LONDON (ICIS)–Chemicals sector executives are increasingly facing up to the idea that the sector is going through a process of reinvention, with no big recovery on the horizon and a return to pre-crisis normalcy less likely. Executives are now looking at next steps for the sector. In this Think Tank podcast, Tom Brown interviews Paul Hodges, chairman of New Normal Consulting, Katherine Sale,  ICIS head of editorial strategy, and Chris Barker, senior editor covering PVC and caustic soda, on impressions from the EPCA assembly. Growing acceptance of no big demand recovery, while demographic shifts to an ageing population reduce potential future demand growth Consolidation trend likely to continue, but environmentally sustainable products offer a growing opportunity Mood at EPCA less muted than previous two annual meetings, but far from positive Energy pricing less of an issue in 2024 so far but worries remain for 2025, with the specter of high costs likely to speed closures Caustic soda, chlorvinyls markets continue to suffer amid low demand, with substantial closures seen as necessary to balance the market Upcoming EU clean industrial deal likely to be a benefit, but will not be the end of regulatory conversation in Europe Tariffs continuing to proliferate in Europe against lower-cost imports, but do not address underlying competitiveness issue Click here to watch ICIS’ analyst podcast on future chemical and recycling market trends from EPCA. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson’s ICIS blogs.

LONDON (ICIS)–Eurozone annual inflation fell to 1.7% in September from 2.2% in August, statistics agency Eurostat said on Thursday. In the wider EU, inflation was down to 2.1% in September from 2.4% in August. The European Central Bank is widely expected to cut interest rates again later on Thursday as inflation continues to fall. On Wednesday, the UK’s Office for National Statistics (ONS) said the country’s annual inflation had also fallen to 1.7% in September from 2.2% in August.

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US continue to face downward pressure after an early end to the peak pre-holiday shipping season, but backlogs at some East Coast ports following a 3-day strike could lead to short-term delays. Rates to the US West Coast edged lower by 3% this week, according to online freight shipping marketplace and platform provider Freightos and as shown in the following chart. Judah Levine, head of research at Freightos, said transpacific rates are now down by 30% from the peaks during July but remain several thousand dollars higher than what would be typical peak season rates. They are also about $1,000/FEU (40-foot equivalent units) higher than the adjusted floor set in April to account for diversions away from the Red Sea. “As long as Red Sea diversions continue to absorb capacity on an industry level, prices may not fall much further than seen back in April,” 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. PORT CONGESTION The International Longshoremen’s Association (ILA) strike at US Gulf and East Coast ports lasted just three days, and market analysts initially expected backlogs created by the work stoppage to be cleared up in two to three weeks. Some ports, such as the Port of New York/New Jersey, were expecting to be back to normal sooner than that. But Levine said the backlog at the Port of Savannah, Georgia still needs another two weeks to get back to normal as Hurricane Milton added to the number of waiting vessels. Ships are waiting more than two days to get into Savannah, and Levine said other ports are citing delays of one to four days, which he termed as significant congestion, but not extreme. Port Tampa Bay remains closed and is expected to reopen on Monday after damage caused by Milton, which will mostly impact the fertilizer industry. Levine said that some carriers have announced blank sailing in response to the congestion, but this may also be aimed at reducing capacity to adjust for the lower, post-peak season volumes. Visit the ICIS Logistics – impact on chemicals and energy topic page

LIMA (ICIS)–Brazil’s Senate approved on 15 October the creation of a National Inventory of Chemical Substances aiming at “reducing negative impacts” of toxic chemicals on human and environmental health. The inventory and the associated public bodies to ensure compliance will put Latin America’s largest economy close to the EU’s Reach regulatory system regarding chemicals. In the 27-country EU, the stringent Reach has since its inception at the end of the 2000s banned several chemicals and put hundreds of others in the so-called list of Substances of Very High Concern (SVHC). While industry has repeatedly said it support the Reach principles, increased costs associated with complying with the regulation has put a burden in some small- and medium-sized enterprises (SMEs), a burden their peers in jurisdictions such China or the US do not have to face. Industry has also argued that while Reach may indeed avoid the entry of many toxic chemicals into the EU, those same chemicals are nonetheless still used in the manufacturing of many goods in overseas jurisdictions which end up entering the EU. On Tuesday, the trade group representing Brazil’s chemicals producers Abiquim welcomed the measure, arguing it had lobbying for the creation of the registry since 2014. The bill, called in Parliament’s jargon PL 6120/2019, now awaits presidential sanction from Brazil’s President Luiz Inacio Lula da Silva, and after that it will come into force. “[The Inventory] establishes rules for the assessment and control of the risk of substances used in the national territory, to be determined by committees of experts, and defines criteria for the manufacture, import, and use of chemical components,” said the Senate after passing the bill. “The bill creates the Technical Committee for the Evaluation of Chemical Substances and the Deliberative Committee on Chemical Substances, made up of experts with knowledge in the areas of the environment, health, trade and metrology. It also establishes the Registry of Chemical Substances, which will form the inventory and the public access database on substances imported or produced in Brazil.” The parliamentarians added that it will fall on manufacturers and importers of chemical substances to provide information to the inventory. If they do not comply in an orderly and timely manner, they will be subject to fines of up to 40,000 minimum wages – in 2024, Brazil’s minimum wage was set at Brazilian reais (R) 1,412/month ($249/month). The maximum fine, thus, would stand at nearly $10 million. However, the aim to control what chemicals are used and how in Brazilian manufacturing will stop at some substances which the regulators thought were of national interest, and the law does not apply to radioactive substances or substances intended for national defense, for instance. It will not apply either to products subject to control by specific legislation, such as food, medicines, pesticides, cosmetics, fertilizers, and veterinary products, among others. “In the case of new substances that require unprecedented studies in Brazil for the information to be made available, the bill guarantees the right to ownership of the studies for up to ten years,” said the Senate. “Other provisions of the project impose criteria for the evaluation of substances by the responsible committees, establish restrictions on the performance of tests on animals and establish the Registration, Evaluation and Inspection Fee for Chemical Substances.” BROAD DAYLIGHT CHEMICALSIn 2023, when the draft proposals were already gaining traction in Parliament, a consultancy focused on chemicals regulation, the Chemical Inspection and Regulation Service (CIRS) Group, summarized the regulation’s main point in a report titled “Brazil’s REACH-like Regulation is Approaching”. In it, it said from now companies’ declarations on the chemicals they use in their manufacturing processes must include the following aspects: – The identification data of manufacturers and importers specified in regulations – The annual production and import amount of chemical substances – The exact identification of chemicals including names and CAS number (if they exist) issued by the Chemical Abstracts Service (CAS) or the International Union of Pure and Applied Chemistry (IUPAC) – Hazard classifications made under the Globally Harmonized System (GHS) and current Brazilian regulation – Recommended uses of chemical substances You can read CIRS Group’s report here. CLARITY, TRANSPARENCY, PREDICTABILITYAbiquim welcomed on Tuesday the bill with open arms. It is worth noting the trade group represents large producers – Braskem has a commanding voice in the group, for instance – which tend to be the players more capable of dealing with new and extra regulation. According to Abiquim’s CEO, Andre Passos, the new bodies created with the bill will help optimize the use of public resources, as well as bring positive impacts to competitiveness, innovation and economic growth, he said. “We will be able to count on a regulatory model that, in fact, provides the sector with greater clarity of its requirements, transparency in its processes, and long-term predictability, thus allowing the chemical industry to define future investments in the country,” he said. “[With this measure] Brazil joins a select list of the most developed and economically sustainable nations.” Abiquim said several studies have backed having a strict registry of chemicals because official control – with companies collaboration – has helped reduce negative impacts some chemicals can have on human and environmental health. The trade group said the EU had been its paramount source of inspiration, but added that several jurisdictions, following the former’s example, have implemented or are aiming to implement similar regulations. “Based on these initiatives, whose monitoring of health and environmental results demonstrated a positive trend, we presented a proposal to the CONASQ [Brazil’s National Commission for Chemical Safety] Working Group that could be applied in Brazil,” said Camila Hubner, the trade group’s manager for regulatory affairs and sustainability. According to Abiquim, similar regulatory frameworks have been implemented or are in the phase of doing so in the following jurisdictions: the US, the EU’s 27 countries, Australia, New Zealand, Japan, South Korea, China, Switzerland, the UK (which, for now, has basically applied Reach post-exit from the EU), Turkey, the Eurasian Economic Union (which includes Russia, Kazakhstan, Belarus, and Armenia), Canada, Costa Rica, Ecuador, Chile, and Colombia. After naming the parliamentarians who lobbied hard to have these regulations approved, Abiquim’s Passos said: “It is very important to remember these names because they understood that regulation was needed based on science and the risks that chemical substances can present, prioritizing human health and the environment. “On behalf of the chemical industry, I would like to thank each congressman who made an effort.” Front page picture: Brazil’s Senate approves the creation of the National Inventory of Chemical Substances, 15 October 2024 Picture source: Brazil’s Senate news services (Agência Senado) Focus article by Jonathan Lopez

LONDON (ICIS)–According to attendees at the annual European Petrochemical Association (EPCA) conference in Berlin held during 7-10 October, mixed xylenes (MX), paraxylene (PX) and orthoxylene (OX) consumption in 2025 is not expected to recover, with various hurdles highlighted. In this podcast, market editors Zubair Adam (MX) and Miguel Rodriguez Fernandez (PX, OX) along with Rob Peacock, ICIS lead analyst for aromatics, share the sentiment captured after talking with various market players at the conference.

HOUSTON (ICIS)–There is now 47% of the corn crop completed with soybeans at 67% harvested according to the latest US Department of Agriculture (USDA) weekly crop progress report. The ongoing pace of the corn harvest is ahead of the 42% rate seen in 2023 and is above the five-year average of 39%. Texas now has 98% of its acreage harvested, followed by North Carolina and Tennessee at 88%. There is now 94% of the crop rated mature, which is above the 93% from last season as well as higher than the five-year average of 89%. For corn conditions there is 4% listed as very poor with 8% still as poor and 24% now as fair. There remains 49% ranked as good and 15% as excellent. Soybeans dropping leaves has climbed to 95%, which trails the 96% from last season but is above the five-year average of 92%. Harvesting of the soybean crop has jumped to 67%, which is ahead of 57% mark from 2023 as well as the five-year average of 51%. Minnesota is now the top state with 88% of their soybeans now completed with Mississippi coming next at 84% finished. There were no further updates for soybean conditions. In other harvesting updates the USDA said there is now 34% of the cotton crop finished with sorghum acreage now at 53% completed.

HOUSTON (ICIS)–The fertilizer industry, like the rest of the Tampa, Florida, community, was still feeling the effects from Hurricane Milton even days after the storm as producers continue to assess damages and determine the impact this might have on their production. With electrical power steadily being restored, the cleaning up efforts are also making progress with flooding appearing to have had the most far-reaching consequences as the incredible powerful hurricane is estimated to have unleashed 3.4 trillion gallons of water upon Florida. As a key hub for fertilizers in the US, with both production and logistics as well as storage and corporate offices, there had been concerns over how much destruction could have been experienced if it had not weakened some before landfall or had made a direct strike into Tampa. Industry sources within the area said some normality to everyday life was returning with market activity likely needing several more days to recover.  As a participant said it is “all good here, got power everywhere now. No damage to the office or homes.” For producers, the review of the consequences of Milton were still at hand but considering the magnitude of the event it looks like the industry’s assets held up fairly well and that output of phosphates will only see a very short delay. With their White Springs phosphate facility located within Florida, Canadian fertilizer producer Nutrien had previously said it was not impacted by Hurricane Milton, but it was by the earlier strike of Hurricane Helene, with those affects still underway. “The timeline for re-starting our White Springs phosphate facility continues to be assessed. We are working with our customers on any potential impacts to supply,” said a Nutrien spokesperson. Having not completely escaped the wrath of Milton, Mosaic had confirmed on 14 October that there was limited damage to their facilities and warehouse product. The producer is expecting to resume full production in the coming days, and also said there was no significant environmental impacts that occurred due to the storm. It is understood that producer Yara did not suffer any damages or lost time at its ammonia plants from the hurricane.

SAO PAULO (ICIS)–Petroquimica Rio Tercero has shut its toluene di-isocyanate (TDI) plant in Cordoba on the back of global oversupply, a spokesperson for the Argentinian producer confirmed to ICIS on Tuesday. The plant had a production capacity of 28,000 tonnes/year of TDI, which is a key feedstock to produce polyurethane foam. Production there stopped on 14 October. Rio Tercero said it would dismiss 1,250 employees. “This decision [to shut the TDI plant] is mainly due to the transformation the sector has undergone worldwide, with the emergence of large-scale plants, especially in Asia, which are producing an oversupply of TDI which caused global prices to fall abruptly in recent years,” said the company. “Another determining factor is the limited production capacity of our Rio Tercero plant, which makes it impossible to compete with larger global companies.” The spokesperson said Rio Tercero would now “become a TDI trader” to ensure the continuity of the company, given that it will still need the product to produce polyaluminum chloride (PAC), an inorganic coagulant used in water purification. The company’s PAC production capacity stands at 58,000 tonnes/year, according to the spokesperson. As well as PAC, Rio Tercero also produces sodium hypochlorite, with a production capacity of 97,500 tonnes/year, and sodium hydroxide, with a production capacity of 11,000 tonnes/year. All the remaining production plants are operating normally, the spokesperson said. The company is a subsidiary of Buenos Aires-based Grupo Piero. According to local media reports, the provincial government has contacted the union to express its support to the plant’s workers, but it remains unclear whether the government could make any significant intervention to avoid the closure. EASIER TO SHUT PLANTSUnder the new Administration of Javier Milei which took office in December 2023, labor laws have been eased and firing employees has now become easier for companies. Earlier in October, US chemicals major Dow also said it would stop producing polyether polyols at its site in San Lorenzo, in Argentina’s province of Santa Fe, on the back of poor economics. The company had already tried to close that plant earlier, but pressure from the trade unions and tighter labor regulations at the time made the company backtrack in its plans. According to the ICIS Supply & Demand Database (ISDD), with Rio Tercero’s TDI Plant now shut and Dow’s in the process of shutting its polyols facility, no company in Argentina will produce any isocyanates or polyether polyols. Consequently, companies producing polyurethane (PU) will have to import all their inputs, among other examples. Rigid PU foams are used mainly in insulation, refrigeration, packaging and construction, while flexible PU foams have applications such as upholstery, mattresses and seats. Polyols can also be used in elastomers, adhesives, coatings and fibers. Front page picture: Petroquimica Rio Tercero’s facilities south of Cordoba city, Argentina Source: Petroquimica Rio Tercero Additional reporting by Al Greenwood

LONDON (ICIS)–The outlook for Germany’s economy improved in October, think tank ZEW said on Tuesday, as its economic sentiment indicator ticked up following three months of decline. The research group’s October economic sentiment indicator increased by 9.5 points from September to reach 13.1 points. However, its assessment of the current situation in Germany continued to worsen as the group’s index fell 2.4 points from September to -86.9 points in October. “Starting from a very poor assessment of the current situation, the economic sentiment for Germany has risen in the latest survey,” said ZEW president Achim Wambach. “Contributing factors include the expectation of stable inflation rates and the associated prospect of further interest rate cuts by the ECB. Positive signals are also coming from Germany’s export markets.” For the eurozone, the group’s economic sentiment indicator rose by 10.8 points to 20.1 points in October, while the current situation index remained in negative territory at -40.8 points, down by 0.4 points from the previous month.