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Ethylene17-Apr-2024
SAO PAULO (ICIS)–US manufacturers were
“uniformly optimistic” in March about the
prospects for the next 12 months on expected
higher sales, the country’s Federal Reserve
(Fed) Beige Book said on Wednesday.
The Beige Book is a summary of US economic
activity during the past six weeks among the 12
districts, one of which is the Federal Reserve
Bank of Dallas. That bank includes all of Texas
and northern Louisiana, the home of many
petrochemical plants and refineries.
The Beige Book published on Wednesday contains
survey responses collected in the six week to 8
April.
US manufacturing activity was in the doldrums
in 2023 and beginning of 2024, but the
manufacturing PMI index for March showed
activity expanding
for the first time in 17 months.
Earlier this week, official data from the Fed
showed manufacturing output expanding 0.5% in
March.
Increased recent demand may have been one of
the reasons for manufacturers to feel
reasonably optimistic for the months ahead.
“Contacts were uniformly optimistic for the
remainder of 2024, projecting steady to
moderately higher sales moving forward; in one
case, however, that still meant that total
sales in 2024 would fall short of their 2023
levels,” said the Fed.
“The positive forecasts were based largely on
firms’ own recent demand trends, although one
contact cited the prospects of productivity
gains from AI and expected cuts in the federal
funds rate as additional sources of optimism.”
For the six weeks covered in the report,
overall US manufacturing revenues were
practically unchanged, with half of respondents
reporting moderate gains in sales over the
cycle and the other half experiencing moderate
losses.
In the Dallas district – the 11th District in
the Fed’s terminology – the economy expanded
modestly, propped by services and housing.
However, the district’s manufacturing output
“declined slightly”, with job creation slowing.
“Employment growth slowed as wages, input
costs, and selling prices grew at a moderate
pace. Overall, Texas firms noted an uptick in
uncertainty,” said the Fed.
OVERALL, STEADY
The overall US economic continued expanding in
the six weeks to 8 April, with 10 out of 12
districts experiencing “either slight or
modest” economic growth, up from eight in the
previous report.
Some downside economic risks remain, however,
with labor shortages still being mentioned,
although with the expectation that over the
course of the next 12 months a more balance
labor market could emerge.
“On balance, contacts expected that labor
demand and supply would remain relatively
stable, with modest further job gains and
continued moderation of wage growth back to
pre-pandemic levels,” said the Fed.
Price increases were practically unchanged from
the last report, with logistics disruptions in
the Red Sea and the collapse of Baltimore’s Key
Bridge not leading yet to a significant
increase in costs, despite some shipping
delays.
“Another frequent comment was that firms’
ability to pass cost increases on to consumers
had weakened considerably in recent months,
resulting in smaller profit margins. Inflation
also caused strain at nonprofit entities,
resulting in service reductions in some cases,”
concluded the Fed.
“On balance, contacts expected that inflation
would hold steady at a slow pace moving
forward. At the same time, contacts in a few
districts – mostly manufacturers – perceived
upside risks to near-term inflation in both
input prices and output prices.”
Thumbnail image shows an ExxonMobil plant
in Beaumont, Texas. Photo courtesy of
ExxonMobil
Crude Oil17-Apr-2024
LONDON (ICIS)–Eloise Radley, Energy Market
Reporter, and Ignacio Sotolongo, Senior Editor
at ICIS, sit down to discuss how geopolitics
have impacted US oil production in recent years
and how things could change if we see a new
administration in November.
Ethylene17-Apr-2024
SAO PAULO (ICIS)–Polymers major Braskem and US
petrochemicals engineering services provider
Lummus are to carry out a joint study with US
engineering services provider Lummus to
electricity one of its steam crackers in
Brazil.
Financial details were not disclosed.
The two companies did not disclose which
facility Lummus’ proprietary technology for
e-cracking will be tested.
Lummus commercializes its proprietary
technology under the branded name
SRT-e.
“The SRT-e electric cracking heater
leverages Lummus’ proven Short Residence
Time (SRT) technology modified to operate
using electricity and incorporates a modular
unit-cell design that can be replicated for
plants to accommodate any commercial capacity,”
said the two companies.
“The technology uses all commercially
demonstrated components, plus an optimum heat
flux profile leading to a longer radiant coil
life and longer run length. In addition,
decoking can be carried out on a unit-cell
basis so maintaining a spare heater is not
required.”
Steam cracking is one of the most
energy-intensive activities within a
petrochemical plant. The sheer amount of energy
required has so far made crackers’
electrification elusive.
Some petrochemicals majors are developing
experimental e-cracking units. In 2022, Dow and
Shell announced one test
unit in the Netherlands.
Also in 2022, Germany’s BASF and Saudi Arabia’s
SABIC, together with industrial gases major
Linde, announced another test
unit at BASF’s flagship Ludwigshafen site.
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Speciality Chemicals17-Apr-2024
BARCELONA (ICIS)–Europe is finalizing the
Packaging and Packaging Waste Regulation
(PPWR), with far-reaching implications for both
virgin and recycled polymer producers.
Most significant EU packaging legislation
in decades
Includes binding targets for recycling and
recyclability
PPWR will have huge impact on virgin and
recycled packaging sectors
Legislation in final stages but may not be
passed before EU elections in June
Working groups need to be set up across
recycling value chains
In this Think Tank podcast, Will
Beacham interviews ICIS senior
recycling editor Mark Victory,
ICIS insight editor Nigel
Davis, and Paul
Hodges, chairman of New Normal
Consulting.
Editor’s note: This podcast is an opinion
piece. The views expressed are those of the
presenter and interviewees, and do not
necessarily represent those of ICIS.
ICIS is organising regular updates to help
the industry understand current market trends.
Register here.
Read the latest issue of ICIS
Chemical Business.
Read Paul Hodges and John Richardson’s
ICIS
blogs.
Recycled Polyethylene Terephthalate17-Apr-2024
SINGAPORE (ICIS)–Asia recycled polymers
markets were sluggish for the most part in
2023. In early 2024 too, challenges that dim
the short-term outlook persist.
Some legislations surrounding recycling were
also put in place in the region over the last
few years, but the obstacles that limit the
growth of this sector still remain.
In this chemical podcast, ICIS senior editor
Arianne Perez and analysts Joshua Tan and Chua
Xin Nee share their insights on the topic.
Crude Oil17-Apr-2024
SINGAPORE (ICIS)–Singapore’s petrochemical
shipments in March fell by 3.6% year on year to
Singapore dollar (S$) 1.16 billion ($853
million), extending the 2% contraction in the
previous month and weighing on overall non-oil
domestic exports (NODX), official data showed
on Wednesday.
March non-electronic NODX down 23.2% year
on year
March manufacturing PMIs show continued
expansion
Singapore economy forecast to grow 1.0-3.0%
in 2024
Overall exports of chemicals and
chemical products in March fell by 37%
year on year to S$3.54 billion,
reversing the 5.8% expansion in
February, Enterprise Singapore said in
a statement.
The country’s NODX for the month fell
by 20.7% – a much steeper decline from
February’s 0.2% contraction – to S$14
billion because of a high base a year
ago, with shipments to most major
trading partners posting declines.
March non-electronic NODX, which
includes petrochemicals and
pharmaceuticals, fell by 23.2% year on
year to S$11.2 billion.
Overall NODX to seven out of
Singapore’s top 10 markets fell in
March, but shipments to Hong Kong,
Taiwan and China rose.
Singapore is a major manufacturer and
exporter of petrochemicals in southeast
Asia. Its petrochemicals hub Jurong
Island houses more than 100 global
chemical firms, including energy majors
ExxonMobil and Shell.
In the first quarter, the country’s
economy grew by 2.7% year on year in
the first quarter, accelerating
slightly from the 2.2% expansion in the
preceding quarter, according to
official advance estimates.
On a quarter-on-quarter seasonally
adjusted basis, Singapore’s economy
expanded by 0.1%, extending the 1.2%
expansion in Q4.
The manufacturing sector in Q1 grew by
0.8% year on year, moderating from the
1.4% expansion in the previous quarter.
“Within the sector, output expansions
in the chemicals, precision engineering
and transport engineering clusters more
than offset output contractions in the
electronics, biomedical manufacturing
and general manufacturing clusters,”
the Ministry of Trade and Industry
(MTI) said.
For the whole of 2024, Singapore’s
economy is expected to expand by
1.0-3.0%, compared with actual GDP
growth of 1.1% growth in 2023, the
ministry said.
Manufacturing activity in Singapore
improved in March, with the Singapore
Institute of Purchasing and Materials
Management (SIPMM) purchasing managers’
index (PMI) inching
up to 50.7, marking the
seventh straight month of expansion.
In contrast, a separate survey of
private manufacturers by financial
information and services provider
S&P Global showed Singapore’s March
PMI eased to 55.7 from 56.8 in
February.
Focus article by Nurluqman
Suratman
Thumbnail image: Singapore harbour
and the Marina Bay Sands Hotel, 16
March 2023. (Franz
Neumeier/imageBROKER/Shutterstock)
($1 = S$1.36)
Crude Oil17-Apr-2024
SINGAPORE (ICIS)–Japan’s chemical exports rose
by 3.9% year on year to yen (Y) 1.03 trillion
in March, supported by higher plastic materials
shipments abroad, amid the continued weakness
of the yen, official data showed on Wednesday.
The country’s exports of plastic materials rose
by 19.3% year on year to Y297 billion in March,
Ministry of Finance (MOF) data showed.
By volume, exports of plastic materials rose by
7.6% year on year to 513,959 tonnes.
Shipments of organic chemicals, meanwhile,
slipped by 2.2% year on year to Y199.4 billion
in March.
Exports of motor vehicles rose by 15.8% year on
year to Y1.5 trillion in March, while shipments
of motor vehicle parts were up by 3.7% at Y349
billion.
Japan’s overall exports rose by 7.3% year on
year to Y9.47 trillion in March, up for the
fourth straight month, while imports were down
by 4.9% at Y9.1 trillion.
This resulted in a trade surplus of around Y366
billion, the first in three months and
reversing the around Y378 billion deficit
recorded in February this year.
By destination, Japan’s overall exports to the
US rose by 8.5% year on year while those to
China were up by 12.6%.
WEAK YEN PROVIDES TAILWIND FOR
EXPORTSThe March trade data
follows the yen sinking hit 34-year lows to the
dollar beyond 154 yen this week as hopes of
quick US interest rates receded amid persistent
inflation.
US Federal Reserve Chair Jerome Powell,
speaking at the Washington Forum on the
Canadian Economy on 16 April, said the US
economy has not seen inflation come back to the
central bank’s goal, pointing to the further
unlikelihood that interest rate cuts are in the
offing anytime soon.
At 01:33 GMT, the yen was trading at 154.62 to
the dollar. The US dollar extended gains on 16
April, with the US Dollar Index (DXY) rising to
highs of 106.51 before closing around 106.06.
Higher interest rates in the US make
dollar-denominated assets more attractive due
to higher yields compared to Japanese assets.
Japan’s finance minister Shunichi Suzuki on 16
April said that he is closely monitoring the
yen’s depreciation and are ready to implement
all necessary measures to address the situation
if needed.
Japanese authorities intervened in the currency
market in 2022 to purchase the yen on three
occasions.
“Jawboning from officials appeared to be an
everyday affair with markets largely ignoring
them for now as the move higher appears to be
in line with recent market developments –
higher US treasury yields while the Bank of
Japan is still perceived to normalise slowly,”
Singapore-based OCBC Global Markets Research
said in a note.
The Bank of Japan on 19 March
ended eight years of negative rates, ending
the country’s historic era of negative interest
rates, but this has failed to stop the slide in
the yen.
In a statement announcing the policy change,
the central bank said that the economy has
“recovered moderately” and that it is “highly
likely that wages will continue to increase
steadily.”
Focus article by Nurluqman
Suratman
Speciality Chemicals16-Apr-2024
HOUSTON (ICIS)–Global container shipping major
Maersk will resume Panama Canal transits for
its OC1 service beginning 10 May, ending its
“two-loop” setup it established in January
because of transit restrictions brought on by a
persistent drought.
Maersk ceased transiting the
canal in January for the service connecting
Asia-Pacific and the US East Coast and instead
transported containers across Panama using
railroads.
The company said it is taking the action
because of the onset of the rainy season in the
region and after the Panama Canal Authority
(PCA) added three more
daily slots based on the present and projected
water levels in Gatun Lake.
The PCA said it is optimistic
that traffic through the canal could return to
normal in 2025 as current forecasts indicate
that steady rainfall will arrive later this
month and continue during the rainy season.
The PCA said all future plans remain contingent
on how much rainfall comes and water levels in
Gatun Lake.
Peter Sand, chief analyst at ocean and freight
rate analytics firm Xeneta, said he thinks
there is still a long way to go before trade
lanes via the Panama Canal become normal.
“There may be projections for increased
rainfall but at the moment they are just that –
projections,” Sand said. “If water levels do
not rise then it will be interesting to see how
this plays out and whether Maersk can stick to
this timeline.”
Container ships and costs for shipping
containers are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers, such as polyethylene
(PE) and polypropylene (PP), which are shipped
in pellets.
Some liquid chemicals are also shipped on
container ships using isotanks.
Please see the
Logistics: Impact on chemicals and energy topic
page
Gas16-Apr-2024
LONDON (ICIS)–Gas in Focus deputy editor Marta
Del Buono talks about key drivers for the
current weeks affecting European gas market:
Increasing geopolitical tensions support
European gas prices
ICIS technical analysis also indicates
bullish sentiment across commodities
Below average temperatures and below solar
generation in Germany add support
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