Energy

SINGAPORE (ICIS)–Singapore's petrochemical shipments rose by 26.5% year on year in April to Singapore dollar (S$) 1.34 billion, reversing the 3.6% decline in the previous month, official data showed on Friday. Overall exports of chemicals and chemical products in April fell by 34.5% year on year to S$3.59 billion, extending the 37% contraction in March, Enterprise Singapore said in a statement. The country's overall non-oil domestic exports (NODX) fell by 9.3% year on year to S$13.9 billion, extending the 20.8% decline in the preceding month. Non-electronic NODX – which includes chemicals and pharmaceuticals – fell by 12.3% year on year to $10.9 billion in April following the 23.2% contraction in March. NODX shipments to the US and EU fell sharply in April, while exports to China rose last month. Singapore is a major manufacturer and exporter of petrochemicals in southeast Asia. Its petrochemicals hub Jurong Island houses more than 100 global chemical firms, including energy majors ExxonMobil and Shell. The drop in the country's NODX in April mirrors weaker manufacturing activity seen during the month. The country’s purchasing managers' index (PMI) slipped to 50.5 in April from 50.7 in March, marking the eighth consecutive month that the reading has remained above the 50 mark, according to data from the Singapore Institute of Purchasing and Materials Management (SIPMM). A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction. In a separate survey of private manufacturers, Singapore’s April PMI eased to 52.6 from 55.7 in March, financial information and services provider S&P Global said on 6 May. For the whole of 2024, Singapore's economy is expected to expand by 1.0-3.0%, compared with actual GDP growth of 1.1% growth in 2023, the ministry said. Focus article by Nurluqman Suratman

17-May-2024

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: Blood bags, syringes, disposable hospital sheets, gowns and medicine packaging. Modern-day medicine, which has greatly extended the quantity and quality of our lives, would be impossible without the plastics industry. Computers, smartphones, washing machines, refrigerators and automobiles cannot be manufactured without plastics and chemicals. Think of women in the developing world who still have to wash clothes by hand (this is, sadly, how some patriarchal societies work). Imagine the time and energy they would save if their families can afford their first washing machine, enabling girls and women to spend more time at school and freeing them up to attend college. The absence of decent roads in developing countries doesn’t matter a jot because, since the invention of the smartphone, buying and selling goods and services, issuing microfinance and keeping accounts up to date can be done on the go. The scale of future demand for nine of the world’s biggest synthetic polymers is illustrated by the chart in today's post. We forecast that global demand for the resins will this year total 299 million tonnes, up from just 79 million tonnes in 1992 which I believe was the start of the Petrochemicals Supercycle. By 2024, we predict that demand will reach 515 million tonnes – a 72% increase. The question on the exam paper is how we meet this demand in as sustainable a fashion as possible. This is going to require a new industrial revolution. Jim Fitterling, CEO of Dow Chemical, provided the best summary I have seen of the challenges that lie ahead for the chemicals industry. This was in a speech he gave in New York on 8 May. He highlighted the strain on electricity supply resulting from the growth in artificial intelligence, making it harder for the chemicals industry to secure the renewable electricity it needs to decarbonise. While it was “almost fashionable” to blame producers for plastics waste, around 3bn people around the world lacked access to basic waste management. About 95% of leakage occurs in emerging markets with underdeveloped waste management systems, he said. Demand for recycled plastics outstrips supply and was growing, but the ecosystem to collect, sort and efficiently recycle plastics waste was not keeping up, he added. Government support for these efforts would be critical – policies that preserved the many benefits of plastics while also helping eliminating waste, the CEO said. Through its history, the chemical industry had a formidable record of achievement in overcoming challenges and can do it again in making the energy transition a reality and ending plastics pollution, said the Dow CEO. Key to this was harnessing talent – not just chemical talent, but a new generation of workers who understood robotics, AI, machine learning and analytics, he said. Hear, hear! Let’s get on the with this new industrial revolution. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

17-May-2024

HOUSTON (ICIS)–Dow's operations in Terneuzen, the Netherlands, and Tarragona, Spain, have attractive costs for a region that is struggling to remain competitive against other parts of the world with cheaper energy, the CEO said on Thursday. Dow has crackers at both sites, and they can use imported liquefied petroleum gas (LPG) as feedstock to produce ethylene. The imports give the crackers a cost advantage. "Terneuzen and Tarragona are in great cost positions, and both of those countries, the Netherlands and Spain, have good energy policies," said Dow CEO Jim Fitterling. He made his comments during an investor day presentation. "Going forward, I feel good about how they are going to wind up, and we have good plans there," he said. "We have good line of site to keep cost competitiveness." The company mentioned cracking more LPG at Terneuzen to lower its costs. Exports of LPG should increase from the US in the next couple of years as midstream companies complete terminal expansions. The US Gulf Coast is running out of export capacity to handle growing amounts of propane being produced in the country. EUROPE LACKS COST POSITION TO EXPORTOther companies are selling European businesses or shutting down plants because of excess global capacity and high costs. Fitterling sees no signs that Europe is considering any policies that could address high energy costs. "Europe is focused more on the stick, on carbon emissions reductions," he said. "They are not focused at all on energy policy to drive down energy costs. Energy costs are going to continue to rise." Dow's cost position does allow it to serve the domestic market, but it is not in Europe to export, Fitterling said. "Europe doesn't have the cost position any more to export." Dow will continue find ways to improve its cost position at its European operations, he said. But the company's growth investments will be in low-cost regions and in high value projects.

16-May-2024

SAO PAULO (ICIS)–Six years after the disaster at Braskem’s rock salt mines in Brazil’s state of Alagoas, the polymers major could continue facing legal cases which could dent its cash flow, according to analysts at US credit rating agency Fitch. Fitch downgraded the company’s credit rating in December 2023 and placed it on what it called ‘Negative Watch’. This week, following a very damning report issued by Brazil’s Senate following a public enquiry into the Alagoas disaster, the agency’s analysts said that Braskem is likely to face increase costs related to environmental, social, and governance (ESG) challenges. That would add, they said, to the expected poor spreads for global petrochemicals in general, which would be here to stay for at least the remaining of 2024. “Increased ESG risks and potential new claims associated with the geological event in Alagoas could worsen the company’s credit profile,” said Marcelo Pappiani, a Fitch analyst covering Braskem. Fitch said Braskem has since 2019 disbursed approximately Brazilian reais (R) 10.0 billion ($2.0 billion) on relocations, compensation, the closure and monitoring of salt cavities, and environment and other technical matters. A spokesperson for Braskem said to ICIS on Thursday the company would continue collaborating with the authorities in their enquiries about the Alagoas disaster but did not comment on the specifics of the Senate’s report. “Braskem reiterates it was always willing to collaborate with the public enquiry, promptly collaborating providing all the information and measures requested,” said the spokesperson. “The company remains available to collaborate with the authorities, as it has always been.” NEVER-ENDING DISASTERLate on Wednesday, the Brazilian Senate published the final report after its public enquiry into the Alagoas disaster in 2018 which caused thousands to be displaced from their homes in Maceio, the capital’s state. The report is to be voted by the Senate’s plenary on 22 May. Braskem's rock salt mining caused the displacement of the subsoil; the company used the rock salt for production of caustic soda and polyvinyl chloride (PVC), among others. The 765-page report was highly damning for Braskem, with vice president Marcelo Cerqueira and other seven people accused of environmental crimes as the company’s activities resulted in the geological event. Nearly 15,000 households had to be relocated, and some of Maceio’s neighborhoods evacuated in 2018 remain ghost areas to this day. The report was not only damning for Braskem but also for Brazil’s authorities, especially the National Mining Agency (ANM) as well as the Ministry of Mines and Energy for failing to implement the controls which are required. THE GROUND KEEPS MOVINGTo make matters worse for Braskem, just last December there were further movements in the subsoil which made residents and authorities fear another geological event, a prospect which in the end did not materialize. Those recent events, as well as this week’s report, keep bringing back the Alagoas disaster into the spotlight and seem set to keep haunting the company for several quarters to come, said the Fitch analysts. “We believe the environmental and ecological impacts of the salt mine collapse in the context of sinking land in Alagoas could damage Braskem’s financial position … Uncertainty about current and upcoming lawsuits is high, with negative outcomes potentially pressuring cash flow and adversely impacting the company’s financial results,” they said. “The company could also face social impacts from new claims and reparation costs to victims and neighboring communities, in addition to the 14,446 families relocated to other areas.” The Alagoas liabilities are casting such a long shadow for Braskem that Abu Dhabi’s energy major ADNOC, who seemed the strongest candidate to acquire Novonor’s controlling stake in Braskem, walked away earlier in May, reportedly on the back of those liabilities. “We believe the prospect of Novonor selling its stake in Braskem hit an impasse after the December 2023 salt mine collapse, with ongoing uncertainty regarding the repercussions of the geological event,” said Fitch. Neither the Senate report nor Fitch’s credit rating warning seemed to dent investors’ interest on Braskem’s stock on Thursday though, with shares trading nearly 1.45% higher on the Sao Paulo stock exchange Bovespa by midday local time. Following ADNOC's announcement it was throwing the towel on Braskem, Braskem’s shares opened the next trading session down more than 14%.

16-May-2024

SINGAPORE (ICIS)–Japan's economy shrank by 2.0% on an annualized basis in January-March 2024 as domestic consumption and capital spending weakened. Weak yen fuels inflation, hurts consumer spending Core inflation slows but remains above 2% target Japan central bank faces tough challenge of balancing growth and inflation The first-quarter reading reverses the 0.4% year-on-year growth in October-December 2023. On a quarter-on-quarter basis, Q1 GDP posted a 0.5% contraction, according to preliminary data released by Japan’s Cabinet Office on Thursday. Private consumption, which makes up more than half of Japan's economic growth, fell by 0.7% in the first three months of 2024, marking the fourth straight quarter of decline and extending the 0.4% decline in the last three months of last year. Capital spending – a crucial component of private demand – decreased by 0.8% in the first quarter, reversing the 1.8% expansion in the fourth quarter. Net exports of goods and services fell by 0.3% in the first quarter. The sharp decline of the Japanese yen (Y) to levels not seen since 1990 has raised concerns about increasing living costs and depressed consumer spending. At 04:12 GMT, the yen was trading at around Y154 to the US dollar, strengthening from the recent record low of around Y159 in late April. In March to April, the yen had continued to weaken despite the Bank of Japan's (BoJ) decision to hike interest rates in March for the first time in 17 years, ending eight years of negative rates. The central bank is expected to proceed cautiously in tightening monetary policy due to the fragile state of the economy. Japan’s nationwide core consumer price index (CPI), which excludes fresh food items but includes energy items, rose by 2.6% year on year, data from the BoJ showed on 14 May. The number represented a deceleration from February’s 2.8% print but remained well above the central bank’s 2% target. "The year-on-year rate of increase in the CPI is likely to be in the range of 2.5-3.0% for fiscal 2024 [year ending 31 March 2025] and then be at around 2% for fiscal 2025 and 2026," Japan's Ministry of Finance (MoF) said in a report on 15 May. Meanwhile, underlying consumer inflation, which excludes temporary fluctuations, is expected to increase gradually and then be at a level that is generally consistent with the price stability target of 2%, it said. "If the BOJ also expects GDP to recover in 2Q24, then the BoJ’s focus should remain on high inflation and the JPY [Japanese yen] as a major contributor to high inflation," Dutch banking and financial information services provider ING said in a note on Thursday. "April inflation is expected to ease quite sharply due to a high base last year, but pipeline inflation indicates upward inflationary pressures building for the coming months,” it said. “We believe that the BoJ is ready to act in July, as it confirms that strong wage growth is boosting household spending," it added. Japan's economy is likely to keep growing at a pace above its potential growth rate, with overseas economies growing moderately, as well as financial conditions being accommodative, the finance ministry said in its 15 May report. Focus article by Nurluqman Suratman

16-May-2024

HOUSTON (ICIS)–US builder confidence in the market for newly built single-family homes fell sharply in May as higher mortgage rates “hammer” confidence, the National Association of Home Builders said on Wednesday. Mortgage rates averaged above 7% for the past four weeks as a lack of progress on reducing inflation pushed long-term interest rates higher, NAHB said. The NAHB/Wells Fargo Housing Market Index (HMI) fell by six points from April to 45 in May – its first decline since November 2023. HMI readings below the 50 neutral mark indicate that builders are pessimistic, readings above 50 that they are optimistic. The high mortgage rates have pushed many potential buyers back to the sidelines and the market has slowed, NAHB said. Another worry are new code rules that require the US Department of Housing and Urban Development and the US Department of Agriculture to insure mortgages for new single-family homes only if they are built to the 2021 International Energy Conservation Code. This would further increase the cost of construction in a market “that sorely needs more inventory for first-time and first-generation buyers”, said NAHB chairman Carl Harris. NAHB chief economist Robert Dietz added: “The last leg in the inflation fight is to reduce shelter inflation, and this can only occur if builders are able to construct more attainable, affordable housing.” The housing market is a key consumer of chemicals, driving demand for a wide variety of chemicals, resins and derivative products, such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibers, among many others. Please also visit the ICIS construction topic page and Macroeconomics: Impact on Chemicals. Thumbnail photo source: NAHB

15-May-2024

LONDON (ICIS)–The International Energy Agency (IEA) on Wednesday cut its expectations for global crude oil demand growth as demand from the OECD shifted into contraction territory in Q1 and as refinery margins continued to slump into the spring period. Demand slows on global economic health concerns Refinery margins near two-year lows More balanced supply-demand expected in 2025 The IEA now expects global crude demand to slip to 1.1 million barrels/day this year, down from projections of 1.2 million barrels/day in its previous monthly oil forecast, and a further decline from the 1.3 million barrels/day projected in March. The upward revisions seen in February and March were driven by higher demand expectations on the back of improved economic momentum, particularly for the US, with the agency predicting that the market could move into supply deficit. Weaker-than-expected deliveries to OECD countries, particularly in Europe, drove demand from the bloc into the negative in Q1, according to the IEA, while pricing fell through the early spring as economic concerns outpaced the upward impact of geopolitical tensions. Crude futures have fallen from over $90/barrel earlier in the year to $82.53 at midday Brent trading on Wednesday. Refinery margins have also fallen to near a two-year low in the wake of a sell-off across many crude and downstream markets such as middle distillates. Particularly pronounced in Europe, the slump in refinery margins could lead to run rate cuts that undermine the usual seasonal output uptick, the IEA added. “The slump in European refinery margins in April outpaced those seen in the US Gulf Coast and Singapore, reflecting its heavy reliance on diesel output and weak regional demand eroding the premium needed to attract long-haul imports from East of Suez,” the IEA said in its monthly report. European gasoil demand dropped 140,000 barrels/day year on year in the opening three months of the year, following a 210,000 barrel/day decline in Q4 2023. Despite declining demand expectations for 2024, supply growth is expected to be subdued, with a 1.4 million barrel/day increase in non-OPEC+ output offset by a projected 840,000 barrel/day decline in OPEC+ output, amounting to a total increase of 580,000 barrel/day. The latest deliberations among OPEC member states and allied country ministers is expected at the start of June in Vienna, Austria, with decisions taken there potentially setting the tone for the second half of the year. “Despite the recent weakness, our current balances show the call on OPEC+ crude oil at around 42 million barrels/day in the second half of this year – roughly 700,000 barrels/day above its April output,” the IEA added. The agency projects that crude demand growth will rise modestly to 1.2 million barrels/day, but production is likely to reach 1.8 million barrels/day, with 1.4 million of that total expected from non-OPEC+ countries. “Even if OPEC+ voluntary production cuts were to stay in place, global oil supply could jump by 1.8 million barrels/day compared with this year’s more modest 580,000 barrels/day annual increase,” the IEA said. “The United States, Guyana, Canada and Brazil continue to dominate gains, even as the pace of the US supply expansion decelerates,” the IEA added. Focus article by Tom Brown. Thumbnail photo: A crude oil tanker moored off the coast of Cyprus (Source: Danil Shamkin/NurPhoto/Shutterstock)

15-May-2024

SINGAPORE (ICIS)–US President Joe Biden is ramping up tariffs on $18 billion worth of imports from China, including electric vehicles (EVs), semiconductors, batteries and other goods, in a move that the White House said was a response to unfair trade practices and intended to protect US jobs. US tariffs on Chinese EVs to quadruple to 100% Targeted China products account for 4.2% of total US imports Near-term impact on China’s EV exports likely limited "Following an in-depth review by the United States Trade Representative, President Biden is taking action to protect American workers and American companies from China’s unfair trade practices," the White House said in a statement on 14 May. In response, China's Ministry of Commerce said that it "will take resolute measures to safeguards its own right and interests". “The US should immediately correct its wrong actions and cancel the additional tariff measures against China," the ministry said in a statement. There is growing concern over a potential "vicious cycle of tit-for-tat retaliatory actions" between the world's two biggest economies ahead of the US presidential elections on 5 November, Japan's Nomura Global Markets Research said in a note. EVs and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for the environment-friendly vehicles. "With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China’s exports of electric vehicles (EVs) grew by 70% from 2022 to 2023—jeopardizing productive investments elsewhere," the US said. "A 100% tariff rate on EVs will protect American manufacturers from China’s unfair trade practices," it added. The new rate represented a quadruple increase from 25% previously. However, the impact on China’s EV exports may be limited in the near term, as the US constitutes a small portion of the Asian giant’s total EV shipments. According to Nomura, the US imported in 2023 $400m worth of Chinese EVs, accounting for 1% of China's total shipments to the world's biggest economy. "We expect limited near-term impact, as the targeted $18bn worth of products account for only 4.2% of total US imports from China and less than 1% of China’s total exports," the Japanese brokerage said. US-CHINA TRADE WAR ADDS TO GLOBAL JITTERS The US and China have been embroiled in a trade war since 2018, when then US President Donald Trump imposed tariffs on around two-thirds of goods imported from China valued at an estimated $360 billion at the time. China has recently faced criticism from major trade partners for operating at “overcapacity,” dumping cheap products, and deepening trade relations with Russia, Nomura said. This leads to growing concerns that China may face similar trade-restrictive measures from other regions. With the EU and UK accounting for about 40% of China’s EV exports in 2023, the EV sector could face increased pressure if Europe follows the US’ lead. Although China's export growth has been strong this year due to the global tech upswing, resilient external demand, and competitive prices, rising trade tensions may hinder the export sector and prompt more supply chain relocations away from China in the long term. Late last year, the European Commission initiated an anti-subsidy investigation into China’s EVs. Europe's open approach and ambitious decarbonization goals have made it the main target market for Chinese-made EVs in 2023. The EU accounted for 30% of China's total EV export volumes last year, down from 36% in 2022, while the UK accounted for 8%, down from 10% in 2022, according to Nomura. Focus article by Nurluqman Suratman Thumbnail image: Aerial photo shows over 2,000 BYD Song Plus new energy vehicles to be exported at Lianyungang Port in east China's Jiangsu Province, 25 April 2024. (Shutterstock)

15-May-2024

HOUSTON (ICIS)–Global rates for shipping containers are surging, liquid chemical tanker rates were mixed, and wait times at the Panama Canal have eased, highlighting this week’s logistics roundup. CONTAINER RATES Container rates surged this week after rising last week for the first time since January amid general rate increases (GRIs) implemented because of rising demand and as continued Red Sea diversions have overall capacity fully deployed. Maersk CEO Vincent Clerc said during a Q1 earnings conference call that demand is trending toward the higher end of its guidance. Average global rates surged by 16% over the week, according to supply chain advisors Drewry and as shown in the following chart. Meanwhile, rates from Shanghai to the US West Coast jumped by 18%, and rates from Shanghai to the East Coast soared by 16%, as shown in the following chart. Drewry expects freight rates ex-China to continue increasing in the upcoming week amid a huge demand spike and tight capacity. Capacity is growing from newly built ships, according to international freight platform ShipHub, who said that 2.83m 20-foot equivalent units (TEUs) of container ship capacity is on order for 2024, after 2.34m TEUs were ordered in 2023. That is almost double the capacity added in 2021 and 2022, which were both around 1.1m TEUs. Shipping analysts Linerlytica said that over-capacity concerns are on the backburner with containership diversions to the Cape route effectively removing more than 7% of the total fleet. Rates from North China to the US Gulf were flat this week after spiking the previous week, as shown in the following chart from ocean and freight rate analytics firm Xeneta. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID CHEM TANKER RATES US chemical tanker freight rates assessed by ICIS were mostly unchanged but fell from the US Gulf (USG) to ARA. From the USG to Rotterdam, there are bits of part cargo space still available for April. This trade lane has been mostly quiet over the last few weeks. If this trend continues, this route could face further downward pressure. On the other hand, from the USG to the Caribbean, rates have risen slightly since last week leaving the market overall mixed. Methanol continues to be active out of this market to various destinations. From the USG to Brazil, space remains tight despite the slow market as only a handful of indications being seen in the market.  Space is available for H1 May out of Columbia and H2 May out of the USG. Although ICIS does not assess spot rates from the USG to the Mediterranean, this trade lane has continued to tighten up, with several cargoes of Glycols, Caustic and Veg Oil fixed. There is limited space for May which may likely cause rates to further tighten, although there could be some working space for June. PANAMA CANAL Wait times for non-booked vessels ready for transit fell for both northbound and southbound transits this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 4.4 days for northbound traffic and 6.5 days for southbound vessels. The PCA will increase the number of slots available for Panamax vessels to transit the waterway beginning 16 May and will add another slot for Neopanamax vessels on 1 June based on the present and projected water levels in Gatun Lake. PORT OF BALTIMORE The Key Bridge Response Unified Command (UC) is scheduled to use precision cuts made with small charges to remove a large section of the Francis Scott Key Bridge wreckage from on top of the container ship Dali, which struck the bridge on 26 March and caused its collapse. Source: Key Bridge Response 2024 The exact time of the precision cuts will depend on multiple environmental and operational factors. The closing of the port did not have a significant impact on the chemicals industry as chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. Additional reporting by Kevin Callahan

10-May-2024

SINGAPORE (ICIS)–China’s April exports rose by 1.5% year on year to $292.5 billion in April, reversing the 7.5% contraction in March supported by signs of improved global demand, customs data showed on Thursday. China posts $72.4bn April trade surplus, exceeding March Year-to-date trade balance slightly below 2023 levels SE Asia grows as key Chinese export destination; exports to the US, EU continue to decline China's imports rose by 8.4% year on year in April, reversing the 1.9% contraction in March, General Administration of Customs data showed. This led to a trade surplus of $72.4 billion in April, up from the $58.6 billion surplus in March this year. By export destination, the Association of Southeast Asian Nations (ASEAN) continued to grow in importance for China. April exports to the region were up 20.4% year on year, bringing the year-to-date growth level to 6.3%. Through the first four months of the year, ASEAN remained the largest export destination for China, accounting for 16.9% of total exports. Exports to the US remained weak, falling by 1.6% year on year in April for a year-to-date decline of 1.0%. Exports to the EU also struggled, down 3.3% year on year in April and contracting by 4.8% in the year to date. “It remains to be seen if President Xi's trip to Europe, where improving trade ties were emphasized, will help bring about a trade recovery in the coming months,” Dutch banking and financial information services provider ING said in a note. China's trade balance through the first four months of the year amounted to $255.7 billion, lower than the $266.0 billion in the same period of 2023. In Chinese yuan (CNY) terms, which are more relevant for gauging GDP growth, the trade balance was CNY1,817.3 billion in the first four months of this year – slightly weaker than the CNY1,829.0 billion over the comparable period in 2023. By export product, the performance of various categories remained uneven in January-April of this year, ING said. Automobiles continued to see strong growth amid China's strong competitiveness in the new energy vehicle sector, up 21.2% year on year. The impact of auto sector price competition can also be seen in the export data; volume growth was even higher at 26.0% year on year on a year-to-date basis. Household appliance exports have also been a surprising area of strength, up 12.6% year on year for the first four months of 2024. “With domestic demand for household appliances likely to recover after the rollout of trade-in policies, the sector could see a recovery this year,” ING said. “PMI data has shown export orders expanded for two consecutive months, which is a favorable sign, but we anticipate that global external demand conditions are likely to be relatively lukewarm at best this year.” China's manufacturing activity expanded for a second month in April amid improved overseas demand, but the rate of expansion weakened amid higher production costs. China saw surprisingly strong economic growth in the first quarter, fueled by exports from its manufacturing sector. The world's second-largest economy expanded by 5.3% year on year in the first three months of 2024, accelerating from the 1.6% growth in the previous quarter. A debt-ridden property market with declining home prices, coupled with weak consumer confidence and shrinking foreign demand, however, creates significant headwinds for China's economic growth. In response, Beijing is doubling down on industrial policy, prioritizing high-tech and green technology. China has set an ambitious economic growth target of around 5% for 2024. Focus article by Nurluqman Suratman Thumbnail photo shows a port in Suqian, China. (Source: Costfoto/NurPhoto/Shutterstock)

09-May-2024