Archive for the ‘Platts analysis’ Category

Petrochemical implications of easing sanctions on Iran

Earlier this month, the US and its negotiating partners announced steps to move ahead on what is known as “adoption day,” intended to show readiness for sanctions relief for Iran. However, relief will only begin on “implementation day,” the day when the International Atomic Energy Agency certifies that Iran lived up to its commitments according to the nuclear deal completed in July.

According to the US CIA’s The World Factbook, Iran has the world’s second largest supply of conventional natural gas reserves, much of which is rich in ethane. Given that the rest of the Middle Eastern countries are experiencing limited supplies in ethane, this presents a huge opportunity for the Iranian petrochemical sector as sanctions are eased.

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Infographic: Japan’s nuclear restart

Japan’s fleet of 43 nuclear reactors, with a total installed capacity of about 42,000 MW, has been largely idled since September 2013, when the country adopted stricter nuclear safety requirements in the wake of the Fukushima I accident.

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Metals prices unsteady in September, but August’s multi-year lows not tested

Concerns over the Chinese economy continued to trouble the metals market in September with expectations that the Federal Open Market Committee (FOMC) would raise US interest rates creating further headwinds. As a result, contracts traded on the London Metal Exchange continued to see volatility, although most metals (excluding zinc) did not trade below the multi-year lows established at the end of August.

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The effects of ethane steam crackers on the blink

The price of oil certainly has some effect on the petrochemical prices throughout the value chain, but supply/demand fundamentals will always be the biggest driver. It is the unplanned outages that create uncertainty, and that was certainly the case this year.

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Canada’s petchem sector looks for expansions on back of domestic feedstock

Prior to the drop in oil prices during the second half of 2014, the shale revolution was putting the US in a position to become less dependent on foreign oil, fueling job creation in the oil and gas industry, and creating a manufacturing renaissance. Many countries attempted to replicate the same success that the US experienced in shale. However, the US and Canada are the only major producers of commercially viable natural gas from shale formations in the world.

While large-scale commercial production of shale gas has not yet been realized in Canada, at least to the degree that the US has attained, many petrochemical companies are exploring the opportunities from the new supply of natural gas liquids derived from shale gas developments in Canada.

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September gloom in store for US ethanol prices?

US ethanol producers are treading water right now with razor-thin margins brought on by low prices, but if historical trends hold up, things could get even uglier in September.

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US crude oil export state of play

On Thursday, a House Energy and Commerce subcommittee passed HR 702, which would repeal all limits on US crude exports. The US Energy Information Administration claims that a crude export policy shift would likely have a relatively minimal impact on overall export levels, causing, at most, 1.5 million b/d of crude exports over current levels, but only in the most extreme case the agency looked at.

Still, the policy has ignited a fierce lobbying battle between producers, who claim they need access to the world market to compete in the current low-price environment, and some refiners, who claim a policy change will hinder the domestic refining industry.

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Base metals come to terms with China’s ‘new normal’ in July

In July, base metals faced two dominant headwinds in the form of the Greek debt crisis and the China stock market crash that saw metals test fresh multi-year lows on the London Metal Exchange. This led to a number of investment banks adjusting their short-term and long-term price forecasts as they focused on the likely impact of the rebalancing of the Chinese economy and its projected slower growth — what China’s Premier Li Keqiang has coined the ‘new normal.’

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The changing dynamics of global benzene supply

Benzene is a primary aromatic and the precursor for the C6 value chain, and finds itself at crossroads in relation to the aromatics main outlet of supply. Benzene supply is traditionally dependent on gasoline production out of the refinery and as a co-product of naphtha cracking.

However, massive projections for increased polyethylene terephthalate demand in Asia led to a wave of investments in paraxylene production units and resulted in growth of benzene production as a by-product from these units. Also, with major refinery expansions in the Middle East (especially processing heavier crude, which yields more benzene) and Asia, as well as move to lighter cracking for ethylene production in the US and the Middle East, benzene supply dynamics globally have changed. Benzene is no longer just dictated by the traditional means of supply.

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Holy Carbon: Does the Pope’s view matter in the fight against climate change?

Pope Francis is set to weigh in on the climate change debate in what has already caused a considerable buzz in the media, by equal measure prompting cheers from the green lobby and irritation among climate skeptics, even before the message has been released.

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