Caustic soda

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US surged this week as importers pulled volumes forward ahead of the possible restart of the US Gulf and East Coast port strike and anticipated tariff hikes under the incoming Trump Administration. Rates from Asia to both US coasts had been trending steadily lower since July. Rates from Shanghai to New York began stabilizing in October before surging by almost 17% this week, according to data from supply chain advisors Drewry. Rates from Shanghai to Los Angeles were falling steadily before jumping by almost 26% this week, as shown in the following chart from Drewry. Drewry has global average rates up by 8% this week, as shown in its World Container Index. Drewry expects an increase in rates on the transpacific trade in the coming week, driven by front-loading ahead of the looming port strike and possible tariffs. Rates at online freight shipping marketplace and platform provider Freightos also showed significant increases to both coasts. Judah Levine, head of research at Freightos, suggested that the pull-forward for the pending strike is largely over as the pre-15 January arrival window has closed. Levine thinks a strike – or at least a prolonged one – is unlikely now that President-elect Trump has backed the union in the dispute. But the anticipation of increased tariffs is still driving some unseasonal volume strength, Levine said. 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 TANKER RATES STABLE Overall, US chemical tanker freight rates were unchanged this week for most trade lanes ex-USG. For the USG to ARA, both spot cargoes and contract of affreightment (COA) nominations to northwest Europe took a slight dip this week, with minimal opportunities quoted but remained relatively flat week over week. COA volumes for January are still pending so it is not clear how much space will be available, but sentiment is that contract business will be strong, making spot space harder to find. Along the USG to Asia route, there was a bit more activity this week with January base oils, ethanol and vegoil requirements being quoted out in the market. The January chemical COAs are showing healthy levels, and most regulars are reporting that space is currently tight on paper. Most market participants expect rates to remain steady for the balance of the year. COA nominations are strong on the USG-Brazil trade lane with still some space available for the end of December. However, several traders were in the market with 10,000 tonnes of caustic soda ex-Point Comfort to Santos for loading on prompt dates. So far, no fixture has been reported yet, leaving this market overall quiet. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. Additional reporting by Kevin Callahan Thumbnail image shows a container ship. Photo by Shutterstock

20-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

HOUSTON (ICIS)–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. Dow plans to shut down that PO unit at the end of 2025, and those plans prompted Olin to close the diaphragm-grade chloralkali capacity that serves the Dow facility. Olin's is restricting the shutdown to capacity that relies on asbestos-based technology. US regulators seek to end the use of asbestos in the chloralkali industry. The amount of diaphragm-grade chloralkali capacity that Olin plans to shut down at Freeport amounts to 450,000 electrochemical units (ECUs), according to the company. Olin already has shut down its diaphragm-grade chloralkali capacity in McIntosh, Alabama. It plans to transition its chloralkali capacity in Plaquemine, Louisiana, to non-asbestos-based technology, the company said. Chloralkali units produce caustic soda and chlorine. Thumbnail shows salt, which is used to make caustic soda and chlorine. Image by Alessandra Sarti/imageBROKER/Shutterstock (

12-Dec-2024

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US were flat to softer this week while global average rates rose by 6%, but the looming strike at US Gulf and East Coast ports could put upward pressure on rates in the coming week. Rates from supply chain advisors Drewry showed Shanghai-New York rates fell slightly to $5,160 from $5,182, while rates from Shanghai to Los Angeles plunged by more than 12%, as shown in the following chart. The previous chart also shows the sharp increases in rates from Shanghai to Rotterdam and Genoa, which contributed to the global average increase as shown in the following chart. Drewry expects an increase in rates on the Transpacific trade in the coming week due to the looming ILA (International Longshoremen’s Association) port strike in January 2025 and the anticipated rush to ship goods before the strike begins. The 15 January deadline for finalizing a new labor agreement between unionized dock workers at US Gulf and East Coast ports and the negotiating entity for the ports is nearing with no clear progress on a key remaining issue – automation. Rates at online freight shipping marketplace and platform provider Freightos showed a sharp increase on the Asia-NY trade lane and a 4% decrease from Asia-LA. Rates at Freightos are higher than rates at Drewry. Judah Levine, head of research at Freightos, said the increases on Asia-NY are because of importers again frontloading shipments ahead of a possible strike and to beat tariffs proposed by the incoming Trump administration. Some carriers have already begun introducing general rate increases (GRIs) to try and push rates higher. Levine said the window to move shipments from the East Coast to the West Coast ahead of a possible strike is closing, but many retailers are sitting on significant inventories from pulling forward shipments ahead of the original 1 October strike deadline. “These factors may make early December rate increases difficult to sustain, though prices could increase later in the month or early in January ahead of Lunar New Year,” Levine said. 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 TANKER RATES Overall, the US chemical tanker freight rates were unchanged this week for several trade lanes, except for the USG-Asia trade lane as spot tonnage remains tight. This all-basis limited spot activity to most regions and as COA nominations are taking longer than usual for the regular vessel owners. They have tried to delay the sailings but there has been very little spot space in the market leaving no other options for full cargoes and in turn impacting spot rates. MEG, ethanol and styrene still are being seen quoted in the market from various traders, for early January loadings to Asia. Eastbound space had not yet been fully absorbed despite the few fresh inquiries for small specialty parcels stemming from USG bound for Antwerp, most owners waiting for full contract nominations. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. PANAMA CANAL Fiscal Year 2024 revenue rose from 2023, the Panama Canal Authority said this week even after having to reduce crossings for part of the year because of a severe drought. The Authority said a noticeable impact from the drought was a decrease in deep draft transits, which fell by 21%. Despite the arrival of the rainy season, the challenge of water for Panama and the Panama Canal remains and serves as a reminder that climate change and its effects are a reality requiring immediate attention and concrete action. Potential solutions include the identification of alternative sources of water from the 51 watersheds and lakes in Panama, along with projects that can increase storage capacity to ensure water availability for the entire Panamanian population and the Canal’s operation, thereby ensuring its long-term sustainability. At the same time, the Panama Canal is exploring additional short- and long-term solutions that can optimize the use and storage of water at the Canal for the benefit of both the local population and its operations. Additional reporting by Kevin Callahan Thumbnail image shows a container ship. Photo by Shutterstock

06-Dec-2024

SINGAPORE (ICIS)–Days before the shock declaration of martial law in South Korea by President Yoon Suk-yeol, political wranglings stalled the 2025 budget deliberations of Asia’s fourth-biggest economy. Opposition DPK wants heavy cut in 2025 national budget Impeachment looms for President Yoon No impact on petrochemical operations/trades “Tensions between the ruling PPP [People Power Party] and main opposition Democratic Party of Korea (DPK) have escalated as both sides have been unable to come to a consensus on the budget,” according to BMI Country Risk & Industry Research, a unit of Fitch Solutions Group in a note on Wednesday. DPK has proposed heavy cuts – to the tune of won (W) 4.1 trillion ($2.9 billion) – to the Yoon administration’s proposed budget of W677.4 trillion for next year, which represents a 3.2% increase from 2023. “As things stand, Yoon’s proposed 2025 budget … faces the risk of being watered down to KRW673.3trn amid strong opposition from the DPK which holds a parliamentary majority,” BMI stated. QUITE AN UNEXPECTED MOVE Most South Koreans, including players in the petrochemical industry, like the rest of the world, were baffled at Yoon’s declaration of emergency martial law late on 3 December. The last time the highly industrialized country in Asia faced martial law was in 1979, and no recent developments in the geopolitical and financial sectors of the country indicated that such a drastic measure would be taken. At close to midnight, Yoon had declared martial law – which meant military rule and curbs on civil rights – on national television noting that it was meant to crack down on pro-North Korean forces and protect the constitutional order in the country. "Martial law was quite surprising for us to hear because it hasn't happened in the last 40 years," said a soda ash distributor. The declaration of martial law and its withdrawal hours later has thrown South Korea into political instability. It was highly disruptive for market sentiment that for a time, suspension of trading was mulled, but was eventually called off when the martial law was rescinded about six hours after it was declared. South Korea’s Ministry of Finance and Economy and the Bank of Korea assuaged market fears of disruption by offering “unlimited liquidity support” to ensure market stability, immediately after the martial law declaration. The won weakened near two-year lows against the US dollar on 3 December at around W1,440 but recovered to around W1,412 levels as of Wednesday afternoon. The benchmark KOSPI composite index closed off lows at 2,464.00, down 1.44% from the previous day, after falling nearly 2% in intraday trade. “For now, we expect limited implications for the economy and financial markets as the Bank of Korea and the Ministry of Finance have responded swiftly by reassuring investors,” BMI said. “Notably, the central bank committed to boosting short-term liquidity and enacting measures to stabilise the FX [foreign exchange] markets, which aligns with our view that risks around the South Korean won, should remain contained for now,” it added. The central bank held an emergency monetary policy meeting on Wednesday morning, with the Monetary Board deciding “to keep all options open and to actively take market stabilization measures until markets are fully stabilized”. In late November, the BoK issued its second interest rate cut in as many months to prop up the economy, while trimming its GDP growth forecasts for this year to 2.2%, and for 2025 to 1.9%. In Q3, the country's GDP growth decelerated to 1.5% from a 2.3% pace set in Q2. The South Korean economy is expected to face added pressure next year amid US threats to impose tariffs on all imported goods. Like most of Asia, the country is heavily reliant on exports, with China and the US as its biggest trade partners. South Korea's export growth in November weakened to 1.4% year-on-year to $56.4 billion, while imports shrank by 2.4% to $50.7 billion, indicating domestic weakness. YOON’S FUTURE UNCERTAIN Calls for Yoon’s resignation is mounting, with lawmakers from DPK saying that if he does not resign immediately, steps will be taken to have him impeached. “We anticipate heightened political uncertainty in the near term. Yoon is now under intense pressure to resign. If he does not, we expect that it is only a matter of time before he is impeached,” BMI said. “If so, we believe Prime Minister Han Duck-soo will step in as interim leader, paving the way for elections to be held within 60 days, in accordance with the constitution,” it added. According to Korean news agency Yonhap, opposition parties – DPK and five others, including the Rebuilding Korea Party and Reform Party, submitted on Wednesday afternoon a motion to impeach President Yoon to the National Assembly. The motion – which was signed by 190 opposition lawmakers and one independent lawmaker, with no support from any ruling party lawmakers – will be reported to a parliamentary plenary session on 5 December and then put to a vote on either 6 December or 7 December. South Korea’s law requires that an impeachment motion be put to a vote between 24 and 72 hours after the motion is reported to a plenary session, Yonhap said. Yoon, an inexperienced politician, became the 20th president of the country in May 2022 and is currently serving the third of his five years of office. Previously, he was South Korea's chief prosecutor. In its note, BMI noted that PPP leader Han Dong-hoon had urged Yoon to explain his decision and to dismiss defense minister Kim Yong-hyun, who advised the president to declare martial law “even as the finance and foreign ministers advised against it”. “The silver lining we think is that the swift reversal of the martial law underscores the resilience of South Korea’s institutions,” it said. NO IMPACT ON PETROCHEMICAL TRADESPlayers in the petrochemical industry are monitoring the political developments but noted no immediate impact on the commodities markets. "Politically, [it is] still unstable as the President is getting pressure to resign," a source at a phenol/acetone producer said. South Korea is a major exporter of ethylene, as well as aromatics such as benzene, toluene and styrene monomer (SM). "At this moment the situation has settled down, but we'll see how the government will respond to the issue,” the soda ash distributor said. “From the industrial side there is no huge impact because plants/factories are always running at full capacity so now we don't see any impact," he said. "But long-term impact, we'll need to see how other foreign companies and assets may move out of South Korea," the distributor added. For the time being, players are more pre-occupied with unsteady port operations in Daesan because of heavy winds which are affecting trades and cargo deliveries. Meanwhile, South Korea's petrochemical industry has its own troubles stemming from Asia's overcapacity. In the case of of major player Lotte Chemical, which swung into a net loss of W514 billion in Q3 2024, the company is making big changes to its  portfolio, selling or closing commodities businesses as it refocuses on higher margin specialties. South Korean industries, including chemicals, rely heavily on exports to China, whose self-sufficiency has grown over the years. Insight article by Pearl Bantillo ($1 = W1,414) Additional reporting by Fanny Zhang, Jonathan Chou, Evangeline Cheung, Helen Lee, Shannen Ng, Josh Quah and Clive Ong

04-Dec-2024

HOUSTON (ICIS)–Global average container rates ticked lower last week, along with rates from Shanghai to the US West Coast, but rates from Asia-New York held steady during what is typically the slow season for transpacific ocean freight. Shipping analysts said rates remain elevated for several reasons, most significantly the frontloading of imports ahead of possible renewed labor strife at US Gulf and East Coast ports. The possible implementation of new tariffs proposed by the incoming Trump administration is also keeping upward pressure on rates. Global average rates fell by 2% for the week ended 29 November, as shown in the following chart from supply chain advisors Drewry. The following chart from Drewry shows the rates from Asia to both US coasts. Drewry expects spot rates to be relatively stable this week. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said inland truck and rail rates could also face upward pressure as tariffs aimed specifically at Canada and Mexico could lead to increased cross-border volumes. Levine said congestion remains minimal at US ports, including the main West Coast port of Los Angeles/Long Beach. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said container ship traffic through the port continues to be steady with 67 container ships enroute and 12 scheduled to arrive in the next three days. 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 RATES STEADY Overall, US chemical tanker freight rates were largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane, as that market picked up this week following activity during the APLA conference in Colombia. Part space has limited availability as most owners are awaiting contract of affreightment (COA) nominations. The USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market. Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh enquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm. The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable. Additional reporting by Kevin Callahan

02-Dec-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 29 November. Europe methanol supply shortages worsen for December, prices at 2022 highs Europe's methanol market is expected to tighten further as production outages in US and Europe apply pressure on supply. India’s Adani Group access to foreign capital at risk amid US bribery charges India’s Adani Group may run into difficulty accessing external funding and may see an increase in its capital costs as global rating agencies have downgraded the outlook for several of the group’s companies, citing escalating legal and governance risks. Soda ash annual contract talks progress as players prepare for another challenging year Soda ash demand in November is overall stable in Europe, but the lack of any pick-up has prompted some furnace closures at glass manufacturers, although some plants that were shut last year may restart next year. Deloitte expects more chem M&A as industry remains in flux The chemical industry is entering the new year amid an especially large amount of flux, with China receding as a demand driver, Europe contending with plant shutdowns and producers rearranging businesses through mergers and acquisitions (M&A). Europe PE/PP spot prices stable to soft as year ends with a limp Polyethylene (PE) and polypropylene (PP) spot prices were stable to lower in the week to 22 November, with limited business done.

02-Dec-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 22 November. NEWS APLA '24: LatAm chems should prepare for rebalancing to take place only from 2030 onwards – APLALatin American chemicals producers should be prepared to face a prolonged downturn which could extend to 2030 as newer capacities globally keep coming online, according to the director general at the Latin American Petrochemical and Chemical Association (APLA). APLA '24: Mexico's Cancun to host APLA 2025Next year's annual summit of the Latin American Petrochemical and Chemical Association (APLA) will take place in Cancun, Mexico, the organizers confirmed on Thursday. APLA '24: Moeve to advance sustainable detergent materials – execMoeve Chemicals, previously known as Cepsa Chemicals, is pushing forward with sustainable innovations in the detergent industry, particularly through its linear alkyl benzene (LAB) business, according to an executive at the producer. APLA ’24: Anastacio sees Mexico as next major market to gain market share – CEOBrazil-based chemical distributor Quimica Anastacio is making a major push into Mexico, adding to its strong presence in Brazil and Argentina, its CEO said. APLA '24: Women face persistent workplace and travel safety challenges – chems execsA discussion among industry leaders has highlighted ongoing challenges women face in workplace equality and business travel safety, with experts warning that salary parity remains decades away. APLA '24: Latin America poised for strategic growth amid global shifts – economistLatin America stands at a crucial turning point as global economic and political dynamics shift, with significant opportunities in energy, food security and technological advancement, an economist said on Tuesday. APLA ’24: Vaca Muerta to double Argentina oil and gas production by 2030, allow for new chem projects – YPFGrowing production in Argentina’s Vaca Muerta shale formation should double oil and gas volumes in the country by 2030, enough for new petrochemicals projects, as rising production in Vaca Muerta more than offsets declines in conventional production, an executive at energy producer YPF said. APLA ’24: Brenntag aims to expand footprint in Brazil and Mexico via M&A, organic growth – execGermany-based chemical distributor Brenntag will focus on expanding its business in Brazil and Mexico in particular in Latin America through acquisitions and organic growth, said the head of its Latin American industrial chemicals business. APLA '24: Colombia’s plastics grapple with new regulations, Chinese competition – Grupo AlmatiaThe Colombian plastics industry faces significant challenges as it navigates new environmental regulations and increasing competition from Chinese imports, the CEO at plastics distributor Grupo Almatia said. APLA ’24: Logistics more challenging to plan with increasing external threats – panel Logistics are getting even more challenging, as climate change, armed conflicts and tariffs are making planning difficult, shipping experts said on a panel discussion at the Latin American Petrochemical and Chemical Association (APLA) Annual Meeting. APLA '24: LatAm petchem woes remain, some help to come from nascent protectionist eraLatin American petrochemicals profitability, even the survival of some domestic producers, will hardly come from oversupplied markets facing poor demand but governments’ helping hand with protectionist measures. Unigel seeks US court recognition of Brazilian reorganization planUnigel filed a court proceeding that seeks US recognition of its reorganization plans, which had been approved in Brazil, the Brazilian styrenics and acrylics producer said on Friday. PRICINGAPLA '24: LatAm PP international prices fall in Chile, Peru on competitive Asian offersInternational polypropylene (PP) prices dropped in Chile and Peru due to competitive Asian offers. Prices remained unchanged this week in other Latin American (LatAm) countries. APLA '24: Most LatAm PE domestic, international prices steady to lower on weak demand, cheaper importsMost domestic and international polyethylene (PE) prices were assessed as steady to lower across Latin American countries this week on the back of weak demand and competitive offers from abroad. APLA '24: Brazil’s caustic soda supply strains; PVC market sees increased competitionIn Brazil’s caustic soda market, a combination of planned and unplanned maintenance events in Q4 2024 has intensified supply constraints, exerting potential pressure on prices. APLA '24: Latin America’s PE, PP demand expected weak to year-end, 2025Persistent poor demand for polyethylene (PE) and polypropylene (PP) across Latin American economies is expected to stay for the remaining of the year and into 2025, with no improvement signs on the horizon.

25-Nov-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 22 November. Bearish sentiment in Asian naphtha market likely short-lived By Li Peng Seng 18-Nov-24 11:46 SINGAPORE (ICIS)–Asia's naphtha market sentiment nosedived last week amid bearish pressures, but cracker expansion in South Korea and gasoline demand ahead of a festive season will likely buoy up demand. Thai PTTGC plans $840 million 5-year capex; focus on Allnex growth By Jonathan Yee 18-Nov-24 17:12 SINGAPORE (ICIS)–Thai chemicals producer PTT Global Chemical plans capital expenditure (capex) of $840 million in the next five years, more than 78% of which will be invested to grow its Germany-based specialty chemicals subsidiary Allnex. INSIGHT: Most Asia petrochemical markets to post Nov losses By Lina Xu 18-Nov-24 15:55 SINGAPORE (ICIS)–Most petrochemical markets in Asia are expected to register losses in November on slowing demand as the year draws to a close. China's PC market faces ongoing supply pressure By Li Peng Seng 19-Nov-24 11:42 SINGAPORE (ICIS)–China's polycarbonate (PC) import market is likely to remain under pressure due to persistent oversupply, trade conflicts and geopolitical uncertainties. Asia caustic soda unlikely to see immediate impact from China’s removal of aluminium export tax rebates By Jonathan Chou 20-Nov-24 12:30 SINGAPORE (ICIS)–China's announcement to end export tax rebates on aluminium effective on 1 December may have limited long-term changes in caustic soda’s demand and supply conditions in Asia. SE Asia bottlenecks disrupt regional chemical tanker operations By Hwee Hwee Tan 21-Nov-24 11:57 SINGAPORE (ICIS)–Persistent delays in tanker operations in southeast Asia are snowballing into wider vessel schedule disruptions across intra-Asia trade lanes. More stringent regulations to hamper Asia’s rPET exports By Arianne Perez 22-Nov-24 14:20 SINGAPORE (ICIS)–Major producers of high-value recycled polyethylene terephthalate (rPET) flakes and pellets from Asia continue to aim for a growing market share in premium markets including the Americas and Europe.

25-Nov-2024

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US East Coast were largely flat and rates to the West Coast fell by 5%, and the Panama Canal will begin allowing swapping of slots on 1 January, highlighting shipping news this week. 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), which are shipped in pellets. They also transport liquid chemicals in isotanks. Global average rates ticked lower by 1% this week, according to supply chain advisors Drewry and as shown in the following chart. Rates from Asia to New York were largely stable on the week while rates from Shanghai to Los Angeles fell by 5%, as shown in the following chart. Drewry expects spot rates to remain stable over the coming week. Drewry’s assessment has rates to the East Coast about $700/40-foot equivalent units (FEU) higher than to the West Coast. Online freight shipping marketplace and platform provider Freightos has rates to both coasts nearly at parity slightly higher than Drewry’s East Coast rate. Judah Levine, head of research at Freightos, said transpacific ocean rates are about 35%-45% below peak levels seen in July now that the peak season has ended. He said upward pressure remains from stronger than normal demand as some shippers are frontloading volumes ahead of expected tariff increases from the new administration as well as the possibility of another work stoppage at US East Coast ports as the 15 January deadline to finalize a new collective bargaining agreement nears. Levine noted that Lunar New Year starts at the end of January this year, which is earlier than usual. The unusual parity of transpacific rates to both coasts may point to some shift of demand to the West Coast due to January strike concerns, Levine said. LIQUID TANKER RATES – USG-BRAZIL TICKS HIGHER Overall, US chemical tanker freight rates was largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane as that market picked up this week following activity during the APLA conference in Columbia. Part space has limited availability as most owners are awaiting COA nominations. USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market. Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh inquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm. The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable. Bunker prices rose, mainly due to the increase in energy prices following continued geopolitical concerns. PANAMA CANAL TO ALLOW SWAPPING OF SLOTS The Panama Canal will begin allowing swapping and substitutions of booking slots between container vessels with some conditions beginning 1 January, the Panama Canal Authority (PCA) said. The conditions are that both vessels must be the same type and must belong to the containership segment, both vessels must belong to the same vessel classification (Neopanamax, Super or Regular), and both vessels must be transiting in the same direction. Also, for swaps, vessels must have similar transit restrictions, and for substitutions, the new vessel must have similar or lesser transit restrictions, both vessel operators must belong to services under the same cooperative working agreement (Global Alliances or VSA), and the booking date of the vessels involved in the swap or substitution must be within the effective date of the services and of the Alliance or VSA. All other Long Term Slot Allocation method (LoTSA) and ordinary booking slots rules remain in effect. Additional reporting by Kevin Callahan

22-Nov-2024