Epoxy
June 4, 2022
Lumber Prices
Lumber Prices Crash 50% As Fed Tightens
by Tyler DurdenFriday, Jun 03, 2022 – 08:40 PM
Lumber prices have been halved since the Federal Reserve embarked on its most aggressive interest rate tightening campaign in decades as the pandemic boom in housing slows.
Lumber contracts trading on the CME crashed to $653 per thousand board feet, down 51% from a high in late February of $1,336. The decline in wood prices occurred about two weeks before the Fed began hiking interest rates in mid-March.
The Fed is expected to continue raising rates this summer. Interest rate probabilities show the Fed could hike by 50bps at three of the next FOMC meetings to suppress consumption and get inflation under control ahead of the midterm elections. However, that’s going to be a challenging task, which may cause a hard landing in the economy.
Fed Chair Jerome Powell’s pursuit of finding the neutral rate has already unleashed a rate shock in the housing market, with the 30-year fixed-rate mortgage shooting up more than 200bps this year, from 320 bps to 557 bps. This has crushed activity for refinancing houses (remodeling) and sent mortgage applications (home construction) plunging, a sign the housing market is cooling.
Signs of a slowdown in construction are already materializing: “Buyers don’t have the same mentality of having to go out and buy 10 when they only need five,” Ash Boeckholt, co-founder and chief revenue officer at online wood-products marketplace MaterialsXchange, told WSJ.
A monthly survey from John Burns Real Estate Consulting of building-products dealers shows only 12% had tight lumber inventories in April, down 61% from last year. Lumber is a leading indicator and suggests higher prices and soaring interest rates have helped fix shortages that were stoked during the pandemic lockdowns of easy money and robust demand for housing.
Lumber is still double the price of the three-decade trend of $359. Matthew Saunders, who leads John Burns Real Estate Consulting, said that prices are expected to stay above pre-pandemic levels despite improving supply chains and falling demand for wood.
“We believe that they will trade above long-term averages for the balance of the year. However, in the short term, lumber is down more than 50% from the most recent peak. The market is trying to determine where the new price equilibrium compared to slowing demand and increased supply,” Josh Goodman, vice president of inventory and purchasing at Sherwood Lumber, told GlobeSt.com.
Another sign lumber demand is declining is directly from one of the largest wood producers in North America, Canfor Corp, who reduced operating schedules at sawmills in Western Canada. Since March, Canfor has operated sawmills at 80% of production capacity.
On the retail side, traders and analysts have noticed slumping demand for lumber at Home Depot and Lowe’s as consumers shift away from home-improvement projects to spending money on vacations.
The Fed will frontload interest rate hikes this summer which could pressure lumber prices even lower. Perhaps, if some readers have been waiting to build a deck or fence and didn’t want to pay crazy COVID prices, now could be the time to build (despite paying high labor costs).
https://www.zerohedge.com/commodities/lumber-prices-crash-50-fed-tightens
June 2, 2022
Superfund Tax Overview
Chem firms brace for new US Superfund taxes
Author: Al Greenwood
2022/04/28
HOUSTON (ICIS)–Chemical companies are bracing themselves for the return of two Superfund taxes, one of which covers 42 chemicals made or imported in the US and another covering an even wider range of substances imported into the country.
- US will revive two Superfund taxes on 1 July 2022.
- One tax applies to 42 chemicals sold or used by producers or importers.
- Another tax could apply to many more substances that are imported.
The US is reviving the taxes as part of the $1trn Infrastructure Investment and Jobs Act that President Joe Biden signed into law in November.
The proceeds raised by the taxes will help replenish the government’s Superfund programme, which pays for clean-up at waste sites.
TAXABLE CHEMICALS
The tax levied on the 42 chemicals apply to some of the most common building blocks used in the industry.
These taxes are levied on a short-ton basis for the following 42 chemicals sold in the US by manufacturers or importers:
Taxable Chemical | Alias | $/Short Ton | Cent/lb |
Acetylene | 9.74 | 0.487 | |
Ammonia | 5.28 | 0.264 | |
Antimony Trioxide | 7.40 | 0.370 | |
Arsenic Trioxide | 6.82 | 0.341 | |
Barium sulphide | 4.60 | 0.230 | |
Benzene | 9.74 | 0.487 | |
Bromine | 8.90 | 0.445 | |
Butadiene | BD | 9.74 | 0.487 |
Butane | 9.74 | 0.487 | |
Butylene | 9.74 | 0.487 | |
Chlorine | 5.40 | 0.270 | |
Chromite | 3.04 | 0.152 | |
Cupric oxide | 7.18 | 0.359 | |
Cupric sulphate | 3.74 | 0.187 | |
Cuprous oxide | 7.94 | 0.397 | |
Ethylene | 9.74 | 0.487 | |
Hydrochloric acid | HCl | 0.58 | 0.029 |
Hydrogen fluoride | hydrofluoric acid (HF) | 8.46 | 0.423 |
Lead oxide | 8.28 | 0.414 | |
Methane | 6.88 | 0.344 | |
Naphthalene | 9.74 | 0.487 | |
Nitric acid | 0.48 | 0.024 | |
Phosphorus | 8.90 | 0.445 | |
Potassium dichromate | 3.38 | 0.169 | |
Potassium hydroxide | Caustic potash | 0.44 | 0.022 |
Propylene | 9.74 | 0.487 | |
Sodium dichromate | 3.74 | 0.187 | |
Sodium hydroxide | Caustic soda | 0.56 | 0.028 |
Stannic chloride | 4.24 | 0.212 | |
Stannous chloride | 5.70 | 0.285 | |
Sulphuric acid | 0.52 | 0.026 | |
Toluene | 9.74 | 0.487 | |
Xylene | 9.74 | 0.487 | |
Zinc chloride | 4.44 | 0.222 | |
Zinc sulphate | 3.80 | 0.190 | |
Antimony | 8.90 | 0.445 | |
Arsenic | 8.90 | 0.445 | |
Cadmium | 8.90 | 0.445 | |
Chromium | 8.90 | 0.445 | |
Cobalt | 8.90 | 0.445 | |
Mercury | 8.90 | 0.445 | |
Nickel | 8.90 | 0.445 |
Source: Deloitte
Paraxylene (PX), an isomer of xylene, would be subject to the tax once it is imported into the country, said Jeffery Wright, US oil, gas & chemicals tax leader for Deloitte, a consultancy. For xylene, the tax becomes due upon the first sale or the first use.
The tax does include some exceptions.
Exporters can apply for a refund, according to Deloitte. Companies that use the chemicals to make fuel, fertilizer or animal feed are also exempt.
Based on those exceptions, hydrofluoric acid or propylene used in the alkylation units of refineries could be exempt, since those chemicals would be used to make gasoline. Butane could avoid the tax if it is blended in gasoline.
Ammonia used to make nitrogen fertilizers could also avoid the tax.
Methane could escape taxes if it is burned as a fuel in power plants or used to make hydrogen for feedstock in refineries.
However, if the methane is used to make methanol for downstream chemical production, it could be taxed.
The tax also exempts coal derivatives and sulphuric acid that is a by-product of air-pollution control.
TAXABLE SUBSTANCES
The second tax covers substances sold or used by importers, according to Mayer Brown, a law firm.
The tax will cover imports that contain at least 20% of the 42 taxable chemicals. The tax rate would depend on the percent of the taxable chemicals contained by the substance.
For example, a short ton of a taxable substance that contains 20% propylene would be subject to an excise tax rate that is 20% of that for propylene. Since the propylene tax rate is $9.74/ton, the rate for the taxable substance would be $1.95/ton.
It is up to the importer to determine the rate for a taxable substance and maintain the records that would back their findings. If the company comes short, the IRS will impose a 10% tax based on the substance’s value when it enters the country.
So far, there are 151 taxable substances that could meet this 20% threshold, according to lists from the Internal Revenue Service (IRS).
One of these lists was published when the Superfund tax was last in effect in the 1990s, Wright said. Another list was from historic notices that also date from the 1990s. At the time, the substances in the two lists contained at least 50% of the taxable chemicals.
It is presumed that they still contain at least 20%, Wright said.
The table below shows some of the taxable substances in the lists that are followed by ICIS.
Chemical | Alias |
1,4 butanediol | BDO |
acetic acid | |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
adipic acid | |
adiponitrile | ADN |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acetate | butac |
butyl acrylate | butyl-a |
cumene | |
cyclohexane | CX |
dimethyl terephthalate | DMT |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl alcohol for non-beverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
formaldehyde | |
glycerine | |
isopropyl alcohol | isopropanol (IPA) |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
maleic anhydride | MA |
melamine | |
methanol | |
methyl acrylate | metyl-A |
methyl ethyl ketone | MEK |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
nylon 6/6 | |
phenol | |
phenolic resins | |
phthalic anhydride | PA |
polyalphaolefins | PAOs |
polycarbonate | PC |
polyethylene resins, total | PE |
polyethylene terephthalate pellets | PET |
polypropylene | PP |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propanol | n-propanol |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic linear fatty alcohol ethoxylates | |
synthetic linear fatty alcohols | |
synthetic rubber, not containing fillers | |
terephthalic acid | purified terephthalic acid (PTA) |
toluene diisocyanate | TDI |
urea | |
vinyl acetate | VAM |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
Source: Deloitte
Some of these taxes will be problematic. The US has just one plant that makes melamine. It has no domestic production for methyl ethyl ketone (MEK) and relies solely on imports.
The list could be modified to add taxable substances that meet the 20% threshold or remove them that no longer meet the threshold, said Shawn O’Brien a partner at Mayer Brown. Advances or changes in production methods could cause some of the substances to contain less than 20% of the taxable chemicals.
For example, some of these chemicals can be made with renewable feedstock, such as butanediol (BDO), polyethylene (PE) and monoethylene glycol (MEG). Others could be made from feedstock derived from chemically recycled plastics.
PASSING THE BUCK
If companies choose to pass through the taxes, it will likely appear as line items, O’Brien said. He could see the tax being passed down to end consumers.
In total, the amount could be substantial.
The Superfund taxes could raise $452m in 2022 and $1.17bn in 2023, according to the congressional Joint Committee on Taxation. By the time the tax ends on 31 December 2031, the proceeds could reach $14.5bn.
Wright said that companies could evaluate existing contracts with suppliers and customers to see if they can pass along the taxes. Ultimately, each company will have to determine the pros and cons of absorbing the taxes versus passing them along.
To make things clearer for companies, the American Chemistry Council (ACC), a trade group, has asked that the IRS publish tax rates for the taxable substances.
It also asked the IRS to include the harmonised tariff schedule (HTS) numbers and the chemical abstract service numbers of the taxable substances.
The HTS numbers are used by countries around the world to determine which products are subject to a specific tariff. Such numbers allow governments to impose the tariffs in a consistent and clear way.
The list of 151 taxable substances could certainly use some more clarity. It lists polypropylene and polypropylene resins as separate items. HTS numbers could reveal whether the tax applies to two different grades of polypropylene or if the IRS simply listed the same product twice.
The ACC noted that the 20% threshold could cause a lot of chemicals to fall under the definition of a taxable substance. The ACC would like the government to publish rules under which companies could request the removal of chemicals from the list of taxable substances.
The following table shows the full list of the 151 taxable substances that, if imported, would be subject to the Superfund tax.
Chemical | Alias |
1,4 butanediol | BDO |
1,3-butylene glycol | |
1,5,9- cyclododecatriene | |
2-ethyl hexanol | |
2-ethylhexyl acrylate | |
2,2,4-trimethyl- 1,3-pentanediol diisobutyrate | |
2,2,4-trimethyl- 1,3-pentanediol monoisobutyrate | |
acetic acid | |
acetylene black | |
adipic acid | |
adiponitrile | ADN |
allyl chloride | |
alpha- methylstyrene | |
aniline | |
benzaldehyde | |
benzoic acid | |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acrylate | butyl-a |
butyl benzyl phthalate | |
chlorinated polyethylene | |
cyclododecanol | |
decabromodiphenyl oxide | |
di-2 ethyl hexyl phthalate | |
di-n-hexyl adipate | |
diethanolamine | DEA |
diglycidyl ether of bisphenol-A | |
diisopropano- lamine | |
dimethyl terephthalate | DMT |
dimethyl-2, 6-naphthalene dicarboxylate | |
diphenyl oxide | |
diphenylamine | |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl chloride | |
ethylene dibromide | |
ethylenebistetra- bromo- phthalimide | |
formic acid | |
glycerine | |
hexabromocyclod odecane | |
hexamethylenedia mine | |
isobutyl acetate | |
isopropyl acetate | |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
methyl acrylate | metyl-A |
methyl chloroform | |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
monochloro- benzene | |
monoethanolamine | MEA |
monoisopro- panolamine | |
normal butyl acetate | butac |
normal propyl acetate | |
nylon 6/6 | |
ortho- dichlorobenzene | |
ortho-nitrochloro- benzene | |
paraformaldehyde | |
para- dichlorobenzene | |
para-nitrochloro- benzene | |
para-nitrophenol | |
pentaerythritol | |
perchloroethylene | |
phenol | |
phosphorous pentasulfide | |
phosphorous trichloride | |
poly 1,4 butylenetere-phthalate | |
poly (69/31 ethylene/ cyclohexylene- dimethylene terephthalate) | |
poly (96.5/3.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly (98.5/1.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly(ethyleneoxy) glycerol | |
poly(propylene) glycol | |
poly(propylene/ ethylene) glycol | |
poly(propyleneoxy) glycerol | |
poly(propyleneoxy)s ucrose | |
poly(propyleneoxy/ ethyleneoxy) benzenediamine | |
poly(propyleneoxy/ ethyleneoxy)diamine | |
poly(propyleneoxy/ ethyleneoxy)glycerol | |
poly(propyleneoxy/ ethyleneoxy)sucrose | |
polyalphaolefins | PAOs |
polybutene | |
polybutylene | |
polybutylene/ ethylene | |
polycarbonate | PC |
polyethylene terephthalate pellets | PET |
propanol | n-propanol |
sodium nitriolotriacetate monohydrate | |
synthetic linear fatty alcohols | |
synthetic linear fatty alcohol ethoxylates | |
terephthalic acid | purified terephthalic acid (PTA) |
tetrabromo- bisphenol-A | |
tetrachloro-phthalic anhydride | |
tetrahydrofuran | |
texanol benzyl phthalate | |
toluene diisocyanate | TDI |
toluenediamine | |
trichloroethylene | |
triethanolamine | TEA |
triisopropanolamine | |
trimethylolpropane | |
vinyl acetate | VAM |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
ammonium nitrate | |
carbon tetrachloride | |
chloroform | |
chromic acid | |
cumene | |
cyclohexane | CX |
ethyl alcohol for nonbeverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
ethyl methyl ketone | MEK |
ferrochrome ov 3 pct. carbon | |
ferrochromium nov 3 pct | |
ferronickel | |
formaldehyde | |
hydrogen peroxide | |
isophtalic acid | |
isopropyl alcohol | isopropanol (IPA) |
maleic anhydride | MA |
melamine | |
methanol | |
methylene chloride | |
nickel oxide | |
nickel powders | |
nickel waste and scrap | |
phenolic resins | |
phthalic anyhydride | PA |
polybutadiene | |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polyethylene resins, total | PE |
polypropylene | PP |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic rubber, not containing fillers | |
unwrought nickel | |
urea | |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
wrought nickel rods and wire |
Source: Deloitte
Thumbnail shows dollars. Image by Shutterstock
By Al Greenwood
June 2, 2022
Superfund Tax Overview
Chem firms brace for new US Superfund taxes
Author: Al Greenwood
2022/04/28
HOUSTON (ICIS)–Chemical companies are bracing themselves for the return of two Superfund taxes, one of which covers 42 chemicals made or imported in the US and another covering an even wider range of substances imported into the country.
- US will revive two Superfund taxes on 1 July 2022.
- One tax applies to 42 chemicals sold or used by producers or importers.
- Another tax could apply to many more substances that are imported.
The US is reviving the taxes as part of the $1trn Infrastructure Investment and Jobs Act that President Joe Biden signed into law in November.
The proceeds raised by the taxes will help replenish the government’s Superfund programme, which pays for clean-up at waste sites.
TAXABLE CHEMICALS
The tax levied on the 42 chemicals apply to some of the most common building blocks used in the industry.
These taxes are levied on a short-ton basis for the following 42 chemicals sold in the US by manufacturers or importers:
Taxable Chemical | Alias | $/Short Ton | Cent/lb |
Acetylene | 9.74 | 0.487 | |
Ammonia | 5.28 | 0.264 | |
Antimony Trioxide | 7.40 | 0.370 | |
Arsenic Trioxide | 6.82 | 0.341 | |
Barium sulphide | 4.60 | 0.230 | |
Benzene | 9.74 | 0.487 | |
Bromine | 8.90 | 0.445 | |
Butadiene | BD | 9.74 | 0.487 |
Butane | 9.74 | 0.487 | |
Butylene | 9.74 | 0.487 | |
Chlorine | 5.40 | 0.270 | |
Chromite | 3.04 | 0.152 | |
Cupric oxide | 7.18 | 0.359 | |
Cupric sulphate | 3.74 | 0.187 | |
Cuprous oxide | 7.94 | 0.397 | |
Ethylene | 9.74 | 0.487 | |
Hydrochloric acid | HCl | 0.58 | 0.029 |
Hydrogen fluoride | hydrofluoric acid (HF) | 8.46 | 0.423 |
Lead oxide | 8.28 | 0.414 | |
Methane | 6.88 | 0.344 | |
Naphthalene | 9.74 | 0.487 | |
Nitric acid | 0.48 | 0.024 | |
Phosphorus | 8.90 | 0.445 | |
Potassium dichromate | 3.38 | 0.169 | |
Potassium hydroxide | Caustic potash | 0.44 | 0.022 |
Propylene | 9.74 | 0.487 | |
Sodium dichromate | 3.74 | 0.187 | |
Sodium hydroxide | Caustic soda | 0.56 | 0.028 |
Stannic chloride | 4.24 | 0.212 | |
Stannous chloride | 5.70 | 0.285 | |
Sulphuric acid | 0.52 | 0.026 | |
Toluene | 9.74 | 0.487 | |
Xylene | 9.74 | 0.487 | |
Zinc chloride | 4.44 | 0.222 | |
Zinc sulphate | 3.80 | 0.190 | |
Antimony | 8.90 | 0.445 | |
Arsenic | 8.90 | 0.445 | |
Cadmium | 8.90 | 0.445 | |
Chromium | 8.90 | 0.445 | |
Cobalt | 8.90 | 0.445 | |
Mercury | 8.90 | 0.445 | |
Nickel | 8.90 | 0.445 |
Source: Deloitte
Paraxylene (PX), an isomer of xylene, would be subject to the tax once it is imported into the country, said Jeffery Wright, US oil, gas & chemicals tax leader for Deloitte, a consultancy. For xylene, the tax becomes due upon the first sale or the first use.
The tax does include some exceptions.
Exporters can apply for a refund, according to Deloitte. Companies that use the chemicals to make fuel, fertilizer or animal feed are also exempt.
Based on those exceptions, hydrofluoric acid or propylene used in the alkylation units of refineries could be exempt, since those chemicals would be used to make gasoline. Butane could avoid the tax if it is blended in gasoline.
Ammonia used to make nitrogen fertilizers could also avoid the tax.
Methane could escape taxes if it is burned as a fuel in power plants or used to make hydrogen for feedstock in refineries.
However, if the methane is used to make methanol for downstream chemical production, it could be taxed.
The tax also exempts coal derivatives and sulphuric acid that is a by-product of air-pollution control.
TAXABLE SUBSTANCES
The second tax covers substances sold or used by importers, according to Mayer Brown, a law firm.
The tax will cover imports that contain at least 20% of the 42 taxable chemicals. The tax rate would depend on the percent of the taxable chemicals contained by the substance.
For example, a short ton of a taxable substance that contains 20% propylene would be subject to an excise tax rate that is 20% of that for propylene. Since the propylene tax rate is $9.74/ton, the rate for the taxable substance would be $1.95/ton.
It is up to the importer to determine the rate for a taxable substance and maintain the records that would back their findings. If the company comes short, the IRS will impose a 10% tax based on the substance’s value when it enters the country.
So far, there are 151 taxable substances that could meet this 20% threshold, according to lists from the Internal Revenue Service (IRS).
One of these lists was published when the Superfund tax was last in effect in the 1990s, Wright said. Another list was from historic notices that also date from the 1990s. At the time, the substances in the two lists contained at least 50% of the taxable chemicals.
It is presumed that they still contain at least 20%, Wright said.
The table below shows some of the taxable substances in the lists that are followed by ICIS.
Chemical | Alias |
1,4 butanediol | BDO |
acetic acid | |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
adipic acid | |
adiponitrile | ADN |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acetate | butac |
butyl acrylate | butyl-a |
cumene | |
cyclohexane | CX |
dimethyl terephthalate | DMT |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl alcohol for non-beverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
formaldehyde | |
glycerine | |
isopropyl alcohol | isopropanol (IPA) |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
maleic anhydride | MA |
melamine | |
methanol | |
methyl acrylate | metyl-A |
methyl ethyl ketone | MEK |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
nylon 6/6 | |
phenol | |
phenolic resins | |
phthalic anhydride | PA |
polyalphaolefins | PAOs |
polycarbonate | PC |
polyethylene resins, total | PE |
polyethylene terephthalate pellets | PET |
polypropylene | PP |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propanol | n-propanol |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic linear fatty alcohol ethoxylates | |
synthetic linear fatty alcohols | |
synthetic rubber, not containing fillers | |
terephthalic acid | purified terephthalic acid (PTA) |
toluene diisocyanate | TDI |
urea | |
vinyl acetate | VAM |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
Source: Deloitte
Some of these taxes will be problematic. The US has just one plant that makes melamine. It has no domestic production for methyl ethyl ketone (MEK) and relies solely on imports.
The list could be modified to add taxable substances that meet the 20% threshold or remove them that no longer meet the threshold, said Shawn O’Brien a partner at Mayer Brown. Advances or changes in production methods could cause some of the substances to contain less than 20% of the taxable chemicals.
For example, some of these chemicals can be made with renewable feedstock, such as butanediol (BDO), polyethylene (PE) and monoethylene glycol (MEG). Others could be made from feedstock derived from chemically recycled plastics.
PASSING THE BUCK
If companies choose to pass through the taxes, it will likely appear as line items, O’Brien said. He could see the tax being passed down to end consumers.
In total, the amount could be substantial.
The Superfund taxes could raise $452m in 2022 and $1.17bn in 2023, according to the congressional Joint Committee on Taxation. By the time the tax ends on 31 December 2031, the proceeds could reach $14.5bn.
Wright said that companies could evaluate existing contracts with suppliers and customers to see if they can pass along the taxes. Ultimately, each company will have to determine the pros and cons of absorbing the taxes versus passing them along.
To make things clearer for companies, the American Chemistry Council (ACC), a trade group, has asked that the IRS publish tax rates for the taxable substances.
It also asked the IRS to include the harmonised tariff schedule (HTS) numbers and the chemical abstract service numbers of the taxable substances.
The HTS numbers are used by countries around the world to determine which products are subject to a specific tariff. Such numbers allow governments to impose the tariffs in a consistent and clear way.
The list of 151 taxable substances could certainly use some more clarity. It lists polypropylene and polypropylene resins as separate items. HTS numbers could reveal whether the tax applies to two different grades of polypropylene or if the IRS simply listed the same product twice.
The ACC noted that the 20% threshold could cause a lot of chemicals to fall under the definition of a taxable substance. The ACC would like the government to publish rules under which companies could request the removal of chemicals from the list of taxable substances.
The following table shows the full list of the 151 taxable substances that, if imported, would be subject to the Superfund tax.
Chemical | Alias |
1,4 butanediol | BDO |
1,3-butylene glycol | |
1,5,9- cyclododecatriene | |
2-ethyl hexanol | |
2-ethylhexyl acrylate | |
2,2,4-trimethyl- 1,3-pentanediol diisobutyrate | |
2,2,4-trimethyl- 1,3-pentanediol monoisobutyrate | |
acetic acid | |
acetylene black | |
adipic acid | |
adiponitrile | ADN |
allyl chloride | |
alpha- methylstyrene | |
aniline | |
benzaldehyde | |
benzoic acid | |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acrylate | butyl-a |
butyl benzyl phthalate | |
chlorinated polyethylene | |
cyclododecanol | |
decabromodiphenyl oxide | |
di-2 ethyl hexyl phthalate | |
di-n-hexyl adipate | |
diethanolamine | DEA |
diglycidyl ether of bisphenol-A | |
diisopropano- lamine | |
dimethyl terephthalate | DMT |
dimethyl-2, 6-naphthalene dicarboxylate | |
diphenyl oxide | |
diphenylamine | |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl chloride | |
ethylene dibromide | |
ethylenebistetra- bromo- phthalimide | |
formic acid | |
glycerine | |
hexabromocyclod odecane | |
hexamethylenedia mine | |
isobutyl acetate | |
isopropyl acetate | |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
methyl acrylate | metyl-A |
methyl chloroform | |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
monochloro- benzene | |
monoethanolamine | MEA |
monoisopro- panolamine | |
normal butyl acetate | butac |
normal propyl acetate | |
nylon 6/6 | |
ortho- dichlorobenzene | |
ortho-nitrochloro- benzene | |
paraformaldehyde | |
para- dichlorobenzene | |
para-nitrochloro- benzene | |
para-nitrophenol | |
pentaerythritol | |
perchloroethylene | |
phenol | |
phosphorous pentasulfide | |
phosphorous trichloride | |
poly 1,4 butylenetere-phthalate | |
poly (69/31 ethylene/ cyclohexylene- dimethylene terephthalate) | |
poly (96.5/3.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly (98.5/1.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly(ethyleneoxy) glycerol | |
poly(propylene) glycol | |
poly(propylene/ ethylene) glycol | |
poly(propyleneoxy) glycerol | |
poly(propyleneoxy)s ucrose | |
poly(propyleneoxy/ ethyleneoxy) benzenediamine | |
poly(propyleneoxy/ ethyleneoxy)diamine | |
poly(propyleneoxy/ ethyleneoxy)glycerol | |
poly(propyleneoxy/ ethyleneoxy)sucrose | |
polyalphaolefins | PAOs |
polybutene | |
polybutylene | |
polybutylene/ ethylene | |
polycarbonate | PC |
polyethylene terephthalate pellets | PET |
propanol | n-propanol |
sodium nitriolotriacetate monohydrate | |
synthetic linear fatty alcohols | |
synthetic linear fatty alcohol ethoxylates | |
terephthalic acid | purified terephthalic acid (PTA) |
tetrabromo- bisphenol-A | |
tetrachloro-phthalic anhydride | |
tetrahydrofuran | |
texanol benzyl phthalate | |
toluene diisocyanate | TDI |
toluenediamine | |
trichloroethylene | |
triethanolamine | TEA |
triisopropanolamine | |
trimethylolpropane | |
vinyl acetate | VAM |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
ammonium nitrate | |
carbon tetrachloride | |
chloroform | |
chromic acid | |
cumene | |
cyclohexane | CX |
ethyl alcohol for nonbeverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
ethyl methyl ketone | MEK |
ferrochrome ov 3 pct. carbon | |
ferrochromium nov 3 pct | |
ferronickel | |
formaldehyde | |
hydrogen peroxide | |
isophtalic acid | |
isopropyl alcohol | isopropanol (IPA) |
maleic anhydride | MA |
melamine | |
methanol | |
methylene chloride | |
nickel oxide | |
nickel powders | |
nickel waste and scrap | |
phenolic resins | |
phthalic anyhydride | PA |
polybutadiene | |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polyethylene resins, total | PE |
polypropylene | PP |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic rubber, not containing fillers | |
unwrought nickel | |
urea | |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
wrought nickel rods and wire |
Source: Deloitte
Thumbnail shows dollars. Image by Shutterstock
By Al Greenwood
May 31, 2022
Lockdown Lifted
Shanghai Is Finally Lifting Its COVID Lockdown
by Tyler DurdenTuesday, May 31, 2022 – 06:00 PM
After another two months of misery and lockdowns, Shanghai is finally starting to lift its Covid restrictions (again).
Authorities in the Chinese city have started “dismantling fences around housing compounds and ripping police tape off public squares and buildings”, according to a report published on Tuesday by Reuters.
On Monday night, residents were being allowed out of their compounds for the first time in two months, the report says. Despite the lockdowns starting to come to an end, “there was a sense of wariness and anxiety among residents,” Reuters reported.
Joseph Mak, who works in education, commented: “I feel a little nervous. It’s hard to believe it’s actually happening.”
Not only has the recent bout of lockdowns triggered public protests and anger in the city of more than 25 million people, it also threw another sizeable wrench into the global supply chain at a time when the world could least afford it.
Shanghai government spokeswoman Yin Xin told reporters this week: “This is a day that we dreamed of for a very long time. Everyone has sacrificed a lot. This day has been hard-won, and we need to cherish and protect it, and welcome back the Shanghai we are familiar with and missed.”
Despite the lockdowns being lifted, residents will still have to test every 72 hours to take public transportation and those who test positive will still be subjected to China’s “normal” quarantine procedures.
Shanghai brought COVID under control at “very significant personal and economic cost”, commented Julian MacCormac, chair of the British Chamber in China. He continued: “What has materially changed to ensure that this will not happen again? That’s where the uncertainty lies.”
Todd Pearson, managing director of Camel Hospitality Group added: “I’m hopeful that they will rush things along to restart the economy. I just hope it’s not at the cost of more outbreaks. I’m not sure many businesses or the people could handle much more.”
Qu Weiguo, a professor at the Fudan University school of foreign languages even wrote online: “The Shanghai government needs to make a public apology in order to obtain the understanding and support of the people of Shanghai and repair the damaged relationship between the government and the people.”
https://www.zerohedge.com/markets/shanghai-finally-lifting-its-covid-lockdown
May 31, 2022
Lockdown Lifted
Shanghai Is Finally Lifting Its COVID Lockdown
by Tyler DurdenTuesday, May 31, 2022 – 06:00 PM
After another two months of misery and lockdowns, Shanghai is finally starting to lift its Covid restrictions (again).
Authorities in the Chinese city have started “dismantling fences around housing compounds and ripping police tape off public squares and buildings”, according to a report published on Tuesday by Reuters.
On Monday night, residents were being allowed out of their compounds for the first time in two months, the report says. Despite the lockdowns starting to come to an end, “there was a sense of wariness and anxiety among residents,” Reuters reported.
Joseph Mak, who works in education, commented: “I feel a little nervous. It’s hard to believe it’s actually happening.”
Not only has the recent bout of lockdowns triggered public protests and anger in the city of more than 25 million people, it also threw another sizeable wrench into the global supply chain at a time when the world could least afford it.
Shanghai government spokeswoman Yin Xin told reporters this week: “This is a day that we dreamed of for a very long time. Everyone has sacrificed a lot. This day has been hard-won, and we need to cherish and protect it, and welcome back the Shanghai we are familiar with and missed.”
Despite the lockdowns being lifted, residents will still have to test every 72 hours to take public transportation and those who test positive will still be subjected to China’s “normal” quarantine procedures.
Shanghai brought COVID under control at “very significant personal and economic cost”, commented Julian MacCormac, chair of the British Chamber in China. He continued: “What has materially changed to ensure that this will not happen again? That’s where the uncertainty lies.”
Todd Pearson, managing director of Camel Hospitality Group added: “I’m hopeful that they will rush things along to restart the economy. I just hope it’s not at the cost of more outbreaks. I’m not sure many businesses or the people could handle much more.”
Qu Weiguo, a professor at the Fudan University school of foreign languages even wrote online: “The Shanghai government needs to make a public apology in order to obtain the understanding and support of the people of Shanghai and repair the damaged relationship between the government and the people.”
https://www.zerohedge.com/markets/shanghai-finally-lifting-its-covid-lockdown