LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the major changes underway in the auto market and how they are set to transform the chemicals business. 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 30 August. Europe OX post-summer restocking intentions unclear as weak demand lingers Restocking operations after the summer were once common practice in the European orthoxylene (OX) market, but this year could be different. BASF to shut down adipic acid production at Ludwigshafen next year BASF is to end production of adipic acid and several downstream units at Ludwigshafen, Germany, as part of structural changes underway at the site, the company said on Thursday. Rising costs, outages fail to rattle sluggish propylene oxide market in Europe Outages at domestic suppliers, a local unit being flagged for a potential sale and rising production costs have failed to rattle a sluggish European propylene oxide (PO) market. Europe August nylon 6,6 contract prices soften in a slow market European nylon 6,6 contract prices for August softened from July levels, posting highly varied monthly deltas. Global spot index slips on lower prices in northeast Asia, US Gulf The global spot ICIS Petrochemical Index (IPEX) slipped by nearly one-percentage point in the week ending 23 August, on the back of price falls in northeast Asia and the US Gulf.

MUMBAI (ICIS)–India’s economic growth slowed down to 6.7% in the April-June 2024 on reduced government capital expenditure during the national elections and an uneven monsoon season, official data showed. The fiscal Q1 growth was the lowest GDP growth in 15 months, according to the Ministry of Statistics and Programme Implementation (MoSPI) on 30 August. The country’s fiscal year ends in March. The number was lower than the 7.8% growth posted in the previous quarter and the 8.2% pace set in April-June 2023. The growth was also lower than the Reserve Bank of India’s (RBI) forecast of 7.2% for the quarter. For current fiscal year ending March 2025, the central bank is projecting a GDP growth of 7.2%, with Q2 at 7.2%, Q3 at 7.3% and Q4 at 7.2%. The slowdown in GDP growth occurred due to reduced government spending during the election period, RBI governor Shaktikanta Das said at a press conference on 31 August. India’s general elections were held from 19 April to 1 June 2024. “Domestic economic activity continues to be resilient on positive trends in agriculture, and an anticipated increase in government expenditure. Manufacturing activity continues to gain ground on the back of improving domestic demand,” he added. An anticipated increase in government expenditure over the next few months would provide the required support to economic growth, Das said. India’s economic growth has been robust, with an average growth rate of 8.3% over the last three years, he added.

SINGAPORE (ICIS)–China’s August official manufacturing purchasing manager index (PMI) dropped to a six-month low of 49.1, while a private survey by Caixin gives an expansion print of 50.4 from 49.8 in July. The official PMI published by the National Bureau of Statistics (NBS) had been in contraction territory for four consecutive months, pointing to persisting weakness in factory activity. The sub production index fell to 49.8 in August from 50.1 in July, while new order index declined to 48.9 in August from 49.3 in the previous month, NBS said. High temperatures, intensive rain and seasonal lull in combine dragged the PMI figures, according to NBS. For Caixin, the private firm said there was a slight uptick in production index and strong rebounding in new order index, which is mainly driven by improving basic demands and all types of promotions.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 30 August 2024. Asia EDC demand suppressed while deep-sea availability improves By Jonathan Chou 30-Aug-24 12:19 SINGAPORE (ICIS)–Soft downstream conditions are weighing on demand for ethylene dichloride (EDC) in Asia. Margins of some downstream polvinyl chloride (PVC) producers are being depressed by an influx of imports in the key markets of India and southeast Asia. SE Asia regional ethylene tightness sees more arbitrage opportunities By Josh Quah 28-Aug-24 18:07 SINGAPORE (ICIS)–The market thus far is on track to end the third quarter as anticipated in the ICIS outlook for second-half 2024. The two main regions in Asia’s ethylene markets – northeast Asia and southeast Asia – have diverged in terms of demand-supply fundamentals. INSIGHT: China PP exports to seek other outlets amid intense competition in southeast Asia By Lucy Shuai 27-Aug-24 17:34 SINGAPORE (ICIS)–As China’s polypropylene (PP) capacity increases and a weak economy drags down demand, the imbalance between supply and demand has intensified and China’s PP exports have surged. NE Asia ACN at the lowest point in a year, market players await seasonal demand By Corey Chew 27-Aug-24 11:11 SINGAPORE (ICIS)–The acrylonitrile (ACN) market saw prices fall significantly last week in the northeast Asia market, while the India market saw a smaller decrease. India’s BPA price falls; sellers may face more pressure By Li Peng Seng 26-Aug-24 13:59 SINGAPORE (ICIS)–The average bisphenol A (BPA) spot price in India has fallen to a 2.5-month low recently on easing freight rates, and buyers may now hold back spot purchases if they could as they expect freight rates to undergo further downward correction. INSIGHT: China PP exports to seek other outlets amid intense competition in southeast Asia By Lucy Shuai 27-Aug-24 17:34 SINGAPORE (ICIS)–As China’s polypropylene (PP) capacity increases and a weak economy drags down demand, the imbalance between supply and demand has intensified and China’s PP exports have surged.

HOUSTON (ICIS)–US railroads Norfolk Southern (NS) and BNSF have reached tentative, five-year collective bargaining agreements with several labor unions four months ahead of the opening of the next collective bargaining round, the companies announced on Friday. The agreements cover about 30% of the unionized NS workforce and about 15% of BNSF union workers. The agreements are still subject to ratification by union membership. BNSF and NS reached agreements with the International Brotherhood of Boilermakers and Blacksmiths (IBBB) and the National Conference of Firemen and Oilers (NCFO). NS also separately reached tentative agreements with the American Train Dispatchers Association (ATDA), the Brotherhood of Maintenance of Way Employes Division (BMWED) and the International Association of Sheet Metal, Air, Rail and Transportation Workers – Transportation Division Yardmasters (SMART-TD Yardmasters). The tentative agreements provide a 3.5% average wage hike annually over the next five years and offer railroaders more vacation earlier in their career and make meaningful enhancements to an already robust suite of health care benefits. Over the past two weeks, NS has reached tentative agreements with nine of its 13 unions. BNSF reached tentative agreements with four other unions last week – the ATDA, the Brotherhood of Railway Carmen Division/TCU (BRC), International Association of Sheet Metal, Air, Rail and Transportation Workers – Mechanical Department (SMART-MD) and the Transportation Communications Union/IAM (TCU). Railroad CSX last week announced agreements with TCU, BRC, SMART-TD, BMWED, the International Association of Machinists & Aerospace Workers (IAM), the American Railway and Airway Supervisors Association (ARASA) and the B&O Joint Council (BOJC). CSX has now reached a total of 12 separate tentative agreements, covering more than 50% of its union employees. The progress on labor negotiations should offer some relief to chemicals markets in the US considering the recent four-day shutdown in Canada because of labor strife. Freight rail service at railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC) resumed on 26 August following an order by a labor tribunal that ended a complete shutdown that started on 22 August. 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. Railroads are vital to the chemicals industry as chemical railcar loadings represent about 20% of chemical transportation by tonnage in the US, with trucks, barges and pipelines carrying the rest. With additional reporting by Stefan Baumgarten Thumbnail shows railway tank cars. Image by Sergei Ilnitsky/EPA-EFE/Shutterstock

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Colourless (C), blue flake ranges narrow in eastern Europe Contradictory C bale prices heard in parts of the east as well Wider R-PET market still impacted by summer holiday slowdown

LONDON (ICIS)–An unexpectedly active August for European polyethylene (PE) and polypropylene (PP) was rounded off by surprising news of an unexploded WW2 bomb and more details of which LyondellBasell sites might be sold or rationalised. Senior editors Vicky Ellis, Ben Lake and Samantha Wright look at what else made August unusual, and look ahead to September in this latest podcast on Europe, Africa and Turkey markets. Articles they refer to include: Joe Chang’s Insight article, A new kind of low-carbon PE, PP is coming in 2025, and low density polyethylene (LDPE), linear low density polyethylene (LLDPE) and PP multi-month spot price highs.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Chemical companies, as my ICIS colleague Kevin Swift and I write in today’s blog, need “to write their own story”. This can only come from a much more rigorous approach to scenario planning from the C-Suite level down that needs to then permeate to every decision at every level of an organisation, from long-term investment planning right down to even month-by-month pricing and production- volume decisions. And key to building proper scenarios, now that the Chemicals Supercycle, is understanding demographics as demographics are chemicals demand destiny. Chemicals demand is of course the number of people multiplied by per capita consumption. Because of the increasing uncertainty about the rate at which most of the world’s population is going to age and shrink, one set of scenarios on future population levels makes no sense at all. Front and centre of the global demographics crisis is China given that in 2024, ICIS expects China to drive 40% of the world’s polymers demand from just 18% of the global population. There is a huge variance in estimates of China’s population decline that you simply must factor in. For example, China’s population may decline to 767 million by 2100 or just 373 million! Kevin’s scenario modelling on China’s demographics and its polymers demand is an important starting point for your boardroom discussions: Under the ICIS Base Case, major resins demand rises from 103.1 million tonnes in 2020 and starts to mature in the 2030s, reaching 188.6 million tonnes in 2050. After 2050, a falling population and evolving market/economic dynamics adversely affect demand, which falls to 89.3 million tonnes in 2100. This is a level consistent with pre-2020 demand. With a more pessimistic outlook on population and reduced economic dynamism under the Dire Demographics scenario, major resins demand rises from 103.1 million tonnes in 2020 and starts to mature in the 2030s, reaching 116.2 million tonnes in 2050. With a falling population and adverse economic dynamics, demand falls to 38.7 million tonnes in 2100, a level consistent with pre-2010 demand. Equally important is consideration of what these demand outcomes could mean for China’s polymers trade flows: The Base Case suggests China remains a net importer of major resins, but its net import position falls from 27.4 million tonnes in 2020 to 4.7 million tonnes in 2050. We only focus on the period to 2050. Under the Dire Demographics scenario, production is more than sufficient and by early-2030s China attains self-sufficiency in these resins and emerges as a net exporter of 3.6 million tonnes in 2035, 7.1 million tonnes in 2040, 9.7 million tonnes in 2045 and 11.6 million tonnes in 2050. Please write your own story by conducting the right kind of planning for a far more nuanced and uncertain chemicals world. 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.