Vinyl chloride monomer (VCM)

BANGKOK (ICIS)–Northeast Asia ethylene and polyvinyl chloride (PVC) markets have seen a slower-than-expected tempo of spot talks for June cargoes, with the main driver of uncertainty being unclear start-up timelines from new ethylene derivative expansions, particularly from Chinese PVC. Around 1.5 million tonnes/year of new PVC supply may face start-up postponements Import discussions on ethylene slow pending clearer demand picture PVC demand clouded by India-Pakistan tensions amid pre-monsoon season In this chemical podcast, ICIS editors Jonathan Chou and Josh Quah discuss their findings from the Asia Petrochemical Industry Conference (APIC) 2025, held in Bangkok, Thailand.

16-May-2025

HOUSTON (ICIS)–The tariff deal that the US has reached with China did not eliminate the duties on steel, aluminium and auto parts, all of which could lower automobile production and reduce demand for the plastics and chemicals used to make the vehicles. The US maintained its 25% sectoral tariffs on Chinese imports of steel, aluminium and auto parts. It levies the same tariffs on imports from much of the world. Imports from Canada and Mexico can avoid the tariffs if they comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement. Oxford Economics expects US auto production will fall by -2.0% to -0.9% year on year in 2025. Fitch Ratings, a credit rating agency, lowered its US auto sales forecast by 6.7% and warned of production cuts. WHY ARE AUTOS IMPORTANT TO CHEMSAutomobiles made in North American contain an average of 198 kg of plastic, according to ICIS, making them an important end market for producers. Polypropylene (PP) is the most commonly used resin in North American automobiles followed by polyurethanes and nylon, as shown in the following charts. In addition, automobiles are large end markets for paints and coatings. In all, the typical automobile has nearly $4,000 worth of chemistry WHAT CHEMS SAY ABOUT AUTOSCelanese, whose Engineered Materials segment is heavily dependent on autos, stressed the uncertainty about the effects that tariffs will have on this key end market during the second half of the year. It will prepare by reducing inventory, controlling costs and lowering operating rates if warranted by demand weakness. Polyurethanes producer Huntsman is seeing automobile build rates drop low-single digit percentages. By the time order patterns trickle through original equipment manufacturers (OEMs) and down to chemical companies, Huntsman is seeing double-digit drops in some order patterns. AdvanSix warned that uncertainty surrounding tariffs is affecting the market for nylon and other engineering plastics. Axalta Coating Systems, which makes auto paint, warned of a $50 million gross annualized charge from tariffs. Axalta lowered its 2025 sales guidance to $5,300-5,375 million from $5,350-5,400 million. Earnings guidance remained unchanged. Steps that Axalta could take to offset a portion of that hit include insourcing production capacity to domestic plants; sourcing raw materials locally; reformulating products; managing strategic inventory; and executing pricing actions. TARIFFS RAISE AUTO COSTS, THREATEN OUTPUTTariffs on auto inputs will increase costs for vehicles, and producers will likely pass through a portion of those higher costs to customers. The size of those cost pass throughs will play a large role in the tariffs' effects on chemical demand. Higher prices for automobiles will discourage sales. Lower sales will reduce auto production and cut demand for plastics and chemicals used to make those vehicles. THE EFFECT SO FAR ON AUTO BUILDSPrior to the announcement of the US and China trade deal, Ford estimated that the gross cost impact from the tariffs is $2.5 billion. Among that, half will come from imported and exported parts as well as the effect that steel and aluminium tariffs will have on domestic prices. The rest is from imported vehicles. Already, Stellantis halted production for two weeks at a plant in Windsor, Ontario Province, Canada, because of tariffs. AUTO'S EXPOSURE TO TARIFFSThe US auto industry's exposure to tariffs is not trivial because the country imports enormous amounts of auto parts, steel and aluminium. Many of these products are subject to 25% sectoral tariffs or 10% baseline tariffs. More than 50% of the content of cars assembled in the US is imported, according to a 3 May CNN article, citing US government statistics. AUTO PART TARIFFSThe following chart breaks down 2024 general imports by country for auto parts under the 8708 code of the harmonized tariff schedule (HTS). Figures are in billions of dollars. Source: US International Trade Commission (ITC) Not all auto parts will be hit by the 25% tariffs. Some parts are excluded. Those from Mexico and Canada will escape the levy if they comply with the USMCA. STEEL AND ALUMINIUM TARIFFSThe following chart shows 2024 general imports of iron and steel under the HTS codes 7206-7224. These codes cover iron and nonalloy steel; stainless steel; and other alloy steel. The chart breaks down the imports by country and lists the value in trillions of dollars. Source: ITC Metal imports from the UK will be exempt under a recent trade deal, as indicated by a press conference in that country. Imports from Canada and Mexico would be exempt from these tariffs if they comply with the USMCA. Not all of these steel imports would be used in automobiles But the chart does illustrate that the US imports iron and steel from many countries that will be covered by the 25% tariffs. The following chart provides a similar breakdown for 2024 general imports of articles of iron and steel under Chapter 72. Figures are in trillions of dollars. Source: ITC The following chart provides the country breakdown for 2024 general imports of aluminium and articles thereof under Chapter 76. Figures are in trillions of dollars. Source: ITC OTHER THREATS TO DOMESTIC AUTO PRODUCTIONTariffs are taxes, and taxes reduce economic growth. Slower GDP growth translates to lower sales and production. 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. Many US consumers bought automobiles to avoid paying tariffs. Those purchases made ahead of the tariffs will come at the expense of future sales. US SELF-SUFFICIENT FOR MANY PLASTICS, CHEMS USED IN AUTOSMany of the plastics and chemicals used by the US auto industry are produced in abundance in the country, and that will limit customers' exposure to the nation's tariffs for those products used in automobiles. The US is self-sufficient in polypropylene (PP), polyvinyl chloride (PVC) and polyethylene (PE), a plastic used in packaging and fuel tanks. Nylon is excluded from the tariffs. Polyurethanes, the second most common polymer used in automobiles, are made with methylene diphenyl diisocyanate (MDI), and a substantial amount of US MDI imports comes from China. The US also relies on imports of acrylonitrile butadiene styrene (ABS), much of which comes from Mexico, South Korea and Taiwan. Additional reporting by Stefan Baumgarten, Joseph Chang and Jonathan Lopez Insight article by Al Greenwood (Thumbnail shows automobile. Image by Shutterstock)

15-May-2025

BANGKOK (ICIS)–Sluggish domestic demand weighed on Japan’s petrochemical industry, resulting in reduced production volumes in 2024 compared with previous years, according to the Japan Petrochemical Industry Association (JPCA). 2024 ethylene output falls 6.3% Production of five major plastics shrink by 5% Japan economy forecast to grow by 1.2% in 2025 “Although some crackers in Southeast Asia and East Asia are reducing production, there are plans for capacity increases in crackers that significantly exceed demand in China,” JPCA said in a report prepared for the Asia Petrochemical Industry Conference (APIC) 2025. The conference is being held in Bangkok, Thailand from 15-16 May. Operating rates of crackers in Japan are expected to remain lowered, as with previous years, JPCA said. Japan's ethylene production in 2024 fell 6.3% year on year to 4.99 million tonnes, as domestic crackers have operated at below 90% of capacity since August 2022, with the monthly average run rate falling below 80% five times in 2024. Japan’s real GDP growth rate in 2024 was 0.1% amid weak exports, neutral growth in private consumption, and a slight increase in government consumption. For the whole of 2024, the country’s total production of five major plastics – namely, linear density polyethylene (PE), high density PE (HDPE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC) – declined to 5.7 million tonnes, lower by 5.2% from 2023. Production (in thousand tonnes) Product 2024 2023 % change Ethylene 4,989 5,324 -6.3 LDPE 1,160 1,219 -4.8 HDPE 656 665 -1.4 PP 1,935 2,075 -6.8 PS 549 564 -2.7 PVC 1,406 1,496 -6.0 Styrene monomer (SM) 1,297 1,428 -9.2 Ethylene glycol (EG) 276 264 4.6 Acrylonitrile (ACN) 303 341 -11.2 Sources: METI, Japan Styrene Industry Association (PS, SM) and Vinyl Environmental Council (PVC) Domestic demand as ethylene equivalent in 2024  inched up by 1.4% to 3.92 million tonnes, according to JPCA data. While the global economy is expected to grow steadily in 2025, there is a risk of deterioration in the global economy and a corresponding decline in demand due to geopolitical issues, JPCA said, citing Russia's invasion of Ukraine, the Israel-Hamas war, as well as the tariff policy of the US Trump administration. The latter has caused costs of raw material prices to soar, JPCA said. Meanwhile, Japan's real GDP growth rate for 2025 is projected to accelerate to 1.2%, supported by increased exports, sustained growth in personal consumption, and increases in capital investment, said JPCA. Higher wage hikes in 2025 should help boost domestic consumption, it said. In the report, JPCA called on the petrochemical industry to adopt new roles and responsibilities in achieving carbon neutrality and advancing a recycling-oriented society. The report outlined a two-stage timeline: first, to reduce greenhouse gas emissions from existing facilities by immediately deploying currently available technologies; and second, to establish sustainable development goals by gradually introducing new technologies into society. “Not only corporate efforts but … collaboration and system design throughout the supply chain are required,” JPCA said. Focus article by Jonathan Yee

15-May-2025

SAO PAULO (ICIS)–Braskem swung to a net profit in the first quarter, year on year, but sales and earnings fell slightly as the global petrochemicals downturn continues, management at the Brazilian polymers major said on Monday. Speaking to reporters from Sao Paulo, the company’s CEO and CFO described the operating environment as persistently challenging on the back of excess capacity and emerging international trade conflicts. The company’s net profit stood in Q1 at $113 million, up from a net loss of $273 million in the same quarter of 2024, while recurring earnings before interest, taxes, depreciation and amortization (EBITDA) stood 2% lower, however, at $224 million. Braskem produces mostly polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC), some of the most widely used polymers and which remain under intense pressure due to global overcapacities. Braskem (in $ million) Q1 2025 Q1 2024 Change Q4 2024 Q1 2025 vs Q4 2024 Sales 3,331 3,618 -8% 3,285 1% Net profit/loss 113 -273 N/A -967 N/A Recurring EBITDA 224 230 -2% 102 121% Brazilian operations achieved 74% utilization rates, up 4% from the previous quarter, while US and European facilities operated at 80% capacity, a 13% improvement, and Mexican operations reached 79% utilization (up 2%). The improved performance was primarily driven by better spreads and increased sales volumes, particularly in Brazil, Europe and the US. CHINA PP COMPETITION: ADDs?Much of the earnings call with reporters on Monday focused on the global trade tensions and competition from Chinese producers, particularly in the Brazilian market. "The question of tariffs generated much instability and many doubts in this first quarter," said CEO Roberto Ramos, who noted how negotiations over the weekend between China and the US in Switzerland could potentially alter the tariffs war. "This discussion between the two countries should move toward some kind of normality. Therefore, I think when all is said and done, after all this commotion, very little will remain,” he said. He highlighted a few aspects which have affected petrochemicals in the trade war so far, such as China's decision not to impose retaliatory tariffs on US natural gas-based ethane imports, which he said stand at approximately 18 million tonnes annually. That was a positive, he said, because ethane from the US to China would continue uninterrupted, preventing a scenario where excess ethane in the US would have driven down prices and potentially created advantages for ethane-based producers. Braskem operates most of its plants in Brazil on crude-derived naphtha. However, Chinese authorities did maintain tariffs on propane imports from the US, which affects Chinese PP producers and that did affect Braskem, said the CEO. “China has a surplus in PP, so it is a net exporter, and the main destination of this excess PP production has been precisely Brazil, which has greatly affected us here in the Brazilian market,” said Ramos. "They wanted to become self-sufficient regarding both resins [PP and PE], had a project to become self-sufficient in PP by 2030, but achieved this much earlier, by 2024. Therefore, as there isn't enough consumption for the resin, they're forced to sell, and they sell here at a price we can't compete with." In response to this competitive pressure, Ramos confirmed Braskem is actively pursuing trade remedies in talks with the authorities, which could, among others, include instruments like antidumping duties (ADDs) against China but also against the US, also a big producer with excess product in some materials. "Yes, we are studying trade protection measures in relation to China, as, moreover, we are also doing in relation to US PE producers, who also place resin here at a lower price than they sell in their respective countries," he said. Management said they continue to pursue the "switch to gas" strategy, which involves systematically reducing dependence on naphtha as feedstock, particularly in Brazilian operations, in favor of more competitive ethane-based production. Despite recent decreases in oil prices and consequently naphtha prices, executives said the price differential between naphtha and ethane remains substantial at approximately $350-370/tonne, sometimes even higher. RECOVERY STILL WAITINGAlthough some of Braskem’s margin spreads posted improvements during Q1, the CEO was not too optimistic about a strong recovery anytime soon. “I do not imagine that spreads will recover further in the short term, because there is still an excess supply of ethylene but also of propylene, and therefore the plants are operating at lower capacity. Apart from the US producers who are processing at over 90% of their capacity utilization, we here have around 70%, and the Europeans have even less than that,” said the CEO. “As long as this excess installed capacity still exists, as long as the pace of construction of new plants in the US and China continues, there is no reason to imagine that spreads will react, because the supply and demand situation continues to be an excess of supply in relation to demand. “If you have an excess installed capacity of 30 million tonnes of ethylene, for example, therefore of PE, and if the market increases its consumption volume by 5 million tonnes per year, you will need at least six years to be able to clear this excess supply. Therefore, there is no structural reason to think about an increase in spreads."

12-May-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 9 May. S Arabia's SABIC swings to Q1 net loss amid higher operating costs By Jonathan Yee 05-May-25 11:36 SINGAPORE (ICIS)–SABIC swung to a net loss of Saudi riyal (SR) 1.21 billion ($323 million) in the first quarter on the back of higher feedstock prices and operating costs, the Saudi Arabian chemicals giant said on 4 May. Ethane fuss cools for NE Asia C2, positions reassessed over Labor Day break By Josh Quah 05-May-25 20:24 SINGAPORE (ICIS)–The early May holidays probably could not have come at a more appropriate time for Asia ethylene players, with players noting that the pause in spot discussions was a good time to take stock of positions going into June shipment talks. Malaysia's Lotte Chemical Titan narrows Q1 net loss on improved margins By Nurluqman Suratman 06-May-25 14:46 SINGAPORE (ICIS)–LOTTE Chemical Titan (LCT) narrowed its first quarter (Q1) net loss to ringgit (M$) 125.7 million ($29.7 million) amid improved margins, the Malaysian producer said on 5 May. Singapore's Aster acquires CPSC at undisclosed fee By Nurluqman Suratman 07-May-25 12:33 SINGAPORE (ICIS)–Aster Chemicals and Energy has reached a sales and purchase agreement to acquire Chevron Phillips Singapore Chemicals (CPSC) through its affiliate, Chandra Asri Capital, at an undisclosed fee, the Singapore-based producer said on Wednesday. Vietnam’s economy to slow despite exports jump, lower inflation – Moody's By Jonathan Yee 07-May-25 16:16 SINGAPORE (ICIS)–Escalating trade tensions with the US are casting a shadow over Vietnam’s growth trajectory in 2025, despite continued growth in exports as well as lower inflation. China SM plagued by weak fundamentals and falling feedstock By Aviva Zhang 07-May-25 16:44 SINGAPORE (ICIS)–China’s styrene monomer (SM) prices fell sharply in April, as a result of decreasing crude oil prices and weak end-user demand expectations caused by the China-US tariff conflicts. The domestic market is likely to face headwinds from supply, feedstock and downstream sectors in May. Asia refined glycerine trades to Europe to be spurred by weak Chinese demand By Helen Yan 08-May-25 14:43 SINGAPORE (ICIS)–European demand for refined glycerine may lend support to regional glycerine producers in southeast Asia, who have been faced with persistently sluggish Chinese demand. Asia VAM plant margins to get a lift from westbound trades By Hwee Hwee Tan 09-May-25 13:08 SINGAPORE (ICIS)–Asia’s vinyl acetate monomer (VAM) producers are eyeing improved netbacks from expansion in westbound shipments as regional trade margins narrow into the second quarter. Asia capro remains pressured by weak benzene, cautious demand outlook By Isaac Tan 09-May-25 13:11 SINGAPORE (ICIS)–Spot prices for caprolactam (capro) in Asia continued to soften in the week ending 7 May, weighed down by persistent losses in the upstream benzene market and a lack of recovery in downstream demand. China Apr export growth slows to 8.1% amid tariff uncertainty By Nurluqman Suratman 09-May-25 16:03 SINGAPORE (ICIS)–China's export growth slowed to 8.1% year on year in April from 12.4% in March in US dollar terms, underscoring the increasing impact of US tariffs amid ongoing uncertainty surrounding a potential trade agreement.

12-May-2025

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the fortnight ended on 2 May. NEWSBrazil chems production still impacted by imports despite protectionist measures – Abiquim Brazil’s chemicals production structural woes, such as high production costs, remain while imports continue making their way unabated, despite protectionist measures deployed by the government, according to the director general at producers’ trade group Abiquim. INSIGHT: Mexico’s chemicals revive as tariffs woes ease (part 1)When Donald Trump won the US election with a larger-than-expected majority, Mexican chemicals players started making plans for their businesses under what promised to be a disruptive second term for trade relations between the two countries. Argentina savoring economic spring but recovery for all biggest task still pending – Evonik execAfter years in the doldrums, Argentina's economy is finally going through some sort of “spring” thanks to sectors such as agricultural, mining and energy – but the country, however, is yet to achieve a recovery which works for all Argentinians, an executive at Germany’s chemicals major Evonik said. Mexico’s improved fortunes on US tariffs propping up petchems demand – Entec execMexico’s chemicals fortunes seem to be turning for the better after the country was spared from the most punitive US’ import taxes, according to an executive at chemicals distributor major Ravago’s Mexican subsidiary. INSIGHT: Argentina faces up to rising inflation after currency controls liftedArgentina’s decision to end foreign currency restrictions is set to devalue the peso’s official exchange rate and increase inflation but it was a vital step to normalizing a dysfunctional exchange rate system. Mexico launches antidumping investigation into US PVC importsThe Mexican government officially launched an antidumping investigation into imports of suspension polyvinyl chloride (PVC) resin from the US, following allegations of unfair trade practices that have impacted domestic industry at the end of April. Brazil's Braskem Q1 higher priced PE, PP sales in Q1 cannot offset lower PVC volumesBraskem resin sales in its domestic market dropped by 4% in Q1, year on year, due to lower polyethylene (PE) and polypropylene (PP) sales volumes as the producer prioritized sales with higher added value, the Brazilian polymers major said. Mexico’s Orbia earnings fall again while ‘trying’ to guess potential green shoots – CEOOrbia’s Q1 sales and earnings fell again, year on year, with the Mexican chemicals producer already writing off any significant recovery in 2025 and “trying to figure out” potential green shoots for 2026, its CEO said on Friday. PRICINGLatAm PE international prices steady to lower on competitive US export pricesInternational polyethylene (PE) prices were assessed as steady to lower as US export prices remain competitive. LatAm PP domestic, international prices fall in Colombia, Mexico on cheaper feedstocksDomestic and international polypropylene (PP) prices fell in Colombia and Mexico tracking lower US propylene costs. In other Latin American (LatAm) countries, prices were unchanged. LatAm – Argentina PP domestic price range narrows as distributors try to compete with cheaper imports Domestic polypropylene (PP) price range was assessed as narrower in Argentina. Distributors' prices have fallen to compete with cheaper imports.

05-May-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 2 May. India RIL oil-to-chemicals fiscal Q4 earnings fall on poorer margins By Nurluqman Suratman 28-Apr-25 11:57 SINGAPORE (ICIS)–India's Reliance Industries Limited (RIL) late on 25 April reported a 10% year-on-year drop in its oil-to-chemicals (O2C) earnings before interest, tax, depreciation and amortization (EBITDA) on poorer transportation fuel cracks and subdued downstream chemical deltas. Asia naphtha market strengthens but uncertainties linger By Li Peng Seng 28-Apr-25 15:01 SINGAPORE (ICIS)–Asia’s naphtha intermonth spread hit a three-week high recently as market sentiment recovered following stronger demand from China, but the market ahead could be choppy on the back of volatile crude oil and trade war uncertainties. PODCAST: MMA market turmoil in China and Asia amid rising supply, weak demand By Yi Liang 28-Apr-25 15:19 SINGAPORE (ICIS)–In this podcast, ICIS analysts Jasmine Khoo and Mason Liang will talk about the current situation and outlook for the methyl methacrylate (MMA) market. INSIGHT: China new energy vehicle industry to continue driving polymer industry development By Chris Qi 28-Apr-25 18:31 SINGAPORE (ICIS)–China's automotive industry has maintained rapid growth over the last few years, with the expansion of the country's new energy vehicle (NEV) sector particularly notable, now accounting for 70% of global production. China’s Sinopec enters $4bn JV with Saudi Aramco unit for Fujian project By Jonathan Yee 29-Apr-25 12:19 SINGAPORE (ICIS)–China’s state-owned Sinopec has entered a joint venture (JV) with an Asian unit of Saudi Aramco to manage the second phase of a refining and petrochemical complex at Gulei in Fujian province, it said on 28 April. Asia glycerine may see restocking after Labour Day holiday By Helen Yan 29-Apr-25 14:34 SINGAPORE (ICIS)–Asia’s glycerine market may see a pick-up in restocking activities after the May Day or Labour Day holiday as Chinese buyers hold back their purchases, given the sluggish downstream epichlorohydrin (ECH) market and uncertainties over the US-China trade war. China Apr manufacturing activity shrinks on US tariffs pressure By Jonathan Yee 30-Apr-25 12:09 SINGAPORE (ICIS)–China’s manufacturing activity shrank in April as export orders weakened amid the intensifying trade war with the US, official data showed on Wednesday. INSIGHT: Rising costs to curtail China PDH runs, mixed impact on C3 derivatives By Seymour Chenxia 30-Apr-25 13:00 SINGAPORE (ICIS)–Chinese PDH producers are likely to lower operating rates as US-China trade tensions drive up propane import costs, which is expected to tighten propylene supply. However, the impact on downstream markets will be mixed due to varying feedstock sources. Asia VAM market to slow as China solar drive eases By Hwee Hwee Tan 02-May-25 11:35 SINGAPORE (ICIS)–Asia’s vinyl acetate monomer (VAM) supply is lengthening as spot demand tied to a major downstream sector is softening into May.

05-May-2025

SINGAPORE (ICIS)–Asia's petrochemical markets are poised for a resurgence in activity following the May Day holidays, with discussions subdued as buyers await signs of recovery and producers restart plants over the coming months. Producers to restart plants, refill inventories after holidays Delayed purchases until after holidays US has contacted China for trade talks – Chinese state media The May Day or Labor Day holiday is celebrated in China from 1-5 May, and in most other Asian countries on 1 May. Japan and South Korea also observe several days of holiday in May. Feedstock propane supply-demand fundamentals are being weighed on by the ongoing US-China trade war, which is affecting the cost of propane imports and could lead to reduced operating rates for propane dehydrogenation (PDH) units. This may tighten propylene supply in the longer term, potentially supporting prices if demand picks up. Demand has been sluggish in the propylene market, weighing prices down as producers maintain low inventories ahead of 1 May. However, after the Labor Day holiday, there is an expectation of increased supply, which may lead to a more balanced supply-demand scenario as they resume normal operations. Separately, the glycerine market in Asia is expected to see a notable pick-up in restocking activities after the holidays. Chinese buyers, who have been holding back purchases due to a sluggish downstream epichlorohydrin (ECH) market and uncertainties surrounding the US-China trade war, are likely to return to the market. “We will wait until after the Labor Day holidays before we commit to any purchases as we expect the downstream ECH market to slow down after the holidays,” a Chinese buyer said. The ECH market, a key downstream sector for glycerine, is anticipated to experience a price drop after the holidays due to demand remaining weak amid the US-China trade war. Asia's butyl glycol (BG) import prices were assessed as lower this week amid a bearish market sentiment amid unimproved demand conditions. In southeast Asia, the glycol ethers market is undergoing price adjustments as producers lower offers in anticipation of the Labor Day holidays. China's export prices for propylene glycol ether (PGE) also softened as sellers looked to increase sales before the holiday. Meanwhile, propylene glycol prices are expected to remain stable as market participants await the outcomes of the holiday period. In China, domestic prices have held steady, but the overall sentiment remains cautious due to the impact of the holiday on production and logistics. The stability in pricing reflects balanced supply-demand fundamentals, though any unexpected disruptions post-holiday could lead to short-term volatility. PRODUCERS ADJUSTING OUTPUT The acetic acid market is experiencing softening spot prices due to lengthening supply as plants restart operations following maintenance turnarounds. However, the holiday period is likely to further influence supply dynamics, with some producers adjusting output to manage inventory levels. In China, a new plant tied to a downstream ethylene vinyl acetate (EVA) unit has come online. It is among other plants in Asia with a combined capacity of nearly 1.8 million tonnes/year which have either already restarted or are restarting in May, EVA-linked vinyl acetate monomer (VAM) demand is generally expected to slow as June approaches, when a pricing policy in China – which has spurred a rush in solar panel installations across the country – comes into effect. Concerns of slowing demand were kept on the boil in Asia ethyl acetate (etac) markets amid fluid developments surrounding trade tensions between the US and China, and its potential ripple effect on sentiment in the days ahead. Notably, market players were conscious of weakening product spreads or etac production margins. Eroding margins have thus left regional suppliers with little room to scale back asking levels, despite the current market climate that was viewed as largely skewed towards buyers. EYES ON POSSIBLE TRADE TALKSAs the US-China trade war persists, both sides have indicated a willingness to engage with each other on trade talks. On Friday, a spokesperson of China’s Ministry of Commerce said that senior US officials have “repeatedly expressed their willingness” to negotiate with China on tariffs, according to state media outlet CCTV. The spokesperson said that the US has sent requests hoping to talk to China, and the Asian country is currently evaluating them. “China's position is consistent. If we fight, we will fight to the end; if we talk, the door is open,” the spokesperson said. Meanwhile, US President Donald Trump has maintained that trade talks are ongoing between the two largest economies in the world, which Chinese state media denied. Amid US tariffs, manufacturing activity continued to remain sluggish across Asia, including China and Japan. In April, China's manufacturing activity shrank as export orders weakened due to the escalating trade war with the US. The official purchasing managers' index (PMI) dropped to 49.0, indicating contraction, down from 50.5 in March. Japan's manufacturing PMI rose to 48.7 in April from 48.4 in March, marking the tenth consecutive month of contraction. Focus article by Jonathan Yee Additional reporting by Seymour Chenxia, Helen Yan, Julia Tan, Joy Foo and Matthew Chong and Melanie Wee.

02-May-2025

SAO PAULO (ICIS)–Mexico’s chemicals fortunes seem to be turning for the better after the country was spared from the most punitive US’ import taxes, according to an executive at chemicals distributor major Ravago’s Mexican subsidiary. Pedro Escalona, sales director at Entecresins Mexico, said demand for most polymers has notably picked up in the past weeks, with order which were on hold now flowing to more optimistic customers. Among the main polymers, only polypropylene (PP) remains in the doldrums, said Escalona, haunted by low prices for the monomer. Overall though sentiment is on the up and has been so especially since 2 April, when the US announced sweeping tariffs but spared its trade partners within the USMCA free trade zone, Mexico and Canada. Prior tariffs in some sectors, however, remain, and Escalona said automotive seems for now the most problematic sector. “For the rest, people seem to start assuming Mexico will be spared from the worst possible scenario,” said Escalona. WHAT ONE MONTH CAN CHANGESpeaking to Escalona, practically everything seems to have changed in one month, with exception of PP. In an interview with ICIS during the plastics trade fair Plastimagen in Mexico City in mid-March, the Entec executive painted a doom-and-gloom picture of both chemicals and wider manufacturing, with falling prices and domestic and overseas woes mounting. As of Thursday, 24 April, this is what he had to say: “Even a month ago, or even less, even two weeks ago, there were a lot of people holding orders, saying they were unsure whether they would need the product for May, or even for June. Some large clients, while not cancelling any orders, were starting to say they may need to lower consumption going forward,” said Escalona. “But in the last few weeks, there is more confidence in general, and people are already confident in going out to make purchases. Everyone seems to be more optimistic in that we don't think anything will finally happen that will significantly affect Mexico’s economy.” A stone on the positive story, however, remains the large, petrochemicals intensive automotive sector on which US President Donald Trump had imposed tariffs prior to 2 April. Analysts have said the tariffs, in their current form, could greatly dent the sector’s competitiveness. But sources in chemicals remain optimistic Mexico could use this chance to increase its USMCA compliance, mostly related to rules of origin which would at the same increase its manufacturing stance and integrate it even more with the US economy. As the US tries to contain China’s formidable rise in global supply chains, other sources have said the US would shoot itself on the foot going against Canada and Mexico, economies which are now well integrated within the North American free trade zone. The battle should be, they said, North America as a block versus the other large trading blocs. “Automotive still has over its head a lot of uncertainty, because there are some issues that haven't been fully defined yet regarding automotive components. That's the only one that still has some uncertainty,” said Escalona. “Demand is not the best it could be, but it is not too bad either. PP is still suffering from low prices for the monomer, which is expected to fall further. But for the rest of plastics, PE [polyethylene], PS [polystyrene], and for PET [polyethylene terephthalate] there has been some notable price rises.” Escalona said that US companies must have done their important bit of lobbying to the Trump administration about how harming tariffs on Mexico could be for them, as well. The absence of Mexico and Canada on the board Trump exhibited on 2 April quickly raised the prospects that, behind the scenes, renegotiation of the USMCA deal is well underway, an assessment Escalona deemed possible. But equally, he said there may be starting to be a realization within the Trump administration that punitive, sudden import tariffs to certain countries – not least China – would deprive the US of key markets it needs to sell materials of which it is oversupplied. “[Very punitive tariffs on Mexico] Just wasn't convenient for the US. We’ll need to see what happens, but I think the US is also going to have to sit down and negotiate with China. The US is full of raw materials it exports to China – monomers such ethane, propane, benzene… That’s why prices are falling,” said Escalona. “There are many things they plan for, and the initial strategy was to renegotiate with tariffs as a pressure measure. But clearly, they are going to have to reconsider this and fine-tune several aspects.” DOMESTIC FRONT: LESS OPTIMISMWhile most analysts think Mexico has done good progress on issues key for Trump, such migration at the border and stricter measures to control fentanyl trade – a powerful drug which has caused havoc across the US – the domestic policies of President Claudia Sheinbaum remain a red flag for many chemicals players. With a declared intention to expand the welfare state, Mexico may be turning into the ‘nanny state’ which does not incentivize competitiveness, some sources said at Plastimagen. Moreover, fiscal policy has been loose under Sheinbaum’s predecessor, also from the left-leaning Morena party. The expansion in the welfare state was mostly funded by debt, and fiscal deficits were recurrent. Sheinbaum has promised to remedy that and seems more open to the necessary private investments needed in Mexico to propel it to be a key part in the nearshoring trend – North American companies bringing manufacturing facilities closer to home. But Sheinbaum has ploughed through other measures in parliament which are worrying business. Thanks to the supermajority of two thirds of seats in Parliament voters granted Morena in June 2024 – and propelled Sheinbaum to the top with 60% of popular vote – the government approved a judicial reform, which most analysts agree is to weaken the rule of law, in a country much needed of stronger rule of law. A key measure in the bill was that judges would be elected by voters, which has sparked fears the well-funded and strong organized crime will have it easier to silence the judiciary. Escalona, not impressed, said those elections for judges have started and told how he feels weird seeing advertisements by candidates on boards or media outlets. Seeing adverts to vote for judges clearly does not feel right, he came to say. “We have had plenty of politicians who were not prepared or educated for the positions they were chosen for. While it’s not optimal, it can be expected in a democracy. But the job of a judge, and in country like Mexico, is a completely different matter,” he said. “And, invariably, you can see all kinds of people running to be judges. It’s tremendous. We’ll need to see how this pans out, but everyone seems to agree that this will weaken the rule of law – and that is not good for economic development and stability." Interview article by Jonathan López Clarification: Re-casts subsidiary name in paragraph two. Entec Polymers, as written previously, is Ravago's subsidiary in the US

24-Apr-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 18 April 2025. INSIGHT: China SM feedstocks, end-products outlook clouded by US tariffs By Aviva Zhang 17-Apr-25 12:18 SINGAPORE (ICIS)–Escalating US-China trade tensions have driven significant fluctuations in China’s styrene monomer (SM) market, with feedstock import costs and constraints on end- products exports to continue to affect the market. INSIGHT: ICIS cuts April Asia chemical forecast as recession fears hit global market By Ann Sun 17-Apr-25 12:0 SINGAPORE (ICIS)–Uncertainty surrounding US tariff policies and the potential for a global recession continues to weigh on global oil prices, projecting a decline in chemical prices as a consequence. The knock-on effect on end markets, coupled with conservative business sentiment, will shape the price trend. Asia petrochemicals slump as US-China trade war stokes recession fears By Jonathan Yee 16-Apr-25 17:34 SINGAPORE (ICIS)–US “reciprocal” tariffs are prompting a shift of trade flows and supply chains as market players in Asia seek alternative export outlets for some chemicals, while overall demand remains tepid amid growing fears of a global recession. INSIGHT: US tariff barriers put further downward pressure on the Asian aromatics market By Jenny Yi 16-Apr-25 17:01 SINGAPORE (ICIS)–The macroeconomic repercussions from the escalating US-China trade war and potential for reduced end-market demand are expected to exert additional pressure on Asian aromatics markets. CHINAPLAS ’25: Asia polyolefin players gather for clarity amid US trade war By Jackie Wong 16-Apr-25 14:34 SINGAPORE/SHENZHEN, China (ICIS)–Polyolefin market players from Asia are gathering in China this week for an annual industry event under a cloud of uncertainty as the US embarks on a trade war that could potentially redefine trade flows in the region. China Q1 GDP growth at 5.4%; outlook dims amid trade war with US By Nurluqman Suratman 16-Apr-25 12:31 SINGAPORE (ICIS)–China's economy expanded by 5.4% year on year on the first quarter, unchanged from the previous quarter, official data showed on Wednesday, but the world’s second-biggest economy is generally expected to weaken due to the tit-for-tat trade war with the US. INSIGHT: Asia C2 awaits tariff response from Chinese ethane crackers By Josh Quah 16-Apr-25 12:00 SINGAPORE (ICIS)–Asia ethylene markets have settled into a disquieting calm belying the tumult of the past 10 tariff-packed days. The spotlight is now sharply on a segment of players – crackers that crack ethane into ethylene – that may have an impact on the import-export market depending on their response to the US-China trade war. INSIGHT: China propylene supply to fall amid trade tensions with US By Seymour Chenxia 15-Apr-25 14:4 SINGAPORE (ICIS)–Escalating US-China trade tensions are expected to raise production cost for Chinese propane dehydrogenation (PDH) plants and weaken overall domestic demand for propylene (C3) at the same time. Singapore slashes 2025 GDP growth on escalating US-China trade war By Jonathan Yee 14-Apr-25 12:06 SINGAPORE (ICIS)–Singapore's Ministry of Trade and Industry (MTI) on Monday cut the country's 2025 GDP growth forecast to 0-2% from a previous 1-3%, citing escalating US-China trade tensions and the impact of reciprocal tariffs on global trade. INSIGHT: China-US trade war to hurt NGL trades both ways By Lillian Ren 14-Apr-25 14:39 SINGAPORE (ICIS)–As one of the largest petrochemical producers globally, China plays a vital role in taking in US’ natural gas liquids (NGLs) such as ethane, propane and butane for propylene and ethylene production. High tariffs are expected to rule out US NGLs products from China market, which, in turn, will hurt buyers and producers in both countries. INSIGHT: China new energy storage capacity to surge by 2030 By Anita Yang 14-Apr-25 16:19 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.

21-Apr-2025