Recycled polyolefins (R-PE, R-PP)

SAO PAULO (ICIS)–Grupo Almatia continues seeking expansions outside its Colombian domestic market as the medium-term economic prospects and the government’s fiscal policy cast a shadow, according to the CFO at the chemicals distributor, formerly known as Quimico Plasticos. Jose Andres Toro added his voice to the many which, in the past week, have showed great concern about Colombia’s government decision to exercise an “escape” clause which allows for the so-called fiscal rule to be lifted in extraordinary circumstances. In a pre-election year and with the public finances offering little margin for the left-leaning government of Gustavo Petro to fulfill its promises to expand the welfare state, the cabinet has now decided to exercise a rule which is meant to be used in public emergencies or calamities. Chemicals sources and industrial groups have said companies' borrowing costs could rise sharply if those costs for Colombia’s sovereign also rise, as expected, while the trade group representing plastics, Acoplastics, said in an interview with ICIS the fiscal issues were coming to add issues to an industry already under pressure due to China’s competition. But Almatia’s CFO described frustration with government spending increases because, in theory, they should have improved public services but, he said, that the spending programs have been unable to deliver tangible benefits to citizens. "It's already proven it's not making social investments. It's not doing anything with that money; instead, what it's doing is creating bureaucracy, creating jobs in the public sector,” said Toro. “In the province where we are based, Antioquia, the situation has become particularly acute. National projects with state funding have been abandoned by the government and we Antioquians reached into our pockets and are financing the projects ourselves, with our own resources, through the provincial government.” Beyond fiscal concerns, the company faces challenges from inflation and dramatically rising transportation costs affecting grassroots workers, said Toro, highlighting how gasoline subsidy removals have pushed fuel prices up by approximately 50%, far outpacing general inflation rates of 5-7%. "Transportation costs have risen much more than the average inflation rate because the government began to remove a subsidy that gasoline used to have. For someone who travels every day on the subway or the bus, those costs are multiplied," he said. “With domestic growth stagnating at 2-3% annually, while inflation runs at around 5%, real economic performance is declining. In real terms, we're not growing. We're stagnant," he said. Toro said a good example of Colombia’s issues would be the construction sector, where the downturn has proved especially acute, casting a shadow to the rest of the economy given that real estate is a sector of sectors, with many associated industries depending on it, not least the many plastics which Almatia sells to be used in multiple applications going into construction. Facing domestic market challenges, Grupo Almatia is slowly but decisively pursuing expansions across Latin American countries, said Toro. For now, the company has set up operations in markets close to Colombia because the majority of its facilities are there, and from them it delivers to other markets such as Ecuador, Peru, Guatemala and the Dominican Republic. CHINA COMPETITION: GOOD OR BAD?The executive detailed how Chinese suppliers have become increasingly competitive across chemical markets, though not to the exclusion of other international competitors, and conceded many of Almatia’s materials come from that country. China has been under fire for some time due to its “dumping” – selling industrial products at below production costs in overseas markets, just to dump excess products China does not need, which has hit producers hard in other, non-state-controlled economies which cannot compete with China's heavily subsidized companies. "We've been working with several suppliers for several years, and they compete here like any other, like the Koreans, the Americans, the Arabs. For instance, in TiO2 [titanium dioxide], Chinese pricing remains competitive against Western suppliers without creating insurmountable advantages [for the Chinese],” said Toro. "Chinese prices are competitive compared to those coming from outside the West, but they're not so markedly different that those from the West can't compete. We import from 20 countries, and obviously prioritize the most competitive supply sources.” All in all, Toro conceded there are concerning price dynamics taking place currently in the petrochemicals industry, dynamics which could end up hitting all sides of the market if not corrected. “In PP [polypropylene] markets, for instance, monomer prices around $750-770/tonne should theoretically support resin prices near $980-990/tonne in regional markets,” said Toro. “However, freight and production costs don't support these economics, suggesting either advantageous raw material sourcing or unsustainable pricing. And this pricing pressure affects non-integrated PP producers globally.” This interview took place on 16 June. Front page picture: A warehouse operated by Grupo Almatia in Antioquia, Colombia  Picture source: Grupo Almatia  Interview article by Jonathan Lopez

19-Jun-2025

LONDON (ICIS)–Renewable methyl 9-decenoate (9-DAME), to be produced at Verbio’s upcoming ethenolysis plant in Germany, could be an opportunity for the oleochemicals industry, a Verbio executive told ICIS. With 9-DAME, the industry could access palm-free C10 derivatives in consumer products that are typically derived from palm kernel oil (PKO), Marc Siegel, Verbio’s head of sales, Specialty Chemicals and Catalysts, said in an interview. “9-DAME chemicals could offer alternatives for an important fraction in the oleochem industry,” he added. Verbio’s plant at the Bitterfeld chemical site in Germany’s Saxony-Anhalt state is expected to start up in 2026, using rapeseed oil methyl ester as feedstock, It will have capacities for 32,000 tonnes/year of methyl 9-decenoate (9-DAME), and for 17,000 tonnes/year of 1-decene. 9-DAME is a valuable platform molecule enabling a multitude of products, Siegel said. It will enable customers to produce C10 fatty acids or alcohols, allowing them to make their own C10 derivatives with high purity, he said. As such, Verbio’s production capacity of 32,000 tonnes/year of 9-DAME could replace PKO and “represents significant potential in the oleochemicals industry for the C10 value chain”, he said. PKO, for its part, is controversial because of the environmental impacts of palm oil plantations, Siegel said. Furthermore, the availability of PKO is limited globally at about 6.2 million tonnes/year, and its C10 content is only about 3-3.5%, he said. By using 9-DAME to make C10 fatty acids or alcohols, customers would avoid the complex supply chains of PKO from Asia, with its price fluctuations. They would also reduce their carbon footprint, and they could put palm-free and GMO-free labels on their shampoos and other products, he said. Siegel added that coconut oil is another source of C10 derivatives. However, coconut oil is typically more expensive than PKO, and its global production volumes are lower, he said. Asked about 9-DAME pricing, Siegel said: “We feel to have a solid position in the market with attractive pricing” and "strong unique selling propositions”, including palm-free claims and regional European sourcing. As Verbio’s project is nearing completion, the environment for renewable chemicals and recycling has become challenging in North America whereas in Europe “there are many positive examples” of new projects for bio-based chemicals, supported by the European Green Deal and other regulations, Siegel said. “Verbio remains positive about increasing demand [for renewable chemicals] in Europe and other regions,” he said. “Many European projects continue to thrive”, he added. In North America, however, the situation is “less dynamic”, with some companies scaling back operations (Origin Materials in Canada) or facing funding losses (Eastman in Texas), Siegel noted. Verbio's ethenolysis plant under construction at Bitterfeld, Germany; Source: Verbio

19-Jun-2025

HOUSTON (ICIS)–PureCycle plans to reach 1 billion lb/year (454,000 tonnes/year) of capacity in the US by 2030, Europe and Asia, the US-base recycler of polypropylene (PP) said on Tuesday. As part of that push, PureCycle has started a partnership with IRPC Public Co Limited, under which PureCycle will build a 130 million lb/year line at IRPC's complex in Rayong, Thailand. IRPC is a subsidiary of PTT. Construction should start in the second half of 2025, PureCycle said. The line should become operational in mid-2027. PureCycle will hold a 100% equity position, and IRPC will retain rights for 10% of the plant's production. PureCycle has plans to build another 130 million lb/year plant in Antwerp, Belgium. It expects to receive final permits in 2026. The plant in Antwerp should become operational in 2028. PureCycle expects to begin construction on a Gen 2 facility in Augusta, Georgia, US, in mid-2026. The facility's pre-processing (PreP) unit should be operational in mid-2026. The first purification line should be operational in 2029. PureCycle also plans to add compounding capabilities at the site, but it did not disclose timelines. The final Gen 2 design should have a capacity of more than 300 million lb/year before compounding, PureCycle said. The company will disclose design capacity in early 2026 after it finishes engineering. PureCycle will build another Gen 2 line in Thailand or Augusta. The following table summarizes PureCycle's expansion plans. Figures are in millions of pounds per year. Site Capacity Belgium 130 Thailand 130 Augusta 300+ Augusta or Thailand 300+ TOTAL 860+ Source: PureCycle PureCycle has one operating facility in Ironton, Ohio, US, that has a capacity of 107 million lb/year. The following chart illustrates the timeline for the projects. Source: PureCycle PureCycle revealed the expansion plans when it announced that it raised $300 million from new and existing investors. Those investors include Duquesne Family Office, Wasserstein Debt Opportunities, Samlyn Capital, Pleiad Investment Advisors and Sylebra Capital Management. PureCycle recycles waste PP through a dissolution process. Thumbnail shows PP. Image by Shutterstock.

17-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

COLORADO SPRINGS, Colorado (ICIS)–Chemical companies can find more ways to grow profits beyond cost cutting as they enter another year of slow economic growth in the longest downturn in years. Early in 2025, chemical companies lost faith that economic growth will be strong enough to contribute to profit growth, and that drought could extend into 2026. A five-year global chemical buyer value study conducted by the consultancy Accenture shows areas where chemical companies can wring value out of their operations that go beyond cost-cutting. The study was conducted in December 2024-February 2025. Cost cutting is not off the table. The study found that chemical companies have overestimated their customers' preferences for some products and services. MULTI-YEAR DOWNTURNThe downturn in the chemical industry started about three years ago after consumers stopped splurging on big-ticket items following the pandemic. Higher inflation caused interest rates to increased, which raised house prices and depressed demand for plastics and chemicals used in construction. Consumers moved less because they could not afford new or existing houses, so that lowered demand for durable goods like furniture and appliances. The war between Russia and Ukraine caused a surge in energy costs. In Europe energy prices never returned to levels before the conflict. Higher costs lowered demand and contributed to de-industrialization in Europe. This year, tariffs and uncertain trade policy from the US have made companies and consumers more reluctant to purchase goods and make investments. The performance of US-listed shares of chemical companies illustrates how difficult these past few years have been for the industry. The following lists Wednesday’s closing prices for the US listed companies followed by ICIS and their 52-week highs. Figures are in dollars/share. Company Price 52 Week High AdvanSix 24.81 33.00 Avient 36.06 54.68 Axalta 30.29 41.66 Braskem 3.75 7.71 Chemours 11.87 25.80 Celanese 58.19 150.31 DuPont 69.40 90.06 Dow 30.68 57.22 Eastman 80.04 114.50 HB Fuller 56.58 87.67 Huntsman 12.04 25.12 Kronos 6.73 14.37 LyondellBasell 61.12 100.46 Methanex 35.05 54.49 NewMarket 667.15 667.15 Olin 21.80 52.17 PPG 113.01 137.24 RPM 115.11 141.79 Stepan 56.53 94.77 Sherwin-Williams 357.13 400.42 Tronox 6.01 20.29 Trinseo 3.39 7.05 Westlake 80.19 156.64 For now, a recession is not in the outlook, but neither is a strong recovery. ICIS expects that US economic growth will slow to 1.5% in 2025 from 2.8% in 2024. Growth in 2026 could be 1.7%. The country has a 34% chance of slipping into a recession in the next 12 months. HOW TO GROW IN A SLOW GROWTH WORLDChemical companies don't have to wait for the recovery to increase profits, according to the chemical buyer study from Accenture. It found that 36% of chemical customers are willing to pay 5% or more above market price if their needs are fully met, and 43% are willing to buy 10% or more if all of their product and service needs are met, the study said. Chemical companies can increase revenue if they know where to look. The following table shows the top 10 customer needs for 2025, according to the Accenture study. Product Performance Reliable Delivery Quality Technical Support Product Consistency Data Privacy & Cybersecurity Secure & Seamless Transactions Trust Product Innovation Brand Strength Product Offerings Source: Accenture Making high-quality molecules will always be a priority, but chemical companies can do a better job of meeting their customers' needs by targeting services, Accenture said. Many underestimated needs cited by customers centered around services. The following table lists the top 10 services valued by chemical customers. Reliable delivery Quality technical support Data privacy and cybersecurity Secure and seamless transactions 24/7 access Order flexibility Complaint resolution Easy access to product info. & regulatory support E-commerce Comprehensive product support & expert guidance Source: Accenture New technologies are opening more opportunities for chemical companies to stand out by improving their services. Accenture mentioned the following: AI-based transport management solutions E-commerce platforms for seamless transactions Web portals and large language model-supported platforms for 24/7 access. CUSTOMER NEEDS HAVE EVOLVED SINCE 2020Chemical companies can extract more value by updating their priorities to keep up with the changing demands from their customers. The following table lists the top five needs that customers are underestimated by chemical companies. It compares those needs with Accenture's list from 2020. 2025 2020 24/7 access Packaging customization Reliable delivery Reliable delivery Product consistency Water conservation Environmental health & safety compliance Complaint resolution Product innovation Digital interfaces & experiences/chatbots Source: Accenture HOW TO CUT THE RIGHT COSTSCompanies may still have some fat they can cut, based on the Accenture study. It showed a gap between what customers want and what chemical companies think they want. The following lists the top five overestimated needs by chemical companies in 2025 and compares them with those in 2020. 2025 2020 Renewable-based products Value-added services Market intelligence Product consistency Product customization Quality technical support Value-added services Product sampling/trails Local/regional supply source Recyclable products Source: Accenture Renewable-based products, which also covers recycled materials, can demand a premium, but it may fall short of what producers need to generate a profit. While 74% of chemical customers are willing to pay more for sustainable products, only 38% are willing to pay a premium of more than 5%, according to Accenture. Only 13% are willing to pay a premium of at least 15%. That is short of the premium of 20% that is likely to be needed to produce sustainable products. HOW CAN CHEMICAL COMPANIES GET ON THE SAME PAGE AS THEIR CUSTOMERSChemical companies have a tendency to focus on innovation even when it does not align with their customers' needs, because that is the nature of a science-based industry, said Denise Dignam, CEO of Chemours, a US-based producer of pigment and fluoromaterials. She spoke on a panel that discussed the findings of Accenture's study during the annual meeting held by the American Chemistry Council (ACC). “We are scientists. We like innovation," she said. Chemical companies need to be mindful that customers value mundane but critical services like supply chain logistics. One strategy to keep customer needs front and center is to rely on front-line sales people, said Alastair Port, executive president of Indorama Ventures: Indovinya. Port cautioned against relying too heavily on point-of-time surveys. Someone who fills out those surveys is providing feedback that is tied to one moment in time. It does not encompass overall satisfaction with the company's products and services. Ed Sparks, CEO of catalyst producer WR Grace, said technical resources and sales people are the best resources for gauging the actual needs of customers. Their collect data from their interactions with customers, convert it into information that can then become market intelligence. Companies that produce commodity chemicals can find ways to stand out even when their products vary little from their competitors, Port said. Buyers of commodity chemicals vary greatly in size. Smaller ones may not have innovation departments or elaborate purchasing departments. Commodity chemical producers can tailor their services to match the needs of their varied customers. Chemical producers can replicate molecules, but they cannot replicate service, Sparks said. WR Grace's refining catalyst business has a prominent service component, under which the company helps refiners optimize their operations. “That service component is really hard to replicate,” Sparks said. The ACC Annual Meeting ended on 4 June. Insight article by Al Greenwood Thumbnail shows money. Image by ICIS.

12-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

LONDON (ICIS)–Recent revisions of recycled content targets from major brands have led to questions about just how committed companies are to reducing their consumption of virgin plastic. But what are the underlying issues behind such decision? In this third episode of Sustainably Speaking, ICIS senior executive, business solutions group John Richardson is joined by Mark Victory and Matt Tudball, senior editors for recycling Europe, and Helen McGeough, global analyst team lead for plastic recycling at ICIS, to dive deeper into this topic. Key topics in the discussion include: Revised down recycled content targets do not mean lower recyclate demand The impact on current and future investment decisions for both mechanical and chemical recycling The importance of improving access to good-quality feedstocks The role of consumers and consumer pressure Spreads between packaging and non-packaging grades remain high, particularly for recycled polyolefins The impact of regulation on the US and European markets

10-Jun-2025