Asia petchem producers plan to switch to LPG after price slump

Asia petchem producers plan to switch to LPG after price slump

Several Asian petrochemical producers plan to switch a portion of their feedstock from naphtha to cheaper liquefied petroleum gas (LPG) late in the second quarter as the price gap between the two fuels has widened, refinery and trade sources said, said Reuters.

A rise in LPG use by petrochemical units could hit Asian refiners' margins for naphtha, which is used to make consumer goods including plastics and clothing. Profits from making naphtha from Brent crude have already dropped by about 51% to USD50.25 a ton since Feb. 5, when European Union sanctions forced Russia to divert naphtha supplies from the EU to Asia.

This has prompted Taiwan's Formosa Petrochemical, Asia's top naphtha importer, to plan a 10% switch of its naphtha feed to LPG in May, spokesman KY Lin said. The feedstock change is expected to continue until the end of the third quarter.

Formosa is exploring ways to increase use of LPG, a mixture of propane and butane, to more than 10% without affecting its overall petrochemical production, Lin said. The company has already bought two propane cargoes of 46,000 tons each for May delivery, Lin added.

The price of the LPG cargoes was USD104-105 per ton below the Japan naphtha benchmark price, traders said. That has dropped from a premium of USD8 to Japan naphtha in early February, according to Reuters calculations based on Eikon data. Petchem makers typically buy spot cargoes only when prices are at least USD50 a ton cheaper than naphtha.

LPG prices, which rose in tandem with natural gas last year as sanctions on Russian energy trade unfolded, collapsed more than naphtha after winter demand waned earlier this month, consultancy FGE said in a note. Steam crackers in Asia can typically switch between 10% and 20% of naphtha to alternative feedstock LPG whenever prices are low.

An east Indian cracker operator is also planning to switch to LPG, a company source said, without giving a timeline. A source at a South Korean petrochemical producer said his company plans to boost LPG use to 15% during summer, up from 10% use in winter months.

Asia is also receiving more LPG from the U.S. and the Middle East as winter demand for the heating fuel has passed. Monthly U.S. LPG exports to Asia in February and March rose to around 2.6 million-2.8 million tons, up 100,000-200,000 tons from January, ship-tracking data from Vortexa and Kpler showed.

March supplies from Middle East have risen to the highest level so far this year at about 2.8 million-3.4 million tons in March, the data showed.

We remind, Singapore's imports of Russian naphtha nearly tripled in the first quarter of 2023, government data showed, after the European Union banned oil products imports from Russia. The Asia oil hub imported 741,000 tons of Russian naphtha in the period, accounting for about 23% of Singapore's total imports of the refined product, a Reuters calculation based on Enterprise Singapore data showed. This jumped from about 261,000 tons imported in the fourth quarter last year, the data showed.

Plastic Industry Association survey shows support for mechanical, advanced recycling methods

Plastic Industry Association survey shows support for mechanical, advanced recycling methods

The Plastic Industry Association (Plastics), Washington, has released a survey that indicates that consumers overwhelmingly support all types of recycling when it comes to plastic products or packaging that should be considered “recyclable” or made from “recycled material", said Reciclingtoday.

Plastics partnered with RG Strategies for the survey, which was conducted from Feb. 22-28 and surveyed 1,200 Americans. According to the survey, about two-thirds of respondents believe that single-use plastics are important to their quality of life.

In addition, the survey indicated that most Americans see both advanced recycling and mechanical recycling as examples of recycling. According to the survey, 90 percent of Americans care more that plastics don’t end up in trash than the process by which they are recycled.

Plastics says it plans to submit these survey findings to the Federal Trade Commission, which is accepting comments on potential changes to its Green Guides, which are intended to provide guidance on how consumers interpret environmental marketing claims.

We remind, more than 120 European packaging industry associations issued a joint letter urging co-legislators to preserve the internal market legal basis of the EU Packaging and Packaging Waste Regulation in its entirety, as the best way to achieve the environmental and economic objectives of the proposal. The internal market legal basis addresses the differences among the various national rules on the management of packaging and packaging waste and resulting internal market barriers, while providing a high level of environmental protection.

Turkey top destination for Russian diesel after EU embargo

Turkey top destination for Russian diesel after EU embargo

Turkey remains the top destination for Russian diesel exports after an embargo on shipments to Europe forced traders to divert supplies to Asia, Africa, the Middle East and ship-to-ship (STS) loadings, traders said and Refinitiv Eikon data showed, said Reuters.

Russia has sent about 0.8 million tons of diesel to Turkey since the start of April, having shipped almost 1.5 million tons in the previous month, Refinitiv data shows. About half of April volumes are still in transit with the port of discharge not yet confirmed.

Some of the diesel cargoes heading to Turkey could be for STS transfers to be transported elsewhere, traders said. About 180,000 tons of diesel from Russian ports is heading to Brazil after a record high of 440,000 tons in March.

Russian diesel is gaining market share from the United States, which traditionally accounts for most of Brazil's diesel imports. Brazil buys about 30% of its diesel abroad. Rapidly growing supplies of Russian diesel to Latin America include exports to Panama (160,000 tons for March-April), Uruguay (75,000 tons) and Cuba (33,000 tons), Refinitiv data shows.

About 500,000 tons of Russian diesel have headed to Africa since the start of April. The exports have been mainly to Ghana (110,000 tons) and Tunisia (100,000 tons), but also to Libya, Morocco and Nigeria among others. In March diesel loadings from Russian ports to Africa totaled more than 1.1 million tons, Reuters calculations based on Refinitiv data showed.

This month Russia has sent only about 60,000 tons of diesel to Saudi Arabia after almost 300,000 tons in March. All the shipping data above was by cargo departure. About 300,000 tons of diesel loaded in Russian ports this month does not yet have a confirmed destination.

Another 230,000 tons of Russian diesel is awaiting STS loading near Kalamata port and could be exported to various destinations, according to Refinitiv data.

We remind, Russia has increased its diesel exports to Brazil and other parts of Latin America following an embargo on shipments to Europe, traders said and Refinitiv Eikon data showed. Russia has long been the main diesel supplier for Europe, where refineries do not produce enough fuel to meet domestic demand for diesel cars. But a full EU embargo on Russian oil products since Feb. 5 has diverted Russian diesel exports to Asia, Africa, the Middle East and STS loadings.

Europe’s largest-ever energy security contracting package launched

Europe’s largest-ever energy security contracting package launched

Top representatives of the transmission system operator TenneT, the Hitachi Energy/Petrofac co operation and the three consortium partnerships GE/Sembcorp (SMOP), GE/McDermott and Sie mens Energy/Dragados today officially signed the contracts in Berlin to seal Europe’s largest-ever tender award for energy transition infrastructure, said the company.

The total volume of the contracts for the compo nents of the 14 systems amounts to around €30 billion. The result will be a transmission capacity of offshore wind energy in the German and Dutch North Sea that will generate as much electricity as 28 large-scale power plants.

TenneT has thereby completed the process of awarding contracts for the sea- and land-based converter stations for a total of 14 offshore grid connection systems, which was launched in Au gust 2022. TenneT had already awarded 11 of these systems at the end of March, eight of them in the Netherlands and three in Germany. Three more systems in Germany were added today. These 14 systems are to be realised by 2031.

Their “core components”, meaning the innovative two-gigawatt technology for converting alternating current into direct current and back, will be manufactured exclusively at European production sites of the consortiums’ members in all pro jects. With a contract of this magnitude, Europe will be taking a global lead – in terms of both tech nology and production – in a key sector of tomorrow’s energy supply.

We remind, McDermott has been awarded an engineering, procurement services and construction management (EPsCm) contract from Slovnaft, a.s., for the steam cracker intensification off-gas processing project at its plant in Bratislava, Slovakia.

PPG Industries exceeds profit expectations, forecasts strong FY earnings

PPG Industries exceeds profit expectations, forecasts strong FY earnings

PPG Industries Inc. (PPG) on Thursday reported first-quarter earnings of USD264 mln, said the company.

The Pittsburgh-based company said it had net income of USD1.11 per share. Earnings, adjusted for non-recurring costs, were USD1.82 per share.

The results topped Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of USD1.55 per share.

The paint and coatings maker posted revenue of USD4.38 billion in the period, which did not meet Street forecasts. Four analysts surveyed by Zacks expected USD4.49 billion.

For the current quarter ending in June, PPG Industries expects its per-share earnings to range from USD2.05 to USD2.15. Analysts surveyed by Zacks had forecast adjusted earnings per share of USD1.33.

The company expects full-year earnings in the range of USD6.95 to USD7.25 per share.

We remind, PPG will invest USD11 million to double the production capacity of its powder coatings plant in San Juan del Rio, Mexico. The expansion project is expected to be completed by mid-2023 and will allow the plant to meet the expected future demand for powder coatings in Mexico.

PPG is a leading supplier of powder coatings to the automotive, transportation, appliance, furniture and other markets. The company expanded the business with its 2020 acquisition of Alpha Coating Technologies, which manufactures powder coatings for light industrial applications and heat-sensitive substrates, and its 2021 acquisition of Worwag, which makes liquid, powder and film coatings for industrial and automotive applications. PPG recently agreed to acquire the powder coatings business of Arsonsisi, including a manufacturing plant in Verbania, Italy.