The Urethane Blog
October 9, 2021
Johan, CC BY-SA 3.0 Natural gas prices are being passed to MDI American chemicals producer, Huntsman, has announced that it will be increasing the price of its methylene diphenyl diisocyanate (MDI) due to high natural gas prices.
Breaking it down:
Remember last time when we talked about Yara’s response to rising natural gas prices? Yara decided to cut back its ammonia production by 40% instead of passing the additional production cost down the value chain. Huntsman made the call to add a surcharge of €125 (which is roughly a 10% price increase) to its MDI production.
The decision to cut production or increase prices has to do with current storage levels and whether the end market is willing to pay the price. Ammonia is used to make fertilizers and MDI is used to make polyurethanes. Apparently, polyurethane consumers can eat the margin.
Wait, natural gas prices are high?
Take a look at the price at the top of the newsletter (HH stands for Henry Hub—a nickname owed to pipeline nexus in Louisiana). It’s twice as high as normal here in the US, but even higher in regions that rely on oil & gas imports (cough cough Europe). Give Wednesday’s newsletter a read if you’re interested in what’s causing the spike.
Read the press release here.
October 8, 2021
Soaring LPG prices rapidly deteriorate Korean petrochem makers’ profitability
 |
| [Photo by Kim Ho-young] |
| <이미지를 클릭하시면 크게 보실 수 있습니다> |
A sharp surge in liquefied petroleum gas (LPG) prices driven by a surge in oil prices is threatening the profitability of South Korean petrochemical companies that heavily relay on propane to produce plastic materials.
According to industry sources on Tuesday, LPG prices soared nearly 30 percent in seven months from over $500 per ton in March to over $800 in September. The higher crude oil prices have led to a jump in LPG prices given that LPG is produced in the process of refining crude oil. The recent hike, however, is seen as excessive, sources say.
The anticipated higher demand for heating during the upcoming winter season should hike LPG prices further, industry observers concerned.
With the surge in LPG prices, Korean petrochemical companies are rapidly losing profit because they rely on import propane to make and sell plastic products.
Removing hydrogen from LPG-categorized propane creates propylene, which is a feedstock to make plastics. Petrochemical companies usually produced naphtha from crude oil before changing it to propylene but because the abundant supply of U.S. Shale gas had helped significantly lower LPG prices, producing propylene using propane began to generate more profit.
In recent years, major Korean petrochemical players such as Lotte Chemical, LG Chem, and Hanwha Total, expanded facility that produces propylene using propane. With the surge in LPG prices, however, the companies started losing price competitiveness.
Industry sources noted that in general, producing propylene using LPG creates more profit when LPG price per ton falls to below 90 percent of naphtha.
Until last year, LPG prices were kept low, leading many petrochemical companies to rush to ramp up propylene production using LPG instead of naphtha. But tith LPG prices hitting multi-year highs near naphtha prices, local petrochemical players are under mounting pressure to change their feedstock diversification strategies.
October 8, 2021
Soaring LPG prices rapidly deteriorate Korean petrochem makers’ profitability
|
| [Photo by Kim Ho-young] |
| <이미지를 클릭하시면 크게 보실 수 있습니다> |
A sharp surge in liquefied petroleum gas (LPG) prices driven by a surge in oil prices is threatening the profitability of South Korean petrochemical companies that heavily relay on propane to produce plastic materials.
According to industry sources on Tuesday, LPG prices soared nearly 30 percent in seven months from over $500 per ton in March to over $800 in September. The higher crude oil prices have led to a jump in LPG prices given that LPG is produced in the process of refining crude oil. The recent hike, however, is seen as excessive, sources say.
The anticipated higher demand for heating during the upcoming winter season should hike LPG prices further, industry observers concerned.
With the surge in LPG prices, Korean petrochemical companies are rapidly losing profit because they rely on import propane to make and sell plastic products.
Removing hydrogen from LPG-categorized propane creates propylene, which is a feedstock to make plastics. Petrochemical companies usually produced naphtha from crude oil before changing it to propylene but because the abundant supply of U.S. Shale gas had helped significantly lower LPG prices, producing propylene using propane began to generate more profit.
In recent years, major Korean petrochemical players such as Lotte Chemical, LG Chem, and Hanwha Total, expanded facility that produces propylene using propane. With the surge in LPG prices, however, the companies started losing price competitiveness.
Industry sources noted that in general, producing propylene using LPG creates more profit when LPG price per ton falls to below 90 percent of naphtha.
Until last year, LPG prices were kept low, leading many petrochemical companies to rush to ramp up propylene production using LPG instead of naphtha. But tith LPG prices hitting multi-year highs near naphtha prices, local petrochemical players are under mounting pressure to change their feedstock diversification strategies.
October 8, 2021
Mitsubishi Gas Chemical Announces Expansion of MXDA Production
September 29, 2021
Mitsubishi Gas Chemical Company, Inc. (MGC; Head Office: Chiyoda-ku, Tokyo; President: Masashi Fujii) is pleased to announce expansion of Meta-xylenediamine (MXDA) production in Europe.
MGC is expanding its production capacity of MXDA to meet the market growth in the epoxy, polyamide and isocyanate sector. MGC will be constructing a 25,000 MTA plant in Rotterdam through its newly established subsidiary, MGC Specialty Chemicals Netherlands B.V. The new plant is scheduled to start its operation in mid-2024.
MGC has just started off its 3-year management plan ‘Grow UP 2023’ this April and aims to shift to a profit structure more resilient to environmental changes. MXDA is internally defined as a “differentiating” business, to which the company will proactively allocate its resources to further strengthen its competitive advantage.
MXDA is mainly used in epoxy coatings for infrastructure applications due to its excellent anticorrosion properties, and a long-term growth in the market is expected. The new plant will be located in Rotterdam to mainly meet the demand in Europe, which is the largest market for MXDA in this sector. With the establishment of the new manufacturing subsidiary, the MGC Group will be able to strengthen its business continuity plan (BCP) and ensure the stable supply of MXDA worldwide.
The two existing plants in Japan will be in full operation until the start-up of the new plant, and will continue to serve the fast growing markets in Asia.
(1)Company Name MGC Specialty Chemicals Netherlands B.V.
(2)Location Rotterdam, Kingdom of the Netherlands
(3)Managing Director Mr. Masatoshi Sato
(4)Establishment *January 2021
(5)Business Content Manufacture and Sales of MXDA
(6)Start of Manufacturing July 2024 (scheduled)
(7)Capacity 25,000 MTA
(8)Ownership Ratio MGC 100%
(9)Capital 1.67 million Euro
Capital increase to 85.27 million Euro scheduled for November 2021
*) Established for the purpose of initial investigation. After the capital increase scheduled for November 2021, it will become a manufacturing subsidiary.
October 8, 2021
Mitsubishi Gas Chemical Announces Expansion of MXDA Production
September 29, 2021
Mitsubishi Gas Chemical Company, Inc. (MGC; Head Office: Chiyoda-ku, Tokyo; President: Masashi Fujii) is pleased to announce expansion of Meta-xylenediamine (MXDA) production in Europe.
MGC is expanding its production capacity of MXDA to meet the market growth in the epoxy, polyamide and isocyanate sector. MGC will be constructing a 25,000 MTA plant in Rotterdam through its newly established subsidiary, MGC Specialty Chemicals Netherlands B.V. The new plant is scheduled to start its operation in mid-2024.
MGC has just started off its 3-year management plan ‘Grow UP 2023’ this April and aims to shift to a profit structure more resilient to environmental changes. MXDA is internally defined as a “differentiating” business, to which the company will proactively allocate its resources to further strengthen its competitive advantage.
MXDA is mainly used in epoxy coatings for infrastructure applications due to its excellent anticorrosion properties, and a long-term growth in the market is expected. The new plant will be located in Rotterdam to mainly meet the demand in Europe, which is the largest market for MXDA in this sector. With the establishment of the new manufacturing subsidiary, the MGC Group will be able to strengthen its business continuity plan (BCP) and ensure the stable supply of MXDA worldwide.
The two existing plants in Japan will be in full operation until the start-up of the new plant, and will continue to serve the fast growing markets in Asia.
(1)Company Name MGC Specialty Chemicals Netherlands B.V.
(2)Location Rotterdam, Kingdom of the Netherlands
(3)Managing Director Mr. Masatoshi Sato
(4)Establishment *January 2021
(5)Business Content Manufacture and Sales of MXDA
(6)Start of Manufacturing July 2024 (scheduled)
(7)Capacity 25,000 MTA
(8)Ownership Ratio MGC 100%
(9)Capital 1.67 million Euro
Capital increase to 85.27 million Euro scheduled for November 2021
*) Established for the purpose of initial investigation. After the capital increase scheduled for November 2021, it will become a manufacturing subsidiary.
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