Chemicals

HOUSTON (ICIS)–US polyurethane prices for toluene diisocyanate (TDI), methylene diphenyl diisocyanate (MDI) and a variety of polyether and polyester polyols continue to see increase pressure as the market assesses the impacts of potential tariffs on imports from Canada and Mexico, heading into this year’s International Petrochemical Conference (IPC). Because US domestic suppliers of polyurethane products expect a cascading inflationary effect of these tariffs, they are trying to price the cost of this inflation in new pricing offers for Q2. At the same time, these tariffs could hinder demand for polyurethane products in downstream industries such as automotive, construction, the comfort sector (furniture and bedding) and appliances. 25% TARIFFS RISK CAUSING DISRUPTION IN THE AUTOMOTIVE SECTORThe ongoing worldwide tariff conflict heightens the chances of the automobile sector experiencing a prolonged disruption phase. This could imply a halt in the production of several car models, increased prices for new vehicles, and production delays due to hurdles in product development for the subsequent years, experts say. Automotive seating consumes large volumes of TDI and flexible polyether polyols. Some analysts approximate that nearly one-third of North America's vehicle production could face reductions as a response to the 25% tariffs on Mexico and Canada imposed by US President Donald Trump. These cuts would be part of the automakers attempts to balance the escalated costs, and simultaneously, consumers might procrastinate their new car and truck purchases. Flavio Volpe, the President of the Automotive Parts Manufacturers' Association (APMA), representing Canada's OEM suppliers within the global auto industry, has shared that Canadian car parts suppliers have funneled more than $10 billion into parts facilities situated across 26 US states. These plants employ up to 48,000 US workers, equating to the workforce of roughly 5-10 large car and truck factories. Focusing on Michigan, it alone houses 55 Canadian parts factories employing 17,000 US workers. TARIFFS MIGHT HINDER CONSTRUCTION SECTOR RECOVERYThe latest US housing starts numbers brought some hope for a recovery of the construction sector, which consumes a large amount of MDI and rigid polyols. Housing is a key end-use market for chemistry in the form of paints, wire insulation, house-wrap, sealants, roofing materials, resilient flooring, vinyl siding and related products. New housing also generates sales of appliances, furniture, carpet, fixtures and window treatments. In total, each start engenders on average over $13,000 worth of chemistry. After plunging 9.8% month on month in January amid harsh winter weather, US housing starts rebounded 11.2% in February to an adjusted annual rate of 1.501 million, according to US Census Bureau data. February’s increase was led by an 11.4% gain in the single-family segment, noted Kevin Swift, ICIS senior economist for Global Chemicals. This segment is more sensitive to interest rates and housing costs that affect affordability. It is also more plastics intensive than the multifamily segment. DEMAND FROM THE COMFORT SECTOR REMAINS WEAKPoor demand continues to plague the comfort sector (furniture and bedding), with the latest sales on President's Day not showing the traditional consumer interest the industry expected. The comfort sector consumes the largest volumes of TDI and flexible polyether polyols. There is hope that demand might recover in the second half of the year. Labor Day is traditionally the strongest sales day of the year for furniture and bedding items. However, the latest consumer sentiment data does not bode well for expectations on consumer expenditures, which make up 70% of the US GDP. US consumer sentiment fell nearly 11% month on month in March amid ongoing economic policy and tariff uncertainties and inflation fears. The Michigan “Index of Consumer Sentiment” fell to 57.9 points in March, from 64.7 in February, according to preliminary results of the University of Michigan’s monthly consumer survey. Sentiment has now fallen for three consecutive months and is down 22% from December 2024. FLAME RETARDANTS FACE RISK OF SUBSTANTIAL INCREASESExpectations of further tariff increases are also feeding concerns about the rise of cost of flame retardants used in various polyurethane foams in the US. Case in point is Tris (chloropropyl) phosphate (commonly abbreviated TCPP), a chlorinated organophosphate flame retardant commonly added to polyurethane foams. TCPP is currently imported from China, often in blended form, but it can also be purchased as a sole product. Its cost in the US is currently above $2/lb and rising, although it's still available in Canada for 58 cents/lb. The prospect for further increases on imported products is having market participants scrambling to find TCPP alternatives that are economically viable. According to sources, some alternatives currently under consideration are Triethyl Phosphate (TEP), a halogen free flame retardant, and Tris(1,3-dichloro-2-propyl) phosphate (also known as chlorinated Tris, TDCP, TDCPP or Fyrol FR-2). There are other flame retardants available as well, but the key is to be able to find a solution that is economically viable compared to the cost of TCPP. Compounding the problem, last December China limited the sales of flame-retardant precursor antimony for exports, since antimony is also a dual-use product that can end up in military applications. Since 2020, antimony prices have increased over 234%, according to data from the Institute for Rare Earths and Metals. ANTICIPATION OF TARIFFS INFLATIONARY EFFECT DRIVES SUPPLIERS TO OFFER HIGHER PRICESCurrent negotiations for April and Q2 polyurethane pricing are wrapping up amid continued efforts by suppliers to increase prices. Especially in the flexible polyol segment, domestic suppliers are mentioning "margin improvement" and "inflation adjustment" needs as the main rationale for these price increases, which in some cases have come on top of prior increases announced in February for March. Foamers are fighting these increases, which have been offered for MDI and TDI as well. Fundamentals do not seem to support these Q2 increase efforts. To begin with, downstream demand is not recovering any time soon. Second, there is plenty of product in the market despite some minor turnarounds in effect for MDI and TDI between mid-March and mid-Aril. Third, feedstock costs are not justifying price increases, either. All main polyurethane feedstocks such as propylene, benzene, toluene, ethylene glycol and 1,4 butanediol (BDO) are moving on downtrend trajectories. Rather than being an adjustment to market dynamics, these increase pressures find their rationale in inflationary expectations of these tariffs, which polyurethane suppliers seem to be taking for granted. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Visit the Logistics: Impact on chemicals and energy topic page Focus article by Umberto Torresan (Thumbnail shows polyurethane foam. Image by Shutterstock.)

21-Mar-2025

TORONTO (ICIS)–In light of the ongoing trade and tariffs tensions, Canada may want to review its industrial carbon pricing rules, trade group Chemistry Industry Association of Canada (CIAC) said. “With ongoing changes and uncertainty in trade and tariffs, now is a good time to review industrial carbon pricing – especially for energy-intensive and trade-exposed industries – to ensure the current pricing levels and rules are still the right fit,” the group said in a statement to ICIS. However, CIAC made clear that it and its members support industrial carbon pricing as a tool to encourage companies to reduce emissions in a cost-effective way. “[Carbon pricing] sends investment signals that help businesses make decisions about lowering their carbon footprint,” it said. If a future federal government should decide to remove the federal carbon pricing system, it should work closely with provincial governments and industry to prevent disruptions, the group said. ICIS had asked CIAC to comment on an announcement this week by Canada’s opposition Conservatives that they would, if they win the next election, abolish the country’s federal industrial carbon pricing, along with the federal consumer carbon tax. Federal industrial carbon pricing, known as an “Output-Based Pricing System” (OBPS), sets minimum standards for provincial industrial emissions systems, and it applies directly in provinces that do not have their own system. Canada’s chemical industry has been subject to carbon pricing policies for years. Alberta introduced an industrial carbon price in 2007, and a national carbon price has been in place since 2019, CIAC noted. Industrial carbon pricing is seen as key in attracting investments in low-carbon projects, such as Dow’s Path2Zero petrochemicals complex under construction in Alberta. Canada’s new prime minister, Mark Carney, has suspended the federal consumer carbon tax but said the government would retain and improve federal industrial carbon pricing as the most effective measure to control emissions. Carney, who last week took over from Justin Trudeau, is expected to call an election on Sunday (23 March), which will likely be held on 28 April or 5 May, public broadcaster CBC reported on Thursday, citing unnamed government sources. After Trudeau’s resignation announcement on 6 January and amid the intensifying tariff threat from the US, Carney's Liberals quickly caught up with the Conservatives in opinion polls about the elections, with both parties now running neck and neck. Thumbnail photo source: International Energy Agency

21-Mar-2025

TORONTO (ICIS)–Canada’s central bank will work to ensure that US tariffs, and Canada’s reciprocal duties, will not turn into an inflation problem, the bank’s governor said during a webcast event on Thursday afternoon. Monetary policy cannot solve a trade conflict Tariffs to impact oil, farming, manufacturing Tariffs are a structural change that needs a structural response While the tariffs will slow Canada’s GDP growth and raise prices, the tariff-induced direct price increases must not be allowed to spread into “ongoing generalized inflation”, Tiff Macklem, governor of the Bank of Canada, said in a speech to the Calgary economic development agency in Alberta. US tariffs on Canadian exports will be paid by the US company buying those goods, and the company will pass at least some of the cost onto the US consumer, Macklem said. However, the same goes for the retaliatory tariffs Canada imposes on goods imported from the US, he said. As such, higher tariffs will raise prices, causing inflation to rise for a period as the upward pressure on prices from higher costs will outweigh the downward pressure from a weaker economy, he said. Businesses have already lowered their sales outlooks, notably in manufacturing and sectors that depend on consumer spending, he said. Companies are also holding back on investment plans. “Businesses are telling us they are delaying or cancelling investments and scaling back on hiring,” Macklem said. However, as Canadians worry about trade uncertainty, “we don’t want them to have to worry about inflation as well”, he said. What the bank can and must do is ensure that higher prices from a trade conflict do not become ongoing inflation, he said. “We are committed to maintaining price stability over time,” he said, adding: “There should be no uncertainty about that.” The tariffs and resulting uncertainties will – if maintained – particularly hurt certain sectors and regions in Canada, he said. ENERGY For oil-rich Alberta province, the impact on the energy industry from a 10% US tariff is “a major concern”. At the same time, however, the tariffs are also “a big issue” for US Midwest refineries that have invested in equipment to refine heavy Canadian oil, he said. About 94% of Canadian crude oil exports go to the US, mostly through north-south pipelines, he said. The launch of the Trans Mountain oil pipeline expansion last year increased access to overseas markets for Canadian oil, and new export capacity for liquefied natural gas (LNG) is due to come online, he noted. These capacities would help to diversify markets for Canadian energy exports, he said, but also pointed out that these investments are designed to increase Canada’s export capacity – not replace US demand, he said. FERTILIZERS Although the US has temporarily exempted fertilizers, including potash, from tariffs, “uncertainty remains,” he said. With spring seeding to begin soon, farmers on both sides of the border are already feeling pressure from low grain prices, he said. US farmers import potash from Saskatchewan to add potassium to their soil, while Canadian farmers often need US phosphate to fertilize their crops, he said. Canadian farmers also buy machinery and equipment from the US, he said. He also noted that China has imposed a 100% tariff on Canadian canola, effective 20 March, in retaliation for the 100% tariff Canada placed on electric vehicles (EVs) from China. China is the top market for Canadian canola, with an export value of close to Canadian dollars (C$) 5 billion ($3.5 billion), he said. ALUMINUM, STEEL Industries in other parts of Canada, particularly in Ontario and Quebec, will be disrupted by the 25% US tariffs on steel and aluminum. In 2024, the US imported about one-quarter of its steel and 40% of its aluminum from Canada, and Canada imported one-quarter of its steel and one-fifth of its aluminum from the US, he said. Those cross-border flows mean these sectors will be hit by both US tariffs and counter-tariffs, he said, adding: “It’s going to hurt output and increase prices.” Monetary policy could not target specific industries or regions, he said. “We have one monetary policy for the whole country,” he said. A challenge for the Bank of Canada will be trying to assess by how much tariffs will dent demand, how much of the tariff burden will be passed on to consumer prices, and how quickly the burden will be passed on, he said. A faster pass-through means inflation will rise faster, but it will also come down faster, “provided monetary policy does its job”. “So, we’re watching closely how the costs of tariffs and uncertainty pass through to consumer prices,” he said. “Our mandate is price stability, and low inflation is the best way we can support the economic and financial well-being of Canadians in good times and bad,” he said. While monetary policy “cannot solve a trade war”, the bank could help avoid adding damage to the economy by ensuring that inflation remains anchored at the bank's 2% inflation target, he said. Helping the Bank of Canada will be its co-operation with central banks around the world, he said. Central bank governors meet regularly to exchange information and consult each other, he said. “As central banks, we are all in this together,” Macklem said. STRUCTURAL CHANGE If not resolved, Canada’s tariff conflict with its largest trading partner by far would become a “structural change” that requires a structural solution, Macklem said. High tariffs would put Canada on a permanently lower growth path, he said. “We are going to earn less, we are going to consume less, because we are going to have less income,” he said. One way to at least partially offset the negative structural change caused by the tariff conflict would be “positive structural reform”, he said. Such a reform would include removing the barriers to the country’s interprovincial trade, he said. Despite many attempts over the years, Canada never agreed on interprovincial free trade as in many cases it is easier to trade north to south, rather than across Canada. The barriers between the country's 10 provinces and three territories include actual trade restrictions, as well as different provincial regulations for the accreditation of professionals, Macklem said. With the tariff conflict, Canada may now finally remove its interprovincial barriers, which would increase commerce east-west across the country, he said. This positive structural reform could offset “at least some of the consequences of this very negative structural shock we are facing with the US,” he said. It would, however, be difficult and take time for Canada to try to replace the millions of US consumers it may be losing, he said. While hoping for the best, Macklem did not seem too optimistic about the chances of resolving the tariff conflict with the administration of US President Donald Trump. “There is a certain level of trust that has been broken,” he said, and he noted that “Trump has threatened our sovereignty, repeatedly referring to Canada as the 51st state.” Regarding Canada's upcoming federal election, Macklem said the bank's commitment to low inflation was independent of which political party is in government. Canada’s new prime minister, Mark Carney, is expected to call an election on Sunday (23 March), which will likely be held on 28 April or 5 May, public broadcaster CBC reported on Thursday, citing unnamed government sources. Carney, who took over from Justin Trudeau on 14 March, is a former governor of the Bank of Canada and of the Bank of England. CHEMICAL INDUSTRY Trade group the Chemistry Industry Association of Canada (CIAC) has said that to cope with the tariff challenge, Canada needs a competitiveness framework to attract investment and stimulate economic growth. CIAC wants the government to implement pro-growth tax and regulatory policies; strengthen the country’s infrastructure; improve labor relations to avoid supply chain disruptions; and help diversify and expand Canada’s trade into new markets beyond North America. In chemicals and plastics, the tariff conflict affects about C$115 billion in US-Canada chemicals and plastics trade, according to CIAC. Focus article by Stefan Baumgarten $1 = C$1.43 Please visit US tariffs, policy – impact on chemicals and energy Tumbnail photo of Tiff Macklem, governor of the Bank of Canada; photo source: Bank of Canada

21-Mar-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. At the end of 2024, Beijing ditched “prudent” for “moderately loose” monetary policy—raising hopes of a growth reboot. But I warned: deep structural issues and growing global trade tensions would blunt any gains. Now, three months on, the most sweeping consumer stimulus in 31 years has landed. Key measures include: Budget deficit raised to 4% of GDP (31-year high) 13% increase in local government borrowing 30% increase in long-term bonds to fund consumer trade-ins RMB 500bn ($70bn) injection into state-owned banks Wage increases, childcare subsidies, rural income support Expansion of social benefits Backing for AI and emerging sectors Sounds bold—but deep-rooted problems persist: Housing wealth down ¥25tn ($3.4tn) Youth unemployment above 10% CPI fell 0.7% in Feb; PPI deflation for 29 consecutive months Consumption grew just ~5% in 2024 (vs ~8% pre-pandemic average) As Michael Pettis notes, China would need: Higher wages (hurts exports) Higher taxes (hurts investment) Stronger RMB (hurts trade) To hit the 6–7% consumption growth needed for 4–5% GDP. Then there’s demographics: Population may fall to 1.1bn by 2050, under 400m by 2100 Fertility rate: 0.8 Some estimates say 2020 population was 130m lower than reported And rising trade protectionism: China accounts for 40% of global resins demand Dominates 600+ global export categories Trade surpluses with EU, Japan, and rest of Asia are swelling Retaliation and reshoring are accelerating On AI: Stock market rally, but under 20% of adults own shares Investment is concentrated; automation risks job loss Consumer sentiment remains cautious PE Spread & Margin Reality Check: Jan–Feb 2025 average PE spread: $294/tonne Post-NPC average (to 14 March): $300/tonne Supercycle average (1993–2021): $532/tonne NEA PE margin since 2022: $7/tonne (vs $462/tonne during Supercycle) Conclusion: Short-term rally? Maybe. Long-term recovery? Not without deep reform. Weak consumption Property slump Demographic drag Trade backlash Let’s see how spreads and margins evolve over the next 12–18 months. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

21-Mar-2025

HOUSTON (ICIS)–As both regulatory and economic landscapes continue to change, production and commercialization progress among pyrolysis based plastic recyclers continues to be mixed heading into this year’s Plastics Recycling Conference (PRC). Pyrolysis, a thermal depolymerization/conversion technology which targets polyolefin-heavy mixed plastic waste, or tires, is expected to become the dominant form of chemical recycling over the next decade. This comes at a time when sought after food grade, natural colored mechanically recycled polyethylene (R-PE) and recycled polypropylene (R-PP) resins continue to be in tight supply and chemically recycled resin could help to close the gap. However, all types of recycled resin face rising premiums compared to softening virgin markets. REGULATION: FEDERAL AND STATEChemical recycling technologies, such as pyrolysis, have previously been under scrutiny at the federal level through Environmental Protection Agency (EPA) regulation. The latest 2023 stance, officials asked for more time to review the full life cycle and environmental impact of chemical recycling facilities before deregulating permit processes. Counter to this stance and while not explicitly stated, it is assumed the Trump administration would likely be supportive of chemical recycling, due to the underlying petrochemical industry involvement and pro-business fundamentals. At a state level, 25 states have passed bills classifying chemical recycling technologies as recycling technologies rather than waste management processes. This potentially opens the door for pyrolysis facilities in those states to qualify for state grants and tax incentives that are available to manufacturing operations as well as supports the case for recycled resin from chemical recycling processes to count towards post-consumer recycled (PCR) content minimums. However, there is a catch: among the states that have accepted chemical recycling, there are a few states that explicitly exclude certain processes. For example, states such as Kentucky and Kansas are among those that exclude processes that turn plastic to fuel. One example of this can be seen in the State of Kentucky’s HB 45, which notes, "Advanced recycling does not include energy recovery or the conversion of post-use polymers into fuel." Similar language can be found in the State of Kansas’ SB 114, "Advanced recycling does not include incineration of plastics or waste-to-energy processes, and products sold as fuel are not recycled products." In these specific situations, pyrolysis may still not be counted as a form of recycling. Similarly, there are several states which have passed or proposed passing laws which prohibit processes such as pyrolysis to count as recycling. PYROLYSIS HURDLES FROM PCR/EPR MANDATESStates with plastic recycled content requirements have mixed views on acceptance of recycled content from chemical recycling, including pyrolysis. Currently, five states – California, Maine, Connecticut, Washington and New Jersey – have passed PCR laws, through of which are currently active. However, none of these states are among the 25 mentioned above that have formally accepted chemical recycling into legislation. This fact means that it is often unclear if outputs from chemical recycling are ineligible to count toward PCR requirements, undermining the industry’s potential impact and growth. In some cases, clarity is brought informally through "Frequently Asked Questions (FAQ)" documents, such as in New Jersey. A notable exception exists in Washington, where its PCR law explicitly states: “Both mechanical and chemical recycling methods are acceptable.” This language demonstrates a more inclusive approach, contrasting with states like California and Maine, which remain cautious about embracing chemical recycling. This mirrors uncertainty in extended producer responsibility (EPR) policies which are currently implemented on a state-by-state basis. At present, five states have passed plastic packaging related EPR – Oregon, Colorado, California, Minnesota and Maine. However, the relationship between EPR and chemical recycling remains complex. A key issue lies in how EPR laws define acceptable “end markets” for collected plastics. Oregon’s definition of responsible end markets appears tailored to traditional mechanical recycling, inadvertently excluding many chemical recycling technologies. This exclusion stems from the varied outputs of chemical recycling, which can range from plastics to fuels or chemical precursors, complicating their classification as traditional recycling. Pyrolysis is one of the recycling processes that produce multiple outputs, meaning that it will likely suffer from this definition. INVESTMENT, PROGRESS MIRRORS FRAGMENTATIONAs a result of these legislative hurdles, as well as financial burdens, lack of commercial success in the face of premiums, and public pushback on the environmental consequences of these processes, there have been project cancellations for chemical recycling in 2024. Two notable pyrolysis cancellations are Regenyx and Encina. Announced this week, another US pyrolysis player, Brightmark, has filed for chapter 11 bankruptcy, thus placing their existing Ashley, Indiana plant in jeopardy, though with the hope that both existing and planned facilities will be able to continue operations in the future. Per the bankruptcy filing, the Ashley facility, with an installed capacity of 100,000 tonnes, had been operating at less than 5% capacity. Progress on the Thomaston, Georgia facility announced last year is on going. Brightmark had previously cancelled plans for a separate Georgia facility. Moreover, several facilities continue to see operational challenges and are also heard to be producing a minimal amount of material. Despite these setbacks, pyrolysis is projected to have the most growth based on announced plants. According to data gather from the ICIS Chemical Recycling Supply Tracker – which tracks these facility announcements – the chemical recycling capacity could potentially grow 10 times by 2030, with a majority of that growth expected to come from pyrolysis. Reasons for this include synergies with mechanical recycling by targeting different feedstock and the ability to handle a wider range of feedstock, reducing the degree of sorting needed. Notable expected facilities include ExxonMobil's expansion plans, Braven Environmental's recently announced plans, and LyondellBasell's future plans for the Houston refinery. The chemical recycling industry is nascent as well as controversial. As such, there is a considerable amount of both optimism and challenges. Despite all of the challenges on the horizon, the chemical recycling industry and pyrolysis continue to push forward. Hosted by Resource Recycling Inc, the PRC takes place on 24-26 March in National Harbor, Maryland. ICIS will be presenting "Shaping the Future of Recycled Plastics: Trends and Forecasts" on Monday, March 24th at 11:15AM in room Potomac D. As well as attending our session, we would love to connect with you at the show- please stop by our booth, #308. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Visit the Logistics: Impact on chemicals and energy topic page Focus article by Joshua Dill Additional reporting by Emily Friedman

20-Mar-2025

HOUSTON (ICIS)–US sustainability companies are starting to buckle, with a chemical recycling plant and a bioplastic producer both going bankrupt. Brightmark's Indiana operations filed for bankruptcy protection under Chapter 11, a move that will protect it from creditors while it tries to sell its underutilized chemical recycling plant. The bankruptcy will not affect the other operations of the parent company or its plans to build another chemical recycling plant in Georgia. Danimer Scientific is winding down operations at its plants in Bainbridge, Georgia, and Winchester, Kentucky. Danimer makes polyhydroxyalkanoates (PHA) and formulates polylactic acid (PLA). DANIMER GOES BANKRUPT AFTER ANNOUNCING PLANT CLOSUREDanimer had bet big on PHA, a renewable polyester made by fermenting natural oils. It became the owner of the world's first commercial scale PHA plant in 2022 after it expanded capacity at its site in Winchester, Kentucky, to 55 million lb/year (25,000 tonnes/year), said Frank Pometti, a partner of AlixPartners, the proposed financial advisor for the company. He made his comments in a court filing. By then, Danimer had already broken ground on another plant in Bainbridge that would have produced another 125 million lb/year of PHA. However, Danimer was increasing capacity faster than its customers were enacting sustainability initiatives. Since 2020, Danimer's operating rates never exceeded 15% of capacity. Moreover, Danimer was expanding capacity right when inflation was taking off. Companies like Phillips 66 were revising cost estimates for capital projects by 50%. Danimer would later suspend work on the new PHA plant after a prospective customer indicated that it wasn't ready to switch to the company's bioplastics. To date, Danimer has sunk nearly $190 million into the project. For years, Danimer had courted what it described as a new and significant customer that would have purchased the company's bioplastic to supply an internationally recognized quick-service restaurant with cutlery for all of its locations in North America. By 2025, securing a firm commitment from that customer became critical. Danimer was facing liquidity challenges, and its shares were taken off the New York Stock Exchange (NYSE) in January 2025. A firm volume commitment from that customer could allow Danimer to attract fresh capital from a potential investor, from which the company received a non-binding indication of interest. The customer would not provide the commitment. In March, Danimer reached out to its lenders and another customer in a last-ditch effort to secure a deal to keep the business running. That effort also failed. In mid-March, Danimer announced the shutdown of its operations in Bainbridge, home to the company's corporate headquarters, its PHA demonstration plant and its PLA reactive extrusion plant. It also plans to wind down operations at its plant in Kentucky. Days later, Danimer filed for bankruptcy protection in Delaware Bankruptcy Court. It plans to sell its plants and liquidate the uncompleted project in Bainbridge. The case number is 25-10518. BRIGHTMARK'S CHEM RECYCLING PLANT RUNS AT 5%Brightmark's chemical recycling plant in Indiana has required substantial re-engineering and re-design after starting up in 2023, said Craig Jalbert, chief restructuring officer. He made his comments in court filings. The plant needs $800,000/week just to maintain operations and fund improvement projects – all while working under $172 million of senior debt. To date, the plant's upgrade system has not worked, according to Jalbert. That system was made up of a hydrotreater that cleaned the pyrolysis oil (pyoil) and a fractionator that separated the cleaned oil. After starting up in 2023, the plant only managed to produce 10 million lb (4,500 tonnes ) of pyoil, or 5% of its 100,000 tonne/year capacity. So far, three petrochemical producers have bought its pyoil, which it sold under the brand name PyBright. Pybright did command a premium, but it was not high enough to offset the low run rates and the capital needs of the company. That plant will need more than $100 million in capital investments before it can operate at a high enough rate to be profitable, Jalbert said. Brightmark's parent company had been funding the plants operations and capital expenditures through equity contributions. These have totalled more than $210 million. By February, the parent company determined that it could no longer make the contributions. A $12.9 million payment was due on 1 March. The recycling company defaulted on the payment and filled for Chapter 11 bankruptcy protection on 14 March. Brightmark will continue to operate the Indiana plant while it tries to sell it. If necessary, Brightmark will hold an auction on 7 May. Meanwhile, Brightmark continues to work on its second chemical recycling plant that it is developing in Thomaston, Georgia. The next step is to file for air permits, the company said. The Georgia plant will have a capacity of 400,000 tonnes/year. Brightmark has not said when operations will start. Brightmark filed bankruptcy in Delaware. The case number is 25-10472. Insight article by Al Greenwood

20-Mar-2025

LONDON (ICIS)–EU construction fell by 0.2% in January compared to the previous month, according to official Eurostat data released on Thursday. This was in contrast with the eurozone, which recorded a 0.2% increase for the same period. In December, construction increased by 0.4% in the eurozone and 0.7% in the wider EU, according to data from the EU’s official statistics agency. A drop in civil engineering activity (down 2.8% in the EU, and 1.0% in the eurozone) offset gains in building construction (up 1.2% and 0.9% respectively). The EU recorded a modest increase at the start of 2025, up 0.2% compared to the previous year, with production stable in the eurozone. In contrast with the monthly figures, increased building works (EU up 1.5%, eurozone up 1.8%) was supported by a rise in civil engineering output (up 0.9% for both blocs). Construction is a key end-use market for the chemicals industry, and so weak activity reflects the bearish sentiment witnessed at the beginning of the year. Winter has in the past been a slower period for construction work, with increased output typically expected in periods of warmer weather. In the wake of the COVID pandemic, however, traditional seasonal patterns have been thrown off and European recessions have weighed on sectors like construction, which rely on substantial long-term investments. “The construction sector is under heavy financial pressure, with a growing number of distressed balance sheets. The outlook is less upbeat year on year because of concerns over tariffs,” said ICIS demand analyst Jincy Varghese. “On the positive side, markets are expecting interest rate cuts. The European Central Bank (ECB), as expected, lowered three key interest rates by 25 basis points on 5 February, but the governing council said it was not pre-committing to a particular rate path.” Please also visit the ICIS construction topic page Macroeconomics: Impact on Chemicals.

20-Mar-2025

LONDON (ICIS)–Concerns in the European base oils market about the imminent US-EU trade dispute are limited to the wider economic impact long term, but participants dismissed an immediate effect given an exclusion for oil and oil products. In 2024, base oils were US’s third most exported chemicals into Europe and mostly concentrated on Group II material. According to ICIS Supply and Demand Database, about 800,000 tonnes of Group II volumes were imported  into Europe from the US last year. Existing European domestic supply also comes from the Exxon Mobil-owned base oils plant in Rotterdam established in 2019, which adds about 1 million tonnes of capacity per year. “For the moment I don’t see any impact [from the tariffs], just a lot of tensions and talks and at the end you have to wait and see,” said one market participant. Current market sentiment is focused on the broader effects of the tariffs and retaliatory action from the EU on the wider economy. Any economic impact may also feed into the US dollar exchange rate and therefore may send some ripples into the base oils market. “Anything damaging to the broader economy will hurt base oils demand,” agreed Michael Connolly, principal refining analyst at ICIS. While the tariffs were not perceived as an “an immediate challenge”, some risk remains, market participants told ICIS. “We see the risk in the supply chain is bigger than the tariff itself,” said one source. Some other individual producers may face issues should tariffs be applied on base oils or related commodities, like crude oil, in the future. Base oils hold the top spot for US chemical exports, with flows largely heading to Mexico, the rest of the world and thirdly the EU, closely followed by Canada – also targeted by tariffs this year. Meanwhile, EU exports of base oils to the US  were lower in 2024 than in 2020. Looking at the top chemicals imported from the EU into the US, base oils are ranked seventh. More information on the US tariffs and impact on chemical markets is available on the ICIS topic page. AFPM ‘25: US tariffs, retaliation risk heightens uncertainty for chemicals, economies | ICIS Base oils are used to produce finished lubes and greases for automobiles and other machinery. Graphs by Yashas Mudumbai. Thumbnail shows aerial view of oil refinery or petroleum refinery in the industrial factory of heavy industry zone (image credit: AU USAnakul/Shutterstock)

20-Mar-2025

HOUSTON (ICIS)–Commercial vessels are likely to continue diverting away from the Red Sea in the peak season of summer as the US has stepped up attacks on Houthi rebels in Yemen, a shipping analyst said. Lars Jensen, president of consultant Vespucci Maritime, said shipping capacity is likely to maintain its strong supply/demand balance if demand growth holds up. “Additionally, [US President Donald] Trump has warned that counterattacks from the Houthis will de facto be seen as attacks performed by Iran and that Iran will be held responsible,” Jensen said. “For shipping this means an increased risk of escalation, which could include the Strait of Hormuz.” Trump said on 15 March that “no terrorist force will stop American commercial and naval vessels from freely sailing the waterways of the world”. In a social media post on 16 March, the president said the US military was carrying out aerial attacks on the terrorists’ bases, leaders, and missile defenses to protect American shipping, air, and naval assets, and to restore navigational freedom. Jensen said the Houthis remain defiant and claimed to have attacked a US aircraft carrier with missiles and drone. The Red Sea is also one of several global shipping choke points to be targeted by the US Federal Maritime Commission (FMC) for possible impacts to shipping that could include refusing entry to US ports by vessels registered in countries responsible for creating unfavorable conditions. BACKGROUND Global shipping capacity tightened dramatically in December 2023 when attacks by Houthis on commercial vessels in the Red Sea led to diversions around the Cape of Good Hope, leading to higher costs for carriers using more fuel and more ships for the longer journeys around the south of Africa, and higher container rates for shippers. Houthi rebels began attacks as retaliation for Israel’s attacks on Hamas in the West Bank. There was hope that after a ceasefire was declared between Israel and Hamas in January shippers could return to using the Suez Canal, but most of the major carriers continued to avoid the route. The diversions have the largest impact on the Asia-Europe trade lane. About 30% of all global container trade passes through the Suez, but only 12% of US-bound cargo. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks.

19-Mar-2025

SINGAPORE (ICIS)–Japan’s chemical exports rose by 7.5% year on year to yen (Y) 1 trillion in February, supporting the fifth consecutive rise in overall exports abroad, official preliminary data showed on Wednesday. The country’s exports of organic fell by 2.1% year on year to Y180.7 billion in February, while shipments of plastic materials were up by 10.8% at Y282.5 billion, Ministry of Finance (MOF) data showed. By volume, shipments of plastic materials fell by 1.7% year on year to 429,716 tonnes. Japan’s total exports rose by 11.4% year on year to Y9.19 trillion in February, while imports slipped by 0.7% to Y8.61 trillion. This resulted in a trade surplus of around Y584 billion. By destination, Japan's overall exports to China rose by 14.1% year on year in February, reversing the 6.2% decline in January. Total exports to the US rose by 10.5% year on year in February, while overall shipments to the Association of Southeast Asian Nations (ASEAN)  were up by 13.3%.

19-Mar-2025