US reopening rail crossings with Mexico

Spanish Market: Agriculture, Biofuels, Chemicals, Crude oil, Fertilizers, Metals, Oil products, Petrochemicals
22/12/23

US officials are scheduled today to reopen closed railroad crossings between Texas and Mexico, four days after halting traffic over concerns migrants were entering the US by rail.

Western railroad Union Pacific (UP) said it was relieved the border crossings at Eagle Pass and El Paso, Texas, would reopen. UP and rival carrier BNSF operate 24 trains across these crossings on a daily basis.

US Customs and Border Protection (CBP) did not address specifics but said it will "continue to prioritize our border security mission as necessary in response to this evolving situation."

UP said it would work to restore normal operations as quickly as possible but would have to work through a five-day backlog of freight shipments waiting to cross the border. "These crossings are critical gateways for international commerce, and the closures had real-world impacts for families, businesses, and our customers on both sides of the border," UP said.

UP and BNSF operate over the three crossings that were closed by CBP on 18 December.

The Association of American Railroads (AAR) applauded President Joe Biden's administration for reopening the rail line but urged the government to halt the practice. This is the second time this year CBP has closed the crossings.

AAR acknowledged the agency has been working under "under exceptionally difficult circumstances, but these ill-advised closures were a blunt force tool that did nothing to bolster law enforcement capacity."

Shippers, trade groups and legislators have been calling on border officials to reopen the lines all week, citing delays that would be costly to the economy.

UP estimated the overall economic impact of the border closure at more than $200mn/d. Those lines represent about 45pc of cross-border shipments on UP.

Many different types of commodities are transported between the US and Mexico, including crude, ethanol, metals, chemicals and agriculture.

The Renewable Fuels Association earlier this week estimated that for every day the crossings were closed, nearly 1mn bushels of grain exports were lost.

By Abby Caplan

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24/12/25

Viewpoint: US butadiene demand cools, exports climb

Houston, 24 December (Argus) — Price support for the US butadiene (BD) market may remain under pressure next year from oversupply concerns, as market participants contend with weak demand, while volumes are increasingly redirected to the seaborne export market. Market participants told Argus that they expect their annual term commitments to stay unchanged in 2026, though some reductions are possible as derivative nameplate capacity shrinks. Most buyers and sellers anticipate demand conditions comparable to this year, which proved weaker than expected, as tariff- and other trade-related headwinds weighed on an already challenging market environment. The permanent closure of three derivative sites in 2025 — Lion Elastomers' synthetic rubber plant in Texas, Ineos Styrolution's acrylonitrile-butadiene-styrene plant in Ohio and Denka Performance Elastomer's chloroprene rubber plant in Louisiana — underscores broad weakness across a host of downstream segments. This follows the earlier shutdown of Invista's adiponitrile plant in Orange, Texas, in 2023. These four assets account for 17pc of US BD consumption capacity lost between 2023-2025, according to Argus Butadiene Analytics data. A combination of rising raw material costs and capital expenditures, low demand and regulatory burdens were cited as severely impacting the profitability of chemical operations. Part of the challenge, in tandem with those factors, stems from an influx of low-cost imports, primarily from Asia-Pacific. The US tariff regime, rolled out in April, has not yet lifted demand and, in some cases, eroded output among US derivative manufacturers. In fact, the White House's trade policy shifts have coincided with the shutdown of BD-based polymer facilities and an absence of new builds. The Institute for Supply Management's purchasing managers' index (PMI) fell to 48.2 in November, its ninth consecutive drop. Chemical products, plastics and rubber products were among the industries reporting contraction. Efforts to stimulate domestic production have failed to deliver a significant upside, leading some US suppliers to more closely match their contract nominations to netback export values. This dynamic has helped to reposition the US as the lowest-cost region, replacing Europe's long-standing advantage. The Argus prevailing US BD contract price (CP) for December settled at 29.25¢/lb ($645/t), the lowest level in over two years. December's settlement shed 19.75¢/lb year-to-date, or 40pc, the tenth consecutive decline. The US BD spot price on a fob basis followed the same pattern, remaining at a discount to the CP in nearly all months over the same period. Market fundamentals reshape trade flows A decrease in US demand for BD has pushed suppliers to lean more heavily on exports to bridge structural gaps, though this strategy has contributed to downward price pressure. US BD exports climbed to record levels this year, totaling 142,100t year-to-date through November, up by 66pc from 85,400t during the same period last year, Argus data shows. Nearly 54pc of these exports headed to Asia-Pacific, the world's largest consuming region. Mexico accounted for 44pc, a trend supported by shifting derivative production from the US to Mexico. Europe received the smallest share at 2pc, although volumes could rise as traders capitalize on the logistical advantages of co-loading BD with ethylene shipments bound for the Mediterranean. On a monthly contract basis, US BD prices have sustained a better value option than rival European supplies for delivery into northeast Asia. In December, the US CP maintained a discount of about $200/t compared with Europe's monthly contract price. This was wider than the estimated mid-$100s/t discount on a spot basis. Despite the US' low-cost position and growing exposure to seaborne exports, Europe has shipped almost twice as much volume to Asia-Pacific from January-November this year. A key driver of this trend is China's taxes on US imports, which gives other regions preferential market access. There have been discussions of exporting tons on a term basis to northeast Asia, but the US would have to compete for business with western Europe, Brazil and intra-regional suppliers in Asia-Pacific. The US will continue to prioritize spot shipments elsewhere in Asia-Pacific, primarily South Korea and Taiwan, unless China reverses course and grants tariff waivers on US-origin imports. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: US steel tariffs cause scrap supply glut

24/12/25

Viewpoint: US steel tariffs cause scrap supply glut

Pittsburgh, 24 December (Argus) — North American ferrous scrap dealers and exporters will likely continue flooding the US market in 2026 because the tariff-protected US steel industry is on track to outcompete international markets for scrap. The magnetic pull of the US steel market this year attracted greater volumes of ferrous scrap deliveries from domestic and international shippers alike, in a trend that could keep bolstering US scrap supply and weighing on prices in 2026. "The tariffs are protecting US steel and aluminum industries and therefore domestic demand for scrap," said Stephen Mikkelsen, chief executive of global metals recycler Sims Metal during an August earnings call. "This has resulted in premiums often emerging for domestic scrap sales in the US." President Donald Trump's 50pc tariffs on imported steel have helped ramp up US steel mills' operating rates. The import tax has also guarded the US market from an oversupply of Chinese steel in the global marketplace. That dynamic has encouraged dealers to sell ferrous scrap — which does not face a tariff — increasingly to US steel mills rather than the seaborne market. "We see this continuing in fiscal year 2026. In our view, production changes will take time to play out, and China will continue to dampen steel prices, and therefore, ferrous scrap prices outside the US," Mikkelsen added. The recent divergence of US and Turkish steel prices signals that US exporters could continue to prefer selling into the domestic market in the first quarter. US flat and long steel prices have continued to climb in December. Turkish rebar has decreased to $559/t ex-works, an $18.50/t decrease since 4 December. US ferrous scrap market participants expect prices to edge up in January based on slower supply flows in the winter season. But the long-term trend of steel tariffs fueling higher ferrous scrap supply in the US will likely persist in 2026 and keep preventing major price increases. Trump has shown no interest in nixing the steel tariffs, likely indicating that the US market will continue attracting similar or larger volumes of scrap from domestic and international sources in 2026. The first of two price increases scrap dealers got this year came when winter weather curbed supply flows nine months ago. The second came this month under the same circumstance. Sellers craved stronger demand from US steel mills to lift markets in early 2025. They got their wish when Trump doubled US steel tariffs to 50pc in June. US steel mill utilization rates jumped by 4pc to higher than 79pc in the summer. The stronger run rates equated to hundreds of thousands of metric tonnes (t) of additional monthly demand for scrap. US exporters shift sales to domestic mills US exporters diverted scrap sales — particularly shredded scrap — to US steel mills to help fill that extra demand. US scrap exports are on track to fall by 15pc to 11.7mn t this year, the lowest sum since 2016, according to annualized US customs data pending the releases for the final three months of the year, which were delayed by the federal government shutdown. US scrap imports have also risen, particularly from Mexico and Canada, because US steel tariffs have lessened demand for scrap in those countries. US ferrous scrap import volumes are on course to total 4.1mn t this year, a 10pc increase from 2024. The extra scrap supply in the US has prevented scrap prices from raising proportionally with steel. #1 busheling, a key feedstock for hot-rolled coil, averaged $390/gross ton (gt) this month, a 4pc increase from a year earlier. But US hot-rolled coil was $922/short ton (st) this week, a 38pc uptick during that time. Shredded scrap, a major part of melt mixes for rebar, was $378/gt on average in December, up by 5pc from a year earlier. Rebar rose by 23pc to $915/st in the past year. By James Marshall US ferrous scrap and iron metallic import/export swings t 2025 2024 ± ±% Imports Ferrous scrap 4,109,633 3,750,091 359,542 9.6 Pig iron 5,443,307 4,713,161 730,146 15.5 DRI/HBI 1,562,073 1,525,159 36,914 2.4 Exports Ferrous scrap 11,666,187 13,876,316 -2,210,129 -15.9 Net change in iron units in US 3,336,731 US customs data aggregated by Global Trade Tracker with final three months of 2025 annualized Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: US midcontinent uncertain over return of E15

24/12/25

Viewpoint: US midcontinent uncertain over return of E15

Houston, 24 December (Argus) — The US midcontinent fuel market is again poised to enter a spring driving season fraught with uncertainty over the future of 15pc ethanol gasoline (E15), which boosts demand for higher-cost, lower Reid vapor pressure (RVP) fuel. Production of E15 requires blending with more costly, lower RVP fuel because E15 does not qualify for the 1-psi Clean Air Act waiver available for E10 production, a waiver that allows blenders to use less costly, higher RVP fuel. On 17 March, non-waiver gasoline ballooned to a 19¢/USG premium against waiver fuel, as Magellan added storage for the boutique grade non-waiver fuel and market participants wondered whether the US Environmental Protection Agency (EPA) would intervene. From 17 March to 1 May, traders bought non-waiver gasoline for 10¢/USG more than in past years, before the EPA issued emergency waivers and closed the gap between the grades. Ahead of the 2026 driving season, the situation is much the same. Market participants are uncertain whether non-waiver grades will return, or whether there will be an act of Congress or additional EPA waivers to resolve any price discrepancies. Eight US states — Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota, Wisconsin and Ohio — requested to opt out of the 1-psi waiver in 2022, a rule that was approved in 2024 and then briefly implemented in 2025, although Ohio and South Dakota deferred implementation. The states requested to opt out of the 1-psi waiver to secure access to year-round E15, which otherwise cannot be produced during summer due to volatility limits. The waiver allows for E10 to be produced at 10 RVP while E15 without the waiver needs to be blended to 9 RVP. EPA issued emergency waivers on 1 May 2025 that allowed for E15 to be made with 9 RVP gasoline. This marked the fourth consecutive year that the EPA had issued such waivers to eliminate the need for the non-waiver specification. To waiver or not to waiver When waiver/non-waiver gasoline was active from 17 March to 1 May, Magellan pipeline V grade suboctane non-waiver gasoline in the southern midcontinent, also known as Group 3, traded at an average 10.35¢/USG premium to waiver gasoline, or about 5pc higher. Conventional 91 gasoline A grade on the same pipeline averaged a 10.43¢/USG spread, or a 4.2pc premium. Chicago, in contrast, had most of its non-waiver trade focused on the West Shore/Badger system, which runs through Wisconsin and Illinois, while the Buckeye Complex trading hub in Indiana remained on waiver product. The West Shore/Badger pipeline system non-waiver CBOB averaged a 4.32¢/USG premium to Buckeye Complex's waiver CBOB, a difference of 2.1pc. Those spreads could be even wider next year, depending on the approach of the regional pipelines and the overall availability of non-waiver product. Looking ahead Participants in the US midcontinent market have expressed uncertainty about the possibility of non-waiver returning. The American Petroleum Institute (API) along with ethanol groups and fuel retailers have publicly endorsed a bill that would allow year-round E15 and curb small refiners' ability to seek exemptions from biofuel blend quotas. A provision for extending the 1-psi waiver to E15 was included in a funding bill in December 2024, but ultimately did not make it into law. Since then, the year-round E15 issue has become entangled with small refiner exemptions with API advocating for the year-round E15 bill with the caveat that the process for gaining exemptions for small refiners become more stringent. API is also seeking to avoid having larger refiners compensate for blending exemptions granted smaller refiners. Barring an act of Congress or more EPA emergency waivers, the US midcontinent is poised to enter another summer driving season that includes both waiver and non-waiver product. By Zach Appel Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: LCFS ambitions lack diesel power

24/12/25

Viewpoint: LCFS ambitions lack diesel power

Houston, 24 December (Argus) — US low-carbon fuel standard (LCFS) programs are rumbling toward their steepest targets yet with little of the fuel powering them in the tank. West coast regulators and lawmakers have approved ambitious reductions in carbon levels for automotive fuel following a four-year deluge of renewable diesel production. The fuel grew over that time into the largest source of new credits needed to meet California, Oregon and Washington regulatory obligations. But federal uncertainty and feedstock challenges this year have left renewable diesel producers spinning their wheels. West coast states have claimed up to 90pc of all US renewable diesel consumption in recent quarters. Made from seed oils, animal fats or used cooking oil, and in some of the same equipment used to produce petroleum diesel, the lower-carbon alternative remains chemically identical to its conventional cousin. This means it can move seamlessly in the same supply systems and engines, leaving customers to manage only the higher price. Renewable diesel accounted for nearly three-quarters of California's total liquid diesel pool early this year, up from just a quarter of state supply in 2020. Programs in Oregon and Washington lured the fuel further north to account for around 25pc of the total diesel in those markets during recent peaks. That consumption produced a torrent of credits for the state LCFS programs. The fuel has generated as much as 40pc of new California quarterly credits in recent years, helping credits grow to 1.8 times more than new deficits in 2024. Inundated by supply and concerned about biofuel reliance, California regulators finalized much tougher carbon targets that also limit the types of feedstocks, including for renewable diesels, eligible to meet them. LCFS programs reshaped both the domestic refining sector and the west coast road fuel markets with incentives driving lowest-carbon alternatives. But this year demonstrated that federal policy remains the heaviest hand on the wheel steering fuel decisions. Federal proposals to favor US producers and domestic oilseeds with tax and other incentives, alongside hostility toward foreign lower-carbon feedstocks and fuels, stifled renewable diesel output. Total renewable diesel supplied in the US during the first 10 months of the year fell by 19pc compared with the same period of 2024, the first year-over-year drop in supplies since 2018. Diamond Green Diesel, the largest US renewable diesel producer, left one of its production units idled for most of an unprofitable 2025. Phillips 66 and Marathon Petroleum reduced runs at California facilities converted to produce renewable diesel, while CVR Energy will convert units from renewable to conventional diesel production at its Wynnewood, Oklahoma refinery . Oregon demonstrated the west coast's diesel dependency earlier this year. When facility downtime and other factors cut renewable diesel deliveries in late 2024 and early 2025, credits available for LCFS compliance began to shrink. Credit prices more than doubled from May to July in response to data reporting the supply drop. California's gasoline carbon intensity limit will start next year 12pc lower than the targets in place in January 2025. Previous years have fallen by 1-2pc. The state will also soon limit credit generation from crop-based diesels to just 20pc of the volume supplied, and require verification standards that agribusiness groups have decried as overly onerous. Washington state lawmakers early this year adopted a 5pc tougher carbon intensity target for 2026 to rekindle alternative fuel incentives in the state. Credit generation has slowed amid declining renewable diesel supplies this year. The right price can inspire the right supplies, yet the cost of these state incentives ultimately adds to what drivers pay at the pump. Fears of retail price hikes helped slow the adoption of changes to the California LCFS programs this year. Growing national sensitivity to costs could add scrutiny to rising low-carbon incentives in 2026. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: US tariffs altering UBC buying in ’26

24/12/25

Viewpoint: US tariffs altering UBC buying in ’26

Houston, 24 December (Argus) — Consumers of used beverage cans (UBCs) likely will seek to purchase more of the scrap grade on a spot basis in 2026, minimizing their exposure to long-term supply agreements after buying spreads widened to historical lows this year on the back of a record-high regional premium. Sell-side sources estimate that most rolling mills reduced their volumes under contract between 10-20pc for next year compared to 2025 levels, reflecting a shift in consumers' procurement strategies after US tariffs on aluminum imports disrupted price mechanisms against which UBCs and other grades of scrap are traded. "All mills directionally did less contract pounds. That showed up everywhere," a broker said about 2026 negotiations. "They all want more flexibility to buy spot." Rolling mills locked in annual contracts for 2025 at tight discounts to the Midwest transaction price (MWTP), with sources saying that most deals were struck on either side of 80pc within a narrow range. Supply availability of UBCs was constrained at the end of 2024, prompting consumers to accept brokers' and dealers' higher offers to ensure stable inflows of scrap. But US trade policies and White House threats against major trading partners provoked a surge in the Midwest P1020 premium, which led to a sharp rise in the MWTP and an influx of UBC imports from overseas suppliers, with shipments setting a one-month high of 30,082 metric tonnes (t) in May as importers sought to take advantage of higher prices in the US, customs data showed. The US imported an average 16,230t of the scrap every month from 2023-2024, according to customs data. The regional upcharge climbed by more than 270pc from the start of the year to an all-time high of 88¢/lb as of 10 December, Argusdata showed. The MWTP rose by 56pc to $2.1665/lb in the same timeframe, with gains in the premium far outpacing increases in the London Metal Exchange (LME) cash settlement — the other component that comprises the MWTP. Buying spreads, as a result, dropped from an average of 80.8pc in January to an average of 45.3pc in November — reaching a low of 44.4pc on 29 October — after supply tightness eased and consumers widened discounts, saying underlying fundamentals did not support paying more for UBCs just because intrinsic values had risen, which several viewed as artificial increases. That sentiment from buyers has been reflected in outright prices for UBCs, which fell by a smaller margin — down by 13¢/lb, or by 12pc, to 98.5¢/lb at the end of November — compared to buying spreads. Still, that divergence in discounts led to a significant discrepancy between what rolling mills had to pay brokers and at what levels they could purchase UBCs in the spot market. This compelled consumers to take on more volumes from the trade or under shorter-term supply deals in 2026 in efforts to avoid a repeat of 2025. Consumers have already entered the spot market for significant tonnage for January, with one rolling mill having already closed out its next-month position and another procuring north of 40 truckloads so far. Buyers at the consumer level say they want to purchase more UBCs on the spot market to help fill the balance of their needs despite lower contract volumes. Sources noted that most rolling mills' overall consumption forecasts for 2026 are relatively stable based on downstream demand for beverage-can sheet. Adding to upward pressure on UBC demand are Section 232 import tariffs, which currently stand at 50pc. Consumers have sought to utilize more scrap for their melts to help offset elevated costs for P1020 and other grades of primary aluminum — a trend that most expect to persist next year. Beverage-can sheet can utilize a higher percentage — as high as 90pc, Argus understands — of scrap as an input compared to other flat-rolled products, precluding the need for rolling mills to use primary aluminum in their melts. Sources have signaled that first-quarter contracts with rolling mills have been locked in between 51-54pc of the MWTP, with buying spreads for annual deals that have been concluded coming in between 55-62pc broadly — depending on volume and the quality of UBCs. With those discounts, buyers effectively have priced in expectations that US tariffs on primary aluminum will persist throughout the year. Some market participants are optimistic that negotiations on a new US-Mexico-Canada free trade agreement will result in a tariff carveout for aluminum from top US supplier Canada. Still, there have been no concrete indications that such a reduction, which likely would spur a drop in the Midwest premium, will come. Challenges to 2026 consumption While most consumers' indicated demand levels have not changed significantly, suppliers and brokers are monitoring developments with two major rolling mills to see how certain constraints may impact industrywide consumption for UBCs in 2026. Aluminum-roller Novelis' hot-rolling mill outage at its facility in Oswego, New York, which primarily produces flat-rolled products for the automotive industry, has forced the company and its domestic competitors to scramble to meet automakers' needs. Those efforts have included shifting manufacturing lines away from other end markets to focus on producing automotive-grade sheet or hot-rolled coil, also known as "hot band". Sources also noted that new entrant Aluminum Dynamics' (ADI) demand for UBCs may not be as significant for next year as market participants originally thought when the company first announced its 650,000 metric tonne (t)/yr plant in Columbus, Mississippi. ADI planned to build satellite facilities in Arizona and Mexico to supply Columbus, with those sites recycling UBCs to melt into slab for production of beverage-can sheet. The Arizona plant has yet to be built, with the company contending with locals who have been fighting its construction, while the Mexico facility is operational, but products from the site have been subject to import tariffs, sources said. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US reopening rail crossings with Mexico

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