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Ammonia13-Aug-2024
TORONTO (ICIS)–Freight railroads Canadian
Pacific Kansas City (CPKC) and Canadian
National (CN) may start to lock out workers on
22 August:
CPKC will issue notice to labor union
Teamsters Canada Rail Conference (TCRC) “of its
plan to lock out employees at 00:01 ET on
August 22 if union leadership and the company
are unable to come to a negotiated settlement
or agree to binding interest arbitration”, it
said in a statement.
CN will have “no choice” but to begin a
phased and progressive shutdown of its network,
starting with embargoes of hazardous goods,
which would culminate in a lockout at 00:01
Eastern Time on August 22nd, “unless there is
immediate and meaningful progress at the
negotiating table or binding arbitration”, it
said.
CN also requested the intervention of Canada’s
federal labor minister, it added.
TCRC, for its part, said that it remains
committed to negotiating new collective
agreements.
The railroads’ lockout warning comes after the
Canada Industrial Relations Board (CIRB) on 9
August imposed a 13-day cooling-off
period in the labor dispute about wages,
benefits, work scheduling and safety.
Canada’s chemicals, fertilizer and other
industries have been facing the threat of a
rail labor disruption for months now.
In early May about 9,300 unionized conductors,
train operators and engineers at CN and CPKC
voted for a strike as early as 22 May, while
the labor minister referred the matter to the
CIRB for a decision about a strike’s impacts on
public safety and health.
With the referral, the minister suspended the
right to strike as under law a legal strike or
lockout could not occur until the board had
made its decision.
The minister asked the CIRB to examine whether
certain rail deliveries such as fuel, food and
chlorine for water-treatment facilities should
be declared essential services, allowing
shipments to continue during work stoppages.
However, the CIRB ruled last Friday (9 August)
that no rail activities needed to be maintained
during a strike or lockout, thus clearing the
way for industrial action after the expiry of
the 13-day cooling off period.
IMPACT ON CHEMICALS
Trade group Chemistry Industry Association of
Canada (CIAC) warned again of the impact of a
freight rail disruption on Canada’s chemical
industry and the overall economy.
“Canada’s economy relies on rail to keep
products and commodities moving,” the group’s
CEO, Bob Masterson, said in a statement.
Chemicals needed for water treatment and sewage
treatment are shipped by rail, he said.
Many CIAC members were “captive” to CPKC and/or
CN, with no viable alternatives for shipments,
he said.
Companies producing highly regulated goods –
about one-third of CIAC members – typically
begin shutdown procedures before 72 hours’
notice of a strike or lockout is given, he
said.
Although plants at some CIAC member companies
can only operate up to two days without rail
service before having to be shut down, most
will be shut down within a week, he said.
The Canadian chemistry sector alone moves over
500 railcars/day, he said.
It would require over 1,500 road-based tanker
trucks to carry the same load, he said.
There was no “Plan B” because of a lack of
availability of trucks and drivers and the
additional cost of moving product over long
distances, Masterson said.
Furthermore, many chemical products are
restricted to move by rail due to their
hazardous nature, he added.
According to CIAC, more than Canadian dollar
(C$) 76 million (US$55 million) of industrial
chemical products move on Canada’s rail network
daily, or C$28 billion each year.
Chemicals account for nearly 10% of all
Canadian rail traffic, the group said.
Furthermore, the chemical industry’s customers
in the automobile, forest products, minerals
and other industries ship most of their product
by rail, it said.
CIAC is urging a negotiated solution to the
conflict, it said.
However, should negotiations fail, Canada’s
federal government “must be prepared to act
quickly to order the parties to return to work
and the negotiating table to protect Canadians,
Canadian workers directly affected by the
disruption, and the Canadian economy,” the
group said.
The group added that the CIRB’s decision not to
impose requirements to ensure the rail shipment
of essential products – such as fuel, food or
chlorine for water treatment – during
industrial action was “concerning”.
FERTILIZERS
In the fertilizer industry, trade group
Fertilizer Canada said that the railroads on
Monday, 12 August, issued embargoes immediately
halting certain fertilizer shipments 10 days
ahead of an expected labor disruption.
The threat of a work stoppage has already begun
to impact the movement of fertilizers, and the
industry expects further embargoes and
slowdowns in rail service, the group said.
A work stoppage that prevents the
transportation of fertilizer would have
“potentially disastrous effects” on crop yields
and food security, it added.
Fertilizer Canada wants the government “to take
immediate action to assist all parties” in
reaching agreements, “including ordering a
directive for binding arbitration that
prohibits TCRC from undertaking strike action
and CN and CPKC from lockout action,” it said.
Furthermore, the group is asking the federal
government to recognize fertilizers as an
essential good critical to domestic and global
food security that should continue to move
during work stoppages, it said.
Canada’s reputation has already been damaged by
numerous supply chain disruptions in the recent
past and the renewed labor uncertainty will
give its international competitors an
advantage, Karen Proud, CEO of Fertilizer
Canada, added.
Canadian chemical producers rely on rail to
ship more than 70% of their product, with some
exclusively using rail, while in the fertilizer
industry about 75% of all fertilizers produced
and used in Canada is moved by rail.
The following table by the American Association
of Railroads (AAR) shows Canadian freight rail
traffic for the week ended 3 August and
the first 31 weeks of 2024:
In their recent earnings calls, midstream
energy firms Pembina and Keyera, as well as
fertilizer major Nutrien and others
raised the looming rail disruption as a
concern, and CN reduced its 2024 earnings
guidance, citing the impact of the labor
uncertainty.
Meanwhile, Canada continues to face the
threat of new labor
disruptions at its West Coast ports.
However, as of Monday, neither the BC Maritime
Employers Association (BCMEA) nor trade union
and International Longshore and Warehouse Union
Local 514 issued the required 72-hour notices
before a legal strike or lockout can begin.
(US$1=C$1.37)
Additional reporting by Al Greenwood
Thumbnail photo source: Keyera
Crude Oil13-Aug-2024
LONDON (ICIS)–Sentiment for Germany’s economic
outlook fell sharply in August on concerns over
the US economy and the protracted conflict in
the Middle East.
A monthly survey of analysts and investors
carried out by the Germany-headquartered think
tank ZEW saw its indicator of economic
sentiment fall to 19.2 points.
The drop marked a decrease of 22.6 points from
July. It was also the strongest decline in two
years.
An assessment of the current economic situation
in Germany also saw a drop in its reading, with
the corresponding indicator still in negative
territory and down by 8.4 points to -77.3
points.
“It is likely that economic expectations are
still affected by high uncertainty, which is
driven by ambiguous monetary policy,
disappointing business data from the US economy
and growing concerns over an escalation of the
conflict in the Middle East,” ZEW president
Achim Wambach said in a statement.
The economic outlook for the eurozone also fell
to 17.9 points, a drop of 25.8 points from
July.
While the current situation indicator for the
eurozone was assessed slightly higher by 3.7
points, it was still in negative territory at
-32.4 points.
Thumbnail photo: Dortmund port,
Germany (Source: Christopher
Neundorf
/EPA-EFE/Shutterstock)
Crude Oil13-Aug-2024
SINGAPORE (ICIS)–Singapore’s non-oil domestic
exports (NODX) growth forecast for 2024 has
been revised downward to 4-5%, Enterprise
Singapore (EnterpriseSG) said on 13 August.
The forecast is down from its initial 4-6%
projection amid external demand concerns.
Support for NODX expected to come from
electronics sector
Q2 decline in NODX driven by 9.2% drop in
non-electronic NODX
GDP growth forecast for 2024 narrows to
2-3%
The adjustment comes as the country’s NODX fell
by 6.4% year on year in the second quarter
following a 3.4% decline in Q1, the government
agency championing enterprise development said
in a statement.
Singapore’s petrochemical exports rose by 14.9%
year on year in the second quarter, extending
the 0.7% expansion in the first three months of
the year.
“Key downside risks remain for the NODX
forecast, including a weaker-than-expected
recovery in H2 2024, which could potentially
lead NODX growth for the year to come in below
the forecast range,” EnterpriseSG said.
The Q2 decline in NODX was largely driven by a
9.2% year-on-year drop in non-electronic NODX,
primarily due to a significant decrease in
pharmaceuticals exports.
Non-electronic NODX includes petrochemical
shipments abroad.
Electronic NODX bucked the trend with a 3.8%
year-on-year increase in the second quarter,
after a 1.6% decline in the first three months
of the year.
Support for Singapore’s NODX in the second half
of 2024 is expected to come primarily from the
electronics sector, driven by growing demand
for artificial intelligence (AI) servers and
consumer devices, EnterpriseSG said.
This optimism is bolstered by a revised upward
forecast for global chip sales, now projected
to increase by 19.2% in 2024, up from the
previous forecast of 17.4%.
“In addition, a net weighted balance of 36% and
56% of firms in the electronics and
pharmaceuticals clusters respectively forecast
new export orders for the upcoming quarter,”
EnterpriseSG added.
In its outlook, EnterpriseSG noted the
International Monetary Fund’s (IMF) projection
of a 3.2% growth in global economic activity
for 2024.
“Most of Singapore’s key trade partners,
including China, the US, the EU 27 and ASEAN-5
are projected to grow in 2024,” it said.
ASEAN-5 comprises the following Association of
Southeast Asian Nations (ASEAN) member
countries: Indonesia, Malaysia, the
Phillippines, Thailand and Singapore.
On the trade front, the IMF forecasts a 3.1%
increase in global trade volume for 2024, a
significant improvement from the 0.8% growth in
2023.
The World Trade Organization (WTO) also
projects a 2.6% expansion in global merchandise
trade for 2024, reversing the 1.2% decline seen
in 2023.
Separately, Singapore’s Ministry of Trade and
Industry (MTI) on 13 August said the country’s
GDP growth forecast for 2024 has been narrowed
to 2-3%, versus the previous estimate of a 1-3%
expansion.
The country’s economy expanded by 2.9% year on
year in the second quarter, in line with its
advance estimates released in July, bringing
growth in the first half of the year to 3.0%.
Focus article by Nurluqman
Suratman
Thumbnail image: Part of the Singapore city
skyline, with Marina Bay Sands and the
ArtScience Museum in the background. (Photo
source: Wallace Woon/EPA/REX/Shutterstock)
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Ammonia12-Aug-2024
HOUSTON (ICIS)–US crops are moving closer to
full maturity with corn acreage now at 94%
silking while soybeans have reached 91%
blooming, according to the latest US Department
of Agriculture (USDA) weekly crop progress
report.
For corn, the pace of acreage reaching the
silking phase is just behind the 95% rate from
2023 but is equal to the five-year average of
94%.
The amount of crop now at the dough stage is
60%, which matches the 60% level from last year
and is above the five-year average of 56%.
Corn which has reached the dented phase is at
18%, which is ahead of both the 15% achieved in
2023 and the five-year average of 12%.
Corn conditions remain unchanged with there
being 3% rated very poor, 7% poor, 23% fair,
51% good and 16% as excellent.
For soybeans, there is now 91% of the crop
blooming. This does trail the 2023 level of 93%
but is slightly ahead of the five-year average
of 90%.
The amount of acreage setting pods is at 72%,
which is behind the 75% from last year, but is
above the five-year average of 70%.
For soybean conditions, there continues to be
2% listed as very poor, 6% as poor and 24%
rated as fair. There is now 55% seen as good
with 13% as excellent.
In harvesting updates, winter wheat is now at
93% completed with this current pace ahead of
the 91% rate from 2023 as well as the five-year
average of 91%.
Spring wheat harvest has reached 18% completed,
which does trail both the 20% level from last
year and the five-year average of 21%.
Ammonia12-Aug-2024
HOUSTON (ICIS)–The US Department of
Agriculture (USDA) is forecasting increased
corn and soybean production, according to the
August World Agricultural Supply and Demand
Estimate (WASDE) report.
Corn production is being calculated at 15.1
billion bushels, up 47 million bushels from the
July report, while soybeans are projected to be
4.6 billion bushels, up 154 million bushels.
Looking further at the domestic corn crop, the
USDA said the monthly outlook is for larger
supplies, lower domestic use, greater exports
and smaller ending stocks.
Projected beginning stocks are now 10 million
bushels lower based on a slightly higher use
forecast for 2023-2024, with higher exports
partly offset by reductions in corn used for
glucose, dextrose and starch.
Corn production is forecasted at 15.1 billion
bushels, up 47 million bushels from last month
with the agency saying a 700,000 acre decline
in harvested area is fully offset by an
increase in yield.
The season’s first survey-based corn yield
forecast is at a record 183.1 bushels per acre,
which is 2.1 bushels higher than last month’s
projection.
Among the major producing states there are
indications that yields will rise year on year
in Illinois, Indiana, Iowa, Missouri, Nebraska
and South Dakota, with yields in Ohio
forecasted to be below a year ago.
Total US corn use is forecast 60 million
bushels higher to now stand at 15.0 billion
bushels.
Exports for 2024-2025 are being lifted by 75
million bushels to a total of 2.3 billion
bushels, which the USDA said reflects US export
competitiveness and relatively low world market
prices.
With supply rising less than use, ending stocks
are now calculated to be lower by 24 million
bushels to 2.1 billion bushels.
The August WASDE said the season-average farm
price received by producers is lowered by 10
cents to stand at $4.20 per bushel.
For soybeans, the USDA said the outlook
includes higher production, exports and ending
stocks.
Currently production is being forecasted at 4.6
billion bushels, which is an increase of 154
million bushels and is based on higher area and
yield.
The harvested area is being calculated at 86.3
million acres, which is 1 million acres higher
from the July WASDE.
The first survey-based soybean yield forecast
is at 53.2 bushels per acre, which is up 1.2
bushels from last month’s projection.
Soybean supplies are being estimated at 4.9
billion bushels, which is 11% higher year on
year.
The USDA said exports are up 25 million bushels
on higher supplies and crush unchanged, with
ending stocks now expected to be 560 million
bushels, up 125 million bushels from last
month.
The season-average soybean price is forecast at
$10.80 per bushel, down 30 cents from July.
The next WASDE report will be released on 12
September.
Ethylene12-Aug-2024
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 9 August.
Canada labor tribunal rules on rail strike,
orders 13-day cooling-off period
The Canada Industrial Relations Board (CIRB) on
Friday ruled that no rail activities need to be
maintained in case of a strike or lockout at
rail carriers Canadian National (CN) and
Canadian Pacific Kansas City (CPKC).
Celanese lifts force majeure on acetic acid,
VAM in western Hemisphere
Celanese has lifted the force majeure it
declared on acetic acid and vinyl acetate
monomer (VAM) sold in the western Hemisphere,
the US-based acetyls producer said on Thursday.
INSIGHT: So far, recession is unlikely despite
market turmoil
Chemical companies are expecting a lacklustre
second half of the year, but, so far, they will
unlikely suffer through a recession, despite
the spate of pessimistic economic data and the
worst stock-market selloff in more than a year.
Avient hikes guidance after strong Q2, sees
restocking in packaging and consumer
Avient has raised its 2024 guidance for
adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA)
following stronger-than-expected Q2 results.
US chem shares plunge for third day amid fears
of hard landing
Shares of US-listed chemical companies fell
sharply for the third consecutive trading day
on Monday amid growing concerns that the US
economy could head towards a hard landing and
enter a recession.
US recession fears fan slide in global
stocks
US stocks were trading down around 3%
mid-morning on Monday, with the major chemical
companies posting double-digit falls on growing
fears about a recession after the world’s
largest economy reported weak economic data.
Speciality Chemicals12-Aug-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 9 August.
Europe propylene glycol
ethers market to focus on imports until year
end
A balanced propylene glycol ethers market in
Europe is widely expected to continue for the
remainder of the year with the focus to remain
heavily on changes in supply.
Supply changes to drive
European ethanolamines market into the
autumn
Supply changes are expected to remain the
driving force in the European ethanolamines
market for the remainder of the year.
Europe ACN market to see
seasonal demand shift in H2 2024
Evolving geopolitics-led supply chain
developments and the macroeconomic picture will
dominate changes to supply and demand in the
European acrylonitrile (ACN) market in H2 2024.
Europe methanol run rates
to remain low to counterbalance
demand
European methanol demand is likely to remain
stable in the second half of 2024, with limited
recovery in derivative markets expected.
Europe chems stocks
tumble amid global sell-off on US economic
fears
Chemical stocks in Europe slumped in early
trading on Monday after a market rout in Asia
following bearish US economic data at the end
of last week prompted fears of a slowdown.
Gas12-Aug-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 9 August 2024.
INSIGHT: The future of gasoline demand under
India’s new fuel efficiency norms
By Man Yiu Tse 08-Aug-24 12:00 SINGAPORE
(ICIS)–India’s newly proposed Corporate
Average Fuel Efficiency (CAFE) norms for
passenger cars until 2037 will drive a
significant shift towards compressed natural
gas (CNG), hybrid, and electric passenger cars,
reducing the dominance of gasoline models and
influencing the long-term trajectory of
gasoline demand.
OUTLOOK: Asia Group I base oils supply
constraints to persist in H2 amid demand
uptick
By Michelle Liew 08-Aug-24 11:03 SINGAPORE
(ICIS)–Asia’s Group I base oils supply,
especially for heavy neutrals, is expected to
remain tight in H2 2024 despite subdued demand,
which may pick up towards September.
PODCAST: China’s Third Plenum signals optimism
for Asia’s propylene markets
By Damini Dabholkar 08-Aug-24 00:32 SINGAPORE
(ICIS)–The third plenary session of the
Chinese Communist Party (CCP) Central Committee
recently concluded in July, with the CCP
underlining the country’s long-term economic
strategy. This session, a significant event in
China’s economic planning, serves as a guide
for both immediate and long-term policies.
OUTLOOK: Asia mixed xylenes market could
continue to face headwinds
By Jasmine Khoo 07-Aug-24 10:44 SINGAPORE
(ICIS)–Mixed xylenes (MX) in Asia for both the
isomer and solvent grades are expected to
continue facing headwinds from various market
factors.
Asia shares rebound after sharp losses, oil
prices rise more than $1/barrel
By Nurluqman Suratman 06-Aug-24 18:32 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.
Ammonia09-Aug-2024
TORONTO (ICIS)–The Canada Industrial Relations
Board (CIRB) on Friday ruled that no rail
activities need to be maintained in case of a
strike or lockout at rail carriers Canadian
National (CN) and Canadian Pacific Kansas City
(CPKC).
However, the quasi-judicial tribunal ordered a
13-day cooling-off period before a legal rail
strike or lockout can begin.
The CIRB’s long-awaited ruling does not remove
the rail strike threat that has been looming
over Canada’s energy, chemicals and other
industries for months.
A strike by the more than 9,000 CN and CPKC
unionized conductors, train operators and
engineers could now start towards the end of
the month if collective bargaining fails.
The railroads and labor union Teamsters Canada
Rail Conference (TCRC) resumed negotiations on
Wednesday, 7 August.
Federal labor minister Steve MacKinnon on
Friday urged the parties to continue
negotiating. MacKinnon became labor minister
last month after his predecessor resigned
suddenly.
The former labor minister, Seamus O’Regan, in
May referred the industrial dispute to the CIRB
for a decision about a strike’s impacts on
public safety and health after the rail workers
voted for a strike as early as 22 May.
The referral suspended
the workers’ right to strike because under law
a legal strike or lockout could not occur until
the board made its decision.
The ongoing uncertainties around rail
disruptions have affected Canadian chemical,
fertilizer and other manufacturers, as they
need to make preparations.
In recent earnings calls, midstream energy
firms Pembina and Keyera, as well as
fertilizer major Nutrien and others
raised the looming rail strike as a concern,
and CN reduced its 2024 earnings guidance,
citing the impacts of the labor uncertainty.
Canadian chemical producers rely on rail to
ship more than 70% of their products, with some
exclusively using rail, while in the fertilizer
industry about 75% of all fertilizers produced
and used in Canada is moved by rail.
Thumbnail photo source: CN
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