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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
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 27 December.
OUTLOOK ’25: US
phenol/acetone production to remain curtailed
on soft demandUS phenol
demand will likely remain soft and weigh on
acetone supply in H1 2025 as expectations for
a rebound are tempered.
OUTLOOK ’25: US PVC
faces oversupply, export
challengesThe US polyvinyl
chloride (PVC) market is set to face
significant headwinds in 2025, entering the
year with abundant inventories, expanded
production capacity and constrained export
opportunities.
OUTLOOK ’25: US chem
tanker market growth to support favorable
rates; container market readies for port
labor issues,
tariffsGrowth in the US
liquid chemical tanker market is likely to
support favorable rates in 2025, while the
container shipping market could see upward
pressure from possible labor strife at US
Gulf and East Coast ports and proposed
tariffs on Chinese imports.
OUTLOOK ’25: LatAm
chemicals pessimism persists as downturn
could last to 2030For many
players within Latin America petrochemicals,
2025 will only be one more stop on the long
downturn journey as, for many, the market’s
rebalancing will only take place towards the
end of the decade.
Speciality Chemicals30-Dec-2024
SAO PAULO (ICIS)–Here are some of the stories
from ICIS Latin America for the week ended on
27 December.
NEWS
OUTLOOK ’25: LatAm
chemicals pessimism persists as downturn could
last to 2030For many players
within Latin America petrochemicals, 2025 will
only be one more stop on the long downturn
journey as, for many, the market’s rebalancing
will only take place towards the end of the
decade.
Colombia GDP to grow
‘close to 3%’ in 2025 – central
bankThe Colombian economy
picked up strength at the end of 2024, and
higher spending on gross capital formation such
as petrochemical-intensive public works and
machinery could see “close to 3%” growth in
2025, according to the country’s central bank.
Peru
declares state of environmental emergency on
Petroperu’s oil spillPeru’s
Ministry of the Environment (MINAM) declared
late on Wednesday an environmental emergency
after state-owned crude producer Petroperu
admitted to an oil spill five days ago.
Argentina’s consumers
expect 2025 inflation to average 45% –
pollArgentinians are buying
into the success story of inflation, which has
sharply come down in 2024, and expect the
annual rate to average 45% in 2025, its lowest
level since 2021, according to an opinion poll
by Buenos Aires’ University Torcuato di Tella.
Mexico’s manufacturing
output up slightly in October, construction
down 8.5%Output in Mexico’s
petrochemicals-intensive manufacturing’s output
rose by 0.5% in October, year on year, but
production in construction fell considerably,
the country’s statistic office Inegi said on
Monday.
PRICING
OUTLOOK ’25: LatAm PP
supply to remain long amid squeezed
marginsLatin America
polypropylene (PP) is expected to remain
oversupplied in the first half of 2025, with
producers’ margins likely to remain squeezed.
OUTLOOK ’25: LatAm PE
demand could finally improve from Q2
onwardsLatin American
polyethylene (PE) demand should start slowly in
2025, but it could take a decisive turn for the
better from Q2 onwards.
OUTLOOK ’25: Ample LatAm
PS supply meets poor
demandThe Latin American
polystyrene (PS) market will continue facing
headwinds in 2025 on the back of weak demand
across the region combined with plentiful
supply.
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Ethylene27-Dec-2024
SAO PAULO (ICIS)–The Colombian economy picked
up strength at the end of 2024, and higher
spending on gross capital formation such as
petrochemical-intensive public works and
machinery could see “close to 3%” growth in
2025, according to the country’s central bank.
The Banco de la Republica published this week
minutes of its monetary policy committee
meeting earlier in December which resulted in
an interest rate cut of
25-basis points to 9.5%.
In its final assessment of the economy’s
performance in 2024, the central bank said
inflation was converging towards its target of
3%, but said it will do so “more slowly than
projected” on due to a weaker Colombian peso
and higher for longer US interest rates.
The rate of inflation in Colombia stood at 5.2%
in November, down from 5.41% in October, the
fifth month of decline.
The central bank also called on Gustavo Petro’s
cabinet to be realistic about public finances
and fiscal discipline, and questioned whether
fiscal parameters the government had set itself
for 2025 will be met.
TO-PREPANDEMIC
LEVELSHowever, overwhelming
sentiment in the minutes was one of optimism
about an economy which has a more secure
footing in healthier growth, with an increase
in gross capital formation a key part of that.
In fact, after sluggish growth posted since the
pandemic, next year the Colombian economy could
hit some of the indicators in line with those
pre-2020.
Economic growth reached 2.0% in Q3, said the
bank, driven by a 20.3% jump in gross capital
formation. The Economic Tracking Indicator
showed 3.1% growth in October.
Gross capital formation measures economy-wide
investment in fixed assets plus inventory
changes. Fixed assets include infrastructure
improvements, machinery and equipment
purchases, and construction of buildings like
schools, homes, offices, and industrial
facilities.
“They [board members] consider there is room to
further propel the rebound in gross capital
formation enjoyed during the third quarter to
ensure greater economic dynamism that will
bring the Colombian economy closer to the
growth rates observed before the pandemic. In
this regard, they note that the 1.8% GDP growth
projected for Colombia in 2024 is lower than
the average GDP expansion recently estimated
for Latin America (2.1%),” said the minutes.
“They stress that the recent recovery in
specific components of gross fixed capital
formation, such as civil works and machinery
and equipment, which contribute more than 50%
to fixed investment, suggests that an
improvement of close to 3.0% could be reached
in 2025 for Colombia, which is higher than the
forecast for Latin America (2.3%), and will
help it recover the position it held for almost
a decade before 2020.”
Healthy economic indicators can also lead to
higher prices on the back of strong demand, so
the central bank also adopted a cautious stance
on monetary easing.
The bank projects slower inflation convergence
to target in 2025, citing currency depreciation
pressures and their impact on prices, adding
that additional inflationary pressures are
expected from minimum wage increases and
regulated price adjustments.
Market volatility has increased due to concerns
over 2025 budget financing gaps and recent
reforms to regional funding transfers, while
external pressures have increased due to
tighter global financial conditions, a slower
pace of US interest rates cuts and falling
commodity prices which have affected Colombia’s
terms of trade.
Colombia’s state-owned energy major Ecopetrol
is a key income generator for the Treasury.
“They [board members] agreed that 2025 may
bring a challenging macroeconomic scenario that
requires vigilance and harmonization in both
monetary and fiscal policy design,” the bank
said.
Earlier in December, Colombia’s statistical
office DANE said industrial production expanded 1.1% in
October year on year, while the nation’s
leading economic indicator showed broad-based
growth acceleration across major sectors.
The reading was in line with the manufacturing PMI index
for November, which showed broad-based
improvement on better demand.
Meanwhile, DANE’s main economic indicator for
activity across the economy, also published
earlier in December, rose 2.94% in October,
year on year, an improvement from September’s
downwardly revised 1.07% increase.
Within petrochemicals, however, the story may
be more mixed as domestic producers will
continue to face stiff competition from
competitive imports.
All petrochemicals players interviewed by ICIS
at the annual meeting of the Latin American
Petrochemical and Chemical Association (APLA)
held in Colombia’s Cartagena in November, spoke
of challenging market conditions in 2025.
This included Ecopetrol’s
petrochemicals division, its subsidiary
producing polypropylene (PP) Essentia and plastics
distributor Grupo
Almatia.
Prices closed the year with decreases. Latin
American PP values, for instance, fell
in Colombia and Chile on the back of
competitive offers from abroad as well as lower
feedstock costs.
Focus article by Jonathan
Lopez
Ethylene Vinyl Acetate24-Dec-2024
SINGAPORE (ICIS)–ICIS senior analyst Joanne
Wang discusses the recent rebound in China’s
ethylene vinyl acetate (EVA) prices and gives a
brief outlook for 2025.
Some EVA plants switch to low density
polyethylene (LDPE) production in Q4 on profit
considerations
EVA producers’ Q4 inventory low after
destocking in the first three quarters
Photovoltaic industry resumes replenishment
in Q4, boosting demand
ICN
Speciality Chemicals23-Dec-2024
SAO PAULO (ICIS)–Here are some of the stories
from ICIS Latin America for the week ended on
20 December.
NEWS
Brazil’s chemicals likely
to avoid higher tariffs as bilateral trade
favors US – AbiquimBrazil’s
chemicals producers are confident the sector
would be mostly spared from potentially higher
US import tariffs as the latter maintains a
clear trade surplus in bilateral commerce, the
country’s trade group Abiquim said to ICIS.
Argentina’s
manufacturing, construction output falls in
OctoberOutput in Argentina’s
petrochemicals-intensive construction and
manufacturing kept falling in October, year on
year, the country’s statistical office Indec
said on Friday.
Mexico’s central bank
cuts rates by quarter point to 10.0%, signals
further cutsMexico’s central
bank on Thursday cut interest rates by 25 basis
points (bps) to 10.0% and hinted at steeper
cuts ahead.
Colombia’s central bank
lowers rates by quarter of a point to
9.5%Colombia’s central bank
on Friday lowered its benchmark interest rate
by 25 basis points (bps) to 9.5%.
Argentina’s YPF agrees
with Shell to continue building LNG export
projectYPF and global energy
major Shell have signed an agreement to develop
the first phase of a liquefied natural gas
(LNG) export project, the Argentinian
state-owned oil and gas major said.
Brazil’s chemicals output
up 1.6% in OctoberBrazil’s
chemicals output rose by 1.6% in October, year
on year, while plastics and rubber production
increased by 4.9%, according to the country’s
statistical office IBGE.
Brazil central bank steps
up currency defence as real
slidesBrazil’s central bank
has mounted four currency interventions this
week, spending nearly $6 billion to stem the
decline in the Brazilian real (R).
Chile
cuts rates as growth concerns outweigh
inflation risksChile’s
central bank cut its benchmark interest rate
this week by 25 basis points (bps) to 5.0%,
balancing concerns over stubborn inflation with
signs of economic weakness.
Pemex
remains ‘financially vulnerable’ as output
flattens, crude prices fall –
FitchMexico’s state-owned
crude major Pemex “remains financially
vulnerable” as its output is likely to flatten
and crude oil prices are set to fall, US credit
rating agency Fitch said.
MOVES: Brazil Potash
appoints fertilizer industry veteran Schmidt as
board executive
chairmanProducer Brazil
Potash, which is advancing the $2.5 billion
Autazes project within the state of Amazonas,
has appointed fertilizer industry veteran Mayo
Schmidt as the executive chairman of its Board
of Directors effective 6 January.
PRICING
LatAm
PE domestic, international prices stable as
year draws to closeDomestic
and international polyethylene (PE) prices were
assessed as unchanged across Latin American
countries.
LatAm
PP domestic, international prices steady as
2024 endsDomestic and
international polypropylene (PP) prices were
steady across Latin American countries.
Braskem Idesa seeks
January PE price increase in
MexicoBraskem Idesa (BI) is
seeking a price increase of $110/tonne on high
density polyethylene (HDPE) and for low density
polyethylene (LDPE) as of 1 January, according
to a customer letter.
Ethylene23-Dec-2024
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 20 December.
CP Chem’s US, Qatar JV projects on
track for 2026 startup – Phillips
66
Two world-scale joint venture projects being
developed by Chevron Phillips Chemical and
QatarEnergy remain on track to start
operations in 2026, Phillips 66 said on
Monday.
Canada in turmoil as finance minister
resigns, CEOs worry about fiscal
policies
Canadian CEOs and business trade groups are
warning about the state of Canada’s fiscal
policies.
US Fed cuts rate by quarter point,
expects fewer cuts in 2025
The Federal Reserve lowered on Wednesday its
benchmark interest rate by a quarter point
while reducing the number of cuts it expects
to make in 2025.
INSIGHT: US Gulf chems face more
freezing spells amid warmer
winters
Chemical plants and refineries along the Gulf
Coast of the US will likely face another
winter that will be warmer than usual but
punctuated with brief periods of freezing
temperatures, which could disrupt operations.
Oil prices fall on stronger US
dollar, looming US government
shutdown
Oil prices fell sharply on Friday on a
stronger US dollar and amid a looming US
government shutdown over the failure to pass
a budget bill in the House of
Representatives.
SHIPPING: Asia-US container rates
surge as volumes pulled forward ahead of
strike, tariffs
Rates for shipping containers from east Asia
and China to the US surged this week as
importers pulled volumes forward ahead of the
possible restart of the US Gulf and East
Coast port strike and anticipated tariff
hikes under the incoming Trump
Administration.
Crude Oil23-Dec-2024
LONDON (ICIS)–The UK economy was weaker than
initially thought in Q3 with GDP showing zero
growth, according to official data on Monday.
There was no growth in the services sector,
while a 0.7% increase in construction was
offset by a 0.4% fall in production.
The Q3 GDP figure was revised down from
a
first estimate of 0.1% growth, the Office
for National Statistics (ONS) said.
Quarterly growth has trended down throughout
2024 with GDP at 0.7% in Q1, 0.4% in Q2 and 0%
in Q3.
On a monthly basis, GDP fell by 0.1% in
September and October, according to the ONS.
Last week, the Bank of England (BoE) held
its key interest rate at 4.75% as inflation
continued to firm despite weakening industrial
activity.
Economic growth in
the eurozone and EU has been more positive
with Q3 GDP rising by 0.4% in both blocs from
the previous quarter.
Speciality Chemicals23-Dec-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 20
December.
Stagnant manufacturing,
overcapacity, looming trade war weigh on Europe
chems in 2025
Europe’s petrochemical sector will be under
even more pressure in 2025 as demand from the
region’s manufacturing sector remains in
contraction, global overcapacity gets worse and
amid the possibility of increased exports from
China and the US.
Europe melamine December
contracts roll over, Q4 contracts rise on
margin pressure
European December melamine contracts were
assessed steady, in line with market feedback.
Europe paraxylene
December contract price up €5/tonne
The Europe paraxylene (PX) December contract
reference price rose €5/tonne from November’s
levels.
German business sentiment
weakest since May 2020
German business sentiment dropped to its lowest
point since May 2020 in December, according to
the latest data from the Ifo Institute on
Tuesday.
Eurozone private sector
closes out 2024 in contraction as manufacturing
slows
The eurozone private sector ended the year on a
bearish note as output contracted driven by a
weakening manufacturing sector, which offset a
return to growth for services.
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