HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US fell again this week as demand has fallen after a brief period of front loading during a pause in tariffs. With this week’s decreases, rates from Shanghai to Los Angeles have fallen by more than 50% over the past month, and rates from Shanghai to New York have fallen by more than 33% over the same time, as shown in the following chart from supply chain advisors Drewry. Rates from China to the US West Coast have fallen faster than on other trade lanes because of the surge in shipping capacity once the Trump administration put a pause on extremely high tariffs on goods from China. But average spot rates from Asia 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 as carriers stop adding capacity to the transpacific trade lane. Average global rates continue to trend lower, falling by 5% week on week as shown in the following chart from Drewry. Drewry expects spot rates to continue to decline next week as well due to excess capacity and weak demand. Rates from online freight shipping marketplace and platform provider Freightos also showed significant decreases to both US coasts. Rates to the West Coast are around $3,000/FEU (40-foot equivalent unit) while rates to the East Coast are around $5,000. Judah Levine, head of research at Freightos, said during a webinar this week that there remains a lot of uncertainty in ocean freight, especially since US President Donald Trump extended the tariff deadline to 1 August. “This three-week extension for reciprocal tariffs could mean that importers from those impacted countries will resume shipping activities that maybe they are already getting ready to pause if tariff hikes had materialized this week,” Levine said. “But this short run by only three weeks until August does not really make it possible to move goods from Asia in time.” Levine said that carriers canceled general rate increases (GRIs) for July and have mostly suspended or reduced peak season surcharges also aimed at July volumes. Levine said some carriers have already begun to remove capacity from the trade lane in efforts to stop the rate deterioration. 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), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES UNCHANGED US chemical tanker freight rates assessed by ICIS were steady this week with rates holding steady despite continuing to face downward pressure on several trade lanes. There is a downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode. Besides contract cargoes, there is very little seen in the market. The tariffs and looming uncertainty continue to dampen the spot market, pressuring rates. The usual spot cargoes of methanol from Jose to China are the only ones reported, leaving methanol requirements from the region active to Asia. For the time being, larger parcels seem to have found a floor in the $60/tonne range. Similarly, rates from the USG to ARA and all other trade lanes also held steady. The previous uptick in activity which resulted from the recent Israel/Iran hostilities appears to have calmed and the market to Europe fell flat. As a result, this route remained quiet this week, which has placed downward pressure on freight rates. There have only been a few cargos fixed, a few more outsiders have come on berth and are working to fill space which has led to more competition for regular owners. MTBE, methanol and caustic soda are the most frequently reported in the market. From the USG to Brazil, this trade lane remains unusually quiet and in turn rates seem to have softened. Although availability for prompt space seems to be somewhat tight but there is plenty of open space for mid-July into August. The USG to India route has not seen an uptick in inquiries over the last week with no confirmed fixtures. There was only one new inquiry seen for 8,000-9,000 tonnes Pascagoula/Mumbai for August dates. Along with the other regions, freight rates are widely viewed as softer. Additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

HOUSTON (ICIS)–The US Department of Agriculture (USDA) said in the July World Agricultural Supply and Demand Estimate (WASDE) report that the outlook for corn is for lower production and ending stocks, while soybeans will have slightly reduced production and exports but have increased ending stocks. For the corn crop beginning stocks are decreased by 25 million bushels to 1.3 billion bushels, which the agency said reflects an increase in exports that is partly offset by lower feed and residual use. Feed and residual use is down 75 million bushels based on indicated disappearance in the 30 June grain stocks report. Exports have been raised by 100 million bushels to 2.8 billion bushels based on current outstanding sales and shipments to date and, if realized, would be record high. Corn production is projected down by 115 million bushels on lower planted and harvested area from the 30 June acreage report. The yield is unchanged at 181 bushels per acre. Total use is cut 50 million bushels with a reduction for feed and residual use based on lower supplies, and with supply falling more than use, ending stocks are down 90 million bushels. The season-average farm price received by producers is unchanged at $4.20 per bushel. For soybeans, the July WASDE shows slightly lower production, reduced exports, and increased ending stocks compared to last month. Soybean production is projected at 4.3 billion bushels, down 5 million bushels from last month on lower harvested acres and an unchanged yield of 52.5 bushels per acre. Exports were lowered by 70 million bushels to 1.75 billion bushels on higher domestic demand, higher exports for Argentina and Ukraine, and larger Brazilian supplies at the end of September during the US peak export season. With lower soybean exports partly offset by higher crush, ending stocks are increased 15 million bushels to 310 million bushels. The US season-average soybean price is projected at $10.10 per bushel, down 15 cents from last month. The next WASDE report will be released on 12 August.

LONDON (ICIS)–Germany’s Federal Ministry for Economic Affairs and Energy (BMWE) has reaffirmed its commitment to accelerating the hydrogen economy, after a spate of recent industry setbacks including steel manufacturer ArcelorMittal’s cancellation of its renewable hydrogen-based decarbonisation plans for two steel plants. A spokesperson for the ministry told ICIS on 3 July that BMWE regrets ArcelorMittal’s cancellation but stressed that it was a private sector decision and that none of the €1.3 billion government subsidy secured for the project has been disbursed. They reiterated the ministry’s support for other major steel decarbonisation projects by Salzgitter, Thyssenkrupp, and SHS, which have collectively secured €5.6 billion in funding. “Reducing electricity prices in the short term is key for companies”, the spokesperson added, welcoming the European Commission’s recent adoption of the Clean Industrial Deal State Aid Framework, which provides the possibility to “reduce electricity prices for energy-intensive industries”. Since ArcelorMittal’s announcement, EWE, LEAG and E.ON have all confirmed to ICIS the postponement or cancellation of German projects totalling 80MW capacity of hydrogen production. However, the BMWE remains committed to the “swift implementation” of national and European regulations to enable the growth of the hydrogen industry. The spokesperson stated that “the development of a hydrogen economy is to be accelerated and organised more pragmatically”, using “all colours” of hydrogen, while transitioning to renewable hydrogen in the long-term. Hydrogen infrastructure expansion, including connections to all German and European ports, remains important. To improve the competitive conditions of the economy, the ministry wants to “abolish unnecessary bureaucracy (e.g. Supply Chain Act)” and “simplify planning and approval procedures”. The Supply Chain Act, which entered into force in 2023, requires companies to exercise due diligence to prevent or address human rights and environmental violations within their supply chains, but has been criticized for the administrative and cost burden on companies. The BMWE has recently made moves to simplify hydrogen bureaucracy. On 7 July, it published a draft bill for the hydrogen acceleration act, which aims to “significantly accelerate the market ramp-up of hydrogen (…) by establishing fast, simplified, and coordinated approval procedures with clear specifications and deadlines”. As part of the bill, hydrogen projects will be deemed to be of “overriding public interest”, which will give them priority in regulatory and legal balancing decisions. The spokesperson told ICIS that the status of the hydrogen ramp-up will be reviewed as a basis for further work addressing the country’s energy supply security.

LONDON (ICIS)–Covestro has downgraded its outlook for 2025 due to an ongoing weak global economy with no signs of a short-term recovery, it said on Friday. The Germany-headquartered polymers producer cut its forecast for earnings before interest, tax, depreciation and amortization (EBITDA), as well as two other key financial metrics. Covestro outlined its revisions in a statement released ahead of its second-quarter earnings, due to be published on 31 July. The company’s adjusted forecast is as follows: EBITDA is expected to be between €700 million and €1.1 billion. The previous forecast projected EBITDA between €1.0 billion and €1.4 billion. Free operating cash flow (FOCF) is expected to be between €-400 million and €+100 million. The previous forecast projected FOCF between €0 million and €300 million. Return on capital employed over weighted average cost of capital (ROCE over WACC) is expected to be between -9 and -5 percentage points. The previous forecast projected ROCE over WACC between -6 and -3 percentage points. Preliminary EBITDA for the second quarter amounted to €270 million, within the forecast range €200 million-€300 million, Covestro said. The producer’s first quarter EBITDA halved year on year though was at the upper end of its forecast.

LONDON (ICIS)–UK economic growth fell for the second consecutive month in May, driven down by weak production and construction output. GDP declined by 0.1% in May following a decrease of 0.3% in April, the Office for National Statistics (ONS) said on Friday. A fall in May production output by 0.9% month on month was mainly driven by a decline in manufacturing, which fell by 1.0%. Construction declined by 0.6% in May, the ONS said, while the services sector grew by 0.1%. First-quarter growth strengthened in the UK from the previous quarter, although this was recorded before the announcement of US trade tariffs, which are likely to be reflected in future economic data.

SINGAPORE (ICIS)–Royal Vopak has signed an agreement with Japanese heavy-industry firm IHI Corp to establish a joint venture for the development and operation of an ammonia terminal in Japan, the Dutch provider of storage and infrastructure solutions firm said on Friday. The terminal is expected to start operations in the Japanese fiscal year 2030, it said in a statement. “The ammonia terminal development aims to facilitate the receiving and storing of imported ammonia within Japan and to facilitate the establishment of a system for stable supply of such ammonia in Japan,” Vopak said. Ammonia is expected to contribute to Japan’s decarbonization goals through its increased use as fuel and raw material in power generation and various industrial uses, it said. The collaboration focuses on developing a broader ammonia supply chain in Japan, with the goal of promoting the various uses of ammonia. IHI and Vopak also aim to establish an efficient ammonia distribution system by utilizing an ammonia terminal with a hub function for marine transportation. Vopak, which currently operates six ammonia storage facilities globally, had signed a memorandum of understanding (MoU) with Japan’s IHI in November 2023 to jointly investigate developing and operating efficient, high value-added ammonia terminals in Japan.

HOUSTON (ICIS)–A federal appeals court has vacated the reciprocal switching rule enacted by the Surface Transportation Board (STB) last year, saying the agency exceeded its authority. Reciprocal switching is when a railroad that has physical access to a specific shipper facility switches rail traffic to the facility for another railroad that does not have physical access. The second railroad pays compensation to the railroad that has physical access, typically in the form of a per car switching charge. As a result of the arrangement, the shipper facility gains access to an additional railroad. The STB said its rule was a remedy for poor service. After the STB approved the rule, three major railroads – Union Pacific (UP), CSX and CN – filed a challenge in the court, saying the rule was unlawful. The US Court of Appeals for the Seventh Circuit said in its decision this week that the performance standards in the rule were arbitrary, capricious and unsupported by the record. The court granted the petition to vacate the rule and sent it back to STB for further action. The chemical industry has generally been in favor of reciprocal switching and submitted statements in favor of the rule. Jeff Sloan, senior director of regulatory and scientific affairs at the American Chemistry Council (ACC), said the ACC was disappointed with the court’s ruling, but not overwhelmed. “When the rule was adopted, we felt it was too limited and would have limited benefits for chemical shippers,” he said. “But it is still disappointing that – even if you know this very limited attempt to increase access to competitive rail service – has been denied by the court.” Sloan said the STB has authority to use reciprocal switching in two ways – when it is in the public interest, and when it is necessary to promote competition. “We felt the better approach was for the board to use the tools that Congress gave it to promote competition more broadly,” Sloan said, “and I think this decision confirms that.” The rule was passed under the previous presidential administration, and Sloan said he sees nothing that would indicate the current administration is likely to oppose the rule if it was based on promoting competition. “The administration has issued a number of executive orders on regulations, and they have asked the agencies to focus on regulations that are anticompetitive,” Sloan said. Sloan said it is still too early to predict the path forward. “We would strongly urge the board to look at the options it has to use its statutory authority to promote competition,” Sloan said. The chemical industry is one of the largest users of the freight rail system, and it relies on efficient, reliable, competitive railroads to meet its transportation needs. “When it falls short, it is harmful to US chemical producers,” Sloan said. Eric Byer, president and CEO of the Alliance for Chemical Distribution (ACD), said he respects the court’s decision while urging the STB to work toward providing shippers with a meaningful reciprocal switching remedy. “The STB’s original goal, to address inadequate rail service and provide more competitive access, is both necessary and long overdue,” Byer said. “In recent years, widespread rail service challenges have exposed critical vulnerabilities in the freight system, and the chemical distribution industry continues to face the consequences of limited-service options and poor reliability.” Railroads are vital to the chemicals industry as chemical railcar loadings represent about 20% of chemical transportation by tonnage in the US, with trucks, barges and pipelines carrying the rest. Canada-based chemical producers rely on rail to ship more than 70% of their products, with some exclusively using rail. About 80% of Canada’s chemical production goes into export, with about 80% of those exports going to the US.

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.”

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.