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Phosphoric Acid28-Jun-2024
HOUSTON (ICIS)–Global sustainable technology
firm Metso announced it has been awarded
an order by Brazilian producer Galvani
Fertilizante to deliver a lime calcination kiln
and cooler package for their fertilizer plant
in Irece, Brazil.
The company said Galvani is taking a
significant step at their Irece project by
introducing sustainable technological
innovation with this new unit expected to
produce 350,000 short tons of phosphate
concentrate and 600,000 short tons of
agricultural limestone annually.
Metso will supply a rotary kiln, a rotary
cooler and ancillary equipment with the kiln
and cooler system a critical part in the
process to remove limestone from the phosphate
concentrate.
The kiln will be the largest lime calciner
Metso has ever delivered, measuring almost six
meters in diameter and over 140 meters in
length.
For its part Galvani said the partnership will
bring strategic benefits and allow gains in
mineral processing at their new unit.
“The laying of the foundation stone for this
unit, which took place in May of this year,
reinforces the importance of this project for
the development of the economy of the state of
Bahia, in Brazil, and for the generation of
jobs and income,” said Marcelo Silvestre,
Galvani CEO.
“This milestone represents our commitment to
innovation and development, boosting our
ability to meet the demands of the fertilizer
market.”
Ammonia28-Jun-2024
HOUSTON (ICIS)–This spring US farmers planted
less corn than last year but conversely
increased their soybeans sowings, according to
the US Department of Agriculture (USDA) in the
acreage estimate report.
The agency said corn planted area for all
purposes in 2024 is estimated at 91.5 million
acres, down by 3% or 3.17 million acres year on
year.
Overall, this year’s crop represents the eighth
highest planted acreage in the US since 1944.
Compared with last year, planted acreage is
expected to be down or unchanged in 31 of the
48 estimating states.
Area harvested for grain is being projected at
83.4 million acres, which is a decrease of 4%
from last year.
Looking at soybeans the USDA said planted area
is estimated at 86.1 million acres, up 3% year
on year, with planted acreage being up or
unchanged in 24 of the 29 estimating states.
All wheat planted area for 2024 is estimated at
47.2 million acres, down 5% from 2023 with all
cotton planted area for this season being
calculated at 11.7 million acres, up 14% year
on year.
Speciality Chemicals28-Jun-2024
HOUSTON (ICIS)–The Panama Canal Authority
(PCA) has increased the maximum allowable draft
to transit the Neopanamax locks effective
immediately, announced that another increase
will take effect on 11 July, and will add an
additional booking slot in the Neopanamax locks
during Booking Period 2 for booking dates
beginning 5 August.
Source: Panama Canal Authority
Water levels at Gatun Lake, the freshwater lake
that feeds the canal’s locks have improved
recently amid the arrival of the rainy season
after a prolonged drought, allowing the PCA to
continue to add transit slots.
Water levels at Gatun Lake, currently at 81.3
feet, are projected to be at 82.1 feet by
mid-July and to 87 feet by December.
The transit restrictions that began in July
2023 – the first time in the canal’s history
that limitations were placed on the number of
daily transits – have gradually eased over the
past few months and are approaching the average
daily transits of 36-38/day seen prior to
impacts from the drought.
The improved conditions at the canal are likely
to improve transit times for vessels travelling
between the US Gulf and Asia, as well as
between Europe and west coast Latin America
countries.
This should benefit chemical markets that move
product between regions, including those in the
following chart.
The bottleneck at the Panama Canal has had
varying affects on US chemical markets.
Formosa Plastics USA had to shut down its EG2
unit because of negative impacts on
monoethylene glycol (MEG) exports because of
the backlog and delays transiting the canal.
The majority of product from the unit is
expected to be exported to Asia.
The company restarted the unit
this week.
Higher water levels at the Panama Canal could
also have knock-down effects on US natural gas
demand, ICIS feedstocks analyst Barin Wise
said.
If higher water levels at the canal enable
liquefied natural gas (LNG) shippers to cut
down on travel times from the US Gulf Coast to
Asia, it could encourage LNG export plant
managers to maximize output, he said.
AUCTION PRICES EASE
The PCA said recently that auction prices have
levelled off since the peak period last year.
In October-November 2023, there was a surge in
auction prices related to a market-driven
congestion premium, though this is no longer
the case, the PCA said.
Auction prices are generally near normal levels
presently, though auctions remain an invaluable
tool and option for customers who may otherwise
not have secured reservations.
The PCA noted that auction prices are also not
set by the waterway, but rather influenced by
many factors and market dynamics, including
internal considerations such as waiting times
and queue lengths, as well as external elements
like charter rates and bunker prices.
Additionally, the specific preferences and
needs of individual customers, which may not be
fully captured by the route value model, can
also influence auction outcomes.
WAIT TIMES FOR NON-BOOKED
VESSELS
Wait times for non-booked southbound vessels
ready for transit have been relatively steady
at less than two days, according to the PCA
vessel tracker and as shown below.
The tracker is only for non-booked vessels in
the queue and shippers should consider two
additional days as a minimum to estimate
transit times for unscheduled vessels, the PCA
said.
Focus article by Adam
Yanelli
With additional reporting by Melissa
Wheeler, Bryan Campbell and Emily Burleson
Thumbnail photo: Shows a container ship
transiting the Panama Canal. (Source: Courtesy
of PCA)
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Gas28-Jun-2024
LONDON (ICIS)–Tell me what you think about Net
Zero and I will tell you who you are – has
become a zeitgeist of the energy sector and
society at large in the past decade or so.
After all, “science has settled” on man-made
climate change, the media have certified this
as “fact” and
activists in their teens and eighties never
let us forget about the dangers with actions
that scream louder than words.
Those who doubt the wisdom of the day have
generally remained politically correct and
silent.
Under pressure from environmentalists and
politicians, industry heavyweights have been
changing their strategies,
brand names and allocation of resources
towards green projects, which – after all –
come not only with moral high ground but also
hefty subsidies.
EIB’s REPowerEU+ initiative in July 2023
increased the bank’s original renewable energy
financing targets
by 50% to €45 billion until 2027 . “This
additional financing is expected to mobilise
over €150 billion in new green investments,
helping Europe cut its carbon emissions to net
zero by 2050,” the EIB statement said. Private
banks have also been keen to distance
themselves from the dirty business of fossil
fuels that currently cover about 80% of global
energy demand.
However, several headlines in the past few days
have signalled that companies and banks may be
cautiously changing their tune in order to
deliver on their shareholders’ expectations.
In its
Climate Change Statement in February
Barclays’ bank pledged to “focus on clients
actively engaged in the energy transition”. The
bank had earmarked $1 trillion to Sustainable
and Transition Finance by 2030. On 25 June,
Barclays CEO CS Venkatakrishnan told Bloomberg
the global economy cannot go
“cold Turkey on fossil fuels”.
According to the article, Barclays is moving
away from coal and oil, but Venkatakrishnan
pointed out that “the reality is that for quite
some time, fossil fuels will be with us” as he
singled out natural gas as the transition fuel
on the long path to cleaner energy.
Just two days later Reuters reported that
investors are pushing BP to rethink its
approach to offshore wind and oil and gas
projects in order to improve the bottom line.
BP told ICIS it may still consider bidding for
offshore wind future opportunities but its
ultimate focus is “on value, strict discipline,
and meeting our investment criteria”.
Environmentalists were quick to condemn BP for
“choosing profits over people and planet” .
But one could also argue that a job of a
business is to make profit offering products
that meet people’s needs. Those who speak in
defense of fossil fuels do not deny concerns
about the environment, they speak against
catastrophizing those concerns to scare people
into adopting green policies.
Alex
Epstein, founder at Center for Industrial
Progress and the author of two books on
energy argues that “speculated climate changes
would be slow and thus affordable to adapt to —
while rapidly eliminating fossil fuels would
make billions far poorer, including more
endangered by climate.” One of Epstein’s main
arguments is “climate mastery”. “Huge benefit
we get from fossil fuels is the ability to
master climate danger … which can potentially
neutralize fossil fuels’ negative climate
impacts.”
In his book “Is Reality Optional?” US economist
Thomas Sowell said: “Much of the social history
of the Western world over the past three
decades has involved replacing what worked with
what sounded good.” Human florishing is not
possible without affordable and reliable
energy.
Let us chose what works.
Ethylene27-Jun-2024
SAO PAULO (ICIS)–Most chemical prices have
stabilized, and a few are posting small rises,
a trend which should strengthen in coming
quarters as global manufacturing picks up,
executives at US-headquartered adhesives
producer HB Fuller said on Thursday.
Celeste Mastin, CEO at the company, said sales
volumes in Q2 had posted a “strong performance”
and came higher than initially expected, with
regions such as Europe also improving and some
sectors in China “growing like crazy”.
The improvement in manufacturing prospects
globally prompted HB Fuller to
increase its 2024 financial guidance
earlier this week after it published its Q2
financial results, which showed sales rose by
2%, year on year, and earnings by 10.1%.
As an adhesives producer, HB Fuller’s raw
materials include tackifying resins, polymers,
synthetic rubber, plasticizers and vinyl
acetate monomer (VAM). The company’s fiscal
year starts on 1 December; its fiscal Q2 covers
March-May.
EARLIER THAN PLANNED
RECOVERYAfter its longest
downturn ever, chemicals may finally be
savoring the green shoots of a recovery in
earnest. HB Fuller, at least, is.
According to Mastin, the notable improvement in
Q2 foresees a healthier second half of the
year, with the improvement across all the
company’s divisions and regions it operates in.
“We have had a strong volume performance and,
actually, we were planning volume growth in the
mid-single digits for the second half, but we
are already seing that, which explains Q2
[performance],” she said, speaking to reporters
and chemical equity analysts.
“We track the prices of 4,000 raw materials –
80% they are flat or increasing slightly. We
think from Q3 onward the trend will be for
increases over time.”
HB Fuller’s upbeat assessment contrasts with
what the company issued after its fiscal Q1. At
the time, Mastin said sales
volumes were still weak and, if that situation
persisted, prices of specialty chemicals, which
had so far held up reasonably well, could also
fall.
The improvement as of late has prompted the
company to also raise its selling prices
forecast – from an initially expected negative
pricing impact of 2-3%, the company now
forecasts a negative impact of 1-2%.
Those pricing negative effects, however, will
be overcome by growth in sales volumes, the CEO
said.
Mastin went on to say the automotive sector is
one where HB Fuller is “aggressively” trying to
gain market share, adding the strategy is
paying off with sales volumes up between 20%
and 30% compared with last year.
“In China, we have a very strong position in
automotive. But we are seeing healthy
performance in other sectors as well, such
glass, aerospace, or electronics – the latter
is growing like crazy there. Equally, we are
also seeing strong growth in India,” said
Mastin.
HB Fuller’s CFO, John Corkrean, also present at
the press conference, added that, after a poor
Q1, even the beleaguered European economy –
under pressure since Russia’s invasion of
Ukraine and the consequent energy prices shock
– also showed some positive signs in Q2.
“We have seen a return to volume growth in all
market segments. Some spots such as hygiene
remain a weak spot, but we have also seen there
an improvement from Q1 and we expect to see
further improvement in the next two quarters,”
said Corkrean.
“Europe was slow in Q1 but that improved in Q2
in , for example, the construction-related
businesses. These are positive signs we expect
will continue in coming quarters.”
Front page picture shows glue being
applied
Source: Shutterstock
Recycled Polyethylene Terephthalate27-Jun-2024
LONDON (ICIS)–Senior Editor for Recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
Colorless and blue bale prices rise in
eastern Europe
PRSE: Most see stable market over summer
PRSE: Confusion and frustration around lack
of SUPD clarity
PRSE: SUPD impact on R-PET not until Q4
earliest
Petrochemicals27-Jun-2024
NEW YORK (ICIS)–In an era of heightened
competition and global overcapacity for
chemical companies, cost competitiveness and
efficiency become even more important. And
artificial intelligence (AI) may be the key to
unlocking cost savings beyond the usual
measures.
On 25 June, Covestro announced a global
transformation plan to achieve annual savings
of €400 million in material and personnel costs
by the end of 2028. The company specifically
cited the use of AI to “continue increasing
efficiency and productivity in the future”.
Covestro’s cost savings program will include
“making production, administrative units and
other areas as efficient as possible and
continuously expanding the innovation
pipeline”. Sounds right up AI’s alley.
AI could be particularly useful for the
chemical industry, especially as labor
productivity (sales per full-time equivalent
employee) has failed to increase more than
1%/year on average over the past 15 years, and
lags behind other asset-intensive manufacturing
industries such as automotive, mining, oil and
gas, utilities, steel, cement and paper,
according to a study by Accenture showcased at
the American Chemistry Council (ACC) Annual
Meeting earlier in June.
The chemical industry is arguably more complex
than other sectors, making productivity gains
more of a challenge. However, this also means
it has more to gain.
“Generative (gen) AI has the potential to
revolutionize work and workflows across the
entire value chain. Our research indicates that
gen AI will affect about 31% of working hours
in the chemical industry through automation or
augmentation,” said Accenture in the study.
“This large potential is likely why 97% of
leaders in the chemical industry believe that
gen AI will positively affect their company’s
market share in the next three years,” it
added.
Chemical companies can restructure work to
allow gen AI to take on routine tasks, freeing
up workers to focus on more creative and
meaningful tasks.
Production employees, who make up almost half
of the workforce, spend 90% of their time on
transactional matters and tasks involving
simple judgment and only 10% of their time on
complex judgmental tasks, according to
Accenture.
“We as an industry are very slow to adopt new
technologies that will help us be more
productive and better. We have to find a way to
balance that,” said Robert King, executive vice
president of the Crop Protection Business Unit
at Corteva Agriscience, at the Accenture
breakfast briefing at the ACC Annual Meeting.
GEN AI FOR KNOWLEDGE
CAPTURELabor productivity will
become an even bigger challenge for chemical
companies, given demographic and skills
challenges. Around 30% of employees in the
industry are 50 years of age or older, and
student enrollment in engineering and business
is declining, further shrinking the talent
pool, the study found.
And with an aging workforce, it is critical to
capture knowledge and preserve valuable
insights from these workers prior to
retirement, to be able to transfer them to new
and existing employees.
“Companies can draw on gen AI for help, using
large language models (LLMs) to interview
retiring employees and to document their
expertise in handling specific situations and
challenges,” the study said.
On the product innovation side, chemical
companies such as Dow are already using AI to
improve product formulation and accelerate time
to market.
While AI will not solve everything and may even
create new challenges, it will be a key piece
to solving the labor productivity puzzle.
Companies that figure it out and leverage this
technology will gain a competitive edge.
Insight article by Joseph
Chang
Ammonia26-Jun-2024
HOUSTON (ICIS)–Swiss fertilizer producer and
trader Ameropa and India firm Hygenco Green
Energies have announced they have signed a term
sheet regarding the potential supply of green
ammonia from Hygenco’s forthcoming plant in
India.
The companies said one of the goals of this
pact is to enhance green ammonia exports from
India and to support the global transition to
renewable energy and sustainable agricultural
practices.
Hygenco will produce green ammonia from a
project to be located at the Gopalpur port in
Odisha with the first phase anticipated to
produce 600 short tons/day, which it plans to
achieve by 2027.
As designed phase two will double output to
1,200 tonnes/day by early 2028 with the project
scheduled to reach full capacity of 1.1 million
tons/year of green ammonia by 2030.
Looking to capture a significant share of the
growing global low-carbon ammonia markets,
Hygenco and Ameropa said they are planning to
start exporting green ammonia to Europe and
Asia with a key focus on establishing a
reliable supply chain.
Currently Hygenco is the only Indian company
with an operational commercial green hydrogen
plant, and it plans to invest $2.5 billion in
green hydrogen and green ammonia projects in
the next three years.
“Inspired by the age-old philosophy that the
world is one family, we are proud to announce a
visionary partnership with Ameropa to support
their decarbonization goals,” said Amit
Bansal, Hygenco Green Energies CEO.
“This term sheet highlights India’s exceptional
position to lead globally in this sector, by
harnessing its abundant renewable energy
resources and strong infrastructure.”
India has a target of producing 5 million
tonnes of green hydrogen by 2030 and if this is
achieved the country is poised to then become a
major exporter of green ammonia.
For Ameropa, this opportunity is seen as being
pivotal to help them make low-impact
fertilizers and grow sustainable agricultural
practices as well as significantly enhance the
company’s indirect emissions reduction.
“The Swiss trader has decided to support
Hygenco’s well-advanced plans while nurturing
the ambition of a global portfolio of
low-carbon ammonia,” said Beat Ruprecht,
Ameropa Head of Ammonia.
Ethylene26-Jun-2024
SAO PAULO (ICIS)–Brazil’s chemicals producers,
represented by trade group Abiquim, have gotten
on board with peer groups and trade unions in
their lobbying for higher import tariffs for
dozens of products as the government’s decision
looms.
Led by Abiquim, a total of 28 trade groups,
trade unions, industrial development groups,
one professional association and one company
have signed a manifesto pleading for higher
import tariffs to safeguard an industry which,
in their view, is being threatened by lower
priced imports which are produced with lower
environmental standards.
“The Brazilian chemicals input production
chain, fundamental to the country’s economic
and technological development, faces
unprecedented challenges that threaten its very
existence and the future of sustainable
solutions for Brazilian industry,” said the
manifesto.
“Ensuring measures to protect the trade balance
is vital to maintain the operation of the
chemical chain and attract new investments.”
In May, chemicals producers – via Abiquim but
also as individual companies – proposed increasing
tariffs in more than 100 chemicals,
most of them from 12.6% to 20%, in a public
consultation held by the Brazil’s government
body the Chamber of Foreign Commerce (Camex). A
decision is expected in August as the latest.
Other trade groups in the chemicals chain, such
as Abiplast, representing plastics
transformers, do not support higher tariffs as
most of their members import product to meet
their demand, and are doing their own lobbying not to increase
tariffs.
ABIQUIM LOBBYING GETS
PARTNERSAs well as Abiquim,
other trade groups within chemicals signed the
document, such the Brazilian Association of
Alkali, Chlorine, and Derivatives Industry
(Abiclor); the Brazilian Association of Fine
Chemical, Biotechnology and Specialty
Industries (Abifina); and the Brazilian
Association of Artificial and Synthetic Fiber
Producers (Abrafas) also signed the document.
In total, 11 trade groups and 12 trade unions
signed the document, as well as industrial
development groups and other players in the
chemicals chain. See bottom for full list of
signatories.
The backing of the unions is important because
it is likely to resonate in the corridors of
power in Brasilia, where the left-leaning
government of President Luiz Inacio Lula da
Silva got into office thanks in part to the
votes of the industrial workers constituency
who voted for Lula’s Workers Party (PT) in 2023
under the promise of more and better paid
industrial jobs.
“The Brazilian chemicals input production
chain, fundamental to the country’s economic
and technological development, faces
unprecedented challenges that threaten its very
existence and the future of sustainable
solutions for Brazilian industry. Ensuring
measures to protect the trade balance is vital
to maintain the operation of the chemical chain
and attract new investments,” said the
manifesto.
“What we are witnessing by allowing a surge in
imports of products without environmental
commitments is the failure to comply with a
global agenda, with negative contributions to
the fight against climate change.”
As the left-leaning Lula cabinet aims to
increase public spending, the manifesto also
touches on Abiquim’s calculations in the
decrease in tax receipts by the Brazilian
Treasury in 2023, as a consequence of lower
imports – the trade group said the state’s
receipts decreased during that year by
Brazilian reais (R) 8.0 billion ($1.45
billion).
“[The decrease in tax receipts] directly
impacts investments in the production sector
and in several other areas of public policy.
Continuing to allow the unbridled entry of
chemical products is a paradox for the policy
that Brazil has planned in the context of
neo-industrialization, while imports already
account for 50% of demand in the chemicals
industry,” said the manifesto.
“Because of this, some plants are idle, with
preventive maintenance anticipated, while
others are hibernating plants. And this affects
not only the production of chemical inputs, but
an entire broad supply chain of raw materials,
services, and energy supply related to the
sector.”
The Abiquim-led manifesto was also signed by
several trade unions in some of Brazil’s key
petrochemicals hubs, such the Chemists Union of
Sao Paulo; the Union of Chemical Industries of
Rio Grande do Sul (Sindiquim), and the Union of
workers in the chemical, petrochemical, plastic
and pharmaceutical industries of the State of
Bahia (Sindiquímica Bahia).
According to Abiquim’s figures, Brazil’s
chemicals production and related chain employs
around 2 million workers, representing 12% of
the country’s industrial GDP.
Earlier in June, the director general at
Abiquim said in an interview with ICIS
that the request for higher tariffs was only
one of the proposals presented to the
government to safeguard producers’ global
competitiveness.
“What we have presented to the government is
the need to undertake action on three main
fronts: in the short term, import tariffs, but
in the medium and long term we also need a
structural plan to address natural gas prices,
which are seven times higher in Brazil than in
some other jurisdictions, as well as a stimulus
plan covering the whole chemicals production
chain,” said Andre Passos.
The list of signatories to the manifesto also
includes one company, one professional
association, and two industrial development
groups:
TRADE GROUPS
1. Chemical Industry Association
(Abiquim)
2. Association of Piped Gas Distribution
Companies (Abegas)
3. Association of Alkali, Chlorine, and
Derivatives Industry (Abiclor)
4. Association of Fine Chemical,
Biotechnology and Specialty Industries
(Abifina)
5. Association of Pharmaceutical Inputs
Industry (Abiquifi)
6. Association of Glass Industries
(Abividro)
7. Association of Independent Oil and Gas
Producers (ABPIP)
8. Association of Artificial and
Synthetic Fiber Producers (Abrafas)
9. Association of Campos Elíseos
Companies (Assecampe)
10. Association of Natural Gas Pipeline
Transportation Companies (Atgás)
11. Federation of Industries of the State
of Alagoas (FIEA)
TRADE UNIONS
12. Federation of Chemical Workers of the
CUT of the State of Sao Paulo (Fetquim –
CUT SP)
13. Single Federation of Oil Workers
(FUP)
14. Unified Chemical Union
15. Chemists Union of Sao Paulo
16. Plastic and Paint Industries Union of
the State of Alagoas (Sinplast-AL)
17. Industry Union of Chemical Products
for Industrial Purposes of the State of
Rio de Janeiro (Siquirj)
18. Industry Union of Chemical Products
for Industrial Purposes, Petrochemicals
and Synthetic Resins of Camaçari,
Candeias and Dias D’Avila (Sinpeq)
19. Industry Union of Chemical Products
Chemicals for Industrial and
Petrochemical Purposes in the State of
Sao Paulo (Sinproquim)
20. Union of Chemical Industries of Rio
Grande do Sul (Sindiquim)
21. Union of Chemists of ABC (Sao Paulo
state region)
22. Union of workers in the chemical,
petrochemical, plastic and pharmaceutical
industries of the State of Bahia
(Sindiquímica Bahia)
23. Union of Workers in the Chemical,
Pharmaceutical and Fertilizer Industries
of Baixada Santista (coastal Sao Paulo
area)
24. National Confederation of the
Chemical Branch of CUT (CNQ-CUT)
INDUSTRIAL DEVELOPMENT
GROUPS
25. Camacari Industrial Development
Committee (Cofic)
26. Industrial Development of the Rio
Grande do Sul Pole (Cofip RS)
PROFESSIONAL
ASSOCIATIONS
27. Federal Council of Chemistry (CFQ)
COMPANIES
28. Forca Quimica
($1 = R5.51)
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