N. America weekly chemical rail volume stable at high level

The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending March 23, 2024. AAR also weighed in on the Francis Scott Key Bridge collapse and how railroads are working to limit disruptions, said Aar.

“The top priority following the tragic collapse of the Francis Scott Key Bridge must be supporting the individuals and families impacted,” said AAR SVP of Policy and Economics Dr. Rand Ghayad. “At this time, there are many unknowns about the long-term business impacts. However, recent years have shown us the resilience of railroads and the broader logistics sector in adapting swiftly to challenges while continuingto serve our customers. Those lessons will be put to work in the days ahead to minimize disruption to the fullest extent possible.”

For this week, total U.S. weekly rail traffic was 470,593 carloads and intermodal units, up 2.1 percent compared with the same week last year.

Total carloads for the week ending March 23 were 215,277 carloads, down 6.1 percent compared with the same week in 2023, while U.S. weekly intermodal volume was 255,316 containers and trailers, up 10.2 percent compared to 2023.

Five of the 10 carload commodity groups posted an increase compared with the same week in 2023. They included grain, up 2,735 carloads, to 21,467; chemicals, up 1,822 carloads, to 33,702; and motor vehicles and parts, up 888 carloads, to 16,109. Commodity groups that posted decreases compared with the same week in 2023 included coal, down 14,169 carloads, to 53,727; nonmetallic minerals, down 2,835 carloads, to 27,607; and metallic ores and metals, down 2,129 carloads, to 18,519.

For the first 12 weeks of 2024, U.S. railroads reported cumulative volume of 2,555,094 carloads, down 4.3 percent from the same point last year; and 3,014,729 intermodal units, up 9.1 percent from last year. Total combined U.S. traffic for the first 12 weeks of 2024 was 5,569,823 carloads and intermodal units, an increase of 2.5 percent compared to last year.

North American rail volume for the week ending March 23, 2024, on 10 reporting U.S., Canadian and Mexican railroads totaled 324,001 carloads, down 5.3 percent compared with the same week last year, and 340,799 intermodal units, up 9.4 percent compared with last year. Total combined weekly rail traffic in North America was 664,800 carloads and intermodal units, up 1.7 percent. North American rail volume for the first 12 weeks of 2024 was 7,798,583 carloads and intermodal units, up 1.8 percent compared with 2023.

Canadian railroads reported 91,620 carloads for the week, down 3.1 percent, and 73,851 intermodal units, up 7.9 percent compared with the same week in 2023. For the first 12 weeks of 2024, Canadian railroads reported cumulative rail traffic volume of 1,887,198 carloads, containers and trailers, down 0.9 percent.

We remind, the US Department of Energy (DOE) has selected ExxonMobil’s Baytown, Texas, olefins plant carbon reduction project to receive up to USD331.9 million in funding under the USD6-billion Industrial Demonstrations Program (IDP). The announcement comes one month after a report in the Houston Chronicle that ExxonMobil might have to cancel the project if proposed federal tax incentives for the production of clean hydrogen exclude the use of carbon capture and sequestration (CCS).

mrchub.com

For petrochemical producers making capital investment decisions today, the management of carbon dioxide emissions may be as important a consideration as feedstock advantage, production technology, market access and integration, says Mark Eramo, global head/fuels, chemicals & resource solutions at S&P Global, as per Chemweek.

Eramo discussed the implications of the energy transition for petrochemical investment at the World Petrochemical Conference by S&P Global in Houston.

"Where can I be competitive? I would say that for the last 10 years, there's been a model of build low-cost and ship to high-demand regions," said Eramo. "Today we're saying that now there's a fifth consideration, and that is, how do I provide effective carbon management? How will that change the footprint over the next 10 years when it comes to the location strategy of petrochemical assets going forward? Maybe the model stays the same. Or does the fact that you need an effective carbon management strategy in order to get the financing you need or approval from the board mean that now your location strategy is going to have to be slightly different than it was in the past?"

Eramo said the petrochemical industry is committed to lowering carbon emissions. “That’s what we’re trying to get to and yet maintain that balance of economics, society, environmental stewardship, and meeting all the needs of our various stakeholders.”

However, doing so is "a global balancing act complicated by geopolitics," he told attendees. "It's about curtailing demand for high-intensity carbon energy while decarbonizing supply and then trying to build this green-energy economy of the future," he stated. "And probably the most important thing is that energy security and energy affordability are at the front of the line in creating this multidimensional energy transition dynamic."

A very large portion of the world's population remain eager to improve their living standards, and demand for energy and consumer goods will necessarily increase. "You have to continue to supply the growing needs of a growing population with the assets you've got on the ground," Eramo noted. "Those are hydrocarbon-based assets for the most part. So this balancing of capital to make my current assets profitable and meaningful while I try to transition to this cleaner greener energy-based future is the balancing act that these executives are facing."

Decisions around capital investment must balance the need for an energy transition not only with the broader needs of society but also the financial realities that place limits on the path and speed of progress.

"This set of assets has to be very profitable, and it has to fund the ability to get to this green future -- the ability to bring in renewable energy, to look at on-site electrification or go with carbon capture, to go with hydrogen, or deeper integration into chemicals. That hydrocarbon-based business has to be able to fund the cash flow that enables me to make the investments that get me to a lower carbon future."

Despite the complexities involved and the uncertainty that clouds the outlook, certain companies are "placing their bets," Eramo observed. "They're making assumptions and moving forward with significant investments." In November 2023, he noted, ExxonMobil entered the lithium market with the goal of achieving a top position by 2030; the same month, Air Products decided to proceed with a blue ammonia project in Louisiana; and in December 2023, Dow finalized plans to build a net-zero ethane cracker in Alberta.

"The pathway to net zero requires us to rethink business models and evaluate low-carbon inputs along with end-of-life solutions for consumer goods," said Eramo. Incentives will be more effective than penalties, he said, because they attract capital investment. "I also believe a more pragmatic approach makes good sense," he added, such as asking consumers to focus more on managing their own waste.

Eramo stressed the need for multiple solutions. "We have to have hydrocarbons for the consumer goods that enable modern living and advance the human condition," he continued. "Whether it's plastic or any other material, it's a question how you handle the waste stream, not the product itself. You can't continue to get the efficiency gains and the other advances that we've made just in the mobility sectors without plastics and engineering resins." He also argued for carbon pricing and markets. "I've heard this multiple times last year and this year: Give me a carbon price, and then let the industry run off that, and we'll make the decisions that we need to in terms of dealing with carbon," he said.

He expressed confidence that the petrochemical industry can drive the energy transition if allowed to do so.

We remind, the US Department of Energy (DOE) has selected ExxonMobil’s Baytown, Texas, olefins plant carbon reduction project to receive up to USD331.9 million in funding under the USD6-billion Industrial Demonstrations Program (IDP). The announcement comes one month after a report in the Houston Chronicle that ExxonMobil might have to cancel the project if proposed federal tax incentives for the production of clean hydrogen exclude the use of carbon capture and sequestration (CCS).

mrchub.com

Covestro has finished its first plant for polycarbonate copolymers that can produce these high-quality plastics on an industrial scale at its Antwerp site in Belgium, said the company.

The new platform technology, which the company developed itself, is based on an innovative, solvent-free melt process in combination with a new reactor concept. This makes polycarbonates with adjustable properties accessible, which have been developed and tested on a laboratory and pilot scale in recent years. The investment is in the mid double-digit million euro range and covers a pilot and a production plant.

In addition to the reduced complexity of the new production process, the connection to the existing infrastructure in Antwerp with four production lines for polycarbonate also has an advantageous effect, as it combines global scale in production with the flexibility of a stand-alone unit.

"The new production process is the first and only one of its kind in the world and enables us to offer a broad portfolio of material innovations," says Sucheta Govil, Chief Commercial Officer at Covestro. "With the new plant, we can now produce and launch new polymer materials on an industrial scale much faster than before. This is the result of several years of development work by our research and process technology teams, as well as our long-term experience with polycarbonates. In our Solutions & Specialties segment, we focus on sophisticated products with a high pace of innovation, which is a key success factor since customer requirements change quickly. The new production line is a prime example of how we implement this strategy and support our customers to the best extent."

"Compared to pure polycarbonates, the copolymers open up new possibilites for us to integrate further functionalities and properties into our materials," explains Lily Wang, Global Head of the Engineering Plastics business unit. "These can range from improved mechanical properties, a higher resistance against chemical attack to an enhanced flame retardancy. By that, we can offer innovative materials that meet the high requirements of our customers in a wider range of applications. We will focus first on materials for the electrical, electronics and healthcare industries, while future innovations might focus on mobility and other trends." To understand its customers' needs, Covestro will showcase some of the products that could be produced with the new plant at the Chinaplas exhibition in Shanghai in April and looks forward to talking to customers about these innovative material solutions.

We remind, Covestro has published its climate neutrality targets for scope 3 emissions, completing its climate strategy for reducing greenhouse gas emissions. As a short-term goal, the company plans to reduce greenhouse gases by 10 million metric tons by 2035. This corresponds to a drop in emissions of 30 percent compared to the base year 2021, with some growth-related emissions through 2035 included in the calculation.

mrchub.com

The American Fuel & Petrochemical Manufacturers announced ExxonMobil’s Karen McKee—president of ExxonMobil Product Solutions Company—as the 2024 Petrochemical Heritage Award recipient for her outstanding contributions to the petrochemical community. McKee received the award on March 25 during the International Petrochemical Conference in San Antonio, Texas hosted by AFPM.

“This award reflects the extraordinary achievements of the talented employees at ExxonMobil who push for excellence every day. I am confident that our next generation of leaders will continue to pioneer new technologies and develop even greater products that will further improve living standards for societies around the world.” — Karen McKee, president of ExxonMobil Product Solutions Company.

Chet Thompson, AFPM president and CEO issued the following statement commending McKee on her accomplishments: “Being named this year’s Petrochemical Heritage Award recipient is a testament to Karen’s leadership and ingenuity. Throughout our industry, Karen is recognized as one of the best business minds and someone who reliably delivers results in constantly evolving markets. Her strategic vision and ability to see beyond the next corner is certainly helping to propel ExxonMobil’s global work and ever-broadening suite of sustainable products and patented innovations. We applaud Karen for her substantial contributions to our industry and congratulate her on this well-deserved recognition. She rightfully joins a long list of petrochemical industry greats, and her work and legacy in our sector—and on behalf of consumers—is far from over.”

Acclaimed as a skilled pioneer and business leader, Karen is the first woman to receive the Petrochemical Heritage Award. In her near 34-year career with ExxonMobil spanning multiple continents, McKee has overseen the combination of ExxonMobil's downstream and chemicals operations into a single Product Solutions business, led refinery expansions and a series of North American chemical growth projects. All the while, she’s worked to increase community engagement, led several multi-million-dollar ExxonMobil giving campaigns and advance the company’s effectiveness in service to customers.

McKee is recognized throughout the petrochemical industry and has held leadership posts in trade associations, including currently serving as president of the International Council of Chemical Associations. She previously served on the executive committee for the Alliance to End Plastic Waste, working on behalf of petrochemical producers and brands to advance policy promoting circularity, sustainability and responsible care. Additionally, McKee has been a leading voice for the industry in the recent United Nations negotiations of a global agreement on plastic pollution, championing the need to develop policies that enable a circular economy for plastics.

Presented annually by AFPM, the Science History Institute and the Founders Club, the Petrochemical Heritage Award recognizes individuals who have displayed significant entrepreneurship in the petrochemical profession, contributed to better public understanding of this critical industry and been active in philanthropic and communal affairs. Established in 1997, this award encourages emulation, inspires achievement and promotes public understanding of modern science, industries and economies.

We remind, QatarEnergy and ExxonMobil are on track to commence LNG production at their Golden Pass LNG export terminal, situated on the US Gulf Coast near Sabine Pass, Texas, during the first half of 2025. QatarEnergy, a state-owned entity, holds a substantial 70 percent stake in the Golden Pass project, which boasts a capacity exceeding 18 million metric tons per annum (mtpa). Notably, QatarEnergy will offload 70 percent of the terminal's capacity. In parallel, ExxonMobil, a prominent US-based energy firm, possesses a 30 percent share in the venture.
mrchub.com

Borealis has published its annual report 2023, combining its financial and non-financial reports, said the company.

Overall, Borealis Group had a negative operating profit of EUR9M ‘due to adverse market conditions, high inventory effects, and a generally weaker environment in all business areas, driven by higher inflation and cost- of-living crises’, the report reads. The business recorded EUR8,042M in sales and other income, including its Fertilizers, Melamine and Technical Nitrogen Products business unit (NITRO), which was sold in July 2023.

Borealis Polyolefins’ operating profit fell to EUR79 million in 2023 from EUR526 million in 2022. Borealis and TotalEnergies polyethylene joint venture Baystar, which started production in October 2023, recorded EUR158 million in losses compared to EUR58 million in 2022.

The new unit is the first in North America to use proprietary Borstar technology from Borealis. The technology produces polymers with enhanced sustainability by enabling light-weighting and the incorporation of greater amounts of post-consumer recycled materials in a variety of end products.

Weak polyolefin margins in 2023 resulted in a significant decrease in net sales for Borealis Polyolefins, despite similar sales volumes. The segment’s net sales dropped to EUR5,687M in 2023 from EUR7,041M in 2022.

“The year 2023 was one of petrochemical overcapacity and flagging demand, both of which exerted downward pressure on prices and operating rates,” Borealis Supervisory Board wrote in the report. “Overall, industry profitability and operating rates fell to levels last seen during the height of the global financial crisis of 2007–2008.”

Borouge, Borealis’ joint venture with ADNOC, helped to balance the scales with a EUR317M contribution, nonetheless a sharp decrease from the EUR1,062M reported in 2022.

Borealis Base Chemicals delivered a 2023 operating profit of EUR162 million, in comparison with the EUR243 million reported in the previous year.

“A confluence of factors made the year 2023 a challenging one for petrochemicals companies, and Borealis was no exception,” the report says. “Market volatility, logistics and supply chain disruptions, lagging demand and geopolitical strife will continue into 2024 and beyond.”

Nonetheless, Borealis emphasised again that ‘transformation is essential to adapt to these changing circumstances and that it continues to invest in ‘more sustainable solutions that benefit society’.

The report also highlights that Borealis reached an intermediate decarbonisation goal two years earlier than set forth in its 2030 strategy, which aims to increase the share of renewables used to power European production operations in Base Chemicals and Polyolefins to 100% by 2030. The group’s share of renewables is now over 40%.

mrchub.com