The Week in Chemistry: US PE, PP prices flat in final week of October, Asia PP prices hit two-year lows amid greater supply, slow demand; 'green methanol', based on alternative materials rather than coal, gains traction worldwide amid sustainability push

Sample article from our Chemicals Industry

LOS ANGELES , November 4, 2022 () –

 

US Resins

US spot prices for PE and PP held flat during the final week of October, according to the PasticsExchange report.

Trading kept a rapid pace during the week as producers continue to offload oversupply and offer aggressive discounts for exports.

PE contracts for October are also expected to hold flat, or nearly flat, despite proposals for increases of US$0.05-$0.07/lb. If October contracts hold stable, the month would close off a decline of $0.11/lb for the previous three months combined.

PP will continue to face cautious demand until markets have a clearer picture of the global economic and geopolitical situation. 

The primary source of this information is Plastics Today.


Asia PP

PP prices in China and Southeast Asia have reached two-year lows as the market grapples with sluggish demand downstream and greater supply.

PP Raffia CFR Far East Asia was assessed at US$870/tonne on Nov. 2, a week-on-week decrease of $25/tonne, according to S&P Global Commodity Insights data.

PP Raffia CFR Southeast Asia also decreased by $55/tonne week-on-week, hitting $900/tonne on Nov. 2, its lowest in more than two years.

PP prices had a short reprieve in October after China’s Golden Week holiday, but were again dampened by government plans to continue with a zero-COVID strategy.

Prices came under additional pressure near the end of October with the arrival of aggressively discounted material from the Middle East and South Korea.  

Sources note that Middle East producers cannot offload supply to Europe, where converters have to contend with margin-reducing energy costs.

In China, plant operation rates average about 90%, according to most recent estimates. However, some sources believe factories will start winding down operations at the start of 2023 ahead of Lunar New Year celebrations.

The primary source of this information is S&P Global Platts.


Green Methanol

Projects that utilize innovative technologies for ‘green methanol’ are in their budding stage, but have potential markets as feedstock for fuels, polymers and power generation.

Industry analysts note that green methanol has in fact existed for years, but had to contend with lobbying by the corn industry, which favors ethanol. 

However, demand for green methanol is steadily growing in Asia, Australia and Europe, where industry faces increasingly strict environmental regulations. The rising methanol demand from China in particular comes largely from methanol-to-olefins projects serving downstream PP.

Major players like Mitsubishi Gas Chemical are taking notice of the trend, which could support its corporate sustainability targets. 

Methanol traditionally comes from coal, but Mitsubishi’s investments aim to instead utilize CO2, plastics, biomass and other waste streams --producing a product that better reflects a circular mindset.

The primary source of this information is Chemical & Engineering News.

 

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