Fertilizers

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Gain strategic advantage in global fertilizers

The fertilizer industry plays a critical role in sustaining the world’s population yet the market faces formidable challenges, from geopolitical uncertainty to changing weather patterns and volatile natural gas prices.

Fertilizer and energy markets are closely linked, and along with increased governmental focus on food security and environmental protection, the dynamics of the industry are shifting. Navigate volatile fertilizer markets and better understand the connection between energy and fertilizers with ICIS benchmarks in gas and LNG (Liquefied natural gas).

Identify trends using current and historic pricing data, news and in-depth analysis of major market developments and global trade flows. Gain a clear picture of fertilizer demand factoring in crop yields, grain prices and buyer affordability, to optimise efficiency and minimise waste.

Weekly market roundups and quarterly supply and demand outlooks help you stay one step ahead in today’s fast-moving fertilizer markets. ICIS prices are referenced by the CME (Chicago Mercantile Exchange) in the settling of fertilizer contracts.

Commodities we cover:

Ammonia

Comprehensive, up-to-date global pricing data and supply and demand drivers for this key commodity, increasingly valued for its potential as a hydrogen carrier.

Phosphates

A complete market view with price data, market intelligence and interactive analysis that includes in-depth focus pieces and forward-looking analysis.

Urea and nitrates

Up-to-date pricing data and daily reports including trades and market movements, plus expert insight on major global trading hubs.

Sulphur

Weekly content includes market fundamentals for key markets including China, Europe, the Middle East and Canada plus forward-looking analysis and up- and downstream viewpoints.

Sulphuric acid

The longest-established market report for sulphuric acid, offering market intelligence and insight plus real-time pricing and updates on market-moving events.

Potash

Forward-looking analysis and timely news from the world’s largest fertilizer market, including pricing assessments from key import destinations such as Southeast Asia, Brazil, China and India.

Fertilizers solutions

Optimise profitability with ICIS’ complete range of market intelligence, data services and analytics solutions for the fertilizers industry. Trusted by majorexchanges including the CME, and adhering to IOSCO principles, ICIS intelligence is derived from transparent methodologies incorporating over 250,000 annual engagements with Chemical market participants. Visit Sectors to find out how we can set your business up for success.

Optimise decision-making

Minimise risk and preserve margins with the latest pricing and market intelligence for key fertilizers.

Respond quickly as events unfold

Stay ahead of fast-moving markets with news and expert analysis of market developments, plus market outlooks and trends.

Trade with confidence in volatile markets

Remain competitive and secure supply with market reports, data dashboards, price assessments, news articles and custom reports covering all major fertilizer markets.

Model with accuracy

Optimise results with instant access to critical data, seamlessly integrated into your workflows and processes.

Carbon cost-adjusted ammonia price

(Northwest Europe)

When the EU’s CBAM (Carbon Border Adjustment Mechanism) takes full effect in 2026, the increased cost of carbon certificates will significantly impact ammonia prices, affecting both producers, buyers and importers into Europe. Plan ahead, with ICIS’ weekly carbon cost-adjusted ammonia price for Northwest Europe.

Using a formula based on the weekly CFR Northwest Europe Duty Unpaid spot/contract ammonia price, the weekly average carbon spot price from EEX EUA, carbon emission per tonne of NH3 (ammonia) production and free CO2 allocation per tonne of ammonia, our carbon cost-adjusted ammonia price helps you manage costs and stay ahead of this developing market.

ICIS fertilizers sustainability hub

As the transition to a more sustainable future gains pace, the
fertilizers industry is grappling with the challenge to transform.
But periods of transformation offer tremendous opportunity.

Maximise your potential with the ICIS Fertilizers Sustainability hub,
featuring coverage of all the regulatory and market developments
impacting fertilizers markets

Plan with confidence and manage compliance risk with news and
timely, in-depth analysis from our team of experts embedded in
fertilizer, chemical and energy markets around the world.

Global fertilizer trade map 2024

Together with the International Fertilizer Institute (IFA), ICIS produces an interactive map showing fertilizers trade flows each year. Inform your decision-making with this essential tool revealing the complete, complex network of global fertilizer trade routes.

Fertilizers news

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

PODCAST: All eyes on India as phosphates and ammonia markets see low demand

LONDON (ICIS)–Phosphates prices have been under pressure in India recently, while demand is expected to revive soon. Meanwhile, a lack of ammonia spot demand globally is weighing on the market. Phosphates editor Chris Vlachopoulos talks to senior editor Sylvia Traganida about the state of the phosphates market ahead of the International Fertilizer Association (IFA) annual conference (20-22 May).

15-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

INSIGHT: Lula’s ‘Katrina moment’ and Brazil’s wider environmental challenges (part 1)

SAO PAULO (ICIS)–Up to 29 April, Brazil’s President Luiz Inacio Lula da Silva may have been feeling optimistic: the economic recovery seems to have now reached all economic sectors, including manufacturing, where he promised to create more and better paid jobs. However, on 27 April heavy rainfall started in Brazil’s Rio Grande do Sul and two days later, large parts of the state were flooded, hundreds of roads blocked, landslides were widespread, and a dam collapsed. More than 150,000 have been displaced. As of Sunday, the death toll stands at 136 and as many remain uncounted for.  In the 12-million-people state, it is estimated two million have been affected by the floods. While the rains have mostly stopped, many cities remain still at risk of flooding as the stream of several overflown rivers advances towards the sea. The state’s economy has come to a standstill. Not many GDP growth forecasts have been updated yet following the floods, but last week a report by bank Bradesco said output could be flat in 2024, compared with 2023. Rio Grande do Sul is the fifth largest economy in Brazil and an agricultural stronghold, concentrating around 70% of the country’s rice output. It is estimated 10% of it could have been lost, and Lula has said imports will be stepped up to cover for any shortfall of the grain, which is on every Brazilian table, every day. Petrochemicals plants at the Triunfo production hub, near the city of Porto Alegre, remain under force majeure, mostly due to the difficulty of bringing workers in, and fertilizers players fear a hit to demand as the planting season for some crops is set to be affected. KATRINA 2005; RIO GRANDE DO SUL 2024As the days went by, the extent of the disaster was becoming clearer, and the scenes broadcast to the world from Rio Grande do Sul were sadly very similar to those seen in 2005 in the US in the aftermath of Hurricane Katrina. Financial newswire Bloomberg quickly came up with the analogy: Brazil’s worst floods in nearly a century were Lula’s ‘Katrina moment’. US former President George W Bush became the quintessential example of lack of leadership skills in a crisis and, many criticized, lack of compassion for the Black residents of poorer areas of New Orleans, which were practically left to fend for their own. “His [Lula’s] advisers say he’s keenly aware this may be his ‘Katrina moment,’ a reference to the 2005 hurricane that caught US President George W Bush off guard and entered the global lexicon as shorthand for the failure of leadership in a crisis,” said Travis Waldron on 9 May on Bloomberg. “The response to the devastation is particularly important for Lula’s leftist presidency, premised on the philosophy that governments should do more to meet the people’s basic needs. The tragedy has consumed Lula’s government.” Hurricane Katrina caused 1,836 fatalities and the economic damage was estimated at between $97 billion and $145.5 billion. LULA AND HIS PLACE IN HISTORYSeventy-eight-year-old Lula is a true post-modern, spinning-expert politician. Brazilian newspapers often report on his inaccuracies in speeches and, just last week, he and his Workers Party (PT) were under scrutiny after Lula took part in a rally which could be in breach of electoral regulations. Under his spinning, Lula wanted his third term – Lula 3, to differentiate it from the first and second terms between 2003 and 2011 – to be remembered as the Administration that “re-built” Brazil after Jair Bolsonaro’s pandemic-hit and rather divisive term (2019-2023). Facing his biggest test yet, Lula’s response during the first week of the disaster was rather slow. However, as the country enters the third week of the calamity, there are indications Lula is getting it, and has now put his government on turbocharge mode and practically all ministers are focused on Rio Grande do Sul. Following months of almost daily public quarrels between ministers in the coalition cabinet – Lula’s PT does not command a majority in parliament – the renewed sense of common purpose can only be a good thing for a country in crisis. Lula’s global commitments in 2024, with Brazil holding the G20 presidency and hosting the annual summit in Rio de Janeiro in November, and in 2025, when the city of Belem will host the COP30 climate summit, have now taken something of a back seat. Perhaps because of the authorities' slow response, the country at large seemed to be on a wait-and-see mode during the first week, hoping for the best but fearing the worst. WAR EFFORT-LIKEBut when the disaster was apparent both government and citizens alike started a remarkable, war-like almost effort to alleviate the pain of gauchos, as citizens of the state are called in Portuguese. The President finally proposed the declaration of state of emergency, which can speed up the release of funds and the state’s wider machinery to assist in the aftermath of the floods, on 5 May: a week after the floods started. Parliament greenlit the proposal on 7 May, a quick turnaround considering Brazil’s standards. Finance and Treasury ministers have announced special credit lines for citizens and companies, and low paid workers will have access to special subsidies, while payments for other benefits they are entitled to will be brought forward. Lula has visited the state three times. Lula’s left-leaning cabinet does not hide its intention to increase public spending although, as long as taxation remains unchanged, higher proceeds can only come from higher debt, which has slightly increased under Lula 3. That’s another debate for another day. However, in what concerns the current crisis, further increasing the debt burden to speed up Rio Grande do Sul’s recovery will be good debt in any case, the state being one of the most prosperous in the country. As we enter the third week of the floods, for any of the 215 million residents in this subcontinent-like country the disaster is now inescapable and calls for action are everywhere. From workplaces to residential buildings, from schools to universities, from civil associations to companies, there is practically no place where an effort to collect goods, food, and money is not being deployed. And, in a country where poverty levels are still very high, it is humbling to see that some of those who have very little are giving a little bit, something. When tragedy strikes next door, it is hard not to be moved. Some personal thoughts to wrap up. Living in Brazil and wishing this rich country could deliver more of its wealth to many more of its people, one can only hope Lula does not repeat a ‘Bush moment’, not for his own sake or his place in History books, but for the sake of gauchos and Brazilians at large. Hurricane Katrina and, mostly and foremost, the poor way its aftermath was handled left deep scars which are still evident. In 2019, a long 14 years after the Hurricane, this correspondent visited outer areas of New Orleans and, indeed, they were in stark contrast with the quickly refurbished, fancy-again, and tourism-heavy city center. For many residents of the suburbs, most of them Black, President Barack Obama’s promises of reconstruction never materialized, while his successor Donald Trump seemed to ignore the issue altogether, they said. The same cannot happen to the dynamic and prosperous Rio Grande do Sul, an export-intensive and diversified economy accustomed to trade with the rest of the world as much as with other Brazilian states. The state has an edge in several economic sectors, not only in agriculture but also in industry and services. Its GDP per capita stood at Brazilian reais (R) 50,700 ($9,830), versus a national average of R42,250, according to the country’s statistics office IBGE. The poorest state in Brazil, Maranhao in the north, had a GDP per capita of R17,500. Rio Grande do Sul’s ambitions go as far as having some wineries, a rarity in what is considered a Tropical country. It is the only state to produce wine because, given its southernmost latitude, it has an actual winter – of sorts – and wine connoisseurs will know grapes can only thrive with cold in winter months and decent heat in the summer. Brazil needs more states like Rio Grande do Sul, so any setback to its economic development must be averted. Brazilian politicians, often more focused on themselves than in those they are meant to serve, have a golden opportunity to show to the world that this is the new Brazil they have been promising for decades. The steps announced in the second week of the disaster go in the right direction. Brazil’s economy and its macro stability leave room for the state to step in and support citizens and companies in Rio Grande do Sul at their time of most need. The political tits-for-tats of the first week, with exchange of futile accusations between the conservative-led state and the left-led Federal Administration, while on the ground the disaster was exploding, cannot be repeated. “Public anger over the handling of the COVID-19 pandemic by his predecessor, Jair Bolsonaro, helped propel Lula to a narrow victory in Brazil’s 2022 presidential contest. Now he faces a calamity of his own,” concluded Bloomberg’s Waldron. “Lula’s response could help him regain public approval of his leadership — or propel his presidency into a downward spiral that he can’t escape.” ($1 = R5.16) The second part of this article, to be published on Wednesday 15 May, will look at Brazil’s climate change-related challenges; whether extreme and rare events like the floods in Rio Grande do Sul could become more common; and the country’s preparedness for such scenario Insight by Jonathan Lopez

13-May-2024

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 10 May. NPE '24: Plastics industry headwinds likely to persist through 2024 Headwinds for the plastics industry including higher cost of capital, weaker household spending momentum and capacity adjustments will likely persist through 2024, according to a presentation by Perc Pineda, Chief Economist at PLASTICS, at this year’s NPE show. IPEX: April index rises for fourth month in a row on firmer pricing in northwest The ICIS Petrochemical Index (IPEX) was up 1.5% in April month on month as production constraints continue to push contract prices up across some commodities, mainly in northwest Europe and northeast Asia. NPE '24: SABIC eyes growth opportunities in Americas amid era of global overcapacity SABIC is looking for further opportunities for growth in the Americas as part of its strategy to navigate an era of excess capacity around the world, one that has led it and other producers to shutter capacity in high-cost regions, an executive said. Brazil’s Braskem deliveries safe despite Triunfo shutdown taking off third of capacity – CFO Braskem will be able to deliver material to its customers from its other three sites in Brazil after it declared force majeure at its Triunfo complex following heaving flooding in the area, Brazilian polymers major CFO Pedro Freitas said on Thursday. Brazil’s Indorama suspends operations at Triunfo, ports still closed, fertilizers demand to be hit Brazil’s state of Rio Grande do Sul remains at a standstill from the floods, with Thai petrochemicals major Indorama’s subsidiary in the country also suspending operations at its Triunfo facilities, a spokesperson confirmed to ICIS.

13-May-2024

PODCAST: Europe sulphur, sulphuric acid tightness key concerns for H2 2024

LONDON (ICIS)–It is rare to see sulphur or sulphuric acid take center stage in Europe when discussing a lack of feedstock for downstream petrochemicals – but the tight supply of both have been key talking points in Q1 and Q2. Senior editor for sulphuric acid, Andy Hemphill, and Julia Meehan, managing editor of ICIS Fertilizers, take a look at the origins of this current tightness and explore any options the industry has to counter it.

13-May-2024

Brazil’s Indorama suspends operations at Triunfo, ports still closed, fertilizers demand to be hit

SAO PAULO (ICIS)–Brazil’s state of Rio Grande do Sul remains at a standstill from the floods, with Thai petrochemicals major Indorama’s subsidiary in the country also suspending operations at its Triunfo facilities, a spokesperson confirmed to ICIS. Two main ports in Brazil’s southernmost state remain closed, while fertilizers players have said demand is likely to be hit on the back of a reduced planting season. A spokesperson for Indorama said the company had suspended operations at Triunfo on 3 May until further notice. Indorama's operations in Brazil are the result from its acquisition of Oxiteno and operates at Triunfo a methyl ethyl ketone (MEK) plant with a production capacity of 42,000 tonnes/year and a butene-2 plant with capacity at 42,000 tonnes/year, according to ICIS Supply & Demand. “Initially, we ensured that the emergency shutdown was carried out safely. Currently, we are carefully assessing the weather and logistical conditions, as well as the guidance from the relevant authorities, to determine the short, medium and long-term impacts [of the suspension],” said the Indorama spokesperson. Earlier in the week, Brazil’s polymers producer Braskem and styrenics producer Innova declared force majeure from its operations in Triunfo, as did styrene butadiene rubber (SBR) producer Arlanxeo. Official figures on Friday put the dead toll at 116, with more than 130 people still unaccounted for, while more than 100,000 remain displaced from their homes and nearly two million people in the 12-million-strong state are being affected by Brazil’s worst floods in nearly a century. To make matters worse, rains returned to Rio Grande do Sul by the latter part of the week, forcing authorities to suspend some rescue operations. Brazilians this week have kicked off a remarkable national mobilization to help alleviate the disruption gauchos – as citizens from Rio do Grande do Sul are known in Portuguese – are going through. From workplaces to residential buildings, from civil associations to companies, there is practically no place in the country where an effort to collect goods, food and money is not being deployed. PORTS CLOSED, AGRICULTURE HITThe Port Authority for Rio Grande do Sul, called Portos RS and which oversees operations at the Port of Rio Grande, Port of Pelotas and Port of Porto Alegre, said operations at the two latter facilities remain shut to traffic. The Port of Rio Grande is operating normally, it added. “[Portos RS] maintains operations at the Port of Porto Alegre suspended, due to the maintenance of the level of Lake Guaiba above the so-called flood level. At the Port of Pelotas, in the south of the state, the shipment of wood logs remains suspended and activities are paralyzed at the terminal,” the Authority said. “Regarding the crossing to Sao Jose do Norte [a city north of Porto Alegre], the vehicle and passenger transport service is suspended due to the high level of Laguna dos Patos.” This week, several fertilizers players said to ICIS demand is likely to be hit as planting for some crops which had just started is likely to be delayed, postpone, or cancelled. Moreover, seeds recently planted could also get damaged by high levels of moisture, potentially ruining their harvest. “There has been great damage to infrastructure in the state, with fertilizers mixers underwater and authorities still calculating the impacts,” said an urea trader. “The rice harvest is almost done, but wheat planting is in its early days and producers of urea believe demand destruction can happen due to the circumstances.” Another fertilizers source added that around 70% of soybeans in Rio Grande do Sul had already been harvested, but there is still 30% to be harvested which would now be at risk. It added that 30% would represent approximately 6.5 million tonnes of soybeans, or 5% of Brazil’s total production. Rio Grande do Sul is the main rice producer in Brazil, and the source said the harvest for that crop was already behind schedule when the rains started, with 78% harvested. “We estimate that the unharvested volume should significantly affect the supply of rice in Brazil, increasing the upward pressure on prices, “the source said. “Corn was also in the process of being harvested, with an estimated 83% harvested by the time the rains started. It is not possible yet to estimate precisely how much of this amount at risk has been lost.” Front page picture: Voluntaries working in Rio Grande do Sul organizing donations Source: Government of Rio Grande do Sul Additional reporting by Bruno Menini, Deepika Thapliyal and Chris Vlachopoulos

10-May-2024

Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 3 May. NEWS Besieged by imports, Brazil’s chemicals put hopes on hefty import tariffs hike Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. Mexico’s manufacturing slows on weaker exports, Chinese competition Mexico’s manufacturing sectors slowed down slightly in April on the back of tough competition, particularly from China, and weak demand from abroad, which caused a fall in output, analysts at S&P Global said on Thursday. Brazil’s manufacturing at nearly three-year high on booming demand Brazil's manufacturing sectors continued booming in April on the back of a sharp increase in new business intakes, which led to higher output and job creation, analysts at S&P Global said on Thursday. Mexico increases PET import tariff again in attempt to shield economy In the last week of April, Mexican President Andres Manuel Lopez Obrador introduced an amended version of the Tariff within the General Import and Export Duties Law to enforce import duties, or temporary duties, on products falling under 504 tariff items, including polyethylene terephthalate (PET) resin. These new duties will vary from 5% to 50%. Brazil's Braskem Q1 resin sales fall 5% yearly, on prioritizing sales with higher added value Braskem resin sales in its domestic Brazilian market dropped by 5% in Q1, year on year, on the back of prioritizing sales with higher added value in the period, the Brazilian petrochemicals major said on Friday in its quarterly production and sales report. INSIGHT: Six decades on, Brazil’s Unigel founder fights the ultimate battle The founder of Unigel, aged 87, is actively fighting the Brazilian chemicals and fertilizers producer’s most decisive battle, one for its survival, as it tries to restructure its debts, one step away from bankruptcy. PRICING Lat Am PE domestic prices fall in Argentina, Brazil on cheaper imports, soft demand Domestic polyethylene (PE) prices fell in Argentina and Brazil due to competition with cheaper imports and soft demand. In other Latin American countries, prices were unchanged. LatAm PP domestic prices fall in Argentina, Colombia, Mexico on lower feedstock costs, soft demand Domestic polypropylene (PP) prices fell in Argentina, Colombia and Mexico on the back of lower feedstock costs and soft demand.

06-May-2024

US Huntsman assets in Europe spare from energy hit, but EU policies erratic – CEO

RIO DE JANEIRO (ICIS)–Huntsman’s assets in Europe are not energy intensive and have been spared from the energy crisis, but more broadly, the 27-country EU is still lacking a comprehensive policy to address the issue, the CEO at US chemicals major Huntsman said on Friday. Peter Huntsman, one of the chemical industry’s most outspoken CEOs, said the company is not planning to divest any asset in Europe but said the region should stop its “nonsense” about reindustrialization and implement policies that create actual economic growth. The CEO added he is feeling “bullish” about the coming quarters regarding demand, arguing the chemical industry had gone to “hell” and was just coming back from the steep low prices of 2023. In North America, Huntsman said the construction industry should post a marked recovery in the coming quarters after two years in the doldrums because of high interest rates because, he argued, even with current interest rates, the industry will adapt. Huntsman’s sales and earnings in the first quarter fell again, year on year, as higher sales volumes could not offset low selling prices; the company said, however, that a notable improvement in sales volumes quarter on quarter should be a signal that the recovery is underway. Among others, Huntsman produces polyurethanes (PUs), which are widely used in the construction and automotive sectors. EUROPE NONSENSEPeter Huntsman on Friday first referred to the EU’s need to stop its “nonsense” about reindustrialisation, without elaborating further, but he was more measured when asked about the company’s assets in that region. He nonetheless made clear that he thinks European governments have yet to formulate, two years into the region’s biggest energy crisis in decades, appropriate policies to address the issue. “What I am most concerned about Europe is high energy costs. Most of our businesses there are not energy intensive assets, so they are competitive; in fact we have some strong businesses there, and our margins in Advanced Materials [the division] are stronger there than in other parts of the world,” said Huntsman, speaking to reporters and chemical equity analysts on Friday. “There are businesses in Europe in which you will do OK, such as aerospace, lightweighting. But if you are energy intensive, if you produce fertilizers, glass, cement… you have some portfolio concerns there. Energy prices are too high, and this is not being addressed by governments, they still have to come up with realistic policies to address that.” Europe’s construction has also taken a hit from the crisis after interest rates shot up to bring down inflation, with projects put on hold and many building companies in financial distress. Huntsman’s CEO said he is not hoping for a strong recovery anymore in that sector in Europe, but simply for stability, which could come with governments taking more decisive action to prop up GDP growth. “If we look at the past two years… We are looking for stability: it is the volatility that concerns us the most. We need to see Europe stop its the nonsense policies around reindustrialization and get the economy growing once again,” he said. See Huntsman assets in Europe at bottom table. NORTH AMERICA CONSTRUCTIONPeter Huntsman was feeling more optimistic about North America’s construction sector, where even if high interest rates stay for longer, builders will adapt to the situation, easing the way towards a recovery. “US builders are doing two things: if interest rates were to stay where they are, they are going to adapt, perhaps building smaller units, and if rates do come down, that will open up demand quite a bit higher than it has been in the last couple of years. There are big gaps [in housing stock] which need to filled,” said Huntsman. “I am increasingly feeling better and better [about an improvement in demand]. In Q1 we saw a lot of inventory drawdown, now we are seeing a slow, steady recovery as we try to get back to average inventory levels. By and large inventory levels feel pretty thin in MDI [methylene diphenyl diisocyanate] and we look forward to moderate growth in coming quarters.” MDI is consumed mainly in PU foams, used in construction, refrigeration, packaging, and insulation. MDI is also used to make binders, elastomers, adhesives, sealants, coatings and fibers. Huntsman’s CFO, Philip Lister, also at the press conference, added that in a normal year the company’s growth in volumes from the first quarter to the second would be around 5%, as construction and other seasonal activities enter their annual peak. “This year, we are expecting more [than 5% growth],” said Lister. CHINA ELECTRIC VEHICLESHuntsman’s CEO said China’s electric vehicle (EV) sector continues to boom, although potential trade restrictions in the EU, after those imposed by the US, could start denting China’s dominance in that sector. However, the company also knows what China’s dominance in the sector, thanks to the country’s strong public support for it, can mean for western producers: in 2023, Huntsman suspended an EV battery materials project in the US because of aggressive imports from China. But the CEO added that even if China’s EV sector slowed down, the company would still be able to tap into other growing markets such as lightweighting or insulation, among others. “The automotive sector continues to be one of the strongest areas of growth in China. How long that continues [remains to be seen], but probably for some time still,” said Huntsman. “There is a broader question about [trade in the EV chain] with the US, which has been extremely limited, or Europe, where there is a lot of talk about limitations to China’s EVs.” He added that despite sluggish activity in the residential construction sector because of financial woes in building companies, exemplified by the demise of major company Evergrande, subsectors such as energy conservation, insulation, building materials and infrastructure are still doing well. “By and large we are seeing in China a slow but steady recovery in volumes and pricing. Elsewhere, I am getting more bullish. A year ago, we were in a nightmare, and we expected a recovery in the second half [of 2023] which didn’t happen and got worse and worse, until we found ourselves in hell,” said Huntsman. “At the beginning of this year we have seen good, reliable, consistent growth. What we need to see is that growth continues in the second half of this year.” HUNTSMAN ASSETS IN EUROPE Product Location Capacity (in tonnes) Aniline Wilton, UK 340,000 Epoxy resins Bergkamen, Germany 18,000 Monthey, Switzerland 120,000 Duxford, UK 10,000 Isocyanates Runcorn, UK 70,000 Maleic anhydride (MA) Moers, Germany 105,000 MDI Rozenburg, The Netherlands 470,000 Nitrobenzenes Wilton, UK 455,000 Polyalolef Grimsby, UK 15,000 Polyester polyols Huddersfield, UK 20,000 Rozenburg, The Netherlands 86,000 Unsaturated polyester resins (UPRs) Ternate, Italy 8,000 Source: ICIS Supply & Demand Database Front page picture: Huntsman’s headquarters in The Woodlands, Texas  Source: Huntsman Additional reporting by Miguel Rodriguez-Fernandez

03-May-2024

Canada rail workers vote to strike, work stoppage could start on 22 May

TORONTO (ICIS)–Workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike. A first work stoppage could occur as early as 22 May, if no new collective agreements are reached by then, officials at labor union Teamsters Canada Rail Conference (TCRC) said in a televised announcement on 1 May. The rail carriers warned that a work stoppage would disrupt supply chains throughout North America and constrain trade between Canada and the US and Mexico. The two railroads account for the bulk of freight rail traffic in Canada. Canada-based chemical and fertilizer producers rely on rail to ship more than 70% of their products, with some exclusively using rail. In the run-up of strikes, producers have to make preparations. Longer strikes can force plant shutdowns and after a strike ends it can take weeks for normal operations to resume. For the first 17 weeks of 2024, ended 27 April, Canadian chemical railcar loadings were 233,074, up 3.1% from the same period in 2023, according to  the latest freight rail data released on 1 May. Chemical industry sources had warned about the possibility of a rail strike in Canada early last month. The country's labor law requires a minimum of 72-hours notice prior to a strike or lockout. TCRC represents about 9,000 CN and CPKC engineers and conductors. The previous collective agreements expired on 31 December 2023. Thumbnail photo source: CN

02-May-2024

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