Plastic-waste – PX-naphtha-spread 16-02-2022
Plastic-waste – PX-naphtha-spread
Crude Oil Prices Trend
PX market trimmed some gains after the rise driven by crude oil since Spring Festival holiday. PX-naphtha spread narrowed in tandem, from high point of $260/mt on Feb 8 to around $230/mt on Feb 10. Then, has the recovery of PXN spread come to an end?
On demand front, Yisheng announced plant operating rate cut or maintenance for 3 PTA lines in the week ending Feb 10. Yisheng New Materials reduced the operating rate of its phase I PTA line to 50% on Feb 9; Yisheng Ningbo shut its 2 million mt/yr PTA line on Feb 10 for maintenance; and Yisheng Dalian planned to shut one 2.25 million mt/yr PTA line on Mar 1 for maintenance. The average operating rate of China domestic PTA plants had dropped by 4 percentage points from 84% before the Spring Festival holiday, to around 80%, while further drop could be capped.
Though crude oil and the feedstock for polyester advanced sharply right back from the holiday, downstream polyester sales ratio was lackluster. It averaged 70% on Fen 7, the first trading day after the holiday, but then declined to around 20% for the rest of the week. Plastic-waste – PX-naphtha-spread
Besides from slower recovery of end-use demand, market sentiment was cautious with participants unwilling to raise price. When would the end-use demand could recover need further observation, and it could take place as late as in end-Feb or early Mar.
On supply front, PXN spread was recovering rapidly, and spot supply was tight. Discussions for spot PX were at premium to formula price, equivalent to contract price minus $5/mt or minus $6/mt, hence, spot goods were attractive. Several producers in China, including Sinochem Quanzhou, Sinopec Fujian and Fujia Dahua restart their PX plants. Saudi’s Rabigh has also restarted its plant, while the operating rate is low. In addition, the problem that Vietnam’s NSPR had been faced with, which was the driving force to PX market prior to the holiday, has been solved, and regular contract supply from NSPR would be available. Moreover, some other plants in China or South Korea raise PX plant operating rates, and some outside China plan to further increase the run rates in Mar. Plastic-waste – PX-naphth a-spread
Apollo Global Management Inc. will buy a majority stake in Novolex Holdings from Carlyle Group Inc. Plastic-waste – PX-naphtha-spread
Carlyle will retain a minority stake in the packaging company, according to a statement Monday that confirmed an earlier Bloomberg News report. Financial terms were not disclosed.
The transaction values Novolex at about $6 billion, a person familiar with the matter said, asking not to be identified because the matter isn’t public.
Novolex develops and manufactures plastic and paper products, including bags, cups and to-go containers, used by the food service industry. Apollo plans to help the company strike more relationships with blue-chip customers, according to the statement. Plastic-waste – PX-naphtha-spread
The deal is the latest large-scale packaging company to be purchased by private equity, which likes the steady cash flow. Stone Canyon Industries is considering a sale of Mauser Packaging Solutions that could value the company at as much as $8 billion, while the owners of Five Star Holdings are also considering a sale for the company, Bloomberg News has reported.
Carlyle acquired Novolex in 2016 from Wind Point Partners and TPG Inc.
The firm, led by Chairman and Chief Executive Officer Stanley Bikulege, employs more than 10,000 people and operates 57 manufacturing facilities worldwide with brands including Hilex Poly, Duro Bag and Burrows Packaging.
“We are proud of our partnership with Stan and team, who have nearly doubled the size of the company since we first invested in Novolex in 2016,” Wes Bieligk, managing director at Carlyle, said in the statement. “We’re excited to see the company enter its new phase with Apollo and look forward to our continued partnership as a minority investor.” Plastic-waste – PX-naphtha-spread
Plastic-waste – PX-naphtha-spread