Major Chemical Industry Events in September | Significant Production Starts and Shutdowns "Changing" the Chemical Market Landscape and Trends
A summary of major chemical industry events has been updated! Let's take a look at the major events that took place in the chemical industry in September. We will review Corporate developments, Policy trends, Market trends, New chemical projects, and other significant happenings in the industry over the past month.
Corporate Developments
I. ADNOC’s $16.4 Billion Acquisition of Covestro, Aiming for Top 5 Global Chemical Companies
On October 1, the Abu Dhabi National Oil Company (ADNOC) announced its agreement to acquire Covestro for $16.4 billion (approximately ￥115.6 billion RMB). Covestro will continue to operate as an independent joint-stock company, with no control or profit-and-loss transfer agreements in place. The deal does not include any plans to sell, shut down, or significantly downsize Covestro's operations. Furthermore, ADNOC has committed to protecting Covestro's technology and intellectual property.
ADNOC is currently executing a strategy of smart growth and future-oriented expansion, with one of its main goals being to become one of the world’s top five chemical companies. Last year, on August 9, the Financial Times reported that ADNOC had assembled a team of nearly 50 dealmakers, primarily composed of Wall Street elites, with the aim of securing investment deals totaling around $50 billion. This effort is part of ADNOC’s broader strategy to diversify its business and expand internationally. The acquisition of Covestro aligns perfectly with ADNOC's vision of becoming a top 5 global chemical company, and it is expected that ADNOC will continue pursuing mergers and acquisitions in the future.
II. Global Chemical Giants Continue Plant Closures and Layoffs
On September 30, global specialty materials leader Trinseo announced that starting October 1, 2024, it will consolidate the management of its engineering materials, plastics solutions, and polystyrene businesses. This streamlining will lead to layoffs, with the process expected to be largely completed by the end of 2025. Additionally, production at its polycarbonate (PC) plant in Stade, Germany, will cease before January 2025. Trinseo’s PC capacity in Germany is 160,000 tons per year, making it the second-largest PC producer in the country, following Covestro, which has an annual capacity of 290,000 tons in Krefeld.
At the end of September, the U.S. high-performance additives and chemical intermediates company SI Group announced plans to close its alkylphenol manufacturing facility on Jurong Island in Singapore by the second half of 2025, while continuing to supply this product in other regions of Europe and North America.
On September 24, Solvay announced plans to negotiate with partners to cease production of trifluoroacetic acid (TFA) and its fluorinated derivatives at its Salindres plant in France, with an expected reduction of 68 related positions between early and October 2025. The decision to halt production is primarily influenced by poor market conditions over the past few years, which have resulted in consistently weak performance at the Salindres plant, with little improvement anticipated in the future. Additionally, several European countries are pushing proposals to comprehensively restrict the production, sale, and use of PFAS (per- and polyfluoroalkyl substances), aiming for broad limitations on PFAS usage starting in 2025. Solvay's decision to cease production may also be a proactive measure to mitigate future regulatory impacts.
III. Domestic Chemical Companies Continue Expanding in Southeast Asia
On September 22, 2024, Shenyang Chemical launched its differentiated nylon 66 fiber project in Thailand, with a capacity of 20,000 tons per year (Phase 1). On September 21, Foster announced plans to redirect 300 million yuan of fundraising from its Guangdong film project to its Thai film project. The high-efficiency battery packaging film project in Thailand, located in Chonburi Province, is expected to produce 250 million square meters annually and is scheduled for completion in 2025, with a total investment of $159 million. The company stated that the reason for the change in the originally planned fundraising project is due to a reduced urgency for expanding domestic photovoltaic film capacity in the short term, while the photovoltaic industry in overseas markets, such as the U.S. and India, continues to grow rapidly.
IV. BASF Unveils New Strategic Blueprint and Opens New Plant
On September 26, BASF officially released its corporate strategy, which aims to redefine its portfolio management approach through strategic leverage and a "focus" strategy. The company plans to manage its core businesses—chemicals, materials, industrial solutions, and nutrition and care—differentially. BASF's core businesses generated approximately €6 billion in sales in 2023, with around 75% of its operations ranking among the top three in their respective markets.
The autonomous businesses include environmental catalysts and metal solutions, battery materials, coatings, and agricultural solutions. Beginning January 1, 2025, environmental catalysts and metal solutions, along with battery materials, will be reported as independent business units within the surface treatment technology sector. BASF also plans to sell its decorative coatings business in Brazil and expedite the IPO of its agricultural business, further accelerating the independent separation of its agricultural, coatings, and battery operations.
In addition, BASF has launched a new world-class production plant for alkyl ethanolamines at its integrated manufacturing site in Antwerp, Belgium. This new investment will increase the company's global annual production capacity for alkyl ethanolamines (including dimethyl ethanolamine (DMEOA) and methyldiethanolamine (MDEOA)) by nearly 30%, exceeding 140,000 tons per year. The new plant is a crucial part of BASF's production network for this product line, which is currently manufactured in Ludwigshafen, Germany; Antwerp, Belgium; Geismar, Louisiana; and Nanjing, China.
Policy Trends
Ministry of Industry and Information Technology Issues Guidelines: Key Points for the Construction of Petrochemical Pilot Platforms Released
Recently, the Ministry of Industry and Information Technology (MIIT) issued a notice outlining plans to cultivate and build several provincial and ministerial-level pilot manufacturing platforms in suitable areas by 2027. The notice specifies the key points for constructing pilot platforms in the petrochemical and chemical industries, focusing on:
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The initiative aims to establish a number of pilot platforms, enhance the foundational capabilities, technological support, and public service capacities of these platforms, and improve the efficiency, greenness, and safety levels of petrochemical production processes. It also seeks to accelerate the development of high-purity electronic chemicals, high-performance synthetic resins, high-performance rubber and elastomers, high-performance fibers, functional film materials, bio-based materials, new catalytic materials, and other advanced chemical new materials and fine chemicals.
Market Trends
According to monitoring data from Jinlianchuang's chemical industry index, the chemical market in September showed a trend similar to that of August, with significant declines in early September followed by a slight recovery in the latter half of the month, influenced by macroeconomic news. The Central Political Bureau's meeting on September 26 released positive signals, leading to a narrow recovery in the domestic chemical market after the declines.
Looking ahead to October 2024, there remains room for policy easing in the domestic environment. It is expected that the chemical market may experience a "rise before a fall." In the first half of the month, with strong policy expectations and marginal improvements in demand, the chemical market could see a notable rebound. However, as the month progresses and the U.S. elections approach, the international market may experience further fluctuations, and the chemical market will likely focus on stabilizing and digesting previous gains during the latter half of the month.
New Chemical Projects
I. China's First Industrial POE Facility Passes Continuous Operation Assessment
China's first industrial POE facility—Beoyi Technology's special polyolefin project with an annual capacity of 30,000 tons—has received a 72-hour continuous operation assessment conclusion from the China Petroleum and Chemical Industry Federation. This milestone signifies a significant breakthrough in China's industrial production of POE. This achievement lays a solid foundation for further promotion and application within the industry.
II. New Critical Material Production Facility Begins Trial Production with Import Prices Reaching 700,000 Yuan/Ton
On September 20, Wuxi Acorely Co., Ltd. announced that its kiloton-level high-transparency material (cycloolefin copolymer, COC) production line has officially entered the trial production phase. COC/COP is widely used in optics, packaging, and medical fields, with substantial market potential in VR/AR and soft-pack battery aluminum-plastic films. Due to the limited number of producers and high technical barriers, global consumption is largely determined by supply. China is the largest consumer of COC/COP, heavily relying on imports, with prices reaching as high as 700 yuan/kg, approximately 700,000 yuan/ton.
Production is mainly dominated by Japanese companies such as Zeon Corporation, Polyplastics, Mitsui Chemicals, and JSR, with Zeon holding a capacity of 47,600 tons, Polyplastics 35,000 tons, and Mitsui Chemicals 6,400 tons. In addition to Acorely, other domestic companies, including Toplon Optical, Kintor Technology, Liaoning Luhua Hongjin, and Wanhua Chemical, are conducting small-scale trials or actively promoting industrialization. Several other companies, such as Shandong Lujing, Yifeng Biochemical, and Gaifeng New Materials, are also advancing the industrialization of the COC/COP supply chain from the aspects of monomers and catalysts.
III. 1 Million Tons/Year Polyether Polyol Project Set to Commence Production Next Year, Exerting Pressure on SMEs
Longhua Chemical's subsidiary plans to build a "carbon dioxide polyether and high-performance polyol project," which has completed project registration and safety condition review, with other pre-construction procedures progressing smoothly. The project will be constructed in phases, with the first phase expected to commence in 2024 and production to begin in 2025. The project, which broke ground in June in Xuwei New Area, has a total investment of 6 billion yuan and aims to establish a key laboratory for carbon dioxide polyether polyols with an annual production capacity of 1.06 million tons of carbon dioxide polyether polyols and 1.02 million tons of high-performance polyols. Currently, there is an oversupply of polyether polyols both globally and domestically. As leading companies in the domestic polyether polyol industry continue to expand, small and medium-sized enterprises (most with annual capacities under 200,000 tons) may face pressure, leading to increased market concentration in China's polyether polyol industry and enhancing the international competitiveness of Chinese enterprises.
IV. Satellite Chemical's Major Project Pre-Announcement, PDH Capacity to Reach 1.8 Million Tons/Year
On September 27, chemical giant Satellite Chemical released a pre-announcement for its key project, the "Zhejiang Satellite Energy Co., Ltd. Integrated Project for Annual Production of 40,000 Tons of Hydrogen/900,000 Tons of Propylene/800,000 Tons of Polyols/80,000 Tons of Neopentyl Glycol and Hydrogen Energy Utilization." The project covers approximately 496 acres with a total investment of about 10.2 billion yuan and is located in Dushangang, Pinghu City, Zhejiang Province. This public announcement pertains to neopentyl glycol, a downstream product of the 800,000 tons of polyols project. Zhejiang Satellite Energy Co., Ltd. has completed two phases with a total PDH capacity of 900,000 tons, all utilizing UOP technology. If the third phase integrated project is completed, the company's PDH capacity will reach 1.8 million tons/year.
V. 300,000 Tons/Year HPPO Plant Commences Production, Total Capacity to Exceed 8 Million Tons in Second Half of the Year
At the end of September, Weiyuan Co., Ltd.'s 300,000 tons/year hydrogen peroxide direct oxidation method for producing propylene oxide (HPPO) plant successfully completed all processes and produced qualified products. Due to the continuous expansion of downstream applications such as polyurethane foam, coatings, and adhesives, the market demand for propylene oxide (PO) is steadily increasing. In 2023, global PO capacity continued to grow, with a year-on-year increase of 19.4%. Approximately 61.3% of PO capacity is concentrated among the top ten producing companies. Dow Chemical is the largest producer of propylene oxide globally, followed by LyondellBasell and Shell.
China's PO industry is still in a period of concentrated capacity expansion, with an additional 840,000 tons/year of PO capacity expected to come online in the second half of 2024, mainly in Shandong and East China. By then, the total domestic PO capacity is expected to expand to 8.06 million tons/year. Despite the continuous increase in new capacity, the market supply and demand may remain relatively balanced due to the predominant focus on supporting capacity and simultaneous construction of downstream capacities.