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Speciality Chemicals16-Oct-2024
HOUSTON (ICIS)–Rates for shipping containers
from east Asia and China to the US continue to
face downward pressure after an early end to
the peak pre-holiday shipping season, but
backlogs at some East Coast ports following a
3-day strike could lead to
short-term delays.
Rates to the US West Coast edged lower by 3%
this week, according to online freight shipping
marketplace and platform provider Freightos and
as shown in the following chart.
Judah Levine, head of research at Freightos,
said transpacific rates are now down by 30%
from the peaks during July but remain several
thousand dollars higher than what would be
typical peak season rates.
They are also about $1,000/FEU (40-foot
equivalent units) higher than the adjusted
floor set in April to account for diversions
away from the Red Sea.
“As long as Red Sea diversions continue to
absorb capacity on an industry level, prices
may not fall much further than seen back in
April,” Levine said.
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.
PORT CONGESTION
The International Longshoremen’s Association
(ILA) strike at
US Gulf and East Coast ports lasted just three
days, and market analysts initially expected
backlogs created by the work stoppage to be
cleared up in two to three weeks.
Some ports, such as the Port of New York/New
Jersey, were expecting to be back to normal
sooner than that.
But Levine said the backlog at the Port of
Savannah, Georgia still needs another two weeks
to get back to normal as Hurricane Milton added
to the number of waiting vessels.
Ships are waiting more than two days to get
into Savannah, and Levine said other ports are
citing delays of one to four days, which he
termed as significant congestion, but not
extreme.
Port Tampa Bay remains closed and is expected
to reopen on Monday after damage caused by
Milton, which will mostly impact the fertilizer
industry.
Levine said that some carriers have announced
blank sailing in response to the congestion,
but this may also be aimed at reducing capacity
to adjust for the lower, post-peak season
volumes.
Visit the ICIS Logistics – impact on
chemicals and energy topic
page
Ethylene16-Oct-2024
LIMA (ICIS)–Brazil’s Senate approved on 15
October the creation of a National Inventory of
Chemical Substances aiming at “reducing
negative impacts” of toxic chemicals on human
and environmental health.
The inventory and the associated public bodies
to ensure compliance will put Latin America’s
largest economy close to the EU’s Reach
regulatory system regarding chemicals.
In the 27-country EU, the stringent Reach has
since its inception at the end of the 2000s
banned several chemicals and put hundreds of
others in the so-called list
of Substances of Very
High Concern (SVHC).
While industry has repeatedly said it support
the Reach principles, increased costs
associated with complying with the regulation
has put a burden in some small- and
medium-sized enterprises (SMEs), a burden their
peers in jurisdictions such China or the US do
not have to face.
Industry has also argued that while Reach may
indeed avoid the entry of many toxic chemicals
into the EU, those same chemicals are
nonetheless still used in the manufacturing of
many goods in overseas jurisdictions which end
up entering the EU.
On Tuesday, the trade group representing
Brazil’s chemicals producers Abiquim welcomed
the measure, arguing it had lobbying for the
creation of the registry since 2014.
The bill, called in Parliament’s jargon PL
6120/2019, now awaits presidential sanction
from Brazil’s President Luiz Inacio Lula da
Silva, and after that it will come into force.
“[The Inventory] establishes rules for the
assessment and control of the risk of
substances used in the national territory, to
be determined by committees of experts, and
defines criteria for the manufacture, import,
and use of chemical components,” said the
Senate after passing the bill.
“The bill creates the Technical Committee for
the Evaluation of Chemical Substances and the
Deliberative Committee on Chemical Substances,
made up of experts with knowledge in the areas
of the environment, health, trade and
metrology. It also establishes the Registry of
Chemical Substances, which will form the
inventory and the public access database on
substances imported or produced in Brazil.”
The parliamentarians added that it will fall on
manufacturers and importers of chemical
substances to provide information to the
inventory.
If they do not comply in an orderly and timely
manner, they will be subject to fines of up to
40,000 minimum wages – in 2024, Brazil’s
minimum wage was set at Brazilian reais (R)
1,412/month ($249/month). The maximum fine,
thus, would stand at nearly $10 million.
However, the aim to control what chemicals are
used and how in Brazilian manufacturing will
stop at some substances which the regulators
thought were of national interest, and the law
does not apply to radioactive substances or
substances intended for national defense, for
instance.
It will not apply either to products subject to
control by specific legislation, such as food,
medicines, pesticides, cosmetics, fertilizers,
and veterinary products, among others.
“In the case of new substances that require
unprecedented studies in Brazil for the
information to be made available, the bill
guarantees the right to ownership of the
studies for up to ten years,” said the Senate.
“Other provisions of the project impose
criteria for the evaluation of substances by
the responsible committees, establish
restrictions on the performance of tests on
animals and establish the Registration,
Evaluation and Inspection Fee for Chemical
Substances.”
BROAD DAYLIGHT
CHEMICALSIn 2023, when the draft
proposals were already gaining traction in
Parliament, a consultancy focused on chemicals
regulation, the Chemical Inspection and
Regulation Service (CIRS) Group, summarized the
regulation’s main point in a report titled
“Brazil’s REACH-like Regulation is
Approaching”.
In it, it said from now companies’ declarations
on the chemicals they use in their
manufacturing processes must include the
following aspects:
– The identification data of manufacturers and
importers specified in regulations
– The annual production and import amount of
chemical substances
– The exact identification of chemicals
including names and CAS number (if they exist)
issued by the Chemical Abstracts Service (CAS)
or the International Union of Pure and Applied
Chemistry (IUPAC)
– Hazard classifications made under the
Globally Harmonized System (GHS) and
current Brazilian regulation
– Recommended uses of chemical substances
You can read CIRS Group’s report
here.
CLARITY, TRANSPARENCY,
PREDICTABILITYAbiquim welcomed
on Tuesday the bill with open arms. It is worth
noting the trade group represents large
producers – Braskem has a commanding voice in
the group, for instance – which tend to be the
players more capable of dealing with new and
extra regulation.
According to Abiquim’s CEO, Andre Passos, the
new bodies created with the bill will help
optimize the use of public resources, as well
as bring positive impacts to competitiveness,
innovation and economic growth, he said.
“We will be able to count on a regulatory model
that, in fact, provides the sector with greater
clarity of its requirements, transparency in
its processes, and long-term predictability,
thus allowing the chemical industry to define
future investments in the country,” he said.
“[With this measure] Brazil joins a select list
of the most developed and economically
sustainable nations.”
Abiquim said several studies have backed having
a strict registry of chemicals because official
control – with companies collaboration – has
helped reduce negative impacts some chemicals
can have on human and environmental health.
The trade group said the EU had been its
paramount source of inspiration, but added that
several jurisdictions, following the former’s
example, have implemented or are aiming to
implement similar regulations.
“Based on these initiatives, whose monitoring
of health and environmental results
demonstrated a positive trend, we presented a
proposal to the CONASQ [Brazil’s National
Commission for Chemical Safety] Working Group
that could be applied in Brazil,” said Camila
Hubner, the trade group’s manager for
regulatory affairs and sustainability.
According to Abiquim, similar regulatory
frameworks have been implemented or are in the
phase of doing so in the following
jurisdictions: the US, the EU’s 27 countries,
Australia, New Zealand, Japan, South Korea,
China, Switzerland, the UK (which, for now, has
basically applied Reach post-exit from the EU),
Turkey, the Eurasian Economic Union (which
includes Russia, Kazakhstan, Belarus, and
Armenia), Canada, Costa Rica, Ecuador, Chile,
and Colombia.
After naming the parliamentarians who lobbied
hard to have these regulations approved,
Abiquim’s Passos said: “It is very important to
remember these names because they understood
that regulation was needed based on science and
the risks that chemical substances can present,
prioritizing human health and the environment.
“On behalf of the chemical industry, I would
like to thank each congressman who made an
effort.”
Front page picture: Brazil’s Senate
approves the creation of the National Inventory
of Chemical Substances, 15 October 2024
Picture source: Brazil’s Senate news services
(Agência Senado)
Focus article by Jonathan
Lopez
Mixed Xylenes16-Oct-2024
LONDON (ICIS)–According to attendees at the
annual European Petrochemical Association
(EPCA) conference in Berlin held during 7-10
October, mixed xylenes (MX), paraxylene (PX)
and orthoxylene (OX) consumption in 2025 is not
expected to recover, with various hurdles
highlighted.
In this podcast, market editors Zubair Adam
(MX) and Miguel Rodriguez Fernandez (PX, OX)
along with Rob Peacock, ICIS lead analyst for
aromatics, share the sentiment captured after
talking with various market players at the
conference.
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Ammonia15-Oct-2024
HOUSTON (ICIS)–There is now 47% of the corn
crop completed with soybeans at 67% harvested
according to the latest US Department of
Agriculture (USDA) weekly crop progress report.
The ongoing pace of the corn harvest is ahead
of the 42% rate seen in 2023 and is above the
five-year average of 39%.
Texas now has 98% of its acreage harvested,
followed by North Carolina and Tennessee at
88%.
There is now 94% of the crop rated mature,
which is above the 93% from last season as well
as higher than the five-year average of 89%.
For corn conditions there is 4% listed as very
poor with 8% still as poor and 24% now as fair.
There remains 49% ranked as good and 15% as
excellent.
Soybeans dropping leaves has climbed to 95%,
which trails the 96% from last season but is
above the five-year average of 92%.
Harvesting of the soybean crop has jumped to
67%, which is ahead of 57% mark from 2023 as
well as the five-year average of 51%.
Minnesota is now the top state with 88% of
their soybeans now completed with Mississippi
coming next at 84% finished.
There were no further updates for soybean
conditions.
In other harvesting updates the USDA said there
is now 34% of the cotton crop finished with
sorghum acreage now at 53% completed.
Ammonia15-Oct-2024
HOUSTON (ICIS)–The fertilizer industry, like
the rest of the Tampa, Florida, community, was
still feeling the effects from Hurricane Milton
even days after the storm as producers continue
to assess damages and determine the impact this
might have on their production.
With electrical power steadily being restored,
the cleaning up efforts are also making
progress with flooding appearing to have had
the most far-reaching consequences as the
incredible powerful hurricane is estimated to
have unleashed 3.4 trillion gallons of water
upon Florida.
As a key hub for fertilizers in the US, with
both production and logistics as well as
storage and corporate offices, there had been
concerns over how much destruction could have
been experienced if it had not weakened some
before landfall or had made a direct strike
into Tampa.
Industry sources within the area said some
normality to everyday life was returning with
market activity likely needing several more
days to recover. As a participant said it
is “all good here, got power everywhere now. No
damage to the office or homes.”
For producers, the review of the consequences
of Milton were still at hand but considering
the magnitude of the event it looks like the
industry’s assets held up fairly well and that
output of phosphates will only see a very short
delay.
With their White Springs phosphate facility
located within Florida, Canadian fertilizer
producer Nutrien had previously said it was not
impacted by Hurricane Milton, but it was by the
earlier strike of Hurricane Helene, with those
affects still underway.
“The timeline for re-starting our White Springs
phosphate facility continues to be assessed. We
are working with our customers on any potential
impacts to supply,” said a Nutrien
spokesperson.
Having not completely escaped the wrath of
Milton, Mosaic had confirmed on 14 October that
there was limited damage to their facilities
and warehouse product.
The producer is expecting to resume full
production in the coming days, and also said
there was no significant environmental impacts
that occurred due to the storm.
It is understood that producer Yara did not
suffer any damages or lost time at its ammonia
plants from the hurricane.
Polyols15-Oct-2024
SAO PAULO (ICIS)–Petroquimica Rio Tercero has
shut its toluene di-isocyanate (TDI) plant in
Cordoba on the back of global oversupply, a
spokesperson for the Argentinian producer
confirmed to ICIS on Tuesday.
The plant had a production capacity of 28,000
tonnes/year of TDI, which is a key feedstock to
produce polyurethane foam.
Production there stopped on 14 October. Rio
Tercero said it would dismiss 1,250 employees.
“This decision [to shut the TDI plant] is
mainly due to the transformation the sector has
undergone worldwide, with the emergence of
large-scale plants, especially in Asia, which
are producing an oversupply of TDI which caused
global prices to fall abruptly in recent
years,” said the company.
“Another determining factor is the limited
production capacity of our Rio Tercero plant,
which makes it impossible to compete with
larger global companies.”
The spokesperson said Rio Tercero would now
“become a TDI trader” to ensure the continuity
of the company, given that it will still need
the product to produce polyaluminum chloride
(PAC), an inorganic coagulant used in water
purification.
The company’s PAC production capacity stands at
58,000 tonnes/year, according to the
spokesperson.
As well as PAC, Rio Tercero also produces
sodium hypochlorite, with a production capacity
of 97,500 tonnes/year, and sodium hydroxide,
with a production capacity of 11,000
tonnes/year.
All the remaining production plants are
operating normally, the spokesperson said.
The company is a subsidiary of Buenos
Aires-based Grupo Piero.
According to local media reports, the
provincial government has contacted the union
to express its support to the plant’s workers,
but it remains unclear whether the government
could make any significant intervention to
avoid the closure.
EASIER TO SHUT
PLANTSUnder the new
Administration of Javier Milei which took
office in December 2023, labor laws have been
eased and firing employees has now become
easier for companies.
Earlier in October, US chemicals major Dow also
said it would
stop producing polyether polyols at its
site in San Lorenzo, in Argentina’s province of
Santa Fe, on the back of poor economics.
The company had already tried to close that
plant earlier, but pressure from the trade
unions and tighter labor regulations at the
time made the company backtrack in its plans.
According to the ICIS Supply & Demand
Database (ISDD), with Rio Tercero’s TDI Plant
now shut and Dow’s in the process of shutting
its polyols facility, no company in Argentina
will produce any isocyanates or polyether
polyols.
Consequently, companies producing polyurethane
(PU) will have to import all their inputs,
among other examples.
Rigid PU foams are used mainly in insulation,
refrigeration, packaging and construction,
while flexible PU foams have applications such
as upholstery, mattresses and seats. Polyols
can also be used in elastomers, adhesives,
coatings and fibers.
Front page picture: Petroquimica Rio
Tercero’s facilities south of Cordoba city,
Argentina
Source: Petroquimica Rio Tercero
Additional reporting by Al Greenwood
Crude Oil15-Oct-2024
LONDON (ICIS)–The outlook for Germany’s
economy improved in October, think tank ZEW
said on Tuesday, as its economic sentiment
indicator ticked up following three months of
decline.
The research group’s October economic sentiment
indicator increased by 9.5 points from
September to reach 13.1 points.
However, its assessment of the current
situation in Germany continued to worsen as the
group’s index fell 2.4 points from September to
-86.9 points in October.
“Starting from a very poor assessment of the
current situation, the economic sentiment for
Germany has risen in the latest survey,” said
ZEW president Achim Wambach.
“Contributing factors include the expectation
of stable inflation rates and the associated
prospect of further interest rate cuts by the
ECB. Positive signals are also coming from
Germany’s export markets.”
For the eurozone, the group’s economic
sentiment indicator rose by 10.8 points to 20.1
points in October, while the current situation
index remained in negative territory at -40.8
points, down by 0.4 points from the previous
month.
Styrene15-Oct-2024
SINGAPORE (ICIS)–Watch ICIS analyst Aviva
Zhang discuss the implications of China’s
growing styrene monomer (SM) capacity, which is
poised to open up export opportunities for the
remainder of 2024.
Chinese SM capacity currently at over 20
million tonnes/year; market pressured by new
capacity
Downstream acrylonitrile-butadiene-styrene
(ABS) margins still negative while polystyrene
(PS) margins are constrained
Implementation of new macroeconomic
policies is expected to stimulate end-use
demand, which players are closely watching
ICN
Petrochemicals14-Oct-2024
MUMBAI (ICIS)–India’s retail inflation hit a
nine-month high of 5.49% in September, mainly
on firmer food prices, while the country’s
industrial output in August shrank for the
first time in 22 months.
The year-on-year increase in the consumer price
index (CPI) in September was higher than the
3.65% rate seen in August, the Ministry of
Statistics and Programme Implementation (MoSPI)
said on Monday.
“It is likely that the increase in inflation
rate for the month of September 2024 is due to
high-base effect and weather conditions,” the
MoSPI said.
The September inflation figure remains within
the Reserve Bank of India’s (RBI) tolerance
band of 2.00-6.00%.
Inflation had softened significantly in
July and August with both
months recording an inflation rate below the
central bank’s target of 4%.
Food inflation, which forms a significant
portion of the CPI, stood at 9.20% in
September, a sharp increase from 5.66% in
August.
On 9 October, the central bank kept its key
interest rate unchanged at 6.5% but changed its
monetary policy stance to
“neutral”, following a deceleration in GDP
growth below 7% in fiscal Q1.
RBI maintained its inflation forecast for the
fiscal year ending March 2025 at 4.5%, while
retaining its full-year GDP growth forecast at
7.2%.
India – a giant emerging market in Asia –
overperformed most economies last year, posting
a robust 8.2%
GDP growth in the year ending March 2024.
Meanwhile, India’s factory output in August, as
measured through the Index of Industrial
Production (IIP), declined for the first time
in 22 months – down by 0.1% year on year
compared with a 4.7% expansion in July.
The decline was caused by an unfavourable base
effect and excessive rainfall in several
regions across the country, data released on 11
October showed.
August manufacturing output grew 1% year on
year, while mining output contracted by
4.3% and power generation declined by 3.7%.
In the same period last year, manufacturing
posted a 10% growth, with mining and power
generation posted increases of 12.3% and 15.3%,
respectively.
For the first five months of the current fiscal
year (April-August 2024), India’s IIP grew by
an average of 4.2%, weaker than the 6.2%
expansion recorded in the previous
corresponding period.
Focus article Priya Jestin
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