ICIS Supply and Demand Database

LONDON (ICIS)–Weak demand continues to be a concern in the European acetone and phenol chain and in the wider chemicals industry and Q4 will remain tough, in view of year-end considerations, but when will demand turn a corner? Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Meeta Ramnani (polycarbonate), Mathew Jolin-Beech (methyl methacrylate) and ICIS senior analyst Michele Bossi (aromatics and derivatives) discuss current market conditions, in particular demand challenges, in view of residual macro and geopolitical headwinds, although easing interest rates and the trade defense investigation for epoxy bring some hopes and opportunities in Europe. However, global oversupply driven by growing capacity in China, falling deep sea freight rates making imports more interesting again and the need for restructuring actions in PC and regulatory changes are just some of the challenges that the chain is facing. Demand fundamentally weak across markets; Q4 destocking on top Acetone/ phenol length to increase when turnarounds end, on poor demand Some hopes, but no big expectations of recovery for 2025 EU epoxy AD case could support more domestic sourcing in 2025 Global oversupply, Asian exports likely to continue to weigh on the chain Restructuring in Europe PC production BPA ban in food contact materials a blow, but widely expected/prepared for Podcast editing by Meeta Ramnani Podomatic Player Podomatic Player

25-Oct-2024

SAO PAULO (ICIS)–Spanish chemicals sales are expected to rise in 2024 by 4.8%, compared with 2023, to €86.5 billion while output is expected to expand by 7.1%, the country’s chemicals trade group Feique said this week. The enviable figures for chemicals are expected to be repeated in other manufacturing sectors as well as in the services sector, which makes up around 80% of Spain’s economy and includes its powerful tourism industry. For 2025, Feique forecasts chemicals sales will rise by 4.2%, compared to 2024, pushing the country’s chemicals sales over the €90 billion mark for the first time. Output is expected to rise by 3.2% next year. As far as the economy’s ups and downs, the 2010s will be a decade most Spaniards will want to turn the page on after the country’s banking sector had to be bailed out by the EU in the hangover of its housing bubble, with the consequent strict austerity policies which were the only game in town at the time. Spaniards can feel a bit more upbeat about the 2020 as its equator approaches, after a start which made many feared a lost decade was on the cards amid a health emergency that put the country under one of Europe’s strictest lockdowns, in a place where being outside is the norm, and with tourism brought to its knees. It was not to be. Society’s mental health may still be reeling, and may do so for years to come, but the economy’s health is evident and, moreover, the recovery is reaching sectors outside services, creating hopes the much-needed diversification in the economy might finally be taking place. Just like after its accession to the EU in the 1980s, generous and well-targeted subsidies from the 27-country bloc are propping up the green economy and, with it, manufacturing. However, the motor of the recovery has once again been tourism: more than 80 million people visit Spain annually, a trend increasing post-2020. Much has been written about how after the pandemic consumers are prioritizing spending on ‘experiences’, rather than goods: Spain has developed over the past 50 years one of the world’s strongest tourism sectors. Meanwhile, the booming and fiscally prudent Germany of the 2010s has in the space of just two years turned into the sick man of Europe as it pays a high price for its decades-long geostrategic error of over depending on Russian natural gas, an error which has hit the chemicals industry hard. The IMF said this week Germany’s output in 2024 is expected to be flat, compared with 2023, a year which was already hard on Germany as the peak of the energy crisis sank in. Spain’s healthy macroeconomic and chemicals sector-specific figures come against a backdrop of political woes. Spain has not been immune to the current European trend of strong and corrosive polarization. Since July 2023, the center-left government has been navigating in a minority in Parliament. Pedro Sanchez’s cabinet minority has raised the prospects it may not be able to pass a Budget for 2025, the most important vote annually in Madrid’s Congreso de los Diputados. While under Spanish law, the cabinet could extend this year’s Budget into next, its inability to pass a new Budget to implement its recent electoral promises would weaken it greatly. Meanwhile, passing a Budget for 2025 before the year-end would come to guarantee the cabinet’s survival for at least another two years – if needed, it could expand 2025’s budget into 2026. The term is due to end in 2027. While the economy booms, Spanish politics is suffering a Latin Americanization process – experts’ theory that political instability and fragmentation, leading to weaker Administrations, is the new norm after the hangover of the 2008 financial crash came to end the previous bi-partisan system of alternance in office. ‘ROCKET’ DOMESTIC ECONOMY IS CHEMICALS GAINThis week, the IMF raised up its GDP growth forecast for Spain in 2024 to 2.9%, up from its July forecast of 2.4% and one percentage point above its forecast a year ago. In 2025, Spain’s output is expected to expand by 2.1%. Both years, the country’s growth is set to be well above that of the eurozone’s two largest economies, Germany and France. IMF GDP GROWTH FORECASTSWorld and main European economies 2024 Versus July forecast 2025 Versus July forecast World 3.2 0.0 3.2 -0.1 Germany 0.0 -0.2 0.8 -0.5 France 1.1 0.2 1.1 -0.2 UK 1.1 0.4 1.5 0.0 Italy 0.7 0.0 0.8 -0.1 Spain 2.9 0.5 2.1 0.0 The healthy macroeconomic figures are filtering down nicely to the chemicals sector, still feeling the scars of the falls in sales and output in 2023, after years of relentless growth except for 2020. Strong domestic demand and, in 2024, a recovery in exports – which account for around two-thirds of Spain’s chemical sales have allowed the sector to weather the storm better in peers in other major eurozone economies. In the post-pandemic instability, Spanish chemicals sales rose sharply in 2021 and 2022, as prices globally shot up, but fell by nearly 7% in 2023 as prices came down, with output declining by 0.7% compared with 2022. In 2024, the story has been one of growth again, as already forecast in an interview with ICIS in July by Feique’s director general. “Prices are recovering from the lows we saw in 2023 – I think by the end of the year selling prices on average should reach pre-crisis levels. Demand at home is holding up strongly and exports remain healthy,” said Juan Labat at the time. “In Spain, production of basic chemicals is recovering strongly, and this is important because output in that subgroup had fallen the most, down 11% in 2023, but it is up 8% year to date [to July]. Practically all sectors are performing well – paints, personal care, pharmaceuticals… Considering the economics of countries around us, the Spanish economy is bit of a rocket.” For comparison, chemicals sales in Germany, the largest chemicals producer in Europe, stood at €229.3 billion in 2023, in a powerful manufacturing sector which employs 470,000 workers. For comparison again, Spain’s chemicals companies are expected to close 2024 with a 250,000-strong workforce. However, the headline positive figures hide underperformance in key sectors, according to Feique’s President, Teresa Rasero, who is also the board’s chair at Spain’s subsidiary of French industrial gases major Air Liquide. This week, Feique’s annual assembly re-elected her for the post for another year. Rasero said that while consumer chemicals, specialties, and health products are growing healthily, basic chemicals are still struggling with high energy costs, worsened by Spain’s “non-existent or very low” public support for energy-intensive industries, compared with peers such as Germany or France. In the EU jargon, this is called the carbon emission rights expenses. Feique said that figure in Spain in 2024 is expected to stand at a mere €300m annually in coming years, well below the support which neighboring countries have deployed, which runs into the billions. “[Emissions expenses compensation is] non-existent or very low compared to the few countries that have established a comparable regime. The problem is that it is precisely the production of basic chemicals or other similar energy-intensive industrial sectors that are essential to maintaining our strategic autonomy,” said Rasero. “We need more competitive energy prices and to accelerate the decarbonization processes, which are key aspects for the future of the European productive economy.” Feique’s president said the €300 million support in Spain is set to fall very short in a chemicals sector which would need €3 billion annually in investments to decarbonize between 2025 and 2050, according to the trade group’s forecast – a whooping €75 billion which will hardly be realized if all the effort is to come just from the private sector. The trade group said the annual €3 billion would need to be distributed in €1.7 billion for capital expenditure (capex) to build and modernize chemicals plants; €850 million for operational adjustments during technological transitions; and €450 million for maintenance and regulatory compliance. The daunting task is clearly showed in the headline figure of what the industry must achieve: Spain’s chemicals must reduce 12.4 million tonnes of annual CO2 emissions by 2050. DECARBONIZATION FUND: WHO PAYS?The Spanish cabinet has spent months negotiating a bill with employers and employees representatives an industrial policy, with both sides supporting the overall bill’s targets. With the decarbonization challenge hurrying along, Spain may be finally coming to terms with the fact that its weakened manufacturing sectors need revival, so it is able to weather storms such as the 2020 shock, when airports, hotels, and beaches remained empty. Spain’s manufacturing accounts for around 12% of its GDP. Economists’ mantra about a healthy economy being one in which 20% of its output comes from manufacturing only rings true, among the EU’s major economies, in Germany, after decades of delocalization and deindustrialization in most of Europe. Spain’s attempt to pass an industrial policy worth the name is also a bit of a novelty: the country’s policymakers had not sat to negotiate a similar initiative since the 1980s, when the country seemed to confidently put most of its eggs in the tourism basket, Barcelona’s 1992 Olympics catalyst included. With that industrial policy bill expected to pass, Feique is proposing to include in its implementation the creation of a decarbonization fund. “[The Decarbonization Fund could be financed with] at least 50% of the income from emission rights, which last year reached €3.5 billion. We estimate the fund should aim for a figure close to €2.5 billion annually, which would help guarantee the continuity of our country's strategic industrial assets in a competitive manner," said Rasero. In the past years, Feique’s executives have said, publicly but also privately, that the cabinet has been prone to listen to the trade group’s lobbying, giving an access to the corridors of power it lacked in the past, as the cabinet aims to expand and improve manufacturing employment. Taking advantage of that, Feique is confident the bill will include proposals to implement carbon contracts which would resemble those already in place in EU countries such as Germany and the Netherlands – another chemistry hub due to its location – as well as Denmark. “Our objective is that carbon contracts for difference [compensation to energy-intensive sectors] can be applied to essential technologies for decarbonization such carbon capture, utilization, and storage (CCUS), electrification, hydrogen, and renewable gases, oriented both to supply and demand requirements, when necessary,” said Rasero. SPAIN POLICIES, EU-WIDE DECISIONS The 27-country EU remains, despite recent setbacks and delays to key policies, the world’s self-declared champion in the effort to decarbonize, a move which could not come sooner in a region which mostly lacks all the conventional energy sources that have fueled the modern industrial era. Whether the bloc and the world at large are able to decarbonize in such a relatively short period of time – target for 2050 in the EU, 2060 in countries such India or China – remains to be seen. However, for Spain specifically, climate change deceleration and adaptation are set to be key challenges in years to come, as increasing and more intense heatwaves and droughts hit its powerful agricultural sector, as well as human health. However, certain wave against urgent decarbonization targets is gaining traction in the EU, fueled by climate change skepticism related to the loss of jobs. The trend is reaching the EU’s capital Brussels, where policymakers are considering delays in the targets. Turning upside down an industrial model created over the past two centuries in just two decades was always going to be a challenge, to put it mildly. Industry players in all sides – employers and employees – around the EU have, have been lobbying hard for some of those delays, which will invariably increment regulatory burdens and, most likely, costs. In July, Feique’s Labat he said the EU’s new approach to industry was good news, but added finetuning is needed if the EU is serious about safeguarding its diminished remaining industrial fabric. For example, he was very critical of the many changes to the deadlines for phasing out some polluting technologies, which only contribute to create uncertainty for many businesses, he said, arguing companies do want to go greener but are fearful of failing along the way if the regulatory environment is unstable. “What we saw, for example, with Green Deal targets for certain technologies to be phased out by 2035, which soon after the Deal’s passing were changed to 2033: that is simply not serious and the opposite of legal certainty,” said Labat. “We want to go greener, but it would help if the authorities understood the huge undertaking this will mean. And, obviously, companies in our sector don’t work out their capex [capital expenditure] plans with just the short or medium term in mind: those assets are planned for several decades.” In another interview with ICIS in July, the chemicals lead at the country's main trade union, Comisiones Obreras (CCOO), said the industry's workers do see an opportunity in the EU Green Deal, rather than a threat, but added that tight timeframes risk jeopardizing that support. “We have had cases, like in automotive, where obviously adapting a plant producing combustion engine vehicles to produce EVs [electric vehicles] is an expensive and time-consuming process: the authorities want us to go faster than we could possibly go,” said Daniel Martinez at the time. “And, still on EVs, the infrastructure across the EU – with a few exceptions – remains far from what is needed for a full transition towards electric mobility. We need to be realistic here.” All in all, he concluded, moves by some political groups in the EU to practically dismantle the Green Deal are not welcomed by the chemicals industry as a whole, which is set to benefit from the green transition, he said, describing himself as a “techno-optimistic.” This week, Rasero said the EU’s current music about industry is starting to rhyme, after the recent publication of official reports by Enrico Letta and Mario Draghi, showing a potentially competitive pathway towards an EU’s decarbonized industry, as well as the approval of the EU's Strategic Agenda 2024-2029. She also mentioned the chemical industry’s own Declaration of Antwerp. While fully supporting decarbonization efforts by 2050, the private-led initiative was mostly an emergency cry for extended state support if the endeavor is to be successful. “The EU must propose an industrial model that is simultaneously oriented towards sustainability and competitiveness, and which always keeps in mind the objective of reducing the costly and complex regulatory framework and the administrative burdens that flood us with inefficiencies,” said Rasero. “The model must serve to reduce the cost of energy in the EU, guarantee access to critical and strategic raw materials, and effectively transform industrial sectors while respecting technological neutrality.” SPAIN CHEMICAL SALESTurnover in thousand million euros Annual change in % Source: Feique Insight by Jonathan Lopez

25-Oct-2024

HOUSTON (ICIS)–Canadian ammonia production technologies firm AmmPower announced it has entered a strategic collaboration with FuelCell Energy to participate in pilots of distributed ammonia production. The company said the partnership will result in the integration of AmmPower’s modular ammonia production units with FuelCell Energy’s highly efficient solid oxide electrolyzer systems, improving clean ammonia production efficiencies and opening new commercial avenues. AmmPower’s Independent Ammonia Making Machine (IAMM) is designed to produce up to four tonnes of carbon-free ammonia daily using renewable electricity. By coupling this technology with FuelCell Energy’s solid oxide electrolyzer the joint effort is expected to reduce energy consumption by over 25% compared to traditional processes. The company said that the FuelCell Energy’s Solid Oxide Electrolyzer Cell produces hydrogen at nearly 90% electrical efficiency without excess heat and can reach 100% efficiency when using excess heat. Further it noted that hydrogen produced from electrolysis can be stored long term and transported, allowing energy from wind, solar and nuclear to be available on demand. “As we look forward, our focus is on applying these advanced technologies to meet the critical needs of agriculture and industrial sectors, where ammonia plays a key role,” said AmmPower CEO Gary Benninger. “This partnership is about more than just technological innovation, it’s about providing practical solutions that enhance productivity and sustainability in vital industries.”

24-Oct-2024

LONDON (ICIS)–Plastics Recyclers Europe (PRE) has called on the EU to restrict imports of material failing to meet the EU’s environmental requirements to bulwark the industry against recessionary pressures, the industry association said in a press release on Thursday. The press release cited recommendations in a report by Mario Draghi on EU Competitiveness, and stated that “Creating a level playing field will be key to making the green transition sustainable and safeguarding the competitiveness of the EU’s industry in the long run.” The press release also called measures and targets introduced in core EU legislation “unrealistic,” given what it perceives as stalling growth in the sector, “as capacities would need to at least double by 2030.” The press release calls on the recently elected EU institutions to enact immediate measures to “solve the key issues threatening the existing plastics sorting and recycling infrastructure, as well as future investments. Without these measures, the future of European plastic recycling appears uncertain.” PRE listed a number of challenges facing the sector, including limited investment in domestic recycling, an increase in imports of recyclates from outside the EU, and increasing lack of demand for recyclates produced in Europe. “These issues are feeding the existing recession on the market – driving many recycling companies out of business in 2023, with further closures happening or planned in the course of 2024. This downturn will continue unless the situation is addressed urgently,” the press release stated. PRE cited its PRE Plastic Recycling Industry Figures in Europe, 2022 study (the latest year for which data is available) as evidence of underinvestment, highlighting a drop in growth of installed recycling capacity in Europe to 10.6% year-on-year in 2022, down from 17.7% in 2021. PRE estimated year-on-year recycling capacity growth (in millions of tonnes/year) Percentage increase year-on-year 2018 0.6 9.99999 2019 1.9 28.8 2020 1.1 12.94 2021 1.7 17.7 2022 1.2 10.61 Average since 2017 1.3 16.009998 *source: extrapolated from PRE Plastic Recycling Industry Figures in Europe, 2022 European recycling capacity in 2022 stood at 12.5 million tonnes/year, according to PRE estimates. If the 10% growth rate estimated by PRE in 2022 were to continue in the subsequent years to 2030 this would result in a capacity increase to just under 27 million tonnes/year and a growth from 2022 of just over 114%. Nevertheless, if market capacity were to grow at a consistent capacity year-on-year increase to 2022 of 1.2 million tonnes/year, this would result in around 22.1 million tonnes/year of capacity by 2030, an increase from 2022 of just under 77%. The long-term average yearly growth since 2017, according to data from PRE’s study is 1.3 million tonnes/year, this would result in approximately 22.9 million tonnes/year of capacity by 2030 at a consistent rate, an 83% rise in capacity from 2022. Headline figures do not tell the whole picture for recycling capacity because of the wide variation in technical properties of different grades of recycling material, which limit usage of multiple grades in key end-use applications such as packaging. 2022 saw record high prices for recycled polyolefins, and multiyear high prices for R-PET because of supply shortages across the chains and rising demand because of regulatory and consumer pressure. Prices and demand fell back was in 2023 due to the energy cost crisis, followed by the cost-of-living crisis. PRE also named the influx of imports as the primary issue facing the market that needs addressing by regulators. "Many recyclers are struggling to survive in a market flooded with uncontrolled imports that fall short of EU requirements,” Ton Emans, Plastics Recyclers Europe’s President, was quoted as saying in the press release,. As evidence of the damaging role of imports, PRE cited a study it published in February 2024. That study was solely focussed on recycled polyethylene terephthalate (R-PET). High freight costs and unfavorable exchange rates have limited the arrival of imports from Asia in 2024 across recycling markets. But falling freight rates in recent weeks have reopened the arbitrage window for R-PET flakes. Imports of recycled polyolefins in to Europe have historically been considerably less common than imports of R-PET and have been particularly limited in 2024, with macroeconomics largely unfavorable. PRE estimates that recycled polyolefins and R-PET account for around 80% of market capacity for recycled polymers. Demand in 2024 across these recycled polymers has become increasingly fragmented by grade, end-use, location, and individual player circumstances. Buying interest across the majority of non-packaging applications remains weak, with construction offtake particularly limited. Display packaging demand for recycled polyolefins has remained more robust due to the onboarding of projects from the sector during Q4. This has been driven by a variety of factors, including:- The restarting of packaging projects previously delayed in 2023 The approach of 2025 fast-moving consumer goods (FMCG) recycling targets and FMCG players looking to broaden the range of materials they use to help meet those targets Ambitious recycled content mandates forming part of the proposed Packaging and Packaging Waste Regulation (PPWR), which have led some buyers to seek to establish relationships with new suppliers to pre-position themselves R-PET colourless flake and food-grade pellet demand, meanwhile (which typically serve packaging applications), varies from seller to seller with some seeing good demand and order volumes, while others choose to build stock ahead of an anticipated pick up in demand in 2025. Some sellers are less happy with the current mood however, and there are concerns that high stocks and the bearish PET outlook could lead to tougher price talks in November and December. Buyers in the sheet sector, in particular, can afford to be more selective with their R-PET flake purchases as they are not subject to the Single Use Plastics Directive (SUPD) target that requires 25% R-PET in PET beverage bottles from 1 January 2025. Focus article by Mark Victory Additional reporting by Matt Tudball

24-Oct-2024

SINGAPORE (ICIS)–Asian methanol markets in recent weeks were driven more by sentiment than changes in fundamentals as participants respond to an escalation of the conflict in the Middle East. However, some supply changes in coming months are expected to alter the landscape in Q1 2025. Gas shortages in Q4 lead to expectations of lower supply China market sees correction after post-holiday exuberance Downstream demand tepid, expected to see slight recovery in Q4 In this chemical podcast, ICIS markets editor Damini Dabholkar and senior analyst Ann Sun discuss recent market conditions with an outlook ahead in Asia.

24-Oct-2024

HOUSTON (ICIS)–Higher interest rates and weaker demand have led to shutdowns, layoffs and a couple of distressed debt exchanges that were considered defaults by ratings agencies. Nylon producer Ascend Performance Materials is closing a plant and laying off workers at another site. Cornerstone and SI Group held distressed debt exchanges. Mid-2025 recovery could be delayed if US mortgage rates remain elevated due to growing government debt. ASCEND SUMS UP CHALLENGES FOR CHEMSAscend's nylon 6,6 business is contending with a troubling mix of rising supplies in polyamides and weak demand from its key end markets of consumer goods, automobiles and housing. ICIS keeps track of global capacity for nylon 6 and nylon 6,6. By 2027, capacity should be nearly 70% larger than levels in 2022. Nearly all of the new capacity is being built in northeast Asia, which includes China. Another company, US-based paints and coatings producer PPG, is planning possible shutdowns and layoffs, but these will be primarily in Europe and certain other global businesses. DISTRESSED DEBT EXCHANGES FROM SI GROUP, CORNERSTONESI Group is expected to complete what a ratings agency considers to be another distressed debt exchange, which would lead to the company's second restricted default this year. SI declined to comment when the ratings note was issued in September. SI Group is facing the same difficult business conditions as Ascend, according to Fitch Ratings. Sales fell amid new capacity in China. SI Group makes specialty chemicals used in coatings, adhesives, sealants and elastomers (CASE) as well as in lubricants, fuels, surfactants and polymers. Cornerstone, the sole melamine producer in the US, is trying to sell some of its assets to avoid a second default. The company also makes acrylonitrile (ACN). Demand fell for both products fell, leading to large operating losses in 2023. COMPANIES HOLD OUT FOR SECOND HALF RECOVERYThe chemical industry is hopeful that falling inflation and interest rates will lead to a recovery in demand in 2025. "It is only a question of when, not if," said Heidi Petz, CEO of Sherwin-Williams, a US-based paints and coatings producer. Polyurethane producers expect a recovery could start in mid-2025, coinciding with the start of the US construction season and the cumulative effects of what it expects to be subsequent declines in interest rates. Lower mortgage rates would make housing more affordable, which would increase sales of new and existing homes. That would increase demand for furniture and appliances as well as for chemicals used to make paints, coatings, sealants and insulation. Lower interest rates would also make automobiles more affordable. The industry is suffering from a temporary lull, with PPG noting that original equipment manufacturers (OEMs) started taking unscheduled and prolonged downtime in Q3. The decline in interest rates will depend, in part, on US inflation remaining on track to reach the central bank's target of 2%. The danger is that inflation remains stubborn or, if it does fall, the lower benchmark interest rate does not fully translate into declines in longer term rates like US home loans. US home loans typically rise and fall with yields on 10-year Treasury notes, and an economist has warned that yields could remain elevated because of the growing US debt. The International Monetary Fund (IMF) also warned about the consequences of growing government debt. If the link between longer term rates and government debt holds true, then that could limit or delay the recovery in demand expected by many chemical companies that sell materials used in durable goods. Insight by Al Greenwood

24-Oct-2024

LONDON (ICIS)–Dow is set to review the competitiveness of several assets in Europe, particularly around its polyurethanes operations, amid “increasing challenges” presented by the region’s regulatory environment, CEO Jim Fitterling said in a Q3 results statement on Thursday. The company is set to launch a fresh review of “select” assets in its European portfolio, with a particular focus on its polyurethanes operations, in the face of regulatory headwinds and a lack of meaningful economic recovery. “Consistent with our best-owner mindset, we are announcing a strategic review of select assets in Europe, primarily those in our polyurethanes business,” Fitterling said. The US-based producer had initially announced a review of its European assets in January 2023 as part of a drive to cut costs and reduce headcount by 2,000 workers. At the time, Fitterling stated that the attrition may be focused on smaller sites with less favourable economics, as opposed to its large integrated cracker complexes. “The decisions we announced today around restructuring, we’ve looked at locations that are going to be challenged in any scenario and take actions on those,” Fitterling said, speaking early last year. Dow did not announce substantial closure plans following the initial announcement of that review. The company on Thursday announced a 27% year-on-year decline in third-quarter net income to $240 million as a result of prevailing macroeconomic softness and an unplanned cracker outage in Texas during the period. Dow had reported reduced operating rates at its Freeport, Texas, cracker in the wake of Hurricane Beryl hitting the US Gulf Coast in July. A filing with the Texas Commission of Environmental Quality (TCEQ) reported a flow meter failure, leading to process instability. Dow had signalled the expected decline in a September statement, with third-quarter sales of $10.9 billion exceeding the $10.6 billion revised guidance last month, but below earlier expectations of $11.1 billion. ($m) Q3 2024 Q3 2023 Change Net sales 10,879 10,730 1% Operating EBIT 641 626 2% Net income 240 327 27% Specialty plastics division operating profit firmed by $142 million year on year during the quarter to $618 million, as higher margins offset the Texas cracker outage. The industrial intermediates division swung to a $53 million loss on lower margins. Performance materials and coatings division third-quarter operating income fell by $39 million year on year, to $140 million, as higher raw materials costs offset higher volumes. Thumbnail photo: Dow's headquarters in Midland, Michigan (Source: Dow)

24-Oct-2024

HOUSTON (ICIS)–Idemitsu Kosan and Mitsubishi Corporation announced they have agreed to jointly study the efficient operation of clean ammonia carriers and transshipment terminals. The companies said in a statement this effort will look at ExxonMobil’s planned low-carbon hydrogen and low-carbon ammonia production project in Baytown, Texas, as well as the offtake of ammonia. Further through this combined effort, Idemitsu and Mitsubishi Corporation intend on accelerating their study on structuring a supply chain for low-carbon ammonia which is procured from overseas. Idemitsu, which has established an ammonia import and receiving terminal at its Tokuyama Complex, said it aims to jointly introduce over 1 million short tons of ammonia as fuel and raw materials by 2030 in cooperation with other companies. For its part Mitsubishi Corporation said it is assessing the partial conversion of its Namikata terminal into an ammonia terminal. It is also preparing to build a hub terminal that will supply approximately 1 million short tons of ammonia annually to various industrial applications such as electricity, transportation and chemicals by 2030. Idemitsu and Mitsubishi Corporation said they both plan to supply the low-carbon ammonia volumes produced by this project to Japan through their receiving terminals.

23-Oct-2024

HOUSTON (ICIS)–Fertilizer producer Atlas Agro and plant nutrient distributor International Raw Materials have announced a binding strategic offtake and partnership agreement for the green nitrogen fertilizer from Atlas Agro’s Pacific Green Fertilizer plant in Richland, Washington. The Pacific Green Fertilizer plant will be the first at-scale, low carbon fertilizer production facility in the world with it planned to produce 700,000 short tons of nitrogen fertilizer annually and serving farmers across the Pacific Northwest region. The facility will be in the Horn Rapids industrial park in Richland, Washington, and will produce green nitrogen fertilizers in liquid and solid form. Switzerland-based Atlas Agro recently completed its front-end engineering design (FEED) study for the project and received the environmental determination of non-significance from both state and federal agencies. The final investment decision (FID) is expected in early 2025. Atlas Agro’s fertilizer production process will use proven technologies and be powered by renewable energy sources with the company saying low carbon fertilizer products are essential to sustainable food production and addressing climate change. “Our partnership with IRM is a significant milestone in our progress to bring locally produced, green nitrogen fertilizer products to growers in the Pacific Northwest. IRM is a company renowned for its market knowledge and logistics capabilities with deep roots in the Pacific Northwest, and a commitment to bringing sustainable solutions to the agriculture supply chain,” said Petter Ostbo, Atlas Agro CEO. For its part International Raw Materials said adding the green fertilizer products to their marketing and distribution portfolio is well-aligned with the company’s commitment to agricultural sustainability. “We’re seeing increased demand for a variety of solutions across the supply chain as food companies respond to the needs of consumers and look for new tools to address their Scope 3 emissions,” said Tip O'Neill, International Raw Materials president.

23-Oct-2024

SINGAPORE (ICIS)–Emerging Asian economies are expected to see strong economic growth subside, partly due to a sustained slowdown in China, the International Monetary Fund (IMF) said on Tuesday. China’s 2024 growth forecast lowered to 4.8% Downside risks dominate global outlook China property risks may trigger global impact The IMF trimmed its forecast for emerging and developing Asian economies by 0.1 percentage points to 5.3% and 5.0% for this year and 2025, respectively, slowing from the 5.7% expansion in 2023. In India, the outlook on a fiscal year basis is for GDP growth to moderate from 8.2% in 2023 to 7% in 2024 and 6.5% in 2025, “because pent-up demand accumulated during the pandemic has been exhausted, as the economy reconnects with its potential”, the IMF said. For China, the IMF downgraded its projection for this year by two-tenths of a percentage to 4.8% from its 5% estimate in July. This is lower than China’s official growth target of around 5% for this year. The IMF’s China growth forecast for 2025 was unchanged at 4.5%. However, the slowdown in China is projected to be more gradual despite persisting weakness in the real estate sector and low consumer confidence, it said, largely thanks to better-than-expected net exports. The IMF’s chief economist Pierre-Olivier Gourinchas at a press conference on Tuesday said in its latest forecasts that China’s fiscal stimulus measures so far lacked detail and therefore were not included in the China growth outlook. China’s central bank stimulus measures, unveiled last month to spur lending, “would do little to materially lift growth”, Gourinchas was quoted by news agency Reuters as saying. China's economic forecast remains bleak, despite the government’s stimulus measures announced in late September, which briefly boosted market sentiment. China on 18 October reported year-on-year GDP growth of 4.6% in the second quarter, the slowest pace since early 2023, while overall growth in the first nine months of 2024 stood at 4.8%. China’s latest measures are insufficient to address its economic woes, economists have warned, and the IMF notes that significant risks remain, particularly in the troubled property sector. “Conditions for the real estate market could worsen, with further price corrections taking place amid a contraction in sales and investment,” the IMF said. “The experiences of Japan in the 1990s and the United States in 2008 suggest that a further price correction is a plausible downside risk if the crisis is not adequately addressed.” GLOBAL REPERCUSSIONS OF CHINA’S SLOWDOWN A prolonged or severe downturn in China's property market, especially one that triggers financial instability, could dampen consumer confidence and negatively impact the global economy due to China’s significant role in international trade, the IMF warned. With China’s economy softening, global growth is expected to be a lackluster 3.1% in five years – a notch down from the pre-pandemic average, it said. Growth is projected to hold steady at 3.2% in 2024 and 2025, but some low-income and developing economies have seen sizable downside growth revisions, often tied to intensifying conflicts. The IMF’s Gourinchas in a separate blog post said that downside risks are increasing and now dominate the global economic outlook. “An escalation in regional conflicts, especially in the Middle East, could pose serious risks for commodity markets,” he said. Global output could be significantly lower than the IMF’s baseline forecast due to shifts toward undesirable trade and industrial policies, overly tight monetary policy, or an abrupt tightening of global financial conditions, Gourinchas added. Focus article by Nurluqman Suratman

23-Oct-2024