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Hydrogen (Energy Editorial)03-Jul-2025
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.
Crude Oil03-Jul-2025
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.
Ethylene02-Jul-2025
Correction: In the ICIS story headlined “US announces
Vietnam trade deal, will impose 20% tariffs” dated 2 July
2025, please read in paragraphs 7 and 14 as … trillion
… instead of … billion … A corrected story follows.
HOUSTON (ICIS)–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.
“The Terms are that Vietnam will pay the United
States a 20% Tariff on any and all goods sent
into our Territory, and a 40% Tariff on any
Transshipping,” President Donald Trump said on
social media. “In return, Vietnam will do
something that they have never done before,
give the United States of America TOTAL ACCESS
to their Markets for Trade. In other words,
they will ‘OPEN THEIR MARKET TO THE UNITED
STATES,’ meaning that, we will be able to sell
our product into Vietnam at ZERO Tariff.”
The transshipment tariff would discourage China
or other countries using Vietnam as an
intermediary to export goods to the US under
more favorable trade terms.
Meanwhile, tariffs are not paid by the country
of origin. Instead, they are
a tax levied by the government on the importer
of record.
The government of Vietnam has not confirmed the
tariff rates, but it did say that the
negotiating delegations of the two countries
had reached a joint statement on what it called
“a fair, balanced reciprocal trade agreement”.
Vietnam also urged the US to recognize it as a
market economy and to lift export restrictions
on certain high-tech products.
Vietnam is the sixth largest source of imports
by value to the US in 2024, with shipments
totaling $136.5 billion.
The US had initially proposed tariffs on
Vietnamese imports of 46% on 2 April. Those
were soon lowered to 10% during a 90-day pause
that is scheduled to end on 9 July.
VIETNAMESE TRADE DEAL TO HAVE LITTLE
IMMEDIATE CHEM EFFECTFor now,
the trade deal will have little immediate
effect on shipments of plastics and chemicals
between the countries.
The US imports small amounts of plastics and
chemicals from Vietnam.
Electronic machinery, parts for nuclear plants
and furniture made up more than 60% of the
goods the US imported from the country in 2024.
Organic chemicals, plastics and rubber each
made up less than 5% of total US imports from
Vietnam in 2024.
For US exports to Vietnam, plastics made up the
second largest category, accounting for 6.37%
of the total in value.
On a volume basis, some of the largest plastic
exports from the US to Vietnam include linear
low density polyethylene (LLDPE), high density
polyethylene (HDPE) and polyvinyl chloride
(PVC), according to ICIS.
In total, the US exported $11.4 billion to
Vietnam in 2024.
US imports will play a larger role in Vietnam’s
chemical industry after the completion of the
Long Son Petrochemicals Complex, which will
include a cracker that can use ethane or
propane as a feedstock. The complex will
receive ethane from the US
under a 15-year deal between Enterprise
Products and Siam Cement Group (SCG) which owns
the subsidiary that is developing the complex.
VIETNAM IS SECOND TRADE DEAL FOR
USVietnam joins the UK among the
countries that reached trade arrangements with
the US since
it announced on 9 April a 90-day pause on
its proposed reciprocal tariffs on imports from
most of the world.
Under the UK agreement, the US will
preserve its 10% baseline tariffs on imports
from the UK. It will relax its sectoral tariffs
on UK imports of automobiles and eliminate them
on imports of steel and aluminium. The UK made
concessions on US imports of ethanol and beef.
The US and China are working under a different
arrangement under which the two countries
agreed to pause their proposed triple-digit
tariff increases through to mid-August.
The US and Canada
seek to reach a trade agreement by 21 July.
Thumbnail shows a type of container ship
that features prominently in trade. Image by
Costfoto/NurPhoto/Shutterstock.
(recast paragraphs 7, 14 with billion instead
of trillion)

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Hydrogen02-Jul-2025
LONDON (ICIS)–On 2 July, a spokesperson for
energy supplier E.ON told ICIS that its
“international hydrogen imports, hydrogen
production, and midstream activities will be
deprioritized” as part of the company’s
integration of its green gas business into its
energy infrastructure solutions (EIS) business
unit.
E.ON confirmed that this includes the
cancellation of its proposed 20MW
HydroHarbourEssen plant in Essen, Germany. It
was expected to produce 2,300 tons of renewable
hydrogen per year by 2027.
The company also confirmed it had exited the
H2.Ruhr project, a collaboration with Enel,
Iberdrola, ABB and SAP to construct a hydrogen
pipeline in the Ruhr area of Germany, proposed
to initially connect Essen and Duisberg.
Announced in 2021, the project targeted
delivery of up to 80,000 tons of renewable
hydrogen and ammonia per year.
This is the latest blow to the German hydrogen
industry, after steel manufacturer
ArcelorMittal announced last month that it had
cancelled its renewable hydrogen-based
decarbonisation plans for two of its steel
plants in Bremen and Eisenhuttenstadt, despite
securing €1.3 billion in subsidies.
This was followed by postponements of EWE’s
50MW project in Bremen and LEAG’s 10MW plant in
Lusatia.
“National and European overregulation
undermines the economic viability of renewable
energy sources” a spokesperson for EWE told
ICIS at the time.
“The energy sector and industry cannot shoulder
the ramp-up alone. Policymakers must now act
swiftly to establish reliable framework
conditions and targeted incentives to make
investments in hydrogen technologies
economically viable.”
“Uncertainty regarding availability and prices
in a future hydrogen market is high” a
spokesperson for LEAG told ICIS.
“The end of the German Ampel government last
year has indefinitely delayed the
implementation of the federal Power Plant
Safety Act, a key regulatory pre-condition.”
E.ON said that the company “will focus on
integrated, B2B [business-to-business]
customer-oriented hydrogen solutions within the
framework of EIS. This will enable us to create
an even more attractive portfolio of solutions
to support our B2B customers”.
It added that the company is “convinced that
green hydrogen will play a role in a
decarbonized energy future, especially for
hard-to-decarbonize industrial B2B sectors”.
In 2024 E.ON had selected technology group
Andritz to complete feasibility studies for the
HydroHarbourEssen project.
Germany targets 10GW electrolyzer capacity by
2030.
Power02-Jul-2025
Energy regulator designates OPEM as NEMO
ahead of market integration
Exchange to start spot operations by
year-end, traders
Moldova must launch a functional
electricity balancing market
LONDON (ICIS)–Moldova has come a step closer
towards EU electricity market coupling after
adopting landmark legislation and designating
OPEM, a subsidiary of the Romanian state
electricity exchange OPCOM, as its nominated
electricity market operator (NEMO).
The Moldovan parliament has adopted a new
electricity law which will transpose key
provisions of the Energy Community’s
electricity integration package as a
preliminary move towards full participation in
the EU’s single day-ahead and intra-day
markets, according to a statement by the Energy
Community on 1 July.
The electricity integration package (EIP)
enables full market integration of contracting
parties into the single European market for
electricity.
As a contracting party of the Energy Community,
an international institution tasked to extend
the EU’s single market to neighboring states,
Moldova is required to align its electricity
and gas market regulations with the EU.
Once transposed, the act is expected to help
stabilize prices, boost energy resilience, and
improve the management of renewable flows,
especially following the launch of one of the
country’s first green energy tenders earlier
this year.
The Energy Community said it would continue to
work with Moldovan authorities to support the
swift adoption of the remaining five network
codes and guidelines for electricity markets.
These include rules related to forward capacity
allocation, capacity allocation and congestion
management, electricity balancing, system
operation and the network code on emergency and
restoration.
Under the latest legislation, Moldova is
expected to set up a spot market which will
then ensure the full coupling of the Moldovan
electricity market with those of the EU and
neighboring Ukraine, also a contracting party
of the Energy Community.
The spot market will be launched by OPEM, and
traders active regionally say it should be
ready before the end of the year.
Shortly after the adoption of the electricity
law on 26 June, the regulator ANRE designated
OPEM as the country’s NEMO, an entity mandated
to operate the coupled day-ahead and intra-day
integrated electricity markets in the EU.
A local market source welcomed the news but
said Moldova should first establish its
electricity balancing market.
Polyester Staple Fibres02-Jul-2025
LONDON (ICIS)–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.
Regulation will dictate future end-use
share between chemicals and fuel
Regulation could turbocharge demand
Regulatory uncertainty challenging
investment cases and fragmenting markets
Regulation has the potential to significantly
boost chemicals market consumption for both
materials – as it has done for packaging grades
of mechanical recycling in Europe – and to
speed the transition away from fossil-derived
material.
Nevertheless, a lack of regulatory clarity and
impetus has seen chemicals buying interest in
both markets reduce in 2024 and 2025 (albeit
from a high base) and made financing for new
projects and infrastructure challenging.
Differing accounting rules for mass-balance,
for example, drastically alter potential
profitability, and a lack of clarity makes it
challenging to predict return on investment.
The impact of the uncertainty has intensified
as wider conditions across European chemicals
and financial markets have deteriorated in the
wake of the energy and cost of living crises.
With both sectors remaining nascent, this will
likely impact on scalability timeframes for
both.
For both markets the uncertainty centers on
mandatory sustainability targets under the
Packaging and Packaging Waste Regulation (PPWR)
and End of Life Vehicle Regulation (ELVR)
definitions, and mass-balance accounting rules.
PPWRUnder the PPWR, the
European Commission will be required to review
the state of technological development and
environmental performance of bio-based plastic
packaging within three years of the
legislation’s entrance in to force (which
occurred in Q1 2025).
Following the review, the Commission will be
required to bring forth legislative proposals
for targets to increase the use of bio-based
plastics in packaging. This will include the
possibility of bio-based material contributing
to recycling targets for food-contact material
where recycled material is not available.
For pyrolysis oil, there remains lingering
uncertainty on definitions under Directive
2008/98/EC – also known as the Waste Framework
Directive – which forms the basis of the
majority of EU recycling legislation
definitions.
That directive defines recycling as “any
recovery operation by which waste materials are
reprocessed into products, materials or
substances whether for the original or other
purposes. It includes the reprocessing of
organic material but does not include energy
recovery and the reprocessing into materials
that are to be used as fuels or for backfilling
operations.”
This has left the legal status of chemical
recycling uncertain, particularly for
pyrolysis, because pyrolysis oil conversion is
an intermediate stage prior to conversion into
recycled plastics.
ELVRThe ELVR, meanwhile,
remains at an early stage of its regulatory
chain. The European Parliament committee on the
environment, climate and food safety and the
committee on the Internal Market and consumer
protection proposed a series
of amendments to the European Commission’s
draft revision of its end-of-life vehicle
regulation – including the allowance of
bio-based material to count towards mandatory
recycled targets proposed for the sector.
The EU Council, meanwhile, adopted its position
on 11 July, which stands in stark contrast. The
EU Council is proposing that by seven years and
11 months after the entry in to force of the
bill, the Commission should review the
environmental performance and technological
development of bio-based plastic in vehicles
and propose legislation for bio-based plastic
targets, sustainably requirements and whether
bio-based plastic might count towards or be
separate from recycled content targets.
There are also differences in the approach to
the recycled content targets themselves. The EU
Council’s position is for a graduated target
with new vehicles needing to contain 15%
recycled plastic six years after the regulation
comes into force, 20% recycled plastic content
after eight years, and 25% after 10 years. For
each target 25% of the recycled plastic would
need to have originated from end-of-life
vehicles.
The European Parliament committees’ recommended
position is for a 20% recycled plastic target
six years after the regulation comes in to
force, with 15% of that needing to come from
end-of-life vehicles. Its position is to allow
both post-consumer and pre-consumer material to
count towards the targets, and would allow
bio-based plastics and chemically recycled
material to count towards these targets.
MASS-BALANCE ACCOUNTINGEven if
both pyrolysis oil and bio-naphtha are accepted
as counting towards both the PPWR and ELVR,
given that both are used as a naphtha
substitute in a cracker and typically
co-processed with virgin naphtha, many see the
acceptance of mass-balance as an essential
enabler for chemical recycling to count towards
recycling content thresholds.
There have been different proposed
accounting rules for mass-balance, all
of which alter the possible recycled polymer
output allocations, and therefore profitability
throughout the chain, competitiveness against
other regions that may adopt different rules,
and the sector’s attractiveness to investors.
The EU’s Technical Advisory Committee (TAC) had
been due to take a decision on mass-balance
accounting rules under the single use plastics
directive (SUPD) at the end of March 2024. It
was understood from players familiar with the
matter that the TAC decision was delayed due to
ongoing discussions with regulators. It was
then expected that a decision would be
announced before the end of 2024, but this did
not occur.
An EU Commission policy advisor confirmed via
email to ICIS that “the Commission is preparing
an implementing act (planned for Q4/2025) that
will extend the calculation, verification and
reporting methodology to cover all recycling
technologies, including chemical recycling”,
under the SUPD.
While this would only be applicable directly to
the SUPD, it is seen as precedent-setting for
other pieces of legislation, and would set out
the EU’s general approach, giving some clarity
to markets.
FUEL LEGISLATION OUTPACING PLASTIC
LEGISLATIONLegislation
surrounding renewable fuels meanwhile, enjoys
greater clarity, and targets under legislation
such as the Renewable Energy Directive (RED)
III and the ‘fit for ‘55’ package are
encouraging the use of both pyrolysis oil
(under the fit for ’55 package fuel derived
from plastic waste can count towards targets
such as those for sustainable aviation fuel
(SAF) provided it meets certain criteria such
as demonstrating emissions reduction).
FRAGMENTATION OF
PRICESEurope pricing for
bio-naphtha is becoming increasingly fragmented
depending on feedstock origin. As the market
develops further, fragmentation is expected,
based on whether the material is co-processed
or not.
The main feedstock routes for bio-naphtha
include:-
Used cooking oil (UCO)
Crude tall oil (CTO)
Tallow
Typically, CTO-derived bio-naphtha trades at a
premium to UCO-derived, with tallow showing the
lowest achievable values. This is being driven
by usage in gasoline blending to meet road fuel
mandates, tighter overall supply, and a
preference among some brand owners for
CTO-derived (which is a by-product of wood pulp
production) because of its traceability.
Coupled with this, a significant premium is
being charged for material accompanied by Life
Cycle Assessment (LCA) data in particular, as
companies increasingly focus on carbon
reduction goals. ISCC EU certified
material commands the highest premium for
bio-naphtha with values heard as high as
€1,900/tonne ex-works Europe this week. ISCC EU
certification verifies compliance with RED III.
ISCC+ material meanwhile, is a voluntary
certification scheme commonly used for
chemical-bound material.
Refineries, using bio-naphtha for fuel uses to
meet targets under legislation such as the
Renewable Energy Directive III (RED III), were
understood to be more willing to consider a
wider variety of bio-naphtha origins than
chemicals.
Chemical demand for bio-naphtha is currently
concentrated on used UCO- and HVO-derived
routes.
USE OF TYRE-DERIVED PYROLYSIS OIL TO
MEET BIO-FUEL TARGETSTyre-based
pyrolysis oil producers are increasingly
separating out bio-attributed content and
polymer content in pyrolysis oil production,
with bio-attributed content attracting premiums
compared with polymer-derived tyre-based
pyrolysis oil.
Prices for bio-attributed material have been
heard at up to $1,200/tonne FD Europe for
imported material this week, and have been
heard at around €1,000/tonne ex-works Europe in
recent weeks. Alongside supply shortages,
higher prices compared with polymer-derived
material are because tyre-based pyrolysis oil
is viewed as a relatively cheap source of
biogenic content compared to alternatives such
as bio-naphtha.
Regulation will be a key driver of future
overall pyrolysis oil and bio-naphtha demand
and investment. Beyond that it will dictate
which grades develop the greatest traction and
the proportion of the market serving chemicals
and fuel usage. The sooner the EU brings
clarity to its approach, the sooner these
markets will scale.
Insight by Mark
Victory
ICIS is currently researching bio-naphtha
pricing in Europe. If you’re interested in
learning more, and to share your views on the
market, please contact mark.victory@icis.com
ICIS assesses more than 100 grades
throughout the recycled plastic value chain
globally – from waste bales through to pellets.
This includes recycled polyethylene (R-PE),
recycled PET (R-PET), R-PP, mixed plastic waste
and pyrolysis oil.
Thumbnail image credit: Shutterstock
Linear Low-Density Polyethylene02-Jul-2025
MUMBAI (ICIS)–India has launched an
anti-dumping investigation into imports of
linear low-density polyethylene (LLDPE) from
five countries from the Gulf Cooperation
Council (GCC), as well as Malaysia.
Imports from Kuwait, Oman, Qatar, Saudi Arabia,
the UAE and Malaysia will be probed, based on
the notification issued by India’s Directorate
General of Trade Remedies (DGTR) on 30 June
2025.
The investigation was prompted by a petition
from the Chemicals and Petrochemicals
Manufacturers Association (CPMA).
Ethylene02-Jul-2025
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.
US not keen to extend tariff pause, which
expires 9 July for most trade partners
Global trade tensions, US tariffs weigh on
Asian factories
ASEAN manufacturing PMI falls for third
month; June reading at 48.6
The downturn, marked by falling orders, reduced
output, and job cuts in export-reliant
economies such as Taiwan, Vietnam, South Korea,
and Indonesia, is largely driven by persistent
global trade tensions, according to surveys
done by financial intelligence firm S&P
Global.
Concerns are heightened as the 90-day
suspension of the US’ “reciprocal” tariffs is
set to expire next week, threatening
significant disruption to Asia’s exports to the
world’s biggest economy.
“The fallout from tariff uncertainty dampened
demand and business confidence, as firms scaled
back or canceled orders, impacting output, new
orders, employment, and purchasing activities,”
consulting firm McKinsey & Co noted.
While
China’s official manufacturing PMI edged up to
49.7 in June from 49.5 in May, it
marked the third consecutive month the
index has remained below the 50-point expansion
threshold.
The continued contraction suggests limited
impact from the US-China tariff truce achieved
in early May, analysts at Japan’s Nomura Global
Markets Research said in a note.
A 90-day pause on reciprocal tariffs on US’
trading partners ex-China declared on 10 April,
is scheduled to expire on 9 July. For China, a
separate three-month period of reduced tariffs
agreed with the US on 14 May – which set US
tariffs at 30% and Chinese duties on US imports
at 10% – is set to end around 12 August.
Meanwhile, other export-reliant economies like
Taiwan and Vietnam saw their PMIs deteriorate
in June, with factories reporting continued
declines in new orders, output, and staffing as
ongoing trade tensions dampen demand.
Other Asian nations reporting PMIs that
remained firmly in contraction territory were
Malaysia and Indonesia. The latter, which is
southeast Asia’s biggest economy, was the worst
performer in the region, with a June PMI
reading of 46.9.
Manufacturing and exports heavyweight South
Korea posted a PMI reading of 48.7 in June, up
from May’s 47.7, but the gauge was still well
below the 50 threshold of expansion.
South Korea’s exports in June rose by 4.3%
year on year to $59.8 billion, reversing the
1.3% contraction in May, although shipments to
the US and China remained weak amid tariff
uncertainty.
The S&P Global ASEAN manufacturing PMI fell
to 48.6 in June from 49.2 in May, marking the
third straight month that the headline figure
has fallen below the 50-mark.
The deterioration in the region’s manufacturing
health was the worst since August 2021, it
said.
A sharper decrease in new orders was
accompanied by more substantial cuts to
staffing levels and purchasing activity, with a
marginal decline in production.
“Both new orders and output remained in
contraction territory since April. Recent
figures revealed a sharper decline in incoming
new orders for ASEAN goods producers, marking
the most significant drop since August 2021,”
S&P Global said.
INDIA REMAINS BRIGHT SPOT; CHINA SHOWS
SIGNS OF RESILIENCE
India’s manufacturing sector remains a
significant bright spot in Asia, with June PMI
hitting a 14-month high of 58.4 in June,
largely driven by stronger external demand,
according to a private survey conducted by
financial institution HSBC in partnership with
S&P Global.
Robust end-demand fueled expansions in output,
new orders, and job creation at Indian
factories last month, according to S&P
Global.
To keep pace with this strong demand,
particularly from international markets as
evidenced by a substantial rise in new export
orders, Indian manufacturing firms reduced
their existing stockpiles. This resulted in a
continued shrinkage of finished goods stock, it
said.
For China, a private survey of small-to-medium
manufacturers conducted by Chinese media group
Caixin indicated an expansion in June, with PMI
reading rising to 50.4 from 48.3 in the
previous month.
The Caixin PMI surveys small and medium-sized
enterprises (SMEs) as well as export-oriented
enterprises located in eastern coastal regions,
while the official PMI is tilted toward larger
state-owned enterprises.
The headline June PMI reading marked the eighth
month of growth in the manufacturing sector out
of the past nine months, “showing that market
conditions were improving”, said Wang Zhe,
senior economist at Caixin Insight Group.
“However, external demand remained weak,” Wang
said, adding that exports of consumer goods
remained under pressure due to additional US
tariffs, causing new export orders to contract
for a third straight month.
LATEST PMI DATA A WARNING
SIGN
Markets are closely watching Trump’s next move
regarding reciprocal tariffs, which were
supposed to take effect in April but were
paused for 90 days to facilitate negotiations
with about 60 trading partners.
Trump said on 1 July that he is not considering
delaying the 9 July deadline for higher tariffs
to resume.
Despite the US pledging new trade agreements
after 4 July, following broad frameworks with
China and Britain, significant uncertainty
persists.
For Japan, US trade relations appear to be
souring, with Trump initiating a new round of
brinkmanship, threatening the world’s
fourth-biggest economy and a major global car
exporter with fresh tariffs over the latter’s
reluctance to accept US rice exports.
Trump on 1 July said tariffs as high as 30% or
35% could be imposed on Japan – higher than the
24% reciprocal tariffs set in April for the key
Washington ally.
Trump sounded more optimistic on reaching a
trade deal with India, with India’s external
affairs minister S Jaishankar saying that a
deal will require “give and take” and finding a
“meeting ground” ahead of the 9 July deadline.
As for China, US Treasury Secretary Scott
Bessent announced on June 27 that US tariffs on
Chinese imports would now start at 30%, while
maintaining a 20% fentanyl levy on China.
The “fentanyl levy” is an additional tariff
specifically imposed on Chinese imports due to
concerns that China is allegedly a source of
precursor chemicals used to produce fentanyl, a
highly potent synthetic opioid that has fueled
a severe overdose crisis in the US.
China’s exports to the US accounted for 14.6%
of the northeast Asian country’s total exports
last year.
“The US-China 90-day pause in reciprocal
tariffs will end on 13 August, by when we
expect a trade deal to be announced or a
further extension of the deadline,” said Ho
Woei Chen, economist at Singapore-based UOB
Global Economics & Markets Research.
Insight article by Nurluqman
Suratman
Thumbnail image: Production scene of
Jiangsu Shagang Group Huigang Special Steel Co
in Huai’an, Jiangsu Province, China, on 3
January
2025.(Costfoto/NurPhoto/Shutterstock)
Visit the ICIS Topic Page: US
tariffs, policy – impact on chemicals and
energy.
Speciality Chemicals01-Jul-2025
HOUSTON (ICIS)–Rates for shipping containers
from east Asia and China to the US will
continue to face downward pressure on capacity
increases to the major trade lane.
Market intelligence group Linerlytica said on
Tuesday that carriers have not been able to
scale back the large capacity influx introduced
on the route since the end of May, when the US
reduced reciprocal tariffs on Chinese
goods from a prohibitive 145% to a more
manageable 30%.
Rates from Shanghai to both US coasts on the
global Shanghai Containerized Freight Index
(SCFI) continue to slide, as shown in the
following chart.
And capacity is expected to continue rising in
July, Linerlytica said, as several carriers
have already committed to vessel charters
before the current market slump.
Judah Levine, head of research at online
freight shipping marketplace and platform
provider Freightos, said the surge of Chinese
goods appears to be losing steam and that
carriers likely added too much capacity,
especially to the West Coast.
Rates from Asia to the West Coast more than
doubled from around $3,000/FEU (40-foot
equivalent units) from May to June.
“But by the end of last week these demand and
capacity factors combined to push transpacific
container rates down sharply,” Levine said.
“Last week’s average of $3,388/FEU is 43% below
the June peak, although this price is still 22%
higher than the end of May.”
Rates to the East Coast behaved similarly
although not as dramatically as demand was
stronger on the shorter West Coast trade lane,
Levine said.
Average spot rates from ocean and freight rate
analytics firm Xeneta have also fallen
dramatically, as shown in the following chart.
Peter Sand, chief analyst at Xeneta, said
capacity is now more than meeting demand,
leading shippers to push back on peak season
surcharges.
“The Transpacific into US West Coast is the key
battleground for carriers when it comes to
China exports, so spot rates have fallen harder
and faster as they prioritized bringing
capacity back onto this trade in the immediate
aftermath of the lowering of 145% tariffs,”
Sand 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.
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tariffs, policy – impact on chemicals and
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