Vinyl chloride monomer (VCM)

Navigating volatility in this key commodity, with global data and insight 

Discover the factors influencing vinyl chloride monomer (VCM) markets

Vinyl chloride monomer (VCM) is principally polymerised into polyvinyl chloride (PVC). Sudden spikes and dips in demand can often be seen in VCM markets, due to the variety of end-user applications for PVC. This volatility is a challenge to navigate without accurate forecasts.

VCM is a truly global market, so it is vital to stay close to activity in Europe, Asia and the US, keeping track of supply and demand factors, price fluctuations and contracts secured. We provide actionable data, insights and analytics on the multitude of factors impacting prices, deals and decisions on a daily basis.

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Latin America stories: weekly summary

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 24 May. NEWS Brazil’s Triunfo petchems restart odd one out as wider industry still disrupted – consultant Most of Rio Grande do Sul’s industrial plants remain shut or operating at very low rates as the Brazilian state reels from the floods, with the restart at the Triunfo petrochemicals hub an exception rather than the norm, a chemicals consultant at MaxiQuim said to ICIS. Mexico’s Orbia/Vestolit's Altamira plant ceases operations due to water scarcity Orbia/Vestolit ceased operations at its Altamira, Tampico facilities in Mexico on 21 May due to water scarcity. The company operates there a polyvinyl chloride (PVC) facility with a production capacity of 690,000 tonnes/year. The company estimates it could resume activity on 19 June. SABIC declares force majeure at Tampico Mexico ABS plant SABIC Innovative Plastics Mexico (SABIC) declared force majeure at its Tampico, Mexico acrylonitrile butadiene styrene (ABS) plant on 23 May. The products affected include CYCOLAC ABS.  This facility has a capacity of 30,000 tonnes. Mexico’s Q1 GDP grows 0.3%, economic activity remains healthy in MarchMexico’s GDP rose by 0.3% in Q1, an acceleration from Q4’s 0.1% quarterly growth, the country’s statistic office Inegi said on Thursday. Brazil’s antitrust authority paves way for Petrobras to shed refinery sales Brazilian state-owned energy major Petrobras has been allowed by the country’s antitrust authority CADE to backtrack on planned refinery sales. Argentina’s manufacturing down nearly 20% in March Argentina’s petrochemicals-intensive manufacturing output fell in March by 19.6% year on year, the country’s statistics office, Indec, said this week. Brazil’s Unigel creditors mull fertilizers divestment The debt restructuring agreement at Unigel, under which the Brazilian chemicals producer’s creditors are to take a 50% equity stake, could result in a divestment of the company's beleaguered fertilizers division. Brazil’s Unigel to give creditors 50% equity stake in debt restructuring Unigel has obtained the support of enough creditors for a debt restructuring plan although it comes at a price as they will be getting a 50% equity stake in the Brazilian chemical and fertilizer producer. Brazil's Braskem restart at Triunfo to kick off petchem hub normalization Braskem has restarted operations at its Triunfo facility in the flood-hit state of Rio Grande do Sul, which will allow other players in the petrochemicals hub to start up their plants as many depend on input from the Brazilian polymers major to operate. INEOS Styrolution declares force majeure at Altamira Mexico facility INEOS Styrolution declared force majeure at its facility in Altamira, Mexico, on 20 May. The products affected include Teluran ABS, Novodur High Heat ABS and Luran ASA. This facility has a capacity of 113,000 tonnes. Chile’s Q1 GDP up 2.3% on strong consumption, manufacturing up 1.1% The Chilean economy started 2024 on a strong footing with GDP growth in the first quarter at 2.3%, year on year, the country’s central bank said on Monday. Volkswagen, Stellantis idle car plants in Brazil, Argentina after floods Volkswagen (VW) idled its three plants in the Brazilian state of Sao Paulo on Monday, as suppliers in the floods-hit state of Rio Grande do Sul are unable to produce any automotive parts, a spokesperson for the German automotive major told ICIS. PRICING LatAm PP international prices stable to up on higher Asian freights International polypropylene (PP) prices were assessed as steady to higher across Latin American countries due to the surge in freight rates from Asia to the region. LatAm PE domestic, international prices steady on sufficient supply, stable demand Domestic and international polyethylene (PE) prices were assessed unchanged this week across Latin American countries on the back of sufficient supply and stable demand.

27-May-2024

Europe top stories: weekly summary

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 24 May. Brenntag CEO says Europe must play to its strengths Europe’s chemical sector is seeing a wave of commodity production closures, which is likely to accelerate as the region is suffering from structurally higher energy costs and depressed margins since it lost access to cheap Russian gas. Europe epoxy sentiment stable, Asia imports may face EU antidumping claim Europe epoxy resins prices have been mainly agreed with rollovers for May so far, in spite of a drop in feedstock costs this month. Speculation is also growing over EU anti-dumping claims against Asian imports. Europe naphtha and gasoline prices firm on improved liquidity, summer optimism Liquidity in Europe's naphtha and gasoline markets improved in the week to 17 May as stable-to-soft prices encouraged buying appetite, just as the market is gearing up for an uptick in demand ahead of the summer holidays. Europe PE, PP contract prices down beyond monomer for May Europe’s polyethylene (PE) and polypropylene (PP) freely negotiated prices for May are down, with variance by grade

27-May-2024

APIC '24: PODCAST: Asia PVC shaped by ample supply, policy changes in India

SINGAPORE (ICIS)–Asia's polyvinyl chloride (PVC) markets are expected to see some uncertainty in the coming months, with factors like China’s domestic demand, the impact of India’s monsoon and some policy changes likely to shape the landscape. June offers from Asian producers awaited Healthy SE Asian Q1 GDP growth to support PVC demand Low domestic demand in China encourages exports, especially to India In this chemical podcast, ICIS editors Jonathan Chou, Damini Dabholkar and analyst Lina Xu discuss recent market conditions with an outlook ahead in Asia. (This podcast first ran on 8 May.) Visit us at Booth 13, Grand Ballroom Foyer, Grand InterContinental Seoul Parnas in South Korea. Book a meeting with ICIS here.

27-May-2024

DuPont flags $60 million in dis-synergies from break-up, assures on PFAS liabilities

HOUSTON (ICIS)–DuPont expects about $60 million in dis-synergies from its break-up into three independent publicly traded companies, CEO Ed Breen and CFO Lori Koch told analysts in a conference call on Thursday. The US specialty chemicals and materials company announced late on Wednesday that it plans to separate its electronics and water businesses into two publicly traded companies while the existing DuPont, dubbed “New DuPont”, will continue as a diversified industrial company. The dis-synergies were largely related to insurance, audit fees, leadership and boards, that is, “public company stand-up costs”, Koch said. The dis-synergies were “not a huge number” and would be across all three companies, she said. As for separation costs, those are estimated at $700 million, with the biggest cost items being IT separation and tax, legal and audit work, she said. DIVESTMENT NOT RULED OUT While DuPont is pursuing spin-offs and is not running a parallel M&A processes for electronics and water, it does not entirely rule out divesting them. “If somebody wants to call and propose something, we are going to listen to it,” Breen said in response to analysts' questions. He also said that the water business, which is relatively smaller, may be spun off before electronics. The timing for the separations is good as markets are coming out of destocking cycles, Breen noted. Especially in semiconductors, “we are going into a real upcycle”, he added. DuPont has been working on the separation for about six months and expects to complete it within the coming 18-24 months, he said. The relatively long completion timeline is mainly due to tax matters as DuPont intends to execute tax-free separations, he said. In some of the countries where DuPont operating, a separated business must be run for a full 12 months before it gets tax-free status, Breen said. New DuPont, with annual sales of $6.6 billion, and the electronic spin-off (sales: $4.0 billion), are expected to have investment-grade balance sheets whereas the smaller water business (sales: $1.5 billion), may not, Koch said. PFAS As for DuPont’s liabilities for poly- and perfluoroalkyl substances (PFAS), those will be allocated between the three companies pro rata, based on their earnings before interest, tax, depreciation and amortization (EBITDA) in the last year before the spin-off, Breen said. The amount of PFAS liabilities may not be that large as DuPont expects to “make great progress” on settling claims by the time the spin-offs will be completed in 18-24 months, he said. BREEN’S NEW ROLE Breen will step down as CEO on 1 June, to be succeeded by Koch. However, he will continue as full-time executive chairman of DuPont’s board of directors, focusing on the separations, including the appointment of the spin-off companies’ boards and the hiring of their management teams. Breen would not rule out that he may join the boards of the electronics and water spin-offs but added that a decision has yet to be made. PROFILES OF THE THREE COMPANIES' MARKETS New DuPont, focused on healthcare, advanced mobility, and safety & protection: Electronics, focused on semi-conductors and interconnect solutions: Raw materials used by the electronic business include, among others, monomers, pigments and dyes, styrenic block copolymers, copper foil, filler alumina, nickel, silver, palladium, photoactive compounds, polyester and other polymer films, polyethylene (PE) resins, polyurethane (PU) resins, polyvinyl chloride (PVC) compounds and silicones, according to DuPont's website. Water, focused on reverse osmosis, ion exchange, and ultra filtration: Raw materials used by the water business include, among others, methyl methacrylate (MMA), styrene, polysulfone, high density polyethylene (HDPE), polyethylene (PE), aniline, calcium chloride, caustic and sulfuric acid, according to DuPont's website. DuPont's shares traded at $78.44/share, down 0.13%, at 11:00 local time on the New York Stock Exchange. With additional reporting by Al Greenwood Thumbnail photo source: DuPont

23-May-2024

Freight rates on China exports soar amid Red Sea crisis

SINGAPORE (ICIS)–Freight rates for China's exports, including petrochemicals, have been spiking in recent weeks and are expected to remain firm in the next three to six months on the back of improving overseas demand and amid continued logistics disruptions in the Middle East. Geopolitical tensions translate to higher shipping cost, longer delivery time Container shortages intensifying in China Freight rates to remain firm on strong western demand Most ocean carriers have halted transits in the Red Sea, which is the fastest shipping route between Europe and Asia, fearing missile attacks by Yemen’s Houthi rebels. They have opted to take the longer route via the Cape of Good Hope, resulting in much longer time and costs for moving cargoes to their destinations. The Red Sea crisis is showing no signs of de-escalation, with the latest casualty being the Panama-flagged oil tanker M/T Wind bound for China, which was struck by a Houthi-launched ballistic missile on 18 May. Logistics and supply chain disruptions are expected to continue. Dutch shipping giant Maersk had said on 6 May that its vessels have been forced to lengthen their journey further because of the expanded risk zone and attacks reaching further offshore in the Rea Sea. “The knock-on effects of the situation have included bottlenecks and vessel bunching, as well as delays and equipment and capacity shortages,” the company had said, estimating an industrywide capacity loss of 15-20% on the Far East-to-North Europe and Mediterranean market during the second quarter. CONTAINERS/VESSEL SPACE IN SEVERE SHORTAGE As carriers now need longer time to come back from destinations, the resulting severe shortage of containers and vessel space was triggering sharp spikes in freight rates. From Shanghai to the US west coast and the US east coast, freight rates on 17 May jumped to $5,025/forty-foot equivalent unit (FEU), and $6,026/FEU, respectively, up by 14.4% and 8.3% week on week, according to the Shanghai Shipping Exchange. To South America from China’s financial capital, the shipping cost increased at a sharper rate of 22.4%, while to Europe, freight rates rose by 6.3%, the data showed. A shipping broker said that China-to-Europe freights have been soaring by $500-$800/FEU each week since late April, while a polypropylene (PP) trader noted that the rates to West Africa more than tripled to $8,000/FEU, more than a fourfold increase from $1,500-$2,000/FEU rates in early April. “We now need to wait 10-15 days for booking containers. We face severe stockpiling and warehouses are flooded with cargoes waiting for shipment,” said a marketing manager of a Shenzhen-based logistics company. A plastic bag factory in east China is currently stuck with high inventories and risk suspending production, a source from the company said For vinyl acetate producers, a shortage of shipping tanks prevents them from exporting more cargoes, providing them with the less-efficient means of bulk shipments with other products as the only alternative. ROBUST WESTERN DEMAND SUPPORTS FIRM RATES The recent spike in freight rates came as a surprise to players in the petrochemical industry as the May-June period is normally a lull season for Chinese exports. Besides the Red Sea crisis, strong demand coming from the west underlies the recent surge in freight rates. “July-September is the peak season for China-to-West shipping. With [the] destocking last year, Europe and US markets demand are expected to rise substantially before the Christmas [season in December],” said Wang Guowen, director of Shenzhen Logistics and Supply Chain Management Research. “Plus, Europe and UK central banks are expected to cut interest rates, which will further stimulate consumptions there,” he added, noting that demand from both Europe and the US will remain strong rest of the year. This will continue to buoy up shipping rates, which are projected to hover at high rates over the next three to six months, industry sources said. On 16 May, Maersk announced a hike in peak season surcharge (PSS) for major east-to-west shipping lanes, including the China-to-Dar es Salaam, Tanzania route, PPS for which increased to $1,500/FEU since 20 May. Meanwhile, French shipping and logistics major CMA CGM plan to hike its Asia-to-northern Europe freights to $6,000/FEU, effective 1 June. Current container production in China could not catch up with strong demand. New China-manufactured containers to be delivered before late June have been sold out, a source at domestic logistics company said. Wang of Shenzhen Logistics and Supply Chain Management Research, however, noted that the present container shortage is not about undersupply but more about the sharp slowdown in turnover amid the global logistics disruptions. Tight shipping conditions are expected to prevail in the third quarter as demand is expected to peak, with a gradual easing of freight rates likely in the fourth quarter, he said. Focus article by Fanny Zhang Additional reporting by Joanne Wang and Lucy Shuai Thumbnail image: At the container terminal of Yantian Port in Shenzhen City, Guangdong Province in south China, 16 May 2024 (Shutterstock)

22-May-2024

Brazil’s Braskem Alagoas disaster claims could rise; Senate issues damning report

SAO PAULO (ICIS)–Six years after the disaster at Braskem’s rock salt mines in Brazil’s state of Alagoas, the polymers major could continue facing legal cases which could dent its cash flow, according to analysts at US credit rating agency Fitch. Fitch downgraded the company’s credit rating in December 2023 and placed it on what it called ‘Negative Watch’. This week, following a very damning report issued by Brazil’s Senate following a public enquiry into the Alagoas disaster, the agency’s analysts said that Braskem is likely to face increase costs related to environmental, social, and governance (ESG) challenges. That would add, they said, to the expected poor spreads for global petrochemicals in general, which would be here to stay for at least the remaining of 2024. “Increased ESG risks and potential new claims associated with the geological event in Alagoas could worsen the company’s credit profile,” said Marcelo Pappiani, a Fitch analyst covering Braskem. Fitch said Braskem has since 2019 disbursed approximately Brazilian reais (R) 10.0 billion ($2.0 billion) on relocations, compensation, the closure and monitoring of salt cavities, and environment and other technical matters. A spokesperson for Braskem said to ICIS on Thursday the company would continue collaborating with the authorities in their enquiries about the Alagoas disaster but did not comment on the specifics of the Senate’s report. “Braskem reiterates it was always willing to collaborate with the public enquiry, promptly collaborating providing all the information and measures requested,” said the spokesperson. “The company remains available to collaborate with the authorities, as it has always been.” NEVER-ENDING DISASTERLate on Wednesday, the Brazilian Senate published the final report after its public enquiry into the Alagoas disaster in 2018 which caused thousands to be displaced from their homes in Maceio, the capital’s state. The report is to be voted by the Senate’s plenary on 22 May. Braskem's rock salt mining caused the displacement of the subsoil; the company used the rock salt for production of caustic soda and polyvinyl chloride (PVC), among others. The 765-page report was highly damning for Braskem, with vice president Marcelo Cerqueira and other seven people accused of environmental crimes as the company’s activities resulted in the geological event. Nearly 15,000 households had to be relocated, and some of Maceio’s neighborhoods evacuated in 2018 remain ghost areas to this day. The report was not only damning for Braskem but also for Brazil’s authorities, especially the National Mining Agency (ANM) as well as the Ministry of Mines and Energy for failing to implement the controls which are required. THE GROUND KEEPS MOVINGTo make matters worse for Braskem, just last December there were further movements in the subsoil which made residents and authorities fear another geological event, a prospect which in the end did not materialize. Those recent events, as well as this week’s report, keep bringing back the Alagoas disaster into the spotlight and seem set to keep haunting the company for several quarters to come, said the Fitch analysts. “We believe the environmental and ecological impacts of the salt mine collapse in the context of sinking land in Alagoas could damage Braskem’s financial position … Uncertainty about current and upcoming lawsuits is high, with negative outcomes potentially pressuring cash flow and adversely impacting the company’s financial results,” they said. “The company could also face social impacts from new claims and reparation costs to victims and neighboring communities, in addition to the 14,446 families relocated to other areas.” The Alagoas liabilities are casting such a long shadow for Braskem that Abu Dhabi’s energy major ADNOC, who seemed the strongest candidate to acquire Novonor’s controlling stake in Braskem, walked away earlier in May, reportedly on the back of those liabilities. “We believe the prospect of Novonor selling its stake in Braskem hit an impasse after the December 2023 salt mine collapse, with ongoing uncertainty regarding the repercussions of the geological event,” said Fitch. Neither the Senate report nor Fitch’s credit rating warning seemed to dent investors’ interest on Braskem’s stock on Thursday though, with shares trading nearly 1.45% higher on the Sao Paulo stock exchange Bovespa by midday local time. Following ADNOC's announcement it was throwing the towel on Braskem, Braskem’s shares opened the next trading session down more than 14%.

16-May-2024

PODCAST: Like blocks pulled out of a Jenga tower, chemicals closures could collapse value chains

BARCELONA (ICIS)–The closure of chemical plants in Europe and elsewhere could remove essential raw material supplies, threatening the future of downstream industrial value chains. Global oversupply, driven by China, forecast to reach over 200 million tonnes/year by 2028 Interconnected value chains threatened if important raw materials cease production Globally 20 million tonnes of ethylene capacity may need to shut down to keep operating rates healthy In Europe 5.6 million tonnes/year of polypropylene (PP) capacity may need to close Integrated chemicals sites under threat if parts shut down Industry associations could help plan to maintain critical raw materials supplies Anti-dumping measures could protect exposed markets China polyvinyl chloride (PVC) overcapacity may increase exports globally In this Think Tank podcast, Will Beacham interviews ICIS Insight Editor Nigel Davis, ICIS Senior Consultant Asia John Richardson and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson's ICIS blogs.

14-May-2024

PODCAST: APIC ’24 – Asia PVC shaped by ample supply, impending policy changes in India

SINGAPORE (ICIS)–Asia's polyvinyl chloride (PVC) markets are expected to see some uncertainty in the coming months, with factors like China’s domestic demand, the impact of India’s monsoon and some policy changes expected to shape the landscape. June offers from Asian producers awaited next week SE Asian economies see healthy growth in Q1, expected to support PVC demand Low domestic demand in China encourages exports, especially to India In this chemical podcast, ICIS editors Jonathan Chou, Damini Dabholkar and analyst Lina Xu discuss recent market conditions with an outlook ahead in Asia. Visit us at Booth 13 at the Grand Ballroom Foyer at the Grand InterContinental Seoul Parnas! Book a meeting with ICIS here.

08-May-2024

BLOG: Global PVC markets tell a familiar of story of supply overhang, greater geopolitical risks

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. No matter which petrochemical or polymer you examine, the story is similar. To illustrate this point, let’s today look at polyvinyl chloride (PVC). As China’s economy boomed, largely thanks to the growth in its exports, so did its petrochemicals demand, increasing the gap between China’s consumption and that of the much more populous Developing World ex-China region. China’s 2008-2009 US$586bn economic stimulus package – which largely went into housing and infrastructure – seems to have had a much bigger effect on the country’s PVC demand than in some other products. Up until the Evergrande turning point in September 2021, China’s investment in housing and infrastructure continued at apace. It appears as if stimulus greatly increased the importance of Chinese PVC demand as a driver of global PVC demand: Between 1992 and 2008, China’s share of global demand averaged 17% per year; in 2009-2024, the ICIS Supply & Demand Database expects China’s share to reach 40%. China’s demand growth averaged 10% per annum between 1992 and 2023. But growth is forecast to decline to 3% per year in 2024-2030. This decline is in line with what ICIS expects in other products. Between 1992 (the start of what I see as the Petrochemicals Supercycle) and 2023, global PVC capacity exceeding demand was estimated by ICIS as averaging 8m tonnes a year. As with many other products, ICIS forecasts a big increase in global PVC capacity exceeding demand in 2024 -2030. During this period, capacity exceeding demand is expected to average 15m tonnes a year. In another parallel with other products, China’s self-sufficiency in PVC has reached the point where it has swung from being a major net importer to being a net exporter. Trade tensions between China and the West have been building since Mike Pence, the then US Vice President, made a landmark speech in October 2018. Could this translate to more protectionism in global PVC markets? It is a scenario worth considering as China seeks to increase its exports, challenging the US which accounts for the lion’s share of export trade. During the Petrochemicals Supercycle, the world was becoming ever-more globalised rather than what we are seeing today – the reverse. China was the tide that lifted all ships. Almost every year, its growth surprised on the upside, guaranteeing success for even the least-competitive plants. We didn't we have to worry about big increases in China’s self-sufficiency in PVC, polyethylene (PE) and polypropylene (PP). Now everything has changed, making big picture analysis of China’s economic problems and the global geopolitical landscape crucial. This kind of analysis has become as important if not more important than studying cost-per-tonne economics. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

07-May-2024

Besieged by imports, Brazil’s chemicals put hopes on hefty import tariffs hike

SAO PAULO (ICIS)–Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. For some products, Brazil’s chemicals trade group Abiquim, which represents producers, has made official requests for the import tariffs to go up to a hefty 35%, from 9% in some cases. On Tuesday, Abiquim said several of its member companies “are already talking about hibernating plants” due to unprofitable economics. It did so after it published another set of somber statistics for the first quarter, when imports continued entering Brazil em masse. Brazil’s government Chamber of Foreign Commerce (Camex) is concluding on Tuesday a public consultation about this, with its decision expected in coming weeks. Abiquim has been busy with the public consultation: it has made as many as 66 proposals for import tariffs to be hiked for several petrochemicals and fertilizers, including widely used polymers such polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), polystyrene (PS), or expandable PS (EPS), to mention just a few. Other chemicals trade groups, as well as companies, have also filed requests for import tariffs to be increased. In total, 110 import tariffs. HARD TO FIGHT OFFBrazil has always depended on imports to cover its internal chemicals demand, but the extraordinary low prices coming from competitors abroad has made Brazil’s chemicals plant to run with operating rates of 65% or lower. More and more, the country’s chemicals facilities are becoming white elephants which are far from their potential, as customers find in imported product more competitive pricing. Considering this dire situation and taking into account that the current government in Brasilia led by Luiz Inacio Lula da Silva may be more receptive to their demands, Abiquim has put a good fight in publica and private for measure which could shore up chemical producers’ competitiveness. This could come after the government already hiked import tariffs on several products in 2023 and re-introduced a tax break, called REIQ, for some chemicals which had been withdrawn by the previous Administration. While Brazil’s chemicals production competitiveness is mostly affected by higher input costs, with natural gas costs on average five times higher than in the US, the industry is hopeful a helping hand from the government in the form of higher import tariffs could slow down the flow of imports into Brazil. As a ‘price taker region’ given its dependence on imports, Latin American domestic producers have taken a hit in the past two years. In Brazil, polymers major Braskem is Abiquim’s commanding voice. Abiquim, obviously, has always been very outspoken – even apocalyptic – about the fate of its members as they try to compete with overseas countries, namely China who has been sending abroad product at below cost of production. The priorities in China’s dictatorial system are not related to the balance of markets, but to keep employment levels stable so its citizens find fewer excuses to protest against the regime which keeps them oppressed. Capitalist market dynamics are for the rest of the world to balance; in China’s dictatorial, controlled-economy regime the priority is to make people feel the regime’s legitimacy can come from never-ending economic growth. The results of such a policy for the rest of the world – not just in chemicals but in all industrial goods – is becoming clear: unprofitable industries which cannot really compete with heavily subsidized Chinese players. The results of such a policy in China are yet to be seen, but subsiding at all costs any industry which creates employment may have debt-related lasting consequences: as they mantra goes, “there is no such thing as a free lunch.” Abiquim’s executive president urged Lula’s cabinet to look north, to the US, where the government has imposed hefty tariffs on almost all China-produced industrial goods or raw materials for manufacturing production. “[The hikes in import tariffs] have improved the US’ scenario: despite the aggressive advance in exports by Asian countries, the drop in US [chemicals] production in 2023 was of 1%, while in Brazil the index for production fell nearly by 10%,” said Andre Passos. “The country adopted an increase in import taxes of over 30% to defend its market from unfair competition. The taxation for some inputs, such as phenol, resins and adipic [acid], for example, exceeds three digits. “Here, we are suggesting an increase in rates to 20% in most claims … We need to have this breathing space for the industry to recover,” he concluded. As such, the figures for the first quarter showed no sign of imports into Brazil slowing down. The country posted a trade deficit $9.9 billion during the January-March period; the 12-month accumulated (April 2023 to March 2024) deficit stood at $44.7 billion. A record high of 61.2 million tonnes of chemicals products entered Brazil in Q1; in turn, the country’s industry exported 14.6 million tonnes. Abiquim proposals for higher import tariffs Product Current import tariff Proposed tariff Expandable polystyrene, unfilled, in primary form 12.6% 20% Other polystyrenes in primary forms 12.6% 20% Carboxymethylcellulose with content > =75%, in primary forms 12.6% 20% Other polyurethanes in liquids and pastes 12.6% 20% Phthalic anhydride 10.8% 20%  Sodium hydrogen carbonate (bicarbonate) 9% 35% Copolymers of ethylene and alpha-olefin, with a density of less than 0.94 12.6% 20% Other orthophthalic acid esters 11% 20% Other styrene polymers, in primary forms 12.6% 20% Other silicon dioxides 0% 18% Other polyesters in liquids and pastes  12.6% 20% Commercial ammonium carbonates and other ammonium carbonates 9% 18% Other unsaturated polyethers, in primary forms 12.6% 20% Polyethylene terephthalate, with a viscosity index of 78 ml/g or more 12.6% 20% Phosphoric acid with an iron content of less than 750 ppm 9% 18% Dinonyl or didecyl orthophthalates 11% 20% Poly(vinyl chloride), not mixed with other substances, obtained by suspension process 12.6% 20% Poly(vinyl chloride), not mixed with other substances, obtained by emulsion process 12.6% 20% Methyl polymethacrylate, in primary form  12.6% 20% White mineral oils (vaseline or paraffin oils) 4% 35% Other polyetherpolyols, in primary forms 12.6% 20% Other unfilled epoxy resins in primary forms 12.6% 20% Silicon dioxide obtained by chemical precipitation 9% 18% Acrylonitrile-butadiene rubber in plates, sheets, etc 11% 35% Other organic anionic surface agents, whether or not put up for retail sale, not classified under previous codes 12.6% 23% Phenol (hydroxybenzene) and its salts 7% 20% Fumaric acid, its salts and esters 10 ,8% 20% Plasticizers and plastics 10 ,8% 20% Maleic anhydride 10 ,8% 20% Adipic acid salts and esters 10 ,8% 20% Propylene copolymers, in primary forms 12.6% 20% Adipic acid 9% 20% Unfilled polypropylene, in primary form 12.6% 20% Filled polypropylene, in primary form 12.6% 20% Methacrylic acid methyl esters 10 ,8% 20% Other ethylene polymers, in primary forms 12.6% 20% Acrylic acid 2-ethylhexyl esters 0% 20% 2-Ethylexanoic acid (2-ethylexoic acid) 10. 8% 20% Other copolymers of ethylene and vinyl acetate, in primary forms 12.6% 20% Other unfilled polyethylenes, density >= 0.94, in primary forms 12.6% 20% Polyethylene with a density of less than 0.94, unfilled 12.6% 20% Other saturated acyclic monoalcohol acetates, c atom <= 8 10. 8% 20% Polyethylene with a density of less than 0.94, with filler 12.6% 20% Triacetin 10. 8% 20% Sodium methylate in methanol 12.6% 20% Stearic alcohol (industrial fatty alcohol) 12.6% 20% N-butyl acetate                              11% 20% Stearic acid (industrial monocarboxylic fatty acid) 5% 35% Alkylbenzene mixtures 11% 20% Organic, non-ionic surface agents 12.6% 23% Ammonium nitrate, whether or not in aqueous solution 0.0% 15% Monoethanolamine and its salts 12.6% 20% Isobutyl alcohol (2-methyl-1-propanol) 10.8% 20% Butan-1-ol (n-butyl alcohol) 10.8% 20% Styrene-butadiene rubber (SBR), food grade as established by the Food Chemical Codex, in primary forms 10.8% 22% Styrene                                9% 18% Hexamethylenediamine and its salts 10.8% 20% Latex from other synthetic or artificial rubbers 10.8% 35% Propylene glycol (propane-1, 2-diol) 10.8% 20% Preparations 12.6% 20% Linear alkylbenzene sulfonic acids and their salts 12.6% 23% 4,4'-Isopropylidenediphenol (bisphenol A, diphenylolpropane) and its salts 10.8% 20% Dipropylene glycol 12.6% 20% Butanone (methyl ethyl ketone) 10.8% 20% Ethyl acetate                                 10.8% 20% Methyl-, ethyl- and propylcellulose, hydroxylated 0.0% 20% Front page picture: Chemical production facilities outside Sao Paulo  Source: Union of Chemical and Petrochemical industries in the state of Sao Paulo (Sinproquim) Focus article by Jonathan Lopez Additional information by Thais Matsuda and Bruno Menini

30-Apr-2024

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