Polyethylene (PE)

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the fortnight ended on 18 April. NEWS Brazil's chemicals production in ‘free fall’ as idle capacity hits 40%Brazil's chemicals industry is facing its worst performance in 30 years, with the producing companies in the sector operating at just 60% of installed capacity during January and February, the country’s trade group Abiquim said. Mexico must do homework on USMCA compliance, set policy to prop up nearshoring – Evonik execMexico breathed a sigh of relief when the US spared it from very punitive tariffs, but the country should not turn complacent and use this as a catalyst to step up compliance with rules of origin clauses contained in the North America free trade deal USMCA, according to the director for Mexico at German chemicals major Evonik. US tariffs spark fears in Chile about even higher industrial goods importsUS import tariffs on China and other Asian countries are increasing fears in Chile that even higher amounts of imports will dent domestic plastics and wider manufacturing producers’ competitiveness, according to the CEO at the country’s plastics trade group Asipla. INSIGHT: Argentina’s chemicals remain uninvited to the recovery partyArgentina’s chemicals sector remains in the doldrums, with output in the first quarter lower year on year, according to sources, who are increasingly turning pessimistic about manufacturing’s prospects amid the push for economic liberalization. Brazil's inflation rises to 5.5% in March, further tightening expectedBrazil's annual rate of inflation rose to 5.5% in March, year on year, the highest level in more than two years and up from 5.1% in February, the country’s statics office said on Friday. Argentina’s chemicals, plastics output keeps falling but manufacturing, construction upArgentina’s chemicals and plastics output continued falling in February, year on year, but petrochemicals-intensive activity in construction and overall manufacturing rose, according to the country’s statistics office Indec. Argentina’s annual inflation down to 56%; monthly price rises accelerateArgentina’s annual rate of inflation fell in March to 55.9%, down from 65.9% in February, the country’s statistics office said on Friday. Argentina’s IMF bailout confirmed after Milei returns from Washington; tariffs deal more elusiveWhen President Javier Milei of Argentina travelled to Washington last week, most analysts expected him to return with an IMF bailout agreed and ready. On Wednesday, the Fund confirmed a bail out for Argentina for the second time in four years, affirming analyst expectations. PRICINGLatAm PP spot domestic prices lower in Brazil on ample supply, weak demandSpot domestic polypropylene (PP) prices were assessed lower in Brazil on ample supply and weak demand. In other Latin American countries, prices were steady. LatAm PE domestic prices fall in Brazil, Mexico on ample supply, soft demandDomestic polyethylene (PE) prices fell in Brazil and Mexico while being unchanged in other Latin American (LatAm) countries.

21-Apr-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 17 April. Europe PE endures week of tariff chaos, emerges with softer outlookThe European polyethylene (PE) market has suffered a week of tariff-based turmoil, which resulted in a significant shift in market sentiment. Low river Rhine severely restricts chemical shipping, rates riseDry weather conditions are starving the river Rhine of water, restricting its use for chemicals traffic and pushing up shipping rates, with no improvement forecast until later in April. Europe MPG players say seasonal improvement unlikelyEuropean monopropylene glycol (MPG) sellers do not see any respite from tough market conditions as the construction sector is struggling, arbitrage with Asia is wide and US tariffs are creating uncertainties through the value chain. INSIGHT: Europe chems players move to the side lines on tariff upheavalThe market volatility following the intensification of tariff threats has cast a pall over European chemicals sector activity, with players avoiding committing to long-term orders if possible in the face of demand uncertainty and currency volatility.

21-Apr-2025

HOUSTON (ICIS)–Newly announced port fees by the US Trade Representative (USTR) are less substantial than the proposal from February, but a shipping analyst expects vessel supply to decrease and rates to climb on certain routes. Theodor Gerrard-Anderson, chemical freight analyst at Lighthouse Chartering, said that most bulk liquid shipowners will not be affected by the USTR’s final plan for port fees on China-linked vessels, but major Chinese operators will see impacts from Annex I. And despite exemptions in Annex II, Gerrard-Anderson anticipates tighter vessel supply and higher rates for vessels transiting the US Gulf. Annexes I and II from the USTR’s final plan are the applicable sections for the bulk liquid transportation market. The effects from Annex I, which focuses on service fees on Chinese vessel operators and vessel owners of China, will be impacted as many of these owners have established a meaningful presence in the US market and maintain large contract of affreightment (COA) portfolios for trading specialty chems and bulk liquid cargoes, Gerrard-Anderson said. Annex II, which essentially impacts the rest of the bulk liquid transportation market, includes exemptions for tankers less than 80,000 deadweight tonnage (DWT) even if they are built in China, and for ships on short sea trades of less than 2,000 nautical miles. Special purpose-built vessels for the transport of chemical substances in bulk liquid forms will not be charged. Another exemption, designed to help maintain US exports, is that ships arriving ballast will not be charged to ensure tonnage is available for export. Analysts at shipping broker NETCO said that most vessels in their segment are exempt under Annex II. On the container shipping side, the softening of the fee structure reduces the risk of severe port congestion and could ease overall upward pressure on freight rates, according to an analyst at ocean and freight rate analytics firm Xeneta. Emily Stausbøll, Xeneta senior shipping analyst, said it is significant that the final proposal has fees levied on a net tonnage basis per US voyage, rather than cumulative fees for every port the ship calls at. "We must look carefully at the potential impact of the revised port fees, but changes will be welcomed by the ocean container shipping industry given the significant criticism levelled at the initial proposal during the public hearing,” Stausbøll said. “The fact fees will not be imposed on every port call is particularly important because it lowers the risk of congestion had carriers decided to cut the number of calls on each service into the US,” Stausbøll said. “This port congestion had the potential to cause severe disruption and upward pressure on freight rates.” Stausbøll said costs could still be very high for Chinese carriers and carriers operating Chinese-built vessels – particularly for ships with the largest capacity. "The latest announcement should still be viewed in the context of the original proposal, which offered dire consequences,” Stausbøll said. “The situation has changed for the better, but it isn't a great victory for the ocean container shipping industry because these fees still add further pressure at a time when businesses are already trying to navigate the spiraling tariffs announced by the Trump Administration." 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.

18-Apr-2025

HOUSTON (ICIS)–The US is taking steps that could lead to tariffs on imports of up to 50 critical minerals, many of which are used to make catalysts for key processes used by refiners and chemical producers. If the US ends up imposing the tariffs on the critical minerals, then they would take the place of the reciprocal tariffs. REFINING CATALYSTS AND AROMATICS MARKETSFluorspar is used to make hydrofluoric acid, a catalyst used in alkylation units. These units convert isobutane and propylene into alkylate, a high-octane blendstock. Cerium and lanthanum are used to make catalysts for fluid catalytic cracking (FCC) units. These units convert gas oils into gasoline and refinery grade propylene (RGP). If the US imposes tariffs on these catalysts and if the tariffs cause large enough price increases, then refiners could alter their operations to reduce their costs. If refiners lower alkylation operating rates, they may rely on other high-octane blendstock such as toluene or mixed xylenes (MX). Changes in alkylation and FCC rates would concurrently affect supply and demand for RGP. ANTIMONY AND PETChinese restrictions on antimony already have led producers to propose price increases for polyethylene terephthalate (PET), which relies on the mineral as a catalyst. If the US imposes tariffs on antimony, then it would further increase prices from the other countries that export the mineral to the US. BISMUTH AND POLYURETHANESBismuth is used as a catalyst for making polyurethanes. One such bismuth-based catalyst won an innovation award. OTHER CATALYSTSIridium, neodymium, rhodium, ruthenium, ytterbium and yttrium are all used to make catalysts, according to the US Geological Survey (USGS). Palladium and platinum are used in catalytic converters in automobiles. TIO2 AND PAINTS MARKETSThe US also considers titanium and zirconium as critical minerals. It is unclear if the US would impose tariffs on titanium metal or titanium oxide. However, the US list of critical minerals implies that the tariffs could include titanium oxide. Titanium oxide is the feedstock that is used to make titanium dioxide (TiO2), a white pigment that is used to make paints opaque. Producers of paints and coatings are already facing higher costs from US tariffs on steel. In 2023, Sherwin-Williams estimates that plastic and metal containers made up 15% of its product's costs. A tariff on titanium oxide would further increase costs for paints and coatings producers. Zirconium is a byproduct of processing mineral sands that contain titanium. TiO2 producers Tronox and Chemours operate such mines. Tronox's are in Australia and South Africa, and Chemours has mines in the US states of Florida and Georgia. FLUORSPAR AND FLUOROMATERIALSFluorspar is also the upstream feedstock for fluorochemicals and fluoropolymers. Polyurethane foams use fluorochemicals as blowing agents. Fluoropolymers include Teflon. These are becoming increasingly important in 5G equipment, semiconductor fabrication plants and lithium-ion batteries. Fluoropolymers are also used as membranes in hydrogen fuel cells and chlor-alkali plants. BARITE, CESIUM USED IN OIL PRODUCTIONBarite is used to make drilling mud. Cesium is used to make cesium formate drilling fluids, which are used by oil and gas producers. FLAME RETARDANTSAluminum and antimony are used to make flame retardants. INVESTIGATION TO PRECEDE ANY TARIFFSBefore the US imposes any tariffs on critical minerals, it will conduct an investigation under section 232 of the Trade Expansion Act of 1962. The US has used that section to impose tariffs on other products such as steel and aluminium. The scope of the investigation will include the 50 minerals deemed critical by the USGS, processed critical minerals and derivative products. Derivative products include semi-finished goods and final products "such as permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components and advanced optical devices", according to the order. The secretary of commerce will have 180 days to submit a final report of the investigation to the president. Recommendations will include tariffs and policies the US could adopt that would promote more production of critical minerals. LIST OF CRITICAL MINERALSThe following table shows the minerals that the US considers critical. Aluminium Magnesium Antimony Manganese Arsenic Neodymium Barite Nickel Beryllium Niobium Bismuth Palladium Cerium Platinum Cesium Praseodymium Chromium Rhodium Cobalt Rubidium Dysprosium Ruthenium Erbium Samarium Europium Scandium Fluorspar Tantalum Gadolinium Tellurium Gallium Terbium Germanium Thulium Graphite Tin Hafnium Titanium Holmium Tungsten Indium Vanadium Iridium Ytterbium Lanthanum Yttrium Lithium Zinc Lutetium Zirconium Source: USGS Insight article by Al Greenwood (Thumbnail shows a fuel pump that dispenses gasoline, which relies on critical minerals for production. Image by Shutterstock.)

17-Apr-2025

SINGAPORE (ICIS)–US “reciprocal” tariffs are prompting a shift of trade flows and supply chains as market players in Asia seek alternative export outlets for some chemicals, while overall demand remains tepid amid growing fears of a global recession. US-China trade war 2.0 keeps market players on edge Regional traders wary amid US’ 90-day tariff suspension SE Asia prepares for US trade talks as China president visits Vietnam, Malaysia, Cambodia Trades across the equities and commodities markets last week have been highly volatile since the start of April in the wake of US President Donald Trump’s reciprocal tariffs, the highest of which was imposed on China. The higher-than-expected tariffs sparked concerns over a possible global recession that sent crude prices slumping last week, dragging down downstream aromatics products such as benzene and toluene. Trump had raised the reciprocal tariffs for China three times in as many days – from 34%, to 84% and to 125% on 9-11 April – with China responding in kind. Including the combined 20% tariffs imposed in the past two months, the US’ effective additional tariffs for China stand at 145%. In the polyethylene (PE) market, prices are softening as US-bound export orders shrink, while polypropylene (PP) exports from China to southeast Asia look set to decline. Most polyolefin players in Asia and beyond are currently attending the 37th International Exhibition on Plastics and Rubber Industries (Chinaplas) in Shenzhen, China, which will run up to 18 April. Some China-based market players said the event could provide them an opportunity to explore alternative markets by deepening their relationships with buyers in southeast Asia. Exports of chemicals and plastics used in automobiles to the US, meanwhile, are likely to shrink as well amid auto tariffs from the world’s biggest economy. Apart from PP, exports nylon, butadiene (BD), and styrene butadiene rubber (SBR) to the US are expected to decline. Trump, on 14 April, said he is considering possible exemptions to his 25% tariffs on imported automobiles and parts. His tariffs on all car imports took effect on 3 April, while those on automotive parts will take place no later than 3 May. The automotive sector is a major downstream industry for petrochemicals. China’s PE imports from the US spiked in early 2025 but this is expected to reverse sharply because of the trade war between the two countries. However, China has a substantial number of naphtha and coal-based PE plants starting up in 2025 with a combined PE capacity of more than 8 million tonnes, which should reduce the country’s dependence on imports. The US will also need to redirect surplus PE to alternative markets amid dwindling Chinese demand. Market players expect demand in the second quarter to be worse than the first three months of 2025 amid hefty US reciprocal tariffs hanging over countries in Asia when Trump’s three-month pause lapses. Implementation of the US’ reciprocal tariffs were suspended on 9 April, for 90 days, providing some reprieve to about 60 countries, except China. Freight rates between China and the US have already decreased due to the trade war as demand evaporates. However, vinyl acetate monomer (VAM) prices in India are bucking the general downtrend and have firmed up as the chemical is not directly subjected to US tariffs. VAM is primarily used in the production of adhesives, textiles, paints and coatings. SE ASIA PREPARE TRADE TALKS The 10-member ASEAN group pledged that they will not impose retaliatory tariffs on the US following an emergency meeting, opting to negotiate with the US. Among the nations scheduled for talks with the US are Vietnam, Thailand and Indonesia – all of which were slapped with high tariffs of up to 46%. Thailand intends to scrutinize imports more thoroughly to prevent cheap imports from China entering the country, as the US has warned against such “third-country” methods of evading tariffs. Anti-dumping duties are also being considered by Malaysia and Indonesia against China to counter an expected rise in cheap imports to their countries. Trade flows are still expected to change as China steps up talks and partnerships with the EU, as well as with southeast Asian countries such as Malaysia, Vietnam and Cambodia. While several Asian nations are lining up for discussions with the US government, China and the US have yet to schedule a meeting, heightening concerns of economic headwinds in the coming year. Singapore has revised down its GDP growth forecast for 2025 to between 0-2% on account of the US-China trade war, and other countries are expected to follow suit. Before the pause on reciprocal tariffs, the World Trade Organization (WTO) had forecast trade growth to contract by 1.0% in 2025, from 3.0% previously. Meanwhile, China President Xi Jinping is currently in southeast Asia – with state visits to Vietnam, Malaysia and Cambodia – up to 18 April, to forge stronger economic ties with its Asian neighbors amid an escalating trade war with the US. China posted an annualized Q1 GDP growth of 5.4%, unchanged form the previous quarter, while there is a consensus that the Asian economic giant would weaken from Q2 onward. Focus article by Jonathan Yee Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Additional reporting by Samuel Wong, Izham Ahamd, Jackie Wong, Hwee Hwee Tan, Joanne Wang, Lucy Shuai, Jonathan Chou, Angeline Soh, Melanie Wee, Shannen Ng and Josh Quah

16-Apr-2025

HOUSTON (ICIS)–Container throughput from China’s main ports fell by 6.1% over the past week and cargo bookings over the next three weeks are projected to be down by 30-60% in China and by 10-20% in the rest of Asia as the trade war intensifies. Market intelligence group Linerlytica said the Labor Day holiday in China will further dampen cargo demand in May which could force carriers to cancel additional sailings over the coming weeks to slow the decline in cargo rates. US President Donald Trump initiated the trade war by imposing tariffs with the goal of strengthening supply chains and bringing back domestic manufacturing that has increasingly moved overseas. Lars Jensen, president of consulting firm Vespucci Maritime, noted a survey from television news channel CNBC that showed the effort may be futile. According to the survey, most respondents said bringing back supply chains could double the costs, leading most to instead search for new sources of material from low-tariff countries. More than half of respondents said the main impediment to reshoring is high costs, while 21% said finding skilled labor was the top reason. Instead of moving supply chains back to the United States, 61% of respondents said it would be more cost-effective to relocate supply chains to lower-tariffed countries. ASIA-US CONTAINER RATES Average rates rose last week, reversing the trend that saw prices for shipping containers fall steadily from July 2024. Linerlytica said that three transpacific services have been withdrawn this year, with the MSC Mustang and Premier Alliance PN4 both withdrawn even before they were launched while TS Line’s AWC2 deployed small 1,700 TEU (20-foot equivalent unit) ships on irregular schedules. “These tentative capacity cuts have done little to restore market balance with further turbulence ahead,” Linerlytica said. Linerlytica said that recent tariff concessions are likely insufficient to restore transpacific volumes with about 30-40% of transpacific container imports still effectively halted by the tariffs that remain in place. The trade war is principally affecting carriers with the largest exposure to Chinese transpacific exports to the US, with Hede (100%), Matson (90%), SeaLead (82%), TS Lines (80%) and COSCO (71%) being most at risk from the immediate fallout. The following chart shows transpacific liftings by carrier for this year. Meanwhile, US container imports surged over the first three months of the year as retailers pulled forward volumes to get ahead of the tariffs. But the Global Port Tracker from the NRF and Hackett Associates is predicting import cargo at the nation’s major container ports to drop dramatically beginning next month, as shown in the following chart. “Imports during the second half of 2025 are now expected to be down at least 20% year over year,” Hackett Associates Founder Ben Hackett said. “Even balanced against elevated levels earlier this year, that could bring total 2025 cargo volume to a net decline of 15% or more unless the situation changes.” 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.

15-Apr-2025

HOUSTON (ICIS)–The tariffs imposed by the US and the uncertainty of what will follow has caused a crash in oil prices and is one of the main factors behind a global decline in chemical prices in the days after the country's April announcement of its reciprocal tariffs. The following chart shows the sharp declines among the seven building-block chemicals. Notably, the declines continued even after the US paused the implementation of the higher reciprocal tariffs and settled for the relatively lower 10% rate against most countries. The exception is China, which has been responding to US tariffs with matching rates. The two countries are now imposing triple-digit tariffs on each others' imports. While the US has made exceptions for critical minerals, pharmaceuticals and electronics, China has made none. China's tariffs include the large amounts of natural gas liquids (NGLs) that it imports as feedstock for its propane dehydrogenation (PDH) units and its ethane crackers. LOWER OIL PRICESPrices for plastics and petrochemicals tend to rise and fall with those for oil. Oil prices have been falling since the start of the year, but the decline accelerated rapidly following the April tariff announcements by the US, as shown in the following table. Figures are in dollars per barrel. 2-Jan 1-Apr 14-Apr Brent 75.93 74.49 64.88 WTI 73.13 71.20 61.53 The decline was remarkable because it happened despite the weakening of the US dollar. The US dollar index has fallen by 8% as of 14 April since the start of the year. Oil prices tend to rise when the dollar weakens. This relationship has broken down in part because of plans by OPEC and its allies (OPEC+) to increase May production by an amount much higher than anticipated. But another reason is lower demand. Following the reciprocal tariff announcement by the US, ICIS lowered its forecast for global oil demand by 10%. ICIS also lowered its forecast for Brent oil prices for the rest of the year. Lower oil prices are manifesting themselves in aromatics markets, which are closely tied to crude. Export declined month on month for toluene and other aromatics from South Korea to the US for gasoline blending for March loading. Prices of toluene in India tumbled to fresh three-year lows. FALLING CHEM DEMANDDemand for plastics and chemicals also tends to rise and fall with the economy. Economists have started lowering their forecasts for growth, according to a periodic survey conducted by The Wall Street Journal. Survey participants also increased the chances of a recession. Tariffs will act like a sales tax. Companies and consumers will treat the tax like any other – they will take steps to avoid it by purchasing fewer goods. If one applied the US baseline tariff of 10% to the $3.3 trillion of goods the US imported in 2024, that comes to $3.3 billion in taxes. That represents a lot of potential purchases that US companies and consumers could defer or abandon. RPM International, a US producer of coatings, adhesives and sealants, expects that the slow- to no-growth environment of the past 18 months will persist. RPM's comments are notable because they were made on 8 April, after the US announced its reciprocal tariffs. UNCERTAINTYUncertainty is starting to paralyze some key chemical end markets. The auto industry in the US is already showing signs of this, RPM said. In European polyethylene (PE) markets, buyers are retreating to the side lines rather than committing to volumes in the current climate. “All in all, people are being careful, and that's not just converters that also consumers. People are worried about the future, and it's probably affecting demand further down chain as well," said ICIS markets editor Ben Monroe-Lake. “All in all, people are being careful, and that's not just converters that also consumers. People are worried about the future, and it's probably affecting demand further down chain as well.” REDIRECTED TRADE FLOWSBy imposing such broad tariffs, the US has erected a formidable trade barrier around its economy, which has caused exporters to redirect their shipments to other markets. This is especially true of Chinese exports. The US has created an effective embargo of Chinese imports by increasing its tariffs by 145% in 2025. Even with the recent exemptions adopted by the US, a large portion of Chinese imports will need to find new markets. The following table shows 2024 US general imports from China. Figures are in US dollars. Chapter Description Value 29 Organic chemicals 8,519,224,570 39 Plastics and plastic products 19,290,918,758 All Chapters Total 438,947,386,145 Source: US International Trade Commission (ITC) Similarly, China's 125% tariffs on shipments from the US would cause a large amount of products to be redirected, as shown in the following table. Figures are in US dollars. Chapter Description Value 27 Coal; mineral fuels, oils and products 14,727,138,106 29 Organic chemicals 3,980,594,815 39 Plastics and plastic products 7,452,840,887 All Chapters Total 143,545,739,507 Source: US ITC Given the tariff rates, it's likely that direct trade between the US and China will crater, said Lynn Song, chief economist, Greater China, at ING. Re-arranging global trade flows on such a scale will affect local chemical markets directly and indirectly through the influx of end products made with plastics and chemicals. The world was already contending with an oversupply of chemicals. This will aggravate it Such concerns have already appeared in east Chinese markets for certain grades of linear low density polyethylene (LLDPE) and high density polyethylene (HDPE), which reached multi-year lows. Market players are worried that US tariffs will cause a decline in demand for Chinese products that use these plastic grades. Similar concerns are arising in the Middle East among buyers and sellers of polymeric methylene diphenyl diisocyanate (PMDI) US auto tariffs could cause producers in the rest of the world to reduce output of vehicles and parts. These auto tariffs are global, and they are separate from the reciprocal tariffs. As such, the US auto tariffs are still in effect. If auto producers lower output, that will reduce demand for plastics and chemicals used in auto production, such as polypropylene (PP), nylon, butadiene (BD), and styrene butadiene rubber (SBR) “I may have to tweak my operations if I lose access to the US market, and if so, certainly I would be prudent now not to overcommit on forward deliveries of raw materials including EPDM,” said an auto parts maker in southeast Asia. Ethylene Propylene Diene Monomer (EPDM) refers to a synthetic rubber. DEFLATIONARY SPIRALIf companies expect declines to continue, then they may postpone purchases, setting off a deflationary spiral, in which sellers lower prices each time buyers defer purchases. Such a dynamic could emerge in European ethylene market and its PP market. US TARIFFS COULD MAKE THE COUNTRY THE EXCEPTIONAlthough US prices for building blocks have fallen since the April tariff announcement, many have still raised their expectations for inflation. RPM said on 8 April that the tariffs announced at that time would raise its raw material costs for its US operations by 4.3%. RPM's forecast did not take into account the 90-day pause on tariffs that the US announced on 9 April. That said, others are expecting prices in general to increase. Seasonally adjusted, a net 30% of US small business owners planned price hikes in March, up one point from February and the highest reading since March 2024. CHINA'S NGL TARIFFS MAY CREATE US GLUTChina's tariffs of 125% do not carve out any exemptions for ethane, liquefied petroleum gas (LPG) or other natural gas liquids (NGLs). China imports large amounts of these feedstocks from the US If China maintains the tariffs on NGLs, it could cause a supply glut of these primary chemical feedstocks in the US. The country does not have the chemical capacity to absorb the shipments that would normally go to China, and it is unlikely that the rest of the world can fully offset the loss of China as an export destination. If China maintains its tariffs on US NGLs, ICIS expects that US ethane and propane prices will decline. Insight article by Al Greenwood Additional reporting by Vicky Ellis, Ajay Parmar, Nurluqman Suratman, Isaac Tan, Nel Weddle, Melanie Wee, Kojo Orgle and Jonathan Yee Infographics by Yashas Mudumbai (Thumbnail shows a flask, which commonly holds chemicals. Image by Fotohunter.)

15-Apr-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

HOUSTON (ICIS)–US-listed shares of chemical companies skyrocketed on Wednesday as the biggest market rally occurred in five years, amid news that the US will adopt a 90-day pause on its reciprocal tariffs. The following table shows the major stock indices followed by ICIS: Index 9-Apr Change % Dow Jones Industrial Average 40,608.45 2,962.86 7.87 S&P 500 5,456.90 474.13 9.52 Dow Jones US Chemicals Index 776.26 62.55 8.76 S&P 500 Chemicals Industry Index 829.53 63.68 8.31 PAUSE ON RECIPROCAL TARIFFSUS President Donald Trump announced a 90-day pause on higher reciprocal tariffs, lowering them to 10% for most countries; however, China will see a higher rate of 125%. The following is the entire post from Trump: "Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!" CNBC reported that the 10% tariff will not apply to imports from Canada and Mexico. Earlier, the Wall Street Journal reported that US will also impose the 10% tariff on imports from Canada and Mexico during the 90 days. Trump did not mention Mexico and Canada in his post, and it is unclear if the US would exempt imports that comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement (USMCA). In addition, the 90-day reprieve does not include the steel and automobile tariffs imposed by the US, as those were not part of the reciprocal tariffs. Seemingly, countries that imposed retaliatory tariffs are still getting the 90-day reprieve as long as their actions were not in response to the reciprocal tariffs. RETALIATORY TARIFFS KICK INCanada's 25% tariffs on US-made vehicles went into effect. This applies to the content of fully assembled automobiles that do not comply with the USMCA as well as vehicles that do not comply with the trade deal. China’s government will raise the tariff on US imports from 34% to 84% effective on 10 April in response to the reciprocal tariffs. EU states approved retaliatory tariffs on several US imports in response to its steel and aluminium duties. The EU tariffs go into effect on 15 April, covering several grades of polyethylene (PE). CHEMS GET BREAK FROM TRADE WARSUS tariffs have battered chemical shares, with some trading near lows seen during the COVID pandemic. For the past couple of years, chemical companies have endured a slowdown in the housing market and a recession in manufacturing, lowering demand for many key plastics and chemicals used in construction and durable goods. Exports had provided US producers a lifeline because they enjoyed a cost advantage against much of the world. The prospects of retaliatory tariffs by other countries would cut that. Meanwhile, energy prices have been moving in the wrong direction for US chemical producers. US feedstock costs tend to follow prices for natural gas. Sales prices for petrochemicals tend to follow those for oil. Crude prices have fallen because of worries that the demand will decline due to a downturn caused by the tariffs. Natural gas prices have remained elevated. These two trends are squeezing US margins. The following table shows the US-listed shares followed by ICIS: Symbol Company Price Change Change % ASIX AdvanSix 21.11 2.42 12.95% AVNT Avient 32.89 3.96 13.69% AXTA Axalta Coating Systems 31.76 3.27 11.48% BAK Braskem 3.27 0.36 12.37% CC Chemours 11.88 2.3 24.01% CE Celanese 43.9 6.41 17.10% DD DuPont 61.95 6.82 12.37% DOW Dow 29.86 4.05 15.69% EMN Eastman 81.48 8.78 12.08% FUL HB Fuller 53.78 5.35 11.05% HUN Huntsman 14.26 2.01 16.41% KRO Kronos Worldwide 7.11 0.86 13.76% LYB LyondellBasell 59.83 6.6 12.40% MEOH Methanex 30.29 4.42 17.09% NEU NewMarket 549.66 29.71 5.71% NGVT Ingevity 33.4 3.52 11.78% OLN Olin 21.98 4.02 22.38% PPG PPG 103.11 11.45 12.49% RPM RPM International 105.64 8.67 8.94% SCL Stepan 49.69 4.43 9.79% SHW Sherwin-Williams 336.25 22.74 7.25% TROX Tronox 5.39 0.88 19.51% TSE Trinseo 3.34 0.44 15.17% WLK Westlake 93.73 10.65 12.82% (adds paragraph 6) Visit the ICIS US tariffs, policy – impact on chemicals and energy topic page. Thumbnail shows a stock graph. Image by Shutterstock

09-Apr-2025