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HOUSTON (ICIS)–During the spring 2022 season
US farmers planted slightly more corn than
soybeans but both crops did not match the March
estimates according to the US Department of
Agriculture (USDA) in the acreage estimate
report.
Although growers are calculated to have sowed
89.9m acres of corn in recent weeks the overall
amount of corn planted acreage is down by 4%
year on year.
While this is 3.44m acres less than the 2021
crop had planted, the total was higher than the
agency had earlier estimated the crop would be
in its acreage tally.
The USDA said compared with last year, planted
acreage is expected to be down or unchanged in
35 of the 48 estimating states.
Area harvested for grain is at 81.9m acres
which is also down by 4% from last year.
For soybeans, the report showed that soybean
planted area for 2022 is estimated at 88.3m
acres, up 1% year on year but this amount is
lower than the USDA had previously projected
would be sowed.
Compared with last year, planted acreage is up
or unchanged in 24 of the 29 estimating states.
The USDA said all wheat planted area for this
spring is estimated at 47.1m acres, which is up
1% from 2021.
If realized, this would represent the fifth
lowest all wheat planted area since records
began in 1919.
For cotton the agency is calculating that all
cotton planted area this year will be at 12.5m
acres, up 11% year on year.
Upland area is estimated at 12.3m acres, a rise
of 11% from 2021, while American Pima area is
forecasted at 156,000 acres, up 23% year on
year.
01-Jul-2022
HOUSTON (ICIS)–Australian fertilizer developer
Centrex Limited announced that its Agriflex has
executed an agreement for a trial shipment of
beneficiated phosphate rock with Ameropa
Australia.
The company said the terms are for the sale of
a 5,000 wet tonnes beneficiated phosphate rock
shipment to Ameropa and includes a first right
of refusal to purchase 10% of the Ardmore
mine’s annual production for the first three
years.
The trial shipment has been sold on a FOB basis
with it set to be loaded in November 2022 with
pricing to be finalised 6 weeks prior.
If Ameropa does not elect to exercise the first
right within the timeframe, then it will lapse
for the available production and Ameropa will
have no further obligation to Agriflex under
the agreement.
Centrex said the trial shipment is conditional
upon upgrades to the processing plant being
completed by Agriflex to its satisfaction to
sufficiently produce the product.
It is also conditional upon receiving all
necessary approvals for the performance of the
company’s delivery obligations.
Last month the company said mining operations
are achieving the scheduled rate of 27,000
tonnes of ore per month and that the crushing
contractor had commenced efforts to create both
direct application product and feed for the
Ardmore beneficiation plant.
The production rate is expected to
progressively ramp-up over the next six months
as crushing and the beneficiation plant are
optimised.
“Agriflex is proud to be entering into this
agreement with Ameropa, a well respected and
world class company, at the same time helping
to improve Australia’s supply security of
phosphate rock,” said Robert Mencel, Centrex
Limited managing director.
“With the signing of this agreement, the
Ardmore Project has 100% of its first three
years of production allocated to major
customers in Australia, New Zealand and Asia.”
01-Jul-2022
HOUSTON (ICIS)–On Friday, the US will revive
Superfund taxes on 42 building-block chemicals
as well as imports of several substances made
from those chemicals.
The two Superfund taxes were allowed to end in
the mid-1990s. The US is reviving them as part
of the $1trn Infrastructure Investment and Jobs
Act that President Joe Biden signed
into law in November.
The proceeds raised by the taxes will help
replenish the government’s Superfund programme,
which pays for the clean-up of waste sites.
The US is reviving two different Superfund
taxes.
The first one is levied on the sale or use of
42 chemicals. These taxes are imposed on
companies that make or import the 42 chemicals.
The following table shows 42 chemicals and
their tax rate.
Taxable Chemical
Alias
$/Short Ton
Cent/lb
Acetylene
9.74
0.487
Ammonia
5.28
0.264
Antimony Trioxide
7.40
0.370
Arsenic Trioxide
6.82
0.341
Barium sulphide
4.60
0.230
Benzene
9.74
0.487
Bromine
8.90
0.445
Butadiene
BD
9.74
0.487
Butane
9.74
0.487
Butylene
9.74
0.487
Chlorine
5.40
0.270
Chromite
3.04
0.152
Cupric oxide
7.18
0.359
Cupric sulphate
3.74
0.187
Cuprous oxide
7.94
0.397
Ethylene
9.74
0.487
Hydrochloric acid
HCl
0.58
0.029
Hydrogen fluoride
hydrofluoric acid (HF)
8.46
0.423
Lead oxide
8.28
0.414
Methane
6.88
0.344
Naphthalene
9.74
0.487
Nitric acid
0.48
0.024
Phosphorus
8.90
0.445
Potassium dichromate
3.38
0.169
Potassium hydroxide
Caustic potash
0.44
0.022
Propylene
9.74
0.487
Sodium dichromate
3.74
0.187
Sodium hydroxide
Caustic soda
0.56
0.028
Stannic chloride
4.24
0.212
Stannous chloride
5.70
0.285
Sulphuric acid
0.52
0.026
Toluene
9.74
0.487
Xylene
9.74
0.487
Zinc chloride
4.44
0.222
Zinc sulphate
3.80
0.190
Antimony
8.90
0.445
Arsenic
8.90
0.445
Cadmium
8.90
0.445
Chromium
8.90
0.445
Cobalt
8.90
0.445
Mercury
8.90
0.445
Nickel
8.90
0.445
The chemical tax does include some exceptions.
Exporters can apply for a refund, according to
Deloitte, a consultancy.
Companies that use the chemicals to make fuel,
fertilizer or animal feed are exempt.
Based on those exemptions, hydrofluoric acid or
propylene used in the alkylation units of
refineries could be exempt, because those
chemicals would be used to make gasoline.
Butane could avoid the tax if it is blended in
gasoline.
Ammonia used to make nitrogen fertilizers could
also avoid the tax.
Methane could escape the taxes if it is burned
as a fuel in power plants or used to make
hydrogen for feedstock in refineries.
However, if the methane is used to make
methanol for downstream chemical production, it
could be taxed.
The tax also exempts coal derivatives and
sulphuric acid that is a by-product of
air-pollution control.
TAXABLE SUBSTANCESThe
second tax covers substances sold or used by
importers.
The government has published three lists of
substances that could fall under the tax. The
most recent list was published earlier in June,
and it includes 121 substances and their tax
rates.
The following table shows the full list of the
121 substances that the International Revenue
Service (IRS) says could fall under the
Superfund tax. The list includes the tax rates
for each of the substances.
Substance
Alias
$/Short Ton
Cent/lb
1,3-butylene glycol
BG
7.28
0.33
1,4 butanediol
BDO
4.68
0.21
1,5,9-cyclododecatriene
9.74
0.44
2-ethyl hexanol
2-EH
7.16
0.32
2-ethylhexyl acrylate
7.34
0.33
acetone
20.06
0.91
acetylene black
10.52
0.48
acrylic acid resins
5.65
0.26
methacrylic acid resins
14.94
0.68
acrylonitrile
ACN
9.38
0.43
adipic acid
6.13
0.28
adiponitrile
ADP
8.57
0.39
allyl chloride
10.38
0.47
alpha-methylstyrene
9.93
0.45
ammonium nitrate
AN
1.49
0.07
aniline
9.4
0.43
benzaldehyde
8.47
0.38
benzoic acid
7.31
0.33
bisphenol-A
BPA
10.23
0.46
butanol
butyl alcohol
6.31
0.29
butyl acrylate
butyl-A
6.84
0.31
butyl benzyl phthalate
12.15
0.55
carbon tetrachloride
10.62
0.48
chlorinated polyethylene
10.25
0.46
chloroform
10.51
0.48
chromic acid
4.37
0.20
cumene
9.74
0.44
cyclododecanol
9.05
0.41
cyclohexane
CX
10.02
0.45
decabromodiphenyl oxide
17.99
0.82
di-2 ethyl hexyl phthalate
7.37
0.33
diethanolamine
DEA
6.01
0.27
diglycidyl ether of bisphenol-A
13.86
0.63
diisopropanolamine
12.76
0.58
dimethyl terephthalate
DMT
5.91
0.27
dimethyl-2, 6-naphthalene dicarboxylate
6.81
0.31
di-n-hexyl adipate
8.23
0.37
diphenyl oxide
13.73
0.62
diphenylamine
10.28
0.47
epichlorohydrin
EPC
12.89
0.58
ethyl acrylate
ethyl-A
4.09
0.19
ethyl alcohol for nonbeverage use
ethanol
5.94
0.27
ethyl chloride
4.52
0.21
ethyl methyl ketone
methyl ethyl ketone (MEK)
7.6
0.34
ethyl benzene
ethylbenzene (EB)
9.74
0.44
ethylene dibromide
9.03
0.41
ethylene dichloride
EDC
6.62
0.30
ethylene glycol
monoethylene glycol (MEG)
4.38
0.20
ethylene oxide
EO
6.23
0.28
ferrochrome ov 3 pct. carbon
4.83
0.22
ferrochromium nov 3 pct
4.83
0.22
hexabromocyclododecane
9.11
0.41
hexamethylenediamine
8.93
0.41
isobutyl acetate
4.47
0.20
Isophthalic acid
6.23
0.28
isopropyl acetate
4.54
0.21
Isopropyl alcohol
isopropanol (IPA)
6.82
0.31
linear alpha olefins
LAO or normal alpha olefins (NAO)
9.74
0.44
maleic anhydride
MA
5.75
0.26
melamine
4.28
0.19
methyl acrylate
methyl-A
5.39
0.24
methyl chloroform
6.37
0.29
methyl isobutyl ketone
MIBK
23.65
1.07
methyl methacrylate
MMA
14.75
0.67
methylene chloride
10.33
0.47
monochlorobenzene
10.12
0.46
monoethanolamine
MEA
5.96
0.27
monoisopropanolamine
11.74
0.53
nickel oxide
7.03
0.32
normal butyl acetate
butac
4.47
0.20
normal propyl acetate
3.73
0.17
nylon 6/6
nylon 6,6
8.67
0.39
ortho-dichlorobenzene
10.35
0.47
ortho-nitrochlorobenzene
7.49
0.34
para-dichlorobenzene
10.35
0.47
para-nitrochlorobenzene
7.49
0.34
para-nitrophenol
8.59
0.39
pentaerythritol
3.86
0.18
perchloroethylene
PCE
10.89
0.49
phenol
12.47
0.57
phenolic resins
9.86
0.45
phosphorous pentasulfide
2.49
0.11
phosphorous trichloride
6.21
0.28
phthalic anhydride
PA
7.01
0.32
poly 1,4 butyleneterephthalate
polybutylene terephthalate (PBT)
7.21
0.33
poly(propylene)glycol
10.38
0.47
poly(propylene/ethylene)glycol
8.84
0.40
poly(propyleneoxy)sucrose
2.04
0.09
poly(propyleneoxy/ethyleneoxy)sucrose
2.57
0.12
polyalphaolefins
PAO
11.37
0.52
polybutadiene
polybutadiene rubber (PBR)
9.74
0.44
polybutene
9.74
0.44
polybutylene
PB
9.74
0.44
polybutylene/ethylene
9.74
0.44
polycarbonate
PC
10.84
0.49
polyethylene resins, total
PE
9.74
0.44
polyethylene terephthalate pellets
PET
6.82
0.31
polypropylene
PP
9.74
0.44
polypropylene resins
PP
9.74
0.44
polystyrene homopolymer resins
PS
9.93
0.45
polyvinylchloride resins
PVC
7.46
0.34
propanol
5.47
0.25
propylene glycol
PG
10.38
0.47
propylene oxide
PO
13.6
0.62
styrene
9.93
0.45
styrene-butadiene, latex
9.84
0.45
synthetic linear fatty alcohol
ethoxylates
7.12
0.32
synthetic linear fatty alcohols
9.29
0.42
terephthalic acid
purified terephthalic acid (PTA)
6.23
0.28
tetrabromobisphenol-A
14.79
0.67
tetrachlorophthalic anhydride
8.95
0.41
tetrahydrofuran
THF
5.78
0.26
toluene diisocyanate
TDI
10.85
0.49
toluenediamine
9.18
0.42
trichloroethylene
TCE
10.79
0.49
triethanolamine
TEA
6.04
0.27
triisopropanolamine
12.84
0.58
trimethylolpropane
4.63
0.21
urea
3.01
0.14
vinyl acetate
vinyl acetate monomer (VAM)
3.83
0.17
vinyl chloride
vinyl chloride monomer (VCM)
7.46
0.34
Prior to the June list, the Internal Revenue
Service (IRS) had published two earlier lists
that contained a total of 151 taxable
substances that, if imported, could be subject
to the Superfund tax.
Unlike the more recent list that was published
in June. these two earlier lists do not include
tax rates.
Some of the substances in the two earlier lists
are included in the more recent June list.
Others substances in the earlier lists are not
in the June list. In addition, some substances
in the June list are not included in the
earlier lists.
The following table shows the 151 taxable
substances that were in the two lists.
Chemical
Alias
1,4 butanediol
BDO
1,3-butylene glycol
BG
1,5,9- cyclododecatriene
2-ethyl hexanol
2-EH
2-ethylhexyl acrylate
2,2,4-trimethyl- 1,3-pentanediol
diisobutyrate
2,2,4-trimethyl- 1,3-pentanediol
monoisobutyrate
acetic acid
acetylene black
adipic acid
adiponitrile
ADN
allyl chloride
alpha- methylstyrene
aniline
benzaldehyde
benzoic acid
bisphenol-A
BPA
butanol
normal butanol or NBA
butyl acrylate
butyl-a
butyl benzyl phthalate
chlorinated polyethylene
cyclododecanol
decabromodiphenyl oxide
di-2 ethyl hexyl phthalate
di-n-hexyl adipate
diethanolamine
DEA
diglycidyl ether of bisphenol-A
diisopropano- lamine
dimethyl terephthalate
DMT
dimethyl-2, 6-naphthalene dicarboxylate
diphenyl oxide
diphenylamine
epichlorohydrin
EPC
ethyl acetate
etac
ethyl acrylate
ethyl-A
ethyl chloride
ethylene dibromide
ethylenebistetra- bromo- phthalimide
formic acid
glycerine
hexabromocyclod odecane
hexamethylenedia mine
isobutyl acetate
isopropyl acetate
linear alpha olefins
LAOs or normal alpha olefins (NAOs)
methyl acrylate
methyl-A
methyl chloroform
methyl isobutyl ketone
MIBK
methyl methacrylate
MMA
monochloro- benzene
monoethanolamine
MEA
monoisopro- panolamine
normal butyl acetate
butac
normal propyl acetate
nylon 6/6
nylon 6,6
ortho- dichlorobenzene
ortho-nitrochloro- benzene
paraformaldehyde
para- dichlorobenzene
para-nitrochloro- benzene
para-nitrophenol
pentaerythritol
perchloroethylene
PCE
phenol
phosphorous pentasulfide
phosphorous trichloride
poly 1,4 butylenetere-phthalate
polybutylene terephthalate (PBT)
poly (69/31 ethylene/ cyclohexylene-
dimethylene terephthalate)
poly (96.5/3.5 ethylene/
cyclohexylene-dimethylene terephthalate)
poly (98.5/1.5 ethylene/
cyclohexylene-dimethylene terephthalate)
poly(ethyleneoxy) glycerol
poly(propylene) glycol
poly(propylene/ ethylene) glycol
poly(propyleneoxy) glycerol
poly(propyleneoxy)s ucrose
poly(propyleneoxy/ ethyleneoxy)
benzenediamine
poly(propyleneoxy/ ethyleneoxy)diamine
poly(propyleneoxy/ ethyleneoxy)glycerol
poly(propyleneoxy/ ethyleneoxy)sucrose
polyalphaolefins
PAOs
polybutene
polybutylene
PB
polybutylene/ ethylene
polycarbonate
PC
polyethylene terephthalate pellets
PET
propanol
n-propanol
sodium nitriolotriacetate monohydrate
synthetic linear fatty alcohols
synthetic linear fatty alcohol
ethoxylates
terephthalic acid
purified terephthalic acid (PTA)
tetrabromo- bisphenol-A
tetrachloro-phthalic anhydride
tetrahydrofuran
THF
texanol benzyl phthalate
toluene diisocyanate
TDI
toluenediamine
trichloroethylene
TCE
triethanolamine
TEA
triisopropanolamine
trimethylolpropane
vinyl acetate
vinyl acetate monomer (VAM)
acetone
acrylic and methacrylic acid resins
acrylonitrile
ACN
ammonium nitrate
AN
carbon tetrachloride
chloroform
chromic acid
cumene
cyclohexane
CX
ethyl alcohol for nonbeverage use
ethanol
ethylbenzene
EB
ethylene dichloride
EDC
ethylene glycol
EG
ethylene oxide
EO
ethyl methyl ketone
methyl ethyl ketone (MEK)
ferrochrome ov 3 pct. carbon
ferrochromium nov 3 pct
ferronickel
formaldehyde
hydrogen peroxide
isophtalic acid
isopropyl alcohol
isopropanol (IPA)
maleic anhydride
MA
melamine
methanol
methylene chloride
nickel oxide
nickel powders
nickel waste and scrap
phenolic resins
phthalic anhydride
PA
polybutadiene
polybutadiene rubber (PBR)
polypropylene resins
PP
polystyrene homopolymer resins
PS
polyethylene resins, total
PE
polypropylene
PP
polystyrene resins and copolymers
PS
polyvinylchloride resins
PVC
propylene glycol
PG
propylene oxide
PO
styrene
styrene-butadiene, latex
styrene-butadiene, snpf
synthetic rubber, not containing fillers
unwrought nickel
urea
vinyl chloride
VCM
vinyl resins
vinyl resins, nspf
wrought nickel rods and wire
The government could add or remove substances
from this list. Companies can also request that
the IRS add or remove substances from the list.
Substances could be added to the taxable list
if they contain at least 20% of the 42 taxable
chemicals. The tax rate would depend on the
percent of the taxable chemicals contained by
the substance, either by weight or by value,
according to the IRS.
For example, a short ton of a substance that
contains 20% propylene would be added to the
list.
If an imported substance contains more than 20%
of two or more of the 42 taxable chemicals,
then it could fall under the tax. For example,
an import that contains 10% benzene and 10%
ethylene could be added because it contains 20%
of the taxable chemicals.
If companies do not comply with the substance
tax, then they will pay a default rate of 10%
of the value of the substance, the IRS said.
The IRS published a list of frequently asked
questions (FAQs) that can be found
here.
01-Jul-2022
LONDON (ICIS)–Shipping rates have been a key
cost pressure for the chemicals industry in the
wake of the pandemic, but fundamentals – and
therefore prices – may be set to change course
due to persistent geopolitical pressures.
As logistics major Stolt Nielsen posted its highest net
profit in 15 years for the second quarter
and restated the company’s positive outlook for
the rest of 2022, the company was still
cautious of the challenges surrounding the
market.
“Although we are starting to enjoy improving
returns on our investments, we cannot ignore
the many external challenges that lie ahead.
The war in Ukraine is increasingly impacting
energy supplies, particularly in Europe,”
Stolt-Nielsen said.
“We remain cautious when making new
investments, ensuring that the return hurdles
account for higher inflation and funding costs
in the future, and we are maintaining our focus
on debt reduction to strengthen the balance
sheet and continue to favour fixed rate loans
to protect our cash flow against rising
interest rates.”
MARKET IMPACTSpot tanker
shipping remains tight, despite a slight
downward trend in fluctuating bunker fuel
costs, which has kept freight rates flat for
both intra-Europe and shipping outside of the
continent, in contrast to the continued upward
momentum in prices last week.
Deals are shifting from containers of
20-24-feet to break bulk, where goods are
stowed on ships in individually counted units,
where volumes can be as small as 4,000-5,000
tonnes for some industries, including the
polyethylene
terephthalate (PET) and purified terephthalic
acid (PTA) markets.
Depending on regional fundamentals, this is
also having an impact, as one trader stated
that those bringing material in 5,000-10,000
tonnes in break bulk would see equivalent
prices for current container costs.
“China PET prices got softer, and containers
got cheaper. Shipping costs on a CIF [cost,
insurance and freight] basis are below
$300/tonne, so the cost is $6000/container,”
the trader said.
While prices for 40-feet containers prices from
Europe to Asia tracked increases in the latter
part of June, rates for freight going in the
opposite direction have been stable at a
significant premium.
As bottlenecks persist, transporting smaller
volumes – especially for markets where prices
are sustained at high levels, such as PET –
could keep material flowing to customers, but
it is not without risks.
Shippers may have to pay demurrage charges if
vessels are not unloaded in time and could face
further costs if materials are stored in
warehouses, depending on where the material is
sent to.
One trader advised that the key river port in
Duisburg, Germany was currently more than 90%
full due to “too many empty containers”.
Another European polymer distributor had to
send a vessel using break bulk to fulfil
existing contracts as they have 800 containers
sitting in Houston which were scheduled for
shipping between January and June.
Now ships are forgoing docking in Houston as
they are warned that they will have to wait for
two weeks and are choosing to go to the next
port rather than face the fortnight’s
demurrage.
“Delays in container shipments are causing all
the problems,” the distributor said.
“There is a lack of bags to put material in, a
lack of drivers in trains, a lack of bagging
facilities, a lack of trucks and truck drivers,
warehouse space and warehouse people. The whole
chain is just a total disaster.
“[Break bulk] is not really solving the
problem. It is fulfilling existing contracts
but costing an absolute fortune, as a temporary
bail-out.”
The war in Ukraine has been another factor in
disrupting the industry, as trade flows have
had to redirect to avoid conflict zones, with
ships going for long haulage, which is also
limiting availability of vessels.
Sentiment indicates that supply chains will
remain under pressure for the rest of the year,
but longer-term fundamentals could balance out
as more new capacity becomes available in 2023.
There has been an uptick in orders for new
container ships, which have also been delayed
in the wake of the pandemic but are expected to
come into operation next year.
Front page picture: Containers are being
moved in the Port of Rotterdam; archive
image
Source: Peter
Dejong/AP/Shutterstock
Focus by Morgan Condon
Additional reporting by Vicky Ellis, Marta
Fern, Julia Meehan, and Caroline Murray
Infographics by Yashas Mudumbai
01-Jul-2022
Here is the energy crisis writ large. The
chart, from bp as it released its latest
Statistical Review of World Energy this week,
shows the sharp rebound in energy consumption
as COVID-19 restrictions eased and global
economic activity recovered.
In this week’s podcast, ICIS analysts Jady Ma
and Lucy Shuai discuss the recent developments
and outlook of China’s polypropylene (PP)
market amid concerns over COVID-19.
Asia’s acrylic acid (AA) and acrylate esters
spot discussions were under pressure, with
market sentiment bearish amid a downtrend in
China.
The China domestic market was sluggish, with
the economy impacted by earlier lockdowns.
Meanwhile, the US ethylene market is seeing
ample supply, lower margins but decent
derivative demand heading into Q3.
Updated on 1 July 2022
On this topic page we analyse the
impact of coronavirus and oil price dynamics on
chemical markets and bring together the latest
news reported by ICIS.
Scroll down to see the
latest interactive graphics, podcasts and
videos.
Click
here to register for regular updates to
help you navigate these challenging
times.
LATEST HEADLINES (Last updated
at 09:00 GMT on 1 July 2022)
Mideast petchem
market sentiment bearish on weak
demand
By Felicia Loo 01-Jul-22 11:30 SINGAPORE
(ICIS)–Sentiment in the Middle East
petrochemical markets is bearish, as demand is
tepid against a backdrop of ample supply. The
soaring inflation rates have led to a reduced
purchasing power, weakening buyers’ appetites.
Asia AA and
acrylates largely lower; sentiment softer on
China downtrend
By Li Li Chng 29-Jun-22 21:20 SINGAPORE (ICIS)—
Asia’s acrylic acid (AA) and acrylate esters
spot discussions were under pressure, with
market sentiment bearish amid a downtrend in
China.
PODCAST: China PP
to face uncertainties in H2 ’22 amid high
costs
By Lucy Shuai 29-Jun-22 17:47 SINGAPORE
(ICIS)–ICIS analysts Jady Ma and Lucy Shuai
discuss the recent developments and outlook of
China’s polypropylene (PP) market.
PODCAST: Europe
and Middle East isocyanates demand
slows
By ICIS Editorial 29-Jun-22 17:09 LONDON
(ICIS)–Isocyanates Europe editor Zubair Adam
discusses current demand and supply market
trends for Europe with isocyanates Middle East
editor Damini Dabholkar.
US ethylene
begins Q3 with ample supply, eroding
margins
By John Donnelly 29-Jun-22 05:45 HOUSTON
(ICIS)–The US ethylene market is seeing ample
supply, lower margins but decent derivative
demand heading into Q3.
INSIGHT: Energy
demand rebound at a time of crisis, bp stats
show
By Nigel Davis 28-Jun-22 23:39 LONDON
(ICIS)–Here is the energy crisis writ large.
The chart, from bp as it released its latest
Statistical Review of World Energy on Tuesday,
shows the sharp rebound in energy consumption
as COVID-19 restrictions eased and global
economic activity recovered.
PODCAST:
Isocyanates face high costs, squeezed margins
in H2 – ICIS analysts
By Morgan Condon 28-Jun-22 21:02 LONDON
(ICIS)–The isocyanates market is faced with
steep production costs and weakening demand
across downstream sectors, presenting the
industry with a darkening outlook.
European PVC
shows signs of lengthening on demand, global
trends
By Chris Barker 28-Jun-22 17:29 LONDON
(ICIS)–European polyvinyl chloride (PVC)
contract prices for June have settled with
rollovers to decreases compared to May, with
indications that the outlook for availability
has lengthened compared to earlier in the year.
Asia ADA trade
flows punch above weight in
May
By Josh Quah 24-Jun-22 13:57 SINGAPORE
(ICIS)–Northeast Asia adipic acid (ADA)
markets logged a large trade surplus in May,
according to import-export data captured by
ICIS Supply and Demand Database.
Europe capro,
nylon 6 markets face slow summer
demand
By Marta Fern 24-Jun-22 00:35 LONDON
(ICIS)–European caprolactam (capro) and nylon
6 markets are facing persistent soft demand,
which could weaken further in the coming months
while the costs of production are on the rise.
VIDEO: Asia MEG
may face more challenges in H2
2022
By Judith Wang 23-Jun-22 17:16 SINGAPORE
(ICIS)–Watch ICIS Senior Editor Judith Wang
discuss current developments in Asia’s
monoethylene glycol (MEG) market and its
outlook.
China’s NBR
import offers plummet with domestic losses,
soft demand
By Ai Teng Lim 23-Jun-22 15:56 SINGAPORE
(ICIS)–China’s import offers for acrylonitrile
butadiene rubber (NBR) are at year-low levels,
as sellers tried to chase deals with wider
discounts.
Tight tonnage and
robust demand push Asian chemical tanker
market, sentiment bullish
By Luffy Wu 23-Jun-22 14:37 SINGAPORE
(ICIS)–The Asian chemical tanker shipping
market saw overall upward pressure amid high
global bunker levels and regional tonnage
tightness, drained by robust long-haul
activities and clean petroleum product (CPP)
markets.
PODCAST: How may
China respond to looming global energy
crisis?
By Bee Lin Chow 23-Jun-22 13:32 SINGAPORE
(ICIS)–ICIS analysts discuss how China may
respond to what seems like a looming global
energy crisis.
US SBR demand
healthy from tyre sector, but tyre imports
growing
By Amanda Hay 23-Jun-22 05:34 HOUSTON
(ICIS)–US styrene butadiene rubber (SBR)
demand healthy for tyres, but North American
tyre manufacturers face growing tyre imports.
INSIGHT: Don’t
stifle chemicals now in the face of energy
uncertainty and climate reform – UK
industry
By Nigel Davis 22-Jun-22 22:20 LONDON
(ICIS)-The UK chemical industry is now 6%
larger than at the onset of the pandemic, chief
executive of the country’s sector trade group,
the Chemical Industries Association (CIA), said
last week.
PODCAST: China benzene
prices hit 8-year high; cost and supply support
to persist
By Yoyo Liu 17-Jun-22 10:37 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Yoyo Liu
discuss the recent developments and outlook of
China’s benzene market.
Asian BD buying
slows as domestic China
tumbles
By Ai Teng Lim 17-Jun-22 09:48 SINGAPORE
(ICIS)–Sentiment was duller in this week’s
spot talks for Asian butadiene (BD) imports, as
buyers retreated after the domestic China
market suffered heavy losses early-week.
PODCAST: Europe
PET speculation rife in face of diverging
upstream dynamics
By Caroline Murray 17-Jun-22 00:07 LONDON
(ICIS)–Mixed xylene prices are skyrocketing
higher than PX prices and concerns over
negative margins mount. PX June contract talks
are ongoing. By contrast, MEG supply remains
lengthy and demand has been low, pressuring
down spot prices. The June MEG contract price
also remains unconfirmed.
INSIGHT: PET,
politicians and TikTok – the industry’s battle
for our attention
By Matt Tudball 16-Jun-22 22:17 BRUSSELS
(ICIS)–The battle for our attention is a
fierce one. In the post-COVID-19 world, as
employees we feel a sense of email overload and
Zoom fatigue while as a consumer we face a
constant bombardment of media telling us what
we should be doing, thinking, eating, drinking
and watching.
Asian
petrochemicals to rebound in June amid bumpy
recovery – ICIS analysts
By Ann Sun 16-Jun-22 12:12 SINGAPORE
(ICIS)–Asian petrochemical market is expected
to be generally firmer in June given higher
crude prices and easing lockdowns in China,
according to a latest Price Forecast by ICIS
analysts.
PODCAST: Global
base oils supply and refinery margins to stay
under pressure in H2
By Eashani Chavda 15-Jun-22 22:35 LONDON
(ICIS)–ICIS editors Eashani Chavda, Samantha
Wright and Amanda Hay are joined by ICIS
analyst Mike Connolly to discuss the latest
developments in Europe and US base oils
markets. Key topics include: supply shortages,
shifting trade flows, refinery margins and
additive shortages.
PODCAST: Chemical
distributors see inflation hurting demand,
downturn in prospect
By Will Beacham 14-Jun-22 22:03 BARCELONA
(ICIS)–Rising inflation is now hurting demand
for chemicals, raising the prospect of a broad
economic downturn later this year or in 2023,
according to chemical distributors.
China PE finds
support from stimulus policies; eyes on demand
performance
By Sijia Li 14-Jun-22 14:57 SINGAPORE
(ICIS)–China’s domestic polyethylene (PE)
market entering June has found support from
stimulus policies and costs. Looking ahead,
players are focusing on demand recovery, with
the easing of lockdowns in multiple regions
amid decreasing COVID-19 infections.
India domestic
LAB prices rise; China demand improves as
lockdowns ease
By Clive Ong 10-Jun-22 11:53 SINGAPORE
(ICIS)–India’s domestic prices for linear
alkylbenzene (LAB) have spiked on the back of
rising costs, but some players expect some
headwinds with the monsoon season kicking off.
Monsoon season to hamper India demand
China demand sees uptick as COVID-19
restrictions ease
China’s competitively priced cargoes still
available in Asia (including India), Mideast
Oil prices drop
more than $1/bbl on partial lockdowns in
China
By Nurluqman Suratman 10-Jun-22 11:34 SINGAPORE
(ICIS)–Oil prices fell more than $1/bbl on
Friday on renewed demand fears after fresh
COVID-19 lockdown measures were announced in
China, but tight supply concerns capped losses.
INSIGHT:
Sustainability to remain the key driver for
Asia recycled polymers
By Arianne Perez 10-Jun-22 11:00 SINGAPORE
(ICIS)–Capacity expansions of recycled
polyethylene terephthalate (R-PET) and recycled
polyethylene (R-PE) faced delays amid the
onslaught of COVID-19, particularly last year,
but overall growth of Asia polymers recycling
is set to continue with sustainability as the
main driver.
PODCAST: European
ACN market keeps a close eye on ammonia and
propylene
By ICIS Editorial 09-Jun-22 18:35 LONDON
(ICIS)–The European acrylonitrile (ACN) market
has good supply and some softening demand, but
costs remain high. In this latest podcast, ICIS
deputy managing editor Jane Massingham (Europe)
talks to managing editor fertilizers, Julia
Meehan and senior editor on olefins, Nel Weddle
about the ammonia and propylene markets and
what to expect in the months ahead.
PODCAST: Asia
benzene, styrene short-term outlook to hinge on
demand-supply balance
By Jasmine Khoo 09-Jun-22 11:35 SINGAPORE
(ICIS)–Asia’s benzene prices have hit an
all-time high on strong performance from the US
amid the turnaround season, while styrene price
gains have been lagging behind due to weak
performance in the styrenics sector. In this
podcast, Jasmine Khoo speaks with editors
Angeline Soh and Trixie Yap on benzene and its
key downstream styrene monomer (SM) and
styrenics sectors.
China PP exports
may fall on narrow price gap with SE
Asia
By Lucy Shuai 08-Jun-22 17:09 SINGAPORE
(ICIS)–With the lifting of COVID-19 lockdowns
in China, as well as stimulus policies to boost
the economy, China’s polypropylene (PP) prices
have rebounded since late May. However, as PP
prices have fallen in the southeast Asian
market, China’s PP exports may fall in June due
to a narrow price gap.
VIDEO: China PP
demand set to improve in June as restrictions
ease
By Lucy Shuai 08-Jun-22 16:21 SINGAPORE
(ICIS)–Watch industry analyst Lucy Shuai share
her insights on the rebound seen in China’s
polypropylene (PP) market following the easing
of strict COVID-19 curbs in the country.
Asia Q3 biodiesel
market sentiment to stay weak on poor European
demand
By Felicia Loo 07-Jun-22 12:13 SINGAPORE
(ICIS)–The third-quarter market sentiment for
southeast Asian palm methyl ester (PME)
biodiesel is expected to remain weak amid poor
buying requirements from Europe, a key
importing region for southeast Asian material.
Germany’s chemicals hit hard by China
lockdowns, automotive sentiment
improves – Ifo By Jonathan Lopez 03-Jun-22
16:49 MADRID (ICIS)–Lockdowns in China to
contain the coronavirus pandemic have had a
major impact on export-intensive industrial
sectors in Germany such as chemicals, research
institute Ifo said on Thursday.
Asia MEG rebounds on higher crude, demand
recovery expectations
By Judith Wang 03-Jun-22 10:50 SINGAPORE
(ICIS)–Asia’s monoethylene glycol (MEG) weekly
prices rebounded during the week amid stronger
crude values and expectations of demand
improvement due to easing lockdowns in
Shanghai.
Global chem production fell 2.9% year on year
in April
By Stefan Baumgarten 03-Jun-22 01:57 HOUSTON
(ICIS)–Global chemical production volumes in
April fell 4.1% month on month and 2.9% year on
year, and they were off 0.4% year on year for
the first four months of 2022, ICIS senior
economist Kevin Swift said in a report on
Thursday.
China methanol to face ample supply, mixed
demand performance
By Doris He 01-Jun-22 21:05 SINGAPORE
(ICIS)–China’s methanol market is expected to
face overall ample supply from domestic and
overseas producers in the near term, while
demand may be mixed from different downstream
sectors.
INSIGHT: China, India to be main drivers of PVC
supply, demand in Asia
By Jonathan Chou 01-Jun-22 11:00 SINGAPORE
(ICIS)–The coronavirus pandemic has changed
how we live our lives, upending also supply and
demand dynamics for polyvinyl chloride (PVC)
and its related markets.
Over two years on since the pandemic hit, much
of Asia has attempted “living with COVID-19” in
2022, with some starting to treat it as an
endemic disease.
China SM margins likely to be squeezed by
higher costs, weak demand
By Tina Zhang 31-May-22 11:55 SINGAPORE
(ICIS)–Margins in China’s styrene monomer (SM)
market are expected to continue to be squeezed
in the near term, in view of rising feedstock
benzene values and weak demand.
China petrochemical market sentiment upbeat on
Shanghai recovery plan
By Fanny Zhang 30-May-22 13:27 SINGAPORE
(ICIS)–China’s domestic petrochemical market
sentiment is upbeat at the start of the week,
with demand expected to recover when the
two-month lockdown in Shanghai is lifted in
June.
Asian epoxy
market stable, Chinese domestic market outlook
ambiguous
By Luffy Wu 27-May-22 11:54 SINGAPORE
(ICIS)–The Asia epoxy resins market saw
overall stable market sentiment while buyers
exhibited improved price acceptability compared
with in April.
Asia nylon market cautious as Shanghai
inches towards June
reopening
By Josh Quah 26-May-22 16:16 SINGAPORE
(ICIS)–The lockdowns have been damaging for
Asia’s nylon market, with prolonged demand loss
particularly felt in the CFR (cost &
freight) China market. There have been recent
signs, however, that the worst may have passed
in the lead up to the reopening of key cities
in China.
PODCAST: Weak demand from
lubricants, China’s Group II base oil import
margins to be negative
By Whitney Shi 25-May-22 14:09 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Whitney Shi
discuss the recent developments and outlook of
China’s base oil market.
INSIGHT: China
crude consumption softens amid COVID-19
lockdowns
By Pearl Bantillo 25-May-22 12:00 SINGAPORE
(ICIS)–China’s consumption of crude has
softened as industrial production is hit by
pandemic-related restrictions in place since
February, with no sign of the government giving
up on its zero-COVID policy.
INTERVIEW: China
emergence from lockdowns, stimulus to recharge
auto and construction – Covestro
CFO
By Joseph Chang 25-May-22 05:17 NEW YORK
(ICIS)–China’s easing of and potential
emergence from COVID-19 lockdowns along with
government stimulus should spark a major
recovery in its automotive and construction
markets, the chief financial officer (CFO) of
Germany-based Covestro said on Tuesday.
Asian MMA peaks
in May; outlook pending clarity amid easing
restrictions in China
By Li Li Chng 24-May-22 13:47 SINGAPORE
(ICIS)–Asian methyl methacrylate (MMA) peaked
in May, after increasing around 17% since H2
February. Market players are awaiting clearer
picture on China’s lifting of COVID-19
lockdowns and restrictions.
PODCAST: Europe
PE and PP update and outlook
By Ben Lake 23-May-22 23:42 LONDON
(ICIS)–Senior editor, Vicky Ellis, and market
editor, Ben Lake, join forces to discuss a
distinct change in the polymers market. The
frenzied activity in March and April has given
way to a far more relaxed sentiment in May – on
the buy-side, at least. Vicky and Ben give
their outlook for June and take a look at
events that could shake up the markets again.
INSIGHT: China PE
demand to rebound from June, but slow road
ahead
By Amy Yu 23-May-22 18:27 SINGAPORE
(ICIS)—China polyethylene (PE) demand is
expected to firm as COVID-19 containment
measures ease, but the pace of recovery remains
hindered by remaining lockdown measures.
Asia BDO under
pressure as tepid demand persists, economic
uncertainty
By Clive Ong 20-May-22 12:17 SINGAPORE
(ICIS)–The Asian butanediol (BDO) market
remains under downward pressure from prevailing
soft demand in the region. Buying momentum
could remain slow in the near term from
economic headwinds from the Ukraine conflict
and Russian sanctions, as well as the lockdown
in China which looks set to ease.
INSIGHT: US
supply chain problems may continue for two more
years
By Al Greenwood 19-May-22 21:00 HOUSTON
(ICIS)–US supply-chain problems could persist
for another two years because new problems
continue to pop up. Since the pandemic started
more than two years ago, problems continue to
compound problems, said Eric Byer, president of
the National Association of Chemical
Distributors (NACD). He participated in a
conference call with the ACC.
Markets sell-off drives down Europe
chemical stocks
By Tom Brown 19-May-22 19:28 LONDON
(ICIS)–European chemical company stocks fell
on Thursday amid a wider market sell-off as
below-expectations US retail financials and
high domestic inflation drive fears that
falling consumer demand could result in a
recession.
PODCAST: China’s
MMA demand recovery to lag despite Shanghai
reopening
By Olivia Dai 19-May-22 15:06 SINGAPORE
(ICIS)–ICIS analyst Jady Ma and Olivia Dai
discuss the recent developments and outlook of
China’s methyl methacrylate (MMA) market.
Asia
fatty alcohols near-term demand may pick up on
China lockdown easing
By Helen Yan 18-May-22 12:14 SINGAPORE
(ICIS)–Improved Chinese demand may lend
support to Asia’s fatty alcohols market, as
China gradually eases its COVID-19 lockdown
restrictions. This is amid expectations that
Shanghai, a major port and key financial and
production hub, is likely to open up fully from
1 June.
Increase of PP, PE imports from China
in Pakistan due to lockdowns
By Nadim Salamoun 17-May-22 23:29 DUBAI
(ICIS)–Chinese polypropylene (PP) and
polyethylene (PE) breakbulk and containerized
cargoes have been increasingly available in the
Pakistani market, directly competing with Gulf
Cooperation Council (GCC)-origin material. The
situation could be attributed to the increased
lockdowns in China, which have negatively
impacted domestic demand.
PODCAST: Slowing
China will hurt global economy,
chemicals
By Will Beacham 17-May-22 21:29 BARCELONA
(ICIS)–As lockdowns, the Common Prosperity
policy and lacklustre export markets cut growth
in China’s economy, the global chemical
industry should prepare for negative demand
growth in 2022.
Easing of
lockdown provides limited support for Asian
IPA
By Julia Tan 17-May-22 19:31 SINGAPORE
(ICIS)–Asian isopropanol (IPA) markets saw
slightly mixed indicative prices in the week,
although market sentiment continues to be weak.
Market sources underlined on Tuesday that
demand was not likely to pick up until
mid-June. Despite news that Shanghai lockdowns
would begin to ease in early June, a number of
market participants were fairly sceptical that
this would provide significant support to the
Asian IPA markets.
Asia petrochemical supplies rise as
China exports grow amid weak
yuan
By Fanny Zhang 13-May-22 16:13 SINGAPORE
(ICIS)–Asia’s petrochemical markets are being
weighed down by growing supply, with China
exporting more products – spurred by the weak
yuan and poor domestic demand amid lockdowns.
The Chinese yuan (CNY) lost nearly 7% against
the US dollar from the start of April to 13
May, with the exchange rate at CNY6.79 to $1,
data from the People’s Bank of China (PBoC)
show. The yuan depreciation has caused a
narrowing or closing of arbitrage windows for
moving cargoes into China, while opening up
better export opportunities. With a weaker
yuan, the trading route “out of China” may stay
for a while, traders said. The country’s
domestic demand is significantly dented by
tight restrictions on people movement and
business activity following a strong resurgence
of COVID-19 infections, consequently, exerting
strong downward pressure on Asian markets.
Asia fatty acids remain soft on China
lockdowns and Indonesia export ban
uncertainty
By Helen Yan 13-May-22 15:05 SINGAPORE
(ICIS)–Asia’s fatty acids market is likely to
remain soft in the near term, due to the
economic slowdown in China and the expected
removal of Indonesia’s export ban on crude palm
oil (CPO) sometime in May. China lockdowns are
weighing on demand in Asia. “There is too much
uncertainty, with the market not sure when
China will lift its lockdowns and when
Indonesia will lift its export ban on palm
oil,” a regional supplier said. Market players
are adopting a cautious stance and buyers are
reluctant to commit to any large spot
purchases, given the uncertainty and
expectations that the export ban is likely to
be removed soon.
Container rates from China to US down
by 20% since Shanghai lockdowns
began
By Adam Yanelli 13-May-22 05:23 HOUSTON
(ICIS)–Rates for shipping containers from east
Asia and China to both US coasts have fallen by
between 13-20% since COVID-19-related lockdowns
began in Shanghai in March, and with China
holding fast to its zero-COVID-19 policy, the
trend could continue. The impact of the
lockdown measures on China’s available exports
has been significant, leading to the major
ocean shipping alliances announcing
cancellations of at least a third of their
scheduled sailings out of Asia through early
June.
US considers dropping Chinese tariffs
to fight inflation – Biden
By Al Greenwood 11-May-22 06:09 HOUSTON
(ICIS)–The administration of US President Joe
Biden is discussing whether removing the
tariffs imposed on Chinese imports would lower
inflation, he said on Tuesday. The US imposed
tariffs on billions of dollars’ worth Chinese
imports – including plastics and chemicals –
amid allegations of unfair trade policies on
the part of China, which included unfair
technology transfers and theft of intellectual
property.
INSIGHT: Can US, global economies avoid
recession amid a whirlwind of
headwinds?
By Joseph Chang 12-May-22 01:10 NEW YORK
(ICIS)–Can the US and major economies around
the world avoid a recession in the face of what
can only be called a whirlwind of headwinds? In
the US, the Federal Reserve is moving to tame
the inflation beast and engineer a soft landing
for the economy. Fed chair Jerome Powell opened
the FOMC (Federal Open Market Committee) press
conference on 4 May by addressing the American
people directly. “Inflation is much too high,
and we understand the hardship it is causing,
and we’re moving expeditiously to bring it back
down. We have both the tools we need and the
resolve it will take to restore price stability
on behalf of American families and businesses,”
said Powell.
Asian spot TiO2
to come under pressure from weak Chinese yuan
in early May
By Joson Ng 06-May-22 11:17 SINGAPORE (ICIS)–A
depreciating Chinese currency against the US
dollar could start to have an impact on the
Asian titanium dioxide (TiO2) spot market
starting in May.
Turkey PE and PP
prices stable, market quiet amid public
holidays
By Samantha Wright 05-May-22 23:53 LONDON
(ICIS)–Turkish polyethylene (PE) and
polypropylene (PP) values were steady this week
due to a lack of activity following a public
holiday.
Europe ABS, SAN
import challenge likely to
persist
By Yashas Mudumbai 05-May-22 19:20 LONDON
(ICIS)–Acquiring imports from Asia for
European styrene acrylonitrile (SAN) and
acrylonitrile-butadiene-styrene (ABS) market
players remains a challenge amid ongoing
logistical constraints. There has been some
tightness in supply due to reduced imports from
Asia.
INSIGHT: EU
Russia oil ban will further drive global
remapping of trade
By Tom Brown 05-May-22 19:11 LONDON (ICIS)–The
European Commission’s proposed ban on Russian
oil imports by the end of the year is more
likely to drive further remapping of global
trade flows than drive a spike in crude prices,
but the pain could be more substantial in
refined products markets.
Oil rises more
than $1/bbl on supply worries; China woes cap
gains
By Nurluqman Suratman 04-May-22 12:54 SINGAPORE
(ICIS)–Oil prices rose by more than $1/bbl on
Wednesday on concerns over tight supply after
industry data showed a drop in US crude and
fuel inventories last week, but worries over
poor manufacturing data from China capped
gains.
PODCAST: Europe
chemicals could face short periods of gas
rationing this winter
By Will Beacham 03-May-22 22:12 BARCELONA
(ICIS)–European chemical companies may be
forced to cut gas use for short periods this
winter if demand is very high and supply
crimped, though steps are being taken to avoid
this scenario.
Margin pressure
to persist in European ethanolamines
market
By Cameron Birch 03-May-22 21:33 LONDON
(ICIS)–Two main questions dominate the
European ethanolamines market as participants
make forecasts for the rest of Q2 and into Q3.
First, is the question of continued uncertainty
linked to feedstock costs, and, second, is the
uncertainty that surrounds the demand picture
across the continent.
ANALYSIS AND RESOURCES
01-Jul-2022
SINGAPORE (ICIS)–Click
here to see the latest blog post on Asian
Chemical Connections by John Richardson.
The China Beige Book, the independent economic
analysis service, has found that:
China services and manufacturing businesses
saw a slowdown in the second quarter from the
first quarter, reflecting the prolonged impact
of COVID controls.
· Orders for domestic consumption and
overseas export mostly fell during Q2. Orders
for textiles and chemicals processing were
among the worst affected.
This is in line with what our contacts have
been saying and what the ICIS polyolefins data
appears to be indicating. Based on the
January-May numbers 2022, the outlook for full
year polypropylene (PP)) and high-density
polyethylene (HDPE) demand seems to have
deteriorated.
We worry that China’s options for turning its
economy around in 2022 are narrowing.
At least in low-density PE (LDPE), as we
discuss in, the outlook hasn’t got any worse.
This is small consolation, as it had already
become bleak before May. Our latest worst-case
scenario is that LDPE demand may decline by 8%
this year.
LDPE stands out from the other grades of
polyolefins because China CFR LDPE price
spreads over CFR Japan naphtha costs have held
up very well this year. In PP, HDPE and
linear-low density PE (LLDPE), spreads have hit
record lows.
Why LDPE appears to be different is because
supply has been reduced, thereby keeping prices
relatively high, because ethylene vinyl acetate
(EVA)/LDPE swing plants have swung to more EVA
production as EVA demand seems to be booming.
The EVA price premiums over LDPE are at or
close-to record highs, depending on the ICIS
price assessment.
And LDPE film price premiums over C4 LLDPE film
have also reached record highs in China in
2022. The two resins compete for many of the
same end-use markets. LLDPE supply is much
longer.
So, it is not just the economy that LDPE
players in China have to worry about, but these
other dynamics as well. This may be the third
year in a row of negative LDPE demand growth in
China because of these other factors – and now
an economy that could see a recession.
Meanwhile, as with the other grades of
polyolefins, LDPE exporters to China need to be
also concerned about a potential significant
fall in China’s LDPE imports. Our worst-case
scenario sees China’s net imports in 2022 some
500,000 tonnes lower than in 2021.
We are sorry it is so gloomy, and, hopefully,
conditions will pick up. But hope is not a
strategy. The chemicals industry industry needs
to prepare for worst-case outcomes.
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.
01-Jul-2022
SINGAPORE (ICIS)–Caixin’s China manufacturing
purchasing managers’ index (PMI) rose to 51.7
in June from 48.1 in May as factory activity
recovered on the back of easing regional
COVID-19 lockdowns, the Chinese media firm said
on Friday.
A PMI reading above 50 indicates expansion in
the manufacturing economy, while a lower number
denotes contraction.
The June reading was the first expansion in
fourth months and marked the strongest rate of
increase seen since May last year, Caixin said
in a statement.
Chinese manufacturers registered the first
expansion of output since February at the end
of the second quarter.
The rate of growth was the quickest seen since
November 2020, with a number of firms linking
the rise to the return to more normal
operations and reopening of production lines as
COVID-19 restrictions were eased.
Total new orders likewise returned to growth in
June, though the rate of increase was only
modest. New export business also rose modestly.
“Covid lockdowns and other restrictions eased
in June, facilitating a gradual recovery in
manufacturers’ operations. Supply and demand
were on the rise, with supply improving more,”
said Wang Zhe, senior economist at Caixin
Insight Group.
“Restoration in the post-pandemic era remained
the focus of the current economy, yet its base
was far from strong. Deteriorating household
income and expectations caused by a weak labor
market dampened the demand recovery,” Wang
added.
China’s
official manufacturing PMI released on 30
June also showed expansion at 50.2 in June.
The Caixin PMI mostly tracks smaller and
private firms while the official PMI covers
larger, state-owned companies.
01-Jul-2022
HOUSTON (ICIS)–The National Weather Service is
tracking three disturbances in the US Gulf and
western Atlantic, one of which could bring
large amounts of rainfall to the Houston area
over the next two days.
Source: National
Hurricane Center (NHC)
Disturbance No 1 is generating showers and
thunderstorms near the south Texas coast and is
forecast to move slowly northward and inland,
meteorologists at the National Hurricane Center
(NHC) said.
Slow development of the system remains possible
as it is still over water, meaning there
remains a chance it could strengthen into a
named storm.
“Regardless of development, heavy rain is
possible along portions of the Texas coast for
the next two days,” the NHC said.
A flash flood watch is in effect for southeast
Texas, including the greater Houston area,
which is home to several chemical plants,
refineries and terminals that export oil, fuel,
liquefied natural gas (LNG) and natural gas
liquids (NGLs) such as ethane and liquefied
petroleum gas (LPG).
The Office of Emergency Management of Deer
Park, Texas, said the watch is in effect
through Friday night.
Disturbance No 2 is located several hundred
miles east of the Windward Islands and is
producing disorganised showers and
thunderstorms.
The NHC only gives a 10% chance of this
disturbance becoming a hurricane in the next
five days.
The third disturbance, referred to by the NHC
as potential tropical cyclone No 2, is likely
to generate heavy rainfall across Colombia
today before moving west across Nicaragua and
Costa Rica by Friday.
Areas of life-threatening flash flooding and
mudslides are expected.
Hurricane conditions are possible within the
watch area along the Caribbean coast of
Nicaragua late on Friday.
There is limited chemical production in the
region, according to the ICIS Supply and Demand
Database, with some caustic soda and chlorine
produced in Costa Rica.
The Gulf of Mexico hosts several offshore oil
wells, accounting for 15% of the nation’s crude
production, according to the Energy Information
Administration (EIA), and federal offshore
natural gas production in the Gulf accounts for
5% of total US dry production.
The Atlantic hurricane season runs from 1 June
to 30 November.
30-Jun-2022
HOUSTON (ICIS)–The Fertilizer Institute (TFI)
said it was praising the bipartisan leadership
efforts of Congressmen Ralph Norman and Jim
Costa for their work in organising a letter to
the Surface Transportation Board (STB)
regarding poor rail service.
The trade group, which representing the
domestic fertilizer industry, said ongoing
failures by the railroad companies are having a
negative impact on the industry and their
movement of vital products, which as a result
is have consequences for the overall
agricultural sector.
“With over half of all fertilizer moving by
rail, we are grateful for the leadership of
Congressmen Norman and Costa in bringing the
issue of inconsistent rail service to the
attention of the STB,” said Corey Rosenbusch,
TFI President and CEO.
“Their dedication to working with all
stakeholders will help ensure that essential
crop nutrient inputs reach farmers when and
where they need them.”
TFI said fertilizer shipments rely heavily on
rail to reach farmers, but imposed
restrictions, along with skeleton crews and
railroad-led initiatives such as
precision-scheduled railroading have forced
fertilizer shipping reductions and potential
production delays.
“Fertilizer is attributable to half of all crop
yields. With the world leaning on US farmers
now more than ever before to feed our growing
population, we must ensure strong yields and
our food security,” Rosenbusch said.
“Fertilizer must reach farmers in a timely
manner and crop harvests also need to get to
their destinations, including the kitchen
table.”
The letter to the STB was signed by 51 members
of Congress and it noted that during the late
April STB hearing on rail service a variety of
industries, including grain and feed and
fertilizer producers, reported severe service
problems with most of the Class I rail
carriers.
It highlighted that TFI had said recent service
problems, and imposed restrictions have forced
shipping reductions and potential production
delays. This not only can restrict supply but
can raise costs on the farmers who rely on
this necessary input for 50% of their crop
yields.
Warning about future and further consequences,
the STB was told that by placing onerous
restrictions on shippers without consulting
customers that railroads may “run the risk of
jeopardising family farms and increasing the
cost of food for consumers.”
The letter closed by stressing to the STB that
“rail service must be improved, and we
appreciate the STB’s attention to this matter.
While we respect the challenges of operating a
major railroad, communication is essential when
taking steps to make the necessary
improvements, including the imposition of
service curtailments.”
“As we work toward solutions to meet the
ongoing supply chain challenges, carriers and
the STB should also be mindful of essential
commodities and our country’s best public
interest.”
30-Jun-2022
HOUSTON (ICIS)–US Koch Ag & Energy
Solutions (KAES) announced it has successfully
completed the acquisition of a 50% interest in
Jorf Fertilizers Company III (JFC III) from
fertilizer producer OCP thereby establishing a
50/50 joint venture between the two companies.
JFC III owns and operates an industrial
facility producing up to 1.1m tonnes/year of
phosphate-based fertilizers.
Koch said that through its advantaged location
within the Jorf Fertilizer Complex, the world’s
largest phosphate fertilizer production
platform, JFC III benefits from a unique
relationship with OCP’s broader industrial
operations at the complex.
“Our long-term partnership with Koch is
reaching a new stage through the establishment
of our Moroccan-based joint venture, which
confirms our common goal to provide farmers
with high quality and reliable Moroccan
phosphate fertilizers,” said Mostafa Terrab,
OCP Group Chairman and CEO.
Koch said the acquisition marks Koch’s first
substantial investment on the African
continent.
“KAES and OCP have a long-standing
relationship, and we are excited to continue
growing our relationship as we work together to
secure JFC III’s long-term success,” said Mark
Luetters, Koch Ag & Energy Solutions
president.
30-Jun-2022
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