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Ammonia03-May-2024
HOUSTON (ICIS)–Global hydrogen solutions
provider Plug Power has announced the signing
of a memorandum of understanding (MOU) with
Allied Green Ammonia (AGA) to supply
electrolyzer capacity for a proposed ammonia
facility in Australia.
The terms call for up to 3 gigawatts of
electrolyzer capacity for AGA’s upcoming
hydrogen to ammonia facility with the company
stating that the green hydrogen produced by
their electrolyzers help decarbonize the
ammonia production process.
AGA plans to establish a 2,500 tonne per day
green ammonia operation with the proposed
location at Gove Peninsula seen as being
strategically placed to align with Asia trading
partnerships.
Following the MOU, Plug and AGA plan to enter
an agreement to initiate a Basic Engineering
and Design Package (BEDP) for the project.
The BEDP is expected to advance mid-May of this
year, with final investment decision planned
for Q4 2025, with the progressive delivery of
the 3GW electrolyzer supply slated to begin in
Q1 2027.
“Ammonia producers have recognized the
substantial advantages of cost and carbon
reduction through electrolysis-based hydrogen,”
said Andy Marsh, Plug Power CEO.
“We’re thrilled to sign this MOU and partner
with AGA. Our expertise in constructing and
operating large-scale hydrogen production
facilities and our PEM electrolyzer
manufacturing capability to support their 3GW
project position us as the ideal partner for
this endeavor.”
AGA said this agreement is a critical first
step and a testament to the alignment of the
companies’ respective visions.
“This agreement, in light of Plug’s unrivalled
expertise and complementary technologies, is a
strong vote of confidence in our capabilities
and a significant milestone in the planned
delivery of Allied Green’s facility, which will
be one of the most energy efficient green
hydrogen and green ammonia projects globally,”
said Alfred Benedict, Allied Green Ammonia
managing director.
Speciality Chemicals03-May-2024
HOUSTON (ICIS)–Global average rates for
shipping containers rose for the first time
since January, workers at freight rail carriers
Canadian National (CN) and Canadian Pacific
Kansas City (CPKC) have voted in favor of a
strike, and the US regulator that oversees
railroads finalized a rule allowing reciprocal
switching, highlighting this week’s logistics
roundup.
CONTAINER RATES
Shipping container rates have been rising
steadily since December when attacks by Houthi
rebels on commercial vessels in the Red Sea
forced carriers to take the longer route around
the tip of the African continent before
leveling off last week.
This week, the global average for 40-foot
shipping containers rose by 1%, according to
supply chain advisors Drewry and as shown in
the following chart.
Rates from Shanghai to the US East Coast edged
slightly higher, but rates from China to the
West Coast edged slightly lower, as shown in
the following chart.
Judah Levine, head of research at online
freight shipping marketplace and platform
provider Freightos, said that the overall
container market has settled into a new routine
that avoids the Red Sea.
“Though significant backlogs, congestion and
equipment shortages seen during the first few
weeks of the crisis have dissipated,
adjustments have resulted in some moderate but
ongoing disruptions,” Levine said in a weekly
update.
He said that even after falling drastically
since the beginning of the year, prices remain
well above normal and are likely to increase
relative to this new floor as demand is set to
increase for peak season.
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 CHEMICAL TANKERS
US liquid chemical tanker freight rates
assessed by ICIS were unchanged this week.
From the US Gulf (USG) to Asia, the market has
been quieter this week as a holiday-shortened
week has sidelined some key players.
There have been only a few parcels quoted,
which is placing downward pressure on freight
rates for smaller lots.
Larger base cargoes of monoethylene glycol
(MEG), methyl tertiary butyl ether (MTBE), and
methanol have been popular chemicals on this
route, keeping larger freight rates steady.
From the USG to India, the market has been very
quiet.
PORT OF BALTIMORE
Since the opening of a fourth channel into the
Port of Baltimore, 171 commercial vessels have
transited the waterway, including five of the
vessels that were trapped inside the port after
the containership Dali struck the Key Bridge,
causing it to collapse, according to the
Unified Command (UC).
The MSC Passion III entered the port on 29
April, according to vesselfinder.com, making it
the first container ship to enter the port
since the accident.
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.
But a market participant in Ohio told ICIS
previously that it is seeing delays in delivery
times for imports as vessels originally
destined to offload in Baltimore are getting
re-routed to other ports.
PANAMA CANAL
Wait times for non-booked vessels ready for
transit edged for higher both directions this
week, according to the Panama Canal Authority
(PCA) vessel
tracker and as shown in the following
image.
Wait times a week ago were 2.5 days for
northbound traffic and 5.6 for southbound
traffic.
The PCA will increase the number
of slots available for Panamax vessels to
transit the waterway beginning 16 May and will
add another slot for Neopanamax vessels on 1
June based on the present and projected water
levels in Gatun Lake.
RAILROADS
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.
Meanwhile, chemical industry participants were
largely supportive of a final rule adopted by
the Surface Transportation Board (STB) on
reciprocal switching for inadequate service by
railroads, but think the scope was too narrow
and it does not cover a significant portion of
rail traffic.
For the first time, the STB said it is requiring
that three service metrics be maintained on a
standardized basis across all Class 1
railroads.
In the US, chemical railcar loadings represent
about 20% of chemical transportation by
tonnage, with trucks, barges and pipelines
carrying the rest. In Canada, chemical
producers rely on rail to ship more than 70% of
their products, with some exclusively using
rail.
Rail is also the predominant shipping method
for US ethanol.
Additional reporting by Kevin Callahan and
Stefan Baumgarten
Please see the
Logistics: Impact on chemicals and energy topic
page
Isocyanates03-May-2024
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
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Recycled Polyethylene Terephthalate03-May-2024
LONDON (ICIS)–Senior Editor for Recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
NWE, southern Europe colorless flake prices
rise
Bale prices in NWE, Italy increase
Growing sense that flake and pellet prices
getting close to their ceiling
Speciality Chemicals03-May-2024
BARCELONA (ICIS)–A more optimistic outlook for
the global economy and chemicals could be
jeopardized by rising geopolitical instability.
Current downturn reminiscent of 1970s’ oil
shock
Global GDP growth could start to recover
from 2025
Geo-political risks are rising and could
jeopardise economy
Chemicals CEOs slightly more upbeat
PMIs show China manufacturing now expanding
But China challenged by debt, property
bubble, youth unemployment, demographics
Expect 2-3%/year China GDP growth in 2030s
as population declines
Europe economy is stabilising, driven by
services
US economy should see a soft landing
In this Think Tank podcast, Will
Beacham interviews ICIS chief
economist Kevin Swift, 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.
Crude Oil02-May-2024
LONDON (ICIS)–ICIS senior oil analyst David
Jorbenaze discusses developments in the global
crude markets, with geopolitical tensions and
global economic trends continuing to shape the
Q3 2024 market outlook, as the OPEC+ alliance
weighs the next steps in its production
accords.
Highlights:
-OPEC Supply Strategy Adjustments: Considering
easing production cuts in Q3 2024 if oil prices
stay above $90/bbl, in response to rising
global demand and increased output from
non-member countries.
–Economic Recovery and Demand Growth: Supported
by a rebounding Chinese economy and global
economic growth, leading to higher expected oil
consumption into 2025.
-Geopolitical Risks and Market Volatility:
Increased tensions, particularly between Israel
and Iran, along with potential interest rate
hikes by the Federal Reserve, contribute to
heightened market uncertainty and price
fluctuations.
Ammonia02-May-2024
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
Speciality Chemicals02-May-2024
LONDON (ICIS)–Eurozone industrial sector
momentum sank further into contraction
territory in April, to hit a four-month low as
new orders declined by the sharpest rate seen
in 2024.
The eurozone manufacturing purchasing managers’
index for April slumped to 45.7 in April
compared with 46.1 in March, a third month of
consecutive declines, after jumping to 46.6 in
January from 44.4 in December.
Driven by still-bearish conditions in Germany,
Austria, France and Italy which counterbalanced
firmer growth in Greece and Spain, the figure
represents the 22nd straight month of recession
for the sector. A PMI score of above 50.0
signifies growth.
On the plus side, factory output shrank at the
slowest rate this year, delivery times
shortened during the month and declines in
manufacturer operating costs were the most
modest seen in 2024.
Released on Thursday by S&P Global, the
data is in line with recent reports from the
UK and the US, showing that
manufacturing activity in both economies sank
back into contraction territory last month.
For the UK and US, March was the first month of
tentative expansion in months, but since then
demand in the US has softened and the Red Sea
crisis has exacerbated declining output, new
orders, employment and stocks of purchases in
the UK.
What is going to rescue the eurozone economy?
Although it is a difficult question, one thing
is clear: It’s not the manufacturing sector,”
said Hamburg Commercial Bank chief economist
Cyrus de la Rubia.
“A plethora of evidence highlights the stark
absence of demand, as evidenced by a rapid
decline in new orders, unmatched in speed over
the past four months and devoid of
international support,” he added, noting that
current conditions “portends a postponement of
any semblance of recovery.”
Thumbnail photo source: Photo source:
Ying Tang/NurPhoto/Shutterstock
Crude Oil02-May-2024
SINGAPORE (ICIS)–SABIC’s net income fell by
62% year on year to Saudi Riyal (SR) 250
million in the first quarter amid a drop in
prices and sales volumes, the chemicals major
said late on Wednesday.
Losses from discontinued operations
continue to weigh on results
Overcapacity persists, pressuring the
industry as market growth lags – CEO
Spending range of $4 billion to $5 billion
expected for 2024
in Saudi riyal (SR)
billions
Q1 2024
Q1 2023
% Change
Sales
32.69
36.43
-10
Operational profit
1.21
1.76
-31
Net income
0.25
0.66
-62
“The decrease in net profit is attributed to
lower revenues, lower results from associates
and joint ventures in addition to losses from
discontinued operations,” SABIC said in a
filing on the Saudi bourse, Tadawul.
SABIC swung to a net loss of Saudi riyal (SR)
2.77bn ($739m) in 2023, largely due to
one-off losses related to a divestment.
Q1 revenue fell following a 3% decline in
average selling prices and a 7% reduction in
sales quantities.
“Global economic uncertainty remained high
during the first quarter of 2024, caused by
geopolitical and logistical issues. Adding to
these challenges were high global inflation
levels and strict lending policies,” SABIC CEO
Abdulrahman Al-Fageeh said in a separate
statement.
Al-Fageeh in an investor call cautioned that
overcapacity remains a challenge for the
industry, creating a gap between supply and
demand that is likely to persist throughout
2024.
While positive demand signals emerged in Q1
2024, “the year outlook remains uncertain as
the world still navigates through geopolitical
situations with high inflation”, he said.
SABIC plans to adopt a disciplined approach to
capital expenditure, projecting a spending
range of $4 billion to $5 billion for the year,
compared with $3.5 billion to 3.8 billion last
year.
NEW PROJECTS
SABIC has started construction of its $6.4bn
manufacturing complex in China’s southern
Fujian province.
The project “would add a qualitative range of
products to SABIC’s portfolio of chemicals and
polymers and enhance the company’s presence in
the Chinese market”, the company said.
The project will include a mixed-feed steam
cracker with up to 1.8m tonne/year ethylene
(C2) capacity and various downstream units
producing ethylene glycols (EG), polyethylene
(PE), polypropylene (PP) and polycarbonate
(PC), among other products.
SABIC also inaugurated the world’s first
large-scale electrically heated steam olefins
cracking furnace in Netherlands, which will
pave the way for the company to fulfill its
commitment to reach carbon neutrality by 2050.
SABIC is 70%-owned by energy giant Saudi
Aramco.
($1 = SR3.75)
Thumbnail photo by SABIC
Focus article by Nurluqman
Suratman
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