LONDON (ICIS)–BASF and Covestro’s moves to manage expectations for full-year earnings growth underline the precarity of global economic growth, with potential for heavy US tariffs on the EU only serving to further weigh on sentiment. The two Germany-based companies announced downgrades to their full-year growth expectations on 11 July, with both attributing the move to macroeconomic weakness. BASF now expects 2025 global GDP growth of 2.0-2.5% compared to earlier expectations of 2.6%. This is likely to drive down the company’s full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) pre-special items to €7.3-€7.7 billion from previous forecasts of €8-8.4 billion. In addressing the US’ shifting tariff plans, BASF executives have emphasised the global spread of the company’s operations, insulating the company from the direct impact of inter-regional trade barriers. Company CFO Dirk Elvermann estimated that 90% of its European revenues are derived from local production, as well as 90% in North America – 80% in the US – and 80% in Asia Pacific, a figure likely to rise once its Zhanjiang, China, Verbund  site starts up. This local resilience cannot offset the overall demand hit from a global manufacturing sector that has been impacted in some places by new trade barriers, and spooked by the global economic turmoil in others. Market demand for chemical products would likely grow less than previously expected, the company said in the press statement released last Friday. Due to continued high product availability on the market, margins continued to remain under pressure, especially upstream, it added. BASF’s revised earnings forecast represents a cut of 8% at the mid-point from previous expectations, while Covestro expects 2025 EBITDA to stand at €700 million – €1.1 billion, compared to previous guidance of €1-1.4 billion. Also attributing the downgrade to a weak economy with little hope of a short-term recovery. The announcement comes despite projected second-quarter earnings of €270 million, near the top of its earlier €200 million – €300 million guidance. The company also beat out consensus estimates for first-quarter EBITDA, despite levels halving from the same period a year earlier, hinting that more pain may be ahead in the second half of the year. GLOBAL SLOWDOWN BASF’s current GDP growth expectations are substantially below the 2.8% projected by the IMF in April, itself a 0.5 percentage point downgrade from forecasts the organisation issued in January. Projections are tougher than usual to make amid such a shifting global outlook, but the fact remains that each new global GDP forecast this year issued by almost any organisation is lower than the one that preceded it. So far, this has all taken place with few of the major new tariffs from the US coming into play, with the 2 April announcement of global levies paused through to July, and new numbers only beginning to emerge in the last week. TARIFF FEARS REVIVE So far, the US has proposed 50% tariffs on imports from Brazil and 20% tariffs on Vietnam and rates of 30% on China, along with potential plans for new rates for most goods from 21 other nations. This includes a new proposed tariff of 30% on EU goods, currently set to come into effect on 1 August. The expectation remains among investors that a deal will be struck between Washington and Brussels that will prevent that, with stronger German business sentiment in July driven in large part by that hope. Nevertheless, the prospect of 30% tariffs is “effectively prohibitive of mutual trade” according to European Commission trade minister Maros Sefcovic, speaking on the side lines of a Commission meeting on Monday. Sefcovic also expressed dismay at the US announcement of fresh EU tariffs while the two blocs are in the midst of negotiations. The proposed first wave of EU tariffs on US goods, totalling €21 billion, remains paused through to August, and the Commission has shared plans for a larger package of measures on around €72 billion of US imports. The Commission is also pushing harder to rebalance trade away from the US, with a focus at present on talks with Indonesia, Thailand, the Philippines, Malaysia and India. While the EU-US tariffs may be negotiated away or at least talked down from the current proposed levels – US President Donald Trump had previously proposed 50% rates on EU imports – the uncertainty around the many global talks is likely do dog economic growth well into the third quarter. Heightened investor caution and decision paralysis on bigger investments has been one of the dominant themes of 2025 so far in the wake of the tariff discussions, and this will continue to weigh on GDP and chemicals demand growth until the way ahead looks clearer. Despite moves in the sector, particularly in Europe, to push further up value chains towards more defensible positions in specialties, the chemicals sector remains tied to GDP growth rates. Players may be able to push growth a few points above global economic growth, but that capacity is limited, particularly when demand uncertainty is pushing buyers to maintain low inventories. There had been little hope for a strong recovery this year but at the current trajectory, global growth this year and next is likely to be lower even than 2024, making for even more of an uphill battle for players to push back to the middle of the cycle. BASF announces its full second-quarter results on 30 July, while Covestro is expected to release its financials for the period on 31 July. Insight by Tom Brown Thumbnail image credit: Shutterstock

LONDON (ICIS)–ICIS has received a written statement from the Directorate-General for the Environment (DG Env) confirming that under the current scope of Directive (EU) 2019/904 only recyclate made from post-consumer plastic waste placed on the EU market can count towards the 25% recycled content target set out in Directive 2019/904. ICIS contacted DG Env for clarification on the current scope of the SUPD and Implementing Decision 2023/2683 following publication of a previous article in June in which ICIS stated that only recycled polyethylene terephthalate (R-PET) produced using plastic waste in the EU can currently count towards the 25% recycled content target set out under the Single Use Plastics Directive (SUPD) following written confirmation from DG Env. ICIS received comments from market participants following the June article expressing differing views to that stated by DG Env, leading to a follow-up request for additional clarification, specifically seeking confirmation if R-PET flakes and/or food-grade pellet imported from third countries outside of the EU can be used in the calculation of recycled content in PET beverage bottles placed on the EU market. In its reply to ICIS on 11 July, DG Env stated: “Article 6(5), point (a), of the SUP Directive requires Member States to ensure that as of 2025, SUP beverage bottles made of polyethylene terephthalate as the major component that are placed on their markets contain at least 25 % recycled plastic on average. The Commission laid down the rules on the calculation, verification and reporting on recycled content in SUP beverage bottles in Implementing Decision 2023/2683. Article 1(2) of this Implementing Decision defines ‘recycled plastic’ as “plastic which was post-consumer plastic waste before recycling as defined in Article 3(17) of Directive 2008/98/EC and which has been produced by recycling” [emphasis added]. Article 1(1) defines ‘post-consumer plastic waste’ as “waste, as defined in Article 3(1) of Directive 2008/98/EC, that is plastic and that has been generated from plastic products that have been placed on the market” [emphasis added]. SUP Directive Art 3(6) defines ‘placing on the market’ as “the first making available of a product on the market of a Member State” [emphasis added]. From this it follows that plastic waste stemming from products that had been placed on the market of a third country does not qualify as ‘post-consumer plastic waste’, therefore recyclates being processed from such waste do not qualify as ‘recycled plastic’ pursuant to the above-mentioned definitions.” Market contacts had raised queries regarding the use of the phrase ‘R_imported’ in formula 4 of Annex 1 of Implementing Decision 2023/2683 on which ICIS sought additional clarification. To this DG Env stated: “Formula 4 of Annex I of Implementing Decision 2023/2683 serves to calculate the weight of recycled plastic that is used in the bottles that are placed on the market of a Member State. The term ‘R_imported’ has been included for completeness – together with the terms ‘R_in from other MS’, ‘R_out to other MS’ and ‘R_exported’ – to ensure that movements of bottles across the Member States’ borders can be taken into account. It is defined as the “weight of recycled plastic used in bottles that have been imported, i.e. moved into the Union from third countries, and placed on the market in the Member State”. As such, it covers recycled plastic in imported bottles, with the definition of ‘recycled plastic’ as cited above, i.e. recycled plastic stemming from plastic products that had been placed on the EU market, before – at some point, as products or as waste – they had been brought into a third country. Notably, formula 4 is a simple calculation formula to guide the Member States as to how to calculate the weight of the recycled content in SUP beverage bottles that they have to report to the Commission to show compliance with the recycled content targets. As explained above, it does not create any inconsistency with the definition of ‘recycled plastic’ in Implementing Decision 2023/2683.” FUTURE CHANGES However, the current definition of ‘post-consumer plastic waste’ is likely to change as the Commission is working on a new Implementing Decision that will replace 2023/2683. DG Env stated: “[W]e are working on a new Implementing Decision, which will replace Implementing Decision 2023/2683. Notably, the definition of ‘postconsumer plastic waste’ therein has been aligned with the definition in the new Packaging and Packaging Waste Regulation, which does include waste stemming from products that had been placed on the market of a third country. Therefore, once the new Implementing Decision is adopted and enters into force, such waste will be allowed to count towards the recycled content targets in the SUP Directive. The draft Implementing Decision, which is available to review and comment via the Have Your Say portal until 19 August 2025, in preamble 16 now reads as ‘Post-consumer plastic waste needs to be understood as waste generated from plastic products that have been placed on the market of a Member State or of a third country.’ This new draft version adds in the phrase ‘…of a Member State or of a third country’, which is not present in the existing Implementing Decision. This statement from DG Env gives clarity on what currently counts towards the SUPD target while confirming the draft Implementing Decision will allow for recycled plastic made from post-consumer waste placed on the market of a third country to be allowed to count towards the SUPD recycled content targets.

SINGAPORE (ICIS)–Neste will supply 7,400 tonnes (9.5 million liters) of unblended sustainable aviation fuel (SAF) to DHL Express at Singapore’s Changi Airport beginning this month for a year, the Finland-based company said on Tuesday. The SAF, which will account for approximately 35% to 40% of the overall fuel blend composition of DHL Express’ fleet of Boeing five 777 freighters, is produced at Neste’s refinery in Tuas, located in southwest Singapore. “We are excited to expand our cooperation with DHL to Singapore, a leading aviation hub in Asia-Pacific,” said Carl Nyberg, senior vice president, Commercial, Renewable Products at Neste. “It leverages our SAF production and supply capabilities in Singapore, and demonstrates how we are working with DHL globally to help the company achieve its air transportation decarbonization targets using a solution that is available at scale today,” Nyberg added. Said Christopher Ong, managing director for DHL Express Singapore: “This partnership with Neste to procure and uplift SAF for DHL Express’ international air cargo flights from Singapore is a significant milestone for us.” “Not only will it enable us to gain new strides in emissions reduction in air transport, it also allows us to strengthen our commitment to customers to provide more sustainable shipping options,” Ong said. The agreement will contribute to a target of 1% SAF use on all passenger and cargo flights from 2026 onwards, according to the statement. Neste’s SAF, made from renewable waste and residues including used cooking oil and animal fats, is certified for commercial aviation and can be blended up to 50% with conventional jet fuel without infrastructure changes. Neste’s global SAF production capacity is 1.5 million tonnes/year, with plans to grow to 2.2 million tonnes/year in 2027.

LONDON (ICIS)—“The founding fathers of the Energy Community and the Energy Community Treaty signed exactly 20 years ago proposed three objectives:  competitiveness, security of supply and sustainability,” Energy Community director Artur Lorkowski told ICIS in a recent podcast. “And those three are the principles that are being pursued until today,” Lorkowski concluded, adding that the principles are aligned with the integration new countries with the European Union. Accession negotiations are now pending for Ukraine, Moldova and Bosnia-Herzegovina. The purpose of the organisation established by the Energy Community Treaty in 2005 was to extend the EU internal energy market to southeastern Europe and beyond – with Georgia (2017), Ukraine (2011) and Moldova (2010) being the latest additions. This would be achieved by integrating non-EU countries into the bloc’s unified legal and regulatory energy framework. Twenty years ago, reforms in the EU energy sector indeed centered around increasing competition through liberalising member states’ gas and electricity markets. In the gas market, legal and ownership unbundling of gas supply and transport was one of the key topics. The main purpose of this was to allow competition, break up the grip of incumbent monopolies and diversify sources of supply. Many infrastructure projects in central and eastern Europe carried out with this goal in mind helped to negotiate the price of gas even with dominant suppliers – like Russia’s Gazprom at the time. For example, the Hungary-Slovakia interconnector built in July 2015 stayed dormant for years although the first technical tests, flowing gas from Slovakia to Hungary at the Velke Zlievce border point, took place in February 2016. The lack of commercially viable transport tariffs and low liquidity on both hubs were cited as obstacles. Nevertheless, the pipeline did give Hungary more leverage in negotiations with Russia’s Gazprom by providing an alternative supply source, even on paper. However, while EU political and public figures may still be using the words “competition” and “security of supply” what stands behind them has become quite obscure in the past decade or so. On the political level the EU has been shifting towards ever-greater centralised power, extending even to attempts of joint gas purchasing through the AggregateEU platform. This goes hand in hand with expanding the European Commission’s influence through an ever greater and closer union. When it comes to the energy sector, climate goals and ensuing scores of regulation trumped any considerations of energy costs. As the Energy Community marks its milestone anniversary news headlines regarding the state of the European industry are bleak. On 8 July, polyvinyl chloride (PVC) producer Vynova announced the closure of its plant in Beek, the Netherlands, by November 2025. The plant is closing due to a lack of competitiveness and the weak European market, according to CEO Christophe Andre. “The European PVC market is under strong pressure due to global overcapacity, persistently weak demand and increased competition from regions with lower production costs and less stringent regulations, he said, before adding, ‘These conditions are unlikely to improve in the near term.’ Only one day earlier, Dow announced the closure of three plants in Europe with the loss of 800 jobs – an ethylene cracker in Bohlen, Germany, chloralkali and vinyl assets in Schkopau, Germany and a siloxanes plant at Barry, UK. “This second closure announcement this week by Vynova Group follows Dow on 7 July, highlighting the plight of Europe’s energy-intensive chemical sector,” said Will Beacham, deputy editor at ICIS Chemical Business. “Without EU protection and support we are in danger of hollowing out upstream chemical value chains and increasing vulnerability for the downstream industries they support. More than 5 million tonnes/year of ethylene capacity in Europe is now under threat of closure or other strategic moves, according to latest ICIS estimates.” Joining the European Union used to mean becoming part of a free and economically prosperous part of the world. This had special significance for people in eastern, southern and central Europe who had lived for decades under the oppression of the Soviet Union – a country based on a false ideology kept together through severe suppression of political freedoms and top-down control. On paper, being part of the Energy Community is still expected to improve its members’ economic status through application of laws and regulations that are supposed to foster competition thus improving security of supply. But the reality of the current state of EU industries stifled by endless regulation prompts the conclusion that the EU’s real goal is expanding its own ideology and spere of influence while paying lip service to concepts of freedom, competition and market economy.

HOUSTON (ICIS)–There is 34% of the corn crop now silking and 47% of soybeans blooming, according to the latest crop progress report from the US Department of Agriculture (USDA). The amount of corn currently at the silking stage trails the 39% achieved in 2024 but is slightly ahead of the five-year average of 33%. Corn reaching the dough stage is at 7% of the crop, which equals the 7% from 2024 and is above the five-year average of 5%. Corn conditions are unchanged with 1% listed as very poor, 4% as poor, 21% as fair, 57% as good and 17% as excellent. Soybean blooming has reached 47%, which is lagging the 49% from 2024 yet is equal to the five-year average of 47%. Soybeans setting pods are at 15% and are behind the 17% rate from 2024, but remain ahead of the five-year average of 14%. For soybean conditions, the amount of very poor has decreased to 1% with the amount of the crop listed as poor down to 4%. The level of fair is lower at 25%, with the acreage ranked as good having increased to 58% and the amount rated as excellent is unchanged at 12%. Winter wheat harvest is now 63% completed.

HOUSTON (ICIS)–The short-term reaction to 30% tariffs levied on imports from the EU and Mexico is likely to be the same wait-and-see approach taken after US President Donald Trump’s Liberation Day tariffs, according to a shipping industry analyst. Lars Jensen, president of consultant Vespucci Maritime, said he expects any and all non-urgent cargo orders to be put on hold from 1 August in the expectation, or hope, that these tariffs will again be reduced. “That will mean a short-term dip in cargo demand on all origins to the US,” Jensen said. Jensen noted that the letters being sent to nations describing the level of new tariffs will not be legally valid until an executive order or congressional action is taken. “What is presently legally binding is the executive order from Liberation Day outlining the original levels of reciprocal tariffs as well as the executive order pausing the implementation until 1 August,” Jensen said. And if the new tariff levels take effect and persist, Jensen said many US importers will have little choice but to resume importing their goods and pay the tariffs. “This will mean demand will be at a level roughly around or slightly below the minimum level of import volumes necessary to meet demand in the US and we might see more of a drawdown on inventories,” Jensen said. The trade war has already had an impact on volumes. Orient Overseas Container Line (OOCL), a unit of China’s container shipping major Cosco, said global volumes were up by 4.4% in the second quarter. But Jensen noted underlying data that showed Pacific volumes down by 4.3% and Atlantic volumes up by 20.5%. Meanwhile, rates for containers from east Asia and China to the US continue to fall on low demand and as front-loading during the tariff pause is ending. 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. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 11 July. INSIGHT: Further cracker rationalization could threaten Germany’s ethylene derivative operations The evolving European cracker landscape could have far more wide-ranging repercussions on ethylene consumption in the region than is immediately visible. Derivative units, especially those in Germany’s Ruhr area, that rely on the pipeline network connecting industrial hubs in Belgium, Germany, and the Netherlands are particularly vulnerable/at risk. IPEX: Index rises in June as Middle East tensions drive upstream costs higher The ICIS Petrochemical Index (IPEX) for June was up across all regions, not least northeast Asia and the US Gulf, as growing tensions between Israel and Iran pushed crude oil costs higher and raised concerns about supply levels. INSIGHT: Dow, Vynova close plants as Europe crisis deepens; EU unveils action plan for chemicals In the same week that Dow and Vynova announced major capacity closures, signalling the next step in Europe’s chemical industry crisis, the European Commission has unveiled an action plan to tackle the region’s competitiveness problem. But time is running out. Vynova to close Beek PVC plant by November 2025 Polyvinyl chloride (PVC) producer Vynova has announced the closure of its plant in Beek, the Netherlands, by November 2025, according to a company statement. Dow to close three Europe plants, cut 800 jobs, as asset review progresses Dow is moving ahead with the closure of three plants in Europe with the loss of 800 jobs as it progresses a review of regional assets announced in April 2025.

SINGAPORE (ICIS)–The EU and Indonesia are pursuing a comprehensive economic partnership agreement (CEPA) amid continued uncertainties over US tariffs. The deal is expected to be concluded in September, Indonesia’s chief economic minister Airlangga Hartarto said in a post on social media platform X on Monday. “The CEPA negotiation process has currently reached the stage of finalizing technical issues, fine-tuning, and developing a more detailed timeline to achieve the ratification stage,” he added. The European bloc consisting of 27 countries, and southeast Asia’s biggest economy have “reached a political agreement to advance the trade agreement,” European Commission President Ursula von der Leyen on 13 July. Businesses active in agriculture, automotive, and services will “massively benefit from it”, she said. The free trade agreement (FTA) will also “help strengthen the supply chains of critical raw materials, essential for Europe’s clean tech and steel industry”, von der Leyen said. The EU and Indonesia officially launched negotiations for a CEPA in July 2016. “For Indonesia, CEPA is not only about trade, it is about fairness, respect, and building a strong future together,” Indonesian President Prabowo Subianto said in the statement issued by the Commission. “The agreement must support our efforts to grow our industries, create jobs, and strengthen our sustainable development goals. We are ready to finalize it soon, in a way that benefits both our peoples.” The EU is Indonesia’s fifth-largest trading partner with bilateral trade between them reaching $30.1 billion in 2024, according to data by the European Commission. The EU has separate bilateral FTAs with Singapore and Vietnam among ASEAN countries, which took effect in November 2019 and August 2020, respectively. Talks to relaunch negotiations with Thailand were announced in March 2023, while negotiations with the Philippines resumed in March 2024. Visit our Topic Page: Tariffs, policy – impact on chemicals and energy Thumbnail image: Container port activities in Jakarta, Indonesia – 09 July 2025 (BAGUS INDAHONO/EPA/Shutterstock)

SINGAPORE (ICIS)–Singapore’s economy expanded by 4.3% year on year in Q2 2025, accelerating from the 4.1% expansion in Q1, but significant global economic uncertainty persists in the second half, driven by unclear US tariff policies, official preliminary data showed on Monday. On a quarter-on-quarter seasonally adjusted basis, Singapore’s GDP expanded by 1.4% in the second quarter, reversing the 0.5% contraction Q1 2025, the Ministry of Trade and Industry (MTI) said in a statement. For the first half of 2025, the annual average GDP growth was 4.2%. Full-year 2024 growth was 4.4%. “There remain significant uncertainty and downside risks in the global economy in the second half of 2025 given the lack of clarity over the tariff policies of the US,” MTI said. Singapore’s manufacturing sector grew by 5.5% year on year in Q2 2025, faster than the 4.4% expansion in the previous quarter. “Growth was driven by output expansions across all clusters, except for the chemicals and general manufacturing clusters,” the MTI added. The MTI in April this year lowered its GDP growth forecast for 2025 to 0-2%, from 1-3% previously, mainly due to the anticipated impact of US President Donald Trump’s tariff policies. The Trump administration began issuing tariff letters to several countries last week, with higher tariffs set to take effect from 1 August. Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Aster Chemicals & Energy, based at its Jurong Island hub. Visit our Topic Page: Tariffs, policy – impact on chemicals and energy