Caprolactam and nylon

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 9 May. S Arabia's SABIC swings to Q1 net loss amid higher operating costs By Jonathan Yee 05-May-25 11:36 SINGAPORE (ICIS)–SABIC swung to a net loss of Saudi riyal (SR) 1.21 billion ($323 million) in the first quarter on the back of higher feedstock prices and operating costs, the Saudi Arabian chemicals giant said on 4 May. Ethane fuss cools for NE Asia C2, positions reassessed over Labor Day break By Josh Quah 05-May-25 20:24 SINGAPORE (ICIS)–The early May holidays probably could not have come at a more appropriate time for Asia ethylene players, with players noting that the pause in spot discussions was a good time to take stock of positions going into June shipment talks. Malaysia's Lotte Chemical Titan narrows Q1 net loss on improved margins By Nurluqman Suratman 06-May-25 14:46 SINGAPORE (ICIS)–LOTTE Chemical Titan (LCT) narrowed its first quarter (Q1) net loss to ringgit (M$) 125.7 million ($29.7 million) amid improved margins, the Malaysian producer said on 5 May. Singapore's Aster acquires CPSC at undisclosed fee By Nurluqman Suratman 07-May-25 12:33 SINGAPORE (ICIS)–Aster Chemicals and Energy has reached a sales and purchase agreement to acquire Chevron Phillips Singapore Chemicals (CPSC) through its affiliate, Chandra Asri Capital, at an undisclosed fee, the Singapore-based producer said on Wednesday. Vietnam’s economy to slow despite exports jump, lower inflation – Moody's By Jonathan Yee 07-May-25 16:16 SINGAPORE (ICIS)–Escalating trade tensions with the US are casting a shadow over Vietnam’s growth trajectory in 2025, despite continued growth in exports as well as lower inflation. China SM plagued by weak fundamentals and falling feedstock By Aviva Zhang 07-May-25 16:44 SINGAPORE (ICIS)–China’s styrene monomer (SM) prices fell sharply in April, as a result of decreasing crude oil prices and weak end-user demand expectations caused by the China-US tariff conflicts. The domestic market is likely to face headwinds from supply, feedstock and downstream sectors in May. Asia refined glycerine trades to Europe to be spurred by weak Chinese demand By Helen Yan 08-May-25 14:43 SINGAPORE (ICIS)–European demand for refined glycerine may lend support to regional glycerine producers in southeast Asia, who have been faced with persistently sluggish Chinese demand. Asia VAM plant margins to get a lift from westbound trades By Hwee Hwee Tan 09-May-25 13:08 SINGAPORE (ICIS)–Asia’s vinyl acetate monomer (VAM) producers are eyeing improved netbacks from expansion in westbound shipments as regional trade margins narrow into the second quarter. Asia capro remains pressured by weak benzene, cautious demand outlook By Isaac Tan 09-May-25 13:11 SINGAPORE (ICIS)–Spot prices for caprolactam (capro) in Asia continued to soften in the week ending 7 May, weighed down by persistent losses in the upstream benzene market and a lack of recovery in downstream demand. China Apr export growth slows to 8.1% amid tariff uncertainty By Nurluqman Suratman 09-May-25 16:03 SINGAPORE (ICIS)–China's export growth slowed to 8.1% year on year in April from 12.4% in March in US dollar terms, underscoring the increasing impact of US tariffs amid ongoing uncertainty surrounding a potential trade agreement.

12-May-2025

SAO PAULO (ICIS)–Celanese will aim to weather what is becoming an increasingly “uncertain” second half of 2025 by reducing inventories and keeping firm cost controls, but also by reducing operating rates if demand is not there, the CEO at the US-based acetyls and engineered materials producer said on Tuesday. Scott Richardson added that key end markets for the company such as construction, automotive and consumer goods remain somehow in the doldrums, and occasional improvements in some subsegments during H1 may have just been an illusion of a strong recovery – before the storm. The CEO and the CFO Chuck Kyrish acknowledged, however, there is a high degree of uncertainty about whether slight improvements in H1 in some segments represented genuine demand improvements or temporary supply chain restocking as some customers, them too, would be preparing for a potential turbulent H2. "We are not assuming anything right now. We are continuing to be diligent on driving self-help actions, [and] we are focused on reducing inventory and are going to pull back on rates if we see any kind of reduction in demand," said the CEO, speaking to reporters and chemical equity analysts. The CEO said that the company has been somehow shielded from any direct tariff hit, as its operations in China are mostly focused on the domestic market, but nonetheless the current uncertainty and instability will be one of the factors to make the second half of 2025 an uncertain one. He repeated that claim on several occasions. Celanese’s first-quarter sales fell, year on year, although it managed to narrow the net loss posted in the same quarter of 2024, the company said after the markets closed on Monday. The producer also announced that as part of its efforts to deleverage it is to fully divest its electronic pastes and ceramic tapes producer Micromax, acquired in 2022 as part of the $11 billion acquisition of DuPont’s Mobility & Materials (M&M) business. Despite the poor metrics for the first quarter, the financial results beat analysts' consensus expectations which, together with the Micromax divestment and others which could be on the way, propped up Celanese stock by nearly 9% in Tuesday afternoon trading. AMID THE CHALLENGES, SAVINGSThe CEO said Celanese projects generating between $700-800 million in free cash flow for 2025, driven by optimized working capital management, lower capital expenditure (capex), and comprehensive cost-cutting measures totaling approximately $60 million expected in the latter half of the year. The chemical producer recorded stronger orders in March and April in its Engineered Materials sales volumes, but its Acetyl chain business delivered mixed results, with limited seasonal improvement in key segments including paints and coatings. “In engineered materials, we saw a much stronger March than we saw in January and February. April orders were in line with that March pickup, and the order book for May looks very similar. We are seeing a volume pickup from Q1 into Q2 from engineered materials. June is too early to say [and] there's some uncertainty around where June orders will go,” said Richardson. “On the acetal side of things, we're not seeing the normal seasonal pickup that we would typically see. Usually, Q2 is significantly better volumetrically in sectors like paints and coatings – we haven't seen that. We're seeing some of that, but not nearly at the level that we've seen historically in the past.” The CEO added that within that division, however, the segment producing acetate tow has posted higher sales volumes on the back of some Q1 seasonality. The product is mostly used in cigarette filters as well as Heat Not Burn (HTB) products and demand has been on the rise in countries like Indonesia, Bangladesh and India. Meanwhile, the producer’s beleaguered nylon business, which accounts for approximately 75% of the substantial $350 million profit deterioration in its Engineered Materials segment since 2021, has begun to stabilize following capacity reductions and operational adjustments. However, executives acknowledged considerable work remains to restore this segment to acceptable profitability levels amid persistent industry overcapacity and challenging pricing dynamics. "The industry has given up a lot of margins over the last several years, and it's unsustainable. The actions that we started taking last year around capacity reductions, us flexing a different operating model here, hasn't been enough yet. We are starting to see a stabilization here," said the CEO. "We've been very consistent that our focus is on cash generation, and we are looking at a myriad of options on the divestiture side. It's not just Micromax: we've talked about having a portfolio of things we're looking at." Capex has been reduced to maintenance levels, providing "significant" year-over-year improvement in free cash flow generation, according to Kyrish. Front page picture: Celanese produces acetyls and other chemicals widely used in the paints and coatings sector Picture source: imageBROKER/Shutterstock

06-May-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 25 April. US chemical stocks may already be signaling recession – analyst Plunging US chemical stock prices may already be signaling a recession by year-end 2025, one Wall Street analyst said. Fire, winter freeze push US Ascend into bankruptcy Ascend Performance Materials was already reeling from overcapacity in China and an industrial recession when its main complex caught on fire and a freeze shut down its operations in Texas – events that contributed to the bankruptcy of the nylon 6,6 producer. IMF cuts GDP growth forecasts for China to 4.0%; India to 6.2% The International Monetary Fund (IMF) has cut its growth forecasts for China, India and other developing Asian economies following latest escalation in US-led trade war. US tariffs enlarge woes in Asia chemical freight market Vast uncertainty stemming from the US’ tariff moves has squashed hopes of any near-term recovery for Asia chemical tanker market. Fitch Ratings lowers global auto outlook due to tariffs, forecasts 6.7% fall in US sales Fitch Ratings lowered its global automotive sector outlook to “deteriorating” from “neutral”, and lowered its US sales forecast by 6.7% to 15.2 million from 16.3 million because of US tariffs on auto imports. Dow expands Europe asset review, delays Canada cracker project Dow is to widen its strategic review of European assets and delay work on its planned Canada net-zero cracker project on the heels of a first-quarter net loss. Chems in longest slump in decades as tariffs stifle demand – Dow CEO The chemical industry is facing demand-stifling tariffs just as it is in one of its longest downturns in decades, the CEO of US-based Dow said on Thursday. Mexico’s improved fortunes on US tariffs propping up petchems demand – Entec exec Mexico’s chemicals fortunes seem to be turning for the better after the country was spared from the most punitive US’ import taxes, according to an executive at chemicals distributor major Ravago’s Mexican subsidiary. INSIGHT: China mulls tariff exemptions for US ethane, other chemicals China is considering exempting from tariffs some US goods worth about $46 billion, including chemicals such as ethane, polyethylene (PE) and styrene polymers. LyondellBasell to mitigate tariff impact with global supply network – CEO LyondellBasell has optionality to mitigate tariff impacts with its global supply network across the US, Europe, Middle East and China, its CEO said.

28-Apr-2025

HOUSTON (ICIS)–Ascend Performance Materials was already reeling from overcapacity in China and an industrial recession when its main complex caught on fire and a freeze shut down its operations in Texas – events that contributed to the bankruptcy of the nylon 6,6 producer. Ascend Performance Materials filed for bankruptcy protection under Chapter 11 on Monday. The filing will allow Ascend to continue operations and protect it from creditor lawsuits while it reorganizes its finances. Ascend already has support from its lenders, and it expects to emerge from bankruptcy protection in six months. NYLON MARKET ALREADY STRUGGLING WITH OVERCAPACITYJohn Rogers, an analyst at Moody’s Ratings, noted how the entrance of China caused fundamental changes to the nylon market. “The issue for Ascend was the increased capacity in China by established western producers and domestic companies along with the ability of Chinese producers to now produce [adiponitrile] and [hexamethylene diamine], two key intermediates that have sustained Ascend’s margins during prior downturns.” Over the past six years, Chinese production capacity for chemical intermediates has grown by 93%, and downstream production by 64%, said Robert Del Genio, Ascend's chief restructuring officer. He made his comments in court documents. Many of these new market entrants from China sought to gain market share by selling at a cash loss or pursuant to subsidies from the Chinese government, Del Genio said. Ascend was faced with grim choices. It could cut prices or lose customers to these new entrants. Meanwhile, a prolonged recession has struck manufacturing, a key end market for the nylon produced by Ascend. Many of the company's key end markets have been slow to recover to pre-pandemic levels of production because of destocking, inflation, labor shortages and supply-chain issues, Del Genio said. Weak demand has caused prices for nylon 6,6 to fall and Ascend's EBITDA margin to approach its lowest level in almost a decade, Del Genio said. For chemical intermediates, long-term take-or-pay contracts signed when times were good have turned into money losers under these tougher economic conditions. Ascend was forced to sell at a loss under these contracts. CLOSURE OF BARGE CHAMBER ADDS MORE EXPENSESAscend's main inland barge chamber at Wilson Lock had been closed after cracks were discovered in the lock gates in September 2024, Del Genio said. Wilson Lock is the only way that barge shipments can enter and leave the company's operations in Decatur, Alabama, Del Genio said. With Wilson Lock shut down, the Decatur site has had to rely on trucks to ship acrylonitrile (ACN) from Texas and to move adiponitrile (ADN) to Pensacola. "The use of a trucking alternative has had a $4 million impact on the company’s first two quarters of financials in 2025 in addition to significantly increasing transit times," Del Genio said. Trucking also added delays, which left Ascend's Decatur and Pensacola operations vulnerable to disruptions, Del Genio said. To prevent this, Ascend bought ACN and ADN from third parties at a premium, adding an additional $4 million in expenses. FIRE, FREEZE PROVE TOO MUCHIn December 2024, a fire started at Ascend's main nylon complex in Pensacola, Florida, which disrupted operations until the middle of February 2025, Del Genio said. The fire cost Ascend $6 million in earnings before interest, tax, depreciation and amortization (EBITDA). About a month after the fire, sub-freezing temperatures hit Texas, where Ascend makes hydrogen cyanide (HCN) and ACN at its complex in Chocolate Bayou, Del Genio said. As a proactive step, Ascend shut down its operations at Chocolate Bayou to prevent mechanical failure and threats to the environment. The shutdown of Chocolate Bayou led to a cascade of side effects. Ascend's operations in Decatur, Alabama, needed the ACN from Chocolate Bayou to continue running, Del Genio said. The shutdown of Chocolate Bayou forced Ascend to buy ACN on the open market so it could keep Decatur running. Those purchases further depleted the company's cash reserves. Overall, the closures of Chocolate Bayou, Pensacola and Wilson Lock lowered Ascends Q1 EBITDA by $21 million, Del Genio said. HEADING TOWARDS BANKRUPTCYIn response to a worsening liquidity crisis, Ascend increased its vendor payment deferrals. By late February, the company's past-due accounts-payable wall exceeded $110 million. Vendors responded by demanding cash in advance, tightening payment terms, threatening to remove rental equipment and freezing supplies of goods and services. The company was approaching a breaking point. Ascend owed money to companies that provided critical goods and services. If these companies cut off Ascend, it could bring the company's plants to a halt. Ascend arranged bridge loan financing that gave the company enough time to file for bankruptcy protection in US District Court, Texas Southern District. The case number is 25-90127. (Thumbnail shows nylon. Image by Shutterstock)

22-Apr-2025

TORONTO (ICIS)–Canada will continue resorting to retaliatory tariffs against the US – regardless of which party, the incumbent Liberals or the opposition Conservatives, wins the upcoming 28 April federal election. In an election debate on Thursday evening, Prime Minister Mark Carney and Pierre Poilievre, leader of the Conservatives, both said that retaliatory tariffs were necessary to deter the US tariff threat. However, Carney said that Canada could not impose full-scale “dollar-for-dollar” counter-tariffs, given that the US economy is more than 10 times larger than Canada’s economy. Rather, the Liberals would aim at counter-tariffs that have maximum impact on the US, but only minimum impact on Canada. In opinion polls about the elections, the Liberals are currently on track for their fourth consecutive victory since 2015. Carney took over from former Prime Minister Justin Trudeau on 14 March. AUTO EXEMPTION Carney also confirmed that the government will be granting exemptions to its 25% retaliatory tariffs on US autos that took effect on 9 April. The exemptions will apply to automakers that maintain production and investments in Canada, he said. According to information on the website of Canada’s finance ministry, a “performance-based remission framework” would allow automakers that continue to manufacture vehicles in Canada to import “a certain number” of US-assembled, USMCA-compliant vehicles into Canada, free of retaliatory tariffs. The number of tariff-free vehicles a company is permitted to import would be reduced if there are reductions in the automakers’ Canadian production or investments, according to the ministry. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Please also visit the ICIS topic pages:Automotive: Impact on chemicals, and US tariffs, policy – impact on chemicals and energy Thumbnail photo of Stellantis' Canadian auto assembly plant at Windsor, Ontario, where production was suspended because of tariff uncertainties (photo source: Stellantis)

18-Apr-2025

SINGAPORE (ICIS)–US “reciprocal” tariffs are prompting a shift of trade flows and supply chains as market players in Asia seek alternative export outlets for some chemicals, while overall demand remains tepid amid growing fears of a global recession. US-China trade war 2.0 keeps market players on edge Regional traders wary amid US’ 90-day tariff suspension SE Asia prepares for US trade talks as China president visits Vietnam, Malaysia, Cambodia Trades across the equities and commodities markets last week have been highly volatile since the start of April in the wake of US President Donald Trump’s reciprocal tariffs, the highest of which was imposed on China. The higher-than-expected tariffs sparked concerns over a possible global recession that sent crude prices slumping last week, dragging down downstream aromatics products such as benzene and toluene. Trump had raised the reciprocal tariffs for China three times in as many days – from 34%, to 84% and to 125% on 9-11 April – with China responding in kind. Including the combined 20% tariffs imposed in the past two months, the US’ effective additional tariffs for China stand at 145%. In the polyethylene (PE) market, prices are softening as US-bound export orders shrink, while polypropylene (PP) exports from China to southeast Asia look set to decline. Most polyolefin players in Asia and beyond are currently attending the 37th International Exhibition on Plastics and Rubber Industries (Chinaplas) in Shenzhen, China, which will run up to 18 April. Some China-based market players said the event could provide them an opportunity to explore alternative markets by deepening their relationships with buyers in southeast Asia. Exports of chemicals and plastics used in automobiles to the US, meanwhile, are likely to shrink as well amid auto tariffs from the world’s biggest economy. Apart from PP, exports nylon, butadiene (BD), and styrene butadiene rubber (SBR) to the US are expected to decline. Trump, on 14 April, said he is considering possible exemptions to his 25% tariffs on imported automobiles and parts. His tariffs on all car imports took effect on 3 April, while those on automotive parts will take place no later than 3 May. The automotive sector is a major downstream industry for petrochemicals. China’s PE imports from the US spiked in early 2025 but this is expected to reverse sharply because of the trade war between the two countries. However, China has a substantial number of naphtha and coal-based PE plants starting up in 2025 with a combined PE capacity of more than 8 million tonnes, which should reduce the country’s dependence on imports. The US will also need to redirect surplus PE to alternative markets amid dwindling Chinese demand. Market players expect demand in the second quarter to be worse than the first three months of 2025 amid hefty US reciprocal tariffs hanging over countries in Asia when Trump’s three-month pause lapses. Implementation of the US’ reciprocal tariffs were suspended on 9 April, for 90 days, providing some reprieve to about 60 countries, except China. Freight rates between China and the US have already decreased due to the trade war as demand evaporates. However, vinyl acetate monomer (VAM) prices in India are bucking the general downtrend and have firmed up as the chemical is not directly subjected to US tariffs. VAM is primarily used in the production of adhesives, textiles, paints and coatings. SE ASIA PREPARE TRADE TALKS The 10-member ASEAN group pledged that they will not impose retaliatory tariffs on the US following an emergency meeting, opting to negotiate with the US. Among the nations scheduled for talks with the US are Vietnam, Thailand and Indonesia – all of which were slapped with high tariffs of up to 46%. Thailand intends to scrutinize imports more thoroughly to prevent cheap imports from China entering the country, as the US has warned against such “third-country” methods of evading tariffs. Anti-dumping duties are also being considered by Malaysia and Indonesia against China to counter an expected rise in cheap imports to their countries. Trade flows are still expected to change as China steps up talks and partnerships with the EU, as well as with southeast Asian countries such as Malaysia, Vietnam and Cambodia. While several Asian nations are lining up for discussions with the US government, China and the US have yet to schedule a meeting, heightening concerns of economic headwinds in the coming year. Singapore has revised down its GDP growth forecast for 2025 to between 0-2% on account of the US-China trade war, and other countries are expected to follow suit. Before the pause on reciprocal tariffs, the World Trade Organization (WTO) had forecast trade growth to contract by 1.0% in 2025, from 3.0% previously. Meanwhile, China President Xi Jinping is currently in southeast Asia – with state visits to Vietnam, Malaysia and Cambodia – up to 18 April, to forge stronger economic ties with its Asian neighbors amid an escalating trade war with the US. China posted an annualized Q1 GDP growth of 5.4%, unchanged form the previous quarter, while there is a consensus that the Asian economic giant would weaken from Q2 onward. Focus article by Jonathan Yee Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Additional reporting by Samuel Wong, Izham Ahamd, Jackie Wong, Hwee Hwee Tan, Joanne Wang, Lucy Shuai, Jonathan Chou, Angeline Soh, Melanie Wee, Shannen Ng and Josh Quah

16-Apr-2025

HOUSTON (ICIS)–The tariffs imposed by the US and the uncertainty of what will follow has caused a crash in oil prices and is one of the main factors behind a global decline in chemical prices in the days after the country's April announcement of its reciprocal tariffs. The following chart shows the sharp declines among the seven building-block chemicals. Notably, the declines continued even after the US paused the implementation of the higher reciprocal tariffs and settled for the relatively lower 10% rate against most countries. The exception is China, which has been responding to US tariffs with matching rates. The two countries are now imposing triple-digit tariffs on each others' imports. While the US has made exceptions for critical minerals, pharmaceuticals and electronics, China has made none. China's tariffs include the large amounts of natural gas liquids (NGLs) that it imports as feedstock for its propane dehydrogenation (PDH) units and its ethane crackers. LOWER OIL PRICESPrices for plastics and petrochemicals tend to rise and fall with those for oil. Oil prices have been falling since the start of the year, but the decline accelerated rapidly following the April tariff announcements by the US, as shown in the following table. Figures are in dollars per barrel. 2-Jan 1-Apr 14-Apr Brent 75.93 74.49 64.88 WTI 73.13 71.20 61.53 The decline was remarkable because it happened despite the weakening of the US dollar. The US dollar index has fallen by 8% as of 14 April since the start of the year. Oil prices tend to rise when the dollar weakens. This relationship has broken down in part because of plans by OPEC and its allies (OPEC+) to increase May production by an amount much higher than anticipated. But another reason is lower demand. Following the reciprocal tariff announcement by the US, ICIS lowered its forecast for global oil demand by 10%. ICIS also lowered its forecast for Brent oil prices for the rest of the year. Lower oil prices are manifesting themselves in aromatics markets, which are closely tied to crude. Export declined month on month for toluene and other aromatics from South Korea to the US for gasoline blending for March loading. Prices of toluene in India tumbled to fresh three-year lows. FALLING CHEM DEMANDDemand for plastics and chemicals also tends to rise and fall with the economy. Economists have started lowering their forecasts for growth, according to a periodic survey conducted by The Wall Street Journal. Survey participants also increased the chances of a recession. Tariffs will act like a sales tax. Companies and consumers will treat the tax like any other – they will take steps to avoid it by purchasing fewer goods. If one applied the US baseline tariff of 10% to the $3.3 trillion of goods the US imported in 2024, that comes to $3.3 billion in taxes. That represents a lot of potential purchases that US companies and consumers could defer or abandon. RPM International, a US producer of coatings, adhesives and sealants, expects that the slow- to no-growth environment of the past 18 months will persist. RPM's comments are notable because they were made on 8 April, after the US announced its reciprocal tariffs. UNCERTAINTYUncertainty is starting to paralyze some key chemical end markets. The auto industry in the US is already showing signs of this, RPM said. In European polyethylene (PE) markets, buyers are retreating to the side lines rather than committing to volumes in the current climate. “All in all, people are being careful, and that's not just converters that also consumers. People are worried about the future, and it's probably affecting demand further down chain as well," said ICIS markets editor Ben Monroe-Lake. “All in all, people are being careful, and that's not just converters that also consumers. People are worried about the future, and it's probably affecting demand further down chain as well.” REDIRECTED TRADE FLOWSBy imposing such broad tariffs, the US has erected a formidable trade barrier around its economy, which has caused exporters to redirect their shipments to other markets. This is especially true of Chinese exports. The US has created an effective embargo of Chinese imports by increasing its tariffs by 145% in 2025. Even with the recent exemptions adopted by the US, a large portion of Chinese imports will need to find new markets. The following table shows 2024 US general imports from China. Figures are in US dollars. Chapter Description Value 29 Organic chemicals 8,519,224,570 39 Plastics and plastic products 19,290,918,758 All Chapters Total 438,947,386,145 Source: US International Trade Commission (ITC) Similarly, China's 125% tariffs on shipments from the US would cause a large amount of products to be redirected, as shown in the following table. Figures are in US dollars. Chapter Description Value 27 Coal; mineral fuels, oils and products 14,727,138,106 29 Organic chemicals 3,980,594,815 39 Plastics and plastic products 7,452,840,887 All Chapters Total 143,545,739,507 Source: US ITC Given the tariff rates, it's likely that direct trade between the US and China will crater, said Lynn Song, chief economist, Greater China, at ING. Re-arranging global trade flows on such a scale will affect local chemical markets directly and indirectly through the influx of end products made with plastics and chemicals. The world was already contending with an oversupply of chemicals. This will aggravate it Such concerns have already appeared in east Chinese markets for certain grades of linear low density polyethylene (LLDPE) and high density polyethylene (HDPE), which reached multi-year lows. Market players are worried that US tariffs will cause a decline in demand for Chinese products that use these plastic grades. Similar concerns are arising in the Middle East among buyers and sellers of polymeric methylene diphenyl diisocyanate (PMDI) US auto tariffs could cause producers in the rest of the world to reduce output of vehicles and parts. These auto tariffs are global, and they are separate from the reciprocal tariffs. As such, the US auto tariffs are still in effect. If auto producers lower output, that will reduce demand for plastics and chemicals used in auto production, such as polypropylene (PP), nylon, butadiene (BD), and styrene butadiene rubber (SBR) “I may have to tweak my operations if I lose access to the US market, and if so, certainly I would be prudent now not to overcommit on forward deliveries of raw materials including EPDM,” said an auto parts maker in southeast Asia. Ethylene Propylene Diene Monomer (EPDM) refers to a synthetic rubber. DEFLATIONARY SPIRALIf companies expect declines to continue, then they may postpone purchases, setting off a deflationary spiral, in which sellers lower prices each time buyers defer purchases. Such a dynamic could emerge in European ethylene market and its PP market. US TARIFFS COULD MAKE THE COUNTRY THE EXCEPTIONAlthough US prices for building blocks have fallen since the April tariff announcement, many have still raised their expectations for inflation. RPM said on 8 April that the tariffs announced at that time would raise its raw material costs for its US operations by 4.3%. RPM's forecast did not take into account the 90-day pause on tariffs that the US announced on 9 April. That said, others are expecting prices in general to increase. Seasonally adjusted, a net 30% of US small business owners planned price hikes in March, up one point from February and the highest reading since March 2024. CHINA'S NGL TARIFFS MAY CREATE US GLUTChina's tariffs of 125% do not carve out any exemptions for ethane, liquefied petroleum gas (LPG) or other natural gas liquids (NGLs). China imports large amounts of these feedstocks from the US If China maintains the tariffs on NGLs, it could cause a supply glut of these primary chemical feedstocks in the US. The country does not have the chemical capacity to absorb the shipments that would normally go to China, and it is unlikely that the rest of the world can fully offset the loss of China as an export destination. If China maintains its tariffs on US NGLs, ICIS expects that US ethane and propane prices will decline. Insight article by Al Greenwood Additional reporting by Vicky Ellis, Ajay Parmar, Nurluqman Suratman, Isaac Tan, Nel Weddle, Melanie Wee, Kojo Orgle and Jonathan Yee Infographics by Yashas Mudumbai (Thumbnail shows a flask, which commonly holds chemicals. Image by Fotohunter.)

15-Apr-2025

SINGAPORE (ICIS)–Arab Gulf (AG) ammonia annual average export price is forecast to ease further this year (see Chart 1) as producers are expected to keep prices competitive to maintain market shares in Asia, particularly as weak Asian demand for industrial applications including acrylonitrile (ACN) and caprolactam (capro) have capped ammonia prices. AG ammonia producers are expected to maintain its export prices in 2025 at just below parity with southeast Asian producer with FOB AG at around 97% of FOB SE Asia prices (see Chart 2) to optimize returns while keeping market shares in their key India and Taiwan markets. AG ammonia producers’ netbacks in Taiwan and India in 2025 are projected to return to levels similar to 2020 before the Russian-Ukraine war with AG FOB at around 89% and 84% of CFR Taiwan and CFR India prices, respectively (see Chart 3) Asia remains an important market for AG producers particularly when their returns from Europe have been shrinking. AG ammonia producers’ FOB netbacks from Europe is expected to remain constrained in 2025 with the FOB AG annual price hovering at around 63% of the CFR NWE annual price, following two years of higher returns in 2022 and 2023. (see Chart 4) AG ammonia producers have not been exporting much to Europe except for 2022 and 2023 when outbreak of the Russia-Ukraine conflict and subsequent sanctions on Russian exports created a window of opportunity for AG producers. (See Chart 5) Europe ammonia import prices are expected to remain elevated as high natural gas prices had led several ammonia plants in the region to be permanently shut in 2022, with the ammonia prices remaining tied to the prices of key exporters Trinidad and Algeria. Egypt also exports ammonia to Europe, but its production has been susceptible to disruptions caused by natural gas shortages as seen in Q3 last year and February this year. Europe import prices are expected to ease if Russia resumes exports to Europe hence a burning question for importers is when Togliattiazot’s (TOAZ's) export terminal at Russia’s Taman Port would start loading ammonia. TOAZ is part of the Uralchem Group, and the terminal was expected to start loading ammonia in Q1 this year. Ammonia is a feedstock for inorganic fertilizers such as urea and ammonium sulphates and chemicals such as acrylonitrile (ACN). With contributions from Song Hea Beom, Sylvia Traganida

28-Mar-2025

SINGAPORE (ICIS)–Shares of automotive companies in Asia slumped on Thursday after US President Donald Trump signed an executive order imposing 25% tariffs on all foreign-made cars from 2 April. At 2:30 GMT, Japanese carmakers Honda Motor was down by 2.75%, Nissan Motor declined by 2.56%, and Toyota Motor fell by 3.24% in Tokyo. South Korean Hyundai Motor was down by 3.24%, while Kia declined by 3.25% in Seoul. Being major car exporters to the US, Japan and South Korea are expected to take heavy hits from US tariffs. Chinese electric vehicle (EV) companies, however, appeared unaffected, BYD – China’s biggest EV producer – gained 0.85% on the Hong Kong Stock Exchange. There would be no exceptions on the tariffs, while US-Mexico-Canada Agreement (USMCA)-compliant automobile parts will remain tariff free, according to Japan-based MUFG Global Markets Research. Meanwhile, Trump considers Hyundai’s recently announced plan to invest $21 billion in the US as a win for his tariff policy. Apart from reducing the US trade deficit with other nations, Trump’s tariff policy also aims to attract more investments into the US. The automotive sector is a major downstream sector for petrochemicals, which account for a third of raw material costs of an average vehicle. Automotives drive demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), and styrene butadiene rubber (SBR). The US Federal Reserve maintained its short-term interest rates in the 4.25-4.50% range last week, as tariff uncertainty stoked fears of rising inflation. Uncertainty over tariffs could dampen market sentiment more than the tariffs themselves, Minneapolis Federal Reserve Bank president Neel Kashkari said.  Visit the US tariffs, policy – impact on chemicals and energy topic page Thumbnail image: Japan car exports – July 2014 (Everett Kennedy Brown/EPA/Shutterstock)

27-Mar-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 21 March. Bearish sentiment prevails in Asia petrochemicals amid oversupply By Jonathan Yee 17-Mar-25 14:39 SINGAPORE (ICIS)–Weak downstream demand, exacerbated by economic and geopolitical uncertainties, keeps sentiment bearish and buyers cautious across petrochemical markets in Asia. China unveils consumption stimulus to safeguard growth By Fanny Zhang 17-Mar-25 16:00 SINGAPORE (ICIS)–China’s State Council announced on Sunday a special action plan to boost consumption, in fresh efforts to help achieve its growth target of around 5% for 2025. Monthly price gaps between Asia rPET, PET remain wide in Q1 By Arianne Perez 17-Mar-25 17:07 SINGAPORE (ICIS)–Average monthly spot prices between bottle-grade recycled polyethylene terephthalate (rPET) and polyethylene terephthalate (PET) pellets were persistently wide amid various factors in the Asian markets. Asia methanol in flux as Iran capacities expected to come onstream By Damini Dabholkar 17-Mar-25 17:26 SINGAPORE (ICIS)–The Asian methanol market has seen some price uncertainty over the last few weeks, with several market participants closely watching developments related to the start-up of methanol plants in Iran. INSIGHT: Asia chemical prices to soften in March amid crude oil losses – ICIS By Ann Sun 18-Mar-25 13:03 SINGAPORE (ICIS)–Asia’s petrochemical prices in March are expected soften due to downward pressure from crude oil losses. This forecast is driven by bearish sentiment caused by concerns over OPEC and its allies’ (OPEC+) planned output increase and the US’ trade policies. China remains net SM importer in 2024, setting stage for active exports in 2025 By Luffy Wu 18-Mar-25 16:04 SINGAPORE (ICIS)–Despite market players' rising focus on China's styrene monomer (SM) export market, the country remained a net SM importer in 2024 with an annual SM trade deficit of 159,719 tonnes. INSIGHT: China PET resin production growth to decelerate in 2025 By Jimmy Zhang 18-Mar-25 17:30 SINGAPORE (ICIS)–On an annual basis, China PET resin (mainly bottle grade) production growth remained quite high in both 2023 and 2024, at around 10% and 15% respectively. ICIS China February petrochemical index dips; March demand soft By Yvonne Shi 19-Mar-25 12:13 SINGAPORE (ICIS)–China’s domestic petrochemical prices weakened in February amid a sluggish market, with downstream factories slow to resume operations after the Lunar New Year holiday. PODCAST: Volatility seen in Asia, Mideast isocyanates amid recent supply changes By Damini Dabholkar 19-Mar-25 13:25 SINGAPORE (ICIS)–Asia and Mideast isocyanates prices climbed rapidly immediately after the Lunar New Year holiday, followed by sharp corrections in mid to end-February. Indonesia central bank keeps policy interest rate at 5.75% after market rout By Nurluqman Suratman 19-Mar-25 17:38 SINGAPORE (ICIS)–Indonesia’s central bank kept its policy rate unchanged at 5.75% on Wednesday, a day after local stocks closed nearly 4% lower, on concerns over the country’s economic growth prospects and government finances. Arbitrage widens for Asia-Europe acetic acid, etac spot trades By Hwee Hwee Tan 20-Mar-25 13:03 SINGAPORE (ICIS)–Traders leveraging on easing freight rates and a stronger euro have fixed several spot cargoes for acetyl products bound for Europe from China, lifting Asia-Atlantic trade volume into March. INSIGHT: Persistent capro oversupply sees plant closures, consolidation in Asia By Isaac Tan 20-Mar-25 14:00 SINGAPORE (ICIS)–The global caprolactam (capro) market is grappling with significant challenges, as oversupply from expanding Chinese production capacities, weak downstream demand, and rising margin pressures combine to create a pessimistic outlook for producers worldwide. Vopak's €1bn investments in energy transition projects underway – exec By Jonathan Yee 20-Mar-25 15:49 SINGAPORE (ICIS)–Dutch storage and infrastructure firm Vopak is doubling down on its energy transition strategy, re-affirming its commitment to invest €1 billion in low-carbon infrastructure through to 2030, the company’s Asia and Middle East chief told ICIS. Japan Feb core inflation at 3.0%; upholds interest rate hike hopes By Nurluqman Suratman 21-Mar-25 12:18 SINGAPORE (ICIS)–Japan's core consumer prices excluding fresh food in February rose by 3% year on year, remaining above the central bank's 2% target, reinforcing market expectations of further interest rate hikes this year. PODCAST: A tale of two olefins; C2, C3 to see diverging demand trends By Damini Dabholkar 21-Mar-25 13:32 SINGAPORE (ICIS)–Asia propylene (C3) editor Julia Tan speaks with Asia ethylene (C2) editor Josh Quah about the impact of recent tariff wars on downstream market sentiment, along with the markets' outlook for the second quarter.

24-Mar-2025