SAO PAULO (ICIS)–Hurricane Beryl is expected to post a “slow re-intensification” as it heads towards the north and could potentially hit Texas’ industrial hub of Corpus Christi by Monday. On 4 July, the US National Hurricane Center had said Beryl had weakened from a category 5 hurricane to a category 3 and was expected to become a storm thereafter. However, on Friday, as the Hurricane brought havoc to Yucatan, the NHC said it could strengthen again once it hits sea waters, making it stronger as it heads to make another landfall in Texas. “Beryl is expected to emerge over the southwestern Gulf of Mexico tonight and then move northwestward toward northeastern Mexico and southern Texas by the end of the weekend,” said the NHC on Friday morning. “Maximum sustained winds have decreased to near 85 mph (140 km/h) with higher gusts. Continued rapid weakening is expected as Beryl moves farther inland and crosses the Yucatan Peninsula today, but slow re-intensification is expected once Beryl moves back over the Gulf of Mexico.” Moreover, the Houston area – an eight-million-strong metropolitan area – could also now be subject to a significant impact, although analysts at Space City Weather said on Friday the impact “will be mostly manageable locally”. PETROCHEMICALS, ENERGYWhile the Altamira petrochemicals hub in the Mexican state of Tamaulipas was spare from the worse, industrial assets in Texas may not have the same luck. The current pathway projected by the NHC implies that Beryl would make landfall in Texas right in the Corpus Christi area, where major refining and petrochemical assets are located. In addition to being a refining and petrochemical hub, Corpus Christi is a major oil-exporting port and hosts a terminal that exports liquefied natural gas (LNG). If Beryl finally disrupts US LNG exports, that could have a knock-on effect on petrochemical prices by shutting down one of the eight LNG export terminals in the country. If the disruption lasted long enough, prices for natural gas would fall. Lower gas prices would drag down those for ethane, the main feedstock that US crackers use to produce ethylene. Petrochemical producers could benefit from lower feedstock costs. Meanwhile, as Beryl strengthens again, energy companies in Texas may choose to shut their plants as a precaution, as well as oil and gas wells in the Gulf of Mexico. Major US oil and liquefied natural gas (LNG) ports could also be touched by Beryl now, which could potentially cause major disruption in supplies. THE WEEKEND IS KEYSpace City Weather said that where Beryl ultimately makes landfall will depend on how far the high-pressure system is over the southern US retreats. The landfall location is “complicated by the contour of the South Texas coastline, which is very nearly north-south relative” to the Gulf of Mexico. “Regarding Houston, I would love to be able to tell you with certainty that Beryl will make landfall near or south of Corpus Christi. I truly think that will be the case. But as Beryl’s track has moved significantly in the last 24 hours that is not something I can guarantee you,” concluded analyst Eric Berger. Source: US National Hurricane Center

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Rises on the low end of colourless flake narrows UK, eastern Europe ranges Colourless, blue bale prices rise in Italian monthly auctions Increased bale supply, tighter PET, cheaper R-PET imports

SINGAPORE (ICIS)–Energy major Shell on Friday said that it expects to book $2 billion in post-tax impairments following the sale of its Singapore assets and the suspension of construction at its biofuels plant in the Netherlands. The sale of the company’s Singapore Energy and Chemicals Park announced in May will result in a non-cash, post-tax impairment of $600 million to $800 million when it publishes its second-quarter results on 1 August, the company said in a statement. Shell reached an agreement to sell the assets on Singapore’s Pulau Bukom and Jurong Island to CAPGC, a joint venture between Indonesia’s Chandra Asri Capital and global commodities trader Glencore. The sale is expected to be finalized by the end of 2024. Meanwhile, the temporarily paused on-site construction work at its 820,000 tonne/year biofuels facility at the Shell Energy and Chemicals Park Rotterdam will result in an impairment of between $600 million and $1 billion. The facility is designed to produce sustainable aviation fuel (SAF) and renewable diesel made from waste. Separately, the company said that it expects adjusted earnings at its chemicals unit “to be close to break-even” in the second quarter after posting negative adjusted earnings of $113 million in the first quarter. The company expects an indicative chemicals margin of $155/tonne for the second quarter, up from $150/tonne in the first quarter and $153/tonne in the same period of last year. Chemicals utilization for the second quarter is expected to be at 78% to 82%, up from 73% in the first three months of 2024. Thumbnail photo source: Shell

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: China’s polypropylene (PP) exports in 2024, based on the January-May trends, could reach 2.6m tonnes. That would be double the level of 2023. And as exports surge, China’s self-sufficiency in PP looks set to see a similar dramatic increase. As recently as 2019, China’s PP net imports (imports minus exports) totalled 4.8m tonnes. If the January-May 2024 again continued, we would see full-year net imports of just 900,000 tonnes. Don’t say I didn’t warn you. In September 2021, the blog started to flag up the declines in Chinese PP demand growth combined with the surge in local capacity that created the very real prospect of China becoming a net exporter. And don’t assume that if China’s exports won’t remain in lower value homopolymer grades. China is said to be tripling its number of grades as it broadens its licensing of technologies. But in this ever-more muddle world, now that the Petrochemicals Supercycle is over, what is described above is just one scenario. In the short term, rising container freight rates might limit Chinese exports over the next few months. Or at the very least, we could see China’s exports focused more on southeast Asia because of higher freight rates to other destinations such as south Asia, South America and Africa. Another feature of a PP world turned upside down is that since 2020, China’s PP exports have been sent to a far wider range of destinations. We must also consider the impact of rising protectionism on China’s exports both in the short -and long-term. Confused? You should be, as this is the only sensible response. How do we see through the muddle? What recent history teaches us is that to understand petrochemicals markets, you must follow debts, demographics and geopolitics. Equally important, now that the Petrochemical Supercycle is over, are the effects of sustainability and climate change on demand and trade flows. The old ways of looking at markets no longer work. In the absence of a 100% accurate crystal ball, and with all these variables in play, the only sensible approach is broader and deeper scenario planning. 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.

SAO PAULO (ICIS)–The UK’s public broadcaster BBC was predicting a landslide victory for the center-left Labour Party after polling stations closed at 22.00 local time in London. According to the BBC exit poll, Labour would have won around 410 members of parliament (MPs) in the 650-strong House of Commons, with its leader Keir Starmer set to be the UK’s next Prime Minister. Incumbent Prime Minister Rishi Sunak’s Conservative party lost the overall majority won in 2019, suffering a severe defeat after losing more than 200 MPs. If the BBC exit poll is confirmed, the new House of Commons would be a more plural parliament, with the centrist Liberal-Democrats recovering much ground and the far-left Green Party and the far-right Reform party having achieved some meaningful representation. Earlier in 2024, the UK’s chemicals trade group the CIA said the upcoming cabinet must do more to encourage investment in manufacturing value chains, arguing the country is losing out in the battle to attract investment against competitors such as the EU, the US and China. 14 YEARS LATERLabour last occupied office in 2010 under the premiership of Gordon Brown, who succeeded Tony Blair in 2007. From 2010 on, Conservative leaders David Cameron, Theresa May, Boris Johnson, Liz Truss and Rishi Sunak have been the residents of Number 10 Downing Street, the official residence of the Prime Minister in central London. Behind them, a convulse decade-and-a-half in UK politics when voters decided by a small margin to withdraw from the EU in 2016, a process which was not concluded until 2021. From 2020 on, pandemic-related mismanagement and the energy crisis have kept the governing party trailing in opinion polls. On Thursday’s election, several ministers and key Conservatives figures would have lost their seat in parliament, according to the BBC’s exit poll. UK House of Commons Projections 2024 – BBC Election 2019 Change Conservative Party 131 365 -234 Labour Party 410 203 +207 Scottish National Party 10 48 -38 Liberal-Democrats 61 11 +50 Others 38 23 +15

SAO PAULO (ICISI)–Fears that Hurricane Beryl could cause widespread disruption to petrochemicals production in the Altamira hub, in the Mexican state of Tamaulipas, have now subsided as the hurricane weakens on its path through the Caribbean. Beryl was a powerful Category 5 hurricane until a few hours ago but has quickly weakened to a Category 3 as it heads towards the Mexican peninsula of Yucatan. After that, it is expected to weaken further and reach Tamaulipas and the US state of Texas a storm, much less destructive and not a cause of concern for industrial assets in those regions. A spokesperson for Alpek, one of Mexico’s main chemicals producers, said Beryl is now expected to only cause manageable rainfall in Altamira; that rainfall will be very much welcome after the area suffered a severe drought for months. “At the moment, the prediction is that it will only rain in Altamira [when Beryl passes through] and we do not expect it to have an impact in our operations,” said a spokesperson for Alpek. The petrochemicals hub in Altamira also hosts companies such Orbia, Dynasol, Cabot, or Chemours, among many others. None of the producers mentioned had responded to a request for comment at the time of writing. FROM DROUGHT TO RAINY SEASONAltamira’s petrochemicals players had been struggling with water restrictions for industrial players since May, when a severe drought in Tamaulipas prompted the authorities to restrict water supplies. The situation caused widespread disruption to chemicals production; in mid-June, it started improving as water supplies to households, first, and to industrial players later were re-established. The fact that Beryl is expected to cause only rainfall, without risk of flooding, will also be welcome. In an interview with ICIS in mid-June, an expert from supply chain consultancy Everstreams said that, while much awaited, rainfall in the form of storms or hurricanes could cause as much havoc as the drought had caused. “With flooding, there is potential for things like landslides and run-offs, which can block roads and highways, So, companies are hoping that it will be some kind of happy middle ground, where the rain is not too extreme as to present added challenges and issues,” said Everstreams’ Jena Santoro. Earlier on Thursday, the US’ National Hurricane Center (NHC) said Beryl should hit northern Mexico and southern US as a storm, which would spare industrial assets in those regions – including several petrochemicals hubs as well as refineries – from a big hit to operations. BUSY HURRICANE SEASONMeteorologists have warned that this year’s hurricane season could be the most active ever, with 17-25 named storms. Out of those, between eight and 13 are expected to be hurricanes; between four and seven should be major hurricanes. Major hurricanes are Category 3-5 storms with wind speeds of at least 111 miles/hour. Beryl’s unprecedented early development into a Category 5 hurricane has been attributed to unusually warm sea temperatures, a consequence of global heating. Source: US National Hurricane Center

SAO PAULO (ICIS)–Hurricane Beryl, which until 3 July was a powerful Category 5 hurricane, weakened to Category 3 by Thursday morning as it headed towards the Mexican peninsula of Yucatan. When it hits Yucatan, Beryl is expected to weaken into a storm, the US National Hurricane Center (NHC) said on Thursday morning. Therefore, industrial assets in northern Mexico and Texas – including several petrochemicals hubs as well as refineries – could be spared from a big impact if the forecasted path holds. In addition, few if any energy companies may choose to shut in US oil and gas wells in the Gulf of Mexico. Major US oil and LNG ports are also expected to avoid the worst of the storm. According to the current forecast, the hurricane will make landfall between the Mexican petrochemical hub of Altamira, Tamaulipas, and the US hub of Corpus Christi, Texas. “A westward to west-northwestward motion is expected during the next day or two, taking the core of Beryl away from the Cayman Islands through this afternoon and over the Yucatan Peninsula early Friday. Beryl is expected to emerge over the southwestern Gulf of Mexico Friday night and move northwestward across the southwestern Gulf of Mexico on Saturday,” said the NHC. “Reports from Air Force Reserve and NOAA [National Oceanic and Atmospheric Administration] Hurricane Hunter aircraft indicate that maximum sustained winds are now near 115 mph (185 km/h) with higher gusts.  Beryl is a category 3 hurricane on the Saffir-Simpson Hurricane Wind Scale.  Weakening is forecast during the next day or two, though Beryl is forecast to remain a hurricane until it makes landfall on the Yucatan Peninsula.” BUSY HURRICANE SEASON Meteorologists have warned that this year’s hurricane season could be the most active ever, with 17-25 named storms. Out of those, eight-13 should be hurricanes and four-seven should be major hurricanes. Major hurricanes are Category 3-5 storms with wind speeds of at least 111 miles/hour. Beryl’s unprecedented early development into a Category 5 hurricane has been attributed to unusually warm sea temperatures, a consequence of global heating. Source: US’ National Hurricane Center 

LONDON (ICIS)–The surge of populist far-right movements in recent EU and national elections are raising questions about the bloc’s ability to retain its role as the world’s climate policy pioneer. Many consumers are demanding a focus shift from climate targets to competitiveness and security. While these goals may gather momentum, Europe’s ambition to phase out fossil fuels to achieve climate neutrality will remain firmly on the political agenda. Nevertheless, the speed of implementing legislation or reaching stringent targets will depend on four key factors. Read the full ICIS white paper here .

LONDON (ICIS)–Gas In Focus deputy editor Marta Del Buono and Global Hydrogen Editor Jake Stones discuss UK parties’ pledges for the general elections and what do they mean for the energy market. Labour and the Greens and Conservatives favor renewables while Reform UK is going as far as scrapping Net Zero policies, fast tracking North Sea licenses and embracing fracking. Click here to watch