HOUSTON (ICIS)–Canadian fertilizer major Nutrien temporarily suspended operations at its Rocanville, Saskatchewan, mine after a fatality at the railcar loading facility this past weekend. The producer is investigating the 19 May incident and cooperating with the review being undertaken by Saskatchewan Ministry of Labour Relations and Workplace Safety. It expects to recommence the potash mine facility, located approximately 250 kilometres east of Regina, on 22 May. “Following the tragic fatality of one of our colleagues at our Rocanville mine on Sunday, 19 May, authorities have conducted investigations at the site. Nutrien is carrying out its own investigations. We continue to provide support to all those affected by this tragic event,” said Nutrien spokesperson. The United Steelworkers union (USW) did announce that it was one of their members who was involved but the name has not been released. “Our community is in mourning over this tragic incident at our mine site and our thoughts go out to the family, friends and our union family who are deeply impacted,” said Derek Palmer, USW Local 7916 president.

HOUSTON (ICIS)–PPG plans to spend $300 million to build a new plant in the US and to make investments at existing sites in North America, the paints and coatings producer said on Tuesday. “As we continue to see a resurgence of manufacturing in the US, PPG will leverage this new facility and our other site investments to maximize quality, improve operational efficiency and reduce product complexity within our manufacturing footprint,” according to a statement by Tim Knavish, PPG CEO. The projects will start later in 2024 and span a four-year period, PPG said. The new plant will be in Loudon county, Tennessee state, the company said. Construction should start in August 2024 and finish in 2026. When fully operational, the plant can produce more than 11 million gal/year (42 million liters/year.) The plant will initially make paints and coatings for automakers and auto parts suppliers, the company said. Eventually, it could supply other industrial segments, including transportation, heavy duty equipment, building and construction and consumer products. The plant in Loudon county will be the first plant that PPG has built in the US in 15 years. PPG will also expand and upgrade existing sites in Cleveland, Ohio, US, and San Juan del Rio, Queretaro state, Mexico. The investments will cover new equipment and processes that will make the plants more efficient, PPG said. They will also allow the plants to meet growing demand for sustainable products, such as waterborne coatings. The investments in the two existing sites and the new plant do not represent a change in the level of PPG’s overall capital investment spending, the company said. Thumbnail shows PPG’s headquarters.

SAO PAULO (ICIS)–Braskem has restarted operations at its Triunfo facility in the flood-hit state of Rio Grande do Sul, which will allow other players in the petrochemicals hub to start up their plants as many depend on input from the Brazilian polymers major to operate. On Monday (20 May), Braskem said it would restart its units at Triunfo – where the producer has around one-third of its Brazilian production capacity – with the expected process to take around two weeks. A spokesperson for Innova told ICIS that the styrenics producer’s plants at Triunfo were ready to begin operations as soon as Braskem, which supplies Innova with key feedstock benzene, had started up. The spokesperson did not respond to questions about the financial hit Innova would suffer from the Triunfo outage, but said it had been able to its supply customers with material from its other units in Brazil. “For polystyrene [PS], for instance, our Manaus production unit was able to absorb the tonnage previously allocated to Triunfo, so that we could avoid any negative impact on our customers,” said the spokesperson. Meanwhile, a source at Innova told ICIS late on Monday that it aims to restart its PS, styrene, and ethyl benzene (EB) plants on 22-23 May. However, due to low production volumes, it would be prioritizing customers in Brazil rather than exporting any material. The restart process, however, may not be without hiccups. A source in Brazil’s petrochemicals industry said on Tuesday that highway BR-386, a 525-kilometer road linking Porto Alegre with the interior of the state as well as the south of Santa Catarina state, remains partially blocked. “Drainage is still a problem. The blockage of the BR-386 and the lack of trucks are making distribution very difficult,” said the source. “Yesterday [Monday], they managed to dispatch 15 trucks out of Triunfo, while the daily average on normal days stands at around 400 trucks.” THE BEGINNING OF THE ENDIn what has become one of Brazil’s worst flooding disasters, the state of Rio Grande do Sul came to a standstill on 29 April with hundreds of roads blocked, widespread landslides and a dam collapse. As of Monday, the floods had caused 157 deaths while another 88 people are unaccounted for, according to Rio Grande do Sul’s emergency services. Over 76,000 people are still taking refuge in shelters, while nearly 600,000 have been displaced from their homes. In the 12-million people state, nearly 2.5 million have been affected by the floods which have badly hurt its economy. Although  petrochemicals plants at Triunfo have not been damaged by the flooding, access to them became almost impossible at the peak of the crisis. This forced companies in the hub to declare force majeure, including Braskem, Innova, and styrene butadiene rubber (SBR) producer Arlanxeo. As of Tuesday, none of the force majeures had officially been lifted. Indorama’s subsidiary in Brazil said it was idling its plants, although it has yet to declare force majeure. A spokesperson for Indorama told ICIS that the situation at its plants remains unchanged from last week. Arlanxeo had not responded to a request for comment at the time of writing. Although petrochemical facilities at Triunfo are restarting, other industrial players are still reeling from the floods with widespread stoppages. Earlier this week, automotive global majors Volkswagen (VW) and Stellantis said they were stopping production at some Brazilian and Argentinian plants due to a lack of input from automotive parts producers in Rio Grande do Sul. Meanwhile, fertilizers players have said to ICIS that demand could be hit, potentially resulting in lower prices as Rio Grande do Sul is also a major agricultural state in Brazil. Analysts at S&P Global said that while petrochemicals producers in the state may be spared from a large financial hit, fertilizers players are likely to be more negatively affected. Front page picture: Braskem’s facilities at the Triunfo petrochemicals hub in Rio Grande do Sul Source: Braskem Additional reporting by Bruno Menini

LONDON (ICIS)–Oil benchmarks could be subject to bearish sentiment this week amid rising demand concerns. Minutes from the latest US Federal Reserve meeting and US economic data due this week will provide further clarity on future monetary policy. ICIS experts look ahead to the likely factors that will drive oil prices in Week 21.

SINGAPORE (ICIS)–China’s industrial output grew by 6.7% year on year in April, signalling a further strengthening of its manufacturing sector, but weaker retail sales and bleak property data suggest that its overall growth momentum remains weak. The April industrial output reading accelerated from the 4.5% expansion in the previous month, data from the National Bureau of Statistics (NBS) showed. The strong April data brought year-to-date growth to 6.3% year on year, and industrial activity looks like it will be one of the main growth drivers in the second quarter of the year. The transition toward high-tech manufacturing continues to be one of the major driving forces for China’s industrial output. High-tech manufacturing grew 11.3% year on year in April, and 8.4% over the first four months of the year, while auto production also rebounded strongly, up to 16.3% in April up from 9.4% in March. The upbeat manufacturing outlook follows earlier April data which showed the country’s exports and imports both returning to growth in April after contracting in the previous month, while the official April manufacturing purchasing manager’s index (PMI) remained in expansionary territory at 50.4 in April from 50.8 in March. Despite a partial retreat after peaking during the pandemic, China’s share of global goods exports has recently rebounded, reaching 14.7% in the second half of 2023, up from 14% in the first half and exceeding pre-pandemic levels of 13.3% in 2019, according to Christine Peltier, an economist at French bank BNP Paribas. In addition, China’s recent market share gains have been recorded across a wide range of products, including low value-added consumer goods such as furniture and toys, organic chemicals and plastics, vehicles, electrical and electronic machinery and equipment and parts thereof, she noted. They have been particularly impressive for electric vehicles, with export volumes multiplied by 7 between 2019 and 2023, solar panels, exports multiplied by 5 between 2018 and 2023, and lithium batteries. These three products accounted for around 4% of China’s total exports in 2023, about three times their 2019 share. The flood of Chinese products has given rise to growing concerns among industrial entrepreneurs and governments in the US, the EU and now emerging countries, and is likely to lead to new trade confrontations in the coming months, Peltier added. RISKS STILL OUTWEIGHING POSITIVES”While we acknowledge the resilience in some parts of the [China] economy amid this economic rebalancing, we believe these are insufficient to outweigh the drags from the property woes and geopolitical headwinds,” Nomura Global Markets Research said in its Global Economic Outlook Monthly report. “Export growth is holding up steadily for now, thanks to cheap prices and resilient external demand, but could face further headwinds as countries launch anti-dumping investigations,” it said. Although China’s export growth has been strong this year due to the global tech upswing, resilient external demand, and competitive prices, rising trade tensions may hinder the export sector and prompt more supply chain relocations away from China in the long term. US President Joe Biden is increasing tariffs on $18 billion worth of imports from China, including electric vehicles (EVs), semiconductors, batteries, and other goods. The White House stated that this decision is a response to unfair trade practices and aims to protect US jobs. In response, China’s Ministry of Commerce announced that it “will take resolute measures to safeguard its own rights and interests.” PRIVATE CONSUMPTION REMAINS WEAK April’s data revealed that retail sales growth fell to a new post-pandemic low, further indicating a shift away from consumption as a primary growth driver for 2024. Retail sales growth fell to 2.3% year on year in April, slowing from the 3.1% expansion in March, bringing the year-to-date growth rate to 4.1%. The largest drag to retail sales in April was tied to automotive sales, which declined by 5.6% year on year, and the data may add fuel to the fire for the critics of China’s overcapacity in this sector. Another major category, household appliances, also slowed to 4.5% year on year. As trade-in policies take effect later in the year, these categories could see some recovery, Dutch banking and financial information services firm ING said in a note. “Consumption growth is likely to remain moderate through most of 2024, as consumer confidence remains downbeat amid tepid wage growth and the lingering negative wealth effects from the past several years of declining asset prices,” it said. “A possible bottoming out of prices would also take some time before translating to stronger consumer activity.” HOUSING SECTOR CONTINUES TO SLUMPThe persistent weakness in China’s property sector, accounting for roughly a quarter of its economy, continues to weigh on overall economic growth. April data showed that in the 70-city sample from the NBS, property prices continued to slide. New home prices fell by 0.58% month on month in April, and secondary market prices fell by 0.94%, which were the steepest sequential declines since the start of the housing slump in 2021. At the city level, 69 out of 70 cities continued to see declining prices in the secondary home market in April, unchanged from March. Although new home prices rose in 6 out of 70 cities, including Shanghai and Tianjin, the new home market’s performance was weaker in April compared to March when 11 out of 70 cities saw price increases. Separately, property investment fell by 9.8% year on year in January-April, extending the 9.5% contraction in January-March, NBS data showed on Friday. China is now exploring a bold plan to revive its struggling property market by having local governments purchase millions of unsold homes. Chinese authorities on 17 May pledged new support to enable state-owned enterprises to purchase unsold apartments, aiming to provide developers with more funding to complete pre-sold properties. The People’s Bank of China also on 17 May eliminated the minimum mortgage interest rate and reduced the minimum down payment ratio for both first-time and second-time home buyers. “A recent flurry of supportive policy announcements including removing purchase restrictions, housing “trade-in” policies, and plans to directly purchase housing units for social housing programmes, has boosted market optimism that we will see a bottoming out of housing prices sometime this year,” ING said. As these policies roll out in the coming months and help alleviate downward pressure on property prices, data indicates that homebuyers may still remain cautious and on the sidelines until a trough is established, it said. “While it is arguably one of the most important signs of a stabilization of sentiment in China, it is worth noting that a potential bottoming out of housing prices would only be the first step; elevated housing inventories will likely keep real estate investment suppressed for some time yet, and the property sector will remain a major drag on the economy this year,” ING added. Recent announcements from local governments, including the Dali government of Yunnan Province, have expressed intentions to facilitate the acquisition of existing homes for conversion into public housing, Singapore’s OCBC Bank said in a note. This move is seen as a way to not only address the housing surplus but also potentially stimulate economic growth by increasing public spending and boosting the construction sector. Moreover, China’s Finance Ministry announced on 13 May a plan to issue 1 trillion yuan of ultra-long special bonds over a period of six months, ending in November. This moderate issuance pace marks only the fourth time in 26 years that China has employed this type of debt for fiscal stimulus, allowing for targeted spending. China has set an ambitious economic growth target of around 5% this year, a level which analysts are cautiously optimistic about. The world’s second-largest economy expanded by 5.3% in the first quarter of this year. Thumbnail photo: A man rides a scooter next to a construction site of residential buildings in China (Source: ANDRES MARTINEZ CASARES/EPA-EFE/Shutterstock) Insight by Nurluqman Suratman

HOUSTON (ICIS)–US farmers continue to overcome their recent weather challenges and have now reached 70% of the corn crop planted with soybeans at 52%, according to the latest US Department of Agriculture (USDA) weekly crop progress report. Reflecting some of the wet field conditions, the current pace of the corn sowings is trailing both the 76% achieved in 2023 and the five-year average of 71%. North Carolina remains ahead of the other key corn states with 98% of its crop planted, followed by Texas at 85%. There is now 40% of the corn crop which has emerged. It is lagging the 46% achieved in 2023, but the current rate is slightly ahead of the five-year average of 39%. Soybean plantings are 52% completed, with this pace behind the 61% level reached last year but it is above the five-year average of 49%. Mississippi remains the leading state for soybean plantings at 86% completed, with Arkansas now at 82%. There is 26% of the crop which has emerged; this is less than the 31% seen in 2023, yet it is ahead of the five-year average of 21%. For the other key crops, the USDA said cotton plantings have reached 44% completed, with sorghum at 32% and spring wheat now at 79%.

SAO PAULO (ICIS)–Braskem has restarted its facilities at the Triunfo petrochemicals hub in the floods-hit state of 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

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

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.