Mixed plastic waste and pyrolysis oil

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Gain a transparent view of the opaque mixed plastic waste and pyrolysis oil markets in Europe. With the growth of chemical recycling in Europe, competition for mixed plastic waste feedstock is intensifying. Pyrolysis-based plants targeting mixed plastic waste (with a focus on polyolefins) as feedstock account for ~60% (2023) of all operating chemical recycling capacity in Europe.

Remain at the forefront of this rapidly evolving market, with comprehensive pricing and market coverage of key recycling and burn-for-energy feedstocks and pyrolysis oil prices. Waste bale prices include mixed polyolefins, refuse derived fuel (RDF) bales and unsorted materials recovery facility (MRF) waste.

Pyrolysis oil pricing includes naphtha substitute, non-upgraded and tyre derived grades.
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Mixed plastic waste and pyrolysis oil news

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 14 February. IPEX: Asia finding a floor, up 1%; PVC and PP drive 1.3% index fall in Europe; USG toluene firms The ICIS Petrochemical Index (IPEX) for January shows that northeast Asian chemical markets may be finding a floor after two consecutive months of declines, with the regional index up 1% – only its second gain in six months, driven by a 14.7% surge in butadiene due to rising crude oil costs. US higher steel tariffs could backfire, reduce capex in chemical, industrial plants – ICIS economist Potential US 25% tariffs on steel and other metals could ultimately reduce capital expenditure (capex) in chemicals and industrial plants as costs rise, according to an economist at ICIS. US’ 25% tariffs on all steel, aluminium imports start 12 March The US will start imposing 25% tariffs on all steel and aluminium imports starting 12 March, under the executive order signed by US President Donald Trump on 11 February. INSIGHT: EU-Chile trade deal could benefit chemicals indirectly via higher minerals supply (part 1) An interim trade accord between Chile and the EU kicked off on 1 February and the 27-country bloc is not shy about its main objective: get preferential access to the Latin American nation’s vast resources of raw materials. INSIGHT: US reciprocal tariffs would have little direct impact on commodity chemicals markets – analysis The threat of US reciprocal tariffs is the latest wrinkle in US trade policy, spurring players to game out potential impacts. For the US chemical industry, there should be little direct impact on commodity markets as imports largely originate from Canada and South Korea – countries that already have free trade agreements with the US. Americas Styrenics sale process delayed as better market conditions expected later in 2025 – Trinseo The potential sale of Americas Styrenics (AmSty) – the 50/50 joint venture between Trinseo and Chevron Phillips Chemical (CP Chem) is being delayed as better market conditions are expected later in 2025, said the CEO of Trinseo. Reciprocal tariffs will match taxes on US goods by other countries; to take effect in April The US plans to impose reciprocal tariffs on all countries as early as 2 April once the required investigations have taken place, President Donald Trump said on Thursday. INSIGHT: US mulls reciprocal tariffs on Brazil ethanol, cabinet hopes steel quota is to be kept Although the new US administration has so far only imposed tariffs on China, President Donald Trump keeps using the tariff threat as a form of negotiation and in the latter part of this week it was the turn of Brazil’s ethanol.

17-Feb-2025

UPDATE: China retaliates with 15% tariff on US LNG

UPDATE: China retaliates with 15% tariff on US LNG SINGAPORE (ICIS)–China has announced a 15% tariff to be imposed on coal and LNG imports from the United States as a retaliation to US trade tariffs, the country’s Ministry of Commerce said in a statement. “In accordance with the Tariff Law of the People’s Republic of China, the Customs Law of the People’s Republic of China, the Foreign Trade Law of the People’s Republic of China and other laws and regulations and the basic principles of international law, and with the approval of the State Council, additional tariffs will be imposed on some imported goods originating from the United States starting from 10 February 2025.” A 10% tariff will also be imposed on crude oil, agricultural machinery, and a score of other products. US president Donald Trump and Chinese President Xi Jinping are expected to talk this week on trade and other issues. The US has imposed 10% tariffs on Chinese goods starting 4 February. “This will drive even more US volumes into Europe, and leave portfolio players with suboptimal logistical flows,” said Saul Kavonic, oil and gas analyst with research firm MST Marquee. “Chinese buyers will pay the tariffs, so will be trying to minimize the US volumes they take contractually, and swap that out for non-US volumes. This benefits other regional producers such as Australia, who will be seen as relatively more reliable after this. “The negative impact on US LNG from these tariffs will only partly offset the strong appetite from other buyers to procure more US LNG under pressure from Trump to rebalance trade deficits. The tariffs will create material market inefficiencies, which will benefit some LNG traders in the regions. It may push prices higher everywhere on the margin, as flows become suboptimal.” CHINA IMPORTS China imported 4.4 million tonnes of LNG from the United States in 2024, ICIS data shows, out of a total of 79.24 million tonnes. If the tariff is enforced and stays beyond the upcoming negotiations expected this week between US President Donald Trump and Chinese President Xi Jinping, importers could optimize the US-based positions by diverting them elsewhere. However, the imposition of tariffs on energy by the Chinese government fundamentally means higher energy costs for the country, which increases the cost of industrial production and inflationary pressure. The growing tensions in the commercial relationship between the countries could also equate to reluctance by Chinese buyers to commit to new long-term positions with US-based suppliers. Political tensions with the US could turn Chinese buyers to alternative sources of LNG and pipeline gas, including Russia. The move is the latest in a series of tariff exchanges that so far have involved Canada and Mexico in addition to China. The market anticipates that the next wave of tariffs could target members of the European Union. EU states are unlikely to impose retaliatory tariffs on imported energy, as the cost of gas is already growing following the halt of Russian pipeline gas supplies to the region. Roman Kazmin

17-Feb-2025

S Korea's S-Oil Shaheen project 55% complete; to start commercial ops in H2 ’26

SINGAPORE (ICIS)–S-Oil's Shaheen crude-to-chemical project in Ulsan, South Korea is now 55% complete and is expected to start commercial operations in the second half 2026, the producer said on Monday. Construction of the $7bn project at the Onsan Industrial Complex of Ulsan City started in March 2023, with mechanical completion targeted by the first half of 2026. South Korean refiner S-Oil is 63%-owned by Saudi Aramco, the world's largest crude exporter. The Shaheen project – named after the Arabic word for “falcon” – will have a 1.8 million tonne/year mixed-feed cracking facility; an 880,000 tonne/year linear low density polyethylene (LLDPE) unit; and a 440,000 tonne/year high density PE (HDPE) plant. The site will have a thermal crude-to-chemical (TC2C) facility, which will convert crude directly into petrochemical feedstocks such as liquefied petroleum gas (LPG) and naphtha, and the cracker is expected to recycle waste heat for power generation in the refinery. The company currently produces a range of petrochemicals and fuels including benzene, mixed xylenes, ethylene, methyl tertiary butyl ether (MTBE), paraxylene, polypropylene, propylene, propylene oxide, biodiesel, and potentially bio-based aviation and other bio-derived products at its Onsan site. S-Oil plans to supply feedstock to domestic petrochemical downstream companies mainly through pipelines. "To this end, the construction of logistics-related infrastructure, such as a new pipeline network, is being carried out at the same time," it said. Long-term agreements for stable supply of raw materials are being signed between S-Oil and petrochemical companies located at the two industrial complexes in Ulsan, which would boost competitiveness of domestic value chain, the company said.

17-Feb-2025

Europe top stories: weekly summary

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 14 February. Europe MX and PX chemical value chain braces for headwinds amid downstream closures and tariff threats Downstream demand for mixed xylenes (MX) and paraxylene (PX) in Europe has been limited at the start of 2025, with permanent shutdowns and the threat of tariffs among the hurdles to a meaningful recovery. Germany's battered chemical industry holds its breath ahead of general election Germany is set to head to the polls on 23 February amid one of the most challenging economic scenarios the country has faced in post-war times. EU gas price cap proposals would drive shipments to other regions – ICIS expert Proposals under consideration in the European Commission to temporarily cap natural gas pricing would likely result in the diversion of supplies away from Europe and tighten supply in the region, an ICIS analyst said on Wednesday. EU promises plan to save chemicals as Clean Industrial Deal approaches The European Commission has promised to address the plight of the region’s energy-intensive petrochemical sector later this year as it gears up for the publication of the Clean Industrial Deal on 26 February. IPEX: Asia finding a floor, up 1%; PVC and PP drive 1.3% index fall in Europe; USG toluene firms The ICIS Petrochemical Index (IPEX) for January shows that northeast Asian chemical markets may be finding a floor after two consecutive months of declines, with the regional index up 1% – only its second gain in six months, driven by a 14.7% surge in butadiene due to rising crude oil costs.

17-Feb-2025

ICIS EXPLAINS: German election's impact on energy

LONDON (ICIS)– Germany will head to the polls on 23 February for a snap federal election as Olaf Scholz, the incumbent chancellor, lost the vote of confidence last December, a month after his coalition government collapsed in November 2024. The following analysis will reflect core pledges from the manifestos of the German parties and review those in detail using ICIS data and insights. This analysis of German political pledges and announcements will be continuously updated by the ICIS energy editorial team. Lead authors include German power reporter Johnathan Hamilton-Eve, German gas reporters Ghassan Zumot and Eduardo Escajadillo. Data aggregated from multiple surveys collated by Politico, showed that on 12 February, the CDU/CSU led the polls with 29% of the vote. While the CDU/CDU remains ahead, the party has lost three percentage points since 13 November, when Scholz first announced a vote of confidence would take place on 16 December. Meanwhile, the Alternative for Germany (AfD) and Linke party have seen the largest gains in voter support, with each increasing by three percentage points in the polls. NORD STREAM AfD co-leader, Alice Weidel, said in a party congress on 11 January that her party is willing to resume Russian gas supplies via Nord Stream. The Sahra Wagenknecht Alliance (BSW) has proposed reviving Nord Stream as part of its strategy to affordable and secure gas supplies. However, this is unlikely to materialise as BSW is not among the top three parties while the AfD is explicitly excluded from the ruling coalition. As a result, such energy policies would be very unlikely to pass in parliament. Other parties are explicitly against the idea of returning to Russian piped supplies. Technical capacity of Nord Stream 1 and 2 is 55 billion cubic meters (bcm) per year for each of the twin pipelines. REVIVAL OF NUCLEAR POWER Germany’s controversial decision to shut down its last three nuclear power plants in April 2023, is also an important topic discussed by the main parties who claim that this source of generation would ensure security of supply in the power sector. The AfD is the most vocal party to advocate for the return of nuclear energy as part of its agenda, the CDU/CSU dissimilarly said it would examine the possibility of recommissioning nuclear power plants as part of energy diversification. Excluding the FDP which support nuclear power development, the SPDs have no clear stance on the issue. The Greens/Alliance 90, Linke and BSW are the only parties that explicitly oppose a return to nuclear power generation, although BSW does support intensifying research in the field of nuclear fusion. Despite mixed views on nuclear, market participants and former nuclear operators  remain sceptical on the issue, citing high costs, extensive staff training, regulatory challenges and the advanced dismantling of decommissioned nuclear plants as key barriers, making a revival unfeasible. GAS POWER PLANT STRATEGY? After a year of delays to the power plant safety act, Germany’s coalition collapse led to the current minority government failing to pass the act in December 2024. While the German Federal Ministry of Economic Affairs and Climate action (BMWK) previously told ICIS that implementing the act was “no longer possible” due to CDU/CSU opposition, traders active within the German power market noted that a revised bill with a renewed focus would likely follow the elections to help address missing power plant capacity. “A law to increase the capacity of dispatchable power plants is highly necessary and we will see some version of it in 2025,” said one trader. The CDU/CSU, led by Friedrich Merz, said in January that it would build 50 new gas-fired power plants quickly if elected. According to ICIS Analytics, that would make around a 25GW capacity addition to Germany’s current 36GW gas-fired fleet. This move aims to bring back confidence for investors and supply security for power consumers amid multiple periods of limited renewable generations this winter so far. On the other hand, the Greens want to move away from fossil fuels towards renewable energy as fast as possible. They strongly oppose new gas-fired power plants, unless hydrogen-ready, and aim to achieve 100% renewable electricity within the next ten years. Additionally, they plan to stop using fossil gas by 2045 and reject new long-term gas import deals, focusing on local sustainable energy. The Social Democrats, led by the incumbent chancellor Olaf Scholz, advocate for a more balanced approach. They aim to reduce CO2 emissions and are open to carbon capture and storage projects. Scholz recently welcomed the commissioning of new US LNG projects in a bid to diversify energy sources and expressed commitments to phasing out traditional energy sources gradually to maintain energy security and industrial strength. The Free Democratic Party (FDP) supports a market-driven policy. They want to reduce regulations to improve efficiency and modernization, creating a simple capacity market to incentivize building gas-fired power plants. The FDP also supports increasing domestic natural gas extraction, including the use of fracking, and boosting storage capacities to reduce reliance on international supplies. In stark contrast, AfD takes a very different approach. They support building new coal- and lignite-fired power plants and aim to revive the Nord Stream pipelines to secure cheap gas imports. RENEWABLE ENERGY The expansion of renewable energy remains a key topic in Germany, however, its focus has somewhat declined as debates over migration and how to revive the country's struggling economy take centre stage. Despite this shift, most parties continue to agree on the need to expand renewables. The Greens, SPD and Linke are the most ambitious in terms of promoting renewable energy. The Greens have pledged to uphold the Renewable Energy Sources Act (EEG) target of an 80% renewable energy mix by 2030 and a carbon-neutral power grid by 2035. Similarly, Linke supports a 100% renewable energy mix, but with an extended timeline to 2050. To accelerate renewable expansion, Linke proposes municipalities receive a €25,000 bonus per MW for new wind turbines and large-scale PV systems built, along with a higher mandatory payment from wind and solar operators to municipalities. All parties advocate for lower grid fees, while the Greens, SPD, and CDU/CSU also advocate for a reduction in electricity taxes to cut prices and incentivise renewable growth. The BSW has indicated it would implement a repowering program to replace old wind turbines with new ones to increase electricity yield, while encouraging the installation of PV systems on public buildings and parking lots. In contrast, the FDP and AfD take an openly hostile stance towards renewables. Both parties have pledged to ban renewable subsidies, while the AfD has vowed to go a step further and demolish all wind turbines, with Weidel describing them as “windmills of shame”.

17-Feb-2025

Singapore Jan petrochemical exports dip 0.2%; NODX falls 2.1%

SINGAPORE (ICIS)–Singapore’s petrochemical exports in January declined by 0.2% year on year to Singapore dollar (S$) 1.10 billion ($821 million), while overall non-oil domestic exports (NODX) fell by 2.1% over the same period, official data showed on Monday. The southeast Asian country’s January NODX reversed the 9.0% increase posted in the previous month, trade promotion agency Enterprise Singapore (EnterpriseSG) said. For the whole of 2025, EnterpriseSG forecasts a modest growth of 1.0-3.0% for the overall NODX amid trade and economic headwinds. In January, Singapore’s electronics exports grew by 9.6% year on year, while non- electronics NODX fell by 4.8% over the same period as pharmaceuticals shipments slumped by 53.0%. Exports to Hong Kong, the US and Taiwan posted growths in January 2025, while shipments to China, Indonesia, Thailand, Malaysia and the EU 27 declined. Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Shell, based at its Jurong Island hub. For the whole of 2024, Singapore's petrochemical exports grew by 4.6%, with overall NODX inching up by 0.2%. ($1 = S$1.34)

17-Feb-2025

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 14 February. SE Asia PE plant shutdowns deemed necessary for rebalancing By Izham Ahmad 10-Feb-25 10:57 SINGAPORE (ICIS)–A recent wave of plant shutdowns among polyethylene (PE) producers across southeast Asia has been seen by some as a reflection of how dire the situation in the market is. Malaysia's Lotte Chemical Titan incurs record Q4 loss; '25 outlook downbeat By Nurluqman Suratman 10-Feb-25 14:44 SINGAPORE (ICIS)–Lotte Chemical Titan (LCT) incurred its largest-ever quarterly loss, with analysts expecting the Malaysian producer to remain in the red in 2025 amid weak economic conditions and an oversupply of petrochemical products. INSIGHT: Strong hydrogen push in China to reshape global industry amid US pullback By Patricia Tao 10-Feb-25 18:23 SINGAPORE (ICIS)–The US has suspended financial support for its own hydrogen sector, while China is ramping up efforts to expand its hydrogen industry. The sharp policy divergence between the two countries could accelerate the global hydrogen market’s shift and reshape the industry landscape over the next three to five years. Asia polyester tracks rising costs despite weak post-holiday demand By Judith Wang 11-Feb-25 12:57 SINGAPORE (ICIS)–Asia’s polyester export discussions edged up in line with the higher cost pressure after the Lunar New Year holiday, while buying activities were limited as end-user demand remained weak. SE Asia VAM market rallies on crimped supply, demand surge By Hwee Hwee Tan 12-Feb-25 12:43 SINGAPORE (ICIS)–The southeast Asia vinyl acetate monomer (VAM) import market is being buoyed by resurgent restocking demand and supply disruptions into February. INSIGHT: US policy shift raises concerns on future of CCS, blue ammonia value chain By Bee Lin Chow 12-Feb-25 13:04 SINGAPORE (ICIS)–The unfolding political battle in the US over national economic interest and energy security has raised concerns about potential implications for its emerging carbon capture and storage (CCS) and blue ammonia sectors, and the potential spillover impact on Asia. PODCAST: US hydrogen subsidy halt vs China’s expansion – what’s next for the global market? By Anita Yang 12-Feb-25 15:45 SINGAPORE (ICIS)–The Trump administration swiftly withdrew financial support for its hydrogen sector, while China is accelerating hydrogen expansion with strong policy backing. INSIGHT: India may offer tariff concessions to US as PM Modi meets Trump By Priya Jestin 13-Feb-25 14:18 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. Vietnam to raise 2025 GDP growth target to 8% to fuel socioeconomic growth By Jonathan Yee 13-Feb-25 16:08 SINGAPORE (ICIS)–Vietnam announced on 12 February it would raise its GDP growth target for 2025 to 8.0% from 6.5-7.0%, with industrial manufacturing and foreign investment expected to drive growth. Singapore 2024 petrochemical exports grow 4.6%; trade risks stay high By Nurluqman Suratman 14-Feb-25 14:00 SINGAPORE (ICIS)–Singapore’s petrochemical exports in 2024 rose by 4.6%, supporting the overall growth in non-oil shipments abroad which is being threatened by ongoing trade frictions among major economies.

17-Feb-2025

INSIGHT: US mulls reciprocal tariffs on Brazil ethanol, cabinet hopes steel quota is to be kept

SAO PAULO (ICIS)–Although the new US administration has so far only imposed tariffs on China, President Donald Trump keeps using the tariff threat as a form of negotiation and in the latter part of this week it was the turn of Brazil’s ethanol. Earlier in the week, Brazilian officials had already been in damage limitation mode after the US said it would impose higher tariffs on steel on 12 March. Brazil’s still strong steel sector is now hoping the two countries will agree, just like they did in 2018 during Trump’s first term, a quota so Brazil can have an outlet for its excess steel. ETHANOL IN THE SPOTLIGHTThe Brazilian government has so far kept a low profile in the issues presented to it by the new US Administration; first, it was deportation flights and the rather discrete row caused by the fact that Brazilians returning home did so handcuffed in the aircraft. Brazil’s President Luiz Inacio Lula da Silva, however, was wary of how his Colombian counterpart, Gustavo Petro, reacted to the first deportation flights – taking to social media to say Colombia’s sovereignty could never be curtailed, after he ordered two flights to return to the US. Trump’s furious reaction on a Sunday afternoon in his first week in the White House sent the signal to allies – Colombia is a firm ally of the US in the region – and enemies alike about the new winds blowing in Washington. As already said, Brazil’s cabinet also kept a rather low profile about the tariffs on steel. The week started with a report by Folha de S. Paulo citing an unnamed cabinet official saying Brazil could retaliate by raising taxes on the US technological majors operating in the country. The Finance Minister Fernando Haddad was quick to deny such a possibility a few hours later, and what could have become a big row died down. But then came a White House announcement on reciprocal tariffs later in the week, and the US intention to analyze country by country all tariffs and end “unfair trade practices.” The US mentioned specifically Brazilian ethanol as a prime example of those unfair trade practices, something the US trade group for the sector, the Renewable Fuels Association (RFA), was quick to grasp after years of lobbying. “The US is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit,” said the White House. “There are endless examples where our trading partners do not give the US reciprocal treatment. [For example] The US tariff on ethanol is a mere 2.5%. Yet Brazil charges the US ethanol exports a tariff of 18%.” The White House went on to say the US posted a trade deficit with Brazil of $148 million in 2024, which it attributed to the effect of the country's higher import tariff. Brazil’s exports to the US totaled $200 million last year, while US shipments stood at $48 million. With Brazil featuring so prominently in one of the White House’s dozens of weekly press releases, it was difficult for the cabinet to remain in the background, aware that ethanol is an important employer and, in a way, Brazil’s own success story. In the 1970's crude oil prices shock, the country took the strategic decision to encourage ethanol as a motor fuel, propping up at the same time what was then a nascent agribusiness which became one of the world’s breadbaskets, owing to Brazil’s vast arable land and abundant water and warm weather. Ethanol, therefore, required a stronger response, and the cabinet’s measured statement decided to focus on sugar. The minister for energy and mines – a heavyweight in any Brazilian government – was the one in charge to remind the US that if all tariffs should be reciprocal, Brazil would very much like to see the hefty tariffs on its sugar lowered. Alexandre Silveira argued that Brazil’s sugar had to pay an 81.16% import tariff to enter the US, without offering anything in return. “To have a fair and reciprocal plan, as stated by President Trump, it would be necessary, in fact, to eliminate import tariffs for Brazilian sugar,” he said, as quoted by CNN Brazil. “Trump’s decision is unreasonable, as there is no counterpart in expanding Brazilian sugar exports to the US. This type of stance weakens multilateralism and will have negative consequences for the US economy itself.” As soon as Brazil’s ethanol featured on the White House’s communication, the US trade group RFA’s CEO issued a statement celebrating that after a decade spending “precious time and resources fighting back against an unfair and unjustified tariff regime” imposed by Brazil on US ethanol exports, the lobbying had finally paid off. “What's more ironic is that these tariff barriers have been erected against US ethanol imports while our country has openly accepted – and even encouraged and incentivized – ethanol imports from Brazil,” said Geoff Cooper. STEEL TARIFFSJust like everyone else, the Brazilian cabinet is trying to adapt to the fast pace of another Trump presidency. For much of the first half of this week, ministers in public and steel industry players in private went from panic mode to talks mode as the 12 March implementation date offers room for that. Brazil’s officials are hopeful a new quota can be agreed with the US, after pressure from manufacturing companies in the US persuaded Trump during his first term to establish a 3.5-million tonne quota for steel semi-finished products and slabs, and a 687,000 tonne quota of rolled products. In the current environment, the repetition of that deal would a be a resounding success for Brazil’s steel producers. Brazil’s produces around 32 million tonnes of steel annually, according to trade group the Steel Brazil Institute, but the country’s demand stands at 24 million. This means the sector must find markets overseas, and for the past few years nearly half of that has been going to the US as per the quota agreed. The large US trade deficit in steel is shown by the 20-25 million tonnes/year imported. In the nine months to September 2024, the US had imported 20.2 million tonnes, according to the US International Trade Administration. Brazil, with 16.7% market share in those imports entering the US, is the second largest supplier only behind Canada (22.5%), followed by Mexico (11.4%), South Korea (10.1%), Vietnam (4.6%), and Japan (4.0%), according to the official data. If the universal tariffs on steel are finally implemented on 12 March, Brazil’s quota would also come to an end. This is where Brazilian officials will put much of its efforts in the next four weeks, an attempt which may well end up being successful if US manufacturers are listened to. Earlier this week, an economist at ICIS warned that higher steel tariffs would likely increase prices in US manufacturing and could potentially reduce levels of capital expenditure (capex) in new plants. The US is heavily reliant in steel imports to cover its demand. “A tariff raises the price in the market as domestic steel producers raise the price for steel to match the tariff… Higher price lowers quantity demanded (law of demand) but does increase quantity supplied by domestic producers. Tariffs allow inefficient domestic products to produce when then they could not have done so without the tariff,” said Kevin Swift. “Steel tariffs will raise the cost of building a chemical plant, for ongoing maintenance, etc. These will especially hurt when government policy is to foster re-shoring and FDI [foreign direct investment] in the US.” US manufacturers likely to be lobbying for exceptions to the steel tariffs are set to be Brazil’s best ally in the next four weeks, considering Trump’s chauvinistic approach to most things. Lula’s Workers’ Party (PT) re-election in the presidential election due in 2026 hangs in the balance. While manufacturing had a bumper 2024, more formal and better-paid jobs in industry have been hard to come so far. The PT’s main constituency is industrial workers, and a blow to the steel sector now would come to represent actual jobs being lost but also, given steel’s unique role in supposedly representing a strong and self-sufficient industrial fabric, a blow to the credibility of the government. The government came into office in 2023 promising to create more jobs by reviving manufacturing. Just like so many other cabinets had done before it in the past 50 years. Frong page picture source: World Steel Association (Worldsteel) Insight by Jonathan Lopez

14-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

INSIGHT: EU-Chile trade deal could benefit chemicals indirectly via higher minerals supply (part 1)

SAO PAULO (ICIS)–An interim trade accord between Chile and the EU kicked off on 1 February and the 27-country bloc is not shy about its main objective: get preferential access to the Latin American nation’s vast resources of raw materials. Chemicals players on both sides have welcomed the trade deal, although trade in chemicals is likely to remain limited as Chile’s natural trading partners in the sector have always been the US and Asia. Under the terms of the free trade agreement (FTA), 99.9% of EU exports will enter Chile duty-free, whilst EU firms gain equal treatment with domestic companies across Chilean service sectors, including finance, telecommunications, maritime transport, and delivery services. European businesses bidding for government contracts in Chile, Latin America's fifth-largest economy, will receive enhanced market access through streamlined procurement procedures. CHEMICALS: COLATERAL WINNERS?While chemicals companies in Chile and the EU may not feel much of an impact from the trade deal, chemicals players in the 20-million population Latin American economy showed relief that closer ties are being developed with the EU, rather than China. In 2023, the EU enjoyed a trade surplus in chemicals with Chile of €120 million, the result of EU exporting €770 million worth of chemicals to Chile, while the latter's exports to the EU stood at €649 million, according to figures from Europe-wide chemicals trade group Cefic. In a written response to ICIS, a spokesperson for Cefic said three quarters of the EU exports to Chile were consumer chemicals and specialties. In the case of Chile’s exports to the EU, 80% of them were of inorganic chemicals. Cefic said that while chemicals are not at the center of the trade deal, lithium and other minerals as well as metals are, and that could ultimately benefit the chemicals industry if the EU was to achieve a (green) industrial revival. In fact, the interim deal which came into effect on 1 February, which replaced a previous association agreement, included changes and updates to energy and raw materials: the association agreement came into force in 2002: hydrogen and lithium existed already then, but were little spoken about. On the one hand, EU chemicals firms cannot wait to see their energy bills fall, and more so following the 2022 energy and natural gas shock after Russia invaded Ukraine. Chile’s prime position to produce green hydrogen – strong sunlight and winds for the renewable energy, and abundant water – could turn the country into an exporter of the gas upon which most hopes to decarbonize the industrial sectors have been placed. Green energies such as hydrogen have the potential to lower the EU’s high energy bill. Several European companies have announced plans to build green hydrogen plants in Latin America – where costs are lower than at home – aiming to export to Europe most of the hydrogen produced. On the other hand, EU manufacturers are anxious to secure stable supply of the minerals they require to make the green transition the EU itself is pushing them to implement. By having access to those minerals, manufacturing in the EU could see a revival and indirectly push up demand for chemicals. “While EU-Chile chemicals trade is not major in comparison with other trade relationships, trade with Chile is important, especially due to Chile's leading position in the supply of certain raw materials,” said the Cefic spokesperson. “Chile is a key supplier of lithium and copper for the EU, two metals that are key for the EU chemicals industry in applications like cathode active materials for EVs [electric vehicles] or catalysts. In the future, Chile's hydrogen exports can also become even more relevant due to the EU's green transition.” In terms of polymers, Chile’s annual consumption stands at around 1.3 million tonnes, and the country’s output is far from covering even half of that, according to figures by the country’s plastics trade group Asipla. Local production of polymers, said Asipla, stands at 260,000 tonnes, comprising 200,000 tonnes from recycling and approximately 60,000 tonnes of virgin material. Some company names include Petroquim, Chile’s sole producer of polypropylene (PP), or Styropec producing polystyrene (PS) and expandable polystyrene (EPS). Magdalena Balcells is Asipla’s CEO, and one of the most no-nonsense lobbyists this correspondent has met in almost two years in Latin America. In June last year, her straight talk at an industry event captivated the audience – although that audience was, of course, friendly terrain. “Despite China's transition from petrochemical importer to exporter in the past few years, producers like Petroquim have been able to maintain their market position through established client relationships built on trust, certification, and rigor: advantages which are less predictable with Chinese suppliers,” said Balcells. In this interview, like in a previous one in 2024, Balcells insisted Chile’s policymakers tended to think the country is a developed economy where recycling policies could be easy to implement. This push, however, has prompted many plastic companies to get a grip with sustainability, she said, and that can only be a good thing. On trade relations, Asipla’s CEO is crystal clear on her feelings about China. Asked whether a deal with the EU, any deal, will always be preferable to one with China, she said: “Always preferable. The EU and Chile share a common language, a common way of doing business and trade. Chile's OECD membership facilitates European trade relations. With China, everything becomes… very difficult,” said Balcells. “Chinese exports of industrial goods imports continue to present a significant challenge in terms of price competition, across many industrial sectors, in Chile and the wider Latin America. But for Chile, the EU is a very important commercial partner and one with which it is still relatively easy to operate. This FTA should be a positive.” In a written response to ICIS, the head of logistics at Petroquim, Jorge Gaete, confirmed the company does not expect a great impact from the EU-Chile trade deal, but welcomed it nevertheless as it should benefit the Chilean economy as whole and partly protect it from the new protectionist wave. “This FTA is not of great importance for the chemical industry, and we don’t expect it to represent major benefits for Petroquim. This trade deal, however, is important for the issue of minerals such as lithium and copper, which are the great reserves Chile has,” said Gaete. “Moreover, now with the [US President Donald] Trump government and all the reforms he is implementing or planning to implement, including the increases in import tariffs, I believe that we as a country will benefit from the agreement with the EU.” Last week, Trump mentioned tariffs on metals, including copper, which would hit the Chilean economy hard: the country is the second largest producer of copper globally, and its exports are a key employment- and foreign reserves-generator. Chile’s chemicals trade group Asiquim did not immediately respond to a request for comment. This article is the first part of this Insight. The second part, to be published on Wednesday (12 February), will focus on Chile’s vast natural resources, paramount to kick start green mobility and green industry, and the EU’s desire to get hold of as much of them as it can  Insight by Jonathan Lopez Front thumbnail: Shipping containers with flags of Chile and European Union (Shutterstock)

11-Feb-2025

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