Energy

HOUSTON (ICIS)–The Fertilizer Institute (TFI) has announced the launch of the Verified Ammonia Carbon Intensity (VACI) program, which is a voluntary certification of the carbon footprint of ammonia production at a specific facility. The VACI is the first program of its kind with the industry group saying it is designed to provide ammonia consumers seeking to reduce emissions across their supply chains with an independent and certifiable carbon intensity score. TFI said the VACI certification framework will standardize the approach for calculating the carbon intensity of ammonia encompassing all aspects of ammonia manufacturing from feedstock production through the finished product at the plant gate. Producers will use the VACI standard to calculate the carbon intensity of ammonia produced at their facilities then an independent, third-party auditor will then verify or validate that the carbon intensity score is accurate. TFI president and CEO Corey Rosenbusch said ammonia is a critical input for both agriculture, emissions control and many commercial products including fabric and pharmaceuticals. “As agriculture and other industries increasingly look to develop more sustainable and resilient supply chains, the Verified Ammonia Carbon Intensity program provides ammonia consumers with certifiable transparency that will allow them to quantify the positive impact using low-carbon ammonia has on their greenhouse gas emissions footprint,” said Rosenbusch. Ammonia production typically uses natural gas as a feedstock for its hydrogen component and is an energy-intensive process with substantial carbon dioxide emissions as a byproduct. Currently there are US ammonia producers who are investing in technologies to dramatically reduce emissions with the VACI enabling them to document the varying levels of emissions reduction these technologies provide. The VACI program was developed by TFI in collaboration with technical industry experts from producers CF Industries, LSB, Nutrien, OCI and Yara with guidance from Hinicio, a strategic and technical consulting firm specializing in hydrogen and its derivatives and industrial decarbonization. Facilities certified under the program include Nutrien at Redwater in Canada and CF Industries in Donaldsonville, Louisiana, with audits that have been completed. Audits for LSB Industries in El Dorado, Arkansas, and CVR Energy in Coffeyville, Kansas, in progress. TFI said the VACI is undertaking a 60-day public consultation period for ammonia consumers and stakeholders to provide feedback on the program and its methodology and intends to refine the program based on comments received.

20-Dec-2024

LONDON (ICIS)–A hoped-for recovery in Germany’s chemical industry has been pushed out to 2026, as shown by an industry survey presented at a webinar hosted by chemical producers’ trade group VCI. No recovery before 2026 Chemical production seen flat in 2025 Persistent lack of orders The VCI survey, conducted in November, found that 52% of German chemical companies expect a recovery to only take place in 2026 or later, whereas a previous survey conducted this summer showed that a majority had expected a recovery in 2025. Now, only 22% expect a recovery in the second half of 2025 while 8% expect it to occur in the first half, according to the latest survey As for sales and profits, 33% expect a sales decline in 2025 and 46% expect lower profits. Companies are particularly pessimistic about sales expectations for Germany and Europe, but are less pessimistic about business outside Europe. With nearly every second company expecting falling profits next year, business will remain difficult, said VCI economist Christiane Kellermann. LACK OF ORDERS The share of companies complaining about a lack of orders is around 40%, the same level as at the start of the coronavirus lockdowns in early 2020, she said. Producers have been complaining about a lack of orders since the end of 2022, and there was still no prospect of an improvement, she said. The share of companies stating that a lack of orders was no problem for them and that business was good was “vanishingly small”, she added. New orders were weak both domestically and internationally, she said. LOSS OF COMPETITIVENESS Germany as a place for industrial production is losing competitiveness because of its high bureaucratic costs, high labor costs, high taxes and levies, and high energy costs, she said. Adding to these challenges is rising geopolitical uncertainty, in particular in the wake of Donald Trump’s victory in the 5 November US presidential election, she said. Companies were trying to determine what Trump’s second term as president will mean for them in terms of trade conflicts and tariffs. They were not only worried about direct tariff impacts, but also about the impact on China where the tariffs are likely prompt producers to ship more product to Europe, she said. As for German politics, there are hopes that a new government next year will address at least some of the challenges the country faces, she said. The coalition government of Chancellor Olaf Scholz collapsed last month, and new elections are expected to be held in February. CHEMICAL PRODUCTION TO STAGNATE IN 2025 In 2024, total chemical-pharmaceutical production rose 2.0%, led by a 4.0% increase in chemicals, according to preliminary data, Kellermann said. 2024, percentage change in production, by major segments: Inorganic basic chemicals: +7.0% Petrochemicals: +8.5% Polymers: +4.0% Fine and specialty chemicals: -2.0% Consumer chemicals: +2.0% Pharmaceuticals: -1.5% While some segments saw a significant year-on-year increase in production, the increases did not offset the declines in 2023, she said. Demand for chemicals across industrial customers was weak, especially in Germany, she said. For 2025, VCI currently forecasts that chemical/pharmaceutical production will inch up 0.5%, with chemical production expected to stagnate: Production, year-on-year %-changes   2025 forecast 2024 (based on preliminary data) 2023 Chemicals & pharmaceuticals +0.5% +2.0% -7.9% Chemicals (ex pharma) flat +4.0% -10.4% COMPANIES REACT Companies are reacting to the challenges they face in Germany with a range of measures, Kellermann said. They include restructuring; improvements in productivity and energy efficiency; cost cutting programmess; shifting production abroad; divestments of businesses lines; and plant closures, she said. The country was seeing a permanent shutdown in production, and this trend may accelerate, she added. Only 25% of the chemical companies surveyed expect their investments in plants, equipment and machinery at German locations to increase next year, whereas 40% expect their investments to decline. On the other hand, 46% expect an increase in their investments abroad. Companies were investing, but not necessarily in Germany, Kellermann said. VCI chief economist Henrik Meincke, who also presented at the webinar, said following steady growth in the years after the 2008-2009 global financial crisis, “multiple shocks” have hit Germany’s economy and its energy-intensive industrial producers since 2018: 2018/19: US-China trade conflict 2020: Pandemic lockdowns 2020/21: Supply chain crisis 2022: Ukraine war and energy price shock 2023: Inflation, and high interest rates to contain it Germany was currently in a stagflation phase, with core-inflation above 2% – and this has come at a time of enormous political and economic risks as well as the challenge of transforming the economy to net zero-emissions, he said. Thumbnail photo of BASF’s Ludwigshafen site; source: BASF

20-Dec-2024

HOUSTON (ICIS)–Chemical plants and refineries along the Gulf Coast of the US will likely face another winter that will be warmer than usual but punctuated with brief periods of freezing temperatures, which could disrupt operations. Meteorologists expect winter temperatures in the US will be colder than the previous year but still warmer than average. A meteorologist in Texas warned that the state could face another brief spell of freezing temperatures similar to past winters, such as the devastating Winter Storm Uri in 2021. Chemical plants in the Gulf Coast still have trouble operating in freezing temperatures despite improvements made since Uri. COLD SPELLS CONTINUE TO DISRUPT GULF COAST CHEM PLANTSBrief spells of freezing temperatures are becoming an annual feature of winters in the Gulf Coast, even as the overall season becomes warmer, according to a presentation made earlier this year by Chris Coleman, the supervisor of operational forecasting at Electric Reliability Council of Texas (ERCOT), which manages the flow of electricity in most of the state. This upcoming winter could continue the trend. Coleman warned that the state has a greater than average chance of suffering from freezing temperatures – even though the season as a whole will be warmer than usual. Meteorology firm AccuWeather also warned that the US will be vulnerable to a blast of cold temperatures despite the forecast for a warm winter. Such blasts are caused by polar vortexes, and February is the most probable month when one will move across the eastern US. AccuWeather did not say whether such a polar vortex could hit Texas. CHANCES OF CHEM OUTAGESFor chemical plants, freezing temperatures can cause outages by disrupting operations or by blackouts caused by excessive electricity demand. Such a demand spike caused the widespread plant outages during winter storm Uri in 2021. Since then, Texas has avoided state-wide outages despite continued cold spells and growing demand for electricity. The state's power grid is more reliable, and it has conducted more weatherization inspections, ERCOT said. If the power grid in Texas holds up this winter, then chemical disruptions would be caused by freezing temperatures shutting down operations at specific plants. Even after Uri, steps taken by some companies still did not prevent cold temperatures from disrupting their operations. During the freeze of December 2022, TotalEnergies shut down its polypropylene (PP) units at La Porte, Texas, even though the company said it took all precautions possible through freeze protection and heat tracing. US WINTER COOLER THAN 2023-2024Meteorologists at the National Oceanic and Atmospheric Administration (NOAA) expect winter temperatures will be warmer than average for the southern and eastern US. That said, they will still be cooler than the previous year, according to the Energy Information Administration (EIA). Those cooler temperatures have led the EIA to expect average prices for natural gas to reach $3.00/million Btu in 2025, up from $2.20/million Btu in 2024. Natural gas is important to the chemical industry because they use it as fuel and because it influences prices for ethane, the predominant feedstock that US crackers use to make ethylene. MORE LNG TERMINALS WILL START UPA growing source of gas demand is made up of terminals that export liquefied natural gas (LNG). The following table lists the terminals that should start up in 2025 and later. Capacity figures are listed in millions of tonnes/year. Project Developer Capacity Estimates Start Up Corpus Christi Stage 3 Cheniere 10 2025 Plaquemines LNG Venture Global 20 2025 Golden Pass LNG ExxonMobil/QatarEnergy 15.6 2027 Port Arthur LNG Sempra 13 2027 Rio Grande LNG Phase 1 NextDecade 17.6 2027 Insight article by Al Greenwood Thumbnail shows ice. Image by David J Phillip/AP/Shutterstock

19-Dec-2024

SINGAPORE (ICIS)–China's economic data in November were mixed, with weaker retail sales growth offset by some signs of stability in property prices and a slightly quicker industrial output growth, as policymakers brace for more US trade tariffs once President-elect Donald Trump takes office for a second time. Policy support to ramp up in coming months ahead Retail sales unexpectedly slowed in November Trump 2.0 adds significant risk to trade China's November property market data showed signs of stabilization, with rates of declines for both new home and used home prices easing from the previous month to 0.2% and 0.35%, respectively. These were the smallest rates of decline recorded since June 2023 for new home prices and in May 2023 for used home prices, data from China's National Bureau of Statistics (NBS) showed on 16 December. The numbers suggest the market may be bottoming out, with 21 of 70 cities reporting steady or rising new home prices, the highest proportion this year. Property investment in the country, however, continued to contract at double-digit rates in November, falling by 10.4% year on year, with new residential starts and completions contracting by 23.1% and 26.0%, respectively. "Real estate investment still likely faces some hurdles before it is no longer a headwind on growth – prices have not yet stabilized, but property inventories are still relatively elevated at this stage, and property developer sentiment remains cautious," Dutch banking and financial services firm ING said in a note. "A second consecutive month of improving price data is a positive signal for the property market bottoming out, and we expect a trough to be established in 2025 and the start of an L-shaped recovery to take effect." RETAIL SALES GROWTH SLOWS Meanwhile, China's November retail sales growth surprisingly slowed to 3.0% year on year, down from October's stronger-than-expected 4.8%. Trade-in policies continued to boost specific sectors in November, with household appliances posting a robust 22.2% year-on-year growth, albeit slower than previous months’ increase. Meanwhile, November automobile sales on a year-on-year basis surged to a nine-month high of 6.6%, coming from a 3.7% expansion in October. In contrast, petroleum and related products struggled, recording a 7.1% year-on-year contraction, as the transition to electric vehicles gains momentum. Household confidence clearly remains soft and it remains to be seen if the "vigorous support" for consumption promised next year will be effective in stimulating a recovery, according to ING. "We expect the rollout of supportive policies could take some time, but overall retail sales growth should recover in 2025." INDUSTRIAL PRODUCTION EDGES HIGHER China's industrial output showed a modest improvement in November, with the headline growth edging up to 5.4% year on year from 5.3% in October. "Export demand has been a contributor to solid industrial production growth in 2024, but this factor is expected to weaken somewhat in 2025 as tariffs set in," ING said. The auto sector was a key driver, with output growth accelerating to 15.2% year on year in November, up from 4.8% in October. This uptick was mirrored in November passenger car output, which surged 14.1% year on year, nearly double the 7.7% growth seen in October, according to data from the China Passenger Car Association (CPCA). POLICY SUPPORT TO RAMP UP IN 2025 "Despite data coming in a little softer than expectations, with only one month of data still to come, China will likely manage to complete its ‘around 5%’ growth objective for 2024," ING said. At the Central Economic Work Conference (CEWC) held on 11-12 December, China's top leadership pledged to implement robust policy support measures in 2025. Heading into the conference, much of the attention centered on the scale of stimulus needed to bolster China's growth. While the CEWC affirmed the need for more robust support measures, it remained tight-lipped on specifics. Detailed economic and social targets will be unveiled at the National People's Congress (NPC) in March 2025, with concrete policy measures likely to follow. China's fiscal deficit target and the special government bond issuance targets were both raised at the CEWC, which along with November's Chinese yuan (CNY) 10 trillion debt package should create more room for fiscal stimulus in 2025, according to ING. "The speed and scale of domestic stimulus will likely play the biggest role in determining whether or not China's economy will be able to maintain stable growth," it said. "The eventual growth target setting at next year's Two Sessions meetings in March will give a better indication of how confident policymakers are in terms of growth stabilization." The Two Sessions are the annual gatherings of China's top legislative and advisory bodies, the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC), during which key policies, laws, and leadership appointments are discussed and approved. To achieve this, the government is likely to expand its successful equipment upgrading and consumer goods trade-in program beyond automobiles and home appliances, Ho Woei Chen, an economist at Singapore-based UOB Global Economics & Markets Research, said in a note on 13 December. Future initiatives may encompass a broader range of categories, including services such as tourism and entertainment, as well as emerging areas such as digital and green consumption, Ho said. Additionally, investments in technological innovation, industrial upgrading, and domestic infrastructure – including transportation, energy, and urban renewal projects – are expected to receive a significant boost, she added. "We do expect Beijing to ramp up fiscal deficit and fiscal spending in 2025, but we believe how to spend might be even more relevant than how much will be spent, because this is not a typical downcycle for China," Japan's Nomura Global Markets Research said in a note. "Due to the property meltdown, fiscal issues and worsening tensions with the US, China’s economy is not in a normal downcycle, so it may take much more than the recent ‘bazooka’ stimulus package to truly reboot the economy." A meaningful recovery in China in 2025 will likely require Beijing to tackle several key challenges, including clearing the property market backlog, reforming the fiscal system, strengthening the social welfare system, and easing geopolitical tensions, Nomura noted. "We remain cautious on Beijing’s resolution in clearing the property sector, which has been contracting for almost four years, as the CEWC mentioned little new measures to clear property markets. The CEWC memo did mention reforming the fiscal system, but no details were provided." THE NEW CHALLENGE IN 2025: TRUMP 2.0 Trump's victory, coupled with a Republican sweep in the US sets the stage for significant trade policy shifts in 2025 for the world’s biggest economy, as concerns rise over the potential imposition of 60% tariffs on Chinese goods. Nomura expects tariffs to be introduced in a phased manner throughout 2025, mirroring the gradual rollout seen during Trump's first term. "We assume the actual implementation that would directly impact China’s exports to the US will occur from around mid-2025 and will be mostly concentrated in H2 2025, with some front-loading in H1 2025," it said. "There is a possibility that the incoming Trump administration may take action to tackle the issue of Chinese export rerouting to the US via third countries, and we believe such a threat is a real risk to China’s export growth over the next couple of years." Nomura predicts China's export growth will experience a temporary surge, rising to 8.5% year over year in Q4 2024, up from 6.0% in Q3 2024. This increase is attributed to frontloading, as Chinese exporters rush to avoid the US tariffs in 2025. However, Nomura expects export growth to slow significantly in 2025 due to the anticipated trade headwinds and the frontloading that occurred in Q4 2024. Insight article by Nurluqman Suratman Thumbnail photo: A commercial housing building under construction in Nanjing, China. (Source: Costfoto/NurPhoto/Shutterstock)

18-Dec-2024

HOUSTON (ICIS)–Two world-scale joint venture projects being developed by Chevron Phillips Chemical and QatarEnergy remain on track to start operations in 2026, Phillips 66 said on Monday. Phillips 66 and Chevron hold equal stakes in Chevron Phillips Chemical (CP Chem). The US project is Golden Triangle Polymers, an integrated polyethylene (PE) complex in Orange, Texas. Chevron Phillips holds a 51% stake, and construction started in 2023. The Qatari project in Ras Laffan is another integrated PE project. It is a 70:30 joint venture between QatarEnergy and CP Chem. Construction on this project started in 2024. PHILLIPS 66 CAPEX BUDGETPhillips 66 provided the updates on the two petrochemical projects when it revealed its 2025 capital budget, as shown in the following table. Figures are in millions of dollars. Sustaining Growth TOTAL Midstream 429 546 975 Refining 414 408 822 Marketing & Specialties 63 91 154 Renewable Fuels 18 56 74 Corporate and other 74 1 75 TOTAL 998 1,102 2,100 Source: Phillips 66 Phillips 66's proportionate share of capital spending in its CP Chem and WRB Refining joint ventures is $877 million, and its inclusion would bring Phillips 66's total 2025 capital spending to $3 billion. The joint ventures' spending will be self funded, Phillips 66 said. WRB Refining is a 50:50 joint venture made up of Phillips 66 and Cenovus Energy. The joint venture owns the Wood River refinery in Illinois and the Borger refinery in Texas. WRB's capital spending will direct its capital spending on sustaining projects, Phillips 66 said. PHILLIPS TO SELL STAKE IN OIL PIPELINEA subsidiary of Phillips 66 has agreed to sell its 25% non-operated stake in the Gulf Coast Express Pipeline to an affiliate of ArcLight Capital Partners. Pre-tax proceeds from the sale should total $865 million. The sale should close in January 2025. Thumbnail shows PE. Image by ICIS.

16-Dec-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 13 December. Dow’s $2.4-3.0 billion infrastructure deal larger than expected Dow signed a deal to sell a minority stake in its US Gulf Coast infrastructure assets to a fund managed by Macquarie Asset Management for up to $3.0 billion – larger than expected, according to UBS. PCC's proposed USG chlor-alkali unit to add caustic length in unique development US caustic soda supplies will continue to grow in the coming years following an announcement by PCC Group that it intends to invest in a new 340,000 tons/year chlor-alkali plant at DeLisle, Mississippi. The new capacity will be built on Chemours site at DeLisle Mississippi with the intent to provide Chemours with reliable access to chlorine. The company intends to sell its caustic soda to strategic partners and into the open market. Construction on the unit is expected to begin in early-2026 and conclude in 2028. INSIGHT: New gas pipeline to provide support for ethane prices for US chems A new gas pipeline set to be built by Energy Transfer should provide support for natural gas and ethane prices in the Permian producing basin, lowering the likelihood that US chemical producers see another period of ultra-low costs for the main feedstock used to make ethylene. Olin to shut diaphragm chloralkali capacity that serves Dow's Freeport PO unit Olin plans to shut down its diaphragm-grade chloralkali capacity in Freeport, Texas, that provides feedstock to Dow's propylene oxide (PO) unit, the US-based chloralkali producer said on Thursday. ACC expects modest US chemicals volume recovery in 2025 – economist The American Chemistry Council (ACC) expects a 1.9% rebound in chemical volumes in 2025 after two consecutive years of declines as the US economy undergoes a soft landing and the housing market improves in the second half of the year, its chief economist said.

16-Dec-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 13 December. Little improvement expected for German chems sector in 2025- VCI Germany’s chemicals and production is expected to have increased by 2% in 2024, while output growth is set to slow next year, sales could stagnate and prices fall, trade group VCI said on Friday. Ample supply for crude markets in 2025 despite stronger demand – IEA Global crude oil markets are likely to be comfortably supplied next year despite moves by OPEC+ to hold back on easing production cuts and anticipated firmer demand, the International Energy Agency (IEA) said on Thursday. INEOS pushes forward with Greensand carbon storage project INEOS and project partners Harbour Energy and Nordsofonden have made a final investment decision (FID) to move forward with the first commercial phase of the Greensand carbon storage project. Dow’s $2.4-3.0 billion infrastructure deal larger than expected Dow signed a deal to sell a minority stake in its US Gulf Coast infrastructure assets to a fund managed by Macquarie Asset Management for up to $3.0 billion – larger than expected, according to UBS. EU-Mercosur trade deal to support R&D in green chemicals – Brazil’s Abiquim EU and Mercosur chemicals will greatly benefit from trade without barriers as per their free trade agreement (FTA) which will also encourage much-needed research and development (R&D) in new technologies for greener chemicals, Brazil’s chemicals producers’ trade group Abiquim said.

16-Dec-2024

SINGAPORE (ICIS)–South Korea’s benchmark stock market index was closed lower on Monday, snapping four straight days of gains, after the country’s parliament impeached President Yoon Suk Yeol over the weekend for imposing a short-lived martial law on 3 December. The KOSPI composite index slipped 0.22% to settle at 2,488.97, with shares of major petrochemical companies closing mixed. The Korean won (W) eased against the US dollar at W1,437.68 as of 08:00 GMT, weaker than the previous session’s closing of W1,435.45. The won had plunged to an almost two-year low of above W1,440 to the US dollar when Yoon declared martial law late on 3 December which lasted about six hours. South Korea’s National Assembly on 14 December voted 204-85 to impeach Yoon for imposing martial law, which plunged the country into political instability and economic uncertainty. A two-thirds majority was required to approve the motion, which was the second one filed after the first motion on 7 December failed. Yoon’s political duties have been suspended pending a Constitutional Court decision, which is expected in 180 days, on whether to re-instate or remove him from office. Prime Minister Han Duck-soo became the acting President upon Yoon’s impeachment, stating that his mission is to “swiftly stabilize the confusion in state affairs” during a Cabinet meeting. Han talked to outgoing US President Joe Biden by phone on 15 December, reassuring him that "South Korea will carry out its foreign and security policies without disruption", according to a statement from Han's office. EYES ON 2025 Separately, finance minister Choi Sang-mok on Monday said he has written a letter to financial institutions and world leaders to explain the government’s response to the recent political situation and to request their trust and support in the South Korean economy. During an emergency ministerial meeting on 15 December, strategies were heard for economic stabilization and growth in the short- and long-term. For one, the finance ministry will announce its economic policy direction for 2025 by the end of the year, along with a mid- to long-term strategy to be released in January 2025. Meanwhile, the Ministry of Trade, Industry and Energy (MOTIE) is also drafting support measures for the petrochemical industry in preparation for the Trump-led US government in January 2025, which is threatening to impose tariffs on all imported goods. The US, along with China, is a major trading partner of South Korea. South Korea’s measures are expected to take effect in Q1 2025. The country – which is a major exporter of ethylene and aromatics, such as benzene, toluene and styrene monomer (SM) – is reeling from a combination of weak external demand and overcapacity in China. (updates closing levels for index, share prices; adds details throughout) Thumbnail image: South Korean Prime Minister Han Duck-soo, who assumed office as acting president after the parliamentary impeachment of President Yoon Suk-yeol, speaks to reporters at the government complex in central Seoul, South Korea, 15 December 2024. (YONHAP/EPA-EFE/Shutterstock)

16-Dec-2024

NEW YORK (ICIS)–The American Chemistry Council (ACC) expects a 1.9% rebound in chemical volumes in 2025 after two consecutive years of declines as the US economy undergoes a soft landing and the housing market improves in the second half of the year, its chief economist said. “We do expect the Fed rate cuts to stimulate demand for durable goods and investment, and certainly loosen things up in the housing sector,” said Martha Moore, chief economist at the ACC, at a press briefing. “When the differential between the mortgage rates most people got during the pandemic years and what they are now starts to come closer together, that will hopefully increase some transactions in the housing market,” she added. The economist also sees an improvement in manufacturing and industrial production globally in 2025, which should help US exports, although trade policy is very much uncertain with the threat of tariffs by the incoming Trump administration, she noted. Yet she sees a recovery in demand for US chemicals, although a modest one, in 2025, and weighted to H2 2025 as the lag effects of the US Federal Reserve’s rate cuts take hold. Yet here there is also uncertainty on the trajectory of rate cuts, given sticky inflation. “Weakness persisted in 2024, led by specialties and basic chemicals… but next year we expect to see volume growth across all segments," Moore stated. “We’ve got good energy fundamentals here in the US and the ethane advantage persists. Capacity expansions in manufacturing from reshoring [in the US] and nearshoring [in Mexico] are expected to drive chemical sales in the years ahead,” she added, noting that Mexico is one of the US’ top trading partners. The economist sees 2024 US chemical volumes down 0.4% following a decline of 0.2% in 2023, capping off a dismal period for the industry. Volume declines in 2024 are expected to be led by specialty chemicals (-3.2%) and basic chemicals (-1.5%), offset partially by agricultural chemicals (+1.2%) and a strong gain in consumer products (+5.0%). Within US specialties, there is softness in architectural coatings and automotive chemicals, she noted. The global picture in chemicals is quite different, with a 3.8% gain in volumes expected for 2024, led by Asia Pacific (+4.8%). Europe volumes should rise 1.9% in 2024 off a very sharp decline in 2023. Looking to 2025, Moore expects world chemicals output to increase 3.1% with gains across all regions. For the overall US economy, the economist sees 2025 GDP growth to slow to 2.0% versus an expected 2.7% in 2024. She sees housing starts improving to 1.40 million in 2025 from 1.35 million in 2024, and light vehicle sales rising to 16.2 million in 2025 from 15.7 million in 2024. TRUMP ADMINISTRATION IMPACTWith the incoming Trump administration, the ACC will be closely tracking developments on regulations, transportation and tariffs. “We’ll be keeping an eye on any policy and regulatory changes, [especially] chemical management regulatory policies – things like TSCA (Toxic Substances and Control Act),” said Scott Jensen, director of Issue Communications at the ACC. “We’ve had some issues in the past few years when it comes to new and existing chemical reviews, and then of course we’ll be keeping an eye on trade and tariffs pretty closely, along with transportation issues,” he added. LOOMING DOCKWORKERS STRIKEMost immediate on the transportation and trade front is a potential US East Coast and Gulf Coast dockworkers strike on 15 January if the union and shipping companies do not reach a deal working out a dispute on the future of automation at the ports. “It’s a big deal. Those are some of the biggest ports for us to not only export chemistry but also import,” said Jensen. On 12 December, President-Elect Donald Trump backed the International Longshoremen’s Association (ILA) union and its members, saying the harm to workers far outweighs the benefit of money saved by automation. Focus article by Joseph Chang Thumbnail shows a flask used in chemistry. Image by Fotohunter.

13-Dec-2024

LONDON (ICIS)–Global crude oil markets are likely to be comfortably supplied next year despite moves by OPEC+ to hold back on easing production cuts and anticipated firmer demand, the International Energy Agency (IEA) said on Thursday. Oil demand in 2025 is expected to pick up from 840,000 barrels/day this year to 1.1 million barrels/day next year, bringing total daily consumption to 103.9 million barrels, according to the agency. The petrochemicals sector is expected to be the key driver for that uptick, with transport fuels consumption growth still constrained, and China demand still substantially slower than might have been predicted a few years earlier. Total oil supply growth is expected to increase by 1.9 million barrels/day next year, compared to a 630,000 barrels/day increase in 2024, driven by non-OPEC+ nations, which are expected to comprise 1.5 million barrels/day of the growth. The OPEC+ coalition of nations announced plans last week to hold back on easing voluntary production cuts and slow the rates at which some of the measures are phased out, in the face of continued slow demand growth. OPEC+ member states agreed to extend voluntary cuts amounting to approximately 2.2 million barrels/day through to the end of March next year, and slow the pace of the reintroduction of those volumes so that the process will run through to September 2026. Additional voluntary cuts amounting to 1.65 million barrels/day are to be held in place until the end of December 2026, OPEC added. The moves have substantially reduced the projected supply overhang for 2025, the IEA said, but demand trends still point to an ample buffer of available product. “Persistent overproduction from some OPEC+ members, robust supply growth from non-OPEC+ countries and relatively modest global oil demand growth leaves the market looking comfortably supplied in 2025,” the agency said in its monthly oil report. The US, Brazil, Canada and Guyana are expected to drive production growth next year, while OPEC+ crude output may still stand to increase if Libya, Sudan and South Sudan sustain volumes and additional capacity comes onstream in Kazakhstan, the IEA said. Crude price moves have been relatively subdued in recent months despite geopolitical tensions, with Brent crude futures averaging around $73/barrel, the IEA said, a trend that has continued into December, with midday trading prices of around $73.47 on Thursday. Despite the latest measures announced by OPEC+ and political uncertainty across parts of the globe, demand remains the big question for next year, the agency said. “The abrupt halt to Chinese oil demand growth this year – along with sharply lower increases in other notable emerging and developing economies such as Nigeria, Pakistan, Indonesia, South Africa and Argentina – has tilted consensus towards a softer outlook,” the IEA said. Thumbnail photo: An oil platform off the coast of California (Source: Shutterstock)

12-Dec-2024