HOUSTON (ICIS)–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. Celanese had declared force majeure earlier in the year after two feedstock suppliers suffered from disruptions. During an earnings call, Celanese said the effect of the force majeure was limited because of soft overall demand amid a difficult macro-economic environment. Thumbnail shows adhesive, which is typically made with VAM. (Image by Shutterstock)

HOUSTON (ICIS)–Navigator Holdings, the largest fleet owner of handysize liquefied gas carriers, announced it is undertaking a co-investment with Attis Clean Energy into Ten08 Energy, which is creating a production export facility in Texas. Revealed this past May, clean ammonia developer Ten08 is planning an industrial-scale hybrid blue and green ammonia production export facility to be located on the Texas Gulf Coast. The goal is to produce the most competitively priced ammonia molecule to help decarbonize the power, shipping, fertilizer and chemicals industries. The first phase, comprising 1.4 million tonnes/year of ultra-low carbon ammonia production, is expected to commence operations in late 2029 or early 2030. Navigator said its financial commitment is currently $2.5 million and complements the development capital from lead investor Attis who made its initial investment to fund development until a final investment decision is concluded. The company also received an option to make a larger investment once the investment decision is made of up to $100 million of preferred equity towards construction of the terminal and export infrastructure of the project, with potential further investments in subsequent expansions. The parties intend to offer an integrated service of US-based clean ammonia production combined with international seaborne transportation of the ammonia on ammonia-powered gas carriers to customers in Europe and Asia. “This investment is yet another example of our commitment to growth through energy infrastructure projects and meaningfully supports our existing ammonia shipping business,” said Navigator Holdings CEO Mads Peter Zacho. “Clean ammonia is crucial to the success of the energy transition for both power generation and carbon free shipping, and the Ten08 project will play a critical role in further developing the clean ammonia industry.”

HOUSTON (ICIS)–Nutrien said global potash demand during H1 2024 has been supported by favorable consumption and low channel inventories in North America and southeast Asia, with global nitrogen being boosted by steady demand and continued supply challenges in key producing regions. In its Q2 earnings release the Canadian fertilizer major said it is also seeing that there are expectations which have been created for record US corn and soybean yields, that have pressured crop prices. For the potash segment Nutrien said the settlement of contracts with China and India in July is expected to support demand in standard grade markets in the second half of this year. The producer said that the uptake on the summer fill program it offered in North America has been strong, and as such it has raised full-year global potash shipment forecast from 69 million tonnes to 72 million tonnes. It further said it expects a relatively balanced market in H2 2024. The company showed that potash sales volume guidance has been increased from 13.2 million tonnes to 13.8 million tonnes due to expectations for higher global demand in 2024. It noted that the range does reflects the potential for Canadian rail strike in the second half which would have a relatively short duration. Looking at the situation with global nitrogen, Nutrien said Chinese urea export restrictions have been extended into the second half and natural gas-related supply reductions could continue to impact nitrogen operating rates in Egypt and Trinidad. The company said US nitrogen inventories were estimated to be below average levels entering H2 2024, contributing to strong engagement the summer fill programs. Nitrogen sales volume guidance has been narrowed from 10.7 million tonnes to 11.1 million tonnes as Nutrien continues to expect higher operating rates at their North American and Trinidad plants, It is also counting on a growth in sales of upgraded products such as urea and nitrogen solutions. While end user demand has taken its typical summer slump, Nutrien said they expect buying for crop inputs in North America to remain strong in Q3 as growers aim to maintain optimal plant health and yield potential. With that view it noted that good affordability for potash and nitrogen will be supportive of the upcoming fall application rates “Crop input demand remains strong, and we raised our full-year outlook for global potash demand due to healthy engagement in all key markets,” said Ken Seitz, Nutrien president and CEO. “Our upstream production assets and downstream retail businesses in North America and Australia have performed well in 2024.”

HOUSTON (ICIS)–The 2024 Atlantic hurricane season is likely to remain extremely active, the National Oceanic and Atmospheric Administration (NOAA) said on Thursday in an update to its previous forecast. The only change to the previous forecast, which predicted the greatest number of hurricanes in the agency’s history, was a slight reduction in the number of named storms, from 17-25 to 17-24. A storm is named once it has sustained winds of 39 miles/h (63 km/h). “The hurricane season got off to an early and violent start with Hurricane Beryl, the earliest category-5 Atlantic hurricane on record,” NOAA Administrator Rick Spinrad said. “NOAA’s update to the hurricane seasonal outlook is an important reminder that the peak of hurricane season is right around the corner, when historically the most significant impacts from hurricanes and tropical storms tend to occur.” Atmospheric and oceanic conditions continue to support an above-normal 2024 Atlantic hurricane season, with a 90% probability of this result, NOAA said. There is only a 10% chance of a near-normal season in 2024 and a negligible chance of a below-normal season. Forecasters said the Atlantic Ocean basin is expected to be remarkably active due to several factors: Warmer-than-average sea surface temperatures in the tropical Atlantic Ocean and Caribbean Sea. Reduced vertical wind shear. Weaker tropical Atlantic trade winds. An enhanced west African monsoon. These conditions are expected to continue into the fall, NOAA said. Of note, the dry Saharan air that prevented tropical storm development during portions of the middle of the summer is expected to subside in August. Another factor this year is the possibility of La Nina developing in the coming months. Hurricanes and tropical storms can 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. The updated hurricane forecast from Colorado State University’s (CSU’s) Weather and Climate Research department also predicted an extremely active season, expecting 23 named storms, 12 hurricanes and six major hurricanes. The Atlantic hurricane season runs through 30 November. See the Beryl and Gaemi: Impact on Chemicals topic page

HOUSTON (ICIS)–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. The financial press has said that much of the selloff was caused by investors abandoning the Japanese carry-over trade. Chemical executives have not warned of a possible recession during their earnings calls. It is unclear if recent events will increase the likelihood of larger and more frequent rate cuts by the Federal Reserve. SO FAR, STATISTICS DO NOT INDICATE RECESSIONThe recent selloff in the stock market was enough to give anyone a jolt. The major US indices had three consecutive trading days of selloffs, with the last one on Monday causing declines that exceeded 2%. It was the worst day in more than a year. The weakness of the subsequent relief rally is also concerning, with the declines resuming on Wednesday. But the stock market is not the economy, and, so far, the four key statistics used to measure its health do not point to a recession. One of those statistics, non-farm payrolls, grew by 114,000 in July, a pace below the expectations of most economists. While the US had a bad month, it is still adding jobs, said Kevin Swift, ICIS senior economist for global chemicals. Moreover, the payroll statistics indicate that some of the weakness in the data was caused by the effects of Hurricane Beryl, Swift said. Two other key statistics are still expanding, he said. Those are industrial production and real personal income less transfer payments. Only real business sales have shown softness, Swift said. PROSPECTS STILL WEAKThe unlikely risk of a recession provides cold comfort to the chemical industry, which has spent months waiting for a recovery after what many described as the worst destocking cycle ever. Almost universally, companies have given up on the prospects of a second half recovery. Improvements in profit will have to come internally from cost-cutting or efficiency measures. The market will not help. Consumers have largely spent the excess savings that they pocketed from government stimulus and support that followed the pandemic, Swift said. The lower quintile of consumers is under pressure. Chemical companies noted stress among consumers who are more sensitive to costs, such as those who buy paints and coatings for do-it-yourself (DIY) projects. They are buckling under the weight of elevated interest rates, which have made housing and consumer durables less affordable. Before the markets for such items improve, Dow said that mortgage rates need to fall towards 5%. The prospect of declines will depend on expectations for the benchmark federal funds rate, which the Federal Reserve will likely decide to lower at its next meeting on September 18. Even then, it will take time for those rate cuts to trickle down to chemical markets. Huntsman said the lag is typically about two quarters. Insight article by Al Greenwood Thumbnail shows an indicator board for a stock exchange. Image by BIANCA DE MARCHI/EPA-EFE/Shutterstock

LONDON (ICIS)–India’s Hygenco Green Energies has signed a memorandum of understanding (MoU) with Mitsubishi Power to explore delivering green hydrogen and ammonia-fired gas turbine combined cycle (GTCC) power plants. The agreement includes supplying green fuel for Mitsubishi Power’s GTCC technology and developing commercially viable green hydrogen and ammonia production assets on a ‘build-own-operate’ or ‘gas-as-a-service’ basis. “We are excited to leverage our expertise in green hydrogen and ammonia to support the decarbonization of power generation and contribute to a sustainable energy future, ” said Hygenco CEO Amit Bansal. The partnership, backed by financial support from the Japan International Cooperation Agency (JICA), will provide its integrated solutions in India and globally, Hygenco added in a statement.

HOUSTON (ICIS)–CF Industries said in its latest nitrogen fertilizer market outlook that in the near-term it expects the global supply-demand balance to remain constructive, led by nitrogen import requirements through year-end for Brazil and India. The producer also anticipates there will be continued wide energy spreads between North America and high-cost production in Europe. The fertilizer producer said from the end of the second quarter of 2024 into the third quarter of this year this segment of fertilizers has faced challenges which include gas curtailments in Egypt and Trinidad, along with scheduled outages and a lack of substantial urea export availability from China. These factors the producer said have actually been beneficial for supporting global nitrogen pricing during a period of year that typically sees lower prices and low global shipments as demand shifts from the northern hemisphere to the southern hemisphere. “Over the medium-term, significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, the Company believes the global nitrogen cost curve will remain supportive of strong margin opportunities for low-cost North American producers,” said CF Industries. “Longer-term, management expects the global nitrogen supply-demand balance to tighten as global nitrogen capacity growth over the next four years is not projected to keep pace with expected global nitrogen demand growth of approximately 1.5% per year for traditional applications and new demand growth for clean energy applications.” It further said that global production is expected to remain constrained by the ongoing challenges related to cost and availability of natural gas. Looking specifically at North America the producer said it believes nitrogen channel inventories in the region for all products are below average based on strong demand for urea and UAN during the spring application season and higher-than-expected planted corn acres. CF added that reported UAN and ammonia fill programs achieved prices above 2023 levels despite softening farm economics in the region as corn and soybean prices have fallen due to higher forecasted production in 2024 in the US and Brazil. For Brazil urea consumption is forecasted to increase 3% year over year to more than 8 million tonnes, supported by improved supply availability and lower global urea prices. Urea imports to Brazil in 2024 are expected to be in the range of 7 million to 8 million tonnes as domestic production remains limited. Regarding India CF said the country is expected to be active importing urea through the second half as the country secured lower-than-expected volumes in its two most recent tenders. In addition, urea consumption is expected to rise to support rice, wheat and other crop sowings. Currently CF expects urea imports to India in 2024, including volumes supplied on a contractual basis, to be in a range of 5 million to 6 million tonnes as there are recently revitalized plants and new facilities operating at higher rates. For Europe, the producer said there was approximately 25% of ammonia and 30% of urea capacity reported in shutdown or curtailment mode in early July. CF said because of this situation it anticipates ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term, especially given the region’s status as the global marginal producer. As a result, the company does expect imports of ammonia and upgraded products to the region to be higher than historical averages. Looking at China, CF said the ongoing urea export policy continues to cause limited urea export availability from the country. For the first six months of 2024, China exported 140,000 tonnes of urea, which is 86% lower year-on-year. For Russia, the producer said their view is that urea exports will increase this year due to the start-up of new urea granulation capacity and the willingness of certain countries to purchase those volumes, including the US and Brazil, Russian ammonia exports are projected to rise with the completion of the country’s Taman ammonia terminal in the second half, though annual ammonia export volumes are projected to remain below pre-war levels.

HOUSTON (ICIS)–The Panama Canal Authority (PCA) is immediately increasing the maximum authorized draft for vessels transiting the waterway to 49ft (14.94m) as water levels have improved in Gatun Lake. The increase in draft restrictions will allow vessels to carry more cargo per trip as many had to carry less than a full load to meet the previous draft restrictions. The region has been through an intense drought that caused the PCA in 2023 to lower allowable drafts and to limit the number of vessels permitted to transit each day, a first since the canal formally opened in 1914. Restrictions have gradually eased over the past few months and are approaching the average daily transits of 36-38/day seen prior to impacts from the drought. The better conditions at the canal are likely to improve transit times for vessels traveling between the US Gulf and Asia, as well as between Europe and countries on the west coast of Latin America. This should benefit chemical markets that move product between regions, as shown in the following chart. WAIT TIMES FOR NON-BOOKED VESSELS Wait times for non-booked southbound vessels ready for transit have been relatively steady at around two days, according to the Panama Canal Authority (PCA) vessel tracker. As of 7 August, the tracker showed wait times of 0.4 days for northbound traffic and 2.1 days for southbound traffic. Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship passing through the Panama Canal. Courtesy the Panama Canal Authority

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. Market balance healthier than expected on delays in capacity additions No specific stimulus policies announced, market participants eye 5% GDP target Market sentiment generally supported by Third Plenum Senior Editor Julia Tan speaks with Senior Analyst Joey Zhou on what China’s Third Plenum could mean for Asia’s propylene markets.