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. Yagi causes $3.3 billion in economic losses Jan-Sept GDP average growth at 6.82% Exports grow at double-digit annual rate The third-quarter GDP print represents an acceleration from the revised 7.09% year-on-year expansion in Q2, despite taking huge economic hit from Typhoon Yagi, which wrought havoc in Vietnam’s northern regions in September. For the first nine months of 2024, the economy posted an average annualized growth of 6.82%. Yagi, which was Asia’s strongest storm to date – killed 345 people in Vietnam, with total economic damage to the country estimated at around $3.3 billion, the General Statistics Office (GSO) said on 6 October. The agriculture, forestry and the fishery sectors were especially affected by Yagi, the GSO said. In September, the country’s manufacturing activity indicated a contraction, with its purchasing managers ‘s index (PMI) falling to 47.3, way below the expansion threshold of 50 and down by 52.4 in August, according to a survey by financial information services provider S&P Global. “Typhoon Yagi had a major impact on the Vietnamese manufacturing sector during September, with heavy rain and flooding leading to temporary business closures and delays across production lines and supply chains,” S&P Global said on 1 October. Vietnam is the fourth-biggest economy in southeast Asia and is a net importer of petrochemicals. Operations at its major petrochemical complexes were unscathed as their locations were not in Yagi’s path. Long Son Petrochemical is in the southern province of Ba Ria-Vung Tau; while the Dung Quat petrochemical complex is in the central Quang Ngai province; and the Nghi Son petrochemical complex is in the north-central Thanh Hoa province. EXPORTS DRIVE UP GDP GROWTH Vietnam, like most Asian economies, count exports as a major pillar of growth, which is being threatened by overall weakness in the global economy. But the country’s overall exports managed to post a double-digit annualized growth of 10.7% in the third quarter. For the first nine months of this year, Vietnam’s exports rose by 15.4% year on year to $299.6 billion while imports grew at a faster rate of by 17.3% at $278.8 billion, indicating robust domestic activity. The US is Vietnam’s biggest market, accounting for a third of the southeast Asian country’s exports for the period. Its biggest source of imports was China, whose share of the total was around 38% in the first nine months of 2024. The International Monetary Fund (IMF) forecasts Vietnam’s economic growth is projected to recover to 6.1% in 2024, “supported by continued strong external demand, resilient foreign direct investment, and accommodative policies”. The forecast is higher than the previous year’s GDP growth of 5.05% and was near the low end of the Vietnamese government’s target of 6.0-6.5%. However, Vietnam’s export-driven economy remains vulnerable to a global growth slowdown, persistent geopolitical tensions, and escalating trade disputes, the IMF warned. Focus article by Nurluqman Suratman Thumbnail image: An aerial drone photo shows a steel bridge collapsed in Phu Tho Province of northern Vietnam, 9 September 2024. (Xinhua/Shutterstock)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 4 October. INSIGHT: Bold policy moves might not arrest China economic slowdown By Nurluqman Suratman 30-Sep-24 13:51 SINGAPORE (ICIS)–In a bold move to revitalize its economy and restore investor confidence, China unveiled a comprehensive package of monetary and fiscal measures less than a week before the country goes on a week-long holiday. Focus: China urea to stay weak on ample supply and low demand By Rita Wang 30-Sep-24 18:14 SINGAPORE (ICIS)–China’s urea market rebounded slightly recently, but the outlook for the spot market remains weak due to high inventories, restricted exports and the upcoming lull season. Asia EDC spot demand likely to taper; regional supply to improve in end-2024 By Jonathan Chou 01-Oct-24 18:15 SINGAPORE (ICIS)–Asia’s spot EDC demand may be capped in the near term with buyers adequately stocked. Market players are watching out for ripple effects from China’s recent blitz of stimulus measures that may impact conditions for main derivative polyvinyl chloride (PVC). Asia PVC conditions may see limited impact from China stimulus measures By Jonathan Chou 02-Oct-24 13:48 SINGAPORE (ICIS)–Some bullishness was observed recently in China’s domestic market, in part due to its government’s stimulus measures. India faces BOPP film overcapacity on start-ups in next two years By Aswin Kondapally 02-Oct-24 22:11 MUMBAI (ICIS)–India is facing an oversupply of biaxially oriented polypropylene (BOPP) film, with nine new domestic production lines set to come on stream, which will exert heavy pressure on the market over the next two years. Asia MMA prices see first sharp fall in 2024 on bearish market conditions By Jasmine Khoo 03-Oct-24 10:06 SINGAPORE (ICIS)–Asia methyl methacrylate (MMA) spot import prices were assessed significantly softer in the week ended 27 September, reflecting significant price falls for the first time in 2024. INSIGHT: China Sept small-to-medium factories’ output shrinks on poor demand By Jonathan Yee 04-Oct-24 11:00 SINGAPORE (ICIS)–Manufacturing output of China’s small to medium enterprises went back to into contraction mode in September, underscoring continued and widespread weakness in the world’s second-biggest economy.

HOUSTON (ICIS)–Woodside Energy has confirmed that it experienced an incident on 3 October at the Beaumont Clean Ammonia site in Texas, which resulted in the death of an employee of one of fertilizer producer OCI’s construction contractors. In a statement, Woodside said that the incident occurred at approximately 8:30 am US central time at the Texas facility it recently acquired with construction efforts being managed by OCI. The company did not provide further details of the event other than to say the incident occurred during work activity being carried out at the site. It added that no one else was harmed. Woodside said that senior management was headed to the ammonia site and that a full investigation will be initiated. Currently a stand down of all work at the site is now in place. “This is a very sad day, and I offer my deepest sympathy to our colleague’s family, friends and workmates. The safety of our workforce is always our top priority, and we are providing full support to OCI and its contracting company,” said Meg O’Neill Woodside Energy CEO. “We are taking steps to understand the circumstances around this tragic event and are working closely with relevant authorities and regulators, OCI and the contractor company.” For its part, OCI responded by saying “we don’t provide details or commentary on start/stops at our production sites.”

HOUSTON (ICIS)–US fertilizer producer Intrepid Potash announced that Bob Jornayvaz has stepped down as Chief Executive Officer and as a director of the board following his extended medical leave of absence. The Denver-based producer had previously announced Jornayvaz was injured in an accident while playing in the US Open Polo Championship in April and was on extended medical leave of absence. “We are thankful to Bob for his immeasurable contributions to the company over the last two decades,” said Barth Whitham, Chair of the Board. “Bob led numerous initiatives that strengthened our customer relationships, modernized our operations, and capitalized on our unique position as the only domestic producer of potash. He took great pride in the company and its contributions to the domestic and global agriculture industry. Bob and his family remain in our thoughts, and we continue to wish him well in his recovery.” Intrepid said their Chief Financial Officer Matt Preston will continue to serve as acting principal executive officer as the Board of Directors’ search to identify and select a new CEO. “The board’s search for a CEO is well underway. In the interim, we are pleased to continue to have Matt and the rest of the management team lead the execution of Intrepid’s strategic plan,” Whitham said. Intrepid is the only US producer of muriate of potash and also delivers volumes of magnesium, sulfur, salt and water products for use in not only agriculture and for animal feed, but also within the oil and gas industry.

HOUSTON (ICIS)–With the suspension of the strike at US Gulf and East Coast ports until 15 January, carriers are urging customers to use extended gate times being offered by some ports to collect or deliver any urgent containers to terminals. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) reached a tentative agreement on wages late Thursday and will extend the current contract while they continue to negotiate other outstanding issues. Analysts at freight forwarder Flexport said the relatively short duration of the ILA strike means that the impact on the broader US economy has been limited. “If the strike had continued into next week, the ripple effects could have been massive,” Flexport said. “While the broader economic impact has been averted, the strike has made an immediate impact on the ocean and air markets.” The company said that during the strike, bookings to the US East Coast remained open, and they expect them to stay open. The only limitations were rail routings to the East Coast via Los Angeles, but Flexport expects they will soon resume operations as well. “Early reports indicated that each day of the strike would have added five to 10 days of port congestion,” Flexport said. “If you have urgent cargo, routing via the West Coast on rail or transloading in Los Angeles remains your best option to avoid potential congestion on the East Coast.” CONTAINER RATES FALL FURTHER, PACE SLOWS Global average rates for shipping containers fell by 5% this week, according to supply chain advisors Drewry and as shown in the following chart. But rates from east Asia and China to the US fell at a slower rate, as shown in the following chart. Rates to the West Coast fell by 4.23% while rates to the East Coast fell by 1.76%. Drewry was anticipating rates to the US would because of the strike. But with the strike paused, and because peak season demand was largely pulled forward, it is likely that rates will continue to see downward pressure. 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 CHEM RATES STABLE TO SOFTER The US chemical tanker market was largely stable week over week, with slight decreases seen from the US Gulf to Asia for smaller parcels. Most market participants were preparing to attend the European Petrochemical Association (EPCA) conference in Berlin, so the market was quiet. According to a ship owner that will be attending the conference, the market is weak across all trade lanes and will remain soft for the short term. The ship owner said that the current trend will not change anytime soon as the heightened tension in the Middle East provides a lot of uncertainty. USG-Asia rates were also pressured lower by the increasing availability of space from outside tonnage entering the market to move larger cargoes. The trade lane is expected to remain weak through November. Rates on the USG/ARA trade lane have been driven largely by a weaker CPP market which allows that available tonnage capable of offering on the chemical market, thus adding to the availability of spot tonnage. Additional reporting by Kevin Callahan Thumbnail shows a containership. Image by Noushad Thekkayil/EPA/Shutterstock

LONDON (ICIS)–Global Service International (GSI) CEO Francesco Zanchi discusses polyethylene terephthalate (PET) industry challenges and opportunities with ICIS PET editor Caroline Murray. Europe will combat overcapacity and rising imports with trade barriers Buyers delay switch to recycled PET (R-PET) due to price delta with virgin PET Supply and demand trends favor buyers Caroline interviewed Francesco on the sidelines of the GSI customer day PET Day at Artimino, Italy. Video interview by Caroline Murray Edited by Will Beacham

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Italian monthly bales prices drop in latest auctions Colourless flake prices fall in Italy in October Cheaper PET puts pressure on R-PET sellers No signs of demand improvement in October

SINGAPORE (ICIS)–Manufacturing output of China’s small to medium enterprises went back to into contraction mode in September, underscoring continued and widespread weakness in the world’s second-biggest economy. Caixin’s China Sept PMI falls to 49.3 from 50.4 in August More fiscal measures may be required Three big cities ease home-buying restrictions amid property slump No immediate turnaround of the country’s weak economic conditions can be expected notwithstanding the slew of economic measures recently announced. China’s manufacturing purchasing managers’ index (PMI) last month declined to 49.3, from 50.4 in August, according to a private survey conducted by Chinese private media group Caixin. A PMI number below 50 indicates contraction. The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions, while the official PMI is tilted toward larger state-owned enterprises (SOEs). The small and medium manufacturers are worse off since Caixin’s September PMI reading was below the official number of 49.8, which was an improvement from August’s 49.1. In Caixin’s survey, the China’s September PMI reversed the expansion recorded in August. For two months in the third quarter, factory output shrank, after managing to stay in expansionary mode since November 2023. Production at big factories, on the other hand, has been indicating contraction for five straight months, based on official PMI reading. “The market [in September] was characterized by diminished demand coupled with fierce competition,” Caixin Insight Group senior economist Wang Zhe said. Delays in supplier logistics, low demand for manufacturer purchases, and increased inventories of both raw materials and finished goods affected overall production in September, Wang said. “Across the board, the latest macroeconomic data have fallen short of market expectations,” the Caixin economist said. Falling underlying demand, heightening competition and subdued market conditions were cited as reasons for the decline in incoming new orders for Chinese manufactured goods, according to Caixin. “Softening economic conditions” overseas also negatively affected export orders, it added. A good number of petrochemical producers and their downstream end-users fall under the SME category. Reeling from continued demand weakness, some of these producers which have already been running at reduced capacity may have to cut output further. Pre-holiday restocking turned out weaker than expected, with market outlook post-holiday remaining largely bearish. Poor demand has kept China’s overall producers’ price index (PPI) in deflation territory for nearly two years STIMULUS MEASURES BOOST SENTIMENT Days before China went into a week-long National Day celebration, the People’s Bank of China (PBoC) announced a raft of measures, including lowering of interest rates on existing mortgages, to boost consumption. On 26 September, the Politburo of the Communist Party of China pledged fiscal measures to complement the effective monetary policy easing by the central bank amid growing concerns that the country will fail to achieve its 5% GDP growth target this year. The International Monetary Fund (IMF) revised up its growth forecast for the country in line with the government’s target in May, from 4.6% previously. It, however, warned of slower growth ahead considering China’s ageing population and slowed productivity expansion. Although the financial and commodities markets in China surged after the measures were announced, consumer confidence is still weak, which will affect their spending power, analysts said. A stimulus program, even if seemingly large, could have “a limited impact on growth”, according to analysts at Japanese brokerage Nomura. More durable and impactful measures, including increased fiscal spending, are needed to boost China’s growth and address weak consumer and business spending. Spending during the week-long holidays from 1 October will thus be a gauge as to how the economic measures will impact consumer spending, Singapore’s UOB Global Economics & Markets Research said in a note on 30 September. In the same period in 2023, domestic tourism revenues totaled yuan (CNY) 753 billion ($107 billion), according to state news agency Xinhua. PROPERTY MEASURES MAY BE INSUFFICIENT Three large Chinese cities – Guangzhou, Shenzhen and Shanghai – eased house-buying restrictions on 29 September, according to Xinhua. Guangzhou completely removed restrictions on home purchases, while non-Shanghai residents will be allowed to purchase suburban homes if they have paid social insurance or individual income tax in the city for at least a year, instead of three years. Shenzhen also announced reduction in downpayment ratio and optimized district-specific home purchase restrictions. China’s government hopes to tackle its years-long housing crisis via the fresh measures. But China’s economic worries may not be solved with these measures alone, ICIS senior consultant John Richardson said. Long-term challenges such as the end of the real-estate bubble and an ageing population will not be easily fixed with economic stimulus, he said in a blog post on 30 September. “The extent to which [China] can maintain its dominant role in global exports is also in question because of a much more difficult geopolitical environment,” he said. Insight article by Jonathan Yee and Pearl Bantillo ($1 = CNY7.02) Thumbnail image: At a port in Lianyungang, Jiangsu Province, China, on 2 October 2024. (Costfoto/NurPhoto/Shutterstock)

HOUSTON (ICIS)–The three-day strike by US Gulf and East Coast dock workers has been suspended until 15 January to allow negotiations to resume, according to a joint statement from the union and ports. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) said they have reached a tentative agreement on wages and will extend the current contract while they continue to negotiate other outstanding issues. “Effective immediately, all current job actions will cease, and all work covered by the master contract will resume,” the statement read. The union went on strike on 1 October as negotiations were stalled. The union was seeking a 77% increase over the next six years and commitments against any kind of automation at the ports – full or semi – that would replace jobs or historical work functions. The USMX was offering about a 50% increase. IMPACTS TO CHEM MARKETS The strike had already had some impacts on the US chemicals industry, with polyethylene (PE) exports to Brazil being put on hold. The polyvinyl chloride (PVC) industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. Thumbnail image shows a container ship. Photo by Shutterstock