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Speciality Chemicals24-Jan-2025
HOUSTON (ICIS)–Rates for shipping containers
from east Asia and China to the US plunged this
week, as did global average rates amid the
typical slowdown around the Lunar New Year
(LNY) holiday.
Meanwhile, shipowners are out with surcharges
on various trade lanes, which could support
rates at current levels even with the slowdown
in volumes.
Global average rates fell by 11% according to
supply chain advisors Drewry and as shown in
the following chart.
Rates from Shanghai to Los Angeles fell by 8%,
while rates from Shanghai to New York fell by
7%, as shown in the following chart.
Drewry expects spot rates to decrease slightly
in the coming week on the back of the Chinese
Lunar New Year holidays.
Rates from online freight shipping marketplace
and platform provider Freightos also showed
decreases, with a 10% fall from Asia to the
West Coast and a 3% drop to the East Coast.
Judah Levine, head of research at Freightos,
said the lull around LNY is pressuring rates
lower.
CMA CGM has announced a congestion surcharge of
$300/FEU originating from Callao and San
Antonio to the US East Coast and US Gulf.
Global shipping major Maersk announced peak
season surcharges of $1,000 for all sizes of
containers for shipments from Middle East
countries to the US and Canada East Coast,
effective 1 February.
Hapag-Lloyd has announced peak season
surcharges of $600/container from Chile to
Asia.
Container ships and costs for shipping
containers are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers, such as polyethylene
(PE) and polypropylene (PP), are shipped in
pellets.
They also transport liquid chemicals in
isotanks.
RETURN TO SUEZ CANAL NOT
IMMINENT
While the ceasefire agreement between Israel
and Hamas led to some optimism that
transits through the Suez Canal could resume,
passage of commercial vessels through the
waterway are not imminent.
Levine said there remains skepticism among
shipping analysts that the Houthi rebels will
refrain from attacks on commercial vessels in
the Red Sea even during the first stage of the
ceasefire.
Negotiations on the second phase of the
agreement are scheduled to begin on 5 February.
Levine said ocean carriers do see the ceasefire
as a promising first step, but only CMA CGM has
said it will increase its use of the Suez
Canal.
Most carriers will not take the costly and
complicated concrete steps to return to the Red
Sea until they are confident that the route is
and will remain safe.
Many shippers and freight forwarded are also
hesitant to change course.
Peter Sand, chief analyst at ocean and freight
rate analytics firm Xeneta, said carriers will
want assurance they have safe passage for crews
and ships in the long term and that the
situation will not suddenly deteriorate.
PANAMA CANAL
President Donald Trump surprised some when he
said that the US should reclaim the Panama
Canal.
A US congressman has since introduced a
bill that would
authorize the purchase of the Panama Canal.
The US is the largest user of the canal, with
around 70% of all traffic heading to or coming
from US ports. About 40% of US container
traffic use the canal.
The US relinquished control of the canal on 31
December 1999 in The Panama Canal Treaty,
signed by then US President Jimmy Carter.
Panamanian President Jose Raul Molino said the
treaty, along with The Treaty Concerning the
Permanent Neutrality and Operation of the
Panama Canal, established the permanent
neutrality of the Canal, guaranteeing its open
and safe operation for all nations.
The Panama Canal remains the primary route for
trade between Asia and the US Gulf and East
Coast.
LIQUID TANKER RATES
US chemical tanker freight rates assessed by
ICIS were largely stable week on week, with
just the USG to Brazil trade lane seeing a
slight increase on smaller volumes but overall
unchanged. The market remained quiet this week,
with COA volumes steady.
For cargoes moving in and out of South America
some space remains available, capping the gains
seen on the week. Strong interest that was seen
over the past two months is waning, which is
likely to put additional pressure on freight
rates.
Volumes from the US continue to flow, but cargo
moving into Asia is slowing because of the
Lunar New Year holiday. However, monoethylene
glycol (MEG) and ethanol entered the market for
February loading.
A different scenario is playing out on the
transatlantic eastbound route where February
loading space is already available for spot but
on a limited basis.
On the other hand, there seems to be a lot of
interest on the USG to India trade lanes as
there is a lot of lube oils interest for
January with limited spot space remaining as
owner await COA nominations.
Several inquiries were seen for methanol,
ethanol and vinyl acetate monomer (VAM).
Additional reporting by Kevin Callahan
Ethylene24-Jan-2025
HOUSTON (ICIS)–ExxonMobil may build an ethane
cracker and polyethylene (PE) plant near Corpus
Christi, Texas, the company said in an
application for a tax break.
If ExxonMobil proceeds with the project, it
would be built in Calhoun county, which is
north of Corpus Christi, the application said.
Construction could start in 2025 and finish at
the end of 2030. Production could start in
2031, the application said.
ExxonMobil is considering other locations for
the possible project, including the Middle
East, Asia and other sites in North America.
ExxonMobil did not disclose capacity figures.
The total capital investment could be $8.6
billion.
In a statement, ExxonMobil said it was
evaluating multiple locations around the world
for a future chemical plant. It acknowledged
the advantages of a project on the Gulf Coast,
which it could integrate with its operations in
the Permian basin.
“While this site has potential, we are very
early in our evaluation process,” ExxonMobil
said. “Filing for a tax abatement before a
final decision is required by law and is part
of our due diligence to gain greater clarity
for our shareholders and the community.
“As we look to meet global demand for our
products, we’ll continue to evaluate the market
conditions before we make a decision,” the
company said.
ExxonMobil is involved in another petrochemical
project in nearby San Patricio county under
the Gulf Coast Growth Ventures joint venture
with SABIC. That project produces ethylene, PE
and ethylene glycols.
Thumbnail shows PE pellets. Image by
ICIS.
(adds comments from ExxonMobil, paragraphs 6-8)
Ethylene24-Jan-2025
CHARLOTTE, North Carolina (ICIS)–There is
uncertainty about the extent that stated US
policy goals on tariffs will be achieved and
their impact on the economy this year and
beyond. Yet for now, the US economy remains on
solid ground.
An extension of the 2017 tax cuts would be
positive, as would deregulation and higher
defense spending. On the other hand,
immigration restrictions and tariff increases
would take away from growth and could foster
inflationary pressures. It is possible that new
tariffs will be measured.
Higher inflationary pressures of late have
raised interest rates, which could subtract
from US growth.
It is clear from looking at year-earlier
comparisons that the US economy is slowing. The
US remains in the late stage of the business
cycle, but there is likely more room for the
economy to run.
December featured a solid employment report.
There are 1.1 job openings per unemployed
person, a level back to pre-pandemic levels.
With a balanced labor market, incomes are
holding up for consumers and providing support
for the US economy.
The headline December Consumer Price Index
(CPI) was up 2.9% year on year, a
third month of higher comparisons. Economists
expect inflation to average 2.5% this year,
down from 2.9% in 2024, 4.1% in 2023 and 8.0%
in 2022. This is still above the Fed’s target.
CPI inflation is expected to stabilize at 2.5%
in 2026 and soften to 2.3% in 2027. That said,
expectations of stronger growth and higher
inflation have pushed up interest rates, as
measured by the 10-year Treasury yield.
US MANUFACTURING PMI
IMPROVESTurning to the
production side of the economy, the December
ISM US Manufacturing PMI registered 49.3, an
improvement from November’s reading.
Overall manufacturing production contraction
moved into positive territory, and new orders
strengthened further. Order backlogs and
inventories moved closer to breakeven,
suggesting the start of a restocking cycle.
Seven of the 18 industries surveyed expanded.
The ISM US Services PMI rose 2.0 points to
54.1, a good expansionary reading.
The Manufacturing PMI for Canada was in
positive territory for a fourth month while
that for Mexico contracted again slightly.
Brazil’s manufacturing PMI expanded for a
twelfth month, but at a slower pace.
Euro area manufacturing has been in contraction
for 30 months. The UK PMI remains in
contraction. China’s manufacturing PMI was
slightly positive for a third month, indicative
of a stalling recovery.
AUTO AND HOUSING
OUTLOOKTurning to the demand
side of the economy, light vehicle sales
improved again in December, and although
inventories have moved up this past year, they
remain low. Affordability continues to be the
issue and is providing headwinds, although the
year ended on a solid note.
We expect light vehicle sales of 16.31 million
in 2025, before improving to 16.53 million in
2026 and 16.95 million in 2027. This would
bring activity back to the last peak in 2018.
Housing activity continues to be muted amid
affordability issues as 30-year mortgage rates
returned to over 7%, along with low builder
confidence.
We expect housing starts will average 1.41
million in 2025 and improve to 1.45 million in
2026 and to 1.59 million in 2027. Demographic
factors will support activity through the end
of the decade. There is significant pent-up
demand for housing and a shortage of inventory.
RETAIL SALES PICK
UPRetail sales were lackluster
for much of this year, but Q4 results were
robust. Sales at food services and drinking
places also remained positive. Overall consumer
spending continues to improve but may be
slowing.
Business fixed investment has been languid of
late, but led by a need to boost productivity
and by reshoring initiatives, this will take
over from consumer spending as a driver of the
US economy. This is typical in the late-stage
of the business cycle.
US GDP FORECASTUS GDP
rebounded 6.1% in 2021 and then slowed to a
2.5% gain in 2022. The much-anticipated
recession failed to emerge for a variety of
reasons, and in 2023, the economy expanded 2.9%
followed by an estimated 2.7% in 2024. This
pace is well above long-term growth potential.
Q4 2024 economic growth will be strong, but a
slowdown in quarterly economic gains towards
long-term growth potential suggests that in
2025 the economy could rise 2.2%, followed by
another 2.2% gain in 2026 and 2.0% growth in
2027.
Deregulation, energy and tax reform as well as
other initiatives could aid economic growth.
The US continues to outpace other advanced
nations. Recent results suggest that Europe’s
economic prospects appear stagnant amid many
structural and competitiveness headwinds.
China appears to be attempting to export its
way out of a soft economy. The stimulus
provided will likely have only a modest effect
on improving growth prospects and rising trade
tensions may hinder growth.
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Ethylene24-Jan-2025
SAO PAULO (ICIS)–Argentina’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.
As production costs in Argentina remain higher
than in key manufacturing hubs such as China
and the US, industrialists fear the country’s
battle against inflation – the number one
priority of Javier Milei’s administration – is
to increase liberalizing measures that could
hurt domestic industrial producers.
This week, Argentina’s largest industrial trade
group, the UIA, called on the government to
make use of antidumping duties (ADDs) to
protect the country’s manufacturers against
unfair competition.
The call for an increased use of ADDs comes as
the cabinet lowers import taxes, so cheaper
production from abroad can make its way to
Argentina and, ultimately, lower prices for
consumers: winning the battle against inflation
will mark Milei’s term, and he is decided to
win that battle, at any cost.
Consumers may end up being winners in the
equation, rightly so after the country’s crisis
pushed more than 50% of Argentinians into
poverty, according to official figures. But
where there are winners, there are losers and,
increasingly, chemicals and manufacturing
players fear they will on that side of the
equation.
CHEAP IMPORTS, POTENTIAL PLANT
SHUTDOWNSMacroeconomically,
Argentina has turned a corner, and consumers
are starting to buy into the recovery
narrative.
This week, the country’s statistics office
Indec said output rose in November, both year
on year and month on month, although the
petrochemicals-intensive manufacturing and
construction continued contracting.
Moreover, two much-followed indicators compiled
by Buenos Aires’ University Torcuato Luca di
Tena showed positive trends: consumer
confidence is up and, most importantly, its
so-called Leading Indicator compiling ten
different economic data sources, was showing
the economy had
entered an “expansionary phase” in the last
quarter of 2024.
The annual rate of inflation has more than
halved in the past twelve months, standing at
nearly
118% in December but down from its peak at
nearly 300% in mid-2024.
The state posted fiscal surpluses in some
months of 2024, something unheard of in
Argentina for decades, and squeezed consumers
are holding off showing their pain in the
streets, a well-established tradition in the
country. So far, the majority still buys
Milei’s disruptive narrative, aware the
previous corruption-prone, protectionist system
was unsustainable.
The overall upbeat mood has made some in the
chemicals industry hopeful that sooner rather
than later they will also ride the recovery
wave.
Others, however, are turning increasingly
pessimistic about a liberalized economy in
which smaller chemicals players will have it
very difficult to survive the current global
oversupply.
In an interview with ICIS this week, Manuel
Diaz, the director general at Buenos
Aires-headquartered trade group the Latin
American Petrochemical and Chemical Association
(APLA) and an Argentinian national himself,
said the country’s progress in bringing down
both inflation and the fiscal deficit has been
remarkable.
He conceded, however, many chemical companies
in the country are now analyzing their outlook
as the new liberalizing policies are to force
them to adapt to global competition, which was
not a factor in the previous protectionist
system.
There have already been some plant closures. At
the end of 2024, US chemicals major Dow, who is
the sole producer of polyethylene (PE) in
Argentina, shut its polyols
plant in San Lorenzo, citing global
competitiveness issues.
Local producer Rio Tercero’s
shut its toluene di-isocyanate (TDI)
plant in Cordoba arguing the same.
APLA’s Diaz said there could be other plant
closures in coming quarters, but they would
affect small facilities which are uncompetitive
in the global market, but he remained confident
about larger facilities, which should weather
the storm and come out on the other side still
functioning and profitable.
“Overall economic expectations are turning
positive. In chemicals, the plant closures we
have seen in Argentina is something we can also
see in other markets, such as Europe. But in
Argentina’s case, I think more plant closures
will be contained to small facilities whose
global competitiveness is difficult with higher
production costs,” said Diaz.
“In general, companies will try to accommodate
a new reality, and I am confident many will be
able to do that. Moreover, let’s look ahead:
with crude and gas output from the Vaca Muerta
fields expected to increase, there is a big
potential for chemicals. Also for some
fertilizers such as urea.”
Diaz’s optimistic assessment is not shared by
all other chemicals and wider manufacturing
players.
In its call this week for a larger use of ADDs
to protect domestic production, industrial
trade group UIA highlighted how small- and
medium-sized enterprises (SMEs) would need
extra protection from global markets if they
are to keep their activity.
Some of those SMEs would be the small chemicals
plants Diaz was referring to.
According to the UIA, Argentina currently has
94 ADDs in place, 50 of which are directed at
products from China. Globally, Argentina
occupies the sixth place in terms of ADDs in
place, with 5.6% of the total.
The country is behind the US (21.5% of the
total), India (14.3%), Brazil (7.1%), Turkey
(5.9%), and China (5.7%). Meanwhile, a third of
total ADDs in the world are directed at China,
according to the UIA figures.
The 94 ADDs in place in Argentina are still a
reminiscence of the previous protectionist
system: Milei’s intended plans to turn the
economy around will be a years-long process. If
the President succeeds, it would amount to a
“regime change” economically, said
metaphorically an economist at Buenos
Aires-headquartered Fundacion Capital in an
interview with ICIS
last year.
While the UIA praised changes passed this week
by the cabinet simplifying the ADDs application
procedures for companies, it also said that
without them many companies may go out of
business in the current global oversupplied
markets for industrial goods.
“These tools are essential to combat unfair
competition. The impact of these measures is
crucial for local SMEs, which face significant
challenges, including one of the highest tax
burdens in the world, high logistics costs, and
difficulties in accessing competitive
financing,” said the UIA.
“In contrast, products imported from certain
countries reach the local market with falsified
prices, subsidized at their origin, and with
lower labor costs. This situation generates
unfair competition that threatens the
sustainability of the national industry.
“In developed economies such as the US and the
EU, these tools have proven effective in
protecting local investment and employment.”
BUCKING THE TRENDThe
2020s will be remembered by chemicals players
as a time of global oversupply which plunged
the industry into a years-long downturn. And
China will be at the center of those memories,
as the country turned from chemicals importer
to net exporter – and doing so with distorted
trade practices which helped it dampen its
excess product abroad.
For a couple of years now, Latin America has
been at the centre of this global oversupply.
The region’s chemicals production can only
cover around 50% of its demand, so Latin
America’s trade deficit in chemicals makes the
region a ‘price taker’ at the mercy of global
markets.
A prime target, therefore, for Chinese
state-controlled, heavily subsidized chemicals
producers.
The region’s two largest economies, Brazil and
Mexico, are large users of ADDs to protect
their domestic industries. As observed in the
UIA data on ADDs, Brazil is the third country
globally with most ADDs in place (7.1%) but
Mexico also featured high on the list, in ninth
place with 3.8% of the total.
The EU and Canada were in seventh and eighth
place, with 5.5% and 4.9% of the total,
respectively.
Amid a rise in protectionism best reflected by
the return of Donald Trump to the US
presidency, Argentina is bucking the trend
aiming to be the champion of liberal policies.
The country tried something similar in the
1990s under Carlos Menem’s presidency, an
experiment which did not end up well.
The current push for liberalization has so far
come with a key factor which did not happen in
the 1990s: public sector spending is sharply
down as Milei aims to trim down the size of
state. That was a key factor in 2024 to dampen
demand.
It remains to be seen whether a more
liberalized economy set to be based in services
will leave any room for some industry to thrive
in Argentina. Chemicals-wise, the country has
the advantage of feedstock, but the full
benefits of Vaca Muerta will take some years to
bear fruit.
In the interregnum, many chemical sources fear
they may go out of business permanently.
Sources who deal with cabinet officials have
said to ICIS that when the officials are pushed
on how local manufacturing production may
suffer under liberalization measures, their
response is always the same: in a free market,
those who cannot compete should not be in the
market.
This week, Milei said he would withdraw
Argentina from the free trade bloc Mercosur
with Bolivia, Brazil, Paraguay, and Urugay if
that was a necessary condition to sign a free
trade deal with the US. Milei is Latin
America’s most staunch supporter of President
Trump, although economically their agendas
diverge greatly.
Milei has in the past referred to Mercosur’s
trading rules as having “become a prison” which
dwarfs competition.
This week, asked in an interview with
Bloomberg if he would be willing to
leave the bloc, he said: “If that was the
extreme condition [to sign other trade deals],
yes. There are, however, mechanisms by which it
can be done being within Mercosur. So, we say
it can be achieved without having to abandon
what we have in terms of Mercosur.”
Mercosur and the 27-country EU signed in December a
free trade agreement after more than 20 years
in the making which would create a 700-million
consumer free trade area. The deal, however,
still has to be fully ratified after it sparked
protests among some economic sectors, mostly in
the EU, such as farmers.
The cabinet officials’ reasoning about
uncompetitive companies going bust in a true
free market leaves chemicals sources perplexed
and disappointed, but after one year of Milei
firmly installed in the Casa Rosada
presidential palace, players are starting to
assume they may need to change their business
model – less production and more trading and/or
distribution, for example – if their companies
are to survive.
“In the next few years, Argentina’s economy
will do very well, but not everyone will do
well. Exports-wise, oil and gas, mining, or
agriculture will boom. Those with stable jobs
will be fine, merchants will be fine, importers
will be fine, but clearly industrialists will
not be fine,” said a chemicals source in Buenos
Aires this week.
“Industrialists will suffer because the
Argentine government has not yet lowered any of
the production costs, be it taxes or costs of
the corporatist inefficiency that exists in
Argentina, and that makes it difficult for them
to compete against imported products that are
so cheap.
“In other words, I think that industry will
suffer in coming years and destroy employment.
But employment is not part of the conversation
today: it’s all about inflation. Until
employment is not part of public opinion’s
concerns, the government believes it can ride
the wave and win the next election. But, along
the way, I fear industrial fabric is set to be
lost.”
Insight by Jonathan Lopez
Recycled Polyethylene Terephthalate24-Jan-2025
LONDON (ICIS)–Senior Editor for Recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
FD NWE Colourless flake prices rise at the
low end
Eastern Europe Colourless bale prices also
rise this week
Delta between PET and R-PET flake and
food-grade pellet remains high
Speciality Chemicals24-Jan-2025
LONDON (ICIS)–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.
Eurozone composite purchasing managers’ index
(PMI) firmed to 50.2 in January compared to
49.6 in December, driven by a reading of 51.4
for the service sector, a slight decline
compared to 51.6 the previous month but still
firmly in growth territory.
A PMI score of above 50.0 signifies growth. The
manufacturing PMI rose to 46.1, an improvement
on the previous month but still a long way from
growth.
Representing the first modest growth in private
sector output since August 2024, the uptick saw
employment rates stabilise but input costs rise
sharply, resulting in the highest rate of
inflation in 21 months.
Business activity in Germany, which recorded
its second consecutive year of negative GDP
growth in 2024, stabilised after six months of
private sector recession, while conditions in
France remained negative but eased slightly
month on month.
Ongoing demand weakness limited the pace of
recovery, with new orders falling for the eight
consecutive month, and new export orders –
including intra-eurozone trade – dropping on a
monthly basis for almost three years, according
to Hamburg Commercial Bank (HCOB) and S&P
Global.
“Ahead of the ECB meeting next week, news on
the price front is not encouraging,” said HCOB
chief economist Cyrus de la Rubia. “Worryingly,
input prices in manufacturing have increased,
ending four months of stable or decreasing
costs.”
“Given the weak state of the economy, the ECB
will likely stick to its gradual pace of
cutting interest rates, for the time being,” he
added.
Despite the intensifying inflationary
pressures, the return to growth footing remains
a welcome development after months of grim news
for eurozone industry, according to Oxford
Economics’ Leo Barincou.
“January’s flash PMIs provides some hope that
the eurozone’s economic recovery may finally
gain some speed,” he said.
The UK’s composite PMI also firmed, rising to
50.9 compared to 50.4 in December, with
manufacturing strengthening while remaining in
contraction at 48.2 and service sector activity
ratcheting up to 51.2. The same demand weakness
that slowed the rate of eurozone growth made
itself felt in the UK, with new work rates
falling at the fastest pace since October 2023.
Input costs rose, with the rate of inflation
the highest in a year and a half.
“Inflation pressures have meanwhile reignited,
pointing to a stagflationary environment which
poses a growing policy quandary for the Bank of
England,” said S&P Global Market
Intelligence chief business economist Chris
Williamson.
Thumbnail photo: Frankfurt, Germany’s
financial centre (Source: Shutterstock)
Crude Oil24-Jan-2025
SINGAPORE (ICIS)–Singapore’s central bank
effectively loosened its monetary policy
on Friday – by allowing a more gradual
appreciation of the Singapore dollar (S$) – as
inflationary pressures have eased.
The Monetary Authority of Singapore (MAS),
which utilizes foreign exchange as its primary
policy tool, reduced slightly the slope of the
Singapore dollar (S$) nominal effective
exchange rate (NEER) policy band to “ensure
medium-term stability”, it said in a statement.
The NEER refers to the value of Singapore
dollar against a basket of currencies of its
major trading partners.
The monetary policy easing on Friday was the
first since March 2020.
The width of the S$NEER policy band and the
level at which it is centered were left
unchanged, the central bank said.
“Overall, the pace of consumer price increases
has moderated across a broad range of goods and
services, and core inflation is presently low
and stable,” MAS said.
Singapore’s average core inflation in Q4 2024
fell to 1.9% from 2.7% in Q3.
MAS reduced its average core inflation forecast
for 2025 to 1.0-2.0%, down from 1.5-2.5%
previously.
Business cost- and demand-driven inflationary
pressures are expected to remain contained.
However, imported costs should stay moderate
amid projected global oil price declines and
favorable supply conditions in key food
commodity markets.
Singapore possesses no hydrocarbon resources
and imports crude oil for its refining and
petrochemical industries.
More than 100 global chemical firms, including
energy majors ExxonMobil and Shell, are housed
at its petrochemical hub Jurong Island.
Singapore’s GDP growth is forecast to moderate
to 1.0-3.0% in 2025, on
global trade policy changes, which could
weigh on the domestic manufacturing and
trade-related services sectors, said MAS.
As a trade-dependent economy, Singapore has a
reliance on global commerce, meaning changes
are likely to weigh on its domestic economy.
“Global economic policy uncertainty has risen
since the October [2024] monetary policy
review, mainly reflecting expectations of
increasing trade policy frictions,” MAS added.
Following a period of frontloading of exports
amid fears of Donald Trump’s America First
administration imposing tariffs on foreign
goods, manufacturing and trade activity
globally is anticipated to normalize.
Still-strong wage growth amid supportive labor
market conditions should support steady
consumer spending in advanced economies, though
global growth could slow over 2025.
($1 = S$1.35)
Maleic Anhydride23-Jan-2025
HOUSTON (ICIS)–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.
Wind turbines make up a fast-growing market for
epoxy resins. They also consume unsaturated
polyester resins (UPR) and lubricants.
The moratorium on federal wind permits was
among the numerous orders that US President
Donald Trump issued on his first day in office.
The effect on the moratorium will likely be
small, since only 5% of utility-scale wind
capacity is generated by turbines on federal
land,
according to the US Department of the
Interior.
Some of this may be attributed to the share of
wind power installed in Texas, most of which is
private and not owned by the federal
government.
Out of the 150 gigawatts (GW) of installed US
wind energy, more than 41GW was in Texas as of
2023,
according to a report issued by the Ernest
Orlando Lawrence Berkeley National Laboratory.
Out of the new wind capacity installed in 2023,
1.3GW out of 6.5GW was installed in Texas, the
report said.
Expansion of wind energy has been supported by
a federal production tax credit, according to
the report, and Trump did not rescind that tax
credit in his executive order.
State policies also support wind energy, and
those policies should continue regardless of
the executive orders.
The trend that is slowing down the wind
industry is high interest rates. Those, as well
as interconnection and siting, helped make 2023
the lowest in terms of installed capacity since
2014, according to the report.
LARGE PIPELINE FOR OFFSHORE WIND
PROJECTSThe US has a large
pipeline of possible offshore wind projects,
with 932 megawatts (MW) under construction,
according to a 2023 report from the Department
of Energy. Another 1,100MW off capacity
have received local permits and federal
approval of its construction and operational
plan.
Nearly 21GW are in the permitting stage, but it
is unclear whether these offshore projects will
need any federal permits. State jurisdiction of
submerged lands can extend out to three or nine
nautical miles, depending on whether the land
is under the Atlantic or Pacific ocean or
whether it is under the Gulf of Mexico.
Offshore wind capacity totaled only 42MW,
making up a tiny share of total US capacity,
according to the 2023 report.
TRADE GROUP OPPOSES
MORATORIUMDespite the small
number of wind projects on federal land, the
American Clean Power Association (ACP) spoke
out against the moratorium.
“ACP strongly opposes blanket measures to halt
or impede development of domestic wind energy
on federal lands and waters. The contradiction
between the energy-focused executive orders is
stark: while on one hand the administration
seeks to reduce bureaucracy and unleash energy
production, on the other it increases
bureaucratic barriers, undermining domestic
energy development and harming American
businesses and workers,” the group said.
“For too long, we have witnessed careening
policy restrictions on the development of
energy resources on our nation’s vast federal
lands. Regardless of administration, ’some of
the above’ strategies are not good energy
policy. No nation can achieve energy dominance
absent consistent policy that moves beyond the
idea that energy systems have partisan
character,” the ACP said.
The paltry amount of wind power installed on
federal land hides its potential. Federal lands
have the potential to produce 875GW of
land-based wind energy,
according to a report issued in 2025 by the
National Renewable Energy Laboratory (NREL).
If the most stringent siting constraints are
assumed, then federal land could produce 70GW
of land-based wind.
Europe provides another illustration of the
potential growth for wind power. It has 278GW
of power capacity, with 243GW onshore,
according to Wind Power, a trade group.
Capacity should grow by 22GW/year from
2024-2030.
The trade group Epoxy Europe estimates that
wind energy consumes 40,000 tonnes/year of the
epoxy resins produced by its members.
DETAILS ON THE
MORATORIUMUnder
one of his executive orders, Trump
requested that the government conduct a review
of federal wind leasing and permitting
policies.
Until the government completes that review, no
new or renewed approvals, rights of way,
permits, leases or loans will be issued for
onshore or offshore federal wind projects by
the Secretary of the Interior, the Secretary of
Agriculture, the Secretary of Energy, the
administrator of the Environmental Protection
Agency (EPA) and the heads of all other
relevant government agencies.
Moreover, the government will not lease the
Outer Continental Shelf (OCS) for wind
projects.
Existing wind leases in the OCS will be
reviewed to determine if they should be amended
or terminated because of ecological, economic
and environmental reasons.
The government will review the future of
defunct and idle wind turbines and issue a
report that require their removal.
Trump also ordered that the Secretary of the
Interior impose a temporary moratorium on the
Lava Ridge wind project, which is being
developed by Magic Valley Energy in the state
of Idaho. It would have up to 400 turbines and
produce more than 1GW.
Magic Valley Energy is a subsidiary of LS
Power.
Insight article by Al
Greenwood
(Thumbnail shows wind turbines. Image by Jon
Santa Cruz/Shutterstock)
Speciality Chemicals23-Jan-2025
LONDON (ICIS)–Wacker Chemie has started up two
new specialty silicones plants in Japan and
South Korea to meet growing demand in Asia, it
said on Thursday.
The facilities in Tsukuba, Japan and Jincheon,
South Korea, will meet rising demand from the
automotive and construction industries.
The Germany-based chemicals producer said it
invested an amount in the “double-digit million
euro range” in the expansion. It did not
disclose specific capacity figures.
Wacker said its’ Tsukuba site in Japan would
focus on the automotive sector, particularly
electric vehicles.
At Jincheon in South Korea, it aims to increase
the output of silicone sealants for the
construction industry.
As well as automotive and construction,
specialty silicones are used in the chemicals,
cosmetics, medical technology, energy,
electronics, paper and textiles sectors.
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