Ethanol

HOUSTON (ICIS)–The US Department of Agriculture (USDA) is projecting an increase in corn area and yield which would result in record supplies with lower soybean production forecast, according to the May World Agricultural Supply and Demand Estimate (WASDE) report. The current corn crop is projected at 15.8 billion bushels, up 6% year on year on increases to both area and yield. Planted area of 95.3 million acres if realized would be the highest in over a decade. The yield projection of 181.0 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. The smaller beginning stocks will partially be offsetting the increase in production, but total corn supplies are forecast at 17.3 billion bushels. Corn used for ethanol is unchanged relative to a year ago at 5.5 billion bushels, based on expectations of essentially flat motor gasoline consumption and exports. Feed and residual use is projected higher to 5.9 billion bushels on larger supplies and lower expected prices. US corn exports for 2025-2026 are forecast up from a year ago to 2.7 billion bushels, with lower prices driving a forecast increase in world trade. Exports for competitor countries such as Argentina and Ukraine are higher than a year ago. The US is projected to be the world’s largest exporter, with fractional decline in global market share. Ending stocks are being calculated higher at 385 million bushels, with total corn supply rising more than use, and if realized would be the highest in absolute terms since 2019-2020. The season-average farm price is projected at $4.20 per bushel, down 15 cents from the April update. For soybeans, the outlook shows slightly lower supplies, higher crush, reduced exports and lower ending stocks. The soybean crop is projected lower at 4.34 billion bushels based on trend yield and lower area. Soybean supplies are down less than 1% as there was higher beginning stocks but that is facing lower imports and production. The USDA noted that higher beginning stocks and rising soybean production in South America have lifted exportable supply, and despite higher global demand, the US share of global exports is now expected to be at 26%, down from the 28% level a year ago. The May WASDE calculates that soybean exports will be 1.815 billion bushels, down 35 million bushels, and soybean ending stocks are projected at 295 million bushels, a decrease of 55 million bushels. The season-average soybean price is forecast at $10.25 per bushel, compared with $9.95 per bushel in 2024-2025. The next WASDE report will be released on 12 June.

12-May-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 9 May. INSIGHT: Mexico’s automotive tariffs raise specter of recession, rest of LatAm more resilient Mexico remains the potential largest victim of the change in US trade policy, but practically no country in the world would be spared from an impact, analysts said this week. US Celanese to cut rates if demand falters further in increasingly 'uncertain' H2 – execs Celanese will aim to weather what is becoming an increasingly “uncertain” second half of 2025 by reducing inventories and keeping firm cost controls, but also by reducing operating rates if demand is not there, the CEO at the US-based acetyls and engineered materials producer said on Tuesday. Braskem-Idesa launches its ethane import terminal in Mexico Braskem-Idesa (BI) officially launched the Terminal Quimica Puerto Mexico (TQPM) on Wednesday, according to a notice from the company. US-UK announce trade deal to open up markets for chemicals, ethanol, agriculture, autos, steel and aluminium, aircraft The US and UK announced the first trade deal since the US 2 April ‘Liberation Day’ tariffs which would open up UK market access for US chemicals, machinery, beef, ethanol and other agricultural products, government officials said. Canada’s Pembina assures on US tariffs and Path2Zero delay Pembina Pipeline does not expect material near-term impacts from the US tariffs or from the delay of Dow’s Path2Zero petrochemicals project in Alberta province, the top executives of the Canadian midstream energy company told analysts in an update on Friday.

12-May-2025

NEW YORK (ICIS)–The US and UK announced the first trade deal since the US 2 April ‘Liberation Day’ tariffs which would open up UK market access for US chemicals, machinery, beef, ethanol and other agricultural products, government officials said. The deal also opens up US market access for UK autos, steel and aluminium, and beef. US President Donald Trump and UK Prime Minister Keir Starmer announced the deal in a press conference on the 8 May. While the deal will be finalized in the coming weeks with full details, officials revealed certain aspects of the agreement. Trump and Starmer spoke on the phone in front of the press, and then each ran separate press conferences. US tariffs of 10% on UK imports will remain in place but sectoral auto tariffs will fall from 25% to 10% for UK vehicles, as stated in the US press conference. There was an existing US tariff of 2.5% for imported vehicles prior to the sectoral tariffs, but the final auto tariff level for the UK would be 10%. This would apply to a quota of the first 100,000 cars, almost the total the UK exported in 2024, according to the UK government. The US reciprocal tariffs revealed on 2 April included the minimum 10% level for the UK where the US runs a goods trade surplus. In 2024, the US exported $79.9 billion in goods to the UK and imported $68.1 billion in goods for a trade surplus of $11.8 billion, according to the US Trade Representative. US sectoral tariffs of 25% on steel and aluminium would be slashed to zero for imports from the UK, as indicated in the UK press conference. UK Rolls Royce aircraft engines and other aircraft parts would also face no US tariff. The opening up of new markets to US exports would add, “$5 billion of opportunity”, for US exporters, US Commerce Secretary Howard Lutnick said. “Work will continue on the remaining sectors – such as pharmaceuticals and remaining reciprocal tariffs. But – in an important move – the US has agreed that the UK will get preferential treatment in any further tariffs imposed as part of Section 232 investigations,” said the UK government in a statement. In terms of a template for additional deals, Trump said that 10% tariffs is the floor with some much higher. OPTIMISM ON CHINA TARIFFSHe also expressed optimism that tariffs between the US and China would be lowered. The US has a 145% tariff on imports from China with some exemptions, and China has imposed a 125% tariff on imports from the US with certain reported exemptions.

08-May-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 11 April. UPDATE: Oil, Asia chemical shares extend rout on recession fears By Nurluqman Suratman 07-Apr-25 16:52 SINGAPORE (ICIS)–Oil prices tumbled by more than $2/barrel on Monday, with shares of petrochemical firms in the region falling on heightened concerns that a brewing global trade war could lead to an economic recession. Vietnam Q1 GDP growth slows to 6.98% ahead of Trump's tariffs By Jonathan Yee 07-Apr-25 17:24 SINGAPORE (ICIS)–Vietnam’s economy expanded by 6.93% year on year in the first quarter of 2025 but looming reciprocal tariffs has dampened its growth outlook for the rest of the year. Asia petrochemical market players pause discussions amid Trump tariff uncertainties By Jonathan Yee 07-Apr-25 16:59 SINGAPORE (ICIS)–Market players across petrochemical markets are pausing discussions as they await clarity on the US' ‘reciprocal’ tariff enforcement and potential retaliatory measures from affected countries. Hefty tariffs to slow China’s chemical capacity expansion By Fanny Zhang 07-Apr-25 17:26 SINGAPORE (ICIS)–The trade war between the world’s two biggest economies is expected to exacerbate China’s chemical overcapacity as demand could weaken further, while higher costs stemming from tit-for-tat tariffs would slow down capacity expansion in the country. PODCAST: Impact of US tariffs on aromatics trade flows from Asia By Damini Dabholkar 07-Apr-25 19:31 SINGAPORE (ICIS)–The announcement of import tariffs by the Trump administration is likely to see a shift in aromatics trade flows from Asia, especially given the disparity in tariff rates on different countries. China petrochemical futures extend losses on latest US tariff threats By Fanny Zhang 08-Apr-25 13:01 SINGAPORE (ICIS)–China’s petrochemical futures markets were mostly lower on Tuesday morning, extending their losses from previous session amid worries over an escalating trade war with the US. INSIGHT: China expands carbon market; hydrogen key to decarbonize steel sector By Patricia Tao 08-Apr-25 16:11 SINGAPORE (ICIS)–China has officially included its steel sector in the national carbon emissions trading system, a major step toward greening one of its most carbon-intensive industries. Asia glycerine supply ample as US-bound exports to decline amid trade war By Helen Yan 08-Apr-25 15:14 SINGAPORE (ICIS)–Asia's glycerine market is facing more supply than expected, with regional suppliers seeking other outlets outside of the US, following the tariffs launched by the US on imports from southeast Asia. INSIGHT: Trade war may affect China PP demand more than supply By Lucy Shuai 08-Apr-25 18:06 SINGAPORE (ICIS)–With the escalation of the US-China trade war, it is expected that the impact on demand for China's polypropylene (PP) will be greater than on supply. South Korea ups emergency funding support for embattled auto sector By Nurluqman Suratman 09-Apr-25 12:40 SINGAPORE (ICIS)–South Korea on Wednesday announced emergency measures to support its export-reliant automotive industry in response to a 25% US tariff on vehicles and parts which will take effect on 10 April. INSIGHT: Confusion and anxiety hit Asia oleochemicals market amid US tariffs By Helen Yan 09-Apr-25 16:10 SINGAPORE (ICIS)–Asia’s oleochemicals market is characterized by confusion and anxiety following the steeper-than-expected tariffs launched by the US Trump administration on oleochemicals imports into the US. Asia benzene sinks to lowest daily price in over four years By Angeline Soh 09-Apr-25 19:30 SINGAPORE (ICIS)–Asia benzene import prices on a free on board (FOB) South Korea basis fell to their daily lowest in more than four years. ICIS China March petrochemical index falls; hefty tariffs to hit demand hard By Yvonne Shi 10-Apr-25 13:54 SINGAPORE (ICIS)–The ICIS China Petrochemical Price Index in end-March fell to 1,121.73, down by 3.1% from end-February, with the US-China trade war likely to weigh heavily on overall demand in both the domestic and export markets. INSIGHT: New China PE capacity may cover US supply loss amid trade tensions By Joanne Wang 10-Apr-25 14:16 SINGAPORE (ICIS)–China’s polyethylene (PE) market demand faces significant challenges following the US’ continued imposition of tariffs, with domestic prices of linear low-density polyethylene (LLDPE) down by 4% so far this week on expectations of new capacity coming online. US ethanol exports to Philippines expected to remain duty free; tariff on Brazil increased By Evangeline Chueng 10-Apr-25 17:44 SINGAPORE (ICIS)–US ethanol exports to the Philippines are expected to remain unaffected by the recent tariff changes, as the country has maintained duty-free access since 2016. INSIGHT: China-US tariffs altering Asia olefins supply and demand balance By Joey Zhou 10-Apr-25 18:52 SINGAPORE (ICIS)–Market dynamics for Asia propylene prices in Q2 2025, originally trending bearish amid long supply from China, are shifting on the back of US tariff policy and its impact. Uncertainty remains the watch-word in this market. Asia petrochemical shares drop as US tariffs on imports from China hit 145% By Jonathan Yee 11-Apr-25 10:38 SINGAPORE (ICIS)–Asian chemical shares fell on Friday amid deepening concerns over a global trade war after the White House clarified that the US' tariffs on China has risen to 145%. INSIGHT: India anchors PVC future amid global market re-alignment By Aswin Kondapally 11-Apr-25 15:00 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.

14-Apr-2025

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

SINGAPORE (ICIS)–Vietnam will cut import tariffs by at least half on US products such as ethanol, liquefied natural gas (LNG) and automobiles, while bringing the levy on ethane down to zero, by the end of the month. Tariffs on ethanol will be cut to 5% from 10%; while those for LNG will be reduced to 2% from 5%; and those on cars will be shaved to 32%, half of the high-end of the 45% to 64% tariff range currently in effect, Vietnam’s Ministry of Finance stated on 25 March. The announcement was made by tax policy department head Nguyen Quoc Hung. Vietnam, which is a major manufacturing hub in Asia, has the third-biggest trade surplus with the US after China and Mexico. US President Donald Trump has imposed tariffs on China and Mexico in February and March, respectively, a few months after taking office. The US is Vietnam's largest export market. Data from the US Trade Representative (USTR) showed that the US’ trade deficit in goods with export-reliant Vietnam last year reached $123.5 billion, up by more than 18% from 2023. US' imports from Vietnam totaled $136.6 billion against its exports of $13.1 billion to the southeast Asian country, according to USTR data. Vietnam’s tariff cuts are aimed at "improving trade balances with [its] trade partners", Hung said, adding that despite the Comprehensive Strategic Partnership between the US and Vietnam, the two nations have not yet established a free-trade agreement (FTA). Hung said the decree on the tariff cuts will be ready by the end of March and will take effect right after. Cuts on import tariffs will also apply on goods such as chicken thighs, almonds, apples, cherries, and wooden product. Trump is scheduled to apply reciprocal tariffs on multiple nations from 2 April, with some possible exceptions. Vietnamese-US cooperation, procurement, and trade agreements were signed during the US work trip by Vietnam trade and industry minister Nguyen Hong Dien in mid-March, according to Vietnam state media. PetroVietnam Gas Corp (PVGas) has signed a memoranda of understanding (MoUs) on long-term LNG supply with US energy majors ConocoPhillips and Excelerate. Meanwhile, Vietnam's Binh Son Refining and Petrochemical Company (BSR) has partnered with US engineering and construction solutions firm Kellogg Brown & Root (KBR) for a sustainable aviation fuel (SAF) pre-feasibility study. Starting in 2025, Vietnamese and US business cooperation agreements are anticipated to reach $90.3 billion, according to the Vietnam News Agency (VNA). This includes $4.15 billion in agreements already signed; $50.15 billion for aviation and energy sector deals; and $36 billion in agreements expected to be finalized soon. Thailand’s Siam Cement Group (SCG) is currently paving the way for Vietnam’s first integrated petrochemical complex to use US ethane as feedstock for production. The project, which will mean increased feedstock diversification for its wholly owned Vietnamese subsidiary Long Son Petrochemicals (LSP), is expected to be completed by the end of 2027. Operations at the LSP complex in Ba Ria-Vung Tao province in southeastern Vietnam remains shut after it was halted indefinitely from mid-October 2024 amid poor production economics. (adds details throughout) Visit the US tariffs, policy – impact on chemicals and energy topic page Thumbnail image: At the Hai Phong Port in Hai Phong Vietnam on 25 May 2015 (Minh Hoang/EPA/Shutterstock)

26-Mar-2025

SINGAPORE (ICIS)–Vietnam will cut tariffs on imports of several US products including ethane, liquefied natural gas (LNG) and automobiles. The southeast Asian country will be reducing tariffs on cars to 32% from previous rates of 45% to 64%, lowering ethanol tariffs to 5% from 10%, cutting liquefied natural gas (LNG) tariffs to 2% from 5%, and eliminating tariffs on ethane, Nguyen Quoc Hung, the head of the finance ministry's tax policy department, said in a statement posted on the ministry's website late on Tuesday. Vietnam has the third-biggest trade surplus with the US after China and Mexico. (Recasts headline and first paragraph for clarity)

26-Mar-2025

SAO PAULO (ICIS)–Brazil’s higher import tariffs for dozens of chemicals in place since October have already pushed up costs for industrial players, who are already passing those higher costs onto customers, according to the head at the trade group of industrial chemicals importers Associquim. Rubens Medrano, president of the Brazilian Association of Distributors of Chemical and Petrochemical Products (Associquim), which represents companies employing around 7,000 people across Brazil, would not make a prediction about whether tariffs will be lowered again in October – when the current 12-month measure is due to expire. But he did say manufacturing is feeling the pinch, adding that the international and domestic economic scenarios are worsening, and higher tariffs are not making life easier for the many companies in Brazil which import chemicals and petrochemicals – half of the large country’s demand for chemicals is covered by imports. Brazil’s several changes to chemicals imports over the years, depending on who is in government and whose lobbying policymakers listen to the most, has become a recurrent saga, and one that is certain to provide a few more acts. PRODUCERS GOT THEIR WAY ON TARIFFS – IS IT PAYING OFF?The current situation was meant to benefit domestic producers – of which there are not many, with the market being controlled by a few large players, most prominently polymers producer Braskem, Latin America’s largest petrochemicals producer. Higher tariffs, the narrative went, should encourage domestic purchases of chemicals, with the narrative quickly turning to protecting Brazilian jobs, one narrative the current government is very sensitive to. But Brazil’s 220-million person market requires many more chemicals than it produces domestically, making imports indispensable for many manufacturing firms to operate. This has been a constant feature over the decades as producers never got to specialize but stayed in the commodity – and prone to be hit by global downturns – chemicals market. In the current act in the tariffs saga, Braskem and its lobbying arm Abiquim have been the main characters, with their months-long lobbying paying off last year when tariffs were sharply increased. Or, at least, that was the thinking when the measure was implemented. The reality is proving stickier though: Braskem’s poor financial results in the fourth quarter, meant to be the first one to show positive effects from tariffs, called that theory into question. Unipar, the other large chemicals producer who lobbied via Abiquim for higher tariffs for the main chemicals it produces, is due to release its financial results later this week. Unigel, embroiled in its own financial woes as it restructures its debt aiming to keep afloat, has not published financial results since 2023. Associquim – and the trade group representing plastics transformers Abiplast – fell on the losing side of the last tariffs act. But as Abiplast’s president Jose Ricardo Roriz said in October, they will “continue to fight” to reverse the higher tariffs. A Brazilian senator has also started a campaign against the tariffs, with heated words towards Braskem and what he considered the firm’s market dominance. LET’S START 2025, THENOne of Brazil’s funniest and probably truthful sayings goes: “The year only starts in truth after Carnival” – which this year fell very late, with the last Carnival events only taken place last weekend. The economy does function in January and February, but at a slower pace. A summer pace: for most Brazilians, the saying is just part of the idiosyncrasy and responds to the sort of seasons: the summer is slightly hotter than other seasons. Kids are off school in January and those families who can afford it will holiday away. Lobbyists are already gearing up for their work as the year starts. A key date for them will be the revision of the tariffs in October, so expect to hear from them more in coming months as they lobby to reverse course. This interview with Associquim being an example of it. “Distributors do not import just for the sake of importing. We usually have the criterion that we import products that are not produced domestically. However, the increase in import tariffs, increasing input costs, ends up harming several end consumer companies,” said Associquim’s Medrano. “I don’t think that’s the solution… The companies in our association are already paying more and passing this on to the consumer, of course. We don’t work with thermoplastics – we represent players in the industrial products category, and electrochemical distributors. Any increase in import costs will represent an increase in the final cost. The Brazilian consumer will be the one to pay for this.” Medrano said Abiquim’s intense lobbying running up to October was healthy and legitimate action in a market democratic economy, where companies and their funded trade groups “try to show” to the government their side of the argument. Medrano declined to comment on whether Braskem’s Q4 results indicated that the tariffs had not had the desired impact. ‘DIFFICULT TIMES’ GLOBALLY – AND LOCALLYAs 2025 is about to enter is second quarter, a common consensus is forming: the global economy and the largest economy in Latin America are showing signs of fatigue, with manufacturing especially feeling the heat. The slowdown was taken for granted by most economists even without considering the US’ President Donald Trump proposed tariffs after storming into the White House in January. Trump’s trade policies could hit Brazil in many fronts. Trump views steel as the true sign of industrial prowess, and his proposed tariffs on that product could directly hurt Brazil, which keeps a healthy steel production which makes it a net exporter, with more than 3.5 million tonnes/year sold to the US. Another sector which could be hit is one of the country’s own success stories: ethanol, as Brazil overtakes the US as a global producer thanks to lower costs, hot weather, abundant water, and previous trade wars, which made the largest grain consumer China turn away from US farmers' output. Contributing to the doom and gloom, US credit rating agency Moody’s said in February the potential tariff-induced economic hit to Latin America’s economy would only be recouped by 2028, with lower output and lower employment on the cards. However, the expected economic slowdown could play in favor of those who are lobbying for lower tariffs. Despite the healthier-than-expected manufacturing performance in February, Brazil’s manufacturing has been on a slowing trend for months, and this does not play well with the music the government wants to sell to voters. A fall in jobs in manufacturing could greatly harm President Luiz Inacio Lula da Silva's Workers’ Party (PT) chances of re-election in 2026, as that constituency forms the backbone of the party’s electorate. Amid yet another crisis in the many he has experienced, Associquim’s Medrano preferred to end on an optimistic note. “The global petrochemical industry is in trouble. Let’s see where we are in October, but a decrease in tariffs could take place – it will all depend on how the Brazilian economy behaves in the coming months. If the economy grows, there will be a shortage of products, making imports important in addition to the usual supply and demand patterns,” said Medrano. “Usually, at the beginning of the year, we see a replenishment of stocks as companies reduced their operations ahead of the summer break. This year, however, this replenishment of stocks has been lower and slower than normal. “We are living in difficult times. Not only nationally, but internationally. Adding to that, international trade is very disrupted and could even be more disrupted in coming quarters. Things are not normal, or at least not the normal we became accustomed to in past decades. “However, we have been through worse times and, for sure, we will get through them. I don’t want to be too pessimistic.” Finally, a quick note to readers in Brazil: happy new year. Front page picture: Port of Santos in Sao Paulo, Latin America’s largestSource: Port of Santos Authority Insight by Jonathan Lopez

11-Mar-2025

HOUSTON (ICIS)–Shipping container rates from Asia to both US coasts fell again this week as capacity has grown and as volumes have fallen after frontloading to beat tariffs, and liquid tanker rates rose on the transatlantic eastbound route and fell on the US Gulf to Asia trade lane. CONTAINER RATES Rates from Shanghai to Los Angeles fell by 9% this week, according to supply chain advisors Drewry, while rates from Shanghai to New York fell by 6%, as shown in the following chart. Rates to both US coasts are now at their lowest of the year, according to Drewry data. Global average rates in Drewry’s World Container Index fell by 3% and are also at their lowest over the past year, as shown in the following chart. Drewry expects rates to continue to decrease next week due to increased shipping capacity. Rates from online freight shipping marketplace and platform provider Freightos showed significant decreases this week, although their rates are slightly higher than Drewry’s. Judah Levine, head of research at Freightos, said that tariffs – or the threat of tariffs – led to many importers frontloading volumes to beat the announced levies. “The president’s proposed 60% tariffs on Chinese goods could go into effect as soon as April – as could a wider application of reciprocal tariffs on numerous countries – meaning the window to receive goods before then is about closed,” Levine said. Levine said that the combination of a seasonal slump in demand and the possible end of frontloading likely drove the sharp fall in transpacific ocean rates last week. “If frontloading of the past few months was significant enough, we could also expect to see subdued peak season demand and rates as a result,” 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. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES MIXED US chemical tanker freight rates assessed by ICIS were mixed week on week. Trade routes from the US remain mixed with several trade lanes slightly higher and others lower. Cargo moving into Asia weakens following the recent tariff announcements and this route has recently seen a decrease of cargoes, as the tariffs have all but halted any spot activity for this trade lane. As a result, rates have dipped from the previous week. On the other hand, the rates from USG to Rotterdam experienced upward pressure. For this trade lane freight rates for March have strengthened, given the amount of space left. A shipowner said it is expecting the trend to continue throughout March, with higher contract of affreightment (COA) utilization leaving very little available space. From the USG to Brazil, this market has remained relatively unchanged but is experiencing some downward pressure. While the market continues to be active it is further influenced by freight availability and a swing in trade lane dynamics. Demand remains soft particularly for larger parcels further pressuring some downward movement. On the USG to India trade lane, the market remains extremely soft with plenty of space available as outsiders have entered the market. As a result, this has placed downward pressure, and rates could fall further on the route if this persists. Several inquiries were seen for monoethylene glycol (MEG), methanol, ethanol, and vinyl acetate monomer (VAM), but few fixtures were seen in the market. With additional reporting by Kevin Callahan

07-Mar-2025

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