Issue 16/2018 - Global Chemicals Quick Review

Global Chemicals Quick Review

Logistical pressures are forcing U.
S.
chemical producers to pass on costs

The current investment boom in the US chemical industry and the strong economic growth have brought great challenges to logistics, especially the transportation costs of trucks have risen significantly
.
The Cass Truckload Linehaul Index, released by Cass Information Systems, shows that rising transportation costs in the U.
S.
have not improved, rising 9.
5 percent year-on-year in June, the 15th consecutive month of gains
.
To this end, producers have begun to pass on
costs.
Oxea and BASF have announced freight adjustment plans
.
Teressa Szelest, Head of Marketing and Business Development at BASF, said: "In the current transport environment, it has become increasingly difficult
to meet the growing demand of the market.
We are implementing additional supply models and other means to secure freight capacity
.

The global PE market will remain tight in the next two years

Bob Patel, chief executive of LyondellBasel, said the global polyethylene (PE) market supply is expected to remain tight
this year and next.
Ethylene and polyethylene capacity utilization worldwide was close to full capacity
last year.
From the perspective of supply and demand changes from 2017 to 2018, the proportion of supply growth exceeding demand growth is less than 1%.

In 2019, overall global PE supply and demand growth is expected to be close to balance
.
He added: "If capacity utilisation falls by 1% by the end of the year, the market will remain tight and not much capacity will come on stream
in the next few years.
" ”

The US-China trade war is burning towards chemical products

The second round of the US-China trade war recently began
.
The Office of the United States Trade Representative said on August 7 local time that it will impose 25% tariffs
on 279 goods of about $16 billion imported from China from August 23.
The list of taxes includes semiconductors, electronics, plastics, chemicals and railway equipment
.
China immediately responded in the same way, saying on August 8 that starting August 23, China imposed 25 percent tariffs on 333 items of about $16 billion on U.
S
.
imports, including energy, chemicals, automobiles, and medical devices.
This is the first time that both countries have targeted
chemicals and polymers for taxation.
The trade war could have an impact
on trade flows for polymers.

Global oil majors disappointed in the second quarter