Polyvinyl chloride (PVC)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 4 October. INSIGHT: Bold policy moves might not arrest China economic slowdown By Nurluqman Suratman 30-Sep-24 13:51 SINGAPORE (ICIS)–In a bold move to revitalize its economy and restore investor confidence, China unveiled a comprehensive package of monetary and fiscal measures less than a week before the country goes on a week-long holiday. Focus: China urea to stay weak on ample supply and low demand By Rita Wang 30-Sep-24 18:14 SINGAPORE (ICIS)–China's urea market rebounded slightly recently, but the outlook for the spot market remains weak due to high inventories, restricted exports and the upcoming lull season. Asia EDC spot demand likely to taper; regional supply to improve in end-2024 By Jonathan Chou 01-Oct-24 18:15 SINGAPORE (ICIS)–Asia's spot EDC demand may be capped in the near term with buyers adequately stocked. Market players are watching out for ripple effects from China’s recent blitz of stimulus measures that may impact conditions for main derivative polyvinyl chloride (PVC). Asia PVC conditions may see limited impact from China stimulus measures By Jonathan Chou 02-Oct-24 13:48 SINGAPORE (ICIS)–Some bullishness was observed recently in China’s domestic market, in part due to its government’s stimulus measures. India faces BOPP film overcapacity on start-ups in next two years By Aswin Kondapally 02-Oct-24 22:11 MUMBAI (ICIS)–India is facing an oversupply of biaxially oriented polypropylene (BOPP) film, with nine new domestic production lines set to come on stream, which will exert heavy pressure on the market over the next two years. Asia MMA prices see first sharp fall in 2024 on bearish market conditions By Jasmine Khoo 03-Oct-24 10:06 SINGAPORE (ICIS)–Asia methyl methacrylate (MMA) spot import prices were assessed significantly softer in the week ended 27 September, reflecting significant price falls for the first time in 2024. INSIGHT: China Sept small-to-medium factories' output shrinks on poor demand By Jonathan Yee 04-Oct-24 11:00 SINGAPORE (ICIS)–Manufacturing output of China’s small to medium enterprises went back to into contraction mode in September, underscoring continued and widespread weakness in the world’s second-biggest economy.

07-Oct-2024

HOUSTON (ICIS)–The three-day strike by US Gulf and East Coast dock workers has been suspended until 15 January to allow negotiations to resume, according to a joint statement from the union and ports. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) said they have reached a tentative agreement on wages and will extend the current contract while they continue to negotiate other outstanding issues. “Effective immediately, all current job actions will cease, and all work covered by the master contract will resume,” the statement read. The union went on strike on 1 October as negotiations were stalled. The union was seeking a 77% increase over the next six years and commitments against any kind of automation at the ports – full or semi – that would replace jobs or historical work functions. The USMX was offering about a 50% increase. IMPACTS TO CHEM MARKETS The strike had already had some impacts on the US chemicals industry, with polyethylene (PE) exports to Brazil being put on hold. The polyvinyl chloride (PVC) industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. Thumbnail image shows a container ship. Photo by Shutterstock

03-Oct-2024

HOUSTON (ICIS)–In only its third day, a strike by dock workers at US Gulf and East Coast ports is leading to idled trucks and growing numbers of container ships queuing outside of the ports. TRUCKING A trucking trade group, the American Trucking Associations (ATA), said that the strike has stopped all activity at five of the nation’s top 10 container ports and estimates that more than 60 container ships carrying nearly 500,000 containers scheduled for October delivery are now stuck in limbo. The ATA said there are 30,000 truckers registered to work just at the port of New York and New Jersey, which sees about 12,000 truck visits in a typical day. “Tens of thousands of more up and down the coasts are now sidelined by this strike,” the ATA said. The ATA said that the trucking industry is made up of small businesses with more than 95% of carriers operating 10 trucks or fewer. Todd Spencer, president of the Owner-Operator Independent Drivers Association, said American consumers will suffer the longer the strike goes on, but that independent drivers will also feel the pain. "The longer this labor strike drags out, the more harm is done to American consumers who rely on the trucking industry to deliver the goods they depend on,” Spencer said. “We encourage a quick resolution to this latest dispute and emphasize the need for specific discussions about how supply chain deficiencies stifle driver compensation, increase loading and unloading delays, and hurt highway safety.” CONTAINER SHIPS BACKING UP Ships are also backing up outside of the affected ports, according to publicly available ship tracking services. For example, there were about 51 vessels outside the entrance to Port Houston on 2 October, and about 65 vessels in the same area on 3 October. Alan Murphy, CEO, Sea-Intelligence, said a prolonged strike will have an impact on global capacity as carriers currently have 62 deep sea services that call on East Coast and US Gulf ports. Those vessels will have to wait at anchorage at the first port of call on their discharge schedule, Murphy said. “In addition to that there are vessels which have already commenced their discharge rotation and will have to wait at their second, third, or even fourth port of call, depending on how much of their schedule they have already completed prior to the strike taking place,” Murphy said. If the strike were to last four weeks, Murphy said that almost 7% of the global fleet will be tied up along the US East Coast, and the overall impact on the supply and demand equation will be very significant. EXCESSIVE SURCHARGES A chemical industry trade group, the Alliance for Chemical Distribution (ACD), sent a letter to US President Joe Biden criticizing excessive surcharges imposed by the carriers. In the letter, ACD President and CEO Eric Byer highlighted the excessive surcharges imposed – and profits made – by ocean shippers who strangely had direct involvement in the failed negotiations. “Neither side negotiated in good faith, effectively inviting a strike to take place,” Byer said. “For the ocean carriers, this is not surprising given the extreme profits they have been able to collect over recent years, putting them in a position to contentedly wait out a strike while the American economy loses billions of dollars a day.” Byer said that the ocean carrier member companies of the United States Maritime Alliance (USMX) are levying a myriad of surcharges on shippers, ranging from hundreds of dollars to $3,000/container, citing labor disruptions as the cause. “Through these surcharges, the ocean carriers are profiting from a crisis they played a direct role in creating,” Byer said. STALLED NEGOTIATIONSMeanwhile, the two sides are not currently negotiating. The International Longshoremen's Association (ILA) is representing the dock workers, and USMX is representing the ports. USMX directors include representatives of major shipping lines, including Evergreen Shipping, Maersk, Hapag-Lloyd, Ocean Network Express, CMA/CGM, COSCO Shipping Lines, and Mediterranean Shipping Company (MSC). USMX said it continues to focus on ratifying a new master contract. “Reaching an agreement will require negotiating – and our full focus is on how to return to the table to further discuss these vital components, many of which are intertwined,” USMX said. “We cannot agree to preconditions to return to bargaining – but we remain committed to bargaining in good faith to address the ILA’s demands and USMX’s concerns.” IMPACTS TO CHEM MARKETS The strike is already affecting the US chemicals industry, with PE exports to Brazil being put on hold. The polyvinyl chloride (PVC) Industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. Focus story by Adam Yanelli Visit the ICIS Logistics – impact on chemicals and energy topic page

03-Oct-2024

HOUSTON (ICIS)–Negotiations have yet to resume between union dock workers and the US Gulf and East Coast ports as a costly strike enters its second day. The International Longshoremen's Association (ILA), representing dock workers at ports from Maine to Texas, and the United States Maritime Alliance (USMX), representing the ports, posted statements to their websites accusing each other of being unwilling to negotiate. “We have demonstrated a commitment to doing our part to end the completely avoidable ILA strike,” USMX said. “Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running. We look forward to hearing from the union about how we can return to the table and actually bargain, which is the only way to reach a resolution.” The ILA responded by saying the USMX offer fails to address the demands of union labor. “They might claim a significant increase, but they conveniently omit that many of our members are operating multi-million-dollar container-handling equipment for a mere $20 an hour,” the ILA said. “In some states, the minimum wage is already $15. Furthermore, our members endure a grueling six-year wage progression before they can even reach the top wage tier, regardless of how many hours they work or the effort they put in.” One of the biggest sticking points remains the union’s steadfast stance against any kind of automation at the ports – full or semi – that would replace jobs or historical work functions. "We will not accept the loss of work and livelihood for our members due to automation,” the ILA said. “Our position is clear: the preservation of jobs and historical work functions is non-negotiable.” FMC OFFERS SERVICES With carriers already announcing congestion surcharges, the US Federal Maritime Commission (FMC) is offering assistance for enforcement and litigation services that individuals and companies could find helpful in seeking relief from current supply chain challenges. FMC regulations require that demurrage and detention fees serve as legitimate financial incentives to encourage cargo movement. Pursuant to these requirements, the FMC will scrutinize any demurrage and detention charges assessed during terminal closures. The FMC advised all regulated entities on 23 September that all statutes and regulations administered by the commission remain in effect during any terminal closures related to the strike. GOVERNMENT INTERVENTION REQUESTED Meanwhile, the American Chemistry Council (ACC) and the Alliance for Chemical Distribution (ACD) continue to request government intervention to end the work stoppage. “We urge the White House to do everything possible to prevent this major shockwave from rippling through the American supply chain and hurting US trade by working with both parties to resume contract negations,” Chris Jahn, ACC president and CEO, said. Jahn noted that about 90% of the waterborne chemical shipments that move in and out of the US flow through the East Coast and US Gulf Coast ports. Eric R Byer, president and CEO of the Alliance for Chemical Distribution (ACD) also urged President Joe Biden to act. “ACD urges the Biden Administration to swiftly intervene to resolve this strike by reopening the ports and getting both sides to reach an agreement to prevent further supply chain disruptions and avoid significant economic consequences,” Byer said. Biden, in a statement released last night, said he supports the collective bargaining process as the best way for workers to get the pay and benefits they deserve and urged USMX to return to the bargaining table with a fair offer. “Ocean carriers have made record profits since the pandemic and in some cases, profits grew in excess of 800% compared to their profits prior to the pandemic,” Biden said. “Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates. It is only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well.” Biden also said his administration will be watching for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board. IMPACTS TO CHEM MARKETS The strike is already affecting the US chemicals industry, with PE exports to Brazil being put on hold. The polyvinyl chloride (PVC) Industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. Focus story by Adam Yanelli Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship.

02-Oct-2024

HOUSTON (ICIS)–Participants in the US chemical industry worry that a prolonged strike by US Gulf and East Coast dock workers will hurt exporters and lead to supply surpluses, and some carriers are already initiating port congestion surcharges that will add increased costs on top of delays to both imports and exports. As expected, dockworkers on the US East and Gulf Coasts went on strike early on Tuesday after labor union International Longshoremen's Association (ILA) rejected the latest wage offer by employers’ group United States Maritime Alliance (USMX). While the US government has said it will not intervene, some analysts, including Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, think government intervention will be required to bring the dispute to an end. “The latest statement by the ILA suggests there is very little prospect of the two sides reaching a mutually agreeable resolution,” Sand said. “To stop trade from entering the US on such a scale for a prolonged period of time is unthinkable so the Government will need to step in for the good of its people and economy.” Kevin Swift, ICIS Senior Economist for Global Chemicals, said the strike could cost the US economy up to $5 billion/day. "This will affect imports from Germany, the Netherlands and other European nations," Swift said. "I think the effect is more on specialty chemicals than resins. Swift said the ultimate disruption and cost to the economy depends on how long the strike lasts. IMPACT TO CHEM MARKETSThe strike is already impacting US polyethylene (PE) exports. Container ships also transport polymers, such as PE and polypropylene (PP), which are shipped in pellets. A PE trader in South America told ICIS that they are halting sales of US material destined for Brazil until additional information is available since they are unable to inform clients of the estimated departure date. According to the trader, some cargoes could be delayed by 30 days. The US is the main origin of PE imports into Brazil. The polyvinyl chloride (PVC) Industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. This could result in a long inventory situation and an increase in days of supply if producers and traders are unable to execute on export transactions due to the port strike. In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage. But this places extra pressure on the rail and trucking industries which will need to move that material to destinations that were previously reached from the US Gulf or the East Coast. Imports of purified terephthalic acid (PTA), used to make PET, that typically come from South Korea and Mexico, could be affected by the strike. Even if some PTA gets delivered on the West Coast, it will still need to be transported to the East Coast where most PET plants are located. CARRIER SURCHARGES Market sources are telling ICIS they are seeing congestion surcharges between $1,000-3,000/FEU (40-foot equivalent unit), with some citing even higher surcharges. Sand said that extreme increases in container costs cited by ILA president Harold Daggett have not been seen yet. In a statement on 30 September, Daggett said carriers are charging $30,000/container. Sand cited Xeneta data, which is based on more than 450 million crowdsourced datapoints, showing average spot rates on the major fronthaul from Asia to US East Coast were at around $7,000/FEU on 1 October. “While average spot rates from north Europe to the US East Coast have increased 50% since the end of August, they are still only $2,800/FEU,” Sand said. Supply chain advisors Drewry also show rates from Asia to the USEC at $6,000/FEU, and rates from Asia to the USWC are at $5,500, although the rate of decline has slowed with more traffic heading that way because of the strike. Liquid chemicals that are largely transported by tankers are unlikely to be affected. But more liquid chemicals are being moved on container ships in isotanks. Focus story by Adam Yanelli Additional reporting by Stefan Baumgarten, Emily Friedman, Bruno Menini, Antulio Borneo and Kelly Coutu Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship carrying cargo on its way to Antwerp Harbour. (OLIVIER HOSLET/EPA-EFE/Shutterstock).

01-Oct-2024

HOUSTON (ICIS)–More than 4 million outages were reported in the southeastern US on Friday after Hurricane Helene made landfall as a powerful Category 4 storm in northwestern Florida. The southeastern US does not have a lot of chemical production. But such widespread power outages, in addition to disruptions caused by flooding, will lower demand for plastics and chemicals more broadly. The power outages are concentrated in the US states of South Carolina, Georgia, Florida and North Carolina, according to the website poweroutage.us. Among the few chemical plants near Helene's landfall site are a crude sulphate turpentine refinery and a crude tall oil (CTO) refinery that Kraton owns in Panama City, Florida. Tall oil is a feedstock fatty acids, renewable diesel and sustainable aviation fuel (SAF). Kraton has not returned requests for comment in regard to its preparations for Helene. Since Helene made landfall, it has weakened into a tropical storm, with maximum sustained wind speeds of 45 miles/hour (75 km/hour), according to the National Hurricane Center. The following map shows its projected path. Source: National Hurricane Center PORT CLOSURESInbound and outbound traffic at Port Tampa Bay ceased ahead of the storm, and the port's shipping channels were closed. Tampa is an important hub for the US fertilizer industry, hosting corporate offices, trading, product storage, shipping and other logistical operations. Other port closures include Panama City, St Joe, St Petersburg, Manatee and Key West on Florida's west coast, as well as Fernandina, Jacksonville and Canaveral on Florida's east coast. ENERGY DISRUPTIONS The following table shows the disruptions to US Gulf production that were caused by Helene, according to the Bureau of Safety and Environmental Enforcement (BSEE). Total % of US Gulf Oil, bbl/day 441,923 25.25% Gas, million cubic feet/day 363.39 19.81% Source: BSEE Total % of US Gulf Platforms evacuated 27 7.28% Rigs evacuated 1 20% Source: BSEE The Gulf of Mexico accounts for 14% of US production of crude oil and 5% of total dry gas production, according to the Energy Information Administration (EIA). RAIL DISRUPTIONS Railroad company CSX planned to close its TRANSFLO terminals in Tampa and Tampa Port on Thursday. Railroad company Norfolk Southern said that customers with shipments moving through the southeast and mid-Atlantic should prepare for delays. RECONSTRUCTION AND CHEM DEMANDHurricane Helene's current path could put $5.64 billion worth of housing at risk to storm surge flooding, an insurance data company said on Wednesday. Nearly 25,000 residential properties in the Tallahassee and Homosassa Springs metropolitan areas are at risk, said CoreLogic. “Helene has the potential to become a once-in-a-generation storm,” said Jon Porter, chief meteorologist for the meteorology firm AccuWeather. It estimates that most of Florida and much of the southeastern US will be exposed to winds reaching 40-60 miles/hour. AccuWeather expects that most of Florida and all of the states of Georgia, South Carolina and North Carolina are at risk for tornados. For hurricanes in general, reconstruction can translate to increased demand for many chemicals and polymers. The white pigment titanium dioxide (TiO2) is used in paints. Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA). Blends of aliphatic and aromatic solvents are also used to make paints and coatings. For polymers, expandable polystyrene (EPS) and polyurethane (PU) foam are used in insulation. Polyurethanes are made of methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI) and polyols. High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes. Unsaturated polyester resins (UPR) are used to make coatings and composites. Vinyl acetate monomer (VAM) is used to make paints and adhesives. Thumbnail shows Helene before it made landfall. Image by National Hurricane Center.

27-Sep-2024

HOUSTON (ICIS)–A quarter of US oil production in the Gulf of Mexico remains shut in as Helene becomes close to becoming a major hurricane. The following table shows the disruptions to US Gulf production that were caused by Helene, according to the Bureau of Safety and Environmental Enforcement (BSEE). Total % of US Gulf Oil, bbl/day 441,923 25.25% Gas, million cubic feet/day 363.39 19.81% Source: BSEE Total % of US Gulf Platforms evacuated 27 7.28% Rigs evacuated 1 20% Source: BSEE Hurricane Helene has maximum sustained wind speeds of nearly 110 miles/hour (175 km/hour), which is 1 mile/hour below becoming a major hurricane. It is on track to make landfall in the Big Bend, a sparsely populated region of northwestern Florida. The following map shows the forecasted path of Helene. Source: National Hurricane Center FLORIDA CHEMS AT RISKHelene could threaten Panama City, Florida, where Kraton operates a crude sulphate turpentine refinery and a crude tall oil (CTO) refinery. Tall oil is a feedstock for the production of fatty acids, renewable diesel and sustainable aviation fuel (SAF). Helene's path is too far east to threaten Pensacola, which is home to some nylon and thermoset resin plants. Helene is moving on the opposite side of Texas and Louisiana in the Gulf of Mexico. Those two states are home to most of the refineries, petrochemical plants and LNG capacity of the US. Operations at those plants will not be threatened by Helene. Helene will not make landfall near Tampa Bay, an important hub for the US fertilizer industry. Tampa hosts corporate offices, trading, product storage, shipping and other logistical operations. Nonetheless, Helene will disrupt operations at the port of Tampa Bay. PORTS CLOSED TO TRAFFIC ALONG EASTERN GULF COASTInbound and outbound traffic has ceased among numerous ports along Florida's Gulf Coast, including Port Tampa Bay, an important entrepot. Tampa is in the region that could see a peak storm surge of 5-8 feet (1.5-2.4 meters), as shown in the following map. Source: National Hurricane Center The following table shows some of the other ports in Florida that are closed. Panama City, Florida Port St Joe, Florida St Petersburg, Florida Manatee, Florida Source: US Coast Guard The following ports are open with restrictions. Pensacola, Florida Mobile, Alabama Source: US Coast Guard RAIL DISRUPTIONS Railroad company CSX plans to close its TRANSFLO terminals in Tampa and Tampa Port on Thursday. Railroad company Norfolk Southern said that customers with shipments moving through the southeast and mid-Atlantic should prepare for delays. RECONSTRUCTION AND CHEM DEMANDHurricane Helene's current path could put $5.64 billion worth of housing at risk to storm surge flooding, an insurance data company said on Wednesday. Nearly 25,000 residential properties in the Tallahassee and Homosassa Springs metropolitan areas are at risk, said CoreLogic. “Helene has the potential to become a once-in-a-generation storm,” said Jon Porter, chief meteorologist for the meteorology firm AccuWeather. It estimates that most of Florida and much of the southeastern US will be exposed to winds reaching 40-60 miles/hour. AccuWeather expects that most of Florida and all of the states of Georgia, South Carolina and North Carolina are at risk for tornados. For hurricanes in general, reconstruction can translate to increased demand for many chemicals and polymers. The white pigment titanium dioxide (TiO2) is used in paints. Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA). Blends of aliphatic and aromatic solvents are also used to make paints and coatings. For polymers, expandable polystyrene (EPS) and polyurethane (PU) foam are used in insulation. Polyurethanes are made of methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI) and polyols. High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes. Unsaturated polyester resins (UPR) are used to make coatings and composites. Vinyl acetate monomer (VAM) is used to make paints and adhesives. Thumbnail photo: Helene. (By the National Hurricane Center) (adds missing world "Gulf" in headline)

26-Sep-2024

HOUSTON (ICIS)–Canadian fertilizer developer Karnalyte Resources announced it will begin a review of its development strategy to evaluate the economic potential of increasing magnesium chloride production at their Wynyard project in Saskatchewan. This effort will be undertaken by developing the magnesium assets at the same time as the development of the potash project. The company said the carnallite, also known as hydrated potassium magnesium chloride, is abundant within their mineral deposit so they need to determine the economic balance of developing carnallite for the co-production of magnesium chloride and potassium chloride. The aim is to significantly increase magnesium chloride production through the application of advanced solution mining technologies. The Government of Canada lists magnesium as one of the nation’s 34 critical minerals and it also appears on the lists in other countries including the US, the EU and Australia. Magnesium is a key mineral in the clean technologies and advanced manufacturing value chain while magnesium chloride serves as a key raw material in the production of various chemicals used in high-tech applications such as semiconductor manufacturing and in industries including agriculture and pharmaceuticals. “In light of the increasing importance of magnesium as one of the building blocks for the green and digital economy, we are reevaluating our strategy and we believe we should review the inclusion of concurrent and optimized magnesium and potash deposit development in our plans for the benefit of all stakeholders,” said Danielle Favreau, Karnalyte Resources CEO. The company said it plans to make progress on its technical report through the remainder of the year, which is a key precursor to any mine construction. It expects to complete the study on the review of its development strategy by the first quarter of 2025. Wynyard is one of two projects Karnalyte Resources is advancing with planned phase 1 production calculated at 625,000 tonnes/year of high-grade granular potash with two subsequent phases of 750,000 tonnes/year from each phase. The company noted that all environmental permits remain valid with preliminary detailed engineering complete and that the existing offtake agreement with Gujarat State Fertilizers & Chemicals Limited remains in effect.

25-Sep-2024

SINGAPORE (ICIS)–China’s petrochemical futures markets surged on Tuesday following announcement of fresh measures to rev up activity in the world’s second-biggest economy. As the close of trade on Tuesday, polyvinyl chloride (PVC) was leading the charge in China’s domestic futures market, with a 3.3% increase, with seven others also posting strong gains. Product Prices at close of trade (CNY/tonne) % change from 23 Sept Linear low density polyethylene (LLDPE)                                   7,969 1.2% Polyvinyl chloride (PVC)                                   5,388 3.3% Ethylene glycol (EG)                                   4,459 1.9% Polypropylene (PP)                                   7,360 1.4% Styrene monomer (SM)                                   8,559 0.7% Paraxylene *                                   7,012 2.4% Purified terephthalic acid (PTA)*                                   4,930 2.2% Methanol*                                   2,396 1.6% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange Shares of major Chinese chemical producers traded in Shanghai and Shenzhen bourses also increased, welcoming the central bank’s economic measures. Company  Closing prices on 24 September (CNY/share) % change from 23 Sept Hengli Petrochemical 13.12 5.4% PetroChina 8.36 4.4% Rongsheng* Petrochemical 8.84 4.1% Satellite Chemical* 16.08 7.7% Sinopec 6.76 4.3% Wanhua Chemical 78.96 4.4% Sources: Shanghai and *Shenzhen bourses The Shanghai composite index surged by 4.15% to close at 2,863 on Tuesday. It was the index’s biggest single-day rally since 6 July 2020. People’s Bank of China (PBoC) governor Pan Gongsheng announced in a press conference the new economic measures, which include cuts on banks’ reserve requirement ratio (RRR), key policy rate and mortgage rates to revive the economy. China's economic weakness has been a major drag on overall sentiment across the equities and commodities markets this year. “The move [basket of stimulus by China’s central bank] is bold by historical standards and came earlier than we had expected,” said Betty Wang, lead economist at UK-based Oxford Economics, in a research note on Tuesday. “The policy measures include cuts to the policy rate and reserve requirement ratio (RRR), adjustment to mortgage lending and policy support to stock market,” Wang said. “The continuous weakness in domestic economy and the outsized rate cut from the [US] Federal Reserve were the likely catalysts behind the PBoC's latest move,” the economist said. This is the first time since the COVID-19 pandemic that the central bank offered a combination of rate cuts, RRR cuts, and structural monetary policies as stimulus measures. A 20-basis point (bps) interest rate cut in the 7-day reverse repurchase (repo) rate and a broad-based 50bps RRR cut are also rare, Oxford Economics noted. Focus article by Fanny Zhang ($1 = CNY7.04) Thumbnail image: At a container terminal at Lianyungang Port in east China's Jiangsu Province, 18 September 2024. (Shutterstock)

24-Sep-2024

SAO PAULO (ICIS)–The Brazilian government’s committee on foreign trade Gecex-Camex approved late on Wednesday an increase in import taxes on more than 80 chemical and fertilizers products, with the new rate up to 20% for most materials. Among some of the products affected are widely used chemicals such polypropylene (PP), polyethylene, (PE), polyvinyl chloride (PVC), polystyrene (PS), and polyethylene terephthalate (PET). See bottom list for details. Previous rates stood between 7.6% and 12.6%. The new rates will apply from October and are valid for one year. The decision is yet to be approved by Mercosur, the trading common area formed by Argentina, Paraguay, and Uruguay, as well as Brazil, which is the dominant economy in Mercosur. The cabinet, thus, gave in partly to the pressure by chemical producers in Brazil. Earlier this year, individual companies as well as the trade group representing producers, Abiquim, had proposed to increase tariffs in more than 100 chemicals. The decision was widely anticipated by analysts, and it is expected to immediately prop up earnings for some of Brazil’s largest producers such polymers major Braskem or chlor-alkali major Unipar. Brazil has been the recipient of large amounts of imports from Asia and, to a lesser extent, the US which have greatly dented domestic producers’ market share. Sectors that opposed increasing tariffs, including plastic transformers represented by Abiplast, expressed their disappointment after Wednesday’s measure by Gecex-Camex. “[The decision was taken even though] Abiplast and other trade groups have exhaustively demonstrated to the government the harmful impacts of increases in import tariffs on raw materials,” said Jose Ricardo Roriz Coelho, president of Abiplast, in a letter to the trade group’s members seen by ICIS. “We will continue to fight to ensure that these unreasonable measures are reversed.” Product Current Tax Rate Proposed Tax Rate Plaintiff Phosphoric acid with iron content less than 750 ppm 9% 17.5% Abiquim Sodium hydrogen carbonate (bicarbonate) 9% 20%* Abiquim Isobutyl alcohol (2-methyl-1-propanol) 10.80% 20% Abiquim Isobutyl alcohol (2-methyl-1-propanol) 10.80% 20% Elekeiroz Inc. Phenol (hydroxybenzene) and its salts 7.20% 12.6%* Abiquim Phenol (hydroxybenzene) and its salts 7.20% 12.6%* Rhodia Brasil SA Butanone (methyl ethyl ketone) 10.80% 20% Abiquim Ethyl acetate 10.80% 20% Abiquim n-butyl acetate 10.80% 20% Abiquim n-butyl acetate 10.80% 20% Rhodia Brasil SA Other saturated acyclic monoalcohol acetates, c atom <= 8 10.80% 20% Abiquim Methacrylic acid methyl esters 10.80% 20% Abiquim Methacrylic acid methyl esters 10.80% 20% Unigel Holdings Inc. Adipic acid 9% 20% Abiquim Adipic acid 9% 20% Rhodia Brasil SA Maleic anhydride 10.80% 20% Abiquim Maleic anhydride 10.80% 20% Elekeiroz Inc. Fumaric acid, its salts and esters 10.80% 20% Abiquim Dioctyl orthophthalates 10.80% 20% Abiquim Dioctyl orthophthalates 10.80% 20% Elekeiroz Inc. Dinonyl or didecyl orthophthalates 10.80% 20% Abiquim Hexamethylenediamine and its salts 10.80% 20% Abiquim Monoethanolamine and its salts 12.60% 20% Abiquim Other anionic organic surface-active agents, whether or not put up for retail sale, not classified under previous codes 12.60% 20% Abiquim Polyethylene with a density of less than 0.94, with filler 12.60% 20% Abiquim Polyethylene with a density of less than 0.94, without filler 12.60% 20% Abiquim Other unfilled polyethylenes, density >= 0.94, in primary forms 12.60% 20% Abiquim Other copolymers of ethylene and vinyl acetate, in primary forms 12.60% 20% Abiquim Copolymers of ethylene and alpha-olefin, with a specific gravity of less than 0.94 12.60% 20% Abiquim Unfilled polypropylene in primary form 12.60% 20% Abiquim Propylene copolymers, in primary forms 12.60% 20% Abiquim Expandable polystyrene, unfilled, in primary form 12.60% 18% Abiquim Other styrene polymers, in primary forms 12.60% 20% Abiquim Other styrene polymers, in primary forms 12.60% 20% Unigel Holdings Inc. Polyvinyl chloride, unmixed with other substances, obtained by suspension process 12.60% 20% Abiquim Polyethylene terephthalate of a viscosity index of 78 ml/g or more 12.60% 20% Abiquim Polyethylene terephthalate of a viscosity index of 78 ml/g or more 12.60% 20% Alpek Polyester Pernambuco SA Other unsaturated polyethers, in primary forms 12.60% 20% Abiquim Ex – Surfactant polymer class preparation, silicone free 12.60% 12.60% Abiquim Ex – Solvent-free modified polyester class preparation 12.60% 12.60% Abiquim White mineral oils (vaseline or paraffin oils) 3.60% 35% Abiquim Silicon dioxide obtained by chemical precipitation 9% 18% Abiquim Silicon dioxide obtained by chemical precipitation 9% 17% Rhodia Brasil SA Other silicon dioxides 0% 18% Abiquim Commercial ammonium carbonates and other ammonium carbonates 9% 18% Abiquim Styrene 9% 18% Abiquim Styrene 9% 18% Unigel Holdings Inc. Butan-1-ol (n-butyl alcohol) 10.80% 20% Abiquim Butan-1-ol (n-butyl alcohol) 10.80% 20% Elekeiroz Inc. Propylene glycol (propane-1, 2-diol) 10.80% 20% Abiquim Dipropylene glycol 12.60% 20% Abiquim Triacetin 10.80% 20% Abiquim Triacetin 10.80% 20% Denver Specialty Chemicals 2-Ethylexanoic acid (2-ethylexoic acid) 10.80% 20% Abiquim 2-Ethylexanoic acid (2-ethylexoic acid) 10.80% 20% Elekeiroz Inc. Salts and esters of adipic acid 10.80% 20% Abiquim Other esters of orthophthalic acid 10.80% 20% Abiquim Other esters of orthophthalic acid 10.80% 20% Elekeiroz Inc. Phthalic anhydride 10.80% 20% Abiquim Phthalic anhydride 10.80% 20% Petrom Petrochemicals Mogi das Cruzes S/A Ammonium nitrate, even in aqueous solution 0% 15% Abiquim Pigments and preparations based on these pigments 12.60% 20% Abiquim Linear alkylbenzene sulfonic acids and their salts 12.60% 23% Abiquim Organic surface-active agents, non-ionic 12.60% 23% Abiquim Alkylbenzene mixtures 10.80% 20% Abiquim Stearic acid (industrial monocarboxylic fatty acid) 5.40% 35% Abiquim Stearic alcohol (industrial fatty alcohol) 12.60% 20% Abiquim Sodium methylate in methanol 12.60% 20% Abiquim Other ethylene polymers, in primary forms 12.60% 20% Abiquim Filled polypropylene, in primary form 12.60% 20% Abiquim Other polystyrenes in primary forms 12.60% 20% Abiquim Other polystyrenes in primary forms 12.60% 20% Unigel Holdings Inc. Polyvinyl chloride, unmixed with other substances, obtained by emulsion process 12.60% 20% Abiquim Polymethyl methacrylate, in primary form 12.60% 20% Abiquim Polymethyl methacrylate, in primary form 12.60% 20% Unigel Holdings Inc. Other polyether polyols, in primary forms 12.60% 20% Abiquim Other polyesters in liquids and pastes 12.60% 20% Abiquim Other polyurethanes in liquids and pastes 12.60% 20% Abiquim Carboxymethyl cellulose with content >=75%, in primary forms 12.60% 20% Abiquim Carboxymethyl cellulose with content >=75%, in primary forms 12.60% 20% Denver Specialty Chemicals Styrene-butadiene rubber (SBR), food grade according to the Food Chemical Codex, in primary forms 10.80% 22% Abiquim Acrylonitrile-butadiene rubber in sheets, plates, etc. 10.80% 35% Abiquim Latex of other synthetic or artificial rubbers 10.80% 35% Abiquim  

19-Sep-2024