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HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 1 July.
US urea imports from Russia down 42% in
January-April
US imports of urea from Russia were down 42% at
302,666 tonnes in January-April, according to
the ICIS Supply and Demand Database.
Weekly spot IPEX shows prices down by 2.6% on
declines across all regions
Spot chemical prices dropped by 2.6% on the
back of declines across every region, according
to latest figures from the weekly ICIS
Petrochemical Index (IPEX).
INEOS to expand high viscosity PAO capacity at
Texas site
INEOS is to expand production capacity of high
viscosity polyalphaolefins (HV PAO) at its
Chocolate Bayou, Texas, site by 2025, the
producer said on Tuesday.
INTERVIEW: Univar Solutions aims to provide
carbon footprints for distributed products –
exec
US-based chemicals distributor Univar Solutions
is working towards providing carbon footprints
for the products it distributes to provide
transparency to customers and enable them to
meet sustainability goals, an executive said.
INSIGHT: West Coast US port, dockworkers to
miss deadline for labour contract
Ports and dockworkers on the western coast of
the US said they will miss a 1 July deadline to
sign a labour agreement, leaving chemical
companies at risk for more supply chain
problems.
US June PP contracts settle lower on reduced
demand, weaker feedstock costs
US June polypropylene (PP) contracts settled 10
cents/lb ($220/tonne) lower from May on slower
demand and reduced feedstock costs.
04-Jul-2022
SINGAPORE (ICIS)–AGC has completed the
consolidation of its chlor-alkali operations in
Thailand and Vietnam under a new company called
AGC Vinythai Public Co, the Japanese glass,
chemicals and high-tech materials producer said
on Monday.
Placed under AGC Vinythai are two subsidiaries
in Thailand, namely, a 58.78%-owned Vinythai
Public Co (VNT) and a fully-owned AGC Chemicals
(Thailand) Co; and a 78.11%-owned Vietnamese
subsidiary AGC Chemicals Vietnam Co (ACVN).
AGC has a 70.22% stake in the newly formed
company, with Thailand’s PTT Global Chemical
(PTTGC) holding a 27.32% stake.
AGC and PTTGC are now “in the consideration
process” to increase the Thai producer’s
ownership in AGC Vinythai to as much as 35%,
while the Japanese group’s stake in the new
company will not fall below 65%.
“The final shareholding ratio of the two
companies will be disclosed as soon as it is
determined,” AGC said, adding that the impact
on its consolidated business results will be
minimal since the re-organisation is taking
place among its consolidated subsidiaries.
Japan’s AGC Inc
had said in May this year that it will
invest more than yen (Y) 100bn ($739m) to raise
its chlor-alkali production capacity in
Thailand by the first quarter of 2025.
($1 = Y135.4)
04-Jul-2022
LONDON (ICIS)–Click here to see the
latest blog post on Chemicals & The Economy
by Paul Hodges, which looks at the Fed’s
sudden realisation that its models for
inflation are wrong.
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.
04-Jul-2022
MADRID (ICIS)–Inflation in the eurozone has
yet to peak as energy and food prices are
expected to go even higher in coming months, an
ICIS economist said.
Kevin Swift, senior economist for global
chemicals at ICIS, said the 19-country
currency union’s June
inflation rate was 8.6%, up
from 8.1%
in May.
He added that a “silver lining” was an easing
in the rate of inflation in the services
sectors, which eased slightly year on year.
However, any positive is likely to continue
being eroded by rising energy and food prices,
said Swift.
“Given recent restrictions on natural gas
deliveries, [energy prices] will likely get
worse. Food prices accelerated to an 8.9%
year-on-year pace in June, up from 7.5%
year-on-year [in May],” said Swift.
“Given disruptions in food supply, these gains
will likely be elevated in the months to come.”
Eurozone inflation has caught up to the US rate
of inflation and it is likely it has not yet
reached a peak, said Swift.
04-Jul-2022
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 1 July.
Fright rates could fall in face of tricky
headwinds
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.
Europe PET, PTA decouple from Asia amid
potential spikes upstram
The Europe polyethylene terephthalate (PET)
value chain has delinked from a bearish Asia,
forced up by hypothetical record jumps in
upstream paraxylene (PX).
Eurozone manufacturing output falls for first
time since 2020 lockdowns
Manufacturing sector growth in the eurozone
fell for the first time since the initial spate
of lockdowns in the region at the start of the
COVID-19 pandemic.
Germany’s SKW Piesteritz mulls force majeure in
event of gas shortages, price hikes
Ammonia and urea producer SKW Piesteritz will
consider implementing a force majeure if
natural gas supplies are cut and prices
increased as Germany grapples with plunging
availability from Russia, the company confirmed
to ICIS.
EU, eurozone economic sentiment and employment
expectations fall in June
Economic sentiment and employment expectations
contracted in June across both the EU and
eurozone, according to the latest data from the
European Commission on Wednesday.
BASF’s Antwerp, US ammonia output could offset
potential shutdown in Germany – bank
A possible shutdown of ammonia production at
BASF’s Ludwigshafen flagship site could be
compensated by the German chemicals major’s
facilities in Antwerp and the US, investment
bank Baader Bank said on Tuesday.
Weekly spot IPEX shows prices down by 2.6% on
declines across all regions
Spot chemical prices dropped by 2.6% on the
back of declines across every region, according
to latest figures from the weekly ICIS
Petrochemical Index (IPEX).
04-Jul-2022
SINGAPORE (ICIS)–The UAE and Indonesia on 1
July signed a free trade pact which will remove
or sharply cut duties on most goods traded
between the two countries.
The deal is expected to “increase bilateral
trade to beyond $10bn within five years”, UAE
President Mohamed bin Zayed Al Nahyan said in
post on Twitter on 1 July.
Total trade between the two countries was
valued at $4bn in 2021, according to the
Indonesian Ministry of Trade.
The UAE’s main exports to Indonesia are
non-crude oils, petroleum gases and iron or
non-alloy steel, while Indonesia’s key
shipments to the UAE are palm oil, precious
metals and jewelry, according to trade data
platform the Observatory of Economic
Complexity.
UAE’s total exports to Indonesia last year
stood at $1.9bn, while imports from the UAE
amounted to $2.1bn, Indonesia’s trade ministry
stated.
In the first four months of 2022, total trade
between the two countries were up 15% year on
year at $1.5bn, with exports from Indonesia at
$714m and imports at $831m, it said.
Indonesia hopes that the trade pact will
attract more investment from the UAE, the
ministry said.
In 2021, the total investment by the UAE in
Indonesia totaled $16.1m (double checking –
just in millions? – yes ), it said, adding that
the potential of higher trade and investment
within the framework of the free trade deal was
massive.
The UAE Ministry of Economy expects the trade
pact with Indonesia to increase the value of
trade in services between the two countries to
$630m by 2030 and create 50,000 jobs for
skilled workers in the UAE within the same time
frame.
The Indonesia-UAE Comprehensive Economic
Partnership Agreement was signed during
Indonesian President Joko Widodo’s visit to Abu
Dhabi.
The full text of the trade agreement has not
been released and the pact still needs to be
ratified by both countries.
Focus article by Nurluqman
Suratman
04-Jul-2022
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
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