HOUSTON (ICIS)–US crops have continued to make steady progress with 77% of the corn acreage now silking with soybean blooming also at 77%, according to the latest US Department of Agriculture (USDA) weekly crop progress report. The current rate of silking does trail the 79% level achieved in 2023 but is slightly ahead of the five-year average of 76%. Corn having reached the dough stage is now at 30%, above both the 25% mark from last year and the five-year average of 22%. For corn conditions, there is still 3% rated very poor with 6% now listed as poor. There remains 23% considered fair with 52% now seen as good and 16% continuing to be viewed as excellent. For soybeans, there is 77% of the crop now blooming, which is just below the 79% from 2023 but is ahead of the five-year average of 74%. The amount of acreage setting pods has reached 44%, which is behind the 46% from last year, but it is above the five-year average of 40%. For soybean conditions, there remains 2% as very poor and 6% as poor. There is now 25% listed as fair with 54% as good and 13% as excellent. In harvesting updates, winter wheat is now at 82% completed, which is ahead of the 77% mark from 2023 and the five-year average of 80%.

HOUSTON (ICIS)–So far in the earnings season, US chemical producers have given up on a second half recovery and will rely on their own actions to increase earnings while they wait for interest rates to fall. US-based chlor-alkali producer Olin and specialty chemicals producer Eastman were the latest to abandon the prospect of a second-half recovery. Excluding the effects of Hurricane Beryl, Olin expects the second half of 2024 to resemble its first half in terms of adjusted earnings before interest, tax, depreciation and amortization (EBITDA). Eastman does not expect any improvement in primary demand in its key markets and geographies. US-based paints and coatings producer Sherwin-Williams flat-out said that it did not expect to get any help from the market during the company’s second half. Improvements will have to come from within Sherwin-Williams. Similarly, RPM International said it will rely on its margin achievement plan (MAP) to increase earnings in what it has called a no-growth and low-growth economy. Such self-help measures led Evonik to raise its guidance even though it noted the absence of any broad-based macroeconomic recovery. PPG lowered its full-year guidance because of lower auto production and uneven industrial production. However, PPG did break from the trend, in that it expected US economic activity to improve as the second half progressed. Growth should continue in Mexico. In China, PPG said growth should continue for the company during the second half but at a slower pace. Demand in Europe is uneven but stabilizing. Dow, meanwhile, expects a slower pace of recovery for some of its end markets for 2024. In an interview with ICIS, Dow’s CFO said consumer durables and building and construction will likely remain weak through the rest of the year. In North America, volumes for architectural coatings will not return to pre-pandemic levels until 2025, Dow said. HIGHER INTEREST RATES HOLD BACK KEY CHEM END MARKETSFor many key chemical end markets, elevated interest rates continue to suppress demand. The Federal Reserve has maintained the nation’s benchmark federal funds rate at a multiyear high of 5.25-5.50% as part of a campaign to lower inflation to its target of 2%. The elevated federal funds rate has raised interest rates throughout the US economy, making big-ticket items like homes, automobiles, appliances and furniture more expensive. The higher rates have had an additional effect on the existing home market. Consumers who have cheap mortgages are reluctant to sell their houses and assume a new 30-year loan with a much higher rate. These homeowners are hanging on to their houses, and this trend has battered the nation’s existing home market, bringing sales to a 30-year low. The slowdown in existing home sales has lowered demand for architectural coatings, furniture, mattresses and appliances. For these end markets to recover, Dow said that 30-year mortgage rates need to fall to about 5%. Right now, they are at 6.78%. SIGNS OF CONSUMER STRAINSherwin-Williams noted some signs of strain among US consumers. It is not just inflation, which remains above the Fed’s target of 2%. They have depleted savings and taken on debt. Business from insurance claims declined because consumers were reluctant to pay deductibles, the company said. It noted weakness in its do-it-yourself (DIY) products sold to consumers through third-party retail stores. These customers tend to be more sensitive to price than those that shop at Sherwin-Williams’ paint stores. Dow noted that sales to contractors were stronger than those to DIY consumers. RPM also warned of uncertain DIY demand. Companies outside of the chemical industry are also seeing signs of weakening consumer demand. The fast-food chain McDonald’s also noted consumer weakness. In the second quarter, global same-store sales fell by 1.0% and US same-store sales fell by 0.7%. The broadcaster CNBC said it was the first time that same-store sales fell since the fourth quarter of 2020. McDonald’s said that consumers have become more careful about how they spend their money. Real disposable incomes in the US barely grew in June following an increase of 0.3% the previous month. Growth in consumer spending also slowed down in June. RATE CUTS BECOME MORE LIKELYConsumers could get some relief in the upcoming months. The Federal Reserve could indicate that it is ready to start lowering the benchmark interest rate during its next meeting on 31 July. Inflation is showing signs of falling to its target of 2%. Many expect that the first rate cut will happen during the Federal Reserve’s meeting on 18 September. The anticipation of future rate cuts would trickle through the economy and lower rates for mortgages and other forms of debt. If the inflation continues to cool and if the Federal Reserve continues lowering rates, then mortgages could reach the 5% threshold that Dow said could lead to a sustained recovery for several key end markets. MORE CHEMS SCHEDULED TO DISCUSS OUTLOOKSMany more companies should reveal their guidance and outlook during the next two weeks as earnings season continues. So far, it looks like the industry will have to continue waiting for a sustained recovery. Insight article by Al Greenwood Thumbnail shows a torn dollar. Image by Shutterstock.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 26 July. INSIGHT OUTLOOK: Next US president may upend EV policies, trade, regulations The US election could see Donald Trump return as president with majorities in both legislative chambers, which could bring a reduction in excessive red tape, weaker support for electric vehicles (EVs) and impose even more ponderous tariffs and trade restrictions. OUTLOOK: Red Sea diversions, tight capacity to pressure rates higher, but could ease in August Tight capacity as vessels continue to divert away from the Red Sea and Suez Canal for the longer voyage around the Cape of Good Hope is likely to keep upward pressure on ocean freight rates, but an early start and end to the typical peak season could provide some relief. INSIGHT: US chemical exports more exposed to China today as potential new trade war looms – ICIS analysis As campaigns heat up heading towards the US elections in November, trade wars and tariffs are now front and center in the minds of global chemical players. Producers and customers must brace for the prospects of higher tariffs, particularly on Chinese imports, as well as retaliatory tariffs by China. Dow sees B&C, consumer durables weakness persisting through 2024, rate cuts needed – CFO Weakness in building and construction, and consumer durables demand is expected to persist through 2024, likely pushing out a meaningful earnings recovery to 2025, Dow’s chief financial officer said on Thursday. INSIGHT: Venezuela’s petchems may finally get a chance – but unlikely to be under Maduro Venezuelans go to the polls on Sunday with the hope of a free and fair election, in which case President Nicolas Maduro is widely expected to lose office in a country where the economy has been battered by years of mismanagement, corruption, and US sanctions.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at warning signs around the oil market. 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. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 26 July. BASF sees slowing electric vehicle sector, pauses Tarragona refinery plans BASF is moving to “de-risk” its exposure to the electric vehicles sector in response to slowing market dynamics, CEO Markus Kamieth said on Friday, pausing or deciding against several investments connected to the industry. Dow sees B&C, consumer durables weakness persisting through 2024, rate cuts needed – CFO Weakness in building and construction, and consumer durables demand is expected to persist through 2024, likely pushing out a meaningful earnings recovery to 2025, Dow’s chief financial officer said on Thursday. Eurozone private sector momentum slows further in July Eurozone private sector momentum almost slowed to a standstill in July, dropping to a five-month low as new orders fell and business confidence ebbed. Africa PE/PP demand to remain flat, supply picture difficult to predict Little is certain when it comes to African economics but it appears a fairly safe bet that underlying demand in the polymer markets will remain subdued for the second half of the year across the continent. EU announces provisional ADDs on biodiesel imports from China The EU has implemented provisional antidumping duties (ADDs) on biodiesel from China after deciding that a recent surge in imports has harmed the competitiveness of Europe-based operations. The European Commission has suggested a provisional tariff between 12.8% to 36.4% starting in mid-August.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 26 July 2024. Typhoon Gaemi makes landfall in southern China; hits port operations By Nurluqman Suratman 26-Jul-24 10:36 SINGAPORE (ICIS)–Typhoon Gaemi slammed into Fujian province in southern China on the evening of 25 July, bringing heavy rains as it continues to move inland on Friday, with the strong downpour expected to last three days. PODCAST: Typhoon Gaemi to delay propane, butane cargo arrivals in China By Zhou Shihao 25-Jul-24 14:49 SINGAPORE (ICIS)–Typhoon Gaemi will test the resilience of the liquefied petroleum gas (LPG) supply chain, causing temporary shipment delays and port closures, but market prices and arrival schedules are expected to remain stable and manageable. PODCAST: Hydrogen – the critical blend for decarbonizing gas power in China By Yu Yunfeng 25-Jul-24 09:47 SINGAPORE (ICIS)–China’s installed capacity of gas power generation is projected to surpass 150 GW by 2025, representing roughly 6% of the country’s total installed power generation capacity. VIDEO: China’s LDPE market weakens as supply tightness eases By Joanne Wang 24-Jul-24 14:35 SINGAPORE (ICIS)–Watch ICIS senior industry analyst Joanne Wang discuss the driving factors behind the China’s low density polyethylene (LDPE) price fluctuations this year and briefly discuss prospects for the second half of this year. India cuts MDI import duty; plans six-month review of overall tariff structure By Nurluqman Suratman 23-Jul-24 18:04 SINGAPORE (ICIS)–India will cut import duties for methylene diphenyl diisocyanate (MDI) by 2.5 percentage points to 5.0% effective 24 July, with plans to review the country’s overall tariff structure in the next six months. OUTLOOK: China’s H2 refinery throughput to be weighed by economic slowdown, fuel substitution By Patricia Tao 23-Jul-24 11:21 SINGAPORE (ICIS)–China’s crude throughput is forecast to edge lower to 15.05 million barrels/day in the second half of 2024, about 0.4% lower year on year amid continued sluggishness of the domestic economy and the growing competition from alternative fuels. INSIGHT: China PE demand growth for 2024 to be slowed by weak consumer confidence By Amy Yu 22-Jul-24 17:41 SINGAPORE (ICIS)–China polyethylene (PE) demand is expected to shift to the traditional off-season in July, due to the impact of high temperatures and flood season.

HOUSTON (ICIS)– Producer Agrimin Limited said their Mackay Potash project in Western Australia is now advancing towards a final investment decision. In an update on quarterly activities the company said it continues to focus on their project which is planned to be able to manufacture standard and granular sulphate of potash (SOP) products. Current activities include efforts towards project funding and strategic partnerships, design works, environmental approvals as well as product marketing. The Mackay project is set to undertake sustainable extraction of brine from Lake Mackay using a network of shallow trenches, which will be transferred along trenches into a series of solar evaporation ponds. Raw potash salts will crystallize on the floor of the ponds and be collected by wet harvesters and pumped as a slurry to the processing plant that will refine harvested salts into high quality finished SOP ready for direct use by customers. SOP volumes will be hauled by a dedicated fleet of road trains to a purpose-built storage facility at Wyndham Port. At the port it will be loaded via an integrated barge loading facility for shipment to customers. The project’s definitive feasibility study (DFS) was completed in July 2020 and demonstrated that once in operation it could be the world’s lowest cost source of seaborne SOP. The independent technical review of the DFS was completed in April 2021. The company has signed three binding offtake agreements with Sinochem Fertilizer Macao Limited for the supply of 150,000 tonnes/year, Nitron Group for 115,000 tonnes/year and with MacroSource for 50,000 tonnes/year. Agrimin has already completed site-based testing for the salt harvesters, geotechnical sampling and for the sealed haul road. Additionally, the company has worked with its proposed power contractor to refine the project’s site power station design which has resulted in a hybrid diesel, solar, wind and battery solution. Regarding environmental clearance the company said the project is being assessed by the Western Australian Environmental Protection Authority (EPA) and during the quarter it resubmitted the environmental impact assessment response, which included revised management and monitoring plans. It is still expected that the EPA approval will come during the second half of 2024. Agrimin said it is also progressing other secondary approvals, licenses and agreements which included coverage for mining operations project safety and water regulations.

The infographic for this story was initially developed by ICIS hydrogen policy and regulation analyst Aayesha Pathan LONDON (ICIS)–On 17 July the government of the Czech Republic approved an update to its hydrogen strategy. The update follows a wide array of European policy developments such as targets for the use of renewable hydrogen in transport and industry, as well as alternative fuels infrastructure regulation on hydrogen refuelling stations. The strategy indicates a three phased-approach to the development of the market, focusing initially on localized production and offtake through hydrogen valleys, moving towards large-scale hydrogen imports towards the end of the decade and into the 2030s. ICIS has produced the following infogram to reflect some of the core principles of the strategy update.

LONDON (ICIS)–Senior Editor for Recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Eastern Europe bale bullishness eases Some northwest Europe flake sellers’ views on August offers vary Swedish deposit return scheme (DRS) introduces R-PET cap from May 2025