Polyvinyl chloride (PVC)

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: As delegates gather for this year’s Gulf Petrochemicals and Chemicals Association (GPCA) in Oman, front-of-mind will, of course, be the global trading environment. Is the world willing or able to continue to absorb China’s manufacturing surpluses, including in chemicals and polymers as today’s post discusses? The ICIS data suggest there is nothing new in China dominating global capacities in polymers such as polyester fibres and PVC (although as China moves up the chemicals value chains, its dominance of EVA  and polycarbonate is new). But historic context is everything. In 2001-2021, trade tensions between the rest of the world and China were not where they are today. The world felt more able to accommodate China’s dominance of chemicals and other manufacturing value chains. We, of course, need to consider the implications of Donald Trump’s election victory and the EU’s growing concern over what it sees as Chinese overcapacity. A 29 November South China Morning Post article wrote as follows: The EU’s civil service [last week] flew officials and experts in, at von der Leyen’s personal invitation, from around Europe and the United States for a full day devoted to Chinese overcapacity – an issue former trade chief Valdis Dombrovskis described as a “significant threat”. “From steel and solar panels to shipbuilding and the automotive industry – this is not an abstract challenge, it is reality. And for many businesses, both in Europe and within our partners, it is an existential challenge,” Dombrovskis said. You can talk as much as you like about cost-per-tonne economics and about feedstock advantage, but it won’t get you very far in this post-Chemicals Supercycle world. Today’s blog is another example of why we need to broaden our analysis out to include a wide range of big picture factors that will shape the global chemicals industry. In this case, you need to build a matrix of countries, companies and chemicals products and then determine scenarios for the effect on all three of a much more uncertain global trading environment. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

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 15 November. INSIGHT: India’s ADD findings on PVC have potential to reshape regional flows in wider Asia By Jonathan Chou 11-Nov-24 11:00 SINGAPORE (ICIS)–Asia's polyvinyl chloride (PVC) market players are assessing the potential ramifications following preliminary findings on India's PVC imports released by the country's Directorate General of Trade Remedies (DGTR). Asia petrochemical shares tumble as China stimulus disappoints By Jonathan Yee 11-Nov-24 15:04 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Monday as China’s much-awaited stimulus measures failed to impress markets, while the US is likely to put up more trade barriers against the Asian giant following the re-election of Donald Trump as president. Asia toluene markets slump on waning regional demand By Melanie Wee 12-Nov-24 11:47 SINGAPORE (ICIS)–Asia’s toluene spot markets are being weighed down by a combination of burgeoning supply and lacklustre demand, at a time when arbitrage economics to divert material to the US were unviable. Asia petrochemical shares fall on strong US dollar, uncertain trade policies By Nurluqman Suratman 13-Nov-24 14:07 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia extended losses on Wednesday, tracking weakness in regional bourses, amid a strong US dollar and uncertainty over trade policies of US President-elect Donald Trump which could fuel inflation. Shell Singapore site divestment deal to be completed in Q1 2025 By Nurluqman Suratman 14-Nov-24 11:41 SINGAPORE (ICIS)–Shell expects the deal to sell its energy and chemicals park in Singapore to Chandra Asri and Glencore will be completed by the first quarter of 2025, a company spokesperson said on Thursday. INSIGHT: China may accelerate PP exports amid intensified supply and demand imbalance By Lucy Shuai 14-Nov-24 13:00 SINGAPORE (ICIS)–China may accelerate PP exports in 2025 amid an intensified imbalance between supply and demand as a large number of new plants are expected to start up. PODCAST: SE Asia propylene to face additional supply, freight challenges in 2025 By Damini Dabholkar 15-Nov-24 11:28 SINGAPORE (ICIS)–Southeast Asia's propylene market faces significant challenges in 2025, with additional supply expected and freight rates continuing to impact downstream demand. Crimped supplies ease pressure on Asia VAM prices By Hwee Hwee Tan 15-Nov-24 14:36 SINGAPORE (ICIS)–Sporadic plant disruptions and crimped supplies in China are fuelling expectations of price competition easing across vinyl acetate monomer (VAM) import markets in Asia.

18-Nov-2024

SAO PAULO (ICIS)–Brazil is to start an investigation into polyethylene (PE) arriving on its shores from the US and Canada and whether the material constituted dumping, the government said. As previously reported by ICIS, the proposals to investigate came from polymers major Braskem and were backed by Brazil’s chemicals trade group representing producers, Abiquim. Braskem is the dominant PE producers in Brazil, and antidumping duties (ADDS) on US- and Canada-originated PE would considerably prop up its domestic market position. The start of investigation proceedings was published in Brazil’s Diario Oficial da Uniao (Official Gazette). The investigation is to be carried out by the Department of Commercial Defense (Decom), which is part of the Ministry of Industry’s Secretary of Foreign Trade. Braskem filed on July 31 a petition to initiate an investigation into the practice of dumping of PE resins exports to Brazil with US or Canadian origin. The analysis of the evidence of dumping is to consider the period from April 1, 2023 to March 31, 2024, while the period for analyzing potential damage caused to domestic producers is to consider the period from April 1, 2019 to March 31, 2024. “Due to the large number of producers/exporters from the US and Canada identified in the detailed data on Brazilian imports … the producers or exporters responsible for the largest reasonably investigable percentage of the export volume of the exporting country will be selected to send the questionnaire,” said Decom. “The absolute dumping margins determined for the purposes of this document reached $220.95/tonne and $264.99/tonne, and the relative margins were 21.4% and 26.9% for the US and Canada, respectively. It can be inferred that, if such dumping margins did not exist, domestic industry prices could have reached higher levels, reducing or even eliminating the effects of the investigated imports.” Braskem said earlier in November it is lobbying the Brazilian government to extend ADDs on polyvinyl chloride (PVC) beyond 2025 when they are due to expire. In October, the government implemented higher import tariffs on several chemicals, also after heavy pressure by domestic producers and their trade group Abiquim. Additional reporting by Bruno Menini

14-Nov-2024

HOUSTON (ICIS)–Under US President Donald Trump, US chemical companies will unlikely see the full-blown tariffs that he has proposed during his campaign, but they will operate under a faster growing economy with higher inflation and interest rates that will settle at an elevated rate, economists at Oxford Economics said on Monday. Oxford is forecasting what it calls a limited Trump scenario, under which his administration will not fully adopt the policies he proposed during his campaign. Tariffs will be limited, targeted and phased in, while Congress will limit growth in the government deficit by restraining some of his tax cuts and spending measures. Oxford's baseline scenario for 2025 does not change much because it is assuming that Trump will focus most of his first year in office on extending the tax cuts of his earlier administration, said Ryan Sweet, chief US economist for Oxford Economics. He made his comments during a presentation. The consultancy's forecast for 2025 GDP is a tenth of a point higher versus its estimate in October, he said. Inflation will rise by a tenth of a point in 2025. Trump is inheriting a strong economy, so there is little risk of recession. In these initial years, the biggest effect on the US economy will be tax cuts, and these should increase growth in GDP, said Bernard Yaros, lead US economist for Oxford. After 2026, Oxford assumes Trump will adopt some of his immigration restrictions, and it is expecting GDP growth to fall below its earlier forecast. Stricter immigration policies will reduce the supply of labor and slow down the consumption of goods and services. LIMITED TARIFFSOxford expects the Trump administration will not impose the widespread tariffs it proposed during its campaign, which included 60% duties on Chinese imports and baseline tariffs of 10-20% on all imports. Yaros said these campaign proposals were likely negotiating tactics. Sweet expects that Trump will require Congress to pass some of his tariffs, and legislators will not pass such high rates, Sweet said. In other cases, advisors and trade representatives will restrain Trump. For China, Trump will likely impose tariffs of 25% on major categories, such as machinery, electronics and chemicals, Yaros said. For the EU, Canada and Mexico, Trump will likely impose very targeted tariffs on steel, aluminum, base metals and motor vehicles, Yaros said. For Canada and Mexico in particular, Trump will unlikely adopt measures that will threaten the United States-Mexico-Canada Agreement (USMCA), the trade agreement that his administration signed during his first term. That trade deal was one of the signature achievements of Trump's administration, so he will not want to pursue policies that will threaten the upcoming renewal of that agreement, Yaros said. While the tariffs will be limited, they will still be a drag on the economy by nudging inflation higher, reducing real consumer income, tempering consumer spending and encouraging the misallocation of resources, Yaros said. LIMITED TARIFFS REDUCE RETALIATION RISK FOR CHEMSOxford's scenario will limit the risk of countries imposing retaliatory tariffs on US exports. US chemical producers were vulnerable to such tariffs because they purposely added capacity for export over the years, particularly for polyethylene (PE) and polyvinyl chloride (PVC). The magnitude of these exports and the existence of a global glut in plastics and chemicals would make US chemical exports a likely target for retaliatory tariffs. On the import side, the US does have deficits in key commodity chemicals, such as benzene. Targeted tariffs could carve out exceptions for benzene was well as other chemicals in which the US has a trade deficit, such as methyl ethyl ketone (MEK) and melamine. Targeted tariffs will likely rule out duties on imports of oil. US refineries rely on imports of heavier grades of oil to optimize the operations of some of their units. US shale oil makes up nearly all of the growth in the nation's crude production, and that oil is made up of light grades. Meanwhile, tariffs could shield some chemicals from competition, such as epoxy resins. CONGRESS MAY LIMIT GROWTH IN DEFICITOxford pointed out that some moderate Republicans could restrain some of Trump's tax and spending proposals to limit growth in the government deficit, Yaros said. Other economists have expressed concerns that the US will issue larger amounts of government debt to fund the growing deficit. That would lead to a cascade effect that could ultimately increase rates for US mortgages, which would slow down the housing market and the plastics and chemicals connected to that market. Still, all of Oxford's scenarios forecast a rise in the government deficit. SLOWER RATE CUTS BY FEDOxford expects Trump's policies will be inflationary, which will prompt the Federal Reserve to slow down the pace of cuts on their benchmark federal funds rate. It expects the federal funds rate will settle at 3.125%, versus its forecast of 2.75% that was made in October. TRUMP WILL PRESERVE MOST RENEWABLE TAX CREDITSTrump will likely preserve most of the tax credits in the Inflation Reduction Act (IRA) because most of them benefitted states controlled by his party, the Republicans, Yaros said. These include tax credits on renewable fuels, renewable power, hydrogen and carbon capture. The exception will include incentives for electric vehicles (EV), which Trump had singled out during his campaign, Yaros said. OXFORD'S FORECASTThe following chart shows Oxford's new baseline forecast and compares it with a scenario under which the policies of the previous administration are maintained. The following chart shows Oxford's forecast that assumes Trump will fully adopt all of his campaign proposals. This is not the consultancy's baseline forecast because it does not expect such a full-blown Trump scenario will happen. Thumbnail shows the US Capitol. Image by  photo by Lucky-photographer.

11-Nov-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 8 November. Braskem’s US sales could benefit from higher tariffs on automotive – CFOBraskem’s operations in the US could benefit if president-elect Donald Trump hikes import tariffs related to the automotive sector, the CFO at the Brazilian polymers major said this week. Brazil's Braskem lobbying for ADDs on Chinese PVC to be extended – CFOBraskem is lobbying the Brazilian government to extend antidumping duties (ADDs) on China-produced polyvinyl chloride (PVC), the CFO at the Brazilian polymers major said on Thursday. INSIGHT: Braskem’s tariffs-infused optimism risks turning into complacencyManagement at Brazil’s polymers major Braskem sounded on Thursday the most optimistic in many quarters after the Brazilian government – which indirectly has a stake on the company – sharply increased import tariffs to protect, in large part, Braskem’s market share. Mexico’s Braskem Idesa completes 87% of ethane terminalConstruction of Braskem Idesa’s ethane import terminal in Mexico had reached around 87% of physical completion as of September, the Brazilian petrochemicals major said during its Q3 earnings release and conference call on Thursday. Brazil central bank hikes rates 50 bps to 11.25%, seeks ‘credible’ fiscal policyBrazil's central bank monetary policy committee (Copom) voted unanimously late on Wednesday to hike the main interest rate benchmark, the Selic, by 50 basis points to 11.25%, to fend off rising inflation and a depreciating Brazilian real. Chile’s manufacturing output falls in September, overall activity flatChile’s manufacturing output fell in September by 1.1%, month on month, the central bank’s monthly report about economic activity said this week. Brazilian police indict 20 in Braskem mining disaster caseBrazil's Federal Police (PF) have closed their probe into Braskem's rock salt mining operations in Maceió, state of Alagoas, naming 20 individuals as suspects. MOVES: Braskem appoints Roberto Ramos as CEOBraskem is to appoint Roberto Ramos CEO, effective 1 December, the Brazilian petrochemicals major said on Monday. PRICINGLatAm PE international prices stable to soft on competitive US exportsInternational polyethylene (PE) prices were assessed as stable to soft across Latin American (LatAm) countries on the back of competitive US export offers. LatAm PP domestic prices fall in Chile, Colombia, Mexico tracking lower feedstock costs, weak demandDomestic polypropylene (PP) prices fell in Chile, Colombia and Mexico, tracking lower feedstock costs and weak demand. In other Latin American (LatAm) countries, prices were unchanged this week.

11-Nov-2024

HOUSTON (ICIS)–Recently released data from the US International Trade Commission shows imports of polyethylene terephthalate (PET) scrap have reached record highs, following a slight dip the previous quarter. This is in spite of recent efforts from the US Customs and Border Patrol (CBP) to shift imports of recycled polyethylene terephthalate (R-PET) flake material away from the plastic scrap harmonized schedule (HS) code and towards the PET HS code. Imports and exports of other types of plastic scrap remain relatively steady quarter on quarter (QoQ), though Canada and Mexico continue to fade as trade partners for plastic scrap. US remains a net importer of plastic scrap, largely on PET scrap imports PET scrap imported into US increased 22% QoQ YTD PET scrap exports to Mexico surpass 2023 volumes IMPORTS SURGE, LARGELY DRIVEN BY PETQ3 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915 – have increased 12% QoQ quarter on quarter, and 11% year on year when comparing with Q3 2023. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and also flake material. Imports totalled 129,137 tonnes in Q3, with PET making up 54% of that volume at 70,094 tonnes. This is the highest volume of PET scrap ever imported in a single quarter. Year to date (YTD) volume at 191,738 tonnes remains just shy of the 2023 total amount, 204,278. Demand for R-PET flake was solid throughout Q3, especially as ocean freight rates began to normalize from late spring highs. Moreover, the Q3 typically is the peak in bottled beverage demand, the largest end market for US R-PET resin. At this same time, market players noted that domestic PET bottle bale feedstocks were surprisingly limited in availability, adding to the increased interest in supplementary imported flake feedstocks for recyclers. Though this data could be impacted in the near future due to recent efforts from US Customs who have directed several market players to use the virgin PET HS code, 3907, when importing flake. Market players have traditionally used the plastic scrap code as it is a duty free item, whereas the PET code carries a 6.5% duty, unless the country of origin has a free trade agreement with the US. The top countries who have sent PET scrap to the US include Canada, Thailand and Japan, respectively. While Canada makes up 24% of PET scrap imports alone, of the top 10 origin countries, those based in Asia make up 44% of all PET scrap import volumes, followed by those in the Latin American region at 15%. Market participants confirm they have seen a notable rise in imported R-PET activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor and facility costs related to R-PET. As more imports from Asian and Latin American countries continue to increase, Canada and Mexico could both see a reversal of their previous growth trend on total scrap exports to the US. Imports of all other subcategories of plastic scrap, including polyethylene (PE), polystyrene (PS), and polyvinylchloride (PVC) were relatively steady. PE scrap imports made up 12% of Q3 plastic scrap imports, driven by shipments from Canada at 68% of the YTD volume, followed by Mexico at 17% of the YTD volume. Germany surprisingly has increased PE scrap exports to the US fourfold, though the total volume remains small, at 1,210 tonnes YTD. YTD, the US remains a net importer of plastic scrap. MEXICO REMAINS KEY BUYER OF US PET BALES Though exports of PET scrap, largely in the form of bales, fell QoQ tonnes, YTD volumes have already surpassed that of 2023. Mexico in particular continues to be a key end market for US bale material, making up 59% of the 18,362 tonnes of PET scrap exports. While the US has always exported a portion of domestic PET bale material to other countries, exports to Mexico have surged over the last year. This growing trade relationship is largely attributed to new capacity in Mexico, paired with strong local demand which has elevated local bale prices. As a result, Mexican recyclers have been purchasing US PET bales as a lower cost option with higher availability. YTD exports of PET scrap to Mexico are already 3,333 tonnes above 2023 total PET scrap volumes. Exports of US bales to Mexico, particularly from the Southern areas of the US such as Texas and parts of California, continue to challenge domestic recyclers, who struggle to secure adequate volumes of bale feedstock. Furthermore, as export demand continues put upwards pressure on bale pricing, local recyclers find themselves stuck between rising feedstock costs and very competitive import virgin and recycled pricing, thus unable to pass along those increased costs. PET scrap exports to Malaysia have also surpassed 2023 volumes, at present by over 2,400 tonnes. On the other hand, volumes to Germany are now 2,966 tonnes short of 2023, showing the shift from European demand to Asian and Mexican demand. Overall, exports of other types of plastic scrap continue to slow, following the Chinese National Sword and Basel Convention adoption several years ago. Total plastic scrap exports down QoQ but similar to levels seen this time last year. Canada and Mexico receive 56% of US plastic scrap exports, followed by several Asian countries including Malaysia, India, Vietnam and Indonesia which in total 28% of exports. PE continues to be a leading polymer type for US plastic scrap exports, coming in at 32,519 tonnes this quarter, roughly 32%. Insight by Emily Friedman

11-Nov-2024

HOUSTON (ICIS)–Oil and gas production, the main source of the feedstock and energy used by the petrochemical industry, should benefit from policies proposed by President-Elect Donald Trump, while hydrogen and renewable fuels could lose some of the support they receive from the federal government. Trump expressed enthusiastic and consistent support for oil and gas production during his campaign. He pledged to remove what he called the electric vehicle (EV) mandate of his predecessor, President Joe Biden. Trump may attempt to eliminate green energy subsidies in Biden's Inflation Reduction Act (IRA) BRIGHTER SENTIMENT ON ENERGYRegardless of who holds the presidency, US oil and gas production has grown because much of it has taken place on the private lands of the Permian basin. Private land is free from federal restrictions and moratoria on leases. That said, the federal government could indirectly restrict energy production, and statements from the president could sour the sentiment in the industry. During his term, US President Joe Biden antagonized the industry by accusing it of price gouging, halting new permits for LNG permits and revoking the permit for the Keystone XL oil pipeline on his first day in office. By contrast, Trump has pledged to remove federal impediments to the industry, such as permits, taxes, leases and restrictions on drilling. WHY ENERGY POLICY MATTERSPrices for plastics and chemicals tend to rise and fall with those for oil. For US producers, feedstock costs for ethylene tend to rise and fall with those for natural gas. Also, most of the feedstock used by chemical producers comes from oil and gas production. Policies that encourage energy production should lower costs for chemical plants. RETREAT FROM RENEWABLES, EVsTrump has pledged to reverse many of the sustainability policies made by Biden. Just as Trump did in his first term, he would withdraw from the Paris Agreement. For electric vehicles (EVs), Trump said he would "cancel the electric vehicle mandate and cut costly and burdensome regulations". He said he would end the following policies: The Environmental Protection Agency's (EPA) recent tailpipe rule, which gradually restricts emissions of carbon dioxide (CO2) from light vehicles. The Department of Transportation's (DoT) Corporate Average Fuel Economy (CAFE) program, which mandates fuel-efficiency standards. These became stricter in 2024. The EPA was expected to decide if California can adopt its Advanced Clean Car II (ACC II) program, which would phase out the sale of combustion-based vehicles by 2035. If the EPA grants California's request, that would trigger similar programs in several other states. Given Trump's opposition to government restrictions on combustion-based automobiles, the EPA would likely reject California's proposal under his presidency or attempt to reverse it if approved before Biden leaves office. According to the Tax Foundation, Trump would try to eliminate the green energy subsidies in the Inflation Reduction Act (IRA). These included tax credits for renewable diesel, sustainable aviation fuel (SAF), blue hydrogen, green hydrogen and carbon capture and storage. In regards to the UN plastic treaty, it is unclear if the US would ratify it, regardless of Trump's position. The treaty could include a cap on plastic production, and such a provision would sink the treaty's chances of passing the US Senate. For renewable plastics, much of the support from the government involves research and development (R&D), so it did little to foster industrial scale production. WHY EVs AND RENEWABLES MATTERPolicies that promote the adoption of EVs would increase demand for materials used to build the vehicles and their batteries. Companies are developing polymers that can meet the heat and electrical challenges of EVs while reducing their weight. Heat management fluids made from base oils could help control the temperature of EV batteries and other components. If such EV policies reduce demand for combustion-based vehicles, then that could threaten margins for refineries. These produce benzene, toluene and xylenes (BTX) in catalytic reformers and propylene in fluid catalytic crackers (FCCs). Lower demand for combustion-based vehicles would also reduce the need for lubricating oil for engines, which would decrease demand for some groups of base oils. Polices that promote renewable power could help companies meet internal sustainability goals and increase demand for epoxy resins used in wind turbines and materials used in solar panels, such as ethylene vinyl acetate (EVA) and polyvinyl butyral (PVB). Insight article by Al Greenwood Thumbnail shows the White House. Image by Lucky-photographer.

07-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

SINGAPORE (ICIS)–Oversupply and higher freight costs are driving down petrochemicals demand in India, with trades likely to remain subdued after the Diwali holidays. Prolonged monsoon season hurt pre-Diwali demand Seasonal demand lull begins mid-November US election worries weigh on Indian rupee Demand traditionally picks up post-Diwali but a prolonged monsoon season, coupled with ample inventories, has led to a lack of import demand which is unlikely to change for the rest of the year. India was on holiday on 31 October to 1 November for Diwali or the Hindu festival of lights. Sentiment among market players was mixed, with some hopeful that post-holiday demand will pick up in certain products like polyvinyl chloride (PVC) ahead of implementation of import certification deadline under the Bureau of Indian Standards on 24 December. Demand lull typically sets in after the holiday, particularly for the pharmaceutical and manufacturing sectors, until end-November, when operations are ramped up in preparation for the summer holidays – between May and August. Overall production in the south Asian country typically increases along with demand in the January-March period – India’s fiscal Q4. For isopropanol (IPA), India’s import demand will be dented by antidumping duties (ADDs) imposed on Chinese cargoes. In the ethanolamines and acrylonitrile butadiene styrene (ABS) markets, domestic supplies remains ample, with post-Diwali demand likely to remain soft. India is a major importer of Chinese petrochemicals. It has been adopting protectionist measures against Chinese exports amid an oversupply in the world’s second-largest economy, whose own domestic demand is weak. US ELECTIONS A CONCERN India's economy is slowing down, causing the rupee (Rs) to depreciate, with petrochemical import discussions scant amid ample inventories. A weaker currency makes imports expensive. The rupee plummeted to a near-record low of Rs84.075 against the US dollar on 31 October, partly on uncertainties over the US elections results. The Reserve Bank of India (RBI) had intervened to limit the rupee’s fall, selling US dollars to stem the loss and allowing it to climb back from a record low of Rs83.79, according to newswire agency Reuters. At 05:08 GMT, the rupee was trading at Rs84.03 against the US dollar. There are concerns that intra-Asian exports by China would increase on the possibility of further US punitive tariffs on Chinese products if Donald Trump was elected a second time as US president. His administration in 2017-2021 kicked off the US-China trade war in 2018. Trump is running under the Republican ticket against Democrat Kamala Harris in the US elections, which will be held on 5 November 2024. Focus article by Jonathan Yee Additional reporting by Veena Pathare, Clive Ong, Angeline Soh, Aswin Kondapally, Hwee Hwee Tan and Pearl Bantillo

04-Nov-2024