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Ethylene10-Jul-2025
SAO PAULO (ICIS)–Brazil’s trade group
representing chemicals producers Abiquim has
expressed concern over US President Donald
Trump’s threat to impose 50%
tariffs on Brazilian exports, calling for
technical dialogue to resolve the dispute.
In a written response to ICIS, Abiquim said the
issue holds major relevance for the chemical
sector, not only due to direct exports to the
US but also because the industry supplies key
inputs to export sectors including food
processing and pulp and paper.
The Brazilian chemical sector runs a
significant trade deficit with the US,
importing approximately $10.4 billion, while
exporting just $2.4 billion in 2024, said
Abiquim.
The resulting trade deficit in favor of the US
stood at $7.9 billion – by volume, the deficit
totaled 6 million tonnes, said Abiquim.
US petrochemicals subsectors such as caustic
soda, polyethylene (PE), or acetic acid, among
many others, export in large numbers
to Brazil and could be greatly affected if
Brazil retaliates to the tariffs in kind.
“The chemical industry advocates treating
international trade relations exclusively on
the basis of mutual economic gain and the free
market, following the rules of the World Trade
Organization (WTO). In a scenario subject to
political interference, we believe that
technical dialogue is the best way to resolve
this issue,” said Abiquim.
“Both sides are at risk of losses, as they are
important markets for each other’s exports.
Therefore, negotiations are necessary to avoid
potential losses for all parties involved.”
Ammonia10-Jul-2025
This summary was created by ICIS hydrogen
editor Jake Stones and ICIS policy and
regulation analyst Aayesha Pathan
UPDATED: This analysis was updated to provide
greater clarity around the total emissions
allowance for low-carbon hydrogen instead of
the emissions reduction required.
LONDON (ICIS)–On 8 July 2025, the European
Commission published its much-awaited delegated
act for low-carbon hydrogen, opening the door
to regulated low-carbon hydrogen production via
natural gas with carbon capture and storage
technology.
ICIS has produced the following summary of the
delegated act and details provided in its annex
as a means of supporting the market.
Biodiesel10-Jul-2025
LONDON (ICIS)–The biodiesel market looks
poised for lower supply if UK-based fuels
supplier and distributor Greenergy finalizes
new plans to shut its UK biodiesel site in
Immingham announced on Thursday.
Greenergy began consulting to cease operations
at its biodiesel plant, according to a company
statement. This follows
a strategic review to evaluate the plant’s
commercial viability in May, when production
was halted.
“In light of continuing market pressures, we
unfortunately do not have enough certainty on
the outlook for UK biofuels policy to make the
substantial investments required to create a
competitive operation at Immingham,” Greenergy
said in its statement.
The drop in supply as a result of the plant’s
potential closure may not necessarily ease
market conditions though. This is mainly
because of a steady flow of biodiesel from the
US.
UK biodiesel producers are facing sustained
headwinds, as lackluster domestic demand
collides with a surge in tariff-free imports
from the US and heavily subsidized supplies
from China, further undermining market
competitiveness.
European major Trafigura acquired Greenergy’s
European operations in March 2024.
Greenergy’s CEO, Adam Trager said he was
looking to have “urgent talks” with the
government on a higher quota of biofuels in UK
petrol and diesel consumption. This would
support demand in the biofuels sector, in
particular biodiesel.
Biodiesel, which can be derived from vegetable
oils, animal fats, or other waste-based
bio-feedstocks, is used as fuel in diesel
engines.

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Crude Oil10-Jul-2025
LONDON (ICIS)–Petrochemicals will remain a key
component of oil demand through to 2050,
according to the latest forecast published by
OPEC on Thursday.
Petchem demand set to rise by 4.7m
barrels/day by 2050
Increasing GDP and non-OECD populations
drive increase
Regulatory, environmental concerns pose
challenges to growth
The World Oil Outlook forecasts that demand
from the petrochemicals sector will
significantly increase, by 4.7 million barrels
a day, from 15.5 million barrels/day in 2024 to
20.2 million barrels/day in 2050.
The sector is set to account for 16% of total
oil demand in 2050, from 14% in 2024, with 90%
of that growth coming from the Middle East and
China as new capacity comes on stream.
Petrochemicals demand for oil will
predominantly be as a feedstock, as more
competitively priced fuels such as natural gas
remain viable alternatives.
While natural gas and biomass are expected to
increase their shares as a source of feedstock,
naphtha and liquefied petroleum gas (LPG) will
remain more suitable products for many
downstream materials.
Petrochemicals oil demand in the OECD will
likely mirror tight oil production in the US,
which produces LPG and ethane as feedstocks in
that market.
“Accordingly, demand in this sector is expected
to grow until around 2035 and then start a slow
decline for the rest of the forecast period,”
the report said. This would see offtake from
OECD countries reach 7.7 million barrels/day by
2050, close to its level in 2024.
MACRO, DEMOGRAPHIC
DRIVERSOverall demand is driven
by expected GDP growth, rising population and
income levels, and expanding industries and
technologies that these products use, including
renewables, electric vehicles (EVs) and
construction.
“It is assumed, however, that this growth
potential will be partly constrained by
regulations and actions linked to environmental
concerns,” the report advised.
“These relate to commitments to reduce the
sector’s carbon footprint, the push to increase
recycling, restrictions on single-use plastics,
implementing ‘Extended Producer Responsibility’
schemes, an increasing penetration of
bioplastics and improved circularity of
petrochemical products.”
The outlook cautioned that uncertainty
surrounding US trade tariffs could also weigh
on the chemicals market dynamics and downstream
products.
Naphtha demand is expected to grow from 2.8
million barrels/day in 2024 to 3.1 million
barrels/day in 2030 in OECD countries, and
remain around this level for the entire
forecast.
OECD ethane/LPG demand is expected to rise by
more than 600,000 barrels/day in the medium
term before softening, partly as a result of a
decline in petrochemical demand but also on LPG
substitution in other sectors.
The outlook expects aviation to be the only
segment that will show growth over the entire
forecast period, with even this experiencing
some limitations, adding around 1 million
barrels/day between 2024 and 2050.
China remains the dominant country for oil
demand, peaking at 17.7 million boe (barrels of
oil equivalent) a day in 2035, driven by
petrochemical growth and heavy transportation,
but subsiding to 17.1 million boe/day, in part
due to increased EV use.
Oil consumption growth in India is expected to
rise from 400,000 barrels/day in 2024 to 1
million barrels/day in 2050, with naphtha used
as the primary feedstock.
Petrochemical demand from non-OECD countries
will be particularly strong as a result of
population growth and an increasing middle
class. In response, oil consumption is expected
to rise to 12.5 million barrels/day in 2050,
from nearly 8 million barrels/day in 2024 – an
incremental increase of 4.6 million
barrels/day.
Demand for ethane/LPG from non-OECD countries
will increase by more than 4 million
barrels/day between 2024 and 2050, while
naphtha will add another 2.4 million
barrels/day to incremental demand during the
same period.
The global population is predicted to rise by
around 1.5 billion people, from 8.2 billion in
2024 to almost 9.7 billion by 2050, mainly in
non-OECD countries.
MOBILITY TO REMAIN
PIVOTALTransport is set to
remain “the backbone of oil demand” to 2050,
accounting for 57% of global consumption in
2024, and is expected to largely retain this
share over the entire forecast period. This
accounts for both road travel and the aviation
industry.
Overall energy demand is predicted to grow by
23%, with demand for all fuels expected to rise
apart from coal. Oil consumption is expected to
reach 123 million barrels/day by 2050.
Oil will retain the most significant share of
the energy mix, just below 30%, with oil and
gas accounting for over half of demand between
2024 and 2050. The share of renewables is set
to increase by 10 percentage points from 2024,
to 13.5% in 2050.
Chemicals usage is in part attributed to growth
in demand from both segments, as products will
be used for renewables, for instance in
manufacturing photovoltaic panels for solar
energy.
The percentage of oil, gas, and coal in the
energy mix was around 80% in 2024, “only a
little less than when OPEC was founded in 1960,
despite energy consumption increasing more than
five-fold over that time”, the report noted.
Although the long-term forecast is for
increased energy demand, the outlook cautioned
that volatility around the global economy and
energy markets could alter the landscape
quickly.
In 2024 petrochemicals production, along with
growth in the aviation sector, were cited as
the drivers of oil demand, which rose by 1.3
million boe/day compared with 2023, supported
by sustained growth in transport and
residential sectors in developing countries.
This growth was primarily driven by the
continued expansion of the petrochemicals and
aviation sectors, as well as sustained growth
in road transportation and residential sectors
in developing countries.
Focus article by Morgan
Condon
Gas10-Jul-2025
Route 1 capacity should be offered on
quarterly basis
Capacity will be used only as last-resort
if TSOs do not slash tariffs further
Ukraine renewable sector needs support
mechanism
ROME (ICIS)–Traders looking to export gas from
Greece to Ukraine using a new bundled capacity
product would benefit from three key
improvements by grid operators, the CEO of
D.Trading, the company that is currently using
this route, told ICIS.
Dmytro Sakharuk said transmission system
operators should consider increasing the
capacity allocated for this route, which uses
the Trans-Balkan corridor, extend the booking
period and reduce tariffs.
Speaking on the sidelines of the Ukraine
Recovery Conference in Rome on 9 July, the CEO
said his company booked the largest capacity
for gas exports from the Greek VTP to Ukrainian
storage in July.
He said gas transmission system operators
(TSOs) need to allocate a minimum firm capacity
to allow companies to predict their market
position.
Currently, Route 1 capacity is offered based on what
is left over after firm capacity for standard
products is booked during regular monthly
auctions.
However, Sakharuk said gas grid operators
should guarantee at least a minimum capacity
which traders can count on every month.
He also noted that if the product, currently
offered on a temporary basis, were to be
extended beyond October, it should be marketed
for a longer period.
Sakharuk said traders would benefit if this
capacity were offered on a quarterly basis as
many companies may be looking to import LNG via
Greece, which may require greater time
flexibility in terms of imports, regasification
and send-out.
TARIFFS
Most importantly, however, Sakharuk said
transmission system operators need to reduce
transmission costs even more than they
currently do.
Grid operators agreed to reduce by 25%
aggregated transmission tariffs from Greece up
to the Romania-Ukraine border, with a further
reduction of 47% expected between the Ukrainian
and Moldovan borders.
Nevertheless, Sakharuk said, even when
accounting for the discounts, the fixed
capacity cost was €6.68/MWh which, he said, was
excessively high.
This cost does not include additional
variables, which bring the total transmission
cost up to €9.00/MWh.
Sakharuk said gas grid operators should
benchmark these costs against much cheaper
routes from Hungary or Poland.
The cost to ship gas along Route 1 is
disproportionately higher because Romania’s
Transgaz and its Moldovan subsidiary, VMTG,
charge some of the heftiest transmission costs
in the region despite having no compression
costs along the route.
Sakharuk said that, unless grid operators
implemented these changes, the route will never
be viable and traders will only use it as a
last resort if all regional transmission
capacity elsewhere is fully booked.
RENEWABLES
On a different note, speaking at one of the
side events organised by the Florence School of
Regulation and Ukraine-based think tank Dixi
Group, Sakharuk also referred to the
development of the renewable sector in Ukraine.
He said the country needed to introduce a
support scheme if it was serious about scaling
up clean production.
He said his company, a subsidiary of DTEK,
Ukraine’s largest private power and gas
producer, sees a lot of investor interest in
developing the wind and solar sector despite
war-related risks.
However, he said many developers were put off
by falling electricity prices which meant it
was difficult to take a long-term investment
decision if prices were forecast to fall.
The price decline is largely the effect of a
vicious cycle, also affecting EU producers,
where rising renewable output was depressing
margins.
However, while EU countries benefit from
generous funds in supporting scaled up
projects, Ukraine does not have similar
schemes, which means that investors are
reluctant to commit to long-term projects.
Petrochemicals10-Jul-2025
MUMBAI (ICIS)–India’s state-owned Bharat
Petroleum Corp Ltd (BPCL) is currently
assessing the impact of an 8 July fire incident
at its Kochi refinery and petrochemical complex
in the southern Kerala state, a company source
said on Thursday.
Twenty-three people were hospitalized – seven
BPCL workers and 16 residents of the
surrounding area – after inhaling smoke
following an explosion and fire near BPCL’s
central warehousing unit on 8 July, the source
said.
The fire was caused by a power fluctuation in a
200-kilovolt (kV) underground cable, which
passes through a concealed trench on the BPCL
Kochi Refinery campus, the company source said.
This has affected some plant operations at the
site, he said, but did not provide further
information.
Any impact on operations at any of the plants
in the refinery is unclear, based on checks
with other company sources.
BPCL operates a 15.5 million tonne/year
refinery at its Kochi complex and produces
liquefied petroleum gas, naphtha, benzene,
toluene, hexane, propylene, sulphur, petcoke
and hydrogen.
The company also operates a specialty propylene
derivatives petrochemical project at its Kochi
refinery complex which has the capacity to
produce 160,000 tonnes/year of acrylic acid;
212,000 tonnes/year oxo alcohols (n-butanol,
iso butanol and 2-ethyl hexanol); and 190,000
tonnes/year of acrylates (butyl acrylate and
2-ethyl hexyl acrylate).
The Kerala state government announced that a
special committee was created to investigate
the fire which will submit its report within
three days.
A separate committee has been formed to review
BPCL’s disaster management action plan and to
recommend any changes within a week.
The committee that will review BPCL’s disaster
management plan will include the deputy
collector of the district, BPCL’s security
officer, electrical inspector and officials
from the Kerala State Electricity Board (KSEB).
Additional reporting by Corey
Chew and Aswin
Kondapally
Ethylene10-Jul-2025
SINGAPORE (ICIS)–Trade tensions have been in
focus for the wider petrochemical markets since
US Liberation Day tariffs were announced.
In this podcast, propylene editor Julia Tan
speaks with ethylene editor Josh Quah to
examine how recent tariff developments have
impacted the Asian olefins market.
Ethylene support collapses with ethane
resolution, new downstream demand to cushion
drops
US tariff impact to trickle up from end use
sectors
Zhengzhou Commodity Exchange announces
propylene futures, beginning 22 July
Polyethylene10-Jul-2025
SINGAPORE (ICIS)–Click here to
see the latest blog post on Asian Chemical
Connections by John Richardson.
The global polypropylene (PP) market is
undergoing a seismic shift, driven by
remarkable changes in China’s trade flows. The
data tells a compelling story of a country
rapidly transitioning from a net importer to a
potential net exporter of PP by year-end 2025.
Consider these incredible shifts:
PP Exports Soaring: As recently as 2020,
China’s PP exports were a mere 0.4m tonnes. If
current trends continue, 2025 could see that
figure hit 5.7m tonnes – a staggering 3.3m
tonnes higher than 2024!
Net Imports Plummeting: China’s PP net
imports, which hit an all-time high of 6.1m
tonnes in 2020, are projected to fall to just
0.2m tonnes in 2025.
A Historic Turn: My ICIS colleague Lucy
Shuai highlighted that China was actually a net
exporter of PP between March and May 2025.
This turnaround has profound implications for
overseas producers. I’ve estimated the impact
on sales turnover in China among China’s top PP
import partners.
Comparing the 41 months before the 1992-2021
Chemicals Supercycle ended with the 41 months
since (up to May 2025), the losses are stark.
South Korea leads with a $1.6bn loss in sales
turnover. Taiwan follows with $1.1bn in losses.
Saudi Arabia saw losses of $1.0bn. Only the
Russian Federation gained, up by $178m.
These figures reflect a significant drop in
total PP imports into China (from 18.7m tonnes
to 13.7m tonnes across the compared periods),
coupled with a decline in average PP prices.
What’s driving this? China’s petrochemicals
self-sufficiency is rapidly increasing. ICIS
forecasts China’s PP capacity as a percentage
of demand will surge from 94% in 2019 to 123%
in 2025, and 127% by 2030. This, combined with
weaker domestic demand growth and the second
Trump trade war, is pushing China to spread its
export net ever wider, beyond traditional
markets to destinations like Brazil, India,
Turkey, and Africa.
What does this mean for the global PP industry?
Defensive measures like anti-dumping actions
are likely. But more critically, producers
outside China must go on the offensive. This
demands:
Dynamic Sales Tactics: Maximising returns from
every tonne by constantly re-evaluating sales
efforts in diverse global markets. Data-driven
decisions on where and when to sell are
paramount.
Strategic Innovation: The old approach of
passively riding out downturns is no longer
viable. Innovation, particularly in developing
new end-use applications (making your own
demand), is key to addressing challenges like
climate change.
Events in China, combined with climate change,
the plastic-waste crisis, demographics and
deglobalisation mean the Supercycle’s dynamics
no longer apply. A proactive, strategic, and
innovative approach is essential for survival
and growth.
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.
Speciality Chemicals09-Jul-2025
HOUSTON (ICIS)–Average spot rates for shipping
containers from east Asia and China to the US
East Coast are likely to fall faster than rates
to the West Coast, and could be within
$1,000/FEU (40-foot equivalent unit) by the end
of July.
According to Peter Sand, chief analyst at ocean
and freight rate analytics firm Xeneta, ocean
carriers will work to slow the rapid decline in
Asia-USWC rates by removing – or at least stop
adding – capacity to the transpacific trade
lane.
“That means average spot rates into the US East
Coast will decline at a faster rate and likely
fall to within $1,000/FEU of rates into the US
West Coast by the end of July – a much more
familiar scenario for shippers,” Sand said.
Average spot rates from Asia to the West Coast
have fallen by more than 50% over the past
month, peaking at almost $6,000/FEU during the
week ended 20 June.
Rates from Asia to the East Coast peaked at
around $7,200/FEU in the first half of June.
“Geopolitics has upset the natural order of
ocean container shipping on transpacific trades
in Q2, and shippers are still struggling to
make sense of the situation,” Sand said.
“Shippers need to act decisively to protect
supply chains, but this becomes more difficult
when they see abnormal trends such as Asia
fronthaul freight rates collapsing into the US
West Coast while holding stronger into the US
East Coast.”
Capacity volatility on the Asia-USWC trade lane
has surged amid blank sailings, vessels sailing
off schedule, and vessels of varying sizes
along the same routes, according to Alan
Murphy, CEO, Sea-Intelligence.
The following chart shows weekly capacity on
the transpacific trade lane dating back to
2013.
Source: Sea-Intelligence
“For the past three years, capacity volatility
has been ranging around 250% higher than in
2012 – with variability often reaching up to
300% higher,” Murphy said. “Compared to 2012,
capacity volatility on Asia-USWC has almost
quadrupled.”
Murphy added that volatility is increasing not
only in the weeks with high changes, but also
in the more stable and calm weeks.
“This shows an increased volatility in the
overall supply/demand balance on Asia-USWC
trade lane,” Murphy said. “To the degree that
spot rates are driven by the actual weekly
supply/demand balance, this capacity volatility
means that the underlying driver for spot rate
formation on Asia-USWC has become progressively
more unstable over the past 13 years – creating
a much more volatile and unpredictable spot
rate in itself.”
Market intelligence group Linerlytica said US
consumer demand is holding steady, with
preliminary import volume data for May and June
showing imports from Asia declining by only
5.6% in the last two months despite the severe
disruption from the Trump tariffs.
Although imports from China dropped by 24% year
on year, volumes from all other Asian origins
recorded positive gains, led by Vietnam and
Indonesia which grew by 34% and 33%
respectively, Linerlytica said.
Import cargo volume at the nation’s major
container ports is expected to rebound in July
after a double-digit drop in late spring but is
forecast to fall again after previously paused
tariffs take effect, according to the Global
Port Tracker report from the National Retail
Federation (NRF) and Hackett Associates.
“The tariff situation remains highly fluid, and
retailers are working hard to stock up for the
holiday season before the various tariffs that
have been announced and paused actually take
effect,” NRF Vice President for Supply Chain
and Customs Policy Jonathan Gold said.
“Retailers have brought in as much merchandise
as possible ahead of the reciprocal tariffs
taking effect, and the latest extension to 1
August is greatly appreciated.”
The following chart from NRF/Hackett Associates
shows the forecast for import volumes by month.
“Nonetheless, uncertainty over tariffs makes it
increasingly difficult for retailers to plan,
especially small businesses that have no
capacity to absorb tariffs,” Gold said.
“Tariffs are paid by US companies, not foreign
countries or businesses, and ultimately
drive-up prices for American families while
impacting the availability of products. It is
vital for the administration to finalize
negotiations with our trading partners and
provide stability and certainty for US
retailers.”
Container ships and costs for shipping
containers are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers, such as polyethylene
(PE) and polypropylene (PP), which are shipped
in pellets. They also transport liquid
chemicals in isotanks.
RED SEA UPDATE
Yemen-backed Houthi rebels attacked two
commercial vessels in the Red Sea over the past
few days, leading Lars Jensen, president of
consultant Vespucci Maritime, to suggest
there is not much chance of a reversal back to
a Suez routing for the major container lines in
the short to medium term.
The Houthis began attacks on commercial vessels
in the Red Sea in November 2023, which led
shippers to divert away from the region and
stop using the Suez Canal, the shortest route
between Asia and Europe.
While 30% of all global container trade passes
through the Suez, only 12% of US-bound cargo
used that route.
Focus article by Adam Yanelli
Visit the US
tariffs, policy – impact on chemicals and
energy topic page
Visit the Logistics:
Impact on chemicals and energy topic
page
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