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Ethylene24-Jul-2025
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
Petrochemicals24-Jul-2025
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
Crude Oil24-Jul-2025
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.

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Crude Oil24-Jul-2025
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
Gas24-Jul-2025
SINGAPORE (ICIS)–China has proposed new
industry standards for low-carbon, clean and
renewable hydrogen, introducing stricter carbon
thresholds that align renewable hydrogen with
international benchmarks, particularly those of
the EU.
China tightens hydrogen carbon limits and
introduces a formal life cycle accounting
method to guide industry compliance and
emissions tracking
New rules align with international
standards, paving way for future long-term
export compatibility
Standard supports a multi-pathway model to
back both fossil and renewable hydrogen
The draft 2025 “Clean and Low-Carbon Hydrogen
Evaluation Standard” also preserves a
multi-pathway development model that supports
diverse hydrogen production routes, and hence
could accelerate domestic hydrogen industry
growth, reflect the nation’s
“establish-before-break” approach to energy
transition, as well as enhance future export
readiness.
The standard, overseen by the China Electricity
Council and led by Guoneng HydrogenTech, aims
to be finalized by August 2025. It marks a
shift from the 2020 group-led T/CAB0078—2020 to
a government-backed industrial standard under
the National Energy Administration (NEA). The
upgrade strengthens China’s regulatory
foundation to prepare for future international
certification and trade.
The 2025 revision introduces stricter carbon
intensity caps:
The 2025 standard also defines, for the first
time, a clear methodology for calculating
carbon intensity thresholds.
The baseline carbon intensity of hydrogen
production in 2020, the year when China first
proposed its “dual carbon” goal, was calculated
at 17.704 kgCO2e/kgH2, (kilograms of
carbon dioxide equivalent per kilogram of
hydrogen) weighted across coal-based, natural
gas-based, and industrial by-product hydrogen.
Coal-based hydrogen: Set at
24 kgCO2e/kgH2, based on International Energy
Agency (IEA) estimates and empirical data
from six major domestic projects including
those from China Energy and Sinopec,
averaging 23.4 kgCO2e/kgH2. The figure
reflects the dominant method in China and is
considered broadly representative.
Natural gas hydrogen:
Benchmarked at 11.45 kgCO2e/kgH2, in line
with IEA’s Opportunities for Hydrogen
Production with carbon capture, utilization
and storage (CCUS) in China report. A
domestic survey of 21 projects showed a
broader range (7–17 kg kgCO2e/kgH2, hence
averaging 12 kgCO2e/kgH2), but the IEA
average was adopted for consistency and
stability.
Industrial by-product
hydrogen: Established at 2.88
kgCO2e/kgH2, based on data from 37 projects
across the five key hydrogen fuel cell
vehicle demonstration clusters in China:
Beijing-Tianjin-Hebei, Shanghai, Guangdong,
Zhengzhou, and Hebei. Sources include coke
oven gas, chlor-alkali, steam cracking,
propane dehydrogenation, coal tar upgrading,
styrene production, and others. Weighted
averages were calculated by production
volume.
Using the emission reduction forecasts by China
Energy Investment Corp in its “China Energy
Outlook 2060”, the standard sets carbon targets
for clean and low-carbon hydrogen reflecting
projected improvements by 2040 and 2060.
Renewable hydrogen’s threshold is derived from
measured emissions during electrolysis and
compression, plus grid electricity-related
emissions.
China has established detailed methodologies
for calculating hydrogen’s carbon footprint
using a full life cycle assessment (LCA)
approach, or a cradle-to-gate scope, which
aligns with global practices in carbon
accounting.
The 2025 draft hydrogen standard defines the
carbon footprint of hydrogen (CFPH2) as the sum
of greenhouse gas emissions from four
stages—raw material extraction, transportation,
production, and on-site storage—minus any
carbon dioxide captured and permanently stored
via carbon capture and storage (CCS).
The calculation is expressed as:
CFPₕ₂
= (E_raw + E_trans + E_prod + E_sto
– R_CCS) × A_H2 /
Q_H2
Where:
CFPH2 is
the carbon footprint of hydrogen (kg CO2e per
kg H2)
E_raw = emissions from raw
material acquisition (t CO2e)
E_trans = emissions from
material transport (t CO2e)
E_prod = emissions during
hydrogen production (t CO2e)
E_sto = emissions from
on-site storage and handling (t CO2e)
R_CCS = CO₂ captured and
permanently stored (t CO2)
A_H2 = allocation factor for
hydrogen relative to co-products (%)
Q_H2 = quantity of hydrogen
produced (t)
THREE-TIER SYSTEM SUPPORTS INDUSTRIAL
SCALING
This 2025 standard codifies a three-tier system
– low-carbon, clean, and renewable hydrogen –
designed to accommodate diverse production
methods, including fossil fuels-based
production with CCUS. This approach supports
industrial scaling while avoiding early
bottlenecks, consistent with the government’s
build-before-phase out strategy for new energy
like hydrogen.
The EU’s latest regulatory move underscores the
relevance of China’s strategy. In July 2025,
the European Commission published the
methodology for defining low-carbon hydrogen,
requiring a 70% reduction in greenhouse gases
compared with unabated fossil fuels.
The regulated act complements existing RFNBO
(Renewable Fuels of Non-Biological Origin)
protocols and applies to both domestic
production and importsand recognizes CCUS-based
fossil fuels as eligible production pathways of
low-carbon hydrogen.
EXPORT READINESS LIMITED DESPITE
ALIGNMENT IN STANDARD
China’s new draft renewable hydrogen threshold
(≤2.00 kgCO2e/kgH2) is among the world’s most
stringent.
Combined with estimated emissions from domestic
transportation and for deliveries to Europe,
the total carbon footprint remains under the
EU’s RFNBO limit.
For renewable hydrogen, inputs must come
exclusively from non-fossil sources powered by
renewable electricity, echoing EU requirements
for RFNBOs. Clean and low-carbon hydrogen have
no such restrictions on feedstock type or
energy source.
China’s stricter hydrogen rules bring it closer
to global standards, but the country’s export
readiness remains limited in the immediate
years.
Renewable hydrogen makes up merely 2% of
national output at present, with coal
continuing to dominate..
In addition to scaling up hydrogen production,
large-scale exports will require robust export
logistics and infrastructure, technical
validation, trusted certification systems,
mutual recognition of certification mechanisms
such as Guarantees of Origin and third-party
voluntary schemes, and stronger emissions
tracking across the supply chain — all of which
remain underdeveloped.
The new standard in China lays the groundwork
for future alignment with EU rules and
long-term access to the global markets.
Insight article by Patricia
Tao
Visit the Hydrogen
Topic Page for more update on
hydrogen
Recycled Polyethylene Terephthalate23-Jul-2025
HOUSTON (ICIS)–US-based Blue Polymers has
registered a company at the site of Evergreen
Recycling’s plant in Riverside, California,
according to a state
filing, amid talk that Blue Polymers plans
to buy the site.
Blue Polymers is the
joint venture between waste magnate
Republic Services and distribution giant
Ravago. The company did not immediately
respond to a request for comment.
The new company, Blue Polymers Riverside, LLC
initially filed a statement of information with
the California Secretary of State on 8 July
2025. The mailing address of the new company is
the site of Evergreen’s facility in Riverside.
The fate of the Evergreen Riverside facility
has been the center of market speculation for
over a year.
Evergreen had recently announced the
partial closure of the Riverside facility
in January, laying off over 50 workers and
shutting down bale and flake processing
equipment at the end of March.
Market conditions in California have been
particularly difficult for domestic recyclers
in recent years. Recycler margins are being
squeezed between elevated bale feedstock costs
due to export demand from Mexico, and low sales
prices due to competition with imported resin.
Several recyclers in the region have been known
to cut production during various downcycles –
sometimes by as much as 40%.
The purchase of the Riverside facility
complements existing assets of Republic
Services, who have been producing recycled
polyethylene terephthalate (R-PET) flake out of
their Las
Vegas, Nevada, polymer center since late
2023. Now, flake has a guaranteed end market in
the region, though overall R-PET demand
conditions in the West Coast remain shaky.
Republic Services Polymer Centers sort mixed
plastic waste and produce R-PET flake, while
sending sorted waste polyolefin material to
Blue Polymers facilities for further
processing.
Blue Polymers facilities will then flake and
pelletize the recycled polypropylene (R-PP) and
recycled polyethylene (R-PE) material, to be
distributed by Ravago.
With this potential acquisition, Blue Polymers
would also enter the R-PET pellet market.
The first Blue Polymers facility is now running
in Indianapolis, Indiana, and the second in
Buckeye, Arizona, is slated to be operational
by end of year.
The third
Republic Services Polymer Center is likely
to be Allentown, Pennsylvania, according to a
February property sale record to owner Republic
Polymers III, though it is unknown if there
will be a co-located Blue Polymers facility.
Acrylate Esters23-Jul-2025
LONDON (ICIS)–Europe’s oxo-alcohols and
derivatives markets remain structurally weak,
with some players beginning to feel the onset
of the summer slowdown.
Ongoing economic weakness and geopolitical
uncertainty continue to dampen sentiment, with
activity expected to slow further from late
July into August as summer holidays begin.
Oxo-alcohols and their derivative markets are
not expected to experience significant demand
changes in H2 2025.
Oxo-alcohols and butyl acetate reporter, Marion
Boakye, joins acrylate esters editor,
Mathew Jolin-Beech, and glycol ethers editor,
Cameron Birch, to discuss current conditions
along the oxo-alcohols value chain.
Ethylene22-Jul-2025
HOUSTON (ICIS)–The US and the Philippines
reached a trade deal, under which the US will
impose 19% tariffs on imports from the island
nation, while its shipments will enter the
country duty free, President Donald Trump said
on Tuesday.
“In addition, we will work together
Militarily,” Trump said on social media.
No reports of any trade deal were found on
websites of the Philippine
Information Agency or the Philippine News
Agency.
The rate disclosed by the US is 1 point below
the 20% rate that Trump proposed in a letter he
sent to the Philippines.
Chemical trade between the two countries is
relatively small. The Philippines exports
mostly polyethylene terephthalate (PET) to the
US and imports polyethylene (PE), base oils and
acrylate esters, according to the ICIS Supply
and Demand Database.
The Philippines is the largest source of US
imports of coconut oil, a feedstock used to
make oleochemicals.
The following table shows 2024 US imports from
the Philippines and exports to the Philippines.
Figures are in US dollars.
Imports for Consumption
($)
Domestic Exports ($)
US Deficit ($)
13,930,354,398
8,293,021,350
5,637,333,048
Source: US International Trade
Commission
The Philippines is the fourth country with
which the US said it reached a trade deal,
following agreements struck with the UK,
Vietnam and Indonesia.
The US said its imports will enter Vietnam and
Indonesia tariff free. It will impose tariffs
of 19% on Indonesian imports and 20% tariffs on
Vietnamese imports.
For UK imports, the US will impose 10% tariffs.
The UK made concessions on US imports of
ethanol and beef.
NEGOTIATIONS ONGOING FOR NUMEROUS
COUNTRIESIn July, the US
proposed tariffs on imports from the EU and 24
countries. The proposed rates will take effect
on 1 August if the countries cannot reach a
trade agreement or if the US does not postpone
the duties.
The following table shows the proposed rates
and the actual rates for any countries with
which the US said it reached trade agreements.
Country
Proposed rate
Trade Deal
Algeria
30%
NA
Bangladesh
35%
NA
Bosnia and Herzegovina
30%
NA
Brazil
50%
NA
Brunei
25%
NA
Cambodia
36%
NA
Canada
35%
NA
EU
30%
NA
Indonesia
32%
19%
Iraq
30%
NA
Japan
25%
NA
Kazakhstan
25%
NA
Laos
40%
NA
Libya
30%
NA
Malaysia
25%
NA
Mexico
30%
NA
Moldova
25%
NA
Myanmar
40%
NA
Philippines
20%
19%
Serbia
35%
NA
South Africa
30%
NA
South Korea
25%
NA
Sri Lanka
30%
NA
Thailand
36%
NA
Tunisia
25%
NA
Acetic Acid22-Jul-2025
HOUSTON (ICIS)–Sherwin-Williams expects prices
for some of its petrochemical feedstock to
decline during the second half of 2025 amid a
weakening demand outlook that led the paints
and coatings company to lower its earnings and
sales guidance for the year.
The following table compares the company’s
latest earnings guidance with its previous one.
LATEST
PREVIOUS
Net sales
Up or down low-single digits
Up low-single digits
Diluted net income/share
$10.11-10.41
$10.70-11.10
Adjusted net income/share
$11.20-11.50
$11.65-12.05
Source: Sherwin-Williams
Shares of Sherwin-Williams are down by more
than 2%.
ARCHITECTURAL VOLUMES WORSE THAN
EXPECTEDSherwin-Williams is
lowering its guidance in part because
architectural sales volumes were softer than
expected. In addition, the company has reduced
production gallons within its global supply
chain, which introduced inefficiencies.
The overall outlook is for demand to be softer
for longer, said Heidi Petz, CEO of
Sherwin-Williams. She made her comments during
an earnings conference call.
Mortgage rates will likely end the year at
6.5%, according to Fannie Mae, a US company
that buys home loans and securitizes them.
Mortgage rates need to fall below 6% before the
housing market gets a boost, Petz said.
Demand actually deteriorated in some segments,
such as new residential, do-it-yourself (DIY)
and coil coatings.
“To be clear, we expect no help from the market
over the remainder of the year,” Petz said.
SOFTER DEMAND CONTRIBUTES TO
DEFLATIONThe weaker economic
outlook has led Sherwin-Williams to expect
costs to decline modestly for some of its raw
materials, such as solvents and some of its
resins.
On the other hand, tariffs are pushing costs
higher for applicators, extenders, pigments
other than titanium dioxide (TiO2) and
packaging. Many paint cans are made of steel,
and the US has imposed new tariffs on imports
of the metal
Possible tariffs on lumber and other timber
products would indirectly affect
Sherwin-Williams by raising costs for house
construction, a significant end market for its
architectural coatings.
The US started a section 232 investigation
into such imports, and a report is due at the
end of November.
SHERWIN-WILLIAMS SPEEDS UP COST
CUTTINGBecause of the weaker
outlook, Sherwin-Williams is speeding up its
earlier cost-cutting plan. The company is now
planning on $105 million or 32 cents/share of
restructuring initiatives for 2025, up from $50
million or 15 cents/share announced earlier in
the year. The program should cut annual costs
by $80 million.
SHERWIN-WILLIAMS SEES CHANCE TO TAKE
MARKET SHARE FROM
COMPETITORSSherwin-Williams’
competitors are contending with the same
low-growth outlook, and its largest competitors
have made “significant reductions in
customer-facing positions and assets”, Petz
said, without naming the companies. One unnamed
competitor is imposing high single-digit price
increases during the middle of the painting
season, a move that can disrupt customers’
operations.
Sherwin-Williams sees these moves by its
competitors as an opportunity to capture market
share.
“We continue to believe we are at a major
inflection point in the North American
architectural coatings industry and we refuse
to miss this once-in-a-career opportunity
that’s unfolding before us,” Petz said.
Sherwin-Williams did not discuss any
opportunities presented to the company
by the sale of PPG’s US and Canadian
architectural coatings to American Industrial
Partners (AIP).
(recast paragraph 1 with the year 2025.)
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