Chemicals

SINGAPORE (ICIS)–Francine has strengthened into a hurricane and is moving northeastward across the Gulf of Mexico, with landfall expected in Louisiana, US, on Wednesday afternoon or evening. It turned into a hurricane as of 19:00 US central daylight time (CDT) on 10 September (00:00 GMT), the US National Hurricane Center (NHC) said in its latest update. At 19:00 CDT, Francine was located about 150 miles (240 kilometers) east of the mouth of the Rio Grande and about 350 miles southwest of Morgan, Louisiana, packing maximum sustained winds of 75 miles/hour, according to the NHC. Chemical companies are implementing precautionary measures. with some shutting down operations ahead of Francine’s landfall. Francine is expected to accelerate its northeastward path tonight and into Wednesday. Following landfall, Francine's center is expected to move northward into Mississippi Wednesday night and continue through Thursday. A storm surge warning is in effect for Sabine Pass, Texas to the Mississippi/Alabama border, Vermilion Bay, Lake Maurepas, and Lake Pontchartrain. A hurricane warning is in effect for the Louisiana coast from Cameron eastward to Grand Isle.

11-Sep-2024

SAO PAULO (ICIS)–Storm Francine continues strengthening into a hurricane as it approaches the southern costs of the US, but its path could veer slightly west and potentially hit key petrochemicals sites in Louisiana which border with Texas. According to a Tuesday morning update from the US’ National Hurricane Center (NHC), the storm is to become a hurricane when it makes landfall later in the day, although it should weaken soon after that as it heads north. On Monday, the NHC already said the storm would develop into a hurricane, but its forecasted trajectory then was to hit central parts of Louisiana – including New Orleans – but not the industrious western part of the state. Louisiana has declared a state of emergency; the state has just commemorated the 19th anniversary of Hurricane Katrina, which brought havoc to New Orleans’ outer and poorer suburbs from which many are still recovering. If the current, Tuesday morning forecast holds, key petrochemicals-heavy municipalities in Louisiana such Plaquemine, Geismar, Baton Rouge, and Taft, among others, could be hit by Francine’s gusts. Companies such as Methanex or CF Industries, with production facilities in the areas, had not responded to a request for comment about their hurricane preparations at the time of writing. “Francine is moving toward the north-northeast near 8 mph (13 km/h).  A turn to the northeast with an increase in forward speed is expected later today or tonight.  On the forecast track, Francine is anticipated to be just offshore of the coasts of northeastern Mexico and southern Texas through this [Tuesday] afternoon, and then move across the northwestern Gulf of Mexico, making landfall in Louisiana on Wednesday,” said the NHC. “After landfall, the center is expected to move into Mississippi on Wednesday night or Thursday. Maximum sustained winds are near 65 mph (100 km/h) with higher gusts. Strengthening is expected through Wednesday morning, and Francine will likely become a hurricane later today or tonight [Tuesday]. Francine is expected to weaken quickly after landfall.” CHEMICALS, OIL, GASLouisiana is home to many large petrochemical hubs that produce polyolefins, polyvinyl chloride (PVC), caustic soda, ethylene oxide (EO), ethylene glycol (EG), isocyanates, polyols, and ammonia among many others. The state has numerous refineries. Several offshore oil wells are off of the coast of Louisiana. Companies will often evacuate them and shut-in oil wells – majors such as Shell or ExxonMobil have announced so. The Gulf of Mexico accounts for about 14% of total US crude production and 5% of dry gas production, according to the country’s Energy Information Administration (EIA). The state is home to the Louisiana Offshore Oil Port (LOOP), the only deepwater oil port in the US. If the port shuts down, then the US would lose an important outlet for oil exports. That could offset some of the shut-in wells. Louisiana is also home to two large terminals that export liquefied natural gas (LNG) in the western part of the state. Sabine Pass LNG is in Sabine, Louisiana, and Cameron LNG is in Hackberry, Louisiana. Any shutdowns could affect domestic natural gas markets if the terminals spend too much time offline. Domestic gas supplies could build up, causing local prices to fall. Prices for ethane, the predominant feedstock for ethylene production, typically follow those for natural gas. Ethane prices could fall further if Francine disrupts operations at any of the crackers in Louisiana. LOUISIANA VS TEXAS IMPACTResidents of the Gulf Coast, from Mexico's Yucatan peninsula to the US' state of Alabama, are well accustomed to living with extreme weather events. In times of storms and hurricanes, many turn to specialized sites such as Space City Weather, which on Tuesday did not seem too worried for the fate of Texas – more so about Louisiana's. Space City Weather's main analyst, Houston-based Eric Berger, reiterated on Tuesday the hurricane will be "no joke" in Louisiana, even if for many Texans it will have looked like more like “a regular late" summer day. “The tropical system will remain well offshore from Texas, and effects for most of our area will be minimal. In fact, I would go so far as to say that by tomorrow [Wednesday] people in Houston will be going, ‘Hurricane? What hurricane. This was a joke.’ Well, people who didn’t know better will be thinking that at least — but not readers of this site,” said Berger. “Francine will not be a joke for southern Louisiana. The tropical storm has sustained winds of 65 mph and is likely to move inland Wednesday afternoon or evening as a Category 2 hurricane. The state’s most populated area, from Baton Rouge to New Orleans, will be directly impacted with winds, rains and storm surge.” The analyst concluded saying that for the most part Houstonians will not be able to tell a hurricane is passing offshore on Tuesday and Wednesday. “Skies will be mostly cloudy, with highs in the mid-80s [degrees Fahrenheit, around 29°C], which is cooler than normal for this time of year,” said Berger. “Perhaps that’s our greatest takeaway from this storm, some slightly cooler days. I’m not complaining.” Source: US National Hurricane Center

10-Sep-2024

BARCELONA (ICIS)–Europe’s beleaguered petrochemical industry could see its fortunes improve dramatically if Mario Draghi’s industrial policy proposals are adopted, along with a fair regulatory framework. New industrial strategy can rescue region from structurally higher costs, low levels of investment Historic moment with momentum building for new approach to Europe industry transformation Green Deal objectives need to work alongside measures to improve competitiveness New requirements for environmental, social and governance (ESG) reporting and extended producer responsibility (EPR) will have big impact on chemicals Compliance teams face a “nasty cocktail” because of lack of regulatory clarity Shift from risk to hazard-based approach Regulations create opportunities for innovative chemical companies In this Think Tank podcast, Will Beacham interviews Georgie Messent and Thomas Delille from law firm Squire Patton Boggs, Nigel Davis from the ICIS market development team 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.

10-Sep-2024

SINGAPORE (ICIS)–Indonesia has initiated an investigation as to whether “safeguard measures” would be needed in response to a sharp increase in imports of linear low density polyethylene (LLDPE), its trade ministry said. The Trade Security Committee (KPPI) under the Ministry of Trade started the probe on 9 September following a complaint from The Indonesia Olefin, Aromatics and Plastics Industry Association (INAPLAS), acting on behalf of Chandra Asri Pacific and Lotte Chemical Titan Nusantara Indonesia. The committee noted initial findings suggested there were possible losses to the domestic industry over the years 2021-2023 arising from the sharp increase in imports of LLDPE. It also noted that the biggest sources of these imports were Malaysia and Thailand, which accounted for over 70% of LLDPE imports into Indonesia. Government data showed that in 2023, Indonesia's LLDPE imports increased by 33.3% to 280,385 tonnes, compared with a 3.3% decline registered in 2022, the ministry said. Some market participants ICIS spoke with said they were not yet ready to respond to the announcement as await more details from the government. (adds paragraphs 5-6)

10-Sep-2024

SINGAPORE (ICIS)–Indonesia has initiated an investigation as to whether “safeguard measures” would be needed in response to a sharp increase in imports of linear low density polyethylene (LLDPE), its trade ministry said. The Trade Security Committee (KPPI) under the Ministry of Trade started the probe on 9 September following a complaint from The Indonesia Olefin, Aromatics and Plastics Industry Association (INAPLAS), acting on behalf of Chandra Asri Pacific and Lotte Chemical Titan Nusantara Indonesia. The committee noted initial findings suggested there were possible losses to the domestic industry over the years 2021-2023 arising from the sharp increase in imports of LLDPE. It also noted that the biggest sources of these imports were Malaysia and Thailand, which accounted for over 70% of LLDPE imports into Indonesia.

10-Sep-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 6 September. Brazil’s manufacturing sharply slows in August on higher costs, lower demand Brazil’s manufacturing PMI index for August sharply slowed down from July on the back of output falling for the first time in several months due to subdued sales, and elevated cost pressures, analysts at S&P Global said on Monday. INSIGHT: Brazil’s natgas overhaul to benefit chems but crude players push indispensable The Brazilian government’s decree changing natural gas regulations could potentially overhaul the market and, along the way, benefit the chemicals industry by providing it with cheaper energy and eventually with ethane-based feedstocks. INSIGHT: LatAm chemicals needs to be as plural as society to reach full sales potential For years, Latin American petrochemicals companies have been trying to increase diversity within to better represent the consumers they want to sell their products to – without much success. Canada government wobbles amid fallout from rail labor dispute Canada’s Liberal-led minority government under Prime Minister Justin Trudeau is paying a heavy price for its decision last month to end the labor dispute at freight railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC) through binding arbitration. SHIPPING: Union, USWC ports at impasse as strike deadline looms; container rates keep falling A strike by union dock workers at East Coast and US Gulf ports seems more likely after International Longshoremen’s Association (ILA) Wage Scale Delegates voted unanimously at the end of their two-day meeting to support leadership’s intentions to walk off the job if a new labor deal is not agreed to when the contract expires on 30 September.

09-Sep-2024

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which focuses on the crisis in Europe’s auto industry. 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. Paul Hodges is the chairman of consultants New Normal Consulting.

09-Sep-2024

SINGAPORE (ICIS)–Heavy rains and floodings continued in northern Vietnam on Monday, two days since Super Typhoon Yagi made landfall in the region and killed more than 20 people. Bridge collapses in Phu Tho province Industrial hubs in the north hit by power outage No reported disruptions to petrochemical operations in central/south Vietnam There was massive damage wrought to infrastructure in the northern region, with the Phong Chau bridge in Phu Tho province collapsing early on Monday, sending multiple vehicles plunging into the Red River and severing the connection between Lam Thao and Tam Nong districts. Yagi – Asia's most powerful storm this year – made landfall along the coasts of Vietnam’s Quang Ninh and Haiphong provinces in the afternoon of 7 September, bringing winds of up to 160 kilometers/hour. Yagi weakened into a tropical depression on 8 September making landfall but left several areas of the port city of Hai Phong under half a meter of water in its wake. There were no reports of disruptions or damage to the country's major petrochemical complexes – Long Son in the southern province of Ba Ria – Vung Tau; the Dung Quat petrochemical complex in Quang Ngai province in the central region; and the Nghi Son petrochemical complex in Thanh Hoa province in north-central Vietnam. The storm has killed 22 people and injured 199 others, while 32 people were missing, Vietnamese state media cited National Committee for Disaster Response and Search and Rescue as saying late on 8 September. Up to 38 ships in Quang Ninh have sunk while some 4,350 houses were damaged because of Yagi, with up to 52,371 hectares of crops flooded. A massive power outage initially hit Quang Ninh and Haiphong provinces upon Yagi's landfall, leaving at least three million people without power. These provinces are crucial industrial hubs and home to multiple factories producing goods for global markets, such as Vietnam's VinFast's electric vehicles. Vietnam evacuated more than 50,000 people from coastal towns and deployed 450,000 military personnel due to Yagi. Prior to reaching Vietnam, Typhoon Yagi swept through southern China and the Philippines, claiming the lives of at least 24 people and injuring dozens more. The storm earlier made landfall in China's Hainan province on 6 September, knocking down trees, flooding streets, and leaving over 800,000 homes without electricity. Transportations of chemical cargoes in southern China’s Hainan province were halted since 5 September ahead of Yagi. Focus article by Nurluqman Suratman Additional reporting by Fanny Zhang

09-Sep-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 September. EU chemicals production gradually firming, short of recovery levels – Cefic Chemicals production in the EU has continued to firm through 2024, but weak demand is keeping output growth below recovery levels, with energy prices still substantially above US levels in the region, trade body Cefic said. Europe jet fuel prices hit new lows on supply overhang, crude softness Average European jet kerosene spot prices for cargoes fell 6% week-on-week while barge prices dropped 5% from the week prior as supply overhang and lack of demand continues to haunt the market. Europe markets slump on US, China demand worries, commodity shocks Europe chemicals shares and public markets slumped on Wednesday in the wake of sell-offs in Asia and the US on the back of growth fears and a crude oil sell-off. Europe August acetic acid contracts roll over Acetic acid contract pricing for August was assessed at a rollover in Europe amid balanced supply and seasonally low demand. Global spot index up on gains in NE Asia, NW Europe The global spot ICIS Petrochemical Index (IPEX) was up for the first time in four weeks in the week ending 30 August, on the back of increases in northeast Asia and northwest Europe.

09-Sep-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 September 2024. Strong regional currencies weigh on Asia recycling exports The weakening of the US dollar against major currencies in Asia since August will continue to strain exports of recycled polyethylene terephthalate (R-PET), recycled polyethylene (R-PE), and recycled polypropylene (R-PP). Asia refined glycerine market stagnates on stand-off between buyers and sellers Asia’s refined glycerine market may likely continue to remain tepid in the near term due to a persistent stand-off between buyers and sellers. UPDATE: Oil falls by $1/bbl, Asia petrochemical shares tumble on global growth worries Asian petrochemical shares slumped on Wednesday as regional bourses tracked Wall Street’s rout overnight on poor data from both the US and China, with crude prices shedding more than $1/bbl in late Asian trade. At the close of trade in Tokyo, Mitsui Chemicals fell 3.07% and Sumitomo Chemical tumbled by more than 4%, with the Nikkei 225 index down 4.24% at 37,047.61. Asian PX hits fresh year low, levels last seen in December 2022 Asian paraxylene (PX) prices hit a fresh year low, amid a lack of buyers' confidence and overnight losses seen in upstream crude markets. INSIGHT: China-Canada trade frictions may affect MEG trade flows Trade frictions between China and Canada have intensified recently following the Canadian government’s decision to impose tariffs on imports of electric vehicles (EVs) as well as steel and aluminum from China starting 1 October. INSIGHT: Qatar to emerge as PVC exporter next year when $279 million plant comes online Qatar will become an exporter of polyvinyl chloride (PVC) as early as next year when commercial operations start at its first plant, because its 350,000 tonne/year capacity will be more than 10 times the state's annual imports. Asia titanium dioxide Sept key drivers to be stock levels, exchange rates While the titanium dioxide (TiO2) spot price in Asia is likely to find support with the start of the traditional demand season in September, a large-scale revival now seems unlikely.

09-Sep-2024