HOUSTON (ICIS)–US fertilizer producer Mosaic said there are factors which suggest the global potash market is balanced while the phosphate market will remain tight not only for 2024 but beyond. In its Q2 earnings statement, which had a second quarter net loss of $162 million, the producer said its market outlook is that North American demand remains robust as it sees there are still buyers who continue to seek out and secure summer fill volumes. It is their view that part of this is a result of farmers and retailers having emptied their bins this spring with substantial crop fertilizing. Yet challenging weather has been present all summer and there is growing concern from end-users that yields could be impacted with a dip in income likely to result in less post-harvest demand. Looking at Brazil briefly the producer feels that the level of in-season demand present could be described as solid and comes primarily from concerns of low stocks. For the global potash segment Mosaic said supply constraints are likely to continue to abate this year amid expectations of seeing higher exports from Belarus and Russia. It also noted though that the recent contract settlements in China and India should help further stimulate buying activities further in both southeast Asia and into India. In terms of Chinese phosphate exports the producer said that rate has declined 27% year on year, during the first six months of 2024, which equates to over 1 million tonnes. Mosaic said in its view the long-term outlook remains favorable as domestic and industrial needs will continue to be prioritized over fertilizer exports in the long term. Looking at grains and oilseeds it is their expectations that stock-to-use ratios will remain low and constructive agriculture fundamentals and economics are expected to continue to incentivize growers to maximize yields. Mosaic said while corn and soybean fundamentals as well as prices have softened recently when viewing nutrients, they overall remain affordable and that bodes well for future demand. It noted that during this year the El Nino weather pattern is expected to shift to a La Nina classification which holds the potential for creating a favorable backdrop in southeast Asia, India and Brazil.

HOUSTON (ICIS)–Still churning over parts of the southeastern US tropical storm Debby has kept the fertilizer market watching carefully with producer Nutrien saying that to this point it has not been affected by the heavy rain and winds. With operations in Florida and Georgia the producer undertook emergency plans ahead of the initial landfall as a hurricane on 5 August in the northern part of Florida. It has since trek across Georgia and into South Carolina with storm impacts extending a considerable distance. “Our facilities in Florida and Georgia were not impacted in any material way by Tropical Storm Debby,” said a Nutrien spokesperson. “We have emergency preparedness plans in place that were followed, and we will continue to monitor the storm’s path while taking necessary measures to protect the safety of our people and the integrity of our operations.” The fertilizer industry was initially concerned that Debby could directly strike the key hub of Tampa, Florida, which is vital as the city is home to both corporate offices and trading operations but has product storage, shipping and other logistical assets. Tampa did see heavy rainfall with some localized flooding but did avoid any significant damage. One concern will be how much crop damage has been experienced with a substantial amount of acreage in the path of the storm. As the crops in some of these areas are fairly mature the excessive rain and wind could cause substantial damage and result in a decrease in eventual yield. That lost income could see farmers become more hesitant on fresh fertilizer commitments.

HOUSTON (ICIS)–Intrepid Potash saw indications of improving production during Q2 which has helped support continued expectations that their 2024 potash output will be approximately 15% higher year on year. In a project and operational update, the US fertilizer producer said at the HB Solar Solution mine in Carlsbad, New Mexico, it completed work on the replacement extraction well in June. It is now serving as the primary source of brine for the current evaporation season and Intrepid expects it will be the primary for future seasons. Also underway is phase two of installing a system to clean the injection pipeline and remove scaling to help ensure more consistent flow rates. All pipeline is installed with tanks set and the producer expecting to commission the project during Q3. At the Brine Recovery mine in Wendover, Utah, the construction of primary pond 7 is finished and is being filled with brine. It is expected to increase the brine evaporative area and maximize availability, increasing grade, and improving production by the fall of 2025. At the East Underground Trio mine the producer said because of the efficiencies from the two continuous miners placed into service in 2023, and the operation of a fine langbeinite recovery system, it had significant improvement in production rates and cost structure year on year. Intrepid said for the first six months of 2024 the cost of goods sold totaled approximately $284 per short ton, which compares to the same prior-year figure of $320 per short ton. The Q2 average net realized sales prices for potash and Trio averaged $405 and $314 per short ton, respectively, which compares to $479 and $333 per short ton during Q2 2023. “Our strategic focus continues to be improving our potash production, and I’m happy to share that we saw the first indications of this in our second quarter results,” said Matt Preston, Intrepid Potash CFO and acting principal executive officer. “Improved brine grades at HB from the Eddy Cavern and good early-season evaporation rates, allowed us to extend our spring production season and we still expect our 2024 potash production to be approximately 15% higher than 2023.” Preston added that when looking at the quarterly results their operational and financial performance continues to be solid with significant improvement in both total and per ton production costs. “As the broader potash market looks to be finding its midcycle pricing floor, we remain focused on improving our unit economics by means of higher potash production,” Preston said.

HOUSTON (ICIS)–Meteorologists at Colorado State University (CSU) maintained their forecast of an active 2024 Atlantic hurricane season but slightly reduced the number of named storms they expect to see. The forecasters at CSU still expect 12 storms to reach hurricane strength this season, with six of them expected to reach major hurricane strength of Category 3 or higher. A Category 3 storm is one with maximum sustained winds of 111 miles/hour or faster. The only change from the July update is the expectations of 23 named storms, down from 25. Hurricanes Beryl and Debby, as well as tropical storms Alberto and Chris are included in the current forecast. Hurricane Beryl made landfall on the Texas Coast on 8 July and caused damage that led to several declarations of force majeure (FM) and multiple outages across petrochemical complexes and major hubs of production along the US Gulf Coast. Hurricane Debby made landfall on 5 August in northwestern Florida and weakened into a tropical storm before creeping slowly across Georgia and back into the Atlantic Ocean, where it was hovering near the coasts of Georgia and South Carolina. It is expected to make a second landfall in the Carolinas and then continue up the Eastern Seaboard. Terminals at the Port of Savannah were closed on Tuesday, but officials anticipate reopening on Wednesday once the US Coast Guard completes its waterway inspection and offshore wind analysis. The South Caroline Ports Authority is operating normal gate hours on Tuesday and will shift to reduced hours on Wednesday. Forecasters at AccuWeather are warning about extreme flooding risk in the next 72 hours from Debby with 2 feet of rainfall expected in parts of Georgia and South Carolina. IMPACT ON CHEMICAL PRODUCTION Damage from hurricanes can lead to increased demand for chemicals, but hurricanes and tropical storms can also disrupt the North American petrochemical industry because many of the nation’s plants and refineries are along the US Gulf Coast in the states of Texas and Louisiana. In 2022, oil and natural gas production in the Gulf of Mexico accounted for about 15% of total US crude oil production and about 2% of total US dry natural gas production, according to the US Energy Information Administration (EIA). Even the threat of a major storm can disrupt oil and natural gas supplies because companies often evacuate US Gulf platforms as a precaution. IMPACT ON RECYCLING Severe weather, including tropical storms, heavy rain and winter weather, can easily disrupt curbside and deposit collection efforts, thus limiting the incoming supply of polyethyelene terephthlate (PET) and high density polyethylene (HDPE) bottles for recycling. If collection efforts are delayed, in some cases, material will be routed to landfill, as material recovery facilities (MRFs) have limits on input processing abilities and are unable to catch up. Additionally, MRFs must often dry out wet mixed recyclable material to optimize the sorting process, which can further delay processing.

HOUSTON (ICIS)–Avient has raised its 2024 guidance for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) following stronger-than-expected Q2 results: New 2024 guidance Previous 2024 guidance 2023 Adjusted EBITDA $515-540 million $510-535 million $501.8 million In the second quarter, Avient saw broad-based 5% organic sales growth in both of its segments: Color, Additive & Inks (CAI), and Specialty Engineered Materials (SEM). Both segments gained market share and benefited from inventory restocking in certain end-markets, CEO Ashish Khandpur and CFO Jamie Beggs told analysts during Avient’s Q2 earnings call on Tuesday. Tight cost control and raw material price deflation helped expand the adjusted EBITDA margin by 100 basis points year on year to 16.9% in the second quarter, they said. The better-than-expected performance was led by CAI, which saw improved demand and favorable raw material costs. MARKETS In terms of end-markets, growing sales into two of Avient’s largest markets, packaging (+8%) and consumer (+10%), had the greatest impact in the second quarter, said Khandpur. Both markets benefited from “some restocking”, particularly in Europe, he added. Sales growth in buildings and construction and healthcare was also strong. Although the macroeconomic indicators for building and construction remained weak, both the SEM and CAI segments gained market share and won new business in the US and Canada, Khandpur said. Meanwhile, destocking in the healthcare market has finally run its course, with Avient’s sales into that market up 10% year on year in the second quarter. Sales into the defense end-market continued to be driven by the global conflicts and certain NATO programs, with full-year sales growth expected in the low double digits, he said. The telecommunications and energy markets, which together account for about 7% of Avient’s total sales, however, remained “challenged”, with sales down in the double digits in the second quarter as customers reduced inventories. Telecommunications should improve in the second half as demand in the US has started to improve more recently, Khandpur said. In energy, Avient is seeing improving trends in the third quarter, in particular for applications designed to improve the reliability of the electrical transmission grid, he said. Artificial intelligence (AI) was raising electricity consumption, driving demand for electricity generation and distribution, with positive derivative effects on the materials Avient supplies to energy markets, he noted. Electric mobility and electrification are happening, and Avient aims to “become part of those fast-growing markets”, he added. LATIN AMERICA OPPORTUNITY Avient’s sales in Latin America grew by 19% year on year in the second quarter, driven by sales into the region’s packaging market. That market saw strong demand in food & beverage and cleaning applications on the back of the recent floods in Brazil, as well as high temperatures and drought conditions in Mexico. Latin America currently accounts for only about 6% of the company’s total sales. However, going forward, Avient expects its Latin American packaging business to benefit from the near-shoring trend. The company’s position in the region is “strategic”, allowing it to serve original equipment manufacturers (OEMs) and brand owners who are looking to near-shore production and supply chains in light of global trade conflicts and political uncertainties, Beggs noted. RAW MATERIALS Avient realized about $35 million in raw material price deflation in the first half of 2024, Beggs said. However, the company does not expect this benefit to be repeated in the second half as it has started to see “modest levels of inflation” across the majority of its raw materials, including polyethylene (PE) and polypropylene (PP), as well as pigments and certain performance additives, she said. Primary raw materials used in Avient’s manufacturing operations include polyolefin and other thermoplastic resins, titanium oxide (TiO2), inorganic and organic pigments, specialty additives and ethylene. The executives did not comment on the current stock market turmoil and analysts on Tuesday’s call did not ask about this. Thumbnail photo of Avient CEO and president Ashish Khandpur; photo source: Avient

SINGAPORE (ICIS)–Asian shares rebounded on Tuesday, staging a relief rally after historic losses the previous day, as fresh US economic data for July alleviated recession fears. Meanwhile, oil prices surged by over $1/barrel in early Asian trade, fueled by escalating concerns about the spreading conflict in the Middle East. Japanese Nikkei 225 index jumps 9.55% in early Asian trade Asian petrochemical shares follow regional market rebound, Asahi Kasei gains China’s petrochemical futures continue decline In Europe the main stock markets stabilized, opening slightly up before falling back. The UK’s FTSE 100 was down 0.08% at 11:20 London time, while Germany’s DAX and France’s CAC 40 were 0.17% and 0.46% lower respectively. The stronger-than-expected US Institute for Supply Management (ISM) Services Survey for July helped ease growth worries. The overall services purchasing managers’ index (PMI) improved to 51.4 in July, swinging into expansion and beating the consensus for a rise to 51.0 from 48.8 in June. A PMI reading above 50 indicates growth in the services sector. By 02:30 GMT, Japan’s benchmark Nikkei 225 was up 9.55%, South Korea’s KOSPI was 3.07% higher and Hong Kong’s Hang Seng Index rose by 0.06%. Singapore’s Straits Times Index (STI) was down by 0.96% while China’s benchmark Shanghai Composite Index inched 0.20% higher after shedding 1.54% on Monday. Asian petrochemical shares tracked the rebound in regional bourses, with Japanese major Asahi Kasei jumping nearly 14% and South Korean producer LG Chem up by 4.59%. China’s petrochemical futures, however, continued lower in early trade on Tuesday. At 10:30 local time (02:30 GMT), futures of petrochemical commodities, including plastics, methanol and glycols, were trading lower, after losing 0.4-2.1% in the previous session. Product Yuan (CNY)/tonne Change Linear low density polyethylene (LLDPE) 8,231 -0.3% Polyvinyl chloride (PVC) 5,650 -0.5% Ethylene glycol (EG) 4,590 -0.5% Polypropylene (PP) 7,570 -0.4% Styrene monomer (SM) 9,183 -0.2% Paraxylene * 8,120 -0.9% Purified terephthalic acid (PTA)* 5,644 -0.8% Methanol* 2,468 -0.5% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange The global equity market sell-off intensified on Monday, with a wave of declines sweeping across major bourses worldwide. The rout began in Asia, where the Nikkei 225 index plummeted 12.4% day on day, marking its worst performance since 1987 while the KOSPI posted its steepest decline in its closing price to date. In Europe, the Stoxx Europe 600 index fell 2.2%, with all sectors and major indexes closing in negative territory. Utilities and oil and gas stocks suffered the steepest losses, leading the downturn in European markets. In the US, the Dow Jones Industrial Average plunged by about 1,000 points or down 2.6%, the Nasdaq dived 3.4% and the S&P 500 slid 3.0%. This marked the largest losses since September 2022 for the Dow and S&P, following a downturn late last week due to poor US jobs data and weak manufacturing PMI, which sparked recession fears. The unwinding of the yen “carry trade” after the Bank of Japan raised interest rates last week also added fuel to the retreat in global markets. For now, the US Federal Reserve has no intention of delivering an emergency rate cut before the Federal Open Market Committee (FOMC) meeting on 18 September, Singapore-based DBS Group Research said in a note on Tuesday. “The Fed wants markets to view the coming rate cuts as preserving the soft landing and supporting jobs, not as a delayed response to a weakening economy,” it said. GEOPOLITICAL TENSIONS BOOSTING OILOil prices rose by more than $1/barrel in early Asian trade on Tuesday after dipping in the previous session, driven by supply concerns amid escalating tensions in the Middle East. “Markets are still waiting to see how Iran responds to Israel after it vowed retaliation for the assassination of Hamas’ political leader on Iranian soil,” Dutch banking and financial information services firm ING said in a note. “Oil has been unable to escape the broader risk-off move seen across assets, as concerns grow over the potential for a US recession following some weaker macro data in recent weeks. This only adds to worries over Chinese demand.” Reports that the Sharara oilfield in Libya has completely stopped production due to protests at the site also supported oil prices. This oilfield has a production capacity of 300,000 barrels/day but was producing around 270,000 barrels/day prior to the disruption. Focus article by Nurluqman Suratman Additional reporting by Fanny Zhang Thumbnail photo shows a stock market indicator board (Source: BIANCA DE MARCHI/EPA-EFE/Shutterstock) Updates, adding Europe detail in fourth paragraph

SINGAPORE (ICIS)–SABIC has signed a potential investment agreement with the Fujian government on 1 August to build an engineering thermoplastics compounding plant in the Chinese province, the Saudi Arabia chemicals giant said on Tuesday. The planned compounding plant will be located in the Gulei Port Economic Development Zone at Zhangzhou in Fujian, it said in a statement without disclosing capacity details. It will primarily produce SABIC’s pelletized LEXAN polycarbonate (PC) and CYCOLOY PC/acrylonitrile-butadiene-styrene (ABS) polymer blend for use in advanced materials. These materials will be tailored to the needs of industries including electrical and consumer electronics, automotive, and emerging sectors such as solar energy, electrification, and 5G. The site will include compounding lines, color development capabilities, and advanced equipment. SABIC currently operates a technology center in Shanghai and three compounding plants in China in Guangzhou, Shanghai and Chongqing. The new plant is also expected to create synergies with SABIC’s two existing joint ventures – SINOPEC SABIC Tianjin Petrochemical Co (SSTPC) and SABIC FUJIAN Petrochemicals Co (SFPC). “This investment agreement marks another significant milestone for SABIC’s growth in China and reflects our continued confidence in investing in the country,” said Abdulrahman Al-Fageeh, SABIC’s CEO. “Building on this, we will continue to collaborate with our existing global and local partners and customers to grow together in China.”

SINGAPORE (ICIS)–Asian shares rebounded on Tuesday, staging a relief rally after historic losses the previous day, as fresh US economic data for July alleviated recession fears. Meanwhile, oil prices surged by over $1/barrel in early Asian trade, fueled by escalating concerns about the spreading conflict in the Middle East. Japanese Nikkei 225 index jumps 9.55% in early Asian trade Asian petrochemical shares follow regional market rebound, Asahi Kasei gains China’s petrochemical futures continue decline The stronger-than-expected US Institute for Supply Management (ISM) Services Survey for July helped ease growth worries. The overall services purchasing managers’ index (PMI) improved to 51.4 in July, swinging into expansion and beating the consensus for a rise to 51.0 from 48.8 in June. A PMI reading above 50 indicates growth in the services sector. By 02:30 GMT, Japan’s benchmark Nikkei 225 was up 9.55%, South Korea’s KOSPI was 3.07% higher and Hong Kong’s Hang Seng Index rose by 0.06%. Singapore’s Straits Times Index (STI) was down by 0.96% while China’s benchmark Shanghai Composite Index inched 0.20% higher after shedding 1.54% on Monday. Asian petrochemical shares tracked the rebound in regional bourses, with Japanese major Asahi Kasei jumping nearly 14% and South Korean producer LG Chem up by 4.59%. China’s petrochemical futures, however, continued lower in early trade on Tuesday. At 10:30 local time (02:30 GMT), futures of petrochemical commodities, including plastics, methanol and glycols, were trading lower, after losing 0.4-2.1% in the previous session. Product Yuan (CNY)/tonne Change Linear low density polyethylene (LLDPE) 8,231 -0.3% Polyvinyl chloride (PVC) 5,650 -0.5% Ethylene glycol (EG) 4,590 -0.5% Polypropylene (PP) 7,570 -0.4% Styrene monomer (SM) 9,183 -0.2% Paraxylene * 8,120 -0.9% Purified terephthalic acid (PTA)* 5,644 -0.8% Methanol* 2,468 -0.5% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange The global equity market sell-off intensified on Monday, with a wave of declines sweeping across major bourses worldwide. The rout began in Asia, where the Nikkei 225 index plummeted 12.4% day on day, marking its worst performance since 1987 while the KOSPI posted its steepest decline in its closing price to date. In Europe, the Stoxx Europe 600 index fell 2.2%, with all sectors and major indexes closing in negative territory. Utilities and oil and gas stocks suffered the steepest losses, leading the downturn in European markets. In the US, the Dow Jones Industrial Average plunged by about 1,000 points or down 2.6%, the Nasdaq dived 3.4% and the S&P 500 slid 3.0%. This marked the largest losses since September 2022 for the Dow and S&P, following a downturn late last week due to poor US jobs data and weak manufacturing PMI, which sparked recession fears. The unwinding of the yen “carry trade” after the Bank of Japan raised interest rates last week also added fuel to the retreat in global markets. For now, the US Federal Reserve has no intention of delivering an emergency rate cut before the Federal Open Market Committee (FOMC) meeting on 18 September, Singapore-based DBS Group Research said in a note on Tuesday. “The Fed wants markets to view the coming rate cuts as preserving the soft landing and supporting jobs, not as a delayed response to a weakening economy,” it said. GEOPOLITICAL TENSIONS BOOSTING OILOil prices rose by more than $1/barrel in early Asian trade on Tuesday after dipping in the previous session, driven by supply concerns amid escalating tensions in the Middle East. “Markets are still waiting to see how Iran responds to Israel after it vowed retaliation for the assassination of Hamas’ political leader on Iranian soil,” Dutch banking and financial information services firm ING said in a note. “Oil has been unable to escape the broader risk-off move seen across assets, as concerns grow over the potential for a US recession following some weaker macro data in recent weeks. This only adds to worries over Chinese demand.” Reports that the Sharara oilfield in Libya has completely stopped production due to protests at the site also supported oil prices. This oilfield has a production capacity of 300,000 barrels/day but was producing around 270,000 barrels/day prior to the disruption. Additional reporting by Fanny Zhang Thumbnail photo shows a stock market indicator board (Source: BIANCA DE MARCHI/EPA-EFE/Shutterstock) Focus article by Nurluqman Suratman

SINGAPORE (ICIS)–Soaring Asian styrene prices have grabbed the attention of the global market following unexpected outages at European facilities. This price surge is expected to support both upstream benzene prices as well as downstream prices of expanded polystyrene (EPS), polystyrene (PS), and acrylonitrile butadiene styrene (ABS). Two styrene plant outages in Europe drive price surge upward rapidly. Benzene prices rise with styrene, boosted by August demand growth. ICIS expects EPS and PS prices to rise in August, ABS prices to remain flat due to the butadiene prices decreasing. In this podcast, ICIS senior analysts Jenny Yi and Jimmy Zhang discuss the trends and outlook for the Asian styrenic and benzene markets.