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Crude Oil26-Jul-2024
SINGAPORE (ICIS)–Typhoon Gaemi slammed into
Fujian province in southern China on the
evening of 25 July, bringing heavy rains as it
continues to move inland on Friday, with the
strong downpour expected to last three days.
At 06:00 local time (22:00 GMT), Gaemi has
weakened into a tropical storm and is centered
at Yongtai County in Fuzhou City, according to
China’s Meteorological Administration (CMA) in
its latest update.
Gulei, which is a major chemical production
site in Fujian, is not in the direct path of
Typhoon Gaemi. No disruptions to production
were reported.
According to China’s CCTV state news channel,
Gaemi struck Fujian province at 19:50 local
time on 25 July and is projected to cause
widespread heavy rainfall across the country as
it tracks northwest path.
An orange typhoon warning has been issued, the
second-highest level in China’s four-tier
warning system. The storm is expected to pass
through Jiangxi province and continue to move
north, gradually weakening in intensity.
Heavy rains and strong winds are expected to
batter eastern China from 26 to 27 July, with
coastal areas and the East China Sea forecast
to experience gale-force winds.
Authorities in Fujian province initiated a mass
evacuation, relocating more than 150,000 people
from vulnerable areas ahead of Gaemi’s arrival.
Transportation services across the region have
been severely disrupted, with train services
suspended in parts of Fujian and most flights
canceled at Quanzhou Jinjiang International
Airport.
Schools and offices have also been shuttered in
many parts of Fujian province.
The impact of Typhoon Gaemi has extended beyond
Fujian, with Zhejiang province experiencing
ferry suspensions and flight cancellations.
Guangdong province has also canceled many
eastbound train services in anticipation of the
storm’s arrival.
PORT OPERATIONS AFFECTED
Numerous ports along China’s eastern seaboard
have been closed, ferry services halted, and
vessels ordered back to shore, according to
crisis management firm Crisis24.
The berthing of chemical and oil vessels in
Ningbo is being controlled due to safety or
environmental concerns, according to a shipping
broker.
There are restrictions in place for vessels
mooring in Ningbo, possibly due to congestion
or maintenance, the broker said.
Vessels navigating the south channel of
Zhangjiagang port must have a freeboard of more
than four meters due to shallow water or strong
currents, according to the broker.
The north channel of Zhangjiagang was closed
due to strong winds that occurred early on 25
July, causing safety concerns or difficulties
for navigation, the broker said.
Dense fog was also present in the Dalian area,
causing navigation difficulties or reducing
visibility, according to the broker.
In Taiwan, the southern port city of Kaohsiung
was particularly hard hit by Gaemi, with
meteorologists reporting 135 centimeters (53
inches) of rainfall and extensive flooding
after it made landfall shortly before midnight
on 24 July.
Kaohsiung is home to two major oil refineries
belonging to Formosa Petrochemical Corp (FPCC)
and CPC Corp that are connected to downstream
petrochemical facilities.
There have been no immediate reports of major
disruptions to petrochemical production
facilities in Kaohsiung.
Meanwhile, operations at the Mailiao port are
expected to resume on Friday after a three-day
shutdown.
The port is operated by Taiwanese major Formosa
Petrochemical Corp (FPCC) which primarily
serves the company’s Mailiao refinery and
petrochemical complex.
Taiwan’s major petrochemical complexes are in
Toufen and Mailiao in the northwest; and
Ta-sheh and Linyuan in Kaohsiung City in the
south.
Separately, a Philippine-flagged oil tanker
carrying 1.4 tonnes of industrial fuel oil sank
amid inclement weather on 25 July, prompting
fears of an oil spill.
The MT Terra Nova sank near Lamao Point in
Limay, Bataan, a province northwest of the
capital, Manila, early on 25 July, the
Philippine Coast Guard said.
Sixteen crew members were rescued and at least
one person died, it added.
While the Philippines was spared a direct hit
from Gaemi, the storm exacerbated seasonal
monsoon rains, leading to extensive flooding in
Metro Manila and surrounding areas.
Additional reporting by Hwee Hwee Tan and
Fanny Zhang
Ammonia25-Jul-2024
HOUSTON (ICIS)–US fertilizer producer CF
Industries announced that it is moving forward
with a carbon capture and sequestration (CCS)
project at its Yazoo City, Mississippi complex
that is expected to reduce carbon dioxide (CO2)
emitted to the atmosphere from the facility by
up to 500,000 tonnes annually.
As part of the project the company has signed a
definitive commercial agreement with ExxonMobil
for the transport and sequestration in
permanent geologic storage of the CO2 with
sequestration expected to start in 2028.
The producer is going to spend approximately
$100 million at Yazoo City to build a CO2
dehydration and compression unit to enable CO2
to be generated as a byproduct of ammonia
production and subsequently be captured to be
transported and stored.
Once sequestration by ExxonMobil has commenced,
CF said expects the project to qualify for tax
credits which provides a credit per metric ton
of CO2 sequestered.
“We are pleased to advance another significant
decarbonization project that will keep CF
Industries at the forefront of low-carbon
ammonia production while also helping us
achieve our 2030 emissions intensity reduction
goal,” said Tony Will, CF Industries Holdings
president and CEO.
“This decarbonization project also will
increase the availability of nitrogen products
with a lower-carbon intensity for customers
focused on reducing the carbon footprint of
their businesses.”
The producer added that once sequestration
starts, the Yazoo City complex will be able to
manufacture products with a substantially lower
carbon intensity than conventional ammonia
production sites.
Most of the ammonia produced at the Yazoo City
Complex is upgraded into nitrogen fertilizers
such as urea ammonium nitrate solution (UAN)
and ammonium nitrate (AN) or upgraded into
diesel exhaust fluid.
AN produced at Yazoo City is used as fertilizer
and by the mining industry as a component of
explosives.
CF said demand for these products with lower
carbon intensity is expected to increase
significantly as agriculture and mining
industries work to lower emissions in their
supply chains.
Diammonium Phosphate25-Jul-2024
HOUSTON (ICIS)–Mineral development company
First Phosphate announced it has discovered a
significant high-quality igneous phosphate
deposit at their Begin-Lamarche project,
located in the Saguenay-Lac-St-Jean Region,
Quebec.
Having received all the results from its recent
drilling program at the project the outcome has
demonstrated continuous phosphate
mineralization spread over three mineralized
zones.
First Phosphate said a compliant resource
estimate is now underway with completion
expected in the coming months, which will be
immediately followed by work on a preliminary
economic assessment for the project.
“This drilling campaign has confirmed the
presence of a high-quality igneous phosphate
deposit in-line with expectation and in a
logistically favourable mining area at just
70km from the deep-water port of Saguenay,
Quebec,” said John Passalacqua, First Phosphate
CEO.
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Speciality Chemicals25-Jul-2024
BARCELONA (ICIS)–European petrochemical
leaders should take inspiration from Japan,
which is further ahead in reducing base
chemicals while expanding in specialties and
low carbon technologies.
Japan hit by with high naphtha feedstock
costs, growing global overcapacity
70% of crackers are more than 50 years old
More than 10% of Japan’s crackers could
close
Downstream production also closing such as
polyethylene terephthalate (PET) and paraxylene
(PX)
Japan basic chemicals losing ground, new
focus on specialties
Pushing materials for semiconductors,
electronics
Also expanding into bio-naphtha and
pyrolysis oil
Japanese companies want to licence their
chemicals technologies
Using ammonia and hydrogen to reduce
dependence on LNG
South Korea chemicals face existential
crisis
In this Think Tank podcast, Will
Beacham interviews ICIS senior market
development manager Itaru
Kudose, ICIS senior consultant Asia
John Richardson and
Paul Hodges, chairman of
New Normal Consulting.
Editor’s note: This podcast is an opinion
piece. The views expressed are those of the
presenter and interviewees, and do not
necessarily represent those of ICIS.
ICIS is organising regular updates to help
the industry understand current market trends.
Register here .
Read the latest issue of ICIS
Chemical Business.
Read Paul Hodges and John Richardson’s
ICIS
blogs.
Liquefied Petroleum Gas25-Jul-2024
SINGAPORE (ICIS)–Typhoon Gaemi will test the
resilience of the liquefied petroleum gas (LPG)
supply chain, causing temporary shipment delays
and port closures, but market prices and
arrival schedules are expected to remain stable
and manageable.
Join ICIS LPG analysts Shihao Zhou and Yan Wang
as they discuss the impact of Typhoon Gaemi on
China’s imported propane and butane arrivals.
Typhoon Gaemi will delay propane and butane
shipments, causing temporary logistical issues/
Seven Very Large Gas Carriers (VLGCs)
carrying LPG will be affected by Typhoon Gaemi,
with key ports in East China and Fuzhou closing
until the end of July.
Despite the typhoon, the arrival schedule
remains manageable, with 4-5 VLGS expected to
arrive in east China next week.
Ethylene25-Jul-2024
SINGAPORE (ICIS)–LG Chem’s second-quarter net
income plunged year on year to won (W) 60
billion ($43m), weighed down by poor earnings
at its battery unit LG Energy Solution, the
South Korean producer said on Thursday.
Group results
in Korean won (W)
billion
Q2 2024
Q2 2023
% Change
Sales
12,300
14,336
-14.2
Operating profit
406
618
-34.3
EBITDA
1,562
1,595
-2.1
Net income
60
671
-91.1
Q2 sales at company’s petrochemicals unit rose
by 8.9% year on year to W4.97 billion.
LG Chem’s petrochemicals unit swung to a Q2
operating profit of W32 billion, reversing the
W13 billion loss in the same period of 2023.
A gradual recovery in the supply/demand balance
for LG Chem’s petrochemical products is
expected in Q3, but “profitability improvement
is expected to be limited due to the delay in
global demand recovery and rising freight
rate”.
LG Energy Solution’s Q2 operating profit fell
by 57.7% year on year to W195 billion, with
sales down 29.8% at W6.16 trillion.
LG Chem holds a controlling 81.8% stake in LG
Energy Solution, the leading car battery maker
in the country in terms of sales.
($1 = W1,386)
Crude Oil25-Jul-2024
SINGAPORE (ICIS)–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, preliminary central bank data
showed on Thursday.
Q2 private consumption rose by 0.9% year on
year, slowing from the 1.0% expansion in the
first three months of 2024, the Bank of Korea
(BoK) said in a statement.
Manufacturing for the period rose by 4.5%,
slowing from the 6.5% growth registered in
January-March; while exports grew at a slower
pace of 8.7% compared with the 9.1% expansion
in the first three months of the year.
On a quarter-on-quarter seasonally adjusted
basis, the South Korean economy unexpectedly
shrank by 0.2% in April-June, reversing the
1.3% growth posted in the first three months of
this year.
“We had expected South Korea’s GDP to slow
sharply, but not to the point of falling into
contraction territory,” Dutch banking and
financial information services provider ING
said in a note.
Q2 domestic growth components were weak except
for government spending, which rose by 0.7%
quarter on quarter, it said.
Private consumption, construction, and facility
investment dropped by 0.2%, 1.1% and 2.1%,
respectively,
The downside surprise came mainly from trade,
as imports grew faster than exports, ING said.
Q2 export growth moderated to 0.9% quarter on
quarter, just half the 1.8% increase posted in
Q1. Exports in Q2 were supported by higher
shipments of chemicals and motor vehicles.
Meanwhile, import growth rebounded to 1.2%,
compared with a contraction of 0.4% in Q1,
mainly buoyed by higher imports of crude oil
and petroleum products.
“Given the weaker-than-expected second quarter
2024 GDP, we have revised the annual GDP
outlook downwards from 2.6% year-on-year to
2.3%,” ING said.
“We recently warned that the BOK would face
challenges in its monetary policy decision as
inflation cools towards 2% and sluggish
domestic growth supports a rate cut, but at the
same time, concerns about rising household debt
are growing.”
In its latest forecast in May, the BoK raised
its 2024 GDP growth forecast to 2.5% from 2.1%
previously amid strong exports driven by robust
chip demand.
For inflation, the forecast average was
unchanged at 2.6% for this year.
Crude Oil25-Jul-2024
SINGAPORE (ICIS)–Typhoon Gaemi made landfall
on Taiwan’s eastern coast shortly before
midnight on 24 July, bringing fierce winds and
heavy rains to vast swathes of the island, with
the Mailiao port remaining closed on Thursday.
Financial markets and workplaces are also
closed for a second consecutive day.
Operations at the Mailiao port are expected to
resume on 26 July after a three-day shutdown,
according to market sources with direct
knowledge of the matter.
The port is operated by Taiwanese major Formosa
Petrochemical Corp (FPCC) which primarily
serves the company’s Mailiao refinery and
petrochemical complex.
The closure of Mailiao port is a precautionary
measure taken for operational safety, according
to a Formosa Plastics Corp (FPC) source, adding
that operations at the company’s ethylene vinyl
acetate (EVA) plant in Mailiao were normal.
Taiwan’s major petrochemical complexes are in
Toufen and Mailiao in the northwest; and
Ta-sheh and Linyuan in Kaohsiung City in the
south.
Authorities in Taiwan have reported two
weather-related fatalities and more than 200
others injured as the storm approached.
Officials have evacuated more than 8,000 people
across at-risk areas of the country.
Prior to making landfall near Hualien County,
Taiwanese authorities categorized Gaemi as a
“severe typhoon,” the highest level on their
three-tier scale. This marked the first severe
typhoon to hit the island since 2016.
The storm has since weakened as it moved
inland.
At 08:30 local time (00:30 GMT), Gaemi was 80
kilometres northwest of Hsinchu, packing
maximum winds of 90 kiometres/hour, Taiwan’s
Central Weather Administration (CWA) said in
its latest update.
A typhoon warning is in effect for Nantou,
Chiayi, Chiayi City, Keelung City, Yilan,
Changhua, New Taipei City, Hsinchu, Hsinchu
City, Taoyuan City, Penghu, Taichung City,
Taipei City, Tainan City, Taitung, Hualien,
Miaoli, Kinmen, Yunlin, Lienchiang and
Kaohsiung City, the CWA said.
Over 4,000 people living in in northern
regions, especially Hualien, were evacuated due
to the storm. Hualien, a mountainous area prone
to landslides, was also severely affected by a
7.2-magnitude earthquake earlier this year.
Gaemi is expected to make its way across
the Taiwan Strait towards Fujian and Zhejiang
later on Thursday, with a red storm alert
currently in place in both these provinces in
southern China.
The China Meteorological Administration (CMA)
has issued a red typhoon warning, the highest
level of alert, for strong winds expected in
seas off the southeastern coast and coastal
areas of Fujian and southern Zhejiang
provinces.
The Fujian Maritime Safety Administration has
launched a Level I emergency response, the
highest alert, in anticipation of Gaemi’s
arrival, according to crisis management firm
Crisis24.
Ports have been closed and vessels have been
ordered to return to shore, it said.
Thumbnail photo shows the location of Typhoon
Gaemi at 04:30 GMT on 25 July (Source:
zoom.earth)
Additional reporting by Angeline Soh, Helen
Lee and Samuel Wong
Hydrogen25-Jul-2024
SINGAPORE (ICIS)–China’s installed capacity of
gas power generation is projected to surpass
150 GW by 2025, representing roughly 6% of the
country’s total installed power generation
capacity.
This presents substantial investment prospects
within China and aligns with the nation’s
ambition to achieve carbon neutrality by 2060.
Hydrogen, often regarded as a potential fuel
for blending with natural gas, offers a
promising avenue for reducing emissions from
power generation.
In this podcast, ICIS senior LNG analyst Xu Fei
will delve into the mechanics of
hydrogen-fueled gas turbines and their
potential to significantly cut carbon
emissions.
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