HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 29 August. Some lubricating oil codes fall under US steel tariffs Base oils are exempt from US tariffs, but some lubricant products will be affected. Some trade codes that include lubricating oils and preparations are included in the 50% tariffs on steel, aluminum and derivatives imposed under Section 232, as published in the Federal Register last week. ICIS Economic Summary: US set for moderate growth as trade deals offer some certainty The last month has seen more “deals” made with additional major US trading partners. Deals have yet to be made with China, Canada, Mexico and India, but those made cover roughly three-fourths of US trade. Progress thus far has brought some certainty back to markets and decision-makers, but our base case is for a slowdown in the US economy. UPDATE: RAIL: New service from US railroads BNSF, CSX could be a better option than merger – ACD US railroads BNSF and CSX are offering several new intermodal services designed to offer seamless, efficient connections from coast to coast, an alliance that is supported by the head of the chemical distributors association. INSIGHT: Proposed US biofuel mandate to raise costs for fuel, oleo markets The new biofuel mandate proposed by the US calls for larger amounts of renewable fuel to be blended into gasoline and diesel, all while penalizing companies that import biofuels or the feedstock needed to make them domestically. EU proposes to cut US import duties to zero on plastics, rubber, fertilizers The European Commission has set out its first detailed proposals to cut tariffs on US products flowing to Europe as negotiators continue to flesh out the terms of the US-EU trade deal agreed last month. INSIGHT: Chemical companies seek liquidity with infrastructure assets, but it will not be easy Monetizing ‘hidden’ assets such as infrastructure for chemical producers appears to be an increasingly attractive option, especially amid the prolonged industry downturn and depressed valuations for publicly traded companies.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at key challenges for the autumn. 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. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 29 August. EU proposes to cut US import duties to zero on plastics, rubber, fertilizers The European Commission has set out its first detailed proposals to cut tariffs on US products flowing to Europe as negotiators continue to flesh out the terms of the US-EU trade deal agreed last month. Germany’s Evonik spins out infrastructure activities in Marl and Wesseling into new firmEvonik is spinning out its infrastructure activities in Marl and Wesseling chemicals parks to become new companies, the German firm said on Thursday in a statement. INSIGHT: How the shift to EVs and lightweighting are impacting automotive plastic useThe shift towards electric vehicles (EVs) currently taking place in Europe should ostensibly mean a boon for plastic markets serving the sector. EVs use significantly more plastic than cars run on internal combustion engines (ICEs). However, a trend towards lightweighting, and cost-saving measures, mean that some plastics may not see as large a growth in use as others. INSIGHT: Softer crude oil, seasonal low demand to drive Europe chemical prices down in August The majority of European petrochemical prices are expected to fall in August, driven by lower crude oil values and persistently subdued downstream demand. India’s Paradeep Phosphates secures 1.6 million-tonne agreement with Morocco’s OCP India’s Paradeep Phosphates Ltd (PPL) has announced a significant long-term supply agreement with Morocco’s OCP, securing 1.6 million tonnes of phosphate rock.

SINGAPORE (ICIS)–South Korea’s petrochemical shipments fell by 18.7% year on year to $3.38 billion in August, while semiconductor and automobile exports hit all-time highs for the month, official data showed on Monday. Overall exports growth slows to 1.3% year on year as US tariffs weigh Exports to the US fall 12%, largest drop since May 2020 August manufacturing PMI rises slightly to 48.3 – S&P Global Petrochemical exports in August fell largely due to falling product prices amid declining international oil prices, South Korea’s Ministry of Trade, Industry and Energy (MOTIE) said in a statement. The country’s overall exports rose by 1.3% year on year to $58.4 billion in August, down from the 5.8% growth in July, while imports fell by 4.0% year on year to $51.9 billion. The trade balance stood at a surplus of $6.51 billion in August, narrowing from July’s $6.61 billion. Semiconductors reached a historic high in August, up 27.1% year on year to $15.1 billion, the second consecutive month of record growth. The surge was driven by “favorable trends” in memory chip prices, and sustained demand for high-value memory products. Exports of automobiles also recorded a historic high in August, growing 8.6% year on year to $5.50 billion, as exports of hybrids, electric vehicles (EVs) and used cars all grew. Ship exports in August also grew 11.8% year on year to $3.14 billion amid deliveries of vessels ordered at high prices in 2022-2023. Exports grew in August to three out of nine major regions, including the Association of Southeast Asian Nations (ASEAN), the Middle East, and the Commonwealth of Independent States (CIS). August shipments to ASEAN reached a record high, growing 11.9% to $10.9 billion amid exports of semiconductors and ships. However, exports to both the US and China declined, with US shipments dropping 12.0% year on year and China shipments down by 2.9%. Declines in automobiles, general machinery and steel drove the decrease in US exports after hefty 50% tariffs on steel and aluminum were levied by US President Donald Trump. A 15% levy on South Korean goods also came into effect from 7 August, following a trade deal struck by the two countries, but an agreement to reduce auto tariffs to 15% from 25% has not been ratified. MANUFACTURING DECLINEFactory activity in South Korea continued to contract in August as the manufacturing purchasing managers’ index (PMI) rose slightly to 48.3 from 48.0 in July, according to data released by S&P Global on Monday. A number below 50 signifies contraction and the manufacturing sector has contracted for the seventh successive month, S&P Global said. “Both output and new orders remained in contraction territory, with both metrics little-changed from those seen in July,” said Usamah Bhatti, Economist at S&P Global Market Intelligence. Manufacturers reported challenging domestic economic conditions as well as the US tariff impact, which reduced both sales and production levels. However, the production outlook for the year ahead was positive with hopes of economic improvement, said S&P Global. “The degree of optimism was moderate, with hopes centred on the launch and mass production of new products and an alleviation of domestic economic malaise. There was concern noted, however, regarding the timing of any recovery and the potential prolonged impact of US tariffs,” said Bhatti. GOVERNMENT ANNOUNCES MORE MEASURESSouth Korea’s Minister of Trade, Industry and Energy Kim Jung-kwan said in a statement that the government will prepare “reliable and tangible policies” following feedback from export companies amid tough conditions and US tariffs. “To minimize damage to small and medium-sized enterprises caused by US tariff measures, we plan to announce and implement support measures,” Kim said. The measures will focus on easing management burdens, maintaining export momentum with market diversification and strengthening the competitiveness of “key and promising” industries, said Kim. Previously, the government said it will announce measures to help the ailing petrochemical industry but warned that companies needed to voluntarily restructure their operations as well as cut their overall annual naphtha cracking capacity by up to 3.7 million tonnes. Thumbnail photo shows trade cargo containers at Busan port, Korea (Source: YONHAP/EPA-EFE/Shutterstock) Focus article by Jonathan Yee

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 29 August. Asian naphtha improves on tighter supplies; market to hold steady By Li Peng Seng 25-Aug-25 10:35 SINGAPORE (ICIS)–Asia’s naphtha front-month open-specification price for first-half October hit a three-week high on 22 August, driven not only by crude but also by demand and tighter supplies. India’s sweeping tax reforms to boost chemical demand pre-Diwali By Jonathan Yee 26-Aug-25 10:25 SINGAPORE (ICIS)–India’s proposed sweeping tax reforms on large home appliances, televisions and automotives are set to not only boost downstream demand before the Diwali festive holiday in October, but also demand for chemicals such as polypropylene (PP), polyvinyl chloride (PVC) and polyethylene (PE). INSIGHT: South Korea C2 restructuring signals urgency to shift landscape By Josh Quah 26-Aug-25 10:48 SINGAPORE (ICIS)–The South Korean government has announced its plans to reduce ethylene production by 2.7-3.7m tonnes/year, roughly equivalent to the permanent shutdown of three or four crackers of nearly one million tonnes/year each. Asia butyl-A to see longer supply, low demand; India may offer some support By Corey Chew 27-Aug-25 14:35 SINGAPORE (ICIS)–The Asian acrylates market is expected to see more supply in China from September onwards as BASF’s Zhanjiang plant has already started butyl acrylate (butyl-A) production in second-half August. Asia PX likely ample on healthy margins, amid new downstream start-ups By Samuel Wong 28-Aug-25 13:03 SINGAPORE (ICIS)–Asia’s paraxylene (PX) demand is expected to find support from the impending start-up of new downstream capacities. INSIGHT: China crude-based benzene to face high costs, weak demand in golden Sept, silver Oct By Yoyo Liu 28-Aug-25 17:47 SINGAPORE (ICIS)–China’s crude-based benzene supply and demand have both grown in August. Meanwhile, crude oil volatility and high naphtha costs have provided a floor for benzene prices, while divergent downstream demand and weak end-user consumption have capped the upside potential. INTERVIEW: Germany’s Evonik will continue Asia investments regardless of tariffs By Jonathan Yee 29-Aug-25 12:14 SINGAPORE (ICIS)–Evonik is ramping up plant and research investments in Asia to hit their growth targets, while mitigating direct shocks from US tariffs by targeting “local-from-local” production, according to Claus Rettig, President Asia Pacific at the German-based specialty chemicals firm. S Korea keeps key rate steady, 2025 GDP growth forecast raised to 0.9% By Nurluqman Suratman 29-Aug-25 12:24 SINGAPORE (ICIS)–The Bank of Korea (BoK) held its key interest rate steady at 2.50% on 28 August, taking a a wait-and-see approach as near-term growth improved amid reduced US tariff-related uncertainties.

HOUSTON (ICIS)–Join Emily Friedman, ICIS US recycled plastics senior editor in Episode 5 of Sustainably Speaking alongside Arianne Perez, Asia recycled plastic senior editor, and Joshua Dill, Americas recycled plastic analyst, as they discuss the implications of weak domestic recycled polyethylene terephthalate (R-PET) markets between the US and Asia. Even as local feedstock markets tumble, both regions are seeing further downwards pressure from global trade. Some questions answered during this episode: What is the current state of US and Asian R-PET markets? Are dropping US prices influencing Asian markets? How has the evolving tariff policy impacted US R-PET and PET imports via the 3907 HS code? What is the end of year outlook for US and Asian R-PET markets considering the weak environment at present?

SINGAPORE (ICIS)–Thailand’s Constitutional Court has on Friday dismissed Thailand Prime Minister Paetongtarn Shinawatra after she was found guilty of ethics violations during a leaked call with former Cambodian Prime Minister Hun Sen. The decision paves the way for the election of a new prime minister and ends the term of Paetongtarn after just one year, throwing Thailand into further political turmoil amid economical headwinds and border conflicts with Cambodia. Deputy Prime Minister Phumtham Wechayachai of Paetongtarn’s cabinet is the acting prime minister and will remain in office until an election is called, although there is no deadline, according to news media reports. Thailand’s GDP grew 2.8% year on year in the second quarter amid front-loading of exports ahead of the US imposing 19% tariffs on the country’s goods from 7 August. GDP growth is forecast to grow at 2.3% in 2025, down from 2.5% in 2024, said the Bank of Thailand in June.

LONDON (ICIS)–Covestro has completed the acquisition of Swiss multilayer adhesive films company Pontacol for an undisclosed sum as part of a strategic portfolio expansion, it said on Friday. The Germany-headquartered polymer materials producer said the deal would open up new growth opportunities, driven by increasing demand in future markets such as medical technology, mobility, and the textile industry. The transaction, which was announced in June and closed on 28 August, includes two specialized production sites in Switzerland and Germany that will transfer to Covestro.

SINGAPORE (ICIS)–Evonik is ramping up plant and research investments in Asia to hit their growth targets, while mitigating direct shocks from US tariffs by targeting “local-from-local” production, according to Claus Rettig, President Asia Pacific at the German-based specialty chemicals firm. Evonik is undergoing a significant strategic transformation, aiming to increase its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) by €1 billion to €2.7 billion by 2027 from €1.7 billion in 2023, Rettig told ICIS. €500 million will come from growth and the other €500 million from cost efficiencies via cost reductions among other measures, Rettig said. Asia has been earmarked as a region for further investment by Evonik and one example of this is its new alkoxides plant on Singapore’s Jurong Island, marking Evonik’s fifth plant in the country. When deciding where to build the alkoxides plant, Rettig said Singapore made sense as a base as Evonik already had existing infrastructure in place on Jurong Island, which would save costs while still allowing the company to service customers in Indonesia and Malaysia, who typically purchase alkoxides from China and Saudi Arabia. Indonesia’s growing focus on biodiesel production also serves as an opportunity for the company, who hopes to ramp up the plant’s operating rate to 100% “by the end of 2026”. As of this year, Indonesia has a B40 – 40% blend of palm oil with diesel fuel for domestic consumption – mandate and aims for B50 in the coming years. Finally, the 100,000 tonnes/year alkoxides plant in Singapore complements Evonik’s three plants located in Germany, Argentina and the US, being its first “world-scale” plant of its kind. “With all the uncertainties [surrounding geopolitical tensions], we want to be very balanced in our footprint,” said Rettig. KEY FOCUS ON ASIASales in Asia only amounted to a quarter of Evonik’s total as of 2024, but the company is aiming for a third of sales to come from the region by 2032, with China making up roughly half of that amount. Meanwhile, Europe’s sales made up 45% of Evonik’s total in 2024, and around 30% of sales was from the Americas. “I think nobody doubts Asia is and will remain the fastest-growing region in the world in chemicals, and that’s why we also allocate overproportional investments into Asia [to increase our footprint there],” said Rettig. While China remains a key focus in Evonik’s Asia operations, the company is also targeting India and southeast Asia for growth. For example, plants in India and Japan are due to open by the end of the year, Rettig said. TARIFF IMPACTPlants that mainly serve the country they are built in are useful for Evonik in mitigating direct risks from US tariffs, which are projected to reduce global GDP growth in 2025 to 3.0% from 3.2% in 2024. However, the indirect impact from geopolitical tensions is much harder to quantify, Rettig said. “Its not really easy to judge at all how much could be affected,” he said. Regardless, Evonik will proceed with their investments “based on fundamentals”, which still remain whether tariffs exist or not. “The growing population, the age of the population, the growing middle class, these are the fundamentals that stay in place regardless of tariffs,” said Rettig. Other factors such as the Regional Comprehensive Economic Partnership, which comprises Asia’s largest economies such as China, Indonesia, Japan and South Korea, will also be crucial for the company in the coming years if it wishes to hit their 33% sales target by 2032. Thumbnail photo: Claus Rettig is also a board member at the Singapore Economic Development Board (EDB). Source: Singapore EDB  Interview article by Jonathan Yee