Polyethylene terephthalate (PET)

SINGAPORE (ICIS)–SABIC's net income fell by 62% year on year to Saudi Riyal (SR) 250 million in the first quarter amid a drop in prices and sales volumes, the chemicals major said late on Wednesday. Losses from discontinued operations continue to weigh on results Overcapacity persists, pressuring the industry as market growth lags – CEO Spending range of $4 billion to $5 billion expected for 2024 in Saudi riyal (SR) billions Q1 2024 Q1 2023 % Change Sales 32.69 36.43 -10 Operational profit 1.21 1.76 -31 Net income 0.25 0.66 -62 "The decrease in net profit is attributed to lower revenues, lower results from associates and joint ventures in addition to losses from discontinued operations," SABIC said in a filing on the Saudi bourse, Tadawul. SABIC swung to a net loss of Saudi riyal (SR) 2.77bn ($739m) in 2023, largely due to one-off losses related to a divestment. Q1 revenue fell following a 3% decline in average selling prices and a 7% reduction in sales quantities. "Global economic uncertainty remained high during the first quarter of 2024, caused by geopolitical and logistical issues. Adding to these challenges were high global inflation levels and strict lending policies," SABIC CEO Abdulrahman Al-Fageeh said in a separate statement. Al-Fageeh in an investor call cautioned that overcapacity remains a challenge for the industry, creating a gap between supply and demand that is likely to persist throughout 2024. While positive demand signals emerged in Q1 2024, "the year outlook remains uncertain as the world still navigates through geopolitical situations with high inflation", he said. SABIC plans to adopt a disciplined approach to capital expenditure, projecting a spending range of $4 billion to $5 billion for the year, compared with $3.5 billion to 3.8 billion last year. NEW PROJECTS SABIC has started construction of its $6.4bn manufacturing complex in China’s southern Fujian province. The project "would add a qualitative range of products to SABIC’s portfolio of chemicals and polymers and enhance the company's presence in the Chinese market", the company said. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC also inaugurated the world’s first large-scale electrically heated steam olefins cracking furnace in Netherlands, which will pave the way for the company to fulfill its commitment to reach carbon neutrality by 2050. SABIC is 70%-owned by energy giant Saudi Aramco. ($1 = SR3.75) Thumbnail photo by SABIC Focus article by Nurluqman Suratman

02-May-2024

SAO PAULO (ICIS)–Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. For some products, Brazil’s chemicals trade group Abiquim, which represents producers, has made official requests for the import tariffs to go up to a hefty 35%, from 9% in some cases. On Tuesday, Abiquim said several of its member companies “are already talking about hibernating plants” due to unprofitable economics. It did so after it published another set of somber statistics for the first quarter, when imports continued entering Brazil em masse. Brazil’s government Chamber of Foreign Commerce (Camex) is concluding on Tuesday a public consultation about this, with its decision expected in coming weeks. Abiquim has been busy with the public consultation: it has made as many as 66 proposals for import tariffs to be hiked for several petrochemicals and fertilizers, including widely used polymers such polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), polystyrene (PS), or expandable PS (EPS), to mention just a few. Other chemicals trade groups, as well as companies, have also filed requests for import tariffs to be increased. In total, 110 import tariffs. HARD TO FIGHT OFFBrazil has always depended on imports to cover its internal chemicals demand, but the extraordinary low prices coming from competitors abroad has made Brazil’s chemicals plant to run with operating rates of 65% or lower. More and more, the country’s chemicals facilities are becoming white elephants which are far from their potential, as customers find in imported product more competitive pricing. Considering this dire situation and taking into account that the current government in Brasilia led by Luiz Inacio Lula da Silva may be more receptive to their demands, Abiquim has put a good fight in publica and private for measure which could shore up chemical producers’ competitiveness. This could come after the government already hiked import tariffs on several products in 2023 and re-introduced a tax break, called REIQ, for some chemicals which had been withdrawn by the previous Administration. While Brazil’s chemicals production competitiveness is mostly affected by higher input costs, with natural gas costs on average five times higher than in the US, the industry is hopeful a helping hand from the government in the form of higher import tariffs could slow down the flow of imports into Brazil. As a ‘price taker region’ given its dependence on imports, Latin American domestic producers have taken a hit in the past two years. In Brazil, polymers major Braskem is Abiquim’s commanding voice. Abiquim, obviously, has always been very outspoken – even apocalyptic – about the fate of its members as they try to compete with overseas countries, namely China who has been sending abroad product at below cost of production. The priorities in China’s dictatorial system are not related to the balance of markets, but to keep employment levels stable so its citizens find fewer excuses to protest against the regime which keeps them oppressed. Capitalist market dynamics are for the rest of the world to balance; in China’s dictatorial, controlled-economy regime the priority is to make people feel the regime’s legitimacy can come from never-ending economic growth. The results of such a policy for the rest of the world – not just in chemicals but in all industrial goods – is becoming clear: unprofitable industries which cannot really compete with heavily subsidized Chinese players. The results of such a policy in China are yet to be seen, but subsiding at all costs any industry which creates employment may have debt-related lasting consequences: as they mantra goes, “there is no such thing as a free lunch.” Abiquim’s executive president urged Lula’s cabinet to look north, to the US, where the government has imposed hefty tariffs on almost all China-produced industrial goods or raw materials for manufacturing production. “[The hikes in import tariffs] have improved the US’ scenario: despite the aggressive advance in exports by Asian countries, the drop in US [chemicals] production in 2023 was of 1%, while in Brazil the index for production fell nearly by 10%,” said Andre Passos. “The country adopted an increase in import taxes of over 30% to defend its market from unfair competition. The taxation for some inputs, such as phenol, resins and adipic [acid], for example, exceeds three digits. “Here, we are suggesting an increase in rates to 20% in most claims … We need to have this breathing space for the industry to recover,” he concluded. As such, the figures for the first quarter showed no sign of imports into Brazil slowing down. The country posted a trade deficit $9.9 billion during the January-March period; the 12-month accumulated (April 2023 to March 2024) deficit stood at $44.7 billion. A record high of 61.2 million tonnes of chemicals products entered Brazil in Q1; in turn, the country’s industry exported 14.6 million tonnes. Abiquim proposals for higher import tariffs Product Current import tariff Proposed tariff Expandable polystyrene, unfilled, in primary form 12.6% 20% Other polystyrenes in primary forms 12.6% 20% Carboxymethylcellulose with content > =75%, in primary forms 12.6% 20% Other polyurethanes in liquids and pastes 12.6% 20% Phthalic anhydride 10.8% 20%  Sodium hydrogen carbonate (bicarbonate) 9% 35% Copolymers of ethylene and alpha-olefin, with a density of less than 0.94 12.6% 20% Other orthophthalic acid esters 11% 20% Other styrene polymers, in primary forms 12.6% 20% Other silicon dioxides 0% 18% Other polyesters in liquids and pastes  12.6% 20% Commercial ammonium carbonates and other ammonium carbonates 9% 18% Other unsaturated polyethers, in primary forms 12.6% 20% Polyethylene terephthalate, with a viscosity index of 78 ml/g or more 12.6% 20% Phosphoric acid with an iron content of less than 750 ppm 9% 18% Dinonyl or didecyl orthophthalates 11% 20% Poly(vinyl chloride), not mixed with other substances, obtained by suspension process 12.6% 20% Poly(vinyl chloride), not mixed with other substances, obtained by emulsion process 12.6% 20% Methyl polymethacrylate, in primary form  12.6% 20% White mineral oils (vaseline or paraffin oils) 4% 35% Other polyetherpolyols, in primary forms 12.6% 20% Other unfilled epoxy resins in primary forms 12.6% 20% Silicon dioxide obtained by chemical precipitation 9% 18% Acrylonitrile-butadiene rubber in plates, sheets, etc 11% 35% Other organic anionic surface agents, whether or not put up for retail sale, not classified under previous codes 12.6% 23% Phenol (hydroxybenzene) and its salts 7% 20% Fumaric acid, its salts and esters 10 ,8% 20% Plasticizers and plastics 10 ,8% 20% Maleic anhydride 10 ,8% 20% Adipic acid salts and esters 10 ,8% 20% Propylene copolymers, in primary forms 12.6% 20% Adipic acid 9% 20% Unfilled polypropylene, in primary form 12.6% 20% Filled polypropylene, in primary form 12.6% 20% Methacrylic acid methyl esters 10 ,8% 20% Other ethylene polymers, in primary forms 12.6% 20% Acrylic acid 2-ethylhexyl esters 0% 20% 2-Ethylexanoic acid (2-ethylexoic acid) 10. 8% 20% Other copolymers of ethylene and vinyl acetate, in primary forms 12.6% 20% Other unfilled polyethylenes, density >= 0.94, in primary forms 12.6% 20% Polyethylene with a density of less than 0.94, unfilled 12.6% 20% Other saturated acyclic monoalcohol acetates, c atom <= 8 10. 8% 20% Polyethylene with a density of less than 0.94, with filler 12.6% 20% Triacetin 10. 8% 20% Sodium methylate in methanol 12.6% 20% Stearic alcohol (industrial fatty alcohol) 12.6% 20% N-butyl acetate                              11% 20% Stearic acid (industrial monocarboxylic fatty acid) 5% 35% Alkylbenzene mixtures 11% 20% Organic, non-ionic surface agents 12.6% 23% Ammonium nitrate, whether or not in aqueous solution 0.0% 15% Monoethanolamine and its salts 12.6% 20% Isobutyl alcohol (2-methyl-1-propanol) 10.8% 20% Butan-1-ol (n-butyl alcohol) 10.8% 20% Styrene-butadiene rubber (SBR), food grade as established by the Food Chemical Codex, in primary forms 10.8% 22% Styrene                                9% 18% Hexamethylenediamine and its salts 10.8% 20% Latex from other synthetic or artificial rubbers 10.8% 35% Propylene glycol (propane-1, 2-diol) 10.8% 20% Preparations 12.6% 20% Linear alkylbenzene sulfonic acids and their salts 12.6% 23% 4,4'-Isopropylidenediphenol (bisphenol A, diphenylolpropane) and its salts 10.8% 20% Dipropylene glycol 12.6% 20% Butanone (methyl ethyl ketone) 10.8% 20% Ethyl acetate                                 10.8% 20% Methyl-, ethyl- and propylcellulose, hydroxylated 0.0% 20% Front page picture: Chemical production facilities outside Sao Paulo  Source: Union of Chemical and Petrochemical industries in the state of Sao Paulo (Sinproquim) Focus article by Jonathan Lopez Additional information by Thais Matsuda and Bruno Menini

30-Apr-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 26 April. LyondellBasell sees continued PE momentum in North America, Europe – CEO Polyethylene (PE) demand in North America and Europe should continue to improve in Q2 and through H2 with consistently healthy demand in packaging, the CEO of LyondellBasell said on Friday. Eastman eyes 2027 startup for second US methanolysis plant, French project timing uncertain Eastman expects to reach a final investment decision (FID) on its second US methanolysis (chemical recycling) plant in Q3, CEO Mark Costa and CFO Willie McLain told analysts during the company’s Q1 earnings call on Friday. Dow sees ‘meaningful’ H2 recovery on PE margins, steady demand improvement – CFO Dow continues to expect a strong second half, mainly driven by higher integrated polyethylene (PE) margins, with Q2 sales also expected to trend higher versus the first half in all three of its segments, its chief financial officer said on Thursday. INSIGHT: Latin America’s nascent EV market increasingly a Chinese affair Latin America’s take-up of electric vehicles (EVs) has started to gain momentum, said the International Energy Agency (IEA) this week, with Chinese producers drawing customers with sharply lower prices than western, established brands. Canada moves ahead with plastics registry as UN plastics pollution session starts in Ottawa Following the conclusion of a consultation period, Canada’s federal government has published a formal notice in the Canada Gazette for its planned Federal Plastics Registry. Styrolution Sarnia closure further tightens North America styrene market INEOS Styrolution’s decision this past weekend to temporarily close its Sarnia, Ontario, styrene unit will further tighten a market already dealing with several outages. Prices are under upward pressure with contract prices the highest since Q3 2023.

29-Apr-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 26 April. NEWS Mexico's potential ADDs on China plastics no panacea amid wider stiff competition – Alpek CEO Mexico’s potential antidumping duties (ADDs) on several China-produced plastics will not by itself bring the Mexican market back to balance as “stiff competition” is coming from many other fronts as well, the CEO at chemicals producer Alpek said on Wednesday. INSIGHT: Latin America’s nascent EV market increasingly a Chinese affair Latin America’s take-up of electric vehicles (EVs) has started to gain momentum, said the International Energy Agency (IEA) this week, with Chinese producers drawing customers with sharply lower prices than western, established brands. Mexico’s Alpek Q1 earnings fall but volumes up on shy demand recovery Alpek’s first-quarter earnings and sales fell year on year but improved quarterly on a slight demand recovery, particularly for polyesters, the Mexican chemicals producer said on Tuesday. PRICING LatAm PP domestic prices drop in Argentina on poor demand Domestic polypropylene (PP) prices dropped in Argentina this week. Despite producer prices being unchanged, local distributors have lowered prices due to poor demand. Market participants have reported a 40-60% drop in sales in the past few weeks. LatAm PE domestic prices down in Argentina on sluggish demand After more than a year, domestic polyethylene (PE) prices in Argentina were assessed lower due to sluggish demand. Argentina January PE imports down 32% month on month Argentina polyethylene (PE) imports decreased by 32% month on month in January, totaling 19,106 tonnes, according to the latest figures from the ICIS Supply & Demand database.

29-Apr-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 26 April 2024. Thailand's SCG Q1 net profit slumps 85%; eyes better H2 conditions By Nurluqman Suratman 26-Apr-24 12:45 SINGAPORE (ICIS)–Siam Cement Group (SCG) posted an 85% year-on-year decline in Q1 net profit on losses from chemicals operations, but the Thai conglomerate expects the segment’s earnings to recover in H2 on improved olefins demand and expected restart of its Vietnam petrochemical complex. China VAM exports jump; shipments to India surge in Q2 By Hwee Hwee Tan 25-Apr-24 13:42 SINGAPORE (ICIS)–China's vinyl acetate monomer (VAM) spot offers have tumbled, boosting buying interest in its outbound cargoes, and lifting its exports to India to a multi-month high into the second quarter. SE Asia PE May offers mostly rangebound; demand still weak By Izham Ahmad 24-Apr-24 14:09 SINGAPORE (ICIS)–Initial spot import offers for May shipments of polyethylene (PE) in southeast Asia were announced mostly rangebound so far in the week, while buying interest remained under pressure near recent lows. Saudi Aramco eyes stake in Hengli Petrochemical; prowls for more China investments By Fanny Zhang 23-Apr-24 14:13 SINGAPORE (ICIS)–Saudi Aramco continues its quest for downstream petrochemical investments in the world’s second-biggest economy, adding Hengli Petrochemical in a list of target companies in which the global energy giant intends to acquire a strategic stake. PODCAST: Production constraints keep Asian BD spot trades buoyant in Q1, demand outlook mixed By Damini Dabholkar 22-Apr-24 17:35 SINGAPORE (ICIS)–Persistent production constraints have driven Asia’s spot prices for butadiene (BD) to near two-year-high levels, but how the rally goes from here may hinge on downstream demand conditions. CHINAPLAS ’24: PODCAST: China PP exports strong, imports weak in Q1 By Sijia Li 22-Apr-24 16:23 SINGAPORE (ICIS)–ICIS analyst Sijia Li and senior industry analyst Joanne Wang discuss developments in China's polyolefins market.

29-Apr-2024

HOUSTON (ICIS)–Global shipping container rates are starting to moderate, the Panama Canal expects to increase transits in May, and liquid chemical tanker spot rates are mixed, highlighting this week’s logistics roundup. CONTAINER RATES Global shipping container rates are plateauing as shipowners have implemented blank sailings to control capacity and as some carriers have announced general rate increases (GRIs). Freight forwarder Flexport said in an update on 25 April that GRIs announced for ex-Asia westbound routes are expected to stick amid high utilization from carriers. Flexport noted three factors that supported the increases – a slight increase in demand because of the May labor holiday in China; reduced capacity from the increase in blank sailings; and increased congestion at ports and equipment challenges from certain carriers. Participants in the US polyethylene terephthalate (PET) told ICIS they are seeing higher freight costs as shipping in the Red Sea and now the Strait of Hormuz continues to be disrupted. Rate increases have also been announced for cargo heading to the Middle East region. Global container shipping major Mediterranean Shipping Company (MSC) announced $200/TEU (20-foot equivalent unit) effective 17 May for all cargo leaving the US and Puerto Rico going to the Middle East. Global container rates from supply chain advisors Drewry were flat this week, as shown in the following chart. Rates from North China to the US Gulf also held steady, although at levels higher than were seen in December before the attacks on commercial vessels in the Red Sea, as shown in this chart from ocean and freight rate analytics firm Xeneta. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID CHEM TANKERS US chemical tanker freight rates assessed by ICIS were mixed this week with rates rising for parcels from the US Gulf (USG) to Brazil and India. However, rates from the USG to ARA decreased and all other trade lanes held steady. From the USG to Brazil, this trade lane has had limited availability for H1 May loading. However, mid and H2 May have showed a few more options with an outsider on berth currently to South America. This could place downward pressure on this route. Although COA nominations are still up in the air, a few regular owners hope to have more space and a broker says that time will tell when this space fills up. From the USG to Asia, regular players have said they are full on most of their positions through this time, which has placed some upward pressure on smaller parcels as it has become harder to find space for them. Currently, the USG to Asia market appears to be in a fragile balance between the interest in larger slugs, and the growing number of players looking for stainless steel vessels in the USG for May, according to a broker. BALTIMORE BRIDGE The Unified Command (UC) announced the opening of a new channel at the Port of Baltimore that has allowed ships trapped inside the port to leave. The Fort McHenry Limited Access Channel, which runs the length of the northeast side of the federal channel, provides additional access to commercially essential traffic. The limited access deep draft channel has a controlling depth of a minimum of 35 feet, a 300-foot horizontal clearance, and a vertical clearance of 214 feet. Starting Monday, April 29, operations to remove the Dali will require suspension of transits through the Fort McHenry Limited Access Channel. Once deemed safe, the channel will reopen for commercial traffic. PANAMA CANAL The Panama Canal Authority (PCA) will increase the number of slots available for Panamax vessels to transit the waterway beginning 16 May and will add another slot for Neopanamax vessels on 1 June based on the present and projected water levels in Gatun Lake. The PCA began limiting the number of transits in August 2023 because of low water levels in Gatun Lake brought on by a severe drought that made 2023 the second driest year on record for the Panama Canal watershed catchment area. Wait times for non-booked vessels ready for transit edged lower for northbound vessels and rose for southbound vessels this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 3.0 days for northbound traffic and 2.9 for southbound traffic. The Panama Canal Authority (PCA) said current forecasts indicate that steady rainfall will arrive later this month and continue during the rainy season, which would allow the PCA to gradually ease transit restrictions and traffic could return to normal by 2025. Please see the Logistics: Impact on chemicals and energy topic page With additional reporting by Melissa Wheeler and Kevin Callahan

26-Apr-2024

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Flake, food-grade pellet sellers looking at higher May offers Buyers considering more PET volumes, looking at non-EU R-PET imports Mixed coloured flake price views vary for May

26-Apr-2024

SINGAPORE (ICIS)–Siam Cement Group (SCG) posted an 85% year-on-year decline in Q1 net profit on losses from chemicals operations, but the Thai conglomerate expects the segment’s earnings to recover in H2 on improved olefins demand and expected restart of its Vietnam petrochemical complex. H2 conditions to improve on chemicals recovery Long Son Petrochemicals complex restart targeted in July Olefins prices to stabilize in Q2, recover later in 2024 In Thai baht (Bt) million Q1 2024 Q1 2023 % Change Revenue from sales 124,266 128,748 -3.5 EBITDA 12,623 12,170 3.7 Net profit 2,425 16,526 -85.3 *Earnings before interest, tax, depreciation and amortization First-quarter EBITDA increased on higher contribution of businesses related to cement and construction. The company's listed SCG Packaging (SCGP) subsidiary, meanwhile, posted a 15% year-on-year increase in EBITDA to Bt5.2 billion as sales rose by 1% to Bt34.0 billion. Chemicals results in Bt million Q1 2024 Q1 2023 % Change Revenue from sales 45,376 46,805 -3.1 EBITDA 1,289 2,445 -47.3 Net profit -1,866 1,356  – Petrochemicals demand remained weak in the first quarter due to ongoing geopolitical tensions and weak global economic conditions, the company said in a filing to the Stock Exchange of Thailand on 24 April. The first-quarter loss in the chemicals business, however, was mainly due to lower equity income from associates and start-up expenses of the company's Long Son Petrochemicals Complex (LSP) in Vietnam. Its 100%-owned integrated petrochemical complex completed initial test-runs early this year but was shut in March due to equipment issues and will remain down up to June. SCG expects to restart the facility in July for the final test run, followed by commercial operations beginning August 2024. In the first quarter, the company sold around 306,000 tonnes of both polyethylene (PE) and polypropylene (PP) products, down 22% year on year following the shutdown at Rayong Olefins' (ROC) cracker. SCG now expects olefins demand to improve gradually in the second half of 2024 as supply in the region is expected to be limited due to a series of planned maintenance, particularly in China and southeast Asia. It expects stable olefins prices in the second quarter and a recovery in the latter half of 2024 as demand growth is expected to exceed capacity additions. Polyvinyl chloride (PVC) demand in Asia continues to face challenges due to the persistent real estate crisis in China, while supply is impacted by high inventory in China resulting in more exports to Asia. Focus article by Nurluqman Suratman ($1 = Bt37.05)

26-Apr-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 19 April. NEWS Brazil’s Petrobras, China’s CNCEC mull petchems, fertilizers joint projects Petrobras and China’s chemicals major CNCEC have signed a memorandum of understanding (MoU) to explore petrochemicals and fertilizers joint projects, the Brazilian state-owned energy major said on Thursday. INSIGHT: Argentina’s petchems hit hardest by recession as country holds breath under Milei Argentina’s petrochemicals are taking a severe hit amid the recession, with falls in demand for some materials of up to 50%, but companies and the country are holding firm under the new President’s economic shock therapy. Brazil's Petrobras re-enters fertilizers sector with restart at ANSA plant Petrobras is to restart its large-scale ANSA fertilizers plant in Araucaria, state of Parana, which has been idle since 2020, the Brazilian state-owned energy major said late on Wednesday. Pemex to remain ‘fiscal challenge’ for Mexico's new administration – S&P Beleaguered finances at Pemex, the Mexican state-owned energy major, will require support from the federal budget for years to come, the analysts at S&P said this week. Argentina’s lower rates helping central bank shore up balance sheet at savers’ expense – economist Argentina’s latest cut to interest rates had more to do with shoring up the central bank’s balance sheet, possible thanks to currency controls implemented by the prior Administration, than the actual control of price rises, according to the director at Buenos Aires-based Fundacion Capital. Latin America's fiscal consolidation at risk of slippages as plans postponed – IMF Latin America’s countries high debt levels require fiscal consolidation plans which in some cases are being postponed, increasing risks for the long-term financial stability of the region, the Director of the Western Hemisphere Department at the IMF said on Friday. Chile inflation falls to 3.7% in March Chile’s annual inflation rate fell in March to 3.7%, down from 4.5% in February, according to the country’s statistics office INE. Brazil’s automotive output barely up in Q1, sales rise 9% Brazil’s petrochemicals-intensive automotive output rose by 0.4% in the first quarter, year on year, to just below 550,000 units, the country’s trade group Anfavea said on Monday. LatAm PE domestic price lower in Chile on cheaper US export offers Domestic polyethylene (PE) prices were assessed lower in Chile because of cheaper US export offers. In other Latin American (LatAm) countries, prices remained steady. Latin America’s February lube demand holds steady Lube demand in Latin America was relatively steady in February at a time of year when consumption typically falls in other markets like the US and Europe. The steady consumption coincided with lower base oils output in the region in February. LatAm PP international prices stable to up on higher freights from Asia International polypropylene (PP) prices were assessed as stable to higher because of increased freight rates from Asia to the region. However, Asian offers remain competitive compared to other origins like the Middle East and the US. Plant status: Dow Argentina shuts HDPE and LDPE plants on technical issues – sources US chemicals major Dow’s subsidiary in Argentina shut on 16 April a high density polyethylene (HDPE) plant due to a mechanical pump failure and a low density polyethylene (LDPE) plant due to technical failure, several sources said. Weather conditions starts to slightly shift PET demand in Latin America Polyethylene terephthalate (PET) prices remained stable in Brazil, with a slight softening in consumption coinciding with stabilized temperatures. However, demand continues to exceed expectations when compared with the corresponding period last year. Weather conditions starts to slightly shift PET demand in Latin America Polyethylene terephthalate (PET) prices remained stable in Brazil, with a slight softening in consumption coinciding with stabilized temperatures. However, demand continues to exceed expectations when compared with the corresponding period last year.

22-Apr-2024

HOUSTON (ICIS)–Costs for shipping containers from Asia to South America are soaring while rates are plummeting along the other major trade lanes and Maersk will resume transits through the Panama Canal after administrators said they expect to be back to normal in 2025, highlighting this week’s logistics roundup. ASIA-SOUTH AMERICA CONTAINER RATES Rates for shipping containers from Asia to the US and Europe continue to fall, but rates from Asia to South America are spiking, according to data from ocean and freight rate analytics firm Xeneta and as shown below. Market participants said space along the Asia-South America route has tightened as China is exporting a lot of electric vehicles (EVs) to Brazil. A market participant told ICIS that Chinese automaker BYD has booked more than 10,000 containers to ship EVs to Brazil in April. Autos are typically transported using roll-on, roll-off (RoRo) ships that are designed to carry wheeled cargo. But the surge in EV imports from China has taken up most of the RoRo capacity, forcing China to send autos in containers, which is more expensive. A 20-foot shipping container can hold one or two vehicles, and a 40-foot container can hold up to four standard-sized cars, according to IncoDocs, a shipping solutions provider. ASIA-US CONTAINER RATES FALL Rates from east Asia and China to both US coasts continue to fall, along with rates from Asia to Europe, as shown in the following charts. Asia-US rates from online freight shipping marketplace and platform provider Freightos were largely steady this week, suggesting to the company's head of research that rates might be nearing a floor. Judah Levine, head of research at Freightos, said if diversions continue into the Q3 peak season months, shippers can expect rates to increase relative to this floor. STRAIT OF HORMUZ Global shippers are watching the situation in the Gulf of Hormuz after Iran’s Revolutionary Guard Corps (IRGC) seized a container ship operated by Mediterranean Shipping Co (MSC) near the Strait. "If attacks like this one continue, broaden, or Iran moves to completely close the strait, Middle East container flows would feel the strongest impact," Levine said. A closure would see ports in Kuwait, Iraq and most of the United Arab Emirates (UAE) become inaccessible. Saudi Arabia, with access to their Red Sea port access already challenged, would see their Gulf port access cut off as well. "These disruptions would also impact container hubs in India some of which are part of services that connect south Asia and the Middle East," Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. They also transport liquid chemicals in isotanks. PORT OF BALTIMORE The Unified Command (UC) continues to remove containers from the Dali and clear wreckage from the collapsed bridge at the entrance to the Port of Baltimore. The US Army Corps of Engineers (USACE) expects to open a limited access channel 280 feet wide and 35 feet deep by the end of April, and are aiming to reopen the permanent, 700-foot-wide by 50-foot-deep federal navigation channel by the end of May, restoring port access to normal capacity. Source: Key Bridge Response 2024 LIQUID CHEM TANKERS US chemical tanker freight rates assessed by ICIS were stable to lower this week with rates for parcels from the US Gulf (USG) to Rotterdam and the USG to Brazil unchanged. However, rates from the USG to Asia ticked lower and all other trade lanes held steady. On this route, there is no shortage of glycol enquiries. From the USG to Rotterdam, there are bits of part cargo space still available for April. Most of the outsiders’ vessels that were on berth have already sailed, and only the regulars remain at this time as they push tonnage availability. Freight rates are now expected to remain steady for the time being. PANAMA CANAL Wait times for non-booked vessels ready for transit edged higher for northbound vessels and were unchanged for southbound vessels this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times last week were 0.9 days for northbound traffic. The Panama Canal Authority (PCA) said current forecasts indicate that steady rainfall will arrive later this month and continue during the rainy season, which would allow the PCA to gradually ease transit restrictions and traffic could return to normal by 2025. Global container shipping major Maersk said it will resume Panama Canal transits for its OC1 service beginning 10 May, ending its “two-loop” setup it established in January because of transit restrictions brought on by a persistent drought. Please see the Logistics: Impact on chemicals and energy topic page Additional reporting by Bruno Menini and Kevin Callahan

19-Apr-2024