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Polypropylene20-May-2024
SAO PAULO (ICIS)–Braskem has restarted its
facilities at the Triunfo petrochemicals hub in
the state of Rio Grande do Sul after severe
flooding disrupted industrial operations in Rio
Grande do Sul, a spokesperson for the Brazilian
polymers major said to ICIS on Monday.
Braskem said it hopes to have all facilities up
and running normally in 15 days.
Triunfo represents around 30% of Braskem’s
production capacities in Brazil.
The company said the restart will be undertaken
by phases, as long as weather and access to the
site allows.
While most petrochemicals plants at Triunfo
were not damaged by the flooding, access of
workers as well as inputs into the plants was
very difficult as the floods blocked several
roads in the state.
Braskem and other chemical companies at Triunfo
declared force majeure at the beginning of May.
“In recent days, our teams have been focused on
seeking safe conditions to resume production
and, thus, contribute more actively to the
supply of raw materials for the production of
important items for this time of need,” said
Braskem’s industrial director, Nelzo da Silva.
“To start up the plants, it will be necessary
to activate the flare, a standard safety device
used by the chemical and petrochemical
industries. As part of this process… in the
coming days, residents in the area may notice a
different light than usual coming from our
factories.”
Braskem is Brazil’s sole manufacturer of
polyethylene (PE) and polypropylene (PP), the
most widely used polymers. Its market share in
2023 for PE stood at 56% and for PP at 70%,
according to figures from the ICIS Supply and
Demand Database.
The Triunfo complex, meanwhile, is key for the
country’s polymers supply chain, accounting for
nearly 37% of Brazil’s PP capacity and 40% of
PE capacity.
Brazil’s PP production capacity is nearly 2
million tonnes/year. PE capacity is about 3
million tonnes/year, with 41% being high
density polyethylene (HDPE), 33% being linear
low density polyethylene (LLDPE) and 26% being
low density polyethylene (LDPE).
Braskem’s 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.
Front page picture: Braskem’s facilities in
Triunfo
Source: Braskem
Additional reporting by Bruno Menini
Ethylene20-May-2024
SAO PAULO (ICIS)–Volkswagen (VW) idled its
three plants in the Brazilian state of Sao
Paulo on Monday, as suppliers in the floods-hit
state of Rio Grande do Sul are unable to
produce any automotive parts, a spokesperson
for the German automotive major told ICIS.
At the same time, a spokesperson for
Stellantis, another major auto producer,
confirmed to ICIS that it had shut down its
plant in Ferreyra, in Argentina’s Cordoba
province, also due to a lack of input.
Rio Grande do Sul is Brazil’s southernmost
state and petrochemicals-intensive automotive
parts producers there are major suppliers to
the rest of Brazil and Argentina.
However, the state is still reeling from severe
flooding on 29 April which has brought around
90% of industrial activity to a standstill,
according to local authorities.
VOLKSWAGENVW is using a
so-called “collective vacation” clause under
Brazilian labor laws to send workers at its
plants in Anchieta, Taubate, and Sao Carlos
home for at least 10 days.
However, a plant operated by VW in Sao Jose dos
Pinhais, in the state of Parana, continues to
operate normally, VW said.
“Volkswagen do Brasil informs that continues
with the same preventive vacation position. The
situation of parts supply is being monitored
minute by minute,” said the spokesperson.
The workers at the Anchieta and Taubate plants
will start a 10-day collective vacation on
Monday, and the workers at the Sao Carlos plant
will start an 11-day collective vacation on the
same day.
‘Collective vacation’ is a measure regularly
applied by industrial companies to manage
production. Brazil’s labor laws normally grant
employees around 30 days/year of annual leave.
In the industrial sector, as work is a
“collective” activity, vacation periods can be
organized by the employer for a group of
employees, hence the name.
STELLANTISIn the
meantime, Stellantis – the result of the merger
between Fiat Chrysler and PSA Group – told ICIS
that it is analyzing whether its other plants
in Argentina and Brazil will also need to be
shut down.
In Cordoba, a province in north Argentina and a
major trading partner with Rio Grande do Sul,
there are fears that its economy – which is
already suffering after the country went into
recession – could take a further hit.
In Argentina, Stellantis operates another plant
in El Palomar, in the Buenos Aires
department.
In Brazil, its main facilities are in Betim in
the state of Minas Gerais.
“Stellantis is following with dismay and
expresses its solidarity with the victims of
the floods in Rio Grande do Sul. The
unprecedented impact of the catastrophe has
directly affected the logistics system for the
transportation and supply of industry
components.
“The company had to stop production at the
Stellantis Automotive Centers in Córdoba,
Argentina, and is still analyzing the need for
further stoppages at its plants in the region,”
said the spokesperson.
Both General Motors (GM) and South Korea’s
Hyundai – who also have production facilities
in Brazil – had yet to respond to a request for
a comment.
A spokesperson for Brazil’s automotive trade
group Anfavea did not respond to questions from
ICIS about the impact of the floods on the
sector’s annual output.
However, it did say that it would make its
first estimates at a press conference on 6
June, when it will publish production, sales
and export data for May.
Earlier, the trade group said it feared the sector could
be hit given Rio Grande do Sul’s importance
to Brazil’s auto industry.
INDUSTRY REELS AFTER
FLOODSCompanies based in the
petrochemicals hub of Triunfo, near Porto
Alegre – the biggest city in Rio Grande do Sul
– have also shut, mostly as employees are
having problems getting to and from work.
Companies including Braskem, Innova, and
Arlanxeo all declared force majeure from
Triunfo in the first week of May.
Sources said some of them will try to restart
operations this week, although that has not
been officially confirmed to ICIS.
The automotive industry is a major global
consumer of petrochemicals, and chemicals make
up more than one-third of the raw material
costs for an average vehicle.
The automotive sector drives demand for
chemicals such as polypropylene (PP), along
with nylon, polystyrene (PS), styrene butadiene
rubber (SBR), polyurethane (PU), methyl
methacrylate (MMA) and polymethyl methacrylate
(PMMA), among others.
Front page picture: Volkswagen’s plant in
Anchieta, state of Sao Paulo
Source: Volkswagen
Ethylene20-May-2024
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 17 May.
IPEX: Global spot
IPEX slips as decline in Asia offsets gains in
other regions, crude
The global spot ICIS Petrochemical Index (IPEX)
slipped 0.1%, as a fall in the northeast Asia
index failed to offset gains in other regions
and a rise in crude oil prices.
Univar sees scope
for both industrial and specialty chemicals
M&A – CEO
Chemicals distributor Univar Solutions will
target both industrial and specialty chemicals
and ingredients acquisitions as it seeks to be
a consolidator in a still-fragmented market,
its CEO said.
Brazil’s
floods-hit state plastics sector under
‘hypothesis’ operations could normalize end May
– trade group
Plastics producers in Rio Grande do Sul remain
shut following the floods but are working under
the “hypothesis” operations could normalize by
the end of May, a full month after the floods
hit the Brazilian state, trade group Abiplast
said.
US home builder
confidence dives as mortgage rates exceed
7%
US builder confidence in the market for newly
built single-family homes fell sharply in May
as higher mortgage rates “hammer” confidence,
the National Association of Home Builders said
on Wednesday.
Chemical cycle
has bottomed and now ‘beginning to turn’ – Dow
CEO
The global chemical cycle has bottomed out and
is starting to turn higher, with a higher
degree of confidence in a sustainable recovery
ahead, said the CEO of Dow.
Houston storm
disrupts chems, knocks power out for
thousands
Powerful thunderstorms in Houston and the Gulf
Coast disrupted operations at chemical plants
while leaving more than 700,000 without power
as of Friday.
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Petrochemicals20-May-2024
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which looks at how boom is turning to bust in
China’s housing market.
Editor’s note: This blog post is an opinion
piece. The views expressed are those of the
author and do not necessarily represent those
of ICIS. Paul Hodges is the chairman of
consultants New
Normal Consulting.
Speciality Chemicals20-May-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 17 May.
Europe PET/PTA industry
on high alert as freight costs soar
Another shock to the logistics system is
rippling through the European polyethylene
terephthalate (PET) value chain but the impact
is only so far just touching the surface.
Europe oxo-alcohol spot
prices face pressure from growing
supply
Prices in the European oxo-alcohols spot market
were stable to lower this week as there is now
plenty supply of all grades.
IEA
cuts 2024 crude forecast as OECD Q1 demand
slips into contraction
The International Energy Agency (IEA) on
Wednesday cut its expectations for global crude
oil demand growth as demand from the OECD
shifted into contraction territory in Q1 and as
refinery margins continued to slump into the
spring period.
Non-OPEC+ crude supply
growth to slip in 2025, Latin America to drive
non-OECD output – OPEC
Increases in crude oil supplies from outside
the OPEC+ bloc of countries is expected to
decline slightly year on year in 2025, with the
US and Canada expected to remain the backbone
of OECD production increases and Latin America
driving the rest of the world, according to
OPEC.
IPEX:
Global spot IPEX slips as decline in Asia
offsets gains in other regions, crude
The global spot ICIS Petrochemical Index (IPEX)
slipped 0.1%, as a fall in the northeast Asia
index failed to offset gains in other regions
and a rise in crude oil prices.
Crude Oil20-May-2024
SINGAPORE (ICIS)–Thailand’s economy grew by
1.5% year on year in the first quarter, slowing
from the 1.7% expansion in the preceding
quarter, as private consumption continued to
remain robust.
On a quarter-on-quarter seasonally adjusted
basis, the Thai economy – southeast Asia’s
second largest – expanded by 1.1% in the first
three months of 2024, the National Economic and
Social Development Council (NESDC) said in a
statement.
The quarterly growth prevented the economy from
entering a technical recession, following a
revised 0.4% contraction in the final quarter
of 2023.
Thailand’s economy expanded by 1.9% year on
year in 2023.
Private consumption rose by 6.9% year on year
in the first quarter, continuing the 7.4%
expansion in the previous quarter, and
offsetting a 2.1% decline in government
spending.
Exports by value fell by 1.0% year on year in
the first quarter, weighed by lower volumes,
while imports were up 3.2%.
Manufacturing declined by 3.0% year on year on
in the first quarter, extending the 2.4%
decline in the previous quarter.
The manufacturing sector in Thailand is
dominated by older industries with declining
global demand and lags in sectors where global
demand is increasing, Nomura Global Markets
Research said in a report released on 17 May.
This reflects Thailand’s failure to move up the
supply chain and add value to its export
products, a trend that has become increasingly
evident in its post-pandemic export structure,
it said.
Of the ten largest export products, Thailand
has gained an increasing share in the global
exports of air-conditioners, hard disk drives,
and rubber tires.
However, the global export share of these
products has been declining, with hard disk
drives, the largest export product,
experiencing a significant drop in global
market share.
Meanwhile, Thailand’s global export share in
integrated circuits has declined slightly, even
as the segment has seen substantial growth in
the global market.
“This implies the current global tech
turnaround will result in the export
underperformance of the country,” Nomura added.
2024 FORECAST LOWEREDThe NESDC now
expects the Thai economy to expand by 2-3% year
on year in 2024, down from the previous range
of 2.2-3.2%.
The Thai economy still faces downside risks and
limitations, particularly from high household
and corporate debt levels, the risk of floods
affecting agricultural production, and the
uncertain and volatile global financial market,
it said.
As for trade, a downward revision in exports
for 2024 was mainly attributed to a decline in
export volume during the first quarter of the
year and a lowered forecast for global trade
volume growth.
Initially, export value was anticipated to grow
by 2.9%, but this has been revised down to
2.0%, while export volume growth was adjusted
from 2.4% to 1.5%.
“On the external front, while exports of goods
may not benefit from the global tech
turnaround, given structural constraints, the
slow economic recovery in China should continue
to limit the pace of the tourism recovery [in
Thailand],” Nomura said.
Focus article by Nurluqman Suratman
Gas20-May-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 17 May 2024.
Asia melamine makers grapple with increased
costs, slowing demand
By Joy Foo 17-May-24 11:53 SINGAPORE
(ICIS)–Asia’s melamine spot market for
China-origin product was largely stable in the
first half of May, even though feedstock urea
prices continued to rise, but demand may weaken
for the rest of the month.
Singapore’s April petrochemical exports rise
26.5%; NODX down 9.3%
By Nurluqman Suratman 17-May-24 10:45 SINGAPORE
(ICIS)–Singapore’s petrochemical shipments
rose by 26.5% year on year in April to
Singapore dollar (S$) 1.34 billion, reversing
the 3.6% decline in the previous month,
official data showed on Friday.
PODCAST: China PP exports to weigh on SE Asia
on ample propylene supply
By Damini Dabholkar 16-May-24 21:55 SINGAPORE
(ICIS)–The ample supply of propylene in Asia
and new polypropylene (PP) capacities in China
are expected to weigh on discussions in
southeast Asia over the coming months.
Tanker incident triggers rate hike on South
Korea-Japan trades
By Hwee Hwee Tan 16-May-24 11:28 SINGAPORE
(ICIS)–The intra northeast Asia tanker market
is expected to remain stable despite recent
volatility in South Korea-Japan chemical
freight rates, following a fatal tanker
incident off Japan’s west coast.
US hikes tariffs on $18bn worth of China
imports, including EVs
By Nurluqman Suratma 15-May-24 12:20 SINGAPORE
(ICIS)–US President Joe Biden is ramping up
tariffs on $18 billion worth of imports from
China, including electric vehicles (EVs),
semiconductors, batteries and other goods, in a
move that the White House said was a response
to unfair trade practices and intended to
protect US jobs.
Asia polyester discussions stable amid reduced
supply, lower feedstock prices
By Judith Wang 14-May-24 14:55 SINGAPORE
(ICIS)–Asia’s polyester export discussions
were little changed as the pressure of reduced
supply in China was balanced out by weaker
feedstock prices.
Speciality Chemicals17-May-2024
HOUSTON (ICIS)–Average global rates for
shipping containers continue to surge, liquid
chemical tanker rates ex-US Gulf were mostly
softer, and work continues to reopen the Port
of Baltimore, highlighting this week’s
logistics roundup.
CONTAINER RATES
Rates for shipping containers surged by double
digits again this week on unexpected demand and
tight capacity stemming from Red Sea
diversions.
Average global rates surged by 11% over the
week, according to supply chain advisors Drewry
and as shown in the following chart.
Meanwhile, rates from Shanghai to the US West
Coast are up by almost 33% from early-February
and rates from Shanghai to the East Coast are
more than 30% higher over that period, as shown
in the following chart.
Drewry expects ex-China freight rates to rise
due to increased demand, tight capacity, and
the need to reposition empty containers.
Emily Stausbøll, senior shipping analyst at
ocean and freight rate analytics firm Xeneta,
said the speed of the increases is causing
nervousness in the market.
“Demand reached record levels in Q1 2024, up by
9.2% compared to Q1 2023, and comes at a time
when the Red Sea situation is putting increased
pressure on shipping capacity,” she said. “But
significantly, this is all taking place while
the chaos of port congestion and lack of
available capacity during the COVID-19 pandemic
is still fresh in the memory of shippers.”
“Lessons will have been learned from the
pandemic. If shippers fear there is going to be
a squeeze on capacity during the peak season in
Q3 then they are going to start importing more
goods now,” Stausbøll said. “If these increased
volumes need to be moved on the spot market,
then it is going to put upwards pressure on
rates.”
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), are shipped in
pellets.
They also transport liquid chemicals in
isotanks.
LIQUID TANKER RATES
US chemical tanker freight rates assessed by
ICIS were mostly lower as rates fell from the
US Gulf (USG) to Asia and from the USG to
India.
However, rates ticked slightly higher for
smaller parcels from the USG to Caribbean and
surged from the USG to Brazil.
From the USG to Rotterdam, it has remained
quiet again this week, with available space for
part cargo still open.
COA volumes have been heavy for owners;
however, spot inquiries have been quiet. Due to
the available space and softness, this could
place further downward pressure on this trade
lane.
From the USG to the Caribbean, the market has
remained higher with very little prompt space
available.
Owners have pushed to keep freight rates mostly
steady; however, there is currently a lack of
activity from out of the USG.
From the USG to Asia, this market has remained
overall soft after a long holiday week in
Japan.
BALTIMORE, HOUSTON BRIDGE
COLLISIONS
Traffic in and out of the Houston Ship Channel
was not affected after a barge struck a bridge
connecting Galveston and Pelican islands on
Wednesday morning.
JJ Plunkett of the Houston Pilots said the
Intracoastal Waterway (ICW) was closed, which
could slow movement of barges moving finished
product from plants along the channel.
Ships enter the channel by passing between
Galveston Island and the Bolivar Peninsula and
then move through Galveston Bay before reaching
the main section of the channel where
refineries, chemical plants and storage
facilities are located.
The barge collided with a bridge that connects
Galveston Island to Pelican Island, located
well to the west of where commercial vessels
enter and exit Galveston Bay.
Meanwhile at the Port of Baltimore, the
container ship that essentially closed the port
on 26 March after it struck the Francis
Scott Key Bridge, causing its collapse, is set
to be moved now that the mangled remnants of
the span were removed from the ship’s bow with
controlled blasts on 13 May.
Officials continued to evaluate the situation
on Friday in preparation for refloating the
vessel and clearing the federal channel.
Officials have evaluated sonar and lidar
imagery but are awaiting results from a dive
survey before proceeding with plans to refloat
and move the vessel.
The closing of the port did not have a
significant impact on the chemicals industry as
chemicals make up only about 4% of total
tonnage that moves through the port, according
to data from the American Chemistry Council
(ACC).
The ACC said less than 1% of all chemicals
involved in waterborne commerce, both domestic
and trade volumes, pass through Baltimore.
PANAMA CANAL
Wait times for non-booked southbound vessels
ready for transit surged this week while wait
times for northbound vessels edged higher,
according to the Panama Canal Authority
(PCA) vessel
tracker and as shown in the following
image.
Wait times a week ago were 2.6 days for
northbound vessels and 2.4 days for southbound
vessels.
Additional reporting by Kevin Callahan
Butadiene17-May-2024
HOUSTON (ICIS)–Powerful thunderstorms in
Houston and the Gulf Coast disrupted operations
at chemical plants while leaving more than
700,000 without power as of Friday.
The storms hit Houston on Thursday evening. TPC
Group reported that severe weather caused a
power outage, which led to flaring at its
butadiene (BD) operations in Houston.
Power was restored, and operations returned to
the site, TPC
said in a filing with the Texas Commission
on Environmental Quality (TCEQ).
Lotte Chemical
has delayed the restart of its cracker and
downstream ethylene glycol (EG) unit in Lake
Charles, Louisiana, to next week because of bad
weather, according to market sources. Lotte did
not immediately respond to a request for
comment.
The storm created winds of 40-78 miles/hour
(64-126 km/hour), according to the National
Weather Service.
Such strong winds created widespread power
outages throughout the region.
In the late morning, more than 700,000
customers were without power in the Houston
area, according to CenterPoint Energy, a power
company that is the main transmission company.
Overall, more than 777,000 outages were
reported in Texas, according to PowerOutage.us.
Another 90,000 outages were reported in
Louisiana, another state that is home to
several petrochemical plants and refineries.
The winds reached hurricane force in downtown
Houston, where many petrochemical companies
have corporate offices.
“This was an incredibly dangerous and
destructive storm, impacting one of the largest
cities and busiest travel hubs in America,”
said AccuWeather Chief Meteorologist Jonathan
Porter. “Downtown Houston has not seen wind
damage like this since Hurricane Ike in 2008
and Hurricane Alicia in 1983.
The winds were even stronger at greater heights
because they experienced less friction from
low-lying buildings and trees, according to
AccuWeather. Wind gusts of 33 miles/hour near
ground level would equate to 80 miles/hour at
six stories and 90 miles/hour at 10 stories.
The wind strength at those elevated stories
would be the equivalent of a Category 1
hurricane on the Saffir-Simpson wind scale.
Preliminary damage estimates from AccuWeather
point to $5 billion to $7 billion in total
damage and economic loss from the storm in
southeast Texas, it said.
So far, major railroad companies have not
issued any alerts about disruptions to their
lines.
Port Houston said its terminals are operating
as usual.
Additional reporting by Adam Yanelli and
Melissa Wheeler
(adds paragraphs 3, 5-6, 9-13)
Photo shows aftermath of the storms that
hit Houston. Image by ICIS.
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