Bolivia to restart fertilizer production capacity idled over a year; U.S. chemical industry supports confirmation of Katherine Tai; Inter Pipeline’s board chair retires early amid hostile bid; Oil market rebounded but still faces high uncertainty
Bolivia to accelerate restart of fertilizer production capacity down for longer than a year
A team has been set up to work to restart as soon as possible the state-owned ammonia and urea facilities in Cochabamba, Bolivia, according to a March 10 report from ATB Digital online media.
Legislator Omar Yujra, who heads the committee for planning and economic policy, said the plant must “once again generate revenue.” The company needs to re-establish operations and recapture domestic and export markets in Brazil, Argentina, Paraguay, Uruguay and Peru, he said.
Brazil and Argentina were the two main export markets, representing about 86% for the total of the sales abroad since 2018, when exports started, the ATB Digital report said. The urea plant, started in 2017, did not operate in 2020. The next meetings to evaluate advances will take place on April 9.
The efforts come as on Oct. 2020 Luis Arce, backed by former President Evo Morales, won presidential elections in Bolivia in a vote result that has completely changed the country’s political outlook.
Bolivia saw former President Morales fled amid violence in search of asylum in November 2019. The violence started after election results Morales claimed he won but were contested by the opposition. Now Jeanine Anez, who became interim president as Morales sought asylum, is in trouble herself. She said on March 19 that she was starting a hunger strike as she faced charges including sedition and conspiracy.
According to another report also by ATB Digital but from Jan. 31, Wilson Zelaya, president of Bolivian state owned hydrocarbons company Yacimientos Petroliferos Fiscales Bolivianos (YPFB), said that fertilizer prices have spiked since the shutdown.
In 2020 the country stopped “being self-sufficient in fertilizers” to become once again an importer, he said. The plant that made this short-lived self-sufficiency had been inaugurated as recently as in 2017. The plant was built at a cost of $951 million to produce 600,000 tonnes per year of urea. Morales said at the time it was the biggest investment in the country's history.
Morales nationalized in 2006 the country’s gas energy industry and renegotiate natural gas export contracts to improve prices that had long been a fraction of international prices, mostly for consumption in Brazil and Argentina. Morales used part of the new revenue to start to build a petrochemical industry from the most basic, a chemical fertilizer plant.
Brazil and Argentina were the two main export fertilizer markets, representing about 86% for the total of the sales realized since 2018 when exports started, the ATB Digital report said. The urea plant did not operate in 2020, a year marked by political instability. Morales was out of Bolivia from November 2019 to November 2020.
U.S. chemical industry supports confirmation of Katherine Tai for Trade Representative
The American Chemistry Council’s (ACC) President and CEO Chris Jahn said on March 17 that Katherine Tai’s confirmation as U.S. Trade Representative may bring more predictability to U.S. future trade policy.
“We look forward to working with Ambassador Tai through a more open, transparent, and predictable process to help the administration advance its ambitious trade agenda,” the ACC said.
The “ACC advocates for smart, targeted trade policies that will create a robust business environment for our industry and, as a result, the countless downstream businesses that depend on chemistry,” the association said.
Tai received confirmation as U.S. Trade Representative on March 17. Born of parents who grew up in Taiwan, she is fluent in Mandarin. Tai, who succeeds Robert Lighthizer, also has a law degree from Harvard Law School. Her experience includes work in the U.S. House of Representatives Ways and Means Committee.
“In the international arena, we face stiffening competition from a growing and ambitious China, a China whose economy is directed by central planners who are not subject to the pressures of political pluralism, democratic elections, or popular opinion,” Tai said in January, according to The Voice of America.
According to The Voice of America, Tai was also for three years the chief counsel for China Trade Enforcement, which involved managing U.S. disputes against China before World Trade Organization’s officials.
Inter Pipeline’s board chair retires early amid hostile bid
Richard Shaw, who was until March 18 Inter Pipeline’s Chair of the Board of Directors, retired immediately and left his post to board member Margaret McKenzie.
Shaw, 75, had planned to make the announcement at the annual shareholder meeting for this year but accelerated the announcement due to health reasons, the company said.
The change occurs after Inter Pipeline became the object in late February of an unsolicited takeover bid from Brookfield Infrastructure Corp. that comes as the company begins the final construction year of its propane de-hydrogenator (PDH)/polypropylene (PP) project near Edmonton in Calgary.
The board has recommended shareholders not to sell.
"We greatly value his contributions and his strong support of Inter Pipeline's important growth project, the Heartland Petrochemical Complex, which is nearing completion and about to add significant shareholder value,” McKenzie said.
Brookfield Infrastructure announced on Feb. 22 its plans to make a formal offer to acquire all of the outstanding common shares of Inter Pipeline before later disclosing details.
Oil market rebounded but still faces high uncertainty
Oil markets have rebounded from the massive demand shock triggered by Covid-19 but still face a high degree of uncertainty that is still testing the industry as never before, according to a March 17 report by the International Energy Agency.
“The global refining sector is struggling with excess capacity. Shutdowns of at least 6 million barrels per day will be required to allow utilization rates to return to normal levels,” according to the report.
“The petrochemical industry will continue to lead demand growth, with ethane, LPG and naphtha together accounting for 70% of the forecast increase in oil product demand to 2026,” the report said.
By Reuters Events