Brazil domestic ethanol sales soar amid high inventories

Sales of ethanol in the Brazilian market increased sharply in January according to industry data released on Thursday with mills very active in the selling side as they are apparently running out of storage space due to a bumper crop, said Hydrocarbonprocessing.

Total ethanol sales in the domestic market in the first half of January rose 44% year-on-year, said industry group UNICA, to 335.5 million gallons. Sales of hydrous ethanol, the type that competes with gasoline at pumps for the preference of car owners, rose even more, up 83%.

Mills are selling large volumes despite low current prices. Hydrous ethanol prices in January hit the lowest for the last two years according to Cepea Esalq, a research center at the University of Sao Paulo (USP).

Very high stocks of ethanol following a record sugarcane crop in Brazil in the 2023/24 season are driving mills to sell the product even at low prices, said Filipi Cardoso, a sugar and ethanol analyst at broker StoneX.

He added that fuel distributors are active in the buying as they build inventories before an expected change in state taxes in February that would make gasoline more expensive, potentially benefiting ethanol sales.

Brazil's center-south sugarcane crushing totaled 1.11 million metric tons in the first half of January, UNICA said, up 152.3% from a year ago as the current season nears its end. UNICA said in a report that sugar production totaled 48,000 tons in the period, up 148.6% year-on-year, while total ethanol output rose 62.4% to 338 million liters.

We remind, Brazilian state-run oil firm Petrobras, opens new tab said on Wednesday that it plans to finish expansion works on Train One of its Abreu e Lima refinery in the first quarter of 2025, nearly a decade after the expansion was halted due to a massive corruption scandal.

mrchub.com

Dow is proud to announce it received International Sustainability and Carbon Certification (ISCC) PLUS certification at its PO/PG and Polyols manufacturing site in Freeport, Texas, said the company.

An ISCC PLUS certification recognizes Dow’s implementation of decoupling fossil feedstocks by using waste sourced feedstock, following a full independent, external audit.

ISCC is a world leading international certification standard for fully traceable and environmentally, socially and economically sustainable supply chains. As Dow continues to manufacture products with circular and bio-circular feedstocks, this verification qualifies the tracking of alternative feedstocks through the mass balance approach.

“Mass balance is the best technique to demonstrate usage of alternative feedstock at-scale in the chemical sector,” said Thales de Oliviera, business sustainability leader for the Americas at Dow Polyurethanes. “The ISCC PLUS certification is a significant milestone towards more circular and bio-circular products for polyurethanes end-markets in North America, demonstrating our commitment to more sustainable production and products."

We remind, control of Dow Europe Holding's Russian subsidiary Finndisp LLC has been acquired by Sergei Bendenko and Tula Region company JSC Plastic, which now own respectively 51% and 49% of polymer dispersions producer, data from the Unified State Register of Legal Entities showed. President Vladimir Putin signed an order in December allowing Dow Europe to sell 100% of Finndisp, which is based in Ramenskoye, Moscow Region. Bendenko has also been appointed CEO of Finndisp LLC, as well as Finndisp Uzlovaya LLC, a company established last October 25 that produces polymer-based paints and varnishes.

mrchub.com

Dow expects Q1 sales to be flat versus the fourth quarter as plastic exports remain strong while demand for construction and durable goods remains challenging, said the US-based major company.

For reference, Dow's Q4 sales were USD10.6 billion. In Q1 2023, net sales were USD11.9 billion.

The following chart summarizes the forecasted quarter-on-quarter changes in revenue for Dow's segments. The chart also lists the Q4 revenue for the segments in millions of dollars.

Overall, demand should remain pressured because of inflation, geopolitical tensions and elevated interest rates.

Dow's CEO Jim Fitterling walked through how earnings before interest, tax, depreciation and amortization (EBITDA) could reach $6.4 billion-6.5 billion in 2024. He made his comments during an earnings conference call.

Dow could receive a further boost if the US achieves a soft economic landing, in which the country gets inflation under control without triggering a recession.

The EBITDA estimate given by Fitterling was not a formal guidance for 2024. Higher interest rates have depressed demand for housing and durable goods, which has lowered demand for the polyurethane chemicals produced by Dow and other companies.

In addition, slower construction markets have pressured demand for Dow's chemicals used to make paints and coatings. Relief from higher rates could arrive later in 2024. Members of the Federal Reserve expect the nation's benchmark interest rate to fall by a total of 0.75 points.

Lower rates should make housing and durable goods more affordable, which should increase sales. Housing permits have increased, and construction could increase later in the second half of the year, Fitterling said.

The American Coating Association expects market demand will grow by 3% in 2024 after three consecutive years of declines, according to Dow.

We remind, Control of Dow Europe Holding's Russian subsidiary Finndisp LLC has been acquired by Sergei Bendenko and Tula Region company JSC Plastic, which now own respectively 51% and 49% of polymer dispersions producer, data from the Unified State Register of Legal Entities showed. President Vladimir Putin signed an order in December allowing Dow Europe to sell 100% of Finndisp, which is based in Ramenskoye, Moscow Region. Bendenko has also been appointed CEO of Finndisp LLC, as well as Finndisp Uzlovaya LLC, a company established last October 25 that produces polymer-based paints and varnishes.

mrchub.com

Formosa Petrochemical Corp. (Taipei) has successfully appealed a 2020 Louisiana district court ruling that threatened to kill the company's plan to build a USD9.4 billion petrochemical complex in the state, said the company.

The decision, issued on Jan. 19 by the Louisiana Court of Appeal for the First Circuit, reinstates air permits granted to the project by the Louisiana Department of Environmental Protection (LDEQ). However, a key federal permit awaits completion of an environmental impact assessment by the US Army Corp of Engineers that was ordered in 2021, and environmental groups vow to continue fighting the project.

The lower court erred in finding that LDEQ had failed to meet its obligation to balance environmental, economic and social impacts of the project, according to the ruling. “DEQ's decision to grant Formosa the fifteen permits was not in violation of any constitutional or statutory law and was not arbitrary or capricious or characterized by abuse of discretion or unwarranted exercise of discretion,” it states. “DEQ reasonably and within its vast discretion determined that any adverse environmental impacts were avoided and/or minimized as much as possible consistent with the public welfare.”

FG LA, the subsidiary of Formosa Petrochemical planning to build the plant, said it was pleased with the decision, which ensures “FG’s permits issued by LDEQ remain active and further enable LDEQ to broaden the reasoning for its decision to award the permits,” said Janile Parks, director of community and government relations for the company, in an emailed statement. “LDEQ provided a robust and detailed basis for decision and response to comments in which it fully explained its reasons for approving FG’s Sunshine Project in St. James Parish.”

The Sunshine Project, which was originally slated for startup in 2024, would include a 1.2 million metric tons per year ethane-fed steam cracker, a 600,000 metric tons per year propane dehydrogenation unit, a 600,000 metric tons per year polypropylene plant, linear low-density (LLD) and high-density polyethylene (HDPE) plants with capacities of 400,000 metric tons per year each, and a 900,000 metric tons per year ethylene glycol (EG) unit. The second phase, originally targeted for startup by 2029, includes a second 1.2 million metric tons per year steam cracker, LLDPE and HDPE plants with capacities of 400,000 metric tons per year each, and a second 900,000 metric tons per year EG unit.

The original decision resulted from a lawsuit brought against LDEQ by environmental groups RISE St. James, Louisiana Bucket Brigade, Sierra Club, Center for Biological Diversity, Healthy Gulf, Earthworks and No Waste Louisiana. The groups resolved to block the project despite the ruling.

“We are extremely disappointed with this court’s decision,” said Corinne Van Dalen, senior attorney with Earthjustice. “It allows LDEQ to continue its practice of greenlighting petrochemical plants, one after another, without stopping to assess the total impacts of cancer-causing pollutants on the communities nearby. The fight is far from over, and we will be with RISE St. James and local communities every step of the way.”

In 2020, the Corps of Engineers suspended another key permit after it was challenged in court by the Center for Biological Diversity, announcing that it would conduct a full environmental impact statement before deciding whether to reinstate the permit.

mrchub.com

Pertamina New & Renewable Energy (Pertamina NRE) announces a collaboration with the global technology company specializing in the electricity sector, Hitachi Energy, in the innovation of energy conservation and power system through a memorandum of understanding, said the company.

The signing was conducted by the CEO of Pertamina NRE, Dannif Danusaputro, and the Country Managing Director of Hitachi Energy Indonesia, Predrag Grupkovic. In this collaboration, both parties agreed to conduct research and development of innovative solutions applicable across various sectors, including energy resource management and energy conservation within the Pertamina NRE environment.

CEO of Pertamina NRE, Dannif Danusaputro, stated, "This strategic collaboration reflects our commitment to continually enhance energy efficiency and adopt cutting-edge technology to reduce environmental impact. We believe partnering with Hitachi will add value to Pertamina NRE and bring significant benefits to Indonesia’s energy industry."

In line with Dannif, Predrag also welcomes the opportunity to contribute to sustainable development in Indonesia.

"Hitachi Energy is proud to collaborate with Pertamina New and Renewable Energy to assist Indonesia in its crucial energy transition towards a sustainable energy future. This collaboration will undoubtedly contribute to climate mitigation efforts by accelerating the energy transition in Indonesia," he expressed at the same event.

Predrag emphasized the company's support for Indonesia's commitment to accelerate the energy transition to achieve emission reduction targets by 2060. "We have supported Indonesia's journey towards carbon neutrality, and we hope that the MoU fostering collaboration between Hitachi Energy and Pertamina New & Renewable Energy will further contribute to the energy transition," he added.

One of the main focuses of this collaboration is the technology development to enhance operational efficiency and reduce carbon footprint in Pertamina NRE activities. Hitachi Energy will share knowledge with Pertamina NRE on topics related to electricity systems and new and renewable energy. Additionally, joint technical studies at the macro level will be conducted concerning new and renewable energy, hybrid power systems, reliability, and energy conservation in Pertamina NRE's power plants.

For Pertamina NRE, which operates in the green business, technological innovation is a crucial and strategic aspect. Hence, the collaboration with Hitachi Energy is a fitting step, particularly in overseeing the energy transition in Indonesia and supporting the achievement of the Net Zero Emission 2060 aspiration. It follows Pertamina NRE's commitment to implementing ESG aspects in its business activities.

Vice President of PT Pertamina (Persero), Fadjar Djoko Santoso, expressed that Pertamina NRE's collaboration is Pertamina's commitment to increase decarbonization in its operations and develop energy transition in Indonesia. "As a leader in the energy transition, we continue to seek innovation and new opportunities, including through synergy and collaboration with various partners, to achieve the Net Zero Emission goals in Indonesia. This is also the focus of Pertamina NRE in line with its business in new and renewable energy," explained Fadjar.

In Indonesia, Hitachi Energy has been supporting the electricity infrastructure for over 30 years. The company has also been involved in several energy transition projects, including a microgrid project in Nusa Penida, Bali, which became a showcase at the G20 Summit in Bali.

We remind, Pertamina expects to complete the capacity upgrade at its Balikpapan refinery in April next year, Nicke Widyawati, chief executive of Pertamina, the parent company of PHE. Pertamina is expanding Balikpapan's capacity to 360,000 barrels of oil per day (bpd) from 260,000 bpd currently. The refinery would also be able to produce fuel to Euro V emission standards.

mrchub.com