Issue 23/2021 - Global Chemicals Quick Facts

Ethylene and methanol will become the next round of petrochemical expansion hotspots in North America

Although the pace of investment in petrochemical expansion in North America has slowed, energy and feedstock costs remain advantageous, so producers continue to announce new petrochemical projects in the region, and several large petrochemical projects are expected to begin commercial production
.
According to the American Chemistry Council (ACC), there are currently 44 petrochemical projects under construction in the United States with a total investment of $35 billion, and another 76 projects are in the planning stage with a total investment of $74 billion
.
Since 2010, the United States has completed the construction of 231 petrochemical projects with a total investment of up to $99 billion
.
IHS Markit's analysis reports that among the basic petrochemicals, ethylene and methanol projects dominate North American petrochemical investment projects
.
From 2011 to 2020, North America added 14 million tons / year of ethylene production capacity, and it is expected to add another 6 million tons / year
by 2025.
During the same period, 7.
2 million mt/year of methanol capacity was added in North America, and another 5.
7 million mt/year
will be added by 2025.

The energy transition is reshaping the future of the global petrochemical industry

In the new landscape, petrochemical companies are being forced to readjust their strategies to adapt to a low-carbon society
in the future.
Recently, LyondellBasel CEO Bob Patel said that in October this year, the company updated its climate goals covering three areas - one is to achieve net-zero emissions by 2050; The second is to reduce carbon emissions by 30% by 2030 compared to 2020; Third, by 2030, 50% of the company's electricity consumption will use renewable energy
.
He pointed out that the energy transition will last for decades and cannot be achieved
overnight.
Petrochemical companies need to continuously optimize energy efficiency and reduce the energy consumption of their products, while using low-emission fuels and switching from coal to natural gas and eventually to renewable energy
.
For businesses, almost all investments will revolve around the circular economy
.

Shell will simplify the corporate structure and accelerate the energy transition

On November 15, Shell said it planned to abandon its dual-class share structure and move its tax seat from the Netherlands to the United Kingdom
.
As a result, the company will lose its "Dutch royal" label and become a more flexible ordinary British company
.
The move will help it quickly buy back shares and adjust its business portfolio, thereby accelerating the pace
of the energy transition.
This shareholding structure change will significantly increase the number of
shares that Shell can buy back at one time.
In addition, a UK company with a simpler structure can make the further necessary structural adjustments more quickly and easily to become a low-carbon energy company
.
For example, as the well-known hedge fund Third Point suggests, issuing capital and conducting mergers involving stock and divestitures would be much
simpler if a single stock class were adopted.

South Korea's base oil exports continue to grow

South Korea's base oil exports were 429,100 mt in October, down 3% from September, up 22% from the same period in 2020 and up 31% from the same period in 2019, which is the fourth month of this year after April, July and September to export more than 422,000 mt worth more than $400 million; South Korea's base oil exports were valued at $443.
4 million, down 15% from the record high of $521.
3 million set in September, but 117% higher than the same period in 2020.
This is 84%
higher than the same period in 2019.
As one of the world's largest base oil exporters, South Korea sells most of its base oils to markets around the world, generating significant profits for its refiners, including SK Lubricants, S-Oil, GS Caltex, Hyundai Shell Base Oils, etc
.