and Platts observation of rising exports from China over the past two years. For January-September 2021, China’s PVC exports increased almost four times compared to a year earlier, to 1.34 million mt, according to Chinese customs data.
Platts proposed the new assessments on Jan. 6 in a subscriber note published here.
The new assessments would be based on latest information sourced from the market up to the close of the assessment process at 4:30 pm Singapore time (0830 GMT) daily.
The new assessments would reflect product with the following parameters:
Volume: 100-500 mt size cargoes
Quality: Suspension grade with K value of 66-68 (SG 5) for both ethylene-based and carbide-based PVC
Timing: Loading 15-30 days forward from the date of publication
Location basis: FOB China, basis Shanghai, Tianjin and Qingdao
Payment terms: Letter of credit 30 days. For deals with usance of greater than 30 days, the value of the extra credit allowance would be factored out for price assessment.
Pricing information for material with other specifications and terms may be normalized to the proposed standard.
The new assessments would be published alongside its existing PVC assessments in the Polymerscan, on Platts real time petrochemical service, in the Platts Market center and on the Platts Dimensions Pro.
Please send all comments, feedback and questions to firstname.lastname@example.org and email@example.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.
The use of bio-based material in petrochemical and plastics markets has come into ever-sharper focus this year as pressure grows from governments and wider society…
Oct 26, 2021
The use of bio-based material in petrochemical and plastics markets has come into ever-sharper focus this year as pressure grows from governments and wider society to plot a way from a fossil-based economy to a sustainable model with a far lower environmental impact. As the plastics industry looks to its own role within the wider energy transition, bio-plastics are one of the main options for retaining the benefits brought by the use of plastics while addressing environmental concerns.
Platts Market Data – Petrochemicals delivers the numbers you need to gauge your markets, your competition, and your future potential. Be confident in your position…
Jan 18, 2022
March 15-16, 2022 | 10:00 am – 05:00 pm SGT | Online Asian Refining and Petrochemicals Summit Disruption of the downstream The downstream industry has…
Jan 03, 2022
The downstream industry has been dealt challenge after challenge in recent times, from COVID, to shipping and supply chain issues, to complex questions about how to approach and implement energy transition strategies. Demand for transportation fuels has been decimated. Policy restrictions and amendments have caused constraints. Consumer sentiment has become increasingly hostile to certain types of output. Not forgetting, competition has been fierce with new mega-refineries dominating the market.
There are a lot of questions about what and how the refining industry needs to do to achieve the numerous demands on it: how to move forward with energy transition, how to ensure margins are healthy, what to produce, and in what quantity.
Join 100+ producers, refiners, traders, and buyers who are looking to understand trends, risks, and issues within the downstream industry from those at the forefront. This event will also allow you to exclusively network, forging sustainable and lasting partnerships with your peers. After an extended time apart due to the COVID pandemic, the Asian Refining and Petrochemicals Summit will give you a great opportunity to meet the downstream industry, face-to-face, in one place!
The Summit will ensure that you gain first-hand, valuable insights into the issues that matter for you, as well as the opportunity to devise workable solutions to put you and your business at the forefront of the market!
In this week’s Market Movers Americas with Jordan Daniel: – Texas petrochemical complex ramps up (00:15) – Record bunker prices slash tanker earnings (00:54) –…
Jan 24, 2022
In this week’s Market Movers Americas with Jordan Daniel:
– Texas petrochemical complex ramps up (00:15)
– Record bunker prices slash tanker earnings (00:54)
– US steelmakers to announce Q4 results (01:49)
– Cold snap drives up power demand, prices (02:25)
In our latest featured video hear from Hartwig Michaels, President, Petrochemicals, BASF SE and President EPCA who joined Philip Reeder, Managing Editor, Petrochemicals, S&P Global…
Jun 07, 2021
In our latest featured video hear from Hartwig Michaels, President, Petrochemicals, BASF SE and President EPCA who joined Philip Reeder, Managing Editor, Petrochemicals, S&P Global Platts for the “Platts LIVE Conversations Industry in Motion: Petrochemicals”.
Join our experienced editorial experts to learn about Platts Price Assessment Methodology across the commodity sectors to better understand: -Why are pricing benchmarks so important?…
Jan 25, 2022
-Why are pricing benchmarks so important?
-How does source market data evolve into a Market-on-Close assessment process?
-What is the eWindow? How does this tool apply to the price methodology process in the markets that utilize eWindow?
-How does index methodology work and where do we deploy this methodology?
-What are the key pricing trends for the physical and derivatives market?
Hosted globally, attending one of these sessions is the perfect opportunity to gain a greater understanding of our benchmarks and how they help improve market transparency and efficiency.
-Introduction to Platts
-Overview of Platts Price Assessments Benchmarks
-Overview of Platts PricingMethodology & Pricing Processes
-eWindow tour (in applicable market sessions)
-Commodity market insights and overview
This in-depth online resource is the next best thing to attending one of our dedicated oil Methodology sessions presented by Platts editors who understand the oil markets and assess the prices. Click here to view: www.plattsmethodology.com
Asia’s petrochemical makers are shifting, or considering to use propane as alternate steam cracker feedstock amid the deepening discount of propane to naphtha, as LPG…
Jan 21, 2022
Asia’s petrochemical makers are shifting, or considering to use propane as alternate steam cracker feedstock amid the deepening discount of propane to naphtha, as LPG is pressured by ample supply and a lull in Chinese and Indian demand, traders said Jan. 21.
South Korean crackers have started seeking propane, traders said, even when the discount of February FEI propane swap to the Mean of Platts Japan naphtha was around $26.25-$26.50/mt over Jan. 17-18, before widening to $36/mt Jan. 20. This is the deepest discount since June 8, 2021, at $41.50/mt, Platts data showed. In contrast, the difference between FEI propane and MOPJ naphtha was at a premium of $185/mt on Oct. 4 last year.
Traders said Asian cracker operators in recent years are likely to turn to LPG as alternate feedstock even if the discount of propane to naphtha is not as sharp as $50/mt, or when LPG is 90% or lower than naphtha, which has been the typical level deemed economically viable for the switch.
On the physical front, the spread between CFR North Asia propane versus CFR Japan naphtha narrowed $54/mt week on week to minus $36/mt at the Jan. 20 Asian close, Platts data showed. The spread is typically tracked closely by end-users as LPG produces more olefins than naphtha feedstock, sources said.
The Asian naphtha market saw demand-side weakness Jan. 20 on narrowing olefins margins.
Unprofitable olefins margins weighed on the naphtha complex and dampened its demand. The CFR Northeast Asia ethylene and C+F Japan naphtha spread was well below the typical breakeven level of $300-$350/mt for non-integrated producers, pushing steam crackers to reduce operating rates. At least one Asian steam cracker cut rates in January, Platts reported earlier.
The ethylene-naphtha spread narrowed $66/mt week on week to $140.50/mt at the Asian close Jan. 20, Platts data showed.
However, the benchmark naphtha C+F Japan cargo was assessed at $784.50/mt at the Asian close Jan. 20, up $16/mt on the week, Platts data showed, taking a cue from rising Brent futures.
Front month ICE Brent crude futures rose $3.20/b over the same period to $87.83/mt at the Asian close Jan. 20.
The propane-naphtha discount considered viable for the switch could lately be as low as $20-$30/mt, traders said, in view of the trend in 2021 when LPG had been costlier than naphtha for at least nine months, keeping naphtha the major staple for Asian crackers.
The discount threshold for the switch to LPG has also changed due to long periods of poor aromatics margins, especially in view of high premiums of light naphtha, traders said.
“Overall margins had been bad for H2 2021 because of escalating feedstock prices due to strong crude oil, especially from the Persian Gulf where usual olefin crackers do not have downstream units, so they are sold at low prices,” one trader said, adding that prices of olefin products “were not that good because of poor downstream prices in China”.
South Korean trader E1 Corp., which normally buys LPG for petrochemical makers, has issued a tender for LG Chem, seeking 23,000 mt of propane for Feb. 19-23 delivery to Daesan, which was due to be awarded on Jan. 19, traders said.
Other North Asian cracker operators such as Taiwan’s Formosa Petrochemical, normally a key first mover to capitalize on cheaper LPG as feedstock, is “likely” to make the switch, a source said.
South Korea’s Lotte Chemical is sensing that the discount could sharpen further. A source said: “This level seems good, but the lower trend would make us wait for the movement.”
“I’m not sure how much the discount would go further, but considering winter season (is ending)… I expect prices to go down without heating demand,” he added.
Asian LPG prices have been on a downtrend in recent weeks as North Asian demand for winter heating ebbed, Chinese demand for propane dehydrogenation plants, along with the manufacturing sector, pause ahead and during Lunar New Year from end-January to early February, while Indian demand is only expected to pick up around March.
Front-cycle H2 February CFR North Asia propane was assessed Jan. 19 at $751.5/mt, down $5.50/mt on the day, the lowest since Dec. 20, 2021, when it was at $750.50/mt, Platts data showed.
On Jan. 20, H2 February CFR North Asia propane inched up $1/mt on the day to $$572.50/mt as trading activity perked up. Platts had assessed H2 February CFR North Asia butane $9/mt below propane Jan. 20.
If the LPG downtrend persisted, it could momentarily firm its position as the alternative cracker feedstock, potentially dampening naphtha demand.
But once China returns from the long holiday and Indian spot demand recovers from March, Asia may see a resumption of strong LPG prices; as regional demand extends its projected growth and competes with rising consumption in Europe and Latin America for US cargoes, traders said.
Jul 26, 2021