LONDON (ICIS)–Markets Editor Stephanie Wix is joined by Senior Editor Manager Vicky Ellis, markets reporter Meeta Ramnani, and Senior Analyst Jincy Varghese, as they discuss the key trends from the 29th Fakuma plastics processing trade fair in Friedrichshafen, Germany, in this latest ICIS podcast. They explore discussion topics heard at the event last week, from the highest concerns to the lowest expectations. They also explain the clash of pessimism and optimism between markets including acrylonitrile butadiene styrene (ABS), polycarbonate (PC), polyethylene (PE) and polypropylene (PP), and also engineering plastics polyacetal (POM) and polybutylene terephthalate (PBT).

EU energy policy must be less ideological in next five years, GIE conference hears Lowering high energy prices, which harm industry, a key goal for incoming Commission Commissioner confirmation hearings to take place 4-12 November MUNICH (ICIS)–The incoming European Commission must move away from ideological energy policy if it hopes to stabilize prices and keep industry competitive, delegates heard at the Gas Infrastructure Europe (GIE) conference in Munich on 17-18 October. However, despite an announced focus on a ‘clean industrial deal’, doubts remain that Europe can apply the lessons learned from the energy crisis. Speaking to ICIS on the sidelines, Tsvetelina Penkova, vice-chair of the European Parliament’s energy and industry committee said the thought the upcoming commissioner hearings would be “dynamic”, though she hoped the meetings would be constructive rather than unpleasant. Nominated commissioners must be confirmed by the European Parliament before they can take up their roles. Hearings are scheduled for 4-12 November. “The problem is quite a lot of topics are overlapping [in commissioners’ portfolios], so it’s very difficult to distinguish exactly the area of expertise,” she said, citing concerns over who would ultimately be responsible for decisions and the time involved if multiple people sign off policies. Penkova told delegates that fluctuations in energy prices between different regions harmed competitiveness and energy security. The discrepancy “really depends on the energy source that’s being used at the moment,” she said, as a lack of proper grid interconnections created bottlenecks, and without fixing this Europe’s energy landscape would remain dominated by local, regional or national solutions. The topic of surging heatwave-driven power prices experienced in central and southeastern Europe also dominated a meeting of EU energy ministers in Luxembourg on 15 October. Penkova called for energy resilience as well as a diversity of sources, including renewables, hydrogen, ammonia and other carriers, alongside storage and flexibility solutions. “We must understand that dependency only on one single sector or energy source is naive. That’s definitely not going to work,” she said. GIE president-elect Arno Bux stressed to delegates that gas infrastructure would remain vital for decades to come, citing nascent hydrogen, biomethane and carbon dioxide markets. “We all know pipelines … are by far the most efficient way to transport and store energy,” he said. But the industry was hindered by 1990s-era regulation, Bux said, which failed to foresee the need to maintain and expand infrastructure under uncertain conditions or the costs involved. NUCLEAR SCEPTICISM? Penkova dismissed concerns over nuclear skepticism previously voiced by the nominees for energy commissioner, Denmark’s Dan Jorgensen, and executive vice-president Teresa Ribera from Spain, tasked with delivering the ‘clean, just and competitive transition’. Noting that the parliament considered nuclear generation as strategic and sustainable technology, Penkova told ICIS she didn’t foresee any change in Europe’s policy, but instead hoped for better integration. “When we’re speaking of nuclear waste, we shouldn’t be looking only [at] the countries that are producing nuclear energy, but also at countries that are consuming [it], because we are all part of the waste creation,” she said. CLEAN AND INDUSTRIAL Ilaria Conti, gas expert and coordinator for strategy and development at the Florence School of Regulation, told delegates it was important the EU had not watered down its commitment to decarbonize, instead aiming to use industry as the “engine” of the transition. The shift followed the results of European parliamentary elections in June, which saw a perceived backlash against green policies. “The election results forced people to realise that achieving climate neutrality targets on time but losing the economy and the electorate along the way was unhelpful, ” said Niko Bosnjak, head of policy and communication at the German grid operator OGE. Bosnjak said he worried that there was less urgency for policymakers to act since the pressure had eased, despite net-zero goals rapidly approaching. “I’m afraid we’re getting into the regular slump that we’ve been in before. I’m not saying I’m all for crises, ok? I think no one wants that, but we need to do better a better job in translating the learnings,” he said. For example, Bosnjak wondered why there was not middle ground between the 9-month construction of an LNG-import pipeline during the crisis and the return to an average of 6-8 years to build infrastructure. Conti said she thought plans to make the Commission more interdependent was “actually in my opinion a very smart move by Ursula von der Leyen.” The overlapping briefs would hopefully force incoming commissioners to cooperate, Conti said, breaking down past silos where each commissioner focused only on their own portfolio.

BARCELONA (ICIS)–Changing trade flows driven by increasing friction between China, the US and their allies mean there will be demand for new chemical logistics routes and infrastructure, according to the executive chairman of chemical logistics group Bertschi. As direct chemical exports from China to the US decline, and more trade barriers go up, countries in Eastern Europe, southeast Asia plus Mexico and Turkey are acting as a stopping off points for indirect exports, while new chemical manufacturing also springs up in these areas, said Hans-Jorg Bertschi. He said: “The geopolitical situation also plays an important role – there are two blocs now – western countries and the BRICs (Brazil, Russia, India, China) led by China where we see a certain fragmentation of global trade. Chemical flows between China and the US are shrinking and we also now see a lot of triangulation trade where bridge countries in between take advantage of the situation.” Speaking on the side lines of the European Petrochemical Association’s annual conference in Berlin, he explained that China now transports a lot more chemicals to Mexico, where local manufacturers add value and then export finished goods to the US. Chemical producers – some from China – are building plants and businesses in Hungary and Turkey. There is also a flurry of activity in Morocco, India and Vietnam, which are all changing trade patterns around the globe, the executive believes. He said: “The reality is that new countries are emerging, which I call bridge countries between the blocs – some do not yet have the right chemicals infrastructure so here I would expect to see more investment in chemical logistics and supply chain infrastructure where there is growing local demand in addition to demand from regional fragmentation.” OTHER CHEMICAL TRADE FLOWS ALTER Bertschi pointed out that there is a clear increase of imports from the US to Europe based on the US feedstock advantage and growth of new-build facilities which are very efficient. “This has been going on for 3-4 years and will develop further. If you look at the average cracker size in Europe it’s about 350,000 tonnes/year whereas new world scale crackers are around 1 million tonnes/year. Also the average age of Europe’s crackers is 40-50… so I expect to see more closure announcements here, and more imports from the US, the Middle East and eventually from China.” CHEMICAL RECYCLING WILL DRIVE NEW LOGISTICS The chemical recycling sector is growing, with 83 projects in Europe alone recorded in the ICIS Recycling Supply Tracker – Chemical.  Globally the database records 173 sites and this nascent part of the chemical industry will create some completely new logistics requirements and trade flows according to Bertschi. He pointed out that the current linear model for chemical production just requires oil and gas to move mainly by pipeline to refinery and cracker sites. The finished products –  chemicals and polymers – are then distributed to downstream customers. The circular economy creates new flows of material which will require logistics support: “But now, with renewables, we have new flows of product which will require inbound logistics to deliver feedstocks into these plants. Pyrolysis oil will then be produced across regions which will require complex inbound logistics to refineries.” Bertschi has started placing storage centers near to crackers, plus heating and testing facilities for pyrolysis oil, which is a product of chemical recycling which can be used as a circular feedstock for chemical production. “This is not homogenous – it needs to be analysed before it is put into a cracker.  Previously just a pipe was needed but now complex inbound logistics will be required. We will import pyrolysis oil from across Europe and the US and some of this is already happening – this is at the beginning but it is becoming one of our growth drivers.” Interview by Will Beacham Image credit: Georgios Tsichlis/Shutterstock

SINGAPORE (ICIS)–The short-term demand outlook for recycled polymers from Asia remains sluggish especially for low-value grades, mainly due to poor economics and brand users’ preference of cheaper virgin plastics. Upcoming regulation in deep-sea regions fails to support Asia recycled polyethylene terephthalate (rPET) exports Asia recycled polyethylene (rPE), recycled polypropylene (rPP) remain traded mostly in domestic markets Investments into recycling continue across Asia despite weak demand In this chemical podcast, ICIS senior editor Arianne Perez discusses recent market conditions with an outlook ahead in Asia.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: The recent clamor about new economic stimulus in China didn’t change anything. After initial stock market rallies, investors parsed the details and realized that Beijing was either unable or unwilling (it is surely a combination of both) to redirect the economy towards much greater domestic consumption and away from investment. It is what it is. The only question now is how low Chinese chemicals demand growth will go over the next decade and more. Will we see a negative growth in some years for some products, especially those tied to construction? Today’s main average polyethylene (PE) margins in northeast Asia between January 2014 and 18 October this year, weighted according to the estimated percentage shares of the three grades out of toral production in each of the 11 years from 2014 until 2024. As LDPE accounted for an average of just 16% in 2014-2024 versus 46% for high density PE (HDPE) and 38% for linear low density PE (LLDPE), then of course more weight was given to the margins of the latter two polymers. Despite all the sound and fury of the recent stimulus: Margins during the Chemicals Supercycle, from January 2015 until December 2022, averaged a positive $435/tonne. From January 2022 until August 2024 (before the most recent stimulus), they averaged minus $32/tonne. From January 2022 until 18 October 2024 (including post-stimulus), they averaged minus $29/tonne; from 1 September-18 October, the margins were at a positive $25/tonne. In other words, the most recent stimulus has barely moved the needle towards returning the northeast Asia PE business to a health condition. Chemicals and polymers are a very good barometer for broader economies. A view from this year’s European Petrochemical Association (EPCA): three to nine years before a full recovery This year’s EPCA in Berlin appeared as if it was attended by more senior executives than is usually the case. “Normally, companies send junior- to mid-level executives to the EPCA, but on this occasion more senior leaders were present because they wanted to try and gauge what happens next,” said one contact. I got the sense from my conversations at EPCA that there is recognition at board levels that the global chemicals industry is it an inflection point, not just because of events in China. The last chart in today’s post is a means of getting the debate going about the wider transformation taking place. Back to the downturn and China. Everyone I spoke to at EPCA recognized that China was front and center of the downturn, given the type of data I presented above. Estimates of when a full recovery might arrive ranged from a further three years to as many as nine years. But there was also a recognition, as the above chart suggests, that we may never fully return to the old market conditions. 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.

HOUSTON (ICIS)–US corn harvesting has reached 65% with soybeans 81% completed, according to the latest US Department of Agriculture (USDA) weekly crop progress report. With warmer weather prevailing far into October in many areas, farmers have kept the quick pace going with the current corn harvest ahead of both the 55% from 2023 and the five-year average of 52%. Texas continues to be the leading state with 99% of its corn completed, with North Carolina and Tennessee each next at 94%. There is now 98% of the crop mature, which is above the 97% from last season and the five-year average of 95%. The USDA has ceased reporting corn conditions for this season. Moving faster than its corn counterpart, the soybean harvesting has reached 81% completion, which is ahead of the 72% level from 2023 as well as the five-year average of 67%. Minnesota remains the leading state with 95% of their acreage completed, with Louisiana right behind at 94% finished. In other harvesting updates, the USDA said there is now 44% of the cotton crop finished with sorghum acreage 64% completed.

HOUSTON (ICIS)–Affected by tropical weather impacts in late September, Canadian fertilizer major Nutrien confirmed its Florida phosphate facility in White Springs did restart late last week. While the producer has not revealed its post-storm assessment, it did say the operations were currently ramping up production. The site was among other Nutrien operations that were shut down under safety protocols during storm-induced power failures as Hurricane Helene made landfall. Following the storm, the company had stated all its colleagues were safe, but many area roads were closed due to downed power lines and flooding. The first storm was followed by the recent Hurricane Milton, but Nutrien said after that event it was not impacted at the White Springs phosphate facility and it was working with customers on any potential impacts to supply. There were no further details provided regarding supply disruption. Earlier in the day, producer Mosaic said all its Florida-based employees were safe and that the Riverview facility has resumed activity and should return to normal rates by the end of the week. Further, it stated all other Florida sites have resumed operations with its mining activity in the process of restarting. Due to the storm impacts, the company does anticipate a production decrease with it estimated to fall between 200,000-250,000 tonnes in Q4.

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 18 October. NEWSArgentina’s Rio Tercero shuts TDI plant on global oversupply Petroquimica Rio Tercero has shut its toluene di-isocyanate (TDI) plant in Cordoba on the back of global oversupply, a spokesperson for the Argentinian producer confirmed to ICIS on Tuesday. Brazil’s higher chemicals import tariffs kick off Brazil’s higher import tariffs on dozens of chemicals kicked off on Tuesday after the government published them on the Official Gazette late on Monday. Brazil’s Senate approves EU Reach-like rules to increase chemicals control Brazil’s Senate approved on 15 October the creation of a National Inventory of Chemical Substances aiming at “reducing negative impacts” of toxic chemicals on human and environmental health. PRICING Mexico PE domestic prices lower on weak demand, ample supplyDomestic polyethylene (PE) prices dropped in Mexico due to weak demand and ample supply. In other Latin American countries, prices were unchanged. Brazil hydrous and anhydrous ethanol sales surgeIn Brazil, 1.73 billion liters of hydrous ethanol were sold by Center-South units, representing a 4.36% increase over the same period in the previous harvest. This expansion demonstrates the domestic market’s ongoing need for hydrous ethanol. Dow plans maintenance at LLDPE unit in Argentina – sourcesDow is having a scheduled maintenance at its linear 310,000 tonne/year low-density polyethylene (LLDPE) plant in Bahia Blanca, Argentina, until 5 November, according to market sources. Chile, Peru international PP prices drop on lower Chinese offers International polypropylene (PP) prices dropped in Chile and Peru on the back of lower offers from China. Chinese offers retreated this week, after rising the previous week due to higher crude oil prices.

Iberia holds four of six projects ICIS data shows product costs could drop to sub €3/kg with subsidy Projects must commence operations in five years LONDON (ICIS)–On 7 October the European Commission announced it had signed grant agreements with six renewable hydrogen production projects as part of the EU Hydrogen Bank scheme, indicating that one of the original seven winners of funding had withdrawn. ICIS data shows project costs could result in hydrogen below €3/kg as a result of the support. From the point of signing contracts, the five projects will need to commence hydrogen production within five years, indicating that their supply would be online before 2030, the year 42% of all hydrogen used in industry must be renewable fuels of non-biological origin (RFNBO) according to the renewable energy directive. The total production from the six projects will amount to roughly 1.5 million tonnes of hydrogen over the entire 10-year period covered by the EU Hydrogen Bank process, meaning that at least 150kt/year of RFNBO will be produced by the scheme by 2030. Companies bid on a €/kg basis for support, meaning for every kilo produced by the projects, a subsidy would be paid to the bid amount, thus reducing the potential sales price for the projects to RFNBO buyers. Bids ranged from €0.37-0.48/kg of RFNBO. The support was designed to bridge the gap between RFNBO and conventional high emissions hydrogen. ICIS understands that current RFNBO sales prices for around 2029 can reach up to €15/kg, with some producers citing production costs in the single figures. ICIS Hydrogen Foresight project data for Spanish electrolysers indicates that, following the subsidy, product costs from the Catalina and HYSENCIA projects respectively could fall to €2.73/kg and €3.11/kg. The project to withdraw from the scheme was the El Alamillo H2 project, coordinated by Benbros Energy S.L. The project had bid for support of €0.38/kg, the second-lowest bid level of the seven successful bidders.