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Crude Oil07-Oct-2024
SINGAPORE (ICIS)–Petrochemical trades in Asia
may pick up mid-week with as Chinese markets
re-open after a week-long holiday, but industry
players remained bearish on demand recovery
prospects.
Trades subdued during 1-7 October China
holidays
Crude, naphtha prices rise amid
geopolitical tensions
China to announce more economic policies
Crude gains on escalating Middle East tensions,
weather-related disruptions in northeast Asia
and the monsoon season in India were all
factors that will affect trading this week.
In late Asian trade,
Brent crude breached $79/barrel, while US
crude was trading at above $75/barrel, on
growing fears of a wider conflict in the Middle
East a year since the Israel-Hamas war began.
Demand concerns,
particularly in China, however, continue to cap
gains.
Prices of naphtha – the main petrochemical
feedstock in Asia – typically track gains in
upstream crude market.
At noon, naphtha prices stood at $700/tonne CFR
(cost & freight) Japan.
With firm naphtha prices, production margins of
petrochemical producers get squeezed.
In the propylene and polymeric methylene
diphenyl diisocyanate (PMDI) markets, players
were awaiting clearer direction from China,
whose players will return to the market on 8
October.
For acetic acid, import demand from India
slowed down as the seasonal monsoon in the
country, which should have ended in late
September, extended its stay and is expected to
affect restocking ahead of Diwali holiday in
end-October/early November.
Diwali is the Hindu Festival of Light and is a
major holiday in India.
In Taiwan, Typhoon Krathon
directly hit its petrochemical hub of Kaohsiung
last week, causing power outages that affected
plant operations at the site, with some units
likely to be shut for days.
In the case of
Taiwan VCM (TVCM)’s 450,000 tonne/year
vinyl chloride monomer (VCM) plant, it
sustained equipment damage and may have to be
down for 7-10 days, sources said.
The consequent reduction is supply of some
petrochemicals, however, will likely have a
minimal impact on markets as demand remains
largely weak.
EYES ON CHINA
Market players are expecting more economic
measures from China post-holiday, which will
follow a slew of policy announcements days
before its week-long National Day celebration.
China’s State Council announced on 6 October
that the National Development and Reform
Commission (NDRC), the country’s top economic
planning body, will hold a press briefing on 8
October.
In its announcement, the State Council referred
to “systematically implementing a package of
incremental policies to solidly promote
economic growth, structural optimisation and
sustained momentum of development”.
China’s
recent economic stimulus package have
boosted investor sentiment, mainly in the
equities markets, but there were doubts over any near-term
lift to economic activity.
Focus article by Jonathan Yee
Additional reporting by Seng Li Peng,
Jonathan Chou, Helen Lee, Shannen Ng and Hwee
Hwee Tan
Petrochemicals07-Oct-2024
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which focuses on sector surprises for October.
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. Paul Hodges is the chairman of
consultants New
Normal Consulting.
Speciality Chemicals07-Oct-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 4 October.
No
signs of petchems demand recovery from car
sector on the horizon, H2 2025 may be a moment
of truth
After a strong rebound in car sales last year,
the European automotive industry is facing a
more challenging environment in the second half
of 2024, leading to a drop in petrochemical
requirements from car manufacturers.
LANXESS exits polymers
via sale of urethane business to Japan’s
UBE
LANXESS is selling its urethane systems
business to Japanese chemicals producer UBE
Corp for around €500 million, the German
specialty chemicals firm said on Thursday.
Europe recycled
polyolefin agglomerates prices face downward
pressure
Europe recycled polyolefin
agglomerate prices are facing downward
pressure due to weak demand from mechanical
recyclers.
ADNOC
makes public takeover offer for Germany’s
Covestro
Abu Dhabi state oil and petrochemicals player
ADNOC has launched a public takeover offer for
Germany-based producer isocyanates,
polycarbonates and adhesives specialist
Covestro, representing an equity value of €11.7
billion.
Bold
policy moves might not arrest China economic
slowdown
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.
Global News + ICIS Chemical Business (ICB)
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Base Oils07-Oct-2024
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.
Impact of regional conflict on spot Group I
supply from Iran to emerge
Group II export offers from the US awaited
to offer clearer near-term market direction
Persistent crude volatility may temper base
oils uptake
Currency woes in Africa may undermine
finished lube exports
In this podcast, ICIS editor Damini Dabholkar
and senior editor Veena Pathare discuss recent
market conditions and the outlook for the UAE.
Crude Oil07-Oct-2024
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)
Gas07-Oct-2024
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.
Ammonia04-Oct-2024
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: “This is
an incredibly sad time for OCI, and we extend
our deepest condolences to our colleague’s
family, friends, and co-workers.
“The safety and well-being of our employees and
contractor employees are of paramount
importance to us. Both Woodside and OCI remain
committed to providing a safe working
environment and will take all necessary
measures to prevent such tragedies in the
future. We are fully cooperating with local
authorities to investigate the circumstances
surrounding this incident.”
(recasts, amending OCI quote in final
paragraph)
Potassium Chloride (MOP)04-Oct-2024
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.
Speciality Chemicals04-Oct-2024
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
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