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Petrochemicals06-Dec-2024
MUMBAI (ICIS)–India’s central bank on Friday
maintained its benchmark interest rate at 6.5%
but cut its cash reserve ratio (CRR) by 50
basis points to 4%, in a bid to improve growth
and rein in high inflation.
Monetary policy stance kept at “neutral”
Year-to-March 2025 GDP growth forecast cut
to 6.6% from 7.2%
High food prices to keep consumer inflation
elevated in Oct-Dec 2024
In its monetary policy decision, the Reserve
Bank of India (RBI) retained its monetary
policy stance at “neutral”. It has maintained
the repo rate at 6.5% since February 2023.
CRR is the percentage of a bank’s total
deposits that it is required to maintain in
cash with the RBI as a reserve.
India is a giant emerging market in Asia and is
a major importer of petrochemicals.
The central bank’s hawkish outlook is due to
persistently high food inflation, which has yet
to stabilize, RBI governor Shaktikanta Das said
during his address to the media.
While the central bank remains optimistic about
India’s growth outlook, following a good
monsoon season and an anticipated revival of
capital expenditure, global factors could slow
down growth, Das said.
“Headwinds from geopolitical uncertainties,
volatility in international commodity prices,
and geo-economic fragmentation continue to pose
risks to the outlook,” RBI said in its official
statement.
The outlook is also “clouded by rising
tendencies of protectionism which have the
potential to undermine global growth and push
inflation higher”, it added.
RBI has lowered its GDP growth forecast for the
fiscal year ending March 2025 to 6.6%, from
7.2% previously, in view of weak fiscal Q2
performance.
India’s GDP for the July-September quarter
slowed to an almost two-year low of
5.4%, on sluggish growth and weak demand.
It was also significantly lower than the RBI’s
projection of a 7% growth for the quarter.
RBI GDP Forecasts
New – 6 December 2024
Old
October-December (Q3)
6.8%
7.4%
January-March (Q4)
7.2%
7.4%
Fiscal year ending March
2025
6.6%
7.2%
April-June (Q1 FY2025-26)
6.9%
7.3%
July-September (Q2)
7.3%
–
Meanwhile, inflation forecast for the current
fiscal year was raised to 4.8% from 4.5% on
continued high food inflation.
“Inflation increased sharply in September and
October 2024, led by an unanticipated increase
in food prices. Core inflation, though at
subdued levels, also registered a pickup in
October,” Das said.
In October, consumer inflation had risen to a
14-month high of
6.21% due to a spike in food prices.
The RBI expects food prices to keep inflation
rates elevated in the October-to- December
quarter, Das said.
RBI inflation forecasts
New – 6 December 2024
Old
October-December (Q3)
5.7%
4.8%
January-March (Q4)
4.5%
4.2%
Fiscal year ending March
2025
4.8%
4.5%
April-June (Q1 FY2025-26)
4.6%
4.3%
July-September (Q2)
4%
–
Focus article by Priya Jestin
Gas06-Dec-2024
Romanian MP calls on EU to work closely
with member states to cut back on red tape
Incoming Romanian government must address
bureaucracy, high taxation, introduce market
reform
Romania can establish itself as viable
regional alternative to Austrian gas hub
LONDON (ICIS)–The incoming European Commission
should simplify procedures to access funds for
energy projects and strengthen the dialogue
with member states particularly in Eastern
Europe amid growing popular discontent, a
Romanian parliamentarian told ICIS.
Speaking to ICIS, Cristina Pruna,
vice-president of the industries and services
committee in the Romanian parliament said the
Romanian energy sector played a major role not
only in the EU but also in supporting
neighbouring countries such as Moldova and
Ukraine.
She warned previous delays in allowing Romania
to join key agreements such as the EU’s
Schengen area, which abolishes border controls,
or bureaucratic procedures complicating efforts
to tap funds had created major frustrations,
which may be partially responsible for gains
made by far-right parties in recent polls.
REFORM
She conceded the incoming Romanian government,
which will be formed following parliamentary
elections on December 1, will also have to
address multiple internal challenges.
These include encouraging local and foreign
investments in the gas and renewable sectors,
cutting back on red tape, reducing taxes and
preparing the market for deregulation.
She said her party, Uniunea Salvati Romania
(USR), which is currently in talks to form the
incoming coalition government, had proposed to
establish a one-stop-shop at the regulator ANRE
to help investors navigate the bureaucratic
process to access EU funds for renewable
projects.
Furthermore, she said Romania should establish
power and gas markets where prices are set by
demand and supply and insisted there should be
a predictable legal framework in place to
support vulnerable consumers as well as
industrial consumers.
One of her party’s proposals is to introduce an
automatic mechanism to guarantee tax credits
for industrial consumers, which would allow
them to deduct from taxes part of rising energy
costs.
Market participants have complained caps on
electricity and gas prices introduced following
the 2022 energy crisis had led to burdensome
taxation and market distortions.
Pruna agreed caps should be lifted but insisted
consumers should be prepared for market
deregulation expected in 2025.
TAXATION
Although the ruling Partidul Social Democrat
(PSD) won the latest polls with a narrow lead,
their policies to date have led to a
high taxation regime that has
throttled investments and led to nosediving
liquidity on Romania’s forward electricity and
gas markets.
As a result of policies spearheaded by PSD and
the liberal party, PNL, in the outgoing
coalition government, up to 87% of the money
made from gas/oil sales is paid in royalties,
windfall taxes and contributions to various
funds.
Their policies have also led to regulatory
unpredictability, deterring large-scale
investments.
Meanwhile, there are fears that the three
far-right populist parties which won seats in
parliament – Alliance for the Union of
Romanians (AUR), Partidul Oamenilor Tineri
(POT) and S.O.S. Romania – could push for
policies that would exacerbate an already
visible nationalist streak which has
underpinned Romania’s energy regulations in
recent years.
AUR calls into question the privatisation and
sale of Romania’s oil and gas assets to OMV
Petrom in the early 2000s.
Meanwhile, the front-running presidential
candidate Calin Georgescu who will face the USR
candidate Elena Lasconi in a run-off on
December 8, claimed Romanians are ‘suffocated
by taxes’ but neither he nor his newly
established party POT has proposed concrete
measures to scrap them.
ENERGY MIX
Although USR advocates scaled up nuclear and
solar as well as onshore and offshore wind
production, Pruna is keen to point out that
Romania should capitalise on its gas reserves.
“Offshore Black Sea gas production is due to
come onstream in 2027 during the mandate of the
incoming 2025-2028 government. We need to
ensure that Romania establishes itself as a
viable regional market and an alternative to
the Austrian gas hub,” she said.
She also noted the importance of working
closely with Moldova and Ukraine to increase
border capacity for electricity and gas flows.
Ammonia05-Dec-2024
HOUSTON (ICIS)–Canadian farmers reported
growing more wheat, oats, soybeans, dry peas
and lentils, but less canola, corn and barley
in 2024, according to the production of
principle fields crops report from Statistics
Canada.
The government agency said that overall yields
were higher this year compared with 2023
but there were some areas where farmers
continued to face issues related to dry
conditions.
This was true particularly in western Canada,
which the report states had a promising start
to the 2024 growing season.
It noted that much of the prairies received
timely precipitation during seeding, although
cool conditions delayed crop development in
some areas.
Yet a lack of rain as the summer progressed,
coupled with hot weather, resulted in lower
yields in some areas compared with 2023.
There were good field conditions throughout the
fall months which allowed farmers to
complete harvest ahead of schedule, with most
crops out of the fields before data collection
for the November field crop survey.
The agency said there were locations that did
receive above-average rainfall, specifically in
Ontario and western Quebec, which when combined
with increased summer heat benefitted growers
with higher yields.
Total wheat production rose 6.1%
to 35 million tonnes in 2024, with
Saskatchewan wheat production rising 12.2%
to 16.5 million tonnes in 2024.
In Alberta, higher yields resulted in
a 6.4% increase in wheat production
to 9.9 million tonnes, while Manitoba
was up 0.7% to 5.5 million
tonnes.
Canola production decreased 7.0% nationally to
17.8 million tonnes in 2024, with this drop
because of lower yields and harvested area,
with the declined output attributed to the hot
and dry conditions in parts of western Canada
in July and August.
Total corn for grain production fell 0.5% to
15.3 million tonnes in 2024 with harvested area
down by 4.6% to 3.6 million acres, offsetting a
4.3% increase in yields to 168.7 bushels/acre.
Ontario farmers, who grow almost two-thirds of
Canada’s corn were down 3.5% to 9.6 million
tonnes, while Quebec rose 7.9% to 3.6 million
tonnes in 2024. Manitoba farmers had 1.8
million tonnes in 2024 with lower harvested
area, but yields were up 8.6% to 139.4
bushels/acre.
Soybean production increased 8.4% nationally to
7.6 million tonnes in 2024 with the increase
due to higher yields, which were up by 7.0% to
stand at 49.1 bushels/acre, while the harvested
area for the crop increased 1.3% to 5.7 million
acres.
In Ontario soybean production climbed 7.9% year
on year to 4.4 million tonnes in 2024, while in
Manitoba the harvested area fell 10.9% to 1.4
million acres in 2024. Production in Quebec
rose 9.3% to 1.4 million tonnes in 2024, on
higher yields and harvested area.
Barley production was decreased by 8.6% to 8.1
million tonnes in 2024 because of lower
harvested area, which the report said was
partially offset by a 3.3% increase in yields
to 63.2 bushels/acre nationally.
Total oat production increased by 27.0%
to 3.4 million tonnes as both
harvested area and yields increased
in 2024.
The improvements in crop output reflects the
sentiment towards fertilizer consumption within
in Canada this year, with nitrogen and potash
volumes having robust periods of consumption
during the spring.
There were additional stretches of demand with
significant refill participant and a good
post-harvest run of ammonia also taking place
before the recent arrival of winter conditions.
Sentiment is that spring demand could continue
at a strong pace if nutrient values do not
escalate over the coming weeks and if future
crop prices either stay steady or can gain some
slightly increase before sowings start again.
Global News + ICIS Chemical Business (ICB)
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Speciality Chemicals05-Dec-2024
HOUSTON (ICIS)–The 15 January deadline for
finalizing a new labor agreement between
unionized dock workers at US Gulf and East
Coast ports and the negotiating entity for the
ports is nearing with no clear progress on a
key remaining issue – automation.
This week, a union vice president criticized
semi-automated rail-mounted gantry cranes
(RMGs) for eliminating jobs and posing national
security risks in a post on the International
Longshoremen’s Association (ILA) website.
In response, the United States Maritime
Alliance (USMX), the group representing the
ports, defended automation as essential for
port modernization and addressing land
constraints.
The ILA paused a three-day
strike on 3 October after agreeing on a wage
increase, with a commitment to negotiate the
remaining issues by 15 January.
Top among the remaining issues is the
automation or semi-automation at the ports,
which the ILA is adamantly against because they
think it will take jobs typically done by
humans and which the USMX says is needed for
the US to remain competitive.
ILA Vice President Dennis A Daggett said in his
post on the union’s website that the ILA is not
against progress, innovation, or modernization
– “but we cannot support technology that
jeopardizes jobs, threatens national security,
and puts the future of the workforce at risk”.
Daggett explained that in the early-2000s,
employers introduced semi-automated RMGs at a
greenfield terminal on the East Coast, saying
the move would create thousands of jobs.
“What seemed like a win for one port turned out
to be the project that is becoming the model
for automation that could potentially chip away
at many jobs at almost every other terminal
along the East and Gulf coasts,” Daggett said.
Daggett said 95% of work performed by RMGs is
fully automated.
“From the moment a container is dropped off by
a shuttle carrier, the RMG operates on its own
– lifting, stacking, and moving containers,
including gantry and hoisting, without any
human intervention,” Daggett said. “This
includes the auto-stacking of containers in the
container stack, which is also fully automated.
Only in the last six feet of the container’s
journey on the landside, when it is placed on a
truck chassis, does an operator step in. But
how long until employers automate those final
six feet as well?”
The USMX, in a response, said modernization and
investment in new technology are core
priorities required to successfully bargain a
new master contract with the ILA – they are
essential to building a sustainable and greener
future for the US maritime industry.
“Port operations must evolve, and embracing
modern technology is critical to this
evolution,” the USMX said.
“It means improving performance to move more
cargo more efficiently through existing
facilities – advancements that are crucial for
US workers, consumers, and companies,” the USMX
said. “Due to the lack of available new land in
most ports, the only way for US East and Gulf
Coast ports to handle more volume is to densify
terminals – enabling the movement of more cargo
through their existing footprints. It has been
proven this can be accomplished while
delivering benefits to both USMX members and to
the ILA.”
The USMX stressed that it is not, nor has it
ever been, seeking to eliminate jobs, but to
simply implement and maintain the use of
equipment and technology already allowed under
the current contract agreements and already
widely in use, including at some USMX ports.
As an example, the USMX pointed to a terminal
where modern crane technology was implemented
more than a decade ago, which was previously
limited to a 775,000-container capacity using
traditional equipment.
That same terminal nearly doubled its volume
after incorporating the use of modern
rail-mounted gantry cranes into its daily
operations.
“The added capacity delivered an equal increase
in hours worked, leading to more union jobs, as
the terminal went from employing approximately
600 workers a day to nearly 1,200,” the USMX
said. “Moving more containers through the
existing terminal footprints also means higher
wages from the increased cargo, bringing in
more money for volume/tonnage bonuses.”
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.
No negotiations are currently underway with
just about five weeks left before the deadline.
Focus article by Adam Yanelli
Petrochemicals05-Dec-2024
PARIS (ICIS)–Global specialty chemicals
producer Arkema aims to supercharge growth in
key targeted markets by leveraging proprietary
chemistries to develop new products with clear
sustainability and performance benefits.
From France-based Arkema’s spinoff from energy
giant Total (now TotalEnergies) in 2006, the
company has undergone a major transformation
from a diversified chemical company with a
mixed bag of commodity, intermediates and
specialty businesses, to nearly a pure play
specialty and materials business today.
“We had to revisit the strategy of the company
in-depth, and we had a strong belief at that
time that there was an exponential growth
[opportunity] in innovative and high
performance materials,” said Thierry Le Henaff,
chairman and CEO of Arkema, in a
video interview with ICIS.
“So our strategy was to focus on specialty
materials around three segments – adhesives,
coatings solutions, and also high performance
additives and polymers in order to make Arkema
a pure specialty player,” he added.
Le Henaff is the 2024 ICIS CEO of the Year,
having been selected in a vote among his peers
– the CEOs and senior executives in the ICIS
Top 40 Power Players.
M&A STRATEGY AND LATEST
DEALSThe latest move in the
company’s transformation is the acquisition of
Dow’s flexible packaging laminating adhesives
business for $150 million which just closed on
2 December.
The deal adds about $250 million in sales to
Arkema’s Bostik adhesives business, and Le
Henaff calls it a “step change” for Bostik in
the flexible packaging adhesives market, giving
it a unique opportunity to be a key partner for
customers across the packaging industry.
Arkema will spend around $50 million in
implementation costs or capex related to the
acquisition and is targeting about $30 million
in annual cost and development synergies after
five years.
“We are going to continue to invest in… cost
optimization, but at the same time continue to
change the portfolio, which means to invest in
M&A,” said Le Henaff.
The Dow deal comes on top of major acquisitions
such as a 54% stake in South Korea-based PI
Advanced Materials (polyimide films for mobile
devices and electric vehicles) in December 2023
and US-based Ashland’s performance adhesives
business (pressure-sensitive adhesives for auto
and buildings) in February 2022.
While the company will now focus more on
organic growth, bolt-on acquisitions will be an
important part of Arkema’s strategy in the
coming years, he noted.
One such smaller bolt-on deal was the April
2024 acquisition of a 78% stake in
Austria-based Proionic, a start-up company for
the development of ionic liquids, a key
component for the next generation of EV
batteries.
HYPER GROWTH
SUBMARKETSSpeaking of organic
growth, the Arkema CEO has an ambitious goal of
growing sales in certain parts of its specialty
businesses at a rate triple that of its overall
business through 2028.
These high growth areas are green energy and
electric mobility; advanced electronics;
efficient buildings and homes; sustainable
lifestyle; and water filtration, medical
devices and crop nutrition.
“It is really with this combination of our
technologies [in] these submarkets… where we
want to multiply by three, the average growth
of Arkema. This means that in this market, we
could deliver 12% organic growth while for the
average of Arkema it would be 4%,” said Le
Henaff.
Arkema aims to grow these businesses from
around 15% of sales in 2023, to 25% of total
sales, which are projected to be around €12
billion, by 2028.
These high growth areas with three times higher
sales than the group average will account for
50% of the company’s R&D budget.
“We have about 15 technologies, superior
technologies, where we can really differentiate
ourselves. Our strategy is really to take
advantage of this sustainability trend,” said
Le Henaff.
“In fact, the answer to climate change is
through the solutions we can develop for
customers. This is really the core of our
strategy,” he added.
Within electric mobility, in addition to the
acquisition of a majority stake in Proionic,
Arkema in January 2024 took a stake in Tiamat,
a pioneer in sodium-ion battery technology – a
potential alternative to lithium-ion batteries.
RENEWABLE RAW MATERIALS AND
DECARBONIZATIONArkema is also
undertaking organic growth projects in these
hyper growth submarkets.
One key project is in bio-based polyamide 11,
used in bicycle helmets, consumer goods, wire
and cable and medical equipment.
“We are adding more and more renewable raw
materials in the product range we are offering
to our customers. One good example and very
emblematic [of our strategy] is this polyamide
11 made from castor oil, which is a fully
sustainable, renewable, bio-sourced, high
performance polymer,” said Le Henaff.
“We are very proud of it, and we have just
invested in a plant in Singapore to accelerate
the growth of this polymer,” he added.
Its Rilsan bio-based PA 11 has an 80% lower
carbon footprint versus traditional polyamide
resins using fossil-based raw materials and
conventional energy sources, according to the
company.
Arkema also recently launched more sustainable
adhesive solutions, including its Kizen LIME
range of packaging adhesives made with a
minimum of 80% renewable ingredients, and
Bostik Fast Glue Ultra+ for do-it-yourself
(DIY) applications with 60% bio-based
materials.
Along with helping its customers decarbonize,
the company is also decarbonizing its own
operations, targeting a 48.5% reduction in
Scope 1 and 2 emissions, and a 54% reduction in
Scope 3 emissions by 2030 versus a 2019 base.
One major project is to decarbonize its
acrylics production in Carling, France by
installing new purification technology. The
€130 million project should result in a 20%
reduction in CO2 emissions at the site by 2026.
GLOBAL FOOTPRINTAlong
with its transformation into pure play
specialties, Arkema has also diversified its
global footprint, with more exposure in North
America than Europe.
Today Arkema is a global player with close to
40% of sales in North America, 25% in Asia and
around a third in Europe, versus Europe at
about 60% of sales when it was spun off in
2006, the CEO pointed out.
“I still believe in Europe, but it’s clear that
we have a gap in competitiveness and also in
demand. The pace of demand is slower for Europe
than it is for the rest of the world,” said Le
Henaff.
“It’s very important that our governments and
the European Commission understand that the
cost of doing business in Europe is too high
compared to what it is in the rest of the world
because of legislation, because of the cost of
energy, because of the cost of raw materials,”
he added.
There is much work to do on this front to get
Europe back to competitiveness and growth,
especially for chemicals, he said.
DEMONSTRATING
RESILIENCEArkema’s geographic
diversification and specialties focus has made
it more resilient to challenging macroeconomic
markets.
In Q3, sales rose 2.9% year on year to €2.39
billion and adjusted earnings before interest,
tax, depreciation and amortization (EBITDA)
increased 5.4% to €407 million, the latter
driven by 9.0% growth in specialty materials,
offsetting a 7.3% decline in intermediates
segment. Its overall EBITDA margin expanded to
17.0% versus 16.6% a year ago.
A strong focus on efficiency and a healthy
balance sheet has served it well.
“Arkema over 20 years has doubled in size and
we have a set number of headcount. This means
that competitiveness and productivity is very
important for Arkema, even if we are less vocal
than other companies on this topic,” said Le
Henaff.
On the balance sheet side, net debt of around
€3.11 billion is “tightly controlled” at a
conservative two times last 12 months EBITDA.
TRANSFORMATION NEVER
OVERKey to success for Arkema is
to continuously evolve, be nimble and be open
to growth opportunities.
“It’s never over. The status quo in this world
is not possible, because the world is changing
all the time, because of demography, because of
geopolitics, for plenty of reasons, so we have
to move forward,” said Le Henaff.
“There are plenty of opportunities, but the
opportunities of today won’t be the
opportunities of tomorrow. So we really need to
have a company which is structured to be able
to catch these new opportunities which arise
all the time,” he added.
Meanwhile, on the macro-outlook for 2025, he is
cautiously optimistic.
“We are all cautious because we thought 2023
would be the year of the rebound and also 2024,
so we have to be cautious for 2025. But I’m
cautiously optimistic,” said Le Henaff.
“I still think that we should have some kind of
rebound for 2025. We’ll see if I’m right or
not, but in the meantime, I would say the most
important thing is we need to continue
[evolving]. We are very glad to be in a unique
position because at the end of 2024, we will
have nearly fully financed billions of euros of
projects, including external growth and organic
growth,” he added.
PEOPLE AND CULTUREKey to
any ongoing transformation is of course the
people involved. Arkema deems it critical to
keep its people engaged with the mission.
“I think, in a world which is quite volatile,
quite changing, it’s very important to have
fixed points,” said Le Henaff.
First, the long-term strategy and vision has to
be attractive. But equally as important is
having a corporate culture with clear and
simple values. These five values for Arkema
are: Solidarity, Performance, Simplicity,
Empowerment and Inclusion.
It is the culture that amplifies the inherent
strengths in an organization, including
technology, and smooths the path for continued
successful transformation in an uncertain
world, he said.
Interview article by Joseph
Chang
Watch the exclusive Q&A video
interview with Arkema CEO Thierry Le Henaff on
the
2024 ICIS CEO of the Year landing
page.
Polyethylene Terephthalate05-Dec-2024
HOUSTON (ICIS)–Announced this week,
beverage giant The Coca-Cola Company has
updated many of their 2030 sustainability
goals, in some cases delaying and minimizing
targets, in other cases removing tangible goals
all together.
All goals have now been extended to a 2035
timeline.
In support of this move, the company notes that
they have assessed progress and identified
challenges to achieving their original 2030
goals. This comes as companies grapple with the
premium often associated with sought after
food-grade, clear recycled resins, especially
amid a weaker global macroeconomic environment.
“These challenges are complex and require us to
drive more effective and efficient resource
allocation and work collaboratively with
partners to deliver lasting positive impact,”
noted Bea Perez, Executive Vice President and
Global Chief Communications, Sustainability
& Strategic Partnerships Officer at The
Coca‑Cola Company.
This comes as the company has faced rocky unit
case sales volumes in the North American market
over the last several quarters. Most recently,
the company posted flat quarter on quarter
results, an improvement over negative volumes
the prior quarter.
In relation to packaging, the original goal of
50% recycled content by 2030 has been
downgraded to a target of 35-40% recycled
content in primary packaging. Specifically,
they aim to reach 30-35% recycled content in
their plastic packaging, which makes up nearly
50% of their packaging mix by number of units.
In
2023, the company noted 27% of their
primary packaging material by weight came from
recycled content, 17% of which was recycled
plastic.
This now leaves a 10-year runway to achieve an
additional increase of just 8% to reach their
new recycled content target and 13% to reach
their recycled plastic target.
Additionally, the company has reduced their
beverage container collection target from 100%
by 2030 to 70-75% by 2035. As of 2023, the
company noted 62% of the equivalent bottles and
cans introduced into the market were collected
for recycling or reuse.
When looking at packaging design, the company
noted they had converted more than 95% of their
packaging to recyclable formats, nearing the
100% by 2025 goal.
As many other converters and brand companies
have also reckoned with, it can be very
difficult to convert the final items, ones
which typically require a complete re-design or
additional cost to comply with recycling
requirements.
The company has now removed a virgin resin
reduction goal, amid a poor result in 2023,
where virgin plastic use actually increased due
to business related growth.
The prior reuse and refill goal was also
removed.
Coca-Cola now joins several other brand
companies, such as Unilever, PepsiCo who have
delayed or reduced their original ambitious
goals amid bottom line pressure.
It is uncertain how brand companies will
demonstrate their commitment to packaging
circularity sustainability in the long term,
especially as leaders around the globe continue
negotiating towards a global treaty on plastic
pollution.
While voluntary goals have boosted demand for
recycled plastics markets, many recyclers and
suppliers note that actual procurement efforts
have been inconsistent. Many believe regulatory
requirements are the only solution to securing
long term demand for these materials.
Crude Oil05-Dec-2024
SINGAPORE (ICIS)–South Korea is preparing to
activate a market stabilization fund worth won
(W) 40 trillion ($28 billion) following the
country’s brief dalliance with martial law,
with its slowing economy facing the prospect of
increased US tariffs in 2025.
KOSPI index falls
for second day
Prospective US tariffs to hurt exports
Q3 GDP growth slows to 1.5% on year, up
0.1% on quarter
At 06:30 GMT, the KOSPI composite index fell by
0.90% to close at 2,441.85, after shedding 1.4%
in the previous session.
The Korean won, meanwhile, was trading at
W1,415 to the US dollar, off the lows of more
than W1,440 on 3 December.
While the fallout of the political crisis on
the financial markets appears to be contained,
South Korea may be bracing for further
volatility next year.
“As the domestic situation coincides with the
external uncertainty caused by the inauguration
of the new US administration, there is a
possibility that volatility will increase, so
the relevant agencies will closely monitor the
market situation together and take all possible
measures,” the Ministry of Economy and Finance
said on Thursday.
A task force has been created to check on the
country’s overall economic health.
Much of the concern stems from threats of US
tariffs on all imported goods, which would
affect Asia’s export-oriented economies
including South Korea.
Weak external demand caused the country’s
overall export growth in November to decelerate
to 1.4% year on year.
In Q3, South Korea’s annualized GDP growth
slowed to 1.5% year on year due to weakness in
both domestic demand and exports, official data
showed on Thursday.
This economic weakness prompted the Bank of
Korea (BoK) to cut its policy interest rates by
25 basis points twice in two months.
Full-year 2024 and 2025 growth forecasts were
trimmed to 2.2% and 1.9% respectively.
On a quarter-on-quarter basis, the fourth
largest economy in Asia barely expanded in Q3,
but the 0.1% growth represents a reversal of
the 0.2% contraction in April-June, according
to the central bank.
On the supply side, manufacturing increased by
0.2% on quarter mainly due to increases in
transportation equipment and machinery and
equipment.
Construction fell by 1.4% and services expanded
by 0.2% on a quarter-on-quarter basis.
Exports decreased by 0.2% on quarter as
shipments of motor vehicles and chemical
products dropped. Imports, on the other hand,
rose by 1.6% due to increased demand for
machinery and equipment.
The cloudy political
climate in the country is not expected to
affect South Korea’s sovereign ratings and
growth prospects, S Korean central bank
governor Rhee Chang-yong was quoted by local
news agency Yonhap as saying in a press
briefing.
“The martial law declaration was purely out of
political reasons. We can separate such
political events from economic dynamics,” Rhee
said.
He noted that the Korean won, which “weakened
due to the negative news” is forecast to
“gradually rise if there are no new shocks”.
The won tumbled to a near two-year low of
W1,444 against the US dollar on 3 December, but
eased after martial law was lifted some hours
later.
Impeachment motions
lodged at the National Assembly against South
Korean President Yoon Suk-yeol are up for
voting on 7 December.
“It is hard to forecast how things will unfold
regarding the impeachment process, which adds
uncertainties to the market.
“But I also believe that the matter is not
likely to give a shock to the market if history
serves as any guide,” the central bank chief
said, as reported by Yonhap.
In a separate development, unionized workers of
national railway operator Korea Railroad Corp
(KORAIL) launched a strike from Thursday after
failing to reach a wage agreement, according to
media reports.
Focus article by Pearl
Bantillo
Additional reporting by Fanny Zhang
Thumbnail image: Members of Korean
Confederation of Trade Unions (KCTU) and civic
groups hold placards and lighted candles during
a demonstration calling for the dismissal and
impeachment of South Korean president in Seoul,
South Korea, 4 December 2024. (JEON
HEON-KYUN/EPA-EFE/Shutterstock)
Polypropylene05-Dec-2024
SINGAPORE (ICIS)–Indonesia has initiated an
antidumping investigation on imported
polypropylene (PP) homopolymer products,
according to a government document obtained by
ICIS on Thursday.
The products are under HS code 3902.10.40,
based on the document dated 4 December from the
Indonesian Anti-Dumping Committee (KADI).
The investigation was requested by PT Chandra
Asri Pacific and targeted at exporters from
Saudi Arabia, the Philippines, South Korea,
Malaysia, China, Singapore, Thailand and
Vietnam, according to the document.
Initial evidence suggests incidents of dumping
by these exporters, resulting in losses
suffered by players in the domestic industry in
Indonesia which are producing similar products,
KADI said.
A questionnaire will be sent to those involved
and interested parties can submit feedback or
request a public hearing no later than 17
December, two weeks from the date of the
notice.
(Adds paragraphs 3-4)
Polypropylene05-Dec-2024
SINGAPORE (ICIS)–Indonesia has initiated an
antidumping investigation on imported
polypropylene (PP) homopolymer products,
according to a government document obtained by
ICIS on Thursday.
The products are under HS code 3902.10.40,
based on the document dated 4 December from the
Indonesian Anti-Dumping Committee (KADI)
A questionnaire will be sent to those involved
and interested parties can submit feedback or
request a public hearing no later than 17
December, two weeks from the date of the
notice.
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