Engineering plastics (POM, PBT)

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Discover the factors influencing engineering plastics (POM, PBT) markets

Production and trade of both polyacetal (POM) and polybutylene terephthalate (PBT) is active across Asia and Europe. These are engineered thermoplastics used in high volumes in the automotive sector as well as for a range of manufactured household products such as showerheads and irons. As a result, POM and PBT prices and market activity is sensitive to fluctuations in consumer demand from downstream markets.

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Engineering plastics (POM, PBT) news

Germany's chemical industry faces weak domestic demand and persistent structural issues – VCI

LONDON (ICIS)–Although Germany’s chemical-pharmaceutical sales and production are forecast to increase this year, after sharp declines in 2023, domestic demand remains weak and the industry’s structural problems persist, according to Henrik Meincke, chief economist of chemical producers’ trade group VCI. Weak domestic industrial demand Pre-crisis chemical production levels not in sight Low capacity utilization reflects structural problems VCI’s 2024 forecast: Sales: +1.5% Export sales: +3.5% Domestic sales: -1.5% Chemical producer prices: -2.0% Production: +3.5% Production, excluding pharmaceuticals: +5.0% Employment: flat DOMESTIC DEMAND In the 2024 first quarter, domestic chemical-pharmaceutical sales fell 9.3% year on year, Meincke told participants in a webinar presentation that accompanied VCI’s recent Q1 report. Excluding pharmaceuticals, the decline was even worse, at 11.3%, as most domestic customer industries curtailed production: Building and construction: -1.4% Plastics products sector: -3.6% Metal production: -2.3% Metal products sector: -6.4% Autos: -8.2% Food: +1.3% Glass and ceramics: -11.3% Paper: -0.8% Printing products: -7.2% Furniture: -10.9% Machinery: -7.1% Electrical equipment: -14.6% CHEMICAL PRODUCTION Despite a 5.4% year-on-year increase in 2024 first-quarter chemicals production (excluding pharma), production in the chemicals industry’s major segments remains below its levels from 2018, Meincke noted. Production declines, from H2 2018 to H2 2023, by segment: Total chemicals: -19.8% Inorganic chemicals: -21.9% Petrochemicals: -24.1% Polymers: – 22.5% Fine and specialty chemicals: -16.8% Soap and detergents: -17.9% In fact, Germany’s chemical production has fallen back to its level from 1995 and the gap between the country's overall production and chemical production has widened, Meincke said. Production trends (red line: overall goods producing sector; blue line: chemicals; five-month moving average; 2021 = 100): (source: VCI) STRUCTURAL PROBLEMS The main reasons for the decline in Germany’s chemicals production include high costs for labor, raw materials and energy, bureaucracy, a weak economy and a loss in international price competitiveness, Meincke said. Although electricity and natural gas prices have somewhat normalized, they were still much higher than in 2019 and much higher than in countries such as China, the US or France – making it hard for Germany’s energy-intensive industry to compete internationally, he said. The low capacity rates in the chemical industry reflect its “extremely difficult” situation, Meincke said. Chemical-pharmaceutical capacity utilization in the 2024 first quarter was at 78.1% – a 10th consecutive quarter in which the industry is running “significantly” below normal rates of 82-85%, he said, adding that there were no signs of a significant improvement. As the under-utilization continues quarter after quarter, companies will react by not restarting idled capacities but rather shift investments abroad, the economist said. The crisis was so severe that it has triggered “structural effects”, he said. Eric Heymann, senior economist at Deutsche Bank Research, who also presented at the webinar, spoke of an “investment leakage”, meaning that German companies will avoid making big energy-intensive investments in the country but rather invest abroad. Heymann said one needed to distinguish between Germany’s problems as a location for industrial production and German industrial companies, which may invest in Germany or elsewhere. Although domestic sales are forecast to fall this year, increased export sales should more than offset this and VCI therefore forecasts a 1.5% increase in total 2024 sales. Production is expected to rise 3.5% in 2024. Production excluding pharmaceuticals should rise 5.0%, which would follow a 10.4% decline in 2023. However, despite the expected year-on-year increase, production will remain far from pre-crisis levels, the industry’s structural problems will persist, and companies are not expecting a recovery any time soon, Meincke said. Focus article by Stefan Baumgarten Thumbnail photo of Steam cracker II at BASF's Ludwigshafen site; source: BASF

22-May-2024

INSIGHT: China's industrial activity gathers pace but lopsided April data clouds outlook

SINGAPORE (ICIS)–China's industrial output grew by 6.7% year on year in April, signalling a further strengthening of its manufacturing sector, but weaker retail sales and bleak property data suggest that its overall growth momentum remains weak. The April industrial output reading accelerated from the 4.5% expansion in the previous month, data from the National Bureau of Statistics (NBS) showed. The strong April data brought year-to-date growth to 6.3% year on year, and industrial activity looks like it will be one of the main growth drivers in the second quarter of the year. The transition toward high-tech manufacturing continues to be one of the major driving forces for China's industrial output. High-tech manufacturing grew 11.3% year on year in April, and 8.4% over the first four months of the year, while auto production also rebounded strongly, up to 16.3% in April up from 9.4% in March. The upbeat manufacturing outlook follows earlier April data which showed the country's exports and imports both returning to growth in April after contracting in the previous month, while the official April manufacturing purchasing manager's index (PMI) remained in expansionary territory at 50.4 in April from 50.8 in March. Despite a partial retreat after peaking during the pandemic, China's share of global goods exports has recently rebounded, reaching 14.7% in the second half of 2023, up from 14% in the first half and exceeding pre-pandemic levels of 13.3% in 2019, according to Christine Peltier, an economist at French bank BNP Paribas. In addition, China’s recent market share gains have been recorded across a wide range of products, including low value-added consumer goods such as furniture and toys, organic chemicals and plastics, vehicles, electrical and electronic machinery and equipment and parts thereof, she noted. They have been particularly impressive for electric vehicles, with export volumes multiplied by 7 between 2019 and 2023, solar panels, exports multiplied by 5 between 2018 and 2023, and lithium batteries. These three products accounted for around 4% of China's total exports in 2023, about three times their 2019 share. The flood of Chinese products has given rise to growing concerns among industrial entrepreneurs and governments in the US, the EU and now emerging countries, and is likely to lead to new trade confrontations in the coming months, Peltier added. RISKS STILL OUTWEIGHING POSITIVES"While we acknowledge the resilience in some parts of the [China] economy amid this economic rebalancing, we believe these are insufficient to outweigh the drags from the property woes and geopolitical headwinds," Nomura Global Markets Research said in its Global Economic Outlook Monthly report. "Export growth is holding up steadily for now, thanks to cheap prices and resilient external demand, but could face further headwinds as countries launch anti-dumping investigations," it said. Although China's export growth has been strong this year due to the global tech upswing, resilient external demand, and competitive prices, rising trade tensions may hinder the export sector and prompt more supply chain relocations away from China in the long term. US President Joe Biden is increasing tariffs on $18 billion worth of imports from China, including electric vehicles (EVs), semiconductors, batteries, and other goods. The White House stated that this decision is a response to unfair trade practices and aims to protect US jobs. In response, China's Ministry of Commerce announced that it "will take resolute measures to safeguard its own rights and interests." PRIVATE CONSUMPTION REMAINS WEAK April's data revealed that retail sales growth fell to a new post-pandemic low, further indicating a shift away from consumption as a primary growth driver for 2024. Retail sales growth fell to 2.3% year on year in April, slowing from the 3.1% expansion in March, bringing the year-to-date growth rate to 4.1%. The largest drag to retail sales in April was tied to automotive sales, which declined by 5.6% year on year, and the data may add fuel to the fire for the critics of China's overcapacity in this sector. Another major category, household appliances, also slowed to 4.5% year on year. As trade-in policies take effect later in the year, these categories could see some recovery, Dutch banking and financial information services firm ING said in a note. "Consumption growth is likely to remain moderate through most of 2024, as consumer confidence remains downbeat amid tepid wage growth and the lingering negative wealth effects from the past several years of declining asset prices," it said. "A possible bottoming out of prices would also take some time before translating to stronger consumer activity." HOUSING SECTOR CONTINUES TO SLUMPThe persistent weakness in China's property sector, accounting for roughly a quarter of its economy, continues to weigh on overall economic growth. April data showed that in the 70-city sample from the NBS, property prices continued to slide. New home prices fell by 0.58% month on month in April, and secondary market prices fell by 0.94%, which were the steepest sequential declines since the start of the housing slump in 2021. At the city level, 69 out of 70 cities continued to see declining prices in the secondary home market in April, unchanged from March. Although new home prices rose in 6 out of 70 cities, including Shanghai and Tianjin, the new home market's performance was weaker in April compared to March when 11 out of 70 cities saw price increases. Separately, property investment fell by 9.8% year on year in January-April, extending the 9.5% contraction in January-March, NBS data showed on Friday. China is now exploring a bold plan to revive its struggling property market by having local governments purchase millions of unsold homes. Chinese authorities on 17 May pledged new support to enable state-owned enterprises to purchase unsold apartments, aiming to provide developers with more funding to complete pre-sold properties. The People's Bank of China also on 17 May eliminated the minimum mortgage interest rate and reduced the minimum down payment ratio for both first-time and second-time home buyers. "A recent flurry of supportive policy announcements including removing purchase restrictions, housing "trade-in" policies, and plans to directly purchase housing units for social housing programmes, has boosted market optimism that we will see a bottoming out of housing prices sometime this year," ING said. As these policies roll out in the coming months and help alleviate downward pressure on property prices, data indicates that homebuyers may still remain cautious and on the sidelines until a trough is established, it said. "While it is arguably one of the most important signs of a stabilization of sentiment in China, it is worth noting that a potential bottoming out of housing prices would only be the first step; elevated housing inventories will likely keep real estate investment suppressed for some time yet, and the property sector will remain a major drag on the economy this year," ING added. Recent announcements from local governments, including the Dali government of Yunnan Province, have expressed intentions to facilitate the acquisition of existing homes for conversion into public housing, Singapore's OCBC Bank said in a note. This move is seen as a way to not only address the housing surplus but also potentially stimulate economic growth by increasing public spending and boosting the construction sector. Moreover, China's Finance Ministry announced on 13 May a plan to issue 1 trillion yuan of ultra-long special bonds over a period of six months, ending in November. This moderate issuance pace marks only the fourth time in 26 years that China has employed this type of debt for fiscal stimulus, allowing for targeted spending. China has set an ambitious economic growth target of around 5% this year, a level which analysts are cautiously optimistic about. The world's second-largest economy expanded by 5.3% in the first quarter of this year. Thumbnail photo: A man rides a scooter next to a construction site of residential buildings in China (Source: ANDRES MARTINEZ CASARES/EPA-EFE/Shutterstock) Insight by Nurluqman Suratman

21-May-2024

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 17 May. IPEX: Global spot IPEX slips as decline in Asia offsets gains in other regions, crude The global spot ICIS Petrochemical Index (IPEX) slipped 0.1%, as a fall in the northeast Asia index failed to offset gains in other regions and a rise in crude oil prices. Univar sees scope for both industrial and specialty chemicals M&A – CEO Chemicals distributor Univar Solutions will target both industrial and specialty chemicals and ingredients acquisitions as it seeks to be a consolidator in a still-fragmented market, its CEO said. Brazil’s floods-hit state plastics sector under ‘hypothesis’ operations could normalize end May – trade group Plastics producers in Rio Grande do Sul remain shut following the floods but are working under the “hypothesis” operations could normalize by the end of May, a full month after the floods hit the Brazilian state, trade group Abiplast said. US home builder confidence dives as mortgage rates exceed 7% US builder confidence in the market for newly built single-family homes fell sharply in May as higher mortgage rates “hammer” confidence, the National Association of Home Builders said on Wednesday. Chemical cycle has bottomed and now ‘beginning to turn’ – Dow CEO The global chemical cycle has bottomed out and is starting to turn higher, with a higher degree of confidence in a sustainable recovery ahead, said the CEO of Dow. Houston storm disrupts chems, knocks power out for thousands Powerful thunderstorms in Houston and the Gulf Coast disrupted operations at chemical plants while leaving more than 700,000 without power as of Friday.

20-May-2024

Europe top stories: weekly summary

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 17 May. Europe PET/PTA industry on high alert as freight costs soar Another shock to the logistics system is rippling through the European polyethylene terephthalate (PET) value chain but the impact is only so far just touching the surface. Europe oxo-alcohol spot prices face pressure from growing supply Prices in the European oxo-alcohols spot market were stable to lower this week as there is now plenty supply of all grades. IEA cuts 2024 crude forecast as OECD Q1 demand slips into contraction The International Energy Agency (IEA) on Wednesday cut its expectations for global crude oil demand growth as demand from the OECD shifted into contraction territory in Q1 and as refinery margins continued to slump into the spring period. Non-OPEC+ crude supply growth to slip in 2025, Latin America to drive non-OECD output – OPEC Increases in crude oil supplies from outside the OPEC+ bloc of countries is expected to decline slightly year on year in 2025, with the US and Canada expected to remain the backbone of OECD production increases and Latin America driving the rest of the world, according to OPEC. IPEX: Global spot IPEX slips as decline in Asia offsets gains in other regions, crude The global spot ICIS Petrochemical Index (IPEX) slipped 0.1%, as a fall in the northeast Asia index failed to offset gains in other regions and a rise in crude oil prices.

20-May-2024

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

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

17-May-2024

VIDEO: UK C flake prices rise but wider market enters stable period

LONDON (ICIS)–Senior editor for recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: UK colourless flake prices rise for May Eastern Europe blue bale, colourless flake prices down Wider market entering a more stable period for now

17-May-2024

BLOG: Chemicals, sustainability and the new industrial revolution

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

17-May-2024

INSIGHT: Q1 2024 US imports of plastic scrap remain strong on cost savings opportunities

HOUSTON (ICIS)–US plastic scrap trade continues to show robust import activity amid flat export volumes in the first quarter. Polyethylene terephthalate (PET) plastic scrap in particular continues to see strong growth in import and export volumes despite domestic recyclers citing only moderate-to-weak demand. This is likely due to the wide window of arbitrage for recycled flake and pellet resin into the US. On the other hand, US PET bale prices have minimally improved following last year's market crash, creating export opportunities to other global destinations. US remains a net importer of plastic scrap US PET scrap imported increased 88% Q1 2024 vs Q1 2023 US PET scrap exported increased 33% Q1 2024 vs Q4 2023 Q1 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915 – remain strong, having dropped only 2% quarter on quarter, but having jumped 38% year on year when comparing with Q1 2023. Exports on the other hand were nearly identical quarter on quarter, having leveled off over the last several quarters around 100,000 tonnes. US plastic scrap imports totaled 127,176 tonnes in Q1 2024, marking it the strongest first quarter in the last 10 years, and only the second strongest quarter ever, following Q4 of last year. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and now also flake material. PET SCRAP IMPORTS CONTINUE RECORD PACEPET in particular continued to see growth in imported scrap volumes, increasing 88% year on year. PET scrap now constitutes nearly 50% of all US imported plastic scrap, followed by the "other" plastic scrap category at 29% and polyethylene (PE) scrap at 14%. Overall plastic scrap imports from Mexico continued to drop, down both year on year and quarter on quarter, largely driven by declines in PET scrap imports. Canada on the other hand increased year on year but declined quarter on quarter with the broader volume trend. Together, plastic scrap coming from Canada and Mexico continues to constitute nearly half (46%) of US plastic scrap imports. Material from Thailand comes in as the third largest region for US plastic scrap imports at 7% of the total volume. When considering just PET scrap, Thailand continued their strong growth trajectory with nearly identical volumes to Q4 2023. US PET scrap imports from Thailand in Q1 2024 increased 82% year on year. Despite this growth, Canada still sends the largest volume of PET scrap to the US at 11,960 tonnes in Q1 2024. When considering other countries, PET imports from Asian-based countries now makes up over 40% of the total PET scrap import volume, passing up Canada and Mexico at a combined 21%. Market participants confirm they have seen a notable rise in imported recycled polyethylene terephthalate (R-PET) activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor and facility costs in light of cheaper ocean freight rates. Though, other regions may not always be in a cost-competitive position, as most recently seen in South American countries like Peru and Colombia, where local bale prices have increased significantly, while US feedstock prices remain relatively stable. Supporting the increase in imported scrap plastic, US recyclers who continue to have strong order volumes were heard to be supplementing their operations with imported feedstock. Several recyclers now purchase low-cost spot or imported R-PET flake to process into their food-grade pellet product and redirect their internally produced flake from high-cost domestic bale feedstock to sell directly to customers. This in turn has alleviated pressure from US PET bales, thus enabling price stability for pellet material which is formulated to US bale feedstock costs. In the long term, the US will seek imports of bale or flake feedstock not just due to the cost driver but to feed growing plastic recycling capacities amid stagnant plastic collection rates domestically. PET SCRAP EXPORTS TO MEXICO ACCELERATEUnlike many other polymer types which continue to see declining volumes following the Chinese National Sword and Basel Convention adoption several years ago, exports of PET scrap have increased, as many global regions with growing R-PET capacities see a cost-play opportunity. PET scrap exports, which could include PET bales, rose 33% quarter on quarter and 21% year on year, coming in at 21,662 tonnes in Q1 2024. Specifically, exported PET scrap to Mexico increased 38% year on year, making up 61% of all US PET scrap exports. At present, aggressive buying activity from Mexican recyclers continues to drive up West Coast PET bale prices. Exports to Mexico have always made up a small portion of US PET bale sales from southern California or states like Texas, though the current activity has been notably strong. PE SCRAP TRADE REMAINS ROBUSTPE continues to be a leading polymer type for US plastic scrap exports, coming in at 35,359 tonnes in Q1 2024. Of that volume, India is the largest destination at 25%, followed by Malaysia and Canada tied at 16%. On the other hand, PE scrap imports show mixed trends. While Canada and Mexico continue to make up nearly 75% of imported PE scrap volumes, US imports from Mexico increased 24% quarter on quarter. On the other hand, imports from Canada decreased 40% quarter on quarter. This time last year, India did not export any PE scrap to the US, and now is the third largest per Q1 data.

14-May-2024

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

HOUSTON (ICIS)–The container ship that essentially closed the Port of Baltimore on 26 March after it struck the Francis Scott Key Bridge, causing its collapse, is set to be moved now that the mangled remnants of the span was removed from the ship’s bow with controlled blasts on 13 May. The Key Bridge Response Unified Command (UC) used precision cuts made with small charges to remove a large section of the bridge from the Dali, which will now be refloated and moved to another part of the port. While not a big hub for chemical imports/exports, the closure of the port had some ripple effects for logistics in the region. US-based catalyst producer WR Grace said operations at its Curtis Bay Manufacturing site, located to the northwest of the collapsed bridge, have been unaffected despite its proximity to the accident site. Chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. But Baltimore is the largest US port for handling exports and imports of vehicles and farm equipment. Since opening a fourth temporary channel into the port earlier this month, 171 commercial vessels have transited the waterway, including five of the vessels that were trapped inside the port. The MSC Passion III entered the port on 29 April, according to vesselfinder.com, making it the first container ship to enter the port since the accident. There are two container ships and a roll-on, roll-off (RoRo) vessel – designed to carry wheeled cargo – in the port on 14 May, according to vesselfinder.com. The US Army Corps of Engineers (USACE) is aiming to reopen the permanent, 700-foot-wide by 50-foot-deep federal navigation channel by the end of May, restoring port access to normal capacity. Container ships have been rerouting to other East Coast ports.

14-May-2024

Brazil’s floods-hit state plastics sector under ‘hypothesis’ operations could normalize end May – trade group

SAO PAULO (ICIS)–Plastics producers in Rio Grande do Sul remain shut following the floods but are working under the “hypothesis” operations could normalize by the end of May, a full month after the floods hit the Brazilian state, trade group Abiplast said. As such, they have made calculations for losses in revenue during a month, since 29 April when the floods started until the end of May. According to the trade group, the estimated impact on plastics producers in the state could come up to Brazilian reais (R) 680 million ($132 million), or an estimated daily impact of R$23 million since the floods started on 29 April. Rio Grande do Sul and its petrochemicals hub in Triunfo, near the city of Porto Alegre, is home to 40% of Brazil’s polyethylene (PE) and polypropylene (PP) production capacities. Despite the end of May hypothesis, a spokesperson for the trade group conceded that as things stand – with hundreds of roads still blocked and workers unable to turn up for duty – to set a date for restart of operations would be premature, however. “Plastics transformers’ plant have stopped …The [estimated costs would include the] costs of potential renovations and recovery of assets in the areas degraded,” said Abiplast. “The main plastic products could also suffer price increases if there is an increase [in selling prices] by manufacturers.” Several petrochemicals companies based at the Triunfo production hub, near the state’s largest city of Porto Alegre, declared force majeure last week, including Brazil’s polymers major Braskem, Innova and Arlanxeo. Thai major Indorama’s subsidiary in Brazil said to ICIS it had suspended operations. Meanwhile, fertilizers players have said to ICIS demand could be hit considering the state’s prowess within Brazil’s large agricultural sector. Analysts at S&P Global have also said fertilizers could be greatly hit, although they said petrochemicals could be spare from a large impact if the situation normalizes in coming days or weeks, at most. TRIUNFO: KEY TO PLASTICSAccording to figures by Abiplast, Triunfo has production capacities of 740,000 tonnes/year for PP, and of 1.2 million tonnes/year for PE, with a large chunk of that belonging to Braskem, for whom the Triunfo facilities represent 30% of its production capacity in Brazil. Braskem is the sole manufacturer of polyethylene (PE) and polypropylene (PP). Its market shares in 2023 were about 56% and 70%, respectively, according to figures from the ICIS Supply and Demand Database. Brazil’s PP capacity is nearly 2 million tonnes/year, while PE capacity is about 3 million tonnes/year, of which 41% is high density polyethylene (HDPE), 33% is linear low density polyethylene (LLDPE) and 26% is low density polyethylene (LDPE). The 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. The company said last week it was confident it will be able to deliver material from its other sites in the country, but sources have pointed out some of the specialized PE grades are only produced at Triunfo, and feared a hit to supply and increasing prices if the disruption in Rio Grande do Sul prolongs. According to Abiplast, there are 1,428 plastic processing and recycling companies in Rio Grande do Sul, the second largest state in Brazil in number of plastic processing companies, behind Sao Paulo’s 5,200 companies. The state’s plastics sector employs 33,100, added the trade group. Their sales in 2023 stood at R8.2 billion, or 7.1% of the total revenue posted by Brazilian plastics processing industry of R117 billion. The tragedy has consumed the Brazilian government since the second week of the floods – after a rather slow response during the first days. Some analysts have described this as Brazilian President Luiz Inacio Lula da Silva’s ‘Katrina moment’ as a reference to the poor handling of the Hurricane Katrina in the US in 2005 by former President George W Bush. Additional reporting by Bruno Menini Front page picture: A sign in Sao Paulo calling residents to collaborate in the floods relief effort Source: Jonathan Lopez/ICIS 

14-May-2024

Events and training

Events

Build your networks and grow your business at ICIS’ industry-leading events. Hear from high-profile speakers on the issues, technologies and trends driving commodity markets.

Training

Keep up to date in today’s dynamic commodity markets with expert online and in-person training covering chemicals, fertilizers and energy markets.

Contact us

In today’s dynamic and interconnected chemicals markets, partnering with ICIS unlocks a vision of a future you can trust and achieve. Our unrivalled network of chemicals industry experts delivers a comprehensive market view based on trusted data, insight and analytics, supporting our partners as they transact today and plan for tomorrow.

Get in touch to find out more.

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