Engineering plastics (POM, PBT)

HOUSTON (ICIS)–US President Donald Trump did not propose any new tariffs on his first day in office, but he did issue an executive order that calls for his administration to conduct the investigations needed to impose them under several sections of the law – in many cases, repeating the same playbook Trump used during his first term in office. While the investigations take place, the US can use the threat of possible tariffs to negotiate agreements. If the negotiations fail, the US would have taken the steps necessary to respond with tariffs. Trump did indicate that he is considering imposing tariffs on Canada and Mexico as early as 1 February. This could rely on using existing laws in unprecedented ways. The US chemical industry is vulnerable to tariffs because it has deficits in commodities such as benzene, melamine and methyl ethyl ketone (MEK). Its large exports of plastics make it vulnerable to retaliatory tariffs. TRUMP LAYS FOUNDATION FOR TARIFFSAmong the investigations that will be launched by Trump's executive order, those into national security could lead to Section 232 tariffs, which Trump imposed on steel during his first term. Discriminatory trade practices would open the door to Section 201 tariffs, which were imposed on washing machines and solar panels. Unfair trade practices could lead to Section 301 tariffs. The US imposed these against numerous Chinese imports. That unleashed a trade war, with China imposing retaliatory tariffs, many of which targeted US exports of plastics and chemicals. POSSIBLE NEW TARIFFSTrump's first-day order pointed to other reviews that his administration could complete faster and lead to new tariffs imposed under different sections of the law. These could fall under the International Emergency Economic Powers Act of 1977 (IEEPA), Section 338 and Section 122. Trump's first-day order did not mention these specific laws, but it did mention national security, discriminatory actions against US products and balance of payment deficits – all issues that these laws were designed to address. These laws could allow Trump to impose tariffs on a faster schedule. The IEEPA only requires consultation with Congress, and Section 1222 can apparently be imposed unilaterally, according to the American Action Forum (AAF), a think tank. THREAT OF CANADIAN, MEXICAN TARIFFS ON 1 FEBRUARYTrump would need such speed if he were to impose 25% tariffs on Canada and Mexico goods on 1 February, a possibility that he mentioned on Monday, according to CNBC and other publications. Drug trafficking and immigration could provide the national security basis needed under these laws. REVISITING THE PHASE 1 AGREEMENT WITH CHINATrump's first-day order called for a review of the Economic and Trade Agreement to determine if China is living up to its end of the deal. The agreement is more commonly known as the phase one deal, and the two countries signed it in January 2020. It included commitments by China to purchase more goods from the US; to adopt policies that will protect intellectual property; and to reduce pressure on companies to transfer technology. China has not fulfilled its import commitments under the agreement, and Trump's order said the country could impose additional tariffs in response. US CHEMS VULNERABLE TO TARIFFSUnless Trump carves out exceptions, his proposed tariffs on China and Mexico could raise costs for US chemical producers. Canada provides US refiners with heavier grades of oil that are not produced in sufficient quantities domestically for the nation's refineries. Canadian oil complements the light grades of oil that the US produces in abundance from its shale fields. Regional US markets may rely on Canadian imports because they are closer than the more distant sources along the US Gulf. Those customers will have to reroute their supply chains if they want to avoid tariffs. For the broader tariffs that Trump proposed in his campaign, they could prompt countries to impose retaliatory duties on US shipments of plastics and chemicals. The US is vulnerable to such tariffs because it has large surpluses of many plastics and chemicals, such as vinyl acetate monomer (VAM), methanol, ethylene glycols (EG), polyethylene (PE) and polyvinyl chloride (PVC). Tariffs on Chinese imports of rare earth materials would increase production costs for catalysts. Tariffs on fluorspar and hydrofluoric acid (HF) could increase costs for US producers of fluorochemicals and fluoropolymers. Insight article by Al Greenwood (Thumbnail shows cranes and containers, which make up important infrastructure used in international trade. Image by Costfoto/NurPhoto/Shutterstock)

21-Jan-2025

SINGAPORE (ICIS)–Shares of petrochemical firms in Asia and China’s commodity futures markets closed mixed on Tuesday, with no immediate announcement of new tariffs from the US on the first day of Donald Trump’s second term as president. South Korea’s LG Chem closed 4.75% lower in Seoul , while Japan’s Mitsubishi Chemical finished 1.85% higher in Tokyo. China’s state oil and gas firm PetroChina was down 1.40%, while chemicals major Sinopec ended down 1.62% in Hong Kong. The CSI 300 Index, a benchmark for Chinese mainland shares, edged up 0.08% to close at 3,832.61. Japan's benchmark Nikkei 225 rose by 0.32% to settle at 39,027.98, while South Korea's KOSPI Composite Index ended 0.08% lower at 2,518.03. Hong Kong's Hang Seng Index finished the session 0.91% higher at 20,106.55. Singapore's Straits Times Index (STI) was trading 0.27% lower at 3,797.61 at 08:44 GMT. Analysts said that markets have already pre-digested the “Trump effect”. In his presidential campaign, Trump had threatened to impose tariffs on all US imports. His first four-year term as US president in 2017-2021 sparked the US-China trade war. In China, six out of nine petrochemical futures markets posted declines on Tuesday.   CNY/tonne 21-Jan % change from previous session Linear low density polyethylene (LLDPE)                                   7,808 -0.3% Polyvinyl chloride (PVC)                                   5,304 0.6% Ethylene glycol (EG)                                   4,753 -0.2% Polypropylene (PP)                                   7,400 -0.7% Styrene monomer (SM)                                   8,520 0.0% Paraxylene *                                   7,420 -0.1% Purified terephthalic acid (PTA)*                                   5,192 -0.2% Methanol*                                   2,591 0.6% Polyethylene terephthalate  (PET)*                                   6,388 -0.2% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange Overall trading activity in China’s petrochemical markets is waning as many players have suspended trading to prepare for the upcoming Lunar new year holiday, which will last eight days from 28 January. ($1 = CNY7.28) Additional reporting by Nurluqman Suratman

21-Jan-2025

HOUSTON (ICIS)–US President Donald Trump proposed no new tariffs on his first day of office, and instead instructed his administration to investigate the nation's trade deficit and other areas of trade policy. The absence of any tariff proposal marks a contrast to his campaign platform and his subsequent threats after winning the election. Tariffs would expose the US chemical industry to disruptions in trade flows, increased costs for chemicals in which the nation has deficits and the threat of retaliatory tariffs on its  exports of polyethylene (PE), polyvinyl chloride (PVC) and other plastics and chemicals. Instead of proposing tariffs, Trump issued a memorandum that called for the following: The Secretary of Commerce to investigate the nation's deficit and its consequences to the economy and to national security. The Secretary of the Treasury to investigate the creation of an External Revenue Service to collect tariffs and duties. The US Trade Representative to investigate any unfair trade practices. The US Trade Representative to prepare for the July 2026 review of the United States-Mexico-Canada Agreement (USMCA), which is the name of the countries' trade agreement that replaced NAFTA. The US Secretary of the Treasury to investigate exchange rates. The US Trade Representative to review and recommend revisions to existing trade agreements. The US Trade Representative to negotiate bilateral or sector-specific agreements to open markets. The Secretary of Commerce to review policies and regulations regarding antidumping and countervailing duty laws. A review of several trade issues with China, including the Economic and Trade Agreement. This is also known as the phase one agreement, under which China failed to fulfil its import commitments. The absence of first-day tariff proposals does not mean that Trump will not make any later in his presidency. In some cases, the US president has the authority to propose them even without investigations. For example, the International Emergency Economic Powers Act (IEEPA) of 1977 allows the president to propose tariffs that would address a severe national security threat. It requires only a consultation with Congress. During Trump's presidential campaign, he proposed the following tariffs: Baseline tariffs of 10-20% on all imports. Tariffs of 60% on imports from China. A reciprocal trade act, under which the US would match tariffs that other countries impose on its exports. After winning office, he threatened to impose tariffs of up to 25% on imports from Canada and Mexico and up to 10% on imports from China. Thumbnail image: Inauguration Ceremony for President Donald Trump in Washington, District of Columbia, United States – 20 January 2025 (By Chip Somodevilla/UPI/Shutterstock)

21-Jan-2025

TORONTO (ICIS)–US President-elect Donald Trump is expected to quickly move forward with his proposed 25% tariff on all imports, including oil and energy, from Canada and Mexico after taking office on Monday 20 January. Tariffs to hurt US industry and consumers US refiners rely on Canadian crude Canada oil embargo could jeopardize national unity So far, Trump has given no indication that he may exempt Canada’s oil from the tariffs. Canada supplies more than 4 million barrels per day of oil to the US, accounting for the majority of US oil imports. The oil goes mainly to US Midwest refineries, such as BP’s Whiting plant in Indiana, that are configured to process heavy Canadian crude. The move could be felt in the US as well as Canada. IMPACTS ON US The US Midwest refiners buy the Canadian oil at a discount, a price advantage they would lose with the tariffs. The refiners will not be able to quickly secure alternative sources of heavy crude, and neither will they be able to quickly reconfigure their processing units to lighter oil. The tariffs will raise US domestic energy prices, in particular gasoline prices – running counter to Trump’s campaign promises to address inflation and reduce costs for consumers. US inflation expectations have already been rising, partly because of the planned tariffs. Higher inflation expectations could prompt the US Federal Reserve to delay further rate cuts and possibly even raise rates, slowing the economy. The imported cheap Canadian crude frees up higher-priced US oil for export to other nations, allowing the US to run a trade surplus in oil with those countries, an advantage that may be lost if tariffs are imposed. ICIS feedstocks and fuels analyst Barin Wise said that it was hard to believe that Trump would place tariffs on Canadian oil as this would cause a big problem for US refiners processing the oil, with very limited alternatives to run in their plants. "This would cause prices to rise, which is the last thing Trump would want to see," Wise said. "I suppose we will know for sure shortly." IMPACTS OF OIL EMBARGO ON CANADA There was much discussion this week in Canada about responding to the US tariffs by imposing an oil embargo or putting an export tax on oil. However, analysts noted that those counter-measures would have self-defeating impacts on Canada: Producers in oil-rich Alberta province ship oil to eastern Canada on a pipeline system that passes through Wisconsin and Michigan (Enbridge’s Line 5) before re-entering Canada near the Sarnia refining and petrochemicals production hub in Ontario. In case of a Canadian oil embargo, Trump would likely stop the flow of Canadian oil on Line 5 to destinations in eastern Canada. As a result, an embargo would not just hit the US but cause a supply squeeze and higher energy prices in Ontario and Quebec, which are home to much of Canada’s auto, aerospace and other manufacturing. An oil embargo could also give new life to the Michigan state government’s efforts to shut down Line 5, because of environmental concerns. Canada could use rail to ship oil from Alberta to eastern Canada, but this would be expensive and there is not enough railcar capacity to replace the lost pipeline volumes. Canada could import oil through Montreal and other Canadian East Coast ports to replace the Alberta oil, but that would also be expensive. Furthermore, the flow of a pipeline (Enbridge’s Line 9) supplying refineries in Ontario and Quebec goes from west to east, and not from east to west. A flow reversal would be a costly undertaking. Once the US Midwest refiners have reconfigured their refineries to lighter oil or found alternative sources of heavy crude, they may not want to go back to Canadian crude if the tariffs are lifted later. Alberta, as well as Saskatchewan, would lose substantial revenues from their oil exports to the US. Both provinces have said they oppose an embargo. CANADA MUST AVOID UNITY CRISIS However, there is much more at stake for Canada. The premier (governor) of Alberta, Danielle Smith, has warned that the country’s national unity would be jeopardized if the federal government imposes an embargo. She refused to endorse a joint statement by the federal government and 12 of Canadas 13 provincial premiers at a summit this week, on Canada’s position in facing the US tariff threat. The statement is broad and does not even mention oil, but Smith said she could not endorse it as it did not rule out an embargo or an oil export tax. “Alberta will simply not agree to export tariffs on our energy or other products, nor do we support a ban on exports of these same products,” she said on social media. Smith added that an oil embargo was also unacceptable as politicians in eastern Canada, she claimed, had blocked the Energy East oil pipeline project to ship oil from Alberta to Ontario and Quebec and to export markets. The cancellation of Energy East deprived Alberta of an important opportunity to reduce its dependence on the US market, she argued. She failed to mention, however, the Trans Mountain oil pipeline. The Liberal government under Prime Minister Justin Trudeau bought and expanded Tans Mountain by nearly 600,000 bbl/day, enabling oil shipments from Alberta to an export terminal near Vancouver. Trudeau noted this week that the government did this to the benefit of Alberta’s oil industry, with funding from all of Canada’s taxpayers. Smith has often disagreed with the federal government over oil and environmental issues. In 2022 she put in place an “Alberta Sovereignty Act” to challenge federal laws. The act has not yet been reviewed by Canada’s Supreme Court. Canada’s Globe and Mail newspaper, siding with Smith, warned against imposing an oil embargo or other oil export restrictions. Such measures would incite renewed separatist sentiment in Alberta, the paper said in an editorial on Thursday and reminded readers of the alienation caused in Alberta by former Prime Minister Pierre Trudeau’s National Energy Program (NEP) in the early 1980s. (Pierre was the father of Justin Trudeau). The NEP was seen by Alberta as an unfair attempt to redistribute its oil wealth to Ontario, Quebec and other eastern provinces. Instead of an embargo, Canada needed to use targeted tariffs that “inflict the greatest possible political damage on Mr Trump”, and it should particularly target exports from US swing states, the paper said. Longer-term, Canada needed to have a fresh look at projects such as Energy East to reduce its dependence on the US market, it added. However, Trudeau and Ontario premier Doug Ford insisted that Alberta put Canada first, ahead of its own needs. All options must be on the table, including an embargo, in case the trade conflict escalates, they said. Commentators said that even if Trump exempts Canadian oil, Canada should consider an oil export tax as it could not allow a large part of its economy being devastated by the US tariffs while Alberta does business as usual with the US. Pierre Poilievre, leader of Canada’s opposition Conservatives, has yet to state whether he would use an oil embargo as a weapon in a trade dispute. The issue of Canada’s response to the US tariff challenge is expected to be at the center of the upcoming election campaign. Elections that must be held before October but will likely be called earlier. The Conservatives are far ahead of Trudeau’s Liberals in opinion polls on the elections. Furthermore, the Liberals are in disarray. Trudeau last week announced his resignation, and the Liberals have opened the process of selecting a new leader who will then also take over as the new prime minister until the elections. Meanwhile, the federal government has prepared a list of US products to be targeted with potential retaliatory tariffs. Details will be released only after Trump moves ahead with the tariffs, officials said. According to public broadcaster CBC the list includes certain US-made plastics products. In Canada’s chemical industry, trade group Chemistry Industry Association of Canada (CIAC) this week joined the Canadian Association of Petroleum Producers (CAPP) and others in forming a new group to jointly confront the imminent US tariff threat. Canada’s chemicals and plastics industry accounts for more than Canadian dollar (C$) $100 billion (US$69 billion) in annual shipments. Nearly two-thirds of those shipments are exported to the US, with a reciprocal value returning to Canada from the US, according to Ottawa-based CIAC, which speaks for Canada’s chemical and plastics industry (US$1=C$1.44) Insight by Stefan Baumgarten Thumbnail photo of Imperial Oil’s Cold Lake oil sands site in Alberta; the Toronto-listed ExxonMobil affiliate is one of Canada’s largest oil companies, and it also produces petrochemicals. Photo source: Imperial Oil.

17-Jan-2025

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Flake sellers see more positive start to 2025 based on January volumes Feedstock bale prices still a key issue Buyers yet to accept higher prices for January February price talks not yet underway

17-Jan-2025

SINGAPORE (ICIS)–India’s currency – the rupee – slumped to a record low in the week, pushing up both domestic and import prices of some petrochemicals in the south Asian country amid stable demand. Strong US dollar sends Indian rupee tumbling Acetone, EVA import prices jump India inflation within central bank target range The Indian rupee (Rs) is currently trading at above Rs86 against the US dollar, having shed more than 3% since the early November, when Donald Trump won the US election. At 07:10 GMT, the rupee was trading at Rs86.49. A strong US dollar and heavy outflows of short-term investments sent the currency tumbled to a record low of Rs86.9964 on 14 January, according to foreign exchange platform xe.com. India’s demand for overseas goods will likely be dented as a weaker currency makes imports more expensive. PETROCHEMICAL BUYERS TURN CAUTIOUS With import prices of several products on uptrend amid the rupee weakness, some buyers have adopted a wait-and-see attitude on markets. India is a major importer of petrochemicals including polymers. Rupee’s tumble has notably adversely affected PE Black 100 pipe import offers from Gulf Cooperation Council (GCC) and Asian sellers as buyers switch to domestic PE Natural. PE Black 100 and PE Natural are specific grades of high-density polyethylene (HDPE) used primarily for high pressure water pipes. In the recycled polyethylene (rPE) and recycled polypropylene (rPP) markets, downstream converters in India that import cargoes from northeast Asia are feeling the pinch. Fewer India-bound rPE and rPP cargoes are expected in the coming weeks, compounded by high intra-Asia freight rates. For exporters of recycled polyethylene terephthalate (rPET), meanwhile, there was no upsurge in shipments despite the rupee’s weakness. India continues to position itself as net exporter of rPET cargoes,  mainly bound to long-haul buyers in the Americas and in Europe. India’s aggressive expansion of rPET materials have posed competition to other Asian producers, particularly those in southeast Asia. In the toluene di-isocyanate (TDI) and ethanolamines markets, market sentiment is mixed. “Import and domestic prices for India TDI are unchanged from last week, but sentiment is mixed due to positive demand versus the weak rupee/US dollar rate,” a market player said. TDI is primarily used in the production of flexible polyurethane foams, which are widely used in furniture, bedding, and automotive seating. Meanwhile, after several months of decline, ethanolamines’ domestic prices moved higher, with players attributing the sudden rebound on the steep devaluation of the rupee, while demand was stable. For ethylene vinyl acetate (EVA) and acetone, import and domestic prices have spiked while demand was stable. EVA restocking momentum and discussions have been weighed down by the falling rupee due to higher cost of imports, market players said. “I have not booked yet because of the currency depreciation; import costs have gone up so it has really impacted importers… we'll wait for negotiations with suppliers,” said a distributor. For acetone, fresh import demand is being hampered by the weak rupee amid a prevailing supply surplus in the Indian domestic market. US DOLLAR TO REMAIN STRONG The US dollar remains strong on better-than-expected job growth in the world’s largest economy, while the unemployment rate fell to 4.1%, reducing the chances of interest rate cuts by the Federal Reserve in February. A weaker currency fuels inflation as it raises the cost of imported goods. “The RBI intervened extensively in the FX market last year but the appointment of a new central bank governor last month has raised market expectations of a less active intervention approach to smooth the rupee’s volatility,” Netherlands-based banking and financial service firm ING said in a note on 13 January. “The recent equity market correction, foreign institutional investor (FII) outflows and overvaluation of the Indian rupee suggest that the rupee will continue to face downward pressure in the near term,” ING added. DEC INFLATION EASES; NOV INDUSTRIAL OUTPUT UP 5% India’s inflation rate eased to a four-month low of 5.22% in December from 5.48% in the previous month, continuing its decline from 6.21% recorded in October, official data showed. The December figure was within the 2.0% to 6.0% tolerance band set by the Reserve Bank of India (RBI). Easing food prices had some analysts predicting a possible cut in RBI’s repurchase rate as early as February, but the weakness of the rupee could delay adoption of a looser monetary policy. “We maintain our base case for RBI to begin monetary policy easing via a 25 bps points reduction to the repo rate in the upcoming Feb 2025 … meeting,” Singapore-based UOB Global Economics & Markets Research analysts said in a 14 January macro note. Meanwhile, India’s factory output in November, as measured through the Index of Industrial Production (IIP), rose 5.2% year on year driven by growth in manufacturing activity and power generation. Manufacturing output growth in November accelerated to 5.8% year on year from 1.3% in the same period last year. In April to November 2025, industrial output posted a slower year-on-year growth of 4.1% from 6.5% in the previous corresponding period. India, which is a giant emerging market in Asia, is expected to post a slower GDP growth of 6.6% in the fiscal year ending March 2024, down from 7.2% in the previous year, based on RBI’s projections. Nonetheless, India is still predicted to be the fastest-growing country in Asia, according to ING, which forecasts 6.8% growth for India for the current fiscal year. Focus article by Jonathan Yee Additional reporting by Helen Lee, Clive Ong, Shannen Ng, Veena Pathare, Nadim Salamoun and Arianne Perez Thumbnail image: Indian rupee notes – 5 January 2025 (Firdous Nazir/NurPhoto/Shutterstock)

16-Jan-2025

LONDON (ICIS)–In December 2024, the European bioplastics industry met in Berlin at the European Bioplastics Conference (EBC) to discuss innovations, barriers to growth and the future outlook for production capacity, demand and changes in legislation. ICIS Recycling Analyst Alexandra Tomczyk attended the conference and updates us on the current state of play for the bioplastics market. Some of the key takeaways included: Global capacities are set to grow rapidly in the next 5 years It’s unclear how the rise of bioplastic packaging will impact the goals set in Packaging and Packaging Waste Regulations Bioplastics are only one of a range of tools needed to improve the sustainability of plastics

15-Jan-2025

HOUSTON (ICIS)–The rally in crude markets could get continued support from cold weather, sanctions and a recovery in demand from China, the CEO of US crude producer Hess said on Tuesday. Oil markets are important to the US chemical industry because prices for crude influence prices for several commodity petrochemicals. Since the first day of trading in 2025, front-month Brent crude futures have risen by nearly 7%. Oil demand could be several hundreds of thousands of barrels of oil a day higher because of the cold winter, said John Hess CEO of Hess and chairman of the American Petroleum Institute (API), an oil trade group. He made his comments during API's State of American Energy presentation. A further rise in oil demand could come from continued economic growth in the US and a recovery in China. "They are going to do everything they can to stimulate their economy," he said "I would not bet against China for two years in a row." During the end of 2024, Hess suspects that oil demand shrank in China because of the slowdown in the nation's economy. The third leg of support for oil markets will come from geopolitical tensions, Hess said. On 10 January, the US Department of the Treasury introduced more sanctions on vessels that carry Russian oil. "The initial numbers that are out there are up to a million barrels a day of impact of supply that might have trouble getting into the market for Russia," Hess said. "There could be another 1 million barrels a day from Iran." If sanctions and other factors cause a large enough spike in oil prices, Saudi Arabia and other members of OPEC have spare capacity that they can use to stabilize the oil market, he said. PROSPECTS FOR PERMIT REFORM, EXTENDING TAX CUTSSenator John Thune (Republican, South Dakota) said Congress may opt to address energy, military spending and border security in one bill and extending tax cuts in a second bill. The tax bill will make permanent nearly all of the 2017 Tax Cuts and Jobs Act (TCJA). This was a campaign promise made by Donald Trump, who will be sworn into office on 20 January. WAYS TO ROLL BACK EV PERKSThune said Congress could use the Congressional Review Act (CRA) to repeal a waiver that California needed to adopt its Advanced Clean Car II (ACC II) program, which gradually phased out sales of vehicles powered by internal combustion engines. The California program is a lynchpin for similar programs adopted by 12 other states and territories. If California loses its waiver, then those other states and territories cannot adopt their programs. The fate of the ACC II program could become a legal dispute over state versus federal power that would need to be settled in court. Trump's predecessor, President Joe Biden, introduced two other auto programs that critics say are so strict, they act as effective bans on ICE vehicles. The Environmental Protection Agency's (EPA's) recent tailpipe rule, which gradually restricts emissions of carbon dioxide (CO2) from light vehicles. The Department of Transportation's (DoT's) Corporate Average Fuel Economy (CAFE) program, which mandates stricter fuel-efficiency standards. Thune doubts that Congress can use the CRA to roll back the tailpipe rule. Nonetheless, Trump may find other ways to scale back or repeal the tailpipe rule and the stricter CAFE standards during his first days in office. Even though EVs make up a small share of overall US auto sales, they are important to the chemical industry because they consume more plastics than their counterparts that are powered by internal combustion engines. EVs are also creating demand for new polymers and fluids that can meet their unique material challenges. Thumbnail shows snow. Image by Xinhua/Shutterstock

14-Jan-2025

HOUSTON (ICIS)–On his first day in office as president, Donald Trump could repeal the pause on permits for new liquefied natural gas (LNG) terminals and automobile policies that are so restrictive, critics say they favor electric vehicles (EVs) over those powered by internal combustion engines (ICE), an oil and gas trade group said. Repealing those polices are among the goals of the American Petroleum Institute (API), and they would have indirect effects on the US chemical industry. LNG exports affect US chemical markets because they support prices for natural gas by providing another source of demand. Natural gas prices influence those for ethane, the main feedstock that US crackers use to make ethylene. EVs consume more plastics than their counterparts that are powered by internal combustion engines. EVs are also creating demand for new polymers and fluids that can meet their unique material challenges. REMOVING THE HALT ON NEW LNG PERMITSThe US has effectively frozen the issuance of new LNG permits since January 2024, when President Joe Biden issued the order. The freeze applies to terminals that will export LNG to countries that lack free trade agreements with the US. "I think the LNG pause is something that they can address on day one," said Mike Sommers, API president. He made his comments in a briefing earlier in the week. Trump takes office on 20 January. If Trump removes the freeze, it would not automatically lead to a flood of new permits for LNG terminals. US companies may be reluctant to build more terminals when global LNG capacity is expected to increase. Rising US costs for material and labor have made LNG projects less attractive. Legal challenges could arise during the permitting process. REMOVING EFFECTIVE RESTRICTIONS ON ICE VEHICLESTrump could ax two Biden automobile policies his first day in office, Sommers said. The Environmental Protection Agency's (EPA's) recent tailpipe rule, which gradually restricts emissions of carbon dioxide (CO2) from light vehicles. The Department of Transportation's (DoT's) Corporate Average Fuel Economy (CAFE) program, which mandates fuel-efficiency standards. The group also wants Trump to withdraw a waiver that the federal government granted to California, which allowed the state to adopt a program that will gradually phase out ICE vehicles. California's program, called Advanced Clean Cars II (ACC II), is the lynchpin for similar programs adopted by 12 other US states and territories. If Trump can successfully withdraw the waiver, then it would prevent California and the 12 other states and territories from adopting ACC II style programs. The fate of the ACC II program could become a legal dispute over state versus federal power that would need to be settled in court. OTHER POLICY GOALS OF THE APIEVs and LNG permits make up two of the five policies that the API will promote to the new administration. The other three include permitting reform, tax policy and issuing a new five-year offshore leasing program. Under these five policy goals, the API has outlined more than 70 actions that the administration could take, many of them possible on Trump's first day in office. Others may require acts from Congress. This could be challenging because Trump's party holds a two-seat majority in the lower legislative chamber of the US. API TO DISCOURAGE TARIFFS ON CANADIAN CRUDEPrior to taking office, Trump had threatened to impose tariffs of 25% on imports from Canada. Trump did not indicate that he would exclude Canada's sizeable shipments of crude oil. In 2023, Canadian oil made up nearly 60% of all crude imported by the US, according to the Energy Information Administration (EIA). Canadian oil is heavier than that produced in the US, so the two grades complement each other in the nation's refineries. "40% of the American refinery kit is not tooled to refine the kind of oil that is found in the US," Sommers said. "We're confident that the Trump administration understands the importance of that kind of trade, and we're going to work with them as they consider their trade policy over time," he said. PIECEMEAL PRESERVATION OF IRAThe API would like the government to preserve some of the tax credits created by the Inflation Reduction Act (IRA). Those include the carbon capture tax credits under Section 45Q and the hydrogen production tax credits under Section 45V. Many API members are developing carbon capture and hydrogen projects. Meanwhile, it would like the government to repeal the IRA's methane fee.

14-Jan-2025

HOUSTON (ICIS)–Bottle-grade US polyethylene terephthalate (PET) demand is currently in a seasonal lull and is expected to continue that way through the end of January and into February. However, demand is expected to pick up in March with healthy orders already for the month, according to market participants. Typically, demand picks up ahead of peak season which runs from Memorial Day at the end of May to Labor Day at the beginning of September, but in recent years, demand has been slow to pick up before the beginning of peak season. Historically, an increase in temperatures pushes consumers to purchase more bottled beverages. PET resins can be broadly classified into bottle, fibre or film grade, named according to the downstream applications. Bottle grade resin is the most commonly traded form of PET resin and it is used in bottle and container packaging through blow molding and thermoforming. Fibre grade resin goes into making polyester fibre, while film grade resin is used in electrical and flexible packaging applications. PET can be compounded with glass fibre for the production of engineering plastics. DAK Americas, Indorama, Nan Ya Plastics Corporation and Far Eastern New Century (FENC) are PET producers in the US.

13-Jan-2025