HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 6 September. Brazil’s manufacturing sharply slows in August on higher costs, lower demand Brazil’s manufacturing PMI index for August sharply slowed down from July on the back of output falling for the first time in several months due to subdued sales, and elevated cost pressures, analysts at S&P Global said on Monday. INSIGHT: Brazil’s natgas overhaul to benefit chems but crude players push indispensable The Brazilian government’s decree changing natural gas regulations could potentially overhaul the market and, along the way, benefit the chemicals industry by providing it with cheaper energy and eventually with ethane-based feedstocks. INSIGHT: LatAm chemicals needs to be as plural as society to reach full sales potential For years, Latin American petrochemicals companies have been trying to increase diversity within to better represent the consumers they want to sell their products to – without much success. Canada government wobbles amid fallout from rail labor dispute Canada’s Liberal-led minority government under Prime Minister Justin Trudeau is paying a heavy price for its decision last month to end the labor dispute at freight railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC) through binding arbitration. SHIPPING: Union, USWC ports at impasse as strike deadline looms; container rates keep falling A strike by union dock workers at East Coast and US Gulf ports seems more likely after International Longshoremen’s Association (ILA) Wage Scale Delegates voted unanimously at the end of their two-day meeting to support leadership’s intentions to walk off the job if a new labor deal is not agreed to when the contract expires on 30 September.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which focuses on the crisis in Europe’s auto industry. 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.

SINGAPORE (ICIS)–Heavy rains and floodings continued in northern Vietnam on Monday, two days since Super Typhoon Yagi made landfall in the region and killed more than 20 people. Bridge collapses in Phu Tho province Industrial hubs in the north hit by power outage No reported disruptions to petrochemical operations in central/south Vietnam There was massive damage wrought to infrastructure in the northern region, with the Phong Chau bridge in Phu Tho province collapsing early on Monday, sending multiple vehicles plunging into the Red River and severing the connection between Lam Thao and Tam Nong districts. Yagi – Asia’s most powerful storm this year – made landfall along the coasts of Vietnam’s Quang Ninh and Haiphong provinces in the afternoon of 7 September, bringing winds of up to 160 kilometers/hour. Yagi weakened into a tropical depression on 8 September making landfall but left several areas of the port city of Hai Phong under half a meter of water in its wake. There were no reports of disruptions or damage to the country’s major petrochemical complexes – Long Son in the southern province of Ba Ria – Vung Tau; the Dung Quat petrochemical complex in Quang Ngai province in the central region; and the Nghi Son petrochemical complex in Thanh Hoa province in north-central Vietnam. The storm has killed 22 people and injured 199 others, while 32 people were missing, Vietnamese state media cited National Committee for Disaster Response and Search and Rescue as saying late on 8 September. Up to 38 ships in Quang Ninh have sunk while some 4,350 houses were damaged because of Yagi, with up to 52,371 hectares of crops flooded. A massive power outage initially hit Quang Ninh and Haiphong provinces upon Yagi’s landfall, leaving at least three million people without power. These provinces are crucial industrial hubs and home to multiple factories producing goods for global markets, such as Vietnam’s VinFast’s electric vehicles. Vietnam evacuated more than 50,000 people from coastal towns and deployed 450,000 military personnel due to Yagi. Prior to reaching Vietnam, Typhoon Yagi swept through southern China and the Philippines, claiming the lives of at least 24 people and injuring dozens more. The storm earlier made landfall in China’s Hainan province on 6 September, knocking down trees, flooding streets, and leaving over 800,000 homes without electricity. Transportations of chemical cargoes in southern China’s Hainan province were halted since 5 September ahead of Yagi. Focus article by Nurluqman Suratman Additional reporting by Fanny Zhang

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 September. EU chemicals production gradually firming, short of recovery levels – Cefic Chemicals production in the EU has continued to firm through 2024, but weak demand is keeping output growth below recovery levels, with energy prices still substantially above US levels in the region, trade body Cefic said. Europe jet fuel prices hit new lows on supply overhang, crude softness Average European jet kerosene spot prices for cargoes fell 6% week-on-week while barge prices dropped 5% from the week prior as supply overhang and lack of demand continues to haunt the market. Europe markets slump on US, China demand worries, commodity shocks Europe chemicals shares and public markets slumped on Wednesday in the wake of sell-offs in Asia and the US on the back of growth fears and a crude oil sell-off. Europe August acetic acid contracts roll over Acetic acid contract pricing for August was assessed at a rollover in Europe amid balanced supply and seasonally low demand. Global spot index up on gains in NE Asia, NW Europe The global spot ICIS Petrochemical Index (IPEX) was up for the first time in four weeks in the week ending 30 August, on the back of increases in northeast Asia and northwest Europe.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 September 2024. Strong regional currencies weigh on Asia recycling exports The weakening of the US dollar against major currencies in Asia since August will continue to strain exports of recycled polyethylene terephthalate (R-PET), recycled polyethylene (R-PE), and recycled polypropylene (R-PP). Asia refined glycerine market stagnates on stand-off between buyers and sellers Asia’s refined glycerine market may likely continue to remain tepid in the near term due to a persistent stand-off between buyers and sellers. UPDATE: Oil falls by $1/bbl, Asia petrochemical shares tumble on global growth worries Asian petrochemical shares slumped on Wednesday as regional bourses tracked Wall Street’s rout overnight on poor data from both the US and China, with crude prices shedding more than $1/bbl in late Asian trade. At the close of trade in Tokyo, Mitsui Chemicals fell 3.07% and Sumitomo Chemical tumbled by more than 4%, with the Nikkei 225 index down 4.24% at 37,047.61. Asian PX hits fresh year low, levels last seen in December 2022 Asian paraxylene (PX) prices hit a fresh year low, amid a lack of buyers’ confidence and overnight losses seen in upstream crude markets. INSIGHT: China-Canada trade frictions may affect MEG trade flows Trade frictions between China and Canada have intensified recently following the Canadian government’s decision to impose tariffs on imports of electric vehicles (EVs) as well as steel and aluminum from China starting 1 October. INSIGHT: Qatar to emerge as PVC exporter next year when $279 million plant comes online Qatar will become an exporter of polyvinyl chloride (PVC) as early as next year when commercial operations start at its first plant, because its 350,000 tonne/year capacity will be more than 10 times the state’s annual imports. Asia titanium dioxide Sept key drivers to be stock levels, exchange rates While the titanium dioxide (TiO2) spot price in Asia is likely to find support with the start of the traditional demand season in September, a large-scale revival now seems unlikely.

HOUSTON (ICIS)–A strike by union dock workers at East Coast and US Gulf ports seems more likely after International Longshoremen’s Association (ILA) Wage Scale Delegates voted unanimously at the end of their two-day meeting to support leadership’s intentions to walk off the job if a new labor deal is not agreed to when the contract expires on 30 September. The ports, represented by the United States Maritime Alliance (USMX), contend that the offer on the table “demonstrates a willingness by our members to reach a new deal before the end of this month,” and that it remains committed to reaching a new deal before the current agreement expires. Last week, both parties submitted documents with the US Federal Mediation and Conciliation Service (FMCS) informing the agency of a dispute between the parties, as required by law. The looming work stoppage would have major impacts on the US economy, and the National Retail Federation (NRF) has urged both sides to resume negotiations. Union delegates from the 13 port areas included in the current agreement received a strike mobilization plan from ILA Executive Vice President Dennis A Daggett during the two-day meeting that will be implemented if a new agreement is not reached in time. USMX said in a statement posted to its website that “the ILA continues to strongly signal it has already made the decision to call a strike and we hope the ILA will reopen dialog and share its current contract demands so we can work together on a new deal, as we have done successfully for nearly 50 years”. USMX said its offer includes industry-leading wage increases, retention of the existing technology language in the current agreement, which already formalizes that there will be no fully automated terminals and no implementation of semi-automated equipment or technology/automation without agreement by both parties to workforce protections and staffing levels, increases to retirement account contributions, higher starting wages and continuation of premier health care coverage. The ILA is seeking better pay, including container royalty. Market participants have said a strike by dockworkers would not have much of an impact on liquid chemical tankers. One reason is that most terminals that handle liquid chemical tankers are privately owned and do not necessarily use union labor. Also, tankers do not require as much labor as container or dry cargo vessels, which must be loaded and unloaded with cranes and require labor for forklifts and trucks. But more liquid chemicals are being moved on container ships in isotanks. CONTAINER RATES Rates for shipping containers from east Asia and China to the US fell again this week and global average rates continued to fall at a faster rate, according to multiple analysts. Supply chain advisors Drewry in its World Container Index showed average rates down by 8%, as shown in the following chart. The decrease in rates from China to both US coasts is shown in the following chart from Drewry. Despite the looming threat of a port strike in the US, transpacific Eastbound freight rates have seen a slight dip this week, Drewry said. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said the looming strike may be pushing more volumes to the West Coast, supporting some rebound in rates since mid-August, but prices are nonetheless 15% below their high for the year reached in mid-July. “Some of this rate decline is likely also due to capacity increases, including from opportunistic carriers who launched transpacific services when rates were spiking earlier in the summer,” Levine said. 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 CHEM TANKER RATES STABLE Rates for chemical tankers ex-US Gulf were unchanged this week on trade lanes assessed by ICIS. Rates firmed on the USG to Mediterranean, and to Mexico’s East Coast. The firming is due to a lack of available tonnage amid more inquiries and fixtures along these trade lanes. However, rates to both Asia and India are facing downward pressure, especially for stainless steel vessels. The downward pressure is likely to hold into next week. Overall, throughout September the spot market should remain soft as there is open partial space in the US Gulf and as most owners continue to depend on contract tonnage. Bunker fuels in the USG were slightly lower following the weaker energy complex. PANAMA CANAL MAINTENANCE The Panama Canal will be conducting maintenance from 10-25 September on the center wall culvert of the Gatun Locks but is not expected to limit transits, according to the Panama Canal Authority (PCA). Although the culvert maintenance will increase the time required to fill and empty the chamber in both lanes at Gatun Locks, this should not affect significantly the capacity of the Panamax Locks to warrant a booking condition change. Since the culvert outage is at Gatun Locks, Neopanamax vessels should not be affected as result of this maintenance. The PCA added an additional booking slot effective 1 September, bringing the total number of passages allowed per day to 36, almost at par with the 36-38 transits/day seen before a drought forced the PCA to limit transit for the first time in its history. There are 10 slots for Neopanamax vessels, 20 for supers and six for regular vessels. The better conditions at the canal are likely to improve transit times for vessels traveling between the US Gulf and Asia, as well as between Europe and countries on the west coast of Latin America. This should benefit chemical markets that move product between regions. Wait times for non-booked southbound vessels ready for transit are 2.6 days for northbound vessels and 0.4 days for southbound vessels on 6 September, according to the PCA vessel tracker. Additional reporting by Kevin Callahan Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship carrying cargo on its way to Antwerp Harbour. (Olivier Hoslet/EPA-EFE/Shutterstock).

HOUSTON (ICIS)–US recycled plastics Senior Editor, Emily Friedman and Americas recycled plastics Analyst, Josh Dill, dive deeper into the challenges chemical recyclers face, following Josh’s recent webinar, Chemical Recycling Growth: Accelerating Progress Towards Meeting Recycling Targets (view the recording here). While the webinar primarily highlighted legislative uncertainties, this discussion expands on the other hurdles including: Technological difficulties faced by chemical recyclers as a nascent industry Challenges in securing adequate feedstock which is financially sustainable Overall economic headwinds as many recyclers look to startup new plants

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Further narrowing of the colorless flake range in eastern Europe Latest Italian bale auctions see colorless and blue bales drop More bullish sentiment displayed by some sellers in September

LONDON (ICIS)–Chemicals production in the EU has continued to firm through 2024, but weak demand is keeping output growth below recovery levels, with energy prices still substantially above US levels in the region, trade body Cefic said. Sector output increased for the fourth consecutive quarter in the April-June period, increasing 1.2% compared to the first three months of the year and 4.3% from the same period in 2023. The second quarter last year may stand as the low point for chemicals production going back to before the pandemic, Cefic added, but the 4.3% annual improvement for the same period this year does not yet represent a pronounced recovery. Second-quarter 2023 productivity had plummeted over 12% compared to the same period in 2022. “Given the lack [of] demand growth, the European chemical industry production volumes are still far from the pre-COVID levels,” the group said. Despite gradually firming output, demand remains depressed, and capacity utilisation declined slightly during the quarter, to 75.2%, with that trend continuing into July. Despite capacity rates substantially below the long-term average of 81%, the longstanding destocking trend in the sector may have come to an end in March, with July standing as the fourth consecutive month of increasing stocks. The sector outperformed general industrial productivity in the first six months of 2024, Cefic said, which saw a 3.6% decline year on year. This is having a knock-on effect on chemical company order books, while energy prices continued to be 4.7 times higher than in the US in July. Gas prices in the first half of the year were 70% above the 2014-2019 average in Europe, Cefic added. Thumbnail photo: Part of BASF’s Ludwigshafen, Germany, site on the banks of the River Rhine (Source: Lilly/imageBROKER/Shutterstock)