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Acetic Acid08-Aug-2024
HOUSTON (ICIS)–Celanese has lifted the force
majeure it declared on acetic acid and vinyl
acetate monomer (VAM) sold in the western
Hemisphere, the US-based acetyls producer said
on Thursday.
Celanese had declared force majeure
earlier in the year after two feedstock
suppliers suffered from disruptions.
During an earnings call, Celanese said the
effect of the force majeure was limited because
of soft overall demand amid a difficult
macro-economic environment.
Thumbnail shows adhesive, which is
typically made with VAM. (Image by
Shutterstock)
Ammonia08-Aug-2024
HOUSTON (ICIS)–Navigator Holdings, the largest
fleet owner of handysize liquefied gas
carriers, announced it is undertaking a
co-investment with Attis Clean Energy into
Ten08 Energy, which is creating a production
export facility in Texas.
Revealed this past May, clean ammonia developer
Ten08 is planning an industrial-scale hybrid
blue and green ammonia production export
facility to be located on the Texas Gulf Coast.
The goal is to produce the most competitively
priced ammonia molecule to help decarbonize the
power, shipping, fertilizer and chemicals
industries.
The first phase, comprising 1.4 million
tonnes/year of ultra-low carbon ammonia
production, is expected to commence operations
in late 2029 or early 2030.
Navigator said its financial commitment is
currently $2.5 million and complements the
development capital from lead investor Attis
who made its initial investment to fund
development until a final investment decision
is concluded.
The company also received an option to make a
larger investment once the investment decision
is made of up to $100 million of preferred
equity towards construction of the terminal and
export infrastructure of the project, with
potential further investments in subsequent
expansions.
The parties intend to offer an integrated
service of US-based clean ammonia production
combined with international seaborne
transportation of the ammonia on
ammonia-powered gas carriers to customers in
Europe and Asia.
“This investment is yet another example of our
commitment to growth through energy
infrastructure projects and meaningfully
supports our existing ammonia shipping
business,” said Navigator Holdings CEO Mads
Peter Zacho.
“Clean ammonia is crucial to the success of the
energy transition for both power generation and
carbon free shipping, and the Ten08 project
will play a critical role in further developing
the clean ammonia industry.”
Ammonia08-Aug-2024
HOUSTON (ICIS)–Nutrien said global potash
demand during H1 2024 has been supported by
favorable consumption and low channel
inventories in North America and southeast
Asia, with global nitrogen being boosted by
steady demand and continued supply challenges
in key producing regions.
In its Q2 earnings release the Canadian
fertilizer major said it is also seeing that
there are expectations which have been created
for record US corn and soybean yields, that
have pressured crop prices.
For the potash segment Nutrien said the
settlement of contracts with China and India in
July is expected to support demand in standard
grade markets in the second half of this year.
The producer said that the uptake on the summer
fill program it offered in North America has
been strong, and as such it has raised
full-year global potash shipment forecast from
69 million tonnes to 72 million tonnes.
It further said it expects a relatively
balanced market in H2 2024.
The company showed that potash sales volume
guidance has been increased from 13.2 million
tonnes to 13.8 million tonnes due to
expectations for higher global demand in 2024.
It noted that the range does reflects the
potential for Canadian rail strike in the
second half which would have a relatively short
duration.
Looking at the situation with global nitrogen,
Nutrien said Chinese urea export restrictions
have been extended into the second half and
natural gas-related supply reductions could
continue to impact nitrogen operating rates in
Egypt and Trinidad.
The company said US nitrogen inventories were
estimated to be below average levels entering
H2 2024, contributing to strong engagement the
summer fill programs.
Nitrogen sales volume guidance has been
narrowed from 10.7 million tonnes to 11.1
million tonnes as Nutrien continues to expect
higher operating rates at their North American
and Trinidad plants,
It is also counting on a growth in sales of
upgraded products such as urea and nitrogen
solutions.
While end user demand has taken its typical
summer slump, Nutrien said they expect buying
for crop inputs in North America to remain
strong in Q3 as growers aim to maintain optimal
plant health and yield potential.
With that view it noted that good affordability
for potash and nitrogen will be supportive of
the upcoming fall application rates
“Crop input demand remains strong, and we
raised our full-year outlook for global potash
demand due to healthy engagement in all key
markets,” said Ken Seitz, Nutrien president and
CEO.
“Our upstream production assets and downstream
retail businesses in North America and
Australia have performed well in 2024.”
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Caustic Soda08-Aug-2024
HOUSTON (ICIS)–The 2024 Atlantic hurricane
season is likely to remain extremely active,
the National Oceanic and Atmospheric
Administration (NOAA) said on Thursday in an
update to its previous forecast.
The only change to the previous forecast,
which predicted the greatest number of
hurricanes in the agency’s history, was a
slight reduction in the number of named storms,
from 17-25 to 17-24.
A storm is named once it has sustained winds of
39 miles/h (63 km/h).
“The hurricane season got off to an early and
violent start with Hurricane Beryl, the
earliest category-5 Atlantic hurricane on
record,” NOAA Administrator Rick Spinrad said.
“NOAA’s update to the hurricane seasonal
outlook is an important reminder that the peak
of hurricane season is right around the corner,
when historically the most significant impacts
from hurricanes and tropical storms tend to
occur.”
Atmospheric and oceanic conditions continue to
support an above-normal 2024 Atlantic hurricane
season, with a 90% probability of this result,
NOAA said.
There is only a 10% chance of a near-normal
season in 2024 and a negligible chance of a
below-normal season.
Forecasters said the Atlantic Ocean basin is
expected to be remarkably active due to several
factors:
Warmer-than-average sea surface
temperatures in the tropical Atlantic Ocean and
Caribbean Sea.
Reduced vertical wind shear.
Weaker tropical Atlantic trade winds.
An enhanced west African monsoon.
These conditions are expected to continue into
the fall, NOAA said.
Of note, the dry Saharan air that prevented
tropical storm development during portions of
the middle of the summer is expected to subside
in August.
Another factor this year is the possibility of
La Nina developing in the coming months.
Hurricanes and tropical storms can disrupt the
North American petrochemical industry because
many of the nation’s plants and refineries are
along the US Gulf Coast in the states of Texas
and Louisiana.
In 2022, oil and natural gas production in the
Gulf of Mexico accounted for about 15% of total
US crude oil production and about 2% of total
US dry natural gas production, according to the
US Energy Information Administration (EIA).
Even the threat of a major storm can disrupt
oil and natural gas supplies because companies
often evacuate US Gulf platforms as a
precaution.
The updated hurricane forecast from
Colorado State University’s (CSU’s) Weather and
Climate Research department also predicted an
extremely active season, expecting 23 named
storms, 12 hurricanes and six major hurricanes.
The Atlantic hurricane season runs through 30
November.
See the Beryl and Gaemi: Impact on
Chemicals topic
page
Ethylene08-Aug-2024
HOUSTON (ICIS)–Chemical companies are
expecting a lacklustre second half of the year,
but, so far, they will unlikely suffer through
a recession, despite the spate of pessimistic
economic data and the worst stock-market
selloff in more than a year.
The financial press has said that much of
the selloff was caused by investors abandoning
the Japanese carry-over trade.
Chemical executives have not warned of a
possible recession during their earnings calls.
It is unclear if recent events will
increase the likelihood of larger and more
frequent rate cuts by the Federal Reserve.
SO FAR, STATISTICS DO NOT INDICATE
RECESSIONThe recent selloff in
the stock market was enough to give anyone a
jolt.
The major US indices had three consecutive
trading days of selloffs, with the last one on
Monday causing declines that exceeded 2%. It
was the worst day in more than a year.
The weakness of the subsequent relief rally is
also concerning, with the declines resuming on
Wednesday.
But the stock market is not the economy, and,
so far, the four key statistics used to measure
its health do not point to a recession.
One of those statistics,
non-farm payrolls, grew by 114,000 in July,
a pace below the expectations of most
economists. While the US had a bad month, it is
still adding jobs, said Kevin Swift, ICIS
senior economist for global chemicals.
Moreover, the payroll statistics indicate that
some of the weakness in the data was caused by
the effects of Hurricane Beryl, Swift said.
Two other key statistics are still expanding,
he said. Those are industrial production and
real personal income less transfer payments.
Only real business sales have shown softness,
Swift said.
PROSPECTS STILL WEAKThe
unlikely risk of a recession provides cold
comfort to the chemical industry, which has
spent months waiting for a recovery after what
many described as the worst destocking cycle
ever.
Almost universally, companies have given up on
the prospects of a second half recovery.
Improvements in profit will have to come
internally from cost-cutting or efficiency
measures. The market will not help.
Consumers have largely spent the excess savings
that they pocketed from government stimulus and
support that followed the pandemic, Swift said.
The lower quintile of consumers is under
pressure.
Chemical companies noted stress among consumers
who are more sensitive to costs, such as those
who buy paints and coatings for do-it-yourself
(DIY) projects.
They are buckling under the weight of elevated
interest rates, which have made housing and
consumer durables less affordable.
Before the markets for such items improve, Dow
said that mortgage rates
need to fall towards 5%.
The prospect of declines will depend on
expectations for the benchmark federal funds
rate, which the Federal Reserve will likely
decide to lower at its next meeting on
September 18.
Even then, it will take time for those rate
cuts to trickle down to chemical markets.
Huntsman said the
lag is typically about two quarters.
Insight article by Al
Greenwood
Thumbnail shows an indicator board for a
stock exchange. Image by BIANCA DE
MARCHI/EPA-EFE/Shutterstock
Hydrogen08-Aug-2024
LONDON (ICIS)–India’s Hygenco Green Energies
has signed a memorandum of understanding (MoU)
with Mitsubishi Power to explore delivering
green hydrogen and ammonia-fired gas turbine
combined cycle (GTCC) power plants.
The agreement includes supplying green fuel for
Mitsubishi Power’s GTCC technology and
developing commercially viable green hydrogen
and ammonia production assets on a
‘build-own-operate’ or ‘gas-as-a-service’
basis.
“We are excited to leverage our expertise in
green hydrogen and ammonia to support the
decarbonization of power generation and
contribute to a sustainable energy future, ”
said Hygenco CEO Amit Bansal.
The partnership, backed by financial support
from the Japan International Cooperation Agency
(JICA), will provide its integrated solutions
in India and globally, Hygenco added in a
statement.
Ammonia07-Aug-2024
HOUSTON (ICIS)–CF Industries said in its
latest nitrogen fertilizer market outlook that
in the near-term it expects the global
supply-demand balance to remain constructive,
led by nitrogen import requirements through
year-end for Brazil and India.
The producer also anticipates there will be
continued wide energy spreads between North
America and high-cost production in Europe.
The fertilizer producer said from the end of
the second quarter of 2024 into the third
quarter of this year this segment of
fertilizers has faced challenges which include
gas curtailments in Egypt and Trinidad, along
with scheduled outages and a lack of
substantial urea export availability from
China.
These factors the producer said have actually
been beneficial for supporting global nitrogen
pricing during a period of year that typically
sees lower prices and low global shipments as
demand shifts from the northern hemisphere to
the southern hemisphere.
“Over the medium-term, significant energy cost
differentials between North American producers
and high-cost producers in Europe and Asia are
expected to persist. As a result, the Company
believes the global nitrogen cost curve will
remain supportive of strong margin
opportunities for low-cost North American
producers,” said CF Industries.
“Longer-term, management expects the global
nitrogen supply-demand balance to tighten as
global nitrogen capacity growth over the next
four years is not projected to keep pace with
expected global nitrogen demand growth of
approximately 1.5% per year for traditional
applications and new demand growth for clean
energy applications.”
It further said that global production is
expected to remain constrained by the ongoing
challenges related to cost and availability of
natural gas.
Looking specifically at North America the
producer said it believes nitrogen channel
inventories in the region for all products are
below average based on strong demand for urea
and UAN during the spring application season
and higher-than-expected planted corn acres.
CF added that reported UAN and ammonia fill
programs achieved prices above 2023 levels
despite softening farm economics in the region
as corn and soybean prices have fallen due to
higher forecasted production in 2024 in the US
and Brazil.
For Brazil urea consumption is forecasted to
increase 3% year over year to more than 8
million tonnes, supported by improved supply
availability and lower global urea prices.
Urea imports to Brazil in 2024 are expected to
be in the range of 7 million to 8 million
tonnes as domestic production remains limited.
Regarding India CF said the country is expected
to be active importing urea through the second
half as the country secured lower-than-expected
volumes in its two most recent tenders.
In addition, urea consumption is expected to
rise to support rice, wheat and other crop
sowings.
Currently CF expects urea imports to India in
2024, including volumes supplied on a
contractual basis, to be in a range of 5
million to 6 million tonnes as there are
recently revitalized plants and new facilities
operating at higher rates.
For Europe, the producer said there was
approximately 25% of ammonia and 30% of urea
capacity reported in shutdown or curtailment
mode in early July.
CF said because of this situation it
anticipates ammonia operating rates and overall
domestic nitrogen product output in Europe will
remain below historical averages over the
long-term, especially given the region’s status
as the global marginal producer.
As a result, the company does expect imports of
ammonia and upgraded products to the region to
be higher than historical averages.
Looking at China, CF said the ongoing urea
export policy continues to cause limited urea
export availability from the country.
For the first six months of 2024, China
exported 140,000 tonnes of urea, which is 86%
lower year-on-year.
For Russia, the producer said their view is
that urea exports will increase this year due
to the start-up of new urea granulation
capacity and the willingness of certain
countries to purchase those volumes, including
the US and Brazil,
Russian ammonia exports are projected to rise
with the completion of the country’s Taman
ammonia terminal in the second half, though
annual ammonia export volumes are projected to
remain below pre-war levels.
Speciality Chemicals07-Aug-2024
HOUSTON (ICIS)–The Panama Canal Authority
(PCA) is immediately increasing the maximum
authorized draft for vessels transiting the
waterway to 49ft (14.94m) as water levels have
improved in Gatun Lake.
The increase in draft restrictions will allow
vessels to carry more cargo per trip as many
had to carry less than a full load to meet the
previous draft restrictions.
The region has been through an intense drought
that caused the PCA in 2023 to lower allowable
drafts and to limit the number of vessels
permitted to transit each day, a first since
the canal formally opened in 1914.
Restrictions have gradually eased over the past
few months and are approaching the average
daily transits of 36-38/day seen prior to
impacts from the drought.
The better conditions at the canal are likely
to improve transit times for vessels traveling
between the US Gulf and Asia, as well as
between Europe and countries on the west coast
of Latin America.
This should benefit chemical markets that move
product between regions, as shown in the
following chart.
WAIT TIMES FOR NON-BOOKED
VESSELS
Wait times for non-booked southbound vessels
ready for transit have been relatively steady
at around two days, according to the Panama
Canal
Authority (PCA) vessel
tracker.
As of 7 August, the tracker showed wait times
of 0.4 days for northbound traffic and 2.1 days
for southbound traffic.
Visit the ICIS Logistics – impact on
chemicals and energy topic
page
Thumbnail image shows a
container ship passing
through the Panama Canal.
Courtesy the Panama Canal
Authority
Propylene07-Aug-2024
SINGAPORE (ICIS)–The third plenary session of
the Chinese Communist Party (CCP) Central
Committee recently concluded in July, with the
CCP underlining the country’s long-term
economic strategy. This session, a significant
event in China’s economic planning, serves as a
guide for both immediate and long-term
policies.
Market balance healthier than expected on
delays in capacity additions
No specific stimulus policies announced,
market participants eye 5% GDP target
Market sentiment generally supported by
Third Plenum
Senior Editor Julia Tan speaks with Senior
Analyst Joey Zhou on what China’s Third Plenum
could mean for Asia’s propylene markets.
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