LONDON (ICIS)–Gas In Focus editor Katya Zapletnyuk and deputy editor Marta Del Buono discuss the surge of populist movements in recent EU and member state elections and its impact on energy markets. Europe has been hurt by the energy crisis and high energy costs are driving businesses to other parts of the world. Consumers are demanding a focus shift from climate targets to competitiveness and security. Click here to watch

LONDON (ICIS)–Companies including financial services were hit by a global IT outage on Friday, with disruptions partly affecting energy trading. The chemicals sector currently appears unaffected though Poland’s largest container terminal, the Baltic Hub in Gdansk, was reportedly having some issues. Trayport, a key data platfrom for European wholesale energy markets, issued a statement warning the outage was affecting some of its key services. “We are currently facing infrastructure issues due to a global outage with a third-party service provider” Trayport said in a statement. Trayport added it was currently implementing workarounds, and customers may begin to see some of Trayport services become available. “We continue to work closely with the vendor to resolve the situation as soon as possible,” it added. ICIS continued to receive trade information on European gas and power markets spread across multiple trading venues. However, traders contacted by ICIS reported issues: “Servers are not accessible for the moment. We can trade but not book deals,” one trader said. A power trading source has said systems were unaffected in some countries. A gas trader in northern Europe said that some brokers were impacted, but that major exchange platforms were functioning as usual. Some trading companies are also faced internal IT issues. European power exchange EPEX SPOT reported a partial decoupling on the OMIE area, which includes Spanish and Portuguese power markets, for the IDA3 auctions, although it did not indicate whether it was related to the global IT outage. But the group reported a normal market status for most other markets and order book closures were also reported as being on time. Additional reporting by Clare Pennington

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Bullish outlook for eastern Europe bales and flake Upwards pressure appearing when market usually quietens down for summer Wider market expects bale supply to improve during August Outlook from September onwards still uncertain

Additional reporting by Clare Pennington LONDON (ICIS)–Companies including financial services were hit by a global IT outage on Friday morning, with disruptions partly affecting energy trading. Trayport, a key data platform for European wholesale energy markets, issued a statement warning the outage was affecting some of its key services. “We are currently facing infrastructure issues due to a global outage with a third-party service provider” Trayport said in a statement. Trayport added it was currently implementing workarounds, and customers may begin to see some of Trayport services become available. “We continue to work closely with the vendor to resolve the situation as soon as possible,” it added. ICIS continued to receive trade information on European gas and power markets spread across multiple trading venues. However, traders contacted by ICIS reported issues: “Servers are not accessible for the moment. We can trade but not book deals,” one trader said. A power trading source has said systems were unaffected in some countries. A gas trader in northern Europe said that some brokers were impacted, but that major exchange platforms were functioning as usual. Some trading companies are also faced internal IT issues. European power exchange EPEX SPOT reported a partial decoupling on the OMIE area, which includes Spanish and Portuguese power markets, for the IDA3 auctions, although it did not indicate whether it was related to the global IT outage. But the group reported a normal market status for most other markets and order book closures were also reported as being on time. ICIS is monitoring the ongoing disruptions and the impact on markets and will provide regular updates in the coming hours.

SINGAPORE (ICIS)–Malaysia’s economy grew by 5.8% year on year in the second quarter, driven by stronger exports and an expansion in the services sector, official advance estimates showed on Friday. The second-quarter GDP print follows the stronger-than-expected annual growth of 4.2% in the first quarter of 2024, the Department of Statistics said in a statement. Manufacturing for the period posted a stronger annualized growth of 4.7% compared with the 1.9% pace set in the first quarter. On a quarter-on-quarter basis, Malaysia’s economy grew by 0.7% in April-June, reversing the 3.1% contraction registered in Q1. Q2 exports grew faster by 5.8% year on year to ringgit (M$) 368.8 billion ($84 billion), compared with the 2.0% growth in the previous quarter. Malaysia’s services sector expanded by 5.6% year on year in the second quarter, accelerating from the 4.7% expansion in the first three months of 2024. In H1, the country’s GDP growth averaged 5.0%, stronger than the 4.1% growth posted in the same period last year. Malaysia is southeast Asia’s fifth-largest economy and a net exporter of polyolefins. The country is also one of the largest producers and exporters of oleochemical products worldwide, contributing about 20% to global capacity, according to the Malaysian Petrochemicals Association (MPA). ($1 = M$4.67) Thumbnail image: Petronas Towers in Kuala Lumpur, Malaysia (Source:C F Tham/AP/Shutterstock)

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The slide in today’s post is an updated version of the slide I first published late last year. Note that there is a new scenario added to the original two, A Bi-polar World. I could be wrong, of course. I might have given the wrong weightings to each of the scenarios, or more simply have chosen the wrong scenarios entirely. But today’s events point to very different outcomes than we saw during the 1992-2021 Petrochemicals Supercycle. Supermajors – 25% probabilityA small number of oil-and-gas-to-petrochemicals players dominate the business as they have increasingly turned oil and natural-gas liquids into petrochemicals at competitive costs. This is in response to the decline in crude-oil demand into transportation fuels because of the electrification of vehicles. Non-integrated petrochemical producers in Europe, South Korea, Singapore, Taiwan and Southeast Asia consolidate. Large swathes of capacity closes-down in these countries and regions to balance markets. A Bi-Polar World – 50% probabilityThe split between China and the US, and possibly the EU as well, widens. The rest of the developed world, including major petrochemical players in countries such as South Korea, Singapore and Japan, will need to decide where they stand: With the US and its partners or with China and its partners. They are at risk of losing access to the China market. Petrochemicals trade is largely confined to between China and its partners and between the US and its partners. No one scenario will be completely right. We could end up at any of many points between each of these three extreme outcomes. This is the case with Supermajors and A Bi-polar World. It could be that the closer relationship between Saudi Arabia and China allows Saudi Arabia to supply more of China’s petrochemicals deficits, allowing the Kingdom to perhaps realise some of its crude-oil-to-chemicals ambitions. A De-globalised World – 25% probabilityMarkets are in general much more regional. Instead of just a bi-polar world, we end up with beggar-thy-neighbour trade barriers similar in scale to the ones which led to the Great Depression. Petrochemical companies become much more “local for local”. Governments put up barriers to protect jobs and to ensure refineries don’t shut down along with uncompetitive petrochemical plants, thereby by protecting local supplies of transportation fuels. While extreme outcomes help push people out their comfort zones, supporting local petrochemical companies might instead fit at some mid-way point between all the scenarios. And “local for local” shouldn’t be viewed as automatically a bad thing. One can argue that because of today’s highly uncertain geopolitical world, local supplies of at least some petrochemicals are essential. Calling all senior management teams out there: You need to prepare your teams for the world after the Petrochemicals Supercycle. 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.

LONDON (ICIS)–On 11 July the first auction results from the German H2Global programme were released, providing the European hydrogen market critical information on the green premium across the supply side as ammonia participants switch to lower-carbon, cleaner products. H2Global is a double auction system that procures international volumes of hydrogen and re-sells them domestically, providing a subsidy based on how low the sell price of the market is against how high the buy price is. ICIS has produced the following infographic to contextualise the update.

LONDON (ICIS)–Ursula von der Leyen on Thursday secured her re-election to a second five-year term as President of the European Commission, and identified competitiveness as the most pressing issue facing the EU. Following a June European parliamentary election season that saw liberal and centrist political blocs hold on to majority power but cede ground to right-wing and Eurosceptic parties, von der Leyen’s position as leader of the bloc was reaffirmed on 18 July. A total of 401 Ministers of European Parliament (MEPs) backed von der Leyen’s candidacy, equating to roughly the number of members linked to the centrist European People’s Party, left-wing Progressive Alliance of Socialists and Democrats, and  liberal group Renew Europe. A total of 360 votes in favour of von der Leyen were necessary to secure a majority. Of the 719 total MEPs, 284 voted against her, and 22 submitted blank or invalid votes, according to European Parliament. Chemicals sector representatives have expressed hopes that the next term of the European Parliament will feature a stronger focus on industrial competitiveness, in light of the impact of high energy prices on the long-term viability of some sectors. ““If you read the State of the Union, there are a number of statements which clearly indicate industry policy is back, that it will get, if not the deepest political priority, as there are issues like Ukraine, it will get political priority in the next commission,” Cefic director general Marco Mensink said, speaking in October 2023. The impact of higher energy prices on operating costs and the rollout of more cash-heavy subsidy frameworks elsewhere, such as the US Inflation Reduction Act, have intensified pressure on European industry. “Our competitiveness needs a major boost,” von der Leyen said, addressing MEPs earlier on Thursday. “The fundamentals of the global economy are changing. Those who stand still will fall behind. Those who are not competitive will be dependent. The race is on and I want Europe to switch gear,” she added. This push on competitiveness is likely to be focused on reducing the administrative burden on companies in the region and prioritising faster permitting, she added. Von der Leyen also intends to launch a Clean Industrial Deal within the first 100 days of her new term, she added, to channel investment in infrastructure and industry decarbonisation, particularly for energy-intensive sectors. Germany-based chemicals trade group VCI welcomed von der Leyen’s re-election, but warned that Europe is at a crossroads in terms of its future trajectory. “We are at a turning point that will decide the future of Europe. Will we manoeuvre ourselves further into the side lines as a business location or back on the road to success? The new Commission must act decisively to balance sustainability and industrial competitiveness,” said VCI CEO Wolfgang Grosse Entrup. No deviation is expected in the bloc’s 2030 and 2050 decarbonisation goals, despite growing murmurs that the EU is not on track to meet the 2030 targets with just over six years still remaining to build out infrastructure. “So I want to be clear. We will stay the course on our new growth strategy and the goals we set for 2030 and 2050. Our focus now will be on implementation and investment to make it happen on the ground,” von der Leyen added. Focus article by Tom Brown. Thumbnail photo: Ursula von der Leyen, speaking in Strasbourg, France, after winning re-election as European Commission President on 18 July 2024. (Source: Ronald Wittek/EPA-EFE/Shutterstock)

HOUSTON (ICIS)–The US chemical industry could see the return of some popular trade and chemical-safety programs later this year, and customers of the major railroads could get their first chance to switch carriers if they get bad service. The year is turning out to be a busy and potentially productive one despite the presidential election Key trade and security bills for the chemical industry could pass during the lame duck session, which falls between the November 5 election day and the January 20 inauguration Globally, the final round of negotiations for the UN plastics treaty should take place near the end of the year UN PLASTICS TREATYThe concern of the chemical industry is that the ratified plastic treaty could include caps or curbs on the production of plastic. Companies such as BASF have advocated that the treaty should focus on curbing pollution instead. Chemical companies have noted a growing consensus around the industry’s views, leading them to be optimistic about the upcoming negotiations. The next round of talks is scheduled for November 25 through December 1 in Busan, South Korea. Formal ratification could take place in early 2025. RECRIPROCAL SWITCHING MAY GET FIRST TRIALReciprocal switching in the US will become effective in September, which will allow chemical companies to switch rail carriers if they can demonstrate substandard service. Reciprocal switching will be limited to Class 1 railroad companies, which are the biggest carriers. Redress for bad service is not automatic, and the process will require time, effort and legal fees on the part of chemical companies. “The question is how laborious and costly will that process be when you file a complaint?” said Eric Byer, president of the Alliance for Chemical Distribution (ACD) the new name for the National Association of Chemical Distributors (NACD). Still, it is possible that a chemical company upset with its rail service takes the plunge and files the first request for reciprocal switching. NEW RAIL BILL AND POSSIBLE TANK CAR BANA rail safety bill that passed the Senate shortly after the Norfolk Southern train derailment in Ohio state has recently received momentum that could push it into law. That momentum is coming from HR 8996, a sister bill that was introduced in the House of Representatives by Troy Nehls (Republican-Texas) and Seth Moulton (Democrat-Massachusetts). Related to the bill is a possible ban on DOT 111 tank cars. The ban is also connected to the derailment, since it is part of a settlement agreement between the US and Norfolk Southern. The agreement proposes that Norfolk Southern stop using its own DOT-111 tank cars and that it encourages its customers to do the same. The ACD is concerned that the agreement could be the first step in an outright ban of DOT 111 tank cars. Such a ban could take place before the industry has time to replace the tank cars. Hazardous materials would then be shipped by truck, which is more dangerous. A ban would also disrupt the movement of chemicals if it happens too quickly. REVIVAL OF CHEM SECURITY PROGRAMLegislators could revive the nation’s main anti-terrorism program for chemical sites, which is known as the Chemical Facility Anti-Terrorism Standards (CFATS). CFATS has been inactive for about a year, after a bill that would have re-authorized it was blocked by US Senator Rand Paul (Republican-Kentucky). While CFATS has lost its authorization, it has not lost funding. Were Congress to re-authorize CFATS, employees who were associated with the program could be reassigned to it. Senators could attempt to revive CFATS through an amendment to the National Defense Authorization Act (NDAA), Byer said. That could happen later in September or during the lame duck legislative session, Byers said. Another tactic would add an amendment to the appropriations bill, he said. Congress will likely consider the appropriations bill during the lame duck session. REVIVAL OF TRADE PROGRAMSTwo trade programs popular with the chemical industry could also be revived during the lame duck session. The Generalised System of Preferences (GSP) expired at the end of 2020, and it eliminated duties on thousands of products from more than a 100 developing countries. Prior to its expiration, the GSP had existed for decades. Byer said a bill could bring back the GSP program and make it retroactive to January 1, 2021. If such a bill becomes law, companies would receive rebates for the taxes they paid while the GSP program was inactive. The GSP has typically been coupled with another expired trade program, known as the Miscellaneous Tariff Bill (MTB), Byer said. The MTB temporarily reduced or suspended import tariffs on specific products, and it could be packaged with any other legislative action that would revive the GSP. ELECTION SEASON TO LIMIT NEW BILLS, POLICIESOutside of the trade and security bills, Byer does not expect a lot of new legislation because of the elections. Similarly, the pace of new policies and rulemaking at federal agencies should slow down. Any regulatory relief would be a welcomed change because the first half of 2024 was the worst regulatory climate that the chemical industry has ever seen, Byer said. The regulatory climate could change after the elections on November 5. Otherwise, the chemical industry may have to turn to the courts to challenge policies that have a questionable basis and a harmful effect on companies. Insight article by Al Greenwood Thumbnail shows plastic waste. Image by HOTLI SIMANJUNTAK/EPA-EFE/Shutterstock