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)

SINGAPORE (ICIS)–LANXESS is selling its urethane systems business to Japanese firm UBE Corp in a deal worth around €500 million, the German specialty chemicals firm said on Thursday. “With this transaction LANXESS exits the last remaining polymer business.” The enterprise value of the deal amounts to €460 million with expected proceeds of around €500 million, the company said in a statement. LANXESS expects the transaction to close in the first half of 2025.

HOUSTON (ICIS)–Australian fertilizer firm Minbos Resources, who is advancing the Cabinda Phosphate project in Angola, announced the $14 million loan facility agreement with the International Development Corporation of South Africa Limited (IDC) has been executed. The company said the loan proposal is awaiting credit committee approval, which it said is proceeding favorably, with the completion of the documentation and the normal legal and regulatory processes expected to take several months. “The company is now in a great funding position with a complementary mix of funding solutions to advance the Cabinda Phosphate project. It is wonderful to have the support of the South African IDC for this important project in Sub-Saharan Africa,” said Lindsay Reed, Minbos Resources managing director. “We are receiving tremendous support from some of Angola’s most important banking and investment institutions, which is a testament to the project’s importance for agriculture in Angola. I would like to thank all parties for their continued support in our endeavors.” The Cabinda project, located in northeast Angola, is being developed based on an initial name plate capacity of 150,000 tonnes/year of enhanced phosphate rock with initial production calculated at 50,000 tonnes/year. Previously Minbos said expansion will come in two stages with it planning to add a second and third granulation circuit to reach a name plate capacity of 450,000 tonnes/year after 8 years of operations.

HOUSTON (ICIS)–Negotiations have yet to resume between union dock workers and the US Gulf and East Coast ports as a costly strike enters its second day. The International Longshoremen’s Association (ILA), representing dock workers at ports from Maine to Texas, and the United States Maritime Alliance (USMX), representing the ports, posted statements to their websites accusing each other of being unwilling to negotiate. “We have demonstrated a commitment to doing our part to end the completely avoidable ILA strike,” USMX said. “Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running. We look forward to hearing from the union about how we can return to the table and actually bargain, which is the only way to reach a resolution.” The ILA responded by saying the USMX offer fails to address the demands of union labor. “They might claim a significant increase, but they conveniently omit that many of our members are operating multi-million-dollar container-handling equipment for a mere $20 an hour,” the ILA said. “In some states, the minimum wage is already $15. Furthermore, our members endure a grueling six-year wage progression before they can even reach the top wage tier, regardless of how many hours they work or the effort they put in.” One of the biggest sticking points remains the union’s steadfast stance against any kind of automation at the ports – full or semi – that would replace jobs or historical work functions. “We will not accept the loss of work and livelihood for our members due to automation,” the ILA said. “Our position is clear: the preservation of jobs and historical work functions is non-negotiable.” FMC OFFERS SERVICES With carriers already announcing congestion surcharges, the US Federal Maritime Commission (FMC) is offering assistance for enforcement and litigation services that individuals and companies could find helpful in seeking relief from current supply chain challenges. FMC regulations require that demurrage and detention fees serve as legitimate financial incentives to encourage cargo movement. Pursuant to these requirements, the FMC will scrutinize any demurrage and detention charges assessed during terminal closures. The FMC advised all regulated entities on 23 September that all statutes and regulations administered by the commission remain in effect during any terminal closures related to the strike. GOVERNMENT INTERVENTION REQUESTED Meanwhile, the American Chemistry Council (ACC) and the Alliance for Chemical Distribution (ACD) continue to request government intervention to end the work stoppage. “We urge the White House to do everything possible to prevent this major shockwave from rippling through the American supply chain and hurting US trade by working with both parties to resume contract negations,” Chris Jahn, ACC president and CEO, said. Jahn noted that about 90% of the waterborne chemical shipments that move in and out of the US flow through the East Coast and US Gulf Coast ports. Eric R Byer, president and CEO of the Alliance for Chemical Distribution (ACD) also urged President Joe Biden to act. “ACD urges the Biden Administration to swiftly intervene to resolve this strike by reopening the ports and getting both sides to reach an agreement to prevent further supply chain disruptions and avoid significant economic consequences,” Byer said. Biden, in a statement released last night, said he supports the collective bargaining process as the best way for workers to get the pay and benefits they deserve and urged USMX to return to the bargaining table with a fair offer. “Ocean carriers have made record profits since the pandemic and in some cases, profits grew in excess of 800% compared to their profits prior to the pandemic,” Biden said. “Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates. It is only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well.” Biden also said his administration will be watching for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board. 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 Thumbnail image shows a container ship.

HOUSTON (ICIS)–Fertilizer developer American Potash announced the US Bureau of Land Management (BLM) has approved their plan of operations at the Green River project in Utah, including issuing 11 prospecting permits and authorizing four exploratory drill holes. The company now has federal potash exploration permits and has a total of 7 exploratory drill holes authorized and is positioned for confirmation drilling, with expectations that will validate a high-grade potash potential estimated to be between 600 million to 1 billion tonnes of sylvinite. Another outcome is American Potash intends to establish an initial resource for not only potash but also lithium and potential by-products. The project is located 20 miles northwest of Moab, Utah, within the state’s Paradox Basin, which is one of only eight designated potash Super Basins globally with a long history of potash production. The company said recent development work has also validated the location’s potential as one of the largest domestic sources of lithium in the US. “This is a huge step for the company and the culmination of a process lasting several years. It positions the company to be able to drive forward with its business plan to confirm and validate historic data and targets, and to leverage the benefit of nearby production and neighboring development work, through the drill-bit,” said Simon Clarke, American Potash president and CEO. “We now have complete coverage for potash and lithium exploration across our acreage at a time when global events are driving home the need for domestic sources of potash and lithium to secure food and energy independence. We are now positioned to fully validate the strategic potential of our Green River project.”

LONDON (ICIS)–Underlying demand for European recycled agglomerates has increased throughout 2024, and is expected to rise sharply as pyrolysis-based chemical recycling scales. The majority of recycled polyolefin agglomerates are currently used by mechanical recyclers. Nevertheless, pyrolysis based chemical recyclers are increasingly targeting agglomerates as a feedstock. While chemical recycling can process waste types that it would be difficult or impossible for mechanical recyclers to use, though, it is a myth that there is no link between the input waste quality and output quality of chemical recyclers, and that chemical recyclers can use any form of waste. Take pyrolysis-based chemical recycling as an example. Pyrolysis-based plants targeting mixed plastic waste as feedstock – with a focus on polyolefins – currently account for ~60% of all operating chemical recycling capacity in Europe according to ICIS Recycling Supply Tracker – Chemical. Typically, pyrolysis-based processes aim to limit chlorine content in bales- due to corrosion risks –  polyethylene terephthalate (PET) content in bales – because it doesn’t pyrolyse and it creates oxygenation – nylon and flame retardants – which also oxygenates the process. They also typically aim to minimise moisture content, because loose water molecules in the reactor can cause changes to pressure values. The production of pyrolysis oil requires an inert atmosphere (i.e. heating in the absence of oxygen). The quality of input waste is one of the largest dictators of output quality across pyrolysis oil grades, dictating the type of impurities and boiling point. Boiling point, chlorine, sulphur, fluorine, nitrogen and oxygen contents are among the key determiners of pyrolysis oil prices – with an average spread of €1,150/tonne currently being seen between the lowest value (tyre-derived) and highest value (naphtha substitute) grades of pyrolysis oil that ICIS prices. Any sorting that needs to be done to remove the presence of these materials in the input bale adds additional cost and slows throughput. Pyrolysis oil can be – and often is – run through an upgrader or purifier to enhance its properties, but the quality of input waste has an impact both on yield and quality – and, therefore, profitability. This is one of the reasons the environmental impact of pyrolysis oil remains unclear and varies from producer to producer. While pyrolysis oil producers continue to test with a wide-range of waste input qualities, many producers are turning to agglomerations of polyolefins, and it is expected to become a leading feedstock for pyrolysis-based chemical recycling in the mid-term. This is in response to some of the challenges chemical recyclers have found with pre-treatment and sorting on site. This is particularly connected to the need to adapt processes continuously to account for continually shifting feedstock mixes. Pre-treating and sorting at waste manager level creates economies of scale and prevents the slowdown in throughput sometimes associated with chemical recyclers sorting on site. The use of agglomerates helps pyrolysis oil producers: Limit impurities such as sulphur, fluoride, oxygen, chlorine and nitrogen in finished pyrolysis oil – which typically results in a higher realizable price for that pyrolysis oil, and greater feasibility for use in a cracker Enable placing feedstock straight into the reactor and thereby save on capital expenditure Ensure a more consistent feedstock, with pre-treatment handled at waste managers which benefit from economies of scale and long-standing technical know-how Avoid slowing throughput and the expense of onsite sorting Avoid degradation and allow players to stockpile material ahead of plant scale-ups Target specific waste input mixed (although this can result in additional cost premiums) In response to the growing interest in recycled polyolefin agglomerates, ICIS has launched a new recycled agglomerates price index as part of its mixed plastic waste and pyrolysis oil (Europe) pricing service. The new index is for spot prices of agglomerated forms of mixed polyolefin material containing at least 95% polyolefin content and a maximum moisture content of 3%. It is assessed weekly on an ex-works Europe basis. The mixed plastic waste and pyrolysis oil (Europe) pricing service also offers pricing for mixed polyolefin bales, high plastic content refuse derived fuel (RDF) bales, reject unsorted plastic waste bales from municipal recover facilities (MRFs), and 3 spot price series for pyrolysis oil (tyre derived, non-upgraded, and naphtha substitute). For more information on these new series, or to share feedback, please contact Mark Victory at mark.victory@icis.com.

SINGAPORE (ICIS)–South Korea’s overall export growth slowed in September, as petrochemical exports dipped 0.6% year on year to $3.84 billion, fueling expectations of a potential monetary policy easing next week. Total exports grew for 12th straight month in September Economists expect central bank to soon cut its benchmark interest rate Overall shipments to China, US surge in September The country’s headline export growth slowed to 7.5% year on year in September at $58.8 billion, down from 11.4% in August, data from the Ministry of Trade, Industry and Energy (MOTIE) showed on 1 October. This marks a full year of continuous growth for South Korean exports, fueled by record-high semiconductor sales and the strongest September performance ever for automobile exports. Exports of chemical, steel, and oil products weakened in September, with falling oil prices dragging down the export prices of those products, according to Japan’s Nomura Global Markets Research. The slowdown was mainly attributed to fewer working days due to a three-day public holiday on 16 September. South Korea’s automobile industry saw a resurgence in September, with auto export growth rebounding to 4.9% year on year after contracting by 4.3% in August. This positive shift followed three consecutive months of decline and was driven by a recovery in demand for environmentally friendly cars like hybrids and electric vehicles, according to Nomura. The return to growth also reflects a normalization of production schedules after disruptions caused by summer breaks and labor strikes, which had previously hampered the industry, it added. Meanwhile, South Korea’s import growth also decelerated to 2.2% year on year in September, down from 6.0% in August due to weaker energy imports. This resulted in a wider trade surplus of $6.7 billion, compared with August’s $3.83 billion. By region, exports to China reached their highest point this year at $11.7 billion, marking a 6.3% increase, driven by demand for semiconductors and wireless communication devices, according to MOTIE. This surge also led to a trade surplus of $0.5 billion with China, MOTIE data showed. Shipments to the US also hit a record high for September with $10.4 billion in exports, a 3.4% rise, and extended its 14-month growth streak. Exports to the EU climbed 5.1% to reach $6 billion, fueled by strong demand for IT goods. STRONG EXPORTS TO SUPPORT INTEREST RATE CUT IN OCTOBERWith solid exports easing recession concerns amid weak consumption, the Bank of Korea (BOK) is expected to deliver only a 25-basis point cut at the upcoming 11 October meeting to ease the household financial burden and aid consumption growth, according to Nomura. “However, although tighter macroprudential measures are having an impact in slowing housing price inflation and household debt growth, we expect the BOK to remain focused on controlling housing prices and market expectations about the number of rate cuts in this easing cycle.” Separately, data from Wednesday showed that South Korea’s consumer price index (CPI) slowed more than expected in September, rising 1.6% year-on-year, the weakest annual increase since February 2021. This brings the inflation rate below the BOK’s 2% target, fueling further expectations of an interest rate cut. Core CPI, which excludes volatile food and energy items, rose by 2.0% year on year, slower than the 2.1% expansion the previous month and the weakest since November 2021. The BOK has held interest rates at a 16-year high of 3.50% since August, citing financial stability concerns amid a hot housing market. The BOK in July slashed its 2024 growth forecast to 2.4% from 2.5% previously, after Asia’s fourth-largest economy unexpectedly contracted in the second quarter. South Korea’s economy posted a slower second-quarter annualized growth of 2.3%, compared with the 3.3% pace set in the preceding quarter amid sluggish domestic consumption. Focus article by Nurluqman Suratman