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Crude Oil21-Aug-2024
SINGAPORE (ICIS)–Japan’s chemical exports rose
12% year on year to yen (Y) 1.04 trillion in
July, driven in part by increased plastic
materials shipments abroad, with a weaker yen
also contributing to the inflated trade figures
overall, official data showed on Wednesday.
Trade deficit of Y622 billion recorded in
July, reversing June surplus
Overall exports to key trade partner China
increase 7.2% in July
Yen hit 38-year low against US dollar in
July
The growth in July chemical exports extends the
upward trend to seven consecutive months,
building on favorable low base effects
following a string of contractions throughout
most of 2023.
The country’s exports of plastic materials rose
by 16.6% year on year to Y303.8 billion in
July, the Ministry of Finance (MOF) said in a
statement.
By volume, exports of plastic materials rose by
8.9% year on year to 471,703 tonnes.
Shipments of organic chemicals rose by 19.4%
year on year to Y185.5 billion in July.
Exports of motor vehicles rose by 6.2% year on
year to Y1.69 trillion in July, while shipments
of motor vehicle parts were up by 4.4% at Y376
billion.
Japan’s overall exports rose by 10.3% year on
year to Y9.62 trillion in July, while imports
were up 16.6% at Y10.2 trillion.
This resulted in a trade deficit of around Y622
billion, reversing the surplus of about Y224
billion in June.
By region, shipments to the US rose 7.3% year
on year, a slightly slower pace than the
previous month, while exports to China
increased 7.2%.
In contrast, shipments to the EU declined 5.3%
year on year.
WEAKER YEN INFLATING EXPORT
FIGURESThe MOF reported that
that the yen averaged 159.77 against the US
dollar in July, marking a 12.3% decline in
value compared to the same period last year.
The yen plummeted to a 38-year low against the
US dollar on 3 July, breaching the
162-per-dollar threshold for the first time
since December 1986, as divergent monetary
policies between Japan and the US continued to
drive the currency’s decline.
Higher interest rates in the US make
dollar-denominated assets more attractive due
to higher yields compared with Japanese assets.
The yen has made strong gains after the BOJ’s
decision on 31 July to raise interest rates to
levels not seen since 2007, following the one
on 19 March this year when the central bank
lifted a negative interest rate policy and
ended equity purchases and yield curve
controls.
On Wednesday, the yen was trading at around
145.5 to the dollar. The rate has fluctuated
over the last 30 days, with a high of 156.9 and
a low of 144.7.
EXPORTS PROPELLING ECONOMY TO
RECOVERY
After a two-quarter slump, Japan’s economy
bounced back in the April-June period, posting
an annualized growth rate of 3.1%, driven by a
resurgence in consumer spending and continued
exports growth.
“We expect the latest growth rebound to extend
into Q3 supported by an extension of the
consumption rebound, aided by influx of
tourists and accelerated tech investments,”
Alvin Liew, senior economist at Singapore-based
UOB Global Economics & Markets Research
said.
The rebound in consumption is likely to
encourage the central bank to stay the course
on its monetary policy normalization path, but
recent market volatility may prompt the central
bank to exercise greater caution, Liew said.
“We continue to expect the BOJ to stay on the
rate tightening trajectory although it may not
be a continuous cycle and likely to be a
limited normalization path.”
Focus article by Nurluqman
Suratman
Acrylonitrile Butadiene Styrene21-Aug-2024
SINGAPORE (ICIS)–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.
The draft rates are lower than the provisional
duties published on 4 July and took effect on 5
July, the commission said on 20 August.
China car
companies
Definitive duties
(draft)
Provisional duties
BYD
17.0%
17.4%
Geely
19.3%
19.9%
SAIC
36.3%
37.6%
Other cooperating companies
21.3%
20.8%
All other non-cooperating companies
36.3%
37.6%
The Commission said that definitive measures
must be imposed no later than four months after
imposition of provisional duties and definitive
findings will be published by 30 October 2024
at the latest.
It granted a lower individual duty rate of
9% to US EV maker Tesla as it was classified as
an exporter from China at this stage, down from
the 20.8% provisional rate.
The duties, once finalized, will be in force
for five years.
In a response to EC’s decision, China’s
Ministry of Commerce said that the EU’s ruling
discriminates between different types of
Chinese companies which distorted the results
of the investigation.
“The final ruling was based on the ‘facts’
unilaterally identified by the EU, rather than
the facts recognized by both sides. China
firmly opposes this and is highly concerned,”
the ministry said.
The China Association of Automotive
Manufacturers (CAAM) voiced strong opposition
to the decision, saying that the European
Commission seriously “distorted the facts” of
China’s EV industry.
The EU duties bring great risk and
uncertainties to Chinese companies’ operations
and investment in the bloc, damage their
business confidence, as well as impact EU’s
development of EV industry, the association
said.
The automotive industry is a major global
consumer of petrochemicals, which account for
more than a third of the raw material costs of
an average vehicle.
EVs and associated battery markets provide
growth opportunity for the chemical industry,
with chemical producers separately developing
battery materials, as well as specialty
polymers and adhesives for the
environment-friendly vehicles.
Thumbnail image: Cars for export at Yantai
port in China – 07 August 2024
(Costfoto/NurPhoto/Shutterstock)
Crude Oil21-Aug-2024
SINGAPORE (ICIS)–The 18th Annual Gulf
Petrochemicals and Chemicals Association (GPCA)
Forum will be held in Muscat, the capital of
Oman, on 2-5 December.
The annual event will take place for the first
time in Oman and will address the theme
“Industry’s Next Chapter: Driving Sustainable
Advancement for Global Progress”, event
organizer GPCA said in a statement released on
20 August.
The 17th Annual GPCA Forum last year in Qatar
attracted 5,127 delegates.
The chemicals industry makes up the second
largest manufacturing sector in the Gulf
Cooperation Council (GCC) after oil and gas,
producing over $108 billion worth of products
every year, according to the GPCA.
The GCC comprises Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the UAE.
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Ammonia20-Aug-2024
HOUSTON (ICIS)–The National Corn Growers
Association (NCGA) said it is urging Canadian
Prime Minister Justin Trudeau to resolve a
dispute between his nation’s railways and the
employees.
The US trade group is concerned if left
unresolved, the labor issues could result in a
strike interrupting rail service into the US.
The NCGA said Canada is the third-largest
destination for US agricultural exports and the
second-largest source of agricultural imports.
The main threat to corn growers is that a
strike could interrupt shipments of fertilizer
imports and exports of ethanol, corn and
byproducts used as animal feed just as harvest
is getting close to commencing in many of the
key states.
“If a strike shuts down rail service from
Canada into the US, it will adversely impact
America’s farmers who rely on rail to ship
goods between the two countries,” said Harold
Wolle, National Corn Growers Association
president.
“We encourage Prime Minister Trudeau, the
Teamsters and Canadian rail workers to do
everything possible to avoid such a strike.”
Both railways have issued lockout notice which
would begin 22 August while the union has
issued a strike notice also starting 22 August.
The NCGA noted that under federal labor law,
Canadian officials can order all parties to
enter binding arbitration and that it has
joined other agricultural groups in sending a
letter to the prime minister calling for
action.
“We plan to keep calling for a resolution on
this issue. The stakes are high, and this is
the last thing our farmers need as they deal
with a drop in corn prices and higher input
costs,” Wolle said.
Ammonia20-Aug-2024
HOUSTON (ICIS)–Fertilizer Canada said
disruptions to rail services across the country
will cost the fertilizer industry an estimated
C$55-63 ($40.3-46.2) million per day in lost
sales revenue.
Facing a potential strike, the industry group
is urgently calling on the federal government
to take immediate action to prevent a work
stoppage on both railways.
It wants to see binding arbitration that
prohibits Teamsters Canada Rail Conference
(TCRC) from undertaking strike action and CN
Railway and Canadian Pacific Kansas City (CPKC)
from lockout action.
Both railways have served lockout notices to
TCRC beginning 22 August and TCRC has served a
strike notice to CPKC also beginning 22 August.
“The time for action is now. We can no longer
patiently wait for a resolution. The federal
government must protect Canada’s economy and
food security by ordering binding arbitration,”
said Karen Proud, Fertilizer Canada president
and CEO.
The group noted that the railways move an
average of 69,000 tonnes of fertilizer product
per day, which is equivalent to four to five
trains.
The fertilizer industry is among the first to
experience slowdowns. As on 12 August, the
movement of some ammonia products were halted
when they were embargoed.
Since that action the railways have issued
further embargoes, including US railways
halting shipments to Canada.
Currently 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.
“In the last seven years, Canadian supply chain
labour disruptions have cost the fertilizer
industry nearly a billion dollars,” Proud said.
“These stoppages are doing immense damage to
our reputation as a reliable trading partner.”
“Our customers, who rely on Canadian fertilizer
products, are being forced to turn to our
competitors in Russia, Belarus and China. We
can’t afford for our railways to shut down, and
we can’t afford a passive approach to our
supply chains any longer. We need long-term
solutions.”
Fertilizer Canada represents producers,
manufacturers, wholesale and retail
distributors of nitrogen, phosphate, potash and
sulphur fertilizers.
$1.00=C1.36
Crude Oil20-Aug-2024
LONDON (ICIS)–Crude benchmarks are likely to
be subject to bearish pressure in week 34 as
Chinese oil demand concerns take centre stage.
However, European and US economic data released
later this week may provide clues to future
monetary policy decisions and provide hope for
upcoming interest rate cuts.
ICIS experts look at factors that are forecast
to drive oil prices in Week 34.
Speciality Chemicals20-Aug-2024
LONDON (ICIS)–Construction output in the
eurozone rebounded in June after declining for
three months, official data showed on Tuesday.
Seasonally adjusted production in construction
rose by 1.7% from May and was also higher, by
1.4%, in the EU.
Eurozone output had been on a downward trend
since March, with the EU following a similar
track, though with a marginal, near flat 0.1%
rise in April.
Building construction, civil engineering and
specialized construction activities all
increased in June from the previous month in
both the eurozone and EU, according to
statistics agency Eurostat.
On a year-on-year basis, June construction
output in the eurozone was 1.0% higher in the
eurozone and 0.1% lower in the EU.
Numerous petrochemicals and specialty chemicals
are key ingredients in products used
for modern
construction, including adhesives,
ad-mixtures, sealants, coatings, paints,
flooring, insulation and water proofing.
Petrochemicals20-Aug-2024
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.
44% of total earmarked for refinery,
petrochemical capacity growth
Bina refinery/petrochemical project due for
commissioning in FY2028-29
New refinery project being mulled
As part of the investment initiative named
‘Project Aspire’, some Rs750 billion will go to
increasing capacity at BPCL’s refineries and
expand its petrochemical portfolio, company
chairman G Krishnakumar said in the company’s
annual report for the fiscal year ending March
2024.
“The demand for major petrochemical products is
expected to rise by 7-8% annually. This
presents a strategic opportunity to expand
refining capacity alongside the development of
integrated petrochemical complexes,”
Krishnakumar said.
BPCL’s planned petrochemical expansions include
the new petrochemical projects at its Bina
refinery in the central Madhya Pradesh state,
and the Kochi refinery in the southern Kerala
state.
The Bina
project is a brownfield expansion that will
raise the refinery’s capacity by 41% to 11m
tonnes/year, to cater to the requirements of
upcoming petrochemical plants, which include a
1.2m tonnes/year ethylene cracker and
downstream units.
The site is expected to produce 1.15m
tonnes/year of polyethylene (PE), including
high density PE (HDPE) and linear low density
PE (LLDPE); 550,000 tonnes/year of
polypropylene (PP); and 50,000 tonnes/year of
butene-1
The complex will also produce chemicals such as
benzene, toluene, xylene, the annual report
said.
“Technology licensors for all critical
packages, and project management consultants
for refinery expansion and downstream units
have been onboarded and work at the site
commenced in the first week of July 2024,”
Krishnakumar said.
BPCL has chosen US-based Lummus to
provide technologies for the new ethylene
plant and downstream units at the complex.
The refinery will be ready for commissioning by
May 2028, while petrochemical operations will
begin in the financial year ending March 2029.
At Kochi, BPCL’s 400,000 tonne/year PP project
is progressing as per schedule and is on track
for commissioning in October 2027.
It plans to raise its Kochi refinery capacity
by 16% over the next five years to 18m
tonnes/year, based on data from the company’s
latest annual report.
https://subscriber.icis.com/news/petchem/news-article-00110958286
The company also plans to set up additional
petrochemical capacities over the next few
years.
“To meet the anticipated demand beyond our
planned expansions in Bina and Kochi, we are
actively evaluating options for setting up
additional integrated refining and
petrochemical capacities within the next 5-7
years,” Krishnakumar said
BPCL has begun evaluating options to set up a
new refinery with a planned capacity of around
9 million to 12 million tonnes/year, a company
official said, adding, “we are exploring a new
refinery either on the east coast or at other
locations”.
In Mumbai, the company also plans to expand its
refinery capacity by a third to 16m tonnes/year
in the next five years, according to its annual
report.
In the eastern Odisha state, BPCL expects to
begin operations at its 200 kilolitre/day
ethanol plant at Bargarh by October 2024. Once
operational, the integrated refinery is
expected to produce both first generation (1G)
as well as second generation (2G) ethanol using
rice grain and paddy straw as feedstock.
Focus article by Priya Jestin
($1 = Rs83.85)
Thumbnail image: The Bharat Petroleum
import terminal at Haldia in West Bengal on 13
March 2021. (Debajyoti
Chakraborty/NurPhoto/Shutterstock)
Ammonia19-Aug-2024
HOUSTON (ICIS)–The US corn crop is now at 97%
silking with soybean blooming having reached
95%, according to the latest US Department of
Agriculture (USDA) weekly crop progress report.
For corn, the current rate of the crop silking
is just slightly trailing both the 98% achieved
last year and the five-year average of 98%.
The amount of crop now at the dough stage is
74%, which equals the 74% rate from 2023 and is
above the five-year average of 71%.
Corn which has reached the dented phase is at
30%, which matches the 30% level from last year
and is ahead of the five-year average of 26%.
In the first update on corn reaching maturity,
the report showed there is 5% of the crop at
this stage, which is above the 3% from 2023 as
well as the five-year average of 3%.
For corn conditions, there is now 4% rated very
poor with 7% still listed as poor and 22% as
fair. There remains 51% as good and 16% as
excellent.
The soybean crop is now 95% blooming, which is
equal to the 95% rate achieved in 2023 as well
as the five-year average of 95%.
The amount of acreage setting pods has risen to
81%; this trails the 84% mark from last year,
but is above the five-year average of 80%.
For soybean conditions, there continues to be
2% listed as very poor, 6% as poor and 24% as
fair. There is now 54% seen as good with 14% as
excellent.
In harvesting updates, winter wheat is now at
96% completed which is slightly ahead of the
95% level from 2023 as well as the five-year
average of 95%.
Spring wheat harvest has reached 31% completed,
which is behind the 35% mark from last year and
the five-year average of 36%.
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