Titanium dioxide (TiO2)

SINGAPORE (ICIS)–China is turning to hydrogen as a potential lever in efforts to decarbonize its aluminium industry, as regulators tighten emissions rules, and global buyers demand greener materials. While still in early stages of deployment, hydrogen is gaining attention for its possible role in high-temperature heating, increasing renewables in grid, and emissions reduction. The move aligns with China’s broader ambition to peak carbon emissions in the aluminium sector by 2025 and support global net-zero targets by 2050, as set by the International Aluminium Institute (IAI). Carbon market expansion enhances hydrogen’s value in aluminium Early adoption may offer global market edge Significant potential, but barriers remain In March 2025, China’s Ministry of Ecology and Environment expanded the national carbon trading market to include aluminium, steel, and cement – raising market coverage from 40% to more than 60% of national emissions. This inclusion means aluminium producers will face growing pressure to curb emissions or bear rising compliance costs. The High-Quality Development Plan for the Aluminium Industry (2025–2027), recently released by the Chinese government, makes clean energy substitution a policy priority. The strategy encourages increased use of renewable electricity and pilot applications of hydrogen in key production processes. EMISSIONS PROFILE HIGHLIGHTS DECARBONIZATION URGENCY China’s aluminium sector is responsible for 85% of emissions in the country’s nonferrous metals industry. In 2023, aluminium-related emissions hit 530 million tonnes, including 420 million tonnes from electrolytic smelting, according to the China Nonferrous Metals Industry Association. In 2024, the country produced roughly 43.7 million tonnes of electrolytic aluminium, around 60% of global output. In 2023, China produced about 41.59 million tonnes of electrolytic aluminium, and the segment consumed over 500 billion kilowatt-hours of electricity, with each tonne of aluminium requiring at least 12,000 kWh and emitting an average of 12.7 tonnes of carbon dioxide (CO2), according to the National Bureau of Statistics, National Energy Agency and Ministry of Ecology and Environment. Most emissions are tied to primary production. Industry estimates suggest over 95% of the aluminium sector’s emissions stem from upstream processes such as mining, refining, and smelting, with energy use (electricity and heat) accounting for three-quarters of the total. Coal remains the dominant power source in China’s aluminium sector. The IAI and International Energy Agency (IEA) outline three primary decarbonization pathways: transitioning to low-carbon electricity, reducing process emissions, and boosting recycling rates. GREEN ELECTRICITY TARGETS DRIVE INFRASTRUCTURE INVESTMENT The IEA estimates the carbon intensity of aluminium’s power supply must fall by 60% by 2030. Globally, about 55% of aluminium smelters rely on captive power. In China, more than 60% of aluminum smelters owned captive coal-fired power generators by September 2023, according to Ministry of Ecology and Environment. Electricity represents 30%-40% of aluminium production costs in China, according to industry sources. With renewable energy uptake still limited and preferential electricity pricing being phased out, aluminium producers are under pressure to diversify power sources and enhance flexibility via storage. The Chinese government requires the sector to raise clean electricity use to above 30% by 2027, up from less than 25% in 2023. This is spurring investment in hydropower, wind, solar, and hydrogen storage. Shanghai Metals Market data show green electricity accounted for over 25% of smelting power in 2024. In provinces such as Yunnan, Qinghai, and Sichuan, the share exceeded 80%, while coal-dominant Xinjiang and Shandong remained low at below 5% in 2023. One pilot example is Dongfang Hope Group’s Xinjiang facility, which uses a wind-solar-hydrogen integrated system to meet 95% of its electricity demand, positioning it as a “zero-carbon aluminium” site. HYDROGEN GAINS TRACTION IN HIGH-TEMPRETURE HEATING Reducing non-electric emissions – especially from alumina refining – presents another challenge. Emerging technologies such as mechanical vapor recompression (MVR), electric calcination, and hydrogen-based burners are being tested, although large-scale deployment remains years away. Hydrogen’s high heat value and clean combustion make it a candidate to replace natural gas or coal in calcination and smelting. The IEA’s Hydrogen Review 2024 highlights multiple global trials: In Australia, Rio Tinto and Sumitomo are piloting hydrogen calcination at the Yarwun refinery with a 2.5 MW electrolyser and a retrofitted calciner with a hydrogen burner. Norway’s Hydro tested aluminum smelting fired by hydrogen and produced 225 tonnes of green aluminium at its Navarra plant in Spain, approved by electric vehicles manufacturer Irizar. Tokyo Gas and LIXIL in Japan tested hydrogen heat treatment for aluminium, finding no impact on product quality. Hydrogen-based aluminium production still carries a steep price tag – up to $5,000 per tonne versus $2,000 using conventional methods. Analysts say the economics could shift if green hydrogen costs fell below $2 per kg. In China, Aluminum Corporation of China Limited (Chalco)’s Qinghai subsidiary launched a 15% hydrogen blend in natural gas for anode calcination, cutting CO2 emissions by 370,000 tonnes annually. CARBON TRADING ADDS FINANCIAL INCENTIVE With the aluminium sector now in China’s emissions trading scheme, carbon becomes a direct item in aluminium companies’ cost structures. The government supports reducing Scope 2 emissions – those from purchased electricity – via renewable energy contracts and green certificate (REC) purchases. These instruments allow companies to offset emissions and potentially trade surplus emissions carbon allowances. China issued 80 million RECs in 2023, but aluminium producers bought less than 5%; with expanded policy incentives, this could rise to 15–20% by 2027, according to industry sources. Green hydrogen, as a quantifiable emissions reducer, may also be monetized through carbon credits. China’s aluminium decarbonization strategy depends on simultaneous progress across power substitution, process innovation, and recycling. Hydrogen is not the only solution, but it is fast becoming part of the mix. Though significant development potential for adopting hydrogen, there are still barriers ahead. High hydrogen production and logistics costs, limited infrastructure with few cost-effective delivery routes to factories, and underdeveloped technologies like hydrogen calcination will continue to limit scale-up. Still, with the carbon market expanding and global demand for green aluminium rising, for China’s aluminium companies, investing early in hydrogen may help secure a greener foothold in an increasingly climate-conscious global supply chain. Analysis by Patricia Tao Visit the Hydrogen Topic Page for more update on hydrogen

12-May-2025

HOUSTON (ICIS)–Rates for shipping containers were stable to higher this week as carriers have reduced capacity by 4-5% along the trade route amid efforts to stop the slide in prices, but capacity could surge and put downward pressure on rates if the Red Sea ceasefire holds. On 6 May, US president Donald Trump announced that a peace deal had been struck between the US and Houthi rebels, which would bring attacks against shipping to an end in the Red Sea. Since the start of 2024, traffic through the Suez Canal has collapsed and remains at roughly half pre-Gaza conflict levels. CONTAINER RATES Rates from online freight shipping marketplace and platform provider Freightos were flat week on week, and supply chain advisors Drewry showed a 4% increase in rates from Shanghai to New York and a 5% increase from Shanghai to Los Angeles, as shown in the following chart. Drewry expects rates to be less volatile in the coming week as carriers are reorganizing their capacity to reflect a lower volume of cargo bookings from China. Judah Levine, head of research at Freightos, said many US importers have paused orders out of China, but shippers (as well as manufacturers) can hold out only so long before consumers will start to see empty shelves or higher prices. Import cargo at the nation’s major container ports is expected to see its first year-on-year decline in over a year and a half this month as the effect of tariffs increases, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates as shown in the following chart. Alan Murphy, CEO, Sea-Intelligence, said carriers have reduced capacity by 4-5% in April and May on the transpacific trade lane. “When we look across what was deployed in April and what is scheduled for May combined, blanked capacity accounts for 19% of the total Asia to North America West Coast (NAWC) planned capacity, and 17% of the total Asia to North America East Coast (NAEC) planned capacity, across those two months,” Murphy said. “But a high level of blank sailings does not automatically translate into a large reduction of capacity year on year, if the originally planned level of capacity, without blank sailings, constituted a large increase in capacity deployment on a year-on-year basis,” Murphy said. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said the ports of Los Angeles and Long Beach are seeing fewer arrivals than normal. “For example, only 22 arrived the first five days of May, whereas 28.5 arrivals would be normal,” Louttit said. “Only nine are scheduled to arrive in the next three days, whereas 17 in three days would be normal.” Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES UNCHANGED US chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged week on week despite continuing to see downward pressure for several trade lanes. For yet another week, there is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode. Besides contract of affreightment (COA) cargoes, there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, pressuring rates. As a result, owners are sending fewer vessels and therefore keeping rates stable for now due to the lack of available tonnage. Similarly, rates from the USG to ARA and all other trade lanes also held steady. Although COA volumes are lower there are also fewer spot inquiries available. Despite the lack of interest, rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft leaving those vessels to participate in the chemical sector and pressuring chemical rates lower. However, several cargoes of styrene, methanol and caustic soda continue to be seen in the market. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for the balance of May lending downward pressure to spot rates. This is leaving most owners still trying to fill up prompt partial space to WCSAM and to ECSAM for 2H May. Rates are soft and have lost some ground. During the past week large parcels of MEG and caustic soda were seen in the market and as well as a CPP cargo further demonstrating the length in the market and weighing down on rates. Along the USG to India route the spot market is stable and with its usual slow pace. No new cargoes have been heard from the US. With additional reporting by Will Beacham and Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

09-May-2025

HOUSTON (ICIS)–Container ship arrivals at the port of Los Angeles are expected to fall by 35% next week when compared with the same week a year ago, the executive director of the port said. Gene Seroka, executive director of the Port of Los Angeles, said cargo from China makes up 45% of volumes through the port annually. “This is a precipitous drop in volumes with a number of American retailers stopping all shipments from China based on the tariffs,” Seroka said in an interview on CNBC. The expected slowdown comes after nine months of year-on-year increases in volumes as Chinese exporters accelerated shipments to circumvent the tariffs, and US retailers pulled volumes forward for the same reason. 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. Seroka said he anticipates the fall in volumes to persist until a trade agreement is reached between China and the US. “Until some accord or framework is reached with China, the volumes coming out of there – save a couple of different commodities – will be very light at best,” Seroka said. Seroka thinks US retailers have about five to seven weeks of inventory, and that manufacturers likely also pulled forward components so there could be a delay before consumers notice any shortfalls. Rates for shipping containers from China have been relatively stable over the past six weeks despite the decrease in volumes. Over the past week, rates from southeast Asia and Vietnam rose above rates from China as the trade war contributes to shifting trade patterns. Shipowners have dramatically increased blank sailings amid efforts to support rates or at least stop the slide. Rates from Shanghai to New York have fallen by 49%, and rates from Shanghai to Los Angeles have fallen by 52% from the most recent highs in September, according to supply chain advisors Drewry and as shown in the following chart. Market intelligence group Linerlytica said ocean carrier Zim has withdrawn its Central China Express line after the last departure on 10 April. The line was launched in July 2024 and called at Shanghai, Ningbo, Los Angeles, Shanghai using five ships of 4,500-5,300 TEU (20-foot equivalent units). The last sailing was made by the 5,500 TEU Mississippi that departed from Ningbo on 10 April and made its last call at Los Angeles on 24 April 2025. Zim said the withdrawal was in response to a sharp drop in Chinese exports to the US following the imposition of punitive tariffs. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

30-Apr-2025

HOUSTON (ICIS)–US based paints and coatings producer PPG has so far seen no changes in order patterns from its customers, and it has maintained its full-year guidance despite the tariffs imposed by the US. PPG's customers did not pull orders forward to the first quarter, and outside of Mexico, PPG did not see any significant changes in demand in the first quarter or in the first four months of the second quarter, said Tim Knavish, PPG CEO. He made his comments during an earnings conference call. "We have not seen evidence of any curtailment of customer orders in our business," he said. While PPG makes paints and coatings, it sells products to many end markets that are key for many chemical products, such as automotive, marine and aerospace. PPG's Q1 organic sales rose by 1% year on year, volumes and pricing rose, and the company gained market share from competitors. PPG shares rose by more than 4% while overall US stock markets fell. LIMITED EXPOSURE TO TARIFFSMost of PPG's operations buy raw materials locally at a rate of more than 95%, Knavish said. This limits their exposure to tariffs. The company has yet to see any significant changes to prices for its raw materials, he added. For two commodity feedstocks, epoxy resins and titanium dioxide (TiO2), PPG already withstood disruptions because these raw materials have been subject to anti-dumping and countervailing duties. Other upstream chemical products have excess supplies, Knavish said. For now, PPG's suppliers are favoring volumes over pricing. If suppliers begin raising prices because of tariffs, PPG will work with customers to reformulate products, substitute costly feedstock and pass through costs through surcharges and other measures. In regards to the threat posed to sales by tariffs, PPG's customers are spread around the world, and it is not heavily reliant on one country or region, Knavish said. Unlike commodity chemical producers, PPG does not rely on a continuous manufacturing process to make its products. It is a batch manufacturer, which makes it easier to adjust production to meet demand. PPG does not expect it will have to idle any of its lines, Knavish said. PROPOSED US TARIFFS HIT PPG MEXICAN BUSINESSIn Mexico, while PPG's store retail sales were solid, its project business weakened because of uncertainty about US trade policy. In February, the US proposed 25% tariffs on imports from Mexico, and the threat caused a slowdown in projects from companies and government, said Tim Knavish. He made his comments during an earnings conference call. That side of the Mexican business should remain soft in the second quarter, but PPG expects a recovery during the rest of the year. Many of the projects in question were already in flight, and PPG has not seen any cancellations. Moreover, the US is limiting the 25% tariffs to imports that do not comply with the trade agreement with its North American neighbors, the US-Mexico-Canada Agreement (USMCA). "We still believe Mexico remains a strong growth country for PPG," Knavish said. AEROSPACE YEARS-LONG BACKLOGPPG's sales to the aerospace industry are benefiting from a years-long backlog in orders caused by the COVID pandemic. This has been a long-term trend, and in addition to coatings, aerospace consumes several plastics and chemicals including synthetic hydraulic fluids and their additives, polycarbonate (PC), fibres in seating, resins in wire and cable, adhesives and electronic chemicals used in avionics. They also use composites made with epoxy resins and polyurethanes for seat cushions. PPG's aerospace backlogs extend to commercial, general aviation, after market and military, Knavish said. Vince Morales, chief financial officer, added that geopolitical turmoil is also increasing demand from the military. EUROPE BEGINS STABILIZINGFor the first time in several months, PPG is seeing some momentum in Europe, Knavish said. Industrial production is stabilizing and better order patterns are emerging in western Europe. Governments could increase spending, and Scandinavia is showing signs of recovery after two difficult years. Even the automobile sector is stabilizing. If the stabilization trend continues and if volumes increase slightly, then the improvement should provide a meaningful boost to PPG's earnings due to past cost cutting in Europe, Knavish said. That said, Knavish stressed that PPG is not expecting a sharp recovery in Europe. PAVEMENT COATINGS SUPPORTED BY INFRASTRUCTURE SPENDINGPPG sees no stop to government infrastructure projects, which are supporting demand for pavement coatings. Also, road crews have a backlog of projects because 2024 had a lot of rain and bad weather. Demand should remain strong through the year, Knavish said. Pavement coatings are made with methyl methacrylate (MMA). AUTOSPPG has gained market share among original equipment manufacturers in the automobile industry, and those share gains should allow the company to outperform the market, for which demand forecast are slightly down, Knavish said. PPG auto refinish business is focusing on the entire system of applying the paints and coatings, which allows it to weather inherent bumpiness in the market. Focus article by Al Greenwood Thumbnail shows paint, one of the products made by PPG. Image by Shutterstock.

30-Apr-2025

HOUSTON (ICIS)–Rates for shipping containers from southeast Asia and Vietnam have risen above rates from China to the US as tariffs – and a 90-day pause on reciprocal tariffs – are already shifting global trade patterns. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said he is now seeing the shifting global trade patterns caused by the tariffs play out in ocean freight rates. “Falling demand out of China has coincided with shippers rushing imports out of Vietnam, which is subject to a 90-day pause on reciprocal tariffs,” Sand said. “Seeing the relationship between these two trades turn on its head is an early indication of the potential for tariffs to shift global trade on its axis.” Sand, using Xeneta data, said importing into the US West Coast from China was more expensive than importing from Vietnam on 16 March. But by 25 April, Vietnam has become the more expensive of the two trades, as shown in the following chart. In another example, the spread in rates between China and southeast Asia trades into US West Coast has widened from $7/FEU (40-foot equivalent unit) on 31 March to $181/FEU on 25 April (with southeast Asia the more expensive). “As shippers stopped or slowed exports from China due to the tariffs, they have accelerated exports from southeast Asia countries, which has caused the spread in freight rates on these trades to widen,” Sand said. AVERAGE GLOBAL RATES TICK LOWER Average global container rates edged lower by 2% week on week, accord to supply chain advisors Drewry and as shown in the following chart. Drewry expects rates to continue to decline in the coming week due to uncertainty stemming from reciprocal tariffs. Blank sailings have surged again this week as carriers strive to maintain rates or at least stop the slide. Alan Murphy, CEO of Sea-Intelligence, said the impact of the trade war has led shippers to pause, or outright cancel, shipments. “This in turn reduces demand for capacity on container vessels, to which carriers respond by cancelling sailings,” Murphy said. Murphy said this level of escalation in blanked capacity illustrates a dramatic change in the market. “Partly from the perspective of the magnitude of the blank sailings, which are more akin to what we tend to see seasonally following Chinese New Year in January/February and Chinese Golden Week in October,” Murphy said. Rates from online freight shipping marketplace and platform provider Freightos also fell over the week, with rates to both US coasts down by 5%. Judah Levine, head of research at Freightos, said some vessels are leaving China only half full because of canceled orders. Levine said some retailers have inventory from front-loading deliveries over the past few months and are taking a wait-and-see approach. PORT CHARGES TARGETING CHINA-LINKED SHIPS Levine said revised guidelines from the US Trade Representative (USTR) targeting China’s dominance in the maritime industry should not lead to the significant port call omissions and congestion that many feared would result from the original per port call proposal. Market intelligence group Linerlytica said that although port fees on Chinese operated and Chinese-built ships are retained, carriers will be able to circumvent the fees by swapping out all of the affected ships in the next 180 days as the fee will no longer apply on the operators’ fleet composition or prospective orders but only on ships calling at US ports on a per voyage basis. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES HOLD STEADY US chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged from last week despite rates continuing to be pressured downward for several trade lanes. There is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode, and besides contract of affreightment (COA) cargoes there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, weighing on rates. The usual spot cargoes of methanol from Jose to China are the only ones reported, leaving methanol requirements from the region active to Asia. Similarly, rates from the USG to ARA and all other trade lanes also held steady. The spot market to Europe gained momentum with a relatively good number of inquiries following the Easter holidays.  Despite the increased interest rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft, leaving those vessels to participate in the chemical sector. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for May lending downward pressure to spot rates and leaving most owners still trying to fill up prompt part space to both South American coasts for 1H May. Rates are soft and have lost some ground. The USG to India route has seen an uptick in inquiries over the last week with no confirmed fixtures. Market talk of a trade deal between the US and India have sparked some interest leaving the rates flat for the time being and expected to remain unchanged in the near term. With additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

25-Apr-2025

HOUSTON (ICIS)–Newly announced port fees by the US Trade Representative (USTR) are less substantial than the proposal from February, but a shipping analyst expects vessel supply to decrease and rates to climb on certain routes. Theodor Gerrard-Anderson, chemical freight analyst at Lighthouse Chartering, said that most bulk liquid shipowners will not be affected by the USTR’s final plan for port fees on China-linked vessels, but major Chinese operators will see impacts from Annex I. And despite exemptions in Annex II, Gerrard-Anderson anticipates tighter vessel supply and higher rates for vessels transiting the US Gulf. Annexes I and II from the USTR’s final plan are the applicable sections for the bulk liquid transportation market. The effects from Annex I, which focuses on service fees on Chinese vessel operators and vessel owners of China, will be impacted as many of these owners have established a meaningful presence in the US market and maintain large contract of affreightment (COA) portfolios for trading specialty chems and bulk liquid cargoes, Gerrard-Anderson said. Annex II, which essentially impacts the rest of the bulk liquid transportation market, includes exemptions for tankers less than 80,000 deadweight tonnage (DWT) even if they are built in China, and for ships on short sea trades of less than 2,000 nautical miles. Special purpose-built vessels for the transport of chemical substances in bulk liquid forms will not be charged. Another exemption, designed to help maintain US exports, is that ships arriving ballast will not be charged to ensure tonnage is available for export. Analysts at shipping broker NETCO said that most vessels in their segment are exempt under Annex II. On the container shipping side, the softening of the fee structure reduces the risk of severe port congestion and could ease overall upward pressure on freight rates, according to an analyst at ocean and freight rate analytics firm Xeneta. Emily Stausbøll, Xeneta senior shipping analyst, said it is significant that the final proposal has fees levied on a net tonnage basis per US voyage, rather than cumulative fees for every port the ship calls at. "We must look carefully at the potential impact of the revised port fees, but changes will be welcomed by the ocean container shipping industry given the significant criticism levelled at the initial proposal during the public hearing,” Stausbøll said. “The fact fees will not be imposed on every port call is particularly important because it lowers the risk of congestion had carriers decided to cut the number of calls on each service into the US,” Stausbøll said. “This port congestion had the potential to cause severe disruption and upward pressure on freight rates.” Stausbøll said costs could still be very high for Chinese carriers and carriers operating Chinese-built vessels – particularly for ships with the largest capacity. "The latest announcement should still be viewed in the context of the original proposal, which offered dire consequences,” Stausbøll said. “The situation has changed for the better, but it isn't a great victory for the ocean container shipping industry because these fees still add further pressure at a time when businesses are already trying to navigate the spiraling tariffs announced by the Trump Administration." Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks.

18-Apr-2025

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

17-Apr-2025

HOUSTON (ICIS)–Container throughput from China’s main ports fell by 6.1% over the past week and cargo bookings over the next three weeks are projected to be down by 30-60% in China and by 10-20% in the rest of Asia as the trade war intensifies. Market intelligence group Linerlytica said the Labor Day holiday in China will further dampen cargo demand in May which could force carriers to cancel additional sailings over the coming weeks to slow the decline in cargo rates. US President Donald Trump initiated the trade war by imposing tariffs with the goal of strengthening supply chains and bringing back domestic manufacturing that has increasingly moved overseas. Lars Jensen, president of consulting firm Vespucci Maritime, noted a survey from television news channel CNBC that showed the effort may be futile. According to the survey, most respondents said bringing back supply chains could double the costs, leading most to instead search for new sources of material from low-tariff countries. More than half of respondents said the main impediment to reshoring is high costs, while 21% said finding skilled labor was the top reason. Instead of moving supply chains back to the United States, 61% of respondents said it would be more cost-effective to relocate supply chains to lower-tariffed countries. ASIA-US CONTAINER RATES Average rates rose last week, reversing the trend that saw prices for shipping containers fall steadily from July 2024. Linerlytica said that three transpacific services have been withdrawn this year, with the MSC Mustang and Premier Alliance PN4 both withdrawn even before they were launched while TS Line’s AWC2 deployed small 1,700 TEU (20-foot equivalent unit) ships on irregular schedules. “These tentative capacity cuts have done little to restore market balance with further turbulence ahead,” Linerlytica said. Linerlytica said that recent tariff concessions are likely insufficient to restore transpacific volumes with about 30-40% of transpacific container imports still effectively halted by the tariffs that remain in place. The trade war is principally affecting carriers with the largest exposure to Chinese transpacific exports to the US, with Hede (100%), Matson (90%), SeaLead (82%), TS Lines (80%) and COSCO (71%) being most at risk from the immediate fallout. The following chart shows transpacific liftings by carrier for this year. Meanwhile, US container imports surged over the first three months of the year as retailers pulled forward volumes to get ahead of the tariffs. But the Global Port Tracker from the NRF and Hackett Associates is predicting import cargo at the nation’s major container ports to drop dramatically beginning next month, as shown in the following chart. “Imports during the second half of 2025 are now expected to be down at least 20% year over year,” Hackett Associates Founder Ben Hackett said. “Even balanced against elevated levels earlier this year, that could bring total 2025 cargo volume to a net decline of 15% or more unless the situation changes.” Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks.

15-Apr-2025

SINGAPORE (ICIS)–New energy storage plays a crucial role in ensuring power balance in China, especially in effectively addressing the intermittent issues of new energy generation. It helps alleviate the dual pressures of power supply security and consumption. China new energy storage capacity more than double by 2030 China new energy storage capacity at 73.76 million kW/168 million kWh by the end of 2024 Policy support accelerates rapid development of new energy storage By fully considering market and price factors, it can achieve a win-win situation of ensuring power balance and profitability. The new energy storage market in China has great development potential in the future. The cumulative installed capacity of new energy storage in China is expected to exceed 100 gigawatts (GW) by 2025, according to the Energy Storage Industry Research White Paper 2025 released by the Institute of Engineering Thermophysics on 10 April. The capacity is likely to surpass 200GW by 2030, more than double the 2024 level of 73.76GW. NEW ENERGY GENERATION CAPACITY EXCEEDS COAL POWER FOR FIRST TIME China's "dual carbon" goals, announced in September 2020, aim to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. As the "dual carbon" goals approach, China's power structure is continuously evolving towards cleaner energy, with the proportion of non-fossil energy, especially new energy, steadily increasing. The total wind and solar power generation in 2024 increased by 20% to 1,288.4 billion kilowatt hours (kWh), according to data from the National Bureau of Statistics (NBS). As of February 2025, the installed capacity of wind and solar power totalled 1.45 billion kW, surpassing coal power for the first time to become the largest power source in China. This achievement came nearly six years ahead of the 2030 target of 1.2 billion kW for wind and power generation installed capacity. The national new energy utilization rate was 96.3% as of December 2024, according to data from the State Grid Energy Research Institute released at the 3rd China Energy Storage Conference and Exhibition in end-March. NEW ENERGY GENERATION AND STORAGE AS KEY SUPPORT FOR POWER SUPPLY Due to the randomness and volatility of new energy generation output, coupled with the integration of a large number of power electronic devices into the grid, the operation of power system faces challenges such as supply stability and consumption. New energy generation combined with new energy storage will provide key support for power supply. In terms of ensuring supply, new energy generation has insufficient output capacity during peak power load periods. The balancing capacity of wind power is 5-15%, while the balancing capacity of solar power during the evening peak is almost 0, data from the State Grid Energy Research Institute showed. During consecutive days of no sunlight and no winds, the prolonged low output of new energy may lead to temporary power shortages. On the consumption side, the growth of new energy installed capacity will continue to maintain a rapid growth momentum, surpassing the growth rate of system regulation capacity. Hence the utilization rate of new energy is expected to be on a downward trend in the future. The total installed capacity of power generation nationwide will exceed 3.6 billion kW in 2025, with an additional new energy generation installed capacity of over 200 million kW, according to the National Energy Administration's Energy Work Guidelines for 2025, released in February. Additionally, changes due to technical characteristics present new challenges to the operational risks of the power system. New energy storage features fast regulation speed and the ability to charge and discharge, providing regulation capabilities in both time and space scales. Through the innovative application of grid-forming energy storage, it is an important solution to the many challenges of large-scale integration of new energy. POLICY SUPPORT ACCELERATES RAPID DEVELOPMENT OF NEW ENERGY STORAGE Governments at national and local levels have introduced policies in areas such as ancillary services, demand response, and direct subsidies to encourage the strategic development of new energy storage. The Energy Law of the People's Republic of China, promulgated in November 2024, proposed the rational layout and active, orderly development and construction of pumped storage power stations. It also promotes the high-quality development of new energy storage and emphasizes the regulatory role of various types of energy storage in the power system. The National Development and Reform Commission and the National Energy Administration (NEA) jointly issued the Notice on Deepening Market-oriented Reform of New Energy Grid-connected Electricity Prices and Promoting High-quality Development of New Energy on 27 January 2025, marking the formal establishment of a dual-driven mechanism of policy and market for the energy storage industry. The configuration of energy storage should not be used as a prerequisite for the approval, grid connection, and grid access of new energy projects, which will fully leverage the decisive role of the market in resource allocation and facilitate the formation of a more mature and comprehensive business model for energy storage, the notice stated. At the local level, governments of 18 provinces, municipalities and autonomous regions released 32 batches of energy storage demonstration project lists from 2021 to 2024.  Over 40 cities in eight provinces have introduced subsidies for user-side energy storage. For example, the subsidy amount for initial investment in energy storage projects ranges from yuan (CNY)100 to CNY200 per kWh in Shenzhen and Dongguan of Guangdong province, and in Shanghai. Subsidies for the charge and discharge volumes of energy storage projects range from CNY0.15 to CNY0.30 per kWh, with a subsidy period of two to three years in cities such as Wuhu in Anhui, Ningbo, and Wenzhou in Zhejiang. The nationwide operational new energy storage capacity reached 73.76 million kW/168 million kWh by the end of 2024, about 20 times the level in 2020, at the end of the 13th Five-Year Plan period  and more than double compared with end-2023 levels, according to NEA data. Data from the State Grid Corporation of China (SGCC) showed that the installed capacity of new energy storage in its operating area reached 58.61 million kW/137.86 million kWh by the end of 2024, more than double their 2025 levels. During the 15th Five-Year Plan period (2026-2030), an additional 180 million kW of new energy storage is expected to be added, with an effective capacity of 160 million kW, covering 27.4% of the incremental demand for power generation. ELECTROCHEMICAL ENERGY STORAGE DEVELOPMENT STANDS OUT Currently, there are dozens of new energy storage technology routes in China, including advanced compressed air energy storage, flywheel energy storage, lithium iron phosphate batteries, vanadium redox flow batteries, and sodium-ion batteries, each suitable for different scenarios based on their characteristics. Among them, electrochemical energy storage (such as lithium-ion batteries, lead-acid batteries, flow batteries, and sodium-sulfur batteries) has become the mainstream form of new energy storage due to its high efficiency, high power density, and high energy density. The dominant role of lithium-ion battery storage has been further strengthened, with over 97% of the newly added new energy storage in 2024 coming from this type of storage. There was a total of 1,473 operational electrochemical energy storage stations by the end of 2024, with a total installed capacity of 62.13GW/141.37GWh, according to data from the National Electrochemical Energy Storage Power Station Safety Monitoring Information Platform. Among these, lithium-ion battery storage installed capacity was 135.76GWh, representing 96.03% of the total (with 99.91% of lithium-ion projects being lithium iron phosphate). However, lithium-ion batteries have relatively poor thermal stability and are prone to thermal runaway issues. As the number of energy storage projects increases, higher requirements are placed on safety technology and management capabilities. The platform data also showed that in 2024, China saw significant improvement in the operational performance of electrochemical energy storage compared to the previous year. The average annual operation time was 1,649 hours, an increase of around 510 hours compared to 2023. The average annual utilization time was 911 hours, an increase of about 300 hours year on year. The total charging electricity was 8,991GWh, and the discharging electricity was 7,980GWh, with an average conversion efficiency of 88.75%. Energy storage is mainly used in three major application scenarios: the power generation side, the grid side, and the user side. Currently, energy storage stations on the user side are relatively profitable, while the profit margins for the power generation side and the grid side are limited. Based on a typical 20-year lifespan and 350 charge-discharge cycles per year for batteries, the energy storage market needs to achieve a revenue of CNY0.42 per kWh, Zheng Yaodong, an expert from China Southern Power Grid said at the 3rd China Energy Storage Conference and Exhibition. However, this is difficult to achieve under the current domestic market mechanism. In the future, the development of new energy storage business models should follow a comprehensive market system approach, including the capacity market, energy market, and ancillary services market, to gradually improve and perfect the business models. Insight article by Anita Yang ($1 = CNY7.30)

14-Apr-2025

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US reversed direction and edged slightly higher this week as US tariffs went into effect and as capacity tightened. The increases are in line with global average rates, which ticked higher by 3% this week, according to supply chain advisors Drewry and as shown in the following chart. Rates from Shanghai to Los Angeles rose by 3% and rates from Shanghai to New York rose by 2%, as shown in the following chart. Drewry expects rates to increase in the coming weeks due to tariffs and reduced capacity. Rates from online freight shipping marketplace and platform provider Freightos also rose over the week, with Asia-USWC rates up by 3% and Asia-USEC rates up by 5%. Judah Levine, head of research at Freightos, said many shippers rushed to get cargo loaded in the small window before tariffs went into effect, but noted that there are concerns that the sudden policy changes could also mean delays at US customs for arriving shipments. Levine said he expects to see a drop in demand for containers into the US as shippers wait for the situation to stabilize. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said global maritime supply chains have become more complex amid the trade war between the US and China. “Shippers will be monitoring freight costs across the major and secondary trades,” Sand said. “Japan, for example, is one the key trade partners with the US, so a rush to frontload goods could put upward pressure on spot rates on this trade.” Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES HOLD STEADY US liquid chemical tanker freight rates as assessed by ICIS held steady this week despite downward pressure for several trade lanes. There is downward pressure on rates along the USG-Asia trade lane as charterers are seeking to divert cargoes to other regions. Overall, most market participants continue to struggle with tariff uncertainties and other alternatives. As a result of the limited cargo activity, spot rates appear to be softening. However, methanol requirements from the region remain active to Asia. Similarly, rates from the USG to Rotterdam were steady this week, even as space among the regular carriers remains limited. However, several larger size cargos of caustic soda, methanol, MTBE, ethanol and styrene were seen in the market. Several outsiders have come on berth for both April and May, adding to the available tonnage for completion cargos. Easing demand for clean tankers has attracted those vessels to enter the chemical sector. Contract tonnage continues to prevail, with interest in styrene, methyl tertiary butyl ether (MTBE), methanol and ethanol. For the USG to South America trade lane, rates remain steady with a few inquiries for methanol and ethanol widely viewed in the market. Overall, the market was relatively quiet with fewer COA nominations, putting downward pressure on rates as more space has become available. On the bunker side, fuel prices have declined as well, on the back of plummeting energy prices, as a result week over week were softer. Additional reporting by Kevin Callahan Thumbnail image shows a stack of shipping containers. Image by Shutterstock

11-Apr-2025