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.”

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.

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)

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.

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

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

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

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.

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)