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Mitsui sets up joint venture in China
F O C U S based on the average in 2013. The country’s palm oil refining industry is worth around Ringgit 2.9 bn. It has 58 refineries including Wilmar International Ltd, Sime Darby Bhd and Mewah Group. If the threshold price is breached, Malaysia would impose an export duty on CPO of 4.5%. A corresponding CPO export duty from Indonesia is seen to benefit that country since there will be a tax differential of 1% for RBD palm olein, which will favour the country’s cost of production. A zero CPO export duty is not considered as a factor that will increase the worldwide demand for CPO. In related news, the Malaysian government aims to meet its Gross National Income Contribution of Ringgit 178 bn for the palm oil industry by 2020. Initiatives under the Entry Point Projects are already being reviewed by the Plantation Industries and Commodities Ministry. The government also plans to continue introducing measures to aid the oil palm upstream and downstream sectors. Original Source: The Star, 1,5,13,19 & 20 Jan 2015, (Website: http://thestar.com.my) © Star Publications (M) Bhd 2015
Intensifying production: Indonesian palm oil market Concurrent with the increasing global population, vegetable oil production and consumption is also set to rise. Global palm oil output is projected to continually increase and reach a record high of 63.3 M tonnes in 2014/2015, up by 6% year-on-year driven by higher Indonesian production. Demand is also expected to improve, particularly triggered by the biofuel and food sector. Global ending stocks are forecast to rise by 9% year on year to 8.4 M tonnes. Currently, Indonesia is one of the biggest palm oil producers in the world, together with Malaysia. With its plans to increase global capacity, Indonesia is expected to remain a key industry player. Indonesian palm oil production totalled 28.4 M tonnes in 2013, 8 M tonnes of which were domestically consumed while 21.4 M tonnes were exported. Indonesia converts some of its palm oil into biodiesel, of which it consumes 1 M tonnes and exports 1.5 M tonnes. Indonesia’s food and oleochemicals markets consume 7 M tonnes of its 4
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refined palm oil, while 13.9 M tonnes are exported. Moreover, 6 M tonnes of crude palm oil (CPO) are exported. Original Source: Oils and Fats International, Jan 2015, 31 (1), 32,34,40 (Website: http://www.oilsandfatsinternational.com) © Quartz Business Media Ltd 2015
Mitsui sets up joint venture in China Mitsui & Co Ltd has signed an agreement with the Malaysian company Kuala Lumpur Kepong Berhad (KLK) for a 20% stake in the capital of KLK Premier Capital at a cost of Ringgit 154 M ($44 M; €37.5 M). The deal involves Mitsui acquiring 2.362 M ordinary shares and 84,500 redeemable preference shares. The sale is conditional upon the injection of $50. 3 M by KLK into Taiko Palm-Oleo (Zhangjiagang) Co Ltd (TPOZ). KLK holds 100% in TPOZ, which runs an oleochemicals production plant in Zhangjiagang, China. TPOZ produces and markets fatty acids, glycerine, soap and triacetin from palm oil and other natural oils. These are used as raw materials for detergents and lubricants. According to Mitsui, the world market for oleochemicals is worth around ¥3 trillion (€51 bn) and is predicted to grow by 4%/y (7%/y in China). Original Source: Chimie Pharma Hebdo, 19 Jan 2015, (703), (Website: http://www.industrie.com/chimie) (in French) © ETAI Information 2015. Original Source: The Star, 8 Jan 2015, (Website: http://thestar.com.my) © Star Publications (M) Bhd 2015
Coconut and palm kernel oil prices Prices of lauric oils reached a peak in 2011 of c $2300/tonne before falling back below $1000/tonne in 2012/2013. A decreasing trend in prices for both coconut oil (CNO) and palm kernel oil (PKO) in 1H 2014 was reversed with a marginal increase in 2H 2014 as a result of improved demand and lower ending stock levels. CNO output is forecast to reach 3.4 M tonnes in 2014/2015, level with the previous year. However, ending stocks are projected to slump by 25% year on year to 0.3 M tonnes in 2014/2015. In contrast, PKO production is set to grow by 5% year on year for the same period to 7.3 M tonnes. Original Source: Oils and Fats International, Jan 2015, 31 (1), 40 (Website: http://www.oilsandfatsinternational.com) © Quartz Business Media Ltd 2015
Other Asia chemical profile: ethanolamines The various uses of ethanolamines are outlined. Asian demand for these materials is still weak due to the shrinking economy of China. Demand for triethanolamine (TEA) has decreased due to the slowing of construction activities in China. Demand for herbicide is weak for the whole region, placing a pressure on consumption for diethanolamine (DEA). Prices of ethanolamines are following suit with the decline of ethylene oxide (EO) prices, which are also following the downward trend of the prices of upstream crude, naphtha and ethylene, as well as showing the effect of new Chinese EO capacity. During the week ended 17 Dec 2014, prices of monoethanolamine (MEA) in China were at Yuan 8500-9000/tonne (c €1200-1270/tonne) EXWH against Yuan 9800-10,300/tonne EXWH in the previous four weeks. DEA and TEA prices decreased to Yuan 90009500/tonne EXWH from Yuan 10,40011,100/tonne and Yuan 10,00010,300/tonne EXWH from Yuan 11,400-11,500/tonne, respectively, during the same period. Import prices of MEA in China declined to $11001380/tonne cost insurance & freight (CIF) China during the week ended 17 Dec 2014 from $1280-1380/tonne CIF China four weeks prior. Import prices of DEA and TEA also fell to $1200/tonne CIF China from $1380/tonne and $1200-1540/tonne CIF China from $1350-1545/tonne CIF China, respectively, during the same period. It is expected that the prices of ethanolamines in China will remain weak in 2015 due to the country’s sluggish economy, decreasing demand and ample supply. Across Asia, Oriental Union Chemical has an 80,000 tonnes/y ethanolamines plant in Kaohsiung, Taiwan; BASF has a 75,000 tonnes/y plant in Nanjing, Jiangsu, China; and Petronas Chemicals Group has a 75,000 tonnes/y plant in Kerteh, Terengganu, Malaysia. Prices of EO in the region have been falling since Nov 2014. The trend is expected to continue due to growing supply from new EO capacities. In the past month, as much as 540,000 tonnes of new EO capacity came online resulting in MARCH 2015
Intensifying production: Indonesian palm oil market Concurrent with the increasing global population, vegetable oil production and consumption is also set to rise. Global palm oil output is projected to continually increase and reach a record high of 63.3 M tonnes in 2014/2015, up by 6% year-on-year driven by higher Indonesian production. Demand is also expected to improve, particularly triggered by the biofuel and food sector. Global ending stocks are forecast to rise by 9% year on year to 8.4 M tonnes. Currently, Indonesia is one of the biggest palm oil producers in the world, together with Malaysia. With its plans to increase global capacity, Indonesia is expected to remain a key industry player. Indonesian palm oil production totalled 28.4 M tonnes in 2013, 8 M tonnes of which were domestically consumed while 21.4 M tonnes were exported. Indonesia converts some of its palm oil into biodiesel, of which it consumes 1 M tonnes and exports 1.5 M tonnes. Indonesia’s food and oleochemicals markets consume 7 M tonnes of its 4
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S U R FA C TA N T S
refined palm oil, while 13.9 M tonnes are exported. Moreover, 6 M tonnes of crude palm oil (CPO) are exported. Original Source: Oils and Fats International, Jan 2015, 31 (1), 32,34,40 (Website: http://www.oilsandfatsinternational.com) © Quartz Business Media Ltd 2015
Mitsui sets up joint venture in China Mitsui & Co Ltd has signed an agreement with the Malaysian company Kuala Lumpur Kepong Berhad (KLK) for a 20% stake in the capital of KLK Premier Capital at a cost of Ringgit 154 M ($44 M; €37.5 M). The deal involves Mitsui acquiring 2.362 M ordinary shares and 84,500 redeemable preference shares. The sale is conditional upon the injection of $50. 3 M by KLK into Taiko Palm-Oleo (Zhangjiagang) Co Ltd (TPOZ). KLK holds 100% in TPOZ, which runs an oleochemicals production plant in Zhangjiagang, China. TPOZ produces and markets fatty acids, glycerine, soap and triacetin from palm oil and other natural oils. These are used as raw materials for detergents and lubricants. According to Mitsui, the world market for oleochemicals is worth around ¥3 trillion (€51 bn) and is predicted to grow by 4%/y (7%/y in China). Original Source: Chimie Pharma Hebdo, 19 Jan 2015, (703), (Website: http://www.industrie.com/chimie) (in French) © ETAI Information 2015. Original Source: The Star, 8 Jan 2015, (Website: http://thestar.com.my) © Star Publications (M) Bhd 2015
Coconut and palm kernel oil prices Prices of lauric oils reached a peak in 2011 of c $2300/tonne before falling back below $1000/tonne in 2012/2013. A decreasing trend in prices for both coconut oil (CNO) and palm kernel oil (PKO) in 1H 2014 was reversed with a marginal increase in 2H 2014 as a result of improved demand and lower ending stock levels. CNO output is forecast to reach 3.4 M tonnes in 2014/2015, level with the previous year. However, ending stocks are projected to slump by 25% year on year to 0.3 M tonnes in 2014/2015. In contrast, PKO production is set to grow by 5% year on year for the same period to 7.3 M tonnes. Original Source: Oils and Fats International, Jan 2015, 31 (1), 40 (Website: http://www.oilsandfatsinternational.com) © Quartz Business Media Ltd 2015
Other Asia chemical profile: ethanolamines The various uses of ethanolamines are outlined. Asian demand for these materials is still weak due to the shrinking economy of China. Demand for triethanolamine (TEA) has decreased due to the slowing of construction activities in China. Demand for herbicide is weak for the whole region, placing a pressure on consumption for diethanolamine (DEA). Prices of ethanolamines are following suit with the decline of ethylene oxide (EO) prices, which are also following the downward trend of the prices of upstream crude, naphtha and ethylene, as well as showing the effect of new Chinese EO capacity. During the week ended 17 Dec 2014, prices of monoethanolamine (MEA) in China were at Yuan 8500-9000/tonne (c €1200-1270/tonne) EXWH against Yuan 9800-10,300/tonne EXWH in the previous four weeks. DEA and TEA prices decreased to Yuan 90009500/tonne EXWH from Yuan 10,40011,100/tonne and Yuan 10,00010,300/tonne EXWH from Yuan 11,400-11,500/tonne, respectively, during the same period. Import prices of MEA in China declined to $11001380/tonne cost insurance & freight (CIF) China during the week ended 17 Dec 2014 from $1280-1380/tonne CIF China four weeks prior. Import prices of DEA and TEA also fell to $1200/tonne CIF China from $1380/tonne and $1200-1540/tonne CIF China from $1350-1545/tonne CIF China, respectively, during the same period. It is expected that the prices of ethanolamines in China will remain weak in 2015 due to the country’s sluggish economy, decreasing demand and ample supply. Across Asia, Oriental Union Chemical has an 80,000 tonnes/y ethanolamines plant in Kaohsiung, Taiwan; BASF has a 75,000 tonnes/y plant in Nanjing, Jiangsu, China; and Petronas Chemicals Group has a 75,000 tonnes/y plant in Kerteh, Terengganu, Malaysia. Prices of EO in the region have been falling since Nov 2014. The trend is expected to continue due to growing supply from new EO capacities. In the past month, as much as 540,000 tonnes of new EO capacity came online resulting in MARCH 2015