HOUSTON (ICIS)–The US has proposed on Monday tariffs of 25% on imports from Japan as well as from South Korea, which was the top source of US imports of aromatics and base oils in 2024. The tariffs will take effect on 1 August, US President Donald Trump said on social media. The tariffs would not apply to imports subject to the sectoral tariffs that the US has adopted on goods such as aluminium, steel and automobiles. The US will also start imposing an unspecified higher tariff on transhipped goods from Japan and South Korea. The US is already adopting such a tariff on transhipped goods from Vietnam, which it set at 40%. S KOREA IS TOP US SOURCE OF IMPORTED AROMATICSSouth Korea is the largest source of US imports of benzene, toluene and mixed xylenes (MX), according to ICIS. In addition, it is the second largest source of paraxylene (PX), trailing only Mexico. These are building block chemicals produced as byproducts from refineries or from cracking naphtha, an oil-based feedstock. Companies will not purposely expand refineries or naphtha crackers to produce these byproducts. As a result, US importers will have to find lower-cost sources, pay the tariffs or lower production. Benzene is used to make many intermediates such as cumene and styrene. Cumene is used to make phenol and acetone, which, in turn, are feedstock for polycarbonate (PC) and methyl methacrylate (MMA) respectively. Styrene is used to make polystyrene (PS), acrylonitrile butadiene styrene (ABS) and styrene butadiene rubber (SBR) among many others. Toluene and MX can be used as solvents or octane boosters for gasoline. MX can be further refined to produce orthoxylene (OX) and PX. PX is one of the two main feedstocks used to make polyethylene terephthalate (PET), a polyester used to make fabric and beverage bottles. Thumbnail shows a cup made out of PS, a derivative of benzene, a chemical for which South Korea is the top source of US imports. Image by ICIS.

By Tobey Barnett European energy company MET Group said on Monday 7 July it had acquired 100% of gas storage operator KGE, based in Gronau, Germany. KGE operates a H-gas storage facility in Gronau-Epe capable of holding 179 million cubic metres of natural gas, injecting 150,000 Nm3/h of gas and withdrawing 400,000 Nm3/h at maximum capacity. This represents around 0.7% of Germany’s total combined gas storage capacity. The facility is connected to the German THE hub. According to MET CEO Benjamin Lakatos, the acquisition will “strengthen our position in the German market” while furthering natural gas infrastructure in Germany. According to ICIS price assessments on Friday 4 July, German gas for the coming winter season was assessed at €36.725/MWh, a rough €3.00/MWh premium to the Summer ’26. While not a significant premium in historical terms, the €3.00/MWh figure does show a widening of the seasonal spread in Germany in recent months. As recently as March for example, the Summer ’25 was priced marginally higher than the Winter ’26 largely due to uncertainty over summer injection demand. In Germany, MET Group has been active since 2020 operating two natural gas storage facilities at the Etzel and Reckrod sites. MET is present in 32 national gas markets and in 44 international trading hubs, trading 140 billion cubic meters of natural gas in 2024.

SAO PAULO (ICIS)–Braskem’s controlling stakeholder Novonor and the potential buyer for its stake at the Brazilian petrochemicals major have notified competition authority CADE about the transaction seeking approval. In May, Brazilian entrepreneur Nelson Tanure’s investment fund Petroquimica Verde launched a non-binding acquisition offer for Novonor’s 38.3% stake in Braskem, which gives it however 50.1% of voting rights. Monday’s move represents the furthest an acquisition offer for Novonor’s stake has gotten, after several potential buyers ultimately ended up backing off. Braskem’s second-largest shareholder is the country’s state-owned energy major Petrobras, with a 36.1% stake and 47.0% of voting rights. Novonor, formerly Odebrecht, has for years tried to divest the stake as it aims to deleverage after the company got embroiled in the Latin America-wide Lava Jato corruption scandal in the mid-2010s. Names such as Abu Dhabi’s oil company Adnoc, US chemicals major LyondellBasell, or Brazilian players such as Unipar and J&F made offers for Novonor’s stake but ultimately backed off. Most of the potential buyers ended up desisting because of Braskem’s heavy-weight legacy related to the environmental disaster caused by one of its salt mines in the state of Alagoas in 2018, which left many homeless and/or displaced. “NSP Investimentos [Novonor’s parent company], in Judicial Reorganization, and Petroquimica Verde Fundo de Investimento em Participaçes – Multiestrategia notified the Administrative Council for Economic Defense (CADE) requesting the authorization of the competition authority for a potential transaction involving the shares issued by NSP Investimentos,” said Braskem. “Novonor also informed that until this date, no definitive binding agreements have been executed in relation to the eventual transaction, which remains subject to the usual assessments and confirmations in similar transactions.” Braskem’s stock in the Sao Paulo exchange rose by nearly 1.5% in the early morning following the announcement, although by midday local time the gains had moderated and was up nearly 0.50%. In a written response to ICIS, a spokesperson for Novonor said the company would not comment further. Petroquimica Verde had not responded to a request for further comment at the time of writing. Front page picture: Braskem’s Duque de Caxias site in Rio de Janeiro; it shares the complex with Petrobras’ Reduc facilities Picture source: Petrobras

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the fortnight ended on 4 July. Brazil’s Petrobras mulls acetic acid, MEG plants in Rio as part of $6 billion capex planPetrobras is mulling production plants for acetic acid and monoethylene glycol (MEG) at its site in Rio de Janeiro as part of its 2025-2029 capital expenditure plans of Brazilian reais (R) 33 billion ($6.08 billion), the Brazilian state-owned energy major said this week. US Woodside, Mexico’s Pemex joint oil venture 25% complete, remains on budget and timeWoodside’s Trion crude oil joint venture with Mexico’s state-owned Pemex is 25% complete and construction is running on budget and on time with expected start-up date for 2028, the US energy producer said to ICIS. Brazil’s protectionism benefits few but ‘suffocates’ plastics transformers, manufacturing – AbiplastBrazil’s highly protectionist model to cushion domestic producers from overseas competition is suffocating other parts of the production chain in a country obliged to import around half of its chemicals demand, the trade group representing plastics transformers Abiplast said this week. Petrobras eyes 2029 for Group II production, mulls RRBO projectPetrobras is targeting 2029 for first production from its Group II base oils project at the Boaventura Energy Complex in Itaborai, Rio de Janeiro state, Brazil, said Ulysses Donadel, Petrobras special products commercial manager, at this week’s 15th Meet the Market International Conference by Lubes em Foco. US Transition Industries signs EPC contract for Mexico’s methanol project Pacifico MexinolUS Transition Industries and its consortium partners signed this week an Engineering, Procurement and Construction (EPC) contract for its Mexican green methanol project Pacifico Mexinol, in Sinaloa state, although the company is yet to take a final investment decision (FID). Dutch chemicals distributor IMCD acquires Chile’s Apus QuimicaIMCD is to acquire Chilean distributor Apus Quimica as it seeks to strengthen its presence in the Latin American country, the Netherlands-headquartered global chemicals distributor said this week. Brazil’s move to raise biodiesel blending mandate to 15% unlikely to boost short-term glycerine suppliesBrazilian regulators’ decision to boost the country’s biodiesel blending mandate to 15% (B15) in August is unlikely to boost short-term glycerine availability, as existing production continues to lag behind the current B14 mandate. Mexico’s Braskem Idesa to remain under financial pressure as new terminal relief takes time – S&PBraskem Idesa is grappling with deteriorating financial metrics as the Mexican polyethylene (PE) producer struggles to recover from the broader petrochemical industry downturn, credit rating agency S&P Global said this week. Brazil’s chemicals operating rates keep falling despite protectionist measuresBrazil’s chemicals production posted its worst performance in over three decades during Q1 2025, with operating rates at 62% – down from 65% in the same quarter of 2024 – and production falling by nearly 4%, chemicals producers’ trade group Abiquim said on Wednesday. Solvay’s Peroxidos do Brasil to expand Chilean hydrogen peroxide facilityPeroxidos do Brasil is to invest $12 million in an expansion of its Chilean hydrogen peroxide (H2O2) production facility, the subsidiary of Belgium-headquartered chemicals major Solvay said on Monday.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 4 July. US chem firm warns of unprecedented destocking in comments to Fed An unnamed chemical company warned of unprecedented destocking in comments to one of the Federal Reserve’s regional banks, according to a survey published on Monday. INSIGHT: US chemical stocks catch a bid along with cyclicals. Could manufacturing finally be bottoming? US chemical stocks have finally caught a bid to kick off H2 2025, rallying strongly even with the S&P 500 benchmark index slightly in the red. US announces Vietnam trade deal, will impose 20% tariffs The US will impose 20% tariffs on imports from Vietnam and 40% tariffs on transshipments – while Vietnam will charge no tariffs on US imports, according to a trade agreement that the US president announced on Wednesday. INSIGHT: Transshipment tariffs of 40% unclear in US-Vietnam trade deal The finer points of US President Donald Trump’s trade deal with Vietnam were notably vague, particularly concerning a 40% tariff targeting “any transshipping”. INSIGHT: US-Vietnam trade deal a template for SE Asia; US PE exports could benefit The US-Vietnam trade deal, which includes US tariffs on imports from Vietnam but exempts US exports from tariffs, should serve as a template for potential agreements with other southeast Asia countries where the US has a large trade deficit. Brazil’s Petrobras mulls acetic acid, MEG plants in Rio as part of $6 billion capex plan Petrobras is mulling production plants for acetic acid and monoethylene glycol (MEG) at its site in Rio de Janeiro as part of its 2025-2029 capital expenditure plans of Brazilian reais (R) 33 billion ($6.08 billion), the Brazilian state-owned energy major said this week.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the growing risks in the US housing market. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 4 July. Europe chemicals producer prices in May fell at faster rate than previous months European chemicals producer prices continued to fall in May at a more significant rate than previous months, according to the latest data from Eurostat. Europe heatwave ignites demand for domestic PET Soaring temperatures across much of Europe are creating demand for European polyethylene terephthalate (PET), but any optimism remains cautious. INSIGHT: EU regulatory certainty needed to boost bio-naphtha, pyrolysis oil growth Continued regulatory uncertainty over the status of bio-based plastics and pyrolysis oil within the EU is hampering demand from the petrochemicals sector, stalling investment, and fragmenting prices by end-use for both bio-naphtha and pyrolysis oil. INSIGHT: Crude prices return to earth as Iran fears cool Crude pricing has shifted back to its former footing after surging costs in a week of Middle East political unrest led some analysts to predict the return of triple-digit dollar barrels, with pricing set to slip further in the mid-term. INSIGHT: Europe toluene and TDI value chains demand washed out Demand for toluene and downstream toluene diisocyanate (TDI) has been moving with slow momentum with no expectations for a substantial recovery in the near term.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 4 July. PODCAST: Steel, aluminum, cement – China-EU dialogue on hydrogen and carbon markets By Patricia Tao 30-Jun-25 11:52 SINGAPORE (ICIS)–China’s expansion of its carbon market and the EU’s implementation of Carbon Border Adjustment Mechanism (CBAM) are reshaping the landscape for high-emission industries. Steel, aluminum, and cement are under increasing pressure to decarbonize, and hydrogen is emerging as a strategic solution. India, China BPA import prices slump; ample supplies to persist By Li Peng Seng 30-Jun-25 13:10 SINGAPORE (ICIS)–Import prices of bisphenol A (BPA) in India and China have sunk to their 4.5-year lows amid oversupply and economic headwinds. Feedstock shortage, supply imbalance reignite Asia C2 arbitrage trades By Josh Quah 30-Jun-25 16:19 SINGAPORE (ICIS)–A coincidental meeting of geopolitical and trade headwinds has re-opened deep-sea arbitrage window for ethylene (C2) into northeast Asia, a circumstance not seen in Asia ethylene markets since 2024. Indonesia to relax import rules on some goods, including chemicals, textiles By Jonathan Yee 01-Jul-25 14:12 SINGAPORE (ICIS)–Indonesia announced plans to relax import regulations on some goods, including chemicals, electronics and textiles, about a week before the US’ suspended “reciprocal” tariffs take effect. China manufacturing PMI returns to growth despite US tariffs – Caixin By Nurluqman Suratman 01-Jul-25 12:37 SINGAPORE (ICIS)–China’s factory activity returned to expansion in June, as higher new order inflows supported a renewed rise in output, a private-sector survey by Chinese media firm Caixin showed on Tuesday. BLOG: After the bombs: Israel-Iran and three long-term scenarios By John Richardson 01-Jul-25 14:38 SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: The recent “12-day-war” between Israel and Iran has irrevocably altered the dynamics of the Middle East. What comes next? INSIGHT: Weakness at Asia factories persists as US tariffs loom By Nurluqman Suratman 02-Jul-25 13:12 SINGAPORE (ICIS)–Asia’s manufacturing sector exhibited signs of further weakness in June, with most economies in the region registering purchasing managers’ index (PMI) readings of below 50, indicating a deepening slump in factory activity. INSIGHT: Transshipment tariffs of 40% unclear in US-Vietnam trade deal By Nurluqman Suratman 03-Jul-25 14:21 SINGAPORE (ICIS)–The finer points of US President Donald Trump’s trade deal with Vietnam were notably vague, particularly concerning a 40% tariff targeting “any transshipping”. INSIGHT: Vietnam-US trade deal points to higher tariff rates for SE Asia By Nurluqman Suratman 04-Jul-25 13:44 SINGAPORE (ICIS)–The trade deal between Vietnam and the US, particularly its focus on transshipment, suggests other economies in southeast Asia may also face significantly higher tariff rates than the current universal 10% tariff.

SAO PAULO (ICIS)–Petrobras is mulling production plants for acetic acid and monoethylene glycol (MEG) at its site in Rio de Janeiro as part of its 2025-2029 capital expenditure plans of Brazilian reais (R) 33 billion ($6.08 billion), the Brazilian state-owned energy major said this week. Ethylene supply, necessary for acetic acid and MEG plants, uncertain Investments in Rio could indicate favorable Petrobras-Braskem dynamics New cabinet in 2027 may bring new Petrobras CEO, new capex plans While Petrobras fell short of giving more details on the petrochemicals investments, the company was more specific on capex plans for base oils and several fuels, including biofuels. In base oils, a company executive said earlier in the week at an industry event in Rio that the company is targeting 2029 for first production from its Group II base oils project at the Boaventura Energy Complex, also called as the municipality is in, Itaborai. The acetic acid and MEG plants would also be built at the complex. “A study for the production of acetic acid and MEG is under evaluation at the Boaventura Complex. Acetic acid is an important raw material for the production of paint, PET [polyethylene terephthalate], and the broader chemical industry,” it said. “Brazil currently imports its entire acetic acid demand and complements MEG demand with imports.” The company had not responded to a request for additional comment at the time for writing. For instance, to produce acetic acid and MEG Petrobras would need a supply of ethylene, which is in short supply in Rio unless petrochemicals major Braskem expanded its cracker in the state. Petrobras is the second largest shareholder in Braskem – with a stake of 36.1% although voting rights of 47% – and both companies are at the same time in talks on natural gas supply to Braskem’s Duque de Caxias complex in Rio. In coming years, the company will aim to switch feedstock at the site, from the current plans mostly running on crude-based naphtha into natural gas-based ethane facilities, currently more competitive. Analysts have said those investments will require large sums in coming years, but most of all would need the until now elusive gas on natural gas, which basically depends on Petrobras given its dominance in the Brazilian market. In June, Braskem said the deal on gas, if reached, could unlock investments at its site of R4.3 billion. In fact, on Friday afternoon Petrobras released another statement which mentioned Braskem as investing R4 billion in Duque de Caxias, which would add to the R29 billion Petrobras is to invest and making the total R33 billion. The first statement had mentioned those two figures but linked the R4 billion to another project operating in “synergy” with its assets. On Friday, the statement read: “Of the total to be invested, R29 billion will be contributed by Petrobras and R4 billion by Braskem, in a project that works in synergy with Petrobras assets.” Also, in the previous release it mentioned Braskem’s R4 billion figure another time but, as it had been the official position up to now, those interments were subject to final approvals. Braskem’s own positioning on Friday was indeed the same. In a statement sent to ICIS late on Friday, the company said the potential investments – which it has always said would be R4.3 billion instead of Petrobras’ figure – remained only a potential because the deal with Petrobras on ethane has not yet been signed. FUELS, LUBRICANTSApart from targeting production 12,000 barrels/day of base oils Group II by 2029, Petrobras’ special products commercial manager, Ulysses Donadel, also said at the industry event the company is mulling production of re-refined base oils (RRBO). Later, Petrobras’ statement on capex this week gave more clarity on capacities. It said it will also increase capacities for production of S-10 diesel, up by 76,000 barrels/day, and jet fuel, up by 20,000 barrels/day. The plans also include a “dedicated” biofuels facility for production of 19,000 barrels/day of hydrotreated vegetable oil (HVO) and sustainable aviation fuel (SAF). “The project also includes two gas-fired power plants at the Boaventura Complex, which will participate in capacity reserve auctions. The engineering project for the power plants has been approved, and the units will leverage synergies with the infrastructure of the Itaborai Natural Gas Processing Unit (UPGN),” said Petrobras. “A lubricant oil re-refining project with a capacity of 30,000 cubic meters (cbm)/month, or 6,300 barrels/day, is also under evaluation at Reduc [its other side in Rio, included in the same complex as Duque de Caxias]. “With the operation of the Boaventura Complex for Group II lubricant oil production, Reduc may repurpose existing units to re-refine used oil, applying the circular economy concept to generate high-value products from waste,” it added. The company said the co-processing test is expected to take place this year after it had been authorized by Brazil’s oil and gas regulator the ANP. Petrobras said initial tests had proved reductions in emissions. As part of its green efforts, the company said it will build a new thermal power plant at Reduc to replace “obsolete” steam and power generation equipment, with expected capex of R860 million. “Investments of up to R2.4 billion in maintenance shutdowns at Reduc are also planned from 2025 to 2029, to ensure the integrity, reliability, and safety of the facilities. Major shutdowns are scheduled for 2026 in the delayed coking and hydrotreatment units of the refinery,” the company added. UNCERTAINTIESIn May, Petrobras said it had started commercial operations at the second module of that Natural Gas Processing Unit (NGPU) at the Boaventura Energy Complex, an expansion which stalled in the mid-2010s as the company got embroiled the Latin American-wide corruption scandal known as Lava Jato. Brazil’s rampant corruption levels have dwarfed many industrial plans before, but in the case of Petrobras there is an additional factor. The company is de facto controlled by the government in office in Brasilia, and the CEO is directly appointed by the president and it basically has the same status as a minister. Current polling shows the current center-left cabinet of Luiz Inacio Lula da Silva may struggle to revalidate the coalition of parties which support it in Parliament in the general election to be held in October 2026. In other words, a new president may appoint a new CEO – Lula has appointed two since 2023 – and it remains to be seen whether there will be new priorities. Moreover, some of the investments mulled in the sizeable capex plans to 2029 depend not only on Petrobras but other players in the chain. if a change at the helm does occur, it will be also interesting to see what direction Petrobras takes on fertilizers policy. The previous center-right administration mandated a complete exit from the sector, even leaving some plants idle in a powerhouse agricultural country that depends largely on imports. That policy has been completely reversed since 2023 and Petrobras is amid considerable investments to revive the fertilizers division. Front page picture: Rio de Janeiro’s Duque de Caxias/Reduc complex Picture source: Petrobras Focus article by Jonathan Lopez Additional reporting by Al Greenwood