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Pilot fears rail crisis will cut US DEF, biofuel supply

  • Spanish Market: Biofuels, Fertilizers, Oil products, Petrochemicals, Petroleum coke
  • 28/04/22

Refined products retailer Pilot Travel Centers fears a move to cut rail traffic by western US railroad Union Pacific (UP) will drive a shortage of diesel exhaust fluid (DEF) and ethanol in the US.

UP this month ordered Pilot to cut rail shipments by 50pc or face embargoes on shipments of DEF — an important solution used to cut NOx emissions from diesel engines without hurting fuel efficiency — as well as ethanol, biodiesel and renewable diesel, Pilot chief executive Shameek Konar told the US Surface Transportation Board (STB) yesterday .

UP's "restrictions will prevent Pilot from keeping many markets adequately supplied with DEF, likely causing shortages that will sideline trucks and reduce trucking capacity," Konar said on the second of STB's two-day hearing on the rail service crisis.

Pilot has not cut volumes so far but UP also hasn't implemented an embargo. But Konar said he worries about the effect on Pilot and the trucking industry.

UP this month told some of its largest shippers that it will start limiting their rail volume if the carrier is unable to clear railcar congestion from its system.

UP told Pilot one day this month it had shipped about 160 cars during the prior week and wanted the shipper to reduce that by about 46 cars/week, or 6 cars/day.

"We have not reduced the cars because we would be in deep trouble," he said, adding that UP has not responded. Each railcar of DEF translates to about 5mn miles of trucking.

"If you lose 100mn USG of DEF, it would be absolutely catastrophic because we do not just supply ourselves," Konar said. He estimated the cuts would equate to removing 10pc of the trucks on the road today.

Pilot estimates it supplies 30pc of the DEF in the US. The company provides more than 300mn USG of DEF to the trucking industry annually, with about 74pc of that shipped by rail. Pilot also provides roughly 20pc of the nation's highway diesel, renewable diesel and biodiesel.

Cutting Pilot's renewable diesel volume, with about 50pc being shipped by rail, would increase fuel prices in certain states and potentially dry up supply, he said.

Cutting ethanol shipments from Pilot's plant in Nebraska to Arizona, Nevada and a few other regions is also expected to remove the amount of ethanol available to blend with gasoline, potentially raising prices.


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05/11/24

Phillips 66 Calif shutdown to shift tanker flows

Phillips 66 Calif shutdown to shift tanker flows

Houston, 5 November (Argus) — Phillips 66's plans for a late 2025 shutdown of its 139,000 b/d refinery in Los Angeles, California, will likely lead to more trans-Pacific refined products tanker shipments into the US west coast while having a more muted effect on crude tankers. Phillips 66 said it would likely shut the refinery in the fourth quarter of 2025, citing the high regulatory costs of operating in California. While it is unclear what will become of the facility, Phillips 66 said it still plans to supply the region with road fuels in the future. The closure will reduce California's refining capacity by 8.6pc to about 1.48mn b/d and removes about 14pc of refining capacity in the Los Angeles area. Tankers hauled about 160,000 b/d of refined products to California in January-October, with about 95,000 b/d going to Los Angeles, according to data from analytics firm Vortexa. About 27pc of the deliveries to Los Angeles came from refiners on the US Gulf coast and elsewhere on the US west coast on Jones Act-compliant vessels, which must be US-built, US-flagged and US-crewed. But the relatively small Jones Act fleet is already fully utilized, with no additional ships on order, shipbroker Poten said. This means replacement supplies of refined products will need to come from farther afield, likely Asia-Pacific. South Korea is Los Angeles' biggest source of waterborne refined products so far this year, shipping about 33,000 b/d in January-October, Vortexa data show, followed by other US sources (25,000 b/d), China (9,000 b/d), India (9,000 b/d) and Canada (8,500 b/d). Taiwan, Singapore and Japan also have supplied marginal cargoes to Los Angeles this year. An increase of California-bound shipments from these countries would create additional demand for voyages lasting a range of 19-35 days, boosting ton-mile demand and tanker employment in the Pacific basin. Medium range (MR) and long range 1 (LR1) refined product tankers would benefit the most from these increased trade flows, with MRs accounting for 67pc of the current market share and LR1s 33pc, according to Vortexa data. Tanker demand for exports from the US west coast is unlikely to be affected. Phillips 66 Los Angeles exported just 2,000-4,000 b/d of products in January-October, data from Kpler and Vortexa show. Limited impact on crude tankers Because Phillips 66's Los Angeles refinery was designed to process domestic California crude, the impact on the regional crude tanker market likely will be much more limited — and offset by increased tanker demand on Canada's Pacific coast. With available domestic — albeit declining — California crude production, the 139,000 b/d refinery imported 64,000 b/d of crude in January-August 2024, mostly from short-haul sources in the Americas, the latest data from the US Energy Information Administration (EIA) show. The trade was dominated by 1mn bl Suezmaxes and 500,000-700,000 bl Aframaxes. The refinery imported 15.52mn bl of crude in January-August 2024, according to the EIA. Canada was the largest international supplier (4.84mn bl) in that span, boosted by the Trans Mountain Expansion (TMX) pipeline start-up in May, followed by Guyana (3.48mn bl) via the Trans-Panama Pipeline, Mexico (2.98mn bl), Brazil (2.92mn bl) and Ecuador (1.3mn bl). Because of the refinery's use of domestic crude supplies, the complex's imports are equivalent to just two Suezmax shipments or three Aframax shipments per month. For the regional tanker market, that is more than offset by the burgeoning TMX flows on Canada's Pacific coast, which in October loaded a record 24 Aframaxes , destined to refineries in China and the US west coast. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Port of Vancouver grinds to halt as picket lines form


05/11/24
05/11/24

Port of Vancouver grinds to halt as picket lines form

Calgary, 5 November (Argus) — Commodity movements at the port of Vancouver have halted as a labour dispute could once against risk billions of dollars of trade at Canada's busiest docks. The International Longshore and Warehouse Union (ILWU) Local 514 began strike activity at 11am ET on 4 November, following through on a 72-hour notice it gave to the BC Maritime Employers Association (BCMEA) on 1 November. The BCMEA subsequently locked out workers hours later that same day, 4 November, which the union says is an overreaction because the union's job action was only limited to an overtime ban for its 730 ship and dock foreman members. Natural resource-rich Canada is dependent on smooth operations at the British Columbia port of Vancouver to reach international markets. The port is a major conduit for many dry and liquid bulk cargoes, including lumber, wood pellets and pulp, grains and agriculture products, caustic soda and sodium chlorate, sugar, coal, potash, sulphur, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and petroleum products. These account for about two-thirds of the movements through the port. Canadians are also reliant on the port for the import of consumer goods and Asian-manufactured automobiles. The two sides have been at odds for 19 months as they negotiate a new collective agreement to replace the one that expired in March 2023. Intervention by the Canada Industrial Relations Board (CIRB), with a hearing in August and September, followed by meetings in October with the Federal Mediation and Conciliation Service (FMCS), failed to culminate in a deal. The BCMEA's latest offer is "demanding huge concessions," according to the ILWU Local 514 president Frank Morena. The BCMEA refutes that, saying it not only matches what the ILWU Longshore workers received last year, but includes more concessions. The offer remains open until withdrawn, the BCMEA said. A 13-day strike by ILWU longshore workers in July 2023 disrupted C$10bn ($7.3bn) worth of goods and commodities, especially those reliant on container ships, before an agreement was met. Grain and cruise operations are not part of the current lockout. The Westshore coal terminal is also expected to continue operations, the Port of Vancouver said on 4 November. The Trans Mountain-operated Westridge Marine Terminal, responsible for crude oil exports on Canada's west coast, should also not be directly affected because its employees are not unionized. In all, the port has 29 terminals. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Urea prices soften further west of Suez


05/11/24
05/11/24

Urea prices soften further west of Suez

Amsterdam, 5 November (Argus) — Granular urea prices have dipped again today, with levels in Brazil trending down to about $360/t cfr and Nigeria's Dangote having concluded business in the $330s/t fob. Offers to Brazil have dropped to $360/t cfr, with bids heard in the $350s/t cfr and below. One supplier was heard to be offering 30,000t of urea for loading in the first half of November at $360/t cfr Paranagua. Sluggish demand and unsold incoming tonnage are weighing on the market, with the November urea line-up surpassing 1mn t. Argus assessed granular urea at $365-375/t cfr Brazil on 4 November. Nigeria's Dangote is understood to have sold two urea cargoes following its scrapped tender last week. The producer sold one mid-November loading cargo in the low to mid-$330s/t fob. A prompt-loading cargo was also likely to have been sold. Dangote was heard to be offering the mid-November lot at $345/t fob. A trading firm was in the freight market to ship 30,000t of urea from Lekki to either the US or Brazil, loading on 10-20 November. Meanwhile, prices in Argentina have also slipped, with an offer heard in the mid- to high $380s/t cfr and indications at $380-385/t cfr. The Dangote business could soon pressure levels to the $370s/t cfr Argentina. And granular urea to west coast Mexico was indicated at about $385/t cfr. A lack of overall demand in the Americas and Europe is weighing on international urea prices. But levels east of Suez have remained comparatively insulated by continued demand from India and tighter supply from the Middle East. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India proposes provisional s-PVC anti-dumping duties


05/11/24
05/11/24

India proposes provisional s-PVC anti-dumping duties

Singapore, 5 November (Argus) — India is proposing to implement anti-dumping duties (ADDs) on suspension polyvinyl chloride (s-PVC) imports originating from China, Indonesia, Japan, South Korea, Taiwan, Thailand and the US. These will apply to s-PVC imports with a k-value of between 55 and 77, excluding cross-linked PVC, chlorinated PVC, paste PVC, mass PVC, co-polymer PVC and blending resins. Indian authorities are inviting interested parties to submit comments on the proposal within 30 days of publication in the Indian Gazette, which happened on 30 October. It is unclear when the ADDs will be implemented, with participants anticipating potential introduction towards the end of the fourth quarter for now. These preliminary findings come after an initial anti-dumping investigation on s-PVC imports was initiated by three out of five Indian s-PVC producers on 26 March. Current findings show there is a significant disparity between domestic and import s-PVC prices in India, with margins by the investigated countries forming the basis of the proposed ADDs. The investigation suggests these duties would provide a future level playing field between s-PVC exporters into India and local s-PVC producers, with the former having increased market share in India over recent years while the latter faced elevated inventories and poor margins. ADDs on paste PVC and chlorinated PVC imports to India are already in place. India set to become self-sufficient on supply The Indian market is, and will likely remain, one of the largest PVC demand drivers globally for years to come. Indian demand for PVC is set to grow to 5mn t/yr by 2027, with imports surpassing 3.2mn t in 2023 and likely to replicate that this year. The global market is long on PVC supply, and with Indian output at 1.6mn t/yr, local producers are willing to increase capacity and regain market share from imports. Argus estimates India will increase domestic PVC capacity across various grades by 3.8mn t/yr by 2028, which would surpass current annual imports and provide additional selling opportunities for future demand growth. ADDs on s-PVC imports are one way for this new PVC capacity to easily find a home among Indian plastic converters, many of which now import large amounts of more competitively priced s-PVC from northeast Asia and north America to fulfill their requirements. Lower PVC production cash costs in these regions allowed exporters to gain favourable market share in India over recent years, but proposed ADDs will probably limit this growth in the long-term. Upcoming BIS quality restrictions will also contribute to a drop in imports, albeit to a lesser extent presuming regular exporters to India are certified by the date of implementation, since this would mainly target PVC grades produced from the carbide-route, which are already being imported less into India due to quality concerns. All these factors are likely to create renewed import competition into the Indian market over the coming years, leading global participants to consider potential rationalisation of some PVC capacity, delays to new capacity projects and new demand outlets, should global supply remain above overall consumption. By Michael Vitiello India s-PVC ADD list $/t Country of origin Country of export Producer Duty China China Chiping Xinfa Polyvinyl Chloride 125.0 China China Chiping Xinfa Huaxing Chemical 125.0 China China Tianjin Bohua Chemical 82.0 China China Qingdao Haiwan Chemical 92.0 China China Non-sampled producers 97.0 Any China Any 167.0 Indonesia Indonesia PT Asahimas Chemical 73.0 Indonesia Indonesia PT TPC Indo Plastic & Chemical 61.0 Indonesia Any Any 200.0 Any Indonesia Any 200.0 Japan Japan Kaneka Corporation 54.0 Japan Japan Shin-Etsu Chemical 73.0 Japan Japan Non-sampled producers 66.0 Japan Any Any 147.0 Any Japan Any 147.0 Korea PR Korea PR LG Chem 51.0 Korea PR Korea PR Hanwha Solutions Corporation 0.0 Korea PR Any Any 161.0 Any Korea PR Any 161.0 Taiwan Taiwan China General Plastics Corporation 25.0 Taiwan Taiwan CGPC Polymer Corporation 25.0 Taiwan Taiwan Ocean Plastics Co. 40.0 Taiwan Taiwan Formosa Plastics Corporation 74.0 Taiwan Any Any 163.0 Any Taiwan Any 163.0 Thailand Thailand Thai Plastics and Chemicals 53.0 Thailand Thailand AGC Vinythai Public Company 80.0 Thailand Any Any 184.0 Any Thailand Any 184.0 US US Westlake Chemicals & Vinyls 164.0 US US Westlake Vinyls 164.0 US US Westlake Vinyls Company 164.0 US US Shintech Incorporated 104.0 US Any Any 339.0 Any US Any 339.0 Source: Ministry of Commerce and Industry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU contributed $31.2bn public climate finance in 2024


05/11/24
05/11/24

EU contributed $31.2bn public climate finance in 2024

Edinburgh, 5 November (Argus) — The EU has contributed €28.6bn ($31.2bn) in climate finance from public sources in 2024 to help developing countries cut their greenhouse gas emissions (GHG) and adapt to climate change, according to the European Council. Around half the funding went to climate adaptation or to cross-cutting action, which involves both mitigation — reducing GHG emissions — and adaptation. Almost 50pc took the form of grants, according to the EU. The €28.6bn includes €3.2bn from the EU budget, including from the European Fund for Sustainable Development Plus, and €2.6bn from the European Investment Bank. The EU said it also mobilised €7.2bn of private finance last year, and it "seeks to extend the range and impact of sources and financial instruments and to mobilise more private finance". The figures were released ahead of the UN Cop 29 climate talks, which open on 11 November in Baku, Azerbaijan. Finance will be a key topic at this year's summit as parties to the Paris deal will seek to agree on a new finance goal for developing nations, following on from the current, but broadly recognised as inadequate, $100bn/yr target. EU negotiators have signalled willingness to support "a stretched goal" with a public finance core, but have yet to provide a figure. Developed countries in general have yet to commit to a number for climate finance, while developing nations have for some time called for a floor of at least $1 trillion/yr. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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