Methylene chloride

SINGAPORE (ICIS)–India will cut import duties for methylene diphenyl diisocyanate (MDI) by 2.5 percentage points to 5.0% effective 24 July, with plans to review the country's overall tariff structure in the next six months. MDI was among raw materials identified by the Indian government on which custom duties will be reduced. India's finance minister Nirmala Sitharaman announced the changes to the country's Basic Customs Duty (BCD) – a tax levied on imported goods at the time of their entry into the country – in her presentation of India’s national budget for the fiscal year ending March 2025 before parliament. HIGHER DUTIES FOR SOME PRODUCTSConversely, the minister said that the customs duty for polyvinyl chloride (PVC) flex films/flex banners will be raised to 25% from 10% currently starting 24 July, "to curb their imports". Flex banners are commonly used for outdoor advertising as billboards. "PVC flex banners are non-biodegradable and hazardous for environment and health," Sitharaman said. The customs duty on ammonium nitrate will also be raised to 10% from 7.5% from 24 July "to support existing and new capacities in the pipeline", she said. EXEMPTIONS FOR CRITICAL MINERALSSitharaman also proposed full exemption of 25 critical minerals from import duties, a cut in duty rates for two other products in the same category. "Minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defense, telecommunications, and high-tech electronics,” she said. “This [cut in import duty] will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," Sitharaman said. As for the electronics sector, the finance minister proposed to remove the BCD on oxygen-free copper for the manufacture of resistors. GOV'T TO REVIEW CUSTOMS DUTY STRUCTUREOver the next six months, the Indian government will conduct a thorough review of its customs duty rate structure, Sitharaman said. "I propose to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes," she said. "We will continue our efforts to simplify taxes, improve taxpayer services, provide tax certainty and reduce litigation while enhancing revenues for funding the development and welfare schemes of the government." It was not immediately clear how the revised BCD structure will impact implementation of import certifications of various chemicals under the Bureau of Indian Standards (BIS). BIS certification for some chemicals has been extended many times since they were introduced in 2019-20 to allow domestic end-user industries more time to adhere to the quality-control orders (QCO). Focus article by Nurluqman Suratman Thumbnail image: At the Vallarpadam Terminal in Kochi, Kerala, India. 2014 (By Olaf Kruger/imageBROKER/Shutterstock)

23-Jul-2024

SINGAPORE (ICIS)–India will cut import duties for methylene diphenyl diisocyanate (MDI) by 2.5 percentage points to 5.0% effective 24 July, the country’s finance minister Nirmala Sitharaman announced on Tuesday. MDI was among raw materials identified by the Indian government on which custom duties will be reduced. Sitharaman announced the changes to the country's Basic Customs Duty (BCD) – a tax levied on imported goods at the time of their entry into the country – in her presentation before parliament of India’s national budget for the fiscal year ending March 2025. Conversely, the minister said that the customs duty for polyvinyl chloride flex films/flex banners will be raised sharply from 10% currently to 25% from 24 July "to curb their imports". Flex banners are commonly used for outdoor advertising as billboards. "PVC flex banners are non-biodegradable and hazardous for environment and health," Sitharaman said. For ammonium nitrate, the custom duty will be raised to 10% from 7.5% from 24 July "to support existing and new capacities in the pipeline", she said. (adds paragraphs 4-7)

23-Jul-2024

SINGAPORE (ICIS)–India will cut import duties for methylene diphenyl diisocyanate (MDI) by 2.5 percentage points to 5.0% effective 24 July, the country’s finance minister Nirmala Sitharaman announced on Tuesday. MDI was among the raw materials identified by the Indian government on which custom duties will be reduced. Sitharaman announced the changes to the country's Basic Customs Duty (BCD) – a tax levied on imported goods at the time of their entry into the country – in her presentation before parliament of India’s national budget for the fiscal year ending March 2025.

23-Jul-2024

HOUSTON (ICIS)–The US election could see Donald Trump return as president with majorities in both legislative chambers, which could bring a reduction in excessive red tape, weaker support for electric vehicles (EVs) and impose even more ponderous tariffs and trade restrictions. Incumbent President Joe Biden has dropped out of the race, and current polls show Trump ahead in the election The House of Representatives and the Senate are closely split between the nation's two major parties, so the Republican party could obtain majorities in both legislative chambers Regardless of who wins the presidential election on 5 November, the outlook remains pessimistic for tariff relief and trade deals in the US US TRADE POLICY WILL REMAIN RESTRICTIVERegardless of who wins the presidential election, US trade policy will remain restrictive, which could leave the nation's chemical exports vulnerable to retaliatory tariffs imposed during a trade dispute. Also, tariffs could increase the cost of imports of critical chemical intermediates. Biden's campaign website did not discuss trade policy, and he recently dropped out of the race. But he maintained many of the tariffs that Trump introduced during his presidency in 2016-2020. In addition, Biden raised tariffs on EVs from China. He signed bills passed by Congress that required local content rules for government programs. Trump's platform proposed a baseline tariff, with the candidate mentioning 10% for most imports. For China, he mentioned tariffs of more than 60% during an interview on the television program Fox News. Trump's campaign website proposes a reciprocal trade act, under which the US could match tariffs that another country imposes on its exports. Although the platform concedes that reductions are possible, the proposal focuses on the potential of higher tariffs. TRUMP TO ROLL BACK BIDEN'S EV POLICIESBiden did not mention EVs on his campaign website. But during his presidential term, the federal government used multiple laws and regulatory statutes to promote EV adoption. If Trump becomes president, he has pledged to cancel what he calls the electric vehicle mandate. He specified many of Biden's policies that encouraged the adoption of EVs. EVs typically consume more plastics on a per unit basis than automobiles powered by internal combustion engines (ICEs). EVs also pose different material challenges, which is increasing demand for different plastics and compounds. Policies that prolong the use of ICE-based vehicles could extend the operating life of the nation's refineries. Companies could be more willing to invest in maintenance and repairs if they are confident that they could recoup their investments. Refineries produce many building block chemicals, such as propylene, benzene, toluene and mixed xylenes (MX). BIDEN, TRUMP PRESENT EXTREMES ON CHEM REGULATIONSBiden and Trump lay on opposite extremes of regulations and policy. Under Biden, the federal government has adopted numerous regulations, many of which the chemical industry has said provided them with little benefit given the time and expense of compliance. The past six months has been described as the worst regulatory environment that the chemical industry has ever seen. That burdensome regulatory climate could persist if a Democrat wins the election, since personnel from the Biden administration could remain in place. The following lists some of the regulatory policies that could either persist under a Democratic administration or weaken under a Trump administration: The Environmental Protection Agency (EPA) has adopted a whole chemical approach in determining whether a substance poses an unreasonable risk under the nation's main chemical-safety program, known as the Toxic Substances Control Act (TSCA). The regulator is currently reviewing vinyl chloride monomer (VCM), acrylonitrile (ACN) and aniline, a feedstock used to make methylene diphenyl diisocyanate (MDI). Changes to the Clean Waters Act, the Risk Management Program (RMP) and the Hazard Communication Standard that were made by Biden. Biden has promoted environmental justice throughout the federal government. Environmental justice could make it harder for chemical companies to expand existing plants or build new ones. Because these are federal policies, a different president could reverse them. Trump could try to unravel some of Biden's rules to the degree possible under executive authority. However, some of the rules will persist because of entrenched bureaucracy or because they are final. The pace of new regulations would likely slow under a Trump presidency. He has pledged to restore his order that for every new regulation introduced by the federal government, two existing ones must be eliminated. OTHER POLICY DIFFERENCESSuperfund tax: If Trump wins the presidency and Republicans win the legislative branch, that could set up a repeal of the Superfund tax, which imposes taxes on several building-block chemicals and their derivatives. Republican legislators have already introduced bills to repeal the tax. Trump tax cuts: Trump has pledged that he would make his 2017 tax cuts permanent. These are set to expire at the end of 2025 from his previous term in 2016-2020. Oil production: Biden has imposed several restrictions on oil and gas production on federal land and on offshore leases, although this did not stop production from surging in the Permian Basin, much of which is outside of government control. Trump has pledged to remove those restrictions. Insight by Al Greenwood Thumbnail shows US capitol. Image by Lucky-photographer

22-Jul-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 19 July. NEWS Braskem Idesa ethane supply more stable, PE prices to recover in H2 2025 – exec Supply of ethane from Pemex to polyethylene (PE) producer Braskem Idesa is now more stable after a renegotiation of the contract – but the global PE market remains in the doldrums, according to an executive at the Mexican firm. INSIGHT: Colombia’s wide single-use plastics ban kicks off amid industry reluctance Colombia’s single-use plastic ban, which affects a wide range of products, kicks off amid some industry reluctance after a hurried implementation, and with provisions to revise the legislation after a one year trial period. Brazil’s chemicals capacity utilization falls to record low in May at 58% The utilization rate at Brazil's chemical plants fell to 58% in May, the lowest level since records began in 1990, the country’s chemicals trade group Abiquim said on Wednesday. Brazil’s floods hit GDP growth in 2024 but strong recovery in 2025 – IMF The IMF has revised Brazil’s economic outlook for 2024, with GDP growth now forecast at 2.1%, down from an earlier projection of 2.2%, because of the floods in Rio Grande do Sul. Mota-Engil, PEMEX agree to build new ammonia, urea and AdBlue plant in Mexico Mota-Engil, through its subsidiary MOTA-ENGIL MEXICO, has signed an agreement with Pemex Transformación Industrial, a subsidiary of state-owned energy major Petróleos Mexicanos (“PEMEX”), to construct a fertilizer plant in Escolin in the state of Vera Cruz. Harvest Minerals undertakes rare earth elements exploration at Brazil fertilizer project Fertilizer producer Harvest Minerals announced a two-phase rare earth elements exploration program has commenced at its Arapua project in Brazil. Stolthaven Terminals chosen as potential operator for Brazil green ammonia export terminal Logistics firm Stolthaven Terminals announced that in cooperation with Global Energy Storage (GES), it has been selected as the only potential operator to design, build and operate a green ammonia terminal in Brazil to be located within the industrial export zone at Pecem in the state of Ceara. Silver Valley Metals selling Idaho project to refocus on Mexico lithium and SOP project Brownfield exploration company Silver Valley Metals announced it has signed an asset purchase agreement for the Ranger-Page project in Idaho which will allow it to refocus efforts at its lithium and potash project in central Mexico. BHP enters into further agreement with Vale over 2015 Brazil dam failure BHP announced it has entered into an agreement with Vale regarding group action proceedings in the UK in respect of the Fundao Dam failure in Brazil which occurred in 2015. PRICING Lat Am PE international prices stable to up on higher US export offers International polyethylene (PE) prices were assessed as steady to higher across Latin American countries on the back of higher US export offers. PP domestic prices fall in Argentina on sluggish demand, ample supply Domestic polypropylene (PP) prices were assessed lower in Argentina on the back of sluggish demand and ample supply. In other Latin American countries, prices were unchanged. US Gulf sees PVC price decline, Latin America stays stable Polyvinyl chloride (PVC) demand in Brazil has shown fluctuations from weak-to-stable this July, accompanied by sufficient supply. Although market prices have stabilized, local prices continue to face pressure following a recent price drop in the US Gulf market.

22-Jul-2024

SINGAPORE (ICIS)–Reliance Industries Ltd’s (RIL) oil-to-chemicals (O2C) business posted a 14.3% year-on-year drop in earnings in its fiscal first quarter ending June 2024 on poor chemicals margins, the Indian conglomerate said. O2C results in 10 million rupees (Rs) Apr-June 2024 Apr-June 2023 % Change Revenue 157,133 133,031 18.1 EBITDA 13,093 15,286 -14.3 Exports 71,463 69,006 3.6 – Revenue for the period rose primarily on the back of higher product prices in line with Brent crude price gains, and increased volumes due to strong domestic demand, the company said on 19 July. – Fiscal Q1 overall earnings before interest, tax, depreciation and amortisation (EBITDA) margin dropped to 8.3% from 11.5% in the same period of last year. – On a year-on-year basis, April-June domestic polymer and polyester demand increased by 8% and 5%, respectively. – RIL's consolidated group profit after tax fell by 4% year on year to Rp175 billion ($2.09 billion) in April-June 2024. Polymers- Fiscal Q1 polymer margins were down by 0.5% to 16.9% year on year due to firm naphtha prices. Product margin over naphtha April-June 2024 ($/tonne) April-June 2023 ($/tonne) % Change Polyethylene (PE) 330 397 -16.9% Polypropylene (PP) 318 381 -16.5% Polyvinyl chloride (PVC) 371 373 -0.5% Polyester – Paraxylene (PX) and monoethylene glycol (MEG) margins over naphtha decreased year on year due to higher naphtha prices. – "PTA [purified terephthalic acid] margins were impacted adversely due to high inventory with Chinese producers and increased competition," the company said. – On a year-on-year basis, domestic polyester demand in fiscal Q1 increased by 5%, driven by strong growth in PET, which was up 27% due to "higher demand from the beverage segment on account of summer season and elections". ($1 = Rs83.7)

22-Jul-2024

SHANGHAI (ICIS)–In this podcast, markets reporter Shannen Ng discusses how northeast Asia’s methylene diphenyl diisocyanate (MDI) supply is expected to remain tight as Q3 progresses. However, poor demand expectations in the Asian import markets for the rest of this quarter remain. Polymeric MDI sentiment in SE Asia, India supported by tight supply Monomeric MDI particularly sluggish and expected to remain so Weak demand outlook for China’s downstream construction and automotive sectors

18-Jul-2024

HOUSTON (ICIS)–The conditions that helped make Beryl become a hurricane before hitting Texas chemical plants will persist through the rest of the season, with meteorologists forecasting 11 more forming in the Atlantic basin. Conditions are already conducive for hurricanes even though the peak of the season does not happen until the late summer. Beryl still disrupted chemical operations even though it was a relatively weak hurricane when it made landfall in Texas. The next hurricane could disrupt global chemical markets if it damages terminals and ports on the Gulf Coast. BERYL'S KNOCKS OUT POWEREven though Beryl was a Category 1 hurricane – the weakest class – it still caused more than 2 million outages in Texas. Many of the disruptions that Beryl caused to the chemical industry were because of power outages. A roughly equal number of disruptions was caused by companies shutting down operations as a precaution. Other disruptions were attributed to bad weather. PORT DISRUPTIONSBeryl's other major effect was on ports. The ports of Corpus Christi, Freeport, Texas City and Houston had shut down. Beryl caused Freeport LNG Development to shut down its operations. CONDITIONS THAT MADE BERYL SO POWERFUL WILL PERSISTBeryl illustrates the destructive potential of a weak Category 1 hurricane that travels through parts of Texas that host critical powerlines and ports. The meteorology firm AccuWeather estimates that total damage and economic loss caused by Beryl was $28-32 billion. Beryl was remarkable because, prior to making landfall in Texas, it had become a Category 5 hurricane, the most powerful class under the Saffir-Simpson scale. It was the first time that such a powerful hurricane had formed so early in the year, something that US meteorologist attributed to exceptionally warm ocean temperatures. The surface temperatures at sea are already close to what is typical during the mid-September, the peak hurricane season, according to the National Oceanic and Atmospheric Administration (NOAA). After Beryl made landfall in Mexico's Yucatan peninsula, it weakened into a tropical storm before passing over more warm water in the Gulf of Mexico. There it strengthened rapidly and became a hurricane once more before hitting Texas. The warm waters that contributed to Beryl's strength will persist and should soon be joined by La Nina, a weather phenomenon that also makes hurricanes more likely. METEOROLOGISTS RAISE HURRICANE FORECASTEarlier this week, the hurricane forecast for this year was raised by meteorologists at Colorado State University's Tropical Weather & Climate Research. The following compares the center's latest hurricane forecast to its update in June and to the average for the years 1991-2020. July June Average Named Storms 25 23 14.4 Named Storm Days 120 115 69.4 Hurricanes 12 11 7.2 Hurricane Days 50 45 27.0 Major Hurricanes 6 5 3.2 Major Hurricane Days 16 13 7.4 Source: Colorado State University Like NOAA, Colorado State University (CSU) noted that extremely warm sea surface temperatures and a possible La Nina are making it more likely for hurricanes to form and strengthen. THE NEXT HURRICANE COULD CAUSE MORE DAMAGEThe next hurricane can prove to be a bigger logistical headache for railroad companies. Beryl had caused only brief disruptions at BNSF and Union Pacific (UP). Beryl's path did not threaten US oil and gas production in the Gulf of Mexico. The next storm could threaten those wells, causing several energy producers to shut in production. Damage to Gulf Coast oil, ethane, LPG and LNG terminals could disrupt energy markets if the outages last long enough. Texas and the neighboring state of Louisiana are home to most of the nation's LNG export capacity. Prolonged outages at LNG terminals could lead to an oversupply of natural gas in the US because producers could lose an outlet to ship out excess capacity. Prices for natural gas could consequently fall. Prices for ethane tend to follow those for natural gas, so they would also fall in the event of a supply glut. Texas ships ethane and liquefied petroleum gas (LPG) to crackers all over the world. If the next hurricane damages those terminals and leads to a prolonged shutdown, it could have global repercussions by interrupting shipments of feedstock to crackers. In the US, it could cause prices for those products to plummet, especially for propane. US midstream companies are already trying to ship out as much LPG as possible because production has been so prolific. Over the years, US producers have exported increasing amounts of polyethylene (PE) and polyvinyl chloride (PVC). If the next hurricane damages those plants, then it would have a direct effect on global petrochemical markets. Insight by Al Greenwood Thumbnail shows a distribution transformer of a power line knocked down by Beryl. Image by Reginald Mathalone/NurPhoto/Shutterstock

11-Jul-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 June 2024. Asia melamine sees uptick on tighter supply; demand recovery uncertain By Joy Foo 28-Jun-24 12:54 SINGAPORE (ICIS)–Asia’s melamine spot market for China-origin product faced some pressure from early June due to lagging demand. China MEG market supported by limited import arrivals By Cindy Qiu 26-Jun-24 12:20 SINGAPORE (ICIS)–China’s monoethylene glycol (MEG) prices rose after falling in June, reflecting supply-demand dynamics, but the price growth may be capped by increasing domestic supply and curtailed downstream polyester production, despite limited import arrivals expected in July. India’s BPA import price surges; freight continues to exert pressure By Li Peng Seng 24-Jun-24 11:53 SINGAPORE (ICIS)–India’s bisphenol A (BPA) average import price hit its highest level in nearly 20 months recently due to firm ocean freight rates, a phenomenon that is expected to persist in the short term as vessel space is likely to stay tight. PODCAST: Asia base oils supply, demand to gradually rise in H2 By Damini Dabholkar 26-Jun-24 18:13 SINGAPORE (ICIS)–Asia’s base oils supply is expected to improve slightly in H2 2024, while a seasonal peak in overall demand is due to kick off in the later part of Q3. INSIGHT: Asia isocyanates H1 performance mixed, poor expectations for Q3 By Shannen Ng 26-Jun-24 14:30 SINGAPORE (ICIS)–Demand in Asia’s import markets for polymeric methylene diphenyl diisocyanate (PMDI) and toluene diisocyanate (TDI) is likely to remain limited in the upcoming summer months of July and August, and the outlook for late Q3 is uncertain. Chemanol to supply methanol to Saudi Amiral project over 20 years By Pearl Bantillo 25-Jun-24 12:52 SINGAPORE (ICIS)–Saudi Arabia's Methanol Chemicals Co (Chemanol) has signed a 20-year deal to supply methanol to the Amiral petrochemical project of Saudi Aramco Total Refining and Petrochemical Co (SATORP).

01-Jul-2024

SAO PAULO (ICIS)–Rains this week in the area where the Altamira petrochemicals hub is located, in Mexico’s state of Tamaulipas, could start fixing the weeks-long drought which has hit companies in the area hard, according to an analyst at supply chain consultancy Everstream. Jena Santoro added that, while force majeures by industrial players across the board remain in place, companies are privately saying this week's rain could be the beginning of the end in the drought crisis which has forced many of them to reduce or shut operations. The analyst added, however, that extremely dry land after months of practically no rain could cause other problems: if rainfall is heavy, the water may not perforate the land, causing landslides or floods which could add up logistical problems. In mid-May, the government in Tamaulipas halved water supplies to industrial players on the back of the drought. Soon after, petrochemicals companies operating in Altamira started declaring force majeures for several products. Last week, sources said to ICIS that supply was not yet affected by the operational hurdles related to the drought, although adding that industrial players were fearful that a prolonged drought could have a meaningful impact on both US and Mexico’s petrochemicals. On Tuesday, a spokesperson for Mexico’s petrochemicals major Orbia said to ICIS the company’s polyvinyl chloride (PVC) production out of Altamira remains affected, where the company has the capacity to produce 690,000 tonnes/year, according to the ICIS Supply & Demand Database (ISDD). RAINY SEASONMany parts in the Gulf of Mexico are expected to receive considerable rainfall from Wednesday (19 June) onwards, including Mexico’s state of Tamaulipas, one of the most affected in a nation-wide crisis which has jeopardized water supply to households and companies in several regions. “We have a tropical system that just happens to be moving this week toward Tamaulipas state. So, I think in the next 24 to 48 hours, the situation will look very different than what we're seeing. That heavily impacted area is also one of the areas expected to receive heavy rainfall,” said Santoro. “The state of Tamaulipas and the Altamira area in particular are supposed to receive a lot of rain between June and July, according to our meteorological department: this week’s storm system is the beginning of that.” Companies have been, on average, around four weeks out of operations or with reduced rates. That period should be manageable as companies can work through stocks or bring in product from other facilities. However, longer shutdowns could really start affecting supply and, ultimately, cause a hit to companies’ financials. “Nobody has come out publicly saying any specific timeline or duration [for the current disruption to end] but, at least from what our sources are saying and what we are seeing by monitoring this closely hour by hour, this could be the beginning of the end of the crisis,” said Santoro. “Obviously, in private companies are already saying this rain is very welcome,” the analyst went on to say. FLOODS, LANDSLIDESHowever, the situation will not be fully normalized until the rainy season in June-July concludes, pretty much because companies will need to be alert for potential flooding caused by the heavy rains coming up in the traditionally storm, hurricane-prone season in the Gulf of Mexico. After months of little or non-existent rainfall, the ground is extremely dry and, when it rains, the water can run off and cause flash flooding. Dry land is usually hard-packed, dense, and the pores in the surface can be too small to absorb water quickly. “Indeed, we may go from one extreme to the next: with a lot of rain, there is potential for flooding in the Altamira area and in Tamaulipas. On one hand, rains could refill water reservoirs and ease the drought but in the same very week they could end up having different logistical and production challenges if there is flooding,” said Santoro. “With flooding, there is potential for things like landslides and run-offs, which can block roads and highways, So, companies are hoping that it will be some kind of happy middle ground, where the rain is not too extreme as to present added challenges and issues.” Front page picture: The Port of Altamira, Mexico's state of Tamaulipas Source: Altamira Municipality Interview article by Jonathan Lopez  

18-Jun-2024