News and analysis

HOUSTON (ICIS)–The US corn crop is now 5% harvested, according to the latest US Department of Agriculture (USDA) weekly crop progress report. In the first update on the corn acreage being harvested, the weekly update showed 5% of the crop is now completed which is above the 4% rate from last year and the five-year average of 3%. There is currently 95% of the corn crop in the dough stage, which trails the 96% level from 2023 but is slightly higher than the five-year average of 94%. Corn at the dented stage is now 74% of the reported acreage, which is behind the 78% achieved last year but is ahead of the five-year average of 73%. 29% of the crop is listed as mature, which is equal to the 29% mark from last year and above the five-year average of 24%. For corn conditions, there is still 4% rated very poor, with 8% as poor and 24% now as fair. There is 48% listed as good and 16% as excellent. Soybeans setting pods has climbed to 97%, which is equal to the 97% mark from last year and is just above the five-year average of 96%. The amount of soybeans dropping leaves is now at 25%, which trails the 2023 level of 27% but is higher than the five-year average of 21%. Soybean conditions were unchanged with there still being 3% listed as very poor, with 7% as poor and 25% as fair. 52% is good with 13% as excellent. In other harvesting updates, there is 8% of the cotton acreage completed with sorghum harvest at 21%.

09-Sep-2024

HOUSTON (ICIS)–After a quiet few weeks for hurricane activity and with crop harvesting and movement of nutrients for autumn applications advancing, the US Gulf Coast and its agricultural and fertilizer interests are again facing a tropical weather threat. Tropical Storm Francine has developed in the Gulf of Mexico with the system moving rapidly at 60 miles/h with the edge closing in near Brownsville, Texas, along the US-Mexico border late on Monday. It is now being forecasted to bring heavy rain which could result in flooding and there is the possibility of storm surge. There are expectations that tropical storm force winds may extend up to 160 miles from the center. As Francine begins the trek northward, US farmers and fertilizer industry participants are watching the developments as the conditions will certainly deliver impacts to growers, with wind and rainfall possibly resulting in crop damage and delayed post-harvest fertilizing. Parts of south Texas are already beginning to experience these conditions with the rest of the Texas coast in the path as well, but the forecast has it eventually turning towards Louisiana. Given the duration until it strikes, it is likely the storm will intensify and gain enough in the coming days to become a moderate hurricane with impacts stretching far from the initial site of landfall. This will halt field work as well as stop harvesting progress across many states and in the aftermath will leave acreage soaked across many areas. For the fertilizer segment, there is awareness of the threat as the potential path takes it near the key location of New Orleans and across the locations of production facilities within the state, including those of CF Industries. The producer did not respond to an enquiry on its upcoming storm preparation, but no activity so far has been heard from any manufacturers in the region. As an industry source said “nobody is talking about this yet”, but that likely changes in the next 48 hours especially if the tropical system ends up displaying potential to be larger than currently anticipated.

09-Sep-2024

HOUSTON (ICIS)–Industrial gas firm Messer announced it has entered into a long-term renewal of a carbon dioxide (CO2) purchase and sale agreement with US fertilizer producer LSB Industries. As part of the agreement, Messer said it will subsequently commit more than $9 million into the liquid CO2 plant at LSB’s Cherokee, Alabama, facility with a focus of this investment on the continued safe and reliable operations at the site. The plant manufactures fertilizers including ammonia, urea and urea ammonium nitrate (UAN) and it also makes industrial and mining offerings including ammonium nitrate (AN) solutions and diesel exhaust fluid (DEF). Messer said this deal will help increase security of its CO2 supply and provide continuity to customers for decades to come. “The efficiency upgrades for the plant modernization effort will add more molecules to our network and reduce CO2 emissions at the site in-line with our sustainability goals,” said Chris Ebeling, Messer executive vice president, sales & marketing, North America.

09-Sep-2024

HOUSTON (ICIS)–Canadian potash developer Sage Potash Corporation announced it has entered into an agreement with a subsidiary of International Process Plants (IPP) for the purchase of processing equipment for Canadian dollars (C$) 12.6 million ($9.29 million). The company, which is advancing the Sage Plain Potash project located in Utah’s Paradox Basin, said this equipment is capable of processing up to 300,000 tonnes per year of potash. The majority of the equipment, which has not been assembled or used and is in storage in Europe, was fabricated in 2012 at a then cost of approximately €36 million. Sage Potash said the rest of the equipment will come from IPP’s inventory of second-hand machinery. Under the terms the company will satisfy the purchase price by paying C$6.3 million in cash and issuing 12,600,000 common shares to IPP at a price of C$0.20 per share. It will also issue IPP a secured convertible debenture with a principal of C$3.78 million, with the purchase and transactions subject to acceptance by the TSX Venture Exchange. Sage Potash said it is getting an exceptional opportunity considering stainless steel and titanium costs have more than doubled since 2012. In addition to the cost benefits the company estimates it is going to save between four to five years’ worth of fabrication time. “By buying this existing equipment now, Sage is mitigating project risk and cost, as well as providing added clarity to the project’s timeline, which is what project funders require. We believe this ultimately enhances shareholder value as we seek to reduce the United States’ nearly 100% reliance on imports for potash supply,” said Peter Hogendoorn, Sage Potash CEO. $1 = C$1.36

09-Sep-2024

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

09-Sep-2024

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which focuses on the crisis in Europe’s auto industry. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.

09-Sep-2024

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

09-Sep-2024

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

09-Sep-2024

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

09-Sep-2024

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

06-Sep-2024