Unigel Set to Restart Polystyrene Production in Brazil

MRC -- Unigel, a significant player in Brazil's polystyrene (PS) production landscape, is gearing up to recommence its polystyrene manufacturing activities in Sao Jose dos Campos, Brazil, said Chemanalyst.

This strategic decision follows a temporary shutdown of the plant, which boasts an annual production capacity of 130 thousand tons of substation, initiated in July due to subdued market demand. Unigel is strategically timing the restart of operations to align with the escalating demand in the Brazilian polystyrene market, influenced by both seasonal factors and supply challenges.

The temporary halt in production in July was prompted by a period of low demand in the market, a circumstance that prompted Unigel to implement a strategic pause in its operations. With the plant's reinstatement, Unigel aims to capitalize on the evolving market dynamics and the heightened demand expected in the lead-up to the summer period in the region.

Notably, the Brazilian polystyrene market has encountered supply challenges in recent weeks, contributing to the urgency and importance of Unigel's decision to resume production. Additionally, Unigel's competitor, Innova, is currently operating at reduced capacity at its Manaus plant, attributing the decrease in output to logistical issues. This reduction in supply from Innova has further intensified the supply constraints in the market, creating an opportune moment for Unigel to re-enter the production landscape.

Earlier in the year, Unigel had temporarily closed its styrene production in Cubatao, Sao Paulo, Brazil, on June 12, for scheduled repairs. The styrene production facility, with an annual capacity of 120 thousand tons, underwent the shutdown for planned maintenance. While the exact duration of the repairs remains undisclosed, the decision was made for economic reasons.

The broader context of the Brazilian polystyrene and styrene plastics market reveals a notable increase in consumption. According to ScanPlast's analysis, the estimated consumption of polystyrene and styrene plastics in the initial eight months of the current year reached 379.32 thousand tons, reflecting a significant 7% growth compared to the same period last year.

Unigel and Videolar Innova emerge as the primary manufacturers of polystyrene in Brazil, occupying pivotal roles in shaping the dynamics of the domestic market. The strategic decisions and operational shifts undertaken by these major players significantly influence the overall supply-demand balance and market conditions.

Unigel's strategic move to resume polystyrene production in Sao Jose dos Campos underscores the company's responsiveness to market fluctuations and its proactive stance in leveraging opportunities. The decision to restart operations aligns with the changing dynamics of demand in the Brazilian polystyrene market, influenced by both seasonal patterns and supply challenges. Unigel's role, alongside other key players, continues to shape the trajectory of the Brazilian polystyrene and styrene plastics industry, contributing to its growth and resilience.

We remind, Unigel, the largest Brazilian manufacturer of nitrogen fertilizers, on Thursday announced the resumption of activities at a unit called Unigel Agro Sergipe, which produces urea and ammonia. The company said it scheduled the restart for September after a slight improvement in the outlook for the domestic petrochemical sector. The factory in Sergipe state was idled due to challenging market conditions, Unigel said. Another plant in Bahia state that was likewise idled will remain offline.


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MRC -- Industry operating rates and margins fell to a record low in Q3, according to Indorama Ventures, as the Thailand-based producer announced a fall in as earnings amid the weak economy, said the company.

Despite a year-on-year drop, EBITDA compared to the previous quarter rose 1% on the back of inventory gains in its integrated oxides and derivatives segment and volume growth for its fibres business.
Indorama’s polyethylene terephthalate (PET) activities were hit by low integrated PET margins in China, high feedstock costs in Western markets and lower margins in Europe and Brazil due to import pressure.

Production and sales volumes fell 11% and 5% respectively in line with destocking from buyers and industry operating rates falling to around 70%, which Indorama said are likely at a record low for the industry. This also weighed on margins, which are also at the bottom.

Operating cash flow rose on a year prior, resulting in free cash flow (FCF) of $52m so far this year. This was negative previously on the back of steeper feedstock costs, higher inventory volumes and Indorama's acquisition of Oxiteno.

Although inflationary pressures are expected to cool and there has been a pick-up in China’s economy in Q3, macroeconomic volatility is expected to assuage any meaningful recovery for the rest of 2023.
Volumes are expected to improve in 2024 across all segments as destocking activity comes to an end. Indorama anticipates improved margins on a modest market recovery.

We remind, Indorama Ventures Public Company Limited, a global sustainable chemical company, today announces that it has recycled 100 billion post-consumer PET bottles since February 2011. This has diverted 2.1 million tons of waste from the environment and saved 2.9 million tons of carbon footprint from the product lifecycles. Demonstrating its commitment to support the establishment of a circular economy for PET, in the last ten years Indorama Ventures has spent more than $1 billion towards waste collection of used PET bottles.

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MRC -- SunGas Renewables announced it has been selected by Australian green hydrogen and methanol project developer, ABEL Energy, to supply green methanol for a new $1.4-billion facility in Northern Tasmania, Australia, said Chemanalyst.

Johnson Matthey, a leading methanol synthesis technology and catalyst supplier, was also selected to supply key technologies for the project.

The ABEL Energy Bell Bay Powerfuels Project is expected to produce 300,000 tonnes of green methanol per year. This amount is three times Australia’s current methanol consumption and is the shipping fuel equivalent of removing 540,000 tonnes of carbon dioxide from the atmosphere annually.

The project requires 240 MW of electrolysis to produce green hydrogen, and robust methanol synthesis and biomass gasification technologies. SunGas Renewables’ renewable syngas generation unit, the SunGas System 1000, is specifically designed to convert sustainably sourced wood fiber into renewable syngas. It is this renewable syngas that is used to make renewable biofuels for facilities such as Bell Bay.

We remind, Exxon Mobil moved up the start date for a CDU overhaul at its 619,024-bpd Beaumont, Texas, refinery from August 2024 to June 2024, said people familiar with the company’s plans. Exxon continues to plan to shut the 65,000-bpd diesel-producing hydrocracker in January for an overhaul, during which the 80,000-bpd reformer will also be shut for work, according to the sources. The 180,000-bpd Crude B CDU is scheduled to shut down for the overhaul in June, two months earlier than previously planned, the five sources said.

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MRC -- European chlorine production and capacity utilisation rose slightly year on year in September, while caustic soda stocks were higher, according to the most recent data from statistics agency Eurochlor.

With 19,689 tonnes, the September 2023 average daily production was 2.4% lower than in the previous month, but 2.0% higher than in September 2022.

Capacity utilisation remained low in historical terms; 2023 has seen the lowest chlor-alkali production rates since ICIS data began in 2006, on the back of the very weak market for chlorine derivatives.

Caustic soda stocks rose to historically above-average levels, pointing to weak demand for caustic soda as well, compared to supply.

We remind, European capacity utilisation and chlorine production fell year on year in July, while caustic soda stocks were higher, according to the most recent figures released by Eurochlor. In July, European chlorine production reached 658,845 tonnes. With 21,253 tonnes, the July 2023 average daily production was 6.9% higher than in the previous month, but 4.2% lower than in July 2022.

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MRC -- Formosa Plastics Corp. (FPC), a prominent global petrochemical producer based in Taiwan, is poised to recommence ethylene vinyl acetate (EVA) production on Line 1 at its Mailiao facility, said Chemanalyst.

This strategic move follows a temporary shutdown for maintenance work, with Line 1, boasting an annual production capacity of 190 thousand tons of EVA, scheduled to resume operations on November 15. The maintenance period, initiated on November 8, represents a proactive approach by FPC to ensure optimal performance and reliability.

This planned shutdown aligns with FPC's commitment to regular maintenance cycles to uphold operational efficiency and product quality. The temporary pause in production is a standard industry practice aimed at addressing operational requirements and enhancing the overall reliability of manufacturing processes. With Line 1 set to resume production, FPC is well-positioned to meet the demand for EVA, a versatile ethylene copolymer widely used in various applications.

Earlier this year, on March 27, FPC had successfully resumed operations on Line 2 for EVA production in Mailiao after a brief hiatus for minor maintenance work. Line 2, with a capacity of 80 thousand tons of EVA per year, was temporarily closed from March 22 to facilitate necessary upkeep and ensure the seamless functioning of the production process.

The resumption of EVA production by FPC holds significance not only for the company but also within the broader context of the Asian EVA market. FPC stands as a key player alongside other major EVA producers in Asia, including Taiwan's USI Corp, South Korea's Hanwha Chemical, Honam Petrochemical, and Samsung Total Petrochemicals, as well as Japan's Sumitomo Chemical, Tosoh Corp, DuPont, Mitsui Polychemicals, and China's BASF-YPC, among others.

Analyzing import trends, data for January to August of the current year indicates a notable increase in imports of EVA to the Russian Federation. Import figures for this ethylene copolymer surged by 13.57%, reaching 31.06 thousand tons compared to 27.35 thousand tons in the same period in 2022. This underscores the growing demand for EVA on a global scale, with the material finding applications in diverse industries.

Formosa Plastics Corporation (FPC) stands as a major global chemical manufacturer, headquartered in Taiwan. The company's product portfolio includes polyvinyl chloride (PVC), polyethylene (PE), polypropylene (PP), and various other petrochemical products. FPC's strategic presence and commitment to quality have solidified its position as a leading contributor to the global petrochemical industry.

We remind, Formosa Petrochemical Corp has shut its 36,000 barrel-per-day hydrocracker at its Mailiao refinery following a fire last week, reported Reuters with reference to the company spokesman's statement on Tuesday.
The refiner has cancelled gasoil exports and offered a rare cargo of 180-centistoke (cst) fuel oil for February following the accident. The company is currently carrying out investigations into the accident. The unit is expected to come back online by mid-March.

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