Energy

HOUSTON (ICIS)–Woodside Energy has confirmed that it experienced an incident on 3 October at the Beaumont Clean Ammonia site in Texas, which resulted in the death of an employee of one of fertilizer producer OCI’s construction contractors. In a statement, Woodside said that the incident occurred at approximately 8:30 am US central time at the Texas facility it recently acquired with construction efforts being managed by OCI. The company did not provide further details of the event other than to say the incident occurred during work activity being carried out at the site. It added that no one else was harmed. Woodside said that senior management was headed to the ammonia site and that a full investigation will be initiated. Currently a stand down of all work at the site is now in place. “This is a very sad day, and I offer my deepest sympathy to our colleague’s family, friends and workmates. The safety of our workforce is always our top priority, and we are providing full support to OCI and its contracting company,” said Meg O’Neill Woodside Energy CEO. “We are taking steps to understand the circumstances around this tragic event and are working closely with relevant authorities and regulators, OCI and the contractor company.” For its part, OCI responded by saying “we don’t provide details or commentary on start/stops at our production sites.”

04-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)–Fertilizer developer American Potash announced the US Bureau of Land Management (BLM) has approved their plan of operations at the Green River project in Utah, including issuing 11 prospecting permits and authorizing four exploratory drill holes. The company now has federal potash exploration permits and has a total of 7 exploratory drill holes authorized and is positioned for confirmation drilling, with expectations that will validate a high-grade potash potential estimated to be between 600 million to 1 billion tonnes of sylvinite. Another outcome is American Potash intends to establish an initial resource for not only potash but also lithium and potential by-products. The project is located 20 miles northwest of Moab, Utah, within the state’s Paradox Basin, which is one of only eight designated potash Super Basins globally with a long history of potash production. The company said recent development work has also validated the location’s potential as one of the largest domestic sources of lithium in the US. “This is a huge step for the company and the culmination of a process lasting several years. It positions the company to be able to drive forward with its business plan to confirm and validate historic data and targets, and to leverage the benefit of nearby production and neighboring development work, through the drill-bit,” said Simon Clarke, American Potash president and CEO. “We now have complete coverage for potash and lithium exploration across our acreage at a time when global events are driving home the need for domestic sources of potash and lithium to secure food and energy independence. We are now positioned to fully validate the strategic potential of our Green River project.”

02-Oct-2024

SINGAPORE (ICIS)–South Korea’s overall export growth slowed in September, as petrochemical exports dipped 0.6% year on year to $3.84 billion, fueling expectations of a potential monetary policy easing next week. Total exports grew for 12th straight month in September Economists expect central bank to soon cut its benchmark interest rate Overall shipments to China, US surge in September The country’s headline export growth slowed to 7.5% year on year in September at $58.8 billion, down from 11.4% in August, data from the Ministry of Trade, Industry and Energy (MOTIE) showed on 1 October. This marks a full year of continuous growth for South Korean exports, fueled by record-high semiconductor sales and the strongest September performance ever for automobile exports. Exports of chemical, steel, and oil products weakened in September, with falling oil prices dragging down the export prices of those products, according to Japan’s Nomura Global Markets Research. The slowdown was mainly attributed to fewer working days due to a three-day public holiday on 16 September. South Korea’s automobile industry saw a resurgence in September, with auto export growth rebounding to 4.9% year on year after contracting by 4.3% in August. This positive shift followed three consecutive months of decline and was driven by a recovery in demand for environmentally friendly cars like hybrids and electric vehicles, according to Nomura. The return to growth also reflects a normalization of production schedules after disruptions caused by summer breaks and labor strikes, which had previously hampered the industry, it added. Meanwhile, South Korea’s import growth also decelerated to 2.2% year on year in September, down from 6.0% in August due to weaker energy imports. This resulted in a wider trade surplus of $6.7 billion, compared with August’s $3.83 billion. By region, exports to China reached their highest point this year at $11.7 billion, marking a 6.3% increase, driven by demand for semiconductors and wireless communication devices, according to MOTIE. This surge also led to a trade surplus of $0.5 billion with China, MOTIE data showed. Shipments to the US also hit a record high for September with $10.4 billion in exports, a 3.4% rise, and extended its 14-month growth streak. Exports to the EU climbed 5.1% to reach $6 billion, fueled by strong demand for IT goods. STRONG EXPORTS TO SUPPORT INTEREST RATE CUT IN OCTOBERWith solid exports easing recession concerns amid weak consumption, the Bank of Korea (BOK) is expected to deliver only a 25-basis point cut at the upcoming 11 October meeting to ease the household financial burden and aid consumption growth, according to Nomura. “However, although tighter macroprudential measures are having an impact in slowing housing price inflation and household debt growth, we expect the BOK to remain focused on controlling housing prices and market expectations about the number of rate cuts in this easing cycle.” Separately, data from Wednesday showed that South Korea’s consumer price index (CPI) slowed more than expected in September, rising 1.6% year-on-year, the weakest annual increase since February 2021. This brings the inflation rate below the BOK's 2% target, fueling further expectations of an interest rate cut. Core CPI, which excludes volatile food and energy items, rose by 2.0% year on year, slower than the 2.1% expansion the previous month and the weakest since November 2021. The BOK has held interest rates at a 16-year high of 3.50% since August, citing financial stability concerns amid a hot housing market. The BOK in July slashed its 2024 growth forecast to 2.4% from 2.5% previously, after Asia's fourth-largest economy unexpectedly contracted in the second quarter. South Korea’s economy posted a slower second-quarter annualized growth of 2.3%, compared with the 3.3% pace set in the preceding quarter amid sluggish domestic consumption. Focus article by Nurluqman Suratman

02-Oct-2024

Week-long heatwave in gas production states Hot summer may intensify export-domestic supply debate Darwin and Broome temperatures soar SINGAPORE (ICIS)–Australian Bureau of Meteorology (BOM) has issued warnings for a severe-to-extreme heatwave in parts of Northern Territory (NT) and Western Australia (WA) from 30 September, close to LNG production hubs in Darwin and at the Woodside-operated North West Shelf. The extreme heatwave will last for six days starting 2 October over parts of northern NT, with a larger range of the region and areas near North West Shelf experiencing the severe heatwave from 30 September to 8 October, according to the BOM forecast. The weather data monitor said Darwin had the “hottest September in more than 100 years”. High temperatures pose risks to cooling facilities at liquefaction plants, which may curb LNG output. This has not yet happened to LNG facilities in the areas, according to operators. “We do not expect a significant impact to Ichthys LNG production as the heatwave is expected to last approximately 1 week and peaking today/tomorrow,” an Inpex spokesperson told ICIS 2 October. The Chevron-operated Gorgon and Wheatstone gas facilities are “not subject to a current heatwave assessment” due to their distance from the heat center Broome, Chevron’s spokesperson told ICIS. A Woodside spokesperson said that, "we are not experiencing any unusual weather in Karratha, where our operations are located." SUPPLY TENSION Although the areas affected by the heatwave are not densely populated, hot weather ahead this upcoming southern hemisphere summer could lead to increased electricity use for air-conditioning and industrial cooling. Australia’s 2023/24 summer electricity demand was 776MW more than 2024 winter, according to Australian Energy Regulator data. Should the upcoming summer experience high temperatures, which is possible according to the BOM forecast, the summer-winter demand gap would further widen. Source: Australia Bureau of Meteorology Energy resource exports from Australia have been challenged because domestic electricity users pay premiums for local coal and gas. However, WA state recently eased an onshore gas export ban that had been in place since 2020. The government has been urging LNG exporters to secure domestic supplies in the context of growing demand in its east coast. Gas supply would fall short of domestic demand from 2027, the Australian Competition and Consumer Commission (ACCC) said in its latest report.

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

SINGAPORE (ICIS)–Denmark's AP Moller Holding, the parent company of shipping company Maersk, plans to invest €1.5 billion to build a “fossil-free” plastics production plant in Antwerp, Belgium, via a new venture called Vioneo. “The Antwerp plant will benefit from the region’s expertise in the chemicals industry, strong export facilities and access to renewable energy,” AP Moller said in a statement on 30 September. The Vioneo plant is expected to use green methanol as feedstock to produce polypropylene (PP) and polyethylene (PE), with commercial operations slated to begin in 2028, the investment company said. “Fully operational, the plant will be able to produce … 300,000 tonnes of fossil-free plastics annually, corresponding to a reduction of 1.5 million tons of CO2 [carbon dioxide] emissions,” it said. The plant will be located within the Antwerp energy park of Dutch logistics firm Vopak, with support from Vopak Belgium and the Port of Antwerp-Bruges. Project plans will take place in phases, with front-end engineering design (FEED) to begin in Q4 2024, and with the final investment decision (FID) expected in 2025. In a separate statement, the Port of Antwerp-Bruges said that the project is expected to generate "significant job opportunities” during the construction phase and around 250 permanent positions when the plant is fully operational. ($1 = €0.90)

01-Oct-2024

NEW YORK (ICIS)–Celanese sees a major growth opportunity in low carbon, recycled and bio-based materials, its CEO said. In January 2024, the company announced it started running a carbon capture and utilization (CCU) project at its Clear Lake, Texas, site as part of its Fairway Methanol joint venture with Mitsui & Co. The project is expected to capture 180,000 tonnes/year of CO2 industrial emissions and produce 130,000 tonnes/year of low-carbon methanol. “We actively capture carbon off some of the major producers in Clear Lake, Texas, at our site and we take those CO2 emissions… and we recycle it back into the ATR (autothermal reformer),” said Lori Ryerkerk, CEO of Celanese, on a webinar hosted by Chemical Marketing & Economics (CME-STEM). This low-carbon methanol can then be used to produce vinyl acetate monomer (VAM), vinyl acetate ethylene (VAE) emulsions and other downstream products, she added. “We have customers like Amazon that want a lower carbon footprint product, and we are able to meet that customer need,” said Ryerkerk. The CCU unit takes CO2 emissions that were otherwise being vented into the atmosphere from both Celanese and from third parties to use as a feedstock. “The exciting thing about this project is that we started it as a way to make more methanol and have found the value is also there for being able to produce through mass balance tracking, a green product that can be certified under the ISCC carbon footprint certification system,” said Ryerkerk. In March 2024, Celanese announced that the International Sustainability and Carbon Certification (ISCC) group certified its Low Carbon CCU Methanol under the ISCC Carbon Footprint Certification (CFC) system. Low Carbon CCU Methanol demonstrated a greater than 70% reduction in carbon footprint relative to a global average benchmark for fossil-based methanol production, as included in EU legislation, according to Celanese. “This is an area of growth for us – to be able to expand our green product offering,” said Ryerkerk. In Celanese’s Sustainable Solutions portfolio, those using carbon capture fall under the ECO-C label, with recycled content under ECO-R and bio-based content under ECO-B. RECYCLED AND RECYCLABLE CONTENTOn the recycled content side, Celanese in Europe recycles nylon airbags into high quality nylon which can be used by customers such as furniture giant IKEA, said Ryerkerk. IKEA has a goal of using only recycled or renewable-based plastic in all its products by 2030. “In India, we take fishing nets that are recovered from the sea, clean them, sort them and recycle them into a nylon grade which is used for furniture,” said Ryerkerk. “We have the ability to make recycled [products] across much of our portfolio now,” she added. Celanese also works with customers to develop products that are recyclable. An example is its NEOLAST fiber made from thermoplastic copolyester elastomer which can be blended with other fibers at a level anywhere from 2-40% of total fiber content. “We developed this fiber together with Under Armour to solve a problem they had with elastane (Spandex) because Spandex is energy intensive, uses solvents that aren’t very environmentally friendly, and tends to shed a lot of plastic fibers,” said Ryerkerk. “The great news is that this is recyclable. Elastanes are not. It’s solvent-free so more environmentally friendly from a production standpoint and it has better characteristics of wear – it’s more colorfast, better wicking, all these things,” she added. NEOLAST is in the very early stages of sales with Under Armour producing some products with the fiber and Celanese talking to a number of other companies interested in using it, the CEO said. “This is a long-term commitment. This has been in development for many, many years. We’ve just introduced it, and it will probably be several years yet before we really see widespread use of it,” said Ryerkerk, who noted that most of these types of new products take three to five years to develop. BIO-BASED CONTENTOther customers such as toy producer LEGO aim to use more renewable-based content. “We are able, since we start with bio-methanol and bio-ethylene – these building block chemicals – to make a bio-content material which we call ECO-B for those customers [that want to use] a non-fossil fuel feedstock,” said Ryerkerk. In H1 2024, 30% of the resin LEGO purchased was certified according to mass balance principles, which translated into an estimated average of 22% renewable sources. The company plans to “significantly increase this percentage” through the rest of 2024 and beyond. Celanese considers its ability to offer low carbon, recycled and bio-based products a unique competitive advantage. “Many of our competitors may offer one of these, but we’re probably one of the few that have the ability right now to offer all of them – and offer them in a way that is certified,” said Ryerkerk. GROWTH PROSPECTSCelanese’s Sustainable Solutions portfolio represents just around 5% of sales today but is growing double digits on a percentage basis every year, said the CEO. A stronger economic recovery would be a tailwind as these products are typically more expensive. “We’ll see what happens with the economy. Let’s be honest – most people are more interested in these things when the economy is better than when the economy is tough like it is right now,” said Ryerkerk. “But there are a lot of companies that have made commitments to go to more sustainable solutions. As our volumes grow, we’re able to make sustainable solutions more affordable for them… I think it is going to be quite some time before it is the majority of our portfolio, but that’s OK because we need time to build our capabilities as well,” she added. Focus article by Joseph Chang

27-Sep-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