GLG News by Mr. Kevin Boyle, Consultant
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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Sabic’s Dismal Q2 Results Unlikely Representative of the Petrochemical Industry
July 20, 2009
UPDATE 1-Saudi Basic Industries' Q2 profit plummets on crisis | www.iii.co.uk
Sabic buys feedstocks at a low, fixed price, so falling prices mean falling EBITDA.Market conditions for Sabic in Q2 of 2008 were different that for other non-Middle Eastern producers.
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After Dow’s Petrochemical Plant Closures – More Yet to Come
July 5, 2009
Dow Chemical to Shut Three Louisiana Ethylene Plants (Update3) | www.bloomberg.com
This plant closure will have no immediate impact on the ethylene market. There may be additional rationalization coming in petrochemicals. What may close in the future is a big gamble.
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PVC Futures Contracts – A Very Tough Hedge
May 18, 2009
Shanghai Chlor-Alkali to Run PVC Futures Hedging Business | www.tradingmarkets.com
The economics of PVC have always been complicated; much more complicated than polyolefins. Several years ago as China undertook a rapid expansion in the PVC capacity, they introduced a very old concept which has further complicated the market.
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Petrochemicals : Japan Out, Japan In, Venezuela Tries Again
April 14, 2009
Chavez Says Japan to Spend $33.5 Billion in Venezuela (Update3) | www.bloomberg.com
Venezuela has the potential to build ethylene operations that would rival Middle Eastern plants. Japanese companies actively supporting and participating in Venezuela's ambitious plans.
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Can India take on the Global Petrochemical Industry?
April 7, 2009
India sets out plans for rapid petrochemicals growth | www.yourindustrynews.com
India plans large increases in petrochemicals making it long ethylene. Can Indian petrochemical capacity compete with the Middle East?
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Middle Eastern Petrochemical Companies have Incentives to Expand to Other Regions
March 24, 2009
Gulf petrochemicals industry has to make most of slump | www.meed.com
Sentiment in the Middle East is that these times are an opportunity for local petrochemical producers to become global players.
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The Independent Petrochemical Producers Are Ready
January 21, 2009
LBO Burden May Force Ineos, Georgia Gulf Bankruptcy (Update2) | www.bloomberg.com
Production activity in petrochemicals appears to be restarting. Ineos, LyondellBasell, and Georgia Gulf have optimized their operations.
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January 16, 2009
Equistar to reopen La Porte olefins plant | houston.bizjournals.com
Lyondell is using the flexibility of their ethylene production system to optimize their costs.
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Some Good News for Petrochemicals
January 15, 2009
CPC to Restart No. 4 Naphtha Cracker as Market Demand Improves | www.bloomberg.com
Restarting of this cracker in Taiwan is an indication of improved profitability in ethylene, and maybe improving demand.
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“The worst I’ve ever seen!,” in the Petrochemical Market
December 20, 2008
Equistar to Temporarily Idle Second Olefins Unit | www.marketwatch.com
The shuttering of Lyondell's and Westlake's ethylene facilities brings operable capacity to about 70% of nameplate, and utilization rates below 65%. By closing Chocolate Bayou, Lyondell most likely, stands to improve their net cash flow.
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Who Might Buy Sunoco Chemicals?
December 17, 2008
US Sunoco puts chemicals business up for sale | www.icis.com
Sunoco Chemicals is the largest US producer of phenol and a significant producer of polypropylene. These are very large businesses in the trough of a downturn. Which companies might have the foresight to entertain this kind of acquisition?
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Plastic Price Weaknesses Due to Demand, Not Cheap Supply
October 8, 2008
Sharp drop in prices of imported Polyethylene into Europe (6-10-2008) | www.plastemart.com
Polymer prices are beginning to fall in Europe with supply on its way from the Middle East. However, it is the weak demand driving down prices, not the cheap supply from new Middle Eastern plants.
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Investing in the Chemical Industry
September 10, 2008
As Buyout Bust Turns Bitter, A Major Deal Lands in Court | online.wsj.com
Private investment firms have supported dynamic growth in the chemical industry.
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The Petrochemical Industry Returns to Profitability!!!
August 8, 2008
EVENING SNAPSHOT - Americas Markets Summary | www.icis.com
Ethylene producers have returned to profitability. While ethylene prices are dropping quickly, feedstock prices are dropping faster. While heavy feedstock cracking may still be negative, the overall industry (median margins) are back in positive territory. Derivative margins are quite strong.
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High Costs Begin to Take Their Toll on Asian Ethylene Produce
July 2, 2008
Japan's Asahi Kasei to cut ethylene plant runs-Nikkei | beta.ph.news.yahoo.com
Japanese ethylene producers are beginning to reduce operating rates to adjust to market conditions. Because of their relative high costs in Asia, Japanese producers are the marginal suppliers. As they reduce production, we see the deepening of the trough hit Asia.
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Housing Market Drags on PVC, Sends Caustic Soaring
June 11, 2008
Japan's Shin-Etsu: no sign of U.S. housing recovery | biz.yahoo.com
The hopeless housing market puts US PVC makers in a very poor position. Global PVC capacity is up, and prices and margins are falling. New capacity will toughen the market conditions on a global basis. In the meantime, falling chlorine consumption is sending caustic prices higher.
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June 2, 2008
Dow Chemical hikes prices 20 percent, citing energy | news.yahoo.com
Dow seeks to lead the industry to try to recover the increase in energy costs. An across the board increase makes sense if energy costs have equal effect on manufacturing costs. The move certainly gives them another opportunity to raise the awareness of energy prices on chemical producers.
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Plastics Markets are Softening, But There is Hope for Plastics Economics
May 15, 2008
Graham Packaging net sales up 8 per cent | www.prw.com
First quarter results from converters confirm that demand for plastics packaging materials is down. The good news is that higher revenues are attributed to thier ability to increase prices. If converters have pricing power in the market, this should be good news for resin producers.
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Power costs are THE key to chlor-alkali margins
April 30, 2008
Grangemouth firm in deal with British Energy | business.timesonline.co.uk
Energy costs are the most important input to chlor-alkali production costs. Companies who have advantaged energy contracts, like those with low cost hydroelectric power, have a significant cost advantage in the market. If Ineos can secure discounted electricity supplied to their operations in Runcorn, they pull closer to competing with hydroelectric power supplied firm, particularly in northern Europe.
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Commodity chemicals won't see the same "break"
March 4, 2008
Fourth-Quarter Specialty Chemical Results Vary By Sector | www.chemweek.com
Specialty chemical are not as sensitive to underlying raw material costs as commodities. In addition, the structure of specialties softens the price volatility. Commodity chemicals will not enjoy these kinds of results as energy prices increase, a recession looms, and increasing global capacity dampens export prices.
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