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Ethylene06-Jan-2025
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 3 January.
OUTLOOK ’25: US acetic acid, VAM
exports expected stronger, domestic demand
could rise
US acetic acid and vinyl acetate monomer
(VAM) supply heading into 2025 is improving
after production outages resolved, while
tight global supply is expected to boost
export demand and lower inflation may lead to
stronger domestic demand.
OUTLOOK ’25: US EG/EO demand expected
higher in 2025; turnarounds to tighten Q1
supply
Demand for US ethylene glycol (EG) and
ethylene oxide (EO) should increase in 2025
on restocking and if lower inflation drives
consumption, but this may be met with tight
supply in Q1 due to plant maintenance.
OUTLOOK ’25: US President Trump could
move quickly on tariffs,
deregulation
As US president, Donald Trump could quickly
proceed on campaign promises to impose
tariffs and cut regulations after taking
office on 20 January.
SHIPPING: Union dockworkers, ports to
resume negotiations ahead of 15 Jan
deadline
Union dockworkers and representatives for US
Gulf and East Coast ports are expected to
resume negotiations on a new master contract
on 7 January, just more than a week ahead of
the 15 January deadline.
OUTLOOK ’25: US methanol supply
expected tight in Q1, demand may pick up
mid-year
US methanol supply is tight heading into the
new year, a situation that has been offset by
lackluster demand, but demand is expected to
pick up farther into 2025 if more controlled
inflation and lower interest rates fuel
consumer spending and the housing market.
Speciality Chemicals06-Jan-2025
SAO PAULO (ICIS)–Here are some of the
stories from ICIS Latin America for the week
ended on 3 January.
NEWSBrazil’s manufacturing
loses steam as new orders slow at home and
abroadGrowth in Brazil’s
petrochemicals-intensive manufacturing
sectors slowed down considerably in December
on the back of lower new orders and
households’ squeezed budgets on rising
inflation and high borrowing costs, analysts
at S&P Global said on Thursday.
Brazil economists
expect weaker real, higher interest rates in
2025Brazilian economists
surveyed by the central bank do not expect
the depreciation in the real in past weeks to
stay for much of 2025, with interest rates
consequently expected at nearly 15%.
Mexico manufacturing
sector ends 2024 in contraction on domestic,
overseas woesMexico’s
petrochemicals-intensive manufacturing sector
concluded 2024 in contraction on the back of
lower new orders and acute woes in the
export-intensive automotive sector, analysts
at S&P Global said on Thursday.
Colombia manufacturing
falls into contraction on China competition,
squeezed
consumersColombia’s
petrochemicals-intensive manufacturing sector
fell into contraction at the end of 2024 as
consumers’ squeezed pockets put a dent in
demand and competition from Chinese products
increased, analysts at S&P Global said on
Thursday.
Chile’s manufacturing
up 1.9% in November, industrial output 1.7%
higherChile’s
petrochemicals-intensive manufacturing
sectors posted output growth of 1.9% in
November, year on year, the country’s
statistical office INE said on Tuesday.
Argentina’s YPF
high crude production costs offset by stable
operations, growing output –
Fitch
YPF remains one of the country’s economic
hopes for coming years, with output and
exports expected to grow, but Argentina’s
state-owned energy major’s production costs
remain higher than regional peers, US credit
rating Fitch said on Friday.
Argentina’s YPF
divests lubricants subsidiary in Brazil to
UsiquimicaArgentina’s
state-owned oil and gas major YPF has signed
an agreement to sell its Brazilian lubricants
subsidiary to local chemicals producer
Usiquimica.
PRICINGLatAm PE prices
unchanged on weak market
activityDomestic and
international polyethylene (PE) prices were
assessed as unchanged across Latin American
countries.
LatAm PP prices stable
on muted market
activityDomestic and
international polypropylene (PP) prices were
assessed unchanged across Latin American
countries.
Unigel seeks January PS
price increase in
BrazilUnigel has announced
a 15% price increase, excluding local taxes,
on all grades of polystyrene (PS) sold in
Brazil, as of 2 January 2025, according to a
customer letter.
Innova announces
January PS price increase in
BrazilInnova has announced
a 15% price increase, excluding local taxes,
on all grades of polystyrene (PS) sold in
Brazil, effective 1 January 2025, according
to a customer letter.
Speciality Chemicals06-Jan-2025
BARCELONA (ICIS)–The Eurozone economy
continues to be troubled, with new purchasing
manager indices (PMIs) showing a slight overall
deterioration as a strong services performance
was offset by poor manufacturing at the end of
the year.
The HCOB Eurozone Composite PMI for December
2024 indicated a marginal decline in the
eurozone economy, with the Output Index at
49.6, up from November’s 48.3 but still below
the 50 mark which separates expansion from
contraction.
The Services PMI
Business Activity Index rose to 51.6 from 49.5,
showing a modest recovery in the sector, while
manufacturing continued to decline sharply.
The eurozone faced sustained declines in new
business and employment, with inflationary
pressures intensifying. Despite this,
business confidence improved to a three-month
high.
Germany, France and Italy all saw reductions in
business activity, with France performing the
worst. However, Spain and Ireland expanded,
with Spain’s private sector output growing at
the fastest pace since March 2023.
New orders in the eurozone fell for a seventh
consecutive month, driven by a significant drop
in factory sales, while services saw a slight
increase in new business. Export demand also
decreased, continuing a near three-year
decline.
Employment fell in December, with the
manufacturing sector driving job losses, while
services saw a fractional increase in
headcount. Despite lower staffing, companies
reduced their work-in-hand volumes. Price
pressures accelerated with input costs rising
at the fastest pace since July, particularly in
the services sector, leading to higher output
charge inflation.
Business sentiment improved, with growth
expectations for the coming year reaching a
three-month high, although it is still below
the historical average.
Cyrus de la Rubia, chief economist at Hamburg
Commercial Bank, noted that services inflation
remains high, likely due to rising wages, and
suggested cautious monetary policy with small
interest rate cuts in early 2025.
He highlighted that while the service sector
showed resilience, the overall economic outlook
remains fragile, with industrial weakness
posing a risk.
The economist added, “Service providers have
maintained their confidence, with future
business prospects largely positive and even
improving in December, despite the index
measuring sentiment being below the long-term
average.”
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Speciality Chemicals06-Jan-2025
LONDON (ICIS)–Here are some of the top
stories from ICIS Europe for the week ended 3
January.
Europe PX demand to
remain downbeat in H1 2025 amid downstream
rationalizations, imports
Paraxylene (PX) demand pessimism in Europe is
expected to continue in the first half of
2025 due to the rationalization of downstream
purified terephthalic acid (PTA) plants in
the region.
Europe PMMA hoping for
demand growth, but bracing for stagnant
market
The Europe polymethyl methacrylate (PMMA)
market is bracing for 2025 to be “more of the
same” with the challenges of 2024 continuing.
Europe BDO demand
pessimism to continue under the gloom of
rising capacities in China
There is a growing sense of apathy among
players in the European butanediol (BDO)
market when it comes to discussing demand
hopes for 2025 as there are no expectations
of an uptick and there is a prevalence of
worry ahead of growing capacity in China in
an already oversupplied market.
Europe PP players eye
pain points from old plants, tariff threats
and limp manufacturing
2024 was dominated by supply-driven dynamics
and 2025 looks unlikely to be much different
for Europe’s polypropylene (PP) market.
Gas06-Jan-2025
SINGAPORE (ICIS)–Here are the top stories
from ICIS News Asia and the Middle East for
the week ended 3 January.
OUTLOOK ’25: Asia
acetic acid supply glut to balloon on
capacity expansion
By Hwee Hwee Tan 30-Dec-24 11:00 SINGAPORE
(ICIS)–Asia acetic acid supply is likely to
outstrip demand on the back of China’s
significant capacity growth into 2025,
prompting producers to review regional plant
run rates and supply contracts.
OUTLOOK ’25: Asia ABS,
SAN to start year on upbeat note
By Angeline Soh 31-Dec-24 11:00 SINGAPORE
(ICIS)–The acrylonitrile-butadiene-styrene
(ABS) and styrene acrylonitrile (SAN) markets
in Asia are expected to start the new year on
an upbeat note after festivity-driven trades,
amid caution about possible tariffs on
exports to the US.
OUTLOOK ’25: Volatile
feedstock to weigh on Asia fatty alcohol
mid-cuts in Q1
By Helen Yan 02-Jan-25 11:00 SINGAPORE
(ICIS)–Buyers and sellers of fatty alcohols
mid-cuts in Asia are expected to tussle over
the market’s trajectory in the first quarter
of 2025 amid volatile feedstock palm kernel
oil (PKO) prices.
Singapore Q4 economy
grows 4.3%; whole-year GDP rises
4.0%
By Jonathan Yee 02-Jan-25 11:45 SINGAPORE
(ICIS)–Singapore’s GDP rose 4.3% in the
fourth quarter of 2024, supported by an
increase in public sector construction
output, official advance estimates showed on
Thursday.
S
Korea GDP forecast cut amid political
uncertainty, trade headwinds
By Nurluqman Suratman 02-Jan-25 14:38
SINGAPORE (ICIS)–South Korea’s finance
ministry on 2 January slashed the country’s
2025 GDP growth forecast to 1.8% from a
previous projection of 2.6% amid growing
domestic demand and trade uncertainties.
OUTLOOK ’25: Asia
methanol demand still uncertain amid new
capacities
By Damini Dabholkar 03-Jan-25 11:00 SINGAPORE
(ICIS)–The outlook for methanol in Asia
continues to be uncertain, with factors such
as additional capacity, seasonal gas issues
and upcoming downstream demand expected to
play a role in this.
Speciality Chemicals03-Jan-2025
HOUSTON (ICIS)–Rates for shipping containers
from Asia to the US surged this week as the
deadline to avoid a strike at US Gulf and East
Coast ports nears, while rates for liquid
chemical tankers were flat to softer as ship
owners await contract nominations.
CONTAINER RATES
Global average rates for shipping container
rose by 3% this week, according to supply chain
advisors Drewry, with rates to both US coasts
topping that.
The following chart from Drewry shows rates
from Shanghai to New York rose by 6% and rates
from Shanghai to Los Angeles rose by 7%.
Drewry expects rates on the transpacific trade
to rise in the coming week, driven by
front-loading ahead of the looming
International Longshoremen’s Association (ILA)
port strike in January and the anticipated
tariff hikes under the incoming Trump
Administration.
Judah Levine, head of research at online
freight shipping marketplace and platform
provider Freightos, said rates could continue
to be pressured higher by January general rate
increases (GRIs) from ship owners and from
increased volumes ahead of the Lunar New Year
holiday.
“Pre-Lunar New Year demand will combine with
higher-than-normal volumes for this time of
year into the US,” Levine said. “And the post
Lunar New Year dip in volumes will likely be
less pronounced than usual too as many US
shippers continue to frontload ahead of
expected tariff increases.”
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.
A strike could have a direct impact on US PE
exports.
Year-to-date through November, PE exports
accounted for 46.6% of overall PE sales with an
average of 2.4 billion lb/month.
Through October, 73% of seaborne US PE exports
utilized ports that are facing the work
stoppage threat.
LIQUID TANKER RATES
US chemical tanker freight rates held steady
for most trade lanes this week, with only a few
exceptions.
Commentary was quiet again this week amid the
start of the new year as most players are still
on extended holidays.
However, the USG to Brazil and West Coast India
is starting 2025 off slightly lower.
From the USG to India, there has been a slow
start to the new year with limited activity on
the market. There is some prompt space
available for few prospects to fill.
A broker said that most contract of
affreightment (COA) charterers are or have been
nominating their cargoes to move in January,
while the spot market is virtually nonexistent.
However, this does not mean that putting a ship
on berth would be cheap.
Sentiment for this route is slightly down, as
some owners with partial space available are
not able to reach full cargo currently.
From the USG to Rotterdam, rates are facing
some downward pressure in the new year compared
to where they were at the end of December.
It is likely that the market will pick back up
in the next couple of weeks.
Freight rates remain steady and will likely
stay unchanged for the beginning of the year.
With additional reporting by Kevin Callahan
and Harrison Jacoby
Speciality Chemicals02-Jan-2025
HOUSTON (ICIS)–Union dockworkers and
representatives for US Gulf and East Coast
ports are expected to resume negotiations on a
new master contract on 7 January, just more
than a week ahead of the 15 January deadline.
Meanwhile, global container shipping major
Maersk is encouraging customers to pick up
laden containers and return empty containers at
US East and Gulf Coast ports before 15 January
to help mitigate any potential disruptions at
the terminals.
Global container shipping major Hapag-Lloyd
will implement US port strike surcharges on 20
January, the same day that President-elect
Donald Trump will be inaugurated.
All these factors are keeping upward price
pressure on Asia-US container rates.
ILA PORT STRIKE
An October strike by the International
Longshoremen’s Association (ILA), representing
dockworkers, was paused after three
days when an agreement on wages was reached
with the United States Maritime Alliance
(USMX), representing the ports.
The parties set a 15 January deadline to
negotiate the remaining issues – the key one being the
implementation of automation at the ports.
The union has criticized semi-automated
rail-mounted gantry cranes (RMGs) for
eliminating jobs and posing national security
risks in a post on its website, while the USMX
responded, defending automation as essential
for port modernization and addressing land
constraints.
In a 12 December post on social media,
President-elect Donald Trump expressed his
support for dockworkers in the labor dispute.
The Alliance for Chemical Distribution (ACD),
an industry trade group, is urging both sides to
push back the deadline, pointing to economic
impacts felt after the short work stoppage in
October.
INCREASED TARIFFS
Adding to shipping issues at the start of 2025
are possible tariff increases on imports from
Canada, Mexico and China, as proposed by Trump.
Trump has announced his intent to levy
increased tariffs, primarily on imports from
Canada, Mexico and China, including a high
tariff rate of up to 60% against Chinese goods.
Analysts at ocean and freight rate analytics
firm Xeneta said that US importers who have
goods or materials that can be stored and have
access to warehousing likely have been
bolstering their inventories, which could then
be followed by a pause.
A surge of imports ahead of possible tariffs
would put upward pressure on rates.
For recyclers with outbound materials, that
could affect how and whether they can find
empty containers, Xeneta said.
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), which are shipped
in pellets.
They also transport liquid chemicals in
isotanks.
Focus article by Adam Yanelli
Thumbnail image shows a container ship.
Photo by Shutterstock
Gas31-Dec-2024
Additional reporting by Jamie Stewart and
Alex Froley
No day-ahead gas pipeline capacity was offered
for transit at Ukraine’s Sudzha border point
with Russia and no flows were nominated for 1
January 2025, data published by capacity
booking platform RBP and Ukraine’s gas grid
operator GTSOU on 31 December 2024 showed.
Although final nomination data will be expected
later on 31 December 2024, the indication was
that Russian gas transit through Ukraine
to Europe would cease on 1 January 2025 at
05:00 UTC.
Writing to ICIS on 30 December, Ukraine deputy
energy minister Mykola Kolysnyk said:
“We have prepared for a potential unilateral
transit termination by Gazprom at any moment,
disregarding contractual obligations to
European customers, as such actions have
occurred before as a typical form of
blackmail.”
Although transit may be temporarily halted
Ukraine and interested buyers in Slovakia and
Hungary may strike a compromise later this
month.
But at least for now, the Ukrainian gas system
is prepared for the unilateral termination of
the transit.
Polish gas grid operator Gaz-System will offer
5.1 million cubic meters (mcm)/day from 1
January in addition to an existing 6.4mcm/day
interruptible capacity. Ukraine also has firm
import capacity of 9.8mcm/day at the Bereg
virtual interconnection point until the end of
March 2025. Both can be extended.
There are also expectations of increased
reverse capacity at the Romanian border.
Meanwhile, global LNG supplies are improving.
The US, the world’s largest exporter, has all
its plants running normally at present and is
bringing new capacity online.
Venture Global’s Plaquemines plant, which will
build up to 13.3 million tonnes per annum
(mtpa) in its initial phase, loaded its first
cargo on 26 December.
Meanwhile Cheniere announced first LNG
production from its Corpus Christi stage III
project on 30 December. Stage III will add
seven 1.5mtpa trains, the first of which is now
working.
These plants will continue to build up output
across 2025, and be added by further new
facilities, including the 14.0mtpa LNG Canada.
WHAT HAPPENED?
As of late-afternoon London time on Tuesday
31 December, a five-year deal to transit
Russian pipeline gas through Ukraine into
Europe was set to expire within hours on 1
January, with no announcement of a new deal
having materialised.
Ukrainian grid operator TSOUA data,
published at 16:22 local time, showed gas
nominations at multiple Ukrainian border
entry and exit points as zero for 1 January,
including at the Sudzha border point with
Russia.
Earlier, nominations at the Sudzha point
for 31 December stood at 40.4 million cubic
meters/day, only marginally down from 30
December, the TSOUA data showed, meaning the 1
January figures were highly unlikely to be a
data error.
WHY DOES IT MATTER?
The five-year Ukraine transit deal has kept
a significant volume of Russian pipeline gas
flowing into Europe since the start of 2020,
including throughout the almost three-year long
war between the two countries.
More than 15 billion cubic meters of gas
was transited from Russia to Europe via Ukraine
in 2024. A similar volume will need to be
replaced by alternative sources, mainly LNG.
European energy markets have for weeks been
positioning around expectations of a new
transit deal being reached or, as has seemed
increasingly likely as the year-end deadline
has neared – not being reached.
In the first half of December, the
benchmark ICIS TTF Q1 ’25 lost 18% of its value
to be assessed at €39.90/MWh, down from
€48.30/MWh, but has since 16 December regained
almost all of that value.
At 11:00 London time on Tuesday morning,
trade on the component months indicated a Q1
’25 valuation at around €48.70/MWh, narrowly
below its high for the year seen in late
November.
The ICIS midday close on 31 December had
TTF Q1 ’25 priced just over €48.50/MWh, a
modest day on day increase of 1.6%. These
movements suggest the recent late-December
positioning had all but priced in the end of
the transit deal.
TTF Winter ’25 was up nearly 2%, the
largest forward-curve move on the day.
WHAT NEXT?
Recent European gas price movements,
although still volatile compared with the rest
of the year, pale in comparison to the extreme
volatility seen during the late-2021 price
crisis and the aftermath of Russia’s early-2022
invasion of Ukraine.
While this means the full magnitude of any
Russia-related supply shock is behind Europe,
significant uncertainty will still be priced in
over coming weeks and months as European
traders get used to another new normal.
Pricing movements indicate the market sees
Europe’s expanded LNG import infrastructure as
ample to meet demand spikes, but the continent
must compete with Asian LNG buyers to secure
what going forwards will be a larger overall
share of marginal supply.
Ethylene30-Dec-2024
SAO PAULO (ICIS)–Brazilian economists surveyed
by the central bank do not expect the
depreciation in the real in past weeks to stay
for much of 2025, with interest rates
consequently expected at nearly 15%.
In its last weekly survey among economists in
2024, the Banco Central do Brasil (BCB) said on
Monday inflation expectations have also jumped
considerably for 2025, with the annual rate now
expected at nearly 5%.
GDP growth, on the other hand, is expected to
slow considerably.
Brazil’s annual rate of inflation has been on
the rise for months,
reaching 4.87% in November. The central
bank swiftly reversed its monetary policy
easing, bringing the main interest rate
benchmark, the Selic,
up to 12.25%, and signaled it is to tighten
further in 2025.
In fact, some economists have said GDP
quarterly growth could even turn negative
towards the second half of 2025 after the
economy overheated in 2024.
The Brazilian real (R) has been the emerging
markets currency which has depreciated the most
in 2024 – it started the year trading at less
than $1:R5.00, but as of Monday morning it was
trading at $1:R6.18.
Most economists expect the currency to recover
slightly in 2025, but to stay at depreciated
levels.
A depreciated real feeds into inflation as it
makes dollar-denominated imports more
expensive. Higher inflation meanwhile prompts
central banks to hike rates to slow price rises
by cooling down borrowing.
That, in turn, can slow down consumption of
petrochemicals-intensive higher priced durable
goods, as consumers shy away from purchasing
under a high borrowing costs environment.
BCB Focus Market Readout
2024
2025
Inflation (in %)
4.90
4.96
GDP(in %)
3.49
2.01
Exchange rate($:R)
6.05
5.96
Interest rates(in
%)
N/A
14.75
Brazil’s central bank weekly economic survey
compiles answers of more than 100 economists
and analysts.
Meanwhile, the country’s largest financial
daily Valor also published on Monday
the results of its own survey among 76
analysts, with GDP expectations in line with
those published by the central bank.
They expect GDP growth of 2% in 2025, but the
forecasts vary between 1.3% and 3%, showing
wider uncertainty about next year’s outlook.
Some analysts surveyed did not rule out a
technical recession – two quarters with
negative growth – towards the second half of
2025.
“The unemployment rate is low, and the
agricultural sector should be very strong. But
the end point, at the end of next year, could
be bad. The activity has been more resilient,
but I believe that, in 2025, it will be much
more difficult to achieve growth close to 3%,
as we have seen in recent years,” said Cesar
Garritano, chief economist at Somma
Investimentos.
“In quarterly variations, there is a lot of
discussion about seasonal adjustment and,
therefore, I prefer to compare the same periods
year on year. But the estimates show that it is
not possible to exclude the possibility of a
technical recession.”
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