SAO PAULO (ICIS)–Petrobras is to restart its large-scale ANSA fertilizers plant in Araucaria, state of Parana, which has been idle since 2020, the Brazilian state-owned energy major said late on Wednesday. The company did not disclose the date it intends to restart production but said as soon as “next week” technicians would work at the site to establish what repair or upgrading work is necessary to restart the facilities. The facilities are called Araucaria Nitrogenados SA (ANSA), a wholly owned Petorbras subsidiary. They are located next to Petrobras’ Presidente Getulio Vargas Refinery (REPAR). Production capacities stand at 720,000 tonnes/year of urea, 475,000 tonnes/year of ammonia, and 450,000 cubic meters/year of the so-called ARLA urea, an additive added to diesel engines to reduce the emission of polluting gases. “In view of the review of the company’s strategic guidelines approved last year, investment in fertilizers production is once again part of Petrobras’ portfolio,” said the company. Petrobras new CEO, Jean Paul Prates, was appointed by President Luiz Inacio Lula da Silva in January 2023, when he started his term. Unlike the prior Administration, Lula wants Petrobras to play a more active role in the economy. Lula has repeatedly said Brazil needs to increase fertilizers production to lessen its dependence on imports – the country’s trade deficit in fertilizers is large as its agricultural output has become on of the largest in the world. Agriculture is now a quarter of Brazil’s economy. Moreover, the significant producer of fertilizers in the country, Unigel, has paused production on two large-scale fertilizers plant due to high natural costs while it negotiates with its creditors a debt restructuring. The two plants were a 10-year lease from Petrobras signed in 2019. Meanwhile, Unigel and Petrobras have been involved in negotiations to help the former restart its plants, but an agreement signed in December is now under scrutiny. All in all, the two plants remain idle. This week, Petrobras said its “re-entry” into the fertilizers sector would first focus on “assets that already belong” to it. Front page picture: Petrobras’ facilities in Aracaura, state of Parana  Source: Petrobras

SINGAPORE (ICIS)–Buying activities in the Asia and Middle East polyethylene terephthalate (PET) markets remained relatively need-based, with factors like geopolitical tensions and uncertainties in freight rates clouding sentiment. Asian market sentiment mixed, PET tracks upstream closely Uncertainty around freight rates leads to need-based buying Mideast buyers’ inventories high, but some replenishment expected post-Eid break In this chemical podcast, ICIS editors Damini Dabholkar and Zachary Tia discuss recent market conditions with an outlook ahead in Asia and the Middle East. ICIS will be at the Chinaplas conference in Shanghai from 23-26 April. Please get in touch with our team there for more discussion on the PET market.

SINGAPORE (ICIS)–Oil prices rose on Thursday, reversing sharp losses in the previous session, after the US re-instated oil sanctions on Venezuela, and amid discussions by the EU about implementing new restrictions on Iran. EU leaders mull fresh sanctions against Iran at Brussels summit Market uncertainty tied to potential Israeli response to Iran Poor economic data from China cap crude gains Product ($/barrel) Latest (at 04:27 GMT) Previous Change Brent June 87.57 87.29 0.28 WTI May 82.87 82.69 0.18 Both crude benchmarks fell overnight by nearly $3/barrel on demand concerns, with the US showing a higher-than-expected build in crude inventories. The US on 17 April announced it would not renew a license expiring on Thursday which had previously eased sanctions on Venezuelan oil, opting to re-instate punitive measures due to President Nicolas Maduro’s failure to fulfill his election commitments. The US’ six-month sanctions relief for Venezuela took effect on 18 October 2023. Meanwhile, EU leaders are in Brussels, Belgium for a two-day summit (17-18 April) to discuss intensifying sanctions against Iran following Tehran’s missile and drone attack on Israel on 13 April, an incident that prompted global powers to attempt averting a broader Middle Eastern conflict. “We have to adjust, to expand them [the sanctions] on Iran,” French President Emmanuel Macron said in Brussels ahead of the summit. “We are in favor of sanctions that can also target all those who help manufacture drones and missiles that were used in the attacks last Saturday and Sunday [13-14 April].” Israel has indicated its intention to retaliate, although it has not specified the means of response. Iran and Venezuela, which are among the founding members of oil cartel OPEC, have substantial oil reserves, with Iran having the world’s fourth-largest proven oil reserves and Venezuela holding the largest. Despite their influence on global oil prices, international sanctions have curtailed their production and export capabilities and market impact. “The lack of direction in the market reflects the significant uncertainty about Israel’s possible response to Iran’s attack over the weekend,” Dutch banking and financial information services provider ING said in a note. “However, for oil, sanctions are already in place, the issue is that they have not been strictly enforced for the last couple of years. And the big question is whether they will be enforced more rigorously now,” it said. Keeping a lid on prices was poor March economic data from China, the world’s second-biggest economy. Chinese exports in March fell by 7.5% year on year, the biggest fall since August last year. March retail sales and industrial output also missed expectations, heightening concerns of muted demand from the world’s largest crude importer. The US, on the other hand, showed improved in economic activity from late February to early April, with firms indicating expectations for steady inflation pressures, based on a Federal Reserve survey released on 17 April. The Federal Reserve is currently not considering interest rate cuts in the near term due to a combination of resilient economic activity and persistently high inflation. In March, US employers added more than 300,000 jobs – the most in nearly a year – and retail sales exceeded expectations after expanding by 0.7% month on month. Focus article by Nurluqman Suratman An oil tanker at the dock of the El Palito oil refinery at Puerto Cabello, Carabobo, Venezuela – 13 March 2022. (Juan Carlos Hernandez/ZUMA Press Wire/Shutterstock)

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

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.

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.

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.

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.

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)