TORONTO (ICIS)–Labor tribunal Canada Industrial Relations Board (CIRB) on 24 August ordered Canada’s two freight railroads and about 9,300 unionized workers to resume rail service at 0:01 eastern time on 26 August. Freight rail service on both Canadian National (CN) and Canadian Pacific Kansas City (CPKC) was shut down on Thursday, 22 August amid a protracted labor dispute. With the order, the CIRB follows directions Canada’s federal labor minister issued shortly after the shutdown began. The dispute between railroads and workers would be settled through binding arbitration, in line with the minister’s directions, the CIRB said. The board said that “the current circumstances and impact of work stoppages involving Canada’s two main rail companies” were reasons for its decision. The board will provide detailed reasons later, it said. UNION, RAILROADS WILL COMPLY Labor union Teamsters Canada Rail Conference (TCRC) and the railroads said they would comply with the board’s decision. CPKC asked workers to return to work for the day shift on Sunday, 25 August, in order to restore service as quickly as possible and avoid further disruptions to supply chains. TCRC added that while it would comply with the CIRB’s decision, it would appeal the ruling in court. In Canada’s chemical industry, trade group Chemistry Industry Association of Canada (CIAC) has said that going by past experience, for each day of a rail disruption it could take three days or more to return to service once labor issues are resolved. CIAC is particularly concerned about the supply of chlorine and derivatives for drinking water treatment during rail disruptions. For safety reasons, chlorine can only be shipped by rail. Although the rail shutdown began on 22 August, the railroads stopped accepting chlorine and other hazardous materials for shipment before that date. The disruption in rail service prompted fears that Canadian chlorine plants could be forced to curtail or stop production. Canada-based chemical producers rely on rail to deliver more than 70% of their products, with some exclusively using rail. About 80% of Canada’s chemical production goes into export, with about 80% of those exports going to the US, according to CIAC. (Map by Miguel Rodriguez Fernandez) Meanwhile, LyondellBasell declared force majeure on all cargo movements by rail to Canada and industrial chemical producer Chemtrade Logistics warned about the impact of the rail disruption on its financial results. The following table by the American Association of Railroads (AAR) shows Canadian freight rail traffic, including chemicals, for the week ended 17 August and the first 33 weeks of 2024: Additional reporting by Adam Yanelli and Nurluqman Suratman

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 23 August 2024. INSIGHT: Asia BD capacity growth to accelerate to 10% in 2025 By Ann Sun 23-Aug-24 10:35 SINGAPORE (ICIS)–The Asian butadiene (BD) market is anticipated to experience large-scale capacity expansion between Q4 this year and end-2025, with nine projects scheduled to begin operations. Asia BDO market demand unable to reduce inventories, oversupply persists By Corey Chew 22-Aug-24 11:16 SINGAPORE (ICIS)–The Asian 1,4-butanediol (BDO) market has been going through a downtrend that started about a month ago, mainly due to the falling domestic China market. INSIGHT: China’s EVA capacity expected to exceed 2.6 million tonnes in 2024 By Amy Yu 20-Aug-24 17:12 SINGAPORE (ICIS)–China’s EVA capacity is forecast to exceed 2.6 million tonnes in 2024, a year-on-year growth rate of 17%, considering Jiangsu Hongjing New Material a new plant with 200,000 tonnes/year is scheduled to come on stream in Q4. INSIGHT: China plasticizer alcohols’ supply growth accelerating By Lina Xu 19-Aug-24 17:08 SINGAPORE (ICIS)–China’s plasticizer market is diversifying, leading the supply expansion of feedstock alcohols amid high requirements for end-products and growing emphasis on sustainability in operations in recent years. Asia naphtha back in the black within a day; volatility to stay By Li Peng Seng 19-Aug-24 11:06 SINGAPORE (ICIS)–Asia’s naphtha intermonth spread returned to the positive zone on 16 August, after slipping into the red the day before for the first time this year, with volatile trades expected to persist amid uncertainties over supply balances. INSIGHT: China’s MEG export market changes amid volatile global fundamentals By Cindy Qiu 22-Aug-24 14:00 SINGAPORE (ICIS)–China’s monoethylene glycol (MEG) exports have been on an uptrend in recent years due to the rapid expansion of domestic capacity. MEG exports totalled around 93,000 tonnes in January-June 2024 and are expected to exceed 150,000 tonnes for the year as a whole. India’s BPCL to invest Rs1.7 trillion on capacity growth over five years By Priya Jestin 20-Aug-24 12:58 MUMBAI (ICIS)–India’s state-owned Bharat Petroleum Corp Ltd (BPCL) plans to invest rupee (Rs) 1.7 trillion ($20.3 billion) over the next five years to grow its refining and fuel marketing business, as well as expand its petrochemicals and green energy businesses.

HOUSTON (ICIS)–Although the Canadian railroad labor strife is poised to carry on further, US fertilizer participants are not growing overly concern as this action comes at a slower time of the year for domestic applications and fresh buying. With it being late August most of the attention of domestic growers are either on advancing harvesting campaigns or commencing those efforts soon, with some locations still tending to mature crops. There were also strong summer refilling efforts, which together is overall keeping the pull for nutrients light for most products although volume of nitrogen, phosphate and potash have continued to move over August on barges and terminals. As a source said they had zero concerns so far and not hearing that the situation is concerning customers either, “I assume if it persists there will be. It’s just happening at a time of year that it isn’t impactful enough to our industry.” The railroad strike appeared to have been resolved on 22 August when the government directed the matter to the Canada Industrial Relations Board (CIRB) for binding arbitration, with Canadian National (CN) and Canadian Pacific Kansas City (CPKC) having said they were preparing to begin running. Then on Friday labor union Teamsters Canada Rail Conference (TCRC) issued a strike notice for 26 August, against railroad Canadian National (CN) with approximately 6,500 unionized employees set to withdraw their service starting Monday. As there was prior to the start of this strike activity, there is also optimism from some that this will not be a protracted dispute. The US is about to enter a period of what has been anticipated to be good post-harvest demand, with a source saying a work stoppage “could be an issue then but generally these things resolve quickly.” Earlier this week industry group Fertilizer Canada said disruptions to rail services across the country will cost the fertilizer industry millions per day in lost sales revenue, with an average of 69,000 tonnes of fertilizer product transported per day. 75% of all fertilizer produced and used in Canada is moved by rail, with minimal transportation alternatives, with 90% of those volumes which are destined for the US market delivered by rail.

TORONTO (ICIS)–Labor union Teamsters Canada Rail Conference (TCRC) on Friday issued a strike notice for Monday, 26 August, against railroad Canadian National (CN). The move surprises as railroads CN and Canadian Pacific Kansas City (CPKC) said earlier they were preparing to resume operations after a government order on Thursday that referred the labor dispute between TCRC and the railroads to the Canada Industrial Relations Board (CIRB) for binding arbitration. The country’s labor minister issued the order after the railroads locked out about 9,300 workers and shut down operations on Thursday, 22 August, 00:01 Eastern Time. In Friday’s strike notice, TCRC said that about 6,500 unionized CN workers would withdraw their service starting Monday, 26 August, 10:00 Eastern Time. However, it added that its differences with CN were not “insurmountable” and that it remained available for discussions to avoid a further work stoppage at CN. TCRC’s strike notice also surprises because the union said earlier that it took down picked lines again CN and that unionized CN workers would start returning to work on Friday. Picket lines at CPKC, however, would remain in place, the union said. Teamsters president Francois Laporte said in remarks to public broadcaster CBC/RDI on Friday that the union was looking at its legal options and would “use our constitutional rights” to “fight” for workers’ interests. He also confirmed that despite the referral to the CIRB, the industrial action at CPKC was continuing. Political commentators said that the union may seek to challenge the constitutionality of the minister’s referral of the dispute to the CIRB for binding legislation. There is legal precedent that deems the right to strike and to collective bargaining as a constitutional right. Bottomline: Despite earlier hopes that binding arbitration would end the dispute and trains would run again soon, freight rail service remains disrupted and it is unclear when it will resume. CHEMICALS AND RAIL Canada-based chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. About 80% of Canada’s chemical production goes into export, with about 80% of those exports going to the US, according to CIAC. Chlorine plants in Canada may have to shut down if reliable rail service does not resume soon, CIAC CEO Bob Masterson said. (Map by Miguel Rodriguez Fernandez) Meanwhile, LyondellBasell on Thursday declared force majeure on all rail shipments to Canada and industrial chemical producer Chemtrade Logistics warned about the impact of the rail disruption on its financial results. The following table by the American Association of Railroads (AAR) shows Canadian freight rail traffic, including chemicals, for the week ended 17 August and the first 33 weeks of 2024: With additional reporting by Adam Yanelli and Nurluqman Suratman Thumbnail photo source: CN

TORONTO (ICIS)–Freight railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC) are preparing to restart operations after the federal government stepped in to end a labor dispute with workers – although it remains unclear on Friday when exactly a full freight rail service will resume. Following the lockout of about 9,300 rail workers and the shutdown of operations at both railroads effective Thursday, 22 August, 00:01 Eastern Time, Canada’s federal labor minister ordered binding arbitration to settle the dispute between the railroads and labor union Teamsters Canada Rail Conference (TCRC). The arbitration process will be conducted by the Canada Industrial Relations Board (CIRB), an independent, quasi-judicial labor tribunal. The CIRB is expected to act quickly, and trains should be running again “within days”, labor minister Steven MacKinnon said. CN said it was “satisfied” that the labor conflict has ended CPKC said it remains prepared to resume service as soon as it is ordered to do so by the CIRB TCRC said it has taken down picket lines at CN and workers would return on Friday, but at CPKC the work stoppage “remains ongoing”, pending an order from the CIRB In the chemical industry, trade group Chemistry Industry Association of Canada (CIAC) said that going by past experience, for each day of a rail disruption it could take three days or more to return to service once labor issues are resolved. “Things will continue to be tight and will need monitoring” going forward, said CIAC president Bob Masterson. The trade group is particularly concerned about the supply of chlorine and derivatives for drinking water treatment. For safety reasons, chlorine can only be shipped by rail. Although the rail shutdown lasted less than a day, the railroads had stopped accepting chlorine and other hazardous materials for shipment before 22 August as they prepared for the shutdown. Canada-based chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. About 80% of Canada’s chemical production goes into export, with about 80% of those exports going to the US, according to CIAC. (Map by Miguel Rodriguez Fernandez) Meanwhile, LyondellBasell on Thursday declared force majeure on all rail shipments to Canada and industrial chemical producer Chemtrade Logistics warned about the impact of the rail disruption on its financial results. The following table by the American Association of Railroads (AAR) shows Canadian freight rail traffic, including chemicals, for the week ended 17 August and the first 33 weeks of 2024: With additional reporting by Adam Yanelli and Nurluqman Suratman Thumbnail photo source: CN

Additional reporting by Anna Coulson UK energy price cap for October-December set at £1,717 Q4 cap is £149 higher than the Q3 cap, but has fallen £117 year on year Higher wholesale energy prices for Q1 2025 suggest a price cap rise compared to Q4 2024 LONDON (ICIS)–The UK energy price cap for October-December will increase compared to the previous quarter, energy regulator Ofgem said on 23 August, but remains lower than in the same period one year ago. Introduced in January 2019, the price cap sets the maximum price that energy suppliers can charge end-users for each unit of energy. Ofgem sets the cap based on supplier operating costs, including ICIS wholesale energy price assessments, as well as VAT and network costs. Looking ahead, if forward prices for delivery in the first quarter of 2025 continue at current levels, the wholesale component of the cap for the period January-March is expected to be higher than for the preceding three months. FALLING PRICES ICIS assessed the British NBP gas Q4 ’24 contract at an average 97.069p/th from 20 May to 15 August – the period used by Ofgem to calculate wholesale energy costs for the upcoming cap. This is 17.026p/th lower than the Q4 ’23 contract average over equivalent dates. The year-on-year difference comes as a result of several factors, including a gradual fall from a peak in prices after the Russian invasion of Ukraine and the trade sanctions which followed. Fears of strikes at Australian LNG refineries also pushed up gas prices during 2023, whereas LNG markets were generally more settled in 2024. Due to its significant role in power generation, gas is a key price driver for the UK power market. This means that UK power prices have moved with a similar bearish trend to NBP Q4 ’24 prices, at a discount to Q4 ’23 prices. ICIS assessed the UK power Baseload Q4 ’24 contract at an average £85.65/MWh between 20 May and 15 August, 28% lower than the Q4 ’23 over equivalent dates. The Q4 ’24 power contract is at a premium to its European counterparts which indicates that the UK is likely to import power from neighbouring countries, including France, through the front-quarter. Data from French utility EDF shows that nuclear output is set to average 48.1GW in the period 1 October to 31 December, 7.1GW above the 2019-23 average. Both gas and power Q1 ‘25 prices are currently at a premium to Q4 ’24 prices, which will likely result in a larger wholesale component of the cap for the first quarter of 2025 than for October-December. CAP OUTLOOK On 22 August, ICIS assessed the NBP Q1 ‘25 contract at 7.025p/th above the Q4 ’24 contract and the UK power Baseload Q1 ‘25 contract was £7.10/MWh above the Q4 ’24 contract. Yearly energy prices generally peak around February, when the coldest months of the year increase energy demand for heating. In these months, gas storage facilities start to deplete and disruptions to supply cause larger price rises than at other times of the year. Given the increasing European reliance on LNG, higher prices also attract LNG shipments to Britain ensuring stability of supply. On the power side, French nuclear availability is another key driver for UK power prices through the first quarter. The UK power Q1 ‘25 Baseload contract was €109.47/MWh on 22 August, which is €5.22/MWh above its French counterpart, indicating that the UK is likely to import power from France through the first quarter of 2025. ICIS Power Foresight indicates that French nuclear generation could total 98.6TWh in the period 1 January to 31 March. However, unplanned outages, downward revisions in nuclear availability, and cold weather through the first quarter of 2025 would be potential bullish drivers for French and UK power prices.

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Blue flake prices rise at the low end in eastern Europe Wide range of views on eastern Europe bale prices Mixed coloured flake demand remains poor September price talks getting underway

LONDON (ICIS)–Business activity in the eurozone rose in August, driven by the services sector, which grew at the fastest pace in four months. Growth in services was largely due to the strongest expansion in France since May 2022 as the Olympics took place in Paris, according to S&P Global’s latest Purchasing Managers Index (PMI) data. This drove the flash services August PMI index to 53.3, up from 51.9 in July, which in turn helped push the HCOB (Hamburg Commercial Bank) composite PMI index to a three-month high of 51.2. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, warned, however, that the uplift could be temporary. “The boost largely comes from a surge in services activity in France, with the Business Activity Index jumping by almost five points, likely linked to the buzz surrounding the Olympic Games in Paris,” he said. “It’s doubtful this momentum will carry over into the coming months, however. Meanwhile, the overall pace of growth in the services sector has slowed down in Germany, and the eurozone’s manufacturing sector remains in rapid decline.” S&P’s August eurozone manufacturing PMI was at an eight-month low of 45.6, down slightly from July. An index figure above 50 indicates expansion and below 50 contraction. Elsewhere, the latest PMI data for the UK showed a significant increase in private sector business activity, with the composite index rising to a four-month high of 53.4. “August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

TORONTO (ICIS)–Canada’s federal labor minister has decided to refer the labor dispute between the country’s two freight railroads and labor union Teamsters Canada Rail Conference (TCRC) to the Canada Industrial Relations Board (CIRB) for binding arbitration, he said in a webcast media briefing on Thursday. Steven MacKinnon expects the CIRB to act “with dispatch” and rail services at railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC), which shut down effective Thursday morning, 00:01 eastern time, should resume within a couple of days, he said. With the decision, the minister reversed his previous position. Just hours before the shutdown took effect, he had said the government would not intervene but leave it to the parties to settle the dispute through the collectives bargaining process, and last week he rejected CN’s call for binding arbitration. However, in Thursday’s press briefing MacKinnon said that he came to the conclusion that the negotiations between the railroads and the union were at an impasse and that collective bargaining was not working to settle the dispute. He therefore decided to direct the CIRB to settle the dispute through final binding arbitration; to extend the terms of the existing collective agreements until new agreements are signed. The CIRB process was “generally a process that does not take longer than two days”, he said. However, he conceded that it was not yet quite clear when exactly rail service will resume, adding that the CIRB was an independent body that follows its own procedures. The CIRB is a quasi-judicial tribunal charged with keeping the industrial peace in Canada. The government has come under intense pressure from trade groups in Canada and the US and from Canadian provincial premiers (governors) to take quick action to end the shutdown, which threatened the economy and trade relations with the US. MacKinnon acknowledged the concerns raised by the chemical and fertilizer industries about supplies of chlorine to treat drinking water and the supply of potash fertilizer to farmers. It was up to the government to ensure that shipment of chlorine and fertilizer were not disrupted, the minister said. The railroads had stopped accepting shipments of chlorine and other hazardous materials well ahead of the 22 August shutdown. Meanwhile, LyondellBasell on Thursday declared force majeure on all rail shipments to Canada and industrial chemical producer Chemtrade Logistics warned about impacts from the rail disruption on its financial results. With additional reporting by Adam Yanelli Thumbnail photo source: CN