News and analysis

HOUSTON (ICIS)–Corn harvest has reached 30% while soybeans are at 47% completed, according to the latest US Department of Agriculture (USDA) weekly crop progress report. The current rate of the corn harvest is just behind the 31% level achieved in 2023 but is ahead of the five-year average of 27%. Texas continues to be the leading state with 95% of it corn crop harvested, followed by North Carolina and Tennessee at 80%. There is 87% of the crop rated mature, which is equal to the 87% from last season and above the five-year average of 81%. For corn conditions there is 5% viewed as very poor, 8% still as poor and 23% as fair. There is 49% listed as good with 15% as excellent. Soybeans dropping leaves is now at 90% but this slightly behind the 91% from last season but is above the five-year average of 85%. Harvesting of the soybean crop has climbed to 47%, which is ahead of 37% mark from 2023 as well as the five-year average of 34%. Louisiana remains the top state for harvesting progress with 77% now completed with Mississippi right behind that level with 76% of their crop finished. For soybean conditions there is still 3% very poor and 8% as poor. There is now 26% fair with 51% good and 12% remaining rated as excellent. In other harvesting updates, there is 26% of the cotton crop finished with sorghum acreage now at 43% completed.

07-Oct-2024

HOUSTON (ICIS)–As Hurricane Milton continued to crank up into a potentially record setting storm heading for central Florida, the US fertilizer industry within the key hub of Tampa began quickly preparing for its arrival. As of late 7 October Milton had reached Category 5 status with winds at 180 miles per hour (mph) and moving east at 10mph. It is expected to make landfall late on Wednesday with a general track consensus having the center of the storm crossing over Tampa, with the storm surge locally forecasted to be as high as a life threatening 10-15 feet. Having just experienced Hurricane Helene, which brought considerable rainfall and surge but left the city and much of the fertilizer infrastructure undamaged, the community and market participants are now again trying to get ready and settle in for what will certainly be a much more intense event. As a source said all around the community everything was progressing rapidly to being shut down over Monday afternoon or into early Tuesday. Officials have announced that the Tampa International Airport is suspending all commercial and cargo operations on 8 October at 9:00 eastern standard time. Port of Tampa officials had not issued an update since 6 October advising of the possibility of gale force winds impact our maritime operations within 48 hours. At the time it said inbound and outbound vessel traffic was continuing as were landside operation as long as safely possible. A source at producer Yara said the company was shutting down their Tampa offices Monday afternoon to comply with the evacuation orders but there was no update on stoppage of other operations. With their headquarters within the city and substantial assets in the Tampa vicinity fertilizer producer Mosaic is in the path of this storm’s threat but had not yet commented on their current preparation for Milton. Canadian fertilizer major Nutrien said following the last hurricane it was still assessing the timeline for restarting their White Springs phosphate facility, but they were now getting prepared for another round of impacts. “We are working with our customers on any potential impacts to supply. We are actively monitoring the path of Hurricane Milton and have comprehensive emergency response plans in place to ensure the safety of our people and operational integrity of our facilities,” said Nutrien spokesperson. There is some optimism that for those assets and population that is further away from the coast that the biggest threat seen from the recent tropical activity, the storm surge, will not be a factor. There is also the possibility it could drift further south or edge up more northerly and also potentially weaken ahead of making landfall. As an industry participant said, “We are inland so we are staying for now, will continue to watch.” Officials were saying that residents and business need to be ready for the storm or need to have left the area by at least late 8 October. Already there are reports of slow moving northbound traffic out of Tampa along the interstate, with many heeding the evacuation orders as Milton was being listed as the strongest Gulf of Mexico hurricane since 2005, with extremely low centralized pressure being recorded.

07-Oct-2024

HOUSTON (ICIS)–Milton strengthened on Monday into a powerful Category 4 hurricane, and it is expected to continue strengthening before making landfall by midweek near Tampa, Florida, a major fertilizer hub that was drenched by an earlier major hurricane. That earlier hurricane, Helene, made landfall on September 26 far to the north of Tampa. However, Tampa still saw storm surges of 6-10 feet (1.8-3.0 meters), according to AccuWeather, a meteorology firm. Tampa and other ports along Florida's Gulf Coast had shut down because of Helene. AccuWeather estimates that Hurricane Helene caused $225 billion to $250 billion of damage and economic loss in Florida and the southeastern US. As of September 30, fertilizer companies were assessing the damage caused by Hurricane Helene. A week later, they will now prepare for another major hurricane that will pose a greater risk. AccuWeather is warning that, due to Milton, the Tampa Bay region could be hit by a storm surge of 10-15 feet, wind gusts of 120-140 miles/hour (193-225 miles/hour) and more than 2 feet (60 cm) of rain. "Milton may be a historic, once-in-a-lifetime storm for Floridians," said Jon Porter, AccuWeather chief meteorologist. "Milton has the potential to become one of Florida's most damaging and costly hurricanes." For Tampa, the magnitude of Milton's storm surge will depend on its path, according to AccuWeather. If it makes landfall south of Tampa, it will cause dangerous, but not extreme, storm surges. If landfall is north of Tampa, parts of the Bay could suffer from storm surges of 20 feet, AccuWeather said. FERTILIZER HUB, PHOSPHATES AT RISKTampa is an important hub for the US fertilizer industry, hosting corporate offices, trading, product storage, shipping and other logistical operations. Near Tampa is Florida's phosphate mining operations in Bone Valley, which covers parts of Hardee, Hillsborough, Manatee and Polk counties. In all, Florida has 27 phosphate mines, of which nine are active, according to the Florida Department of Environmental Protection. For chemicals, there is some epoxy resin, phenolic resin and unsaturated polyester resin production in Lakeland and Kathleen, Florida. Both are near Tampa. Milton will make landfall far from Pensacola, Florida, which has plants that make nylon and thermoset resins. PORT TAMPA BAY REMAINS OPENPort Tampa Bay remains open to inbound and outbound vessel traffic, but it has set Port Condition X-RAY. That means gale force winds that could disrupt maritime operations could occur in the next 48 hours. SeaPort Manatee, a deepwater port on Tampa Bay, also set Port Condition X-Ray. It handled bulk, breakbulk and container traffic. RAIL STILL RECOVERING FROM HELENEOn October 4, railroad company CSX warned customers to expect delays despite progress in restoring power and clearing trees. Disruptions to operations are concentrated in the Carolinas. Railroad company Norfolk Southern said it has already started monitoring Hurricane Milton, although its lines are operating as scheduled. POTENTIAL FOR DISRUPTION TO GULF OILHurricane Helene disrupted US oil and gas production in the Gulf of Mexico even though it passed through the eastern portion of the body of water. Hurricane Milton could have the same potential as it approaches the US. RECONSTRUCTION DEMAND FOR CHEMSFor hurricanes in general, reconstruction can translate to increased demand for many chemicals and polymers. The white pigment titanium dioxide (TiO2) is used in paints. Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA). Blends of aliphatic and aromatic solvents are also used to make paints and coatings. For polymers, expandable polystyrene (EPS) and polyurethane (PU) foam are used in insulation. Polyurethanes are made of methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI) and polyols. High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes. Unsaturated polyester resins (UPR) are used to make coatings and composites. Vinyl acetate monomer (VAM) is used to make paints and adhesives. Thumbnail shows the forecasts path of Hurricane Milton. Image by the National Hurricane Center.

07-Oct-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 4 October. US Tampa port reopens after Helene's hit; US-wide losses could top $160 billion The port at Tampa in the US state of Florida reopened over the weekend, the port’s authorities said on Sunday, after Hurricane Helene's destructive path put the US state of Florida against the ropes. SHIPPING: ILA ports strike to weigh on US PE, PVC exports; carriers set congestion surcharges Participants in the US chemical industry worry that a prolonged strike by US Gulf and East Coast dock workers will hurt exporters and lead to supply surpluses, and some carriers are already initiating port congestion surcharges that will add increased costs on top of delays to both imports and exports. SHIPPING: Union, US ports remain at impasse as strike enters second day Negotiations have yet to resume between union dock workers and the US Gulf and East Coast ports as a costly strike enters its second day. US demand for ACN, other chems could take a hit as Boeing strike enters fourth week US acrylonitrile (ACN) demand could soften as 33,000 Boeing employees remain on strike in a work stoppage that is entering its fourth week. SHIPPING: Trucks, container ships backing up as US ports strike marks third day In only its third day, a strike by dock workers at US Gulf and East Coast ports is leading to idled trucks and growing numbers of container ships queuing outside of the ports. SHIPPING: Union, US ports reach tentative agreement, dock workers to return to work on Friday The three-day strike by US Gulf and East Coast dock workers has been suspended until 15 January to allow negotiations to resume, according to a joint statement from the union and ports. INSIGHT: No signs of petchems demand recovery from car sector on the horizon, H2 2025 may be a moment of truth After a strong rebound in car sales last year, the European automotive industry is facing a more challenging environment in the second half of 2024, leading to a drop in petrochemical requirements from car manufacturers. Consumer appetite for new vehicles has become more sluggish following a post-Covid catch-up phase in 2023, mainly due to a mixed economic environment and persistently high interest rates, along with uncertainty on both policy and political developments across the continent. SHIPPING: With strike over, some US ports extending gate hours; container rates fall further With the suspension of the strike at US Gulf and East Coast ports until 15 January, carriers are urging customers to use extended gate times being offered by some ports to collect or deliver any urgent containers to terminals.

07-Oct-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 4 October. NEWS Brazil’s manufacturing expands healthily again in September on stronger demandBrazil’s manufacturing sectors posted a significant improvement in September on the back of an increase in production, stronger job creation, and accelerated sales growth, analysts at S&P Global said on Tuesday. Mexico’s manufacturing contraction deepens in September as perfect storm gathers paceMexico’s petrochemicals intensive manufacturing sectors deepened their contraction during September as a perfect storm of lower orders, lower output and lower employment levels is forming, analysts at S&P Global said on Wednesday. Colombia manufacturing falls further into contraction in SeptemberThe manufacturing sector in Colombia fell further into contraction territory in September on the back of weak demand which dented factory output, analysts at S&P Global said. Chile’s manufacturing starts Q4 in good form, central bank forecasts healthier growthChile’s economy has had several ups and downs in the past 12 months, including flirting with a recession, but the petrochemicals-intensive manufacturing sectors and macroeconomics point to healthier growth in Q4 and into 2025. INSIGHT: Brazil’s booming economy creates problems of its own – but chemicals absent from bonanzaBrazil's economy has beaten the odds in 2024, and GDP growth is expected to top 3% for the year, although this success is coming accompanied by a series of challenges – not least inflation and interest rates, which remain high. INSIGHT: Optimism over Mexico’s Sheinbaum tempered by fears of executive over-reachClaudia Sheinbaum’s historic swearing-in this week as the first female Mexican president and the optimism it infused could quickly turn sour if her party Morena continues approving one-party, structural reforms thanks to the ‘supermajority’ of two thirds of seats in parliament. Agribusiness titan Bunge concludes sale of its share in BP Bunge Bioenergia in BrazilGlobal agribusiness titan Bunge announced it has completed the previously announced sale of its 50% share in BP Bunge Bioenergia to BP, which now owns 100% of the business. Verde AgriTech successfully renegotiates loans with their creditors in BrazilFertilizer producer Verde AgriTech has announced a successful renegotiation with the banks holding 73% of its outstanding loans. Brazil’s Innova BOPP capacity to nearly double with Polo Films acquisitionChemicals producer Innova is to increase its production capacities for biaxially oriented polypropylene (BOPP) film by 86% to 130,000 tonnes/year if its planned acquisition of Polo Films goes ahead as planned. Colombia’s central bank cuts rates by 50 basis points to 10.25%Colombia’s Banco de la Republica decided late on Monday to cut its benchmark interest rate by 50 basis points to 10.25% in a split decision among members of its monetary policy committee. PRICING Mexico PP domestic prices fall tracking propyleneDomestic polypropylene (PP) prices dropped in Mexico tracking lower propylene costs. In other Latin American countries prices were assessed unchanged. Mexico domestic PE prices fall on ample supply, soft demandDomestic polyethylene (PE) prices fell in Mexico on ample supply and soft demand while being unchanged in other Latin American countries.

07-Oct-2024

SINGAPORE (ICIS)–Petrochemical trades in Asia may pick up mid-week with as Chinese markets re-open after a week-long holiday, but industry players remained bearish on demand recovery prospects. Trades subdued during 1-7 October China holidays Crude, naphtha prices rise amid geopolitical tensions China to announce more economic policies Crude gains on escalating Middle East tensions, weather-related disruptions in northeast Asia and the monsoon season in India were all factors that will affect trading this week. In late Asian trade, Brent crude breached $79/barrel, while US crude was trading at above $75/barrel, on growing fears of a wider conflict in the Middle East a year since the Israel-Hamas war began. Demand concerns, particularly in China, however, continue to cap gains. Prices of naphtha – the main petrochemical feedstock in Asia – typically track gains in upstream crude market. At noon, naphtha prices stood at $700/tonne CFR (cost & freight) Japan. With firm naphtha prices, production margins of petrochemical producers get squeezed. In the propylene and polymeric methylene diphenyl diisocyanate (PMDI) markets, players were awaiting clearer direction from China, whose players will return to the market on 8 October. For acetic acid, import demand from India slowed down as the seasonal monsoon in the country, which should have ended in late September, extended its stay and is expected to affect restocking ahead of Diwali holiday in end-October/early November. Diwali is the Hindu Festival of Light and is a major holiday in India. In Taiwan, Typhoon Krathon directly hit its petrochemical hub of Kaohsiung last week, causing power outages that affected plant operations at the site, with some units likely to be shut for days. In the case of Taiwan VCM (TVCM)’s 450,000 tonne/year vinyl chloride monomer (VCM) plant, it sustained equipment damage and may have to be down for 7-10 days, sources said. The consequent reduction is supply of some petrochemicals, however, will likely have a minimal impact on markets as demand remains largely weak. EYES ON CHINA Market players are expecting more economic measures from China post-holiday, which will follow a slew of policy announcements days before its week-long National Day celebration. China’s State Council announced on 6 October that the National Development and Reform Commission (NDRC), the country’s top economic planning body, will hold a press briefing on 8 October. In its announcement, the State Council referred to “systematically implementing a package of incremental policies to solidly promote economic growth, structural optimisation and sustained momentum of development”. China’s recent economic stimulus package have boosted investor sentiment, mainly in the equities markets, but there were doubts over any near-term lift to economic activity. Focus article by Jonathan Yee Additional reporting by Seng Li Peng, Jonathan Chou, Helen Lee, Shannen Ng and Hwee Hwee Tan

07-Oct-2024

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which focuses on sector surprises for October. 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.

07-Oct-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 4 October. No signs of petchems demand recovery from car sector on the horizon, H2 2025 may be a moment of truth After a strong rebound in car sales last year, the European automotive industry is facing a more challenging environment in the second half of 2024, leading to a drop in petrochemical requirements from car manufacturers. LANXESS exits polymers via sale of urethane business to Japan’s UBE LANXESS is selling its urethane systems business to Japanese chemicals producer UBE Corp for around €500 million, the German specialty chemicals firm said on Thursday. Europe recycled polyolefin agglomerates prices face downward pressure Europe recycled polyolefin agglomerate prices are facing downward pressure due to weak demand from mechanical recyclers. ADNOC makes public takeover offer for Germany’s Covestro Abu Dhabi state oil and petrochemicals player ADNOC has launched a public takeover offer for Germany-based producer isocyanates, polycarbonates and adhesives specialist Covestro, representing an equity value of €11.7 billion. Bold policy moves might not arrest China economic slowdown In a bold move to revitalize its economy and restore investor confidence, China unveiled a comprehensive package of monetary and fiscal measures less than a week before the country goes on a week-long holiday.

07-Oct-2024

SINGAPORE (ICIS)–The base oils market in UAE is likely to see an uptick in demand in the fourth quarter, with the impact of escalating tensions in the region on crude prices and Group I supply from Iran closely monitored in the weeks ahead. Impact of regional conflict on spot Group I supply from Iran to emerge Group II export offers from the US awaited to offer clearer near-term market direction Persistent crude volatility may temper base oils uptake Currency woes in Africa may undermine finished lube exports In this podcast, ICIS editor Damini Dabholkar and senior editor Veena Pathare discuss recent market conditions and the outlook for the UAE.

07-Oct-2024

SINGAPORE (ICIS)–Vietnam’s economy expanded by 7.4% year on year in the third quarter despite hefty losses from Typhoon Yagi, with growth marking its strongest in two years on robust exports. Yagi causes $3.3 billion in economic losses Jan-Sept GDP average growth at 6.82% Exports grow at double-digit annual rate The third-quarter GDP print represents an acceleration from the revised 7.09% year-on-year expansion in Q2, despite taking huge economic hit from Typhoon Yagi, which wrought havoc in Vietnam’s northern regions in September. For the first nine months of 2024, the economy posted an average annualized growth of 6.82%. Yagi, which was Asia's strongest storm to date – killed 345 people in Vietnam, with total economic damage to the country estimated at around $3.3 billion, the General Statistics Office (GSO) said on 6 October. The agriculture, forestry and the fishery sectors were especially affected by Yagi, the GSO said. In September, the country’s manufacturing activity indicated a contraction, with its purchasing managers ‘s index (PMI) falling to 47.3, way below the expansion threshold of 50 and down by 52.4 in August, according to a survey by financial information services provider S&P Global. “Typhoon Yagi had a major impact on the Vietnamese manufacturing sector during September, with heavy rain and flooding leading to temporary business closures and delays across production lines and supply chains,” S&P Global said on 1 October. Vietnam is the fourth-biggest economy in southeast Asia and is a net importer of petrochemicals. Operations at its major petrochemical complexes were unscathed as their locations were not in Yagi’s path. Long Son Petrochemical is in the southern province of Ba Ria-Vung Tau; while the Dung Quat petrochemical complex is in the central Quang Ngai province; and the Nghi Son petrochemical complex is in the north-central Thanh Hoa province. EXPORTS DRIVE UP GDP GROWTH Vietnam, like most Asian economies, count exports as a major pillar of growth, which is being threatened by overall weakness in the global economy. But the country’s overall exports managed to post a double-digit annualized growth of 10.7% in the third quarter. For the first nine months of this year, Vietnam’s exports rose by 15.4% year on year to $299.6 billion while imports grew at a faster rate of by 17.3% at $278.8 billion, indicating robust domestic activity. The US is Vietnam’s biggest market, accounting for a third of the southeast Asian country’s exports for the period. Its biggest source of imports was China, whose share of the total was around 38% in the first nine months of 2024. The International Monetary Fund (IMF) forecasts Vietnam's economic growth is projected to recover to 6.1% in 2024, "supported by continued strong external demand, resilient foreign direct investment, and accommodative policies". The forecast is higher than the previous year’s GDP growth of 5.05% and was near the low end of the Vietnamese government’s target of 6.0-6.5%. However, Vietnam's export-driven economy remains vulnerable to a global growth slowdown, persistent geopolitical tensions, and escalating trade disputes, the IMF warned. Focus article by Nurluqman Suratman Thumbnail image: An aerial drone photo shows a steel bridge collapsed in Phu Tho Province of northern Vietnam, 9 September 2024. (Xinhua/Shutterstock)

07-Oct-2024