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Speciality Chemicals27-Jan-2025
SAO PAULO (ICIS)–Here are some of the stories
from ICIS Latin America for the week ended on
27 January.
NEWS
Colombia accepts
US terms for migrants’ deportations, fends off
25% tariff threat
Colombia became over the weekend the first
Latin American country to get a taste of
President Donald Trump’s immigration policy
mixed with unconventional diplomacy after the
country refused landing to two flights with
repatriated Colombian migrants.
INSIGHT: Trump executive
orders to revamp US energy and trade
policyBuckle your seatbelts.
US President Trump kicked off Day One with a
slew of executive orders that will completely
revamp energy and trade policy, with major
implications for chemicals and plastics.
INSIGHT: Argentina’s
chemicals, manufacturing could be collateral
victims of liberalization
pushArgentina’s cabinet
drive to shift the economy from staunch
protectionism into liberal bastion is
increasing fears among chemicals and wider
manufacturing players that the country’s
beleaguered industrial fabric is yet to suffer
further losses in output in coming years.
INSIGHT: Brazil’s
GDP to be hit by potential US tariffs; COP30
loses significant emitter
Brazil could be hit with US import tariffs of
5% by mid-2025, according to credit rating
agency Moody’s, while the Brazilian leading
role in climate negotiations in November will
be diminished as one of the largest carbon
emitters, the US, is absent from the talks.
Argentina’s manufacturing
output still falling but ‘expansionary phase’
starting overallArgentina’s
petrochemicals-intensive manufacturing output
continued falling in November, down 2.3% year
on year, but overall economic output rose while
consumer and business confidence is growing.
Brazil’s grain
harvest expected at record 322 million tonnes,
up 8%Brazil’s
fertilizers-intensive agricultural sector is
expected to produce 322.3 million of grains,
pulses, and oilseeds in the 2024-2025 harvest,
up 8.2% year on year, according to the National
Supply Company (Conab).
Mexico’s cabinet wants
Pemex to meet 80% of national fertilizers
demandThe Mexican government
continues putting high hopes on Pemex’s ability
to sharply increase its fertilizers output and
has suggested the state-owned energy major
produce as much as 80% of the country’s demand.
Brazil’s Petrobras to
start up ANSA fertilizer plant in H2
2025Petrobras will start up
its ANSA fertilizers plant in Araucaria, state
of Parana, in the second half (H2) 2025,
according to a spokesperson for the Brazilian
state-owned energy major.
German lubes maker Fuchs
forms JV with distributor Remsac in
PeruFuchs Group has
established a joint venture in Peru with local
distributor Remsac, the German lubricants
producer said on Friday.
Austria’s ALPLA to take
majority stake in Brazilian recycler Clean
BottleAustrian packaging
firm ALPLA aims to enter Brazil’s recycling
market by purchasing a majority stake
acquisition in high density polyethylene (HDPE)
recycler Clean Bottle, the company said on
Wednesday.
Brazil’s December lube
demand risesBrazil’s lube
demand rose in December for a ninth month on
the back of a jump in consumption of everything
from transformer oils to engine oils.
PRICING
Braskem-Idesa announces
February price increase in
MexicoBraskem Idesa is
seeking a price increase of $110/tonne on
high-density polyethylene (HDPE) and
low-density polyethylene (LDPE) as of 1
February, according to a customer letter seen
by ICIS.
LatAm
PP domestic, international prices increase in
Mexico on higher spot propylene
costsDomestic and
international polypropylene (PP) prices
increased in Mexico, tracking higher spot
propylene costs. In other Latin American
countries, domestic prices were unchanged.
LatAm
international LLDPE, HDPE prices steady to
higher on back of expensive US export
offersInternational linear
low density polyethylene (LLDPE) and high
density polyethylene (HDPE) prices were
assessed as steady to higher across Latin
American countries. Low density polyethylene
(LDPE) prices were assessed unchanged.
Speciality Chemicals27-Jan-2025
HOUSTON (ICIS)–Canadian National Railway (CN)
and a union representing signal and
communication workers are still in talks, and
they are getting closer to reaching a deal, the
International Brotherhood of Electrical Workers
(IBEW) said on Monday.
The union members total 750. The union has
issued a strike notice, allowing them to walk
out as early as Tuesday.
“The company and the union are getting closer
to reaching a deal, and we are optimistic that
a deal can be reached and strike action
avoided,” according to a statement by Jason
Sommer, senior general chair, IBEW System
Council No 11. “We are currently still at the
table with the company, and with the assistance
of federal mediators, we are striving to reach
a fair and equitable deal for our members.”
Outstanding issues are wages, reimbursement for
travel and striking a better work-life balance
for union members, Sommer said.
If the union does call a strike, CN expects no
disruptions.
“There will be no impact on our
operations as a result of a work
stoppage,” the railroad said in a statement.
“CN’s contingency plans are in place,
operations will continue, and our dedicated
teams are prepared to ensure the seamless
continuity of service.”
The two sides have been negotiating a labor
contract since September. That agreement ended
on 31 December 2024.
Canadian chemical producers rely on rail to
ship more than 70% of their products, with some
exclusively using rail.
Speciality Chemicals27-Jan-2025
HOUSTON (ICIS)–Canadian National Railway (CN)
expects no disruptions from a strike by signal
and communication workers that could start on
Tuesday, the Canadian railroad company said.
The union members total 750, and they belong to
the International Brotherhood of Electric
Workers (IBEW). The union has issued a strike
notice, allowing them to walk out as early as
Tuesday.
“There will be no impact on our
operations as a result of a work
stoppage,” the railroad said in a statement.
“CN’s contingency plans are in place,
operations will continue, and our dedicated
teams are prepared to ensure the seamless
continuity of service.”
The IBEW did not immediately respond to a
request for comment.
The two sides have been negotiating a labor
contract since September. That agreement ended
on 31 December 2024.
Canadian chemical producers rely on rail to
ship more than 70% of their products, with some
exclusively using rail.
Thumbnail shows a railroad. Image by
Shutterstock.
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Ethylene27-Jan-2025
SAO PAULO (ICIS)–Colombia became over the
weekend the first Latin American country to get
a taste of President Donald Trump’s immigration
policy mixed with unconventional diplomacy
after the country refused landing to two
flights with repatriated Colombian migrants.
After refusing the aircrafts entry, in a few
frantic hours on Sunday (26 January), Colombian
goods heading to the US were on the verge of
facing a 25% tariff.
The Latin American country, a traditional US
ally in the region although with more strained
relations as of late due to the policies of
Colombian left-leaning President Gustavo Petro,
backed down and said it would accept
deportations to be carried out under US terms.
The move by the US came as a surprise to most
analysts in Latin America, who have spent weeks
forecasting soon-to-be-implemented tariffs on
Mexico and, outside Latin America, on Canada –
the two countries form the free trade zone
under the USMCA trade agreement.
Colombia had been mostly absent from the
equation as the first country potentially
subject to tariffs, especially as the country’s
exports to the US are a daily staple on many US
tables – coffee, avocado – as well as in the
country’s car tanks.
Colombia’s state-owned energy major Ecopetrol
exports to the US are a key part of its
business, with daily shipments between
130,000-140,000 barrels/day (see bottom table).
Ecopetrol and its subsidiary producing
polypropylene (PP) Esenttia had not responded
to a request for comment at the time of
publishing.
The chemicals section at Colombia’s industrial
trade group Andi had not responded to a request
for comment at the time of publishing either.
BUSY SUNDAYOn Sunday
afternoon, Trump posted on his own social media
platform, called TruthSocial, a message
explaining that “socialist” Petro had not
allowed the flights to land on Colombian soil,
“jeopardizing” the US’s national security.
“I have directed my Administration to
immediately take the following urgent and
decisive retaliatory measures: Emergency 25%
tariffs on all goods coming into the US,” said
the US president.
“In one week, the 25% tariffs will be raised to
50%.”
Trump added that the US would issue a travel
ban and revoke visas for the Colombian
government officials as well as “all allies and
supporters”, including visa sanctions on all
members of Petro’s political party, Colombia
Humana.
He added there would be enhanced customs
and border protection inspections of all
Colombian nationals and cargo on national
security grounds, as well as the imposition of
financial sanctions.
By the end of the day, Colombia’s foreign
minister, Luis Gilberto Murillo, spoke to
reporters to explain the country’s new
position, adding he would travel himself to
Washington in coming days to hold “high-levels
meetings” to follow up on the agreements
reached on Sunday.
“We have overcome the impasse with the US
government… As a result of the joint work that
led to the exchange of diplomatic notes between
the two governments, we will continue to
receive Colombians who return as deportees,
guaranteeing them decent conditions as citizens
with rights,” said Luis Gilberto Murillo.
“The Colombian government, under the directive
of President Gustavo Petro, has the
presidential plane ready to facilitate the
return of the compatriots who were to arrive in
the country today in the morning on deportation
flights. Colombia confirms that diplomatic
channels of dialogue will be maintained to
guarantee the rights, national interest and
dignity of our citizens.”
White House press secretary Karoline Leavitt
said on social media platform X, formerly
Twitter, “The government of Colombia has agreed
to all of President Trump’s terms, including
the unrestricted acceptance of all illegal
aliens [migrants] from Colombia returning from
the US, including on US military aircraft,
without limitation or delay.”
“Today’s [Sunday] events make clear to the
world that America [the US] is respected again.
President Trump will continue to fiercely
protect our nation’s sovereignty, and he
expects all other nations of the world to fully
cooperate in accepting the deportation of their
citizens illegally present in the US.”
NEALRY $54 BILLION IN
TRADEThe US and Colombia signed
a free trade deal in 2006 which was fully
implemented in 2012.
In 2022, the US’s trade in goods and services
with Colombia stood at $53.5 billion, with
exports from the US at $28.7 billion and
imports at $24.8 billion, according to figures
by the US government. The US posted a trade
surplus in its favor of $3.9 billion.
The US economy is key to Colombia. According to
figures from the US government, the country is
Colombia’s largest trading partner, accounting
for 34% percent of the Latin American country’s
total trade.
Meanwhile, Colombia is a top 10 supplier of
crude oil to the US, a market which is
dominated by the state-owned energy major
Ecopetrol, which also produces petrochemicals
directly and via subsidiaries such as Essentia,
which produces PP.
The two countries’ traditionally friendly
relationship is reflected in these words from
the US government about their bilateral trade
deal:
“The tariff reductions in the [free trade]
agreement will expand exports of US goods alone
by more than $1.1 billion, supporting thousands
of additional US jobs. The agreement provides
significant new access to Colombia’s $166
billion services market, supporting increased
opportunities for US service providers,” said
the US cabinet on the site dedicated to the
free trade deal with the Latin American
country.
“Colombia is a fast-growing market of 45
million consumers, and the agreement will help
strengthen the Colombian economy and promote
its growing middle class, thereby bolstering a
steadfast strategic partner in this Hemisphere.
The agreement helps cement our broader
relationship with a country that plays an
increasingly important role in the region and
around the world.”
US crude imports by country of
originIn barrels/day
1- Canada
4,339,000
2- Mexico
526,000
3- Saudi Arabia
810,000
4- Iraq
209,000
5- Colombia
136,000
6- Brazil
178,000
7- Nigeria
56,000
8- Venezuela
521,000
9- Ecuador
69,000
10-Libya
32,000
Source: US Energy Information
Administration (EIA)
Front page picture: Ecopetrol’s refinery in
Barrancabermeja, some 400 kilometers (250
miles) north of Bogota
Picture source: Ecopetrol
Additional information by Ignacio
Sotolongo
Acrylate Esters27-Jan-2025
LONDON (ICIS)–European oxo-alcohols and
derivatives markets have been slow to start up
in the new year as familiar factors suppress
consumption.
Players were hoping for reasonable restocking
activity this month, following the destocking
period that took place in late Q4 2024, but
spot activity has been below expectations for
many players down the value chain.
Oxo-alcohols and butyl acetate reporter Marion
Boakye speaks to acrylate esters reporter
Mathew Jolin-Beech and glycol ethers reporter
Cameron Birch about conditions down the
oxo-alcohols value chain.
Ethylene27-Jan-2025
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 24 January.
Hard freeze to hit chem plants on US
Gulf Coast, threatens
operations
Temperatures along the US Gulf Coast should
fall well below freezing later in the week
and remain there for a prolonged stretch,
threatening operations at chemical plants and
refineries.
US President Trump proposes no
tariffs on first day in
office
US President Donald Trump proposed no new
tariffs on his first day of office, and
instead instructed his administration to
investigate the nation’s trade deficit and
other areas of trade policy.
INSIGHT: US tariffs slower to
materialize as Trump assumes the US
Presidency
A US Presidential inauguration day packed
with fresh legislation saw few of the
expected moves on tariffs and trade policy.
UPDATE: US Gulf Coast chemical plants
reel from cold snap
Cold weather in the US Gulf Coast on Tuesday
is expected to disrupt petrochemicals
operations in Texas and Louisiana as
companies take preventive measures.
INSIGHT: Trump’s first-day orders lay
groundwork for future
tariffs
US President Donald Trump did not propose any
new tariffs on his first day in office, but
he did issue an executive order that calls
for his administration to conduct the
investigations needed to impose them under
several sections of the law – in many cases,
repeating the same playbook Trump used during
his first term in office.
UPDATE: US freeze shuts numerous chem
plants, major ports
Winter storm Enzo, which caused a hard freeze
along the US Gulf Coast, led to widespread
shutdowns among chemical plants and
refineries.
INSIGHT: Trump’s moratorium on
federal wind projects may have little effect
on epoxy
The moratorium on federal permits for wind
projects will likely have little effect on
the US industry and on the epoxy resins it
consumes because most turbines are built on
private land.
US ExxonMobil may build cracker, PE
plant in Texas
ExxonMobil may build an ethane cracker and
polyethylene (PE) plant near Corpus Christi,
Texas, the company said in an application for
a tax break.
Speciality Chemicals27-Jan-2025
LONDON (ICIS)–Here are some of the top
stories from ICIS Europe for the week ended
24 January.
Eurozone private sector
returns to growth in January as inflation
heats up
Private sector activity in the eurozone
returned to a growth footing for the first
time in nearly half a year in January, with
an expanding service sector counterbalancing
stronger but still contractionary
manufacturing.
Europe phenol market
squeezed by low demand, high energy costs in
Q1
The European phenol market has had a tough
start to 2025, with the outlook for demand
weak for the first half of the year and the
specter of growing energy costs challenging
margins.
Eastern Europe
colourless PET bottle bale prices rise as
availability tightens
Colder weather means less polyethylene
terephthalate (PET) beverage bottle
consumption, and as winter grips Europe, many
PET recyclers expect feedstock bale
availability to tighten during Q1.
US
tariffs slower to materialize as Trump
assumes the US Presidency
US Presidential inauguration day packed with
fresh legislation saw few of the expected
moves on tariffs and trade policy.
Europe PE/PP 2025
contract talks see buyers and sellers
practice caution
Polyethylene (PE) and polypropylene (PP)
contracts talks for 2025 have seen players in
Europe adopt a cautious outlook.
Polyethylene27-Jan-2025
SINGAPORE (ICIS)–Click here to
see the latest blog post on Asian Chemical
Connections by John Richardson.
Donald Rumsfeld’s famous comments about “known,
unknowns” and “known, knowns” remains useful
(let’s leave aside “unknown, unknowns” for the
time being).
Let’s apply his comments to high-density
polyethylene (HDPE) as we try to answer the
question of whether the US can retain the
strong position it has enjoyed in China over
the last three years.
See today’s post in full here with the summary
as follows:
A “known, unknown” is that nobody has a
clue about the outcome of US trade policies
towards. So, prepare for anything from improved
China/US trading relationships to a full-blown
trade war and anything in between these two
extremes.
A “known, known” is that the US has over
the last three years emerged as a winner in
HDPE exports to China during what is at least a
medium- term (this a second “known, known”, I
believe) Chinese economic slowdown and the
country’s rising HDPE self-sufficiency. This
has been at the expense of Saudi Arabia, Iran
and South Korea etc., as we can see from
today’s main chart. Saudi Arabia’s sales
turnover in China was down by an estimated
$2.3bn in 2022-2024 versus 2019-2021. Iran was
1.8bn lower and South Korea 0.52bn lower. In
contrast, the US was nearly a billion dollars
in the black.
We thus need a range of scenarios on our
first “known, unknown” about how different US
trade policy outcomes could reshape global HDPE
trade flows and sales turnover in China,
But another “known, unknown” is the extent
to which lower Chinese import tariffs on US
HDPE from February 2020 onwards has led to the
US being a winner versus its feedstock
advantages. Since the Evergrande Turning Point,
its feedstock advantages over the Middle East
as a whole have been slight (although Saudi
ethane costs have gone up substantially in
recent years and are reported to have gone up
again this month), but huge over Northeast Asia
and Southeast Asia. Further, we don’t know the
degree to which the mix of grades exported to
China has also played a role. China is
increasingly able to meet its commodity-grade
needs but still requires substantial imports of
higher-value grades as its economy matures. And
what about production issues, i.e. outages and
turnarounds?
This leads us to our final “known, known”:
That scenario modelling has become much more
complex. Different assumptions on all the above
variants – and probably more that I haven’t
even thought of – need to be factored in as we
assess future HDPE trade flows to China and
earnings in China by the big exporters. This is
where artificial intelligence can increasingly
help us.
Why make life hard for yourself by not making
maximum use of AI? Don’t be a Luddite because
the answers are not perfect now. AI will get
better the more we work with it.
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.
Crude Oil27-Jan-2025
SINGAPORE (ICIS)–China’s official
manufacturing purchasing managers’ index (PMI)
slipped back into contraction mode, with a
January reading of 49.1, as factory activity
wound down ahead of the eight-day Lunar New
Year holiday, official data showed on Monday.
Jan new export orders subindex falls to
46.4 from 48.3 in Dec
Industrial profits fall for third straight
year in 2024
Beijing likely to maintain “around 5%”
growth target for 2025
The January PMI print ended a three-month
expansion streak.
A PMI reading above 50 indicates expansion in
the manufacturing sector, while a reading below
50 signals contraction.
The eight-day Lunar New Year holiday which
begins on 28 January, with its attendant mass
migration of workers back to their hometowns
weighed heavily on the country’s manufacturing
sector in January, according to Zhao Qinghe, a
senior statistician at China’s National Bureau
of Statistics (NBS).
The new orders subindex stood at 49.2 in
January, down from 51.0 in the December 2024;
while the subindex for new export orders fell
to 46.4, compared with 48.3 in the previous
month, the data showed.
China’s key exports sector remains under
scrutiny, particularly after the country’s
exports
surged by 10.7% year on year in December,
driven by concerns over potential tariffs by
major trade partner – the US.
Manufacturers had front-loaded orders in
anticipation of these tariffs, leading to the
significant increase in exports.
Trump on 21 January said he is considering 10%
tariffs on imports from China that would take
effect as early as 1 February, citing the east
Asian country’s purported role in the trade of
addictive synthetic opioid fentanyl.
Fentanyl is responsible for tens of thousands
of overdose deaths annually in the US,
according to the US Drug Enforcement
Administration.
Trump’s comments came a day after he ordered an
investigation into Chinese trade practices but
held off on announcing any new tariffs.
“A lot of what Trump pledged to do was carried
out on Day 1 with the absence of concrete
tariff measures a significant relief, but a
delay does not imply no tariffs. There is after
all another 4 years of Trump to go,”
Singapore-based UOB Global Economics &
Markets Research said in a note.
UOB expects a staggered implementation of the
tariffs, starting as early as Q2 2025 and
concluding by the first half of 2026.
China’s
economy posted a 5% growth last year,
reaching the government’s target, following
extensive government stimulus measures.
The economy, however, continues to face
challenges, including a sluggish property
market, weakening domestic demand, and fragile
business confidence.
This imbalance is evident in December’s
economic data, which showed industrial output
outpacing retail sales, while the unemployment
rate edged higher.
Meanwhile, separate data from the NBS on Monday
showed that profits at China’s industrial firms
fell for a third straight year in 2024,
contracting by 3.3% after the 2.3% decrease in
2023.
The 2024 profits at state-owned companies fell
by 4.6% year on year, while those of foreign
firms fell by 1.7% and private-sector companies
recorded a 0.5% rise in earnings, the data
showed.
In December alone, China’s industrial profits
grew by 11% year on year, reversing the 7.3%
decline in November.
The industrial profit figures cover companies
with annual revenues of yuan (CNY) 20 million
or more from their core business operations.
Beijing is likely to maintain its “around 5%”
growth target for 2025, following a rebound in
Q4 growth and achieving its 2024 target,
Japan-based Nomura Global Markets Research said
in a note.
“However, we do not believe it is time for
Beijing to be complacent… in addition to
stepping up monetary easing and fiscal
stimulus, Beijing needs to clear the property
market, fix the fiscal system, reform the
social welfare system, and alleviate
geopolitical tensions to deliver a truly
sustainable growth recovery.”
($1 = CNY7.26)
Focus article by Nurluqman
Suratman
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