Methylene chloride

HOUSTON (ICIS)–The US can maintain nearly all the plastic and chemical tariffs it imposed this year after an appeals court granted on Thursday the government's request to stay the judgment of a lower court. The stay will remain in place while the case is under consideration by the US Court of Appeals for the Federal Circuit. Earlier, the US lost a judgment over its tariffs in the US Court of International Trade. That lower court ruled that the president exceeded its authority when it imposed tariffs under the International Emergency Economic Powers Act (IEEPA). These IEEPA tariffs included nearly all of the duties that the US imposed in 2025 on imports of commodity plastics and chemicals. Had the appeals court rejected the government's request for a stay, then the US would have had 10 calendar days to withdraw the tariffs it imposed under IEEPA. The tariffs covered by the ruling include the following: The 10% baseline tariffs against most of the world that the US issued during its so-called Liberation Day event on 2 April. These include the reciprocal tariffs that were later paused. The US issued the tariffs under Executive Order 14257, which intended to address the nation's trade deficit. The tariffs that the US initially imposed on imports from Canada under Executive Order 14193. These were intended to address drug smuggling. The US later limited the scope of these tariffs to cover imported goods that do not comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement (USMCA). The tariffs that the US initially imposed on imports from Mexico under Executive Order 14194. These were intended to address illegal immigration and drug smuggling. Like the Canadian tariffs, these were later limited to cover imported goods that did not comply with the USMCA. The 20% tariffs that the US imposed on imports from China under Executive Order 14195, which was intended to address drug smuggling. Because the appeals court granted the government's request for a stay, the US can maintain the IEEPA tariffs. The ruling did not cover sectoral tariffs imposed on specific products like steel, aluminium and auto parts, and it does not cover the duties that the US imposed on Chinese imports during the first term of US President Donald Trump. IMPLICATIONS OF THE RULINGIf the ruling is upheld by the higher courts, it could bring some imports of plastics and chemicals back to the US while lowering costs of other products. While the US has large surpluses in many plastics and chemicals, it still imports several key commodities. US states that border Canada import large amounts of polyethylene (PE) and other plastics from that country because it is closer than the nation's chemical hubs along the Gulf Coast. Other significant imports include base oils, ammonia, polyethylene terephthalate (PET), methylene diphenyl diisocyanate (MDI), methanol and aromatics such as benzene, toluene and mixed xylenes (MX). RULING COULD REDIRECT CHINESE EXPORTS OF PLASTIC PRODUCTSThe IEEPA tariffs of the US caused countries to redirect exports of plastics and chemicals to other markets, particularly to Europe. The result depressed prices for those plastics and chemicals. If the ruling holds, some of those exports could return to the US and reduce the quantity of exports arriving in Europe. The IEEPA tariffs had a similar effect on the plastic products exports by China. Those exports were redirected to other countries, especially southeast Asia. These redirected shipments flooded those countries with plastic goods, displacing local products and lowering domestic demand for the plastics used to make those products. If the ruling is restored by higher courts, then it could direct many of those shipments back to the US, although they would unlikely affect shipments of auto parts. Those shipments are covered by the sectoral tariffs, and the court ruling did not void those tariffs. RULING REMOVES BASIS FOR RETALIATORY TARIFFS AGAINST US PLASTICS, CHEMSChina had already imposed blanket tariffs in retaliation to the IEEPA tariffs the US imposed on its exports. China unofficially granted waivers for US imports of ethane and PE, but those for liquefied petroleum gas (LPG) were still covered by the duty. China relies on such imports as feedstock for its large fleet of propane dehydrogenation (PDH) units, which produce on-purpose propylene. If upheld, the ruling could restore many of those exports and improve propylene margins for those PDH units. The EU was preparing to impose retaliatory tariffs on exports of nearly every major commodity plastic from the US. Other proposals would cover EU imports of oleochemicals, tall oil, caustic soda and surfactants from the US. Canada also prepared a list of retaliatory tariffs that covered US imports of PE, polypropylene (PP) and other plastics, chemicals and fertilizers. If the ruling holds, it would remove the basis for the proposed tariffs of Canada and the EU as well as the existing ones already imposed by China. RULING WOULD NOT ELIMINATE THREAT OF FUTURE TARIFFSEven if the higher courts uphold the ruling and bars tariffs under IEEPA, the US has other means to impose duties that are outside of the bounds of the ruling. Section 122 of the Trade Act of 1974. Such tariffs would be limited to 15%, could last for 150 days and address balance of payment deficits. Tariffs imposed under the following statutes would require federal investigations, which could delay them by several months. Section 338 of the Tariff Act of 1930. The president can impose tariffs of up to 50% against countries that discriminate against US commerce. Section 301 of the Trade Act of 1974, which addresses unfair trade practices. This was the basis on the tariffs imposed on many Chinese imports during the peak of the trade war between the two countries. Section 232 of the Trade Expansion Act of 1962, which addresses imports with implications for national security. Trump used this provision to impose tariffs on steel and aluminum. The US has started Section 232 on the following imports: Pharmaceutical and active pharmaceutical ingredient (APIs) – Section 232 Semiconductors and semiconductor manufacturing equipment – Section 232 Medium and heavy-duty trucks, parts – Section 232 Critical minerals – Section 232 Copper – Section 232 Timber and lumber – Section 232 Commercial aircraft and jet engines – Section 232 Ship-to-shore cranes assembled in China or made with parts from China – Section 301 Shipbuilding – Section 301 The case number for the appeal is 2025-1812. The original lawsuit was filed in the US Court of International Trade by the plaintiffs VOS Selections, Genova Pipe, Microkits, FishUSA and Terry Precision Cycling. The case number is 25-cv-00066. Thumbnail Photo: A container ship, which transports goods overseas. (Image by Costfoto/NurPhoto/Shutterstock) Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy

29-May-2025

HOUSTON (ICIS)–A US court ruled on Wednesday that the president cannot impose global tariffs under an emergency act, a judgment that would void many of the tariffs that the nation imposed in 2025 against nearly every country in the world. The administration of US President Donald Trump filed a notice that it was appealing the ruling. Under the judgment issued by the US Court of International Trade, the US has 10 calendar days to withdraw the following tariffs: – The 10% baseline tariffs against most of the world that the US issued during its so-called Liberation Day event on 2 April. These include the reciprocal tariffs that were later paused. The US issued the tariffs under Executive Order 14257, which intended to address the nation's trade deficit. – The tariffs that the US initially imposed on imports from Canada under Executive Order 14193. These were intended to address the flow of illicit drugs. The US later limited the scope of these tariffs to cover imported goods that do not comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement (USMCA). – The tariffs that the US initially imposed on imports from Mexico under Executive Order 14194. These were intended to address the flow of immigrants and illicit drugs. Like the Canadian tariffs, these were later limited to cover imported goods that did not comply with the USMCA. – The 20% tariffs that the US imposed on imports from China under Executive Order 14195, which was intended to address the flow of illicit drugs. The US imposed these tariffs under the International Emergency Economic Powers Act (IEEPA), which gives the president authority to take actions to address a severe national security threat. To justify the use of the IEEPA, Trump declared that the trade deficit, drug smuggling and illegal immigration constituted national emergencies. If the ruling stands, it would remove the tariffs that the US has imposed on many imports of commodity plastics and chemicals. By extension, the ruling would remove the threat of retaliatory tariffs that other countries could impose on the nation's substantial exports of polyethylene (PE), polyvinyl chloride (PVC) and other ethylene derivatives. The court's order does not cover the sectoral tariffs that the US has imposed on specific products such as steel and aluminium. In addition, it does not cover the Section 301 tariffs that the US imposed against Chinese imports during Trump's first term. These tariffs were intended to address unfair trade practices. RATIONALE BEHIND THE COURT'S JUDGMENTThe US constitution delegates the power to impose tariffs to congress. Although congress has delegated trade authority to the president, it had set clear limitations that allowed the legislature to retain the power to impose tariffs. The IEEPA does not delegate unbounded tariff authority to the president, the court said. "Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional." The authority that congress delegated to the president under IEEPA is limited and does not include the power to impose any tariffs, the court said. COURT FINDS NO EMERGENCYEven if the president could impose tariffs under IEEPA, the trade deficit does not constitute an emergency, the court ruled. The US already has a statute to address trade deficits under Section 122. "Section 122 removes the president’s power to impose remedies in response to balance-of-payments deficits, and specifically trade deficits, from the broader powers granted to a president during a national emergency under IEEPA by establishing an explicit non-emergency statute with greater limitations," it said. In addition, the court found that drug trafficking and illegal immigration fail to meet the emergency threshold established under IEEPA. To meet that threshold, the emergency must have a substantial part of its source outside of the US and it must pose a threat to the nation's national security, foreign policy or economy. Also, the emergency must be unusual and extraordinary. The action that the president takes must deal directly with the threat. The court found that the tariffs fail to directly deal with drug trafficking and illegal immigration. While they may provide the US with leverage to negotiate agreements, such leverage does not meet the threshold of addressing the emergency at hand. The lawsuit was filed in the US Court of International Trade by the plaintiffs VOS Selections, Genova Pipe, Microkits, Fishusa and Terry Precision Cycling. The case number is 25-cv-00066. Thumbnail shows containers, which are used in international trade. Image by Costfoto/NurPhoto/Shutterstock. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy

29-May-2025

SAO PAULO (ICIS)–Brazil's foreign trade committee Gecex has postponed a meeting where it was expected to decide on imposing antidumping duties (ADDs) polyethylene (PE) imports from the US and Canada. The decision has created uncertainty in the country's PE market, which widely expected the ADDs to be implemented from June. In a note on its website, Gecex stated the “meeting will be rescheduled” but offered no further details. A spokesperson for Gecex said to ICIS it did not have any further information to offer. Gecex's meeting this week planned to discuss its investigation into allegations by Braskem, Brazil's sole PE producer, that US and Canadian producers are exporting PE to Brazil below fair market value. According to market sources, Braskem had already been communicating to customers price increases on the back of the expected ADDs. Earlier this week, Gecex increased ADDs on US polyvinyl chloride (PVC) from from 8.2% to 43.7%. Gecex is also investigating potential polyethylene terephthalate (PET) dumping from Malaysia and Vietnam, following ADDs proposals by Indorama and Alpek. The plastics transformation sector in Brazil said ADDs in place and those potentially implemented in the near future increase costs for all major thermoplastic resins, raising input costs for manufacturers. Meanwhile, the trade group representing producers Abiquim said the low operating rates across the country’s chemical plants were partly a result of unfair global competition, and fully supported ADDs being imposed on US and Canadian PE. Front page picture: Port of Santos in Sao Paulo, Latin America’s largest Source: Port of Santos Authority Clarification: Re-casts and clarifies last paragraph

28-May-2025

SAO PAULO (ICIS)–Brazil has approved plans to raise antidumping duties (ADDs) on polyvinyl chloride (PVC) imports from the US from 8.2% to 43.7%. The decision, taken late Tuesday, implements one of Brazil’s highest ADDs rates. The sharp hike in duties was taken after a proposal filed in 2024 by local polymers major Braskem and caustic soda and chlorine derivatives producer Unipar, Brazil’s main PVC producers. “The proposal to increase in ADDs applied to imports of suspension polyvinyl chloride (PVC) resin originating in the US was granted, due to a change in circumstances, from 8.2% to 43.7%,” said Gecex, Brazil's body in charge of foreign trade. Gecex is also investigating potential polyethylene (PE) dumping from the US, a proposal brought forward by Braskem, as well as potential polyethylene terephthalate (PET) dumping from Malaysia and Vietnam, following proposals by Indorama and Alpek. The plastics transformation sector in Brazil has said ADDs in place and those potentially implemented in the near future are increasing costs for all major thermoplastic resins, raising input costs for manufacturers. Unsurprisingly, the trade group representing producers Abiquim has said the fears about higher costs due to ADDs “do not hold up” when taking into account a beleaguered chemicals production sector with historic low operating rates.

28-May-2025

SAO PAULO (ICIS)–Fears within the Brazilian manufacturing sector about rising input costs and higher inflation if antidumping duties (ADDs) are imposed on US and Canadian polyethylene (PE) “do not hold up” when taking into account a beleaguered chemicals production sector, according to trade group Abiquim. A spokesperson for the trade group, which largely represents the chemicals producing side, said the low operating rates across the country’s chemical plants were partly a result of unfair global competition, and fully supported ADDs being imposed on US and Canadian PE. Brazil’s government body for foreign trade, the Foreign Trade Chamber (Gecex), is to meet on 29 May to take a decision on the matter. The investigation into possible PE dumping by the US and Canada started in November after a proposal by local polymers major Braskem, which has a commanding voice in Abiquim. “The narrative that specific anti-dumping duties, applied to correct unfair trade operations, could pose inflationary risks in the plastics processing production chain and affect production levels in the economy as a whole, simply does not hold up, given that Brazil is a price taker in thermoplastic resins (i.e. it follows variations in the international market),” said Abiquim. “[Moreover] There is an average idle capacity of 36% in the Brazilian chemicals sector (data from 2024) that can be reversed with the implementation of ADDs. Trade defence investigations in Brazil follow a rigorous and technical procedure, focusing on determining dumping margins, damage to the domestic industry and the causal link between the two.” If those technical parameters are met, Gecex will implement the ADDs “in the interest” of the country, adding that the ADDs would strictly follow World Trade Organization (WTO) rules regarding unfair trade. “Allowing dumping is not justified by any reason, since it allows the distortion of international trade rules, allowing the sale of products often below production cost only to aggressively capture the market,” added Abiquim. GROWING PROTECTIONISMHowever, trade groups representing import-heavy manufacturing companies, in a country where half of chemicals demand is covered by imports, have warned that those ADDs and other protectionist measures implemented by Luiz Inacio Lula da Silva’s administration increase input costs and, ultimately, inflation. The truth is that Lula’s cabinet does listen to industrial producers. The main constituency of the president’s Workers’ Party (PT) is industrial workers, and the health of manufacturing employment is key for its electoral prospects. As the 2026 general election looms, those voters may consider their support for the PT if manufacturing, which already came late to the post-pandemic recovery compared with other sectors, starts faltering again in 2025. This is precisely the argument from the other side. Increasing costs manufacturers could their hit their activity and ultimately employment in manufacturing as a whole could be negatively affected. In a written statement to ICIS this week, Jose Ricardo Roriz, president of the trade group representing plastic transformers Abiplast, reaffirmed his opposition to protectionist measures which increase costs for importers. But that side of the argument has so far failed to turn its lobbying into concrete actions. Since he took office in January 2023, Lula’s cabinet has approved most of the protectionist measures chemical producers demanded. In 2023, it reintroduced a tax break for the purchase of inputs by chemical companies, called REIQ, which was withdrawn by the previous center-right administration. In 2024, the administration re-imposed ADDs on US-origin PP and approved higher import tariffs on dozens of chemicals. Meanwhile, Gecex is investigating another proposal to implement ADDs on polyvinyl chloride (PVC), a proposal by Braskem and caustic soda and chlorine derivatives producer Unipar. In April, Gecex also began a probe into potential polyethylene terephthalate (PET) dumping from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. Brazil’s Congress is currently debating a bill contemplating state subsidies or credit lines at a favorable rate for chemicals companies, called Presiq. If approved, the program could be the “savior” of struggling chemicals producers, according to Abiquim's director general Andre Passos in an interview with ICIS.

28-May-2025

HOUSTON (ICIS)–The US delay of its proposed 50% tariffs on EU imports will still leave its polymers vulnerable to retaliatory tariffs. The new deadline is 9 July. For US exports, the EU has already drafted a list of targets for retaliatory tariffs, part of its second round of €95 billion in tariffs on US imports. A full list of all the proposed imports can be found here. This is on top of the first round of €21 billion in tariffs on US imports. A full list of all the proposed imports can be found here. In all, the EU could impose tariffs on nearly every major polymer from the US, including polyethylene (PE), polypropylene (PP), polystyrene (PS), polyvinyl chloride (PVC) and polyethylene terephthalate (PET). The EU is also considering tariffs on US imports of surfactants, fatty acids, fatty alcohols, and tall oil, a feedstock used to make renewable diesel, sustainable aviation fuel (SAF) and renewable naphtha. The following table lists some of the many plastics and chemicals proposed on the EU's second round of tariffs. CN CODE DESCRIPTION 28151200 sodium hydroxide "caustic soda" in aqueous solution "soda lye or liquid soda" 29053926 butane-1,4-diol or tetramethylene glycol [1,4-butanediol] having a bio-based carbon content of 100% by mass 29091910 tert-butyl ethyl ether (ethyl-tertio-butyl-ether, etbe) 29152100 acetic acid 29153200 vinyl acetate 29291000 isocyanates 32061100 pigments and preparations based on titanium dioxide of a kind used for colouring any material or produce colorant preparations, containing >= 80% by weight of titanium dioxide calculated on the dry matter (excl. preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 and 3215) 32061900 pigments and preparations based on titanium dioxide of a kind used for colouring any material or produce colorant preparations, containing < 80% by weight of titanium dioxide calculated on the dry matter (excl. preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 and 3215) 34023100 linear alkylbenzene sulphonic acids and their salts 34023990 anionic organic surface-active agents, whether or not put up for retail sale (excl. linear alkylbenzene sulphonic acids and their salts, and aqueous solution containing by weight 30-50% of disodium alkyl [oxydi(benzenesulphonate)]) 34024100 cationic organic surface-active agents, whether or not put up for retail sale 34024200 non-ionic organic surface-active agents, whether or not put up for retail sale (excl. soap) 34024900 organic surface-active agents, whether or not put up for retail sale (excl. soap, anionic, cationic and non-ionic) 34025010 surface-active preparations put up for retail sale (excl. organic surface-active preparations in the form of bars, cakes, moulded pieces or shapes, and organic surface-active products and preparations for washing the skin in the form of liquid or cream) 38030010 crude tall oil 38030090 tall oil, whether or not refined (excl. crude tall oil) 38170050 linear alkylbenzene 38170080 mixed alkylbenzenes and mixed alkylnaphthalenes, produced by the alkylation of benzene and naphthalene (excl. linear alkylbenzene and mixed isomers of cyclic hydrocarbons) 38231100 stearic acid, industrial 38231200 oleic acid, industrial 38231300 tall oil fatty acids, industrial 38231910 fatty acids, distilled 38231930 fatty acid distillate 38231990 fatty acids, industrial, monocarboxylic; acid oils from refining (excl. stearic acid, oleic acid and tall oil fatty acids, distilled fatty acids and fatty acid distillate) 38237000 fatty alcohols, industrial 38260010 fatty-acid mono-alkyl esters, containing by weight => 96,5 % of esters "famae" 38260090 biodiesel and mixtures thereof, not containing or containing < 70 % by weight of petroleum oils or oils obtained from bituminous minerals (excl. fatty-acid mono-alkyl esters containing by weight >= 96,5 % of esters "famae") 39013000 ethylene-vinyl acetate copolymers, in primary forms 39019080 polymers of ethylene, in primary forms (excl. polyethylene, ethylene-vinyl acetate copolymers, ethylene-alpha-olefins copolymers having a specific gravity of < 0,94, ionomer resin consisting of a salt of a terpolymer of ethylene with isobutyl acrylate and methacrylic acid and a-b-a block copolymer of ethylene of polystyrene, ethylene-butylene copolymer and polystyrene, containing by weight <= 35% of styrene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms) 39021000 polypropylene, in primary forms 39023000 propylene copolymers, in primary forms 39029010 a-b-a block copolymer of propylene or of other olefins, of polystyrene, ethylene-butylene copolymer and polystyrene, containing by weight <= 35% of styrene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms 39029020 polybut-1-ene, a copolymer of but-1-ene with ethylene containing by weight <= 10% of ethylene, or a blend of polybut-1-ene with polyethylene and/or polypropylene containing by weight <= 10% of polyethylene and/or <= 25% of polypropylene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms 39031100 expansible polystyrene, in primary forms 39031900 polystyrene, in primary forms (excl. expansible) 39032000 styrene-acrylonitrile copolymers "san", in primary forms 39033000 acrylonitrile-butadiene-styrene copolymers "abs", in primary forms 39039090 polymers of styrene, in primary forms (excl. polystyrene, styrene-acrylonitrile copolymers "san", acrylonitrile-butadiene-styrene "abs", copolymer solely of styrene with allyl alcohol, of an acetyl value of >= 175 and brominated polystyrene, containing by weight >= 58% but <= 71% of bromine, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms) 39041000 poly"vinyl chloride", in primary forms, not mixed with any other substances 39042100 non-plasticised poly"vinyl chloride", in primary forms, mixed with other substances 39042200 plasticised poly"vinyl chloride", in primary forms, mixed with other substances 39051200 poly"vinyl acetate", in aqueous dispersion 39051900 poly"vinyl acetate", in primary forms (excl. in aqueous dispersion) 39052100 vinyl acetate copolymers, in aqueous dispersion 39052900 vinyl acetate copolymers, in primary forms (excl. in aqueous dispersion) 39053000 poly"vinyl alcohol", in primary forms, whether or not containing unhydrolyzed acetate groups 39061000 poly"methyl methacrylate", in primary forms 39071000 polyacetals, in primary forms 39072911 polyethylene glycols, in primary forms 39072920 polyether alcohols, in primary forms (excl. bis(polyoxyethylene) methylphosphonate and polyethylene glycols) 39072999 polyethers in primary forms (excl. polyether alcohols, polyacetals and copolymer of 1- chloro-2,3-epoxypropane with ethylene oxide) 39073000 epoxide resins, in primary forms 39074000 polycarbonates, in primary forms 39075000 alkyd resins, in primary forms 39076100 poly"ethylene terephthalate", in primary forms, having a viscosity number of >= 78 ml/g 39076900 poly"ethylene terephthalate", in primary forms, having a viscosity number of < 78 ml/g 39079110 unsaturated liquid polyesters, in primary forms (excl. polycarbonates, alkyd resins, poly"ethylene terephthalate" and poly"lactic acid") 39079190 unsaturated polyesters, in primary forms (excl. liquid, and polycarbonates, alkyd resins, poly"ethylene terephthalate" and poly"lactic acid") 39079980 polyesters, saturated, in primary forms (excl. polycarbonates, alkyd resins, poly"ethylene terephthalate", poly"lactic acid", poly"ethylene naphthalene-2,6-dicarboxylate" and thermoplastic liquid crystal aromatic polyester copolymers) 39089000 polyamides, in primary forms (excl. polyamides-6, -11, -12, -6,6, -6,9, -6,10 and -6,12) 39091000 urea resins and thiourea resins, in primary forms 39092000 melamine resins, in primary forms 39093100 poly"methylene phenyl isocyanate" "crude mdi, polymeric mdi", in primary forms 39094000 phenolic resins, in primary forms 39095010 polyurethane of 2,2'-"tert-butylimino"diethanol and 4,4'-methylenedicyclohexyl diisocyanate, in the form of a solution in n,n-dimethylacetamide, containing by weight >= 50% of polymer 39095090 polyurethanes in primary forms (excl. polyurethane of 2,2'-"tert-butylimino"diethanol and 4,4'-methylenedicyclohexyl diisocyanate, in the form of a solution in n,ndimethylacetamide) Source: EU CN CODE DESCRIPTION 39011010 linear polyethylene with a specific gravity of < 0,94, in primary forms 39011090 polyethylene with a specific gravity of < 0,94, in primary forms (excl. linear polyethylene) 39012010 polyethylene in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms, of a specific gravity of >= 0,958 at 23°c, containing <= 50 mg/kg of aluminium, <= 2 mg/kg of calcium, of chromium, of iron, of nickel and of titanium each and <= 8 mg/kg of vanadium, for the manufacture of chlorosulphonated polyethylene 39012090 polyethylene with a specific gravity of >= 0,94, in primary forms (excl. polyethylene in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms, of a specific gravity of >= 0,958 at 23°c, containing <= 50 mg/kg of aluminium, <= 2 mg/kg of calcium, of chromium, of iron, of nickel and of titanium each and <= 8 mg/kg of vanadium, for the manufacture of chlorosulphonated polyethylene) 39014000 ethylene-alpha-olefin copolymers, having a specific gravity of < 0,94 , in primary forms 39081000 polyamides-6, -11, -12, -6,6, -6,9, -6,10 or -6,12, in primary forms Source: EU

27-May-2025

SAO PAULO (ICIS)–The plastics transformation sector in Brazil is facing increased costs for all major thermoplastic resins as antidumping investigations target imports from key supplier countries, the president of trade group Abiplast told ICIS. Jose Ricardo Roriz said potential antidumping duties (ADDs) against polyethylene (PE) imports from the US and Canada, for which a final decision could be made as soon as this week, will raise cost pressures in the manufacturing sector. The government body that focuses on overseas trade, the Foreign Trade Chamber (Gecex), will meet on 29 May and several sources expect it to make a decision on ADDs during the meeting. The proposal for ADDs on US and Canadian PE was brought forward by polymers major Braskem in July 2024, prompting Gecex to open its probe in November 2024. If approved, the ADDs will complete antidumping coverage on all principal thermoplastic resins used in manufacturing, including PE, polypropylene (PP), polyvinyl chloride (PVC) and polyethylene terephthalate (PET). "The impact [of the ADDs on PE] will create pressure on costs, which ultimately affects not only the plastic transformation sector, but all industrial chains that use these products as inputs," said Roriz. If enforced, the duties will pose a significant challenge for the manufacturing sector which relies heavily on imported resins to produce a wide range of products including construction, automotives, packaging and consumer goods. Roriz said the ADDs or other trade defense mechanisms are being misused and reiterated Abiplast’s staunch opposition to them. "We are against these movements that turn trade defense instruments into simple tools for closing and reserving markets," he said. GROWING PROTECTIONISMGecex is investigating another proposal for PVC ADDs brought about by Braskem and caustic soda and chlorine derivatives producer Unipar, who claim they are subject to unfair competition. In April, Gecex also began a probe into potential PET dumping from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. In the meantime, the Brazilian government re-imposed ADDs on US-origin PP last year. In 2023, it reintroduced a tax break for the purchase of inputs by chemical companies, called REIQ, which was withdrawn by the previous centre-right administration. In October 2024, the government approved higher import tariffs on dozens of chemicals. Earlier this year, it also approved programs contemplating state subsidies or credit lines at a favorable rate for chemicals companies such as Presiq.

27-May-2025

SAO PAULO (ICIS)–Brazil’s polyethylene (PE) sellers this week are encouraging customers to bring forward purchases on the assumption that the government is to impose antidumping duties (ADDs) on US and Canadian material from June. – Braskem’s PE ADDs proposal could be approved this week – Sources said prices are increasing ahead of measure – ADDs on PVC still being analyzed by government According to several sources, the ADDs on US and Canada PE could be approved by the government’s body for foreign trade, the Foreign Trade Chamber (Gecex), at a meeting to take place on 29 May. Gecex’s investigation into possible PE dumping by the US and Canada into Brazil started in November after local polymers major Braskem filed the proposal arguing unfair competition. ADDs are tariffs imposed on imported goods that are sold at prices lower than their normal value, potentially harming domestic producers, and are widely used as a protectionist measure from unfair competition. Brazilian PE sellers are this week encouraging their customers to bring purchases forward, warning them that the ADDs could potentially be effective from as soon as 2 June. While this could be seen as a strategy by sellers to prop up their sales, the assumption that the ADDs on US and Canada’s PE will be imposed is not senseless, given that it would follow a series of protectionist measures implemented by the government of Luiz Inacio Lula da Silva in the past two years. ICIS put to Gecex the markets’ assumptions about an almost certain green light for the ADDs, but in a written response it said it would not comment. “We cannot make any comments or provide information regarding the progress of the investigation. Likewise, we cannot make any inferences regarding market information provided by third parties,” said Gecex. These ADDs would be provisional, while Gecex would have up to 18 months to decide whether they will become permanent. If PE dumping from the US and Canada could not be proved in the end, the measure would cease to exist. If proved, the measure could become permanent until further notice. NOT RESPONSIBLE FOR HIGHER COSTSIn two letters to customers seen by ICIS, two distribution companies warned about the ADDs, with one of them taking for granted they will be imposed and be effective in June. Global chemicals distributor Vinmar’s Brazil subsidiary warned their customers that any potential “financial loss” from the potential ADDs would not be assumed by the distributor but by the customer. “We are on the verge of the potential entry into force of ADDs on PE imported from the US and Canada. We would like to emphasize that Vinmar, as always, cannot be held responsible for any financial loss of the importer if any import tariffs are implemented or adjusted during the logistic process of delivering the cargo to its recipient,” said Vinmar in the letter. “The cargo cannot be canceled or undergo any adjustment of price/commercial condition as a form of compensation, even if the cargo has not complied with the maximum agreed shipping deadline.” To cover its back entirely, Vinmar concluded the letter clarifying to its customers that “logistic process of delivering the cargo” means from beginning to end: since the containers are loaded, in this case in the US or Canada, until delivery at the port of destination in Brazil. Vinmar had not responded to a request for further comment at the time of writing. Another distributor’s letter to customers said: “As of June 2025, the ADDs will come into effect, which will directly impact costs of PE materials. In addition, Braskem announced a price adjustment for June, which should result in increases in the cost of materials.” Braskem had not responded to a request for comment at the time of writing. A source at a distributor said on Monday, however, that these warnings about potential price increases outside a company’s control are common in the chemicals sector. Consequently, the source said its company had been including in contracts with its customers a clause from the beginning of 2025 highlighting the Gecex investigation, so it can cover its back on the potential higher costs emanating from the ADDs. Meanwhile, Gecex continues investigating another proposal for ADDs on polyvinyl chloride (PVC) brought forward by Braskem and Brazilian caustic soda and chlorine derivatives produce Unipar, also arguing unfair competition. Management at Braskem has publicly stated they were lobbying the government for this measure to be approved, since PVC is one of the plastics which is suffering the most the global oversupply and the consequent low prices. Gecex is currently working on the “preparation of the final report” for those ADDs on PVC, according to information on its website as of Monday. Gecex also started in April an investigation into potential polyethylene terephthalate (PET) dumping in material coming from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. MORE PROTECTIONISMIf approved, the ADDs on PE from the US and Canada would add to a list of protectionist measures implemented by the Brazilian government of Luiz Inacio Lula da Silva in the past two years, such higher import tariffs for dozens of chemicals from October 2024. Meanwhile, the Brazilian government re-imposed ADDs on US-origin PP and has approved programs contemplating state subsidies or credit lines at favorable rates for chemicals companies, such as Presiq. Brazil’s chemicals producers – represented by trade group Abiquim and including names such as Braskem, Unipar, and Unigel – have been lobbying for protectionist measures against what they see as unfair competition from overseas markets such as the US and China. Aided by lower production costs, companies in those two countries, but also others such as Canada or nations in the Middle East, are blamed by Brazil’s domestic producers for their historically low operating rates, hovering around 60-65%, and the closure of some plants which were not competitive. In an interview with ICIS earlier in May, the director general at Abiquim said the continuation of protectionist measures was key for Brazilian chemicals producers to stay afloat. "Nothing has fundamentally changed in our situation in the past few months. The scenario remains the same, perhaps even worsening with [US President Donald] Trump's trade measures, and we continue suffering with low capacity utilization rates,” said Andre Passos. “Brazil's chemical production has been on a downward trajectory since 2016. Capacity utilization level of our plants [has gone] from above 80% before 2016 to around 60% now." However, importers of polymers and other petrochemicals are understandably on the opposite side of the debate. They argue measures such as high import tariffs or ADDs negatively affect manufacturers who are dependent on chemicals imports and increase inflation, affecting consumers’ purchasing power. Around half of Brazil’s chemicals demand is covered by imports, given the country’s trade deficit in chemicals, a common feature in the wider Latin America. Trade group Abiplast, representing plastic transformers, has repeatedly showed opposition to protectionist measures which increase costs for importers. Front page picture: Port of Santos in Sao Paulo, Latin America’s largest Source: Port of Santos Authority Additional reporting by Bruno Menini Focus article by Jonathan Lopez

26-May-2025

SAO PAULO (ICIS)–Braskem’s stock rose sharply in Friday trading after reports citing unnamed sources said Brazilian entrepreneur Nelson Tanure would be seeking to acquire Novonor’s controlling stake at the petrochemicals major. At some point, Braskem’s share rose nearly 10% on Friday, taking the whole Ibovespa stock index in Sao Paulo higher. By afternoon trading, however, the stock had moderated the gain although it was still rising nearly 6%, compared with the previous close on 22 May. The offer was first reported by Brazilian daily O Globo, with financial daily Valor Economico and news agency Reuters subsequently also publishing reports confirming the bid, citing also unnamed sources. According to those sources, Tanure would be intending to indirectly assume control previously held by Novonor (called formerly Odebrecht) through one of his investment funds. The proposal includes maintaining Novonor in the shareholding structure with a minority stake of 3%-5%, signaling a gradual transition strategy. Novonor currently holds 50.1% of Braskem's voting shares, while Brazil’s state-owned energy major Petrobras controls 47%. However, the transaction depends on negotiations with Novonor’s creditor banks – Bradesco, Itaú, Banco do Brasil, Santander, and Brazil’s investment bank BNDES – which hold Braskem shares as collateral for debt estimated at Brazilian reais (R) 15 billion ($2.65 billion). These banks currently control 50.1% of Braskem's common shares, representing 38.3% of total capital. Any control change must also consider Petrobras' position as the second-largest shareholder with significant strategic influence. In a written response to ICIS, Braskem said it would not comment. Novonor and Petrobras had not responded to a request for comment at the time of writing. Braskem's financial metrics have been suffering for several quarter due to the global petrochemicals oversupply and low prices, which have hit hard some of the company's key products such polyethylene (PE), polypropylene (PP), or polyvinyl chloride (PVC). Earlier in May, however, it said it had swung to a net profit during Q1 2025, compared to a net loss in the same quarter a year earlier. Its sales and earnings, however, continued shrinking during Q1 in the year-on-year comparison. Braskem(in $ million) Q1 2025 Q1 2024 Change Q4 2024 Q1 2025 vs Q4 2024 Sales 3,331 3,618 -8% 3,285 1% Net profit/loss 113 -273 N/A -967 N/A Recurring EBITDA 224 230 -2% 102 121% WHO IS TANURE While it has been elusive for most media outlets to put a figure on Nelson Tanure’s fortune – even the well-known Forbes magazine has not put a figure on it and has not included him in its Rich List – the entrepreneur is considered one of Brazil’s richest men. His businesses span in a wide range of sectors such energy (mostly electric utilities), civil construction through its firm Gafisa; oil and gas through PetroRio and investments in the exploration of natural resources; telecommunications, with participations in operators Oi and TIM Brasil; and healthcare, with Alliance Health and diagnostic laboratories, among others. UNSUCCESSFUL DISPOSAL SO FARNovonor has attempted to sell its Braskem stake for years without conclusion. Previous interested parties included Abu Dhabi’s energy major Adnoc, Saudi Arabia’s SABIC – now part of oil major Aramco – and Brazilian conglomerate J&F, owned by the Batista brothers. J&F reportedly offered R10 billion for Novonor's stake, but neither this nor the other transactions materialized. Novonor suffers from high leverage since the 2010s, when the company was at the center of the large, Latin America-wide corruption scandal known as Lava Jato in the mid-2010s. The scandal also engulfed personalities from the first administration of the Workers Party (PT), the party of President Luiz Inacio Lula da Silva, now back in power again and at the time led by him and his successor Dilma Rousseff. ($1 = R5.67)

23-May-2025

HOUSTON (ICIS)–Chemical plants along the US Gulf Coast will face another active hurricane season, but any potential disruptions will be partially if not entirely offset by excess global capacity and weaker demand growth. Meteorologists expect up to 10 hurricanes in the Atlantic basin during this year's hurricane season, which starts in June and lasts through November The global supply glut of plastics and chemicals will continue in 2025 and beyond Global plastic and chemical demand will weaken because of tariffs and a prolonged manufacturing downturn BUSY HURRICANE SEASONMeteorologists expect a busy hurricane season as shown in the following table: AccuWeather CSU US 30-Year Average Hurricanes 7-10 9 6-10 7 Major hurricanes 3-5 4 3-5 3 TOTAL 13-18 17 13-19 14 *Major hurricanes have wind speeds of at least 111 miles/hour (178 km/hour) Sources: AccuWeather, Colorado State University (CSU), US National Oceanic and Atmospheric Administration (NOAA) Hurricanes directly affect the chemical industry because plants and refineries shut down in preparation for the storms, and they sometimes remain down because of damage. Power outages can last for days or weeks. Hurricanes shut down ports, railroads and highways, which can prevent operating plants from receiving feedstock or shipping out products. Most US petrochemical plants and refineries are on the Gulf Coast states of Texas and Louisiana, making them prone to hurricanes. Other plants and refineries are scattered farther east in the states of Mississippi, Alabama and Florida, a peninsula that is also a hub for phosphate production and fertilizer logistics. Hurricanes can shut down LNG terminals, most of which are concentrated along the Gulf Coast. If the outages last long enough, it can cause a local glut of natural gas and a decline in prices. US prices for ethane tend to rise and fall with those of natural gas, so a prolonged shutdown of LNG terminals would lower feedstock costs – especially if the hurricane also shuts down ethane crackers. Petrochemical plants outside of the US are becoming increasingly reliant on that country's exports of ethane, ethylene and liquefied petroleum gas (LPG), a feedstock for crackers and for propane dehydrogenation (PDH) units. Most of these terminals are on the Gulf Coast, leaving them vulnerable to disruptions caused by hurricanes. HOTTER SUMMER COULD REDUCE THROUGHPUT AT GAS PLANTSExtremely high temperatures can reduce the throughput of Texan natural gas processing plants, which extract ethane and other natural gas liquids (NGLs) from raw natural gas. Such reductions took place in 2024 during the peak summer months of August and September, when temperatures are typically at their highest in many parts of Texas. Texas has natural gas processing plants in the western and fractionation hubs in the eastern parts of the state. For both regions, summer temperatures should be 1-2°F higher than normal, according to AccuWeather, a meteorology firm. That amounts to 0.6-1.0°C higher. CHEM OVERCAPACITY GROWS BIGGERThe effect of any shutdowns of chemical plants will be blunted by excess global capacity. Companies have continued to start up new plants, despite the oversupply of plastics and chemicals. ICIS FORECASTS WEAKER 2025 DEMAND GROWTHAny disruptions to chemical production would take place amid weaker demand growth. ICIS forecasts that 2025 demand growth for most commodity plastics will slow from 2024 and remain well below levels in 2018 and earlier. The following chart ICIS past demand growth rates and forecasts for 2025. Source: ICIS Growth rates are slower in part due to uncertainty caused by US trade policy. ICIS expects global GDP to expand by 2.2% in 2025, down from 2.8% in 2024. Global manufacturing is expected to contract globally. The following breaks down forecasts for national purchasing managers' indices (PMI). Anything below 50 indicates contraction. Sources: Institute for Supply Management, S&P Global and JP Morgan RESUMPTION OF TARIFFS WOULD FURTHER WEAKEN DEMANDIn July, the US could resume imposing its higher reciprocal tariffs against much of the world, including the EU, following a 90-day pause announced in April. The EU is preparing a list of retaliatory tariffs that covers many US imports of commodity chemicals and plastics, including the following: Caustic soda Acetic Acid Vinyl acetate monomer (VAM) Polyethylene (PE) Polypropylene (PP) Polystyrene (PS) Acrylonitrile butadiene styrene (ABS) Polyvinyl chloride (PVC) Polyethylene terephthalate (PET) The US and EU may extend the pause or reach a trade agreement that would do away with the need for retaliatory tariffs. But if the two sides fail to reach an agreement, then the EU's retaliatory would likely reduce demand for US plastics and chemicals. Demand for US plastics and chemicals could take another hit in mid-August if the US and China resume triple-digit tariffs following their 90-day pause. The pause would expire right before hurricane season reaches its peak in the US. Insight article by Al Greenwood Thumbnail shows a hurricane. Image by NOAA.

22-May-2025