ICIS Supply and Demand Database

HOUSTON (ICIS)– Producer Agrimin Limited said their Mackay Potash project in Western Australia is now advancing towards a final investment decision. In an update on quarterly activities the company said it continues to focus on their project which is planned to be able to manufacture standard and granular sulphate of potash (SOP) products. Current activities include efforts towards project funding and strategic partnerships, design works, environmental approvals as well as product marketing. The Mackay project is set to undertake sustainable extraction of brine from Lake Mackay using a network of shallow trenches, which will be transferred along trenches into a series of solar evaporation ponds. Raw potash salts will crystallize on the floor of the ponds and be collected by wet harvesters and pumped as a slurry to the processing plant that will refine harvested salts into high quality finished SOP ready for direct use by customers. SOP volumes will be hauled by a dedicated fleet of road trains to a purpose-built storage facility at Wyndham Port. At the port it will be loaded via an integrated barge loading facility for shipment to customers. The project’s definitive feasibility study (DFS) was completed in July 2020 and demonstrated that once in operation it could be the world’s lowest cost source of seaborne SOP. The independent technical review of the DFS was completed in April 2021. The company has signed three binding offtake agreements with Sinochem Fertilizer Macao Limited for the supply of 150,000 tonnes/year, Nitron Group for 115,000 tonnes/year and with MacroSource for 50,000 tonnes/year. Agrimin has already completed site-based testing for the salt harvesters, geotechnical sampling and for the sealed haul road. Additionally, the company has worked with its proposed power contractor to refine the project’s site power station design which has resulted in a hybrid diesel, solar, wind and battery solution. Regarding environmental clearance the company said the project is being assessed by the Western Australian Environmental Protection Authority (EPA) and during the quarter it resubmitted the environmental impact assessment response, which included revised management and monitoring plans. It is still expected that the EPA approval will come during the second half of 2024. Agrimin said it is also progressing other secondary approvals, licenses and agreements which included coverage for mining operations project safety and water regulations.

26-Jul-2024

LONDON (ICIS)–BASF is moving to “de-risk” its exposure to the electric vehicles sector in response to slowing market dynamics, CEO Markus Kamieth said on Friday, pausing or deciding against several investments connected to the industry. Take-up of electric vehicles has slowed in most markets other than China, Kamieth said, prompting the company to shift strategy, with new capacities added only where BASF has obtained long-term offtake agreements. “We are confident that the trend toward electric vehicles will continue and that battery materials remain a significant growth opportunity for the chemical industry,” Kamieth said, speaking at a press conference at BASF’s Ludgwigshafen, Germany, headquarters. “However, recent dynamics have changed, and the market penetration of electric vehicles has slowed down significantly outside of China, as shown by a number of announcements by companies in the e-mobility value chain,” he added. The company decided against proceeding with a mooted nickel-cobalt refining complex in Indonesia last month, on the back of shifting nickel market dynamics that are likely to make long-term supply of battery-grade material easier to source. “The supply options have evolved and with that BASF’s access to battery grade nickel. This decision will significantly lower future capital requirements,” Kamieth said. Kamieth, who became CEO of the company in April this year, also moved to pause work on a proposed commercial-scale electric vehicle battery recycling metal refinery at its Tarragona, Spain, complex. To be based on technology developed and tested at BASF’s Schwarzheide, Germany, refinery and with a potential investment range of €500 million to 700 million, the company announced that the project was under consideration in February. Uncertainty also continues at BASF’s Harjavalta, Finland, precursor cathode active materials (PCAM) plant, which has been locked in a cycle of granted environmental permits that are then overturned on appeal. The company recently obtained fresh operation permits for the site, but those could also be overturned, according to Kamieth. “A few weeks ago, we received the approval to operate the site as requested,” he said. “The proviso is that there can be protests against this approval again.” The project, which was yet to receive final investment decision, will remain on hold “until cell capacity build-up and the [electric vehicle] adoption rate in Europe regain momentum,” Kamieth said. The current shift is “a short-term stretching of a growth curve that will inevitably be very large”, he said, due in part to the investment step-changes required in fast-scaling markets that regulatory or investment fears can delay. “We believe that the trend towards electromobility as the powertrain technology of the future is still valid. We also believe that the growth in battery materials is going to be very substantial, and the biggest growth opportunity for that probably right now exists in the chemical industry,” he added. Thumbnail photo source: Shutterstock

26-Jul-2024

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Earlier this week I suggested that there would be no end to the petrochemicals downcycle until 2026. But what if this isn’t just a normal downcycle? What if we see no return to the old petrochemical market conditions because of long-term shifts in the global economy due to the end of the China “economic miracle”, ageing populations in most of the world, the sustainability push and the impact on economies of climate change? Might artificial intelligence lead to such a large loss of employment that petrochemicals demand growth takes a further hit? In as little as three years’ time, in handy bullet points, this is what the petrochemicals world could look like: There is sufficient petrochemical supply already available to meet demand as global demand is shrinking. As China is said to be some 45% of global petrochemicals and other manufacturing capacity, and because it is so plugged into global supply chains, this is one of three locations where we are seeing some petrochemicals capacity growth. China is adding more capacity, where it can find sufficiently competitive feedstocks, for supply security reasons. The other locations are the Middle East because of its feedstock advantages, now improving because of more natural-gas liquids discoveries, and the US where government policy continues to support manufacturing. Major consolidation is taking place elsewhere to accommodate this new supply and shrinking demand. Petrochemical plant closures are taking place in Europe, South Korea, Singapore, Japan, and possibly even Southeast Asia. When electrification of vehicles took off, excitement began over petrochemicals demand replacing lost oil demand into transportation fuels. Good look with that idea as petrochemicals demand is, as mentioned, actually shrinking. Can you afford just one scenario, one plan? No, of course. Everything points to a much more ambiguous future than the comfortable and predictable petrochemicals world see enjoyed during the 1992-2021 Supercycle. 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.

26-Jul-2024

HOUSTON (ICIS)–US fertilizer producer CF Industries announced that it is moving forward with a carbon capture and sequestration (CCS) project at its Yazoo City, Mississippi complex that is expected to reduce carbon dioxide (CO2) emitted to the atmosphere from the facility by up to 500,000 tonnes annually. As part of the project the company has signed a definitive commercial agreement with ExxonMobil for the transport and sequestration in permanent geologic storage of the CO2 with sequestration expected to start in 2028. The producer is going to spend approximately $100 million at Yazoo City to build a CO2 dehydration and compression unit to enable CO2 to be generated as a byproduct of ammonia production and subsequently be captured to be transported and stored. Once sequestration by ExxonMobil has commenced, CF said expects the project to qualify for tax credits which provides a credit per metric ton of CO2 sequestered. “We are pleased to advance another significant decarbonization project that will keep CF Industries at the forefront of low-carbon ammonia production while also helping us achieve our 2030 emissions intensity reduction goal,” said Tony Will, CF Industries Holdings president and CEO. “This decarbonization project also will increase the availability of nitrogen products with a lower-carbon intensity for customers focused on reducing the carbon footprint of their businesses.” The producer added that once sequestration starts, the Yazoo City complex will be able to manufacture products with a substantially lower carbon intensity than conventional ammonia production sites. Most of the ammonia produced at the Yazoo City Complex is upgraded into nitrogen fertilizers such as urea ammonium nitrate solution (UAN) and ammonium nitrate (AN) or upgraded into diesel exhaust fluid. AN produced at Yazoo City is used as fertilizer and by the mining industry as a component of explosives. CF said demand for these products with lower carbon intensity is expected to increase significantly as agriculture and mining industries work to lower emissions in their supply chains.

25-Jul-2024

SINGAPORE (ICIS)–Typhoon Gaemi will test the resilience of the liquefied petroleum gas (LPG) supply chain, causing temporary shipment delays and port closures, but market prices and arrival schedules are expected to remain stable and manageable. Join ICIS LPG analysts Shihao Zhou and Yan Wang as they discuss the impact of Typhoon Gaemi on China’s imported propane and butane arrivals. Typhoon Gaemi will delay propane and butane shipments, causing temporary logistical issues/ Seven Very Large Gas Carriers (VLGCs) carrying LPG will be affected by Typhoon Gaemi, with key ports in East China and Fuzhou closing until the end of July. Despite the typhoon, the arrival schedule remains manageable, with 4-5 VLGS expected to arrive in east China next week.

25-Jul-2024

SINGAPORE (ICIS)–LG Chem's second-quarter net income plunged year on year to won (W) 60 billion ($43m), weighed down by poor earnings at its battery unit LG Energy Solution, the South Korean producer said on Thursday. Group results in Korean won (W) billion Q2 2024 Q2 2023 % Change Sales 12,300 14,336 -14.2 Operating profit 406 618 -34.3 EBITDA 1,562 1,595 -2.1 Net income 60 671 -91.1 Q2 sales at company’s petrochemicals unit rose by 8.9% year on year to W4.97 billion. LG Chem’s petrochemicals unit swung to a Q2 operating profit of W32 billion, reversing the W13 billion loss in the same period of 2023. A gradual recovery in the supply/demand balance for LG Chem's petrochemical products is expected in Q3, but "profitability improvement is expected to be limited due to the delay in global demand recovery and rising freight rate". LG Energy Solution's Q2 operating profit fell by 57.7% year on year to W195 billion, with sales down 29.8% at W6.16 trillion. LG Chem holds a controlling 81.8% stake in LG Energy Solution, the leading car battery maker in the country in terms of sales. ($1 = W1,386)

25-Jul-2024

SINGAPORE (ICIS)–South Korea's economy posted a slower second-quarter annualized growth of 2.3% compared with the 3.3% pace set in the preceding quarter amid sluggish domestic consumption, preliminary central bank data showed on Thursday. Q2 private consumption rose by 0.9% year on year, slowing from the 1.0% expansion in the first three months of 2024, the Bank of Korea (BoK) said in a statement. Manufacturing for the period rose by 4.5%, slowing from the 6.5% growth registered in January-March; while exports grew at a slower pace of 8.7% compared with the 9.1% expansion in the first three months of the year. On a quarter-on-quarter seasonally adjusted basis, the South Korean economy unexpectedly shrank by 0.2% in April-June, reversing the 1.3% growth posted in the first three months of this year. "We had expected South Korea’s GDP to slow sharply, but not to the point of falling into contraction territory," Dutch banking and financial information services provider ING said in a note. Q2 domestic growth components were weak except for government spending, which rose by 0.7% quarter on quarter, it said. Private consumption, construction, and facility investment dropped by 0.2%, 1.1% and 2.1%, respectively, The downside surprise came mainly from trade, as imports grew faster than exports, ING said. Q2 export growth moderated to 0.9% quarter on quarter, just half the 1.8% increase posted in Q1. Exports in Q2 were supported by higher shipments of chemicals and motor vehicles. Meanwhile, import growth rebounded to 1.2%, compared with a contraction of 0.4% in Q1, mainly buoyed by higher imports of crude oil and petroleum products. "Given the weaker-than-expected second quarter 2024 GDP, we have revised the annual GDP outlook downwards from 2.6% year-on-year to 2.3%," ING said. "We recently warned that the BOK would face challenges in its monetary policy decision as inflation cools towards 2% and sluggish domestic growth supports a rate cut, but at the same time, concerns about rising household debt are growing." In its latest forecast in May, the BoK raised its 2024 GDP growth forecast to 2.5% from 2.1% previously amid strong exports driven by robust chip demand. For inflation, the forecast average was unchanged at 2.6% for this year.

25-Jul-2024

LONDON (ICIS)–ICIS Hydrogen Foresight data shows that over the period October 2023-April 2024, the Dutch hydrogen market saw growth across planned low-carbon hydrogen supply and demand. However, despite progression across future buyers and sellers, project progression has remained muted, with no projects progressing to final investment decision (FID). To review the findings of this update, please see the complete analysis below.

24-Jul-2024

EGPC seeks another five LNG cargoes Local industry restarts, power cuts suspended Egypt to bring in up to 26 cargoes over summer LONDON (ICIS)–Egypt is in the market for another five LNG cargoes as the country continues to address declining domestic gas production and soaring summer demand. Egyptian General Petroleum Corporation (EGPC) has issued a TTF-linked DES tender covering 13-14 and 25-26 August and 3-4, 12-13 and 21-22 September delivery windows, traders said on Wednesday. The two cargoes for delivery in August and the middle cargo in September would be delivered to Egypt’s Ain Sukhna terminal, while the first and third September cargoes would be sent to Jordan’s Aqaba terminal for further pipeline delivery. The tender closes on 29 July at 12:00 noon Cairo time and is valid to 18:00 on the same day. This is the fourth LNG tender round Egypt has issued covering the summer period this year, as the country has been forced to turn from LNG exports to imports. EGPC has previously been in the market seeking a total of 22 cargoes in three separate rounds. All cargoes were reported to have been awarded, expect for the 1-2 September cargo in a two-cargo tender that closed on 22 July, one trader said. If the latest tender is fully awarded, this could bring a total of 26 spot cargoes into Egypt from mid-June to mid-September. UREA PRODUCERS RESTART Latest data from association JODI shows a continued decline in domestic gas production. Average May production was around 138 million cubic meters (mcm)/day, down from 142mcm/day in April and 163mcm/day in May 2023. However, the flow of LNG seems to have brought some relief to local industry. Some Egyptian urea producers shut down for a day last week but then restarted, sources said, with one source attributing the ramp up to LNG imports. Five cargoes have been delivered since the start of July, according to ICIS data. As of this week, urea plants in Egypt are running at around 80% capacity on average. “I believe this will [be sustained] till the end of summer period,” a urea source said. “Heard also that old electricity stations have started to work with fuel oil as an alternative [for] gas,” they added. Only one of Abu Qir’s prilled urea lines is down, while its other two lines are running as normal. The government has also suspended its electricity load-shedding program from 21 July until mid-September, as recently announced by Prime Minister Mostafa Madbouly. The Prime Minister said the power cuts halted after the arrival of some LNG cargoes. The cuts were introduced last summer and resulted in daily two-to-three hour power cuts across most of the country. Additional reporting by Deepika Thapliyal.

24-Jul-2024

LONDON (ICIS)–Eurozone private sector momentum almost slowed to a standstill in July, dropping to a five-month low as new orders fell and business confidence ebbed. The composite eurozone purchasing managers’ index (PMI) slipped to 50.1 in the month compared with 50.9 in June, according to S&P Global, with manufacturing sinking further into contraction and service sector growth slowing. A PMI score of above 50.0 signifies growth. Output in Germany sank for the first time in four months in July, while activity in France ebbed for the third consecutive month. Business confidence for the bloc as a whole dropped to its lowest level in six months which arrested the spell of new hiring. The rate of input cost inflation accelerated but low demand meant that companies pushed through the price increases at a softer pace, contributing to the slowest pace of change for inflation since October. The decline in manufacturing activity was the largest monthly fall in 2024, with services slowing but still managing to keep the region in overall growth. The manufacturing sector PMI fell to 45.6 in July from 45.8 in June, while the service sector index fell from 52.8 to 51.9 month on month. New export orders fell faster than total new business as players struggled to secure international sales, representing the 29th successive month of decline. “It’s unsettling how steadily companies in the manufacturing sector are slashing jobs month by month. The pace has barely changed over the last ten months,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, which helps to produce the data. Despite the tepid economic data, sticky input price inflation makes the case for successive rate cuts more difficult, he added. “If only growth was considered, you find a strong argument for a rate cut in September by the ECB (European Central Bank). However, prices data did not provide hoped for relief,” de la Rubia said. “Our conclusion is that while a September rate cut will most probably be exercised, it will be much trickier to follow this path in the months thereafter, unless the downturn morphs into a deep recession,” he added. The unexpected pace of decline for the eurozone economy may result in economic forecast cuts down the line, according to Rory Fennessy, senior economist at Oxford Economics. “The eurozone's flash July PMIs corroborate the message sent by other leading indicators that the recovery is faltering. If leading indicators continue to underwhelm, this may result in a downgrade to our GDP growth forecasts for H2 2024,” he said. Momentum for the UK private sector continued to strengthen despite dynamics seen in the eurozone, with the composite PMI hitting 52.7 in July compared to 52.3 in June, a two-month high. UK manufacturing sector growth outpaced that of services, reaching a 29-month high of 54.4 compared to 52.4 in the latter industry. Average prices charged by companies eased but remain steep due to elevated costs, according to S&P Global. Input costs for the service sector eased on the back of softening wage pressures, but the manufacturing sector saw the sharpest rise in costs in a year-and-a-half on the back of Red Sea logistics disruption. The slower pace of price increases raises the odds of a central bank rate cut before autumn, but the pace of winding down current high interest levels is likely to be slow, according to S&P Global Market Intelligence chief economist Chris Williamson. “Prices have meanwhile risen at their lowest rate for three-and-a-half years, further raising the prospect of a summer rate cut,” he said. “However, policymakers will likely take a cautious approach to loosening policy amid signs of inflationary pressures pivoting away from services towards manufacturing, where Red Sea shipping delays and higher freight prices are adding to costs again,” he added. Thumbnail photo: Rotterdam port (Source: Hollandse Hoogte/Shutterstock)

24-Jul-2024