Southeast Asia PE market faces longer H2 supply, weak demand – Southeast Asia’s polyethylene (PE) market may be facing longer supply in the second half, hinging on how the US-China trade spat plays out, amid the region’s weakening demand for imports – Southeast Asia PE market

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Southeast Asia PE market faces longer H2 supply, weak demand

Source:ICIS News

Southeast Asia PE market   SINGAPORE (ICIS)–Southeast Asia’s polyethylene (PE) market may be facing longer supply in the second half, hinging on how the US-China trade spat plays out, amid the region’s weakening demand for imports.

Global PE trade flows will be affected should China, the biggest importer of spot PE cargoes in the world, decide to impose retaliatory 25% tariff on US cargoes.

Southeast Asia as an alternative buying region might be hard pressed to absorb additional supply from the US, where massive PE capacities recently started up which were meant to cater to huge Chinese demand.

Around 5m tonnes of additional US PE capacities are expected from several major projects, including those in the pipeline to start up within the second half of 2018.

China primarily imports PE cargoes from Asia and the Middle East, while the US is its sixth leading PE supplier in 2017.

“Eventually, more substantial and regular volume of US [PE] cargoes are expected to be traded in Asia in the second half of the year as we have yet to see them in the first half of this year,” said a regional trader.

Any changes in trade flows would pose challenges to US suppliers in the short term as they would need to revamp their logistics and distribution channels to redirect cargoes to other markets.

Suppliers from the Middle East, meanwhile, might take the opportunity to supply more cargoes to China, and would mean fewer volumes available to the southeast Asian market.

The Middle East is southeast Asia’s major PE supplier.

Demand for PE imports in southeast Asia has been weak amid low prices in the domestic markets, as in the case of Thailand.

“Thai traders are not keen to import as local prices are more competitive so they do not have the margin to sell the imported cargoes in local market. Only some converters who need specific cargoes continue to import,” said a local Thai trader.

For Malaysia and Indonesia, which have predominantly Muslim population, market activity has slowed down since mid-May, when Ramadan – the Muslim fasting month – started and which will end with the Eid ul-Fitr holiday on 15 June.

The Indonesian government has declared a longer Eid-ul Fitr holiday this year from 11-20 June.

Markets in Singapore and the Philippines will be closed for the mid-June holiday as well.

With supply expected to become long, some market players expect regional PE prices in July and August to ease from June, with restocking activities expected to kick in towards the end of the third quarter.

In the first half of 2018, southeast Asia’s average prices for commodity PE were largely stable to firm owing to suppliers’ relatively comfortable-to-tight supply for most of the period.

At the start of June, high density polyethylene (HDPE) film grade prices averaged $1,395/tonne CFR SE Asia; while linear low density polyethylene (LLDPE) and low density polyethylene (LDPE) film were at $1,210/tonne CFR SE Asia and 1,265/tonne CFR SE Asia, respectively, according to ICIS data.

Prices had spiked in the first quarter as suppliers were holding comfortable-to-tight inventory as several regional producers have scheduled turnarounds at their plants in March. Production issues and shutdowns in the Middle East and Saudi Arabia also limited availability of imports to southeast Asia during this period.

Supply for HDPE film was particularly tight as some producers from the Middle East as well as Asia switched their focus into making HDPE pipe grade amid robust demand and better netbacks.

The price uptrend across most PE grades could not be sustained in the second quarter although prices remained relatively stable-to-firm.

The depreciation of local currencies in southeast Asia against the US dollar in most of the second quarter was also curbing overall demand for imports. A weaker currency makes US dollar-denominated imports expensive.

“Indonesian buyers have not been buying much cargoes as the market slowed down during Ramadan and also because of weak rupiah which led the central bank to increase interest rate to limit the depreciation,” said a regional producer.

Focus article by Felita Widjaja

Picture: A container ship at Singapore dock. (Source: Sinopix/REX/Shutterstock)

By Felita Widjaja
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Evertis continues its commitment to sustainability – At Evertis Ibérica, the company’s purpose has been achieved to the fullest extent. Evertis Ibérica, located in Portugal, is a subsidiary of Control PET, a group pioneer in the field of PET film extrusion – Evertis sustainability PET film extrusion Control PET

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Evertis continues its commitment to sustainability

Evertis’ logo is a symbol of one of its founding goals—sustainability.
     
Evertis sustainability PET film extrusion Control PET

At Evertis Ibérica, the company’s purpose has been achieved to the fullest extent. Evertis Ibérica, located in Portugal, is a subsidiary of Control PET, a group pioneer in the field of PET film extrusion with more than fifty years of experience.

Since the beginning, Evertis set ambitious recycling goals and strategies to promote a circular economy of their products and minimize the company’s waste. Evertis’ philosophy is that issues, such as landfilling, cannot be left for governments to solve alone; hence they believe in a duty to create environmentally friendly packaging solutions and challenge their stakeholders to effectively address these concerns.

The group began recycling from the time the business was founded, in 1959, but it was in 2002 that their recycling ambitions took on a dynamic dimension, with the start-up of their own recycling plant. Built on the same industrial site as Evertis Ibérica, this plant has significantly contributed to the recycling of post-consumer PET in Portugal, at times recovering more than 90% of post-consumer PET bottles from the Portuguese waste stream. Partnering with non-profit organizations, producer compliance programs and customers, the volume of recovery has grown to 8,755 tons of post-consumer PET recycled in-house last year.

Two categories of PET flake emerge from this process: clear/light blue flake and green flake. Green flake is sold to authorized recycling companies who resell them for applications where clarity is less critical, while one hundred percent of the clear/light blue flake is consumed by Evertis Ibérica for film production. Additionally, Evertis Ibérica sources and reincorporates PET flake beyond the internally recovered quantities which is produced and converted in the international market and some domestic suppliers

To further enhance their recycling goals, Evertis Ibérica partnered with a company that has researched and developed a unique technological process to recycle multilayer PET, making it possible to reincorporate recycled PET from Evertis’ multi-layered films back into the production cycle.

As food companies become more committed to environmental issues, several of Evertis Ibérica’s customers have joined the initiative and have invested in equipment for the disposal of multilayered PET by-product at their plants. This involves a process whereby the trim and off-cut film is collected and processed by Evertis’ partner, creating reusable RPET from the complex films.

In the past multilayered PET could not be recycled and was added to the waste stream. Now, as a result of this innovation, a new realm of possibilities has arisen in the plastic industry. Cost reduction by eliminating landfill volumes combined with the significant environment benefits through source reduction and reuse, make this a win for all with long term and recurring positive impact. Circular economy has become a reality for Evertis, whereby PET from their films is reintroduced into the next chain of production.

Following, the company’s sustainable focus, Evertis incorporates recycled material into the production of their products, whenever the application allows, while meeting all customer requirements Evertis strives for maximum quality of the PET flake production and counts on a high-tech EREMA recycling system that has EFSA approval for food contact, for films with up to 100% of recycled PET composition.

Evertis has instituted a strict waste management and reuse policy, reincorporating virtually one hundred percent of waste produced in the extrusion and slitting processes. This also includes scrap produced during equipment changeovers, auto-cleaning of filters, machine stops and restarts.

Evertis’ philosophy to reuse resources was key to the group’s constant focus on recycling. It’s their belief that recycling is a great waste-management strategy, whereby environmental impact and resource depletion are reduced. With their principals based on high levels of recycling, Evertis paired their reuse or remanufacturing efforts to lower levels of material usage and energy. Within this framework of sustainable development, Evertis is not only providing a partial solution to solid waste problems, but also contributing to reduction of energy and raw petrochemicals consumption.

It is also of importance to mention Evertis Ibérica’s use of environmentally friendly adhesives in their lamination process. It was their eco-friendly goals that made them pioneers in the field of lamination resulted in their alliance with their recycling partner, which would not have been possible if this technology wasn’t in place.

Evertis’ commitment to being environmentally conscious and responsible has been present since their beginnings. Most importantly it is their ambition to continually challenge and update their environmental goals, that has made their products fit for the future.

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Disconnect with feedstock allows European PET to be sold forward – The disconnect between raw material and current, high polyethylene terephthalate (PET) spot prices is so big in Europe that domestic producers are prepared to sell forward without knowing production costs – European PET polyethylene terephthalate raw material

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Disconnect with feedstock allows European PET to be sold forward

Source:ICIS News

LONDON (ICIS)–The disconnect between raw material and current, high polyethylene terephthalate (PET) spot prices is so big in Europe that domestic producers are prepared to sell forward without knowing production costs, a reseller said on Thursday.

European PET polyethylene terephthalate raw material “Just because of the situation we have, it puts European producers in such a comfortable position that they sell for July delivery and already know they will make a margin because [the PET spot price] is so disconnected from raw materials, so it changes the market completely,” he said.

Producers tend to prefer current month sales, but at the moment, those with availability have good order books for July and may even start to sell August, the reseller added.

Material has been worryingly short in Europe, and is tight globally. Imports have been scarce, are priced similar to local material and do not seem to be having much of an impact.

A shift in exchange rates that favour euro-based buyers, or a push by Asian exporters would normally prompt customers in Europe to wait for imports. This competitive edge often results in domestic PET losing value.

While this is something that could happen at any moment, it is not a scenario that is relevant for today. Also, freight rates from China to Europe have recently increased.

In this environment of short supply, domestic producers have the upper hand to the extent that notwithstanding developments in Asia or upstream, they can continue to ask over €200/tonne higher than they did in May, for deliveries in June and July.

There are contracts based on raw materials that are currently between €200-300/tonne cheaper than spot, so producers’ risk in selling spot is minimal.

European PET polyethylene terephthalate raw material PET is used in fibres for clothing, containers and bottles for liquids and foods, thermoforming for manufacturing, and in combination with glass fibre for engineering resins.

Picture source: Ulrich Niehoff/imageBROKER/REX/Shutterstock

By Caroline Murray

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-Far Eastern Union plans to launch a new PET plant in Vietnam in July  – The Chinese company Far Eastern Union Petrochemical plans in July this year to launch a new bottled PET plant in Vietnam, ICIS reports with reference to market participants – Far Eastern Union PET plant Vietnam

-Chengxing Group will launch a new PET plant in China on June 1 – Chengxing Group, a major Chinese producer of petrochemicals, is planning to put into operation a new PET production plant in Jianggyin, Jiangsu – Chengxing Group PET plant China

-Europe PET players mull over further price hikes in June on tightness – European polyethylene terephthalate (PET) players are considering June spot prices as sellers announce further increases due to high demand during a period of tightness – Europe PET price hikes June

-Prices of PET in the Gulf countries increased against the backdrop of limited supply – Manufacturers of polyethylene terephthalate (PET) in the countries of the Persian Gulf (GCC) increased their price proposals at the end of last week, as the supply of material in the region remains limited – Prices PET Gulf countries

-Nan Ya Plastics increases June prices of PET in the US  – The Taiwanese company Nan Ya Plastics (part of the Formosa Group) announced an increase in June prices for all grades of polyethylene terephthalate (PET) for the US market by 5 cents per pound or USD110 per tonne – Nan Ya Plastics June prices PET USA  

-Thai Indorama completes acquisition of Brazil PET plant – Thai Indorama acquisition Brazil PET plant

-Judge approves sale of bankrupt M&G plant – A bankrupt plastics plant that had been under construction in Corpus Christi now might be completed and put into operation – Judge bankrupt M&G plant

-Buyer emerges for bankrupt M&G plant, but sale still not final – Italian plastics giant M&G USA files for Chapter 11 bankruptcy protection. The company will now have to sell the $1 billion plant it is building in Corpus Christi – Buyer Mossi Ghisolfi M&G plant

-Alpek, Indorama, Far Eastern consortium to acquire M&G Texas PTA-PET plant for $1.12bn – Alpek Indorama Far Eastern consortium Mossi Ghisolfi Texas PTA PET

-The bankruptcy nightmare on Mossi & Ghisolfi will decide the court – A glimmer opened when Eni had shown interest in Biochemtex, but in the end of February the cold shower arrived at the Ministry of Economic Development – Bankruptcy Mossi Ghisolfi court

-Indorama to buy M&G’s Brazil PET plant – Indorama Ventures Public Co. Ltd. (IVL), has entered into an agreement to acquire M&G Polimeros Brazil SA in Ipojuca Brazil for an undisclosed amount – Indorama Mossi Ghisolfi Brazil PET plant

-Indorama wants to buy M&G West Virginia PET plant – Bangkok-based materials company Indorama Ventures Public Co. Ltd. is bidding to buy the West Virginia PET plant and Ohio research and development site of bankrupt M&G Polymers USA LLC. –Indorama Mossi Ghisolfi West Virginia PET plant

-Indorama Ventures is considering buying a M & G PET plant in the US – Indorama Ventures Mossi Ghisolfi PET US

 

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Dornbirn Global Fiber Congress 57 to be held in September – The 57th Dornbirn Global Fiber Congress (Dornbirn GFC), the European-led innovation platform for the fibre industry, will be held from September 12 to 14, 2018, in Austria – Dornbirn Global Fiber Congress

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Dornbirn Global Fiber Congress 57 to be held in September
Dornbirn Global Fiber Congress
Courtesy: Dornbirn-GFC

The 57th Dornbirn Global Fiber Congress (Dornbirn GFC), the European-led innovation platform for the fibre industry, will be held from September 12 to 14, 2018, in Austria. Dornbirn-GFC is an innovation platform for the fibre, textile, nonwovens, equipment, and mechanical engineering industry. The event is a major player as an idea and network generator.

Around 100 expert lectures will focus on topics like fibre innovations, transportation und mobility, recycling – circular economy, energy generation and energy storage, and surface modification, and additive technologies. More than 700 participants from over 30 nations take advantage of the Dornbirn-GFC in order to learn about the latest innovations of the fibre industry and its downstream stages.

Sebastian Kurz, the Austrian Federal Chancellor will give his presentation via a video transmission. We can also look forward to the chancellor`s statements in terms of the Austrian presidency of the Council of the European Union starting in July 2018.

James Holbery from Microsoft US will discuss on the issue of ‘How will Smart Textiles change the world and what does Microsoft expect from industry?’ Smart Textiles in the age of digitalisation – an enormous potential for textile industry.

As a connoisseur of the automotive industry, professor Theo Sams from AVL, the world’s biggest independent company for the development of drive systems, will illuminate the ‘relevance and potentials of the fibre industry in the future development of the automotive industry’.

The successful, rapidly growing Canadian brand Lululemon Athletica, represented by Yogendra Dandapure, will provide forward-looking trends and the technology approach for the industry and he will take part at the panel discussion ‘Circular Economy’.

Edwin Keh, CEO from the international renowned Hong Kong Research Institute of Textiles and Apparel HKRITA, will give a lecture on ‘Circular Economy’ and also participate at the subsequent panel discussion. A panel discussion will also take place titled ‘Circular Economy – What an Opportunity!’ moderated by Anton Schumann/ Gherzi. The participants Eberhard Brack/Märkische Faser, Peter Bartsch/Lenzing, Michel Chtepa/Seaqual4U, Yogendra Dandapure/Lululemon, Edwin Keh/HKRITA, Luis Marinheiro/ISWA (International Solid and Waste Association) will show approaches to the current topic, strongly promoted by the EU Commission.

The topic ‘Digital Age in Research and Development’ will be deepened in a workshop by young scientists on September 11, 2018 guided by Syngroup Consulting (AUT). The subsequent visit of the congress will integrate the next generation into the network of the ‘Dornbirn- GFC Innovation Community’.

The Smart Textiles symposium will be held on September 12 and 13, 2018. This symposium will offer top-class lectures on smart textiles. (GK)

Fibre2Fashion News Desk – India

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-NCTO, AFMA Merger Announced – The National Council of Textile Organizations (NCTO) and the American Fiber Manufacturers Association (AFMA) announced a merger of their respective organizations effective April 1, 2018 – NCTO AFMA Merger

NCTO CEO Testifies At USTR NAFTA Hearing– US Textile Renegotiation NCTO USTR NAFTA

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US shale firms miss out on $70 oil after hedging at $55 – Many top US shale oil producers are missing out on the rally in oil prices to more than $70 a barrel – because they sold their oil through futures contracts at about $55 last year when that looked like a good deal – USA shale firms $70 oil

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US shale firms miss out on $70 oil after hedging at $55

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NMMA provides update on EPA bio-isobutanol approval –  Earlier this week, U.S. Environmental Protection Agency Administrator Scott Pruitt approved the registration of bio-isobutanol as a fuel additive – NMMA EPA bioisobutanol

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NMMA provides update on EPA bio-isobutanol approval

BY THE NATIONAL MARINE MANUFACTURERS ASSOCIATION

 NMMA EPA bioisobutanol   Earlier this week, U.S. Environmental Protection Agency Administrator Scott Pruitt approved the registration of bio-isobutanol as a fuel additive.

The National Marine Manufacturers Association has been a leading voice in the effort to secure approval for bio-isobutanol, raising it directly with Pruitt on multiple occasions since he took office.

May’s American Boating Congress featured a special question-and-answer session with NMMA President Thom Dammrich and Pruitt.

“We applaud Administrator Pruitt’s approval of bio-isobutanol as a biofuel additive, which will provide consumers a safe, efficient, and environmentally-friendly E15 alternative that is highly compatible with marine products,” Dammrich said. “This decision will promote an innovative fuel supply, with direct benefits to American boaters and consumers.

As Congress continues to discuss potential reforms to the Renewable Fuel Standard, it is absolutely critical that all stakeholders remember the threat posed by fuel blends exceeding 10 percent ethanol, Dammrich added.

“Thanks to the leadership of Administrator Pruitt and champions in Congress like Representative Buddy Carter (R-GA-1), who highlighted the value of bio-isobutanol during multiple committee hearings, consumers could now have much-needed additional choices at the pump” he said.

While additional steps by EPA are needed to break down other regulatory impediments to the full-scale commercialization of bio-isobutanol, EPA’s recent actions are very encouraging, Dammrich said.

In addition to increased fuel options, the boating industry needs a comprehensive public education and awareness campaign in place prior to any E15 expansion

“We owe it to the millions of American boaters and the 650,000 workers that the industry supports,” Dammrich said.

Background:

  • According to the NMMA, 95 percent of boats are fueled at retail gas stations. Boat owners depend on safe, reliable and proven fuel choices to be universally available.
  • Misfueling of engines voids warranties, leaving consumers with expensive repair and replacement bills.
  • Biobutanol is a four-carbon alcohol produced from renewable, plant-derived energy sources in a fermentation process similar to beer and wine production.
  • Biobutanol can be produced using existing ethanol feedstocks, such as corn and sugar beets, or advanced feedstocks (cellulosic biomass) such as crop residues, wood residues, dedicated energy crops, and industrial and other wastes.
  • Unlike E15, which causes severe damage to small engines like those used in recreational boating, biobutanol delivers more renewable energy content than ethanol while remaining compatible with current vehicles, boats, and infrastructure.

According to a Harris Poll commissioned by the Outdoor Power Equipment Institute (2018):

  • Nearly two thirds of Americans (65 percent) assume that any gas sold at the gas station is safe for all cars, as well as boats, mowers, chain saws, snowmobiles, generators and other engine products;
  • As a result, an ever-increasing number of outdoor power equipment owners are using the wrong type of fuel in their products, including boats. In 2018, 11 percent reported using E15, E30, E50, or E85 to fuel their equipment, up from 7 percent in 2015;
  • The EPA issued a small voluntary label for gas stations to post if they sell fuel with more than 10 percent ethanol. When asked about the label, more than 3 in 5 Americans (63 percent) feel it is inadequate to inform consumers about E15 fuel being illegal to use in outdoor power equipment.
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China’s Hengli aims to start first PX line in Nov, after refinery starts – China’s Hengli Petrochemical plans to start test runs at one of its two new paraxylene production lines in Dalian, Liaoning province, in November – China Hengli PX line

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China’s Hengli aims to start first PX line in Nov, after refinery starts

Singapore (Platts)-

China Hengli PX line  China’s Hengli Petrochemical plans to start test runs at one of its two new paraxylene production lines in Dalian, Liaoning province, in November, in line with planned trial runs at its new 20 million mt/year (400,000 b/d) refinery in October, a source close to the company said Thursday.

Both lines have a production capacity of 2.25 million mt/year. The second line is expected to start in the first or second quarter of 2019, the source said.

Hengli is one of China’s, and the world’s, largest producers of purified terephthalic acid, with three plants at Dalian totaling 6.6 million mt/year in production capacity. PX is used to produce PTA.

In June, Hengli received a crude oil import quota of 5 million mt (36.65 million barrels) from China’s Ministry of Commerce, S&P Global Platts reported previously.

Construction of the refinery is scheduled to be completed in July, after which it will need final approval from the government to start operations.

–Gustav Holmvik, gustav.holmvik@spglobal.com

–Yi-Jeng Huang, yi.jeng.huang@spglobal.com

–Edited by Irene Tang, irene.tang@spglobal.com

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