Demographics are reshaping petrochemicals trade flows, investment patterns and demand

TEN YEARS AGO, fellow blogger Paul Hodges and I  first highlighted the leading role that changing demographics would play in reshaping petrochemicals supply and demand. We have been emphasising the importance of demographics ever since.
Demographics have, of course, always been a critical shaper of economies throughout human history. But during the last 70 years, there have been such major changes in demographics that the study of demographics must be at the very heart of your company’s strategy.
The Babyboomer generation in the West led to a surge in demand as the rapid increase in babies born in the 1950s and early 1960s joined the workforce from the 1970s onwards.
This helps explain high levels of inflation during that decade because too much demand was chasing too little supply. Another driver of inflation was the Middle East embargos against oil exports to the West because of the West’s support for Israel.
Then came the 1990s and first the integration of Eastern Europe into the global economy. This helped dampen inflationary pressures because of the plentiful supply of workers in the east willing to work for low wages in export-focused factories. This reduced the cost of finished goods in the West.
Next came Deng Xiaoping’s critically important “southern tour” in the early 1990s and China’s gradual integration into the global economy. China increasingly leveraged its very youthful population to again make cheap goods to export to the West.
Hundreds of millions of young people were willing to migrate from the countryside to China’s coastal cities to work in export-focused manufacturing plants. The world began to talk about the “China price” and how it was further depressing global inflation.

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Cognis

Cognis is a worldwide supplier of specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability. The company employs about 5,600 people, and it operates production sites and service centers in 30 countries. Cognis has dedicated its activities to a high level of sustainability and provides value adding solutions and products based on renewable raw materials. The company serves the food, nutrition and healthcare markets, and the cosmetics, detergents and cleaners industries. Another main focus is on products for a number of other industries, such as coatings and inks, lubricants, as well as agriculture and mining.

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Chemical Management

Key Trends in the Digital Transformation of the Chemical Industry

Article | June 13, 2021

The chemical business is intricate, with numerous sub-sectors dealing with various challenges. Thus, there are some differences in the sector's main areas of digitalization. For instance, while specialty chemicals with smaller batches but larger profit margins are concerned with improving quality, large factories are concentrated on accelerating throughput speed. To be able to react to quick and repeated changes in demand, supply, and working circumstances, however, every plant must optimize output, reduce waste, improve safety and sustainability, and become more nimble. Therefore, the Industrial Internet of Things (IIoT), artificial intelligence (AI), and cloud computing are expected to be the three most popular applications for digital transformation during the coming two years. Key Trends Production Optimization The first and most valuable use cases of digitalization in chemical plants center on production optimization through improved equipment performance, process automation, remote and predictive monitoring, and simplified maintenance. Chemical factories, which often provide basic chemicals for use as end products in other sectors, have a special responsibility to maintain consistently high product quality. However, doing so can be challenging given the significant variations in raw material supply and quality. In addition, as process engineers can change the mix on the fly in reaction to fluctuations in quality, feedstock, or ambient temperatures, better data and analytics enable finer and more frequent adjustments. Lowering Waste The main advantage of digitally transformed plants so far has been cost reduction. The price volatility of raw materials is a problem for the chemical production sector because customers naturally want constant low prices. Minimizing waste is critical since facilities must contend with rising energy costs. Analytics tools that monitor fluctuating raw material prices aid factories in negotiating the best deals with suppliers and preparing in advance for price spikes. The risk of oversupply is reduced since plants can prepare the proper quantities of various products thanks to more precise demand predictions. Sustainability, Compliance, and Safety The chemical industry is heavily regulated as a result of the quantity of hazardous chemicals and the number of end-use industries that rely on it. Businesses are adopting digital transformation to boost safety awareness, reduce emissions and dangerous flare incidents, and guarantee a transparent and accurate audit trail. Plants that quickly adopt digital solutions for remote monitoring, supply chain visibility, waste reduction, production optimization, raising their safety profile, and opening up new opportunities will profit from higher profits and increased revenue, whereas those that hesitate for too long risk failing in the long run.

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Chemical Management

The pandemic, climate change, plastic waste and the great divide: the world in 2025

Article | July 22, 2021

NOBODY SHOULD be surprised that the developing world has fallen behind in the battle to reduce greenhouse gas emissions as the region is a long way from recovering from the pandemic.Evidence to this effect emerged last week in comments made by Fatih Birol, executive director of the International Energy Agency (IEA). “In many emerging and developing economies, emissions are heading upwards while clean energy investments are faltering, creating a dangerous fault line in global efforts to reach climate and sustainable energy goals,” said Birol. At the current rate, carbon dioxide emissions from developing countries largely in Asia, Africa and Latin America are set to increase by 5bn tonnes/year over the next two decades, according to the IEA, as access to power increases.At present, around 785m people worldwide have no access to electricity. There are also 2.6bn people without access to clean cooking options.

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Chemical Management

Global polyethylene demand boom likely, increasing the sustainability challenge

Article | May 1, 2021

IT FEELS LIKE several lifetimes ago. If you recall, way back in November-December 2019 Asian variable cost integrated naphtha-based polyethylene (PE) margins turned negative because of the increase in US capacity. Then in January the following year, deep Asian and Middle East operating rate cuts returned some order to the market. Then, bang, as we all know, the pandemic arrived and turned everything on its head. The pandemic has, in my view, accentuated trends that were already well underway. I believe this means that the supply-driven downturn that started in late 2019 will not return.Long before coronavirus upended everyone’s lives, PE demand was becoming increasingly divorced from GDP growth because of the shifting nature of end-use demand. Booming internet sales was, I believe, a major factor behind the split between the growth of the overall economies in the developed world plus China and PE demand.The average product bought online is dropped 17 times because of the large number of people involved in the logistics chain, according to Forbes. This had led to a surge in demand for protective packaging made not from PE and other polymers such as polypropylene, expandable polystyrene and PET films (I will look at their demand growth prospects in later posts).Despite sustainability pressures, the scale of demand for stuff bought online translated to a lot more consumption of virgin polymers.

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Chemical Management

Petrochemical buyers, after a very difficult pandemic, can gain from China-driven deflation

Article | May 6, 2021

BUYERS OF polypropylene (PP) and other polymers and petrochemicals have had an incredibly difficult pandemic. Firstly, the converters and brand owners expected doom and gloom last March. At the time it seemed logical to expect a cratering of demand as the global economy pretty much imploded. Just looking at forecasts for GDP, parallels were drawn with the Global Financial Crisis when collapses in growth led to a cratering of polymers demand. The US is a good example where PP demand declined by 12% in 2008 over 2007. Demand then fell by a further 5% in 2009 over 2008.But what we all missed was the complete dislocation of polymers and petrochemicals demand from GDP. As economies registered historic declines, consumption went up. PP demand went through the roof, firstly for food packaging and hygiene applications.Then consumption for the durable goods made from PP also smashed through the rafters as we bought white goods (PP is used to make components of washing machines), consumer electronics (PP is used to make some electronic components) and carpets (PP fibres are used here).

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Spotlight

Cognis

Cognis is a worldwide supplier of specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability. The company employs about 5,600 people, and it operates production sites and service centers in 30 countries. Cognis has dedicated its activities to a high level of sustainability and provides value adding solutions and products based on renewable raw materials. The company serves the food, nutrition and healthcare markets, and the cosmetics, detergents and cleaners industries. Another main focus is on products for a number of other industries, such as coatings and inks, lubricants, as well as agriculture and mining.

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Chemical Management

Sinopec NZRCC Selects Lummus' Polypropylene Technology for Large-Scale Plant in China

PR Newswire | October 17, 2023

Lummus Technology, a global provider of process technologies and value-driven energy solutions, announced a contract from Sinopec Ningbo Zhenhai Refining & Chemical Co. Ltd. (Sinopec NZRCC), a subsidiary of the Sinopec Group and its flagship refining and petrochemical company. Sinopec NZRCC will license Lummus' Novolen® technology for a new 500 kilo ton per annum polypropylene plant in Ningbo, China. "With this award, our Novolen business strengthens its position in China and globally, reinforcing it as the industry's leader and preferred process for producing high-quality polypropylene," said Romain Lemoine, Chief Business Officer of Polymers and Petrochemicals, Lummus Technology. "We look forward to supporting Sinopec NZRCC's project to build this highly competitive plant by providing timely, superior process design- and implementation services." Lummus' scope includes the technology license, basic design engineering, training and project engineering services. Today, Novolen is the industry's leading polypropylene technology and can deliver a sustainable route for polymers production, while maximizing the financial benefits of operations through lower CAPEX and OPEX. The technology is highly flexible, robust, energy efficient and allows production of a full grade slate of leading polypropylene products of all product families, including homopolymers, random copolymers, terpolymers, impact copolymers and rTPO's. About Lummus Technology Lummus Technology is the global leader in developing technology solutions that make modern life possible and focus on a more sustainable, low carbon future. We license process technologies in clean fuels, renewables, petrochemicals, polymers, gas processing and supply lifecycle services, catalysts, proprietary equipment and digitalization to customers worldwide.

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Chemical Management

Syzygy Plasmonics Signs Strategic Investment Agreement with Mitsubishi Heavy Industries

PR Newswire | October 12, 2023

Syzygy Plasmonics announced today that it has reached a strategic investment agreement with Mitsubishi Heavy Industries, Ltd. (MHI), executed through Mitsubishi Heavy Industries America, Inc. (MHIA). The agreement formalizes ties between Syzygy and MHIA, giving the global multinational engineering and manufacturing technology company greater insight into Syzygy's strategic priorities and an opportunity to support Syzygy's business execution plans. "MHIA has been making moves to establish themselves as one of the leaders in the energy transition," said Syzygy Chief Executive Officer Trevor Best. "Formalizing our relationship with them shows their commitment to helping scale cutting edge technology and opens up new avenues for Syzygy and MHIA to work together as we commercialize our industrial decarbonization platform." Syzygy Plasmonics Syzygy Plasmonics is a deep-decarbonization company. It builds reactors that use light instead of heat to electrify chemical manufacturing and power a cleaner, safer world. Utilizing technology licensed from Rice University and advanced engineering, Syzygy is commercializing a universal photocatalytic reactor platform. When powered with renewable electricity, this tunable technology is designed to reduce both cost and emissions from many different chemical reactions. Starting with solutions designed to consume greenhouse gases and produce low- and zero-emissions hydrogen, the company's mission is to create a world where chemicals, fuels, and fertilizer are low cost, carbon neutral, and accessible to everyone. Mitsubishi Heavy Industries Group Mitsubishi Heavy Industries Group is committed to building a business that contributes to realizing a decarbonized society while investing in and collaborating with various partners with innovative technologies. This investment will help Syzygy Plasmonics to accelerate commercialization and continue its development of innovative alternative technologies, particularly those that contribute to the hydrogen ecosystem and CO2 ecosystem. Going forward, MHI will continue to enhance and diversify its solutions portfolio, providing its customers with alternative decarbonization technologies to reach their net zero goals.

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Chemical Management

Sapio Sciences Unifies Small- and Large-Molecule Discovery on a Single Platform

Business Wire | October 10, 2023

Sapio Sciences, the science-aware™ lab informatics platform, today announced the launch of the Sapio Chemistry solution, which unifies small-molecule and large-molecule discovery workflows on a single platform. Built on the same no-code platform as Sapio’s existing large-molecule discovery electronic lab notebook solution, Sapio Chemistry enables scientists to draw insights across all their organization’s discovery experiments. See Sapio’s new Chemistry solution for yourself in this exclusive webinar on October 11, 2023 - register here. “Many organizations are still running decades-old electronic laboratory notebooks (ELNs) and other software for capturing chemical synthesis experiments and registering small molecules,” said Kevin Cramer, president and CEO of Sapio Sciences. “Large-molecule and small-molecule discovery have traditionally been managed on disparate systems, creating artificial islands that impede scientific collaboration and decision-making. Sapio is excited to give biopharma organizations the opportunity to consolidate all their chemistry experiments on a modern, unified lab platform.” Sapio Chemistry is designed to facilitate collaboration among chemistry teams and their colleagues in analytical core facilities and screening labs, including contract research organizations. Advanced, chemically intelligent search built into Sapio Chemistry makes up-to-date project data easily accessible to the entire team. Out-of-the-box, configurable templates simplify the capture and sharing of chemistry experiments, including the reaction, reagents, solvents, and products through to registering synthesized compounds, batches, and lots and requesting assays. Sapio Chemistry also includes advanced capabilities for sample and inventory management, leveraging the strong sample-handling features built into the Sapio platform. Sapio Chemistry includes the latest science-aware™ functionality from Sapio, offering the first-ever lab triple-play solution of ELN, laboratory information management system (LIMS), and Jarvis scientific data cloud all in one. Science-aware means the system unifies data and works the way scientists do with built-in tools for managing, visualizing, and analyzing data to make life in the lab simple. About Sapio Sciences Sapio Sciences' mission is to improve life in the lab — because science is complex, Sapio makes technology simple. Sapio is a global business offering an all-in-one science-aware™ lab informatics platform combining cloud-based LIMS, ELN, and Jarvis data solutions. Sapio serves some of the largest global and niche brands, including biopharma, CROs and clinical diagnostic labs across NGS genomic sequencing, bioanalysis, bioprocessing, stability, clinical, histopathology, drug research, and in vivo studies.

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Chemical Management

Sinopec NZRCC Selects Lummus' Polypropylene Technology for Large-Scale Plant in China

PR Newswire | October 17, 2023

Lummus Technology, a global provider of process technologies and value-driven energy solutions, announced a contract from Sinopec Ningbo Zhenhai Refining & Chemical Co. Ltd. (Sinopec NZRCC), a subsidiary of the Sinopec Group and its flagship refining and petrochemical company. Sinopec NZRCC will license Lummus' Novolen® technology for a new 500 kilo ton per annum polypropylene plant in Ningbo, China. "With this award, our Novolen business strengthens its position in China and globally, reinforcing it as the industry's leader and preferred process for producing high-quality polypropylene," said Romain Lemoine, Chief Business Officer of Polymers and Petrochemicals, Lummus Technology. "We look forward to supporting Sinopec NZRCC's project to build this highly competitive plant by providing timely, superior process design- and implementation services." Lummus' scope includes the technology license, basic design engineering, training and project engineering services. Today, Novolen is the industry's leading polypropylene technology and can deliver a sustainable route for polymers production, while maximizing the financial benefits of operations through lower CAPEX and OPEX. The technology is highly flexible, robust, energy efficient and allows production of a full grade slate of leading polypropylene products of all product families, including homopolymers, random copolymers, terpolymers, impact copolymers and rTPO's. About Lummus Technology Lummus Technology is the global leader in developing technology solutions that make modern life possible and focus on a more sustainable, low carbon future. We license process technologies in clean fuels, renewables, petrochemicals, polymers, gas processing and supply lifecycle services, catalysts, proprietary equipment and digitalization to customers worldwide.

Read More

Chemical Management

Syzygy Plasmonics Signs Strategic Investment Agreement with Mitsubishi Heavy Industries

PR Newswire | October 12, 2023

Syzygy Plasmonics announced today that it has reached a strategic investment agreement with Mitsubishi Heavy Industries, Ltd. (MHI), executed through Mitsubishi Heavy Industries America, Inc. (MHIA). The agreement formalizes ties between Syzygy and MHIA, giving the global multinational engineering and manufacturing technology company greater insight into Syzygy's strategic priorities and an opportunity to support Syzygy's business execution plans. "MHIA has been making moves to establish themselves as one of the leaders in the energy transition," said Syzygy Chief Executive Officer Trevor Best. "Formalizing our relationship with them shows their commitment to helping scale cutting edge technology and opens up new avenues for Syzygy and MHIA to work together as we commercialize our industrial decarbonization platform." Syzygy Plasmonics Syzygy Plasmonics is a deep-decarbonization company. It builds reactors that use light instead of heat to electrify chemical manufacturing and power a cleaner, safer world. Utilizing technology licensed from Rice University and advanced engineering, Syzygy is commercializing a universal photocatalytic reactor platform. When powered with renewable electricity, this tunable technology is designed to reduce both cost and emissions from many different chemical reactions. Starting with solutions designed to consume greenhouse gases and produce low- and zero-emissions hydrogen, the company's mission is to create a world where chemicals, fuels, and fertilizer are low cost, carbon neutral, and accessible to everyone. Mitsubishi Heavy Industries Group Mitsubishi Heavy Industries Group is committed to building a business that contributes to realizing a decarbonized society while investing in and collaborating with various partners with innovative technologies. This investment will help Syzygy Plasmonics to accelerate commercialization and continue its development of innovative alternative technologies, particularly those that contribute to the hydrogen ecosystem and CO2 ecosystem. Going forward, MHI will continue to enhance and diversify its solutions portfolio, providing its customers with alternative decarbonization technologies to reach their net zero goals.

Read More

Chemical Management

Sapio Sciences Unifies Small- and Large-Molecule Discovery on a Single Platform

Business Wire | October 10, 2023

Sapio Sciences, the science-aware™ lab informatics platform, today announced the launch of the Sapio Chemistry solution, which unifies small-molecule and large-molecule discovery workflows on a single platform. Built on the same no-code platform as Sapio’s existing large-molecule discovery electronic lab notebook solution, Sapio Chemistry enables scientists to draw insights across all their organization’s discovery experiments. See Sapio’s new Chemistry solution for yourself in this exclusive webinar on October 11, 2023 - register here. “Many organizations are still running decades-old electronic laboratory notebooks (ELNs) and other software for capturing chemical synthesis experiments and registering small molecules,” said Kevin Cramer, president and CEO of Sapio Sciences. “Large-molecule and small-molecule discovery have traditionally been managed on disparate systems, creating artificial islands that impede scientific collaboration and decision-making. Sapio is excited to give biopharma organizations the opportunity to consolidate all their chemistry experiments on a modern, unified lab platform.” Sapio Chemistry is designed to facilitate collaboration among chemistry teams and their colleagues in analytical core facilities and screening labs, including contract research organizations. Advanced, chemically intelligent search built into Sapio Chemistry makes up-to-date project data easily accessible to the entire team. Out-of-the-box, configurable templates simplify the capture and sharing of chemistry experiments, including the reaction, reagents, solvents, and products through to registering synthesized compounds, batches, and lots and requesting assays. Sapio Chemistry also includes advanced capabilities for sample and inventory management, leveraging the strong sample-handling features built into the Sapio platform. Sapio Chemistry includes the latest science-aware™ functionality from Sapio, offering the first-ever lab triple-play solution of ELN, laboratory information management system (LIMS), and Jarvis scientific data cloud all in one. Science-aware means the system unifies data and works the way scientists do with built-in tools for managing, visualizing, and analyzing data to make life in the lab simple. About Sapio Sciences Sapio Sciences' mission is to improve life in the lab — because science is complex, Sapio makes technology simple. Sapio is a global business offering an all-in-one science-aware™ lab informatics platform combining cloud-based LIMS, ELN, and Jarvis data solutions. Sapio serves some of the largest global and niche brands, including biopharma, CROs and clinical diagnostic labs across NGS genomic sequencing, bioanalysis, bioprocessing, stability, clinical, histopathology, drug research, and in vivo studies.

Read More

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