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The shift to online shopping has increased demand for packaging paper and the caustic soda used to make it. The trend for lightweighting vehicles has increased demand for aluminium and for caustic soda, which is used to refine alumina from bauxite. It is also used in a number of chemical and refinery processes.
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SHIPPING: Asia-US container rates edge higher on tariffs, tighter capacity
HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US reversed direction and edged slightly higher this week as US tariffs went into effect and as capacity tightened. The increases are in line with global average rates, which ticked higher by 3% this week, according to supply chain advisors Drewry and as shown in the following chart. Rates from Shanghai to Los Angeles rose by 3% and rates from Shanghai to New York rose by 2%, as shown in the following chart. Drewry expects rates to increase in the coming weeks due to tariffs and reduced capacity. Rates from online freight shipping marketplace and platform provider Freightos also rose over the week, with Asia-USWC rates up by 3% and Asia-USEC rates up by 5%. Judah Levine, head of research at Freightos, said many shippers rushed to get cargo loaded in the small window before tariffs went into effect, but noted that there are concerns that the sudden policy changes could also mean delays at US customs for arriving shipments. Levine said he expects to see a drop in demand for containers into the US as shippers wait for the situation to stabilize. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said global maritime supply chains have become more complex amid the trade war between the US and China. “Shippers will be monitoring freight costs across the major and secondary trades,” Sand said. “Japan, for example, is one the key trade partners with the US, so a rush to frontload goods could put upward pressure on spot rates on this trade.” 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. LIQUID TANKER RATES HOLD STEADY US liquid chemical tanker freight rates as assessed by ICIS held steady this week despite downward pressure for several trade lanes. There is downward pressure on rates along the USG-Asia trade lane as charterers are seeking to divert cargoes to other regions. Overall, most market participants continue to struggle with tariff uncertainties and other alternatives. As a result of the limited cargo activity, spot rates appear to be softening. However, methanol requirements from the region remain active to Asia. Similarly, rates from the USG to Rotterdam were steady this week, even as space among the regular carriers remains limited. However, several larger size cargos of caustic soda, methanol, MTBE, ethanol and styrene were seen in the market. Several outsiders have come on berth for both April and May, adding to the available tonnage for completion cargos. Easing demand for clean tankers has attracted those vessels to enter the chemical sector. Contract tonnage continues to prevail, with interest in styrene, methyl tertiary butyl ether (MTBE), methanol and ethanol. For the USG to South America trade lane, rates remain steady with a few inquiries for methanol and ethanol widely viewed in the market. Overall, the market was relatively quiet with fewer COA nominations, putting downward pressure on rates as more space has become available. On the bunker side, fuel prices have declined as well, on the back of plummeting energy prices, as a result week over week were softer. Additional reporting by Kevin Callahan Thumbnail image shows a stack of shipping containers. Image by Shutterstock
11-Apr-2025
INSIGHT: India anchors PVC future amid global market re-alignment
MUMBAI (ICIS)–India’s vinyl industry is entering a new era of accelerated growth and global relevance as it emerges as the single-largest contributor to global polyvinyl chloride (PVC) demand expansion, even as the broader chemical industry faces overcapacity and trade re-alignments. India leads global PVC demand growth through 2030 Rising imports, Chinese dominance raise trade and dumping concerns Domestic capacity, infrastructure push support long-term market expansion At the Vinyl India 2025 conference held in Mumbai, senior executives and market watchers outlined India’s evolving role in global petrochemical dynamics, particularly as its PVC consumption is projected to double by 2030, fueled by urbanization, infrastructure programs, and a burgeoning middle class. The south Asian country is set to become the world’s second-largest economy by 2050 based on analysts’ projections. Its economic rise is bringing the PVC industry into sharper focus as a key enabler of infrastructure transformation. “PVC is no longer just a material; it’s an infrastructure backbone,” said Unmesh Nayak, polymer chain president at Indian conglomerate Reliance Industries Ltd. From pipes, cables, and fittings to flooring and films, vinyl products are essential to India’s economic growth. STRUCTURAL SHIFT IN GLOBAL CHLOR-ALKALI MARKETS While India’s PVC demand outlook remains bullish, global chlor-alkali players are navigating complex shifts in supply-demand dynamics. A senior industry executive noted that caustic soda demand remains resilient due to its wide industrial use, while chlorine – which is primarily linked to PVC production – faces higher volatility and weaker margins. Following price spikes for caustic soda, chlorine and PVC in 2021–2022, new investments – particularly in Asia – have triggered capacity overbuild, with a long market expected through to 2029. This imbalance is expected to benefit PVC buyers but continue to strain global margins. Meanwhile, India’s energy imports, logistics costs, and new tariff structures are altering traditional trade flows. US Gulf Coast vinyl exports face mounting challenges, even as India steps up to absorb rising global supply. PVC TRADE FLOWS REBALANCE AMID GLOBAL GLUT According to market experts, the global PVC market is set to grow by 16 million tonnes by 2034, a near one-third increase from 2024 levels. However, the center of gravity is shifting. While China remains the largest demand driver, its role in capacity additions is waning. India, southeast Asia, and the Middle East are rising as new hubs. India is expected to post the highest compounded annual growth rate (CAGR) in PVC demand globally, backed by growth in construction, water management, and mobility. However, trade imbalances are creating new risks. Chinese producers are increasingly exporting PVC in the form of finished goods – films, rods, sticks – nearly doubling exports to India since 2019. Today, 95% of India’s PVC product imports come from China, raising concerns over the health of the domestic downstream industry. “China is exporting its overcapacity through products, not resin,” noted the industry analyst. “This is easing domestic supply pressures in China but creating dependency risks for India.” INDIA STRUCTURAL DEMAND OUTLOOK REMAINS ROBUST Despite global headwinds, India’s structural story remains intact. Tricon Energy president & CEO Ignacio Torras outlined how China’s chemical capacity has outpaced demand, with nearly 20% of its PVC capacity idle due to a real estate slowdown. In stark contrast, India’s PVC consumption is on a steep upward curve. “India has electrified every corner, internet access has reached 70% of the population, and 150 million more people will join the middle class within five years,” he said. “These trends will directly translate to PVC demand.” India’s per capita PVC use is expected to rise from 2.6 to 5.0 kilogram (kg) by 2030, still well below China’s 16 kg – indicating significant headroom for growth. Even amid margin pressure, as tracked by Tricon’s internal index, the executive maintained that India offers scale, resilience, and long-term opportunity. GROWTH BUT NOT WITHOUT CHALLENGES While the outlook is positive, challenges loom. Stakeholders repeatedly highlighted the need for: Tariff safeguards to prevent dumping of cheap PVC and derivatives Investment in downstream manufacturing to reduce reliance on finished product imports Policy and institutional reforms to support rapid infrastructure rollout Circularity and ESG (environment, social, governance) compliance, as sustainability becomes central to investment decisions The National Infrastructure Pipeline (NIP) and other public sector initiatives are playing a catalytic role, but speakers emphasized that regulatory consistency and private-public coordination will be key to unlocking India’s full vinyl potential. As the global industry braces for a prolonged phase of overcapacity and price volatility, India offers a unique growth engine – one that could reshape demand dynamics in both resin and downstream vinyl markets. Insight article by Aswin Kondapally Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.
11-Apr-2025
INSIGHT: US-China Trade War 2.0 to massively disrupt petrochemical trade flows
NEW YORK (ICIS)–It is now a full-blown trade war between the US and China with the launch of massive salvos of tariffs and retaliatory tariffs, far exceeding levels during the first US-China trade war which started in 2018. Trade flows are set to be disrupted in a big way, resulting in a seismic shift in the global chemical industry. The US implemented additional 84% tariffs on imports from China on 9 April – a 34% reciprocal tariff announced on 2 April, and another 50% in response to China’s initial planned retaliation of 34% tariffs on imports from the US. With the earlier 20% tariffs on China implemented in February (+10%) and March (+10%), the additional US tariffs on imports from China jump to 104%. The US escalation against China brings the US effective tariff rate to 29.4%, the highest level since 1890 during the McKinley administration, pointed out Kevin Swift, ICIS senior economist. Since 2 April, dubbed ‘Liberation Day’ by US President Trump, the US claims over 50 countries have reached out for negotiations. “It’s been a week, and this is causing real damage to the economy. Credit markets starting to show signs of stress,” said Swift. “We are increasingly concerned as this continues to play out with no sign of resolution.” The ICIS economist sees a 34% probability of a recession in the US economy in the next 12 months but adds that “the risk of recession is rising every day this goes on”. US PE, EG EXPORTS TO CHINAChina plans to retaliate against the retaliation, upping the tariff ante by another 50% and bringing tariffs on US imports to 84% if implemented on 10 April. US exports of polyethylene (PE) and ethylene glycol (EG) to China can fully be expected to grind to a halt. Since 2018, the start of the first US-China trade war, US ethylene, PE and EG exports to China have exploded more than four times to over 3.5 million tonnes in 2024, with PE at around 2.4 million tonnes – more than three times the volumes in 2018, according to the ICIS Supply and Demand Database. US PE exports to China accounted for between 15-20% of total US PE exports, depending on grade. US EG exports accounted for over 30% of total US EG exports. "There is no other market that can absorb as much EG as China. There could be some reshuffling, but not complete substitution," said Antulio Borneo, vice president and Americas olefins lead analyst at ICIS. Even with China’s initial planned retaliatory tariffs of 34%, “US PE margins go negative at current production costs,” said Harrison Jacoby, director of PE at ICIS, who noted that US PE exports overall have been down 8.1% year to date. While US PE exports could shift to Europe, the EU is planning retaliatory tariffs against the US, with PE initially among the targets. In retaliation for US 25% tariffs on steel and aluminium imports that took effect on 12 March, the EU approved a new round of tariffs on imports from the US on 9 April. The initial list of proposed tariffs released in March included high density PE (HDPE), linear low density PE (LLDPE) and low density PE (LDPE), along with a range of plastics and rubber products. The EU tariff levels percentage levels reportedly range from 10-25%, with one set of tariffs to go into effect on 15 April and another on 15 May, according to media reports. On 9 April the US implemented 20% tariffs on imports from the EU as part of its broad reciprocal tariffs. The US is also a major exporter of PE to Europe. In 2024, the US exported nearly 1.5 million tonnes of LLDPE, over 500,000 tonnes of HDPE, and around 150,000 tonnes of LDPE to the EU; representing around 19% of total LLDPE exports, 11% of total HDPE exports and 8% of total LDPE exports, according to the ICIS Supply and Demand Database. US PE exports to the EU in 2024 were almost 1.5 times higher than in 2018. Total US PE exports to China and Europe comprised 32% of total US PE exports in 2024. The US is a major importer of methylene diphenyl diisocyanate (MDI) with China and the EU as major suppliers. With 104% tariffs on China, the US will not see anything close to the 229,000 tonnes of MDI imported from China in 2024, which accounted for 57% of total US MDI imports, according to the ICIS Supply and Demand Database. CHINA EXPOSUREUBS analyst Joshua Spector on 9 April highlighted publicly traded US chemical companies’ exposure to China. Those with a meaningful percentage of sales from China include Methanex (22%), Celanese (19%), DuPont (19%), Huntsman (18%), Eastman, Axalta Coating Systems, PPG (all at 11%), and Celanese and Dow (both 10%). “Chemical demand in China is typically about equal to US and Europe combined. China is overall a net importer of petrochemicals but an exporter of several coal and mineral-based chemicals (including caustic soda and titanium dioxide), and often several niche chems (rare earth chemicals, pesticide ingredients, etc) that are small but critical to many chemicals,” said Spector. Visit the US tariffs, policy – impact on chemicals and energy topic page Infographics by Yashas Mudumbai Insight article by Joseph Chang
09-Apr-2025
INSIGHT: Tariffs put US chemical exports at risk, but optimism on trade deals emerges on eve of implementation
NEW YORK (ICIS)–2 April 2025 – dubbed ‘Liberation Day’ by US President Trump – saw a sweeping and substantial salvo of reciprocal tariffs, with a baseline tariff set at 10% but for many countries, much higher customized levels. The higher reciprocal tariffs are scheduled to come into effect on 9 April, with the baseline 10% tariff imposed on 5 April. However, as of 8 April, there is emerging optimism on the potential for trade deals following comments from US President Trump that South Korea and China want to make a deal, and from administration officials that the US is in discussions with a number of countries. The reciprocal tariff levels – which include 34% on China, 20% on the EU, 46% on Vietnam, 32% on Taiwan, 26% on India, 25% on South Korea and 24% on Japan – were very much higher than anticipated. For China, 34% in reciprocal tariffs to come into effect on 9 April would be on top of the previous 20% tariffs the US implemented in February (10%) and March (10%), catapulting additional US tariffs on China this year to 54%. Products that fall under US sectoral tariffs, such as 25% on autos and auto parts, in effect since 5 April, will be exempt from the reciprocal tariffs. Products flagged for upcoming sectoral tariffs – pharmaceuticals, semiconductors, lumber and copper – will also be exempt from reciprocal tariffs. For Canada and Mexico, the US 25% tariff will remain in place, but only for non-USMCA (US-Mexico-Canada Agreement) compliant imports. DIRECT IMPACT ON US CHEMICAL MARKETSTariffs will undoubtedly raise costs for the US chemical industry and its customers, in the form of logistics, feedstocks and components such as additives and catalysts. For certain product chains where the US is self-sufficient, the direct impact should be somewhat limited. For example, Canada is the dominant exporter of chemicals and plastics to the US, but these are primarily in the olefins chain – polyethylene (PE), polypropylene (PP), propylene and ethylene glycol (EG) – where the US is more than self-sufficient and a big net exporter. These should also be USMCA compliant and thus exempt from tariffs. Even if there was a disruption, US producers in the US Gulf Coast could ship more volumes of ethylene and propylene derivatives domestically, replacing imports from Canada – although at higher logistics costs to some locations. The aromatics chain is more complicated. The US is a large net importer of benzene, toluene, xylenes and paraxylene (PX) – the bulk of which comes from South Korea, which is being hit with a 25% reciprocal tariff. The EU also exports aromatics to the US and will be subject to a 20% tariff. The US is a major importer of methylene diphenyl diisocyanate (MDI) with China and the EU as major suppliers. With 20% in additional tariffs imposed on all China exports in two stages – February (10%) and March (10%) – on top of the existing 25% tariff on China MDI, the US tariff on MDI from China is 45%. Adding the 34% reciprocal tariff brings this to a whopping 79% tariff level by 9 April. US EXPORTS IN CROSSHAIRS FOR RETALIATIONThe bigger risk to the US is for chemical and plastics exports. The US runs a chemical trade surplus of over $30 billion, according to the American Chemistry Council. Already China has announced a 34% tariff on all US imports to go into effect 10 April, while the EU prepares €18 billion in tariffs that would go into effect 15 April. The latter, which is in retaliation for US steel and aluminium tariffs, includes US PE and other polymers and chemicals. Even as the US is a much larger goods importer than exporter, particularly with China, it is the reverse for the US chemical industry, which will bear the brunt of the impact. “US goods exports to China in 2024 were $143.55 billion. The US imports far more – $462.64 billion – but this will have an impact on the US chemical industry as we compete against producers in the Middle East and elsewhere in Asia,” said Kevin Swift, ICIS senior economist for global chemicals. “This is the first large retaliatory challenge. Let’s hope it doesn’t devolve into a swirling beggar-thy-neighbor trade war,” he added. The new China 34% tariff on imports from the US could result in a $34 billion falloff in US exports of all goods to the nation – about a 24% decline, according to an analysis by Swift. Since 2018, the year that the first US-China trade war kicked off by the first Trump administration, US commodity chemical net exports have surged 88% to 2024, and are thus far more exposed to retaliatory tariffs than ever before. During this period, US exports of commodity chemicals and polymers to the world have increased 28% while imports declined 5%, according to the ICIS Supply and Demand Database. Top US chemical and polymers exports are linear low density PE (LLDPE), high density PE (HDPE), EG, polyvinyl chloride (PVC), caustic soda, methanol, low density PE (LDPE), vinyl chloride monomer (VCM), polypropylene (PP) and styrene. If China puts an additional 34% import tariff on US PE, the economics for exports do not work, even with the substantial US cost advantage. “With a 34% tariff on top of the current 6.5% tariff, US PE margins go negative at current production costs. US PE demand has been weak so far this year, particularly exports, down 8.1% year on year,” said Harrison Jacoby, director of PE at ICIS. “We see rebalancing of trade – less US PE into China, more to Europe. The industry already saw the start of this trend in 2024, with more US PE shifting from China to Europe. Now we need to see how Europe reacts on 13 April with its proposed retaliation targeting US PE, if they will increase their current 6.5% duty,” he added. In retaliation for US 25% tariffs on steel and aluminium imports that took effect on 12 March, the EU plans a new round of tariffs on around €18 billion of imports from the US, which includes high density PE (HDPE), linear low density PE (LLDPE) and low density PE (LDPE) along with a range of plastics and rubber products. This would be implemented in mid-April following a consultation period. The US is also a major exporter of PE to Europe. Total US PE exports to China and Europe were 32% of total US PE exports in 2024, according to the ICIS Supply and Demand Database. “The big picture is there are two low-cost PE regions that are the only net exporters – the US and Canada and the Middle East. These regions will continue to fill global production shortfalls, optimizing to mitigate the impact of tariffs,” said Jacoby. However, demand growth is likely to fall as a trade war will only further weaken demand for all goods and services, he added. Retaliatory tariffs on key US chemical exports could also have ripple effects throughout the chain. For example, retaliatory tariffs on US PE could lower cracker operating rates, in turn reducing crude C4 (CC4) feedstock coming out of those crackers for butadiene (BD) production. “I am concerned about impacts on our suppliers and customers. If there’s an impact on the ethylene industry which causes rate reductions because exports [of derivatives such as PE] get tougher, that would have an indirect effect on our supply of CC4s,” said Ed Dineen, CEO of BD producer TPC Group, in an interview with ICIS at the International Petrochemical Conference (IPC), hosted by the American Fuel and Petrochemical Manufacturers (AFPM). HIT TO KEY END MARKETSKey chemical end markets such as housing, automotive and durable goods will be burdened with higher costs with these reciprocal tariffs. Demand in these sectors has already been struggling for more than two years. “The economic law of demand holds that as prices of a good rise, demand for the good will fall,” said Kevin Swift, ICIS senior economist for global chemicals. US sectoral tariffs of 25% on steel and aluminium, in effect since March, will add nearly $1,500 to the cost of a light vehicle and result in lower sales for the automotive industry, he estimated. This would push down sales by about 525,000 units if the cost is fully pushed through, said Swift. In addition, 25% sectoral tariffs on autos and auto parts will put further upward pressure on pricing, in turn lowering demand further. The ultimate price impact, and not just for automotive, will also depend on consumer demand. It is likely the higher costs from tariffs will be shared by producers, suppliers and consumers. Housing costs are also poised to rise, with sectoral tariffs on steel and aluminum, and signaled tariffs on lumber and copper, along with reciprocal tariffs that will cover other imported goods such as vinyl floors, furniture, carpets and appliances. Consumer confidence is unlikely to improve anytime soon. The Conference Board’s consumer confidence reading in March for future expectations plunged 9.6 points, to 65.2, the lowest in 12 years. Inflation expectations for the next 12 months rose from 5.8% in February to 6.2% in March as consumers were concerned about high prices and the impact of tariffs. One silver lining is that other countries may lower their tariffs and trade barriers in response to US reciprocal tariffs, opening markets for US exports and in turn leading to the US lowering its reciprocal tariff levels. WALL STREET CUTS EARNINGS ESTIMATESIn the meantime, Wall Street is making sizeable cuts to US chemical company profit forecasts, with tariffs expected to squeeze margins in the form of higher costs as well as lower demand. “Uncertainty over tariffs has weakened US PE/PP trading volumes and we expect shifts in trade flows to create near-term negative supply chain/production impacts, which could be negative for Q1,” said UBS analyst Joshua Spector in a 7 April research note. “We are lowering estimates and price targets to better reflect a global [slowdown] that spills into 2026 and 2027,” said Jefferies analyst Laurence Alexander in a 7 April research note. “While we could easily be proven wrong by a couple of tweets (either escalating further or shifting from dramatic action to symbolism, bluff and rhetoric), we are adjusting our framework to reflect the current state of policy,” said Alexander. THE BIG PICTUREUltimately, US President Trump aims to engineer a “once in a hundred year pendulum shift” in the global economy and geopolitical order, said Rana Foroohar, global business columnist at the Financial Times, at the IPC hosted by the AFPM. “Tariffs are for real. Tariffs are here to stay…Trump sees the global economy as a giant gaming table, with the US consumer market as the biggest chip to put down. And he is going to use it in ways we haven’t seen in half a century, if not more,” said Foroohar. “This imbalance between Wall Street and Main Street – between the asset growth economy and the income-led economy – is really at the heart of what’s going on today…Cheaper is going away [and] place matters,” Foroohar added. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy Infographics by Yashas Mudumbai Insight article by Joseph Chang and Yashas Mudumbai
08-Apr-2025
Indonesia's Chandra Asri reconfigures CAP-2 project; to start with CA-EDC plant
SINGAPORE (ICIS)–Indonesian producer Chandra Asri is reconfiguring how it develops its second petrochemical complex project (CAP-2), a company spokesperson told ICIS on Monday. The CAP-2 project's commencement will now begin with downstream units, starting with a chlor alkali – ethylene dichloride (CA-EDC) plant in Cilegon, company corporate director Suryandi said. Chandra Asri, whose operations are based in Banten, Cilegon province, is currently Indonesia’s sole cracker operator. Its CA-EDC project, which will be operated by its subsidiary Chandra Asri Alkali, will be able to produce 400,000 tonnes/year of caustic soda and 500,000 tonnes/year of EDC. Construction will begin in the early second half of 2025 and will take around two years to complete, according to Suryandi. Start-up will be pushed back to 2027 from the previous target of end-2026. "We are mindful of the challenges posed by global market volatility and Indonesia's petrochemical industry. As a result, the CAP-2 Project is currently being reconfigured," Suryandi said. The move follows Chandra Asri's tie-up with trading firm Glencore to acquire the Singapore petrochemical assets of Anglo-Dutch energy giant Shell. Suryandi added that the CA-EDC plant will be integrated into Chandra Asri's existing petrochemical complex and will utilize ethylene produced by the facility. "With the establishment of the CA-EDC plant, the company reaffirms its commitment to reducing Indonesia’s dependence on Chlor Alkali imports and contributing to the supply of EDC, which currently faces a regional deficit," he added. Chandra Asri in its initial plans said that the CAP-2 complex will increase the company's annual overall production capacity to more than 8 million tonnes from 4.2 million tonnes. Based on the original plan, the CAP-2 complex would include a new naphtha cracker as well as downstream units including butadiene, an aromatics recovery plant, high density polyethylene (HDPE) plant and a low density polyethylene (LDPE) plant and a polypropylene (PP) plant. The LDPE plant was to be the first in Indonesia. Thumbnail image: Chandra Asri's petrochemical manufacturing site in Cilegon, Banten province, Indonesia (Source: Chandra Asri website)
24-Mar-2025
AFPM ’25: Summary of Americas market stories
SAN ANTONIO (ICIS)–Here is a summary of chemical market stories, heading into this year’s International Petrochemical Conference (IPC). Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. AFPM ‘25: US tariffs, retaliation risk heightens uncertainty for chemicals, economies The threat of additional US tariffs, retaliatory tariffs from trading partners, and their potential impact is fostering a heightened level of uncertainty, dampening consumer, business and investor sentiment, along with clouding the 2025 outlook for chemicals and economies. AFPM '25: New US president brings chems regulatory relief, tariffs The new administration of US President Donald Trump is giving chemical companies a break on regulations and proposing tariffs on the nation's biggest trade partners and on the world. AFPM ’25: Shippers weigh tariffs, port charges on global supply chains Whether it is dealing with on-again, off-again tariffs, new charges at US ports for carriers with China-flagged vessels in their fleets, or booking passage through the Panama Canal, participants at this year's IPC have plenty to talk about. AFPM ’25: LatAm chemicals face uncertain outlook amid oversupply, trade policy woes Latin American petrochemicals face ongoing challenges from oversupplied markets and poor demand, with survival increasingly dependent on government protectionist measures. AFPM ’25: US propane supply long; ethane prices rising The US petrochemical industry is seeing a glut of upstream propane supply and rising prices for key feedstock ethane. AFPM ’25: Weak demand takes toll on US ethylene as supply concerns ease Persistently poor demand, underpinned by worries over global tariff policies and a sluggish US economy are putting downward pressure on US ethylene prices. AFPM ’25: US propylene demand weak despite recent supply disruptions Weak demand in the US propylene market has counterbalanced recent supply disruptions, pushing spot prices and sentiment lower. AFPM ’25: US BD supply lengthening; rubber demand optimistic US butadiene (BD) has been rather balanced in Q1 despite a couple of planned turnarounds and cracker outages limiting crude C4 deliveries, but supply is expected to lengthen, and demand is cautiously optimistic. AFPM ’25: US aromatics supply ample amid low demand Domestic supply of aromatics is ample and demand is relatively poor. AFPM ’25: US methanol exports, bunker fuel demand to grow, but domestic demand sentiment low US methanol participants’ outlook on the key downstream construction and automotive sectors has dimmed, but optimism continues for export growth and bunker fuel demand. AFPM ’25: Tariffs, weak demand weigh on US base oils Uncertain US trade policy paired with already weak finished lubricant demand weighs on base oil market sentiment. AFPM ’25: Trade policies dampening outlook for Americas PE The US polyethylene (PE) industry started 2025 with some early successes amid the backdrop of lower year-on-year GDP growth. Now, with the impact of volatile tariff policy on top of the aforementioned lower GDP forecast, the outlook for PE has fallen. AFPM '25: Tariffs to shape the trajectory of caustic soda in US and beyond The North American caustic soda market is facing continued headwinds coming via potential tariffs, a challenged PVC market and planned and unplanned outages. US President Donald Trump has threatened to implement tariffs on Mexico, Canada and the EU as well as on products that are directly tied to caustic soda but has delayed enactment on multiple occasions. These delays have bred uncertainty in the near-term outlook, impacting markets in the US and beyond. AFPM '25: US PVC to face headwinds from tariffs, economy The US polyvinyl chloride (PVC) market is facing continued headwinds as tariff-related uncertainties persist. The domestic PVC market is expected to grow between 1-3% in 2025 but continues to face challenges in housing and construction. Meanwhile, export markets continue to wrestle with the threat of protectionist policies and tariffs at home and abroad. AFPM ’25: US spot EG supply balanced-to-tight on heavy turnaround season; EO balanced Supply in the US ethylene glycols (EG) market is balanced-to-tight as the market is undergoing a heavy turnaround season. The US ethylene oxide (EO) market is balanced as demand from derivatives including surfactants is flat. AFPM ’25: US PET prices facing upward price pressure on tariffs, China’s antimony exports ban, peak seasonUS polyethylene terephthalate (PET) prices continue to face volatility as the market assesses the impacts of potential tariffs on imports from Canada and Mexico. AFPM ’25: US PP volatility persists amid weak demand The US polypropylene (PP) market is facing weak demand, raw material volatility and tariff uncertainty. AFPM ’25: US ACN rationalization inevitable amid declining demand Production of acrylonitrile (ACN) in the US is being reduced or shuttered as already weak demand continues to fall and as downstream plants are shutting down. Changes to the supply/demand balance, trade flows and tariff uncertainties are weighing on market participants. AFPM ’25: US nylon trade flows shifting amid global capacity changes, tariff uncertainties US nylon imports and exports are changing as capacity becomes regionalized and geographically realigned. The subsequent changes to trade flows, price increase initiatives and tariff uncertainties are weighing on market participants. AFPM ’25: US ABS, PC face headwinds from closure and oversupply The US acrylonitrile butadiene styrene (ABS) and polycarbonate (PC) markets are lackluster and oversupplied. Demand remains soft kicking off the year, and the closure of INEOS’s Addyston, Ohio, ABS facility and tariff uncertainties continue to pressure ABS and PC markets. AFPM ’25: US styrene market facing oversupply amid weak demand, trade uncertainty The US styrene market is transitioning from a period of supply tightness to one of potential oversupply, driven by weak derivative demand and the recent restart of Styrolution’s Bayport, Texas, unit. This return to full operation, coupled with subdued demand, suggests ample supply in the short term. AFPM ’25: US PS faces slow start to 2025 amid weak demand Domestic polystyrene (PS) demand started the year off weaker than expected, with limited restocking and slower markets. AFPM ’25: US phenol/acetone face challenging outlook heading into Q2 US phenol and acetone are grappling with a lot of moving pieces. AFPM ’25: US MMA facing new supply amid volatile demand heading into Q2 US methyl methacrylate (MMA) is facing evolving supply-and-demand dynamics. Roehm's new plant in Bay City, Texas, is in the final stage of start-up, but is not in operation yet. There is anticipation of sample product being available in Q2 for qualification purposes. AFPM ’25: US epoxy resins in flux amid duties, tariffs heading into Q2 US epoxy resins is grappling with changes in duties and trade policies. AFPM ’25: Acetic acid, VAM eyes impact of tariffs on demand, outages on supply The US acetic acid and vinyl acetate monomer (VAM) markets are waiting to see what impact shifting trade and tariff policy will have on domestic and export demand, while disruptions are beginning to tighten VAM supply. AFPM '25: US etac, butac, glycol ethers markets focus on upcoming paints, coatings demand US ethyl acetate (etac), butyl acetate (butac) and glycol ethers market participants are waiting to see if the upcoming paints and coatings season will reinvigorate demand that has been in a long-term slump. AFPM ’25: Low demand for US oxos, acrylates, plasticizers countering feedstock cost spikes US propylene derivatives oxo alcohols, acrylic acid, acrylate esters and plasticizers have been partly insulated from upstream costs spikes by low demand, focusing outlooks on volatile supply and uncertain demand. AFPM ’25: N Am expectations for H2 TiO2 demand rebound paused amid tariff implementations After initial expectations of stronger demand for titanium dioxide (TiO2) in the latter half of 2025, the North American market is now in flux following escalating tariff talks. AFPM ’25: US IPA, MEK markets look to supplies, upstream costs US isopropanol (IPA) market has an eye on costs as upstream propylene supplies are volatile, while the US methyl ethyl ketone (MEK) market is evaluating the impact of global capacity reductions. AFPM ’25: US melamine prices continue to face upward pressure on duties, tight supply US melamine is experiencing upward pricing pressure, thanks in large part to antidumping and countervailing duty sanctions and tight domestic supply. AFPM '25: US polyurethane industry braces for cascade effect of tariffs 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. AFPM ’25: US BDO market eyes costs, demand outlook uncertain US 1,4 butanediol (BDO) production costs have been mounting, and margins have been crunched. Supply is ample and demand has been lackluster. AFPM ’25: US propylene glycol demand begins softening after prior feedstock-driven uptick After a cold winter with strong demand for seasonal propylene glycol (PG) end-uses in antifreeze and de-icers in many parts of the US, demand is starting to cool. AFPM ’25: US MA sentiment cautious ahead of potentially volatile Q2 US maleic anhydride (MA) is facing a volatile economic backdrop. Spot feedstock normal butane has fallen below $1/gal in March due to the end of peak blending season and strong production. AFPM ’25: US PA, OX face trade uncertainty, production constraints US phthalic anhydride (PA) and orthoxylene (OX) demand remains relatively weak. Prices have been remaining flat and are expected to settle lower this month after losing mixed xylene (MX) price support and underlying crude oil price declines. AFPM '25: Tight feedstock availability to keep US fatty acids, alcohols firm despite demand woes Tight supplies and high prices for oleochemical feedstocks are expected to keep US oleochemicals prices relatively firm, as continued macroeconomic headwinds, including escalating trade tensions between the US and other countries, only further weigh on consumer sentiment and discourage players from taking long-term positions. AFPM '25: Historic drop in biodiesel production to keep US glycerine relatively firm A drop in US biodiesel production to levels not seen since Q1 2017 is likely to keep the floor on US glycerine prices relatively firm through at least H1 as imports of both crude and refined material fail to fully offset the short-term shortfalls in domestic supply. PRC ’25: US R-PET demand to fall short of 2025 expectations, but still see slow growth As the landmark year, 2025, swiftly passes, many within the US recycled polyethylene terephthalate (R-PET) industry doubt the demand and market growth promised by voluntary brand goals and regulatory post-consumer recycled (PCR) content minimums will come to fruition. PRC ’25: US pyrolysis recycling players churning through regulatory, economic uncertainty As both regulatory and economic landscapes continue to change, production and commercialization progress among pyrolysis based plastic recyclers continues to be mixed. 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. 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 Visit the Recycled Plastics topic page
22-Mar-2025
Solvay to cut CO2 emissions at Spain soda ash, bicarbonate plants with biomass project
LONDON (ICIS)–Solvay will almost halve CO2 emissions at its soda ash and bicarbonate plants in Torrelavega, Spain by 2027 as part of an energy transition project to replace coal with biomass, it said on Wednesday. The company has secured a long-term supply agreement with renewable energy firm ENSO to develop, build and operate a biomass cogeneration unit which will replace 70% of the plant’s coal usage at the site. “This initiative marks a major milestone in transitioning the plant from thermal coal power to sustainable energy, supporting Solvay's actions towards carbon neutrality,” the Belgium-headquartered chemicals producer said in a statement. The biomass unit will be Spain’s largest, repurposing by-products from sawmills, forest maintenance, and wood supply for the pulp and paper industries. All materials will be certified and sustainably sourced within 100km (62 miles) of the site, Solvay said. The Torrelavega plant produces soda ash to manufacture glass, solar panels, lithium carbonate for EV batteries and detergents, as well as bicarbonate for a wide range of applications including food, feed, cosmetics, pharmaceuticals and air pollution control.
05-Mar-2025
SHIPPING: Asia-US container rates plunge; liquid chem tanker rates stable to softer
HOUSTON (ICIS)–Rates for shipping containers from Asia to the US fell significantly this week on increased capacity, while spot rates for liquid chemical tankers were stable to softer. CONTAINER RATES Global average container rates continue to fall, dropping by 10% this week, according to supply chain advisors Drewry and as shown in the following chart. Average global rates have fallen by almost 30% from 9 January, according to Drewry data, after rising from late October amid frontloading volumes ahead of a possible union labor strike at US Gulf and East Coast ports. Rates from Shanghai to New York plunged by 13% from the previous week, while rates form Shanghai to Los Angeles plummeted by 11% week on week, according to Drewry data and as shown in the following chart. Rates to Los Angeles are down by 29% from early-January, and rates to New York are down by 27.6% over that time. Drewry expects a slight decrease in spot rates next week as capacity increases. Deliveries of new container ships and a slowdown in recycling older vessels have led to an increase of 2.4 million TEUs (20-foot equivalent units) since the beginning of 2024. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said during a webinar that market players are watching two future dates – 4 March, when the reassessment of the Mexico and Canada 25% tariffs takes place, and the 1 April deadline when investigations should be complete on President Donald Trump’s reciprocal tariffs. 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. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES STEADY-TO-SOFTER Rates for liquid chemical tankers ex-US Gulf were stable to softer this week, with slight decreases seen on the US Gulf-Asia trade lane for small parcels and on the US Gulf to Brazil route. Rates for larger parcels on the US Gulf-Asia trade lane were unchanged amid a slowdown in activity. Shipping brokers are seeing inquiries along this route for ethanol, monoethylene glycols (MEG) and ethylene dichloride (EDC) for March shipping dates. Falling rates on the US Gulf-Brazil trade lane are because there is plenty of open space for the rest of February and into March, brokers said, and limited spot activity. A broker said it is seeing an increase in inquiries for this trade lane which could help steady the market. On the transatlantic eastbound route, a broker said there are plenty of inquiries and that most of the regular contract shipowners have been able to secure smaller parcels to help fill out their vessels. Shipments of styrene monomer (SM) were fixed to Europe, as well as methanol and caustic soda.
21-Feb-2025
INSIGHT: India may offer tariff concessions to US as PM Modi meets Trump
MUMBAI (ICIS)–India may offer the US tariff cuts on various products, including electronics and automobiles – major downstream sectors of petrochemicals – to avoid US President Donald Trump’s “reciprocal duties”, which may deal a big blow to the south Asian nation’s exports. India PM Modi in US for state visit on 12-13 February Tariff cuts incorporated in India budget for year to March 2026 India braces for impact from US’ 25% tariffs on all steel, aluminium imports Indian Prime Minister Narendra Modi is set to meet with Trump in Washington on Thursday – their first meeting since Trump assumed office for a second term. The US has not imposed any direct tariffs on India yet. However, the world’s biggest economy is expected to announce reciprocal tariffs on any countries with tariffs on US goods. India’s tariffs on agricultural, mining and manufacturing products from the US were in double-digits, while US tariffs for the same products from India were in the low single-digit levels. The south Asian country, which is a giant emerging market in Asia, is expected to offer tariff cuts on more than 30 goods, as well as increase the purchase of US defence and energy products, according to analysts at Japanese brokerage firm Nomura, in a research note on 10 February. India’s national budget for the next fiscal year starting April 2025 contained provisions reducing import duties on some goods including electronics, textiles, intermediate goods used for technology manufacturing and satellites, synthetic flavouring essences and motorcycles, which are expected to benefit US-based companies. It was largely seen as a pre-emptive move to thwart reciprocal tariffs from the US under Trump. India may consider further tariff reductions on luxury vehicles, solar cells, and chemicals, as part of its strategy to maintain smooth trade relations, according to analysts from Nomura. “We are analysing the announcements made by the US on increasing tariffs,” an official from India’s Ministry of Commerce said. “We are also asking our industry how these tariffs are going to affect them positively or negatively and are looking at the impact of the tariffs that have already been imposed,” he said. DIALING DOWN ON PROTECTIONIST STANCE India has much higher tariff rates compared with other countries in Asia. Amid threats of reciprocal tariffs from the US, India is being forced to backtrack on its protectionist policy, at least where the US is concerned, while maintaining a tough stance on rival Asian giant China. In year to March 2024, the US was India’s largest export destination and accounted for nearly 18% of the country’s total merchandise exports of $437.10 billion, official data showed. Key Indian exports to the US include industrial machinery, gems and jewellery, pharmaceuticals, fuels, iron and steel, textiles, vehicles, and chemicals. US’ exports to India, meanwhile, accounted for just 2% of total US shipments abroad in January-December 2024. A mutually beneficial tariff regime could be struck between then as India seeks to further boost exports to the world’s biggest economy. The US’ recent tariff hikes on China opens up opportunities for Indian exporters to increase their share in the US market. For instance, India’s exports of auto components to the US are currently very low, accounting for only 2% of the US market, underscoring scope for expansion. Between April and September 2024, the country’s total exports of auto parts stood at $11.1 billion, a third of which – or $3.67 billion – were shipped to the US, according to the Automotive Component Manufacturers Association of India (ACMA). Over the past few years, India has adopted trade measures like import certification under the Bureau of Indian Standards (BIS), increased antidumping duties on various products, including petrochemicals, to limit imports and boost domestic production. While some of these policies apply globally, some of them are directed at China, which is a major exporter of goods to India. While the tariffs are worrisome, certain sectors like auto components, mobiles and electronics, electronic machinery, apparel, leather and footwear, furniture, pharmaceutical and toys could see an increase in demand from US buyers, the commerce ministry official said. India is a major exporter of pharmaceutical products to the US but relies on China for 70% of raw material called active pharmaceutical ingredients (API). The US accounted for over 31% of India’s total pharmaceutical exports of $27.9 billion in year to March 2024. IMPORTS OF US LNG TO GROW; US’ TARIFFS ON STEEL, ALUMINIUM WORRY INDIA The south Asian country is expected to increase its petroleum product imports from the US, to alleviate trade imbalances. For the fiscal year 2023-24, India imported $12.96 billion worth of petroleum oil and products from the US, according to official data. India’s state-owned oil and gas companies, including Indian Oil Corporation (IOC), Gas Authority of India Ltd (GAIL) and Bharat Petroleum Corp Ltd (BPCL), are in active discussions with American suppliers to import more LNG from the US, petroleum secretary Pankaj Jain said on 10 February. The recent announcement of 25% tariffs on all steel and aluminium imports into the US could heavily impact India. While Indian steel exports to the US are relatively small, the US tariffs could cause exporting nations to redirect their goods to the Indian markets. India is both a major exporter as well as importer of steel, on which a basic customs duty of around 7-8% apply – much lower than the US’ 25% – raising fears of supply flooding the south Asian country. With the US shutting its doors to global steel, the surplus will inevitably be redirected to India, threatening our domestic industry with market distortions, price crashes, and unfair competition, Indian Steel Association (ISA) Naveen Jindal said said in an official statement on 11 February. “The US, a major steel importer, has historically imposed strict trade restrictions, with over 30 remedial actions in force against Indian steel – some for more than three decades,” Jindal said. “This latest tariff is expected to slash steel exports to the US by 85%, creating a massive surplus that will likely flood India,” he added. While only 5% of the total steel exports from India go to the US, the country accounts for nearly 12% of India’s aluminium exports. Both steel and aluminium industries use chemicals like caustic soda and soda ash during the production process. Insight article by Priya Jestin With contributions from Nurluqman Suratman and Pearl Bantillo
13-Feb-2025
SHIPPING: Asia-US container rates tick lower; shippers frontloading cargoes on tariff pause
HOUSTON (ICIS)–Rates for shipping containers from Asia to the US ticked lower this week, although they could see upward pressure from shippers pulling forward volumes ahead of the 30-day tariff freeze, while rates for liquid chemical tankers held steady. Global average rates fell by 3%, according to supply chain advisors Drewry and as shown in the following chart. Global average rates are down by almost 18% from 1 September, and down by almost 45% from the high of the year in mid-July. Rates from Shanghai to both US coasts fell by 1%, as shown in the following chart. Drewry expects spot rates to decrease slightly in the coming week due to the increase in capacity as container ship order books are at record highs. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said his company is already seeing some upward pressure on prices although some could be because of shippers frontloading volumes to beat the 30-day pause before tariffs are enacted. ‘We could expect frontloading ahead of tariffs – which has been a major factor keeping US ocean import volumes and transpacific container rates elevated since November – to intensify until the new tariffs are introduced or called off,” Levine said. Levine said it is hard to determine the impact from volumes being pulled forward since this has likely been happening for several months, and with the market in the lull surrounding the Lunar New Year (LNY) holiday. “But we could expect demand and rates to increase post-LNY,” Levine said. 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. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES STEADY US chemical tanker freight rates as assessed by ICIS were unchanged this week with contract of affreightment (COA) nominations steady for most trade lanes. For the cargoes in the South American trade lane, COAs remain strong leaving very little spot availability. A large parcel of ethanol fixed USG to San Luis, and several others were quoted for second half of February. Similarly, for the USG to ARA trade lane, it was another off week with only a few reported fixtures. However, there were some unusual cargoes fixed for products like caustic soda and ethanol. Some styrene was reported fixed from Lake Charles to ARA. Overall, rates seem to be maintaining current levels particularly for the 3,000- and 5,000-tonne parcels. There was no difference along the USG to Asia routes, as it was another quiet week on this trade lane. Spot rates remain steady as the H1 February space across the regular carriers is sold out. Some of the larger players should have space in the second half of February depending on COA nominations. The chemical COAs have been steady through H1 March, but still in the tentative phase. Several inquiries were seen for methanol, ethanol, vinyl acetate monomer (VAM), styrene and MEG. On the other hand, bunker prices were unchanged this week but overall remain strong. PANAMA CANAL UPDATE Panama’s president said the country will not renew its agreement with China’s Belt and Road Initiative (BRI) after a visit from US Secretary of State Marco Rubio. President Donald Trump surprised some when he said that the US should reclaim the Panama Canal, and a US congressman has since introduced a bill that would authorize the purchase of the vital waterway. The actions taken by Panama’s president, Jose Raul Molino, may slow action by the Trump administration to take back control of the canal. Additional reporting by Kevin Callahan
07-Feb-2025
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