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Brazil’s inflation third monthly rise in June pours more cold water on interest rates cuts resumption

SAO PAULO (ICIS)–Brazil’s annual rate of inflation rose over the 4% mark in June as the Brazilian real depreciated and prices for food and health services rose strongly, the country’s statistics office IBGE said on Wednesday. Brazil’s annual National Consumer Price Index (IPCA in its Portuguese acronym) rose in June to 4.23%, up from May’s 3.93%. In May, inflation had already risen partly after severe flooding in Rio Grande do Sul caused generalized food price rises in the southernmost state. Financial analysts had already warned in May than higher-than-expected price rises could prompt the central bank to halt interest rates cuts for the rest of 2024, hoping to contain the latest upticks in inflation. On Wednesday, June further uptick prompted some of them to suggest there were growing chances there would not be any cuts to interest rates until 2026. THREE MONTHS ON THE MARCHAs well as the increase in the annual rate of inflation to 4.23%, the IPCA also rose month on month, with monthly inflation at 0.21%, down from May’s 0.46%. Prices for food consumed at home rose by 0.47% in June, compared with May, and prices for health service rose by 0.54%. Transportation prices fell 0.19% in June, month on month, airfares posting the sharpest drop, down 9.88%. Fuel prices had mixed changes, with gasoline and ethanol prices rising, while diesel and vehicle gas prices fell. Gray columns: forecast Source: IBGE via Trading Economics At the beginning of 2024, there were expectations that inflation would seasonally rise in the second half of the year, but the increases have materialized sooner and stronger than expected. Petrochemicals-intensive manufacturing companies insist high interest rates continue to be a drag in their sales, as consumers shy away from big ticket purchases of durable goods, posting them until borrowing costs come down. RATES AT 10.5% UNTIL 2026?On Wednesday, financial analysts, most of whom were assuming the central bank would resume its monetary policy easing in early 2025 once the latest upticks in inflation had been contained, have now turned more pessimist. UK-headquartered Capital Economics said it was “hard to see any scope” for cuts to the Selic, the main benchmark, in 2024 but added there was even a “growing risk” there will not be cuts in 2025 either. In June, the central bank’s monetary policy committee (Copom) decided to keep the Selic unchanged at 10.5% after several cuts in a few months since August 2023, when it peaked at 13.75%. SELIC Source: Banco Central do Brazil via Trading Economics In June, investors’ weariness about President Luiz Inacio Lula da Silva intentions to increase public spending, potentially widening the fiscal deficit, spooked currency traders and the real (R) depreciating over the month. It reached a low on 2 July at $1/R5.70, although it has recovered since to around $1/R5.41 on Wednesday afternoon. The current fiscal deficit – and the prospect of it widening – was not helped by public spats, first, between members of Lula’s coalition cabinet nor by the President’s remarks criticizing the central bank and its president, quite outside the norm not to interfere with the institution’s independence. In the end, Lula’s comments and his ministers’ public disagreements on fiscal targets may have caused the cabinet’s main wish – lowering rates to increase consumption and jobs in manufacturing – caused the exact opposite effect. “The recent weakness in the real and mounting fiscal concerns means that there is no chance that Copom will restart its easing cycle at its meeting later this month. Rates are likely to be left unchanged throughout this year and there is a growing risk of no cuts next year either,” said analysts at Capital Economics. “Of some comfort to Copom will be that the strength in core services inflation in May unwound … And more to the point, higher headline inflation will compound concerns at the central bank, particularly given the worsening fiscal position and recent fall in the real.” REAL VERSUS DOLLAR Source: Trading Economics  Earlier in the week, before June inflation figures came out, economists surveyed by the central bank every week had already turned pessimistic as well about inflation falls slowing down and cuts being cut less than previously expected. However, they do still expect cuts in 2025 – on average, they expect the Selic to close 2025 at 9.50%, although that was an increase from their expectations a month ago. They now also expect inflation to end up higher both years – at 4.02% in 2024 and 3.88% in 2025. Expectations for GDP growth remain practically unchanged at 2.10% for 2024 and 1.97% for 2025. Expectations for the dollar/real exchange rate also remain practically unchanged, with the economists surveyed by the central bank expecting the real to close 2024 and 2025 at $1/R5.20. BRAZIL GDP Quarter on quarter Source: IBGE via Trading Economic  Focus article by Jonathan Lopez


Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 5 July. NEWS Mexico’s Altamira petrochemicals players breathe sigh of relief as Beryl weakens Fears that Hurricane Beryl could cause widespread disruption to petrochemicals production in the Altamira hub, in the Mexican state of Tamaulipas, have now subsided as the hurricane weakens on its path through the Caribbean. Brazil’s Braskem still facing logistical woes at Triunfo facilities Brazil’s polymers major Braskem is still facing some logistical challenges at its facilities in Triunfo, in the floods-hit state of Rio Grande do Sul, according to a letter to customers seen by ICIS. Brazil’s automotive 2024 output expected lower as ‘uncontrolled’ imports keep rising Brazil’s automotive trade group Anfavea this week downgraded its forecasts for production in 2024 due to ever-rising vehicle imports – mostly from China, with several producers signing a letter to the government asking for higher import tariffs on cars. US dominates base oils exports to Brazil with around 75% market share The US remains the largest exporter to the Brazilian base oils market, with the country’s lead widening in 2024, according to an expert on Tuesday. INSIGHT: Chem shipping to get break from Panama Canal, tariff front-loading The Panama Canal Authority (PCA) is allowing more traffic to pass through the waterway, while the rush to ship goods before the start of tariffs should end soon – all of which should give chemical shippers some relief from elevated freight costs. Brazil's manufacturing recovers but faces pressure on currency depreciation Sales growth in Brazil's manufacturing is being dented by challenging economic conditions, currency depreciation and order postponements after the floods crisis, analysts at S&P Global said on Monday. Mexico’s manufacturing expands in June but new export orders, job creation fall Mexico’s manufacturing expanded in June and remained practically stable from May on the back of factory orders rising, which kept production healthy, analysts at S&P Global said on Monday. Colombia's manufacturing remains in contraction in June Colombia’s manufacturing sectors remained in contraction territory in June as a further decline in new orders led to reduced output, analysts at S&P Global said on Tuesday. Colombia’s fiscal plans based on ‘rosy’ growth assumptions – analysts Plans presented by the Colombian government to reduce its fiscal deficit are based on “rosy” assumptions for growth and are likely to be missed, according to analysts. PRICING Higher hydrous ethanol prices reflect strong sales performance Hydrous ethanol prices rose this week, reflecting ongoing strong sales performance in the market. Surging PET prices in Brazil and Mexico for July Prices for PET in Brazil experienced an upward trend during the first week of July, driven by the ongoing rise in international freight rates. This increase reflects the continued influence of escalating global shipping costs on the local market for PET resin. Innova amends July PS price increase in Brazil Innova amended a price increase to Brazilian real (R) 1,200/tonne ($218/tonne), excluding local taxes, on all grades of polystyrene (PS) sold in Brazil, effective 4 July, up from previously announced R750, according to a customer letter.


Brazil’s Braskem still facing logistical woes at Triunfo facilities

RIO DE JANEIRO (ICIS)–Brazil’s polymers major Braskem is still facing some logistical challenges at its facilities in Triunfo, in the floods-hit state of Rio Grande do Sul, according to a letter to customers seen by ICIS. Braskem was forced to shut down its Triunfo facilities after the severe flooding which affected the state in May. By the beginning of June, the producer said it hoped its operations would return to normality in a few days, according to a spokesperson in a written response to ICIS. However, according to the letter to customers, dated 28 June, Braskem’s operations at Triunfo are yet to return to normality, mostly due to logistical woes as many roads and key port operations at the Brazilian state were hit by the aftermath of the floods. “Specific challenges resulting from force majeure still persist in some logistics modes, leading to the partial receipt of inputs for the production of products derived from ethanol and green ethylene,” said the letter. “At the moment, there is no risk of interruption in the supply of these products, and we are implementing alternatives to return availability to normal levels.” At the end of June, an analyst said to ICIS most of the roads in Rio do Grande do Sul had reopened, although some of them were operating at reduced capacity. The Port of Porto Alegre, the largest city in the state and close to the Triunfo petrochemicals hub, only reopened in mid-June. TRIUNFO KEY FOR PLASTICS Braskem is Brazil’s sole manufacturer of polyethylene (PE) and polypropylene (PP), the most widely used polymers. Its market share in 2023 for PE stood at 56% and for PP at 70%, according to figures from the ICIS Supply & Demand database. The Triunfo complex, meanwhile, is key for the country’s polymers supply chain, accounting for nearly 37% of Brazil’s PP capacity and 40% of PE capacity. Brazil’s total PP production capacity is nearly 2 million tonnes/year. PE capacity is about 3 million tonnes/year, with 41% being high-density polyethylene (HDPE), 33% being linear low-density polyethylene (LLDPE) and 26% being low-density polyethylene (LDPE). Braskem’s Triunfo complex can produce 740,000 tonnes/year of PP, 550,000 tonnes/year of HDPE, 385,000 tonnes/year of LDPE and 300,000 tonnes/year of LLDPE. Additional reporting by Jonathan Lopez 


May WASDE shows USDA anticipating larger corn and soybean supplies

HOUSTON (ICIS)–The US Department of Agriculture (USDA) is anticipating larger corn and soybean supplies and ending stocks according to the May World Agricultural Supply and Demand Estimate (WASDE) report. For corn, the outlook is for not only increased supply and stockpiles, but also greater domestic use and exports with the current corn crop being projected at 14.9 billion bushels. This is a dip of 3% from last year’s record as a decline in area is partially offset by an increase in yield. Right now, the yield projection is at 181.0 bushels per acre and is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2023 period. With higher beginning stocks, total corn supplies are forecasted to be at 16.9 billion bushels, the highest since 2017-2018. Total US corn use is forecast to rise just under 1% relative to a year ago on higher domestic use and exports. Food, seed and industrial use is forecast at 6.9 billion bushels. Corn used for ethanol is unchanged relative to a year ago, based on expectations of flat motor gasoline consumption. Feed and residual use is projected higher on larger supplies and lower expected prices. Corn exports are forecasted to rise by 50 million bushels to 2.2 billion bushels, supported by a reduction in exports for Argentina, Brazil, Russia and Ukraine with the US projected to be the world’s largest exporter for the second consecutive year, with an expected increase in global market share. With total US corn supply rising more than use, ending stocks are up 80 million bushels from last year, and if realized, would be the highest in absolute terms since 2018-2019. The season-average farm price for corn is now being projected at $4.40 per bushel. For soybeans, the monthly update is calling for not only higher supplies and ending stockpiles but also upticks in exports. Currently the soybean crop is being projected at 4.45 billion bushels, up 285 million bushels on higher area and trend yield. With higher beginning stocks and production, soybean supplies are forecast at 4.8 billion bushels, up 8% from 2023-2024. Soybean exports are forecasted to come in at 1.83 billion bushels, which would be up by 125 million bushels from 2023-2024 with higher exports this fall due to a lower Brazilian 2024 harvest. With strong seasonal exports after harvest followed by pressure from larger South American production in 2025, the US. share of global exports is forecast at 28%, down from the prior five-year average of 32%. Ending stocks are projected at 445 million bushels, up 105 million bushels from last year. The current season-average soybean price is forecasted at $11.20 per bushel compared with $12.55 per bushel in 2023-2024. The next WASDE report will be released on 12 June,


LOGISTICS: Container rates rise for first time since January; Canadian rail workers vote to strike

HOUSTON (ICIS)–Global average rates for shipping containers rose for the first time since January, workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike, and the US regulator that oversees railroads finalized a rule allowing reciprocal switching, highlighting this week’s logistics roundup. CONTAINER RATES Shipping container rates have been rising steadily since December when attacks by Houthi rebels on commercial vessels in the Red Sea forced carriers to take the longer route around the tip of the African continent before leveling off last week. This week, the global average for 40-foot shipping containers rose by 1%, according to supply chain advisors Drewry and as shown in the following chart. Rates from Shanghai to the US East Coast edged slightly higher, but rates from China to the West Coast edged slightly lower, as shown in the following chart. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said that the overall container market has settled into a new routine that avoids the Red Sea. “Though significant backlogs, congestion and equipment shortages seen during the first few weeks of the crisis have dissipated, adjustments have resulted in some moderate but ongoing disruptions,” Levine said in a weekly update. He said that even after falling drastically since the beginning of the year, prices remain well above normal and are likely to increase relative to this new floor as demand is set to increase for peak season. 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 CHEMICAL TANKERS US liquid chemical tanker freight rates assessed by ICIS were unchanged this week. From the US Gulf (USG) to Asia, the market has been quieter this week as a holiday-shortened week has sidelined some key players. There have been only a few parcels quoted, which is placing downward pressure on freight rates for smaller lots. Larger base cargoes of monoethylene glycol (MEG), methyl tertiary butyl ether (MTBE), and methanol have been popular chemicals on this route, keeping larger freight rates steady. From the USG to India, the market has been very quiet. PORT OF BALTIMORE Since the opening of a fourth channel into the Port of Baltimore, 171 commercial vessels have transited the waterway, including five of the vessels that were trapped inside the port after the containership Dali struck the Key Bridge, causing it to collapse, according to the Unified Command (UC). The MSC Passion III entered the port on 29 April, according to, making it the first container ship to enter the port since the accident. 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. But a market participant in Ohio told ICIS previously that it is seeing delays in delivery times for imports as vessels originally destined to offload in Baltimore are getting re-routed to other ports. PANAMA CANAL Wait times for non-booked vessels ready for transit edged for higher both directions this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times a week ago were 2.5 days for northbound traffic and 5.6 for southbound traffic. The 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. RAILROADS Workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike. A first work stoppage could occur as early as 22 May, if no new collective agreements are reached by then, officials at labor union Teamsters Canada Rail Conference (TCRC) said in a televised announcement on 1 May. The rail carriers warned that a work stoppage would disrupt supply chains throughout North America and constrain trade between Canada and the US and Mexico. The two railroads account for the bulk of freight rail traffic in Canada. Meanwhile, chemical industry participants were largely supportive of a final rule adopted by the Surface Transportation Board (STB) on reciprocal switching for inadequate service by railroads, but think the scope was too narrow and it does not cover a significant portion of rail traffic. For the first time, the STB said it is requiring that three service metrics be maintained on a standardized basis across all Class 1 railroads. In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. In Canada, chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. Rail is also the predominant shipping method for US ethanol. Additional reporting by Kevin Callahan and Stefan Baumgarten Please see the Logistics: Impact on chemicals and energy topic page


INSIGHT: Latin America’s nascent EV market increasingly a Chinese affair

SAO PAULO (ICIS)–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. Globally, electric car sales stood at 14 million in 2023. The IEA predicts this could reach around 17 million in 2024, more than one in five cars sold worldwide. In the IEA words, these figures are already showing the update in EVs is “shifting from early adopters to the mass market.” Comparatively, Latin America’s numbers are still very low, however, with EV sales in 2023 at 90,000 units, according to the IEA’s Global EV Outlook 2024, its annual report on the industry. In Brazil, Latin America’s largest economy with 215 million people, sales stood at 50,000 units in 2023, which tripled 2022 sales but still represented just 3% of the market. In Mexico, a 130-million-strong country, EV sales in 2023 stood at 15,000, up 80% year on year but still only a market share of just over 1%. Elon Musk’s Tesla reported on Wednesday that Q1 sales and earnings fell due to increased competition from hybrid models. Meanwhile, China’s EV market has grown exponentially in just a decade as the state helped to ensure firms could compete in favourable conditions. The government took the decision to strongly develop its EV sector, with billions of dollars spent in subsidies over the last decade and a half, and now western players are playing catch up. BRAZIL ETHANOL EXCEPTIONAs well as Europe and the US, another key automotive market for EVs was Brazil. There, however, producers at least had a green fuel to justify their inaction: ethanol, which since the 1970s started to transform Brazil’s transport emissions landscape, although at the time the decision was mostly taken to avoid oil shocks the world had just witnessed. By the 2010s, when the key Paris Accord and successive upgrades to it were agreed, Brazil had already achieved some of the targets for transport emissions reductions. The country’s growing role as one of the world’s breadbaskets and ethanol-powered cars are, of course, related. Transport is going electric, however, and there are some attempts from western established players to start closing Brazil's gap with the rest of the world – as well as the Chinese producers’ presence. “Growth in Brazil was underpinned by the entry of Chinese carmakers, such as BYD, Great Wall, and Chery, [whose models] immediately ranked among the best-selling models in 2023. Road transport electrification in Brazil could bring significant climate benefits given the largely low-emissions power mix, as well as reducing local air pollution,” said the IEA. “Today, biofuels are important alternative fuels available at competitive cost and aligned with the existing refuelling infrastructure. Brazil remains the world’s largest producer of sugar cane, and its agribusiness represents about one-fourth of GDP.” The Brazilian government approved at the end of 2023 the so-called Green Mobility and Innovation Programme, which provides tax incentives for companies to develop and manufacture low-emissions road transport technology, with nearly Brazilian reais (R) 19.0 billion ($4.0 billion) to be deployed up to 2028. Several major automotive producers do commercialise hybrid ethanol-electric models, but all-electric models have been more elusive. In comes China, again. BYD said earlier this year it plans to invest $600 million in a new plant in Brazil, its first outside Asia, aiming to produce 150,000 units per year. General Motors, long established in Brazil, also said around the same time it was to invest $1.4 billion up to 2028 at its Brazil facilities to implement a “complete renewal” of its vehicle portfolio, focusing on EVs. Stellantis – the company resulting from the merger of Italian-American conglomerate Fiat Chrysler Automobiles and France’s PSA Group – said recently it would invest €5.6 billion up to 2030 in South America, with most of the funds channelled to its Brazilian operations. These investments, overall, have given the beleaguered Brazilian automotive sector the impetus to potentially recover part of its old glory. Just a decade ago, Brazil produced well over 3 million cars per year. In 2023, it produced 2.3 million. But Chinese producers’ strong entry into Brazil’s market – as well as Mexico’s – could have lasting consequences for consumption patterns. Earlier in April, a source at a chemicals producer in Brazil, for whom the established producers are a key customer, conceded with some apprehension it had just purchased a China-made car. “Chinese brands are newcomers and as such they are disrupting the market with lower prices. I paid for my electric car around R150,000 [$29,200], but some of the established brands are selling their EV models for well over R200,000,” the source said. While inaccessible for most Brazilians, where the minimum monthly wage stands at R1412 ($275), those who can afford SUVs are increasingly turning their eyes to Chinese brands. “They are good cars, and the prices are just so competitive – the choice for me was clear,” the source concluded. According to automotive publications, the cheapest EV car sold in Brazil, at R120,000, is manufactured by Chery Automobile, a state-owned Chinese manufacturer which is the third largest in its home market. CHINA MOVES INTO MEXICOChina’s approach to subsidising its EV industry is causing concern, especially in the US, now also in a race to prop up its own EV sector. Twenty Chinese EV companies have set up operations in Mexico, which is part of the tariff-free North American trade deal USCMA between Mexico, the US, and Canada. Washington fears Mexico could act as the gate of entry into the USMCA free trade zone after the US imposed hefty tariffs in most EV-related Chinese goods, precisely because of the generous state support they enjoy at home. Last week, Mexican media reported how the US had put pressure on Mexico to withdraw subsidies or any other Federal or state support for Chinese EV manufacturers; Mexican states are in a race to attract foreign direct investment (FID) in manufacturing, tapping into the nearshoring trend. Also last week, the Mexican Association of Automotive Distributors (AMDA) showed its concerns about Chinese firms “invading” the country’s automotive sector, according to a report in ABC Noticias. Since 2020, Chinese-manufactured products and brands have gained traction among Mexican consumers, capturing 8.2% of sales during the first quarter of 2024. Guillermo Rosales Zarate, AMDA’s president, said this influx had played a pivotal role in the industry's recovery following the challenges posed by the Covid-19 pandemic, but the polite words stopped there. AMDA published a report, compiled with official data from Mexico’s statistical office Inegi, which showed the sharp increase in China-made automotive parts and vehicles now present in the market. "In this first quarter, the sale of products imported from China, manufactured in China and imported into the Mexican market, and sold through the various participating brands, already represents 19.2%,” said Cristina Vázquez Ruiz, coordinator of economic studies at AMDA. “If we extract Chinese brands from this percentage, this would represent 8.2% [of car sales in Mexico]." The IEA in its annual report stayed away from this controversy. The IEA is a lobby group which advocates for greener technologies and decarbonisation, as most of its key member countries – and financiers – lack the traditional energy sources of their own: the green transition for most of them is a simply a strategic must do. “Given its proximity to the US, Mexico’s automotive market is already well integrated with North American partners, and benefits from advantageous trade agreements, large existing manufacturing capacity, and eligibility for subsidies under the IRA [US regulation propping up green investments],” said the IEA. “As a result, local EV supply chains are developing quickly, with expectations that this will spill over into domestic markets. Tesla, Ford, Stellantis, BMW, GM, Volkswagen (VW), and Audi have all either started manufacturing or announced plans to manufacture EVs in Mexico.” Elsewhere in Latin America, EVs update has been rather poor. In Colombia, a country of 50 million, sales in 2023 stood at 6,000 units. In Costa Rica, with a population of five million, sales stood at 5,000 units. The IEA did not have date for other countries in the region. ELECTRIC BUSES STRONGERUptake of electric buses in Latin America, especially in urban areas where much of the investments required come from public or semi-public entities, has been stronger. City buses are easier to electrify than long-distance coaches thanks to their relatively fixed driving patterns and lower daily travel distances. Once again, Chinese manufacturers are exporting “large volumes” of electric buses, accounting for over 85% of electric city bus deployments in Latin America, said the IEA. “Cities across Latin America, such as Bogota and Santiago, have deployed nearly 6,500 electric buses to date. There are also longer-standing programmes, such as the Zero Emission Bus Rapid-deployment Accelerator partnership that was launched in 2019 to accelerate the deployment of zero-emission buses in major Latin American cities,” it added. “Buenos Aires is targeting a 50% zero emission bus fleet by 2030, and a wider study of 32 Latin American cities expects that 25,000 electric buses will be deployed by 2030, and 55,000 by 2050.” Globally, almost 50,000 electric buses were sold in 2023, equating to 3% of total bus sales and bringing the global stock to approximately 635,000, concluded the IEA. Front page picture: EV charging points. Source: Shutterstock Insight by Jonathan Lopez


LOGISTICS: Asia-US container rates fall; tanker rates stable to softer; bridge collapse causing delays

HOUSTON (ICIS)–Shipping container rates continue to fall, liquid chemical tanker rates are stable to softer, and the bridge collapse at the Port of Baltimore has led to longer delivery times for imports, highlighting this week’s logistics roundup. CONTAINER RATES Rates for shipping containers from east Asia and China to the US continue to fall along with average global rates as capacity remains ample to handle the longer routes as commercial vessels continue to avoid the Suez Canal. Supply chain advisors Drewry said average rates ticked lower this week but remain 64% higher than the same week a year ago, as shown in the following chart. Rates from Asia to the US and Europe have also continued to fall, as shown in the following chart. Drewry said it expects a minor decrease in Transpacific spot rates and for stability along the Transatlantic and Asia-Europe trade lanes. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said rates along the US East Coast have fallen since the collapse of the Key Bridge in Baltimore, which signals to him that regional container traffic continues to flow. Levine said downward pressure will continue because of soft demand and it being the slow season for container trade, but that if threats persist in the Red Sea and commercial vessels continue to divert away from the Suez Canal, prices will remain above normal. 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. Source: Key Bridge Response 2024 While the closure of the port has not had a direct impact on the flow of chemicals, a market participant in Ohio said it is seeing delays in delivery times for imports as vessels originally destined to offload in Baltimore are getting re-routed to other ports. 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. As of 11 April, approximately 38 containers have been removed, the UC said, which is necessary for safe access to them begin removing the segments of the fallen bridge that lie across the ship’s bow. While marine traffic is still limited, 69 vessels have transited through since the creation of the temporary alternate channels. LIQUID CHEM TANKERS US liquid chemical tanker freight rates as assessed by ICIS held mostly steady this week – except from the US Gulf Coast (USG) to India. There is downward pressure on rates along the USG-Asia trade lane as several outsiders have come on berth for both April and May, adding to the available tonnage for completion cargos. On the other hand, rates from the USG to Rotterdam were steady this week even as space is limited and there are no outsiders on berth. Contract tonnage continues to prevail, with continued interest in styrene, MTBE and ethanol. There has been activity on the spot market, but owners are still working with COA customers to finalize their needs before committing to others. For the USG to South America trade lane rates remain steady with several inquiries for methanol widely viewed in the market. PANAMA CANAL Wait times for non-booked vessels ready for transit edged higher both directions this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times last week were 0.8 days for northbound traffic and 0.8 days for southbound traffic. Please see the Logistics: Impact on chemicals and energy topic page With additional reporting by Emily Friedman and Kevin Callahan


USDA calling for smaller ending corn stocks in April WASDE

HOUSTON (ICIS)–The US Department of Agriculture (USDA) is calling for smaller ending corn stocks, while for soybeans it is forecasting higher ending supply, according to the April World Agricultural Supply and Demand Estimates (WASDE) report. For the corn outlook the monthly update is projecting not only the lower amount of ending stocks but also greater usage of the crop for ethanol and feed and residual use. Corn used for ethanol is being raised by 25 million bushels to stand at 5.4 billion bushels based on data through February from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration (EIA). Feed and residual use is also being increased by 25 million bushels to 5.7 billion bushels based on indicated disappearance during the December-February quarter. With no supply changes and use rising, the WASDE said ending stocks are now projected lowered by 50 million bushels to 2.1 billion bushels. The USDA said season-average farm price received by producers is now down by 5 cents to $4.70 per bushel. For soybeans, the outlook for supply and use not only expects higher ending stocks but also lower imports, residual use and exports. The monthly update said the soybean trade is being reduced on the pace seen to date and expectations for future shipments. With the trade changes and slightly lower residual, soybean ending stocks are raised by 25 million bushels to 340 million bushels. The agency said the season-average soybean price is now forecasted lower by 10 cents to $12.55 per bushel. The next WASDE report will be released on 10 May.


Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 5 April. NEWS Mexico’s automotive output falls nearly 13% in March Mexico’s automotive sector output fell by 12.75% in March, month on month, to just over 300,000 units, the country’s statistical office Inegi said on Wednesday. Sanitation framework, nascent LatAm lithium industry keeping Brazil’s chloralkali afloat – Abiclor Brazil’s chlorine and caustic soda sectors have kept afloat in better health than the wider chemicals industry as sanitation plans and new lithium exploitations across Latin America keep demand high, according to the director general at the country’s trade group Abiclor. Brazil’s chemicals, industrial output falls in February Brazil’s chemicals output fell in February by 3.5%, month on month, one of the largest falls among the subsectors measured, the country’s statistical office IBGE said on Wednesday. Petrobras ‘proactively’ engaging with Federal auditor about tolling contract with Unigel Petrobras continues to “clarify in a timely manner” all the information requested by the Federal auditor regarding its tolling contract with Unigel, a spokesperson for the Brazilian energy major said to ICIS on Tuesday. Brazil’s Unigel postpones Q4 results amid debt restructuring Unigel has postponed the publication of its Q4 and 2023 financial results as its debt restructuring is ongoing, the Brazilian chemicals and fertilizers producer said on Tuesday. MOVES: Brazil’s Unipar appoints Alexandre Jerussalmy as CFO Unipar has appointed Alexandre Jerussalmy as CFO and investor relations officer, effective immediately, the Brazilian chemicals producer said on Tuesday. Colombia’s manufacturing slows down in March on lower sales Colombia’s manufacturing output growth slowed down in March on the back of lower sales, although it marked its third month in expansion territory, analysts at S&P Global said on Monday. Brazil's manufacturing March output healthy on new orders, fueling job creation Brazil’s manufacturing continued expanding at pace in March on the back of a healthy new order book, prompting firms to increase workforces, S&P Global said on Monday. Mexico’s manufacturing steady in March but subdued US demand causes concern Mexico’s manufacturing output stayed stable in March but firms are getting increasingly worried about lower demand from the US, the key market for the country’s export-intensive manufacturers, analysts at S&P Global said on Monday. PRICING Lat Am PP domestic prices down in Argentina, Mexico on lower US PGP spot prices, weak demand Domestic polypropylene (PP) prices dropped in Argentina and Mexico on the back of lower US spot propylene prices and weak demand. In other Latin American countries, prices remained steady. LatAm PE international prices steady to lower on lower US export offers International polyethylene (PE) prices were assessed as steady to lower on the back of lower US export offers. Ethanol prices in Brazil experiencing surges during April The prices of hydrous ethanol surged during the initial week of April, propelled by consistent strong sales in Brazil. Unigel to raise PS April prices in Brazil Unigel is seeking an 11% price increase on all grades of polystyrene (PS) sold in Brazil starting on 1 April, according to a customer letter. Innova seeks April PS price increase in Brazil Innova is seeking a real (R) 1,000/tonne ($200/tonne) price increase, excluding local taxes, on all grades of polystyrene (PS) sold in Brazil starting on 1 April, according to a customer letter.


LOGISTICS: No impact yet on shipping rates after Baltimore bridge collapse; Asia-US container rates fall further

HOUSTON (ICIS)–The collapse of the Francis Scott Key Bridge in Baltimore is wreaking havoc on logistics and freight movements in the immediate region, but the incident has yet to have any impact on shipping rates, and costs for shipping containers from Asia to the US continue to fall, highlighting this week’s logistics roundup. PORT OF BALTIMORE The Port of Baltimore remains closed to all vessel traffic following the bridge collapse early Tuesday morning. The unified command (UC) said on-scene crews continue to assess and monitor for spilled oils and hazardous substances to prevent further discharge or release into the marine environment as 14 containers on the Dali that were holding hazardous materials were impacted during the collision. The chemical components assessed were soap products, perfume products, or not otherwise specified resins, the UC said. Salvage efforts have begun but will take some time and according to the local US Coast Guard authorities the port is officially closed for the near future. Some of the chemical products most likely impacted are caustic soda, veg oil, base oils, ethanol, biodiesel and a variety of others. South African producer Sasol told ICIS that a terminal inside the port with the company’s name has not been used by the company since it opened its major facility in Lake Charles, Louisiana. Specialty chemical producer WR Grace has a terminal in the port, according to a map of the port on the Maryland state government’s website. The company did not immediately respond on Friday to questions about the terminal. The port is one of the largest in the US for auto imports and exports. Global shipping major MSC is advising customers that passage to and from the port will not be established “for weeks if not months”. Containers already on the water will be rerouted and discharged at an alternate port where they will be made available for pick-up upon completion of the usual import documentary procedure, MSC said. Customers with containers at the origin, whether gated in or booked but not yet gated, need to contact the origin booking office immediately to decide whether they wish for the cargo to be carried to the alternate ports in the US. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said more vessels arriving at alternative ports, or longer port calls as vessels offload more containers, could cause some congestion at those ports, meaning delays for shippers. “But ocean freight is now in its slow season between Lunar New Year and peak season that typically starts in June or July,” Levine said. “And at the moment there is no significant congestion at any of the major East Coast ports.” CONTAINER RATES FALL FURTHER Average global rates for shipping containers continue to fall after surging in December when Houthi rebels began attacks on commercial vessels in the Red Sea. Shippers began to divert away from the Suez Canal because of the attacks, which added days and sometimes weeks to traditional trade routes and tightened available capacity. Shippers brought all floating capacity online, increased sailing speeds and brought into service newbuilds to help alleviate the situation. Softer overall demand also helped ease stressed supply chains. Average rates and rates from Shanghai to the US and Europe have fallen steadily since the first of the year according to supply chain advisors Drewry and as shown in the following charts. Levine said the Baltimore closure could put some upward pressure on rates but that he expects it would be temporary. 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 TANKER RATES STEADY While many tanker shipping routes from the Americas remained subdued with no significant price changes, the Transatlantic eastbound route remains firm as there continues to be a lot of interest seen in the market this week, although space remains tight. On the bunker side, fuel prices have been steadily decreasing as well on the back of softer energy prices; however, week over week remain relatively mixed. PANAMA CANAL Wait times for non-booked vessels ready for transit edged higher this week, according to the PCA's vessel tracker and as shown in the following image. Wait times last week were 1.2 days for northbound traffic and 1.4 days for southbound traffic. Additional reporting by Kevin Callahan Thumbnail image shows the Dali and the collapsed Francis Scott Key Bridge in Baltimore, Maryland, from


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