Fertilizers

HOUSTON (ICIS)–US-listed shares of chemical companies fell sharply on Friday and performed worse than the overall market following the growing conflict between Israel and Iran. Iranian missiles hit Tel Aviv in a retaliatory attack that reportedly caused injuries, according to the Wall Street Journal. Most of the missiles were intercepted or fell short, according to Reuters and the Wall Street Journal, which reported the Israeli military. Earlier, Israeli warplanes attacked multiple sites in Iran. Following news of the attacks, the major US stock indices followed by ICIS fell, but not as sharply as shares of chemical companies. The following table shows the major indices followed by ICIS. Index 13-Jun Change % Dow Jones Industrial Average 42,197.79 -769.83 -1.79% S&P 500 5,967.97 -68.29 -1.13% Dow Jones US Chemicals Index 832.55 -12.02 -1.42% S&P 500 Chemicals Industry Index 885.14 -15.59 -1.73% The following table shows the US-listed shares followed by ICIS. Name $ Current Price $ Change % Change AdvanSix 23.99 -0.49 -2.00% Avient 34.3 -1.42 -3.98% Axalta Coating Systems 28.79 -1.37 -4.54% Braskem 3.67 -0.07 -1.87% Chemours 10.98 -0.49 -4.27% Celanese 54.63 -2.24 -3.94% DuPont 66.87 -1.57 -2.29% Dow 29.9 -0.24 -0.80% Eastman 76.19 -1.93 -2.47% HB Fuller 54.16 -1.92 -3.42% Huntsman 10.9 -0.64 -5.55% Kronos Worldwide 6.23 -0.22 -3.41% LyondellBasell 60.1 -0.03 -0.05% Methanex 36 1.57 4.56% NewMarket 648.7 -6.24 -0.95% Olin 20.38 -0.67 -3.18% PPG 106.3 -5.73 -5.11% RPM International 108.08 -6.78 -5.90% Stepan 54.42 -1.26 -2.26% Sherwin-Williams 335.88 -20.32 -5.70% Tronox 5.56 -0.23 -3.97% Trinseo 3.4 0.02 0.59% Westlake 77.3 -1.32 -1.68% Methanex shares rose after it passed a regulatory milestone in its $2.05 billion purchase of the methanol business of OCI Global. Meanwhile, Brent and WTI crude futures both rose by nearly $4/bbl. US producers idled three oil drilling rigs, bringing the total to 439, the lowest figure since October 2021. EUROPEAN SHARES FELL EARLIER IN THE DAYEarlier, Europe chemicals stocks and equities markets fell in morning trading on Friday in the wake of Israel’s strikes across Iran, including nuclear facilities, with the prospect of additional attacks chilling sentiment. The International Atomic Energy Agency (IAEA) confirmed on Friday that Iran’s Natanz nuclear enrichment facility had been struck in the first salvo of strikes that also hit residential areas as part of attacks on military leaders and nuclear scientists. Israel’s Prime Minister, Benjamin Netanyahu, stated on Friday that strikes will continue “for as many days as it takes” to remove nuclear enrichment facilities, as US Secretary of State Marco Rubio urged the Iranian government not to respond. The IAEA noted on Thursday that Iran is potentially in breach of its non nuclear-proliferation agreements for the first time since the early 2000s, but Rafael Mariano Grossi, director general of the nuclear watchdog, attacked the strikes on Friday. “Nuclear facilities must never be attacked, regardless of the context or circumstances,” he said, noting that there is presently no elevation at the Natanz site. MARKETS Oil prices soared in the wake of the strikes, with Brent crude futures jumping nearly $5/barrel on Friday to $74.31/barrel, the highest level since April, while WTI futures were trading at $73.15/barrel, the highest since January. Equities slumped as commodities surged, with Asia bourses universally closing in the red and all key European stock indices trading down in morning trading. The STOXX 600 chemicals index was trading down over 1% as of 10:30 BST, in line with general markets, with stock prices for a third of the 21 component companies down 2-3%. The hardest-hit were Fuchs, LANXESS and Umicore, which saw stocks fall 3.72%, 3.24% and 2.97% compared to Thursday’s close. The situation has also had a dramatic impact on fertilizers markets, with Iran a key global exporter of urea, and some contacts reporting disruption in Israel’s supply of gas to Egypt. SHIPPING Shipping could also face further disruption, with the UK’s Maritime Trade Operations (UKMTO) monitor publishing an advisory on Wednesday – before the start of the Israel  strikes – that increased Middle East military activity could impact on mariners. “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution,” the watchdog said. Around 20% of global oil trade passes through along the Strait of Hormuz, and any move by Iran to block the route could have a huge impact on freight traffic that is still disrupted by firms avoiding the Red Sea in the wake of Houthi strikes. Activity in the Red Sea is understood to have subsided in recent weeks after a US-Houthi ceasefire but shipping firms remain leery of the route, and the attacks on Iran could further inflame tensions in the region. Higher risk and insurance price hikes could also drive shipping prices through the region steadily higher. The upward movement for shipping prices had showed signs of plateauing this week, with China-Europe and China-US route charge steady week on week as of 12 June after weeks of surges, according to Drewry Supply Chain Advisors. Some freight indices continued to climb, however, with the Baltic Exchange’s dry bulk sea freight index up 9.6% as of 12 June, the highest level since October 2024. Thumbnail image: Iran Tehran Israel Strike – 13 June 2025. Iran's IRIB state TV reported explosions in areas of the capital of Tehran and counties of Natanz, Khondab and Khorramabad. (Xinhua/Shutterstock) Additional reporting by Tom Brown

13-Jun-2025

Energy markets price in increased risk following Israeli strikes on Iran but impact on fundamentals limited Retaliation from Iran highly likely, strong response expected given Israeli attack severity But energy market participants cautious on longer-term escalation risks, citing regional examples of geopolitical tension with limited lasting price impact Brent crude would need to near $100/bbl for oil-linked LNG contracts to match current LNG spot market prices Unfolding situation further supports already bullish picture for coming months across energy markets In the early hours of 13 June, Israel launched a wave of attacks targeting Iran’s nuclear programme, with strikes on nuclear infrastructure as well as the killing of scientists and military figures. Iran’s foreign minister called the attacks a “declaration of war” and vowed to retaliate. ICIS experts share views on the potential next steps and the future impact across the energy complex.  Did the strike take energy markets by surprise? (Matthew Jones, Head of Power Analytics) An Israeli strike on Iran’s nuclear capabilities has been a significant market risk for many months. Back in January, we predicted this occurrence in 2025. While there had not been much sign of an impending attack in the first few months of the year, there were reports in late May that Israel was preparing a move, while the US began to pull staff out of the Middle East on Tuesday 10 June, after news emerged that strikes could be imminent. The exact timing was not clear, but markets were aware of rapidly increasing risk. What price impact have we seen so far across the commodity complex? (Gemma Blundell-Doyle, Crude Market Reporter) Oil prices spiked by almost 10% on Friday morning, to their highest since January this year. Brent crude reached $78.48/barrel at 03:41 London time. At 14:30 it remained elevated at $74.33/barrel. (Rob Dalton, Senior Gas Market Reporter) European gas prices rose on Friday morning with the ICIS TTF front-month up 6% to €38.50 ($44.30)/MWh, a three-month high. (Anna Coulson, Senior Power Market Reporter) Bullish European gas supported power prices, with the German front month rising 2.2% from Thursday’s close to €82.75/MWh by 13:50 on Friday. (Ed Cox, Global LNG Editor) East Asian LNG (ICIS EAX) spot prices rose 8% on Friday to $13.43/MMBtu, the highest since March. Asian spot prices have been increasing since early June, in line with a firmer ICIS TTF. Global gas price forward curves 13 June 2025, Source: ICIS, CME Is the price impact risk-based, or have we seen a direct impact on fundamentals so far? (Gemma Blundell-Doyle) Oil fundamentals were on Friday afternoon unchanged. The National Iranian Oil Refining and Distribution Company said refining and storage facilities had not been damaged and continued to operate. (Rob Dalton) The immediate, price-driven response across the TTF was fuelled by rising risk premiums and speculative positioning, with particular concern surrounding the shutdown of Israel’s offshore gas fields. Market participants remain cautious about the longer-term risks of escalation, with many pointing to the 2024 Israel-Iran conflict as an example of geopolitical tension with limited lasting impact on pricing. (Ed Cox) No immediate fundamental LNG impact with outright spot LNG demand limited from key Asian buyers, partly due to market prices sitting well above oil-linked LNG contracts. LNG buyers closely monitor oil prices, which are still used to price most Asian LNG procurement. Most oil-linked contracts take a historic oil price of at least three months previous, so higher Brent today would impact LNG contracts later in the year. Brent would need to go closer to $100/bbl for oil-linked LNG contracts to match current LNG spot prices and to encourage buyers to switch to more spot offtake. ICIS understands that Egyptian fertilizer producers have already shut down at least three urea plants because of measures taken by Israel to temporarily halt gas production. Israel supplies over 30 million cubic metres/day of gas to Egypt, which already faces major supply shortages. Any extended reduction in Israeli gas supply could mean Egypt has to buy additional LNG cargoes to cover the shortage. Egypt has recently committed to buy what could be close to 10 million tonnes of LNG in 2025 and 2026 from a variety of sellers through large tenders. It may call on the market for additional cargoes which in turn could further support global spot prices. What next? (Matthew Jones) You could see different levels of response from Iran. The least consequential would be similar to the events of April 2024 playing out again, in which Iran fires missiles and drones at Israel, which shoots most of them down. Given Iran’s weak position this cannot be ruled out. But it seems more likely that Iran will attempt a stronger response given the severity of the Israeli attack. That could include attacks on targets in the Persian Gulf, including on tankers or oil refineries. Iran could conclude that creating energy market turbulence is the best way to get the US to restrain Israeli action. The most consequential response would be the closing of the Straits of Hormuz through which massive volumes of global oil and LNG travel. Such an event would have major bullish consequences for global energy markets but should be seen as low probability as Iran will be very reluctant to alienate key allies like China. It would also be physically very difficult for Iran to close the Strait even if it wanted to. (Ed Cox) For LNG, the narrative around a potential Straits of Hormuz closure will return, even if this would represent a major further escalation from Iran with little clarity on practical implementation. Almost 20% of global LNG production will pass through Hormuz from Qatar and the UAE in 2025 so the global LNG market will naturally focus closely on events. LNG and wider shipping flows via the nearby Suez Canal remain constrained due to the risk of attack and there is limited scope for a major impact on LNG shipping given the large number of new vessels coming to the market which is suppressing charter rates. But we should expect major LNG buyers to analyse current stocks and review emergency supply security plans in response to these events. Global LNG exports and share of trade using the Strait of Hormuz. Source: ICIS (Andreas Schroeder, Head of Gas Analytics) A wider Middle East conflict could have serious implications for Egyptian gas markets. The country has switched to becoming an importer of LNG since 2024 and is set to increase imports going forward. A major buy tender was issued recently. There is now talk of around 100-110 cargos needed overall in 2025 instead of the previously expected 60-70. We forecast 6.3 million tonnes of LNG imports, nearly tripling the 2.4 million tonnes of 2024. Egypt also receives LNG via pipeline from Jordan’s Aqaba import terminal, which imported 0.8 million tonnes in 2024. In addition, Israel is a major pipeline supplier to Egypt with around 10 bcm/year covering a fifth of Egyptian demand. Should a regional conflict escalate further, an extended stop of Israeli gas exports to Egypt could imply even stronger LNG intake into Egypt for the remainder of 2025. Egyptian LNG imports. Source: ICIS (Gemma) The US and Iran are set to meet in Oman on 15 June to continue ongoing nuclear talks. The Israeli strike on Iran will be on the agenda. US president Trump has urged Iran to make a deal regarding its nuclear programme and to prevent further attacks from Israel, bit it is unlikely Iran will concede without retaliation. Where could commodity prices go in coming days and weeks? (Ajay Parmar, Director, Energy & Refining) We expect Iran to retaliate and tensions to escalate further. This will likely cause oil prices to remain elevated for the coming weeks. If a resolution is found later this month, prices could begin to retreat, but for now, we see them remaining elevated in June and July as a result of this escalation. (Ed Cox) The TTF is ever more influenced by geopolitical events given Europe’s dependency on LNG imports. Often, TTF volatility does not match changes in regional gas fundamentals as traders are changing positions to consider wider macro views. It is possible the TTF could swing by 5-10% daily while uncertainty over further escalation continues. Even though oil pricing plays a limited role in European gas price formulation, it is likely the TTF would follow higher Brent in the context of an overall bullish energy market. (Rob Dalton) Even before recent developments, the near-term outlook for European gas markets had already tilted bullish due to a summer injection demand gap. An escalating conflict would heighten the risk of a broader move higher across the entire near curve, placing increased emphasis on refilling storage sites in the near term. How does the news impact your broader view of the current energy market complex? (Matthew Jones) We held a webinar on 12 June in which we presented a bullish view for the European energy commodity complex in H2 2025. We see significant upside risk to prices in the coming months, stemming from expectations for rising carbon prices, gas storage targets shifting volume risk to winter, the potential continuation of low wind speeds and fears over the return of stress corrosion issues at French reactors. The Israeli attack on Iran and the potential consequences we have outlined here further support that bullish picture for the coming months. (Ed Cox) From an LNG perspective, the fundamental outlook from Asia is not strong in the short term, largely due to weak economic performance from China. European gas looks more bullish. But the correlation between the TTF and Asian spot LNG is strong with the potential for prices in both markets to rise further on Middle East concerns, even if the immediate fundamental impact is focused on Israeli gas supply to Egypt.

13-Jun-2025

LONDON (ICIS)–Europe chemicals stocks and equities markets fell in morning trading on Friday in the wake of Israel’s missile strikes across Iran, including nuclear facilities, with the prospect of additional attacks chilling sentiment. The International Atomic Energy Agency (IAEA) confirmed on Friday that Iran’s Natanz nuclear enrichment facility had been struck in the first salvo of strikes that also hit residential areas as part of attacks on military leaders and nuclear scientists. Israel’s Prime Minister, Benjamin Netanyahu, stated on Friday that strikes will continue “for as many days as it takes” to remove nuclear enrichment facilities, as US Secretary of State Marco Rubio urged the Iranian government not to respond. The IAEA noted on Thursday that Iran is potentially in breach of its non nuclear-proliferation agreements for the first time since the early 2000s, but Rafael Mariano Grossi, director general of the nuclear watchdog, attacked the strikes on Friday. “Nuclear facilities must never be attacked, regardless of the context or circumstances,” he said, noting that there is presently no elevation at the Natanz site. MARKETS Oil prices soared in the wake of the strikes, with Brent crude futures jumping nearly $5/barrel on Friday to $74.31/barrel, the highest level since April, while WTI futures were trading at $73.15/barrel, the highest since January. Equities slumped as commodities surged, with Asia bourses universally closing in the red and all key European stock indices trading down in morning trading. The STOXX 600 chemicals index was trading down over 1% as of 10:30 BST, in line with general markets, with stock prices for a third of the 21 component companies down 2-3%. The hardest-hit were Fuchs, LANXESS and Umicore, which saw stocks fall 3.72%, 3.24% and 2.97% compared to Thursday’s close. The situation has also had a dramatic impact on fertilizers markets, with Iran a key global exporter of urea, and some contacts reporting disruption in Israel’s supply of gas to Egypt. SHIPPING Shipping could also face further disruption, with the UK’s Maritime Trade Operations (UKMTO) monitor publishing an advisory on Wednesday – before the start of the Israel  strikes – that increased Middle East military activity could impact on mariners. “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution,” the watchdog said. Around 20% of global oil trade passes through along the Strait of Hormuz, and any move by Iran to block the route could have a huge impact on freight traffic that is still disrupted by firms avoiding the Red Sea in the wake of Houthi strikes. Activity in the Red Sea is understood to have subsided in recent weeks after a US-Houthi ceasefire but shipping firms remain leery of the route, and the attacks on Iran could further inflame tensions in the region. Higher risk and insurance price hikes could also drive shipping prices through the region steadily higher. The upward movement for shipping prices had showed signs of plateauing this week, with China-Europe and China-US route charge steady week on week as of 12 June after weeks of surges, according to Drewry Supply Chain Advisors. Some freight indices continued to climb, however, with the Baltic Exchange’s dry bulk sea freight index up 9.6% as of 12 June, the highest level since October 2024. Focus article by Tom Brown Thumbnail image: Iran Tehran Israel Strike – 13 June 2025. Iran's IRIB state TV reported explosions in areas of the capital of Tehran and counties of Natanz, Khondab and Khorramabad. (Xinhua/Shutterstock)

13-Jun-2025

HOUSTON (ICIS)–Researchers at Colorado State University’s Weather and Climate Research department maintained their prediction of an above-average Atlantic hurricane season, with a probability that 33% of major storms could make landfall in the US Gulf. The CSU team predicts 17 named storms during the Atlantic hurricane season, which began on 1 June and runs through 30 November. Of those 17 storms, researchers forecast nine to become hurricanes and four to reach major hurricane strength of Category 3 or higher. Hurricanes are rated using the Saffir-Simpson Hurricane Wind Scale, numbered from 1 to 5, based on a hurricane’s maximum sustained wind speeds, with a Category 5 storm being the strongest. Saffir-Simpson Hurricane Wind Scale Category Wind speed 1 74-95 miles/hour 2 96-110 miles/hour 3 111-129 miles/hour 4 130-156 miles/hour 5 157+ miles/hour While still very early in the season, researchers said it is showing characteristics as seen in 1996, 1999, 2008, 2011, and 2021. In 1996, there were six major hurricanes, which was the most since 1950, but none entered the US Gulf. In 1999, five storms reached Category 4, with none threatening the US Gulf. Storms in both years made landfall on the US East Coast in North Carolina. Hurricane Ike, one of five major hurricanes in 2008, made landfall in Galveston near the entrance to the Houston Ship Channel, causing chemical plants and refineries in the region to struggle to restart. Hurricane Irene was the only hurricane to make landfall in 2011, striking near Cape Lookout, North Carolina. It was one of seven hurricanes that season, of which four became major hurricanes. In 2021, there were 21 named storms with seven becoming hurricanes, four of which were major storms and several entered the US Gulf. Hurricane Ida was the most destructive, making landfall in Louisiana and leading to many plant shutdowns. The report also includes the following probability of major hurricanes making landfall in 2025: 51% for the entire US coastline (average from 1880–2020 is 43%) 26% for the US East Coast, including the Florida peninsula (average from 1880–2020 is 21%) 33% for the US Gulf Coast from the Florida panhandle westward to Brownsville, Texas (average from 1880–2020 is 27%) 56% for the Caribbean (average from 1880–2020 is 47% Hurricanes directly affect the chemical industry because plants and refineries shut down in preparation for the storms, and they sometimes remain down because of damage. Power outages can last for days or weeks. Hurricanes shut down ports, railroads and highways, which can prevent operating plants from receiving feedstock or shipping out products. Most US petrochemical plants and refineries are on the Gulf Coast states of Texas and Louisiana, making them prone to hurricanes. Other plants and refineries are scattered farther east in the states of Mississippi, Alabama, and Florida – a peninsula that is also a hub for phosphate production and fertilizer logistics. Additional reporting by Al Greenwood

11-Jun-2025

SAO PAULO (ICIS)–Brazil’s trade union representing auditors at the Federal Revenue service, which are some of the best-paid civil servants in the country, accepted late on Monday the court’s ruling ordering the end of their nearly seven-month strike, said Sindifisco. Ruling ends what most Brazilians just saw as state-fueled privilege Striking workers average salary: $5,000/month; Brazil’s median: $400-500/month The strike had started affecting the state’s tax collection While the judge’s ruling ordering the end of the strike was published over the weekend, as of Monday morning Sindifisco maintained it had not been officially notified yet. In a written response to ICIS late on Monday, the union said it had been notified and in compliance with the “democratic state of law” it would accept the ruling, but did not disclose any details about more industrial action for coming weeks. The ruling put an end to one of the longest strikes by civil servants in Brazil, started in November, and a case which has showed some of Brazil’s wrongs – civil servants paid multiple times more than the average Brazilian, complaining about the lack of salary increases. The Federal Revenue auditors have mostly fought this battle alone, and along the way they did not gain any new friends. For the government, the ruling puts an end to a dispute which was becoming increasingly negative for the economy – goods piling up in customs points across Brazil’s vast geography – as well as the state’s ability to collect the taxes due on imports and exports. Finance Minister Fernando Haddad said in parliament in May that the strike was partly to blame for the lower-than-expected tax proceeds for 2025. The pressure was building up while Sindifisco was becoming increasingly isolated in its battle. Chemicals and fertilizers players, as well as most industrial companies, will have breathed a sigh of relief over the weekend as their concerns about trade flows had for months been increasing. The hangover from such an extended period of industrial action is expected to be tedious and things will take months, rather than weeks, to normalize, most analysts think. TIPPING POINTAs their demands kept falling in deaf ears with the government, Sindifisco stepped up the pressure in early June, calling for an even stricter industrial action. It proved lethal for its demands. The cabinet quickly puts its lawyers to work and convinced a judge that the latest strike action was affecting essential services that the state is mandated to deliver, as well as tax receipts. To make sure Sindifisco came around quickly, the judge’s ruling set a daily fine of Brazilian reais (R) 500,000 ($90,100) in case of non-compliance by the union. “Sindifisco states that it was formally notified today [Monday 9 June] of the preliminary decision of the Superior Court of Justice (STJ) granted by Judge Benedito Goncalves and, respecting the democratic rule of law, it will respect the ruling,” it said in its written statement late on Monday. “The essential activities carried out by the auditors will be protected, including the suspension of standard operations in customs units.” In his ruling, the judge specifically mentioned “standard operations”, which is nothing but a euphemism which means auditors do still go to work and in theory carry out their tasks, but they do so at a much slower rate, amounting practically to strike action as workloads pile up. Sindifisco said its legal affairs department is evaluating “all applicable legal measures” to discuss the court decision. However, it did not respond to questions about what its next strategy could be based on, considering they have exhausted practically all industrial actions possible, without succeeding in their demands. The union’s main demand is hefty increases in wages to recoup the losses in purchasing power accumulated since 2016, as they claim their wages have been increased only once since 2016. But even that clear and rather unfair circumstance has not moved public opinion, political parties or the cabinet to the striking workers' turf. The reason not difficult to find: their already very generous, taxpayers-funded wages. STATE-FUNDED PRIVILEGEA Federal Revenue auditor’s salary averages R28,000/month ($5,000/month), gross before taxes and social security contributions, according to the Brazilian branch of jobs site Glassdoor. That, in Brazil, is earned by less than 1% of the population. To make matters worse, those salaries are paid by all taxpayers, most of whom must endure low salaries and long days at work – or take on two jobs – to make ends meet. Wages for most Brazilians range between R1,518/month – the legal minimum wage, widely common in services jobs such as bars or shops – and around R3,000/month. The auditors' salaries, which can also be found in other high-ranking civil servant positions, represent for many Brazilians the centuries-old, state-funded privilege which tends to be concentrated among white Brazilians who come from high-income households and, almost certainly, went to the country's best universities. The 1950s idea of a new capital, Brasilia, which would be able to bring together a modernized and more inclusive version of all Brazils was a lovely idea on paper – which mostly stayed in the papers of idealists such as famous architect Oscar Niemeyer and his disciples. As the decades went by, old habits died hard, and Brasilia became a weird version – for good and bad – of the Brazil they were trying to change. Many of those Brasilia-based, well-paid civil servants have come to live in bubbles and are seen by most Brazilians as some sort of state-sponsored caste. No wonder the auditors’ plea… was never taken too seriously for most Brazilians or even considered just a bad joke. Opinion polls have been telling that story for months, but  Sindifisco seemed to fail to grasp the public’s mood and kept pushing. After the weekend’s ruling gave it the upper hand, the cabinet will be even less inclined to make any concessions now as it tries to rein in the fiscal deficit while keeping a good face in terms of welfare state spending, a difficult balance to start with. But any public opinion’s perception that the cabinet was giving in would have added to an extended belief about some civil servants: they have it better than most private sector employees, not least because their jobs, once they passed exams and obtain the qualifications, are practically secured until retirement. A generous state pension follows. EXPECTED COMPETITIVE ELECTIONBrazil will soon enter an unofficial, year-long electoral campaign as its nearly 160 million voters will be called to the polls to choose a president and renew parliament in October 2026. Lula’s Workers’ Party (PT) and its governing coalition appear to have slim chances to revalidate their mandate as the PT’s core voters – low-income households – have greatly felt as of late the increase in basic items such as food, as a larger share of their spending goes to that. The government will not want to upset any potential voters by appearing to favor already privileged civil servants. The election could literally be decided by a few thousand votes, so any potential voter turning away would not be good news for the PT. To make things more confusing, the PT has yet to officially choose a presidential candidate as its hegemonic leader of the past three decades – Lula – keeps the incognita when enquired about it. And that is a rather strange circumstance, especially as the age of another President, that of US’ Joe Biden, became part of the public conversation after his debate debacle in June 2024. Be it because the Brazilian center-left has not been able to find a successor with the same appeal than Lula or be it because in Brazil’s idiosyncrasy blasting old age is considered rather rude, Lula’s age has not become part of the debate yet, at least to the same extent than it did in the US. Another strange circumstance as the signs of aging are evident for all to see. Biden was 81 during the debate. Lula would be 80 if he runs for re-election at the time of the poll but, if victorious, he would be sworn into office for a fourth term when he will have already turned 81. Front page picture source: Brazil's Federal Revenue press services Focus article by Jonathan Lopez

10-Jun-2025

SAO PAULO (ICIS)–A Brazilian judge has ordered customs workers to end their nearly seven-month strike after the government argued the industrial action was causing financial harm as goods pile up at ports and customs facilities across the country. The prolonged strike has significantly disrupted Brazil's customs operations, affecting imports and exports at major ports including Sao Paulo state’s Santos, Latin America's largest, with companies working with perishable goods and time-sensitive materials experiencing the largest impact. Superior Court of Justice judge Benedito Goncalves also imposed a daily Brazilian reais (R) 500,000 ($89,800) fine on Sindifisco, in case of non-compliance. Moreover, the judge ordered an end to what can be perceived as standard operations, but in which auditors carry out their duties slowly, as part of their industrial action. “Although the Constitution guarantees the right to strike for public servants, it also protects the public interest by ensuring the continuity of essential services," the ruling said, as cited by state-owned news agency Agencia Brasil. If confirmed, the order would put an end to a strike which started in November 2024 and which workers had just doubled down on in early June, expanding the areas where they would not be carrying out audits. The chemicals and fertilizers industries, as well as many other industrial sectors, were growing concerned about the industrial action and its long-term impact, not least because the Federal Revenue is currently implementing a new simplified import system, the last phase of which is to occur in the second half of 2025. THE LONGEST STRIKEEmployees at customs points started their protest in earnest in mid-2024, first with partial stoppages or other type of pressure action. However, talks with the government on what they deem poor salary increases never made any meaningful progress. Then, in November 2024, the strike which has been legally ended now started. Employees say they have had just one pay rise since 2016 – that Lula granted them in 2023 soon after taking office, a 9% increase, which would be far from enough to regain the loss of purchasing power. They also demand full payment of the efficiency bonus. Since talks with the government were going nowhere by May, employees doubled down the pressure in early June, calling a five-day "zero clearance period" in which practically any non-automative checks would not be carried out. The government quickly filed a case on 3 June deeming the latest move illegal, as it would be harming the state’s constitutionally mandated provision of essential services. Additionally, the prolonged strike was casting a financial shadow over the state’s ability to collect taxes. As the cabinet tries to reconcile cutting the fiscal deficit and expanding the welfare state, Finance Minister Fernando Haddad said in parliament in May the strike was high up on the list as one of the causes for its ministry to have to re-work the national accounts as tax proceeds are now to be lower than initially expected. “This volume of contingency [lower revenues] is because some circumstances occurred after the Budget was submitted. These are facts that need to be evaluated: The first fact is that there was no compensation for the payroll tax relief,” said Haddad, as quoted by state-owned Agencia Brasil. “The second problem is the partial shutdown of the Federal Revenue service, which affects the performance of the [tax] collection.” THE END – OR NOTHowever, Sindifisco published a statement on Saturday saying that “to date” it had not been formally notified of the court’s decision. Sindifisco had not responded to a request for comment at the time of writing. “Since 3 June, when the Union [state] filed a request to declare the tax auditors’ strike, the union's legal department has been working non-stop to take appropriate actions, such as those that have already been carried out, but also in defining strategies and possibilities for action in the legal field,” said Sindifisco. “The [union’s] national directorate states that the strike of tax auditors is legitimate and follows all the provisions of the relevant legislation.” ($1 = R5.56) Front page picture source: Brazil's Federal Revenue press services Additional reporting by Bruno Menini

09-Jun-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 June. Europe HDPE spot dragged sub-€1,000/tonne by US offers as US Q1 imports ride highSpot prices for high-density polyethylene (HDPE) in Europe have fallen below €1,000/tonne as local buyers receive highly discounted US offers against a backdrop of high imports from the US in the first quarter of 2025 and gaping spreads between the regions. Higher tariffs on Russia embolden European producers to lift nitrate pricesEmboldened by the European Parliament’s decision to go ahead with higher import duties on Russian fertilizers, nitrate producers in Europe have raised prices despite strong objections from the farming community. Europe pharmaceutical IPA slightly softer, stable demand despite peak seasonEuropean spot pricing for premium pharmaceutical grade isopropanol (IPA) has softened slightly, while prices for technical and cosmetic grades are stable amid steady conditions. European paraxylene contract price for April, May settles following contentious negotiationsEurope paraxylene (PX) contracts for April and May have been finalized in a double settlement. LyondellBasell enters exclusive talks for Europe asset divestmentsLyondellBasell has entered into exclusive talks with an industrial investor for the sale of four European production sites, slightly over a year after launching a review of its asset base in the region. Asia-Europe shipping prices jump on US-China trading windowContainer prices for Asia cargoes to Europe jumped sharply week on week amid a general surge in freight costs as players look to lock down shipments from China to the US during the pause in reciprocal tariffs between the countries. Limited demand for Europe PET mitigates impact of higher freight ratesDemand for European polyethylene terephthalate (PET) has been blighted by poor weather conditions, economic apathy and significant import arrivals. LyondellBasell Europe divestment assets had lost money for years – CEOThe assets LyondellBasell has entered exclusive talks to sell to private equity investor AEQUITA had been cash negative on average to the company over the last five years, with CEO Peter Vanacker welcoming a “clean exit” from the businesses.

09-Jun-2025

SAO PAULO (ICIS)–Mexico’s chemicals sector is ready to potentially invest $50 billion in the next decade if key challenges are addressed, including performance at state-owned energy major Pemex, according to the president of trade group ANIQ. Jose Carlos Pons, who is also the CFO of Mexican chemicals producer Alpek, said ANIQ is in constant contact with the Mexican government about potential projects private companies and Pemex could jointly implement, some of them related Pemex assets in petrochemicals which are idled or running at low capacities. Pons, who was appointed ANIQ's president in May, said that the $50 billion in investments would mean the chemicals industry could double its contribution to GDP from 2% to 4.5%. He said ANIQ is in contact with the ministries of energy and economy (Secretaria de Energia and Secretaria de Economia, respectively) about these plans. The two ministries, as well as Pemex, had not responded to a request for comment at the time of writing. IT IS (ALMOST) ALL ABOUT PEMEX Pemex, which is the largest and key supplier of raw materials to the Mexican chemicals industry, has for years suffered performance problems, with output dwindling below 2 million barrels/day, despite targets to surpass that threshold, and having become the most indebted oil major with obligations of around $100 billion. However, ANIQ puts many hopes in the new administration under Claudia Sheinbaum and in what it sees as an honest intention to turn around Pemex, adding that the trade group wants to go “hand in hand” with the government to spur the investments in petrochemicals. The cabinet has announced plans to cut costs at the major as well as petrochemicals and fertilizers expansions at the company. However, potential and ambitious investment plans – both from Pemex itself and private companies – hinge on several critical factors. “If we were able to turn Pemex around, by improving its supply of key raw materials; if we were able to work on the energy side and achieve competitiveness; if we were able to create the infrastructure so that we wouldn't depend so much on imports; and if we simplified our country's administration, then there could undoubtedly be that potential [of $50 billion chemicals investments],” said Pons. Out of those $50 billion, Pons said that around two-thirds would go primarily to maintenance investments to improve Pemex's petrochemicals operational capacity. "Today, we have a great opportunity for Pemex to operate its plants at greater capacity, and the way to achieve that goal would be to give the plants operational reliability. Ensuring that the different parts of each of the plants have operational reliability will ultimately increase the output of those plants," she said. "Pemex has now an interesting opportunity. Throughout all the areas where it operates, without a doubt, this administration and the previous one have dedicated resources to turning it around. It's very important to us that they're doing this." Efforts to turn around Pemex, however, have so far failed. The previous administration by Andres Manuel Lopez Obrador started its tenure with a target for output to surpass 2 million barrels/day target, which it finally ditched. Some analysts have said Pemex’s woes are too deep and make the company’s survival very difficult. Others, however, think the major is ‘too big to fail’, and therefore will continue to be bailed out by the Treasury as it has been the case for years. "Pemex is very important to us, so we don’t even want to consider a Pemex that fails. Today, it provides us with gas, with many raw materials. The situation is complex, and the fact that it is among the priorities reflects the government's intentions. But these huge titans take time, but with the right investments and decisions [it can happen],” said Pons. “That's why we want to work hand in hand with the government. The project is so large that we all need to get involved. What we want is to tell them and indicate what we think the priorities are and where we want to help them." Pons said ANIQ has established working groups with both the Ministry of Energy and Ministry of Economy to advance these objectives, with regular conversations. "We want to understand in greater detail what the government's expectations are and under what conditions they are expecting them to happen,” said Pons. “Without a doubt, for the private sector to invest, there must be a certain economic logic, whether it's guaranteed supply contracts with priority or a preferential price, so that the investment is paid for." There would also be other, country-wide challenges to be addressed, however. Pons mentioned for the chemicals investment plans to succeed there would be a need to improve other key energy supplies such as electricity, water and natural gas. And yet another added challenge for Mexico: infrastructure. Pons mentioned ANIQ is optimistic about the government’s Plan Mexico, ambitious measures touching nearly all aspects of the economy with the target of putting Mexico among the world’s 10 largest economies. It is now considered to be placed between the 12th and 15th world economic ranking – depending on source and its methodology to calculate GDP. FRIENDLY LOBBYINGPons was pressed about the rather friendly lobbing ANIQ is currently exercising when it comes to the policies of Sheinbaum, who has implemented reforms ‘Corporate Mexico’ is not happy about, such as a judicial reform which has raised alarm bells about the damage it could cause to the state of law, therefore to corporate law. But he would not expand much about those issues, because he said ANIQ is right now focused on helping bring about the abovementioned investment plans, and the trade group has opted for that tone rather the festy lobbying tone other trade groups can use. “What we want most is to work together with the government. What I truly want in my tenure as president is very important to me: for the government to understand that we must work together and that we believe Plan Mexico is truly something important,” said Pons. “So, rather than creating an enemy in the government, what I want to work on is to work hand in hand with them and for them to understand that this won't work if we don't work together. We'll do it when necessary [a more robust lobbying], but right now what I want most is to reach out to the government, for them to understand that we're going to work together.” ICIS will publish on Monday (9 June) the second part of this interview, with ANIQ president's take on the US shift in trade policy and the role of China in the global economy Front page picture: Facilities operated by Mexico's polyethylene (PE) producer Braskem Idesa  Source: ICIS Interview article by Jonathan Lopez

06-Jun-2025

SAO PAULO (ICIS)–Brazil's customs auditors have announced a new five-day "zero clearance period" at the Port of Santos on 2-6 June in which no physical inspections will be carried out, according to a letter to customers by logistics company Unimar seen by ICIS. The action at Santos – Latin America’s largest port – extends a strike started in 2024 which has disrupted logistics for months. The port is a key exit and entry point for some chemicals and a wide range of industrial goods, as well as of fertilizers imports feeding Brazil’s powerful agricultural sector. “Brazil’s Superior Courts have ruled that industrial action cannot entirely paralyze essential public services, such as the clearance of perishable cargo. Judicial intervention may be required to ensure the continuity of critical operations, assessed on a case-by-case basis,” said Unimar’s letter. “Currently, marine terminals at major ports have reported that most cargo is cleared automatically via the system, except for those not classified under the ‘Green Channel.’ Therefore, the strike is expected to primarily impact cargo that requires physical inspections.” Under normal conditions, average clearance times at Santos are five to seven days for imports and one to two days for exports – the action plan up to 6 June may cause delays for cargo requiring physical inspection, while clearance of vessel spare parts at major airports typically takes three to five days. Brazil's Superior Courts have ruled that industrial action cannot entirely paralyze essential public services, such as clearance of perishable cargo. Judicial intervention may be required to ensure continuity of critical operations on a case-by-case basis. A YEAR-LONG STRIKEThe strike by customs workers, with no sign of resolution in sight, is about to reach one year of duration, some of the longest strikes by civil servants ever seen in Brazil. Smaller strikes started to take place in mid-2024 but then escalated into a comprehensive two-month stoppage. Several rounds of talks between the union representing tax auditors and the government have failed to reach agreement. The union is demanding salary increases and better working conditions, including maintenance and upgrades at ageing customs points across Brazil. President Luiz Inácio Lula da Silva's government is attempting to control spending amid investor concerns about the fiscal deficit. Chemicals players have said to ICIS they are increasingly concerned about rising logistics costs, in part due to the strike. The trade group Brazilian Association of Distributors of Chemical and Petrochemical Products (Associquim) warned that companies handling perishable goods or materials requiring quick delivery – pharmaceuticals, food products – are facing particular difficulties. "We have chemical products that have to have a special place for storage, and if too much accumulates in those special storage places, then it will filter down to the end-user, and create a safety problem," said Associquim president Rubens Medrano earlier this year. NEW SYSTEM DEPLOYMENT AT RISKSomething most logistics players have mentioned and remain a key concern is how the strike could threaten the implementation of Brazil's New Import Process on the Single Foreign Trade Portal, approved in 2023 to reduce delivery times and costs. The system's third and most critical phase is due in the second half of 2025. Trade group the Brazilian Machinery Builders' Association (Abimaq) estimated the new system could save companies Brazilian reais (R) 40bn ($7.07bn) annually when fully implemented, nearly halving delivery times from nine days to five days through increased electronic processing. Meanwhile, the trade group representing chemicals producers Abiquim has equally warned that prolonged strike action could negatively impact the current implementation phase of the import system designed to simplify processes and reduce logistics costs. The Santos Port Authority had not responded to a request for comment at the time of writing. Front page picture: The Port of Santos in Sao Paulo state Picture source: Santos Port Authority  Additional reporting by Sylvia Traganida

03-Jun-2025

HOUSTON (ICIS)–The US can maintain nearly all the plastic and chemical tariffs it imposed this year after an appeals court granted on Thursday the government's request to stay the judgment of a lower court. The stay will remain in place while the case is under consideration by the US Court of Appeals for the Federal Circuit. Earlier, the US lost a judgment over its tariffs in the US Court of International Trade. That lower court ruled that the president exceeded its authority when it imposed tariffs under the International Emergency Economic Powers Act (IEEPA). These IEEPA tariffs included nearly all of the duties that the US imposed in 2025 on imports of commodity plastics and chemicals. Had the appeals court rejected the government's request for a stay, then the US would have had 10 calendar days to withdraw the tariffs it imposed under IEEPA. The tariffs covered by the ruling include the following: The 10% baseline tariffs against most of the world that the US issued during its so-called Liberation Day event on 2 April. These include the reciprocal tariffs that were later paused. The US issued the tariffs under Executive Order 14257, which intended to address the nation's trade deficit. The tariffs that the US initially imposed on imports from Canada under Executive Order 14193. These were intended to address drug smuggling. The US later limited the scope of these tariffs to cover imported goods that do not comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement (USMCA). The tariffs that the US initially imposed on imports from Mexico under Executive Order 14194. These were intended to address illegal immigration and drug smuggling. Like the Canadian tariffs, these were later limited to cover imported goods that did not comply with the USMCA. The 20% tariffs that the US imposed on imports from China under Executive Order 14195, which was intended to address drug smuggling. Because the appeals court granted the government's request for a stay, the US can maintain the IEEPA tariffs. The ruling did not cover sectoral tariffs imposed on specific products like steel, aluminium and auto parts, and it does not cover the duties that the US imposed on Chinese imports during the first term of US President Donald Trump. IMPLICATIONS OF THE RULINGIf the ruling is upheld by the higher courts, it could bring some imports of plastics and chemicals back to the US while lowering costs of other products. While the US has large surpluses in many plastics and chemicals, it still imports several key commodities. US states that border Canada import large amounts of polyethylene (PE) and other plastics from that country because it is closer than the nation's chemical hubs along the Gulf Coast. Other significant imports include base oils, ammonia, polyethylene terephthalate (PET), methylene diphenyl diisocyanate (MDI), methanol and aromatics such as benzene, toluene and mixed xylenes (MX). RULING COULD REDIRECT CHINESE EXPORTS OF PLASTIC PRODUCTSThe IEEPA tariffs of the US caused countries to redirect exports of plastics and chemicals to other markets, particularly to Europe. The result depressed prices for those plastics and chemicals. If the ruling holds, some of those exports could return to the US and reduce the quantity of exports arriving in Europe. The IEEPA tariffs had a similar effect on the plastic products exports by China. Those exports were redirected to other countries, especially southeast Asia. These redirected shipments flooded those countries with plastic goods, displacing local products and lowering domestic demand for the plastics used to make those products. If the ruling is restored by higher courts, then it could direct many of those shipments back to the US, although they would unlikely affect shipments of auto parts. Those shipments are covered by the sectoral tariffs, and the court ruling did not void those tariffs. RULING REMOVES BASIS FOR RETALIATORY TARIFFS AGAINST US PLASTICS, CHEMSChina had already imposed blanket tariffs in retaliation to the IEEPA tariffs the US imposed on its exports. China unofficially granted waivers for US imports of ethane and PE, but those for liquefied petroleum gas (LPG) were still covered by the duty. China relies on such imports as feedstock for its large fleet of propane dehydrogenation (PDH) units, which produce on-purpose propylene. If upheld, the ruling could restore many of those exports and improve propylene margins for those PDH units. The EU was preparing to impose retaliatory tariffs on exports of nearly every major commodity plastic from the US. Other proposals would cover EU imports of oleochemicals, tall oil, caustic soda and surfactants from the US. Canada also prepared a list of retaliatory tariffs that covered US imports of PE, polypropylene (PP) and other plastics, chemicals and fertilizers. If the ruling holds, it would remove the basis for the proposed tariffs of Canada and the EU as well as the existing ones already imposed by China. RULING WOULD NOT ELIMINATE THREAT OF FUTURE TARIFFSEven if the higher courts uphold the ruling and bars tariffs under IEEPA, the US has other means to impose duties that are outside of the bounds of the ruling. Section 122 of the Trade Act of 1974. Such tariffs would be limited to 15%, could last for 150 days and address balance of payment deficits. Tariffs imposed under the following statutes would require federal investigations, which could delay them by several months. Section 338 of the Tariff Act of 1930. The president can impose tariffs of up to 50% against countries that discriminate against US commerce. Section 301 of the Trade Act of 1974, which addresses unfair trade practices. This was the basis on the tariffs imposed on many Chinese imports during the peak of the trade war between the two countries. Section 232 of the Trade Expansion Act of 1962, which addresses imports with implications for national security. Trump used this provision to impose tariffs on steel and aluminum. The US has started Section 232 on the following imports: Pharmaceutical and active pharmaceutical ingredient (APIs) – Section 232 Semiconductors and semiconductor manufacturing equipment – Section 232 Medium and heavy-duty trucks, parts – Section 232 Critical minerals – Section 232 Copper – Section 232 Timber and lumber – Section 232 Commercial aircraft and jet engines – Section 232 Ship-to-shore cranes assembled in China or made with parts from China – Section 301 Shipbuilding – Section 301 The case number for the appeal is 2025-1812. The original lawsuit was filed in the US Court of International Trade by the plaintiffs VOS Selections, Genova Pipe, Microkits, FishUSA and Terry Precision Cycling. The case number is 25-cv-00066. Thumbnail Photo: A container ship, which transports goods overseas. (Image by Costfoto/NurPhoto/Shutterstock) Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy

29-May-2025