Polyethylene terephthalate (PET)

SAO PAULO (ICIS)–Mexico's Port of Manzanillo is gradually recovering cargo handling capacity, which currently stands at around 60% of normal levels, according to the port’s authority, after weeks of operational disruptions caused by customs delays. The crisis, however, continues to impact costs and operations for most manufacturing companies, including chemicals, with analysts now expecting the backlog to be cleared in the next four weeks – an improvement from May’s pessimistic forecasts which envisaged the crisis lasting until September. The Pacific coast port, one of Mexico’s largest and the main entry point for imports from China and wider Asia, has struggled since mid-May due to personnel shortages at customs after authorities implemented some redundancies. That was followed, first, by workers’ protests, which caused internal blockades of the port, further creating significant delays in cargo processing, as well as strike action. All in all, Manzanillo was practically idle for several days in May. According to the Mexican Alliance of Transport Organizations, extended 24-hour customs operations and restructured truck appointments have enabled land freight transport to recover to 60% of usual pace. The Manzanillo Port Community implemented staggered entry times for import units, prioritising operations between 03:00 and 12:00 at the Specialized Container Terminal. Contecon Manzanillo, the operator of the facilities – a subsidiary of Manila-headquartered International Container Terminal Services (ICTSI Group) – coordinated with Mexico's National Customs Agency to extend operations through ICTSI Group continuous shifts from 13-15 June, aimed at reducing wait times and preventing further container accumulation. The container backlog has forced some ships planning to dock at Manzanillo to divert to alternative ports including Lazaro Cardenas, further increasing costs, and transportation companies have said they are facing mounting expenses for diesel, travel, food, and lodging due to delays. Port operations are expected to return to normal within four weeks, requiring patience from importers, transporters and the entire logistics chain. PAMA HITS CHEMICALS HARDERFor chemicals players, the problems regarding delayed cargo and lack of personnel at customs points across Mexico, are being compounded by newly established customs regulations, which aimed to improve the clearance of goods at customs as well as the seizing of illegal goods. In practice, the so-called PAMA regulation has added costs in the form of bureaucracy, and in the case of chemicals, sharply slowed down the entry of imports into Mexico. PAMA is becoming the first thing sources mention when asked about logistics. “Things have not improved much since mid-May, at least as we see them. In fact, for us the situation is still terrible, and we are literally hemorrhaging money in payments to shipping companies, due to the delays, and to the port’s facilities, due to the materials we have been forced to store there,” said a source at a Mexican chemicals distributor this week. PAMA entails that companies now must give more information about the load. For example, if the declared weight of the load deviates in the slightest from the weight showed on the customs scale, this can be a reason to send the load back to square one, with a fine potentially also imposed, according to the source in chemicals distribution. In mid-May, the distribution source said they had had a container held for 45 days up to that point, because it could not be released due to a mismatch in the weight: it was missing two decimal places. After correcting the error and paying several fines because of it, the container could finally be released earlier in June. “We are finding PAMA to be a serious problem – many of our loads get stuck because of regulation-related issues, and our logistics are becoming a burdensome and time-consuming process. Moreover, the fines are disproportionate, ranging from 70% to 100% of the value of the merchandise,” they stated. Another source, this on the production side, concurred that Manzanillo’s crisis and delays have been a blow for chemicals companies, but also placed more importance on PAMA and its compliance than the current crisis at the port, which will sooner or later subside. “We were used to see many PAMA proceedings in rail or road transport, but now the authorities are extending that firm hand to the ports as well. And, because of the nature of chemicals, the authorities at times try to go deeper than their knowledge would allow them, making the process even more tedious,” said the producing source. “I am referring here to imports of products such as PE [polyethylene] and, more specifically, HDPE [high density polyethylene]. I am hearing from many players that several HDPE loads were subject to PAMA proceedings because of the big difference in prices [sold overseas and sold domestically], so the government argues imports are being made at lower prices – in other words, considering the load as dumping.” The source went on to say that because the authorities “do not know the market well” the ensuing investigations can in some case take months to be resolved, adding that PAMA rules – which are here to stay, unlike the Manzanillo port crisis – are becoming for the chemicals industry a considerable negative factor when importing into Mexico. Mexico’s chemicals trade group ANIQ and its peer for the plastics sector Anipac had not responded to a request for comment at the time of writing. According to importers, who are already having to endure sharply higher logistical costs due to the crisis – between 20% and 30% – the additional burden of the strict enforcement of PAMA regulations has also added to the financial woes, as the bureaucracy implied required more human resources than with the previous regulation. Mexican law firm Moreno Valdes explained in a note to clients that while most of the contingencies contemplated in PAMA would be precautionary measures and would not necessarily end in any fine, just the fact that authorities are stopping many more loads to analyze further adds delays to the already large delays. “Importers should understand that when the customs authority notifies a PAMA [proceeding], it means that this procedure involves the seizure of the goods and even the truck transportation. It is a precautionary measure, allowing the authority to obtain a guarantee against a possible breach of obligations by the importer," said the law firm. “In other words, the merchandise will remain in Customs until the situation is clarified for the authority. There are many reasons why the authority usually initiates a PAMA. It may be that the cargo was not entered the country through the authorized place, or that it had prohibited merchandise, or because the importer is not accrediting the specific regulations that the merchandise must comply with when entering the country, among others.” Front page picture: Manzanillo’s port (Source: Port operator Contecon Manzanillo) Focus article by Jonathan Lopez Additional reporting by Bruno Menini

20-Jun-2025

LONDON (ICIS)–Senior editor for recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Polish colourless (C) bale prices drop for some buyers after months of what some labelled ‘unsustainable’ high levels Hot weather expected to improve bale availability across Europe and could bring downward pressure Food-grade pellet enquiries rise along with temperatures July price talks start soon and some anticipate lower bids from buyers

20-Jun-2025

SAO PAULO (ICIS)–Braskem is to divest its controlling stake at Upsyde, a recycling joint venture in the Netherlands, as the company aims to focus on its core chemicals and plastics production, the Brazilian polymers major said. The joint venture with Terra Circular was announced in 2022 and is still under construction. When operational, it will have production capacity of 23,000 tonnes/year of recycled materials from plastic waste. Braskem’s exit from Upsyde is likely related to the company's pressing need to reduce debt and increase cash flow rather than a rethinking of its green targets, according to a chemicals equity analyst at one of Brazil’s major banks, who preferred to remain anonymous. Braskem's spokespeople did not respond to ICIS requests for comment at the time of writing. The two companies never officially announced the plant’s start-up, and in its annual report for 2024 (published Q1 2025) Braskem still spoke about the project as being under construction. “Upsyde is focused on converting hard-to-recycle plastic waste through patented technology to make circular and resilient products 100% from highly recyclable plastic,” it said at the time. “Upsyde aims to enhance the circular economy and will have the capacity to recycle 23,000 tonnes/year of mixed plastic waste, putting into practice a creative and disruptive model of dealing with these types of waste.” BACK TO THE COREBraskem said it was divesting its stake at Upsyde to focus on production of chemicals and polymers – its portfolio’s bread and butter – and linked the decision to the years-long downturn in the petrochemicals sector, which hit the company hard. Financial details or timelines were not disclosed in the announcement, published on the site of its Mexican subsidiary, Braskem Idesa. “Considering a challenging environment for the petrochemical industry and a prolonged downcycle exacerbated by high energy costs and reduced economic activity in Europe, Braskem is redirecting all resources toward its core business: the production of chemicals and plastics,” Braskem said. “We remain committed to our sustainability agenda, as demonstrated by our recent investment in expanding biopolymer capacity in Brazil and the development of a new biopolymer plant project in Thailand.” The company went on to say it will also continue to maintain “several active partnerships” to advance research and potential upscaling capabilities for chemical recycling, projects for some of which Braskem has signed agreements to be off-takers for specialized companies. The European plastics trade group PlasticsEurope was until this week listing Upsyde as a project which would make a “tangible impact by upcycling mixed and hard-to-recycle” plastic waste in Europe. That entry, however, has now been taken down. Terra Circular and PlasticsEurope had not responded to a request for comment at the time of writing. Braskem’s management said earlier in 2025 the green agenda remains key for its portfolio, adding it would aim to leverage Brazil biofuels success story to increase production of green-based polymers, a sector the company has already had some success with production of an ethanol-based polyethylene (PE), commercialized under the branded name Green PE. The other leg to become greener, they added, was a long-term agreement with Brazil’s state-owned energy major for the supply of natural gas to its Duque de Caxias, Rio de Janeiro, facilities to shift from naphtha to ethane. Last week, Braskem said that deal could unlock R4.3 billion ($785 million)  in investments at the site. GREEN STILL HAS WAY TO GOThe chemicals analyst who spoke to ICIS this week said for the moment there would be no sign of Braskem aiming to trim its green agenda, which has ambitious targets for 2030 in terms of production of recycled materials. He added Braskem’s shift from naphtha-based production to a more competitive ethane-based production will require large investments in coming years, so a strategy to increase cash flow as well as reduce high levels of debt would be divesting non-core assets and the divestment in the Dutch joint venture would be part of that plan. “Braskem has high debt levels, and they are looking for ways to reduce leverage. What they may be thinking is that, despite this divestment in a purely green project, they can still give a green spin to their operations if we consider the green PE, for which they have been expanding production,” said the analyst. “I don't think they would be relinquishing or giving up any of their initiatives to go green, but I think it's probably part of some initiatives they must increase efficiency and reduce costs and capital needs. So, they probably just saw this business as a main candidate to be divested." ($1 = R5.50) Front page picture: Braskem's plant in Triunfo, Brazil producting green PE Source: Braskem Focus article by Jonathan Lopez 

17-Jun-2025

SINGAPORE (ICIS)–Malaysia's revised sales and services tax (SST) framework officially takes effect on 1 July, with the expanded scope now set to include a 5% tax on an extensive range of petrochemical products, including polyethylene (PE) and polypropylene (PP). Critical raw materials for downstream industries affected Capital expenditure items like machinery now taxed Malaysian industry body calls for further delay in implementation The government had first announced the revision of items subject to the sales tax on 18 October 2024, as part of its fiscal consolidation strategy under the 2025 budget. Under the updated framework, more than 4,800 harmonized system (HS) codes will now fall under the 5% sales tax bracket. Goods exempted from the updated sales tax include specific petroleum gases and other gaseous hydrocarbons that are currently under HS code 27.11. These include liquefied propane, butanes, ethylene, propylene, butylene, and butadiene. In their gaseous state, the list includes natural gas used as motor fuel. The measure, aimed at broadening the country's tax base and increasing revenue, was originally slated to begin on 1 May, but was delayed for two months after manufacturers urged policymakers to refrain from adding to their financial burden. The July revision of Malaysia's sales tax and the expansion of the service tax scope involve several key changes. The sales tax rate for essential goods consumed by the public will remain unchanged, while a 5% or 10% sales tax will be applied to discretionary and non-essential goods. The scope of the service tax will be broadened to include new services such as leasing or rental, construction, financial services, private healthcare, education, and beauty services. This includes critical raw materials for various downstream industries, from plastics and packaging to automotive manufacturing. Previously, many of these materials were zero-rated under the SST. The Federation of Malaysian Manufacturers (FMM) has publicly criticized the decision, calling it "highly damaging to industries” in a statement released on 12 June. According to estimates by the Ministry of Finance, the SST expansion is expected to generate around ringgit (M$) 5 billion in additional government revenue in 2025. “Although this may support the government’s fiscal objectives, the additional tax burden will be largely borne by businesses and has serious implications for operating costs, investment decisions, and long-term business sustainability,” FMM president Soh Thian Lai said in a statement. Soh highlighted that with this expansion, around 97% of goods in Malaysia's tariff system will now be subject to sales tax, representing a significant departure from a previously narrower tax base, to one where nearly all categories including industrial and commercial inputs are now taxable. Under the new sales tax order, 4,806 tariff lines are now subject to 5% tax, covering a wide range of previously exempt goods, according to the FMM. These include high-value food items, as well as a broad spectrum of industrial goods, such as industrial machinery and mechanical appliances, electrical equipment, pumps, compressors, boilers, conveyors, and furnaces used in manufacturing processes, it said. The 5% rate also applies to tools and apparatus for chemical, electrical, and technical operations, significantly broadening the range of taxable inputs used in production and operations. “The expanded scope now places a direct tax burden on machinery and equipment typically classified as capital expenditure. This includes items critical to upgrading production lines, automating processes, and scaling operations,” Soh said. The FMM "strongly urges the government to further delay the enforcement of the expanded SST scope beyond the scheduled date of 1 July", until the review is complete, and industries are ready. They also calling for a broader exemption list, especially for capital expenditure items like machinery and equipment, and a re-evaluation of including construction, leasing, and rental services, which they warn will "increase operational expenses and are expected to cascade through supply chains." “We are deeply concerned and caution that the untimely implementation of the expanded scope of taxes will exert inflationary pressure, as businesses already grappling with rising costs … may have no choice but to pass these additional burdens on to consumers,” the FMM added. The FMM has urged the government to postpone the implementation, citing insufficient lead time for businesses to adapt and calling for a comprehensive economic impact assessment. Malaysia’s manufacturing purchasing managers’ index (PMI) continued to contract in May, with a reading of 48.8, according to financial services provider S&P Global. Beyond the direct sales tax on goods, the revised SST also introduces an 8% service tax on leasing and rental services for commercial or business goods and premises. This could further compound cost burdens for capital-intensive sectors, including parts of the petrochemical industry that rely on leased machinery and industrial facilities. Focus article by Nurluqman Suratman Thumbnail image: PETRONAS Towers, Kuala Lumpur (Sunbird Images/imageBROKER/Shutterstock)

17-Jun-2025

HOUSTON (ICIS)–Arrivals of container ships at the busy US West Coast ports of Los Angeles and Long Beach (LA/LB) are slowly returning to normal after the trade war between the US and China slowed cargo movement between the two nations, according to the Marine Exchange of Southern California (MESC). Kip Louttit, MESC executive director, said the registration process for vessels bound for LA/LB projects a slight uptick in the coming two weeks. Container ships on the way to LA/LB averaged 58.9/day in January, which fell to 47.2/day in May amid trade tensions between the US and China. The average has climbed to 51.8/day over the first 14 days of June, and 52.1/day over the past 17 days. “This is an indicator of a slight increase in ship arrivals over next 1-2 weeks,” Louttit said. Louttit said there are 17 container ships scheduled to arrive at the twin ports over the next three days, which is normal. Container ships at berth at the ports of LA/LB dipped from an average of 19.4/day in April to 15.6/day in May. The average was 12.3/day over the first six days of June but jumped to 15.1/day for all 14 days in June, with 21 at berth on Friday and 14 at berth on Saturday. Maritime information specialists at MESC said there are 49 container ships “blank sailing” that will skip Los Angeles or Long Beach through 1 August, which is two more than the previous week. Blank sailings are when an ocean carrier cancels or skips a scheduled port call or region in the middle of a fixed rotation, typically to control capacity. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said capacity is returning to the transpacific trade – up 28% since mid-May – as carriers react to shippers rushing cargo during the 90-day window of lower tariffs. “This increased capacity and a slowing in the cargo rush should see a return of the downward pressure on spot rates we saw during Q1 prior to the ‘Liberation Day’ tariff announcement,” Sand said. Rates for shipping containers from east Asia and China to the US are at 10-month highs. 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), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks.

16-Jun-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: The global petrochemical industry is already battling a deep, structural downturn. While we've seen no impact on already dire polyethylene (PE) and polypropylene (PP) margins in northeast and southeast Asia from the trade war, the Israel-Iran crisis presents a new set of risks for polyolefins and all the other products. Today, I want to share a first pass at three headline scenarios for how this latest crisis could impact the global economy, and by extension, petrochemicals – Scenario 1: The Best-Case – De-escalation and Containment. International mediation leads to a swift reduction in direct confrontation. Retaliatory actions are limited, avoiding critical infrastructure. Diplomatic channels resume, potentially reigniting broader regional security talks. Oil Prices: Rapid return to pre-crisis levels; spikes short-lived. Inflation: Minimal sustained impact; stable energy costs. Supply Chains: Minor, localised disruptions; vital Strait of Hormuz remains secure. Investment: Quick rebound in confidence; risk assets recover. Scenario 2: The Medium-Case – Protracted Tensions and Proxy Conflicts Averted full-scale direct war, but high tensions persist. The region sees intensified "shadow wars" and proxy conflicts. Occasional targeted strikes or cyberattacks, but no full escalation. Diplomatic efforts are slow and largely ineffective. Oil Prices: Elevated and volatile due to persistent geopolitical risk. Inflation: Sustained upward pressure as higher energy costs feed into all sectors. Supply Chains: Increased shipping insurance, minor rerouting; higher logistics costs. Investment: Increased risk aversion; volatile equity markets; flight to safe havens. Scenario 3: The Worst-Case – Full-Scale Regional War & Strait of Hormuz Closure Direct military conflict spirals out of control, potentially drawing in other global powers. Iran close or severely disrupts the Strait of Hormuz. Oil Prices: Big surge to long-term historic highs. Inflation: Hyperinflationary pressures globally; severe cost-of-living crisis. Supply Chains: Widespread and severe paralysis of global trade; blockades, severe shortages. Global Recession/Depression: High probability of a severe global economic downturn. Financial Markets: Extreme volatility; sharp declines; systemic crisis risk. Conclusion: Understanding scenarios is crucial for strategic planning. Even "medium" level tensions will have significant, widespread consequences. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

16-Jun-2025

HOUSTON (ICIS)–Arrivals of container ships fell in May at the US West Coast ports of Los Angeles (LA) and Long Beach (LB) amid a trade war between the US and China but has shown a slight uptick in June while the two nations continue to negotiate a trade deal. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said the ports of LA/LB, said May container ship arrivals were at 5.0/day, slightly below the 5.7/day that was the average prior to the pandemic. Through the first five days of June, arrivals are at 5.6/day, which is still slightly below the pre-pandemic norm. Import cargo at the nation’s major container ports is expected to surge in the near term amid a pause in reciprocal tariffs between the US and China, according to the Global Port Tracker report released today by the National Retail Federation (NRF) and Hackett Associates as shown in the following chart. NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said this is the busiest time of the year for US retailers as they enter the back-to-school season and prepare for the fall-winter holiday season. “Retailers had paused their purchases and imports previously because of the significantly high tariffs,” Gold said. “They are now looking to get those orders and cargo moving in order to bring as much merchandise into the country as they can before the reciprocal tariff and additional China tariff pauses end in July and August.” Gold said many retailers suspended or canceled orders after US President Donald Trump announced a 145% tariff on China in April but have resumed imports after tariffs were reduced to 30% and a 90-day pause that will last until 12 August was announced. The higher reciprocal tariffs on other nations have also been paused until 9 July as the administration negotiates with those countries. ASIA-US RATES SURGE Rates for shipping containers from Asia to the US have spiked over the past couple of weeks – and have almost doubled over the past four weeks – as demand has surged ahead of the possible reinstatement of tariffs while capacity remains tight. Rates from supply chain advisors showed drastic increases over the past two weeks, and weekly rates from online freight shipping marketplace and platform provider Freightos came out today with Asia-USWC rates at $5,488/FEU (40-foot equivalent unit) and at $6,410/FEU to the East Coast. 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. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page Thumbnail image shows a container ship. Photo by Shutterstock

10-Jun-2025

SAO PAULO (ICIS)–Mexico is well-positioned to benefit from the global trade reorganization started by the US as it takes a stronger stance against China and replicate the resounding success of the 1990s, when the first North America free trade agreement (FTA) NAFTA was signed, the president of the country’s chemicals trade group ANIQ said. José Carlos Pons, who is also the CFO at Mexican chemicals producer Alpek, said Mexico, the wider North America and the world at large still face some persistent Chinese overcapacity of industrial goods which are flooding markets, but said North America together would face that threat in a better position. Pons has just started his tenure as ANIQ president at a time when the trade group is navigating shifts in trade policies as well as domestic issues such as the potential for – or lack of – nearshoring as well as policy issues in which companies fully disagree with the left-leaning government of Claudia Sheinbaum. Pons did not want to enter into much detail about the latter, however, because as he explained in the first part of this interview, ANIQ’s lobbying strategy is to now go “hand in hand” with the government. According to him, Sheinbaum is honestly trying to fix the beleaguered, state-owned energy major Pemex, which would at the same time greatly help chemicals raw material supply reliability. NAFTA, USMCA, SOMETHING ELSE? Soon after taking office in January, US President Donald Trump imposed hefty import tariffs on Mexico and Canada because, he said, the two countries should do more on migration and fentanyl trade – a powerful drug which has caused havoc across the US. However, when the tariffs were about to kick off, the US announced it was pausing them for one month. It was a timely decision for Mexico: the country is almost completely dependent on the fate of the US economy, as it exports around 80% of its output north of the border. That dependance is what makes Corporate Mexico wary of even contemplating a break-up of the now called USMCA FTA, the successor to NAFTA which Trump negotiated during his first term. Pons is optimistic in all fronts – home front and external front – as a relatively young executive who arrives to the helm of ANIQ in some of the most challenging times for Mexico in the past three decades. "I do feel on the side of the optimists. All this issue of tariffs and economic reorganization of imports and exports in the world – if the US plays a strong role against Asia, as I believe it will end up playing, then what can happen is that Mexico is super well-positioned for greater investments," said Pons. “Mexico has natural advantages in serving the US market. Today in many of the industries we are a very relevant supplier to the US. We are connected by pipeline, so to speak, to the US. When there is a competitive supply that Mexico has, Mexico remains the most convenient place to source for the US – it is next door.” It has been widely reported that USMCA renegotiations, for which the deadline is 2026, are in full swing and both officials from Mexico and Canada have recently said they are hopeful USMCA will be renegotiated and revived, ultimately making North America stronger versus other big economies. "I think that commercial logic and economic logic will prevail. Trump, if he understands anything very well, it is economic logic and from that point of view I believe that the logic of Canada-US-Mexico integration will stand out. The last renewal of the free trade agreement was positive in general, with no major changes," said Pons. "In fact, I think we put some order on some of the issues, some of them affecting chemicals, so from that point of view it has been favorable for us. We are understandably focused on the short-term news, but if we take a slightly longer-term view, I think it [current renegotiations] can end up benefitting the region.” Following on with the soft lobbying ANIQ is deploying, he praised the cabinet for keeping a cold head before adversity and having gone through momentous crisis points relatively unscathed. Moreover, Sheinbaum’s popularity ratings are almost unheard of in democracies: around 80% of Mexicans have a positive view of her. “I perceive a Mexican government that is calm, serene, looking more at the long term than the short term, not reacting hastily to attacks, as if taking certain pauses. If you remember, after some tariffs were imposed on Mexico in February, Sheinbaum said the Mexican government would 'answer in a week' – they purposefully wanted to give space for conversations to happen,” said Pons. "I think it has been handled well, it has been handled with composure and I think that is just what is needed." When pressed about domestic policy issues including a judicial reform which has sparked fears among most experts in Mexico and abroad, because it could weaken the rule of law rather than strengthen it, Pons was cautious but conceded companies are concerned: without legal certainty, investments come harder. "One of the important work areas is legal certainty and we are worried as an industry about the change that could occur to legal certainty with this change," he said. "I think we have to understand exactly the implications of this judicial reform, of the new judges we are going to have." CHINA FORMIDABLE RISEOn Chinese competition, which has hit chemicals hard as there is oversupply for the main petrochemicals and polymers, Pons did say the scale of overcapacity affecting global markets is huge, unheard of, and conceded there are still many question marks surrounding how this will end – and when. "We have seen that in practically all sectors there is excess capacity. China has been very aggressive. For instance, take polyester textile fibers as an example – if today the whole world closed its production capacity and China maintained its capacity, there would still be 30% excess capacity," said Pons. He mentioned polyethylene terephthalate (PET), which happens to be one of the main products which Alpek manufactures and he oversees as CFO. "It is no surprise that most countries already have trade protections against China. For example, in one of the businesses I participate in at the company, PET has a 105% antidumping duty [ADD] in the US against China. Mexico just decreed an antidumping duty against PET as well. So, it is very clear that all governments understood that there is an intention that is not commercial, not fair trade, which is what we seek as an industry." Pons did not think the West at large – or, more specifically, market, democratic economies – had been caught off-guard by the rapid ascent of China in the industrial goods global league. "In fact, what much of the industry I represent has been doing is improving its competitiveness. There are many investments going on. Mexico's companies are investing $1.5 billion in maintenance and competitiveness. "All those projects and millions of dollars are focused on improving and putting us on par in competitiveness against the Chinese," said Pons. The first part of this interview was published on 6 June on ICIS news, under the headline "Mexico’s Pemex turnaround key to unlock $50 billion chemicals investments – ANIQ". Click here to read it.  Front page picture: Facilities operated by Mexico's polyethylene (PE) producer Braskem Idesa  Source: ICIS Interview article by Jonathan Lopez

09-Jun-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 June. Europe HDPE spot dragged sub-€1,000/tonne by US offers as US Q1 imports ride highSpot prices for high-density polyethylene (HDPE) in Europe have fallen below €1,000/tonne as local buyers receive highly discounted US offers against a backdrop of high imports from the US in the first quarter of 2025 and gaping spreads between the regions. Higher tariffs on Russia embolden European producers to lift nitrate pricesEmboldened by the European Parliament’s decision to go ahead with higher import duties on Russian fertilizers, nitrate producers in Europe have raised prices despite strong objections from the farming community. Europe pharmaceutical IPA slightly softer, stable demand despite peak seasonEuropean spot pricing for premium pharmaceutical grade isopropanol (IPA) has softened slightly, while prices for technical and cosmetic grades are stable amid steady conditions. European paraxylene contract price for April, May settles following contentious negotiationsEurope paraxylene (PX) contracts for April and May have been finalized in a double settlement. LyondellBasell enters exclusive talks for Europe asset divestmentsLyondellBasell has entered into exclusive talks with an industrial investor for the sale of four European production sites, slightly over a year after launching a review of its asset base in the region. Asia-Europe shipping prices jump on US-China trading windowContainer prices for Asia cargoes to Europe jumped sharply week on week amid a general surge in freight costs as players look to lock down shipments from China to the US during the pause in reciprocal tariffs between the countries. Limited demand for Europe PET mitigates impact of higher freight ratesDemand for European polyethylene terephthalate (PET) has been blighted by poor weather conditions, economic apathy and significant import arrivals. LyondellBasell Europe divestment assets had lost money for years – CEOThe assets LyondellBasell has entered exclusive talks to sell to private equity investor AEQUITA had been cash negative on average to the company over the last five years, with CEO Peter Vanacker welcoming a “clean exit” from the businesses.

09-Jun-2025

SINGAPORE (ICIS)–Tariff concerns and ample supply continue to exert pressure on petrochemical markets in both Asia and the Middle East, with regional demand staying weak, with consumption in India unlikely to pick up until September. Aromatics trade flows shift amid tariff uncertainty Monsoon season weighs on India demand GCC producers upbeat on Syria AROMATICS UNDER PRESSURE AMID TARIFFS In the aromatics market, supply is expected to be tight as increased tariff uncertainties continue `to disrupt traditional trade flows. Mixed xylene (MX) and downstream paraxylene (PX) were in steep backwardation, where in spot prices are higher than futures prices, amid freight constraints and high US demand. Benzene, which closely tracks falling crude prices, continued to underperform its aromatics peers. Benzene from South Korea has not been flowing into the US and were mostly going into China, market sources said. South Korea is a major exporter of aromatics products. Its overall petrochemical shipments in May declined by 20.8% year on year, weighed down by sharp falls in upstream crude prices. For solvent grade mixed xylenes, South Korea exported last month an estimated 50,696 tonnes, of which around 27% was destined for the US, according to ICIS data on 2 June. Strong exports to the US coincide with the start of the summer driving season in the northern hemisphere, when demand for octane boosters like MX and toluene, which goes into gasoline blending, picks up. This strong US gasoline demand expectation is supporting the supply tightness, despite weaker downstream activity in China. Asia’s aromatics tightness is likely to persist through June-August, as market participants adapt to tariff policies and freight cost pressures from front-loading following a trade war truce between the US and China. The US’ 90-day suspension on “reciprocal” tariffs on most countries except China ends on 9 July. A potential escalation of the US-China trade war after the 90-day truce could intensify uncertainties, though a resolution might stabilize flows by late Q3. For shipping, market players are expecting freight rates to start to drop again in July-August. MONSOON ONSET DEPRESSES INDIA PLASTICS DEMAND Prices for plastics in India are under pressure from the monsoon season, as well as more supply coming from China, market sources said. This year’s monsoon season, which typically runs from June-September, arrived eight days early and is projected to bring above-average rainfall, said the India Meteorological Department (IMD) on 24 May. During India’s monsoon period, manufacturing activity tends to moderate, especially the packaging sector as well as the food and beverage sector, weakening end-product demand. Concurrently, domestic supply is ample, pushing down prices for Indian polyethylene (PE), polypropylene (PP), high-density polyethylene (HDPE) and low-density polyethylene (LDPE). But post-monsoon season from September, demand is likely to pick up as agriculture and construction sector activity rises and the harvesting season commences. The festive season, which includes the Diwali (Hindu Festival of Lights) running from 18-23 October, is likely to increase demand for end-products such as plastics, hence, boost production leading to the holiday. Demand for chemicals such as PE, PP and PVC and synthetic rubbers is expected to improve after September. India’s strong domestic consumption would shield it from the US-China tariff war, whose impact on the south Asian nation’s petrochemical trades is mostly on sentiment and not on actual demand. China, however, has tried to push more material to India with cut prices amid the US-China trade war, as domestic demand in the world’s second-largest economy remained weak. The country is already redirecting PE and PP to Africa and India to offset reduced US access. But this offsetting has eased temporarily due to freight costs more than doubling in recent weeks. GCC SEES RENEWED OPPORTUNITY IN SYRIA In the Middle East, Syria is opening up following a regime change and the consequent lifting of sanctions by both the US and EU. A cargo of wheat arrived at the Syrian port of Tartous for the first time in around 11 years, according to news reports. The opening of Syria’s market – after years of civil war and international sanctions – bodes well for GCC petrochemical producers. The GCC bloc consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Suppliers are looking to increase their trades with Syria, as converters in the country begin running their plants at higher rates, with the possibility of new plants to be built. On 29 May, the Syrian government inked a $7 billion strategic Memorandum of Understanding (MoU) with a consortium of companies led by Qatar’s UCC Holding to develop power generation projects. More such agreements, particularly as trade increases, could pave the way for increased demand in the country for chemicals and chemical products, after civil war disrupted life in Syria since 2011. Focus article by Jonathan Yee Additional reporting by Aswin Kondapally, Nadim Salamoun, Jasmine Khoo, Samuel Wong, Melanie Wee, and Angeline Soh. Thumbnail image: At Qingdao Port in east China's Shandong Province, 4 June 2025. (Shutterstock)

09-Jun-2025