LONDON (ICIS)–How long does the world’s current grey hydrogen production fleet have left on average? And why do autothermal reformers with carbon capture and storage appear to be the replacement technology of choice for low-carbon hydrogen producers? In this episode of the ICIS Hydrogen Insights podcast, hydrogen editor Jake Stones discusses these matters and more with Johnson Matthey’s vice president of hydrogen and sustainable technologies, Dr Eugene McKenna. Dr McKenna also gives his take on the prospect of retrofitting steam methane reformers with CCS, and the risks facing hydrogen market participants today when developing their projects.

SAO PAULO (ICIS)–Colombia’s annual rate of inflation stood in June at 7.18%, up very slightly from 7.16% in May, and the first increase in 15 months, according to the country’s statistical office DANE. Monthly inflation stood in June at 0.32%, also a slight increase from May’s 0.30%. Prices for the subgroup for utilities water, electricity, and gas as well as accommodation rose over the average (up 0.58%) as did health services (up 0.49%), in a country where private healthcare is the norm. Restaurant and hotel prices also rose over the average, up 0.39% in June compared with May. Prices for transport rose well below the monthly average with an increase of 0.19% compared with May, as some sub-components of that index such as gas fuel prices posted falls in prices. Earlier in July, the central bank lowered rates for the fifth time since it started easing monetary policy in December, leaving the main rate at 11.25%, and said indicators were pointing to a stronger performance in coming month. The petrochemicals-intensive manufacturing sectors, however, were in contraction in the second quarter and companies continue pointing to still-high interest rates as a drag for their growth as consumers stay away from big-ticket durable goods. UPTICK, BUT FALLS TO CONTINUEDespite June’s small uptick, analysts and Colombia’s central bank still expect inflation to continue falling towards the 3% target by 2025. Gray columns: forecast according to analysts’ consensus Source: DANE via Trading Economics.  Colombia’s annual rate of inflation stayed stubbornly high for much of 2023, despite mediocre economic performance, and only started coming down in earnest this year; the country was well behind other Latin American economies in bringing down its rate of inflation. In June 2023, the annual rate of inflation stood at 12.13%. Due to the slower progress fighting off the inflation crisis caused by the post-pandemic logistical woes and the global energy crisis caused by Russia’s invasion of Ukraine, the country’s Banco de la Republica started easing monetary policy later than most peers in Latin America. Since December, it has lowered interest rates five times; the current 11.25% rate compared to the peak at 13.25% for much of 2023. Gray line: forecast Source: Banco de la Republica de Colombia via Trading Economics Industrialists and manufacturing companies point to high interest rates to the sector’s poor performance. Apart from a bright spell in the first quarter of this year, manufacturing has been in contraction for much of 2023 and the second quarter, as confirmed by the PMI index earlier in July. Corporate Colombia also blames the left-leaning government of Gustavo Petro for some of the troubles, which include higher taxation to expand public spending in areas such public healthcare. The cabinet has also tried to increase tax receipts from the polymers sector, implementing a Europe-type plastic tax which companies and trade groups representing them have vehemently opposed. Financial analysts also think the government is too optimistic in its growth assumptions – and therefore those for tax receipts. Last week, US credit rating agency and analysts at Capital Economics both doubted the plans presented by the cabinet on fiscal consolidation were reachable. In its last statement following its monetary policy committee meeting on 4 July, the central bank said second quarter’s indicators pointed to a potential stronger performance in coming months. “The 0.9% annual GDP growth experienced in the first quarter exceeded the technical staff’s more conservative 0.3% forecast. During this period, net external demand was the primary driver of annual GDP growth due to the annual fall in imports and growth in exports. Second quarter results appear to point towards a recovery path for the economy,” said the bank. “The country’s risk premium and the peso to US dollar exchange rate remained high over the past weeks mainly as a result of uncertainty regarding the inflation behavior in the US and [its central bank] the Federal Reserve’s management of the interest rate, placing pressure on international financial markets and contributing to the strengthening of the US dollar worldwide.” On Petro’s cabinet fiscal consolidation plans, the central bank said it was pleased to see a “welcome public spending adjustment and commitment” to comply with the fiscal rules. Focus article by Jonathan Lopez

SINGAPORE (ICIS)–Chinese electric vehicle (EV) giant BYD has agreed to invest $1 billion to set up a manufacturing plant in Turkey which will produce up to 150,000 vehicles per year. BYD is expected to begin production at the new factory at the end of 2026, Turkey’s vice President Cevdet Yılmaz said in a post on social media platform X on Tuesday. “We expect this investment to make significant contributions to our exports in the medium term and to further reduce our already falling current account deficit,” Yilmaz said. BYD declined to comment on the deal when contacted by ICIS. The company has not issued a official statement on the investment. The Chinese company is the world’s leading EV producer, with annual sales of around 3 million units. The automotive industry is a major global consumer of petrochemicals, which account for more than a third of the raw material costs of an average vehicle. EVs and associated battery markets provide growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for the environment-friendly vehicles. Turkey’s announcement of BYD’s investment comes amid a backdrop of heightened scrutiny of Chinese EV manufacturers within the EU and the US. On 4 July, the EU increased tariffs on Chinese EVs in an effort to safeguard the bloc’s automotive industry. As a result, BYD now faces an additional 17.4% tariff on top of existing 10% import duty on its vehicles shipped to the EU. However, Turkey, being part of the EU’s Customs Union, is exempt from this extra tariff, providing an advantage for vehicles manufactured there and exported to the bloc. Separately, Turkish state news agency Anadolu said that SWM, another Chinese automaker, also announced it was applying to build a factory in Turkey on 8 July, but no details were provided. The Chinese automaker opened a new factory in eastern Thailand’s Rayong district on 4 July which can produce 150,000 vehicles per year – the automaker’s first factory in southeast Asia. Focus article by Nurluqman Suratman Initial reporting by Fanny Zhang Thumbnail photo: BYD’s first car carrier ”BYD Explorer 1” is loading cars for export at Yantai Port in Yantai, Shandong province, China, on 5 July 2024. (Source: Costfoto/NurPhoto/Shutterstock)

SINGAPORE (ICIS)–Market players in Asia are increasingly becoming more interested in the use of pyrolysis oil as fuel. This was one of the critical insights gained by the ICIS recycling analyst team when they were at the Asia Petrochemical Industry Conference (APIC) 2024 in Seoul, South Korea, in May and the 2024 China Plastics Circularity Economy CEO Roundtable in Beijing, China, in June. Join recycling analysts Joshua Tan and Chua Xin Nee in this podcast as they discuss their key takeaways from both events and take a deeper dive into the recycling landscape in China. For more information about Asia’s recycling market, please contact joshua.tan@icis.com and xinnee.chua@icis.com.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the rising impact from Houthi attacks in the Red Sea and this year’s hurricane season. 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.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 5 July. Hurricane Beryl strengthens and shifts path, expected to hit Texas’ Corpus Christi 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. Mexico’s Altamira petrochemicals players breathe sigh of relief as Beryl weakens 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. Hurricane Beryl expected to weaken after hitting Mexico’s Yucatan peninsula 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. INSIGHT: Chem shipping to get break from Panama Canal, tariff front-loading The Panama Canal Authority (PCA) is allowing more traffic to pass through the waterway, while the rush to ship goods before the start of tariffs should end soon – all of which should give chemical shippers some relief from elevated freight costs. US June auto sales fall from May on high prices, interest rates, cyber-attack, but could grow in H2 US June sales of new light vehicles fell from May, but total sales in the second quarter showed a modest improvement over Q1, according to data from the US Bureau of Economic Analysis (BEA). Rethinking business models for resilience in a fragile world to drive M&A – DC Advisory Chemical companies are in many ways rethinking their business models to become more resilient in a fragile and volatile operating environment, potentially leading to more mergers and acquisitions (M&A) activity, an investment banker said. US manufacturing remains in contraction but chemicals healthy US manufacturing activity remained in contraction territory in June but output in the chemicals sector was healthy on the back of healthy new orders, the Institute of Supply Management’s (ISM’s) purchasing managers’ index (PMI) survey showed on Monday.

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 5 July. NEWS Mexico’s Altamira petrochemicals players breathe sigh of relief as Beryl weakens 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. Brazil’s Braskem still facing logistical woes at Triunfo facilities Brazil’s polymers major Braskem is still facing some logistical challenges at its facilities in Triunfo, in the floods-hit state of Rio Grande do Sul, according to a letter to customers seen by ICIS. Brazil’s automotive 2024 output expected lower as ‘uncontrolled’ imports keep rising Brazil’s automotive trade group Anfavea this week downgraded its forecasts for production in 2024 due to ever-rising vehicle imports – mostly from China, with several producers signing a letter to the government asking for higher import tariffs on cars. US dominates base oils exports to Brazil with around 75% market share The US remains the largest exporter to the Brazilian base oils market, with the country’s lead widening in 2024, according to an expert on Tuesday. INSIGHT: Chem shipping to get break from Panama Canal, tariff front-loading The Panama Canal Authority (PCA) is allowing more traffic to pass through the waterway, while the rush to ship goods before the start of tariffs should end soon – all of which should give chemical shippers some relief from elevated freight costs. Brazil’s manufacturing recovers but faces pressure on currency depreciation Sales growth in Brazil’s manufacturing is being dented by challenging economic conditions, currency depreciation and order postponements after the floods crisis, analysts at S&P Global said on Monday. Mexico’s manufacturing expands in June but new export orders, job creation fall Mexico’s manufacturing expanded in June and remained practically stable from May on the back of factory orders rising, which kept production healthy, analysts at S&P Global said on Monday. Colombia’s manufacturing remains in contraction in June Colombia’s manufacturing sectors remained in contraction territory in June as a further decline in new orders led to reduced output, analysts at S&P Global said on Tuesday. Colombia’s fiscal plans based on ‘rosy’ growth assumptions – analysts Plans presented by the Colombian government to reduce its fiscal deficit are based on “rosy” assumptions for growth and are likely to be missed, according to analysts. PRICING Higher hydrous ethanol prices reflect strong sales performance Hydrous ethanol prices rose this week, reflecting ongoing strong sales performance in the market. Surging PET prices in Brazil and Mexico for July Prices for PET in Brazil experienced an upward trend during the first week of July, driven by the ongoing rise in international freight rates. This increase reflects the continued influence of escalating global shipping costs on the local market for PET resin. Innova amends July PS price increase in Brazil Innova amended a price increase to Brazilian real (R) 1,200/tonne ($218/tonne), excluding local taxes, on all grades of polystyrene (PS) sold in Brazil, effective 4 July, up from previously announced R750, according to a customer letter.

SINGAPORE (ICIS)–Squeezed by high propane costs and weak propylene prices, some Chinese propane dehydrogenation (PDH) operators are turning to a potential lifeline: commercializing hydrogen, a valuable byproduct of their operations. Join ICIS LPG analysts Lillian Ren and Shihao Zhou as they discuss how commercializing hydrogen could turn the tide for China’s PDH producers. They’ll delve into current market challenges, the potential of hydrogen as a lifeline, and what this shift could mean for the future of the industry.

SINGAPORE (ICIS)–China’s Hengli Group is planning to invest yuan (CNY) 9.2 billion ($1.3 billion) into its shipbuilding business at Dalian in Liaoning province, the company said on Monday. Its subsidiary Hengli Heavy Industry will build a shipbuilding capacity of 1.8 million deadweight tonnes (DWT) each year and 1.8 million tonnes/year of steel processing capacity at Changxin Island in Dalian City in northeastern China, the company posted on its account on WeChat, a Chinese social media platform. An agreement was signed on 7 July between Hengli Group and the local governments of Dalian City and Changxin Island on the investment. The investment will expand the Group’s building capacity of ultra-large carriers of crude and liquefied petroleum gas (LPG), container vessels, offshore floating storage and drilling facilities. Separately, Hengli Heavy Industry on 3 July inked a deal to build six 325,000 DWT ore tankers for Singapore’s shipping firm Winning International Group. The shipping company in September 2023 had ordered two WinningMax carriers from Hengli. Hengli Group entered the shipyard business in 2022 through the acquisition of STX (Dalian), the Chinese unit of South Korea’s STX Group. Hengli Group is parent of Hengli Petrochemical. ($1 = CNY7.27)