Korea exports decline for a second straight month in November

Exports fell for a second consecutive month in November while Korea's trade balance was negative for an eighth month as energy imports remained high and semiconductor exports dropped dramatically, said Koreanherald.

Strikes by truckers and railway workers could make the situation worse. According to the Ministry of Trade, Industry and Energy on Thursday, Korea’s exports in November fell 14 percent year-on-year to USD51.9 billion.

Through November, Korea's exports for the year totaled USD629.1 billion, up 7.8 percent on year and a record.
Imports last month grew 2.7 percent year-on-year to USD58.9 billion. Imports have been growing for 12 consecutive months.

The trade deficit for November was USD7 billion. “The prices of semiconductors, which is a key export item, have continued to fall,” said Moon Dong-min, deputy minister of trade and investment. “The base effect of a 31.9 percent year-on-year increase in exports in November 2021 also affected last month’s export drop.”

The trade ministry official noted that the truckers strike has also played a significant role. “Basically there has been a significant decline in export cargos carried in and out of our ports,” Moon said. “This indicates that export activities are not operating normally.”

The official said at this point it is difficult to give a specific figure for the damage that had been caused by the trucker strike or quantify the impact. While the deputy minister stressed Korea has fared relatively well, with exports set to break last year’s record, the biggest risk factor is the trucker strike.

“On top of the difficult situation that our exporters are facing amid global economic stagnation, an impact on exports will be inevitable for December if the truckers continue to refuse to deliver,” Moon said. Semiconductor exports fell 30 percent year-on-year to USD8.5 billion. Chips are Korea's biggest export category.

Ship exports declined 68.2 percent to USD1.1 billion, while computer exports fell 50.1 percent and petrochemical exports were down 26.5 percent. Steel export fell 10.6 percent. Automobile exports grew 31 percent to USD5.4 billion, and petroleum goods exports were up 26 percent to USD4.9 billion.

By market, exports to the United States continued for the 27th straight month, rising 8 percent to USD8.8 billion.
Exports to the EU rose 0.1 percent to USD5.3 billion. Exports to China fell 25.5 percent to USD11.4 billion, while exports to Asean shrunk 13.9 percent to USD9 billion. Exports to Japan dropped 17.8 percent to USD2.3 billion.

Energy continued to be a major contributor to the increase in imports. Last month, imports of crude oil, gas and coal totaled USD15.5 billion, which is a 27.1 percent increase on year.

The accumulated import total for the three energy sources in the first 11 months was USD174 billion, a 75 percent increase.

We remind, SK Innovation announced on the company’s official homepage that it would further boost the global Net Zero leadership by introducing an Internal Carbon Pricing System. The core of the Internal Carbon Pricing System is to set internal carbon prices to reflect changes in future carbon prices and use them in investment deliberations.

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North American chemical rail traffic fell by 3.2% year on year to 40,467 railcar loadings for the week ended 26 November – marking a 10th consecutive decline, said Association of American Railroads (AAR).

An increase in Canada was more than offset by declines in the US and Mexico. The four-week average for North American chemical rail traffic was at 45,860 railcar loadings.

Despite the 10th decline in a row, for the first 47 weeks of 2022 ended 26 November North American chemical railcar traffic was still up 1.2% year on year to 2,155,420 railcar loadings.

In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

Shipments of chemicals, coal, motor vehicles and parts, nonmetallic minerals, and oil and oil products rose for the first 47 weeks, while shipments in all other freight railcar categories fell.

In related news, the US House of Representatives on Wednesday adopted a resolution aimed at averting a rail strike.

We remind, for the week ending November 19, 2022, total U.S. weekly rail traffic was 491,794 carloads and intermodal units, down 3.2 percent compared with the same week last year. Total carloads for the week ending November 19 were 235,887 carloads, down 0.6 percent compared with the same week in 2021, while U.S. weekly intermodal volume was 255,907 containers and trailers, down 5.6 percent compared to 2021.

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Malaysian state-owned Petronas on November 30 reported a near doubling of profit in the July-September (Q3) quarter on the back of higher product prices, as per Reuters.

The company reported a profit of 30.8bn ringgit (USD6.93bn) in Q3, compared with a profit of 16.3bn ringgit in the same quarter a year ago, an increase of 88.9%. Revenue was up 61% year/year to 99.2bn ringgit.

Looking ahead, Petronas expects oil and gas prices to remain volatile, influenced by intensifying geopolitical and economic headwinds.

The company said it will continue to invest responsibly towards ensuring energy supply security whilst pursuing its growth strategy and net zero carbon emissions target by 2050 (NZCE 2050).

Petronas earlier this month announced its NZCE 2050 pathway to accelerate and advance groupwide actions and commitment towards achieving net zero future ambitions.

The company’s short-term target for 2024 is to cap its greenhouse gas emissions at 49.5 mtCO2e for scope 1 and scope 2 emissions in Malaysia. By 2025, the target is to achieve a 50% reduction in methane emissions from the natural gas value chain.

We remind, the new methanol plant in Sarawak will almost double Petronas Chemical Group's current production in Malaysia. The new Sarawak Petchem Methanol Project, located in the coastal city of Bintulu, in the Sarawak region of Malaysia, will represent an important step forward in the methanol production capacity of Petronas Chemical Group, which is already the main producer in Asia-Pacific and the fourth in the world, processing an additional 1.75 million tons per year to the 2.4 MMt it’s already capable of producing.
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PKN ORLEN has finalized three transactions with Aramco involving refining, wholesale and plane fuel businesses, following PKN ORLEN’s merger with Grupa LOTOS, said Hydracarbonprocessing.

The European investments support expansion of Aramco’s global downstream presence. Moreover, the joint development agreement of PKN ORLEN, Aramco and SABIC for the potential Gdansk project was signed. Aramco is to supply almost 45% of PKN ORLEN’s crude oil requirement under the agreement.

As part of the transaction, first announced in January 2022, PKN ORLEN has retained a 70% stake in a 210,000 barrels-per-day refinery in Gdansk, with Aramco acquiring equity stakes of 30% in the refinery as well as 100% in a wholesale; and 50% in a plane fuel marketing joint venture with BP Europa SE that operates in seven airports in Poland, following PKN ORLEN’s merger with Grupa LOTOS.

Daniel Obajtek, President of the PKN ORLEN Management Board, said: “These transactions are of strategic importance in further strengthening energy supplies, not only in Poland but for the entire region. We have built the largest company in Central Europe with a diversified portfolio of assets that will effectively strengthen current business lines and develop new ones. This creates new growth opportunities to allow us to continue to expand in prospective and high-margin products.”

The agreements represent a significant milestone in Aramco’s long-term strategy to grow its integrated refining and petrochemicals capacity and expand its product portfolio across the entire hydrocarbon value chain. The transactions also seek to establish a solid foundation for further business development and aim to complement Aramco’s strategy to expand its liquids to chemicals capacity to up to 4 million barrels per day.

Mohammed Y. Al Qahtani, Aramco Senior Vice President of Downstream, said: “These investments are part of our efforts towards cementing Aramco’s presence in a key European market, and provide a unique opportunity to develop new liquids-to-chemicals pathways, with hopes of expanding our global downstream footprint and supporting the diversification of our portfolio. At the same time, we aspire to continue developing our product portfolio through our ongoing downstream transformation strategy.”

Aramco and PKN ORLEN have also entered into a crude oil sales agreement, pursuant to which Aramco will supply approximately 45% of PKN ORLEN’s crude oil requirements.

In addition to the investments, Aramco, SABIC and PKN ORLEN have signed a joint development agreement to assess the technical and economic feasibility of a potential petrochemical project in the Polish city of Gdansk.

We remind, PKN Orlen’s third-quarter petrochemical operating profit dropped 56.4% to zloty (Zl) 350m (USD77.6m) on lower margins and sales volumes and currency depreciation. Orlen’s Q3 2022 model petrochemical margin fell 18% to EUR1,155/tonne from €1,405/tonne in Q2 2022. Versus Q3 2021, it declined 12.4% from EUR1,318/tonne. rlen’s third-quarter petrochemical sales volume decreased by 18% to 1.1m tonnes from 1.4m tonnes in the second quarter of this year.

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Clariant Catalysts has teamed up with Evonik and thyssenkrupp Industrial Solutions (tkIS) in a major propylene oxide project for one of China’s largest rubber producers, said Hydrocarbonprocessing.

Qixiang Tengda is one of the leading global producers of carbon-four chemical products, such as methyl ethyl ketone and maleic anhydride. Expanding into the carbon-three value chain, the company’s new propylene oxide plant in Zibo city, Shandong province, relies on Evonik-tkIS HPPO technology to convert propylene in the presence of hydrogen peroxide (HP) directly into propylene oxide (PO). The plant will have an annual production capacity of 300,000 tons.

In the “polishing” stage of the process, Clariant’s NiSat 310 catalyst will remove by-products by converting up to 95% or more of the unreacted HP into water, and unwanted aldehydes into alcohols. These alcohols can be easily separated in subsequent production steps. Using the catalyst not only improves the purity of the propylene oxide produced, but also extends the lifetime of the custom-made, Evonik-supplied HPPO catalyst applied in the main oxidation step.

Jens Cuntze, President of Clariant Catalysts, commented, “The combination of Evonik-tkIS HPPO technology and Clariant NiSat catalyst is a more economical solution that enables the production of highly pure propylene oxide while minimizing waste. As propylene oxide is a widely used chemical building block globally, the collaboration exemplifies a sustainability-driven solution for industry growth.”

Qixiang Tengda, stated, “Our aim is to create a highly efficient propylene oxide production plant, and our responsibility is to do so using one of the most sustainable processes available. We believe these two goals are achievable with Evonik, tkIS, and Clariant’s technologies and products.”

Lauren Kjeldsen, Head of Evonik’s Smart Materials division, said, “At Evonik, our aim is to drive sustainable solutions to future challenges. HPPO is an excellent example of an innovation that helps the industry to use less energy and fewer resources while generating only water as a co-product. This sustainable advancement is especially important in China, where emissions regulations are becoming ever stricter.”

Evonik has licensed hydrogen peroxide technology to Qixiang Tengda for the exclusive supply of their propylene oxide plant. Compared to conventional production methods, the HPPO process requires a significantly lower investment, resulting in higher profitability for producers.

We remind, Clariant Mining Solutions opened a dedicated global Competence Center for Decarbonization Minerals (CCDM) at the Dubai Science Park in Dubai, United Arab Emirates (UAE) on October 25, 2022. This laboratory is designed to meet the increasing global demand for solutions to process decarbonization minerals more efficiently.

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