Ethanol

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)–The US Department of Agriculture (USDA) is expecting increases in corn utilized for ethanol, larger exports, and lower ending stocks, while soybean supply and use projections are unchanged, according to the December World Agricultural Supply and Demand Estimate (WASDE) report. In the monthly update, the USDA said corn used to produce ethanol is raised by 50 million bushels to 5.5 billion bushels. This lift is based on the most recent data from the Grain Crushings and Co-Products Production report and weekly ethanol production data for the month of November. The agency said this data implies that corn used for ethanol during the September to November quarter was the highest since 2017. The December WASDE shows corn exports raised by 150 million bushels to 2.5 billion bushels, which the USDA said reflects the pace of sales and shipments to date. With no other use changes, corn ending stocks are reduced 200 million bushels to 1.7 billion. The season-average corn price received by producers continues to be unchanged at $4.10 per bushel. For soybeans, the supply and use projections are unchanged but the monthly update has lifted soybean oil production to 131.2 million tons, with the USDA saying it is up slightly due to an increase for cottonseed. With higher soybean oil supplies and strong export commitments to date, exports are raised 500 million pounds to 1.1 billion pounds. The December WASDE said the season-average soybean price is being forecasted at $10.20 per bushel, down $0.60 from last month. The first WASDE report of 2025 will be released on 10 January.

11-Dec-2024

HOUSTON (ICIS)–Fertilizer producer Yara announced it has started production of the first renewable ammonia in Brazil at its Cubatao Production Complex. The company said it has achieved a 75% reduction in carbon footprint, compared to the same fossil energy product, because it uses biomethane, a purified biogas that without additional effort replaces the use of natural gas. Biomethane is produced from vinasse, a sugarcane residue in the manufacture of ethanol, and filter cake, a residue from sugar production and is made available in the gas distribution network. As the main producer of ammonia in the country, Yara said its industrial complex is currently the largest consumer of natural gas in the state of Sao Paulo. “This is the result of Yara's knowledge, innovation and technology applied with a focus on decarbonization, and represents a great milestone for the national industry and, especially, for the Cubatao hub, which in addition to being a global symbol of environmental recovery, now has the potential to lead the energy transition that Brazil needs," says Daniel Hubner, Yara International vice president of industrial solutions. Yara said this is a significant step forward in building value chains based on renewable energy with nitrogen used in numerous industries but for agribusiness, the impact is enormous. “By combining this new generation of fertilizers with a lower carbon footprint with our agronomic knowledge we will bring even more value to the farmer, opening new markets and sources of revenue,” said Marcelo Altieri, Yara Brasil president. “In the coffee chain, for example, the expectation is for a reduction of up to 40% in the carbon footprint of the harvested bean.” The producer has stated its goal is to achieve carbon neutrality by 2050.

09-Dec-2024

SAO PAULO (ICIS)–Brazil's petrochemical industry needs to implement a deep restructuring if it wants to regain global competitiveness, and it can do this by shifting to renewable raw materials and increased use of natural gas, according to the CEO of Bahia state public company Bahiainveste. Paulo Guimaraes was appointed CEO of Bahiainveste and is tasked with attracting investment to Bahia state – home to Camacari, one of the country's biggest chemical production hubs. Bahiainveste, which was founded in 2015, falls under the umbrella of Bahia’s Secretariat for Economic Development, and functions as a public company with its own assets and revenues, as well as budgetary and financial autonomy. Guimaraes spoke to ICIS on the sidelines of the annual summit of the chemicals trade group Abiquim earlier in December. Although the mood at the gathering was more positive than in 2023, Guimaraes said it was best not to be complacent despite recent successes for chemicals producers in Brazil. The most significant of these has been higher import tariffs. In effect since October, they will help domestic producers increase market share. However, Brazil’s lack of competitiveness in the sector run deeper, and it should address them immediately rather than rest on its laurels, Guimaraes added. Although it may sound like an impossible task, Guimaraes said Brazil can and should compete against the US, the Middle East and China, who have sharply  increased their exports to Brazil during the last two years, hitting domestic producers’ market share. RENEWABLE FEEDSTOCKSTo turn the situation around, Guimaraes said a chemical transformation is necessary for Bahia, where the sector has faced falling competitiveness and job losses over the past two decades due to outdated facilities and a lack of modernization. "We need to look at the possibility of renewable raw materials. Within the next three years, Bahia will become an exporter of ethanol, so we will have the capacity to supply the industry with this type of raw material, for example,” said Guimaraes. The executive highlighted how Brazil's chemical industry has historically underinvested in technological innovation, focusing instead on basic petrochemicals. This strategy has left the sector vulnerable to international competition, particularly from Asia, and in the case of ethanol this is telling, he noted. "Brazil was the one who created ethanol as an automotive fuel in the late 1970s and early 1980s, but today we are producing ethanol using a technology imported from the US, because we did not understand that we needed to continue to develop the technology," he said. “This is a recurrent Brazilian feature, and we need to change it.” DOMINANT PLAYERGuimaraes went on to reflect on the dominance of polymers major Braskem, which emerged from a consolidation of several companies in the early 2000s and is in part owned by Petrobras, the state-owned energy major. These factors have resulted in Braskem – Brazil and Latin America’s largest chemical company – to be key in shaping industry development. The company's virtual monopoly in basic petrochemicals has influenced investment patterns across the sector, said Guimaraes. The US and Brazil are the Americas’ two largest chemicals producers. In the former, a significant shift occurred in 2004 when chemicals producers began utilizing shale gas, making natural gas-based chemistry more competitive than traditional crude oil-derived, naphtha-based processes. Brazil failed to adapt its industrial strategy accordingly. Moreover, the Brazilian chemical sector's challenges are further complicated by the country's energy policies. Following an energy crisis in 2001, the government implemented an emergency thermoelectric program that prioritized gas use for electricity generation over industrial applications. "Natural gas began to rise in price because Petrobras began to see it as just another product that needed to be as profitable as oil. And it stopped being used as a lever for the country's growth," said Guimaraes. DUMPING CONCERNSGuimaraes said growing protectionist moves around the world will only increase further over the coming years as countries face significant concerns about dumping practices which have affected their manufacturing sectors, chemicals included. Guimaraes said the tire industry was a good example. "Today, the tires that are entering Brazil are entering at a price lower than the price of the raw material. And the raw material is a commodity," he said. He noted that domestic Brazilian tire production has fallen between 40-60%, and this occurred even though Brazilian manufacturers use 70% clean energy in their production processes, which in theory should have given them an edge in a world increasingly worried about climate change. The threat of climate change could also give way to opportunities of a new, green industry. Looking ahead, Guimaraes said he can envisage significant opportunities in green hydrogen and sustainable aviation fuel (SAF) production in Brazil. However, once again, he advocated for domestic value addition rather than raw material exports. "Producing hydrogen and exporting hydrogen is like exporting water, wind and sun. Brazil should instead focus on manufacturing finished products using those resources. For instance, rather than exporting hydrogen and iron ore separately, we could produce green steel domestically instead,” said Guimaraes. “We have the advantages of a country where renewable energy production is easy, and we have plenty of available land for non-food crops: we would be able to plant crops to produce chemical feedstocks without competing with food production. “For example: I plant corn, and from the corn I produce ethanol and animal feed. What is the energy I use for this? CO2 or the biomass that the cattle generate. So, the animal feed would feed the cattle that would feed this energy." Front page picture: Bahia’s Camacari petrochemicals hub Picture source: Camacari Town Hall (Camara Municipal de Camacari) Interview article by Jonathan Lopez

09-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

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

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

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US were largely stable this week but exporters are being urged to book outgoing shipments 4-6 weeks in advance as labor issues between union dock workers and US Gulf and East Coast ports stalled. For US companies working to export excess volumes to balance year-end inventories, those shipments need to be going out this week. For importers, rates from Asia to the US West Coast fell by 2% and are down by almost 3% over the past two weeks, according to supply chain advisors Drewry and as shown in the following chart. The chart also shows rates from Asia to New York were largely stable, down by 0.20% and by 0.36% over the past two weeks. Global average rates held steady at around $3,440/FEU (40-foot equivalent unit), as shown in the following chart. With the breakdown in negotiations between the US Maritime Alliance (USMX), representing the ports, and the International Longshoremen’s Association (ILA), representing the dock workers, and with the expectation of significant tariff increases under the administration of President-elect Donald Trump, analysts expect a surge of imports over the last few weeks of the year. The National Retail Federation (NRF) has revised its forecast for the rest of the year on the developments. Ports have not yet reported October’s numbers, but the NRF/Hackett Associates Global Port Tracker projected the month at 2.13 million TEU (20-foot equivalent units), up 3.7% year on year. November is forecast at 2.15 million TEU, up 13.6% year on year, and December at 1.99 million TEU, up 6.1%. That would bring 2024 to 25.3 million TEU, up 13.6% from 2023. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. CANADA PORT LABOR ISSUES The Port of Montreal will resume operations on Saturday, 16 November, at 07:00 local time, following labor disruptions that started on 31 October and a subsequent lockout of about 1,200 dock workers. The Port of Vancouver and other Canadian west coast ports resumed operations on Thursday after a strike and lockout of about 730 foremen who supervise more than 7,000 dock workers that began on 4 November. The Port of Vancouver is Canada’s largest port by far. More than Canadian dollar (C$) 22 million ($15.7 million) of chemistry and plastic products was traded through Vancouver and other west coast ports each day in 2023, for a total of C$8 billion for the year, according to the Chemistry Industry Association of Canada (CIAC). LIQUID CHEM TANKER RATES STABLE US chemical tanker spot rates were overall steady this week for most trade lanes, while vessel demand continues to remain soft for various routes. One exception is rates from the USG to the Mediterranean, which surged as interest to this region remains steady. There was an uptick on cargoes from various regions to Montreal as shippers work to deliver and pick up material before the ice season closes for winter transit and soon will require ice class vessels. The US Gulf to ARA remains soft and solid for contractual cargoes and as CPP tonnage continues to participate in the chemical sector. If it persists it could continue to pressure to the market even further. Similarly, that situation exists for volumes on the USG to the Caribbean and South America trade lanes. From the USG to these regions, space among regular carriers remains available, due to a lack of interest. However, for the USG to Asia spot volumes continue to be weak as there seems to be plenty of prompt space available. Mainly parcels of monoethylene glycols (MEG), ethanol and methanol to this region seems to have provided any support to the weak market. Additionally, ethanol, glycols and caustic soda were seen in the market in various directions. Bunker prices remain stable mainly due to the continued the volatility in energy prices week on week. PANAMA CANAL MAINTENANCE The West Lane of Miraflores Locks will be out of service due to concrete maintenance on the West Southend approach wall for about 48 hours from early on 23 November until late on 24 November, according to the Panama Canal Authority (PCA). The number of slots available to super and regular vessels will be reduced because of the maintenance. Once the maintenance is complete, the 20 slots for supers and the six slots for regular vessels will be reinstated for booking dates beginning 25 November, the PCA said. As of September, the PCA has 36 slots per day after limiting transits late in 2023 because of a severe drought in the region. With additional reporting by Kevin Callahan and Stefan Baumgarten

15-Nov-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 1 November. Brazil’s chemicals trade deficit keeps rising; producers entrust recovery to higher tariffsBrazilian chemicals producers’ market share continued to be threatened in the January-September period, with the industry’s trade deficit rising to $36.2 billion, up 1% year on year, the country’s chemicals producers trade group Abiquim said this week. Brazil’s chemicals output up 2% in September, plastics and rubber up 6.5%Brazil’s chemicals output rose by 2% in September, year on year, although it fell compared with August by 2.7%, the country’s statistics office IBGE said on Friday. Brazil's manufacturing keeps momentum in October, export orders robustBrazil's petrochemicals-intensive manufacturing sectors continued expanding in October, the tenth consecutive month of growth, analysts at S&P Global said on Friday. Mexico’s manufacturing recovers slightly in October but poor demand keeps it contractionMexico's petrochemicals-intensive manufacturing sectors continued to contract in October, although it slightly improved its performance month on month, analysts at S&P Global said on Friday. Colombia’s manufacturing output booms in October, central bank cuts rates to 9.75%Colombia's petrochemicals-intensive manufacturing sectors made a decisive return to growth in October on the back of a healthy increase in new business, analysts at S&P Global said on Friday. Brazil’s chemical producer prices up nearly 11% in SeptemberBrazil’s chemicals producer prices rose in September by nearly 11%, year on year, as the sector recovers, the country’s statistics office IBGE said this week. Mexico’s GDP recovers strongly in Q3, more rate cuts dependent on US election – analystsMexico’s GDP grew by 1% in Q3, quarter on quarter, confirming the economy “pulled out of the slump” of the first half of the year, analysts said on Wednesday. Brazil's Braskem Q3 resin sales down 2% due to higher PE and PVC stocksResin sales in Braskem's domestic market dropped by 2% in Q3 year on year, mainly due to the higher levels of polyethylene (PE) and polyvinyl chloride (PVC) stocks in the transformation chain, the Brazilian petrochemicals major said on Wednesday in its quarterly production and sales report. Brazil Petrobras to continue advancing nitrogen project in Tres LagoasBrazil producer Petrobras announced that its board of directors has decided to continue implementing the nitrogen fertilizer unit (UFN-III), located in Tres Lagoas, Mato Grosso do Sul. PRICINGDomestic, international PE prices steady to lower on falling US export offersDomestic, international polyethylene (PE) prices were assessed as steady to lower across Latin American countries on the back of competitive offers from the US. Domestic PP prices fall in Colombia, Mexico on lower feedstocksDomestic polypropylene (PP) prices fell in Colombia and Mexico tracking lower feedstock costs. US October propylene contracts settled at a decrease on falling spot prices. Brazil hydrous ethanol sees small rise, anhydrous stays steadyPrices for hydrous ethanol saw a slight increase at the lower end of the range, with demand demonstrating stable sales in Q4. Chile and Colombia PET CFR prices decline amid Asia price reductionsChile and Colombia's CFR prices fell on the lower end of the range reflecting the recent price reduction in Asia.

04-Nov-2024

HOUSTON (ICIS)–Shipping container rates from east Asia and China to the US West Coast rose this week, reversing a trend that saw rates fall by almost 36% from July, as late-season holiday demand emerged. Many importers had pulled holiday volumes early to avoid any problems related to a US East Coast dock workers strike that was set to begin on 1 October. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said front-loading of volumes to the East Coast in September may have been stronger than to the West Coast due to the rush to beat the 1 October strike deadline. Supply chain advisors Drewry has Shanghai-USWC rates edging higher by less than 1% and said of the increase in spot rates ex-China that it expects this trend to continue as the Christmas rush intensifies. Drewry’s World Container Index showed average global rates rising, as shown in the following chart. Rates from Shanghai to Europe rose more dramatically than those from Shanghai to the US, as shown in the following chart from Drewry. Levine said the stronger front loading of volumes to the East Coast could explain the sharper drop of East Coast rates over the last few weeks, as well as the anomaly that saw East Coast rates fall below West Coast rates. Rates to the East Coast are typically about $1,000/FEU (40-foot equivalent units) higher than to the West Coast. Drewry still has East Coast rates about $400/FEU higher than West Coast rates. Levine noted that rates to both coasts are still $1,000-1,500/FEU above their April lows. 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. EAST COAST LABOR UPDATE Union dock workers and US East Coast port operators will resume negotiations on a new master agreement in November, according to a joint statement from both parties. The International Longshoremen’s Association (ILA), representing the dock workers, and the United States Maritime Alliance (USMX), which represents the ports, reached a tentative agreement on 3 October that ended a three-day strike. The strike was paused until 15 January after parties agreed on the salary portion of the agreement, essentially meeting in the middle. Levine said port automation remains the major sticking point, and if there is no progress in the coming weeks anxious shippers may start increasing orders again ahead of another possible strike. CANADA WEST COAST PORT LABOR UNREST The British Columbia Maritime Employers Association (BCMEA), which represents ports on Canada’s west coast, has issued formal notice of its intention to lock out port workers coastwide, starting Monday, 4 November at 8:00 local time, it said on Friday. On Canada’s east coast, dock workers at the Port of Montreal on Thursday, 31 October, went on an indefinite strike at two of the port’s four container terminals. The labor dispute is about automation at Dubai Ports World (Canada), as well as retirement benefits. The parties have been negotiating a new collective labor deal since the last one expired in March 2023. LIQUID CHEM TANKER RATES STABLE US chemical tanker freight rates were largely unchanged this week for most trade lanes, while vessel demand continues to be soft for various routes. The USG to ARA remains soft and solid for contractual cargoes and any additional available CPP tonnage could continue to pressure the market even further. Similarly, that situation exists for volumes on the USG to the Caribbean and South America trade lanes. From the USG to these regions, space among regular carriers remains available, due to a lack of interest. However, for the USG to Asia spot volumes continues to be weak as there seems to be plenty of prompt space available.  Mainly parcels of methanol to China seems to have provided any support to the weak market. Additionally, ethanol, glycols and caustic soda were seen in the market in various directions. With additional reporting by Stefan Baumgarten and Kevin Callahan Visit the ICIS Logistics – impact on chemicals and energy topic page

01-Nov-2024