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Ammonia10-Oct-2024
HOUSTON (ICIS)–Roaring ashore as a Category 3
hurricane late 9 October and bringing fierce
winds, heavy rainfall and significant inland
storm surge Hurricane Milton inundated the
Tamp, Florida area, which is a key hub of the
US fertilizer industry.
In the aftermath of the storm there were market
sources, based in this region, who were
reporting being unharmed but that they were now
facing considerable flooding, which was causing
property damage in places and overall
restricting public movement.
The section of Florida pounded by Milton is the
location of not only production sites but also
storage and logistic operations as well as
corporate office facilities and the home to the
numerous employees of the local fertilizer
industry.
The Port of Tampa, which handles about 25% of
domestic fertilizer exports, said on their
website that recovery efforts have begun, and
that staff is working with the US Army Corps of
Engineers, US Coast Guard and other maritime
partners to assess landside and seaside
operations.
“Our port is currently without power. Some
damage was observed to buildings but there has
been no significant damage to docks, so far.
The port is accessible through main gates, but
please be advised there are road closures and
flooding concerns in the surrounding roadways
to our port,” the Port of Tampa announced.
“We are working with our fuel terminal
operators to assess their facilities and learn
when they will be able to return to service.
Individual port tenants will make independent
decisions on when to resume their operations.”
The extent of impacts to the fertilizer
industry were not yet clear but Canadia
fertilizer producer Nutrien, who only has the
White Springs phosphate facility within
Florida, said the company is still dealing with
the impacts of the last storm but was able to
avoid further issues from this hurricane.
“While Nutrien’s White Springs phosphate
facility was not impacted by Hurricane Milton,
we are continuing to assess the timeline for
White Springs’ restart following Hurricane
Helene. Nutrien’s nitrogen facilities
were not impacted by Hurricane Milton,” said a
Nutrien spokesperson.
Fertilizer titan Mosaic, who not only has their
headquarters within Tampa but also has numerous
assets for production and logistics, said their
immediate focus is on their workforce.
“As Hurricane Milton has now passed through
central Florida, we are working to contact our
employees and confirm their safety. When
conditions allow, we’ll begin assessing the
impacts on our operations,” said Mosaic.
There were concerns ahead of the storm over the
potential environmental consequences of Milton
as Florida has 25 stacks of slightly
radioactive phosphogypsum waste that are a
by-product of phosphate fertilizer production.
The fear that the winds and rains could release
the material across the land and water
resources that are nearby as has occurred in
past hurricane events.
There was no immediate report of the conditions
of the stacks as of late 10 October but ahead
of the storm Florida environmental officials
had said they were preparing and would have all
resources available to oversee the regulated
facilities and operations.
Sources said the areas that were more south of
Tampa were apparently struck harder but there
has not been full confirmation of the damages
inflicted with a source saying it is a
“different story down there”.
There were weather reports of over 18 inches of
rain having been received in nearby St
Petersburg, Florida.
The hurricane also generated several strong
tornadoes as it approached which are being
blamed for some of the physical damage to
structures.
A market participants said that with it being
less than 24 hours since landfall it was going
to take some time for the fertilizer industry
to assess the scale of the impacts from Milton,
saying it is “too soon for that”.
Federal and state officials have not yet
projected an estimated amount of damages as
assessments were just barely getting underway.
It likely did great harm to the Florida citrus
industry with orange groves bearing fruit and
drawing close to their harvest period.
It is feared that it will be determined in the
coming days that the storm’s intensity will
result in a substantial decline in production
this season, with others crops having also been
exposed to harm like sugarcane and
strawberries.
Speciality Chemicals10-Oct-2024
HOUSTON (ICIS)–Backlogs created by the
three-day strike at US Gulf and East Coast
ports could last for two to three weeks,
although there are indications that operations
could return to normal sooner rather than later
at the Port of New York/New Jersey.
Judah Levine, head of research at online
freight shipping marketplace and platform
provider Freightos, said many industry analysts
were predicting two to three weeks to clear the
backlog of container ships created when the
International Longshoremen’s Association (ILA)
went on strike.
Levine estimated there were 45-60 vessels at
anchor off US Gulf and East Coast ports from
the strike.
But he said officials at the Port of New
York/New Jersey, the largest on the East Coast,
said the work stoppage was more akin to short
weather-related closures they see with winter
storms and expect operations could return to
normal in a matter of days, and maybe even by
the end of the week.
Levine said the larger impact could be from a
build in containers at the ports.
Some ports extended gate times to allow
customers extra time to collect or deliver
containers.
“In the meantime, shippers with containers at
the ports or on vessels at anchor or vessels
arriving quite soon will probably continue to
experience some delays, and for some that could
impact inventory availability in the next
couple weeks,” Levine said.
The strike did not impact the movement of
liquid chemical tankers as most terminals that
handle those vessels are privately owned and do
not necessarily use union labor.
Also, tankers do not require as much labor as
container or dry cargo vessels, which must be
loaded and unloaded with cranes and require
labor for forklifts and trucks.
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.
IMPACT OF STRIKE, HURRICANES ON
TRUCKING
Market participants are also watching for tight
supply or shortages of inland trucking services
because of the work stoppage and because of two
hurricanes in succession that hit Florida and
other southeastern states.
Downstream chemical buyers and compounders
could begin to see issues with road freight in
terms of higher costs and lower availability.
Rates could see upward pressure given the
severity of the damage to roads and highways in
the East Tennessee and North Carolina regions
as the US Federal Emergency Management Agency
(FEMA) works to assist in the recovery.
FEMA also gets precedence on trucking to be
able to move goods or equipment needed for the
recovery efforts.
UPDATE ON ILA/USMX
NEGOTIATIONS
While the work stoppage ended after three days,
the terminology was that it was suspended until
15 January, with only the salary part of a
future deal agreed to by both parties.
Levine said the union remains steadfast in its
opposition to any kind of automation at the
ports – full or semi – that would replace jobs
or historical work functions.
Levine said the union has continued to state
its case against automation even as they
returned to work.
Levine said shippers will keep 15 January in
mind as there is a chance another work stoppage
could occur if no definitive agreement is
reached by then.
Visit the ICIS Logistics – impact on
chemicals and energy topic
page
Speciality Chemicals10-Oct-2024
HOUSTON (ICIS)–Nearly 3.4 million outages have
been reported in Florida in the aftermath of
Hurricane Milton, which made landfall as a
powerful Category 3 hurricane near Sarasota,
Florida, south of the important fertilizer hub
of Tampa.
Milton may have caused more damage had it
passed over Tampa, according to CoreLogic, an
insurance data company.
RAIL UPDATERailroad
company CSX said it has relocated all of its
locomotives and cars from low-lying areas in
Tampa and rerouted them.
CSX operations will continue in and out of
Waycross from the north, east and west
directions. It will continue operating into and
out of the intermodal ramps at Jacksonville,
Florida.
On 8 October, CSX said it had taken the
following steps.
Closed the Central Florida ILC intermodal
gate.
Closed the Tampa, FL intermodal gate.
Closed the TRANSFLO terminals at Tampa,
Tampa Port and Sanford.
Another railroad company, Norfolk Southern, has
not updated its notice from 7 October, when it
said it was monitoring and preparing for
Hurricane Milton.
FLORIDA PORTS REMAIN
CLOSEDMany ports in Florida have
maintained their Zulu port conditions, which
means they are closed to inbound and outbound
vessels.
The following table summarizes the conditions
among the major ports in Florida.
Port
Status
Condition
Port of Pensacola
Open
Normal
Port Panama City
Open
Draft restrictions
Port St Joe
Open
Normal
Port Tampa Bay
Closed
Zulu
SeaPort Manatee
Closed
Zulu
PortMiami
Open
Yankee
Port Everglades
Open
Yankee
Port of Palm Beach
Closed
Zulu
Fort Pierce
Closed
Zulu
Port Canaveral
Closed
Zulu
Jaxport
Closed
Zulu
Port of Fernandina
Closed
Zulu
Source: US Coast Guard.
IMPACT ON FERTILIZERS, PHOSPHATES,
CHEMSFor chemicals, there is
some epoxy resin, phenolic resin and
unsaturated polyester resin (UPR) production in
Lakeland and Kathleen, Florida.
Milton will make landfall far from Pensacola,
Florida, which has plants that make nylon and
thermoset resins.
Tampa is an important hub for the US fertilizer
industry, hosting corporate offices, trading,
product storage, shipping and other logistical
operations.
Fertilizer producer Mosaic has its headquarters
in Tampa. The company has not issued any
statements regarding its corporate operations.
A source at the fertilizer company Yara said it
was shutting down its Tampa offices to comply
with the evacuation orders.
Near Tampa is Florida’s
phosphate mining operations in Bone
Valley, which covers parts of Hardee,
Hillsborough, Manatee and Polk counties.
In all, Florida has 27 phosphate mines, of
which nine are active, according
to the
Florida Department of Environmental
Protection.
Canadian fertilizer producer Nutrien has yet to
restart its White Springs phosphate operations
following Helene, an earlier hurricane that
made landfall farther north in Florida’s Big
Bend region.
On 30 September, Mosaic said its Riverview
operations were off line following water
intrusion from a storm surge caused by
Hurricane Helene.
POSSIBLE DAMAGEHurricane
Milton could be extremely destructive because
of its winds, rainfall and storm surge.
It will pass over the following metropolitan
statistical areas.
Region
Population
Tampa
3,342,963
Orlando
2,817,933
Jacksonville
1,713,240
Sarasota
910,108
Source: US Census Bureau
CoreLogic, the insurance data company, said
Milton’s shift to the south of Tampa could
limit the magnitude of insured losses.
CHEMS AND
RECONSTRUCTIONFor hurricanes in
general, reconstruction can translate into
increased demand for many chemicals and
polymers.
The white pigment titanium dioxide (TiO2) is
used in paints.
Solvents used in paints and coatings include
butyl acetate (butac), butyl acrylate
(butyl-A), ethyl acetate (etac), glycol ethers,
methyl ethyl ketone (MEK) and isopropanol
(IPA).
Blends of aliphatic and aromatic solvents are
also used to make paints and coatings.
For polymers, expandable polystyrene (EPS) and
polyurethane (PU) foam are used in insulation.
PUs are made of methylene diphenyl diisocyanate
(MDI), toluene diisocyanate (TDI) and polyols.
High-density polyethylene (HDPE) is used in
pipes. Polyvinyl chloride (PVC) is used to make
cladding, window frames, wires and cables,
flooring and roofing membranes.
Unsaturated polyester resins (UPRs) are used to
make coatings and composites.
Vinyl acetate monomer (VAM) is used to make
paints and adhesives.
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Recycled Polyethylene Terephthalate10-Oct-2024
LONDON (ICIS)–Glycolysis-based chemical
recycling technology company Ioniqa has
filed
for bankruptcy protection, the company
announced in press release on Thursday.
The company is headquartered in the
Netherlands. It is concentrated on chemically
recycling polyethylene terephthalate (R-PET).
In the press release, the company stated that
it has determined that “achieving a positive
cash flow from its advanced polyester recycling
technology will take too long.” Advanced
recycling is a term that is often used as an
alternative description for chemical recycling
(although mechanical recyclers also use the
term advanced recycling to refer to some
mechanical recycling processes).
It attributed this to the comparatively low
price of traditional virgin PET and the supply
chain for chemically recycled PET still being
in development. It also attributed some of the
blame to “the implementation of regulated
mandatory standards for meaningful recycling
levels… [being] too far out into the future.”
It stated that this meant that
large-scale deployment of its technology was
not economically feasible at this time.
Ioniqa has a glycolysis-based chemical
recycling demonstration plant in Geleen, The
Netherlands, which has been operational since
2019 and has an estimated output of 8,000
tonnes/year according the ICIS Recycling Supply
Tracker – Chemical. Investors in the site
include The Coca Cola Company, Unilever,
Indorama Ventures, Koch Technology Solutions,
and Infinity Recycling’s Circular Plastics
Fund.
Chemical recycling is an umbrella term for a
variety of methods that use different
production routes and feedstocks to create new
material from waste. This means that each
process (and each technology and individual
player) has vastly different cost-structures
and the economics of each chemical recycling
method vary substantially. Coupled with
this, achievable prices for chemically recycled
products vary significantly between grade and
polymer type.
Common chemical recycling methods include
pyrolysis, gasification, glycolysis,
hydrolysis, methanolysis, and enzymatic
hydrolysis.
In chemical recycling, chemical processes are
used to revert waste back to an earlier
molecular state. Waste can be reverted back to
monomer, building block chemicals, or all the
way back to crude oil/energy. Chemical
recycling alters the fundamental chemical
properties of the material.
In glycolysis, a transesterification catalyst
is used to break the ester linkages, which are
replaced by hydroxyl terminals. This produces
bisterephthalate (BHET) and PET glycozates.
These can be reacted with aliphatic diacids to
make: polyester polyols, which are in turn used
in polyurethane (PU) foams; co-polyesters;
unsaturated resins; and hydrophobic dyes. If
combined with virgin BHET, the process produces
chemically recycled PET via dimethyl
terephthalate (DMT) or purified terephthalic
acid (PTA) glycolysis. Typical catalysts
include monoethylene glycol (MEG), diethylene
glycol (DEG), propylene glycol (PG) or
dipropylene glycol (DPG).
Transesterification does not work on polymers
such as polyolefins due to a lack of cutting
points. As a result, glycolysis is
predominantly focussed on PET, and this means
that it typically uses sorted and separated
monomaterial as a feedstock, which can add
additional cost.
The most common form of chemical recycling in
Europe is pyrolysis-based. This is in large
part being driven by demand from ambitious
brand sustainability targets in the packaging
sector. Many fast-moving consumer goods (FMCG)
brands see chemical recycling as the only
viable way to reach large scale food-grade
packaging suitable recycled polyolefins given
current EFSA requirements that 95% of input
waste must be former food-contact to gain
food-contact approval. Most PET input waste is
sourced from used plastic drinks bottles,
making it easier for R-PET producers to meet
this 95% requirement than other polymers, and
there is a well established R-PET food-grade
pellet sector – using traditional recycling
methods – across Europe. R-PET is also the only
mechanical recycling technology recognised as
suitable for producing food-contact material
under European Commission regulation (EU)
2022/1616 on ‘recycled plastic materials and
articles intended to come into contact with
foods’.
Pyrolysis-based chemical recycling uses heat
and pressure – typically in the absence of
oxygen, although it is sometimes present in
controlled volumes – to transform waste
feedstocks (most commonly plastic waste or
end-of-life tyres) into an earlier molecular
state.
Pyrolysis-based plants targeting mixed plastic
waste as feedstock – with a focus on
polyolefins – currently account for more than
60% of all operating chemical recycling
capacity in Europe according to ICIS Recycling
Supply Tracker – Chemical. PET, however, does
not pyrolyse.
Highlighting just how variable achievable
prices for chemically recycled materials can
be, pyrolysis oil prices in Europe are
currently regularly trading on the spot market
anywhere from €800-2,200/tonne ex-works Europe
depending on grade.
ICIS assesses more than 100 grades
throughout the recycled plastic value chain
globally – from waste bales through to pellets.
This includes recycled polyethylene (R-PE),
recycled PET (R-PET), R-PP, mixed plastic waste
and pyrolysis oil. On 1 October ICIS launched a
recycled polyolefins agglomerate price range as
part of the Mixed Plastic Waste and Pyrolysis
Oil (Europe) pricing service. For more
information on ICIS’ recycled plastic products,
please contact the ICIS recycling team at
recycling@icis.com
Speciality Chemicals10-Oct-2024
HOUSTON (ICIS)–Warmer waters in the Atlantic
Basin could make record-setting hurricanes like
Milton and Beryl more common, which
strengthened rapidly to become major storms
that caused significant damage.
Most of the petrochemical and refining
capacity of the US is along the Gulf of Mexico,
making the plants vulnerable to the disruptions
caused by more powerful hurricanes that could
become more common in the future.
Rising exports of energy, chemical
feedstock and plastics from the US Gulf Coast
have caused local hurricanes to have global
consequences.
If wind shear becomes more common, then it
could offset some of the strengthening effects
that warmer water will have on hurricane
development.
RECORD-SETTING HURRICANE
SEASONWarm water is like rocket
fuel for tropical storms and hurricanes, and
that led to the rapid intensification of
Milton, which strengthened from a tropical
storm into a Category 5 hurricane in less than
two days.
By midday on Monday, the rapid strengthening of
Milton placed it among the top three Atlantic
hurricanes, behind only 2005’s Hurricane Wilma
and 2007’s Hurricane Felix, said Alex DaSilva,
lead hurricane expert at the meteorology
company AccuWeather.
Milton had set another record as the strongest
hurricane to occur in the Gulf of Mexico,
according to Levi Silvers, research scientist
at the Department of Atmospheric Sciences at
Colorado State University, which publishes
regular hurricane forecasts.
Milton was also the Gulf’s strongest hurricane
since Rita in 2005, Silvers said.
Milton would weaken to a Category 3 hurricane
before making landfall on Wednesday night.
AccuWeather estimates that Milton could cause
more than $200 billion in damage and economic
loss.
Earlier on July 2, Beryl set its own record
by becoming the earliest Category 5 hurricane
to form in the Atlantic basin, beating the
previous record holder by an astounding two
weeks, DaSilva said.
According to Silvers, Beryl also accumulated
more cyclone energy than any other storm
occurring before August. “Basically, it was the
strongest early storm we have had by several
measures.”
After forming in the Atlantic Beryl weakened
after passing over Mexico’s Yucatan peninsula
before making landfall in Texas and disrupting
operations at several petrochemical plants.
AccuWeather estimated that
total damage and economic loss caused
by Beryl was $28 billion to $32 billion.
Hurricane Helene set a record for the amount of
available atmospheric moisture, also known as
precipitable rain, according to AccuWeather.
Such extreme amounts of moisture allowed Helene
to carry it far inland, leading to rapidly
rising river levels and flash flooding.
AccuWeather estimates that Helene caused $225
billion to $250 billion in damage and
economic loss in Florida, Georgia and the
Carolinas.
WARM WATER THREATSIf the
planet continues to warm, one of the
consequences would be elevated water
temperatures.
Warmer waters contributed to the strength and
rapid intensification of these three
hurricanes, DaSilva said.
The danger is not just the surface temperature
of the Atlantic but also something that
meteorologists call ocean heat content, DaSilva
said. Ocean heat content reflects water
temperatures below the surface.
A warmer planet will also heat up the
atmosphere, allowing the air to hold more
moisture. That would lead to more rainfall and
greater risks of floods.
“I am concerned that we are going to be seeing
more episodes of rapid intensification,”
DaSilva said. “The tie between sea surface
temperatures and rapid intensification – we are
pretty confident about that.”
Silvers also expressed concern about the threat
posed by elevated water temperatures.
WIND SHEAR REMAINS UNKNOWN
VARIABLEMeteorologists are less
sure if wind shear could become more common in
a warmer planet, DaSilva said. Wind shear
usually discourages the formation of tropical
weather.
If wind shear does become more common, it could
partially offset the effects of warmer water.
In a world with more wind shear, it might not
generate more hurricanes, but those that do
form will strengthen rapidly into more powerful
storms, DaSilva said.
The length of the Atlantic hurricane season
could also expand by starting sooner than the
current June 1 date, DaSilva said.
DaSilva doubts that the Atlantic season would
last beyond its November 30 end date, because
wind shear becomes more common during the final
months of the year.
Silvers, though, said it is difficult to
determine if the timing of Atlantic storms will
change in the future.
“This season is a perfect example, with record
breaking storms before and after the peak of
the season, but almost nothing during the
historical peak,” Silvers said.
MORE DISRUPTIONS FOR US, GLOBAL
CHEMICALSMost of the
petrochemical plants and refineries in the US
are on the Gulf Coast, so more powerful
hurricanes would leave them more vulnerable to
damage and shutdowns.
The US now exports significant amounts of
polyethylene (PE), polyvinyl chloride (PVC),
vinyl chloride monomer (VCM) and other
chemicals.
Hurricanes disrupt port operations, so those
exports could be delayed, increasing the risk
of global shortages.
DISRUPTIONS TO WORLD’S CHEMICAL
FEEDSTOCKSIn addition, the US is
increasingly relying on exports to take away
excess ethane and liquefied petroleum gas (LPG)
produced from its oil fields.
These petrochemical feedstocks are being
imported by an increasing number of crackers
and propane dehydrogenation (PDH) units, with
GAIL (India) became the latest to announce
plans to build an ethane cracker.
Nearly all of the terminals that handle these
exports of ethane and LPG are on the Gulf
Coast, and all of the expansion projects are in
the region.
Hurricanes could disrupt operations at these
terminals and interrupt the supply of these
feedstocks to crackers and PDH units throughout
the world.
HURRICANES DISRUPT US LNG
TERMINALSThe majority of US LNG
capacity is on the Gulf Coast and its
preponderance will only increase as the country
starts up more terminals.
This will have effects on US and global energy
prices.
Disruptions in global shipments could raise LNG
costs.
In the US, extended shutdowns of LNG terminals
would increase supplies of natural gas, pushing
prices lower for it and ethane.
Lower ethane prices in the US could increase
margins for ethylene derivatives.
DISRUPTIONS TO US OIL
EXPORTSThe Gulf Coast is a large
exporter of oil, with major terminals in Corpus
Christi, Houston and Nederland in Texas.
In addition, the Gulf Coast is home to the
Louisiana Offshore Oil Port (LOOP), the only
deepwater crude port in the US.
Companies are planning more offshore ports.
Enterprise Products received a deepwater
port license for its Sea Port Oil Terminal
(SPOT), which could load 2 million bbl/day of
crude oil. If built, it would be built 30
nautical miles off the Texas coast.
In 2020, Phillips 66 and Trafigura Group
announced that
they created a 50/50 joint venture called
Bluewater Texas Terminal to develop an offshore
deepwater oil port 21 nautical miles east of
the port of Corpus Christi.
Energy Transfer is proposing its Blue
Marlin Offshore Port, which could load up to
one very large crude carrier (VLCC) per day.
Texas GulfLink, a subsidiary of Sentinal
Midstream,
is developing a deepwater oil terminal off
the Gulf Coast.
If built, these offshore oil ports would be
vulnerable to hurricanes, along with the
onshore terminals on the Gulf Coast.
That could restrict global oil supplies and
push prices higher. Higher prices would
increase costs for crackers that use naphtha as
a feedstock.
Insight article by Al
Greenwood
Thumbnail shows damage caused by Hurricane
Milton. Image by Chris Urso/Tampa Bay
Times/ZUMA Press Wire/Shutterstock
Polyols09-Oct-2024
SAO PAULO (ICIS)–Dow has decided to stop
producing polyether polyols at its site in San
Lorenzo, in Argentina’s province of Santa Fe,
on the back of poor economics, the US chemicals
major confirmed to ICIS on Wednesday.
Dow said global oversupply for polyols had
caused the San Lorenzo plant to persistently
operate at low rates.
The company had already intended to halt
polyurethane (PU) production there in 2021, but
pressure from trade unions and the national
government at the time stopped it from taking
the decision.
According to Dow, 40 employees at the plant
will be affected by the closure, although trade
unions say the figure is 120.
The United Petrochemical Workers and Employees
Union representing the plant’s employees said
the company took the decision to shut the plant
without notifying workers representatives,
according to reports by local media in Santa
Fe.
Dow said, however, employees had been “notified
in accordance” with Argentine labor laws.
“The business driver for this final decision is
aligned with the company’s strategy to optimize
its asset footprint. The San Lorenzo production
unit has been operating at low utilization
rates, while there is an excess of installed
capacity in polyol plants all over the world,”
said the company.
“Dow has worked to minimize any potential
impact and is well positioned to meet customer
demands and deliver the product mix needed to
serve them. These customers may also acquire
products from other suppliers at competitive
prices, as they currently do.”
The chemicals major said it would continue to
“work closely with all stakeholders” of the San
Lorenzo site to ensure an “orderly and smooth”
transition.
The PU plant had a production capacity of
50,000 tonnes/year, according to the ICIS
Supply and Demand Database.
Dow keeps a large presence in Argentina, where
it is the sole producer of polyethylene (PE).
Its main operating facilities are in Bahia
Blanca, south of Buenos Aires, where it employs
3,000 workers in 12 production plants.
Additional reporting by Bruno Menini
Speciality Chemicals09-Oct-2024
HOUSTON (ICIS)–Railroad company CSX is
suspending operations at several of its
intermodal and TRANSFLO terminals in Florida
ahead of Milton, which has shifted its path
away from Tampa, a major fertilizer hub.
If Milton maintains its latest forecasted path,
it could spare Tampa of the worst damage,
according to CoreLogic, an insurance data
company.
Milton’s maximum sustained winds are nearly 145
miles/h (230 km/h), making it a Category 4
hurricane, according to the National Hurricane
Center (NHC).
Milton is expected to weaken to a Category 3
hurricane and make landfall later on Wednesday
south of Tampa near Sarasota, Florida,
CoreLogic said.
Milton will then pass over central Florida.
RAIL DISRUPTIONSRail
shipments through the Tampa area will likely
face delays until Milton passes, CSX said. It
expects multiple downed trees and power outages
in the Wildwood, Lakeland and surrounding Tampa
subdivisions.
Lakeland and nearby Kathleen are near Tampa and
are home to some thermoset resin plants.
CSX has taken the following actions:
Closed the Central Florida ILC intermodal
gate.
Closed the Tampa, FL intermodal gate.
Closed the TRANSFLO terminals at Tampa and
Tampa Port.
Will close the Sanford TRANSFLO terminal
midday on Wednesday.
Another railroad company, Norfolk Southern, has
not updated its notice from 7 October, when it
said that it is monitoring and preparing for
Hurricane Milton.
MORE PORTS CLOSESome of
Florida’s ports on the Atlantic coast have set
conditions to Zulu, meaning that they are
closed to inbound and outbound vessels.
The following table summarizes the port
conditions along the eastern and western coasts
of Florida.
Port
Status
Condition
Port of Pensacola
Open
Port Panama City
Open
X-Ray
Port St Joe
Open
X-Ray
Port Tampa Bay
Closed
Zulu
SeaPort Manatee
Closed
Zulu
PortMiami
Open
Yankee
Port Everglades
Open
Yankee
Port of Palm Beach
Closed
Zulu
Fort Pierce
Closed
Zulu
Port Canaveral
Closed
Zulu
Jaxport
Closed
Zulu
Port of Fernandina
Closed
Zulu
Source: ports, US Coast Guard
IMPACT ON FERTILIZERS, PHOSPHATES,
CHEMSFor chemicals, there is
some epoxy resin, phenolic resin and
unsaturated polyester resin (UPR) production in
Lakeland and Kathleen, Florida.
Milton will make landfall far from Pensacola,
Florida, which has plants that make nylon and
thermoset resins.
Tampa is an important hub for the US fertilizer
industry, hosting corporate offices, trading,
product storage, shipping and other logistical
operations.
Fertilizer producer Mosaic has its headquarters
in Tampa. The company has not issued any
statements regarding its corporate operations.
A source at the fertilizer company Yara said it
was shutting down its Tampa offices to comply
with the evacuation orders.
Near Tampa is Florida’s
phosphate mining operations in Bone
Valley, which covers parts of Hardee,
Hillsborough, Manatee and Polk counties.
In all, Florida has 27 phosphate mines, of
which nine are active, according
to the
Florida Department of Environmental
Protection.
Canadian fertilizer producer Nutrien has yet to
restart its White Springs phosphate operations
following Helene, an earlier hurricane that
made landfall farther north in Florida’s Big
Bend region.
On 30 September, Mosaic said its Riverview
operations were offline following water
intrusion from a storm surge caused by
Hurricane Helene.
POSSIBLE DAMAGEHurricane
Milton could be extremely destructive because
of its winds, rainfall and storm surge.
It will pass over the following metropolitan
statistical areas.
Region
Population
Tampa
3,342,963
Orlando
2,817,933
Jacksonville
1,713,240
Sarasota
910,108
Source: US Census Bureau
The following map shows the expected path of
Milton.
Source: National
Hurricane Center
CoreLogic, the insurance data company, said
Milton’s shift to the south of Tampa could
limit the magnitude of insured losses.
The following map compares three insured loss
scenarios based on Milton’s path.
Source:
CoreLogic
The following map shows Milton’s expected storm
surges.
Source: National
Hurricane Center.
The following map shows three-day rain totals.
Source:
CoreLogic
CHEMS AND
RECONSTRUCTIONFor hurricanes in
general, reconstruction can translate to
increased demand for many chemicals and
polymers.
The white pigment titanium dioxide (TiO2) is
used in paints.
Solvents used in paints and coatings include
butyl acetate (butac), butyl acrylate
(butyl-A), ethyl acetate (etac), glycol ethers,
methyl ethyl ketone (MEK) and isopropanol
(IPA).
Blends of aliphatic and aromatic solvents are
also used to make paints and coatings.
For polymers, expandable polystyrene (EPS) and
polyurethane (PU) foam are used in insulation.
Polyurethanes are made of methylene diphenyl
diisocyanate (MDI), toluene diisocyanate (TDI)
and polyols.
High density polyethylene (HDPE) is used in
pipe. Polyvinyl chloride (PVC) is used to make
cladding, window frames, wires and cables,
flooring and roofing membranes.
Unsaturated polyester resins (UPR) are used to
make coatings and composites.
Vinyl acetate monomer (VAM) is used to make
paints and adhesives.
Thumbnail shows an image of Hurricane
Milton. Image by the National Hurricane
Center.
Crude Oil09-Oct-2024
SINGAPORE (ICIS)–Volatility marked the first
few days of re-opening of China’s financial and
commodities markets as investors’ initial hopes
of more economic measures were crushed.
Implementation plans for pre-holiday
measures unclear
Infrastructure-focused sovereign bonds to
drive growth further
China GDP growth to slow to 4.3% in 2025 –
World Bank
The highly anticipated return of Chinese market
players after a week-long absence sparked a
surge in the equities markets, with the closely
watched CSI 300 – which tracks shares of the
top 300 companies trading in Shanghai and
Shenzhen, had surged by 11% on 8 October.
“Expectations were high after the monetary
announcements made [in] the week of 24
September and there were even news reports of
up to a [yuan] CNY10 trillion ($1.4 trillion)
stimulus,” hedge fund portfolio manager Rikki
Malik said in a note issued on Wednesday for
investment research and analysis firm
Smartkarma.
On Wednesday, the CSI300 index fell by 7%,
reflecting concerns over the lack of concrete
new stimulus measures from Beijing to sustain
the rally.
Other Asian equity indices tracked the weakness
in Chinese bourses amid risk aversion also
stoked by geopolitical jitters in the Middle
East
At 08:53 GMT, Hong Kong’s Hang Seng Index was
down by around 1.4% at 20,637.24, continuing
from its sharpest single-day decline in 16
years in the previous session.
Chemicals giant Sinopec was down by 3.61% and
state energy firm PetroChina fell by 3.14% in
Hong Kong.
Elsewhere in Asia, South Korea’s KOSPI
Composite ended 0.61% lower to 2,594.36 while
Japan’s key Nikkei 225 closed up by 0.87% at
39,277.96
China’s petrochemical futures
tumbled, with polyvinyl chloride (PVC),
purified terephthalic acid (PTA) and paraxylene
(PX) futures leading the slump.
Market sentiment was also weighed down by crude
oil’s plunge overnight, in which both Brent and
WTI benchmarks shed more than 4%.
POST-HOLIDAY POLICY BRIEFING
UNDERWHELMS
The National Development and Reform Commission
(NDRC) – China’s top economic planner – held a
briefing on 8 October in which chairman
Zheng Shanjie said that China was “fully
confident” of achieving economic targets for
2024.
But his failure to detail sufficiently big or
new measures rekindled market doubts about
Beijing’s commitment to ensuring the economy
can climb out of its most serious slump since
the global pandemic and achieve a 5% growth.
Market players were initially expecting the
government to adopt further fiscal
measures to arrest
the slowdown of the world’s
second-biggest economy.
Instead, the NDRC emphasized confidence in
achieving the “around 5%” growth target for
this year based on policy measures announced in
late September.
Toward this end, issuance of long-term
sovereign and local government bonds will be
accelerated to fund infrastructure projects
well into next year.
Additionally, the NDRC announced upcoming
investments in key strategic areas totaling
yuan (CNY) 100 billion, on top of plans to
expedite CNY100 billion in central government
investment originally planned for 2025.
NO MAJOR NEAR-TERM IMPACT FROM STIMULUS
MEASURES
During the seven-day China holiday in the first
week of October, domestic tourist trips grew
5.9% year on year, with revenues up by 6.3%
over the same period. But the per trip spend
was near flat at 0.4%, according to data from
the Ministry of Culture and Tourism.
Week-long holidays in the country, including
the Spring Festival/Lunar New Year and Labor
Day celebrations in February and May,
respectively, typically result in spikes in
domestic tourism spending.
In October, domestic tourism activities
remained positive this year while there were
also reports of stronger outbound and inbound
travel during the period.
The two earlier major holidays in China – the
Spring Festival and Labour Day holidays – had
recorded stronger improvements across number of
trips, total spend and spend per trip,
according to Singapore-based UOB Global
Economics & Markets Research in a note on
Wednesday.
“Although the recovery in outbound travel may
dilute the demand for domestic tourism, the
moderation in spend per trip continue to
indicate more cautious spending amongst
consumers,” it said.
“The initial spillover from recent PBOC
[People’s Bank of China]-led stimulus to
consumer spending including the rollout of
local government vouchers and promotions to
boost consumption had been lacking in the
National Day holiday statistics,” UOB said.
“This further affirms the need for stronger
fiscal measures that target consumption and
support to the labor market particularly with
youth unemployment rate rising to 18.8% in Aug
which continues to hamper the recovery in
consumer confidence.”
Ahead of the National Day holidays, China’s
central bank had announced stimulus measures
estimated to be worth at least CNY3 trillion,
which is equivalent to 2.3% of its GDP.
These measures include a 50-basis point cut to
banks’ reserve requirement ratio (RRR),
injecting CNY1 trillion into the financial
system.
Further measures include a CNY1 trillion
capital injection to state-owned banks, a
reduction in interest rates on existing
mortgages to release CNY150 billion in funds,
and CNY800 billion allocated to swap and
re-lending facilities for stock purchases.
“Investors were also disappointed that some of
the 2025 budget would be pulled forward to this
year, implying no new money, but… it is
easier to issue special bonds which are off
budget, rather than going through the rigmarole
of increasing this year’s budget deficit,” said
SmartKarma’s Malik.
Markets will now be closely watching for
further fiscal stimulus to support consumption
and investment.
“In addition, given the onset of winter,
construction projects need to be started
quickly. We fully expect there to be
further issuance of ultra-long special bonds,”
Malik added.
Investors watching for signs of China’s next
policy moves now have three key dates circled
on their calendars.
In late October, the Standing Committee of the
National People’s Congress (NPC) is scheduled
to meet in late October. Meanwhile, China’s Q3
GDP is slated for release on 18 October; while
country’s Politburo is due to meet early
December, leading to the annual Central
Economic Work Conference (CEWC).
The CEWC is a pivotal annual meeting in China
during which country’s economic agenda is set
for the upcoming year. The conference typically
takes place over two to three days in December.
CHINA 2025 GROWTH TO SLOW DESPITE
STIMULUS – WB
Economic growth in China is projected to slow
to 4.3% next year from 4.8% in 2024 despite
economic stimulus measures that China
introduced in September, the World Bank warned
in a report on 7 October.
This is due in part to low consumer and
investor confidence, property market weakness,
an ageing population and global tensions, the
multilateral institution said.
“Recently signalled fiscal support may lift
short-term growth but longer-term growth will
depend on deeper structural reforms,” the World
Bank said.
“China has led growth in the region for more
than three decades, but its relative growth is
likely to slow down in future,” it added.
Insight article by Nurluqman
Suratman
With contributions from Jonathan Yee
($1 = CNY7.07)
Speciality Chemicals09-Oct-2024
LONDON (ICIS)–Massive overcapacity along some
value chains is likely to drive further
fundamental shifts in the global chemicals
landscape, with differentiation and innovation
key to remaining competitive.
Slow demand in lengthy trough cycle conditions
and the massive ramp-ups in production capacity
seen in China since the start of the 2020s have
left economics ”almost unsustainable” in some
cases, according to Ketan Joshi, president for
intermediates at BASF and member of the
European Petrochemicals Association (EPCA)’s
board of directors.
“In several value chains, the overcapacities
built up in China make the situation in China
almost unsustainable when it comes to
economics, which I assume will trigger some
fundamental changes in the markets globally,”
he said. “Differentiation and competitive
offerings will be imperative for survival.”
The radically changed competitive conditions
for heavy industry in Europe relative to
elsewhere in the world has highlighted the
sluggishness of some industrial players to
adapt to the new conditions.
“I do believe that manufacturing industry in
Europe became complacent to a certain extent in
the past decade, so it is now really about
trying to get back that innovation spirit,” he
said.
“If you talk about what the industry can do,
then this is what the industry has in its own
hand to drive, to differentiate and create a
compelling value proposition for customers,” he
added.
BASF has taken a detailed look at its
operations, particularly those in its Verbund
site in Ludwigshafen, over the course of this
year.
Following the announcement in August of the
closure of its Ludwigshafen adipic acid plant
and several units, in the wake of a complete
evaluation of the prospects for all units at
the complex, further measures could yet be
taken.
The results of that deep dive were fairly
promising, with 78% of Ludwigshafen production
plants deemed competitive, while 16% were
evaluated as facing short- to mid-term
competitive risks and 6% seen as less
competitive in the future, according to site
director Katja Scharpwinkel.
While the bulk of the company’s assets at its
home based have been judged to be competitive,
the current global market remains a challenging
one, with manufacturing productivity continuing
bearish and demand upticks still fairly minor.
The most recent purchasing managers’ index
(PMI) data for the eurozone shows manufacturing
hitting a seven-month low in September, with
conditions in Germany especially challenging,
and the service sector also showing more marked
signs of a slowdown.
Chemicals demand slightly outpaced the general
industrial market in the first half of the
year, according to data from industry body
Cefic, but remains substantially below recovery
levels.
BASF itself has guided for a slow recovery,
with no big step changes in the subdued upward
demand curve, and conditions remain challenging
for intermediates.
“From an intermediates perspective, it’s been a
challenging year, with demand developments
remaining uncertain until the end of 2024, and
no clear sign of any broad recovery. Customers
continue to buy very cautiously, mainly keeping
inventories very low, and competitive pressure
stays high,” Joshi said.
“Geopolitical uncertainties are driving large
fluctuations in basic commodities, which I
think is a major driver in markets at present,
and that poses a major challenge for
capex-heavy industries to really make
decisions,” he added.
While the macroeconomic picture is crucial to
allow for a stronger rebound, companies need to
adapt and innovate to meet the current
challenges, he added.
“To galvanize a broad recovery, several factors
are necessary: stable economic conditions
play a crucial role in boosting investment, and
increasing consumer confidence is necessary to
drive consumption and spending,” he said.
“But also continued innovation is vital to meet
the evolving customer needs, and that is really
what is required to stay competitive in the
market.”
“Traditionally, Europe led the industry in
innovation, so it is important to get back the
focus,” he added.
Decarbonising production and offering a wider
range of sustainable solutions will be core
differentiators for the manufacturing sector,
particularly as consumer tastes continue to
evolve, according to Joshi.
Strong pushes on research and scaling up
production capacities for new markets and new
products are difficult when producers are
moving to aggressively cut costs and financing
costs remain high.
Many European countries, including Germany,
have slipped down the international rankings of
research and development spending and
innovation, and the prospect of making big
financial bets when markets are still forming
remains a daunting prospect.
“Without a doubt, moving towards more
sustainability requires additional effort
across the board. As I said, it cannot be an
individual thing,” Joshi said.
The European Parliament seems at present to be
attempting to adapt to that challenge, without
committing to the kinds of green subsidy
frameworks seen in the US.
Re-elected president of the European
Commission, Ursula von der Leyen, has promised
a clean industrial deal, and to cut red tape
around permitting, although the pushback faced
by BASF for its proposed cathode active
materials plant in Finland and INEOS’ new
cracker in Antwerp shows the continuing
difficulty of building new production in the
EU.
While the policy specifics are still to be
unveiled, the pronouncements by the new
parliament are promising, according to Joshi,
but permitting remains a real issue in Europe.
“Right now, over 80 gigawatt of forthcoming
wind capacity is stuck in lengthy permitting
process in Europe, and eight times more that of
solar energy capacity is in the permitting
process compared to what is under
construction,” he said.
The ambition of the Commission’s targets, both
for carbon reduction and for the use of
non-fossil fuels and feedstocks, has been
stymied to an extent by the continual revision
of those goals, making it difficult for
companies to commit to specific plans.
The chemicals sector has one investment cycle
left before the 2030 decarbonisation targets of
a 55% reduction in carbon emissions compared to
1990 come into effect. The fact that new
large-scale revisions to green industrial
policy are still being drafted makes deploying
that capital a challenge.
“When ambitious targets regarding plastic
recycling and accepted recycling technologies
are reviewed again and again by governments,
parliaments and regulatory authorities, it
creates huge uncertainty in the chemical
industry and delays investments,” he said.
“We need a consistent policy, and we need those
policies to stick to what the industry has
already embarked into, so that the investments
can happen,” he added.
The roadmap for the evolution of the circular
economy is also yet to be written for the
chemicals sector. Companies looking at new
markets often use acquisitions as a way in, but
owning waste recycling infrastructure does not
necessarily make sense for a chemical producer.
Greater collaboration along these new value
chains is necessary, and not all early steps
may prove in hindsight to have been the
best-optimised choices. The important thing is
to start to make those steps, according to
Joshi.
“We cannot just aim for perfect solutions from
the outset. We need to start implementing
things and then improve as we go forward,” he
said.
“Partnership with waste suppliers, brand
owners, technology leaders, will be required,
because not everything can be done by a single
player in the industry,” he added.
The EPCA assembly runs until 10 October.
Interview article by Tom
Brown
Thumbnail image source: Shutterstock
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