Issue 5/2019 - Global Chemicals Quick Facts

Global Chemicals Quick Review

Titanium dioxide giants try to break the cyclical law of large market fluctuations

Affected by changes in supply and demand, the global titanium dioxide market often has ups and downs
.
In order to mitigate the impact of the price collapse and skyrocketing on the industry, some titanium dioxide giants are looking for ways to establish price and profit stability mechanisms
.
Market participants believe that the key to the success of this attempt is that there are enough titanium dioxide manufacturers with a huge market share to introduce a stabilization mechanism and enough customers to participate
.
Chemours aims to provide customers with stable prices and secure supply
through its Ti-Pure brand titanium dioxide product value stabilization (VS) program.
In November 2018, Tronox CEO Jeff Quinn also said that the company is working with customers on earnings stabilization measures to curb large fluctuations in
industry earnings.

Global chemical giants have increased their digitalization

Digitalization is intensifying competition
among chemical companies.
In the coming years, digitalization will continue to reshape the chemical industry
.
Large chemical companies are particularly sensitive to this trend, and they have invested heavily in expanding their digital capabilities
.
In January 2019, BASF Germany established its Digital and Information Services division, which will drive the company's digital activities
at an accelerated pace by collaborating with different business units, functions and R&D departments within the company.
In March 2018, Covestro announced the hiring of engineering services company L&T Technical Services (LTTS) to implement digitally-based engineering projects
around the world.
In January 2019, Covestro and Haier announced that they had agreed to establish a joint laboratory
for the digitalization of home appliance production in Qingdao, China.
The lab will develop digital solutions
for the use of polyurethane in the production of home appliances.

Big oil has shifted its investment focus to downstream refining

Oil giants such as ExxonMobil and Chevron have had phased success in trying to control oil production in shale regions such as the Permian Basin in western Texas, and the next focus of the two companies is on shale oil refining
.
ExxonMobil recently announced plans to expand refining capacity by 250,000 b/d at its refinery in Beaumont, Texas, while Chevron will acquire Petrobras' 110,000 b/d refinery in Pasadena, near Houston
.
Market sources said the latest investments by the two companies show that major oil companies are firmly putting their own labels and carving their ground in the shale oil sector
.
These investments in shale oil are now being integrated into their vertical businesses
through the acquisition of downstream Gulf Coast refining capacity.

Natural gas will become the world's second largest energy source by 2040

BP said that the vast majority of global energy supply growth in the next 20 years will come from renewables and natural gas; Still, large-scale investments in oil exploration and production will be needed to meet global demand for crude oil in
2040.
BP believes in its annual Energy Outlook report that renewables and natural gas, including wind, solar, geothermal, biomass and biofuels, will account for 85% of global energy growth by 2040; Renewables will grow by 7.
1% annually and their share of primary energy will increase from the current 4% to 15%
by 2040.
Natural gas is expected to grow by 1.
7% per year, surpassing coal as the world's second-largest source of energy by 2040 and competing with crude oil
.