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Speciality Chemicals13-Dec-2024
HOUSTON (ICIS)–In a late-Thursday post on
social media, President-elect Donald Trump
expressed his support for dockworkers in the
labor dispute between US Gulf and East Coast
ports and the International Longshoremen’s
Association (ILA).
The ILA and the ports, represented in the
negotiations by the US Maritime Alliance
(USMX), are facing a 15 January deadline to
complete a new master agreement.
The union has vowed to strike if
its demands on limiting automation are not met.
In a post on Truth Social after meeting with
union president Harold Daggett, Trump said “the
amount of money saved [by automation] is
nowhere near the distress, hurt, and harm it
causes for American workers”.
Trump said he would rather see the ports spend
money on labor instead of “machinery, which is
expensive, and which will constantly have to be
replaced”.
“For the great privilege of accessing our
markets, these foreign companies should hire
our incredible American workers, instead of
laying them off, and sending those profits back
to foreign countries,” Trump said.
The USMX responded in a post to its website.
“We appreciate and value President-elect
Trump’s statement on the importance of American
ports,” the USMX said. “But this contract goes
beyond our ports – it is about supporting
American consumers and giving American
businesses access to the global marketplace –
from farmers, to manufacturers, to small
businesses, and innovative start-ups looking
for new markets to sell their products.”
The USMX contends that to achieve this, there
is a need for modern technology that is proven
to improve worker safety, boost port
efficiency, increase port capacity, and
strengthen supply chains.
“ILA members’ compensation increases with the
more goods they move – the greater capacity the
ports have and goods that are moved means more
money in their pockets,” the USMX said.
“We look forward to working with the
President-elect and the incoming administration
on how our members are working to support the
strength and resilience of the US supply chain
and making crucial investments that support ILA
members and millions of workers and businesses
across the entire domestic supply chain,
improving efficiency and creating even more
high-paying jobs for ILA members,” the USMX
said.
A strike would not have an impact on liquid
chemical tankers, which transport most chems.
But 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.
No negotiations are currently underway with
slightly less than five weeks left before the
deadline.
Speciality Chemicals13-Dec-2024
LONDON (ICIS)–Germany’s chemicals and
production is expected to have increased by 2%
in 2024, while output growth is set to slow
next year, sales could stagnate and prices
fall, trade group VCI said on Friday.
The chemicals sector drove the projected 2024
productivity uptick, with output increasing 8%
and helping to offset a 1.5% decline in
pharmaceuticals sector productivity, driven by
supply chain issues, capacity bottlenecks and
high costs.
Despite the overall increase in output expected
for this year, productivity in the sector
remains 16% below levels seen in 2018, with the
drop more pronounced for chemicals.
Projected sales of €221 billion represent a 2%
annual decline in 2024, while sales are
expected to have fallen by 2.5%.
The declines in sales and pricing are expected
to be less substantial next year but there is
little hope for a pronounced uptick, with no
volume growth expected year on year and pricing
to fall 0.5%.
Even the muted 0.5% forecast productivity
increase is expected to be driven largely by
the pharmaceuticals sector, with the chemicals
sector alone expected to stagnate.
“Our stocktaking is bleak,” said VCI president
and Covestro chief Markus Steilemann. “The only
ray of light is that the rapid downturn of the
last two years has not continued.”
VCI, German’s largest trade group for the
chemicals sector, projects more closures in the
domestic industry in future, as average
operating rates remain at lossmaking levels.
”On average, capacity utilisation of production
plants was only 75%. In four consecutive years
mow, the chemical and pharmaceutical industry
has clearly been below the base value for
profitable operation,” the VCI said.
“In consequence… plants were permanently shut
down in recent months. Yet more closures are
likely to follow,” the association added.
Some companies are currently projecting an
upward trend for summer or autumn 2025, but
every second company is bracing for a recovery
to occur in 2026 or later, the VCI said.
Thumbnail photo: Evonik’s production
complex in Marl, Germany (Source: Evonik)
Crude Oil13-Dec-2024
LONDON (ICIS)–Economic growth in the UK fell
for the second consecutive month in October,
mostly driven by a decline in production
output, according to official data on Friday.
Monthly real GDP fell by 0.1%, following a fall
of 0.1% in September.
“Production fell by 0.6% in October 2024 and
was the largest contributor to the overall fall
in GDP in the month. Construction fell by 0.4%,
while services showed no growth,” the Office
for National Statistics (ONS) said.
October’s GDP figure is a first estimate and
subject to revision.
On a quarterly basis, GDP has slowed throughout
the year with 0.7% growth in Q1, 0.5% in Q2
and
0.1% in Q3.
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Gas13-Dec-2024
SINGAPORE (ICIS)–China has pledged to boost
domestic consumption and implement a
looser monetary policy amid a looming
trade war with the US when Donald Trump takes
office in 2025.
The pledges were made on 12 December after the
two-day annual Central Economic Work Conference
(CEWC) of China’s top officials to set the
country’s 2025 economic agenda, according to
state-owned news agency Xinhua.
The proactive policy stance largely echoes the
recommendations of the Political Bureau of the
Communist Party of China (Politburo) on 9
December.
Chinese leaders signalled their aim to reduce
the reserve requirement ratio (RRR) of banks,
and key interest rates “at an appropriate
timing to ensure ample liquidity”, policies
that will likely weaken the yuan (CNY).
A weaker yuan would make Chinese exports more
competitive in the global market, at a time
when they are facing
high tariffs from the US.
Ahead of the expected US tariff imposition,
Chinese exporters have started to
frontload shipping goods to the US in
November 2024 following Trump’s victory in the
US presidential elections.
China is the world’s second-biggest economy.
The country’s domestic spending, which has been
on a downtrend in 2024, will also be tackled,
with Chinese leaders urging efforts to
“vigorously boost consumption, improve
investment efficiency, and expand domestic
demand”.
A special campaign dedicated to stimulating
consumption should be implemented, and efforts
should be made to increase the incomes and
alleviate the burdens of low- and middle-income
groups, according to the meeting.
Fiscal stimulus measures were
introduced around end-September but were deemed
insufficient for China to achieve its GDP
growth target of around 5% in 2024.
China aims to maintain “steady economic growth”
next year, based on the CEWC report, although
growth targets and specific stimulus plans will
only be released at the National People’s
Congress (NPC) in March 2025.
($1 = CNY7.28)
Caustic Soda12-Dec-2024
HOUSTON (ICIS)–Olin plans to shut down its
diaphragm-grade chloralkali capacity in
Freeport, Texas, that provides feedstock to
Dow’s propylene oxide (PO) unit, the US-based
chloralkali producer said on Thursday.
Dow plans to shut down that PO unit
at the end of 2025, and those plans
prompted Olin to close the diaphragm-grade
chloralkali capacity that serves the Dow
facility.
Olin’s is restricting the shutdown to capacity
that relies on asbestos-based technology.
US regulators seek to end the use of
asbestos in the chloralkali industry.
The amount of diaphragm-grade chloralkali
capacity that Olin plans to shut down at
Freeport amounts to 450,000 electrochemical
units (ECUs), according to the company.
Olin already has shut down its
diaphragm-grade chloralkali capacity in
McIntosh, Alabama.
It plans to transition its chloralkali capacity
in Plaquemine, Louisiana, to non-asbestos-based
technology, the company said.
Chloralkali units produce caustic soda and
chlorine.
Thumbnail shows salt, which is used to make
caustic soda and chlorine. Image by Alessandra
Sarti/imageBROKER/Shutterstock (
Speciality Chemicals12-Dec-2024
BARCELONA (ICIS)–European polyethylene (PE)
markets face growing pressure from cheaper
imports, highlighting the impact of rising
overcapacity driven by China and the US.
Plants in Europe operating at technical
minimum levels
Minimal stocks held amid plentiful supply
Demand poor across most end uses, packaging
stronger
Europe will see more PE imports as global
overcapacity grows
More polymer plant closures are likely in
Europe and other high-cost regions
US has more to lose from trade war as it is
a major exporter of PE to China
Trade flows could change dramatically if
tariff walls go up
Supply/demand imbalance may take up to nine
years to correct
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Crude Oil12-Dec-2024
LONDON (ICIS)–Global crude oil markets are
likely to be comfortably supplied next year
despite moves by OPEC+ to hold back on easing
production cuts and anticipated firmer demand,
the International Energy Agency (IEA) said on
Thursday.
Oil demand in 2025 is expected to pick up from
840,000 barrels/day this year to 1.1 million
barrels/day next year, bringing total daily
consumption to 103.9 million barrels, according
to the agency.
The petrochemicals sector is expected to be the
key driver for that uptick, with transport
fuels consumption growth still constrained, and
China demand still substantially slower than
might have been predicted a few years earlier.
Total oil supply growth is expected to increase
by 1.9 million barrels/day next year, compared
to a 630,000 barrels/day increase in 2024,
driven by non-OPEC+ nations, which are expected
to comprise 1.5 million barrels/day of the
growth.
The OPEC+ coalition of nations announced plans
last week to hold
back on easing voluntary production cuts
and slow the rates at which some of the
measures are phased out, in the face of
continued slow demand growth.
OPEC+ member states agreed to extend voluntary
cuts amounting to approximately 2.2 million
barrels/day through to the end of March next
year, and slow the pace of the reintroduction
of those volumes so that the process will run
through to September 2026.
Additional voluntary cuts amounting to 1.65
million barrels/day are to be held in place
until the end of December 2026, OPEC added.
The moves have substantially reduced the
projected supply overhang for 2025, the IEA
said, but demand trends still point to an ample
buffer of available product.
“Persistent overproduction from some OPEC+
members, robust supply growth from non-OPEC+
countries and relatively modest global oil
demand growth leaves the market looking
comfortably supplied in 2025,” the agency said
in its monthly oil report.
The US, Brazil, Canada and Guyana are expected
to drive production growth next year, while
OPEC+ crude output may still stand to increase
if Libya, Sudan and South Sudan sustain volumes
and additional capacity comes onstream in
Kazakhstan, the IEA said.
Crude price moves have been relatively subdued
in recent months despite geopolitical tensions,
with Brent crude futures averaging around
$73/barrel, the IEA said, a trend that has
continued into December, with midday trading prices
of around $73.47 on Thursday.
Despite the latest measures announced by OPEC+
and political uncertainty across parts of the
globe, demand remains the big question for next
year, the agency said.
“The abrupt halt to Chinese oil demand growth
this year – along with sharply lower increases
in other notable emerging and developing
economies such as Nigeria, Pakistan, Indonesia,
South Africa and Argentina – has tilted
consensus towards a softer outlook,” the IEA
said.
Thumbnail photo: An oil platform off the
coast of California (Source: Shutterstock)
Crude Oil12-Dec-2024
SINGAPORE (ICIS)–The UAE will impose a minimum
top-up tax (DMTT) on large multinational
companies, to align its tax system to global
standards.
The DMTT, which will take effect for financial
years beginning on or after 1 January 2025, is
a component of the OECD’s global minimum
corporate tax agreement signed by 136
countries, including the UAE, the country’s
Ministry of Finance said on 9 December.
OECD is a group of industrialized economies
with 38 members. (Note: ICIS doesn’t spell out
OECD)
The new tax will apply to multinational
enterprises operating in the UAE with
consolidated global revenues of at least €750
million in the past two years, the ministry
said.
Small petrochemical converters and traders in
the UAE are not expected to be affected by the
new tax.
These tax amendments follow a 9% business tax
implemented in 2023, with exemptions for
special free zones that operate under different
laws.
Alongside the DMTT, tax incentives for research
and development (R&D) as well as a
refundable tax credit for “high-value
employment activities” will also be introduced,
the ministry said.
The R&D tax incentive, beginning 1 January
2026, will offer a potential 30-50% tax credit,
while the high-value employment tax incentive
will, from 1 January 2025, be “granted as a
percentage of eligible salary costs” for
eligible employees, including C (chief)-suite
executives.
The initiatives aim to “enhance the UAE’s
global competitiveness” as well as spur
innovation and growth, the ministry said.
Additional reporting by Nadim Salamoun
Ammonia11-Dec-2024
HOUSTON (ICIS)–The US Department of
Agriculture (USDA) is expecting increases in
corn utilized for ethanol, larger exports, and
lower ending stocks, while soybean supply and
use projections are unchanged, according to the
December World Agricultural Supply and Demand
Estimate (WASDE) report.
In the monthly update, the USDA said corn used
to produce ethanol is raised by 50 million
bushels to 5.5 billion bushels. This lift is
based on the most recent data from the Grain
Crushings and Co-Products Production report and
weekly ethanol production data for the month of
November.
The agency said this data implies that corn
used for ethanol during the September to
November quarter was the highest since 2017.
The December WASDE shows corn exports raised by
150 million bushels to 2.5 billion bushels,
which the USDA said reflects the pace of sales
and shipments to date.
With no other use changes, corn ending stocks
are reduced 200 million bushels to 1.7 billion.
The season-average corn price received by
producers continues to be unchanged at $4.10
per bushel.
For soybeans, the supply and use projections
are unchanged but the monthly update has lifted
soybean oil production to 131.2 million tons,
with the USDA saying it is up slightly due to
an increase for cottonseed.
With higher soybean oil supplies and strong
export commitments to date, exports are raised
500 million pounds to 1.1 billion pounds.
The December WASDE said the season-average
soybean price is being forecasted at $10.20 per
bushel, down $0.60 from last month.
The first WASDE report of 2025 will be released
on 10 January.
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