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

Week-long heatwave in gas production states Hot summer may intensify export-domestic supply debate Darwin and Broome temperatures soar SINGAPORE (ICIS)–Australian Bureau of Meteorology (BOM) has issued warnings for a severe-to-extreme heatwave in parts of Northern Territory (NT) and Western Australia (WA) from 30 September, close to LNG production hubs in Darwin and at the Woodside-operated North West Shelf. The extreme heatwave will last for six days starting 2 October over parts of northern NT, with a larger range of the region and areas near North West Shelf experiencing the severe heatwave from 30 September to 8 October, according to the BOM forecast. The weather data monitor said Darwin had the “hottest September in more than 100 years”. High temperatures pose risks to cooling facilities at liquefaction plants, which may curb LNG output. This has not yet happened to LNG facilities in the areas, according to operators. “We do not expect a significant impact to Ichthys LNG production as the heatwave is expected to last approximately 1 week and peaking today/tomorrow,” an Inpex spokesperson told ICIS 2 October. The Chevron-operated Gorgon and Wheatstone gas facilities are “not subject to a current heatwave assessment” due to their distance from the heat center Broome, Chevron’s spokesperson told ICIS. A Woodside spokesperson said that, “we are not experiencing any unusual weather in Karratha, where our operations are located.” SUPPLY TENSION Although the areas affected by the heatwave are not densely populated, hot weather ahead this upcoming southern hemisphere summer could lead to increased electricity use for air-conditioning and industrial cooling. Australia’s 2023/24 summer electricity demand was 776MW more than 2024 winter, according to Australian Energy Regulator data. Should the upcoming summer experience high temperatures, which is possible according to the BOM forecast, the summer-winter demand gap would further widen. Source: Australia Bureau of Meteorology Energy resource exports from Australia have been challenged because domestic electricity users pay premiums for local coal and gas. However, WA state recently eased an onshore gas export ban that had been in place since 2020. The government has been urging LNG exporters to secure domestic supplies in the context of growing demand in its east coast. Gas supply would fall short of domestic demand from 2027, the Australian Competition and Consumer Commission (ACCC) said in its latest report.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. We now have 32 months of trade and pricing data since the end of the 1992-2021 Chemicals Supercycle and so it is worth taking stock of what the numbers are telling us. And as we have 32 months of information to draw on since the end of the Supercycle, which is from January 2022 until August 2024, it is worth making like-for-like comparisons with the 32-month period immediately before the end of the Supercycle – May 2019 until December 2021. Focusing just on polypropylene (PP) with the story the same in many other products: South Korea and Taiwan saw declines in PP sales turnover in China of $1.1 billion and $694 million respectively when this two 3-month periods are compared. Despite its feedstock advantages, Saudi Arabia saw its turnover fall by $681m followed by Singapore at $633m and Thailand at $613 million . Losses across China’s top ten trading partners totalled $4.6bn. The only winner was, not surprisingly, the Russian Federation with a turnover gain of $102 million. Another symptom of a chronically oversupplied market has been a collapse in margins as another chart in today’s post illustrates: In May 2019-December, the average of both naphtha and PDH-based PP margins was $281/tonne, but this fell to just $12/tonne in January 2022-September 2024. And this latter period has involved many weeks of negative margins. A pivotal turning point in global chemicals markets, the most important since 1992, was the Evergrande Moment. And yet far are too few references to this essential context. China’s debts and its demographics told us from as early as 2011 that a steep fall in economic growth had to happen. We also knew from 2014 onwards, thanks to a shift in government policy, that much-greater chemicals self-sufficiency was on the way. This gave producers plenty of time to build strategies that reduced their dependence on China. But how many companies took note of what the demographic and debt trends were telling us? How many took note of the threat to China’s exports from 2018 onwards as the geopolitical environment deteriorated? My suspicion is that far too few companies were ready for the changes now well underway, which are reflected in the above demand, supply, sales turnover and margins data. This was because people chose to believe misleading nonsense about the “rise of China’s middle class” when the numbers on China’s per capita incomes, the country’s birthrate and the rise in its debts exposed the myth. The chemicals industry is science and data driven except, seemingly, in one critical area:  Macroeconomics. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

HOUSTON (ICIS)–Participants in the US chemical industry worry that a prolonged strike by US Gulf and East Coast dock workers will hurt exporters and lead to supply surpluses, and some carriers are already initiating port congestion surcharges that will add increased costs on top of delays to both imports and exports. As expected, dockworkers on the US East and Gulf Coasts went on strike early on Tuesday after labor union International Longshoremen’s Association (ILA) rejected the latest wage offer by employers’ group United States Maritime Alliance (USMX). While the US government has said it will not intervene, some analysts, including Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, think government intervention will be required to bring the dispute to an end. “The latest statement by the ILA suggests there is very little prospect of the two sides reaching a mutually agreeable resolution,” Sand said. “To stop trade from entering the US on such a scale for a prolonged period of time is unthinkable so the Government will need to step in for the good of its people and economy.” Kevin Swift, ICIS Senior Economist for Global Chemicals, said the strike could cost the US economy up to $5 billion/day. “This will affect imports from Germany, the Netherlands and other European nations,” Swift said. “I think the effect is more on specialty chemicals than resins. Swift said the ultimate disruption and cost to the economy depends on how long the strike lasts. IMPACT TO CHEM MARKETSThe strike is already impacting US polyethylene (PE) exports. Container ships also transport polymers, such as PE and polypropylene (PP), which are shipped in pellets. A PE trader in South America told ICIS that they are halting sales of US material destined for Brazil until additional information is available since they are unable to inform clients of the estimated departure date. According to the trader, some cargoes could be delayed by 30 days. The US is the main origin of PE imports into Brazil. The polyvinyl chloride (PVC) Industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. This could result in a long inventory situation and an increase in days of supply if producers and traders are unable to execute on export transactions due to the port strike. 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. But this places extra pressure on the rail and trucking industries which will need to move that material to destinations that were previously reached from the US Gulf or the East Coast. Imports of purified terephthalic acid (PTA), used to make PET, that typically come from South Korea and Mexico, could be affected by the strike. Even if some PTA gets delivered on the West Coast, it will still need to be transported to the East Coast where most PET plants are located. CARRIER SURCHARGES Market sources are telling ICIS they are seeing congestion surcharges between $1,000-3,000/FEU (40-foot equivalent unit), with some citing even higher surcharges. Sand said that extreme increases in container costs cited by ILA president Harold Daggett have not been seen yet. In a statement on 30 September, Daggett said carriers are charging $30,000/container. Sand cited Xeneta data, which is based on more than 450 million crowdsourced datapoints, showing average spot rates on the major fronthaul from Asia to US East Coast were at around $7,000/FEU on 1 October. “While average spot rates from north Europe to the US East Coast have increased 50% since the end of August, they are still only $2,800/FEU,” Sand said. Supply chain advisors Drewry also show rates from Asia to the USEC at $6,000/FEU, and rates from Asia to the USWC are at $5,500, although the rate of decline has slowed with more traffic heading that way because of the strike. Liquid chemicals that are largely transported by tankers are unlikely to be affected. But more liquid chemicals are being moved on container ships in isotanks. Focus story by Adam Yanelli Additional reporting by Stefan Baumgarten, Emily Friedman, Bruno Menini, Antulio Borneo and Kelly Coutu Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship carrying cargo on its way to Antwerp Harbour. (OLIVIER HOSLET/EPA-EFE/Shutterstock).

HOUSTON (ICIS)–As port operations along the East Coast and Gulf Coast came to a halt amid a union strike underway, the US fertilizer industry was carefully watching the labor developments but is not overly concerned about the situation having an immediate impact on activities or price direction. Part of this outlook on the port problem comes from a perspective of fertilizer participants that the work stoppage will be short in duration as the economic consequences will be severe if protracted. This latest labor disruption began when union International Longshoremen’s Association (ILA) rejected the latest wage offer by employers’ group United States Maritime Alliance (USMX). This commenced a strike at 36 ports stretching from Maine to Texas, and although the labor talks were said to be continuing there was no further progress reported as of late on 1 October. Also, the US fertilizer sector recently experienced the Canadian rail strike, which did provoke some steep concerns before it was quickly resolved so there is thought this situation could follow a similar course and end with a quick resolution. There are some thoughts this strike could be settled within a few days, although the government has indicated that it will not intervene in the situation. An industry participant echoed the overall outlook in saying “if the short term is like that, I do not expect any fertilizer related issues.” Domestic fertilizer prices should not see any immediate escalation because of this strike activity because demand is still fairly limited following the recent hurricanes and with the ongoing harvest progress. In addition, most of those volumes to be used in the coming weeks for end of the year applications, or stockpiled for next spring, saw the majority of movement over the last part of summer and now are mostly in place already. US producers did not immediately respond to a request for comment but Canadian fertilizer major Nutrien said that while the strike might not have any consequences directly for their operations, there is concern over the larger repercussion if this stoppage turns lengthy. “As the world’s largest supplier of crop inputs and services, Nutrien depends on reliable supply chains to serve North American and offshore customers,” said a Nutrien spokesperson. “While the East Coast port strike is not expected to materially impact our shipments, any extended disruption will be felt more broadly in the supply chain, and we urge parties to dispute to achieve a timely resolution.”