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Ethylene26-Aug-2024
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 23 August.
SHIPPING: Panama
Canal adds additional transit slot, raises
maximum draft allowance
As the water level in the freshwater lake that
feeds the Panama Canal’s locks continues to
rise, the Panama Canal Authority (PCA) has
increased the maximum allowable draft to 50ft
(15.25m), effective immediately, and will add
an additional transit slot beginning 1
September.
Canada needs to
act on rail stoppage, now – chem group
CIAC
Canada’s federal government needs to exercise
its authority and act quickly on the complete
freight rail stoppage, set to start midnight at
00:01 Eastern Time, trade group Chemistry
Industry Association of Canada (CIAC) said.
Canada government
reluctant to intervene as freight rail shutdown
begins
As the unprecedented work stoppage at both of
Canada’s freight railroads began on
Thursday at 00:01 Eastern Time, it remains
unclear how or when it may end as the
government is reluctant to intervene.
LyondellBasell
declares FM on rail shipments to Canada amid
CPKC, CN work stoppage
Global chemicals major LyondellBasell has
declared force majeure on all rail shipments to
Canada after that country’s two largest
railroads shut down operations after
negotiations for a new collective bargaining
agreement stalled.
Canadian freight
railroads prepare to resume operations after
brief shutdown
Freight railroads Canadian National (CN) and
Canadian Pacific Kansas City (CPKC) are
preparing to restart operations after the
federal government stepped in to end a labor
dispute with workers – although it remains
unclear on Friday when exactly a full freight
rail service will resume.
Canada rail
dispute: Union issues fresh strike notice,
despite government order for binding
arbitration
-Labor union Teamsters Canada Rail Conference
(TCRC) on Friday issued a strike notice for
Monday, 26 August, against railroad Canadian
National (CN).
Ethylene26-Aug-2024
MADRID (ICIS)–Sentiment among Germany’s
petrochemicals-intensive manufacturing sectors
worsened in August to its lowest level since
February, research institute Ifo said on
Monday.
Sentiment among construction companies remained
stable at low levels, while overall sentiment
deteriorated as the German economy is
“increasingly” falling into crisis, said the
analysts.
“In manufacturing, the index fell considerably.
Companies were significantly less satisfied
with the current business situation.
Expectations fell to the lowest level since
February,” said Ifo.
“[Manufacturing] companies once again reported
declining order backlogs. The situation for
investment goods manufacturers, in particular,
is difficult.”
Sentiment among petrochemicals-intensive
construction companies remained stable but low
due to, on the one hand, companies being
slightly more satisfied with the current
business situation but, on the other, reporting
declining expectations about future business
conditions.
The overall Ifo’s Business Climate Index
fell from 87.0 points in July to 86.6 points in
August.
“Companies assessed their current situation as
worse. In addition, expectations were more
pessimistic. The German economy is increasingly
falling into crisis,” said Ifo.
Earlier in August, Ifo reported that sentiment
among
chemicals companies is also falling, with
operating rates declining further.
‘MARGINALLY’ GOOD
NEWSAnalysts at Oxford Economics
said the fall in the Ifo Business Climate Index
came as no surprise but added it could be seen
as a positive after a string of negative
indicators in past weeks, not least last week’s
flash manufacturing PMI index for August, which
showed Germany and eurozone’s manufacturing still in
contraction territory.
The downturn in Germany’s manufacturing sector,
the largest in the eurozone, weighed greatly on
the index.
“Although this [Ifo Business Climate Index]
marks the fourth consecutive decline after the
index peaked in April, it is marginally good
news as other surveys had pointed to a sharper
deterioration,” said Oxford Economics on
Monday.
“We think it will take Germany’s manufacturing
sector until end of this year to emerge from
the economic slump but the deterioration in the
services sector highlights the broad weakness
in the German economy.”
The analysts went on to say the road ahead for
Germany’s economic recovery will be a “bumpy”
one, adding they still expect the economy to
expand in the third quarter, although “cannot
exclude” a contraction at this point.
However, the analysts said they are more upbeat
about the coming quarter, with a recovery
potentially taking place towards the end of
2024 in Germany’s economy after the shock
suffered in the past two years related to the
energy crisis and high interest rates.
“We maintain that a recovery will ensue towards
the end of this year on the back of a turning
industrial cycle and easing financial
conditions,” concluded Ifo.
“Last week’s data on negotiated wage growth and
our expectations of falling inflation data for
this week, pave the way for the ECB [European
Central Bank] to cut rates twice this year
followed by a series of cuts next year.”
Front page picture: Chemical plants in
Moers, Germany
Source: Jochen
Tack/imageBROKER/Shutterstock
Polyvinyl Chloride26-Aug-2024
MUMBAI (ICIS)–India will continue imposing
antidumping duties (ADDs) on chlorinated
polyvinyl chloride (CPVC) imports originating
from China and South Korea.
The ADDs apply to CPVC resins as well as
compounds, with rates ranging from $593/tonne
to $792/tonne, depending on origin and
producer, according to India’s Ministry of
Finance.
They are set for five years and can be revoked
or amended, if necessary.
S.No
Country of origin
Country of export
Producer
Type
Amount in ($/tonne)
1
China
Any country including China
Any
CPVC resin
790
2
China
Any country including China
Any
CPVC compound
605
3
Any country other than China and Korea
China
Any
CPVC resin
790
4
Any country other than China and Korea
China
Any
CPVC compound
605
5
Korea
Any country including Korea
Hanwha Solutions Corp
CPVC resin
593
6
Korea
Any country including Korea
Hanwha Solutions Corporation
CPVC compound
792
7
Korea
Any country including Korea
Any producer other than mentioned above
CPVC resin
593
8
Korea
Any country including Korea
Any producer other than mentioned above
CPVC compound
792
9
Any country other than China and Korea
Korea
Any
CPVC resin
593
10
Any country other than China and Korea
Korea
Any
CPVC compound
792
Source: India Ministry of Finance
India’s anti-dumping duties on CPVC imports
from China and South Korea were initially
imposed on 26 August 2019 for a period of five
years.
These measures have been extended following
recommendations by the designated authority to
protect the domestic industry.
It was determined that dumping and injury to
Indian manufacturers were likely if the
existing measures were not extended.
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Speciality Chemicals26-Aug-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 23 August.
Aviation fuel prices hit new lows amid growing
bearishness
European spot jet fuel quotations plunged to
14-month lows towards mid-week, bearing the
brunt of tepid demand and ongoing upstream
softness, with the short-term outlook unclear
as the peak travel season winds down.
Europe SAN contract prices increase double
digits in August
August contract prices have increased €70/tonne
in the European styrene acrylonitrile (SAN)
market, the first price increase since April
2024, mainly driven by composite costs of the
€78/tonne contract price increase for upstream
styrene, and the €36/tonne contract price
increase for secondary feedstock acrylonitrile
(ACN).
EU plans up to 36.3% definitive tariffs on EV
imports from China
The European Commission (EC) has announced a
draft decision to impose up to 36.3% definitive
countervailing duties on imports of battery
electric vehicles (EVs) from China.
Quantafuel cancels pyrolysis-based chemical
recycling project in Sunderland, UK
Quantafuel Sunderland Limited, part of UK
recycling major Viridor, has halted the
development of its planned pyrolysis-based
chemical recycling plant in Sunderland, a
company spokesperson confirmed late on Monday.
IPEX: Global index down on softer prices in NW
Europe, NE Asia
Lower chemical prices in northwest Europe and
northeast Asia drove the global spot ICIS
Petrochemical Index (IPEX) down by 0.2% in the
week ending 16 August.
Ammonia26-Aug-2024
TORONTO (ICIS)–Labor tribunal Canada
Industrial Relations Board (CIRB) on 24 August
ordered Canada’s two freight railroads and
about 9,300 unionized workers to resume rail
service at 0:01 eastern time on 26 August.
Freight rail service on both Canadian National
(CN) and Canadian Pacific Kansas City (CPKC)
was
shut down on Thursday, 22 August amid a
protracted labor dispute.
With the order, the CIRB follows
directions Canada’s federal labor minister
issued shortly after the shutdown began.
The dispute between railroads and workers would
be settled through binding arbitration, in line
with the minister’s directions, the CIRB said.
The board said that “the current circumstances
and
impact of work stoppages involving Canada’s
two main rail companies” were reasons for its
decision. The board will provide detailed
reasons later, it said.
UNION, RAILROADS WILL
COMPLY
Labor union Teamsters Canada Rail Conference
(TCRC) and the railroads said they would comply
with the board’s decision.
CPKC asked workers to return to work for the
day shift on Sunday, 25 August, in order to
restore service as quickly as possible and
avoid further disruptions to supply chains.
TCRC added that while it would comply with the
CIRB’s decision, it would appeal the ruling in
court.
In Canada’s chemical industry, trade group
Chemistry Industry Association of Canada (CIAC)
has said that going by past experience, for
each day of a rail disruption it could take
three days or more to return to service once
labor issues are resolved.
CIAC is particularly concerned about the
supply of chlorine and derivatives for
drinking water treatment during rail
disruptions. For safety reasons, chlorine can
only be shipped by rail.
Although the rail shutdown began on 22 August,
the railroads stopped accepting chlorine and
other hazardous materials for shipment before
that date. The disruption in rail service
prompted fears that Canadian chlorine plants
could be forced to curtail or stop production.
Canada-based chemical producers rely on rail to
deliver more than 70% of their products, with
some exclusively using rail.
About 80% of Canada’s chemical production goes
into export, with about 80% of those exports
going to the US, according to CIAC.
(Map by Miguel Rodriguez Fernandez)
Meanwhile,
LyondellBasell declared force majeure on
all cargo movements by rail to Canada and
industrial chemical producer
Chemtrade Logistics warned about the impact
of the rail disruption on its financial
results.
The following table by the American Association
of Railroads (AAR) shows Canadian freight rail
traffic, including chemicals, for the week
ended 17 August and the first 33 weeks of 2024:
Additional reporting by Adam Yanelli and
Nurluqman Suratman
Gas26-Aug-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 23 August 2024.
INSIGHT: Asia BD capacity growth to accelerate
to 10% in 2025
By Ann Sun 23-Aug-24 10:35 SINGAPORE
(ICIS)–The Asian butadiene (BD) market is
anticipated to experience large-scale capacity
expansion between Q4 this year and end-2025,
with nine projects scheduled to begin
operations.
Asia BDO market demand unable to reduce
inventories, oversupply persists
By Corey Chew 22-Aug-24 11:16 SINGAPORE
(ICIS)–The Asian 1,4-butanediol (BDO) market
has been going through a downtrend that started
about a month ago, mainly due to the falling
domestic China market.
INSIGHT: China’s EVA capacity expected to
exceed 2.6 million tonnes in 2024
By Amy Yu 20-Aug-24 17:12 SINGAPORE
(ICIS)–China’s EVA capacity is forecast to
exceed 2.6 million tonnes in 2024, a
year-on-year growth rate of 17%, considering
Jiangsu Hongjing New Material a new plant with
200,000 tonnes/year is scheduled to come on
stream in Q4.
INSIGHT: China plasticizer alcohols’ supply
growth accelerating
By Lina Xu 19-Aug-24 17:08 SINGAPORE
(ICIS)–China’s plasticizer market is
diversifying, leading the supply expansion of
feedstock alcohols amid high requirements for
end-products and growing emphasis on
sustainability in operations in recent years.
Asia naphtha back in the black within a day;
volatility to stay
By Li Peng Seng 19-Aug-24 11:06 SINGAPORE
(ICIS)–Asia’s naphtha intermonth spread
returned to the positive zone on 16 August,
after slipping into the red the day before for
the first time this year, with volatile trades
expected to persist amid uncertainties over
supply balances.
INSIGHT: China’s MEG export market changes amid
volatile global fundamentals
By Cindy Qiu 22-Aug-24 14:00 SINGAPORE
(ICIS)–China’s monoethylene glycol (MEG)
exports have been on an uptrend in recent years
due to the rapid expansion of domestic
capacity. MEG exports totalled around 93,000
tonnes in January-June 2024 and are expected to
exceed 150,000 tonnes for the year as a whole.
India’s BPCL to invest Rs1.7 trillion on
capacity growth over five years
By Priya Jestin 20-Aug-24 12:58 MUMBAI
(ICIS)–India’s state-owned Bharat Petroleum
Corp Ltd (BPCL) plans to invest rupee (Rs) 1.7
trillion ($20.3 billion) over the next five
years to grow its refining and fuel marketing
business, as well as expand its petrochemicals
and green energy businesses.
Ammonia23-Aug-2024
HOUSTON (ICIS)–Although the Canadian railroad
labor strife is poised to carry on further, US
fertilizer participants are not growing overly
concern as this action comes at a slower time
of the year for domestic applications and fresh
buying.
With it being late August most of the attention
of domestic growers are either on advancing
harvesting campaigns or commencing those
efforts soon, with some locations still tending
to mature crops.
There were also strong summer refilling
efforts, which together is overall keeping the
pull for nutrients light for most products
although volume of nitrogen, phosphate and
potash have continued to move over August on
barges and terminals.
As a source said they had zero concerns so far
and not hearing that the situation is
concerning customers either, “I assume if it
persists there will be. It’s just happening at
a time of year that it isn’t impactful enough
to our industry.”
The railroad strike appeared to have been
resolved on 22 August when the government
directed the matter to the Canada Industrial
Relations Board (CIRB) for binding arbitration,
with Canadian National (CN) and Canadian
Pacific Kansas City (CPKC) having said they
were preparing to begin running.
Then on Friday labor union Teamsters Canada
Rail Conference (TCRC) issued a strike notice
for 26 August, against railroad Canadian
National (CN) with approximately 6,500
unionized employees set to withdraw their
service starting Monday.
As there was prior to the start of this strike
activity, there is also optimism from some that
this will not be a protracted dispute.
The US is about to enter a period of what has
been anticipated to be good post-harvest
demand, with a source saying a work stoppage
“could be an issue then but generally these
things resolve quickly.”
Earlier this week industry group Fertilizer
Canada said disruptions to rail services across
the country will cost the fertilizer industry
millions per day in lost sales revenue, with an
average of 69,000 tonnes of fertilizer product
transported per day.
75% of all fertilizer produced and used in
Canada is moved by rail, with minimal
transportation alternatives, with 90% of those
volumes which are destined for the US market
delivered by rail.
Ammonia23-Aug-2024
TORONTO (ICIS)–Labor union Teamsters Canada
Rail Conference (TCRC) on Friday issued a
strike notice for Monday, 26 August, against
railroad Canadian National (CN).
The move surprises as railroads CN and Canadian
Pacific Kansas City (CPKC) said earlier they
were preparing to resume
operations after a government order on
Thursday that referred the labor dispute
between TCRC and the railroads to the Canada
Industrial Relations Board (CIRB) for binding arbitration.
The country’s labor minister issued the order
after the railroads locked out about 9,300
workers and shut
down operations on Thursday, 22 August,
00:01 Eastern Time.
In Friday’s strike notice, TCRC
said that about 6,500 unionized CN workers
would withdraw their service starting Monday,
26 August, 10:00 Eastern Time.
However, it added that its differences with CN
were not “insurmountable” and that it remained
available for discussions to avoid a further
work stoppage at CN.
TCRC’s strike notice also surprises because the
union said earlier that
it took down picked lines again CN and that
unionized CN workers would start returning to
work on Friday. Picket lines at CPKC, however,
would remain in place, the union said.
Teamsters president Francois Laporte said in
remarks to public broadcaster CBC/RDI on Friday
that the union was looking at its legal options
and would “use our constitutional rights” to
“fight” for workers’ interests.
He also confirmed that despite the referral to
the CIRB, the industrial action at CPKC was
continuing.
Political commentators said that the union may
seek to challenge the constitutionality of the
minister’s referral of the dispute to the CIRB
for binding legislation.
There is legal precedent that deems the right
to strike and to collective bargaining as a
constitutional right.
Bottomline: Despite earlier
hopes that binding arbitration would end the
dispute and trains would run again soon,
freight rail service remains disrupted and it
is unclear when it will resume.
CHEMICALS AND RAIL
Canada-based chemical producers rely on rail to
ship more than 70% of their products, with some
exclusively using rail.
About 80% of Canada’s chemical production goes
into export, with about 80% of those exports
going to the US, according to CIAC.
Chlorine plants in Canada may
have to shut down if reliable rail service
does not resume soon, CIAC CEO Bob Masterson
said.
(Map by Miguel Rodriguez Fernandez)
Meanwhile, LyondellBasell on
Thursday declared force majeure on all rail
shipments to Canada and industrial chemical
producer Chemtrade Logistics
warned about the impact of the rail disruption
on its financial results.
The following table by the American Association
of Railroads (AAR) shows Canadian freight rail
traffic, including chemicals, for the week
ended 17 August and the first 33 weeks of
2024:
With additional reporting by Adam Yanelli
and Nurluqman Suratman
Thumbnail photo source: CN
Ammonia23-Aug-2024
TORONTO (ICIS)–Freight railroads Canadian
National (CN) and Canadian Pacific Kansas City
(CPKC) are preparing to restart operations
after the federal government stepped in to end
a labor dispute with workers – although it
remains unclear on Friday when exactly a full
freight rail service will resume.
Following the lockout of about 9,300 rail
workers and the shutdown of operations at both
railroads effective Thursday,
22 August, 00:01 Eastern Time, Canada’s federal
labor minister ordered binding
arbitration to settle the dispute between
the railroads and labor union Teamsters Canada
Rail Conference (TCRC).
The arbitration process will be conducted by
the Canada Industrial Relations Board (CIRB),
an independent, quasi-judicial labor tribunal.
The CIRB is expected to act quickly, and trains
should be running again “within days”, labor
minister Steven MacKinnon said.
CN said it was “satisfied” that the labor
conflict has ended
CPKC said it remains prepared to resume
service as soon as it is ordered to do so by
the CIRB
TCRC said it has taken down picket lines at
CN and workers would return on Friday, but at
CPKC the work stoppage “remains ongoing”,
pending an order from the CIRB
In the chemical industry, trade group Chemistry
Industry Association of Canada (CIAC) said that
going by past experience, for each day of a
rail disruption it could take three days or
more to return to service once labor issues are
resolved.
“Things will continue to be tight and will need
monitoring” going forward, said CIAC president
Bob Masterson.
The trade group is particularly concerned about
the supply of chlorine and derivatives for
drinking water treatment.
For safety reasons, chlorine can only be
shipped by rail. Although the rail
shutdown lasted less than a day, the railroads
had stopped accepting chlorine and other
hazardous materials for shipment before 22
August as they prepared for the shutdown.
Canada-based chemical producers rely on rail to
ship more than 70% of their products, with some
exclusively using rail.
About 80% of Canada’s chemical production goes
into export, with about 80% of those exports
going to the US, according to CIAC.
(Map by Miguel Rodriguez Fernandez)
Meanwhile, LyondellBasell on
Thursday declared force majeure on all rail
shipments to Canada and industrial chemical
producer Chemtrade Logistics
warned about the impact of the rail disruption
on its financial results.
The following table by the American Association
of Railroads (AAR) shows Canadian freight rail
traffic, including chemicals, for the week
ended 17 August and the first 33 weeks of
2024:
With additional reporting by Adam Yanelli
and Nurluqman Suratman
Thumbnail photo source: CN
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