LONDON (ICIS)–As geopolitical tensions cooled, the chemicals industry did not have time to react to the spike in oil prices, and the seasonal demand drop in Europe could be more severe than the traditional summer lull. China polypropylene flooding global market, outpacing domestic demand Chemicals industry as leading indicator warns of wider economic ill-health Shutdown of plants in Europe is massive crisis Vietnam 20% tariff from US will weigh on both economies Risks of US cutting social security and international relief funding Key economies not as strong as presented Climate change needs to be a priority for businesses CEOs beset with challenging conditions Working patterns reshaped by climate change Stark landscape provides opportunities for innovators to thrive In this Think Tank podcast, Morgan Condon interviews John Richardson from the ICIS market development team, and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here. Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson’s ICIS blogs.

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Colorless bale prices drop in NWE, Eastern Europe and Italy Colorless flake reductions in NWE, Eastern Europe and Southern Europe Mixed colored flake, food-grade pellet prices stable for now

LONDON (ICIS)– The Energy Community celebrates its 20th anniversary this year. Established in the aftermath of the Balkans war and the accession of many central European countries to the EU, the institution faces similar challenges now, being instrumental in supporting Ukraine’s energy resilience in the face of Russian attacks and assisting contracting parties on their path towards EU energy market integration. In this interview, Energy Community director, Artur Lorkowski, tells ICIS journalist Aura Sabadus about the pending opening of the EU energy chapter for Ukraine, Moldova and Bosnia-Herzegovina as part of their accession negotiations as well as the work done to engage observer countries such as Armenia and Norway. 

LONDON (ICIS)–European chemicals producer prices continued to fall in May at a more significant rate than previous months, according to the latest data from Eurostat on Friday. Prices for chemicals manufacturers fell by 1.0% in the EU and 0.9% in the eurozone, supported by declines in key producing countries. Germany saw the most moderate decline at 0.5% on April prices. The biggest decline was recorded by Spanish producers, down 1.4%, following a 1.0% decrease a month prior, while France tracked a 1.1% drop compared with a 1.5% drop in April. Lower prices for the chemicals sector outstripped the fall in overall industrial producer prices, which was 0.6% lower for both regions. The main driver for decreases was energy pricing, which dropped 2.3% in the EU and 2.1% in the eurozone, with all other segments for remaining relatively stable on the previous month. This decline in energy pricing was key to lower chemicals prices for May, as this provided some leverage for producers to offer more competitive rates while providing some buffer to margins. Poor demand in Europe has meant that producers could not sustain prices at higher levels, despite a challenging business environment, as cheap imports remain abundant for many commodities. Overall producer prices continue tracking declines at less substantial than a year prior, although they remain significantly higher than 2021 levels, when markets were reshaped in the aftermath of the pandemic. Source: Eurostat Eurostat data is subject to revision. Thumbnail image source: Shutterstock

LONDON (ICIS)–In this podcast, ICIS market editors Zubair Adam and Miguel Rodriguez Fernandez discuss the low levels of xylene consumption in Europe. Mixed xylene consumption lethargic due to US tariff uncertainty PX demand remains low on competitive PET, PTA imports Europe PX exports to US also affected by US tariffs Mixed xylenes (MX) are traded in two grades. The isomer-grade xylene is used mainly to produce paraxylene (PX) and orthoxylene (OX). The main application for solvent grade is as a raw material for dyes, organic pigments, perfumes and medicines, and as a general solvent for paints and agricultural pesticides. PX is widely used as a building block to manufacture other industrial chemicals, notably purified terephthalic acid (PTA) and dimethyl terephthalate (DMT). OX is used mostly to produce phthalic anhydride (PA), an important intermediate that leads principally to various coatings and plastics.

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US continued to slide this week as demand has eased and capacity has lengthened. Global average rates fell by almost 6% and are just below $3,000/FEU (40-foot equivalent unit) and around four-month lows, according to supply chain advisors Drewry and as shown in the following chart. Drewry’s rates from Shanghai to Los Angeles dropped by 15% week on week, while rates from Shanghai to New York fell by 11%, as shown in the following chart. “This decline is a direct result of the low demand for US-bound cargo and is a sign that the recent surge in US imports, which occurred after the temporary halt of higher US tariffs, will not have the lasting impact we had initially expected,” Drewry said. Drewry expects spot rates to continue to decline next week as well due to excess capacity and weak demand. Drewry’s container forecaster continues to see softening rates in the second half of the year, with the timing and volatility of rate changes dependent on US President Donald Trump’s future tariffs and on capacity changes related to the introduction of the US penalties on Chinese ships, which are uncertain. Rates from online freight shipping marketplace and platform provider Freightos also showed significant decreases to both US coasts. Judah Levine, head of research at Freightos, said the US’s 12 May tariff reduction on Chinese goods spurred a rebound in China-US container volumes that seems to be losing steam. “Possibly expecting a longer demand surge, carriers have also added what is now too much capacity to the transpacific, especially to the West Coast,” Levine said. Even with these tariff-driven pressures that pushed rates up sharply in June, however, the peaks for both lanes were at least $1,000/FEU lower than prices a year ago and may point to overall capacity growth in the container market, Levine said. 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. CONTAINER IMPORT TARIFFS AVERAGE 21% – MAERSKUS importers averaged an effective 21% tariff on all containerized imports, according to container shipping major Maersk. In a market update, the carrier said visibility has worsened and trade barriers have increased since the US formally announced its tariff package to the world on 2 April, the carrier said. “On average, companies are currently paying an effective average tariff rate of approximately 21% relative to container load on all US imports,” according to Maersk’s container-weighted effective average tariff rate metric. At its peak, shortly after 2 April, the average effective rate was 54%. The following chart from Maersk shows the container-weighted average effective tariff rate on US imports from 5 November. “For now, most country-specific import tariffs are paused while long-term deals are being negotiated, with deadlines coming up in July and August,” Maersk said. LIQUID TANKER RATES EDGE LOWER ON TRANSATLANTIC Rates for liquid chemical tankers ex-US Gulf were largely stable this week, except for declines along the US Gulf (USG) to Europe trade lane. This route remains largely dependent on strong contract volumes as most of the regular carriers were able to fill any excess capacity. Despite the limited available space, spot cargoes were not really discussed in the market this week as any spot interest is all but nonexistent along this trade lane. Most of the spot cargoes reported were diethylene glycol (DEG), styrene and caustic soda. From the USG to Asia, spot rates remain soft, particularly for smaller parcels but remain steady for larger parcels as the lingering uncertainty around tariffs continues to weigh on the market. The market overall has been relatively weak, leaving owners to remain flexible on rates to complete voyages. Spot cargoes of monoethylene glycol (MEG) and ethanol were seen in the market for July and early August dates. At present, owners are awaiting final contract nominations so it is still unclear whether any additional space will be available. If nominations are slower than expected, this would open additional space and could push rates lower. On the USG to Brazil trade lane, the market has been steady leading rates to remain unchanged week on week. There was a stable level of spot activity with only a handful of new requirements, however, there was a slight uptick in spot inquiries but not enough to influence a change in rates. Most frequently discussed in the market were ethanol and caustic soda cargoes.  Several traders reported inquiries about a one-year period contract of affreightment (COA) of various easy chemicals, starting in September for 5,000 tonnes/month. Bunker fuel prices continue to remain strong, on the back of higher energy prices due to the ongoing middle east crisis and volatility. 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

SAO PAULO (ICIS)–Brazil’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. Instead of helping to maintain or expand industrialization, those “misguided” protectionist policies have contributed to the opposite in past decades, added Abiplast. The trade group’s statement could be seen as part of its lobbing against antidumping duties (ADDs) in place or being studied on several polymers, as well as the import tariffs on several chemicals implemented in October 2024 for 12 months and which continuation must be decided upon in coming weeks. COSTS ON TRANSFORMERSAbiplast said some of the higher import tariffs implemented in 2024 or ADDs in place have hit its member companies hard as they have to pay more key materials such the widely used polymers: polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), or polyethylene terephthalate (PET). “We are the only country in the world to apply antidumping measures on PP against the US, while other essential resins such as PVC, PET and PE continue to be protected by heavy tariffs. This model, which is repeated systematically, has suffocated the industry, hindering our competitiveness and innovation,” said Abiplast. “[The hike in import tariffs in 2024] Deepened the cost gap we face: we pay up to 40% more for plastic resins than our international competitors. The result: more expensive products for Brazilians, higher inflation, and less capacity to compete globally. This protectionist policy, instead of strengthening, accelerates the country’s deindustrialization.” Abiplast members are not only being hit by higher costs but by lost work as companies are increasingly opting to import finished products, instead of buying them from local transformers as their final prices have risen due to the higher tariffs. According to its calculations, imports of finished plastic products grew by 29% in 2024, a figure which could even be higher this year since the hike in tariffs only affected the last quarter of 2024. The increase will be inevitable because, “we suffocate those who transform and create opportunities”, in Brazil as companies buy finished product abroad due to high prices at home, ultimately propping up other countries’ manufacturing sectors, said Abiplast. “We cannot accept that the defense of strategic inputs devastates important sectors and destroys jobs. The government urgently needs to take a strategic look at the development of the entire productive sector, in order to strengthen the country’s economy,” said Abiplast. “If it wants to promote innovation, sustainability and competitiveness, it must break with the logic of permanent protection of raw materials and balance the tariff escalation. Brazil can no longer be a prisoner of policies that support a few and harm many.” UNPLEASANT REALITIESAbiplast finished saying that, while Brazil’s policymakers and analyst at large are highly critical of the US’ protectionist shift with Donald Trump as president, the reality in Brazil does not differ much from that of the US. In Brazil, sharply higher US import tariffs announced and then paused by US President Donald Trump in April came to be known as the ‘tarifaco’ – which could be translated as the big tariff hit. The difference between the US and Brazil’s ‘tarifacos’ is that Brazil’s has been going on for decades and it has been suffered in silence by many companies in manufacturing, said Abiplast. “While the world is perplexed by Donald Trump’s super tariff package against China, here we have been living with a silent tarifaco for years,” it concluded. Brazil’s Ministry of Development, Industry, Trade and Services, which oversees foreign trade policies under the body Gecex, had not responded to a request for comment at the time of writing. Abiquim, which represents chemicals producers such as Braskem or Unipar, and which has actively lobbied for most of the protectionist measures Abiplast criticizes, had not responded to a request for comment at the time of writing. Thumbnail image: Santos Port in Sao Paulo state, Latin America’s largest port (Image source: Port of Santos Authority)

LONDON (ICIS)–European policymakers need to accelerate hydrogen mobility in the region to avoid it stagnating, a group of CEOs have stated in a joint letter to EU and Member State leaders. The letter has been signed by executives from more than 30 companies, including chemicals firms such as Syensqo, Chemours, Johnson Matthey and Honeywell. They are calling for hydrogen mobility to be firmly positioned at the heart of Europe’s clean transport and industrial strategies. Immediate and targeted policy support should be utilized to unlock investment, and scale deployment of hydrogen vehicles and infrastructure across the EU. “Despite progress, the CEOs warn that hydrogen mobility in Europe will stagnate unless a more coordinated and pragmatic policy framework is implemented to support the rollout of the necessary infrastructure and achieve the scale needed for the hydrogen mobility market to flourish,” said the Global Hydrogen Mobility Alliance, a recently launched lobby group which has publicized the letter. Cost and complexity should be reduced by simplifying EU regulations, the group added.

SINGAPORE (ICIS)–Indonesia has signed agreements worth around $27 billion with Saudi Arabia during President Prabowo Subianto’s visit to the Middle East kingdom, in areas including petrochemicals and energy. The agreements and memorandums of understanding (MoU) span private sector institutions between the two countries in fields such as clean energy, petrochemical industries, and aviation fuel services, according to a statement by the Saudi Press Agency (SPA) on 2 July. Other areas of cooperation agreed upon include the development of the circular carbon economy and clean hydrogen, as well as the supply of crude oil and petrochemicals. Among the agreements include Indonesia state oil and gas firm Pertamina’s collaboration with ACWA Power for the development of 500MW of clean energy, and Pertamina Patra Niaga’s cooperation with AlShams for jet fuel services, according to a statement by the Indonesian Kementerian Luar Negeri (Ministry of Foreign Affairs) on Thursday. President Prabowo left Saudi Arabia on Thursday. Bilateral trade between Saudi Arabia and Indonesia amounted to around $31.5 billion over the past five years, SPA said. Discussions between Indonesia and the Gulf Cooperation Council (GCC) on a free trade agreement (FTA) are underway. The GCC is a Middle Eastern bloc consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Discussions on the FTA were last held in February 2025 and both Saudi Arabia and Indonesia expressed their aspirations to conclude discussions in the near future, the two sides said during the meeting.