Petrochemical firms actively invest in battery materials

Major South Korean petrochemical companies are actively investing in battery material businesses despite the current slump in the electric vehicle market, said Pulsenews.

Sources from the petrochemical industry said on Sunday that LG Chem Ltd. recently began fully operating its cathode material plant 4 in Cheongju, North Chungcheong Province, which began construction in 2020. The plant 4 had been the subject of test checks until recently after completing the installation of its last third line at the end of 2023. The first two lines, which were built earlier, each produce 10,000 tons of nickel-cobalt-manganese (NCM) cathode materials annually.

According to LG Chem‘s business report, the company’s advanced materials division, which includes battery materials, invested 690.3 billion won ($518.82 million) in 2023. This is more than four times the 164 billion won in 2021 and similar to the 696.5 billion won it invested in 2022, when the battery boom was going strong. The advanced materials division is known to have an overwhelming share of battery materials in its investments.

The proactive investments, contrary to market conditions, are believed to reflect the company’s determination to strengthen its non-petrochemical portfolios. The outlook for the petrochemicals business is bleak due to challenges from Chinese companies with price competitiveness and refiners entering the petrochemical sector.

Petrochemical companies are often rumored to be selling naphtha cracking centers (NCCs), which are particularly targeted by refiners as NCC uses naphtha, a byproduct of petroleum refining, as raw material in the initial stage of the petrochemical value chain. Refiners can expect to expand their profitability by vertically integrating into the NCC business.

LG Chem has been accelerating related investments since announcing its three major growth drivers (battery materials, eco-friendly materials, and new drugs) in 2023, and plans to secure a production capacity of up to 60,000 tons annually at its cathode material plant in Gumi, North Gyeongsang Province. The company also expects its cathode material plant in Tennessee, the United States, and lithium iron phosphate (LFP) cathode material plant in Morocco to begin mass production, in 2026, with the plants projected to produce 60,000 tons and 50,000 tons per year respectively. LG Chem is also considering building new nickel refining and precursor plants in Indonesia.

For its part, Lotte Chemical Corp. is actively investing in battery materials as a future growth driver. It is currently preparing to enter the electrolyte organic solvent market after producing materials for battery separators and plans to inaugurate a cathode foil production facility in the United States in 2026.

SKC Co. also plans to inaugurate two plants in Malaysia and one in Poland in the first half of 2024, via its subsidiary SK nexilis Co., which produces copper films. The company is also considering additional investments in production facilities in North America.

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Japan's petrochemical sector will need to consolidate in response to heightened competition from emerging petrochemical complexes in China and the Middle East, the head of the country's oil industry body said on Monday, as per Reuters.

"We anticipate that the operational landscape for petrochemical equipment in Japan will prove challenging in the upcoming year, given the impending commissioning of various new complexes," Shunichi Kito, president of the Petroleum Association of Japan (PAJ), told a news conference.

For Japanese petrochemical companies already grappling with a tough earnings environment, the export of olefin like ethylene is expected to worsen, said Kito, who is also the president of oil refiner Idemitsu Kosan 5019.T.

"I believe that consolidations within the petrochemical industry, or efforts to enhance efficiency and rationalise operations, will inevitably become imperative," he said.

China is adding new petrochemical capacity despite a global glut as the country's refiners diversify from transport fuels, threatening to depress margins worldwide through 2024 as weak economic growth saps demand.

We remind, Japan-based chemical company Sumitomo Chemical has begun construction on its pilot plant to develop new process technology to manufacture propylene directly from ethanol. The development of this propylene manufacturing technology is being financed by the Green Innovation Fund of the New Energy and Industrial Technology Development Organization.

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Russian businesses are not concerned about the Industry and Trade Ministry's proposal to ban certain types of polyethylene terephthalate (PET) plastic bottles, but is worried that this measure might be expanded to encompass other types of PET packaging, food industry association Rusprodsoyuz told Interfax.

"The proposed ban of plastic bottles is not causing serious concerns among businesses, since it is unlikely to affect the business processes of food production facilities because the packaging materials that are proposed to be banned are used very rarely," Rusprodsoyuz executive director Dmitry Vostrikov said, commenting on the ministry's draft government resolution to ban certain types of PET packaging that cannot be recycled or is difficult to recycle as of September 1, 2024.

The draft resolution, posted on the regulation.gov.ru website, would ban the production and use of semitransparent PET bottles of all colors in Russia as of September, with the exception of blue, green and brown ones; nontransparent PET bottles with the exception of white ones; PET packaging made with wrap-around PVC labels; and multilayer PET bottles.

However, businesses are not happy about the actual method of imposing bans, Vostrikov said. "After all, the proposals to impose restrictions on other types of PET that have been made in recent years could have negative consequences for the sector. The path of banning types of packaging is a dead end. It is necessary to improve the technology for recycling packaging materials," Vostrikov said.

Rusprodsoyuz, Russia's largest association of producers and suppliers of all types of food products, includes more than 450 farmers, processors, distributors, logistics companies, operators of wholesale distribution centers and technology suppliers.

We remind, Sibur Holding PJSC (Moscow), Russia’s biggest producer of petrochemicals, has announced plans to transform the business management model of its plastics and synthetic rubber activities to focus on the Russian market, starting in April. Since the war in Ukraine began in 2022, Russian exporters have faced international sanctions that have limited their ability to ship products to many countries/

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Honeywell announced that Petroleos del Peru S.A., one of the largest hydrocarbon producers, refiners and distributors in Peru, will implement Honeywell cybersecurity solutions in order to help Petroperu strengthen the cyber resiliency of its refinery operations and accelerate its broader digital transformation, said Hydrocarbonprocessing.

Petroperu’s multi-year investment with Honeywell includes access to Honeywell’s cybersecurity consulting support, managed security services and world-class threat detection capabilities. Honeywell will help Petroperu further scale its operational technology (OT) cybersecurity efforts in order to improve visibility into potential cybersecurity vulnerabilities and threats across its systems.

“Cybersecurity resiliency is a crucial capability that underpins our sustainable operations as we work toward the future in the energy transition,” said Fernando Villacorta Padilla, chief controls and advanced applications engineer, Petroperu. “Honeywell’s cybersecurity services complement the innovative software solutions that it previously developed to support our digitalization initiatives and our refinery modernization project.”

Petroperu’s implementation of Honeywell’s cybersecurity solutions builds upon its prior integration of Honeywell Forge Workforce Competency solutions, which the company currently uses to train its industrial workforce regarding safer and more efficient operations. The added integration of Honeywell cybersecurity solutions will help Petroperu to further improve its operational efficiency, safety and security programs across Petroperu’s plants and refineries.

“Without strong cybersecurity capabilities, energy companies that heavily rely on technology and information systems to operate can face serious consequences, including financial losses, operational disruptions, reputational damage and environmental risks,” said Sunil Pandita, vice president and general manager of Honeywell Cyber & Connected Industrials. “While Petroperu is already at forefront of the digital transformation within the energy sector, Honeywell’s cybersecurity solutions will help Petroperu to identify and minimize potential cyber risks in near real time in order to create safer, more efficient operations that benefit both customers and employees.”

Honeywell has been working with Petroperu for almost 50 years. Additionally, Honeywell provides engineering, licenses, services and technical support for three units currently in operation.

Honeywell cybersecurity solutions can help organizations to improve their OT cybersecurity defenses with vendor-agnostic solutions designed to assist in identifying, prioritizing and reducing OT cyber risks and potential vulnerabilities through advanced monitoring and detection. Learn more about Honeywell’s OT cybersecurity solutions for industrial businesses.

We remind, Honeywell announced the availability of technologies and digital solutions to enable customers in Asia Pacific to produce renewable fuels from multiple sources of renewable feedstocks. Refiners are facing market changes as the drive toward sustainability accelerates to lower greenhouse gas (GHG) emissions. It is imperative for companies to adopt ready now technologies that can help them produce low-carbon, sustainable fuels while maximizing available resources, reducing waste, and meeting their sustainability goals.

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Shantou Mingca Packaging Co Ltd and ExxonMobil Asia Pacific Research & Development Co., Ltd (ExxonMobil) announced an innovative double bubble Polyethylene-based Shrink Film solution, the next generation of Polyolefin Shrink Film, created using ultra-low density Exceed XP performance polyethylene, said Hydrocarbonprocessing.

PEF can be used to package products in a variety of shapes, such as electronics, household and personal care products, medicines, food, books and magazines, plastic utensils, and toys.

The solution's polyethylene-based structure can help converters create packaging that can be more easily mechanically recycled1 than conventional POF solutions. The recyclability of the film structure has been third party validated and certified by TUV Rheinland2.

PEF shrink film can help provide exceptional "shelf appeal" to products, making them look attractive to consumers. In addition, the PEF solution can provide a snug-fit with small and soft corners, further increasing appearance aesthetics.

It can shrink more than 70 percent upon heating and can help enable excellent shrink performance at lower temperatures.

Thanks to its low-temperature shrinkage capability, the new PEF solution can offer potential cost savings due to the shrink tunnel consuming less energy than what is needed with conventional POF solutions3. With haze as low as 2.8 percent and gloss up to 86 GU, the Exceed™ XP-based PEF offers excellent optical properties.

Exceed™ XP performance polyethylene can help to deliver outstanding softness (1% secant modulus as low as 374 MPa), with tensile strength at MD/TD as high as 100 MPa.

Similar to POF, the new PEF shrink film can be produced using double bubble technology. Converters can typically switch from their current POF formulation to the next generation conveniently with only a few adjustments to their existing POF production line, while brand owners can adopt the new solution without upgrades or changes to their packaging lines.

We remind, QatarEnergy and ExxonMobil are on track to commence LNG production at their Golden Pass LNG export terminal, situated on the US Gulf Coast near Sabine Pass, Texas, during the first half of 2025. QatarEnergy, a state-owned entity, holds a substantial 70 percent stake in the Golden Pass project, which boasts a capacity exceeding 18 million metric tons per annum (mtpa). Notably, QatarEnergy will offload 70 percent of the terminal's capacity. In parallel, ExxonMobil, a prominent US-based energy firm, possesses a 30 percent share in the venture.

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