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Polyethylene11-Feb-2025
SINGAPORE (ICIS)–Click
here to see the latest blog post on Asian
Chemical Connections by John Richardson.
At first glance, the latest ICIS ethylene
operating rate forecast is alarming. Even by
2035, global operating rates could still be
below their long-term average—potentially
marking a 14-year downturn since the Evergrande
Turning Point in late 2021.
But here’s the good news: This is a live
situation, and industry adaptation is
inevitable. The future is not set in stone—it
will be shaped by the decisions we make today.
The Data Speaks
• ICIS base case projections show an average
6.3 million tonnes per year of new
capacity.
• However, by reducing this to 2.5 million
tonnes per year, operating rates could return
to 87%—the long-term norm.
• The question is: When and how will the market
rebalance?
Plant Closures, Project Delays &
Cancellations: The Unknowns
Balancing the market means making difficult
decisions, but shutdowns and project delays are
far from straightforward:
• Timing uncertainty – Could the upturn come
sooner than expected?
• High exit costs – Environmental clean-up and
pension liabilities complicate shutdowns.
• China’s role – Ageing plants, coal-based
capacity, refinery feedstock limits, and
regulatory shifts could drive rationalisation,
but when and to what extent?
• Government intervention – Will policy sustain
industries in Europe & South Korea, or will
we see major consolidations?
Your Three-Point Plan for
Success
1. Update the data every six months – Ethylene
is just the start. Conduct the same detailed
analysis for every product, country, and
region.
2. Stay ahead of trade policy – As global trade
tensions rise, import tariffs will shift market
dynamics. Companies that act early will gain an
advantage.
3. Leverage AI & analytics – Cost savings
and efficiencies from AI-driven tools like Ask
ICIS are already transforming decision-making.
What This Means for You
Yes, the downturn is severe, but opportunities
remain. A data-driven approach will enable your
business to adapt, optimise, and position
itself for the recovery. Are you ready?
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.
Ethylene10-Feb-2025
US higher steel tariffs could backfire, reduce capex in
chemical, industrial plants – ICIS economist
SAO PAULO (ICIS)–Potential US 25% tariffs on
steel and other metals could ultimately reduce
capital expenditure (capex) in chemicals and
industrial plants as costs rise, according to
an economist at ICIS.
Kevin Swift, senior economist for global
chemicals at ICIS, said “steel is a classic
example” of how tariffs work and can harm other
manufacturing industries.
At the weekend, US President Donald Trump said
he plans to impose fresh 25% tariffs on steel
and aluminium imports.
“Any steel coming into the US is going to have
a 25% tariff – aluminium too,” said Trump.
Canada, Brazil and Mexico supply most steel to
the US. Trump said the metal levies would apply
to “everybody” but the White House has not yet
published an official communication on these
tariffs.
Earlier on Monday, Brazilian daily Folha de
S. Paulo cited an unnamed government
source saying Brazil could tax more to US
technological majors in retaliation for the
steel tariff: around half of Brazil’s steel
output is sold to the US. The economy minister,
Fernando Haddad, denied such a possibility
later in the day.
The US’s chemicals trade group the American
Chemistry Council (ACC) had not responded to a
request for comment at the time of writing.
HIGHER PRICES, LOWER
INVESTMENTSWith the US’s steel
output declining for decades, the country’s
strong manufacturing industries have become
dependent on imports, with a large trade
deficit.
It remains to be seen whether higher tariffs
can also bring back to the US higher steel
output. In the meantime, however, higher
tariffs are going to increase prices for a
variety of manufacturing sectors, who will lose
competitiveness when they try to pass higher
costs on.
“A tariff raises the price in the market as
domestic steel producers raise the price for
steel to match the tariff… Higher price
lowers quantity demanded (law of demand) but
does increase quantity supplied by domestic
producers. Tariffs allow inefficient domestic
products to produce when then they could not
have done so without the tariff,” said ICIS’s
Swift.
“Steel tariffs will raise the cost of building
a chemical plant, for ongoing maintenance, etc.
These will especially hurt when government
policy is to foster re-shoring and FDI [foreign
direct investment] in the US.”
Swift cited two studies conducted during
Trump’s first term, when higher tariffs on
steel were imposed on some countries.
One of the research pieces examined the impact
of higher tariffs on employment in US steel and
aluminium industries: jobs in these metals,
mainly steel, would increase by 26,000 over
three years, but at the same time employment in
the rest of the economy would decline by
433,000 jobs.
“Owing to damage of higher steel and aluminium
prices on customer industries,” said Swift.
“Another analysis focusing solely on steel
shows that steel users paid an additional $5.6
billion for more expensive domestic steel;
steel users will pay about $650,000 for each
job created in the steel industry.”
TEMPORARY RISEAnalysts
at London-headquartered Capital Economics were
more optimistic, arguing that any price rise
due to higher tariffs would be temporary.
“If 2018 is any guide, steel and aluminium
import prices will rise one-to-one with the new
tariffs. But the import share of steel, the
more important of the two for domestic
consumption, has fallen by 8%-points since then
to 32%. That lower import intensity means the
tariffs will have a smaller impact on US
prices,” said the analysts.
“The rise in US steel prices then was
short-lived, as US production rose, demand fell
amid a global industrial slowdown, and Trump
granted an exemption for imports from Canada
and Mexico. The current low level of industrial
utilization in the steel sector means there is
again scope for production to pick up.”
Capital Economics was more doubtful about the
positive impact of the higher tariffs in both
the steel sector but also the wider economy.
“Any rise in production is unlikely to
materially boost the overall economy. Even if
total fabricated metals production rebounded to
the peak seen after the first Trump steel and
aluminium tariffs, it would boost industrial
production by just 0.4% and GDP by just 0.05%,”
they concluded.
Frong page picture source: World Steel
Association (Worldsteel)
Polypropylene10-Feb-2025
LONDON (ICIS)–What with tough financial
results from some producers, the threat of
tariffs and upstream price wobbles, 2025
already has a lot to discuss for Europe
polyethylene (PE) and polypropylene (PP) senior
editors.
Vicky Ellis and Ben
Lake look back on January trends and
what is being tussled over for February in
contract talks.
They touch on LyondellBasell’s Q4 results, Dow
CEO Jim Fitterling’s downbeat view on
demand, early February market
trends and ICIS’ article about the southeast
Asia PE plant shutdowns deemed necessary for
rebalancing.
Podcast edited by Will Beacham
ICIS senior analysts, editors and managers will
be at the Hyatt Regency Hotel in Cologne,
Germany on the 8-9 April for the 11th ICIS
World Polyolefins Conference. You’ll also get
to hear from industry leaders like Borealis,
LyondellBasell and Covestro, as they share
their insights.
Discover more:
.

Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Speciality Chemicals10-Feb-2025
SAO PAULO (ICIS)–Here are some of the stories
from ICIS Latin America for the week ended on 7
February.
NEWS
US
tariffs could jeopardize $800 million of
Mexican plastics
exportsPotential US tariffs
of 25% on all goods coming from Mexico could
hit the country’s plastics sector hard, with
exports to the US worth $800million, plastics
sector trade group Anipac said this week.
US
suspends tariffs on Mexico for one month as
high-level talks on key issues
startThe US has agreed to
pause for one month its 25% import tariffs on
Mexican goods as the two countries agreed
setting up working groups on three key issues,
the presidents of both countries said on
Monday.
Brazil’s Braskem Q4 resin
sales fall 7% quarterly on lower PE, PP
demandResin sales in
Braskem’s domestic market dropped by 7% in Q4
2024 compared with Q3 2024, mainly due to the
decreased demand for polyethylene (PE) and
polypropylene (PP) explained by the seasonality
of the period, the Brazilian petrochemicals
major said on Wednesday in its quarterly
production and sales report.
Brazil’s Unigel appoints
Dario Gaeta as CEO after debt restructuring
greenlitBrazilian chemicals
producer Unigel has concluded its debt
restructuring process worth Brazilian reais (R)
5.1 billion ($885 million) after a Sao Paulo
business court greenlit the plans drawn up by
creditors.
Brazil’s industry broadly
declines in December – trade
groupBrazil’s industrial
activity key metrics slowed down in December,
with revenue and production hours both falling
1.3% from November, trade group the National
Confederation of Industry (CNI) said on Friday.
Brazil chemicals output
falls slightly in December; up 3.3%
annuallyBrazil’s chemicals
output fell by 0.8% in December, month on
month, but it rose by 3.3% in 2024, compared
with 2023, the country’s statistical agency
IBGE said on Wednesday.
Brazil’s manufacturing
expansion keeps slowing on currency, fiscal
woesBrazilian manufacturing
continued expanding in January albeit at lower
rates than for most of 2024 as currency
weakness drove up import costs and dampened
demand, though firms remained optimistic enough
to hire temporary workers, analysts at S&P
Global said on Monday.
Mexico’s
manufacturing slump deepens as new orders keep
fallingMexico’s
manufacturing sector contracted for a seventh
straight month in January as new orders fell at
their fastest pace since October, analysts at
S&P Global said.
Colombia’s manufacturing
jumps in January on sharply higher new
ordersColombian
manufacturing growth accelerated sharply in
January as new orders rose at their fastest
pace in a year, driving increased hiring and
purchasing activity, analysts at S&P Global
said on Monday.
Brazil chemicals deficit
hits $49 billion in 2024 despite higher tariffs
by year-endBrazil’s chemical
industry posted a $48.7 billion trade deficit
in 2024 as imports surged to $63.9 billion,
driven by “predatory pricing” from US and Asian
suppliers, the country’s chemicals trade group
Abiquim said.
Brazil chemicals producer
prices up 12% in
2024Chemical producer prices
in Brazil rose 12.2% in 2024 year on year, and
above the average for industrial producer
prices, the country’s statistical agency IBGE
said on Tuesday.
PRICINGLatAm
PP international prices stable to up on ´higher
feedstock costs, squeezed
marginsInternational
polypropylene (PP) prices were assessed as
steady to higher across the region on the back
of higher feedstock costs and squeezed margins.
LatAm
PE domestic, international prices increase on
higher US export
offersDomestic and
international polyethylene (PE) prices
increased across the region on the back of
higher US export offers.
Ethylene10-Feb-2025
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 7 February.
INSIGHT: US tariffs unleash higher
costs to nation’s chem
industry
The tariffs that the US will impose on all
imports from Canada, Mexico and China will
unleash higher costs for the nation’s
chemical industry, create supply-chain snarls
and open it to retaliation.
UPDATE: China retaliates with tariffs
on US coal, crude, LNG
China announced on Tuesday that it
will levy 15% tariffs on coal and liquefied
natural gas (LNG) imports from the US, and a
10% tariff on US crude oil, farm equipment
and certain vehicles from 10 February –
reviving a trade war between the world’s two
largest economies.
SHIPPING: US shippers likely to
frontload cargos amid 30-day pause on
tariffs
With the US agreeing to a 30-day pause before
proposed tariffs on Canada and Mexico take
effect, shipping analysts anticipate a rush
to frontload as much cargo as possible over
the next month.
US Jan auto sales up year on year;
analysts expect growth in 2025 with some
headwinds
US January sales of new light vehicles rose
year on year, and market analysts expect
sales in 2025 to grow by 1.5-2.0% even with
some headwinds including persistently high
interest rates and a pushback on electric
vehicles (EVs) under the new presidential
administration.
US tariffs could jeopardize $800
million of Mexican plastics
exports
Potential US tariffs of 25% on all goods
coming from Mexico could hit the country’s
plastics sector hard, with exports to the US
worth $800million, plastics sector trade
group Anipac said this week.
UBS sees US imposing further tariffs
on China imports in Q3 2025 and
2026
The US implementing 10% additional tariffs on
all goods imports from China on 4 February is
likely to be just the beginning, with further
duties being imposed later in 2025 and 2026,
said investment bank UBS’s chief China
economist.
Petrochemicals10-Feb-2025
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which takes the usual quarterly look at what’s
happening in the smartphone 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.
Speciality Chemicals10-Feb-2025
LONDON (ICIS)–Here are some of the top
stories from ICIS Europe for the week ended 7
February.
BP
puts Gelsenkirchen, Germany refinery,
crackers up for sale
BP plans to sell its to sell its Ruhr Oel
refinery, crackers and downstream assets at
Gelsenkirchen in Germany.
Surge in natural gas
prices highlights problem for chemical
producers in Europe
The challenges facing petrochemical producers
in Europe are well documented, but higher
natural gas prices this winter and an
increase in liquefied natural gas (LNG)
imports highlight just how tough these
difficulties are – particularly in comparison
with other regions.
EU
defiant on tariff threats but faltering
growth could limit response
The European Commission has pronounced itself
ready to respond to any tariff measures
introduced by the US, but the fragility of
the region’s recovery leaves it ill-equipped
to fight a trade war.
Europe PMMA faces price
squeeze from cheap imports, weak
demand
The polymethyl methacrylate (PMMA) market in
Europe faces a price and margin squeeze amid
ongoing weak demand and availability of cheap
imports.
Europe fertilizer
sector considers impact of proposed EU
tariffs on Russia
The announcement by the EU on 28 January that
it has adopted a proposal to impose tariffs
on a number of agricultural products from
Russia and Belarus, as well as on certain
nitrogen-based fertilizers, has been welcomed
by European fertilizer producers.
Urea uptick surpasses expectations as demand
continues to outpace supply
Expectations of an import tender in India and
increasing demand from the US ahead of the
start of fertilizer application for the
spring will continue to boost demand for urea
in the first quarter.
Ethylene10-Feb-2025
SINGAPORE (ICIS)–Lotte Chemical Titan (LCT)
incurred its largest-ever quarterly loss, with
analysts expecting the Malaysian producer to
remain in the red in 2025 amid weak economic
conditions and an oversupply of petrochemical
products.
Indonesia LINE project start-up may be
delayed
2025 plant utilization rate projected to
drop to 50-55%
Market volatility continues amid
geopolitical uncertainties, US tariffs
in Malaysian ringgit (M$) thousands
Q4 2024
Q4 2023
% Change
2024
2023
% Change
Revenue
1,793,286
1,855,771
-3.4
7,435,031
7,646,170
-2.8
EBITDA
-506,605
-84,409
-816,443
-357,098
Net income
-510,074
-186,477
-1,183,406
-702,286
On 7 February, LCT shares on Bursa Malaysia had
slumped by 7% to close at a record low of
ringgit (M$) 0.535, after the company reported
a wider Q4 2024 net loss of M$510 million ($114
million).
At 06:02 GMT on Monday, its shares recovered
slightly, rising by 0.93% to M$0.540.
“LCT is expected to remain loss-making in the
coming quarters, as product spreads are
unlikely to see meaningful improvement due to
persistent supply overhang from significant
capacity expansions – primarily in China –
outpacing demand growth,” Malaysia-based
brokerage TA Securities said in a note.
While construction of its petrochemical project
in Indonesia is expected to be completed in the
first half of this year, commercial operations
may be deferred as product spreads may remain
unfavorable, the brokerage said.
The project called LOTTE Chemical Indonesia’s
New Ethylene (LINE) project in Merak,
Indonesia is nearing completion and is expected
to be fully completed by 2025.
It is expected to produce 1 million tonnes/year
of ethylene and 520,000 tonnes/year of
propylene.
In Malaysia, LCT shut
in December last year its cracker in Pasir
Gudang to “mitigate losses by loading down its
operations”.
In a statement on 6 February, LCT said that it
expects ongoing volatility in the global
business environment due to geopolitical
factors, including the Russia-Ukraine War,
Middle East tensions, and US President Donald
Trump’s policies.
“The sluggish economic performance and
oversupply of petrochemical products in China
have impacted supply and demand balances,” the
company said.
Malaysia, Indonesia, and the rest of ASEAN
region will remain LCT’s key markets in the
foreseeable future due to their strong economic
growth.
For 2025, Indonesia’s growth is expected to
reach 5.1%, up from 5.0% in 2024, while ASEAN’s
growth is projected at 4.7%, up from 4.6% in
2024. Malaysia’s GDP growth, however, is
forecast to slow to 4.4%, from 4.8% in 2024,
LCT said, citing projections from the
International Monetary Fund (IMF).
LCT’s plant operating rate for the whole of
2025 is expected to range from 50% to 55%, down
from 57% in 2024, subject to periodic
adjustments.
HIGH PRODUCTION COST WEIGHS ON
EARNINGS
Q4 group revenue fell due to the depreciation
of the US dollar against the ringgit, but was
partially mitigated by higher sales volumes,
Lotte Chemical Titan said in a filing on Bursa
Malaysia on 6 February.
A stronger ringgit makes Malaysian exports more
expensive for international buyers,
particularly those paying in US dollars.
In 2024, the ringgit had appreciated by 2.7%
against the US dollar, supported by a
stronger-than-expected economic growth.
Olefins and derivative products’ revenue
increased by 2.0% to M$373.5 million on higher
sales volume, but the segment’s loss before
taxation and impairment widened to M$72.1
million from M$49.2 million in the same period
of the previous year.
In contrast, the polyolefin products’ revenue
declined by 4.7% year on year to M$1.42 billion
in Q4 2024, but the segment’s loss to narrow to
M$74.3 million from M$148.5 million in the same
period last year on improved margins and a
reversal of an inventory write-down.
Focus article by Nurluqman
Suratman
($1 = M$4.47)
Gas10-Feb-2025
SINGAPORE (ICIS)–Here are the top stories
from ICIS News Asia and the Middle East for
the week ended 7 February 2025.
INSIGHT: South Korea broadens aid for
struggling petrochemical industry
By Nurluqman Suratman 07-Feb-25 11:29
SINGAPORE (ICIS)–South Korea is streamlining
regulations to make it easier for regions
densely populated by petrochemical companies
to qualify as “industrial crisis response
areas”, a designation that unlocks government
support and financial assistance to mitigate
impact of market downturns.
Asia PE pipe prices get lift from tighter
Mideast supply
By Izham Ahmad 06-Feb-25 11:01
SINGAPORE (ICIS)–Deals and offers for
polyethylene (PE) pipe grade in China and
southeast Asia in the week ending 5 February
were mostly firmer.
China petrochemical futures mixed amid
renewed US-China trade war
By Jonathan Yee 05-Feb-25 16:05
SINGAPORE (ICIS)–China’s petrochemical
futures markets were mixed on Wednesday after
the country reopened following its Lunar New
Year holiday, amid a trade war renewal with
the US on 4 February.
Japan’s Asahi Kasei 9-month income surges;
basic materials swing to profit
By Nurluqman Suratman 05-Feb-25 14:20
SINGAPORE (ICIS)–Asahi Kasei’s net income
surged by 68.1% year on year in the nine
months to December 2024, supported by
improved petrochemical prices and lower fixed
costs, the Japanese chemicals major said on
Wednesday.
UPDATE: Oil gains, Asia petrochemical shares
fall as Trump starts trade war
By Nurluqman Suratman 03-Feb-25 14:16
SINGAPORE (ICIS)–Oil prices jumped while
shares of petrochemical firms in Asia tumbled
on Monday, after US President Donald Trump
imposed tariffs on China, Canada and Mexico.
Asia rPE, rPP demand from packaging stays
subdued in Q1
By Arianne Perez 07-Feb-25 15:40
SINGAPORE (ICIS)–The use of recycled
polyethylene (rPE) and recycled polypropylene
(rPP) for the packaging of fast-moving
consumer goods (FMCGs) has been weak in
general for Q1.
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