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US housing construction weakens in July, PU steady

  • Spanish Market: Petrochemicals
  • 16/08/24

Housing permits and starts both fell in July to four-year lows as persistently high borrowing costs continue to weigh on the housing market, even as polyurethane (PU) demand has remained steady.

Total housing starts fell by 6.8pc to a seasonally adjusted annual rate of 1.238mn in July from June's revised numbers, according to the US Census Bureau and the Department of Housing and Urban Development. This is down 16pc from July 2023, the month the Federal Reserve hiked its target lending rate to its current level, the highest in 23 years. The starts in July were at the lowest rate since 1.053mn in May 2020, when the Covid-19 pandemic had closed down much of the US economy.

PU demand in the construction sector saw continued strong but steady demand in July while supply was balanced to tight, according to market participants. The building blocks of polyurethanes, such as isocyanates like polymeric MDI (PMDI), go into insulation, roofing applications and carpet underlay.

One producer was still under force majeure on MDI through July but the upstream issues had been resolved and the producer was rebuilding inventory after Hurricane Beryl hit in early July.

Supply and demand fundamentals along with cost pressures drove price increase announcements and implementation, pushing up monthly PMDI contracts in July. Argus assessed the US polymeric MDI (PMDI) contract price increasing by 5¢/lb to a midpoint at 100.5¢/lb in July. Additional price increases are expected for August contracts, according to market participants.

Housing permits were issued at a rate of 1.396mn in July. This is down 4pc from June and 7pc down from July 2023. This was the lowest rate of permit issuance since June 2020.

High borrowing costs appear to have a more acutely negative impact on the housing market the longer they remain elevated. Starts and permits were both at their lowest rate since the middle of 2020 when Covid-19 paralyzed a large portion of the US housing market and the economy was just emerging from a brief, sharp recession.

Single-family starts extended their decline into a fifth month, down 14pc to a rate of 851,000 in July from the prior month and off by 15pc from July 2023. Starts on multifamily structures of five or more units climbed 12pc to 363,000 units started in July from the prior month but were down by 24pc from a year earlier.

Single-family housing permits were issued at a rate of 938,000 units in July, down 0.1pc from June and marking the sixth straight month of decreases. This was 1.6pc lower than July 2023. Multifamily permits fell by 12.4pc on the month.

The Federal Reserve is widely expected to start lowering borrowing costs at its next policy meeting next month after holding its target rate at a 23-year high of 5.25-5.5pc since July of last year. Consumer inflation eased to an annual 2.9pc in July, the lowest in three years.

The labor market has also shown signs of weakening among other softer data, including recent slides in stock prices, that triggered recession concerns. This has all led futures markets to give near certain odds of rate cuts beginning next month. They will be too late to shore up the housing market this year, but a sustained pace of rate cuts into 2025 may boost construction and sales next year.


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14/02/25

Biomethanol-methanol diff widens, UK demand ticks up

Biomethanol-methanol diff widens, UK demand ticks up

London, 14 February (Argus) — The spread between biomethanol and conventional methanol is the highest in more than nine months, at $734/t. This is partly driven by falling European methanol prices, with the methanol fob Rotterdam barge quote hitting $348.97/t on 12 February, the lowest since 7 August. Increased imports from the US, and the restart of a 900,000 t/yr capacity European plant have put downward pressure on prices. Biomethanol values ticked higher in recent sessions, tracking gains in the wider biofuels complex after record low values for renewable fuel tickets — tradeable credits generated primarily by the sale of biofuel-blended fuels — in major European demand centres in 2024. European demand for biofuels in 2025 could be supported by a combination of higher mandates for the use of renewables in transport, and by changes to regulations on the carryover of renewable fuels tickets in Germany and in the Netherlands . UK biomethanol prices and demand rise In the UK, the Argus cif biomethanol price has averaged $1,110/t so far in February, a $22/t increase from January and a $60/t rise from the September 2024 average, when prices hit a record low. The price averaged around $1,094/t in February last year. Prices have been in part supported by stronger renewable fuel ticket prices (RTFCs) in the UK recently, according to market participants. UK 2025 non-crop RTFCs averaged 25.45p in the first quarter of 2025 so far, an increase of 1.88p when compared with the previous quarter. Demand picked up in the UK and the wider European market, including from voluntary sectors, at the beginning of the year, participants said. Biomethanol is used as a gasoline blending component in the UK. Consumption in the country in 2024 rose by 45pc on the year but was lower by 7.9pc than in 2022 at 58mn litres, according to the third provisional release of the 2024 Renewable Transport Fuel Obligation statistics. The Argus biomethanol fob Amsterdam-Rotterdam-Antwerp (ARA) netback quote was $1,083/t on 12 February. FuelEU fuels demand The January rollout of the FuelEU Maritime regulations could increase demand for biomethanol in shipping. Ship operators traveling in to, out of and within EU territorial waters must reduce their greenhouse gas (GHG) intensity on a lifecycle basis by 2pc. The reduction rises to 6pc from 2030 and gradually reaches 80pc by 2050. Shipping companies can choose from a range of alternative marine fuels to reduce their emissions. Only dedicated ships can run on methanol alone, but many companies, including Maersk , have ordered dual-fuel vessels that can run on methanol and traditional bunker fuels, along with biofuel blends like B24 — a mix of very-low sulphur fuel oil (VLSFO) and used cooking oil methyl ester (Ucome) biodiesel. International offtake agreements for renewable methanol are also on the rise. Maersk has signed several letters of intent for procurement of biomethanol and e-methanol from producers including Equinor , Proman and OCI Global , and has an agreement with Danish shipping and logistics company Goldwind for 500,000 t/yr from 2024. Biomethanol and e-methanol are likely to be the most competitive and scalable pathways to decarbonisation this decade, Maersk said . While relatively small, Maersk's 'green marine' fuel consumption, which includes biomethanol, increased by 38pc in 2024 to 3,034 GWh. Singaporean container shipping group X-Press Feeders said it will buy biomethanol from OCI's Texas plant starting from 2024. Biomethanol bunker sales in the port of Rotterdam dropped by more than half in the fourth quarter of 2024 compared with the third quarter, to 930t, but sales were 86pc higher than those in the fourth quarter of 2023, according to Port of Rotterdam data . UDB risk to biomethanol imports The European Commission's proposal to exclude automatic certification of biomethane and biomethane-based fuels from the Union Database for Biofuels, if relying on natural gas that has been transported through grids outside the EU, has been slowing some negotiations for 2025 biomethanol imports — particularly from the US — according to market participants. Industry bodies have expressed concerns about implementation of the database, particularly that it will impede the bloc's biomethane development. Burdensome fees, overly strict deadlines, risk of double counting, and a significantly increased number of participants required to enter data will slow market growth, said the European Compost Network and the European Waste Management Association. They recommend mandatory use of the UDB be postponed until 1 January 2026 "at the earliest". By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Republic Services finishes Indiana sorting center build


14/02/25
14/02/25

Republic Services finishes Indiana sorting center build

Houston, 13 February (Argus) — US-based materials recovery facility operator and hauler Republic Services has finished construction on its second polymer center in Indianapolis, with initial income from the plant expected in the second half of the year, the company said in its earnings call. Republic Service's polymer centers are secondary sorting facilities that produce recycled polyethylene terephthalate flake and color sort high-density polyethylene and polypropylene waste to sell to reprocessors. Republic Services faced some challenges in the third quarter and fourth quarter of 2024 with startup costs for equipment and getting specifications correct for customers at its operational polymer center in Las Vegas, but after those initial hurdles, the company was "feeling good" about them, chief executive John Vander Ark said. The company's prior assumptions about production in Las Vegas in terms of selling price, costs, volume sold, and the willingness of customers to pay were really "strong" and "positive," he added. Republic Services finished construction on its Las Vegas polymer center in December 2023. The polymer centers are strategically located next to joint venture Blue Polymers' facilities. Republic Services plans to provide feedstocks to Blue Polymers in order to produce pelletized and compounded recycled resin. Blue Polymers is expected to finish construction on its first plant in Indianapolis in mid-2025, Republic Services said. Republic Services aims to spend $75mn on new polymer centers in 2025. By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Upper Mississippi River ice tops 5-year average


13/02/25
13/02/25

Upper Mississippi River ice tops 5-year average

Houston, 13 February (Argus) — Ice measurements taken Wednesday to gauge when barges can transit the upper Mississippi River exceeded the five-year average, according to the US Army Corps of Engineers (Corps). The annual Lake Pepin ice reports — taken by the Corps in February and March at Lake Pepin south of Minneapolis — are a bellwether for when barge transit can resume on the upper Mississippi River. This year's first report found ice at the lake was 19in thick on 12 February, 8in thicker than last year's measurement and 3in above the five-year average. The Corps' initial report last year found only 11in of ice at the lake, thin enough for waterborne traffic to break through. Subsequent reports were cancelled after the Corps said it would be too hazardous for crews and equipment to take additional measurements. Locks along the upper Mississippi River are anticipated to remain closed through 3 March, the Rock Island Corps district in Illinois said on 5 February. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

ACBL sets release dates for Illinois River lock


13/02/25
13/02/25

ACBL sets release dates for Illinois River lock

Houston, 13 February (Argus) — Major barge carrier American Commercial Barge Line (ACBL) has issued its earliest release dates for Illinois River barges planning to transit the Lockport Lock, which closed for maintenance last month. Release dates will be from 23 February through 19 March for barges expecting to pass through the Lockport Lock over the spring season, ACBL said Wednesday. The US Army Corps of Engineers (Corps) expects to reopen the Lockport Lock on 25 March, the Corps said when it announced the closure . The Corps closed the lock on 28 January to install new vertical lift gates and make repairs. The closure has cut off major trade hubs such as Chicago, Illinois, and Burns Harbor, Indiana, from Illinois River barge transportation. Lock 27 and the Mel Price Lock above St Louis will remain partially closed through 1 April, as they are also undergoing maintenance by the Corps, ACBL said. The barge line acknowledged higher demurrage rates were likely for those who loaded barges prior to the released dates. Initial transit on the Illinois River is also anticipated to have a significant backlog in the spring months. By Meghan Yoyotte ACBL's Illinois River release dates Origin Port Barges destined above Lockport Lock, on IL River Mobile, AL 25 Feb Houston, TX 23 Feb Weeks Island, LA 26 Feb New Orleans, LA 3 Mar Pittsburgh, PA 2 Mar Cincinnati, OH 5 Mar Decatur, AL 10 Mar Memphis, TN 10 Mar Evanscille, IN 12 Mar Cairo, IL 16 Mar St Louis, MO 19 Mar — ACBL Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump bans federal use of paper drinking straws


11/02/25
11/02/25

Trump bans federal use of paper drinking straws

Houston, 11 February (Argus) — President Donald Trump has signed an executive order to ban the procurement of paper drinking straws by the US government and to take steps toward enacting a similar ban nationwide. An "irrational" campaign against plastic straws had forced Americans to use "nonfunctional" paper straws that are more expensive and may pose a risk to human health, Trump said in the order signed Monday. Health risks include the leaching of polyfluoroalkyl substances (PFAS) from paper straws into drinks, the White House said. The order signed on Monday bans the purchase of paper straws for use in federal buildings and requires within 45 days the development of a " National Strategy to End the Use of Paper Straws". Former president Joe Biden had directed the federal government to end the use of single-use plastic in food applications by 2027. The Plastics Industry Association praised the executive order. "Plastic is the best material for nearly everything it is used for, while being sustainable," Plastics Industry Association chief executive Matt Seaholm said. "Straws are just the beginning — 'Back to Plastic' is a movement we should all get behind." Plastic straws are typically made from polypropylene. Environmental group Greenpeace USA accused Trump of signing the order as a distraction from his administration's moves to prevent federal institutions from protecting Americans from microplastics and "dangerous chemicals". By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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