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ICIS Cost Curves

Maximise profitability with a full view of competitors’ costs

Granular data on current and past production costs for key chemicals

Maximise growth with a transparent view of the global cost landscape for chemicals, updated weekly, on a plant by plant basis. Gain a clear picture of how costs are moving, by region, country or producer and track the price negotiation window to optimise outcomes.

Improve the accuracy of market analysis with an understanding of current regional demand, inter-regional trade and how these have changed over time. Understand the relative cost position, both fixed and variable, for 11 key commodities including ethylene, polyethylene (PE), polypropylene (PP) and polyvinyl Chloride (PVC).

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Track the price negotiation window

Strengthen your negotiating position and maximise outcomes by identifying the best time to negotiate.

Optimise revenues and margins

Understand your cost position relative to your trading partners’, at a national, regional or global level.

Outpace the competition

Respond to market trends ahead of time with a clear view of how variable and fixed costs are moving.

Manage risk more effectively

Evaluate the impact of plant disruptions, shutdowns and new capacity, and assess the level of risk associated with new contracts.

Specialised analytics

Optimise outcomes with ICIS specialised analytics tools, seamlessly integrated into your workflows and processes via Data as a Service (DaaS). Support your cost analysis with critical supply and demand data, using the ICIS Supply and Demand Database. Gain access to recycled plastics intelligence with our innovative ICIS Recycling Supply Trackers. *Available for chemicals only

ICIS News

CDI Economic Summary: US Fed rate cuts delayed on sticky inflation, economic resilience

CHARLOTTE, North Carolina (ICIS)–With disinflation having stalled above the US Federal Reserve’s targeted rate, Wall Street expectations of six rate cuts this year have evaporated. Interest rate futures are now moving towards fewer cuts and along the lines the latest Fed “dot plots” of three cuts this year. Any cuts that were to emerge will not happen until May or June. Starting with the production side of the economy, the January ISM US Manufacturing PMI registered 49.1, up 2 points from December and the 15th month in contraction. Only four industries out of 18 expanded, and weakness remains broad-based. But production moved back into expansion, as did new orders. The latter featured a 5.5-point gain to a positive 52.5 reading. This is always a good sign. Order backlogs contracted, however, at a faster pace. Both new orders and order backlogs, when combined with the reading on inventories, are good indicators of future activity. Inventories contracted, which could provide a floor for output. The long and deep de-stocking cycle could be ending, with the possibility for restocking this year. Meanwhile, the ISM US Services PMI improved 2.9 points to 53.4, a reading indicating modest expansion. The Manufacturing PMI for Canada remained in contraction during January while Mexico expanded. Brazil’s manufacturing PMI improved into expansion. Euro Area manufacturing has been in contraction for 18 months, and the region continues to skirt recession. China’s manufacturing PMI was slightly above breakeven levels for the third month, as its recovery continues to face headwinds. Other Asian PMIs were mixed. AUTO AND HOUSING OUTLOOKTurning to the demand side of the economy, light vehicle sales slumped in January due to severe winter weather. This allowed inventories to move up, but they still remain low compared to historical norms. Economists see light vehicle sales of 15.9 million this year before improving to 16.3 million in 2025. The latest cyclical peak was 17.2 million in 2018. Pent-up demand continues to provide support for this market. Homebuilder confidence remains in negative territory but is improving. Housing activity peaked in Spring 2022 and into mid-2023, with the latest housing reports being mixed. We expect that housing starts will average 1.42 million in 2024 and 1.48 million in 2025. We are above the consensus among economists. Demographic factors are supporting housing activity during this cycle. There’s significant pent-up demand for housing and a shortage of inventory. Falling mortgage interest rates will also support affordability and thus demand. RETAIL SALES FALLWith severe winter weather in much of the nation, nominal retail sales fell back in January. Sales were weak across most segments, but sales at restaurants and bars advanced. Spending for services is holding up, but the overall pace is slowing. Job creation continues at a good pace, and the unemployment rate is still at low levels. There are 1.4 vacancies per unemployed worker. This is off from a year ago but at a historically elevated level, which is still fostering wage pressures in services. Incomes are still holding up for consumers. INFLATION STILL HIGH BUT WILL EASEThe headline January Consumer Price Index (CPI) was up 3.1% year on year and core CPI (excluding food and energy) was up 3.9%. Progress on disinflation has been made but appears to be stabilizing. Economists expect inflation to average 2.7% this year, down from 4.1% in 2023 and 8.0% in 2022. Inflation is expected to soften further to 2.3% in 2025. Our ICIS leading barometer of the US business cycle has provided a signal consistent with the “rolling recession” scenario in manufacturing and transportation. The services sectors, however, continue to expand but are slowing. Recent readings show stabilization in this leading index, which is encouraging. US GDP FORECAST POINTS TO SOFT LANDINGAfter real GDP rose 5.8% in 2021 and then slowed to a 2.5% gain in 2022, the much-anticipated recession failed to materialize. In 2023, the economy expanded by 2.5% again. US economic growth is slowing from the rapid pace of Q3 and Q4, but those gains will aid 2024 performance which is showing a 2.1% gain. A cyclical slowdown in economic activity is occurring in 2025, economic growth should average 1.7% for the year. WEAKER OUTLOOK FOR EUROPE, CHINALooking overseas, recent global indicators show slow economic growth and soft commodity prices. Europe is skirting a shallow recession. The conflict affecting Red Sea seaborne trade adds to supply chain disruptions, costs and uncertainty for the region. Within the context of demographic headwinds, continued property sector woes and soft export markets, China’s economy has lost momentum. The government and Bank of China are responding with stimulus measures. For more updates and interactive charts, visit our ICIS Topic Page – Macroeconomic Outlook: Impact on Chemicals

23-Feb-2024

Equinor's H2H Saltend hydrogen project granted planning permission

600MW low carbon plant located in Northeast England Potential application for Cluster Sequencing Track-1 Expansion Site due to be operational by the end of the decade LONDON (ICIS)–Equinor's H2H Saltend low carbon hydrogen project has been granted planning permission by East Riding of Yorkshire Council, the company said in a press release 20 February. The plant is due to have a capacity of 600MW with carbon capture technology applied and is slated to begin commercial operations by the end of the decade. Equinor said that this was a major step forward for the project, with a potential application being prepared into the UK government's upcoming Cluster Sequencing Track-1 Expansion process which is due to launch later this year as part of the East Coast Cluster. The hydrogen set to be produced is expected to be used in chemical processes by nearby companies, as well as being blended with natural gas at the Triton power station, with 900,000 tonnes/year of CO2 expected to be stored in sub-sea aquifers. The H2H Saltend project is part of Equinor's Hydrogen to Humber ambition, which is forecast to produce 1.8GW of low carbon hydrogen within the region by 2030. The UK has ambitions to have 10GW of hydrogen capacity up and running by 2030, of which a maximum of 5GW will be low carbon hydrogen with the remainder being electrolytic hydrogen. Data from ICIS Analytics showed that UK hydrogen demand is due to increase from 21TWh this year to 72TWh by 2030, of which the chemicals sector is forecast to account for 20TWh (28%) of total UK hydrogen demand.

23-Feb-2024

VIDEO: Europe R-PET FD NWE colourless flake prices rise again in February

LONDON (ICIS)–Senior Editor for Recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Further rises in FD NWE colourless flake in February Flake and bale prices rise in eastern Europe Demand driven by restocking, tight availability

23-Feb-2024

INSIGHT: BASF's additional fixed and variable cost reductions in Ludwigshafen reflect Germany’s challenges

LONDON (ICIS)–BASF has suffered in Germany and across Europe from energy high costs and poor demand that continue to drive structural change. Much weakened competitiveness is forcing the company to tackle the situation at the upstream businesses by adapting production capacities to market needs. But plants not operating at 80-90% because of weak demand are a drag on profitability and something has to be done to sustain the operations at Ludwigshafen and maintain the cost-effective Verbund structure on which the company relies. “We have to say goodbye to the good old times in Germany,” BASF CEO Martin Brudermuller said on Friday on release of the company’s fourth quarter and full year 2023 financial results. Weak demand is on-going, although BASF believes that chemicals production globally will 2.7% this year compared with a tough 1.7% increase in 2023. Most growth, however, is expected to come in China. The company’s European operations are under significant pressure, and BASF is feeling the impact in its Chemicals and Materials segments where it has major production capabilities. Chemicals segment earnings (before interest, tax and special items) last year were down 82% at just €361m. Materials segment earnings were down 55% at €826m. Chemicals includes the building block petrochemicals while Materials includes engineering plastics and polyurethanes, among other systems, and their monomers. Gas costs in Europe are still twice what they were and four to five times higher than those in the US. Global supply and demand imbalances for major upstream chemicals are damaging structurally as well as in the short term and BASF has to adapt its giant Ludwigshafen production complex to the new realties. There will be plant shutdowns, Brudermuller said on Friday. Ludwigshafen is so big that it is impossible to imagine BASF without it, or at least to imagine a significantly changed production footprint. Nevertheless, against the backdrop of Germany and Europe’s challenged industrial position and an uncertain industrial manufacturing future the way it is transformed over the next few years will reflect the new realities. The complex has lost money recently – although it does bear the costs of the BASF global HQ amongst its overheads. Most of the company’s employees work there. A new cost reduction programme reduction of €1bn, adds to previous recent plans to address high costs. Plants and jobs will be impacted. New technology will be applied, and the company talks about tackling fixed costs and significantly trimming variable costs. "The situation is serious, so we are explicitly not ruling out any measures,” Brudermuller said. Taking carbon reduction plans into account also, the range of chemicals produced at Ludwigshafen is expected to change. The company has to factor into its plans the costs of decarbonisation of assets, some of which are many decades old. Its CFO, Dirk Elvermann said on Friday that the new reality will have an impact on manufacturing industry in Germany. BASF has to change its approach, he added, and adjust the type and dimensions of upstream and downstream assets. There will be a push towards the downstream, more downsizing and materials will be sourced from elsewhere, he indicated. BASF expects global economic weakness to continue this year with chemicals demand, impacted by high interest rates, rising only slowly in moderately growing customer industries. China growth is somewhat stronger, but uncertain. The company does not expect much from Europe while it foresees a slight slowdown in growth in the US. “We can’t do magic here,” Brudermüller said on Friday. That is possibly a phrase that applies to the company's asset footprint in Germany as much as market conditions. Insight by Nigel Davis

23-Feb-2024

Austrian regulator under pressure to keep current gas transport tariff methodology

Gas companies oppose new transmission tariff calculation methodology from 2025 Changes would lead to soaring costs and block supply diversifcation New consultation on the cards, depending on regulator board’s decision LONDON (ICIS)–Gas companies have opposed proposals by the Austrian regulator to change the transmission tariff methodology from 2025 amid concerns the move would lead to ‘massive’ cost increases and block supply diversification efforts, according to responses published by E-Control on 23 February. If approved, the new tariffs at critical interconnection points with Germany and Italy could increase by 206% and 331% respectively. The proposals, which would see tariffs calculated according to booked capacity and distance, has sparked concerns from companies active in Austria. In one of the letters sent to E-Control, Austrian, German and Slovak producers and storage operators OMV, RAG, Uniper, Nafta and Pozagas said: “The massive and unforeseeable increase in tariffs will lead to a massive decline in capacity bookings which will inevitably lead to even higher tariffs. […] This is detrimental to the political aim to diversify gas supply sources.” Anglo-Dutch Shell echoed the views: “[The proposed methodology change] can greatly affect the economics of using the Austrian gas. “[It] risks to jeopardise the ambition to diversify away from Russian import, since it negatively impacts exactly the points Austria should leverage to diversify import routes.” The consultation ended on 21 February and the regulator’s board is now expected to review the responses in the next two weeks. The source close to E-Control said the board could temporarily extend the existing methodology. A new consultation may be organised following the board’s decision but the survey would have to take place before annual capacity auctions in July. UKRAINE GAS TRANSIT E-Control launched the consultation at the end of December, explaining the tariff review was necessary because the current regulatory period was coming to an end. Furthermore, the region is braced for major changes as the existing gas transit contract held by Ukraine with Russian producer Gazprom expires at the end of this year. Ukrainian officials said incumbent Naftogaz, which currently organises the transit, was unlikely to renew it, as the country has been fighting Russia’s all-out invasion since February 2022. Austria has been dependent on the Russian gas transiting Ukraine not only because it covers most of its internal demand but also because it helps bring in transit revenue. TRANSIT CONTRACTS Since Russia reduced its gas supplies to Europe, including to major buyers Germany and Italy, Austrian transit flows to these countries have nearly stopped. Nevertheless, many of the transmission contracts remain in place, even if they are not serviced. For example, there are around 20 companies currently holding long-term capacity on the Austrian TAG pipeline transiting gas to Italy which are due to expire in 2027 or 2028. There are reportedly another 10 on the line heading west and operated by Gas Connect Austria, which are due to expire in the early 2030s. These contracts are ship-or-pay, which means that the company booking capacity will have to pay for it regardless whether it is used or not. This could give network operators some flexibility in extending the current methodology. Nevertheless, the source close to E-Control said it would be reasonable to review the situation in 2025 once there is greater clarity regarding the Ukrainian gas transit.

23-Feb-2024

UK Q2 energy price cap falls quarterly, year on year

Additional reporting by Hector Falconer Q2 energy price cap falls to £1,690, in line with lower wholesale gas and power prices The Q2 cap is £238 lower than the Q1 cap and has also fallen year on year The Q3 price cap is likely to fall further if gas and power prices continue their bearish trajectory, however bullish drivers could limit losses LONDON (ICIS)–The UK energy price cap for April-June has decreased quarter on quarter and year on year in line with lower wholesale gas and power prices, energy regulator Ofgem said on 23 February. The cap was introduced in January 2019 and sets the maximum price that gas and electricity suppliers can charge end-users for each unit of energy consumed. Ofgem sets the cap through a methodology that considers a range of supplier operating costs, including ICIS wholesale energy price assessments, as well as network costs and VAT. The price cap is likely to fall further for the third quarter of 2024 if prices continue their bearish trajectory, however any bullish driver such as a hot summer could limit losses. FALLING PRICES ICIS assessed the NBP gas Q2 ’24 contract at an average 84.338p/th between 16 November and 15 February – the period used by Ofgem to calculate wholesale energy costs. This was much lower than the previous year when the equivalent contract averaged 228.967p/th between 16 November 2022 and 15 February 2023. Prices have declined steadily from their peak after Russia’s invasion of Ukraine, although NBP products are still well-above seasonal average levels seen before the energy supply crisis. As gas is a key price driver for the UK power market, UK power prices have tracked a similar bearish trend, with UK power Q2 ’24 prices significantly below Q2 ’23 prices. ICIS assessed the UK power Baseload Q2 ’24 contract at an average £76.02/MWh between 16 November and 15 February, 65% lower than the Q2 ’23 over equivalent dates. The Q2 ’24 contract has maintained a premium to its European counterparts, which indicates that the UK is likely to import power from neighbouring countries, including France, through the front-quarter. Data from French nuclear fleet operator EDF shows that nuclear output is set to remain strong through the second quarter of 2024, averaging 46.5GW in the period 1 April to 30 June, 9.5GW above the 2019-23 average. CAP OUTLOOK Both gas and power Q3 ’24 prices are currently at a premium to Q2 ’24 price however, both contracts have continued to shed ground through the first quarter of 2024. Barring any shift in the underlying fundamentals, Q3 ’24 gas and power prices are likely to continue to fall, which could results in the Q3 price cap being lower than the Q2 cap. According to ICIS price assessments on 22 February, the NBP Q3 ’24 contract was 2.225p/th above the Q2 ’24 contract and the UK power Baseload Q3 ’24 contract was £2.65/MWh above the Q2 equivalent. From January to March 2018-2023 the NBP Q2 contract averaged 89.971p/th and the 2018-2023 average of Q3 when it was the front quarter was 85.072p/th – indicating that Q3 ’24 may dip below the Q2 ’24 price level nearing delivery. European gas storage sites currently sit at 65%, which is 22% above the 2017-21 average, according to data from Gas Infrastructure Europe. This, mixed with low levels of historical gas demand could continue to pressure Q3 prices – especially if the UK has a windy summer period which would mute gas-fired power demand. On the power side, heatwaves remain a risk factor in the third quarter, as this would support air condition demand in the UK and on the continent, therefore supporting power prices. High river water temperatures can also lead to reduced output at French nuclear plants, as reactors cannot be cooled effectively. This could also be a potentially bullish driver for UK power prices. Furthermore, low wind generation would also be a risk factor supporting UK power prices and increase gas-for-power demand.

23-Feb-2024

US Huntsman expects gradual recovery, seeks to boost prices and volume

HOUSTON (ICIS)–Huntsman expects a gradual recovery to take hold in 2024, in which the company will attempt to pursue higher prices and recover share, the CEO said on Thursday. So far, order patterns indicate that destocking has ended for most of Huntsman's divisions, said Peter Huntsman, CEO. He made his comment during an earnings conference call. Prices and sales volumes seem to be gradually improving, and Huntsman sees signs of green shoots that had been absent during the past 12-18 months, he said. "Prices and volumes look to be gradually improving," he said. Companywide Huntsman expects mid-single-digit growth in the first quarter versus the same time in 2023. In North America, destocking is ending in housing and construction, he said. In China, prospects are improving for infrastructure and automobiles, he said. Construction is having a bit of a rebound. Overall, the pickup in business following the Lunar New Year is stronger than what the company has seen in the last two to three years. Europe will have a gradual recovery, but Huntsman still warned about the risk of de-industrialization for the region. "We haven't made strong cash flow out of Europe in two years," Huntsman said "That's unacceptable and it's unsustainable." With the prospect of a recovery, Huntsman expects to recover some of the sales it had lost in 2023, he said. It will try to recover lost volumes and push for what the CEO described as much needed price increases. Huntsman stressed that the subsequent restocking cycle will be gradual, and it will stretch out through the year. He does not expect a sudden surge in buying. Thumbnail shows polyurethane spray foam, which is made with MDI. Image by Shutterstock.

22-Feb-2024

BASF navigates low-growth environment as China Verbund spending continues

LONDON (ICIS)–As BASF prepares to provide more detail on its 2023 financial performance, the Germany-based chemicals major is to navigate the still-chilly waters of 2024 as spending on its flagship China Verbund site in Zhanjiang continues and project pipelines face ever-tougher scrutiny. The company will release its fourth-quarter and full-year results on 23 February but has been careful to manage expectations, cutting its full-year guidance several times ahead of the end of year reporting date and releasing 2023 performance figures in January. PERFORMANCE Revised projections of full-year earnings before interest, taxes (EBIT) and special items of €3.9bn were cut further to €3.81bn, a decline of over 44% year on year, even when comparing against the historically difficult energy price environment of late 2022. in € millions* 2023 2022 % Change Group Sales 68,902 87,327 -21.1 EBIT before special items 3,806 6,878 -44.7 EBIT 2,240 6,548 -65.8 Net income 225 -627 According to analyst Konstantin Wiechert at Baader Bank, the revised projections for full-year earnings indicate that conditions may have softened further at the end of the year as, going by previous quarterly results, the company was on track to meet its targets before then. “According to the company before knowing the December figures it still looked like [EBIT pre-specials] guidance of ~€3.9bn could be achieved, so it is likely one month that really was below expectations,” he said, speaking in January. SPENDING The company has set out plans to cut its capital expenditure budget for 2023 to 2027 by €4bn to €24.8bn, with €1bn of the total of the savings expected to have been found last year and the rest in the 2024-27 period. BASF is expected to announce its 2024-27 capex expectations on Friday, but this year and next are expected to be expensive as the concluding work on its Zhanjiang Verbund site continues. Interest rates in China did not soar to the levels seen in Europe over the last two years, and the country’s slow rebound after lifting zero-COVID restrictions means that labour costs in the country, which led to favourable pricing for workers, according to CEO Martin Brudermuller. Nevertheless, work on the Zhanjiang complex means the spending could be robust over the next two years, according to remarks made by Brudermuller on a December investor call. “You optimize a little bit here and there in these two years of heavy investment coming in 2024 and 2025, but it will not change anything in that we have to finish the whole project as such,” he said. “You cannot build 80% of a Verbund and leave the remaining 20%.” Brudermuller has hinted that some manoeuvrability on budget may be achieved by a harsher look at BASF’s project pipeline elsewhere. “We have more projects than money, so that ensures a certain amount of competition,” Brudermuller said in December. “But that is now certainly increasing when we reduce the money available. So, there are more projects, and we look very clearly to see which are the profitable ones, where are some must haves.” Investors and employees will be watching on Friday for news of any further consolidation in its European asset base. PROJECT PIPELINE Another focus for the financial community, given the relative immutability of Zhanjiang spending this year, will be on capex expectations elsewhere, according to Sebastian Bray, a chemicals analyst at Berenberg. “Management comments around capex and working capital in 2024 may prove influential for the share price movement on the day. I believe capex much in excess of €6 billion or comments that working capital improvements recorded in 2023 are largely 'finished' may be taken negatively; the converse also holds, in my view,” he added. ECONOMY The start of the year has seen fairly widespread upticks in pricing across European chemicals markets as a result of disruption to global shipping as a result of tensions in the Red Sea that have limited imports and buoyed domestic demand. The EU in general has become less reliant on imports, with the balance of trade for key products in 2023 firming as a result of the contraction in exports being smaller than the decline in goods volumes flowing into the region. Nevertheless, markets continue to pin hopes on interest rates and inflation as the key drivers of 2024 prosperity, with central bank rate cuts perceived as crucial to allowing a more pronounced recovery to develop. Expectations remain that substantial cuts to rates may only be introduced in the second half of the year, meaning that investor sentiment remains bearish. “I think the swing factor on [BASF] results will be cash flow as much as earnings outlook, where the market has settled into a consensus of a grinding, H2-weighted recovery. 2024 will be a year of high capex for BASF, which may temporarily necessitate funding the dividend out of reserves or divestment proceeds,” he said. According to Brudermuller, the European chemicals industry has lost 25% of its volumes since the onset of the Russia-Ukraine war, with some of that due to energy pricing and cheaper product elsewhere, and part due to lower orders due to customers’ own woes. “I would expect that capacities are lost for good in the European chemical industry.,” Brudermuller said in January. …The industry is still lagging a bit behind reality. I would expect that we will see some movement in the industry in 2024,” he added. Conditions in Europe are gradually thawing, with optimism ticking up, the general trend continuing toward inflation cooling in spite of the impact of the Red Sea crisis, and eurozone private sector activity drawing closer to stabilising. With little signs of a substantial rebound in underlying demand conditions, the first half of the year may remain difficult for the sector, prompting strict discipline on spending. “Without giving guidance now, we have said that the start to 2024 will not be easy. I think that the closer we get to 2024, the more likely it looks that 2024 will be another difficult year,” Brudermuller said. Focus article by Tom Brown Thumbnail image shows flags flying at BASF headquarters, Ludwigshafen, Germany (picture credit: RONALD WITTEK/EPA-EFE/Shutterstock)

22-Feb-2024

Germany announces up to €3.53bn funding for hydrogen production, derivatives import

BMWK funding for Climate and Transformation Fund for 2027-2036 Dutch partnership accelerated to open up further import opportunities Details on new funding being ironed out, more info to follow additional reporting by Gary Hornby LONDON (ICIS)–The German Federal Ministry for Economic Affairs and Climate Action (BMWK) have announced additional funding of up to €3.53bn from the Climate and Transformation Fund. The funding will be over a ten-year period beginning in 2027 and ending in 2036, and will be aimed at procuring renewable hydrogen and its derivatives from other global regions. Germany is forecasting hydrogen demand within the country could reach as high as 130TWh by the end of the decade, more than double current levels, and is set to be at least 50%-reliant on imports to manage domestic demand for the fuel. Some of these imports are due to arrive in the Netherlands before being shipped via pipeline into Germany, with the Netherlands seeing Germany as a key export market for hydrogen moving forward in the country's national hydrogen strategy. "In close cooperation with the European Hydrogen Bank (EHB), we are accelerating the hydrogen ramp-up together with the Netherlands and opening up attractive cooperation opportunities for partner countries," BMWK said in the press release. BMWK said that the core idea of the funding is a "double auction model" which will bridge the difference between the higher price of hydrogen on the global market and the lower price at which hydrogen can be resold regionally. In June 2023, the German government's decision to link the EHB with the H2Global instrument developed by Germany for the market ramp-up was seen as a major step towards securing hydrogen financial needs across the country and wider continent.

22-Feb-2024

Japan flash Feb manufacturing PMI falls to 47.2 on steep new orders decline

SINGAPORE (ICIS)–Japan’s manufacturing purchasing managers’ index (PMI) fell to 47.2 in February from 48.0 in January after a strong decline in new orders, flash estimates from au Jibun Bank showed on Thursday. A PMI reading above 50 indicates expansion while a lower number denotes contraction. The drop in new orders led to a production shrinking at the fastest rate in a year and signalled a ninth consecutive deterioration in the PMI that was the most marked since August 2020, it said in a statement. Purchasing activity at Japanese manufacturers fell sharply in February, while lower capacity pressures led to employment levels falling at the quickest pace since January 2021. "Price pressures faced by Japanese manufacturers softened during February, as the rate of input inflation eased to a seven-month low," au Jibun Bank said. Japan's economy was in technical recession after contracting for a second consecutive quarter from the 3.3% fall recorded in July-September 2023, amid sustained weakness in private consumption and business spending.

22-Feb-2024

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