The Urethane Blog
Everchem Updates
VOLUME XXI
September 14, 2023
Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more
April 28, 2022
Olin Corp Force Majeure Notice. April 22th, 2022
In Pricing by PattyHApril 22, 2022
Due to circumstances beyond our reasonable control, Olin Corporation, for and on behalf of itself
and its subsidiaries (collectively, “Olin”), hereby notifies you that Olin is declaring force majeure.
This force majeure declaration applies system-wide for the following products: caustic soda
(membrane and diaphragm grades), chlorine, bleach, hydrochloric acid, ethylene dichloride,
methylene chloride, chloroform and perchloroethylene. This force majeure declaration also
includes hydrogen produced at our Plaquemine, LA facility.
Olin is experiencing ongoing disruptions across our system, including significant, unplanned
production and power outages at our facilities in Plaquemine, Louisiana and Freeport, Texas.
Olin is working diligently to minimize the impact of these events and restore normal operations
as quickly and safely as possible. The duration of these interruptions is uncertain at this time.
Your account manager will be in touch with you as soon as possible to discuss how this event may
affect your orders. We regret this unforeseen situation and thank you for your continued business
relationship.
Click here to read the official announcement.
Be sure to reach out to your dedicated GreenChem Sales Rep for further insight on how the latest chemical news might effect you.
April 28, 2022
Olin Corp Force Majeure Notice. April 22th, 2022
In Pricing by PattyHApril 22, 2022
Due to circumstances beyond our reasonable control, Olin Corporation, for and on behalf of itself
and its subsidiaries (collectively, “Olin”), hereby notifies you that Olin is declaring force majeure.
This force majeure declaration applies system-wide for the following products: caustic soda
(membrane and diaphragm grades), chlorine, bleach, hydrochloric acid, ethylene dichloride,
methylene chloride, chloroform and perchloroethylene. This force majeure declaration also
includes hydrogen produced at our Plaquemine, LA facility.
Olin is experiencing ongoing disruptions across our system, including significant, unplanned
production and power outages at our facilities in Plaquemine, Louisiana and Freeport, Texas.
Olin is working diligently to minimize the impact of these events and restore normal operations
as quickly and safely as possible. The duration of these interruptions is uncertain at this time.
Your account manager will be in touch with you as soon as possible to discuss how this event may
affect your orders. We regret this unforeseen situation and thank you for your continued business
relationship.
Click here to read the official announcement.
Be sure to reach out to your dedicated GreenChem Sales Rep for further insight on how the latest chemical news might effect you.
April 26, 2022
Bank of America sounding the alarm on collapsing freight demand
Demand for truckers is at 22-month low
Rachel PremackMonday, April 25, 2022 3 minutes read
Listen to this article 0:00 / 3:50 BeyondWords
Trucking demand is “near freight recession levels,” according to Bank of America. Shippers’ outlook on rates, capacity and inventory levels are matching attitudes not seen since May and June 2020, when pandemic lockdowns sent freight volumes into a historic decline.
In a Friday note to investors, Ken Hoexter, the managing director of Bank of America’s trucking research, wrote that shippers’ view of demand is down 23% year-over-year. The proprietary Truckload Demand Indicator hit 58 — the lowest since June 2020.
Hoexter said the shippers’ view of rates have “melt(ed) down,” hitting a low not seen since May 2020. Bank of America’s survey represented views from 44 shippers in industries including retail, consumer goods and manufacturing.
Meanwhile, these shippers are finding it easy to find capacity to move their loads; outlook on capacity hit its highest level since June 2020. They also noted their view on inventory levels had climbed to its highest point since May 2020.
A few anecdotal examples from the Bank of America survey illustrate that data. One food shipper said it was receiving more cold calls from freight brokers rather than those brokers having to seek capacity for shipments on their own. A shipper moving home-building products said flatbed capacity is loosening slightly, though is still tight. And a representative of a forest products company said rates were beginning to soften as truck capacity opened up.
Other indicators are pointing to freight recession
FreightWaves has previously reported that a “sharp, painful downturn” in the U.S. trucking market is coming. The Friday note to investors is the latest indicator of the trucking bloodbath that many in the industry are spotting.
“The way the rates are, you have to run twice as hard to make ends meet,” Dan Guzman, a San Antonio-based fleet owner, recently told FreightWaves.
One key indicator is the FreightWaves SONAR Outbound Tender Reject Index (SONAR: OTRI.USA) . At this time last year, truckers were rejecting a whopping 25.76% of loads they had previously arranged through contract. That indicated they were able to find better loads through the spot market, where shipments are available on demand.
Now that spot market rates have declined, more drivers are moving their contracted loads. As of Sunday, the rejection rate had sunk to 9.92%.
Earlier this month, the Cass Transportation Index Report said the freight market is in a slowdown, though Cass analysts said it’s too soon to declare a recession yet.
A key leading indicator
Freight is often looked at as a bellwether for the rest of the economy. If industries ranging from retail to housing to lumber are estimating that they’ll need fewer truckers, many economists see that as an omen of an economic downturn. If people aren’t buying or building as much stuff, there’s less of a need for truckers. Trucks move 72% of all freight.
One 2019 study from Convoy, a trucking brokerage firm, found that six out of 12 trucking recessions led to macroeconomic downturns. For example, the trucking industry dipped in April 2006 — more than a year before the Great Recession slammed the larger economy.
Trucking experiences recessionary periods twice as much as the rest of the economy. But for the 2 million American truck drivers who power much of this industry, the effects can be brutal.
“Like any recession, these periodic freight industry recessions cause real turmoil for the people who work in freight: Businesses go bankrupt, people lose their livelihoods, and families are disrupted,” said the Convoy report.
Do you work in the trucking industry? Share your story at rpremack@freightwaves.com.
April 26, 2022
Bank of America sounding the alarm on collapsing freight demand
Demand for truckers is at 22-month low
Rachel PremackMonday, April 25, 2022 3 minutes read
Listen to this article 0:00 / 3:50 BeyondWords
Trucking demand is “near freight recession levels,” according to Bank of America. Shippers’ outlook on rates, capacity and inventory levels are matching attitudes not seen since May and June 2020, when pandemic lockdowns sent freight volumes into a historic decline.
In a Friday note to investors, Ken Hoexter, the managing director of Bank of America’s trucking research, wrote that shippers’ view of demand is down 23% year-over-year. The proprietary Truckload Demand Indicator hit 58 — the lowest since June 2020.
Hoexter said the shippers’ view of rates have “melt(ed) down,” hitting a low not seen since May 2020. Bank of America’s survey represented views from 44 shippers in industries including retail, consumer goods and manufacturing.
Meanwhile, these shippers are finding it easy to find capacity to move their loads; outlook on capacity hit its highest level since June 2020. They also noted their view on inventory levels had climbed to its highest point since May 2020.
A few anecdotal examples from the Bank of America survey illustrate that data. One food shipper said it was receiving more cold calls from freight brokers rather than those brokers having to seek capacity for shipments on their own. A shipper moving home-building products said flatbed capacity is loosening slightly, though is still tight. And a representative of a forest products company said rates were beginning to soften as truck capacity opened up.
Other indicators are pointing to freight recession
FreightWaves has previously reported that a “sharp, painful downturn” in the U.S. trucking market is coming. The Friday note to investors is the latest indicator of the trucking bloodbath that many in the industry are spotting.
“The way the rates are, you have to run twice as hard to make ends meet,” Dan Guzman, a San Antonio-based fleet owner, recently told FreightWaves.
One key indicator is the FreightWaves SONAR Outbound Tender Reject Index (SONAR: OTRI.USA) . At this time last year, truckers were rejecting a whopping 25.76% of loads they had previously arranged through contract. That indicated they were able to find better loads through the spot market, where shipments are available on demand.
Now that spot market rates have declined, more drivers are moving their contracted loads. As of Sunday, the rejection rate had sunk to 9.92%.
Earlier this month, the Cass Transportation Index Report said the freight market is in a slowdown, though Cass analysts said it’s too soon to declare a recession yet.
A key leading indicator
Freight is often looked at as a bellwether for the rest of the economy. If industries ranging from retail to housing to lumber are estimating that they’ll need fewer truckers, many economists see that as an omen of an economic downturn. If people aren’t buying or building as much stuff, there’s less of a need for truckers. Trucks move 72% of all freight.
One 2019 study from Convoy, a trucking brokerage firm, found that six out of 12 trucking recessions led to macroeconomic downturns. For example, the trucking industry dipped in April 2006 — more than a year before the Great Recession slammed the larger economy.
Trucking experiences recessionary periods twice as much as the rest of the economy. But for the 2 million American truck drivers who power much of this industry, the effects can be brutal.
“Like any recession, these periodic freight industry recessions cause real turmoil for the people who work in freight: Businesses go bankrupt, people lose their livelihoods, and families are disrupted,” said the Convoy report.
Do you work in the trucking industry? Share your story at rpremack@freightwaves.com.
April 25, 2022
DOW Q1 2022 Earnings Call Transcript
Jim FitterlingChairman and Chief Executive Officer at DOW
Thank you, Pankaj. Beginning on slide 3, we entered our 125th year with global scale, a differentiated portfolio, unmatched feedstock and derivative flexibility and a track record of operational excellence, all of which enables us to continue to deliver more resilient earnings and cash flow in a variety of economic and geopolitical environments and positions us to deliver mid-cycle earnings above pre-pandemic levels. This is reflected in our first quarter results. Team Dow delivered top and bottom line growth, both year-over-year and sequentially. We capitalized on end market demand strength across the breadth of our diverse portfolio and mitigated the impacts of rising raw material and energy costs.
Year-over-year sales growth was 28% with gains in every operating segment, business and region. Sequentially, sales increased 6%, driven by gains in Performance Materials & Coatings and Packaging & Specialty Plastics. Local price was up 28% year-over-year, reflecting gains in all operating segments, businesses and regions. Price was up 2% sequentially, led by silicones and polyurethanes. Volume increased 3% year-over-year with gains in all operating segments and in the United States and Canada. Sequentially, volume was up 5%, reflecting strong demand for silicones and packaging applications.
In Industrial Intermediates & Infrastructure, our alkoxylates capacity and other efficiency investments are also on track to start up this year and in total, are expected to generate more than $50 million in run rate EBITDA with returns greater than 20%. In order to support the accelerating demand growth across pharma, cleaning and energy sectors, today, we’re proud to announce another series of alkoxylate investments in the United States and Europe.
All in all, by 2025, we’re projecting a cumulative underlying EBITDA improvement of approximately $2 billion, driven by projects like incremental high-margin polyethylene and functional polymers capacity to serve growing demand for flexible packaging, debottlenecking projects to enhance our mix toward polyurethane systems serving mobility and consumer applications, and new capabilities to formulate differentiated silicones, including silicone adhesives for next-gen electronics, mobility and infrastructure applications.
Arun Viswanathan Analyst at RBC Capital Markets
Great. Thanks for taking my questions. Good morning. So I guess, two questions real quickly. So could you just give us a quick outlook on MDI? And then also maybe if you could discuss the certain situation that you see as far as inventories in polyethylene. We know that there’s some tied up in supply chain, but do you see that alleviating over the next couple of months? Thanks.
Jim FitterlingChairman and Chief Executive Officer at DOW
Yeah. Look, good question, Arun. On MDI, the balances through 2026 are pretty good. Demand looks like it’s going to continue to outpace supply through 2026. So I think that continues to be positive for MDI. On polyethylene, as I mentioned, in the Gulf Coast — in the U.S. Gulf Coast, we’ve seen inventories come down. Inventories were down in March by about 200 million pounds and days of demand decreased by about 9%. So it’s about 46 days of demand, and that’s pretty — if I looked at all of last year, they probably ran around 45 days all of last year. So I’d say pretty normal. And that is with still some congestion in the ports for the export channel.
So I would say supply challenges will still put upward pressure about 3 to 4 days on DDI. And half of that’s due to third-party congestion and the other half is inventories that were built to cover turnaround season in second quarter, which is typically the heaviest turnaround season. Based on the way things are moving, every month, we’re seeing a little bit better export flows out of the Gulf Coast. So I think if we can keep steady improvement through the year, hopefully, we can get back to a more normal kind of predictable rate by the end of this year.
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