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.

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

LONDON (ICIS)–Global Service International (GSI) CEO Francesco Zanchi discusses polyethylene terephthalate (PET) industry challenges and opportunities with ICIS PET editor Caroline Murray. Europe will combat overcapacity and rising imports with trade barriers Buyers delay switch to recycled PET (R-PET) due to price delta with virgin PET Supply and demand trends favor buyers Caroline interviewed Francesco on the sidelines of the GSI customer day PET Day at Artimino, Italy. Video interview by Caroline Murray Edited by Will Beacham

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Italian monthly bales prices drop in latest auctions Colourless flake prices fall in Italy in October Cheaper PET puts pressure on R-PET sellers No signs of demand improvement in October

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. Caixin’s China Sept PMI falls to 49.3 from 50.4 in August More fiscal measures may be required Three big cities ease home-buying restrictions amid property slump No immediate turnaround of the country’s weak economic conditions can be expected notwithstanding the slew of economic measures recently announced. China’s manufacturing purchasing managers’ index (PMI) last month declined to 49.3, from 50.4 in August, according to a private survey conducted by Chinese private media group Caixin. A PMI number below 50 indicates contraction. The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions, while the official PMI is tilted toward larger state-owned enterprises (SOEs). The small and medium manufacturers are worse off since Caixin’s September PMI reading was below the official number of 49.8, which was an improvement from August’s 49.1. In Caixin’s survey, the China’s September PMI reversed the expansion recorded in August. For two months in the third quarter, factory output shrank, after managing to stay in expansionary mode since November 2023. Production at big factories, on the other hand, has been indicating contraction for five straight months, based on official PMI reading. “The market [in September] was characterized by diminished demand coupled with fierce competition,” Caixin Insight Group senior economist Wang Zhe said. Delays in supplier logistics, low demand for manufacturer purchases, and increased inventories of both raw materials and finished goods affected overall production in September, Wang said. “Across the board, the latest macroeconomic data have fallen short of market expectations,” the Caixin economist said. Falling underlying demand, heightening competition and subdued market conditions were cited as reasons for the decline in incoming new orders for Chinese manufactured goods, according to Caixin. “Softening economic conditions” overseas also negatively affected export orders, it added. A good number of petrochemical producers and their downstream end-users fall under the SME category. Reeling from continued demand weakness, some of these producers which have already been running at reduced capacity may have to cut output further. Pre-holiday restocking turned out weaker than expected, with market outlook post-holiday remaining largely bearish. Poor demand has kept China’s overall producers’ price index (PPI) in deflation territory for nearly two years STIMULUS MEASURES BOOST SENTIMENT Days before China went into a week-long National Day celebration, the People’s Bank of China (PBoC) announced a raft of measures, including lowering of interest rates on existing mortgages, to boost consumption. On 26 September, the Politburo of the Communist Party of China pledged fiscal measures to complement the effective monetary policy easing by the central bank amid growing concerns that the country will fail to achieve its 5% GDP growth target this year. The International Monetary Fund (IMF) revised up its growth forecast for the country in line with the government’s target in May, from 4.6% previously. It, however, warned of slower growth ahead considering China’s ageing population and slowed productivity expansion. Although the financial and commodities markets in China surged after the measures were announced, consumer confidence is still weak, which will affect their spending power, analysts said. A stimulus program, even if seemingly large, could have “a limited impact on growth”, according to analysts at Japanese brokerage Nomura. More durable and impactful measures, including increased fiscal spending, are needed to boost China’s growth and address weak consumer and business spending. Spending during the week-long holidays from 1 October will thus be a gauge as to how the economic measures will impact consumer spending, Singapore’s UOB Global Economics & Markets Research said in a note on 30 September. In the same period in 2023, domestic tourism revenues totaled yuan (CNY) 753 billion ($107 billion), according to state news agency Xinhua. PROPERTY MEASURES MAY BE INSUFFICIENT Three large Chinese cities – Guangzhou, Shenzhen and Shanghai – eased house-buying restrictions on 29 September, according to Xinhua. Guangzhou completely removed restrictions on home purchases, while non-Shanghai residents will be allowed to purchase suburban homes if they have paid social insurance or individual income tax in the city for at least a year, instead of three years. Shenzhen also announced reduction in downpayment ratio and optimized district-specific home purchase restrictions. China’s government hopes to tackle its years-long housing crisis via the fresh measures. But China’s economic worries may not be solved with these measures alone, ICIS senior consultant John Richardson said. Long-term challenges such as the end of the real-estate bubble and an ageing population will not be easily fixed with economic stimulus, he said in a blog post on 30 September. “The extent to which [China] can maintain its dominant role in global exports is also in question because of a much more difficult geopolitical environment,” he said. Insight article by Jonathan Yee and Pearl Bantillo ($1 = CNY7.02) Thumbnail image: At a port in Lianyungang, Jiangsu Province, China, on 2 October 2024. (Costfoto/NurPhoto/Shutterstock)

HOUSTON (ICIS)–The three-day strike by US Gulf and East Coast dock workers has been suspended until 15 January to allow negotiations to resume, according to a joint statement from the union and ports. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) said they have reached a tentative agreement on wages and will extend the current contract while they continue to negotiate other outstanding issues. “Effective immediately, all current job actions will cease, and all work covered by the master contract will resume,” the statement read. The union went on strike on 1 October as negotiations were stalled. The union was seeking a 77% increase over the next six years and commitments against any kind of automation at the ports – full or semi – that would replace jobs or historical work functions. The USMX was offering about a 50% increase. IMPACTS TO CHEM MARKETS The strike had already had some impacts on the US chemicals industry, with polyethylene (PE) exports to Brazil being put on hold. The polyvinyl chloride (PVC) industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. Thumbnail image shows a container ship. Photo by Shutterstock

HOUSTON (ICIS)–In only its third day, a strike by dock workers at US Gulf and East Coast ports is leading to idled trucks and growing numbers of container ships queuing outside of the ports. TRUCKING A trucking trade group, the American Trucking Associations (ATA), said that the strike has stopped all activity at five of the nation’s top 10 container ports and estimates that more than 60 container ships carrying nearly 500,000 containers scheduled for October delivery are now stuck in limbo. The ATA said there are 30,000 truckers registered to work just at the port of New York and New Jersey, which sees about 12,000 truck visits in a typical day. “Tens of thousands of more up and down the coasts are now sidelined by this strike,” the ATA said. The ATA said that the trucking industry is made up of small businesses with more than 95% of carriers operating 10 trucks or fewer. Todd Spencer, president of the Owner-Operator Independent Drivers Association, said American consumers will suffer the longer the strike goes on, but that independent drivers will also feel the pain. “The longer this labor strike drags out, the more harm is done to American consumers who rely on the trucking industry to deliver the goods they depend on,” Spencer said. “We encourage a quick resolution to this latest dispute and emphasize the need for specific discussions about how supply chain deficiencies stifle driver compensation, increase loading and unloading delays, and hurt highway safety.” CONTAINER SHIPS BACKING UP Ships are also backing up outside of the affected ports, according to publicly available ship tracking services. For example, there were about 51 vessels outside the entrance to Port Houston on 2 October, and about 65 vessels in the same area on 3 October. Alan Murphy, CEO, Sea-Intelligence, said a prolonged strike will have an impact on global capacity as carriers currently have 62 deep sea services that call on East Coast and US Gulf ports. Those vessels will have to wait at anchorage at the first port of call on their discharge schedule, Murphy said. “In addition to that there are vessels which have already commenced their discharge rotation and will have to wait at their second, third, or even fourth port of call, depending on how much of their schedule they have already completed prior to the strike taking place,” Murphy said. If the strike were to last four weeks, Murphy said that almost 7% of the global fleet will be tied up along the US East Coast, and the overall impact on the supply and demand equation will be very significant. EXCESSIVE SURCHARGES A chemical industry trade group, the Alliance for Chemical Distribution (ACD), sent a letter to US President Joe Biden criticizing excessive surcharges imposed by the carriers. In the letter, ACD President and CEO Eric Byer highlighted the excessive surcharges imposed – and profits made – by ocean shippers who strangely had direct involvement in the failed negotiations. “Neither side negotiated in good faith, effectively inviting a strike to take place,” Byer said. “For the ocean carriers, this is not surprising given the extreme profits they have been able to collect over recent years, putting them in a position to contentedly wait out a strike while the American economy loses billions of dollars a day.” Byer said that the ocean carrier member companies of the United States Maritime Alliance (USMX) are levying a myriad of surcharges on shippers, ranging from hundreds of dollars to $3,000/container, citing labor disruptions as the cause. “Through these surcharges, the ocean carriers are profiting from a crisis they played a direct role in creating,” Byer said. STALLED NEGOTIATIONSMeanwhile, the two sides are not currently negotiating. The International Longshoremen’s Association (ILA) is representing the dock workers, and USMX is representing the ports. USMX directors include representatives of major shipping lines, including Evergreen Shipping, Maersk, Hapag-Lloyd, Ocean Network Express, CMA/CGM, COSCO Shipping Lines, and Mediterranean Shipping Company (MSC). USMX said it continues to focus on ratifying a new master contract. “Reaching an agreement will require negotiating – and our full focus is on how to return to the table to further discuss these vital components, many of which are intertwined,” USMX said. “We cannot agree to preconditions to return to bargaining – but we remain committed to bargaining in good faith to address the ILA’s demands and USMX’s concerns.” IMPACTS TO CHEM MARKETS The strike is already affecting the US chemicals industry, with PE exports to Brazil being put on hold. The polyvinyl chloride (PVC) Industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. Focus story by Adam Yanelli Visit the ICIS Logistics – impact on chemicals and energy topic page

HOUSTON (ICIS)–US fertilizer producer CF Industries confirmed it had an accident on 2 October at their nitrogen fertilizer complex in Donaldsonville, Louisiana, which resulted in an employee being transferred to a local hospital where they later passed away. The company said through a spokesperson that the incident occurred at approximately 13:45 and that the medical personnel onsite did quickly respond and assessed the injuries, with the individual then transported to a nearby hospital. CF is not identifying the worker or providing any additional details surrounding the circumstances of the accident but said it is focused on supporting this individual’s family and fellow employees at the fertilizer complex. “We are deeply saddened to confirm that a CF Industries employee at the Donaldsonville Complex passed away in a local hospital following an accident onsite earlier today. Our thoughts and prayers are with their family at this difficult time. We are committed to supporting the family as well as providing assistance to the Donaldsonville team,” said a CF Industries spokesperson. The producer did add that this was an isolated incident with no related operational issues or offsite impacts. Located on the Mississippi River in Ascension Parish, the Donaldsonville site is the largest production complex in the world producing anhydrous ammonia, urea, and urea ammonium nitrate (UAN) and nitric acid.

SINGAPORE (ICIS)–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. “With this transaction LANXESS exits the last remaining polymer business,” the company said in a statement. The enterprise value of the deal amounts to €460 million, with expected proceeds of around €500 million, it said. The urethane systems business comprises five manufacturing sites globally as well as application laboratories in the US, Europe and China. UBE will take over the business, which has around 400 employees and generated sales of around €250 million in the year to June 2024. LANXESS expects the transaction to close in the first half of 2025. “The sale of Urethane Systems marks another milestone in our fast transformation into a pure-play specialty chemicals company, as we are divesting the last remaining polymer business in our portfolio,” said Matthias Zacher, chairman of the board of management of LANXESS. “At the same time, we are using the proceeds from the transaction to strengthen our balance sheet by further reducing our net debt,” he added. (Updates throughout) Thumbnail photo: LANXESS’ Cologne, Germany headquarters (Source: LANXESS)