Epoxy resins

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

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

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

21-Mar-2025

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

20-Mar-2025

HOUSTON (ICIS)–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. The US chemical industry, a massive net exporter of chemicals and plastics to the tune of over $30 billion annually, is particularly exposed to retaliatory tariffs. Chemical company earnings guidance for Q1 and all of 2025 is already subdued, with the one common theme from the investor calls being little-to-no help expected from macroeconomic factors this year. Tariffs only cloud the outlook further. Tariffs have long been a feature of US economic and fiscal policy. In the period to the 1940s, tariffs were used as a major revenue source to fund the federal government before the introduction of the income tax and were also used to protect domestic industries. After 1945, a neo-liberal world order arose, which resulted in a lowering of tariffs and other trade barriers and the rise of globalization. With the collapse of the Doha Round of trade negotiations in 2008, this drive stalled and began to reverse. Heading into this year’s International Petrochemical Conference (IPC) hosted by the American Fuel & Petrochemical Manufacturers (AFPM), it is clear that the neo-liberal world order has ended. Rising geopolitical tensions and logistics issues from COVID led many firms to diversify supply chains, leading to reshoring benefiting India, Southeast Asia, Mexico and others, and to the rise of a multi-polar world. It is also resulting in the rise of tariffs and other trade barriers around the world, most notably as US trade policy. FLUID US TRADE POLICYThe US administration’s policy stance on tariffs has been very fluid, changing from day to day. It is implementing 25% tariffs on steel and aluminium imports on 12 March and has already placed additional tariffs of 20% on all imports from China as of 4 March (10% on 4 February, plus 10% on 4 March). On 11 March, the US announced steel and aluminium tariffs on Canada would be ramped up to 50% in retaliation for Canadian province Ontario placing 25% tariffs on electricity exports to the US. Later, Ontario suspended the US electricity surcharge, and the US did not impose the 50% steel and aluminium tariff. The US had placed 25% tariffs on imports from Canada (10% on energy) and Mexico on 4 March but then on 5 March exempted automotive and then on 6 March announced a pause until 2 April. China retaliated by implementing 15% tariffs on US imports of meat, fish and various crops, along with liquefied natural gas (LNG) and coal. Canada retaliated with 25% tariffs on C$30 billion worth of goods on 4 March and then with the US pause, is delaying a second round of tariffs on C$125 billion of US imports until 2 April. Mexico planned to retaliate on 9 March but has not following the US pause. US President Trump has also threatened the EU with 25% tariffs. We have a trade war and as 1960s Motown artist Edwin Starr sang, “War, huh, yeah… What is it good for?… Absolutely nothing.” Canada, Mexico and China are the top three trading partners of the US, collectively making up over 40% of US imports and exports. The three North American economies, until recently, had low or non-existent tariffs on almost all of the goods they trade. This dates back to the 1994 NAFTA free trade agreement, which was renegotiated in 2020 as the USMCA (US-Mexico-Canada Agreement). A reasoning behind the tariff threats on Canada and Mexico is to force Canada and Mexico to stop illegal drugs and undocumented migrants from crossing into the US. These tariffs were first postponed in early February after both countries promised measures on border security, but apparently more is desired. But the US also runs big trade deficits with both countries. Here, tariffs are seen by the administration as the best way to force companies that want US market access to invest in US production. IMPACT ON AUTOMOTIVEUS automakers are the most exposed end market to US tariffs and potential retaliatory tariffs, as their supply chains are even more highly integrated with Mexico and Canada following the USMCA free trade deal in 2020. The USMCA established Rules of Origin which require a certain amount of content in a vehicle produced within the North America trading partners to avoid duties. For example, at least 75% of a vehicle’s Regional Value Content must come from within the USMCA partners – up from 62.5% under the previous NAFTA deal. Supply chains are deeply intertwined. In the North American light vehicle industry, materials, parts and components can cross borders – and now potential tariff regimes – more than six times before a finished vehicle is delivered to the dealer’s lot. US prices for those goods will likely rise. The degree to which they rise (extent to which tariffs costs will pass through) depends upon availability of alternatives, structure of the domestic industry and pricing power, and currency movements. In addition, some of the Administration’s polices dealing with deregulation, energy, and tax will have a mitigating effect on the negative impact of tariffs for the US. The 25% steel and aluminium tariffs will add nearly $1,500 to the cost of a light vehicle and will result in lower sales for the automotive industry which has been plagued in recent years by affordability issues. If it had been implemented, the 50% tariff on steel and aluminium imports from Canada would only compound the pricing impact. All things being equal, 25% tariffs on the metals would push down sales by about 525,000 units but some of the favorable factors cited above as well as not all costs being passed through to consumers will partially offset the effects of higher metal prices. Partially is the key word. Since so many parts, components, and finished vehicles are produced in Canada and Mexico, US 25% tariffs on all imports from Canada and Mexico would add further to the price effects. The economic law of demand holds that as prices of a good rise, demand for the good will fall. ECONOMIC IMPACTTariffs will dampen demand across myriad industries and markets, and could add to inflation. By demand, we mean the aggregate demand of economists as measured by GDP. Aggregate demand primarily consists of consumer spending, business fixed investment, housing investment, and government purchases of goods and services. Tariffs would likely add to inflation but the effects would begin to dissipate after a year or so. By themselves, the current round of tariffs on steel and aluminium and on goods from Canada, Mexico and China will dampen demand due to higher prices. Plus, as trading partners retaliate, US exports would be at risk. Preliminary estimates suggest the annual impact from these tariffs – in isolation – on US GDP during the next three years could average 1.4 percentage points from baseline GDP growth. Keep in mind that there are many moving parts to the economy and that the more favorable policies could offset some of this and, as a result, the average drag on GDP could be limited to a 0.5 percentage point reduction from the baseline. POTENTIAL GDP IMPACT OF US TARIFFS – 20% ON CHINA, 25% ON MEXICO AND CANADA Real GDP is a good proxy for what could happen in the various end-use markets for plastic resins and the reduction of US economic growth. In outlying years, however, tariffs could support reshoring and business fixed investment. The hits on Mexico and Canada would be particularly. China’s economic growth would be affected as well. But China can shift exports to other markets. Mexico and Canada have fewer options. Resilience will be key to growing uncertainty and will lead to shifting trade patterns and new market opportunities. This is where scenarios, sound planning and strategies, and leadership come into play. US EXPORTS AT RISK, SUPPLY CHAINS TO SHIFTUS PE exports are particularly vulnerable to retaliatory tariffs. The US is specifically targeting tariffs on countries and regions that absorb around 52% of US PE exports – China, the EU, Mexico and Canada, according to an ICIS analysis. Aside from PE, the US exports major volumes of PP, ethylene glycol (EG), methanol, PVC, styrene and vinyl chloride monomer (VCM), along with base oils to countries and regions targeted with tariffs. The US exports nearly 50% of PE production with China and Mexico being major outlets. China has only a 6.5% duty on imports of US PE, having provided its importers with waivers in February 2020 that took rates to pre-US-China trade war levels. The US-China trade war under the first US Trump administration started in 2018 with escalating tariffs on both sides, before a phase 1 deal was struck in December 2019 that removed some tariffs and reduced others. After the waivers offered by China to importers in February 2020, US exports of PE and other ethylene derivatives surged before falling back in 2021 from the COVID impact. They then rocketed higher through 2023 and remained at high levels in 2024. Since 2017, the year before the first US-China trade war, US ethylene and derivative exports to China are up more than 4 times, leaving them more exposed than ever to China. With tariff escalation, chemical trade flows would shift dramatically. Just one example is in isopropanol (IPA). Shell in Sarnia, Ontario, Canada, produces IPA, of which over 85% is shipped to the US, mainly to the northeast customers, said ICIS senior market analyst Manny Borges. “It is a better supply chain for the customers instead of shipping product from the US Gulf,” said Borges. “With the increase in tariffs, we will see several customers shifting volumes to domestic producers or countries where the tariffs are not applied,” he added. US IPA producers are running their plants at around 67% of capacity on average and have sufficient capacity to supply the entire domestic market, the analyst pointed out. This dynamic, where US producers supply more of the local market versus imports, would likely play out across multiple product chains as well, especially in olefins where the US is more than self-sufficient. Even as the US is more than self-sufficient in, and a big net exporter of PE, ethylene glycols, polypropylene (PP) and polyvinyl chloride (PVC), it imports significant quantities from Canada. In the event of a 25% tariff on imports from Canada, US producers could easily fill the gap, although logistics would have to be reworked. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Insight article by Kevin Swift and Joseph Chang

12-Mar-2025

HOUSTON (ICIS)–US recycled polypropylene (R-PP) players are currently watching polypropylene (PP) bale price movement as recent increases have put pressure on finished recycled resin margins. As R-PP pellet prices are already established close to or over 2x virgin PP costs, recent increases in bale feedstock costs can be difficult to pass through, though recent increases in virgin PP prices have somewhat softened the blow. Bales East Coast PP bale prices have nearly doubled since last fall, on strong demand from several existing players who have increased processing capacity over the last year, PureCycle in particular. With the recent start-up of PureCycle's plastics recovery facility (PRF), bale markets have seen surprising upwards movement on tight supply as players are having to compete for the same pool of available bales. Bale supply could further tighten as the 25% tariffs on imports from Canada and Mexico take effect this week. Some recyclers who are located near border regions have historically purchased bale feedstock from neighboring countries. The proposed tariffs could render imported bales from Canada and Mexico uneconomic, thus further limiting supply, or lending support to higher domestic pricing. Post-consumer resin On the finished resin side, demand remains mixed, as recyclers and converters continue to field increased customer inquiries but have struggled to transition these to sales volumes. Target end markets include consumer goods/packaging, automotive and fiber applications, though most end markets are currently grappling with the challenging macroeconomic outlook. The latest quarterly earnings results suggest most global brands saw single digit volume growth at the end of last year, though it remains to be seen how consumers react as inflation remains persistent Moreover, as bottom line pressure grows, those considering higher cost sustainable materials may shift back to lower cost virgin resins. Prices for natural post-consumer R-PP material were heard as high as $1.30/lb. This was considered to be an outlier. Prices for PureCycle’s dissolution based material, PureFive, were quoted at $1.36/lb, according to company representatives during their latest earnings call. Moreover, it was noted PureCycle has inventoried 7.2 million lbs of resin, awaiting third party certification. This compares to the Q4 production volume of 3.6 million lbs and uptime of 67% in December. Despite the small initial supply from PureCycle and other PP mechanical recyclers, the ability to compound should increase potential volumes. PureCycle noted typical fiber applications of their resin are a 50/50 blend, where as film applications are centered around a 30/70 blend of recycled/virgin material. Pricing for a 50/50 blend of natural mechanically recycled R-PP and virgin PP material was heard in the range of $1.20-1.30/lb. Moreover, compounding is relatively popular with the PP space, as many PP applications require specific materials properties which can only be achieved through a blend of materials. Though as the recycled plastic space remains nascent, many worry initial failures will deter future interest. One producer noted customers might trial one source of R-PP, and if the resin does not perform as expected, they abandon plans for R-PP integration without trialing other types of R-PP from other providers which can vary significantly in quality and technical support. ICIS is currently developing US R-PP market coverage. Monthly, free prototyped reports target those involved in the processing and purchasing of PP bales as well as mechanically recycled post-consumer and post-industrial PP resin within the US. These reports have market discussion on pricing, supply, demand and current news, split by post-consumer vs post-industrial market categories. If you are interested in learning more about this coverage and or receiving these prototype reports, please reach out to Emily.Friedman@icis.com.

06-Mar-2025

HOUSTON (ICIS)–US polyethylene terephthalate markets reporter Melissa Wheeler interviews Vice President of the North America PET/Polyester Chain, Antulio Borneo. PET market factors discussed include: Tariffs on Mexico and Canada imports and the impacts to the US PET market Supply and demand balance going into the peak summer season China’s antimony bans on exports to the US and the impact that will have on PET production PET resins can be broadly classified into bottle, fibre or film grade, named according to the downstream applications. Bottle grade resin is the most commonly traded form of PET resin and it is used in bottle and container packaging through blow molding and thermoforming. Fibre grade resin goes into making polyester fibre, while film grade resin is used in electrical and flexible packaging applications. PET can be compounded with glass fibre for the production of engineering plastics. DAK Americas, Indorama, Nan Ya Plastics Corporation and Far Eastern New Century (FENC) are PET producers in the US.

05-Mar-2025

Correction: In the ICIS article headlined "US imports record setting 492,101 tonnes of plastic scrap in 2024 as tariffs loom" dated 26 February, please read in the second paragraph … 250,961 tonnes in 2024 … instead of … 59,222 … A corrected article follows. HOUSTON (ICIS)–The US has maintained its status as a net importer of plastic scrap, bringing in a record volume of 492,101 tonnes in 2024 according to recently released data from the US International Trade Commission (ITC). Leading the way, imports of polyethylene terephthalate (PET) scrap have broken their own record, at 250,961 tonnes in 2024, making up roughly 49% of plastic scrap imports. At the same time, PET scrap exports to Mexico reached record highs, coming in at 46,307 tonnes in 2024, a 32% increase year on year (YoY). As Canada remains the top trade partner for US plastic scrap, it remains to be seen what will happen should the US continue to impose trade tariffs and duties on imported goods. Canada remains largest scrap trade partner amid tariff threat PET scrap imported into US increased 23% YoY PET scrap exported to Mexico increased 32% YoY ANNUAL DATA BREAK RECORDS, QUARTERLY DATA SOFTENSFull year 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the Harmonized System (HS) code 3915 – have increased 10% YoY. Plastic scrap imports include items such as used bottles but also other forms of recycled feedstock such as purge, leftover pairings and flake material. Recently, the US Customs and Border Patrol (CBP) issued statements to several importers of PET flake that the HS code 3907 which designates PET resin should be used instead, thus it is expected the US actually imported more PET flake than represented in these numbers. Throughout 2024, stagnant PET bottle collection volumes, paired with increasing bottle exports, led to a need for imported PET scrap material. This was further supported by the cost proposition of cheaper imported flake. As a result, recycled flake imports are seen as both a help and harm to the broader US recycling market. When broken down by country, Canada remains the leader of PET scrap imports, followed by Thailand, Ecuador and Japan. Canada continues to give up market share despite volumes increasing 2% YoY. This pales in comparison to the rapid export volume growth from Thailand, Japan and Ecuador, at an increase of 68%, 75%, and 29% YoY, respectively. Market participants confirmed they saw a notable rise in imported recycled resin activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor, and facility costs related to recycling. Asian countries now account for more than 44% of PET scrap imports, compared to the 26% market share from Canada and Mexico. In 2023, the Canada/Mexico market share was at 34%, and was as high as 44% in 2022, showing a complete reversal over the last few years. Imports of all other subcategories of plastic scrap, including polyethylene (PE), polystyrene (PS), and polyvinylchloride (PVC), were relatively steady. When looking at PE scrap imports, they decreased marginally in 2024 (1%), and Canada/Mexico remain the largest exporters to the US at 69% and 18% of PE scrap imports respectively. Despite the strong annual data, Q4 data individually did show some weakness. In comparison to Q4 2023, Q4 2024 was down 7% as 2023 data was unusually strong. Scrap imports typically slow at the end of the year as players reduce inventory ahead of year end accounting, thus it comes as no surprise that Q4 imports were down 6% compared to Q3 imports. When looking at Q4 specifically, PET scrap imports  were down 16% compared to Q3 and down 9% compared to Q4 2023. For the full breakdown of US plastic scrap imports, click here to see the latest numbers. TOTAL EXPORTS DOWN, PET EXPORTS UPThough total US plastic scrap exports fell 2% in 2024, exports of PET scrap, largely in the form of bales, jumped 24% YoY. Mexico in particular continues to be a key end market for US PET bale material, making up 57% of the 81,018 tonnes exported. This resulted in 46,307 tonnes of material being sent to Mexico, an increase of 32% YoY. While the US has always exported a portion of domestic PET bale material to other countries, exports to Mexico surged over the last year. This growing trade relationship is largely attributed to new capacity in Mexico, paired with strong local demand which has elevated local bale prices. Mexican recyclers have been purchasing US PET bales as a lower-cost option with higher availability. Exports of US bales to Mexico – particularly from the southern areas of the US such as Texas and parts of California – continue to challenge domestic recyclers who struggle to secure adequate volumes of bale feedstock. As export demand continues put upwards pressure on bale pricing, local recyclers find themselves stuck between rising feedstock costs and very competitive import virgin and recycled pricing, thus unable to pass along those increased costs. PET scrap exports were also sent to Malaysia and Vietnam, at 12% and 7% of PET exports respectively. Overall, exports of other types of plastic scrap continue to slow, following the Chinese National Sword and Basel Convention adoption several years ago. Total plastic scrap exports in Q4 were down QoQ and YoY. PE continues to be a leading polymer type for US plastic scrap exports, representing 35% of total plastic scrap exports. India receives over a quarter of US PE scrap material followed by Canada at 16%. For the full breakdown of US plastic scrap exports, click here to see the latest numbers. TARIFFS BETWEEN CANADA, MEXICO TO IMPACT RECYCLINGA tariff decision on imports from Mexico and Canada could come as soon as next Tuesday, 4 March. From a bale or flake feedstock perspective, some northern and southern US recyclers will source material from Canada and Mexico, which would result in elevated feedstock pricing either from the tariffs themselves or the resultant increase in domestic feedstock demand. On the finished post-consumer recycled (PCR) flake and resin side, US customers who purchase materials from Canadian or Mexican recyclers may instead seek volumes from US recyclers which could support some struggling players or further strain players whose facilities are already running at high capacity. Retaliatory tariffs from either country could harm exports of US plastic scrap material. Canada and Mexico were the top countries for plastic scrap exports – 34% and 21%, respectively. Waste and recycling has always been a regional business, and any barriers that prevent regional dynamics could lead to negative consequences for recycling market viability.

26-Feb-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Last week, something unusual happened: my contact outdid me in pessimism about the chemical markets' recovery. And if you know me, you know that’s not easy. Some call it doom and gloom—I prefer realism. The Developing World’s Potential For months, I’ve argued that sometime in the late 2020s, the Developing World ex-China could become the biggest driver of global chemicals demand. That’s a big could. The key assumption? That this region capitalizes on its youthful population. More babies = bigger working-age populations = more demand. Meanwhile, China and the West are moving in the opposite direction. Fewer babies = shrinking workforces. ICIS Data: By the end of this year, China will account for 41% of global demand for nine major synthetic resins—despite making up just 18% of the global population. The Developing World ex-China will account for only 32% of demand, despite representing 68% of the population. But population alone doesn’t dictate economic destiny. What if the 1992-2021 Chemicals Supercycle was a one-off event? Challenges on the Horizon Climate Change & Migration: The UN’s International Organization for Migration estimates up to 1.5 billion environmental migrants within the next 30 years. In Vietnam, a study suggests six provinces home to 37% of the population could be underwater by 2050. The Rise of AI & Regionalization: Will AI enable the U.S. and other developed markets to reshore manufacturing? If so, what happens to the traditional export-driven growth model that fueled China’s chemical boom? Sustainability & Localized Supply Chains: Will the "less is more" movement in the West curb demand for new products? Could plastics recycling become the starting point for more localized supply chains? The One Certainty: Supply Adjustments Propylene market insights from ICIS: Returning to the 1992-2024 global propylene operating rate average of 80% would require: Capacity growth of ~2M tonnes per year (instead of the projected 5M tonnes per year). Potential capacity closures elsewhere to offset growth in China and the Middle East. Three Critical Actions for 2025 Track Supply Adjustments – Stay ahead of plant shutdowns, delays, and cancellations. Regional market tightening could present opportunities even in a subdued demand environment. Prepare for Trade Protectionism – If you don’t already have a trade data analysis team, build one. The surge in antidumping investigations into Chinese chemicals and polymers in 2024 is just the beginning. Integrate AI Into Workflows – AI isn’t just a buzzword. It’s already cutting costs and streamlining forecasting in increasingly complex markets. The next step? Using AI to refine predictive analytics. The post-Chemicals Supercycle world isn’t easy. It’s complex, volatile, and data driven. But for those who adapt, it’s also full of opportunities. Stay sharp. Stay informed. Let’s navigate this together. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

24-Feb-2025

HOUSTON (ICIS)–Huntsman is seeing early signs of a possible recovery in the market for methylene diphenyl diisocyanate (MDI), the CEO of the US-based polyurethanes producer said on Tuesday. "I believe that we're seeing some early signs of recovery in pricing and margins return," said Peter Huntsman, CEO. He made his comments during an earnings conference call. "As we sit here today, it is fair to say that there are more positive than negative movement in the MDI industry." MDI was among the first major chemicals to experience declines in demand and margin, the consequence of a confluence of factors, according to Huntsman. Interest rates rose, which slowed down North American construction, an important end market for polyurethanes. In China the housing market collapsed, and Europe experienced industrial decline. At the same time, projects that were announced before the COVID-19 pandemic started coming online, which created excess capacity. What followed was what Huntsman has described as the worst destocking cycle ever. Destocking has finally ended, and Huntsman's volumes have increased during the past few quarters. In China, publicly reported prices for polymeric methylene diphenyl diisocyanate (PMDI) have reached three-year highs, he said. Moreover, those prices have been remarkably stable. China's recovery should continue through the decade and remain very gradual, he said. In the US, multiple companies have publicly announced price increases in multiple segments, Huntsman said. It is the first time that has happened in two years, and it is another sign that destocking has ended. Europe remains a struggle, and the region has yet to decide whether it will change energy policy or adopt protectionist measures, Huntsman said. Globally, utilization rates are likely in the upper 80% range, Huntsman said. Europe has the loosest market conditions and the US has the tightest. HUNTSMAN EXPECTS SLIGHTLY LOWER Q1 EARNINGSFor the first quarter, Huntsman expects adjusted earnings to decline slightly year on year, as shown in the following table. Figures are in millions of dollars, and they show adjusted earnings before interest, tax, depreciation and amortization (EBITDA). $millions Q1 25 Q1 24 Polyurethanes 45-60 39 Performance Products 25-35 42 Advanced Materials 40-45 43 Corporate -40 -43 Total 70-100 81 Source: Huntsman Overall, Huntsman expects its maleic anhydride (MA) business to benefit from a recovery in the construction market. MA is used to make unsaturated polyester resin (UPR). Huntsman should receive an earnings boost from a polyurethane catalyst project, which is advancing towards completion, commissioning and commercialization. That project should contribute $5 million in EBITDA in the second half of 2025 and another $10 million in 2026. The company also completed an investment in a performance amines product line that serves the semiconductor market. It is now qualifying those products with its downstream electronic customers. The project should contribute $5 million to $7 million in EBITDA in 2025 and a similar amount in 2026. Thumbnail shows polyurethane foam. Image by Shutterstock.

18-Feb-2025