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Potassium Chloride (MOP)06-Aug-2024
HOUSTON (ICIS)–US fertilizer producer Mosaic
said there are factors which suggest the global
potash market is balanced while the phosphate
market will remain tight not only for 2024 but
beyond.
In its Q2 earnings statement, which had a
second quarter net loss of $162 million, the
producer said its market outlook is that North
American demand remains robust as it sees there
are still buyers who continue to seek out and
secure summer fill volumes.
It is their view that part of this is a result
of farmers and retailers having emptied their
bins this spring with substantial crop
fertilizing.
Yet challenging weather has been present all
summer and there is growing concern from
end-users that yields could be impacted with a
dip in income likely to result in less
post-harvest demand.
Looking at Brazil briefly the producer feels
that the level of in-season demand present
could be described as solid and comes primarily
from concerns of low stocks.
For the global potash segment Mosaic said
supply constraints are likely to continue to
abate this year amid expectations of seeing
higher exports from Belarus and Russia.
It also noted though that the recent contract
settlements in China and India should help
further stimulate buying activities further in
both southeast Asia and into India.
In terms of Chinese phosphate exports the
producer said that rate has declined 27% year
on year, during the first six months of 2024,
which equates to over 1 million tonnes.
Mosaic said in its view the long-term outlook
remains favorable as domestic and industrial
needs will continue to be prioritized over
fertilizer exports in the long term.
Looking at grains and oilseeds it is their
expectations that stock-to-use ratios will
remain low and constructive agriculture
fundamentals and economics are expected to
continue to incentivize growers to maximize
yields.
Mosaic said while corn and soybean fundamentals
as well as prices have softened recently when
viewing nutrients, they overall remain
affordable and that bodes well for future
demand.
It noted that during this year the El Nino
weather pattern is expected to shift to a La
Nina classification which holds the potential
for creating a favorable backdrop in southeast
Asia, India and Brazil.
Ammonia06-Aug-2024
HOUSTON (ICIS)–Still churning over parts of
the southeastern US tropical storm Debby has
kept the fertilizer market watching carefully
with producer Nutrien saying that to this point
it has not been affected by the heavy rain and
winds.
With operations in Florida and Georgia the
producer undertook emergency plans ahead of the
initial landfall as a hurricane on 5 August in
the northern part of Florida. It has since trek
across Georgia and into South Carolina with
storm impacts extending a considerable
distance.
“Our facilities in Florida and Georgia were not
impacted in any material way by Tropical Storm
Debby,” said a Nutrien spokesperson.
“We have emergency preparedness plans in place
that were followed, and we will continue to
monitor the storm’s path while taking necessary
measures to protect the safety of our people
and the integrity of our operations.”
The fertilizer industry was initially concerned
that Debby could directly strike the key hub of
Tampa, Florida, which is vital as the city is
home to both corporate offices and trading
operations but has product storage, shipping
and other logistical assets.
Tampa did see heavy rainfall with some
localized flooding but did avoid any
significant damage.
One concern will be how much crop damage has
been experienced with a substantial amount of
acreage in the path of the storm.
As the crops in some of these areas are fairly
mature the excessive rain and wind could cause
substantial damage and result in a decrease in
eventual yield. That lost income could see
farmers become more hesitant on fresh
fertilizer commitments.
Potassium Chloride (MOP)06-Aug-2024
HOUSTON (ICIS)–Intrepid Potash saw indications
of improving production during Q2 which has
helped support continued expectations that
their 2024 potash output will be approximately
15% higher year on year.
In a project and operational update, the US
fertilizer producer said at the HB Solar
Solution mine in Carlsbad, New Mexico, it
completed work on the replacement extraction
well in June.
It is now serving as the primary source of
brine for the current evaporation season and
Intrepid expects it will be the primary for
future seasons.
Also underway is phase two of installing a
system to clean the injection pipeline and
remove scaling to help ensure more consistent
flow rates. All pipeline is installed with
tanks set and the producer expecting to
commission the project during Q3.
At the Brine Recovery mine in Wendover, Utah,
the construction of primary pond 7 is finished
and is being filled with brine. It is expected
to increase the brine evaporative area and
maximize availability, increasing grade, and
improving production by the fall of 2025.
At the East Underground Trio mine the producer
said because of the efficiencies from the two
continuous miners placed into service in 2023,
and the operation of a fine langbeinite
recovery system, it had significant improvement
in production rates and cost structure year on
year.
Intrepid said for the first six months of 2024
the cost of goods sold totaled approximately
$284 per short ton, which compares to the same
prior-year figure of $320 per short ton.
The Q2 average net realized sales
prices for potash and Trio averaged
$405 and $314 per short ton, respectively,
which compares to $479 and $333 per short ton
during Q2 2023.
“Our strategic focus continues to be improving
our potash production, and I’m happy to share
that we saw the first indications of this in
our second quarter results,” said Matt Preston,
Intrepid Potash CFO and acting principal
executive officer.
“Improved brine grades at HB from the Eddy
Cavern and good early-season evaporation rates,
allowed us to extend our spring production
season and we still expect our 2024 potash
production to be approximately 15% higher than
2023.”
Preston added that when looking at the
quarterly results their operational and
financial performance continues to be solid
with significant improvement in both total and
per ton production costs.
“As the broader potash market looks to be
finding its midcycle pricing floor, we remain
focused on improving our unit economics by
means of higher potash production,” Preston
said.
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Caustic Soda06-Aug-2024
HOUSTON (ICIS)–Meteorologists at Colorado
State University (CSU) maintained their
forecast of an active 2024 Atlantic hurricane
season but slightly reduced the number of named
storms they expect to see.
The forecasters at CSU still expect 12 storms
to reach hurricane strength this season, with
six of them expected to reach major hurricane
strength of Category 3 or higher.
A Category 3 storm is one with maximum
sustained winds of 111 miles/hour or faster.
The only change from the July update is the
expectations of 23 named storms, down from 25.
Hurricanes Beryl and
Debby, as well as tropical storms Alberto and
Chris are included in the current forecast.
Hurricane Beryl made landfall on the Texas
Coast on 8 July and caused damage that led to
several declarations of force majeure (FM) and
multiple outages across petrochemical complexes
and major hubs of production along the US Gulf
Coast.
Hurricane Debby made landfall on 5 August in
northwestern Florida and weakened into a
tropical storm before creeping slowly across
Georgia and back into the Atlantic Ocean, where
it was hovering near the coasts of Georgia and
South Carolina.
It is expected to make a second landfall in the
Carolinas and then continue up the Eastern
Seaboard.
Terminals at the Port of Savannah were closed
on Tuesday, but officials anticipate reopening
on Wednesday once the US Coast Guard completes
its waterway inspection and offshore wind
analysis.
The South Caroline Ports Authority is operating
normal gate hours on Tuesday and will shift to
reduced hours on Wednesday.
Forecasters at AccuWeather are warning about
extreme flooding risk in the next 72 hours from
Debby with 2 feet of rainfall expected in parts
of Georgia and South Carolina.
IMPACT ON CHEMICAL
PRODUCTION
Damage from hurricanes can lead to
increased demand for chemicals, but hurricanes
and tropical storms can also 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.
IMPACT ON RECYCLING
Severe weather, including tropical storms,
heavy rain and winter weather, can easily
disrupt curbside and deposit collection
efforts, thus limiting the incoming supply of
polyethyelene terephthlate (PET) and high
density polyethylene (HDPE) bottles for
recycling.
If collection efforts are delayed, in some
cases, material will be routed to landfill, as
material recovery facilities (MRFs) have limits
on input processing abilities and are unable to
catch up.
Additionally, MRFs must often dry out wet mixed
recyclable material to optimize the sorting
process, which can further delay processing.
Speciality Chemicals06-Aug-2024
HOUSTON (ICIS)–Avient has raised its 2024
guidance for adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA)
following stronger-than-expected Q2 results:
New 2024 guidance
Previous 2024 guidance
2023 Adjusted EBITDA
$515-540 million
$510-535 million
$501.8 million
In the second quarter, Avient saw broad-based
5% organic sales growth in both of its
segments: Color, Additive & Inks (CAI), and
Specialty Engineered Materials (SEM).
Both segments gained market share and benefited
from inventory restocking in certain
end-markets, CEO Ashish Khandpur and CFO Jamie
Beggs told analysts during Avient’s
Q2 earnings call on Tuesday.
Tight cost control and raw material price
deflation helped expand the adjusted EBITDA
margin by 100 basis points year on year to
16.9% in the second quarter, they said.
The better-than-expected performance was led by
CAI, which saw improved demand and favorable
raw material costs.
MARKETS
In terms of end-markets, growing sales into two
of Avient’s largest markets, packaging (+8%)
and consumer (+10%), had the greatest impact in
the second quarter, said Khandpur.
Both markets benefited from “some restocking”,
particularly in Europe, he added.
Sales growth in buildings and construction and
healthcare was also strong.
Although the macroeconomic indicators for
building and construction remained weak,
both the SEM and CAI segments gained market
share and won new business in the US and
Canada, Khandpur said.
Meanwhile, destocking in the healthcare market
has finally run its course, with Avient’s sales
into that market up 10% year on year in the
second quarter.
Sales into the
defense end-market continued to be driven
by the global conflicts and certain NATO
programs, with full-year sales growth expected
in the low double digits, he said.
The telecommunications and energy markets,
which together account for about 7% of Avient’s
total sales, however, remained “challenged”,
with sales down in the double digits in the
second quarter as customers reduced
inventories.
Telecommunications should improve in the second
half as demand in the US has started to improve
more recently, Khandpur said.
In energy, Avient is seeing improving trends in
the third quarter, in particular for
applications designed to improve the
reliability of the electrical transmission
grid, he said.
Artificial intelligence (AI) was raising
electricity consumption, driving demand for
electricity generation and distribution, with
positive derivative effects on the materials
Avient supplies to energy markets, he noted.
Electric mobility and electrification are
happening, and Avient aims to “become part of
those fast-growing markets”, he added.
LATIN AMERICA
OPPORTUNITY
Avient’s sales in Latin America grew by 19%
year on year in the second quarter, driven by
sales into the region’s packaging market.
That market saw strong demand in food &
beverage and cleaning applications on the back
of the recent
floods in Brazil, as well as high
temperatures and
drought conditions in Mexico.
Latin America currently accounts for only about
6% of the company’s total sales.
However, going forward, Avient expects its
Latin American packaging business to benefit
from the
near-shoring trend.
The company’s position in the region is
“strategic”, allowing it to serve original
equipment manufacturers (OEMs) and brand owners
who are looking to near-shore production and
supply chains in light of global trade
conflicts and political uncertainties, Beggs
noted.
RAW MATERIALS
Avient realized about $35 million in raw
material price deflation in the first half of
2024, Beggs said.
However, the company does not expect this
benefit to be repeated in the second half as it
has started to see “modest levels of inflation”
across the majority of its raw materials,
including polyethylene (PE) and polypropylene
(PP), as well as pigments and certain
performance additives, she said.
Primary raw materials used in Avient’s
manufacturing operations include polyolefin and
other thermoplastic resins, titanium oxide
(TiO2), inorganic and organic pigments,
specialty additives and ethylene.
The executives did not comment on the current
stock
market turmoil and analysts on Tuesday’s
call did not ask about this.
Thumbnail photo of Avient CEO and president
Ashish Khandpur; photo source: Avient
Crude Oil06-Aug-2024
SINGAPORE (ICIS)–Asian shares rebounded on
Tuesday, staging a relief rally after historic
losses the previous day, as fresh US economic
data for July alleviated recession fears.
Meanwhile, oil prices surged by over $1/barrel
in early Asian trade, fueled by escalating
concerns about the spreading conflict in the
Middle East.
Japanese Nikkei 225 index jumps 9.55% in
early Asian trade
Asian petrochemical shares follow regional
market rebound, Asahi Kasei gains
China’s petrochemical futures continue
decline
In Europe the main stock markets stabilized,
opening slightly up before falling back. The
UK’s FTSE 100 was down 0.08% at 11:20 London
time, while Germany’s DAX and France’s CAC 40
were 0.17% and 0.46% lower respectively.
The stronger-than-expected US Institute for
Supply Management (ISM) Services Survey
for July helped ease growth worries.
The overall services purchasing managers’ index
(PMI) improved to 51.4 in July, swinging into
expansion and beating the consensus for a rise
to 51.0 from 48.8 in June. A PMI reading above
50 indicates growth in the services sector.
By 02:30 GMT, Japan’s benchmark Nikkei 225 was
up 9.55%, South Korea’s KOSPI was 3.07% higher
and Hong Kong’s Hang Seng Index rose by 0.06%.
Singapore’s Straits Times Index (STI) was down
by 0.96% while China’s benchmark Shanghai
Composite Index inched 0.20% higher after
shedding 1.54% on Monday.
Asian petrochemical shares tracked the rebound
in regional bourses, with Japanese major Asahi
Kasei jumping nearly 14% and South Korean
producer LG Chem up by 4.59%.
China’s petrochemical futures, however,
continued lower in early trade on Tuesday.
At 10:30 local time (02:30 GMT), futures of
petrochemical commodities, including plastics,
methanol and glycols, were trading lower, after
losing 0.4-2.1% in the previous session.
Product
Yuan (CNY)/tonne
Change
Linear low density polyethylene (LLDPE)
8,231
-0.3%
Polyvinyl chloride (PVC)
5,650
-0.5%
Ethylene glycol (EG)
4,590
-0.5%
Polypropylene (PP)
7,570
-0.4%
Styrene monomer (SM)
9,183
-0.2%
Paraxylene *
8,120
-0.9%
Purified terephthalic acid (PTA)*
5,644
-0.8%
Methanol*
2,468
-0.5%
Sources: Dalian Commodity Exchange,
*Zhengzhou Commodity Exchange
The global equity market sell-off intensified
on Monday, with a wave of declines sweeping
across major bourses worldwide.
The rout began in Asia, where the Nikkei 225
index plummeted 12.4% day on day, marking its
worst performance since 1987 while the KOSPI
posted its steepest decline in its closing
price to date.
In Europe, the Stoxx Europe 600 index fell
2.2%, with all sectors and major indexes
closing in negative territory.
Utilities and oil and gas stocks suffered the
steepest losses, leading the downturn in
European markets.
In the US, the Dow Jones Industrial Average
plunged by about 1,000 points or down 2.6%, the
Nasdaq dived 3.4% and the S&P 500 slid
3.0%.
This marked the largest losses since September
2022 for the Dow and S&P, following a
downturn late last week due to poor US jobs
data and weak manufacturing PMI, which sparked
recession fears.
The unwinding of the yen “carry trade” after
the Bank of Japan raised interest rates last
week also added fuel to the retreat in global
markets.
For now, the US Federal Reserve has no
intention of delivering an emergency rate cut
before the Federal Open Market Committee (FOMC)
meeting on 18 September, Singapore-based DBS
Group Research said in a note on Tuesday.
“The Fed wants markets to view the coming rate
cuts as preserving the soft landing and
supporting jobs, not as a delayed response to a
weakening economy,” it said.
GEOPOLITICAL TENSIONS BOOSTING
OILOil prices rose by more than
$1/barrel in early Asian trade on Tuesday after
dipping in the previous session, driven by
supply concerns amid escalating tensions in the
Middle East.
“Markets are still waiting to see how Iran
responds to Israel after it vowed retaliation
for the assassination of Hamas’ political
leader on Iranian soil,” Dutch banking and
financial information services firm ING said in
a note.
“Oil has been unable to escape the broader
risk-off move seen across assets, as concerns
grow over the potential for a US recession
following some weaker macro data in recent
weeks. This only adds to worries over Chinese
demand.”
Reports that the Sharara oilfield in Libya has
completely stopped production due to protests
at the site also supported oil prices.
This oilfield has a production capacity of
300,000 barrels/day but was producing around
270,000 barrels/day prior to the disruption.
Focus article by Nurluqman
Suratman
Additional reporting by Fanny Zhang
Thumbnail photo shows a stock market
indicator board (Source: BIANCA DE
MARCHI/EPA-EFE/Shutterstock)
Updates, adding Europe detail in fourth
paragraph
Acrylonitrile Butadiene Styrene06-Aug-2024
SINGAPORE (ICIS)–SABIC has signed a potential
investment agreement with the Fujian government
on 1 August to build an engineering
thermoplastics compounding plant in the Chinese
province, the Saudi Arabia chemicals giant said
on Tuesday.
The planned compounding plant will be located
in the Gulei Port Economic Development Zone at
Zhangzhou in Fujian, it said in a statement
without disclosing capacity details.
It will primarily produce SABIC’s pelletized
LEXAN polycarbonate (PC) and
CYCOLOY
PC/acrylonitrile-butadiene-styrene (ABS)
polymer blend for use in advanced materials.
These materials will be tailored to the needs
of industries including electrical and consumer
electronics, automotive, and emerging sectors
such as solar energy, electrification, and 5G.
The site will include compounding lines, color
development capabilities, and advanced
equipment.
SABIC currently operates a technology center in
Shanghai and three compounding plants in China
in Guangzhou, Shanghai and Chongqing.
The new plant is also expected to create
synergies with SABIC’s two existing joint
ventures – SINOPEC SABIC Tianjin Petrochemical
Co (SSTPC) and SABIC FUJIAN Petrochemicals Co
(SFPC).
“This investment agreement marks another
significant milestone for SABIC’s growth in
China and reflects our continued confidence in
investing in the country,” said Abdulrahman
Al-Fageeh, SABIC’s CEO.
“Building on this, we will continue to
collaborate with our existing global and local
partners and customers to grow together in
China.”
Crude Oil06-Aug-2024
SINGAPORE (ICIS)–Asian shares rebounded on
Tuesday, staging a relief rally after historic
losses the previous day, as fresh US economic
data for July alleviated recession fears.
Meanwhile, oil prices surged by over $1/barrel
in early Asian trade, fueled by escalating
concerns about the spreading conflict in the
Middle East.
Japanese Nikkei 225 index jumps 9.55% in
early Asian trade
Asian petrochemical shares follow regional
market rebound, Asahi Kasei gains
China’s petrochemical futures continue
decline
The stronger-than-expected US Institute for
Supply Management (ISM) Services Survey
for July helped ease growth worries.
The overall services purchasing managers’ index
(PMI) improved to 51.4 in July, swinging into
expansion and beating the consensus for a rise
to 51.0 from 48.8 in June. A PMI reading above
50 indicates growth in the services sector.
By 02:30 GMT, Japan’s benchmark Nikkei 225 was
up 9.55%, South Korea’s KOSPI was 3.07% higher
and Hong Kong’s Hang Seng Index rose by 0.06%.
Singapore’s Straits Times Index (STI) was down
by 0.96% while China’s benchmark Shanghai
Composite Index inched 0.20% higher after
shedding 1.54% on Monday.
Asian petrochemical shares tracked the rebound
in regional bourses, with Japanese major Asahi
Kasei jumping nearly 14% and South Korean
producer LG Chem up by 4.59%.
China’s petrochemical futures, however,
continued lower in early trade on Tuesday.
At 10:30 local time (02:30 GMT), futures of
petrochemical commodities, including plastics,
methanol and glycols, were trading lower, after
losing 0.4-2.1% in the previous session.
Product
Yuan (CNY)/tonne
Change
Linear low density polyethylene (LLDPE)
8,231
-0.3%
Polyvinyl chloride (PVC)
5,650
-0.5%
Ethylene glycol (EG)
4,590
-0.5%
Polypropylene (PP)
7,570
-0.4%
Styrene monomer (SM)
9,183
-0.2%
Paraxylene *
8,120
-0.9%
Purified terephthalic acid (PTA)*
5,644
-0.8%
Methanol*
2,468
-0.5%
Sources: Dalian Commodity Exchange,
*Zhengzhou Commodity Exchange
The global equity market sell-off intensified
on Monday, with a wave of declines sweeping
across major bourses worldwide.
The rout began in Asia, where the Nikkei 225
index plummeted 12.4% day on day, marking its
worst performance since 1987 while the KOSPI
posted its steepest decline in its closing
price to date.
In Europe, the Stoxx Europe 600 index fell
2.2%, with all sectors and major indexes
closing in negative territory.
Utilities and oil and gas stocks suffered the
steepest losses, leading the downturn in
European markets.
In the US, the Dow Jones Industrial Average
plunged by about 1,000 points or down 2.6%, the
Nasdaq dived 3.4% and the S&P 500 slid
3.0%.
This marked the largest losses since September
2022 for the Dow and S&P, following a
downturn late last week due to poor US jobs
data and weak manufacturing PMI, which sparked
recession fears.
The unwinding of the yen “carry trade” after
the Bank of Japan raised interest rates last
week also added fuel to the retreat in global
markets.
For now, the US Federal Reserve has no
intention of delivering an emergency rate cut
before the Federal Open Market Committee (FOMC)
meeting on 18 September, Singapore-based DBS
Group Research said in a note on Tuesday.
“The Fed wants markets to view the coming rate
cuts as preserving the soft landing and
supporting jobs, not as a delayed response to a
weakening economy,” it said.
GEOPOLITICAL TENSIONS BOOSTING
OILOil prices rose by more than
$1/barrel in early Asian trade on Tuesday after
dipping in the previous session, driven by
supply concerns amid escalating tensions in the
Middle East.
“Markets are still waiting to see how Iran
responds to Israel after it vowed retaliation
for the assassination of Hamas’ political
leader on Iranian soil,” Dutch banking and
financial information services firm ING said in
a note.
“Oil has been unable to escape the broader
risk-off move seen across assets, as concerns
grow over the potential for a US recession
following some weaker macro data in recent
weeks. This only adds to worries over Chinese
demand.”
Reports that the Sharara oilfield in Libya has
completely stopped production due to protests
at the site also supported oil prices.
This oilfield has a production capacity of
300,000 barrels/day but was producing around
270,000 barrels/day prior to the disruption.
Additional reporting by Fanny Zhang
Thumbnail photo shows a stock market indicator
board (Source: BIANCA DE
MARCHI/EPA-EFE/Shutterstock)
Focus article by Nurluqman
Suratman
Benzene06-Aug-2024
SINGAPORE (ICIS)–Soaring Asian styrene prices
have grabbed the attention of the global market
following unexpected outages at European
facilities.
This price surge is expected to support both
upstream benzene prices as well as downstream
prices of expanded polystyrene (EPS),
polystyrene (PS), and acrylonitrile butadiene
styrene (ABS).
Two styrene plant outages in Europe drive
price surge upward rapidly.
Benzene prices rise with styrene, boosted
by August demand growth.
ICIS expects EPS and PS prices to rise in
August, ABS prices to remain flat due to the
butadiene prices decreasing.
In this podcast, ICIS senior analysts Jenny Yi
and Jimmy Zhang discuss the trends and outlook
for the Asian styrenic and benzene markets.
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