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Italy’s Eni extends chemicals operating loss in Q2 amid weak sector
SINGAPORE (ICIS)–Eni’s chemical business reported a narrower proforma adjusted loss of €184 million in the second quarter of 2025, mainly attributed to reduced oil-based feedstock expenses, although the chemical sector remains weak, the Italy-headquartered producer said on Friday. This compared with a loss of €222 million during the same period last year. Chemicals € million Q2 2025 Q2 2024 H1 2025 H1 2024 Proforma adjusted EBIT – 184 – 222 -427 -390 Eni’s chemicals business is managed by Versalis. Sales of chemical products decreased 5% year on year in the second quarter amid lower demand and plant shutdown. In the first six months of the year, chemical product sales fell 6% year on year. Plant utilization rates averaged 47% in the second quarter, an increase of two percentage points from the same period last year. Margins remained weak across the board as commodity prices were unable to offset feedstock and energy input expenses amid “European headwinds, sluggish economic activity and competitive pressures from players with better cost structures”, the company said.
BLOG: China: Three scenarios for the trade war, its economy and petrochemicals
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: Trade tensions between China and major global economies are shaping the future of the world’s second-largest economy. What’s next for China’s GDP, unemployment, inflation, and of course petrochemicals? I’ve outlined three “back-of-the-envelope” scenarios to help kickstart your strategic planning, focusing on trends and magnitudes rather than specific numbers. Best Case: Comprehensive De-escalation & Broad Agreements Outlook: A diplomatic breakthrough leading to robust GDP growth, easing youth unemployment, and an inflationary recovery. Exports rebound strongly. Petrochemicals: Increased trade stability, potential for margin rebound, though China’s demand growth recalibrates to a lower, more sustainable pace post-property bubble. Medium Case: Protracted Stalemate & Selective De-escalation Outlook: A “muddle through” period with moderate GDP slowdown, persistently elevated youth unemployment, and ongoing deflationary pressures. Export growth remains sluggish. Petrochemicals: Continued trade route shifts, no major margin recovery from trade alone, and an accelerated push for China’s self-sufficiency. Worst Case: Full-Blown Trade War & Deep Decoupling Outlook: Sharp GDP contraction, a severe unemployment crisis (especially for youth), and entrenched deflation. Exports collapse, leading to aggressive state stimulus. Petrochemicals: Severe disruption, near-cessation of key trade flows (eg, US LPG/ethane), further margin deterioration, and an urgent drive for national security-prioritized self-sufficiency in China. Even in the best case, remember China faces structural headwinds from the property market and an ageing population, which will temper 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.
Thailand June exports rise 15.5%; US shipments surge ahead of tariff deadline
SINGAPORE (ICIS)–Thailand’s overall exports in June grew by 15.5% year on year to $28.6 billion on front-loading of shipments ahead of the US’ 36% tariffs, which will take effect on 1 August. June exports to US surge by 42% year on year Military conflict with Cambodia; domestic political instability dog government 2025 GDP growth projected to slow to 2.3% from 2.5% in 2024 Although June was the 12th straight month of export growth for the southeast Asian nation, the pace of expansion eased from 18.4% in May. Total shipments to the US – Thailand’s largest exports destination – surged in June by 41.9% year on year, according to data released by the Ministry of Commerce on 24 July. Thailand’s overall imports rose by 13.1% year on year to $27.5 billion in May, resulting in a trade surplus of $1.06 billion. During the first six months of the year, exports rose by 15.0% to $66.8 billion, while imports increased at a slower pace of 11.6% to $66.9 billion. However, this run may not last as front-loading momentum may ease once the US tariffs come into force. Thailand has yet to reach a trade deal with the US on bringing down the tariffs from 36%. Exports are expected to remain positive, but the growth rate would ease from double-digit levels in the next five months to December, said Poonpong Naiyanapakorn, director-general of Thailand’s Trade Policy and Strategy Office (TPSO). US TARIFF DEADLINE APPROACHES Thailand and the US have yet to come to a trade agreement, raising pressure on the government at a time when the country’s Prime Minister Paetongtarn Shinawatra was suspended due to a leaked call in which she criticised the Thai military. Phumtham Wechayachai is currently the Acting Prime Minister of Thailand, while Deputy Prime Minister and finance minister Pichai Chunhavajira is heading trade talks with the US. The southeast Asian country is experiencing further instability amid a border clash with Cambodia, during which armed clashes and rocket fire were reported on the morning of 24 July. Thai fighter jets were deployed in response to the rocket fire and at least 12 have been killed, according to media reports on 24 July. Both sides have accused each other of starting the 24 July conflict, centering around historically disputed border regions of Surin in Thailand and the Cambodian province of Oddar Meanchey. On Friday, the Thai army requested people to stay away from border areas as fighting intensifies. “Aside from uncertainty around US trade policies, the outbreak of conflict in the Middle East and domestic political instability could pose additional threats to the Thai economy,” the Asian Development Bank (ADB) said in a report on 23 July. The Thai economy is projected to expand at a slower rate of 2.3% in 2025 and of 1.7% in 2026, the Bank of Thailand (BOT) said in its last monetary policy meeting on 25 June. In 2024, actual GDP growth was 2.5%. Meanwhile, the ADB projects a much slower growth of 1.8% for Thailand in 2025, which would further decelerate to 1.6% in 2026. Focus article by Jonathan Yee Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

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Timor-Leste’s looming ASEAN entry could fuel LNG dreams
SINGAPORE (ICIS)–Timor-Leste is close to achieving full membership in ASEAN this November. The oil- and gas-rich country will see opportunities in its petro infrastructure within the broader market and cooperation mechanisms provided by ASEAN. Once a membership deal is sealed, Timor-Leste’s energy ministry will spend 2026 pushing for a revised Greater Sunrise development plan – either with original operator Australia’s Woodside Energy or a new Chinese EPC and financier, to secure an FID before the nation’s sovereign fund turns to net withdrawal in the early-2030s. Dili’s diplomats would also deepen talks on regional gas integration under ASCOPE-TAGP, positioning the proposed Timor Leste-based Beaçu facility as a future trans-shipment or bunkering hub for intra-ASEAN LNG. BAYU-UNDAN TO SUNRISE MOMENTUM Timor-Leste is one of the world’s youngest nations – having gained independence only in 2002. The country, approximately the size of the US state of Connecticut or South Korea’s Jeju Island, is rich in offshore oil and gas reserves. The nation’s $19 billion sovereign wealth Petroleum Fund has been largely based on oil revenues – with the legacy Bayu-Undan field funding more than 85% of the fund’s balance. Bayu-Undan’s gas sales ceased in late-2023 and will be fully decommissioned in 2026. Bayu-Undan carries high hope for Timor Leste and Australian producer Santos as a “CCS hub” that receives CO2 from Australia, and Japan and South Korea, whose companies hold a combined 38.3% share. Therefore, Timor-Leste is set to further tap into its petro-molecule reserves by granting generous incentives to oil and gas foreign direct investments once accession to ASEAN is completed. Timor GAP E.P., Timor-Leste’s national oil company, holds over half (56.56%) equity in the Woodside-operated (33.44%) Greater Sunrise LNG complex, Japan’s Osaka Gas has the remaining 10% stake. Dili insists Sunrise gas must land on its south coast at a planned Beaçu LNG complex, part of the $12 billion Tasi Mane corridor, while Woodside prefers piping it to the existing Darwin LNG plant or as a floating unit to cut capex. President José Ramos-Horta told local media in May he was courting Chinese partners “if the current operator cannot move forward,” signalling the government’s willingness to look beyond traditional Australian and Japanese partners. Source: La’o Hamutuk ASEAN MEMBERSHIP Full ASEAN status will grant Timor-Leste access to the ASEAN Council on Petroleum and the Trans-ASEAN Gas Pipeline (TAGP) master plan, which stipulates technical standards and opens concessional funding from the ASEAN Infrastructure Fund. Meanwhile, pipe and heavy equipment sourced within ASEAN and LNG modules sold in the region could enjoy Most-Favoured-Nation duties once Timor-Leste signs the ASEAN Trade in Goods Agreement. ASEAN’s mature regional cooperation mechanisms, particularly within ASEAN+3 framework, can provide Timor-Leste with financing instruments from Japanese, Chinese and Korean banks. Dili hopes those levers will attract partners for Greater Sunrise, as well as for smaller prospects such as the Chuditch gas survey, where a 3D seismic study is scheduled this year. These projects are all still long way to materialising, but ASEAN membership would give the micro-state a bigger table to convert offshore molecules into on-shore assets before the Bayu-Undan money runs out. COMPETIVE LANDSCAPE SPLIT WITH PNG LNG Timor’s ambitions is naturally comparable with Papua New Guinea LNG, a 7.9 mtpa project that turned the resource-rich but infrastructure-poor neighbour into a top regional exporter in 2014. PNG’s experience shows that early identification of anchor buyers in Japan or China – and multilateral lending from ADB and Export-Import banks – can accelerate first gas. But it also highlights social-license challenges, something Timor-Leste is keen to avoid after decades of hard-won stability.
US Dow halves dividend as chem downturn to last longer than expected
HOUSTON (ICIS)–Dow cut its dividend by 50% on Thursday because the downturn in the chemical industry is entering its third year and it will last longer than expected. Shares of Dow fell by more than 16% in midday trading. Earlier on Thursday, Dow reported a Q2 net loss of $801 million. DOW Q3 SALES TO FALL YEAR ON YEARLooking ahead at Q3, Dow expects sales to rise slightly from Q2 levels, but they will remain below year-ago levels, as shown in the following table. Figures are in dollars. Q3 25 Q2 25 Q3 24 Net sales 10.2 billion 10.1 billion 10.9 billion Operating EBITDA 800 million 703 million 1,382 million Source: Dow Dow expects a quarter-on-quarter bump in sales in part because of proposed price increases for polyethylene (PE). Exports have started to resume, and Dow is confident that the proposed hikes will go through because it maintains that integrated margins are low and unsustainable. Dow should get another boost in Q3 earnings from the startup of its new Poly 7 PE line in Freeport, Texas. The train is fully sold out, and Dow is selling the output to higher-margin markets such as food and specialty packaging as well as health and hygiene, said Karen Carter, chief operating officer. The train should provide another boost to earnings by absorbing Dow’s last remnant of merchant ethylene in the Gulf Coast market. The new line and the possible price increase would follow what Dow described as the evaporation of PE exports in the wake of the 2 April tariff announcements. The disappearance of exports led to a 3 cents/lb drop in PE prices. The fallout from the tariff announcements showed up in Dow’s earnings for its Packaging & Specialty Plastics segment, which reported a 90% year-on-year decline in operating earnings before interest and tax (EBIT). Overall, Dow’s end markets are mixed at best, as shown in the following heat map from the company. Source: Dow Dow has maintained its forecast for mid-cycle earnings, but the company delayed when it would achieve those levels. That could take place near 2030, which was the latter part of an earlier forecast made by Dow. That said, the company warned that the timing of any recovery is difficult because of the uncertainty surrounding tariffs and trade negotiations and what CEO Jim Fitterling described as “a new world order” and trade rebalancing. Concluding trade negotiations would be a first step towards a recovery, and it appears the US is getting close to wrapping up talks, he said during the company’s earnings conference call. TRADE, OVERSUPPLY AND GEOPOLITICSOne of the reasons why earnings will remain depressed for longer is because tensions and tariffs are re-arranging trade routes. Derivatives, more so than chemicals, are being redirected from the US to other markets, Fitterling said. ICIS has reported on the effects of these redirected derivative shipments on chemical markets in southeast Asia, and they have depressed demand for upstream plastics and chemicals. Dow’s international trade operations are managing tariff negotiations through their connections with governments around the world, Fitterling said. Also, there is work going on through the World Trade Organization (WTO) involving how goods are moved around and how to defend fair trade, Fitterling said. Trade organizations and individual companies are pursuing this option. Countries are starting to take action as well. Brazil is considering anti-dumping duties on PE imports from the US and Canada. The EU has started investigations on imports of butanediol (BDO), polyethylene terephthalate (PET) and adipic acid (ADA). Downstream, countries have imposed duties on electric vehicles (EVs). WORLD WORKS THROUGH EXCESS CAPACITYDow expects the world will work through excess PE capacity because demand should continue growing faster than GDP, Fitterling said. “I don’t think you are looking at an environment where it’s the end of investing in plastics.” The polyurethanes chain has a lot of overcapacity, and demand is low for several of its key markets, such as construction and durable goods. Isocyanates are in relatively decent shape, Fitterling said. Propylene oxide (PO) will take longer to rebalance. Silicones continue to grow well, but siloxanes will take longer. OTHER CHEM FIRMS SEE NO HELP FROM ECONOMYEarlier in the week, paints and coatings producer Sherwin-Williams lowered its guidance and warned that any growth would come from taking market share away from its competitors. The company expected no help from the economy. Adhesives producer HB Fuller raised its guidance, but its rationale confirmed the pessimistic outlook of Sherwin-Williams and Dow. HB Fuller raised its guidance because of the success of its self-help measures and not because of a stronger economy. Focus article by Al Greenwood Thumbnail image: PE, a product made by Dow (Image source: ICIS)
Fast trade deal with US could prevent Canada recession – economists
TORONTO (ICIS)–Canada is heading into a “trade war-induced recession” – unless it can reach a quick deal with the US, with low tariffs and a “significant de-escalation”, economists at Oxford Economics said in a webinar. 1 August deal could avoid recession US tariffs hit Canadian exports, investments, housing, jobs USMCA compliance to provide relief Increased defense spending offers limited domestic stimulus Canada’s government is targeting a deal by 1 August but does not provide updates on the trade talks and does not disclose what concessions it may make, insisting it will not negotiate in public. If there is a quick deal, it would result in improved prospects for Canadian GDP growth, said Tony Stillo, director for Canada, and economist Michael Davenport. However, if a deal is not reached by 1 August, Canada could face the 35% tariffs US President Trump threatened for all Canadian exports that are not compliant with the rules of origin and other conditions of the existing US-Mexico-Canada (USMCA) trade agreement, the economists said. The 35% tariffs, coming on top of the US sectoral tariffs on autos, aluminum, steel, pharmaceuticals and potentially also copper, would imply a deeper and longer downturn of Canada’s economy, they said. As it stands, the global forecasting firm believes that Canada likely already slipped into a recession that could last through the end of 2025. It is currently forecasting a 0.8% peak-to-trough decline in GDP from Q2 to Q4 2025. Oxford’s baseline forecast for Canada’s GDP is for 0.9% growth in 2025, slowing to 0.4% in 2026 but rebounding 3.0% in 2027. Industrial production, widely seen as a proxy for chemical and plastics demand, is expected to decline by 0.5% in 2025 and 2.1% in 2026 before rising by 3.3% in 2027, according to its estimates. EXPORTS DROP Lower exports are the primary negative factor hitting Canadian GDP, but the tariff uncertainties also affect investment plans, households, housing and employment, the Oxford economists said. The US is by far the most important market for Canadian exports, including chemicals and plastics. In chemicals, 77% of Canada’s exports of industrial chemicals headed to the US last year, according to trade group Chemistry Industry Association of Canada (CIAC). While Canadian exports to the US rose early this year during a period of “front-loading” when companies tried to get ahead of the tariffs, they have started to decline noticeably more recently. In May, Canadian goods exports to the US were off 27% from a peak in January, and down 16% year on year, the Oxford economists said. The US share of total Canadian goods exports has fallen to about 68%, from a 75% average in 2024, they said. In addition to the direct impact of declining exports, the tariff uncertainties have also affected firms and households. Companies’ investment plans, in particular for machinery and equipment, have largely stalled and expectations for future employment have declined, the economists said. “Persistent under-investment has been a challenge for the Canadian economy for the last decade or so, and that will be exacerbated by the trade war,” noted Davenport. Oxford expects the US tariffs to lead to about 140,000 job losses in Canada by the end of this year, especially in manufacturing, which is mostly concentrated in Ontario and Quebec. The unemployment rate is expected to rise to 7.6%, Davenport said. The rate was at 6.9% in June. In housing, which is an important end market for chemicals and plastics, re-sales have slumped, and unless there is an immediate trade deal with the US, the slump will accelerate in the second half of this year and extend into 2026, Davenport pointed out. While housing starts have been holding up so far, they are expected to slow in the second half of the year, partly due to rising building costs on the back of tariffs, as well as high interest rates, he said. INTEREST RATES With the “stagflationary tariff shock” Canada’s central bank, the Bank of Canada (BoC), would need to balance concerns over higher prices with a downturn in the economy, the Oxford economists said. Oxford expects Canada’s consumer price inflation to rise to 3.0% by the middle of 2026, from 1.9% in June. Inflation has been relatively mild in recent months, but this was largely due to the removal of the federal consumer carbon tax in April, the economists noted. Uncertainty about tariffs and their impact led the BoC to keep the policy rate at 2.75% in June and Oxford expects it will stay there. The BoC’s next rate decision is expected to be announced on 30 July. DEFENSE SPENDING Canada’s commitment to raise defense spending to 2% of GDP this fiscal year will not prevent a recession, the economists said. The defense spending hike would go largely on salaries, with “a little bit” going to equipment, Stillo said. Longer-term, Canada has committed to spend 5% of GDP on defense by 2035. However, much of the defense equipment would likely continue to be imported from the US, Stillo noted. Imports are a subtraction in the calculation of GDP. Also, the higher defense spending will likely be debt-financed, thus raising the government debt-to-GDP ratio and leading to higher long-term bond yields, which flow through to mortgage rates, thus squeezing housing affordability, he said. Prime Minister Mark Carney said he is aiming for a comprehensive trade and security deal with the US, but did not say if he will use Canadian spending on US military equipment as a bargaining chip in the trade talks. TARIFF RATES, USMCA COMPLIANCE, RETALIATION Oxford currently estimates that the effective average tariff rate Canada faces on all goods exported to the US is 14.1%. However, with a 35% tariff on non-USMCA-compliant goods, the effective rate would rise to an estimated 18.3% on 1 August, if no deal is reached by then, according to Oxford. The following chart shows Oxford Economics’ estimates since March for effective rates of US and Canadian tariffs. It remains unclear what retaliatory measures Canada will take if no deal is reached by 1 August and the US 35% tariff on non-USMCA-compliant goods comes into effect. The economists said Canada, along with Mexico, are highly reliant on trade with the US, but both are less affected than other countries by the trade tensions because of the exemption for USMCA-compliant imports. USMCA compliance of Canadian goods exports has increased in recent months and was at 56% as of May, up from 38% in 2024, according to Oxford’s estimates. For plastics products and autos and parts the compliance rates are especially high, as the following chart by Oxford Economics shows: Most of the increase in compliance was in Canadian fuels exports, which are subject to a lower tariff of 10%. Meanwhile, temporary government relief from Canada’s retaliatory tariffs should help Canadian companies. About C$96 billion (US$71 billion) of goods imported from the US face Canadian retaliatory tariffs, but the government has granted tariff relief (remissions) for goods imports worth between C$56-64 billion, the economists said. The tariff relief is for a wide range of imported products in manufacturing, processing, food and beverage packaging, healthcare, public health and safety, national security, and cases “with severe adverse impacts” and a lack of non-US suppliers, Stillo said. Which products qualify for relief “is still subject to interpretation”, Stillo pointed out before adding, “There is a lot there that firms could use to get tariff relief.” Stillo said although the retaliatory tariffs were a tax on Canadians, the government had to act against the US tariffs, saying, “You can’t just cave in to President Trump.” Canada’s retaliatory tariffs try to target US goods that can be substituted and where the counter-tariffs affect the US economy more than the Canadian economy, he said. On the other hand, the government is providing tariff relief for imported intermediate goods that are deeply integrated into the North American manufacturing process, he said. “So, they are trying to give companies an opportunity to find alternative suppliers, suppliers that are not US-based, not an easy thing to do,” he added. Oxford Economics assumes that most US tariffs will be removed by Q3 2026 as the USMCA is renegotiated. However, targeted tariffs of 10% will remain in place for metal and select agricultural products. Likewise, Oxford expects Canada to remove most of its retaliatory measures by Q3 2026. (US$1=C$1.36) Please also visit US tariffs, policy – impact on chemicals and energy Thumbnail photo source: Government of Canada
INTERVIEW: Europe chemicals hit bottom, policy shift a long-term positive – Covestro CEO
WASHINGTON, DC (ICIS)–The European chemical industry has hit bottom and there are positive developments for structural reforms that could lead to a brighter future, said the CEO of Germany-based Covestro. “First, we see clear signs that the negative growth trajectory for the European chemical industry has come to an end. It has significantly slowed down, and from my perspective, now has come to an end, so we’ve hit the bottom,” said Markus Steilemann, CEO of Covestro, in an interview with ICIS. Steilemann spoke to ICIS at the headquarters of the American Chemistry Council (ACC) in Washington, D.C. “The key question is now, what type of structural reforms will come? I’ve seen significant movements in terms of the willingness to look at overall regulation, but also the energy price situation in Europe, because that is the starting point to reinstall consumer confidence,” he added. ‘IT’S THE ECONOMY, STUPID’A renewed focus on the economy and its key drivers by the EU and Germany could provide support for the chemical industry in the form of deregulation, energy initiatives and tax benefits, he noted, recalling the defining theme of former US President Bill Clinton’s first election campaign in 1992 – “It’s the economy, stupid”. “That fundamental principle – that the economy at the end of the day is the provider of wealth, of societal coherence, of the ability to defend, and so on and so forth – is sinking in,” said Steilemann. “Energy, regulations, taxes and innovation as the four key drivers in that context, has from my perspective been finally understood, and we can see first small steps in the right direction,” he added. The CEO now sees a “strong willingness” by the EU and Germany to address the high cost of energy and dampen some of the effects from the halt in importing Russian gas following the Russia-Ukraine war. As part of its €46 billion tax reduction package passed in July, Germany reduced energy taxes for large manufacturers and certain other groups from 1.54 cents/kilowatt hour (kWh) to the EU minimum of €0.05/kWh. SMALL STEPS IN DEREGULATIONOn the regulatory front, the industry is seeing “first small steps towards not executing some… reporting requirements, and at the same time, also prolonging exemptions for small and mid-sized entities, which have been hit very hard by those additional reporting needs,” said Steilemann. Excessive bureaucracy costs Germany up to €146 billion/year in lost economic output, according to a study by the ifo Institute released in November 2024. “If you just deduct this, you can imagine how big the size of the prize is, if the German and EU governments do something about regulation specifically,” said Steilemann. “It’s not only rolling back but really withdrawing some of those regulations. There have been small steps, but these could also be the first steps of a long journey,” he added. FUTURE IN SPECIALTIESHighly energy intensive and large raw material dependent chemical investments are difficult to justify in Europe, but specialty chemicals are the future, the CEO pointed out. “We must not forget that for Germany alone, of the more than 2,000 companies we have as members of the German Chemical Industry Association (VCI), more than 90% are small to mid-sized entities (SMEs),” said Steilemann, who is also president of VCI. “It’s not the big corporations that make the biggest part of the chemical industry. [It’s the SMEs that] make specialties. They are highly innovative and their investment is going into Germany because they have no internationalization strategy,” he added. The EU and Germany governments are starting to understand and address the situation for energy costs, labor productivity and regulations. “That’s why I see with structural changes in the Europe and Germany, a very bright future, given the fact that Germany has always been strong in innovation, and that there’s a broad base of small and mid-sized entities that can carry that growth,” said Steilemann. Energy-intensive chemicals represent around 10% of the entire chemical sector in Germany, with the majority already taken out or in prolonged shutdowns, he added. Covestro and LyondellBasell in March 2025 announced the permanent shutdown of their joint venture propylene oxide/styrene monomer (POSM) plant in Maasvlakte, Netherlands by the end of 2026. “We are reviewing constantly our asset footprint, but we currently don’t have any active plans [for further shutdowns],” said Steilemann. Insight by Joseph Chang Thumbnail image credit: Shutterstock
Spain’s Repsol Q2 industrial arm adjusted income falls on nationwide outage
SINGAPORE (ICIS)–Repsol’s industrial segment posted a 65.6% year-on-year drop in its second quarter adjusted income amid weaker results in Refining and Chemical, which were negatively impacted by trade and a nationwide outage in Spain on 28 April. The losses were partially offset by higher results in Repsol Peru and Wholesale and Gas Trading, as well as lower taxes mainly due to lower operating income, the company said in a statement. in € million Q2 2025 Q2 2024 % Change H1 2025 H1 2024 % Change Adjusted Income 99 288 -65.6 230 1,019 -77.4 Current cost of supplies (CCS) operating income 119 375 -68.3 294 1,325 -77.8 EBITDA 69 465 -85.2 210 1,342 -84.4 EBITDA CCS 329 568 -42.1 732 1,439 -49.1 “In Chemicals, operating income was €33 million lower year-on-year mainly due to lower cogeneration results as well as lower volumes mainly impacted by the negative effects of the Spanish outage that happened on 28 April 2025,” Repsol said. These were partially redressed by higher margins, the company added. Repsol’s chemical margin indicator rose 22.3% year on year to €329/tonne in the second quarter. Meanwhile, petrochemical product sales fell by 7.4% year on year to 441,000 tonnes in the second quarter. The industrial segment consists of activities involving oil refining, petrochemicals and the trading, transport and sale of crude oil, natural gas and fuels, including the development of new growth platforms. Repsol’s group net income fell to €237 million in the second quarter from €657 million in the same period of last year, which was a 63.9% decline.
S Korea Q2 economy grows 0.6% on quarter amid delay in US tariff talks
SINGAPORE (ICIS)–South Korea’s economy grew by 0.5% year on year in the second quarter, avoiding a technical recession, the central bank’s data showed on Thursday. Exports, imports grow as South Korea’s economy recovers slightly Race to negotiate lower tariffs hit snag with cancelled US talks GDP growth forecast could be 0.7% if tariffs remain – AMRO On a seasonally adjusted quarter-on-quarter basis, GDP rose by 0.6% between April-June 2025, the Bank of Korea (BOK) said in a statement. Exports improved by 4.2% year on year on increased semiconductors, petroleum products and chemical product shipments, while imports were up 3.8% on an increase in energy items, such as crude oil and natural gas. South Korea is a major importer of raw materials like crude oil and naphtha, which it uses to produce a variety of petrochemicals, which are then exported. The country is a major exporter of aromatics such as benzene, toluene and styrene. Private consumption, accounting for roughly half of the country’s GDP, increased by 0.5% year over year in the second quarter. Manufacturing expanded by 2.7% year on year in the second quarter, up from the 0.4% growth in the first three months of 2025. PRESSURE TO MEET TARIFF DEADLINE MOUNTS South Korea faces a race to negotiate lower tariffs on the country imposed by the US, currently set at 25% and will take effect on 1 August if a deal is not reached. However, scheduled talks between the two countries on 25 July were cancelled as US Treasury Secretary Scott Bessent had a scheduling conflict, according to South Korea’s Finance Ministry on Thursday. The meeting will be rescheduled, the ministry added. Depending on the trade talk outcome, South Korea’s economy might grow by just 0.7% this year, according to Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) in an outlook on 23 July. Another key focus for South Korea is reducing automotive tariffs, with auto majors such as Hyundai and Kia dependent on exports to the US. A precedent has been set via a US-Japan trade deal, which reduces Japanese automotive export tariffs to the US to 15% from 25% previously. TRADE MINISTER EYES PETROCHEMICAL INDUSTRY REFORMS Plans to revitalize the petrochemical industry have also stalled amid political instability wrought by former President Yoon Suk Yeol’s declaration of martial law back in December. New Minister of Trade, Industry and Energy, Kim Jung-kwan, who took office in June, has expressed his willingness to restructure South Korea’s petrochemical industry, starting with the consolidation of naphtha cracking centers (NCC), located in the cities of Ulsan, Yeosu and Daesan. The NCC is a facility that produces general-purpose products such as ethylene, propylene and benzene, which are building blocks for the petrochemical industry. Laws preventing monopolies under the Fair Trade Act are a current stumbling block for such consolidation plans, and an exemption from the clause will have to be sought for plans to proceed. The hope is that a new government and greater political stability will pave the way for the restructuring of the struggling sector, even in the face of US tariffs threatening to slow the global economy down. Focus article by Jonathan Yee
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