Asian Markets
February 19, 2021
Duties Imposed in India to Attract Domestic MDI Production
Indian ministry says petrochemical, polymer sectors to witness growth
20
Feb ’21
Pic: Shutterstock The increased outlay for healthcare and the fund for vaccination in the budget will boost polymer consumption with requirements of syringes and other polymer based healthcare products, and in general, the requirement of petrochemicals and polymers, required in a range of sectors, will also increase and boost domestic demand with increased government spending.
The roll out of the production-linked incentive (PLI) schemes for key end-use sectors will boost petrochemical consumption in the country, the ministry of chemical and fertilizers said in a press release.
Among the sectors earmarked, seven sectors—including mobile phone manufacturing, auto and components, medical devices, textile products—use significant quantity of petrochemicals. The estimated outlay of ₹1.41 lakh crores augurs well for the petrochemical industry growth, the ministry said.
The massive emphasis on infrastructure spending is expected to result in additional consumption of petrochemicals like polymers and specialty chemicals. Also, Agriculture focused measure like doubling of outlay for micro-irrigation to ₹10,000 crores will further fuel demand for polymer based irrigation products and services.
The synthetic industry has welcomed increase in import duty on raw cotton. This will support farmers to get better remuneration on cotton production and also eliminate cheap imports coming from neighboring countries. As such India is surplus of cotton and rather than exporting cotton.
Industry also welcomes increase in basic customs duty on silk and silk products. Synthetic Industry will be able to substitute silk products silk products by supplying silk like products out of synthetic fibres.
On methylene diphenyl diisocyanate (MDI), duty has been increased from zero to 7.5 per cent. It is used in the production of polyurethanes for many applications, like spandex yarn. The revised custom duty will attract investments in India given the rising demand of polyurethanes and presence of no domestic players.
February 19, 2021
Chinese Aniline Overview
The oversupply of the aniline industry will ease in the next three years
Echemi 2021-02-18
A few days ago, the first aniline and upstream and downstream industry summit was held in Nanjing. The participating experts analyzed the future trend of the market and believed that the oversupply situation of the aniline industry in the next three years would ease.
Longzhong Consulting analysts said that in recent years, my country’s aniline industry has shown prominent contradictions in oversupply, survival of the fittest, and going overseas. The industry’s operating rate has been maintained at 50% to 70% for a long time.
The main raw materials of aniline are pure benzene and nitric acid. The price of nitric acid is relatively low and its impact on the market is limited. The downstream of aniline mainly includes MDI (diphenylmethane diisocyanate), rubber additives and other products. At present, domestic MDI production enterprises have fully realized the independent production capacity of aniline, and have surplus output on the market.
In recent years, the aniline industry has relied on exports to ease the contradiction of oversupply. From 2016 to 2018, the export volume has increased year by year, and the export volume has declined from 2019 to 2020. The main export destinations are India, the United States, Spain, Hungary and other countries.
Experts predict that in the next three years, the new production capacity of aniline will be mainly concentrated in MDI co-production enterprises, and the expansion of rubber additives will be very small, and the contradiction of oversupply will be eased. The development of the aniline industry still faces two major problems. One is the oversupply, and the other is the single development of downstream products, and the growth point of demand is still on MDI products.
Research on the aniline market must focus on crude oil prices. Longzhong Consulting analysts pointed out that the main factors affecting crude oil prices in 2020 are geopolitics, epidemics, economic demand and inventories. It is a very unstable quadrilateral, and the impact of individual factors cannot be overstated. It is expected that it will take about 100 weeks to fully recover after the international oil price plummet, and the reasonable range is between 55 and 60 US dollars per barrel.
Experts pointed out that because only one set of pure benzene plants was put into operation in Zhejiang Petrochemical in the first half of 2021, and many pure benzene plants were overhauled, the domestic supply of pure benzene would be tight.
In the long run, my country has built seven major petrochemical industrial bases. These projects have relatively high chemical production capacity. The production capacity of pure benzene plants is mostly at the million-ton level. At the same time, due to the misalignment of upstream and downstream production time, the surplus pure benzene may impact the market in the short term.
Experts pointed out that in the context of the transformation and upgrading of my country’s industrial structure, the elimination of backward production capacity and intensive development are the general trend, and the pure benzene industry chain will also be reshaped from the top down. It is expected that in the next two years, the downstream expansion of the pure benzene industry chain will be faster than that of the upstream. However, due to the clearing of downstream backward production capacity and the supplement of foreign pure benzene imports, the domestic pure benzene market is expected to maintain a tight balance.
February 19, 2021
Chinese Aniline Overview
The oversupply of the aniline industry will ease in the next three years
Echemi 2021-02-18
A few days ago, the first aniline and upstream and downstream industry summit was held in Nanjing. The participating experts analyzed the future trend of the market and believed that the oversupply situation of the aniline industry in the next three years would ease.
Longzhong Consulting analysts said that in recent years, my country’s aniline industry has shown prominent contradictions in oversupply, survival of the fittest, and going overseas. The industry’s operating rate has been maintained at 50% to 70% for a long time.
The main raw materials of aniline are pure benzene and nitric acid. The price of nitric acid is relatively low and its impact on the market is limited. The downstream of aniline mainly includes MDI (diphenylmethane diisocyanate), rubber additives and other products. At present, domestic MDI production enterprises have fully realized the independent production capacity of aniline, and have surplus output on the market.
In recent years, the aniline industry has relied on exports to ease the contradiction of oversupply. From 2016 to 2018, the export volume has increased year by year, and the export volume has declined from 2019 to 2020. The main export destinations are India, the United States, Spain, Hungary and other countries.
Experts predict that in the next three years, the new production capacity of aniline will be mainly concentrated in MDI co-production enterprises, and the expansion of rubber additives will be very small, and the contradiction of oversupply will be eased. The development of the aniline industry still faces two major problems. One is the oversupply, and the other is the single development of downstream products, and the growth point of demand is still on MDI products.
Research on the aniline market must focus on crude oil prices. Longzhong Consulting analysts pointed out that the main factors affecting crude oil prices in 2020 are geopolitics, epidemics, economic demand and inventories. It is a very unstable quadrilateral, and the impact of individual factors cannot be overstated. It is expected that it will take about 100 weeks to fully recover after the international oil price plummet, and the reasonable range is between 55 and 60 US dollars per barrel.
Experts pointed out that because only one set of pure benzene plants was put into operation in Zhejiang Petrochemical in the first half of 2021, and many pure benzene plants were overhauled, the domestic supply of pure benzene would be tight.
In the long run, my country has built seven major petrochemical industrial bases. These projects have relatively high chemical production capacity. The production capacity of pure benzene plants is mostly at the million-ton level. At the same time, due to the misalignment of upstream and downstream production time, the surplus pure benzene may impact the market in the short term.
Experts pointed out that in the context of the transformation and upgrading of my country’s industrial structure, the elimination of backward production capacity and intensive development are the general trend, and the pure benzene industry chain will also be reshaped from the top down. It is expected that in the next two years, the downstream expansion of the pure benzene industry chain will be faster than that of the upstream. However, due to the clearing of downstream backward production capacity and the supplement of foreign pure benzene imports, the domestic pure benzene market is expected to maintain a tight balance.
February 15, 2021
Propylene Oxide in Korea
S-Oil expected to continue recovery this year
신문5면 1단 기사입력 2021.02.14. 오후 4:42 최종수정 2021.02.14. 오후 4:45 기사원문스크랩 좋아요 좋아요 평가하기 2 댓글 글자 크기 변경하기인쇄하기 보내기 
S-Oil’s residue upgrading facility (S-Oil)
S-Oil, South Korea’s No. 3 refiner, is expected to see an improvement in profits this year, continuing a recovery momentum from the final quarter of 2020, according to the industry sources Sunday.
S-Oil said the company expects a recovery based on the increasing profitability of the company’s petrochemical products, including propylene oxide and polypropylene.
S-Oil noted the company plans to increase production capacity for propylene oxide through which the company managed to offset the weak refining margin in the last quarter.
During the October-December period, S-Oil’s refining business posted an operating loss of 89.7 billion won. However, the company’s petrochemical and lube oil units posted 72.7 billion won and 110 billion won of operating profits.
S-Oil was the only refiner — among four local refiners in the nation — that avoided plunging into the red.
Increasing profitability of propylene oxide, in particular, helped the company, the firm said.
The price of propylene oxide per metric ton in the fourth quarter last year reached an all-time high since December 2014, increasing 85 percent to reach $1,098 from $595 in the previous quarter.
The refiner said it plans to add its production capacity for propylene oxide by 30,000-40,000 tons to maximize profits from the petrochemical product.
The company also anticipated a recovery in refining margins in the wake of the global rollout of COVID-19 vaccines, which will boost travel demand worldwide.
According to Meritz Securities here, S-Oil’s operating profit this year is expected to hit 1.02 trillion won, turning around from the operating loss of 1.08 trillion won in 2020.
By Shim Woo-hyun (ws@heraldcorp.com)
February 15, 2021
Propylene Oxide in Korea
S-Oil expected to continue recovery this year
신문5면 1단 기사입력 2021.02.14. 오후 4:42 최종수정 2021.02.14. 오후 4:45 기사원문스크랩 좋아요 좋아요 평가하기 2 댓글 글자 크기 변경하기인쇄하기 보내기 S-Oil’s residue upgrading facility (S-Oil)
S-Oil, South Korea’s No. 3 refiner, is expected to see an improvement in profits this year, continuing a recovery momentum from the final quarter of 2020, according to the industry sources Sunday.
S-Oil said the company expects a recovery based on the increasing profitability of the company’s petrochemical products, including propylene oxide and polypropylene.
S-Oil noted the company plans to increase production capacity for propylene oxide through which the company managed to offset the weak refining margin in the last quarter.
During the October-December period, S-Oil’s refining business posted an operating loss of 89.7 billion won. However, the company’s petrochemical and lube oil units posted 72.7 billion won and 110 billion won of operating profits.
S-Oil was the only refiner — among four local refiners in the nation — that avoided plunging into the red.
Increasing profitability of propylene oxide, in particular, helped the company, the firm said.
The price of propylene oxide per metric ton in the fourth quarter last year reached an all-time high since December 2014, increasing 85 percent to reach $1,098 from $595 in the previous quarter.
The refiner said it plans to add its production capacity for propylene oxide by 30,000-40,000 tons to maximize profits from the petrochemical product.
The company also anticipated a recovery in refining margins in the wake of the global rollout of COVID-19 vaccines, which will boost travel demand worldwide.
According to Meritz Securities here, S-Oil’s operating profit this year is expected to hit 1.02 trillion won, turning around from the operating loss of 1.08 trillion won in 2020.
By Shim Woo-hyun (ws@heraldcorp.com)
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