Key Takeaways BASF launched a 1-million-ton ethylene steam cracker at its Zhanjiang Verbund site in China. BASF stated that the cracker's main compressors run on renewable energy, advancing sustainable production. BASF will supply downstream units and extend its local value chain to serve China's chemical market. BASF SE (BASFY) has started up its steam cracker at its new Verbund complex in Zhanjiang, China. This marks a key pillar for the company’s multi-billion-euro investment in China and one of the larg ...

abc 24 December 2025 Global Research First Read Wanhua's petrochemical profitability set to improve in coming two years Wanhua currently has two sets of ethylene facilities with 2.2mtpa capacity in total. It will increase the percentage of ethane as feedstock, as the ethane-to-ethylene process has cost advantages over those with naphtha/LPG as raw materials and could improve the petrochemical segment's profitability meaningfully. Moreover, with petrochemical fundamentals at a historical trough, we note cape ...

Core Insights - Petrobras and Braskem have signed long-term feedstock supply contracts valued at $17.8 billion, marking a significant milestone in the Brazilian petrochemical industry [1][2][18] Group 1: Overview of the Agreements - The agreements consist of two major contracts: one for petrochemical naphtha worth $11.3 billion and another for natural gas liquids (NGLs) worth $5.6 billion, set to commence in January 2026 [3][4] - The naphtha supply deal will provide 4.116 million tons in 2026, increasing to 4.316 million tons by 2030, ensuring a stable supply for Braskem's operations [5][6] Group 2: Strategic Shift and Expansion - Braskem is transitioning from naphtha to more competitive NGLs like ethane, aiming to enhance Brazil's position in global petrochemical production [2][11] - The $5.6 billion contract for ethane, propane, and hydrogen is crucial for expanding Braskem's Duque de Caxias facilities, expected to run for 11 years starting in 2026 [6][7] Group 3: Long-term Supply Commitments - From 2026 to 2028, Petrobras will supply 580,000 tons of ethylene equivalent annually, increasing to 725,000 tons per year starting in 2029, supporting Braskem's expansion plans [10][11] - Additional propylene supply agreements valued at approximately $940 million will further support Braskem's diverse production lines, ensuring access to necessary feedstocks [14][15] Group 4: Strategic Influence and Future Outlook - Petrobras is increasing its influence over Braskem as Novonor plans to divest its stake, indicating a trend of state-controlled entities shaping Brazil's petrochemical sector [12][13] - The collaboration between Petrobras and Braskem is expected to unlock nearly $800 million in investments, driving growth and modernization in the Brazilian petrochemical industry [7][18]

In this episode of Capital Link's Shipping Sector Webinar Series, we had Kristian Sorensen, CEO of BW LPG Ltd. (NYSE:BWLP) (OSLO: BWLPG), Theodore (Ted) Young, CFO & Treasurer of Dorian LPG Ltd. (NYSE:LPG) , and Mads Peter Zacho, CEO of  Navigator Gas (NYSE:NVGS) . The webinar, moderated by Chris Robertson, Vice President, LNG Infrastructure and Maritime Shipping at Deutsche Bank Securities Inc., focused on the LPG carrier market. To watch the full discussion, please visit the following link: https://www.yo ...

U.S. supermajor ExxonMobil plans to permanently shut down one of two steam crackers at its huge Singaporean refining and petrochemical complex, Reuters reported on Thursday, citing anonymous sources with knowledge of the plans. Exxon owns and operates a 592,000-barrel-per-day (bpd) refinery in Jurong, which is fully integrated with the Singapore Chemical Plant (SCP). The petrochemical complex was first commissioned in 2001 and was further expanded to more than double its capacity in 2013. The chemical pla ...

Core Insights - China's new petrochemical capacity is raising concerns about potential oversupply in the global market, which could negatively impact smaller petrochemical producers [1][3] - The forecast indicates an 18% increase in polyethylene production in China this year, significantly outpacing the expected 10% growth in demand, leading to a 13% decline in polyethylene imports [1][4] Industry Overview - China has become the world's largest producer of ethylene and polyethylene, having built seven petrochemical complexes in the last decade, surpassing the United States [2] - As the largest consumer of petrochemicals, China's imports reached 15 million tons last year, but increasing domestic production is shrinking the market for other producers [3] Future Projections - China's polyethylene production capacity is expected to grow by another 16% by 2026, potentially worsening the existing structural imbalance due to surplus production capacity [4] - Some new production capacity is being delayed, as seen with BASF's new petrochemicals plant in China, which has postponed its operations [4] Demand Dynamics - Petrochemicals are the primary driver of crude oil demand growth, accounting for 95% of total oil demand growth over the five years leading to 2024, with significant demand growth observed in China [5] - The rapid growth in petrochemical demand in China mirrors trends seen in other sectors like solar power and electric vehicles, where government support led to oversupply and overcapacity issues [5]

Core Viewpoint - Exxon Mobil announced the shutdown of its Fife ethylene plant in Scotland, scheduled for February 2026, due to high supply costs, weak market conditions, and challenging UK economic factors [1] Group 1: Company Impact - The closure of the Fife ethylene plant reflects Exxon Mobil's response to unfavorable economic conditions affecting its operations in the UK [1] - The decision indicates a strategic shift in the company's operational focus, potentially reallocating resources to more profitable ventures [1] Group 2: Industry Context - The announcement highlights broader challenges within the ethylene production sector, including rising supply costs and market volatility [1] - The situation may signal a trend of consolidation or restructuring within the industry as companies adapt to changing economic landscapes [1]

Summary of the Conference Call on China's Chemical Sector Industry Overview - The conference focused on the transformation of China's chemical sector under the anti-involution policy, aiming for a domestic supply-demand balance by the end of the decade with over 90% of production consumed within China [1][2][3]. Key Points and Arguments 1. **Transformation and Upgrades**: China's chemical sector is undergoing significant changes driven by the anti-involution policy and the upcoming 15th Five Year Plan, focusing on upgrading existing assets and phasing out obsolete equipment to prioritize higher-value products [2][3]. 2. **Capacity Reductions**: Approximately 3 million tons per year (tpy) of capacity is being eliminated, particularly older naphtha cracking units, with impacts expected on supply-demand balances around 2028-2029 [3][4]. 3. **Producer Dynamics**: New ethylene and propylene capacities are concentrated among state-owned enterprises (SOEs) and large private players, focusing on higher-margin derivatives. Shutdowns for private producers occur when margin losses exceed approximately 1,000 RMB/t for 2-3 years [4][11]. 4. **Global Implications**: The global petrochemical market may face risks as mid-cycle conditions could shift lower due to efficiency gains at the higher end of the cost curve. Current policies are favorable for companies rated as Buy, such as ALB and LAC, while EMN and MEOH could benefit from more aggressive reforms [5][33]. 5. **Ethylene Capacity Growth**: China's ethylene capacity is projected to reach 98 million tpy by 2029, with a compound annual growth rate (CAGR) of 12% from 2024 and 9.8% from 2020. Domestic demand for ethylene is expected to grow by 64% by 2028 [7][8]. 6. **Propylene Market Dynamics**: China holds approximately 38% of the global propylene market, with domestic sufficiency at around 96%. The competition is more fragmented compared to ethylene, with the top five producers accounting for only about 15% of the market [11][12]. 7. **Policy Approach**: The government is adopting a more cautious policy approach towards new ethylene projects, emphasizing stability and gradual rationalization rather than abrupt cuts [9][10]. 8. **Strategic Risks**: Ethane sourcing remains a strategic risk, with most ethane for ethylene production still imported from the U.S., raising tariff concerns [17]. Additional Important Insights - The anticipated wave of new capacity additions in ethylene is expected to peak in 2026, with significant additions in derivatives like polyethylene (PE) and monoethylene glycol (MEG) through 2029 [8][12]. - The restructuring of the propylene sector is driven by policy measures and market forces, focusing on technology upgrades and consolidation rather than new entrants [14][15]. - The crude oil to chemicals (CTC) projects remain uncertain, with potential delays but expected to yield significant olefins and aromatics if realized [16]. This summary encapsulates the critical insights from the conference call regarding the evolving landscape of China's chemical industry, highlighting both opportunities and risks for investors.

Financial Data and Key Metrics Changes - Westlake Chemical Partners reported a net income of $15 million, or $0.42 per unit, for Q3 2025, which is lower than the net income for Q3 2024 due to lower margins on ethylene sales [5][6] - Consolidated net income, including OpCo's earnings, was $86 million on consolidated net sales of $309 million [6] - Distributable cash flow for the quarter was $15 million, or $0.42 per unit, a decrease of $3 million compared to Q3 2024 due to higher maintenance capital expenditures [6][7] Business Line Data and Key Metrics Changes - The completion of the planned turnaround at the Petro One Ethylene unit positively impacted sales and earnings in Q3 2025 [5] - The Partnership maintained a cumulative distribution coverage ratio of approximately 1.1 times since its IPO in 2014, despite the recent dip in coverage due to planned turnarounds [8] Market Data and Key Metrics Changes - Global industrial and manufacturing activity remains soft in 2025, affecting the global chemical industry [10] - The ethylene sales agreement with Westlake Corporation, which covers 95% of OpCo's production, continues to provide predictable fee-based cash flow [10] Company Strategy and Development Direction - The company plans to evaluate growth opportunities through increasing ownership interest in OpCo, acquiring other qualified income streams, and expanding current ethylene facilities [11] - The renewal of the ethylene sales agreement through the end of 2027 under the same terms demonstrates the critical nature of OpCo's supply of ethylene [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the operating surplus will continue to build following the successful completion of the turnaround, expecting distributions to be well covered by cash flows [15][16] - The company remains focused on safe operations and sustainability efforts while navigating market conditions [11] Other Important Information - The Partnership announced a quarterly distribution of $0.4714 per unit for Q3 2025, marking 45 consecutive quarterly distributions since its IPO [7][8] Q&A Session Summary Question: Outlook for getting distributable cash flow up to a level where the distribution will be covered - Management indicated that the dip in coverage was due to the planned turnaround, which impacted production and sales, but expects the operating surplus to continue to build now that production is back to full capacity [15] Question: Pro forma basis for distributable cash flow without the impact of the turnaround - Management confirmed that, without the impact of the turnaround, the distributable cash flow would have been in excess of the distribution [16]

Core Insights - The article discusses the significant shift in Shandong Yulong Petrochemical's crude sourcing, primarily moving to Russian oil due to Western sanctions impacting access to other suppliers [4][3][2] Group 1: Supply Chain Changes - Shandong Yulong has transitioned from a diverse supply portfolio to relying almost entirely on Russian crude, securing approximately 350,000 b/d for November delivery compared to only 100,000 b/d earlier in the year [2][4] - The refinery's operational capacity is currently at about 90% of its 400,000 b/d design, with Russian crude now providing nearly all its feedstock [2][5] Group 2: Impact of Sanctions - Western sanctions have inadvertently created a new trade dynamic, linking Russian producers with sanctioned Chinese refiners like Yulong, which now operates almost exclusively on discounted Russian oil [4][3][9] - The sanctions imposed by the UK and EU have restricted Yulong's access to Western supplies, forcing it to adapt its sourcing strategy [4][3] Group 3: Operational Efficiency - Yulong's operational efficiency has improved due to the lower costs associated with sourcing Russian crude, which has offset the deflation in product prices and maintained profitability despite an oversupplied market [6][5] - The refinery has achieved record-high throughput in September and October, running at approximately 90% capacity [5] Group 4: Future Supply Considerations - Analysts express concerns about Yulong's ability to secure the heavy crude necessary for consistent product output, although some suggest that Russia's Urals blend could serve as a suitable substitute [8][7] - Gazprom Neft may redirect its Arctic ARCO crude to Yulong, potentially supplying the heavy feedstock needed for efficient operations [9]