If you want to learn more, please visit our website .
Polypropylene
price chartPolypropylene (PP) is a thermoplastic polymer that is widely used in various applications due to its versatile properties. It is a synthetic resin made from the polymerization of propylene monomers. Polypropylene is a type of plastic that is tough, lightweight, and has a high resistance to heat and chemical solvents. It is also a very cost-effective material.
Polypropylene is used in a wide range of applications, including packaging materials such as containers, bags, and films, as well as in fibers for carpets, upholstery, and clothing. It is also used in the automotive industry for the production of car parts, in the medical industry for the manufacture of medical devices, and in the construction industry for pipes and fittings. Polypropylene is also widely used in 3D printing as a low-cost material.
Polypropylene (PP) is a versatile polymer that is used in a wide range of applications. Some common uses of PP include:
PP is commonly used to produce containers, bottles, caps, and closures for food and beverages, personal care products, and household chemicals.
PP fibers are used to produce clothing, upholstery, and carpets.
PP is used to produce car parts, including bumpers, dashboard components, and interior trim.
PP is used in medical devices such as syringes, IV bags, and surgical instruments.
PP is used to produce pipes, fittings, and other construction materials due to its durability, strength, and resistance to chemicals and moisture.
PP is used to produce a variety of stationery items, including folders, binders, and dividers.
PP is used in the production of electrical components such as cable insulation, switches, and sockets.
PP is used as a filament in 3D printing, due to its low cost and ease of printing.
These are just some of the many uses of polypropylene. Its versatility and low cost make it a popular choice in many industries.
Polypropylene (PP) has several key properties that make it a popular choice for industrial use:
PP has a high resistance to many chemicals, acids, and alkalis, making it suitable for use in harsh chemical environments.
PP is a lightweight material, which makes it ideal for applications where weight is a concern.
PP is a strong and durable material that can withstand heavy loads and repeated use.
PP has a low moisture absorption rate, making it resistant to moisture and water damage.
PP has a high melting point, making it suitable for use in high-temperature applications.
PP is a flexible material that can be easily molded into different shapes and sizes.
PP is a cost-effective material that offers good value for money.
These properties make PP an ideal choice for a wide range of industrial applications, including packaging, textiles, automotive, construction, and medical.
Polypropylene (PP) is typically produced using a polymerization process called “gas-phase polymerization”. The process involves the following steps:
Propylene is produced through a refining process that separates crude oil into different components.
The propylene gas is then polymerized using a catalyst, which causes the propylene molecules to join together and form long chains.
The resulting polymer is then cooled and separated from the unreacted propylene gas and any other byproducts.
The polymer is then pelletized, which involves cutting the polymer into small pellets or beads that are easy to transport and use in manufacturing processes.
The pellets are then tested for their properties, such as molecular weight, melt flow rate, and density, to ensure they meet the required specifications for their intended applications.
The gas-phase polymerization process is preferred for producing PP because it is cost-effective, environmentally friendly, and can produce high-quality polymer with good control over the molecular weight and other properties.
The cost of polypropylene (PP) is affected by a range of factors, including:
The cost of propylene, the primary raw material used in the production of PP, can fluctuate based on supply and demand and other market factors.
The production capacity of PP can affect the cost, with higher production capacity leading to lower costs due to economies of scale.
The cost of energy used in the production of PP, such as natural gas and electricity, can have a significant impact on the overall cost of the polymer.
Labor costs, including wages and benefits, can affect the cost of producing PP.
The cost of transporting the PP pellets from the production site to the end-users can affect the overall cost.
Regulatory requirements, such as environmental regulations, can increase production costs and affect the price of PP.
Overall, the cost of PP is influenced by a complex set of factors, including both supply and demand factors, as well as costs associated with raw materials, production, and transportation.
The global polypropylene (PP) market is large and growing. According to a report by Mordor Intelligence, the global PP market was valued at approximately USD 110.3 billion in 2020 and is expected to reach USD 157.8 billion by 2026, growing at a compound annual growth rate (CAGR) of around 6% during the forecast period.
The demand for PP is driven by its versatility and low cost, making it a popular choice in many industries, including packaging, textiles, automotive, construction, and medical. The increasing demand for sustainable packaging solutions and the growth of the e-commerce industry are expected to further drive the demand for PP.
The Asia-Pacific region is the largest market for PP, accounting for a significant share of the global demand. This is due to the high demand from the packaging, automotive, and construction industries in the region. Other key markets for PP include Europe and North America.
According to https://oec.world/ : Polypropylene are the world’s 104th most traded product.
In 2020, the top exporters of Polypropylene were Saudi Arabia ($4.85B), South Korea ($1.97B), Germany ($1.45B), United States ($1.42B), and United Arab Emirates ($1.11B).
In 2020, the top importers of Polypropylene were China ($3.92B), Turkey ($2.02B), Vietnam ($1.12B), Italy ($1.04B), and Germany ($899M).
The production of polypropylene (PP) is a global industry, with many countries producing this versatile polymer. According to the latest available data from the International Trade Centre, the top 10 PP producing countries in the world in 2020 were:
China is the world’s largest producer of PP, accounting for over 30% of the global production in 2020. The United States and Germany are the second and third largest producers respectively. Other countries in the top 10 include major chemical-producing nations in Europe, Asia, and the Middle East.
The production of PP is driven by demand from a range of industries, including packaging, textiles, automotive, construction, and medical. The availability of raw materials, energy costs, and other factors also play a role in determining the production levels in different countries.
LONDON (ICIS)–The global PE/PP market has been rocked by the disruption to Red Sea shipping, which has sent prices soaring, following sustained periods of weakness. The question now is, how long can this continue? With early March European offers out and some suppliers approaching the market bullishly, ICIS experts sit down to discuss all the potential influences in the coming month. Senior editor/ manager Vicky Ellis, senior editor/manager Samantha Wright and senior editor Ben Lake discuss the variables around the European, African and Turkish markets and what the early signs are for a potentially pivotal month. Meet our ICIS experts in person to talk about the pressing issues around polyolefin price spikes, weak demand and supply disruption. Ask the questions you need answers to, understand what the future looks like and uncover new opportunities. ICIS senior analysts, editors and managers will be at the Ritz-Carlton Hotel in Vienna, Austria on the 10-11 April for the 10th ICIS World Polyolefins Conference. You’ll also get to hear from industry leaders like Berry Global, Borealis and Plastic Energy, as they share their insights. Click here to learn more.
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 1 March. NEWS Mexico’s manufacturing returns to expansion on higher salesMexico’s manufacturing contraction in January was a blip, with output returning to growth in February as sales grew, analysts at S&P Global said on Friday. Brazil’s manufacturing at 20-month high on strong new orders book Brazil’s manufacturing PMI index continued expanding in February as firms increased their output to cater for a healthy new orders book, analysts at S&P Global said on Friday. MOVES: Brazil’s Unipar CFO resigns Unipar’s CFO Antonio Campos Rabello has handed in his resignation, effective 29 February, the Brazilian chemicals producer said late on Tuesday. Surging PET imports reflect Mexico's growing industrial appetiteMexico has seen a significant rise in PET imports since 2021, indicative of heightened demand for this versatile polymer across diverse sectors within the country's burgeoning economy. Persistent weak petchems, longer-than-expected spreads recovery to hit Braskem – S&P Brazil’s petrochemicals major Braskem’s profitability in 2024 will be hit by a delay in a recovery in spreads due to “persistent” weak markets, according to US credit rating agency S&P Global. Petrobras and ArcelorMittal mull joint low-carbon projects Brazilian state-owned energy major Petrobras and steel major ArcelorMittal have signed a memorandum of understanding (MoU) to jointly develop low-carbon projects. PRICING LatAm PE domestic prices up in Brazil, Colombia due to producers squeezed margins Domestic polyethylene (PE) prices were assessed higher in Brazil and Colombia on the back of squeezed margins from local producers. In other Latin American countries prices were steady this week. LatAm PP prices steady to higher due to increased feedstock costs, narrow margins Domestic polypropylene (PP) prices were assessed higher in Argentina, Brazil, Chile and Mexico on the back of higher feedstock costs and narrow margins. In Colombia prices were steady.
HOUSTON (ICIS)–Global container shipping major CMA CGM Group will begin transiting the Red Sea on a case-by-case basis as it continues to closely monitor the situation, the company said in an advisory to customers. The company said it will make assessments for each vessel prior to transits, so routing choices cannot be anticipated or communicated. All other vessels will continue to be rerouted around the Cape of Good Hope. Houthi attacks on commercial vessels in the Red Sea began in November 2023, forcing carriers to begin diverting away from the Suez Canal in December. Maersk and CMA CGM Group were the last two major carriers to completely cease transits through the Suez. The longer routes put upward pressure on freight rates because of increased fuel costs and tightened capacity with fewer available ships. Rates surged but have begun to ease, although they remain elevated. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. Some liquid chemicals are also shipped on container ships using isotanks. Visit the ICIS Logistics: impact on chemical and energy markets Topic Page.
SINGAPORE (ICIS)–Indonesia’s Ministry of Trade informed stakeholders from the polymer industry on Thursday that polyethylene (PE) and polypropylene (PP), along with some other chemicals, will no longer be subjected to the new import quota regulations. Importers of PP block and random copolymers are still required to get import approval just like before, according to market sources attending an event organized by the country's trade ministry. An official announcement is expected within the next two weeks. In December last year, Indonesia announced that it will be enforcing new import quota regulations on a list of petrochemicals. The regulations were scheduled to come into effect on 10 March. Under the new system, importers are required to complete a surveyor report and apply for quota before they are allowed to import the affected petrochemicals. The polymer industry has reacted strongly to the proposed regulations, especially since currently, Indonesia is a net importer of both PE and PP. Local producers also do not produce certain polymer grades, which means users will have to import anyway. Earlier this year, the polymer industry requested for at least an extension or grace period so that importers have sufficient time to complete the formalities. Some were earlier expecting a grace period of three to six months to be granted. Additional reporting by Izham Ahmad
SINGAPORE (ICIS)–South Korean refiner S-Oil has earmarked won (W) 2.72tr ($2bn) this year for its thermal crude-to-chemical (TC2C) project called Shaheen, representing 87% of the total capital expenditure (capex) set for 2024. The full-year capex at W3.14tr was up 54% from 2023, the company said in its Q4 results presentation released in early February. Construction of Shaheen at the Onsan Industrial Complex of Ulsan City started in March 2023 and will be in full swing this year, with mechanical completion targeted by the first half of 2026. The funds that will go to the project – whose name was derived from the Arabic word for falcon – were up 86% from 2023 levels. As of end-December 2023, site preparation was 48% complete, with engineering, procurement and construction at 18.7%, according to S-Oil. “Site preparation and EPC [engineering, procurement and construction] work is under full-fledged execution with the actual progress going smoothly according to the plan,” the company said. The project will leverage on the T2C2 technology of its parent company Saudi Aramco, the world’s biggest crude exporter. Aramco owns more than 63% of S-Oil. The project is expected to yield 70% more chemicals, with a capex/operating expenditure savings pegged at 30-40% versus conventional process. Meanwhile, for upgrade and maintenance of plants in 2024, total expenses will fall by about 32% to W298bn, with just two plants due for turnaround in the year – its No 1 crude distillation unit (CDU) and its No 1 lube HDT (hydrotreatment) unit, the company said in the presentation, noting that the plan is preliminary. ICIS had reported that S-Oil will conduct maintenance at its Group I and Group II base oils units in Onsan, Ulsan for more than a month from mid-September this year. On 23 February 2024, a fire broke out at the company’s Onsan production site in Ulsan, shutting one of the three crude distillation units (CDUs) of its 669,000 bbl/day refinery, with some reduction in propylene output of the residue fluid catalytic cracker (RFCC) at the site, industry sources said. Other downstream operations at the site were not affected, but this could not be immediately confirmed with the company. Its Onsan complex can produce 910,000 tonnes/year of propylene; 187,000 tonnes/year of ethylene; 600,000 tonnes/year of benzene; and 1m tonnes/year of paraxylene (PX), according to the ICIS Supply & Demand Database. The company was planning to restart the No 3 CDU by 27 February, news agency Reuters reported, quoting unnamed sources. 2023 NET PROFIT SLUMPSS-Oil posted a 54.9% slump in net profit, with sales sliding by about 16% to as operating rates across its plants declined. in billion won (W) FY2023* FY2022 Yr-on-yr % change Revenue 35,726.7 42,446.0 -15.8 Operating income 1,354.6 3,405.2 -60.2 Net income 948.8 2,104.4 -54.9 *Revised figures from S-Oil on 26 February 2024 in billion won (W) FY2023 FY2022 Yr-on-yr % change Refining operating profit 399.1 2,344.3 -83.0 Petrochemical operating profit 203.7 -49.8 -509.0 Lube operating profit 815.7 1,110.7 -26.6 Source: S-Oil presentation, 2 February 2024 Average operating rates across the company’s plants declined and were in the range of 75.1% to 90.4% in 2023 due to weakening global demand, with paraxylene (PX) plants registering the lowest run rate. Source: S-Oil, February 2024 2024 OUTLOOK “Regional refining markets are forecast to maintain an above average level by steady demand growth coupled with low inventory levels,” S-Oil said. Refining margins in the first quarter will likely be supported by “heating demand in winter and spring maintenance season", it said. “With uncertainties on start-up timing and pace of major new refineries, market impact is estimated to be restricted in 2H [second half] or beyond,” the company said. Paraxylene (PX) and benzene markets “are projected to be supported by firm demand growth” on the back of new downstream expansions as well as demand for gasoline blending, “amid drastically reduced capacity addition”. Polypropylene (PP) and propylene oxide (PO) markets “are likely to gradually improve in tandem with pace of China’s economic recovery, while pressures from capacity addition continues”, while for lube base oils (LBO), the product spread is projected to be solid “on limited capacity additions and sustained demand growth”, according to S-Oil. Thumbnail image: S-Oil's Residue Upgrading Complex (RUC) and the Olefin Downstream Complex (ODC) in Ulsan, South Korea (Source: S-Oil) Focus article by Pearl Bantillo ($1 = W1,334)
SINGAPORE (ICIS)–Saudi Arabia’s chemicals major SABIC swung to a net loss of Saudi riyal (SR) 2.77bn ($739m) in 2023, largely due to one-off losses related to a divestment, while earnings from continued operations shrank amid challenging global market conditions. in Saudi Riyal (SR) bn 2023 2022 % Change Revenue 141.5 183.1 -22.7 EBITDA 19.0 36.4 -47.7 Net income from continuing operations 1.3 15.8 -91.8 Net income attributable to equity holders of the parent -2.8 16.5 – The company's net loss for 2023 was "driven mainly from the fair valuation of the Saudi Iron and Steel Co (Hadeed) business", SABIC in a filing to the Saudi bourse Tadawul on 27 February. In early September 2023, SABIC announced it had agreed to sell its entire stake in the Saudi Iron and Steel Co (Hadeed) to Saudi Arabia's sovereign wealth fund for SR12.5bn. The sale resulted in non-cash losses worth SR2.93bn. From continuing operation, full-year net income declined by 91.8% on reduced profit margins for major products, as well as lower earnings of joint ventures and associated firms. SABIC also incurred charges from non-recurring items amounting to SR3.47bn in 2023,“as a result of impairment charges and write-offs of certain capital and financial assets as well as provisions for the restructuring program in Europe and constructive obligations”. Meanwhile, SABIC’s average product sales price in 2023 fell by 21%, reflecting the global downturn in petrochemical markets, it said. Overall sales volumes fell by 2% year on year in 2023 amid sluggish end-user demand, the company said. "Year 2023 presented numerous challenges for the petrochemical industry – the market environment was shaped by lackluster macroeconomic sentiment, weak end-user demand, and a wave of incremental supply for a large suite of products," it said. The company's petrochemicals business posted a 20% year-on-year decline in sales to SR131.3bn in 2023, with EBITDA down by 42% at SR14.6bn. "The petrochemical industry navigates a challenging operating environment – underwhelming demand within our target markets led to lower year end product prices and there remains considerable uncertainty heading into the first quarter of 2024," SABIC CEO Abdulrahman Al-Fageeh said. "The announced divestment of Hadeed is proceeding as planned – this optimization of internal resources will enhance our core focus on petrochemicals," he said. SABIC is also pursuing a number of initiatives to address the "competiveness of our European assets" aimed at a "maintainable and modernized footprint in the region", Al-Fageeh added. The company plans a higher capital expenditure of between $4bn and 5bn in 2024, compared with $3.5bn-3.8bn last year. SABIC has started construction of its $6.4bn manufacturing complex in China’s southern Fujian province. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC is 70%-owned by energy giant Saudi Aramco. ($1 = SR3.75)
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 23 February. NEWS Argentina manufacturing output falls 12% in December Argentina’s recession is hitting the petrochemicals-intensive manufacturing sectors hard, with output down 11.9% in December, year on year, the country’s statistics body Indec said late on Thursday. Mexico’s secondary activities output up 1.2% year on year in December Output in Mexico’s petrochemicals-intensive secondary activities rose in December by 1.2%, year on year, the country’s statistics office Inegi said this week. Pause in PVC projects ‘prudent’ until prices rise to $1,200/tonne – Orbia CEO Depressed global polyvinyl chloride (PVC) prices prompted Orbia to take the “prudent” decision to put new projects on hold, the CEO of the Mexican chemical producer said on Thursday. Petrochemicals margins could worsen in 2024 – Mexico’s Alpek Mexican chemicals producer Alpek’s stock was falling more than 3% on Wednesday afternoon after the company issued a downbeat guidance for 2024 in which petrochemicals margins could worsen from the already weak 2023 averages. Brazil's Braskem Q4 main chemicals, resins sales fall on lower demand Braskem’s main chemicals and resins sales in its domestic market fell by 15% and 9%, respectively, in the fourth quarter, year on year, on the back of persistent poor demand, the Brazilian petrochemicals major said this week. Brazil’s Unigel gets green light from creditors for debt restructuring Unigel has agreed a Brazilian reais (R) 3.9 billion ($791 million) debt restructuring with its creditors, which has saved the beleaguered styrenics, acrylics and fertilizer producer from filing for bankruptcy for the time being. US Stepan recovering LatAm surfactants market share, margins – CEO Stepan is recovering its share in the Latin American surfactants market following supply chain disruptions in the second half of 2022, Scott Behrens, CEO of the US-based company, said on Tuesday. PRICINGLat Am PP domestic prices fall in Colombia on cheaper imports Domestic polypropylene (PP) prices were down in Colombia due to more competitive prices for imported products. In other Latin American countries, prices were steady. Lat Am PE buyers on the sidelines waiting for March prices Domestic, international polyethylene (PE) prices were assessed unchanged this week across Latin American countries. Mexico PET industry expecting stable sales during the upcoming peak bottle season Polyethylene terephthalate (PET) prices in Mexico held steady this week, with weak demand and ample supply in February. Brazil ethanol sales continue to face positive results in 2024 According to Unica, Brazil's ethanol sales grew by 38.22% in January over the same time frame in 2023. With this achievement, sales volume has surpassed its highest point since October 2020.
LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 23 February. Europe PE/PP contract prices reach three figure hikes for February Contract prices for European polyethylene (PE) and polypropylene (PP) have settled upwards from initial moves earlier in February, in the pivotal third week of the month. Chemical firms back call for stronger business environment in EU The chief executives of BASF, INEOS, Covestro, Clariant and Dow Europe among others on Tuesday backed a new declaration calling for stronger European Commission prioritisation of business, calling for an industrial deal to be placed at the core of the new Parliament. Europe propylene limitations raise concerns down value chain The European propylene (C3) supply and demand balance is in a tighter than expected position due to a combination of healthy demand and planned and unplanned production constraints. BASF navigates low-growth environment as China Verbund spending continues As BASF prepares to provide more detail on its 2023 financial performance, the Germany-based chemicals major is to navigate the still-chilly waters of 2024 as spending on its flagship China Verbund site in Zhanjiang continues and project pipelines face ever-tougher scrutiny. INSIGHT: EU chemicals plead for help while production sinks to 1999 levels As chemical production in Europe plunges to levels last seen during the 2008/9 financial crisis and back in 1999, industry leaders are urging the EU to improve the regulatory framework and do more to protect them from unfair competition. But with the fundamentals of supply and demand so out of balance globally, there are limits to how much politicians can achieve in Europe.
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Global polyolefins markets are such that the old phrases we use have become "Doublespeak", hiding real meanings. For example, recent mentions of "tight markets" on the Red Sea crisis and a wave of shutdowns should be read as "slightly less long markets". Stick with the data which always gives you the true perspective: Global polyethylene (PE) capacity exceeding demand is forecast to average 26m tonnes a year in 2024-2030, according to the ICIS Supply & Demand Database. This compares with just 7m tonnes a year in 1993-2023 (1993 marked the start of “China’s economic miracle”). Global polypropylene (PP) capacity exceeding demand is forecast to average 24m tonnes a year in 2024-2030 versus 6m tonnes a year in 1993-2023. So far in 2024, average NEA PE integrated variable cost margins have fallen to minus 27 under the blog's new margins index, a record low. NEA integrated naphtha-based variable cost PP margins have so far this year been at minus 28 in another new index, equalling the previous record low in 2022. The average China CFR PE price spread – weighted for the different grades – over CFR Japan naphtha costs has fallen to just $73/tonne so far this year, the lowest since our price assessments began in 1993. And while you stick with the data, remember this essential context: China's economy is undergoing a long-term structural slowdown. Get used to it and come to us for advice about what you should do next. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.
LONDON (ICIS)–Lower pricing for virgin petrochemicals in Europe on the back of a prolonged demand trough is exacerbating the challenge of building out sustainable products portfolios into a core spine of a chemicals business, according to the CEO of Borealis. The Austria-based petrochemicals producer is in the process of substantially increasing its sustainable and circular products offerings, completing its acquisition of Italy-based recycled polypropylene specialist Rialti in November. The company also agreed to acquire Integra Plastics, a Bulgaria-based producer of recycled polyethylene and polypropylene, that month. VIRGIN VS RECYCLED The push to develop circular products as a core plank of Borealis’ operations have become more difficult amid strained profitability and low pricing for conventional plastics, according to CEO Thomas Gangl. “What we want to do is focus on establishing circularity as a viable business,” he said. “This is tricky in general, and even more tricky in times of low prices for virgin material. On the other hand, I truly believe that this is not an optional topic, and is the way forward and we see for Borealis.” “The current environment, with lower demand for products, lower prices and margins, has of course been a difficult situation for us as well. Even more difficult in this environment, is making the mid- and long-term structural changes that we need,” he added. Lower pricing for virgin material has been a challenge for the mechanical recycling sector, with production units tending to be smaller-scale than gigantic fossil-based petrochemicals production plant, and utilising newer technology. Those market characteristics can make for higher costs, and periods of cheap and plentiful fossil-based materials regularly challenge the pace of recycled product market adoption. “We need to go to a more circular product portfolio. During times when the material is so cheap, it is very difficult to afford for customers to buy something with a premium. That is a challenging situation for the transformation,” he said. PERFORMANCE The company reported 2023 operating profit of €18m for its European asset base, excluding its nitrogen fertilizers business, which it sold to AGROFERT in July last year. The long-anticipated divestment has also allowed the company to simplify its approach to moving into a more circular business model, according to Gangl. "The proceeds that we have received from the sale were very good, and it is also about focus in difficult times. With the transformation towards circularity, we need to focus on the polyolefin business, and the nitrogen business was a big distraction from a management point of view," he said. The 2023 figure is a huge decline from the €703m generated -also excluding fertilizers – the previous year, amid high inflation and weaker margins and negative inventory effects. “The European asset base that Borealis is operating, excluding the big joint ventures such a Borouge, recorded €18m operating profit in 2023, a small profit compared to the record year 2022, but 2023 was a tough year for our industry, especially so for European based part of our industry, with high energy prices, inflation, a lot of imports," said CFO Daniel Turnheim. "Don't get me wrong, we are anything but happy with that sum, but it's still in a solid positive territory," he added. Slow ramp-ups and production issues for some new assets at Baystar, the company’s Texas joint venture with Total, also limited profitability last year. This is due in part to the 625,000 tonne/year scale of the polyethylene unit, which can present unique challenges when ramping up output “With this as the biggest machine ever built, you would expect to see some ramp-up curve… but we are convinced that this year this ramp-up curve will be continued and hopefully at the end of the year we will see a very stable operation,” Turnheim said. NO BIG SHIFTS IN 2024 No strong improvements are expected this year compared to last, with OMV projecting that operating margins for its European olefins and polyolefins assets will slip further in 2024, despite polymer sales and cracker operating rates projected to increase. OMV holds a 75% stake in the business, with Borealis standing as the Austria-based oil and gas major’s key foothold in downstream petrochemicals. OMV is in talks with Abu Dhabi sovereign oil major ADNOC on potential closer cooperation on petrochemicals, including the combination of subsidiaries of Borealis and Borouge as equal partners. Gangl declined to comment on the talks. Europe indicator operating margins (/tonne) 2024 (projected) 2023 Ethylene 490 507 Propylene 370 389 Polyethylene 320 322 Polypropylene 320 355 “I think what we really will see in 2024 is that the situation is not substantially different to 2023,” said Gangl. “It will be another challenging year. And so everyone has, therefore, focus on topics where there is the highest value to be delivered." Like most European players, an ever-intensifying focus on costs and efficiencies is the order of the day, Gangl said, with further consolidation in producers’ European asset base a strong possibility. !We've done a lot in working on margins, pricing, variable costs, fixed costs. This is the name of the game for European players, and therefore we need to continue this journey,” he said. “We have seen some first closures of assets last year and also here I expect that the one or the other will be added in the next years,” he added. LEGISLATIVE REFORM With the institution of a new European Parliament later this year as part of a wave of general elections that will see changes in national leadership for nearly half the population of the globe, sustainability legislation is likely to see some shake-ups. Marco Mensink, director general of European chemicals trade body Cefic, has predicted that Commission support on sustainability investment will be focused on the first movers and the highest spenders as industrial strategy rises up the agenda. With the sustainability transition comprised of the reinvention of numerous value chains and those shifts needing to happen in parallel to create a circular economy, what is lacking beyond investment is clarity, according to Gangl. “We are not happy with the timing of what is required from legislation and what we need to do now. We are taking steps without knowing exactly what the legislation will look like, and this is of course creating some issues,” he said. The US Inflation Reduction Act includes scope to cover operational expenses for new production units in value chains that may not yet be profitable, and an issue in Europe remains an obstacle to maturity of cleaner feedstock product markets, Gangl added. “We can for example, produce more products derived from bio-based feedstocks but as long as this is not supported by legislation, customers will not pay the extra costs for that. And this is where we then need a lot of smaller investments as well,” he said. “So it's not only one big investment, it's many smaller investments, and these will be delayed if there is no change in the approach by regulators,” he added. Insight by Tom Brown Thumbnail photo: Borealis' office in Taylorsville, US. Source: Borealis Clarification: recasts seventh paragraph
Click here to get more.
For more information, please visit pharmaceutical glass tube.