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Crude Oil14-Oct-2024
SINGAPORE (ICIS)–China’s crude oil imports in
September totaled 45.5 million tonnes, down by
0.6% year on year and lower by 7.4% from the
previous month, official data showed on Monday.
For the first nine months of 2024, its total
crude imports declined by 2.8% year on year to
412.4 million tonnes, according to China
Customs data.
The world’s second-largest economy is expected
to see a 2.9% decrease on crude imports this
year to 548 million tonnes as economic
headwinds and rising penetration of electric
and gas-powered vehicles drag fuel demand, ICIS
principal analyst Patricia Tao said.
Polyethylene Terephthalate14-Oct-2024
LONDON (ICIS)–Ahead of the 3rd
ICIS Recycled Polymers Conference in
Berlin on 7 November, Senior Analyst for
Recycling Egor
Dementev discusses the challenges
and opportunities for both mechanical and
chemical recycling with Annick
Meerschman, Innovation Director
at CEFIC.
Topics covered include:
Innovations driving plastic recycling in
Europe
Chemical recycling technology evolution
Impact of legislation and regulation
Challenges facing the recycling industry
Speciality Chemicals14-Oct-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 11 October.
Evonik plans major
restructure of two business units as global
competition intensifies
German specialty group Evonik plans to
restructure two of its business units, putting
non-core assets up for sale, closure or
partnerships.
Hurricane Milton moves
off Florida’s east coast with damaging winds,
heavy rainfall
Hurricane Milton is moving away from Florida’s
east coast but is still producing damaging
winds and heavy rainfall in the state,
according to the latest update on Thursday.
Fundamental change still
potentially ahead for chemicals
industry
Massive overcapacity along some value chains is
likely to drive further fundamental shifts in
the global chemicals landscape, with
differentiation and innovation key to remaining
competitive.
Europe chems market
overdue for restructure – Brenntag
chief
The European chemicals market is overdue a
“massive” restructuring, the CEO of Brenntag
said on Tuesday, to create players that can
withstand competitive pressures from companies
in higher-growth markets.
Europe MPG outlook
downbeat, but potential de-icing demand brings
some hope
Europe’s mono propylene (MPG) spot market will
likely remain subdued into early Q1 2025
against a tough macroeconomic backdrop.
Global News + ICIS Chemical Business (ICB)
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Gas14-Oct-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 11 October.
Vietnam Q3 economy grows
7.4% despite heavy typhoon losses
By Nurluqman Suratman 07-Oct-24 14:16 SINGAPORE
(ICIS)–Vietnam’s economy expanded by 7.4% year
on year in the third quarter despite hefty
losses from Typhoon Yagi, with growth marking
its strongest in two years on robust exports.
PODCAST: UAE base oils
may see higher Q4 imports; US Group II offers
keenly awaited
By Damini Dabholkar 07-Oct-24 14:29 SINGAPORE
(ICIS)–The base oils market in UAE is likely
to see an uptick in demand in the fourth
quarter, with the impact of escalating tensions
in the region on crude prices and Group I
supply from Iran closely monitored in the weeks
ahead.
Asia
MMA import trade to stay subdued amid weak
buyer confidence
By Jasmine Khoo 09-Oct-24 13:18 SINGAPORE
(ICIS)–The methyl methacrylate (MMA) spot
trade in Asia is likely to stay curtailed in
the near term.
China
ethanolamines dull post holidays while SE Asia
and India struggle
By Clive Ong 10-Oct-24 15:13 SINGAPORE
(ICIS)–The ethanolamines market in China
remained slow after the country’s Golden Week
holidays. Demand remained tepid while domestic
prices held steady.
S
Korea’s Hyundai Motor seeks to raise $3.3
billion from India IPO
By Nurluqman Suratman 10-Oct-24 16:40 SINGAPORE
(ICIS)–Hyundai Motor’s subsidiary in India is
seeking to raise up to won (W) 4.4 trillion
($3.3 billion) through an initial public
offering (IPO) on 15 October.
China
Sept petrochemicals weaken; Oct demand pick-up
unlikely
By Yvonne Shi 11-Oct-24 12:25 SINGAPORE
(ICIS)–Falling costs of crude oil and
weaker-than-expected seasonal end-demand caused
China’s domestic petrochemical markets to
weaken in September, with players expecting the
current supply-demand imbalance to persist for
the rest of the year.
S
Korea central bank cuts key interest rate to
3.25% amid slowing inflation
By Jonathan Yee 11-Oct-24 17:33 SINGAPORE
(ICIS)–South Korea’s central bank on Friday
lowered its benchmark interest rate by 25 basis
points to 3.25% after holding rates for nearly
two years, seeking to revitalize the economy
amid moderating inflation.
Ammonia11-Oct-2024
HOUSTON (ICIS)–Entering day two of
post-hurricane activities and as the community
of Tampa and surrounding cities attempt to
clean up and dry out, the fertilizer industry
is still assessing damage with flooding
appearing to have had the biggest impact on
production sites.
Striking as a Category 3 hurricane late 9
October the storm brought intense and
life-threatening conditions to a section of
Florida that had already faced such a threat
less than two weeks before. It particularly
impacted the Tamp, Florida area, which is a key
hub of the US fertilizer industry.
Market sources, based in this region, said most
of the focus on Friday was cleaning up and
trying to determine how much damaged had been
caused.
The extent of impacts to fertilizer facilities
were not fully clear but producer Mosaic did
say it had some issues because of the storm but
that once it had the full updates about
Hurricane Milton’s impact on their facilities
it would post on their website.
As was the fear of environmentalists the
gypstacks that are a fixture of phosphate
production experienced problems with the water
supporting the storage at the Mosaic Riverview
facility having likely entered the Tampa Bay
because of the extreme rainfall.
“Back-to-back historic storms crossed our
operational areas. Our sites withstood the
conditions with few challenges. Our Riverview
site, which has operated on Tampa Bay for the
last century, received nearly 15 inches of rain
during Hurricane Milton less than two weeks
after Hurricane Helene,” said Mosaic.
“A water collection system supporting our
closed gypstack became overwhelmed, pushing
excess water out a manhole on our property. At
this time, we believe some of that impacted
stormwater made its way to an outfall which
discharges into Tampa Bay.”
Mosaic said the issue was addressed on 10
October and is not continuing but added that
the volume may have been greater than the
17,500-gallon reporting standard.
“We expect water quality impacts, if any, to be
modest. We’ve been in constant communication
with regulators who are onsite today,” Mosaic
said.
Florida environmental authorities have not made
any statement but ahead of the storm had said
they were preparing and would have all
resources available to oversee the regulated
facilities and operations.
Ammonia11-Oct-2024
HOUSTON (ICIS)–Corn production is forecasted
to increase by 17 million bushels while soybean
output is expected to decline by 4 million
bushels, according to the October World
Agricultural Supply and Demand Estimate (WASDE)
report from the US Department of Agriculture
(USDA).
In the monthly update the agency said the
current outlook for corn is for smaller
supplies, larger exports and reduced ending
stocks.
Projected beginning stocks for 2024-2025 are
now 52 million bushels lower based on the Grain
Stocks report.
Corn production is now being forecasted at 15.2
billion bushels, up 17 million bushels from
last month on a 0.2-bushel increase in yield to
stand at 183.8 bushels/acre.
Harvested area for grain is unchanged at 82.7
million acres.
Total use is raised slightly to 15.0 billion
bushels reflecting greater exports, and with
supply falling and use rising, the ending
stocks have been reduced by 58 million bushels
to 2 billion bushels.
The October WASDE said the season-average corn
price received by producers is unchanged at
$4.10/bushel.
For soybeans, the USDA is showing that
production is now being forecasted at 4.6
billion bushels, which is down 4 million
bushels and is based on expectations of lower
yields.
Harvested area is unchanged at 86.3 million
acres.
The monthly update reveal that soybean yield is
now projected at 53.1 bushels/acre, down 0.1
bushels from the September update.
As lower production is being partly offset by
slightly higher beginning stocks the USDA said
supplies are lowered by 2 million bushels to
stand at 4.9 billion bushels.
With a slightly lower residual and no change to
exports and crush, ending stocks are unchanged
from last month at 550 million bushels.
The season-average soybean price is unchanged
at $10.80/bushel.
The next WASDE report will be released on 8
November.
Speciality Chemicals11-Oct-2024
HOUSTON (ICIS)–Rates for shipping containers
from east Asia and China to the US continued to
fall after a lengthy strike was averted at US
Gulf and East Coast ports and as peak season
volumes have largely been pulled forward.
The International Longshoremen’s Association
(ILA) strike lasted just
three days, and market analysts expect backlogs
created by the work stoppage to be cleared up
in two to three weeks, or even less at the Port
of New York/New Jersey.
Some ports extended gate hours
to allow more time for containers to be
delivered or picked up.
Nathan Strang, the US Southwest director of
ocean freight for Flexport, said the company is
seeing relatively fluid terminal operations and
railroad operations.
Strang said all detentions and demurrage rules
from the Federal Maritime Commission (FMC)
remain in effect but noted that time frames for
detention and demurrage restarted on 7 October
after the strike ended.
CONTAINER RATES FALL
Global average rates for shipping containers
continued to fall, according to multiple
analysts.
Supply chain advisors Drewry has its World
Container Index (WCI) at $3,349/FEU (40-foot
equivalent unit), which is down by 4% and shown
in the following chart.
Drewry said Shanghai to Los Angeles container
rates fell by 5%, and Shanghai to New York
rates fell by 3%, as shown in the following
chart.
Following the tentative deal between the ILA
and the ports, Drewry expects rates ex-China to
continue to decrease marginally in the coming
weeks.
Online freight shipping marketplace and
platform provider Freightos said rates fell by
a larger degree, but its rates had been higher.
Judah Levine, head of research at Freightos,
said carriers are also planning to reduce
deployed capacity on the transatlantic trade
lane later in the month in the hope of
preventing rates from falling back to the
$1,600-1,800/FEU level they had maintained for
much of the year.
“With the strike over and peak season demand
largely behind us from a significant pull
forward of volumes in the last couple months,
transpacific container rates should continue to
ease on the seasonal lull in volumes between
peak season and Lunar New Year,” Levine said.
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.
LIQUID TANKER RATES
UNCHANGED
US chemical tanker freight rates held steady
again this week for most trade lanes, even
though vessel demand is growing for some
routes.
Most rates from the major chemical hubs remain
sideways as a good portion of the market were
attending the European Petrochemical
Association (EPCA) conference in Berlin.
The USG to Asia lane was also quiet following
holidays.
Although it is likely that increased exports
ex–USG will be seen going into Europe and Asia,
primarily as clean petroleum products (CPP)
tonnage continues to focus on alternative
cargoes in the petrochemical space, thereby
adding to spot availability, which is already
well supplied.
On the transatlantic front, the eastbound leg
is expected to warm up with cargoes being
quoted including styrene to ARA from several US
Gulf ports.
With additional reporting by Kevin
Callahan
Visit the ICIS Logistics – impact on
chemicals and energy topic
page
Speciality Chemicals11-Oct-2024
HOUSTON (ICIS)–Some ports in Florida have
resumed operations while millions in the US
state remain without power after Hurricane
Milton made landfall earlier in the week, south
of the fertilizer hub of Tampa.
A few ports in Florida have maintained Port
Condition Zulu, under which they are closed to
inbound and outbound vessels.
Others have reopened and have set Port
Condition IV, which is
a hurricane seasonal alert to which ports
return after a storm.
The following table summarizes the port
conditions in Florida.
Port
Status
Condition
Port of Pensacola
Open
Normal
Port Panama City
Open
Draft restrictions
Port St Joe
Open
Normal
Port Tampa Bay
Closed
Zulu
SeaPort Manatee
Closed
Zulu
PortMiami
Open
IV
Port Everglades
Open
IV
Port of Palm Beach
Open
IV
Fort Pierce
Open with Restrictions
IV with restrictions
Port Canaveral
Open
IV
Jaxport
Open
IV
Port of Fernandina
Closed
Zulu
Source: US Coast Guard
OUTAGESFlorida has more
than 2.2 million reported outages, according to
the website poweroutage.us. That is down by
more than 1 million versus
the immediate aftermath of the hurricane.
Prolonged outages can disrupt economic activity
and slow down demand for plastics and
chemicals.
CSX WARNS OF RAIL
DELAYSThe railroad company CSX
warned of delays while it works to clear
tracks, install generators and conduct repairs.
All routes north of Jacksonville, Florida are
open with no anticipated issues, it said. The
area south, from Callahan to the north end of
Anthony, is also clear.
Work continues in central Florida, and CSX is
addressing washouts on the Carter and Vitis
subdivisions.
The CFR line should be open later Friday night,
providing a potential route into Winter Haven.
CSX is making contingency plans for possible
issues with a gas pipe washout near the Miami
area.
IMPACT ON FERTILIZERS, PHOSPHATES,
CHEMSFor chemicals, there is
some epoxy resin, phenolic resin and
unsaturated polyester resin (UPR) production in
Lakeland and Kathleen, Florida.
Milton will make landfall far from Pensacola,
Florida, which has plants that make nylon and
thermoset resins.
Tampa is an
important hub for the US fertilizer
industry, hosting corporate offices,
trading, product storage, shipping and other
logistical operations.
Fertilizer producer Mosaic has its headquarters
in Tampa. The company has not issued any
statements regarding its corporate operations.
A source at the fertilizer company Yara said it
was shutting down its Tampa offices to comply
with the evacuation orders.
Near Tampa is Florida’s
phosphate mining operations in Bone
Valley, which covers parts of Hardee,
Hillsborough, Manatee and Polk counties.
In all, Florida has 27 phosphate mines, of
which nine are active, according
to the
Florida Department of Environmental
Protection.
Canadian fertilizer producer Nutrien has yet to
restart its White Springs phosphate operations
following Helene, an earlier hurricane that
made landfall farther north in Florida’s Big
Bend region.
On 30 September, Mosaic said its Riverview
operations were off line following water
intrusion from a storm surge caused by
Hurricane Helene.
Thumbnail Photo: Hurricane Milton. (By
Cira/Noaa/Planet Pix via ZUMA Press
Wire/Shutterstock)
Ethylene11-Oct-2024
LONDON (ICIS)–The risks for Germany’s chemical
industry keep rising, economists said during a
webinar hosted by chemical producers’ trade
group VCI, and noted:
Weak demand, domestically and abroad
Investments stall
Geopolitical uncertainty
Contrary to hopes at the start of the year,
Europe’s largest economy is likely to shrink
for a second straight year in 2024, the
government said this week in revising its
previous 0.3% GDP growth projection to a 0.2%
decline.
The economy shrank 0.3% in 2023 and has not
been able to generate strong growth since 2018.
Weak or negative GDP trends translate into
lower demand for chemicals.
So far this year, demand for chemicals from
nearly all domestic key customer industries,
except food and paper, has been weak, said VCI
economist Christiane Kellermann.
Year-on-year % changes in domestic
chemical sales, by major customer markets,
January-August 2024:
Construction: -3.9%
Plastics: -4.5%
Metal products: -7.4%
Autos: -5.8%
Food: +1.5%
Glass, ceramics: -7.8%
Paper: +0.9%
Printing products: -7.3%
Furniture: -7.3%
Machinery: -8.3%
Electrical equipment: -16.1%
Source: VCI
Many of the chemical industry’s customers in
manufacturing are curbing their production, and
in the important construction end market there
is no noticeable recovery.
Meanwhile, export sales of German chemicals
were weak in most regions, with the exception
of Asia, Kellermann said.
Year-on-year % changes in chemical
exports, by region, January-July:
EU: -2.5%
Non-EU Europe: -1.1%
Asia: +1.8%
North America: -3.6%
Latin America: -3.4%
Source: VCI
INVESTMENTSThe low
demand translates into low production rates and
low capacity utilization.
In fact, over the past two-and-half years
chemical producers have been running plants at
utilization levels that were below
profitability thresholds, Kellermann said.
As companies suffer low demand in Germany, with
little prospect of improvement, and cannot run
existing plants and equipment at profitable
levels, it does not make sense for them to
invest in new plants, she said.
In a recent VCI survey, 74% of chemical
companies said they were unlikely to invest in
expanding production in Germany, she noted.
Only 15% said they were likely to invest in
expanding production while 9% were undecided,
according to the survey.
Companies cited the country’s bureaucracy and
long project permitting processes, high energy
and labor costs, and high and complicated
corporate taxes as key obstacles to investing
in Germany.
Only 13% said that a lack of trained workers
deterred them from investing in the country.
With little or no new investment, “import
pressures” rise and the chemical industry’s
export capabilities will decline in coming
years, she said.
Germany’s chemical industry loses in
international competitiveness, in particular in
energy-intensive basic chemicals, she added.
GEOPOLITICAL RISKS
Michael Gromling, an economist from the German
Economic Institute in Cologne, who was also
presenting at the VCI webinar, estimated that
in order to return to a meaningful growth path
and achieve a recovery (“Aufschwung”),
Germany needed to generate annual average GDP
growth of 2.5% from 2025 through 2030.
This, however, was “not realistic”, given the
weakness across all industries and the
geopolitical and structural challenges
companies face, he said.
The country’s industries were export-dependent
and therefore sensitive to geopolitical
tensions, trade conflicts and protectionism, he
said.
Geopolitical tensions were holding back
investment decisions, and without a detente it
would be very difficult for Germany to achieve
its Aufschwung, he said.
An end to the Ukraine war and peace in the
Middle East would be a “game changer”, creating
an opportunity for reviving the global
investment cycle, he added.
However, rather than relaxing, tensions could
further sharpen after the 5 November US
presidential election, he said.
Gromling did not say which candidate – current
Vice President Kamala Harris or former
President Donald Trump – he sees as the greater
risk.
For the time being, VCI maintains its 2024
growth forecast for the country’s
chemical-pharmaceutical production unchanged at
3.5% (excluding pharma: +5.0%). If realized,
the increase would only partially offset last
year’s 7.9% production decline (excluding
pharma: -10.4%).
However, VCI may cut its 2024 sales forecast of
1.5% as exports were trending weaker than
expected, Kellermann indicated.
Focus article by Stefan
Baumgarten
Thumbnail image source: VCI
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