
Mixed plastic waste and pyrolysis oil
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Discover the factors influencing mixed plastic waste and pyrolysis oil markets
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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ICIS has been covering recycled polymer and plastic waste markets since 2006 and holds multiple price benchmarks across the major recycled polymers of R-PET, R-PE and R-PP, as well as across virgin chemical markets. Our experience gives us the insight to contextualise and evaluate the latest market developments and industry trends in a trustworthy, timely and impartial manner.
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Americas top stories: weekly summary
HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 7 February. INSIGHT: US tariffs unleash higher costs to nation's chem industry The tariffs that the US will impose on all imports from Canada, Mexico and China will unleash higher costs for the nation's chemical industry, create supply-chain snarls and open it to retaliation. UPDATE: China retaliates with tariffs on US coal, crude, LNG China announced on Tuesday that it will levy 15% tariffs on coal and liquefied natural gas (LNG) imports from the US, and a 10% tariff on US crude oil, farm equipment and certain vehicles from 10 February – reviving a trade war between the world’s two largest economies. SHIPPING: US shippers likely to frontload cargos amid 30-day pause on tariffs With the US agreeing to a 30-day pause before proposed tariffs on Canada and Mexico take effect, shipping analysts anticipate a rush to frontload as much cargo as possible over the next month. US Jan auto sales up year on year; analysts expect growth in 2025 with some headwinds US January sales of new light vehicles rose year on year, and market analysts expect sales in 2025 to grow by 1.5-2.0% even with some headwinds including persistently high interest rates and a pushback on electric vehicles (EVs) under the new presidential administration. US tariffs could jeopardize $800 million of Mexican plastics exports Potential US tariffs of 25% on all goods coming from Mexico could hit the country’s plastics sector hard, with exports to the US worth $800million, plastics sector trade group Anipac said this week. UBS sees US imposing further tariffs on China imports in Q3 2025 and 2026 The US implementing 10% additional tariffs on all goods imports from China on 4 February is likely to be just the beginning, with further duties being imposed later in 2025 and 2026, said investment bank UBS’s chief China economist.
10-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 7 February 2025. INSIGHT: South Korea broadens aid for struggling petrochemical industry By Nurluqman Suratman 07-Feb-25 11:29 SINGAPORE (ICIS)–South Korea is streamlining regulations to make it easier for regions densely populated by petrochemical companies to qualify as "industrial crisis response areas", a designation that unlocks government support and financial assistance to mitigate impact of market downturns. Asia PE pipe prices get lift from tighter Mideast supply By Izham Ahmad 06-Feb-25 11:01 SINGAPORE (ICIS)–Deals and offers for polyethylene (PE) pipe grade in China and southeast Asia in the week ending 5 February were mostly firmer. China petrochemical futures mixed amid renewed US-China trade war By Jonathan Yee 05-Feb-25 16:05 SINGAPORE (ICIS)–China’s petrochemical futures markets were mixed on Wednesday after the country reopened following its Lunar New Year holiday, amid a trade war renewal with the US on 4 February. Japan's Asahi Kasei 9-month income surges; basic materials swing to profit By Nurluqman Suratman 05-Feb-25 14:20 SINGAPORE (ICIS)–Asahi Kasei's net income surged by 68.1% year on year in the nine months to December 2024, supported by improved petrochemical prices and lower fixed costs, the Japanese chemicals major said on Wednesday. UPDATE: Oil gains, Asia petrochemical shares fall as Trump starts trade war By Nurluqman Suratman 03-Feb-25 14:16 SINGAPORE (ICIS)–Oil prices jumped while shares of petrochemical firms in Asia tumbled on Monday, after US President Donald Trump imposed tariffs on China, Canada and Mexico. Asia rPE, rPP demand from packaging stays subdued in Q1 By Arianne Perez 07-Feb-25 15:40 SINGAPORE (ICIS)–The use of recycled polyethylene (rPE) and recycled polypropylene (rPP) for the packaging of fast-moving consumer goods (FMCGs) has been weak in general for Q1.
10-Feb-2025
VIDEO: Europe R-PET flake, food-grade pellet prices rise in February
LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Colourless, mixed coloured, blue flake prices rise Food-grade pellet (FGP) prices increase Question if demand will be sustained Petcore 2025 conference highlights
07-Feb-2025
Japan's Mitsubishi Chemical to sell pharma business for $3.4 billion
SINGAPORE (ICIS)–Mitsubishi Chemical on Friday said that is selling its pharmaceutical unit Mitsubishi Tanabe Pharma Corp (MTPC) to US private equity firm Bain Capital for around yen (Y) 510 billion ($3.4 billion) as it seeks to focus on its core chemical business. The sale is expected to be completed in April-September 2026, pending shareholder approval at Mitsubishi Chemical's annual meeting scheduled in late June 2025. "Changes in the industry and business structure have reduced the potential for synergies," the company said. "Large-scale investment is essential to strengthen Mitsubishi Tanabe Pharma’s R&D capacity and further growth, but such investment would not be a feasible option under our ownership." Proceeds from the sale of between Y200 billion-250 billion will be directed toward a combination of strategic priorities: new growth investments, returning value to shareholders, and reducing debt. Some Y250 billion-300 billion has been designated for capital and financial investments focused on five key business areas under the company's "KAITEKI Vision 35" initiative. KAITEKI, a Mitsubishi Chemical concept, proposes a path to sustainable development, guiding solutions to environmental and social problems. Among these priorities is the establishment of a stable supply platform for green chemicals, a goal that will be pursued through expanded collaboration with global partners. Mitsubishi Chemical is also prioritizing eco-conscious mobility, focusing on development of a high-value-added carbon fiber chain to meet increasing demand for sustainable transportation solutions. To facilitate progress in advanced data processing and telecommunications, the company plans to bolster the global expansion of its semiconductor precision cleaning technology. It is also increasing the global capacity of its engineering plastic products to support the development of groundbreaking therapies.
07-Feb-2025
INSIGHT: South Korea broadens aid for struggling petrochemical industry
SINGAPORE (ICIS)–South Korea is streamlining regulations to make it easier for regions densely populated by petrochemical companies to qualify as "industrial crisis response areas", a designation that unlocks government support and financial assistance to mitigate impact of market downturns. Yeosu, Ulsan, Daesan petrochemical hubs to benefit Focus shifts to manufacturing for crisis designation Voluntary business restructuring encouraged This designation also unlocks access to tailored assistance in areas like employment stability, R&D, commercialization, market access, and consulting, according to a Ministry of Trade, Industry and Energy (MOTIE) administrative notice released on 5 February. The new regulation follows a wide-ranging support package unveiled by the government on 23 December 2024, aimed at bolstering the competitiveness of its domestic petrochemical industry, which is facing a global oversupply driven by expansions in China and the Middle East. This policy shift is expected to benefit major petrochemical hubs such as Yeosu, Ulsan, and Daesan, providing them with greater access to resources designed to mitigate economic downturns and to support continued growth within the sector. Previously, the high proportion of the services sector in cities like Yeosu hindered their ability to be designated as industrial crisis response areas. The revised regulations will now assess "regional stagnation" based solely on the manufacturing sector, excluding service industries. This change will allow regions heavily reliant on manufacturing, particularly petrochemicals, to meet the designation criteria more readily. MULTI-PRONGED STRATEGY A cornerstone of the government's latest plan is encouraging voluntary business restructuring, encompassing facility closures, sales, joint ventures, efficiency improvements, and new business acquisitions. To facilitate these changes, the government will implement legal reforms and offer a range of financial and tax incentives. These include extending the grace period for acquiring 100% of holding company shares from three to five years and streamlining merger reviews with the Korean Fair Trade Commission (FTC), the country's regulatory authority for economic competition. A dedicated consultation channel between MOTIE and the FTC will further expedite reviews and support restructuring efforts. Separately, the government plans to provide up to Korean won (W) 3 trillion ($2.1 billion) in financing packages for petrochemical companies seeking to revamp their business portfolios, including expanded access to a W1 trillion business restructuring fund managed by the Korea Development Bank. For designated Industrial Crisis Response Areas, existing loan maturities from policy financial institutions will be extended, principal repayments deferred; national tax payment deadlines extended; and seizure and sale deferred for up to one year. Beyond restructuring, the government is targeting cost reduction. The duty-free period for crude oil used in naphtha production will be extended by a year until the end of 2025 and import surcharges on liquefied natural gas (LNG) used as industrial raw materials will be refunded. A "fast-track" approval process will be implemented for ethane terminal and storage tank construction to facilitate access to cheaper raw materials. Additional cost-saving measures include expanding electricity rate options through distributed power trading and rationalizing safety regulations. The plan will also support R&D focused on shifting production from general-purpose petrochemicals to specialized, high-value-added products. An "R&D Investment Roadmap for 2025-2030" will be unveiled in the first half of this year, and preliminary feasibility studies for high-value and eco-friendly chemical material technology development will be conducted. The support ratio for regional investment subsidies in Industrial Crisis Response Areas will be increased, national strategic and new growth technologies will be identified, and a W50 billion "High-Value Specialty Fund" will be established to promote production of specialty chemicals. DOMESTIC PRODUCERS STRUGGLE South Korea's four largest petrochemical manufacturers – LG Chem, Lotte Chemical, Kumho Petrochemical and Hanwha Solutions – faced continued challenges in 2024. LG Chem reported a net loss of W899.2 billion in the fourth quarter, reversing the net profit of W128.5 billion a year ago due to decreased demand for both petrochemicals and battery materials. It also reported an operating loss of W252 billion in the same period. The company has revised down its capital expenditure plan for the year to W2 trillion-3 trillion from W4 trillion previously as it navigates the market downturn. Separately, as part of its global expansion strategy, LG Chem has secured a deal to supply cathode materials to Prime Planet Energy and Solutions (PPES) – a joint venture of Japanese carmaker Toyota and appliance maker Panasonic – starting 2026. The company will focus on developing eco-friendly materials and technologies that align with PPES' low-carbon vision. Meanwhile, major ethylene producer Lotte Chemical in Q3 2024 reported a loss of W514 billion, on "delayed demand recovery, lower product spreads due to currency depreciation, one-time costs from maintenance at overseas subsidiaries, and rising shipping costs". The company is now pursuing an asset-light strategy, which involved liquidation of its Malaysian synthetic rubber production subsidiary Lotte Ube Synthetic Rubber (LUSR) – a joint venture with Japan’s Ube Elastomer. Based in Johor, Malaysia, LUSR produces 50,000 tonnes/year of polybutadiene rubber (PBR). Lotte Chemical also plans to generate W1.4 trillion in proceeds from sale of stakes in overseas subsidiaries. Synthetic rubber major Kumho Petrochemical Co reported on 4 February a Q4 net income of W61.3 billion, down 33% year on year, due to weak market demand due to a year-end drop in raw material prices; with operating profit shrinking by about 72% to W10 billion despite a 19% increase in sales to W1.8 trillion. Insight article by Nurluqman Suratman ($1 = W1,446) Thumbnail image shows an aerial view of a container pier in South Korea's southeastern port city of Busan. (YONHAP/EPA-EFE/Shutterstock)
07-Feb-2025
BP puts Gelsenkirchen, Germany refinery, crackers up for sale
BARCELONA (ICIS)–BP plans to sell its to sell its Ruhr Oel refinery, crackers and downstream assets at Gelsenkirchen in Germany. The company will start marketing the assets immediately, with the aim of completing the sale this year, according to a statement published on 6 February by the UK headquartered energy giant. According to the ICIS Supply & Demand Database BP operates a refinery and two crackers with combined capacity of 1.065 million tonnes/year of ethylene, as well as units with 645,000 tonnes/year propylene, 430,000 tonnes/year benzene plus cumene, cyclohexane, methanol, toluene and ammonia facilities. BP said the assets for sale include DHC Solvent Chemie in Mulheim an der Ruhr. All refinery owners in Europe are under pressure to rationalise their portfolios thanks to the shift to vehicle electrification and high cost base. There is also intense competition from new refineries starting up in Asia and the Middle East. BP said the move is in line with its strategic drive to deliver a simpler, more focused, higher value company. The company said that it has implemented numerous projects to modernize the infrastructure of the refinery in Gelsenkirchen in recent years. This includes renewing the power grid and establishing an independent steam supply. The refinery can process crude oils from around the world, produce fuels and also has the potential to manufacture biofuels and process recycled plastics, said bp. Michael Connolly, ICIS principal refining analyst pointed out that the refinery is configured to give a moderately high yield of gasoline, meaning it is not really suited to the future of the European market, where vehicle electrification is hurting demand. He said BP already had plans to reduce the capacity of the refinery from 260,000 bbl/day to 155,000 bbl/day in 2025. “Undoubtedly it would have used Russian crude, but despite having access to seaborne crude, the loss of Russian crude through sanctions would have impacted financials,” he said. The economics of the facility will also be more challenging, as for all European refiners, because cracks or margins for gasoil production have declined to pre-Ukraine war levels, added Connolly. ICIS expects German crude refining capacity to fall from 2.1 million bbl/day in 2020 to 1.8 million bbl/day by 2026 and well off their peak refining capacity of 2.4 bd in 2007. Emma Delaney, BP executive vice president, customers & products said, “BP needs to continually manage its global portfolio as we position to grow as a simpler, more focused, higher-value company. After a thorough review, we have concluded that a new owner would be better suited for the site to take it forward. We are convinced that the refinery can unlock its full potential under new ownership.” Focus article by Will Beacham Graphics by Miguel Rodriguez-Fernandez Thumbnail photo: bp's refinery site in Gelsenkirchen, Germany (Source: BP) Clarification: recasts to explain BP has two crackers at the site.
06-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
04-Feb-2025
India to roll out 20% ethanol-blended fuel by March
MUMBAI (ICIS)–India is set to roll out a 20% ethanol-blended (E20) fuel mandate by March – about nine months ahead of schedule – as there will be enough availability of the environment-friendly additive in the domestic market without endangering sugar production. 2.5% price hike for C-heavy molasses to deter feedstock diversion away from sugar Rice feedstock prices reduced to boost production Auto companies to soon launch 100% ethanol vehicles For the year ending October 2025, the Indian government has approved on 29 January a 2.5% hike in the procurement price of ethanol made from C-heavy molasses, which contain the least sugar among three types of available sugarcane feedstock. India’s ethanol supply year (ESY) is from November to October. The price adjustment acts as an incentive for producers to use the C-heavy feedstock to make ethanol, instead of the A and B molasses that typically go into sugar production. Domestic oil manufacturing companies (OMC) such as Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) will now have to pay a higher price for ethanol made from C-heavy molasses. The government-determined ethanol price was last revised in November 2022. Meanwhile, to further encourage ethanol production, the government on17 January 2025 reduced the price of rice feedstock by more than 24% to Rs22.50/kilogram (kg) amid a surplus. Rice and maize are alternative feedstocks for ethanol production. This decision has helped to make ethanol produced from rice feedstock more economically viable, Grain Ethanol Manufacturers Association (GEMA) treasurer Abhinav Singal said. The government had banned the use of rice as feedstock for ethanol production from July 2023 to August 2024. Notwithstanding the lifting of the ban, ethanol producers were still finding rice prices too high to make production economically viable. “Stability in feed prices will boost ethanol production from rice. The earlier rate was unviable for the units,” Singal said. Nearly 65% of the ethanol produced in the country is sourced from sugarcane while the remaining 35% comes from grains, including maize and rice. India will achieve 20% blending of ethanol in gasoline in the next two months and will soon be able to blend more than 20% ethanol in gasoline if the need arises, India’s petroleum and natural gas minister Hardeep Singh Puri said at the Auto Expo 2025 on 21 January. In 2023-24, there was a phased roll-out of 20% ethanol in select outlets across the country, with full implementation initially targeted by 2030. The target full implementation was brought forward to 2025-26 as ethanol availability is now assured following a series of measures taken over the past two years, industry sources said. “We have increased ethanol blending in fuel from 1.5% per cent in 2014 to 10% in May 2022, which was well ahead of the November 2022 deadline and now the target of 20% blending has also moved forward significantly,” he added. “Our current distillation capacity, which is at about 16.83 billion litres, is projected to cross 17 billion litres, and will leave us with ample opportunity to blend beyond 20%,” he added. India achieved ethanol blending of 18.2% in gasoline in December 2024, official data show. The government is currently working on a plan to bring down retail prices of ethanol for use as fuel in vehicles with flexible fuel engines, India’s road transport and highways minister Nitin Gadkari said at the Sugar-Ethanol and Bio Energy India Conference on 30 January. Around nine companies in India will soon be launching cars and two-wheelers that run on 100% ethanol, he added. Major automobile manufacturers, including Mahindra & Mahindra, Toyota, Hyundai, and Tata, will introduce 100% ethanol-powered vehicles over the next five months, with two-wheeler makers also adopting the technology, he said. Focus article by Priya Jestin ($1 = Rs87.08)
04-Feb-2025
China imposes 15% tariffs on US coal, LNG; 10% on US crude
SINGAPORE (ICIS)–China has imposed a 15% tariff on coal and liquefied natural gas (LNG) imports from the US, and a 10% tariff on US crude oil and heavy machinery, effective 10 February. The retaliatory tariffs were announced by China’s State Council on the day that the US’ additional 10% tariffs on Chinese goods took effect. “The unilateral imposition of tariffs by the US side seriously violates the rules of the World Trade Organization (WTO) and is not only not conducive to solving its own problems, but also undermines the normal economic and trade cooperation between China and the United States,” it said in a statement on Tuesday.
04-Feb-2025
CORRECTED: INSIGHT: US tariffs unleash higher costs to nation's chem industry
Correction: In the ICIS story headlined “INSIGHT: US tariffs unleash higher costs to nation's chem industry” dated 3 February 2025, the wrong volumes were used for the following imports: Canadian ethylene-alpha-olefin copolymers, having a specific gravity of less than 0.94; Canadian polyethylene having a specific gravity of 0.94 or more, in primary forms; Canadian polyethylene having a specific gravity of less than 0.94, in primary forms; Canadian polypropylene, in primary forms; Canadian mixed xylene isomers; Mexican polypropylene, in primary forms; and Mexican cyclohexane. The US did not import cyclohexane from Mexico in 2023. A corrected story follows. HOUSTON (ICIS)–The tariffs that the US will impose on all imports from Canada, Mexico and China will unleash higher costs for the nation's chemical industry, create supply-chain snarls and open it to retaliation. For Canada, the US will impose 10% tariffs on imports of energy and 25% tariffs on all other imports. For Mexico, the US imposed 25% tariffs on all imports but the countries' presidents said on Monday the tariffs are being paused for a month. For China, the US will impose 10% tariffs on all imports. US IMPORTS LARGE AMOUNTS OF PE FROM CANADAUS petrochemical production is concentrated along its Gulf Coast, which is far from many of its manufacturing hubs in the northeastern and midwestern parts of the country. As a result, individual states import large amounts of polyethylene (PE) from Canada – even though the nation as a whole has a large surplus of the material. Even Texas imports large amounts of PE from Canada – despite its abundance of plants that produce the polymer. In addition, polyester plants in North and South Carolina import large amounts of the feedstocks monoethylene glycol (MEG) and purified terephthalic acid (PTA) from Canada. The US as a whole imports significant amounts of polypropylene (PP) and polyvinyl chloride (PVC) from Canada – again, despite its surplus of these plastics. The following table lists some of the main plastics and chemicals that the US imported from Canada in 2023. The products are organized by their harmonized tariff schedule (HTS) code. HTS PRODUCT MEASUREMENT VOLUMES 3901.40.00 Ethylene-alpha-olefin copolymers, having a specific gravity of less than 0.94 kilograms 1,319,817,405 3901.20.50 Polyethylene having a specific gravity of 0.94 or more, in primary forms kilograms 1,088,071,523 3901.10.50 Polyethylene having a specific gravity of less than 0.94, in primary forms kilograms 420,561,390 2917.36.00 Terephthalic acid and its salts kilograms 407,710,439 2905.31.00 Ethylene Glycol kilograms 329,542,378 3902.10.00 Polypropylene, in primary forms kilograms 271,201,880 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms kilograms 188,800,413 2902.44.00 Mixed xylene isomers liters 746,072 2905.12.00 Propan-1-ol (Propyl alcohol) and Propan-2-ol (isopropyl alcohol) kilograms 87,805,095 3901.30.60 Ethylene-vinyl acetate copolymers kilograms 71,372,396 Source: US International Trade Commission (ITC) IMPORTS FROM MEXICOMexico is not as large of a source of US petrochemical imports as Canada, but shipments from the country are still noteworthy. The following table lists some of the main plastics and chemicals that the US imported from Mexico in 2023. HTS PRODUCT MEASUREMENT VOLUMES 2917.36.00 Terephthalic acid and its salts kilograms 69,230,708 3901.10.50 Polyethylene having a specific gravity of less than 0.94, in primary forms kilograms 34,674,435 2915.24.00 Acetic anhydride kilograms 25,294,318 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms kilograms 24,005,371 2915.31.00 Ethyl acetate kilograms 18,855,544 3901.20.50 Polyethylene having a specific gravity of 0.94 or more, in primary forms kilograms 14,469,582 3902.10.00 Polypropylene, in primary forms kilograms 8,849,478 Source: US International Trade Commission (ITC) IMPORTS FROM CHINAChina remains a significant source for a couple of noteworthy chemicals despite the effects of the tariffs that US President Donald Trump imposed during his first term in office. The following table shows 2023 US imports from China. HTS PRODUCT MEASUREMENT VOLUMES 29152100 Acetic acid kilograms 21,095,566 39093100 Poly(methylene phenyl isocyanate) (crude MDI, polymeric MDI) kilograms 206,642,886 Source: US International Trade Commission (ITC) China's shipments of plastics goods are more significant. OIL TARIFFS WILL HIT US REFINERSCanada and Mexico are the largest sources of imported crude oil in the US, and the heavier grades from these countries complement the lighter grades that the US produces in abundance. Those imports help fill out refining units that process heavier crude fractions, such as hydrocrackers, cokers, base oil units and fluid catalytic cracking (FCC) units. Refiners cannot swap out heavier Canadian and Mexican grades with lighter US grades. Instead, they will need to pay the tariffs or find another supplier of heavier grades, possibly at a higher cost. The following table shows the largest sources of imported crude in 2023. Figures are listed in thousands of barrels/day. COUNTRY IMPORTS % Canada 3,885 59.9 Mexico 733 11.3 Saudi Arabia 349 5.4 Iraq 213 3.3 Colombia 202 3.1 Total US imports 6,489 Source: Energy Information Administration (EIA) US refiners could take another hit from higher catalyst costs. These are made from rare earth elements, and China remains a key source. TARIFFS TO RAISE COSTS FOR FERTILIZERCanada is the world's largest producer of potash, and it exports massive amounts to the US. It is unclear how the US could find another source. Russia and Belarus are the world's second and third largest potash producers. Together, the three accounted for 65.9% of global potash production in 2023, according to the Canadian government. Canada accounts for significant shares of other US imports of fertilizers. The following table lists some of Canada's fertilizer shipments to the US in 2023 and shows its share of total US imports. Figures are from 2023. HTS PRODUCT MEASUREMENT VOLUME % 31042000 Potassium chloride metric tonne 11850925 88.8 31023000 Ammonium nitrate, whether or not in aqueous solution metric tonne 295438 76.6 31024000 Mixtures of ammonium nitrate with calcium carbonate or other inorganic nonfertilizing substances metric tonne 29203 75.7 31055100 Mineral or chemical fertilizers, containing nitrates and phosphates metric tonne 1580 66.1 31022100 Ammonium sulfate metric tonne 947140 49.6 31052000 Mineral or chemical fertilizers, containing the three fertilizing elements nitrogen, phosphorus and potassium metric tonne 147850 41.4 Source: US ITC SUPPLY CHAIN SNARLSIf US companies choose to avoid the tariffs and seek other suppliers, they could be exposed to delays and supply chain constraints. Other companies outside of the petrochemical, plastic and fertilizer industries will also be seeking new suppliers. The scale of these disruptions could be significant because Canada, Mexico and China are the largest trading partners in the US. The following table lists the top 10 US trading partners in 2023 based on combined imports and exports. Country Total Exports ($) General Imports ($) TOTAL Mexico 322,742,472,406 475,215,965,697 797,958,438,103 Canada 354,355,997,349 418,618,659,183 772,974,656,532 China 147,777,767,493 426,885,009,750 574,662,777,243 Germany 76,697,761,127 159,272,068,221 235,969,829,348 Japan 75,683,130,214 147,238,042,342 222,921,172,556 South Korea 65,056,093,590 116,154,470,335 181,210,563,925 UK 74,315,228,810 64,217,031,774 138,532,260,584 Taiwan 39,956,725,574 87,767,403,487 127,724,129,061 Vietnam 9,842,922,146 114,426,076,081 124,268,998,227 Source: US ITC RETALIATIONUS petrochemical exports would be tempting targets for retaliation because of their magnitude and the global capacity glut. China, in particular, could impose tariffs on US chemical imports and offset the disruptions by increasing rates at under-utilized plants. So far, none announced plans to target chemicals on Sunday. Canada's plans to impose 25% tariffs on $30 billion in US goods does not include oil, refined products, chemicals or plastics. That batch of tariffs will take place on February 4. Canada will impose 25% tariffs on an additional $125 billion worth of US goods following a 21-day comment period, it said. The government did not highlight plastics or chemicals in this second batch of tariffs. Instead, it said the tariffs will cover passenger vehicles and trucks, including electric vehicles, steel and aluminium products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles and recreational boats. In a statement issued on Sunday, Mexico's president made no mention of retaliatory tariffs. Instead, she said she will provide more details about Mexico's response on Monday. China said it will start legal proceedings through the World Trade Organization (WTO) and take corresponding countermeasures. RATIONALE BEHIND THE TARIFFSThe US imposed the tariffs under the nation's International Emergency Economic Powers Act (IEEPA), which gives the president authority to take actions to address a severe national security threat. In a fact sheet, Trump cited illegal immigration and illicit drugs. Saturday's executive order is the first time that a US president imposed tariffs under IEEPA. Prior IEEPA actions lasted an average of nine years. They can be terminated by a vote in Congress. Insight article by Al Greenwood (Thumbnail shows containers, in which goods are commonly shipped. Image by Shutterstock)
03-Feb-2025
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In today’s dynamic and interconnected chemicals markets, partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of chemicals industry experts to support our partners as they transact today and plan for tomorrow. Capitalise on opportunity, with a comprehensive market view based on trusted data, insight and analytics.
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