News library
Subscribe to our full range of breaking news and analysis
Viewing 1-10 results of 57296
Ammonia05-Sep-2024
TORONTO (ICIS)–Canada’s Liberal-led minority
government under Prime Minister Justin Trudeau
is paying a heavy price for its decision last month
to end the labor dispute at freight railroads
Canadian National (CN) and Canadian Pacific
Kansas City (CPKC) through binding arbitration.
The left-leaning New Democratic Party (NDP) on
Thursday confirmed that it cancelled a “supply
and confidence agreement” from 2022 under which
it supported the Liberals, which hold only a
minority of parliamentary seats.
The NDP is close to labor trade unions and had
warned Trudeau repeatedly not to intervene in
the dispute.
In a televised press conference on Thursday,
NDP leader Jagmeet Singh said the government’s
intervention added to “mounting evidence” that
the Liberals were “too beholden to corporate
interests”, making it impossible for the NDP to
continue supporting them.
Singh alleged the railroads had “colluded” to
set up a scenario in which both companies were
in a labor dispute at the same time, and that
they had negotiated in “bad faith”.
Instead of allowing the dispute to be settled
through the collective bargaining process, the
government, by ordering binding arbitration,
awarded the companies for their conduct, he
said.
After a four-day freight rail shutdown at both
CN and CPKC last month, the government directed
a labor tribunal to end the shutdown and settle
the dispute through binding arbitration.
Freight rail service resumed on 26 August.
From now on, the NDP’s voting in parliament
would be case-by-case, based on what the party
deems best for workers and families, Singh
said.
Voting non-confidence would be “on the table”
and an early election was now more likely, he
said.
If the NDP joins the Conservatives and other
opposition parties in voting against the
government on the next confidence measure, the
government will fall and an election has to be
held.
Seats in parliament (total:
338):
Liberals
Conservatives
Bloc Quebecois
NDP
Others
154
119
32
24
9
Political commentators said that the NDP
cancelled the agreement as it needed to
distance itself from the Liberals, who after
nine years in government are unpopular and are
far behind the Conservatives in opinion polls.
Singh rejected suggestions that by ending the
agreement with the Liberals he was opening the
door to a Conservative government.
The NDP would be running against both Liberals
and Conservatives, he said.
Trudeau would “always cave to corporate greed”,
and the Conservatives, if elected, would be
worse, he said.
The Conservative Party, which is supportive of
Canada’s oil and gas industry, has pledged that
if elected it would immediately abolish the
consumer carbon tax implemented by the
Liberals.
There is a possibility that the Liberals may
now look to opposition party Bloc Quebecois
(BQ) for support – the BQ is advocating for
Quebec to secede from Canada and become an
independent nation.
Rail labor union Teamster Canada welcomed the
NDP’s decision to stop supporting the Liberals.
The union has filed court
challenges against the government decision
to end the labor dispute through binding
arbitration.
Meanwhile, total Canadian freight rail traffic
– intermodal and railcars – fell 5.8% year on
year for the week ended 31 August.
Industry officials have said it may take weeks
for supply chains to normalize after last
month’s shutdown.
The following table by the AAR shows total
Canadian freight rail data for the week ended
31 August and for the first 35 weeks of 2024:
In Canada’s chemical industry, producers rely
on rail to ship more than 70% of their
products, with some exclusively using rail.
Thumbnail photo of Prime Minister Justin
Trudeau meeting students at college in Ontario
in May; photo source: Government of Canada
Gas05-Sep-2024
European traders asked to pay difference
for capacity booked prior to a sharp tariff
increase
The increase could wipe out transit on
Trans-Balkan route
Ukrainian TSO GTSOU says the latest
increase could lead to a revenue reduction for
Moldova
LONDON (ICIS)–Traders have lashed out at the
Moldovan gas grid operator Vestmoldtransgaz
(VMTG) for being asked to pay higher
transmission tariffs for capacity booked prior
to the
price hike on 1 September.
At least ten companies active regionally and
local traders who booked monthly or quarterly
capacity for gas sourced in southern Europe and
transiting Moldova to Ukrainian storage have
been asked to pay the difference between the
old and the new tariffs.
Traders say the increase is wiping out the
competitiveness of one of the most attractive
regional transit routes and will block Moldova
and Ukraine’s access to non-Russian gas
supplies in southern Europe.
An international trader told ICIS that beyond
hurting the economic viability of the route the
decision would also put a major burden on
Moldovan consumers, who will have to face ever
soaring bills.
Another trader said the increase would hit the
entire region.
He questioned why VMTG increased tariffs by 50%
since it hadn’t made any recent investments and
the transmission assets it now operates have
long been amortised.
MOLDOVAN LOSSES
In a letter sent to the Moldovan regulator, the
ministry of energy, VMTG and the Energy
Community and seen by ICIS, the Ukrainian gas
grid operator GTSOU said reverse flows along
the Trans-Balkan route linking southern Europe
to Ukraine had ‘significantly facilitated
cross-border trading opportunities in the
region.’
VMTG, a company majority-owned by the Romanian
grid operator, Transgaz, took over Moldova’s
transmission operations in September 2023
following a government and regulator push to
divest transmission from incumbent Moldovagaz.
The transfer of operations via the lease
agreement
was pushed through after Gazprom,
Moldovagaz’ majority owner, repeatedly
requested the delay of transmission unbundling.
Immediately after the switchover, VMTG
requested a tariff increase, which was approved
by the Moldovan regulator.
This year VMTG has requested a further rise,
with entry tariffs
increasing from Moldovan Lei 20.9/MWh/h
(€1.08/MWh/h) to Moldovan Lei 30.7/MWh/h
(€1.59/MWh/h) on 1 September. Exit tariffs have
also risen from Moldovan Lei 22.3/MWh/h to
Moldovan Lei 35.5/MWh/h (€1.85/MWh/h).
GTSOU said in the letter that the sharp tariff
increase requested by VMTG combined with an
increase in transmission tariffs in
neighbouring transit country Romania has led to
utilisation rates for the route dropping from
83% in 2023, prior to VMTG’s takeover, to 10%
in 2024.
The Ukrainian operator calculated that prior to
the first VMTG tariff transit costs to ship gas
from Greece to the Grebenyky on the border with
Ukraine were around €3.00/MWh.
Following the first rise, the overall cost rose
by 67% to €5.00/MWh, while now it has increased
to €6.7/MWh, with Moldova being the most
expensive transit country in the region and
possibly across Europe, traders say.
The Ukrainian grid operator said the latest
increase would ‘worsen’ the situation and lead
to a revenue reduction for Moldova.
A source close to GTSOU said VMTG could
alleviate the situation by introducing
comparatively cheaper short-haul tariffs
bridging cross-border points.
ANRE, Transgaz and VMTG did not reply to
questions by publication.
Petrochemicals05-Sep-2024
MUMBAI (ICIS)–Indian petrochemical major
Reliance Industries Ltd (RIL) has won in the
bid to get government incentives to produce
advanced chemistry cell (ACC) batteries, which
can be used in electric vehicles (EVs).
Government incentives worth $431 million
RIL chosen out of seven in tender process
Construction of RIL ACC battery project in
Gujarat ongoing
The company will get Indian rupees (Rs) 36.2
billion ($431 million) worth of incentives
under the government’s production-linked
incentive (PLI) scheme, India’s Ministry of
Heavy Industries said on 4 September.
RIL bested six other bidders in the global
tender process for the incentives in building
an ACC plant with a 10 Gigawatt-hours (GWh)
capacity, it said.
The other bidders were ACME Cleantech
Solutions; Amara Raja Advanced Cell
Technologies; Anvi Power Industries; JSW Neo
Energy; Lucas TVS; and Waree Energies.
RIL is currently constructing an ACC-based
battery manufacturing plant in Jamnagar in the
western Gujarat state.
“We have already begun construction of an
integrated advanced chemistry-based battery
manufacturing facility with a 30 GWh annual
capacity at Jamnagar,” RIL chairman Mukesh
Ambani had said during the Indian
conglomerate’s annual general meeting (AGM) on
29 August.
“Production will commence by the second half of
next year,” Ambani added.
The plant will initially assemble battery
systems and packs, later expanding to cell
manufacturing and chemical production, he
added.
ACC batteries can store and convert electric
energy and are used in a variety of
applications, including electric vehicles
(EVs), renewable energy storage, consumer
electronics, and as power backup.
EVs and associated battery markets provide
growth opportunity for the chemical industry,
with chemical producers separately developing
battery materials, as well as specialty
polymers and adhesives for the
environment-friendly vehicles.
In May 2021, the Indian government set aside
Rs181 billion for a National Programme on ACC
battery storage to encourage development of the
battery storage ecosystem and electric mobility
in India.
In the first round of the ACC PLI bidding in
March 2022, three beneficiary firms were
allocated a total capacity of 30 GWh.
Ola Cell Technologies, Rajesh Exports Ltd and
RIL subsidiary Reliance New Energy Solar Ltd
won the bid in the first round.
The fourth company that was initially awarded
incentives was eventually disqualified, paving
the way for rebidding of the unawarded 20GWh
capacity, according to local media reports.
Focus article by Priya Jestin
($1 = Rs83.98)
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Speciality Chemicals04-Sep-2024
HOUSTON (ICIS)–The collectively bargained
contract between US East Coast and US Gulf
ports and dock workers expires at the end of
the month and the parties are not currently
negotiating, leading one of the nation’s
largest retail trade groups to urge the
government to get involved.
Last week, both parties submitted documents
with the US Federal Mediation and Conciliation
Service (FMCS) informing the agency of a
dispute between the parties, as required by
law.
About 14,500 dock workers are represented by
the International Longshoremen’s Association
(ILA), while the 36 ports – including three of
the busiest ports in the US in Houston, New
York and New Jersey, and Savannah, Georgia –
are represented by the United States Maritime
Alliance (USMX).
The looming work stoppage would have major
impacts on the US economy, and the National
Retail Federation (NRF) has urged both sides to
resume negotiations.
“At a time when inflation is on the downward
trend, a strike or other disruption would
significantly impact retailers, consumers and
the economy,” NRF President and CEO Matthew
Shay said. “The administration needs to offer
any and all support to get the parties back to
the table to negotiate a new contract.”
In June, NRF led a coalition of 158 state and
federal trade associations in a letter to
President Joe Biden urging the administration
to work with the negotiating parties to reach a
new agreement.
The NRF said that the threat of a strike during
the peak shipping season has many retailers
already implementing costly mitigation
strategies, such as shifting deliveries to West
Coast ports.
This adds additional costs because of the
longer routes, which could be even more drastic
as capacity for ocean carriers is already tight
because of diversions away from the Suez Canal
and Red Sea.
USMX said in a statement on its website that it
is seeking a return to the bargaining table.
“USMX has still been unable to secure a meeting
with the ILA to resume negotiations on a new
master contract,” according to the statement.
“USMX continues to meet with its members in
preparation for the resumption of negotiations,
and it remains committed to working with the
ILA leadership on a new agreement.”
The ILA is holding Wage Scale Committee
meetings today and tomorrow in Teaneck, New
Jersey, and union president Harold Daggett
insists the union will strike at 00:01 Eastern
Time on 1 October if a deal is not reached.
“There is a real chance we will not have an
agreement in place,” Harold Daggett said in a
video shared on the ILA website.
“The ILA will definitely hit the streets on 1
October if we do not get the kind of contract
we deserve,” Daggett said.
Dennis Daggett, ILA executive vice president,
said in the video that the two sides are at an
impasse and cannot even get past the economics
of a new contract.
Other issues that the ILA cites as
deal-breakers are container royalty (special
payments to compensate longshoremen for
decreased employment opportunities resulting
from the use of containerized shipping), better
healthcare benefits, and a ban on all automated
and semi-automated services at the ports.
Dennis Daggett said the ILA has been working
through local agreements between locals and
individual ports before focusing on the overall
agreement and still has some items to work out
at the local level, including Mobile, Alabama,
and Jacksonville and Tampa, Florida.
Market participants have said a strike by
dockworkers would not have much of an impact on
liquid chemical tankers.
One reason is that most terminals that handle
liquid chemical tankers are privately owned and
do not necessarily use union labor.
Also, tankers do not require as much labor as
container or dry cargo vessels, which must be
loaded and unloaded with cranes and require
labor for forklifts and trucks.
But more liquid chemicals are being moved on
container ships in isotanks.
Focus story by Adam Yanelli
Visit the ICIS Logistics – impact on
chemicals and energy topic
page
Ethylene04-Sep-2024
BUENOS AIRES (ICIS)–For years, Latin American
petrochemicals companies have been trying to
increase diversity within to better represent
the consumers they want to sell their products
to – without much success.
Company boards and middle management levels
continue to be mostly populated by men, and
most of them tend to be white, in a region
where ethnic minorities are sometimes the
majorities.
The environmental, social, and governance (ESG)
mantra has been used so many times that it has
become a bit futile. A few statistics to show
off positive trends are one thing – real change
is another.
Companies need to go the extra mile to be as
plural as society. And in some Latin American
countries like Brazil, that mostly means one
thing: blackness, in the country outside Africa
with the largest black population.
They will need to hire and promote people who
will not conform to the norm; visionary people
who will be wise enough to know a company will
not reach its sales potential until they try,
at least, to resemble the society they operate
in.
Brazil’s polymers major Braskem – the largest
petrochemicals producer in Latin America –
seems to have found one of those people: meet
Debora Ferraz, global senior HR manager at the
company and specialist in diversity, equity,
and inclusion (DE&I) issues.
“My job is not only about gender inequality,
although that is still a big part of it, of
course. My job goes much further than that and
it involves making Braskem more like the
country: in Brazil, 50% of the population are
black or have black roots,” said Ferraz.
“We have now established a system in which the
HR person looking to hire will not see in what
university the candidate coursed his or her
studies. Before, we always ended up hiring
people who were anything but plural: they all
spoke English, they all came from the same
universities. Behavior is now the key element
in our hiring processes.”
Ferraz went on to say that in Braskem’s Mexican
operations, a country with painful statistics
showing sexism is women’s everyday life, a
hiring process will not go ahead if there is
not at least one woman shortlisted.
In Europe, where nationality is probably the
biggest factor determining discrimination,
Braskem pays more attention to that; in the US,
it is veterans of war, many of whom find
themselves lost in a competitive labor market
after 20 or 30 years of service, she said.
Ferraz was speaking to delegates at an event
about sustainability organized by the Latin
American Petrochemical and Chemical Association
(APLA). Her talk captivated the audience, and
it was recurrently referred to thereafter.
RACISM: LONG
SHADOWBrazil is Latin America’s
largest economy, with 220 million consumers,
and it is a case increasingly studied when it
comes to racism and discrimination. The shadow
of four centuries of Portuguese Empire rule,
where enslaved black Africans composed the
bread and butter of the workforce, have left a
mark present still today, in all aspects of
life.
“The black and brown [Brazilians with black
roots] populations represent 9.1% and 47% of
the Brazilian population, respectively. Yet,
the share of these population is lower in the
indicators that reflect higher levels of life
conditions,” said a report by Brazil’s
statistics office IBGE in 2022.
“This indicator already shows a disadvantage of
those populations when inserting in the labor
market. The proportions of the black and brown
populations among those unemployed and
underutilized are higher than what they
represent in the labor force,” it added.
Racism is so ingrained in Brazil that when the
country officially abolished slavery in 1888,
the last nation in the western hemisphere to do
so, it gave no rights worth the name to its
black population and even decided to go as far
as Italy or Japan to look for the workers it
needed to feed its nascent industrial sectors.
Hence the large Japanese or Italian minorities
present in the country, who were allowed to
integrate fairly well and some of whom went on
to build business empires, quickly becoming
part of the economic fabric.
Meanwhile, blacks remained at the favelas,
Brazil’s famous shanty towns, only mixing with
the non-black population when they went to do
the badly paid jobs, many times in the informal
economy.
Fernando Henrique Cardoso, the Brazilian
center-right president who stabilized the
economy in the 1990s and gave way to the
successes of President Luiz Inacio Lula da
Silva in his first and second terms
(2001-2011), has become a reference in racism
studies.
A quote by Cardoso lies in one of the walls of
Sao Paulo’s Museu Afro-Brasil, which only
opened its doors in 2004 and is a painful
journey through Brazil’s most shameful past, a
quote which sums up why the
integration of all Brazilians will be
a long-term and laborious enterprise.
“An economic system which was based in slavery
and violence for four centuries creates a
deformed society,” said Cardoso.
And a deformed society will invariably take
many decades – hopefully not centuries – to be
fixed. Companies like Braskem should make more
efforts to bring people like Ferraz in but,
most importantly, listen to what they have to
say and follow their advice – Ferraz is black
herself, and without doubt she will have
suffered racism.
“We need to aim to have a good representation
of society within the company. To get serious
with this, we must have quantitative targets:
we can do continuous training with employees,
but if we don’t set clear targets, nothing will
be achieved,” said Ferraz, who has been in her
current post since 2022.
“Up to that year, 30% of our workforce was
black but that figure had not changed in the
preceding 15 years, no matter how many
trainings we did. Since 2022, that figure has
increased to 37%. What has changed? That we set
clear targets, and we are fighting hard to
achieve them. I speak monthly with the CEO and
with other board members, because they are the
first ones who must believe in this.”
Speaking at the same panel, Paola Argento, head
of diversity at Argentina’s energy and
petrochemicals major YPF, corroborated that
until a company does not employ a plurality of
workers – each of them feeling free enough to
bring its own singularity to the workplace – a
company will not reach its potential.
“If we all come from the same universities, the
final product we offer will not be innovative.
Plurality allows us to produce better products
and services. These days, most consumers do
care about these issues, so the lack of
plurality and innovation will end up negatively
affecting sales,” said Argento.
“But to achieve this true plurality of
thinking, the highest executives at a company
have to understand it and be fully behind it.”
The APLA sustainability event runs in Buenos
Aires on 4 September.
Front page picture source: Brazil’s
statistics office IBGE
Insight by Jonathan Lopez
Speciality Chemicals04-Sep-2024
LONDON (ICIS)–Europe chemicals shares and
public markets slumped on Wednesday in the wake
of sell-offs in Asia and the US on the back of
growth fears and a crude oil sell-off.
Stock exchanges in Asia and the US crashed on
Tuesday night and Wednesday morning for the
second time in less
than a month after another market rout,
with weak
economic data from the US and China once
more ringing alarm bells.
BEARISH US INDICATORS
As was the case during the early August rout,
bearish economic data from the US stoked market
fears of a slowdown in the country, which has
proven the most resilient large mature economy
during the slump of the last few years.
The US manufacturing sector contraction
deepened in August, according to purchasing
managers’ index (PMI) data collected by S&P
Global, showing a drop from 49.6 in July to
47.9, with future indicators pointing to
potential further deterioration ahead.
“There is a worrying narrowing of the pockets
of strength,” said ING chief international
economist James Knightley, commenting o the
numbers.
“Just 22% of industry is experiencing rising
orders and just 17% are seeing rising
production. Historically, this weakness in
output and orders points to a sharp slowing in
GDP growth,” he added.
The August figures are the latest warning
signal on economic momentum in the country,
following an unexpected decline in manufactured
goods orders in June, according to the US
Census Bureau in early August, the most recent
data available.
As was the case in last month’s market crash,
tech stock slumps led the US declines on
Tuesday. While sector declines last month
had been driven by growing scepticism over the
potential of artificial intelligence, Nvidia
saw one of the sharpest falls declines this
month.
The chipmaker reportedly received a government
subpoena as part of an antitrust investigation
wiped over 9% off its market value, a loss
estimated at $279 billion.
ASIA SLUMPS
With global microchip supply chains strongly
connected to Asia, the Nvidia sell-off also
ripple through the region’s technology stocks,
with core players including Samsung, Tokyo
Electro and Taiwan Semiconductor suffering
sharp losses by Tuesday’s close.
Economic data for China released late last week
showed the first decline in export orders in
eight months, while the manufacturing sector I
the country remained in contraction for the
fourth consecutive month in August, and house
prices seeing the slowest pace of growth in
2024 so far.
Industrial indicators for Europe, where
manufacturing has been on recessionary footing
for over two years, new order volumes are
continuing to decline, potentially signalling a
period in autumn where manufacturing demand is
shrinking in US, China and the eurozone.
OIL SUPPLY
LENGTHENSCrude oil prices also
slumped, falling to the lowest level in
to the lowest levels of the year, on the
back of expectations that the OPEC+ coalition
will begin to unwind their 2.2 million bbl/day
production cuts next month.
Expectations that Libya will begin to restart
crude production and exports after a political
agreement was reached.
These two factors point to a substantial
increase in supply despite ongoing sluggish
demand, driving Brent and WTI futures down to
$74.19/bbl and $70.79/bbl respectively in
midday trading on 4 September.
The US Dow, S&P 500 and NASDAQ indices
closed down 1.51%, 2.12% and 3.26% respectively
on Tuesday evening, while Japan’s Nikkei 224
and Hong Kong’s Hang Seng bourses concluded
trading down 4.24% and 1.10% on Wednesday.
In Europe, Germany’s DAX index was down 0.84%
in midday Wednesday trading, while France’s CAC
40 and the STOXX Europe 50 index had lost 0.97%
and 1.19% respectively.
Aggregate chemicals sector losses were more
modest, with the STOXX 600 index for the sector
down 0.15% as of 13:29 BST.
EMS-Chemie and Umicore had suffered the
sharpest declines as of that time, dropping
1.49% and 1.31%. Linde and Yara shares both
dropped 0.97% compared to Tuesday’s close,
while Brenntag, Bayer and OCI saw falls of over
0.50%.
Focus article by Tom Brown.
Thumbnail photo: Traders in Seoul, South
Korea, on 4 September, The South Korea
Composite Stock Price Index (KOSPI) closed down
3.15% on the day. Source: Jeon
Heon-Kyun/EPA-EFE/Shutterstock
Crude Oil04-Sep-2024
SINGAPORE (ICIS)–Asian petrochemical shares
slumped on Wednesday as regional bourses
tracked Wall Street’s rout overnight on poor
data from both the US and China, with crude
prices shedding more than $1/bbl in late Asian
trade.
Major US equity indexes suffer worst
session since 5 August
China August export orders decline for
first time in eight months
US crude trades below $70/bbl
At the close of trade in Tokyo, Mitsui
Chemicals fell 3.07% and Sumitomo Chemical
tumbled by more than 4%, with the Nikkei 225
index down 4.24% at 37,047.61.
It was the second sharpest decline in Japan’s
benchmark stock index since the 12% plunge on 5
August due to US recession fears and a stronger
yen.
In Seoul, LG Chem ended down 2.06%, with South
Korea’s KOSPI Index down 3.15% to close at
2,580.80.
In Hong Kong, PetroChina slumped by more than
6% at the close of trade, with the Hang Seng
Index down by 1.10% at 17,457.34.
In Kuala Lumpur, PETRONAS Chemicals Group (PCG)
slipped by 0.36% with the stock market index
dipping by 0.43% to close 1,670.88.
Major US equity indexes overnight posted their
worst session since the global sell-off on
5 August this year, as financial markets
evaluated economic data from the US and China.
The Dow Jones Industrial Average tumbled
overnight by 1.51%, the S&P 500 fell by
2.12%, and the Nasdaq Composite closed 3.26%
lower.
US, CHINA DATA STOKE SLOWDOWN
WORRIES
In the US, the Institute for Supply Management
(ISM) monthly survey of purchasing
managers showed a reading of
47.2, below the 50 breakeven point for
expansion of activity for the fifth straight
month.
Separately, the final S&P Global US
manufacturing PMI reading for August was at
47.9, down from 49.6 in July. The latest
reading was the lowest since last December and
signaled a second consecutive month of
deteriorating manufacturing conditions.
Meanwhile, China released economic data on 31
August indicating a decline in export orders,
the first such decrease in eight months.
China’s factories remained in contraction mode,
with August official manufacturing
PMI posting a reading of below 50 for the
fourth consecutive month.
Additionally, data on 1 September showed that
China’s new home prices increased at their
slowest pace of the year during August.
The average price for new homes across 100
cities in the country edged up 0.11% from July,
slowing from the 0.13% rise in June this year,
according to data from property researcher
China Index Academy.
OIL PRICES CONTINUE
LOWER
Oil prices fell by more than $1/bbl in late
Asian trade on Wednesday, extending their
losses after plunging by more than 4% the
previous day and hovering at their lowest since
December 2023 on concerns about sluggish global
demand.
Also exerting downward pressure on the market
are expectations that a political dispute
halting Libyan exports could be resolved.
Libya’s move to appoint a new central bank
governor signals progress in resolving recent
challenges, but this development, coupled with
the resumption of Libyan oil production and
OPEC+’s planned output increase, could lead to
an oversupply of oil, putting downward pressure
on crude prices.
“The market is also bracing itself for the
gradual return of OPEC+ [OPEC and its allies]
supply from October, at a time when there is
plenty of concern over demand weakness,” Dutch
banking and financial information services
provider ING said in a note.
“The further pressure we see on prices the more
likely that OPEC+ will be forced to scrap plans
to bring supply back onto the market,” it said.
“However, with the balance looking soft through
2025, the question is when the group will
eventually be able to bring supply back onto
the market without putting significant pressure
on prices,” ING added.
Focus article by Nurluqman
Suratman
(Updates stocks, oil prices; adds ING comments)
Thumbnail image: At Yantai Port in China on
2 September 2024. (Source:
Costfoto/NurPhoto/Shutterstock)
Crude Oil04-Sep-2024
SINGAPORE (ICIS)–Typhoon Yagi is steadily
intensifying and tracking northwestward across
the South China Sea on Wednesday, with landfall
expected on Guangdong province in southern
China on 6 September.
The China Meteorological Administration (CMA)
issued on Wednesday an orange typhoon warning –
the second highest level in a four-tier scale.
Strong winds, heavy rainfall and rough seas are
forecast over the central and southern coastal
areas of Fujian and the central and eastern
coastal areas of Guangdong province.
Yagi, which intensified into a typhoon early on
Wednesday, was centered some 60 kilometers
(37.28 miles) east of Wenchang city, Hainan
province at 02:00 GMT, according to CMA.
It is forecast to move in a west-northwest
direction at a speed of about 10 kilometers per
hour, and its intensity will gradually increase
before making landfall on the coast Wanning,
Hainan, and Dianbai in Guangdong on the
afternoon of 6 September.
Guangdong houses the Shenzhen Special Economic
Zone (SEZ), a major hub for industries such as
electronics, telecommunications, and logistics.
The typhoon will then move into the Gulf of
Tonkin in the early morning of 7 September, and
then move towards the China-Vietnam border
before gradually weakening.
Yagi previously made landfall as a tropical
storm in the northern Aurora province of the
Philippines on 2 September, killing 14 people.
It comes in the wake of
Typhoon Shanshan, which crossed Japan late
last month.
Shanshan had brought record-breaking rainfall
triggered widespread flooding and landslides in
Japan, particularly in the western and eastern
regions.
Over 1,000 domestic flights and several
international flights in Japan have had to be
canceled due to Shanshan, affecting thousands
of passengers. Rail operators had suspended
Shinkansen bullet trains and other services.
Polyethylene04-Sep-2024
SINGAPORE (ICIS)–Click here to
see the latest blog post on Asian Chemical
Connections by John Richardson.
Alice asked the Chesire cat perched in a tree,
“what road do I take?” to which the cat asked,
“where are you going?” Alice admitted, “I don’t
know.” The cat’s response was, “then it doesn’t
matter. If you don’t know where you are going,
any road will get you there”. Lewis Carroll’s
Alice in Wonderland, published in 1865, has
always been more than just a fabulous
children’s story.
Such is the plight of some chemicals companies
as they recognize the need for change, but
don’t know exactly what change looks like as
they struggle to decide which road to take.
I see the problem here as being bogged down in
the details, getting stuck in the weeds, when
the details are simply unknowable right now.
But what we do know and must determine at the
C-suite level – and this would then trickle
down to every level of organization – is the
overall direction. The details will sort
themselves out later.
See today’s blog for a reminder of the ten
interconnected reasons why I believe that the
Chemicals Supercycle is over. Click on the
links in the slide for the relevant background.
The first question each commodity chemicals
company needs to answer is this: “Can we
continue to compete in the global commodity
chemicals space, or do we instead need to
become a niche, higher-value player?”
There will be many, many shades of grey between
these two extremes. But C-suites should start
with a binary choice as I believe that:
The truly global and ever-expanding
commodity players are likely to be in the
Middle East, the US and Canada only because of
feedstock advantages – and connected to
feedstocks, the push to convert more oil into
chemicals.
We don’t know whether China can be a major
global export player in commodity chemicals
(maybe in some value chains where it is already
the dominant player) because of geopolitics.
What seems clearer is that by itself, and with
its geopolitical partners, it is likely to
continue its push to greater commodity
chemicals self-sufficiency.
This leaves the rest of the world – barring
a few state-owned oil-to-gas-and-chemicals
majors in regions such as Southeast Asia –
facing the challenge of becoming more niche.
So, you are Alice. You have returned to
the tree, having decided where you want to go.
You ask the Cheshire cat, me, what route to
take. All I will say here is “meow”. For more
details, contact john.richardson@icis.com.
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.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.