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Chemicals news

LOGISTICS: Container rates continue to surge, liquid chem tanker rates mostly lower

HOUSTON (ICIS)–Average global rates for shipping containers continue to surge, liquid chemical tanker rates ex-US Gulf were mostly softer, and work continues to reopen the Port of Baltimore, highlighting this week’s logistics roundup. CONTAINER RATES Rates for shipping containers surged by double digits again this week on unexpected demand and tight capacity stemming from Red Sea diversions. Average global rates surged by 11% over the week, according to supply chain advisors Drewry and as shown in the following chart. Meanwhile, rates from Shanghai to the US West Coast are up by almost 33% from early-February and rates from Shanghai to the East Coast are more than 30% higher over that period, as shown in the following chart. Drewry expects ex-China freight rates to rise due to increased demand, tight capacity, and the need to reposition empty containers. Emily Stausbøll, senior shipping analyst at ocean and freight rate analytics firm Xeneta, said the speed of the increases is causing nervousness in the market. “Demand reached record levels in Q1 2024, up by 9.2% compared to Q1 2023, and comes at a time when the Red Sea situation is putting increased pressure on shipping capacity,” she said. “But significantly, this is all taking place while the chaos of port congestion and lack of available capacity during the COVID-19 pandemic is still fresh in the memory of shippers.” “Lessons will have been learned from the pandemic. If shippers fear there is going to be a squeeze on capacity during the peak season in Q3 then they are going to start importing more goods now,” Stausbøll said. “If these increased volumes need to be moved on the spot market, then it is going to put upwards pressure on rates." 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), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES US chemical tanker freight rates assessed by ICIS were mostly lower as rates fell from the US Gulf (USG) to Asia and from the USG to India. However, rates ticked slightly higher for smaller parcels from the USG to Caribbean and surged from the USG to Brazil. From the USG to Rotterdam, it has remained quiet again this week, with available space for part cargo still open. COA volumes have been heavy for owners; however, spot inquiries have been quiet. Due to the available space and softness, this could place further downward pressure on this trade lane. From the USG to the Caribbean, the market has remained higher with very little prompt space available. Owners have pushed to keep freight rates mostly steady; however, there is currently a lack of activity from out of the USG. From the USG to Asia, this market has remained overall soft after a long holiday week in Japan. BALTIMORE, HOUSTON BRIDGE COLLISIONS Traffic in and out of the Houston Ship Channel was not affected after a barge struck a bridge connecting Galveston and Pelican islands on Wednesday morning. JJ Plunkett of the Houston Pilots said the Intracoastal Waterway (ICW) was closed, which could slow movement of barges moving finished product from plants along the channel. Ships enter the channel by passing between Galveston Island and the Bolivar Peninsula and then move through Galveston Bay before reaching the main section of the channel where refineries, chemical plants and storage facilities are located. The barge collided with a bridge that connects Galveston Island to Pelican Island, located well to the west of where commercial vessels enter and exit Galveston Bay. Meanwhile at the Port of Baltimore, the container ship that essentially closed the port on 26 March after it struck the Francis Scott Key Bridge, causing its collapse, is set to be moved now that the mangled remnants of the span were removed from the ship’s bow with controlled blasts on 13 May. Officials continued to evaluate the situation on Friday in preparation for refloating the vessel and clearing the federal channel. Officials have evaluated sonar and lidar imagery but are awaiting results from a dive survey before proceeding with plans to refloat and move the vessel. The closing of the port did not have a significant impact on the chemicals industry as chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. PANAMA CANAL Wait times for non-booked southbound vessels ready for transit surged this week while wait times for northbound vessels edged higher, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 2.6 days for northbound vessels and 2.4 days for southbound vessels. Additional reporting by Kevin Callahan

17-May-2024

Houston storm disrupts chems, knocks power out for thousands

HOUSTON (ICIS)–Powerful thunderstorms in Houston and the Gulf Coast disrupted operations at chemical plants while leaving more than 700,000 without power as of Friday. The storms hit Houston on Thursday evening. TPC Group reported that severe weather caused a power outage, which led to flaring at its butadiene (BD) operations in Houston. Power was restored, and operations returned to the site, TPC said in a filing with the Texas Commission on Environmental Quality (TCEQ). Lotte Chemical has delayed the restart of its cracker and downstream ethylene glycol (EG) unit in Lake Charles, Louisiana, to next week because of bad weather, according to market sources. Lotte did not immediately respond to a request for comment. The storm created winds of 40-78 miles/hour (64-126 km/hour), according to the National Weather Service. Such strong winds created widespread power outages throughout the region. In the late morning, more than 700,000 customers were without power in the Houston area, according to CenterPoint Energy, a power company that is the main transmission company. Overall, more than 777,000 outages were reported in Texas, according to PowerOutage.us. Another 90,000 outages were reported in Louisiana, another state that is home to several petrochemical plants and refineries. The winds reached hurricane force in downtown Houston, where many petrochemical companies have corporate offices. “This was an incredibly dangerous and destructive storm, impacting one of the largest cities and busiest travel hubs in America,” said AccuWeather Chief Meteorologist Jonathan Porter. “Downtown Houston has not seen wind damage like this since Hurricane Ike in 2008 and Hurricane Alicia in 1983. The winds were even stronger at greater heights because they experienced less friction from low-lying buildings and trees, according to AccuWeather. Wind gusts of 33 miles/hour near ground level would equate to 80 miles/hour at six stories and 90 miles/hour at 10 stories. The wind strength at those elevated stories would be the equivalent of a Category 1 hurricane on the Saffir-Simpson wind scale. Preliminary damage estimates from AccuWeather point to $5 billion to $7 billion in total damage and economic loss from the storm in southeast Texas, it said. So far, major railroad companies have not issued any alerts about disruptions to their lines. Port Houston said its terminals are operating as usual. Additional reporting by Adam Yanelli and Melissa Wheeler  (adds paragraphs 3, 5-6, 9-13) Photo shows aftermath of the storms that hit Houston. Image by ICIS.

17-May-2024

Canada rail strike not imminent, rail carriers and union resume talks

TORONTO (ICIS)–A potential freight rail strike in Canada has been delayed because the matter has been referred to the Canada Industrial Relations Board (CIRB) and collective bargaining resumes today, Friday 17 May. Strike averted, for the time being Industrial board investigates potential strike impacts Rail strike would hit chemical and fertilizer logistics After about 9,300 unionized conductors, train operators and engineers and other workers at freight rail carriers Canadian Pacific Kansas City (CPKC) and Canadian National (CN) earlier this month voted for a strike, federal labor minister Seamus O’Regan referred the matter to the CIRB, a quasi-judicial tribunal charged with keeping industrial peace in Canada. The minister wants the board to investigate if disruptions to the supply of products such as heavy fuel, propane, food, and chlorine and other water treatment chemicals could pose safety and health issues, in particular in remote communities. The board could decide that rail shipments of certain goods need to be continued during a strike. The board has called on affected groups and organizations to make submissions on the matter by no later than 21 May. Trade group Chemistry Industry Association of Canada (CIAC) said it will make a submission about impacts on its industry. It remains unclear how long it will take for the CIRB to reach a decision. After a decision, the union would have to give 72 hours of notice before starting a strike. 22 MAY STRIKE DEADLINE OFF THE TABLE Labor union Teamsters Canada Rail Conference (TCRC), which previously said that a work stoppage could start as early as 22 May, has acknowledged that during the CIRB process there will be no strike. Confusingly, the union on Friday still posted a notice on its website about a possible 22 May work stoppage as an “upcoming event”. A union official did not respond to an ICIS request for comment. Rail carrier CPKC said in a statement that neither a legal strike nor a lockout can occur until the CIRB makes its decision. It added that the referral to the board has created uncertainty about the timing of a potential work stoppage and interruptions of rail service. CPKC, for its part, has proposed to the TCRC a “maintenance of services agreement” under which both parties agree on services that should be maintained in the event of a strike or lockout, it said. “We believe this would eliminate the need for the CIRB referral process and bring much needed clarity regarding the timing of any potential strike or lockout,” it said. If no such agreement is reached, it is unlikely the parties will be in a position to initiate a legal strike or lockout within the next 60 days, CPKC said. A source at a major sulfur exporter told ICIS the referral to the CIRB was a “stall tactic” by the government that delays the risk of a strike, likely until the end of May. IMPACTS ON CHEMICALS AND FERTILIZERS Freight rail work stoppages can quickly affect logistics in the chemical, fertilizer and other industries, and a simultaneous stoppage at Canada’s biggest rail carriers would worsen impacts by far. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. In the fertilizer industry, about 75% of all fertilizer produced and used in Canada is moved by rail and the industry depends on rail to move product across the country and into international markets. In the run-up to potential strikes, producers need to prepare, longer strikes can force them to shut down plants, and after a strike ends it can take weeks for normal operations to resume. Beyond chemicals and fertilizers, rail strikes affect the overall Canadian manufacturing sector. Trade group Canadian Manufacturers and Exporters (CME) has warned that companies could not afford to have their businesses and workers threatened by “a critical supply chain labor disruption”. “More than any other industry, we rely on railways to access critical inputs and bring goods to customers,” CME said in a statement. According to the April purchasing managers’ index (PMI) survey by S&P Global, Canadian manufacturing has been weak for the past 12 months. FREIGHT RAIL DATA For the first 19 weeks of 2024, ended 11 May, Canadian chemical railcar loadings rose 3.9% year on year to 262,089, the American Association of Railroads (AAR) reported this week. Total freight rail traffic – comprising railcar loadings and intermodal units – was at 3,064,779 for the first 19 weeks, up 0.9% from the same period in 2023. Focus article by Stefan Baumgarten Additional reporting by Julia Meehan Please also visit Logistics: Impact on chemicals and energy Thumbnail photo source: Canadian National

17-May-2024

Singapore's April petrochemical exports rise 26.5%; NODX down 9.3%

SINGAPORE (ICIS)–Singapore's petrochemical shipments rose by 26.5% year on year in April to Singapore dollar (S$) 1.34 billion, reversing the 3.6% decline in the previous month, official data showed on Friday. Overall exports of chemicals and chemical products in April fell by 34.5% year on year to S$3.59 billion, extending the 37% contraction in March, Enterprise Singapore said in a statement. The country's overall non-oil domestic exports (NODX) fell by 9.3% year on year to S$13.9 billion, extending the 20.8% decline in the preceding month. Non-electronic NODX – which includes chemicals and pharmaceuticals – fell by 12.3% year on year to $10.9 billion in April following the 23.2% contraction in March. NODX shipments to the US and EU fell sharply in April, while exports to China rose last month. Singapore is a major manufacturer and exporter of petrochemicals in southeast Asia. Its petrochemicals hub Jurong Island houses more than 100 global chemical firms, including energy majors ExxonMobil and Shell. The drop in the country's NODX in April mirrors weaker manufacturing activity seen during the month. The country’s purchasing managers' index (PMI) slipped to 50.5 in April from 50.7 in March, marking the eighth consecutive month that the reading has remained above the 50 mark, according to data from the Singapore Institute of Purchasing and Materials Management (SIPMM). A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction. In a separate survey of private manufacturers, Singapore’s April PMI eased to 52.6 from 55.7 in March, financial information and services provider S&P Global said on 6 May. For the whole of 2024, Singapore's economy is expected to expand by 1.0-3.0%, compared with actual GDP growth of 1.1% growth in 2023, the ministry said. Focus article by Nurluqman Suratman

17-May-2024

BLOG: Chemicals, sustainability and the new industrial revolution

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: Blood bags, syringes, disposable hospital sheets, gowns and medicine packaging. Modern-day medicine, which has greatly extended the quantity and quality of our lives, would be impossible without the plastics industry. Computers, smartphones, washing machines, refrigerators and automobiles cannot be manufactured without plastics and chemicals. Think of women in the developing world who still have to wash clothes by hand (this is, sadly, how some patriarchal societies work). Imagine the time and energy they would save if their families can afford their first washing machine, enabling girls and women to spend more time at school and freeing them up to attend college. The absence of decent roads in developing countries doesn’t matter a jot because, since the invention of the smartphone, buying and selling goods and services, issuing microfinance and keeping accounts up to date can be done on the go. The scale of future demand for nine of the world’s biggest synthetic polymers is illustrated by the chart in today's post. We forecast that global demand for the resins will this year total 299 million tonnes, up from just 79 million tonnes in 1992 which I believe was the start of the Petrochemicals Supercycle. By 2024, we predict that demand will reach 515 million tonnes – a 72% increase. The question on the exam paper is how we meet this demand in as sustainable a fashion as possible. This is going to require a new industrial revolution. Jim Fitterling, CEO of Dow Chemical, provided the best summary I have seen of the challenges that lie ahead for the chemicals industry. This was in a speech he gave in New York on 8 May. He highlighted the strain on electricity supply resulting from the growth in artificial intelligence, making it harder for the chemicals industry to secure the renewable electricity it needs to decarbonise. While it was “almost fashionable” to blame producers for plastics waste, around 3bn people around the world lacked access to basic waste management. About 95% of leakage occurs in emerging markets with underdeveloped waste management systems, he said. Demand for recycled plastics outstrips supply and was growing, but the ecosystem to collect, sort and efficiently recycle plastics waste was not keeping up, he added. Government support for these efforts would be critical – policies that preserved the many benefits of plastics while also helping eliminating waste, the CEO said. Through its history, the chemical industry had a formidable record of achievement in overcoming challenges and can do it again in making the energy transition a reality and ending plastics pollution, said the Dow CEO. Key to this was harnessing talent – not just chemical talent, but a new generation of workers who understood robotics, AI, machine learning and analytics, he said. Hear, hear! Let’s get on the with this new industrial revolution. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

17-May-2024

US home builder confidence dives as mortgage rates exceed 7%

HOUSTON (ICIS)–US builder confidence in the market for newly built single-family homes fell sharply in May as higher mortgage rates “hammer” confidence, the National Association of Home Builders said on Wednesday. Mortgage rates averaged above 7% for the past four weeks as a lack of progress on reducing inflation pushed long-term interest rates higher, NAHB said. The NAHB/Wells Fargo Housing Market Index (HMI) fell by six points from April to 45 in May – its first decline since November 2023. HMI readings below the 50 neutral mark indicate that builders are pessimistic, readings above 50 that they are optimistic. The high mortgage rates have pushed many potential buyers back to the sidelines and the market has slowed, NAHB said. Another worry are new code rules that require the US Department of Housing and Urban Development and the US Department of Agriculture to insure mortgages for new single-family homes only if they are built to the 2021 International Energy Conservation Code. This would further increase the cost of construction in a market “that sorely needs more inventory for first-time and first-generation buyers”, said NAHB chairman Carl Harris. NAHB chief economist Robert Dietz added: “The last leg in the inflation fight is to reduce shelter inflation, and this can only occur if builders are able to construct more attainable, affordable housing.” The housing market is a key consumer of chemicals, driving demand for a wide variety of chemicals, resins and derivative products, such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibers, among many others. Please also visit the ICIS construction topic page and Macroeconomics: Impact on Chemicals. Thumbnail photo source: NAHB

15-May-2024

US hikes tariffs on $18bn worth of China imports, including EVs

SINGAPORE (ICIS)–US President Joe Biden is ramping up tariffs on $18 billion worth of imports from China, including electric vehicles (EVs), semiconductors, batteries and other goods, in a move that the White House said was a response to unfair trade practices and intended to protect US jobs. US tariffs on Chinese EVs to quadruple to 100% Targeted China products account for 4.2% of total US imports Near-term impact on China’s EV exports likely limited "Following an in-depth review by the United States Trade Representative, President Biden is taking action to protect American workers and American companies from China’s unfair trade practices," the White House said in a statement on 14 May. In response, China's Ministry of Commerce said that it "will take resolute measures to safeguards its own right and interests". “The US should immediately correct its wrong actions and cancel the additional tariff measures against China," the ministry said in a statement. There is growing concern over a potential "vicious cycle of tit-for-tat retaliatory actions" between the world's two biggest economies ahead of the US presidential elections on 5 November, Japan's Nomura Global Markets Research said in a note. EVs and associated battery markets are an important 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. "With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China’s exports of electric vehicles (EVs) grew by 70% from 2022 to 2023—jeopardizing productive investments elsewhere," the US said. "A 100% tariff rate on EVs will protect American manufacturers from China’s unfair trade practices," it added. The new rate represented a quadruple increase from 25% previously. However, the impact on China’s EV exports may be limited in the near term, as the US constitutes a small portion of the Asian giant’s total EV shipments. According to Nomura, the US imported in 2023 $400m worth of Chinese EVs, accounting for 1% of China's total shipments to the world's biggest economy. "We expect limited near-term impact, as the targeted $18bn worth of products account for only 4.2% of total US imports from China and less than 1% of China’s total exports," the Japanese brokerage said. US-CHINA TRADE WAR ADDS TO GLOBAL JITTERS The US and China have been embroiled in a trade war since 2018, when then US President Donald Trump imposed tariffs on around two-thirds of goods imported from China valued at an estimated $360 billion at the time. China has recently faced criticism from major trade partners for operating at “overcapacity,” dumping cheap products, and deepening trade relations with Russia, Nomura said. This leads to growing concerns that China may face similar trade-restrictive measures from other regions. With the EU and UK accounting for about 40% of China’s EV exports in 2023, the EV sector could face increased pressure if Europe follows the US’ lead. Although China's export growth has been strong this year due to the global tech upswing, resilient external demand, and competitive prices, rising trade tensions may hinder the export sector and prompt more supply chain relocations away from China in the long term. Late last year, the European Commission initiated an anti-subsidy investigation into China’s EVs. Europe's open approach and ambitious decarbonization goals have made it the main target market for Chinese-made EVs in 2023. The EU accounted for 30% of China's total EV export volumes last year, down from 36% in 2022, while the UK accounted for 8%, down from 10% in 2022, according to Nomura. Focus article by Nurluqman Suratman Thumbnail image: Aerial photo shows over 2,000 BYD Song Plus new energy vehicles to be exported at Lianyungang Port in east China's Jiangsu Province, 25 April 2024. (Shutterstock)

15-May-2024

LOGISTICS: Dali to be moved after controlled blast of bridge remnant at US Port of Baltimore

HOUSTON (ICIS)–The container ship that essentially closed the Port of Baltimore on 26 March after it struck the Francis Scott Key Bridge, causing its collapse, is set to be moved now that the mangled remnants of the span was removed from the ship’s bow with controlled blasts on 13 May. The Key Bridge Response Unified Command (UC) used precision cuts made with small charges to remove a large section of the bridge from the Dali, which will now be refloated and moved to another part of the port. While not a big hub for chemical imports/exports, the closure of the port had some ripple effects for logistics in the region. US-based catalyst producer WR Grace said operations at its Curtis Bay Manufacturing site, located to the northwest of the collapsed bridge, have been unaffected despite its proximity to the accident site. Chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. But Baltimore is the largest US port for handling exports and imports of vehicles and farm equipment. Since opening a fourth temporary channel into the port earlier this month, 171 commercial vessels have transited the waterway, including five of the vessels that were trapped inside the port. The MSC Passion III entered the port on 29 April, according to vesselfinder.com, making it the first container ship to enter the port since the accident. There are two container ships and a roll-on, roll-off (RoRo) vessel – designed to carry wheeled cargo – in the port on 14 May, according to vesselfinder.com. The US Army Corps of Engineers (USACE) is 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. Container ships have been rerouting to other East Coast ports.

14-May-2024

NPE '24: INSIGHT: Big themes at NPE include sustainability, EVs, toxicity rules

HOUSTON (ICIS)–The biggest plastics trade show in the Western Hemisphere returned last week after a six-year hiatus. Delegates returned to consider an industry that is increasingly being shaped by government policy which is favoring sustainability and electric vehicles (EVs) while restricting the use of some classes of chemicals that are used in processing aids. SUSTAINABLE CONTENTThe regulatory outlook is influencing companies' sustainability goals, and that is influencing which plastics they buy and which ones are made by producers. Sustainability was the most prominent theme at the show. The title of the keynote address given by BASF Corp CEO Mike Heinz was "Our Plastics Journey: The Road to Shaping a Sustainable Future". Other examples of sustainability at the show include the following: Executives from SABIC and NOVA Chemicals talked at lengths about what their companies are doing to incorporate more recycled content into their materials. Renewable plastics producers CJ CheilJedang and Danimer Scientific had booths showcasing their grades of polyhydroxyalkanoate (PHA), a renewable polyester. GREENMANTRA showcased its chemical recycling technology, which breaks down plastics to produce waxes, which are then then uses to make additives that make it easier to incorporate waste plastic into finished products. If the exhibitor booths and keynote address weren't enough to drive home the prominence of sustainability, delegates only had to consider the recent round of talks for the UN plastic waste treaty. It was held just days before NPE. While the plastics industry is advocating curbs on pollution, several groups at the talks were pushing for curbs on production. US lawmakers have repeatedly introduced bills that would impose moratoria on new plants. A small number of US states are adopting mandates that require minimum amounts of recycled content. A few states are also adopting policies calling for extended producer responsibility (EPR). The outlook of regulations is causing consumer goods producers and other plastic consumers to start seeking out sustainable materials now, so they have time to rearrange their supply chains and so prepare for the anticipated regulations. POLICIES PROMOTING EVS, LIGHTWEIGHTINGGovernment support should rekindle sales of EV and pull them out of what could be a temporary lull, according to BASF. The world will need more EVs if it wants to achieve its carbon-cutting goals. In the US, the federal government and individual states are adopting and proposing policies that will promote EV adoption. The Environmental Protection Agency (EPA) introduced a new tailpipe rule that will require the US light vehicle fleet to emit progressively smaller amounts of carbon dioxide (CO2). The EPA is expected to decide if California can adopt its Advanced Clean Car II (ACC II), which would phase out the sale of ICE-based vehicles by 2035. If the EPA grants California's request, that would trigger similar programs in several other states. The US Department of Transportation (DOT) is proposing stricter efficiency standards under its Corporate Average Fuel Economy (CAFE) program. EVs have material challenges that are different from automobiles powered by internal combustion engines (ICEs), and these are increasing demand for new grades of plastics. Some plastics will need to tolerate higher voltage environments, while others will need good thermal management properties. BASF and other companies at NPE showcased how several of their materials were meeting these challenges. At the same time, auto companies will want materials that will lighten their vehicles so they can travel farther on a battery charge. ICE automakers also want to lighten their vehicles, in part to comply with stricter emission requirements. Longer term, Dow highlighted the revolutionary ramifications that autonomous vehicles will have on the plastic industry. Such vehicles are driven almost entirely by machines, which should greatly reduce crashes and accidents. Dow said automakers could replace nearly all steel and aluminum paneling used in automobiles with plastic alternatives. SUBSTANCES OF CONCERNDow and Clariant highlighted the ramifications of substances of concern, so called because regulators are concerned about their effects on safety. The latest such substance include per- and poly fluorinated alkyl substances (PFAS), which are used in many polymer processing aids (PPAs). Clariant has recently introduced a hydrocarbon-based processing aid. Longer term are the possible ramifications of the prioritization process that the EPA has started on five chemicals. The regulator would like to start the prioritization process on five additional chemicals each year. The prioritization process is the first step in determining whether a chemical poses an unreasonable risk. If the EPA makes such a finding, then it will proceed with the risk management phase, in which it will propose ways to manage the unreasonable risks. If the chemicals are used in plastics, then any subsequent restrictions could cause companies to find alternative materials. EXCESS PLASTICS CAPACITYExcess plastic capacity will likely persist even as destocking ends and demand recovers. NOVA Chemicals expects future expansion will be on pause until later in the decade. Lost cost regions like North America should suffer less than higher cost regions like Europe. SABIC recently started up its first ethylene and PE production in the US through its joint venture with ExxonMobil, while announcing plans to shut down a cracker in Europe. The company did not rule out further capacity rationalizations Produced by Plastics Industry Association (PLASTICS), NPE: The Plastics Show took place 6-10 May in Orlando, Florida. Insight by Al Greenwood Thumbnail shows cups made out of plastic. Image by Shutterstock.

14-May-2024

PODCAST: Like blocks pulled out of a Jenga tower, chemicals closures could collapse value chains

BARCELONA (ICIS)–The closure of chemical plants in Europe and elsewhere could remove essential raw material supplies, threatening the future of downstream industrial value chains. Global oversupply, driven by China, forecast to reach over 200 million tonnes/year by 2028 Interconnected value chains threatened if important raw materials cease production Globally 20 million tonnes of ethylene capacity may need to shut down to keep operating rates healthy In Europe 5.6 million tonnes/year of polypropylene (PP) capacity may need to close Integrated chemicals sites under threat if parts shut down Industry associations could help plan to maintain critical raw materials supplies Anti-dumping measures could protect exposed markets China polyvinyl chloride (PVC) overcapacity may increase exports globally In this Think Tank podcast, Will Beacham interviews ICIS Insight Editor Nigel Davis, ICIS Senior Consultant Asia John Richardson and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson's ICIS blogs.

14-May-2024

2024 and beyond: global chemicals outlook

The global landscape for chemicals has changed significantly, with a lower demand growth expected to persist, however within these challenges and changes lies opportunity for those who adapt.

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