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Diammonium Phosphate17-Sep-2024
HOUSTON (ICIS)–Canadian junior explorer Nevada
Organic Phosphate (NOP) announced that their
subsidiary Nevagro, has been informed by the
Bureau of Land Management (BLM) that the agency
is authorizing the Murdock Mountain Phosphate
Exploration project.
British Columbia based NOP said the BLM found
no significant impacts and so the preparation
of an Environmental Impact Statement (EIS)
is not required.
This decision approves the
exploration plan portion of the
prospecting permit application submitted to the
BLM with prospecting permit to be issued
separately.
“The next step in the process will be a request
from the BLM to submit a reclamation bond. In
accordance with US Federal Regulation 43 CFR §
3504.50, a reclamation bond will be
required once the official decision is made to
approve the Prospecting Permit
Application,” said Robin Dow, Nevada Organic
Phosphate CEO.
NOP aims to be one of the only certified
organic rock phosphate producers with
large-scale potential in North America and is
currently advancing on the Murdock
project, which contains a nearly flat lying
sedimentary bed of known phosphate
mineralization in northeast Nevada.
The company said the increasing interest in
organic and sustainable agriculture practices
has contributed to the demand for organic
fertilizers, including those derived from rock
phosphate.
Organic rock phosphate is often marketed
as a fertilizer that not only provides
phosphorus but also contributes to overall
soil health.
Ammonia17-Sep-2024
HOUSTON (ICIS)–The Fertilizer Institute (TFI)
told the US Surface Transportation Board (STB)
in testimony on Tuesday that there is an
ongoing need for the freight rail industry to
shift its focus toward customer service and
growth.
The industry group said the fertilizer segment
has long relied on rail service for the
efficient and safe transport of its products,
but it has struggled with declining service
quality, increasing rates and a lack of
attention to customer needs.
“The fertilizer industry is heavily reliant on
rail and cannot afford to see continued
stagnation in freight rail service,” said Ryan
Bowley, TFI vice president of government
affairs.
“Unfortunately, we have seen freight volumes
plateau, services decline and rates skyrocket.”
TFI said that their testimony comes at a
pivotal time for the Class I railroads as the
STB’s inquiry into the rail industry’s growth
potential highlights a disturbing trend, which
is that freight rail carloads have been in
decline since 2008.
Trucking and other transportation sectors have
consistently expanded their capacity.
At the same time that rail employment has
dropped, and carloads have declined, rail rates
have surged. TFI said between 2005 and 2017,
rates for transporting critical farm inputs
like anhydrous ammonia increased by over 200%.
It noted that such price hikes, combined with
inconsistent service, have made it difficult
for fertilizer companies to meet the
just-in-time delivery demands of farmers across
the country.
“These rising costs and service failures are
particularly troubling for industries like
ours, which depend on rail to move bulk
products safely,” Bowley said.
“Our members regularly face delays, held
shipments and escalating rates, often without
any recourse. It is clear that a new approach
is needed.”
TFI highlighted the need for the rail industry
to pivot toward a customer-focused,
growth-driven model that balances profitability
with service quality as the industry’s adoption
of Precision Scheduled Railroading has led to
deep cuts in staff and equipment and adding to
service issues.
The group did praise recent moves by the STB to
increase oversight of rail service and pricing,
including the implementation of faster
emergency service orders.
It did stress the importance of additional
reforms such as expanding access to reciprocal
switching, a policy that would allow shippers
to switch between competing rail carriers more
easily.
“The rail industry should be actively competing
for freight, not relying on captive customers
to drive revenue. We need a system where
railroads are not just collecting more revenue
from a shrinking base but are growing their
business by serving more customers with better
service,” Bowley said.
Ammonia17-Sep-2024
HOUSTON (ICIS)–US ammonia-to-power solutions
provider Amogy has announced a partnership with
HD Korea Shipbuilding & Offshore
Engineering, POSCO Holdings, Seoul National
University and the American Bureau of Shipping
to explore the feasibility of an innovative
offshore ammonia cracking solution to deliver
low-cost, accessible clean hydrogen fuel.
Amogy said under this partnership, HD Korea
Shipbuilding will design the ammonia supply
system and integrate it into the overall
system, and it will provide its
ammonia-cracking technology.
Seoul National University will contribute
expertise in process design and simulation,
while POSCO Holdings intends to harness its
proprietary cracking process design technology
to optimize the systems needed for ship
application.
The American Bureau of Shipping will oversee
certification of the design as the class
society.
Amogy said ammonia, a hydrogen carrier, offers
a more cost-effective and convenient
alternative to liquefied hydrogen due to its
established storage and transport
infrastructure.
Additionally, with energy density 2.7 times
greater than hydrogen, ammonia is emerging as
an optimal carbon-free fuel for the maritime
industry.
Further, the company said their technology
unlocks the potential of ammonia as a hydrogen
carrier by leveraging state-of-the-art catalyst
materials to crack ammonia into hydrogen and
nitrogen at lower reaction temperatures with
high durability thereby reducing heating and
maintenance requirements.
“We are excited to join forces with this
esteemed consortium to develop an innovative
offshore ammonia cracking solution,” said
Seonghoon Woo, Amogy CEO.
“This partnership marks a pivotal advancement
in leveraging ammonia to achieve net-zero
emissions.”
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Ethylene17-Sep-2024
SAO PAULO (ICIS)–The likely increase in
Brazil’s import tariffs for dozens of chemicals
will start improving beleaguered domestic
producers’ poor margins even though
petrochemicals prices remain low, according to
an analyst at US credit rating Fitch.
Marcelo Pappiani, credit analyst for Brazilian
chemicals producers, added that imports into
Brazil and the wider Latin America remain high
and are likely to continue that way as China
and the US work through their overcapacities.
Despite that, prices have stabilized, albeit at
low levels, and “the worst of this downturn”
seems to have subsided, said Pappiani.
The two largest chemicals producers in Brazil,
polymers major Braskem and chlor-alkali and
polyvinyl chloride (PVC) producer Unipar, are
covered by Fitch. The two companies have posted
several quarters of poor financial results on
the back of low prices and competition from
overseas producers.
TARIFFS UPBrazil’s
chemicals producers – represented by trade
group Abiquim, in which Braskem has a
commanding voice –
were hoping the Brazilian cabinet would
increase import tariffs on dozens of chemicals
in September.
However, there have been contradictory reports
on this, with some expecting the hike to be
approved as soon as Wednesday (18 September),
while other reports citing government sources
have said the decision would be pushed back to
December.
The increases would follow a public
consultation earlier this year in which Abiquim
as well as individual companies proposed increasing
tariffs in more than 100 products, most of
them from 12.6% to 20%.
Braskem is, at the same time, partly owned by
the country’s state-owned energy major
Petrobras, so the Abiquim/Braskem lobbying
tandem tends to find open ears in the corridors
of power in Brasilia under the current
government, which has committed to expand the
industrial sector.
Pressure not to increase import tariffs has
also been strong from other
sectors, not least plastic transformers
represented by Abiplast, but the producers’
proposals are expected to have won the day.
“Petrochemicals prices in Brazil and the wider
Latin America seem to have reached the bottom
and we are seeing slightly less pressure on
companies, despite of course still imports
coming into the region in big numbers, from
China, the wider Asia and the US,” said
Pappiani.
“Companies have lobbied the government strongly
for an increase in import tariffs as well as
other measures to prop up the chemicals
industry. Import tariffs seem set to increase
and that should soon make Brazilian producers
more competitive.”
Pappiani is in no doubt higher import tariffs
in several chemicals – when around half of the
Brazilian industry’s demand is covered imports
– are likely to translate into higher prices
for consumers, precisely the reasoning used by
those who oppose the hike.
“President Lula has said he wants to foster the
chemicals sector and has met on several
occasions with CEOs from the industry as well
Abiquim,” said Pappiani.
“But, of course, consumers will end up paying
for higher import tariffs – this happens in all
economic sectors, not just petrochemicals, of
course.”
COMPETITIVENESS THROUGH
TARIFFSAs well as higher prices
for consumers, those opposing the hike in
import tariffs argue that Brazilian
petrochemicals producers should speed up their
modernization and diversification, so they are
not as dependent on government policy for their
profitability.
Pappiani said Braskem is a well-managed company
with international assets which would make it a
profitable enterprise even without government
measures which prop up its competitiveness in
its domestic market.
However, critics of protectionist measures
continue their campaign against the increase in
import tariffs, although according to most
analysts the dice has been cast.
On Tuesday, the president of Abiplast published
a charged article in Brazil’s daily
Estadao in which he wondered if
Braskem would always need state indirect help
to keep afloat, even if its second largest
shareholder is Petrobras, which in theory
should make accessing cheaper raw materials
easier.
“Why are foreign suppliers of petrochemical
products able to be more competitive in their
exports to Brazil, even bearing the costs of
transportation, logistics and exposure to
exchange rate variations? Over the past 40
years, we have exported many of these products
to China; if the Chinese (and other countries)
become competitive by importing Brazilian oil,
why can’t Brazilian [petrochemicals] producers
become competitive?” said Jose Ricardo Roriz
Coelho.
“The exaggerated protection of the few
petrochemical companies in Brazil results in
them directing investments to countries where
they face greater competition in order not to
lose market share. Europe, which is not
competitive due to its lack of raw materials
for petrochemicals, has chosen to add value
further down the production chain by importing
resins from countries that are more efficient
in production.
“Structural problems, such as insufficient
supply of inputs, cannot be solved with
short-term remedies. The debate on new tariffs
and the production chain is crucial,” concluded
Roriz.
Indeed, the prospect of high import tariffs
being approved as soon as this week has already
propped up Braskem’s market capitalization in
the past few weeks.
On 13 September, for instance, the company’s
stock rose by nearly 8% as investors expect an
imminent decision on the increase in import
tariffs, according to a report by
InfoMoney.
The increase in import tariffs could
automatically translate into higher earnings
before interest, taxes, depreciation, and
amortization (EBITDA) for Braskem, to the tune
of $300 million/year, according to some
analysts. Under current business conditions,
that would be roughly the same EBITDA amount
the producer posted in the second
quarter of this year.
“In our view, this additional tariff would help
contain Braskem’s cash burn in recent quarters.
The company would then be better positioned to
capture a future cycle of increases in
petrochemical spreads,” said analysts at XP
cited by InfoMoney.
Front page picture: Facilities operated by
Brazilian polymers major Braskem in the state
of Sao Paulo
Source: Braskem
Interview article by Jonathan
Lopez
Speciality Chemicals17-Sep-2024
BARCELONA (ICIS)–Petrochemical markets are
likely to remain depressed while China and
other countries continue to add significant
capacity, unless big wave of closures and
demand improvement help to achieve balance.
Global capacity additions far outstrip
demand growth
China, Middle East, US likely to continue
expansions
China drove the petrochemical supercycle,
but no longer
China chemicals demand growth likely only
2-4%/year
Prospect of global deflation
Europe can focus on specialty chemicals,
other niches
In this Think Tank podcast, Will
Beacham interviews ICIS Insight editor
Nigel Davis, ICIS senior
consultant Asia John
Richardson and Paul
Hodges, chairman of New Normal
Consulting.
Editor’s note: This podcast is an opinion
piece. The views expressed are those of the
presenter and interviewees, and do not
necessarily represent those of ICIS.
ICIS is organising regular updates to help
the industry understand current market trends.
Register here .
Read the latest issue of ICIS
Chemical Business.
Read Paul Hodges and John Richardson’s
ICIS
blogs.
Power17-Sep-2024
Ursula von der Leyen announces key energy
roles for Denmark, Spain and the Netherlands
Teresa Ribera will oversee delivery of the
bloc’s Green Deal, with former Danish energy
minister Dan Jorgensen to take the energy brief
Parliamentary hearing needed to confirm
candidates in post
LONDON (ICIS)–European Commission president
Ursula Von der Leyen named former Danish energy
minister Dan Jorgensen as her pick for the
energy brief on 17 September, as she unveiled
the structure of the incoming College of
Commissioners.
The role is likely to work closely with big
green portfolios for Spain and the Netherlands,
as von der Leyen presented a leaner, more
cross-cutting college than in the previous
mandate.
Spain’s Teresa Ribera, one of six executive
vice-presidents, will be responsible for a
“clean, just and competitive transition”.
Her work will involve ensuring the EU stays on
track to meet its goals under the bloc’s Green
Deal and proceed with both decarbonising and
industrialising the economy in parallel.
Ribera has been Spain’s ecological transition
minister since 2018, a role which covers both
energy and environmental policy. She was a key
figure in finalising a number of energy files,
including the electricity market reforms, when
Spain held the rotating EU presidency in the
second half of 2023.
Ribera will also pick up responsibility for
competition policy from outgoing Danish
commissioner Margrethe Vestager.
Current Dutch commissioner Wopke Hoekstra will
retain the climate brief he has held since
August 2023, becoming commissioner for
“climate, net-zero and clean growth”.
His responsibilities will include climate
diplomacy and decarbonisation, alongside
implementation and adaptation. The former Dutch
finance minister will also pick up
responsibility for taxation.
Jorgensen’s work will focus on lowering energy
prices, investment in clean energy and cutting
dependencies. His brief will also cover
housing, which covers aspects including energy
efficiency.
Von der Leyen told reporters that Jorgensen’s
broad experience as an energy minister made him
a good fit for the role.
She pointed to topics including the energy
crisis, building an energy union and lessening
Europe’s dependence on fossil fuels as key
agenda items, alongside deepening Europe’s
interconnections and supply corridors.
Von der Leyen also said Jorgensen was well
suited to continue work on joint energy
procurement, which she called “one of the top
topics to increase the market power of the [EU]
on the global energy market”.
Jorgensen was Denmark’s minister for climate,
energy and utilities from 2019-2022, before he
became minister for development cooperation and
global climate policy.
The commissioners-designate must be approved by
the European Parliament before they take up
their roles. Von der Leyen said it was
impossible to say when the process would be
complete but she hoped it would be soon.
The initial goal was 1 November, but that may
slip. The parliament can accept or reject the
whole Commission, and has previously used its
role to replace certain candidates and demand
adjustments to portfolios.
COORDINATION IS KEY
Asked about overlap between Ribera’s and
Hoekstra’s briefs, von der Leyen told reporters
that all commissioners and executive
vice-presidents would need to work closely
together.
“You cannot put reality in little boxes and
separate the different topics from each other.
“Reality: everything is intertwined and
interlinked,” she said, stressing that
coordination and cooperation were paramount.
Von der Leyen also cut an additional layer of
commission vice-presidents in the new college,
which she said meant a “leaner structure, more
interactive and interlinked”.
CZECH DEVELOPMENTS
Josef Sikela, a contender for the energy job,
will instead become commissioner for
international partnerships.
Sikela was well regarded for his work during
the energy price crisis, when the Czech
presidency convened multiple energy councils in
the second half of 2022 to stabilise the
situation.
His work will involve oversight of the €300bn
Global Gateway programme, which invests in
infrastructure abroad.
Von der Leyen said the role had links with
energy and trade, pointing to examples of
working with African countries on renewable
energy or critical raw materials to help
underpin the bloc’s competitiveness.
Ethylene17-Sep-2024
SAO PAULO (ICIS)–Brazil and other Latin
American countries have been grappling with
severe wildfires in recent weeks, affecting
even typically moist areas as they struggle
with an intense drought.
Millions are seeing their livelihoods disrupted
across the Americas in an early showing of the
worse effects of global warming, a signal of
what the new normal will mean for the economy
with recurrent disruption to logistics
potentially the new normal.
While Brazil is now battling wildfires, just
three months ago the country suffered its worst
floods ever, hitting the southernmost state of
Rio Grande do Sul, a key petrochemicals and
industrial hub where the economy came to a
standstill for more than a month.
Meanwhile, a severe drought is for the second
consecutive year hitting the northern state of
Amazonia, where the mightily Amazon River is
already recording lower water levels than
normal.
In 2023, a similar situation brought havoc
to petrochemicals logistics as the area is
home to the Manaus Free Trade Zone (Zona Franca
de Manaus, or ZFM in Portuguese) via which
large amounts of imported chemicals make their
way onto the rest of the country.
Experts have warned Brazil is ill-prepared for the
consequences of global warming, despite its
huge progress on renewable energy’s
implementation, and have asked policymakers to
make climate change preparedness a cornerstone
of all regulations approved.
In another example of extreme weather affecting
the Latin American chemicals industry, the
Mexican petrochemicals hub in Altamira, in the
east of the country, was brought to its knees
earlier this year by a months-long drought.
The authorities in Altamira prioritized water
supplies to households and imposed restrictions
to industrial players, making many companies’ operations
untenable and leading to several force
majeure declarations.
BRAZIL: FIRE
EVERYWHEREThe current wildfires
crisis in Brazil began in August and worsened
due to widespread drought – numerous fires
still burning.
Blazes are also raging near the capital,
Brasilia, and in the northern coastal state of
Bahia, state which is being hit by the same
drought than Amazonia.
Active wildfires on the outskirts of Sao Paulo,
the Americas’ most populous metropolitan area
with 20 million inhabitants, have significantly
polluted the air over the past week, casting a
grey pall over the city and exacerbating the
city’s already congested traffic.
The state’s Civil Defense reported ongoing
fires in eight municipalities on 15 September.
The state government has mobilized all
available aerial resources to combat the
blazes, deploying five fixed-wing and eight
rotary-wing aircraft.
And, just over the weekend, the waters of Sao
Paulo’s major Pinheiros River turned emerald
green due to an algae bloom caused by the
drought. The state’s environmental agency
attributed the river’s color change to low
water levels and the smoky air to a hot, dry
mass trapping pollutants from ongoing wildfires
in nearby forested areas.
Over the weekend, President Luiz Inacio Lula da
Silva surveyed the Brasilia National Park by
air after a fire erupted there, having already
consumed 1,200 hectares.
In Serra do Cipo, in the municipality of Muquem
de São Francisco in western Bahia, firefighters
have been battling a blaze for 30 days.
Persistent challenging weather conditions,
including high temperatures, strong winds, and
low humidity, are hampering efforts to contain
the fire. The situation is further complicated
by a prolonged drought, with no rainfall in the
region since May.
Brazil’s rich greenery, meanwhile, continues to
be threatened by deforestation. The Amazon is
the largest rainforest in the world and it acts
as a key absorber of emissions, reason why the
world’s eyes are on Brazil and its efforts – or
lack of on occasion – to preserve the area.
Last week, analysis by green group Amazon
Conservation showed that significant portions
of the Amazon rainforest remain unprotected.
The study, based on satellite imaging and
machine-learning models, identified key
unprotected areas in Peru, Brazil, French
Guiana, and Suriname.
These regions contain large, dense trees and
continuous canopy cover, making them vital
carbon stores. The analysts reiterated Brazil’s
urgent need to expand its conservation efforts
to safeguard the Amazon’s critical role in
global climate regulation.
While Lula’s first and second terms (2003-2011)
registered lower deforestation rates,
successive administrations overlooked the issue
and partly reversed prior progress.
Lula’s environment minister Marina Silva,
widely praised for the initial success in the
early 2000s, is back in the cabinet to achieve
the same feat in what perhaps is the world’s
last chance to save the vital rainforest.
However, as the Amazon quickly deteriorates,
experts are embroiled in a scary debate: some
studies are already suggesting the area may
turn from a net absorber of carbon into a net
emitter. Without its key lung taking in
emissions, the effects of climate change on
Earth could become considerably worse.
OVERWHELMEDCritics have
accused the Brazilian government of responding
too slowly when the wildfires crisis began in
August, potentially exacerbating the situation.
However, the reality is that no Brazilian
administration has ever faced such widespread
wildfires over such an extended period – the
country has traditionally been seen as the
archetypal tropical country, where rainfall is
common and often torrential.
After thousands of hectares have been lost to
the flames, Lula’s administration appeared to
fully acknowledge the reality last week,
announcing measures to assist residents and
municipalities in the areas most affected by
the drought.
This week, following Lula’s aerial survey of
the devastation in Brasilia National Park, the
government announced the creation of a National
Climate Agency, tasked with addressing extreme
natural phenomena, as the country’s vast
geography makes it susceptible to opposing
weather events within just a few months.
The agency was one of Lula’s plans after he
took office for the third time in January 2023,
but it was repeatedly delayed. The multiple
climate crises Brazil has endured since May
have now made its establishment essential.
LATIN AMERICA IS GETTING
DRIERElsewhere in Latin America,
other countries are also battling record-high
numbers of wildfires.
Satellite data from Brazil’s National Institute
for Space Research (INPE) recorded 346,112 fire
outbreaks across all 13 South American
countries as of 11 September. This figure
surpasses the previous record of 345,322 cases
set in 2007, in a history dating back to 1998.
Recent satellite imagery has revealed a smoke
corridor stretching diagonally across the
continent from Colombia to Uruguay. Despite
efforts by Brazilian and Bolivian authorities,
the blazes continue unabated, fueled by extreme
temperatures and challenging weather
conditions.
Within petrochemicals, it is not only players
in Brazil’s Manaus area who are having to learn
how to do logistics under a new reality.
In a recent trip to Buenos Aires, a source at a
chemicals trader also operating in neighboring
Paraguay and Uruguay described how low water
levels in the equally mighty Parana River are
putting a strain on the company’s logistics.
The Parana River runs through Brazil, Paraguay,
and Argentina for some 4,880 kilometers and it
is the second largest river in South America,
only behind the Amazon River.
As water levels in the Parana have been
unstable and reached record lows in the past
two years, the Argentinian trading source said
the company is slowly shifting the way it moves
its cargo.
“With low water levels, barges cannot fully
load, so more barges are needed to transport
the same amount of material. This obviously
increases logistics costs quite a bit,” said
the source.
“We have always used the Parana River to bring
product from Uruguay’s capital Montevideo,
where it is shipped to from across the world,
to landlock Asuncion, the capital of Paraguay.
This has become a nuisance in recent months,
and we are increasingly turning to trucks to
transport the materials which can be
transported by road.”
Insight by Jonathan Lopez
Crude Oil17-Sep-2024
LONDON (ICIS)–Hopes of a recovery in Germany’s
economy are fading, think tank ZEW said on
Tuesday, as its economic sentiment indicator
fell for the third month in a row.
The research group’s September economic
sentiment indicator declined by 15.6 points
from August to 3.6 points, while its assessment
of the current situation in Germany was down by
7.2 points to -84.5 points, the lowest since
May 2020.
Both indicators also fell
sharply in August from the previous month.
The economic sentiment indicator began its 2024
downward trend in
July.
“The hope for a swift improvement in the
economic situation is visibly fading,” said ZEW
president Achim Wambach.
“In the latest survey, we once again observe a
noticeable decline in economic expectations for
Germany.”
The outlook for the eurozone was also gloomy,
with the September economic sentiment indicator
down by 8.6 points to 9.3 points.
The assessment of the current situation in the
eurozone fell by 8 points from August,
remaining firmly in negative territory at -40.4
points.
Petrochemicals17-Sep-2024
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which suggests OPEC+ risks losing control of
oil markets.
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.
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