LNG charter rates hit fresh lows Sources concerned rates could fall further, backwardating or turning negative Such low rates likely mean more steam ships scrapped or laid up next year LONDON (ICIS)–LNG spot charter rates continue to decline as shipping sources become concerned that prices are shifting into backwardation and that negative rates are emerging in the market. Negative rates are expected to hit steam-propelled vessels soon, with these already at zero, according to several sources on Monday. Shipping rates have fallen to the lowest levels recorded by ICIS due to growing length in the shipping market, with over 60 LNG carriers delivered over the course of 2024 and more than 80 expected in 2025 and in 2026, according to ICIS data. That means shipping capacity is growing faster than expected production increases over the coming two years. Another source added last week that spreads between lower charter rates in December and higher rates in February could be deceptive. They said rates for charters over the coming three months could quickly tumble as backwardation sets in. Rates are usually expected to be in contango in early winter. Putting December Two-stroke vessels at close to $10,000s/day, they added that “January and February won’t be any better, with the market really struggling under so many new vessels.” Others who said rates of around $20,000/day were still fair for Two-stroke vessels last Friday also said on Monday that they had slipped below this level, as the market reaches more consensus over continued rate drops. Sources also have mixed views on whether rates could drop even further. “Who knows [if prices have bottomed now]” said one broker. “You think it’s going up and then it softens again.” Some chartering agreements were also reported at the end of last week. CHARTER AGREEMENTS The MEGA 2-stroke Saint Barbara was chartered out to INPEX’s IT Marine Transport PTE (ITMT) for a loading from Darwin with redelivery to Japan in the low $20,000s/day. But Bp chartered in the MEGI Two-stroke Global Energy for 19 December from the US Gulf for $10,000/day, with ADNOC chartering in a 149,000cbm SEFE vessel from Das Island between 15-30 December for a multi-month charter at the same rate. NEGATIVE RATES Steam vessel rates, most at risk of turning negative, were quoted at between $4,000/day-$11,000/day last week, with these quoted at zero on 25 November. Shipping rates are normally assessed on a round-trip basis, as reflected in most physical chartering agreements. If a vessel is let for multiple journeys, its re-delivery to a specified point is also usually included. Although one source on Monday also said they thought prices had now hit a floor, hire rates could go even lower and trade in negative territory “to get closer to one way economics,” explained another. This essentially means that no ballast bonus is included in a charter price, so that the owner must pay entire costs to move a vessel to its next desired location once a delivery is made. One source said that every time the market expects charter rates have hit a floor in recent weeks, rates then soften further, while a third said that while negative rates may not come to place, “they are clearly now a very real possibility”. “Some smaller vessels will probably now do the laden leg for zero as long as the vessel can be kept cold,” said another, although for most vessels repositioning is still expected to be covered and that most charterers are only looking at vessels of around 174,000cbm. Steam vessel lay-ups are also being considered by some shipowners, they added, saying they had not seen this yet because of the higher costs. “Initial lay-up fees can be over $1m, so we’ve not seen this happening yet. “But I am sure next year a lot of steamers will go into lay-up …or just be scrapped,” they added. Lay-ups can also cost around $20,000/day. Additional reporting from Lars Kjoellesdal

LONDON (ICIS)–November’s polyethylene (PE) and polypropylene (PP) prices have eased in the face of dispiriting demand and as maintenance season comes to a close in Europe. ICIS senior editors Vicky Ellis and Ben Lake weigh up what’s behind the November trends, how forex and logistics might be affecting the markets and what’s in store for December. They also discuss ICIS coverage of European PE, PP players adapting value propositions in the face of an evolving market, and Think Tank’s podcast episode: Trump trade war will drive end of globalization for chemicals. Editing by Will Beacham

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 22 November. INSIGHT: Europe, US chemicals have most to lose from a new trade war Donald Trump’s resounding victory in the US presidential election gives him a powerful mandate for a policy agenda which includes ramping up trade tariffs across the board as he pursues his re-shoring agenda. APLA ’24: LatAm chems should prepare for rebalancing to take place only from 2030 onwards – APLA Latin American chemicals producers should be prepared to face a prolonged downturn which could extend to 2030 as newer capacities globally keep coming online, according to the director general at the Latin American Petrochemical and Chemical Association (APLA). APLA ’24: Latin America poised for strategic growth amid global shifts – economist Latin America stands at a crucial turning point as global economic and political dynamics shift, with significant opportunities in energy, food security and technological advancement, an economist said on Tuesday. INSIGHT: Chems firms struggle to gain traction in Q3 The chemicals sectors’ third-quarter earnings period has underlined how little momentum has built up in the last 12 months, and how tepid expectations are for the closing months of the year. APLA ’24: Mexico nearshoring critical as US-Mexico economies intertwined – Evonik exec Mexico’s nearshoring trend will continue, even with the prospect of changes with the incoming US Trump administration as the US and Mexico economies are growing more and more interconnected, said the head of Evonik’s Mexico business. APLA ’24: Logistics more challenging to plan with increasing external threats – panel Logistics are getting even more challenging, as climate change, armed conflicts and tariffs are making planning difficult, shipping experts said on a panel discussion at the Latin American Petrochemical and Chemical Association (APLA) Annual Meeting. Canada to see higher inflation on Trump tariffs – economists Fallout from the policies and tariffs proposed by US President-elect Donald Trump will inevitably affect Canada’s economy, in particular the manufacturing sector, according to Oxford Economics.

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 22 November. NEWS APLA ’24: LatAm chems should prepare for rebalancing to take place only from 2030 onwards – APLALatin American chemicals producers should be prepared to face a prolonged downturn which could extend to 2030 as newer capacities globally keep coming online, according to the director general at the Latin American Petrochemical and Chemical Association (APLA). APLA ’24: Mexico’s Cancun to host APLA 2025Next year’s annual summit of the Latin American Petrochemical and Chemical Association (APLA) will take place in Cancun, Mexico, the organizers confirmed on Thursday. APLA ’24: Moeve to advance sustainable detergent materials – execMoeve Chemicals, previously known as Cepsa Chemicals, is pushing forward with sustainable innovations in the detergent industry, particularly through its linear alkyl benzene (LAB) business, according to an executive at the producer. APLA ’24: Anastacio sees Mexico as next major market to gain market share – CEOBrazil-based chemical distributor Quimica Anastacio is making a major push into Mexico, adding to its strong presence in Brazil and Argentina, its CEO said. APLA ’24: Women face persistent workplace and travel safety challenges – chems execsA discussion among industry leaders has highlighted ongoing challenges women face in workplace equality and business travel safety, with experts warning that salary parity remains decades away. APLA ’24: Latin America poised for strategic growth amid global shifts – economistLatin America stands at a crucial turning point as global economic and political dynamics shift, with significant opportunities in energy, food security and technological advancement, an economist said on Tuesday. APLA ’24: Vaca Muerta to double Argentina oil and gas production by 2030, allow for new chem projects – YPFGrowing production in Argentina’s Vaca Muerta shale formation should double oil and gas volumes in the country by 2030, enough for new petrochemicals projects, as rising production in Vaca Muerta more than offsets declines in conventional production, an executive at energy producer YPF said. APLA ’24: Brenntag aims to expand footprint in Brazil and Mexico via M&A, organic growth – execGermany-based chemical distributor Brenntag will focus on expanding its business in Brazil and Mexico in particular in Latin America through acquisitions and organic growth, said the head of its Latin American industrial chemicals business. APLA ’24: Colombia’s plastics grapple with new regulations, Chinese competition – Grupo AlmatiaThe Colombian plastics industry faces significant challenges as it navigates new environmental regulations and increasing competition from Chinese imports, the CEO at plastics distributor Grupo Almatia said. APLA ’24: Logistics more challenging to plan with increasing external threats – panel Logistics are getting even more challenging, as climate change, armed conflicts and tariffs are making planning difficult, shipping experts said on a panel discussion at the Latin American Petrochemical and Chemical Association (APLA) Annual Meeting. APLA ’24: LatAm petchem woes remain, some help to come from nascent protectionist eraLatin American petrochemicals profitability, even the survival of some domestic producers, will hardly come from oversupplied markets facing poor demand but governments’ helping hand with protectionist measures. Unigel seeks US court recognition of Brazilian reorganization planUnigel filed a court proceeding that seeks US recognition of its reorganization plans, which had been approved in Brazil, the Brazilian styrenics and acrylics producer said on Friday. PRICINGAPLA ’24: LatAm PP international prices fall in Chile, Peru on competitive Asian offersInternational polypropylene (PP) prices dropped in Chile and Peru due to competitive Asian offers. Prices remained unchanged this week in other Latin American (LatAm) countries. APLA ’24: Most LatAm PE domestic, international prices steady to lower on weak demand, cheaper importsMost domestic and international polyethylene (PE) prices were assessed as steady to lower across Latin American countries this week on the back of weak demand and competitive offers from abroad. APLA ’24: Brazil’s caustic soda supply strains; PVC market sees increased competitionIn Brazil’s caustic soda market, a combination of planned and unplanned maintenance events in Q4 2024 has intensified supply constraints, exerting potential pressure on prices. APLA ’24: Latin America’s PE, PP demand expected weak to year-end, 2025Persistent poor demand for polyethylene (PE) and polypropylene (PP) across Latin American economies is expected to stay for the remaining of the year and into 2025, with no improvement signs on the horizon.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which suggests companies need to refocus to avoid today’s overcapacity problems. 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. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 22 November. Eastern EU nations call for duties on imports of fertilizers from Russia and Belarus Countries such as Poland, Lithuania, Latvia and Estonia have submitted a letter to the European Commission calling for customs duty to be imposed on imports of fertilizers from Russia and Belarus, the Polish Ministry of Development and Technology has confirmed. Europe apathetic to PO asset reviews as oversupply plagues market Two propylene oxide (PO) plants have been added to the pile of European assets under review as the market grapples with chronic oversupply, low utilisation and persistent low demand. Chems firms struggle to gain traction in Q3 The chemicals sectors’ third-quarter earnings period has underlined how little momentum has built up in the last 12 months, and how tepid expectations are for the closing months of the year. Tightening Russia oil supply may support oil benchmarks as Russia-Ukraine conflict marks 1,000th day Global oil benchmarks could find support from tighter Russian oil supply in coming weeks amid calls for stricter EU sanctions and escalating geopolitical tensions. Europe, US chemicals have most to lose from a new trade war Donald Trump’s resounding victory in the US presidential election gives him a powerful mandate for a policy agenda which includes ramping up trade tariffs across the board as he pursues his re-shoring agenda.

SINGAPORE (ICIS)–The fifth and final round of United Nations (UN)-led negotiations for a global plastics treaty to combat plastic pollution kicked off in Busan, South Korea, on Monday. The fifth session of the UN Intergovernmental Negotiating Committee (INC-5) runs through 1 December and is aimed at finalizing an international legally binding instrument on plastic pollution by the end of this year. “Growth in plastic production is emitting more greenhouse gases, pushing us further into climate disaster,” Inger Andersen, executive director of the UN Environment Programme, said at the opening ceremony of the event. “At the international level there have also been clear signals that a deal is essential – including the G20 declaration last week, which said that G20 leaders were “determined” to land this treaty by the end of the year,” she said. The leaders of the G20 met in Rio de Janeiro, Brazil on 18-19 November. If an agreement is reached by the end of INC-5, the final draft of the treaty will be unveiled at the UN Diplomatic Conference of Plenipotentiaries in June 2025. Negotiations may be extended for two to six months if no deal is reached. The UN Environment Assembly (UNEA) in 2022 resolved to end plastic pollution by adopting resolution 5/14, which established an Intergovernmental Negotiating Committee (INC) to work towards a treaty. The INC has met four times since 2022, the latest being in Ottawa, Canada in April this year which ended with no clear path on capping plastic production. “Over the last two years, four negotiation rounds have yielded a wealth of options for the treaty, from plastic product design to waste management,” Swiss international advocacy non-governmental organization World Economic Forum said in a note on 18 November. “In Busan, negotiators face the challenge of refining these options into a coherent treaty that countries can ratify,” it said. Extended producer responsibility (EPR) – which holds producers accountable for their products’ lifecycle, especially after consumer use – has been a focal point in discussions on the international legally binding instrument, it added. Thumbnail image: Protesters call on government to recognize importance of the Global Plastics Treaty, in Seoul, Korea – 11 September 2024 (By JEON HEON-KYUN/EPA-EFE/Shutterstock)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 22 November. Bearish sentiment in Asian naphtha market likely short-lived By Li Peng Seng 18-Nov-24 11:46 SINGAPORE (ICIS)–Asia’s naphtha market sentiment nosedived last week amid bearish pressures, but cracker expansion in South Korea and gasoline demand ahead of a festive season will likely buoy up demand. Thai PTTGC plans $840 million 5-year capex; focus on Allnex growth By Jonathan Yee 18-Nov-24 17:12 SINGAPORE (ICIS)–Thai chemicals producer PTT Global Chemical plans capital expenditure (capex) of $840 million in the next five years, more than 78% of which will be invested to grow its Germany-based specialty chemicals subsidiary Allnex. INSIGHT: Most Asia petrochemical markets to post Nov losses By Lina Xu 18-Nov-24 15:55 SINGAPORE (ICIS)–Most petrochemical markets in Asia are expected to register losses in November on slowing demand as the year draws to a close. China’s PC market faces ongoing supply pressure By Li Peng Seng 19-Nov-24 11:42 SINGAPORE (ICIS)–China’s polycarbonate (PC) import market is likely to remain under pressure due to persistent oversupply, trade conflicts and geopolitical uncertainties. Asia caustic soda unlikely to see immediate impact from China’s removal of aluminium export tax rebates By Jonathan Chou 20-Nov-24 12:30 SINGAPORE (ICIS)–China’s announcement to end export tax rebates on aluminium effective on 1 December may have limited long-term changes in caustic soda’s demand and supply conditions in Asia. SE Asia bottlenecks disrupt regional chemical tanker operations By Hwee Hwee Tan 21-Nov-24 11:57 SINGAPORE (ICIS)–Persistent delays in tanker operations in southeast Asia are snowballing into wider vessel schedule disruptions across intra-Asia trade lanes. More stringent regulations to hamper Asia’s rPET exports By Arianne Perez 22-Nov-24 14:20 SINGAPORE (ICIS)–Major producers of high-value recycled polyethylene terephthalate (rPET) flakes and pellets from Asia continue to aim for a growing market share in premium markets including the Americas and Europe.

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US East Coast were largely flat and rates to the West Coast fell by 5%, and the Panama Canal will begin allowing swapping of slots on 1 January, highlighting shipping news this week. 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), which are shipped in pellets. They also transport liquid chemicals in isotanks. Global average rates ticked lower by 1% this week, according to supply chain advisors Drewry and as shown in the following chart. Rates from Asia to New York were largely stable on the week while rates from Shanghai to Los Angeles fell by 5%, as shown in the following chart. Drewry expects spot rates to remain stable over the coming week. Drewry’s assessment has rates to the East Coast about $700/40-foot equivalent units (FEU) higher than to the West Coast. Online freight shipping marketplace and platform provider Freightos has rates to both coasts nearly at parity slightly higher than Drewry’s East Coast rate. Judah Levine, head of research at Freightos, said transpacific ocean rates are about 35%-45% below peak levels seen in July now that the peak season has ended. He said upward pressure remains from stronger than normal demand as some shippers are frontloading volumes ahead of expected tariff increases from the new administration as well as the possibility of another work stoppage at US East Coast ports as the 15 January deadline to finalize a new collective bargaining agreement nears. Levine noted that Lunar New Year starts at the end of January this year, which is earlier than usual. The unusual parity of transpacific rates to both coasts may point to some shift of demand to the West Coast due to January strike concerns, Levine said. LIQUID TANKER RATES – USG-BRAZIL TICKS HIGHER Overall, US chemical tanker freight rates was largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane as that market picked up this week following activity during the APLA conference in Columbia. Part space has limited availability as most owners are awaiting COA nominations. USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market. Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh inquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm. The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable. Bunker prices rose, mainly due to the increase in energy prices following continued geopolitical concerns. PANAMA CANAL TO ALLOW SWAPPING OF SLOTS The Panama Canal will begin allowing swapping and substitutions of booking slots between container vessels with some conditions beginning 1 January, the Panama Canal Authority (PCA) said. The conditions are that both vessels must be the same type and must belong to the containership segment, both vessels must belong to the same vessel classification (Neopanamax, Super or Regular), and both vessels must be transiting in the same direction. Also, for swaps, vessels must have similar transit restrictions, and for substitutions, the new vessel must have similar or lesser transit restrictions, both vessel operators must belong to services under the same cooperative working agreement (Global Alliances or VSA), and the booking date of the vessels involved in the swap or substitution must be within the effective date of the services and of the Alliance or VSA. All other Long Term Slot Allocation method (LoTSA) and ordinary booking slots rules remain in effect. Additional reporting by Kevin Callahan