SINGAPORE (ICIS)–Petrochemical trades in Asia may pick up mid-week with as Chinese markets re-open after a week-long holiday, but industry players remained bearish on demand recovery prospects. Trades subdued during 1-7 October China holidays Crude, naphtha prices rise amid geopolitical tensions China to announce more economic policies Crude gains on escalating Middle East tensions, weather-related disruptions in northeast Asia and the monsoon season in India were all factors that will affect trading this week. In late Asian trade, Brent crude breached $79/barrel, while US crude was trading at above $75/barrel, on growing fears of a wider conflict in the Middle East a year since the Israel-Hamas war began. Demand concerns, particularly in China, however, continue to cap gains. Prices of naphtha – the main petrochemical feedstock in Asia – typically track gains in upstream crude market. At noon, naphtha prices stood at $700/tonne CFR (cost & freight) Japan. With firm naphtha prices, production margins of petrochemical producers get squeezed. In the propylene and polymeric methylene diphenyl diisocyanate (PMDI) markets, players were awaiting clearer direction from China, whose players will return to the market on 8 October. For acetic acid, import demand from India slowed down as the seasonal monsoon in the country, which should have ended in late September, extended its stay and is expected to affect restocking ahead of Diwali holiday in end-October/early November. Diwali is the Hindu Festival of Light and is a major holiday in India. In Taiwan, Typhoon Krathon directly hit its petrochemical hub of Kaohsiung last week, causing power outages that affected plant operations at the site, with some units likely to be shut for days. In the case of Taiwan VCM (TVCM)’s 450,000 tonne/year vinyl chloride monomer (VCM) plant, it sustained equipment damage and may have to be down for 7-10 days, sources said. The consequent reduction is supply of some petrochemicals, however, will likely have a minimal impact on markets as demand remains largely weak. EYES ON CHINA Market players are expecting more economic measures from China post-holiday, which will follow a slew of policy announcements days before its week-long National Day celebration. China’s State Council announced on 6 October that the National Development and Reform Commission (NDRC), the country’s top economic planning body, will hold a press briefing on 8 October. In its announcement, the State Council referred to “systematically implementing a package of incremental policies to solidly promote economic growth, structural optimisation and sustained momentum of development”. China’s recent economic stimulus package have boosted investor sentiment, mainly in the equities markets, but there were doubts over any near-term lift to economic activity. Focus article by Jonathan Yee Additional reporting by Seng Li Peng, Jonathan Chou, Helen Lee, Shannen Ng and Hwee Hwee Tan

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which focuses on sector surprises for October. 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 4 October. No signs of petchems demand recovery from car sector on the horizon, H2 2025 may be a moment of truth After a strong rebound in car sales last year, the European automotive industry is facing a more challenging environment in the second half of 2024, leading to a drop in petrochemical requirements from car manufacturers. LANXESS exits polymers via sale of urethane business to Japan’s UBE LANXESS is selling its urethane systems business to Japanese chemicals producer UBE Corp for around €500 million, the German specialty chemicals firm said on Thursday. Europe recycled polyolefin agglomerates prices face downward pressure Europe recycled polyolefin agglomerate prices are facing downward pressure due to weak demand from mechanical recyclers. ADNOC makes public takeover offer for Germany’s Covestro Abu Dhabi state oil and petrochemicals player ADNOC has launched a public takeover offer for Germany-based producer isocyanates, polycarbonates and adhesives specialist Covestro, representing an equity value of €11.7 billion. Bold policy moves might not arrest China economic slowdown In a bold move to revitalize its economy and restore investor confidence, China unveiled a comprehensive package of monetary and fiscal measures less than a week before the country goes on a week-long holiday.

SINGAPORE (ICIS)–The base oils market in UAE is likely to see an uptick in demand in the fourth quarter, with the impact of escalating tensions in the region on crude prices and Group I supply from Iran closely monitored in the weeks ahead. Impact of regional conflict on spot Group I supply from Iran to emerge Group II export offers from the US awaited to offer clearer near-term market direction Persistent crude volatility may temper base oils uptake Currency woes in Africa may undermine finished lube exports In this podcast, ICIS editor Damini Dabholkar and senior editor Veena Pathare discuss recent market conditions and the outlook for the UAE.

SINGAPORE (ICIS)–Vietnam’s economy expanded by 7.4% year on year in the third quarter despite hefty losses from Typhoon Yagi, with growth marking its strongest in two years on robust exports. Yagi causes $3.3 billion in economic losses Jan-Sept GDP average growth at 6.82% Exports grow at double-digit annual rate The third-quarter GDP print represents an acceleration from the revised 7.09% year-on-year expansion in Q2, despite taking huge economic hit from Typhoon Yagi, which wrought havoc in Vietnam’s northern regions in September. For the first nine months of 2024, the economy posted an average annualized growth of 6.82%. Yagi, which was Asia’s strongest storm to date – killed 345 people in Vietnam, with total economic damage to the country estimated at around $3.3 billion, the General Statistics Office (GSO) said on 6 October. The agriculture, forestry and the fishery sectors were especially affected by Yagi, the GSO said. In September, the country’s manufacturing activity indicated a contraction, with its purchasing managers ‘s index (PMI) falling to 47.3, way below the expansion threshold of 50 and down by 52.4 in August, according to a survey by financial information services provider S&P Global. “Typhoon Yagi had a major impact on the Vietnamese manufacturing sector during September, with heavy rain and flooding leading to temporary business closures and delays across production lines and supply chains,” S&P Global said on 1 October. Vietnam is the fourth-biggest economy in southeast Asia and is a net importer of petrochemicals. Operations at its major petrochemical complexes were unscathed as their locations were not in Yagi’s path. Long Son Petrochemical is in the southern province of Ba Ria-Vung Tau; while the Dung Quat petrochemical complex is in the central Quang Ngai province; and the Nghi Son petrochemical complex is in the north-central Thanh Hoa province. EXPORTS DRIVE UP GDP GROWTH Vietnam, like most Asian economies, count exports as a major pillar of growth, which is being threatened by overall weakness in the global economy. But the country’s overall exports managed to post a double-digit annualized growth of 10.7% in the third quarter. For the first nine months of this year, Vietnam’s exports rose by 15.4% year on year to $299.6 billion while imports grew at a faster rate of by 17.3% at $278.8 billion, indicating robust domestic activity. The US is Vietnam’s biggest market, accounting for a third of the southeast Asian country’s exports for the period. Its biggest source of imports was China, whose share of the total was around 38% in the first nine months of 2024. The International Monetary Fund (IMF) forecasts Vietnam’s economic growth is projected to recover to 6.1% in 2024, “supported by continued strong external demand, resilient foreign direct investment, and accommodative policies”. The forecast is higher than the previous year’s GDP growth of 5.05% and was near the low end of the Vietnamese government’s target of 6.0-6.5%. However, Vietnam’s export-driven economy remains vulnerable to a global growth slowdown, persistent geopolitical tensions, and escalating trade disputes, the IMF warned. Focus article by Nurluqman Suratman Thumbnail image: An aerial drone photo shows a steel bridge collapsed in Phu Tho Province of northern Vietnam, 9 September 2024. (Xinhua/Shutterstock)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 4 October. INSIGHT: Bold policy moves might not arrest China economic slowdown By Nurluqman Suratman 30-Sep-24 13:51 SINGAPORE (ICIS)–In a bold move to revitalize its economy and restore investor confidence, China unveiled a comprehensive package of monetary and fiscal measures less than a week before the country goes on a week-long holiday. Focus: China urea to stay weak on ample supply and low demand By Rita Wang 30-Sep-24 18:14 SINGAPORE (ICIS)–China’s urea market rebounded slightly recently, but the outlook for the spot market remains weak due to high inventories, restricted exports and the upcoming lull season. Asia EDC spot demand likely to taper; regional supply to improve in end-2024 By Jonathan Chou 01-Oct-24 18:15 SINGAPORE (ICIS)–Asia’s spot EDC demand may be capped in the near term with buyers adequately stocked. Market players are watching out for ripple effects from China’s recent blitz of stimulus measures that may impact conditions for main derivative polyvinyl chloride (PVC). Asia PVC conditions may see limited impact from China stimulus measures By Jonathan Chou 02-Oct-24 13:48 SINGAPORE (ICIS)–Some bullishness was observed recently in China’s domestic market, in part due to its government’s stimulus measures. India faces BOPP film overcapacity on start-ups in next two years By Aswin Kondapally 02-Oct-24 22:11 MUMBAI (ICIS)–India is facing an oversupply of biaxially oriented polypropylene (BOPP) film, with nine new domestic production lines set to come on stream, which will exert heavy pressure on the market over the next two years. Asia MMA prices see first sharp fall in 2024 on bearish market conditions By Jasmine Khoo 03-Oct-24 10:06 SINGAPORE (ICIS)–Asia methyl methacrylate (MMA) spot import prices were assessed significantly softer in the week ended 27 September, reflecting significant price falls for the first time in 2024. INSIGHT: China Sept small-to-medium factories’ output shrinks on poor demand By Jonathan Yee 04-Oct-24 11:00 SINGAPORE (ICIS)–Manufacturing output of China’s small to medium enterprises went back to into contraction mode in September, underscoring continued and widespread weakness in the world’s second-biggest economy.

HOUSTON (ICIS)–Woodside Energy has confirmed that it experienced an incident on 3 October at the Beaumont Clean Ammonia site in Texas, which resulted in the death of an employee of one of fertilizer producer OCI’s construction contractors. In a statement, Woodside said that the incident occurred at approximately 8:30 am US central time at the Texas facility it recently acquired with construction efforts being managed by OCI. The company did not provide further details of the event other than to say the incident occurred during work activity being carried out at the site. It added that no one else was harmed. Woodside said that senior management was headed to the ammonia site and that a full investigation will be initiated. Currently a stand down of all work at the site is now in place. “This is a very sad day, and I offer my deepest sympathy to our colleague’s family, friends and workmates. The safety of our workforce is always our top priority, and we are providing full support to OCI and its contracting company,” said Meg O’Neill Woodside Energy CEO. “We are taking steps to understand the circumstances around this tragic event and are working closely with relevant authorities and regulators, OCI and the contractor company.” For its part, OCI responded by saying: “This is an incredibly sad time for OCI, and we extend our deepest condolences to our colleague’s family, friends, and co-workers. “The safety and well-being of our employees and contractor employees are of paramount importance to us. Both Woodside and OCI remain committed to providing a safe working environment and will take all necessary measures to prevent such tragedies in the future. We are fully cooperating with local authorities to investigate the circumstances surrounding this incident.” (recasts, amending OCI quote in final paragraph)

HOUSTON (ICIS)–US fertilizer producer Intrepid Potash announced that Bob Jornayvaz has stepped down as Chief Executive Officer and as a director of the board following his extended medical leave of absence. The Denver-based producer had previously announced Jornayvaz was injured in an accident while playing in the US Open Polo Championship in April and was on extended medical leave of absence. “We are thankful to Bob for his immeasurable contributions to the company over the last two decades,” said Barth Whitham, Chair of the Board. “Bob led numerous initiatives that strengthened our customer relationships, modernized our operations, and capitalized on our unique position as the only domestic producer of potash. He took great pride in the company and its contributions to the domestic and global agriculture industry. Bob and his family remain in our thoughts, and we continue to wish him well in his recovery.” Intrepid said their Chief Financial Officer Matt Preston will continue to serve as acting principal executive officer as the Board of Directors’ search to identify and select a new CEO. “The board’s search for a CEO is well underway. In the interim, we are pleased to continue to have Matt and the rest of the management team lead the execution of Intrepid’s strategic plan,” Whitham said. Intrepid is the only US producer of muriate of potash and also delivers volumes of magnesium, sulfur, salt and water products for use in not only agriculture and for animal feed, but also within the oil and gas industry.

HOUSTON (ICIS)–With the suspension of the strike at US Gulf and East Coast ports until 15 January, carriers are urging customers to use extended gate times being offered by some ports to collect or deliver any urgent containers to terminals. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) reached a tentative agreement on wages late Thursday and will extend the current contract while they continue to negotiate other outstanding issues. Analysts at freight forwarder Flexport said the relatively short duration of the ILA strike means that the impact on the broader US economy has been limited. “If the strike had continued into next week, the ripple effects could have been massive,” Flexport said. “While the broader economic impact has been averted, the strike has made an immediate impact on the ocean and air markets.” The company said that during the strike, bookings to the US East Coast remained open, and they expect them to stay open. The only limitations were rail routings to the East Coast via Los Angeles, but Flexport expects they will soon resume operations as well. “Early reports indicated that each day of the strike would have added five to 10 days of port congestion,” Flexport said. “If you have urgent cargo, routing via the West Coast on rail or transloading in Los Angeles remains your best option to avoid potential congestion on the East Coast.” CONTAINER RATES FALL FURTHER, PACE SLOWS Global average rates for shipping containers fell by 5% this week, according to supply chain advisors Drewry and as shown in the following chart. But rates from east Asia and China to the US fell at a slower rate, as shown in the following chart. Rates to the West Coast fell by 4.23% while rates to the East Coast fell by 1.76%. Drewry was anticipating rates to the US would because of the strike. But with the strike paused, and because peak season demand was largely pulled forward, it is likely that rates will continue to see downward pressure. 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. LIQUID CHEM RATES STABLE TO SOFTER The US chemical tanker market was largely stable week over week, with slight decreases seen from the US Gulf to Asia for smaller parcels. Most market participants were preparing to attend the European Petrochemical Association (EPCA) conference in Berlin, so the market was quiet. According to a ship owner that will be attending the conference, the market is weak across all trade lanes and will remain soft for the short term. The ship owner said that the current trend will not change anytime soon as the heightened tension in the Middle East provides a lot of uncertainty. USG-Asia rates were also pressured lower by the increasing availability of space from outside tonnage entering the market to move larger cargoes. The trade lane is expected to remain weak through November. Rates on the USG/ARA trade lane have been driven largely by a weaker CPP market which allows that available tonnage capable of offering on the chemical market, thus adding to the availability of spot tonnage. Additional reporting by Kevin Callahan Thumbnail shows a containership. Image by Noushad Thekkayil/EPA/Shutterstock