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Polyethylene Terephthalate24-Apr-2025
SAO PAULO (ICIS)–Mexico’s chemicals fortunes
seem to be turning for the better after the
country was spared from the most punitive US’
import taxes, according to an executive at
chemicals distributor Entec.
Pedro Escalona, sales director at Entec
Polymers, a subsidiary of global distribution
major Ravago, said demand for most polymers has
notably picked up in the past weeks, which were
on hold now flowing to more optimistic
customers.
Among the main polymers, only polypropylene
(PP) remains in the doldrums, said Escalona,
haunted by low prices for the monomer.
Overall though sentiment is on the up and has
been so especially since 2 April, when the
US
announced sweeping tariffs but spared its
trade partners within the USMCA free trade
zone, Mexico and Canada.
Prior tariffs in some sectors, however, remain,
and Escalona said automotive seems for now the
most problematic sector.
“For the rest, people seem to start assuming
Mexico will be spared from the worst possible
scenario,” said Escalona.
WHAT ONE MONTH CAN
CHANGESpeaking to Escalona,
practically everything seems to have changed in
one month, with exception of PP.
In an interview with ICIS
during the plastics trade fair Plastimagen in
Mexico City in mid-March, the Entec executive
painted a doom-and-gloom picture of both
chemicals and wider manufacturing, with falling
prices and domestic and overseas woes mounting.
As of Thursday, 24 April, this is what he had
to say:
“Even a month ago, or even less, even two weeks
ago, there were a lot of people holding orders,
saying they were unsure whether they would need
the product for May, or even for June. Some
large clients, while not cancelling any orders,
were starting to say they may need to lower
consumption going forward,” said Escalona.
“But in the last few weeks, there is more
confidence in general, and people are already
confident in going out to make purchases.
Everyone seems to be more optimistic in that we
don’t think anything will finally happen that
will significantly affect Mexico’s economy.”
A stone on the positive story, however, remains
the large, petrochemicals intensive automotive
sector on which US President Donald Trump had
imposed tariffs prior to 2 April. Analysts have
said the tariffs, in their current form, could
greatly dent the sector’s
competitiveness.
But sources in chemicals remain optimistic
Mexico could use this chance to increase its USMCA
compliance, mostly related to rules of
origin which would at the same increase its
manufacturing stance and integrate it even more
with the US economy.
As the US tries to contain China’s formidable
rise in global supply chains, other sources
have said the US would shoot itself on the foot
going against Canada and Mexico, economies
which are now well integrated within the North
American free trade zone. The battle should be,
they said, North
America as a block versus the other large
trading blocs.
“Automotive still has over its head a lot of
uncertainty, because there are some issues that
haven’t been fully defined yet regarding
automotive components. That’s the only one that
still has some uncertainty,” said Escalona.
“Demand is not the best it could be, but it is
not too bad either. PP is still suffering from
low prices for the monomer, which is expected
to fall further. But for the rest of plastics,
PE [polyethylene], PS [polystyrene], and for
PET [polyethylene terephthalate] there has been
some notable price rises.”
Escalona said that US companies must have done
their important bit of lobbying to the Trump
administration about how harming tariffs on
Mexico could be for them, as well.
The absence of Mexico and Canada on the board
Trump exhibited on 2 April quickly raised the
prospects that, behind the scenes,
renegotiation of the USMCA deal is well
underway, an assessment Escalona deemed
possible.
But equally, he said there may be starting to
be a realization within the Trump
administration that punitive, sudden import
tariffs to certain countries – not least China
– would deprive the US of key markets it needs
to sell materials of which it is oversupplied.
“[Very punitive tariffs on Mexico] Just wasn’t
convenient for the US. We’ll need to see what
happens, but I think the US is also going to
have to sit down and negotiate with China. The
US is full of raw materials it exports to China
– monomers such ethane, propane, benzene…
That’s why prices are falling,” said Escalona.
“There are many things they plan for, and the
initial strategy was to renegotiate with
tariffs as a pressure measure. But clearly,
they are going to have to reconsider this and
fine-tune several aspects.”
DOMESTIC FRONT: LESS
OPTIMISMWhile most analysts
think Mexico has done good progress on issues
key for Trump, such migration at the border and
stricter measures to control fentanyl trade – a
powerful drug which has caused havoc across the
US – the domestic policies of President Claudia
Sheinbaum remain a red flag for many chemicals
players.
With a declared intention to expand the welfare
state, Mexico may be turning into the ‘nanny
state’ which does not incentivize
competitiveness, some
sources said at Plastimagen.
Moreover, fiscal policy has been loose under
Sheinbaum’s predecessor, also from the
left-leaning Morena party. The expansion in the
welfare state was mostly funded by debt, and
fiscal deficits were recurrent.
Sheinbaum has promised to remedy that and seems
more open to the necessary private investments
needed in Mexico to propel it to be a key part
in the nearshoring trend – North American
companies bringing manufacturing facilities
closer to home.
But Sheinbaum has ploughed through other
measures in parliament which are worrying
business.
Thanks to the supermajority of two thirds of
seats in Parliament voters granted Morena in
June 2024 – and propelled Sheinbaum to the top
with 60% of popular vote – the government
approved a judicial reform,
which most analysts agree is to weaken the rule
of law, in a country much needed of stronger
rule of law.
A key measure in the bill was that judges would
be elected by voters, which has sparked fears
the well-funded and strong organized crime will
have it easier to silence the judiciary.
Escalona, not impressed, said those elections
for judges have started and told how he feels
weird seeing advertisements by candidates on
boards or media outlets. Seeing adverts to vote
for judges clearly does not feel right, he came
to say.
“We have had plenty of politicians who were not
prepared or educated for the positions they
were chosen for. While it’s not optimal, it can
be expected in a democracy. But the job of a
judge, and in country like Mexico, is a
completely different matter,” he said.
“And, invariably, you can see all kinds of
people running to be judges. It’s tremendous.
We’ll need to see how this pans out, but
everyone seems to agree that this will weaken
the rule of law – and that is not good for
economic development and stability.”
Interview article by Jonathan
López
Ethylene24-Apr-2025
HOUSTON (ICIS)–The chemical industry is facing
demand-stifling tariffs just as it is in one of
its longest downturns in decades, the CEO of
US-based Dow said on Thursday.
Dow expects Q2 sales will be about $10.4
billion, down from $10.9 billion reported in Q2
2024. The company has intensified its cost
cutting measures, announced 1,500 job cuts and
delayed its Path2Zero project in Canada.
“The reality is our industry is in one of the
most protracted down cycles in decades, facing
the third consecutive year of below 3% GDP
growth,” said Dow CEO Jim Fitterling. He made
his comments during an earnings conference
call. “This has been further exacerbated by
geopolitical and macroeconomic concerns, which
are weighing on demand globally.”
Dow highlighted tariffs, which will delay when
the chemical industry returns to mid-cycle
earnings, said Jeff Tate, Dow chief financial
officer. Those tariffs could change trade
flows, and could squeeze Dow’s margins.
Tighter margins could partially offset the
benefits from demand, which Dow still expects
will rise.
TARIFFS DELAYING PURCHASES, STIFLING
DEMANDThe tariffs have caused
customers and consumers to delay purchases,
Fitterling said.
“We’re just in an environment right now where
in the marketplace, if you look at downstream
demand, it doesn’t matter if it’s a consumer or
one of our customers or somebody in the B2B
world, they’re all just kind of taking a wait
and see approach. And that has that has an
impact on what we think the long term,” he
said. “Right now, all this activity on tariffs
is just stifling the demand.”
HIGH US MORTGAGE RATES DELAYING HOUSING
RECOVERYElevated interest rates
for home loans have made housing less
affordable for consumers. As a result, home
sales have remained depressed, and has dragged
down demand for paints, coatings, polyurethanes
and other chemical products used in house
construction.
The slump in house sales is also lowering
demand for appliances, furniture and other
durable goods because consumers tend to buy
these when they move. Fewer home sales mean
fewer moves.
Tate noted that March marked the 14th
consecutive month of year-on-year declines in
building permits.
SLOWER GROWTH IN AUTO
DEMANDGrowth in automobile
demand and the transition to electric vehicles
(EVs) are slowing, said Karen Carter, Dow chief
operating officer.
The spike that took place in the US in March
was the result of consumers making purchases
before tariffs kicked in.
China is relying on incentives to prop up its
market.
In the EU, February new car registrations fell
by their largest amount since September 2024.
PHARMACEUTICALS, DATA CENTERS REMAIN
BRIGHT SPOTSDow continues to see
pockets of growth in pharmaceuticals and data
centers. Electronics and personal care
applications have proven to be resilient end
market for the company’s Performance Materials
& Coatings segment.
Q2 OUTLOOKThe following
table summarizes Dow’s Q2 outlook.
(Thumbnail shows polyethylene, a product made
by Dow. Image by ICIS.)
Petrochemicals24-Apr-2025
MUMBAI (ICIS)–Two oil refineries will be built
in India as part of Saudi Arabia’s $100-billion
investment pledged to the south Asian nation
which would cover cooperation in multiple
areas, including energy and petrochemicals.
High-level joint task force finalizes plans
for joint cooperation in multiple sectors
Both countries to develop supply chains,
projects linked to energy sector
Green hydrogen infrastructure collaboration
plans on
The projects, which will be built in
partnership with the Indian government, and
agreements to enhance cooperation with the
world’s biggest crude exporter across various
industries were announced on 22 April, during a
state visit by Indian Prime Minister Narendra
Modi to Saudi Arabia.
Collaborations are also planned in the
pharmaceuticals, infrastructure, technology,
fintech, digital infrastructure,
telecommunications, manufacturing and health
sectors, among others, according to a statement
from the Prime Minister’s Office (PMO) of India
on 23 April.
In 2023, the two countries agreed to set up a
joint committee to expedite Saudi Arabia’s
$100-billion investments in India which was
announced in February 2019.
A high-level task force set up by the two
countries has now finalised plans in multiple
areas which will allow both countries to begin
work soon, the PMO stated.
The countries will also work towards developing
supply chains and projects linked to the energy
sector, it added.
The two nations have agreed to enhance
cooperation in the supply of crude oil and its
derivatives, including liquefied petroleum gas
(LPG), the government statement said, adding
that collaborations in the field of green
hydrogen, including developing hydrogen
transport and storage technologies, would also
be explored.
Saudi Arabia is India’s fourth largest trading
partner and is the third largest exporter of
crude oil to the south Asian country.
In the fiscal year ending March 2024, India’s
goods imports from Saudi Arabia stood at $31.4
billion, while exports to the nation were at
around $11.6 billion, official data showed.
Its major exports to Saudi Arabia include
petroleum products, engineering goods, rice,
chemicals, textiles, food products while
imports from Saudi include crude oil, liquefied
petroleum gas (LPG), fertilisers, chemicals,
plastics, among others.
RATNAGIRI MEGA REFINERY PROJECT IN
QUESTION
About seven years ago, Saudi Arabia signed a
deal with Indian refiners to build a mega
refinery and petrochemical complex in the west
coast of India, but the project hit a
snag.
The 60 million tonne/year project in the
Maharastra state which was estimated to cost $44
billion to build was supposed to be
commissioned by 2022, faced delays due to land
acquisition problems.
Opposition to the
project continues and there has been no
breakthrough in discussions with villagers in
the area.
There was no official announcement from the
central government on the fate of the proposed
Ratnagiri mega-refinery and petrochemical
project.
Maharashtra chief minister Devendra Fadnavis,
in a February 2025 interview at an Indian daily
Economic Times, had said that instead of
one mega refinery project, three small ones
will be built – one in Ratnagiri and the other
two will be in two other states in southern
India.
The refineries will each have a 20 million
tonne/year capacity, he said.
Indian petroleum minister Hardeep Singh Puri in
January this year announced plans to build
smaller refineries at different locations in
the country.
Focus article by Priya Jestin

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Petrochemicals24-Apr-2025
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which looks at what companies need to do to
prepare for Trump’s tariff war.
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.
Crude Oil24-Apr-2025
SINGAPORE (ICIS)–Eni’s chemical business
reported an adjusted operating loss of
€243 million in the first quarter of 2025 on a
continuing downturn in the European chemical
sector amid economic headwinds and pressures
from US and Asian players, the
Italy-headquartered producer said on Thursday.
Chemicals
€ million
Q1 2025
Q1 2024
Proforma adjusted EBIT
– 334
– 53
Eni’s chemicals business is managed by
Versalis.
Sales of chemical products fell by 7% year on
year in the first quarter amid lower demand and
plant shutdowns.
Plant utilization rates averaged 54% year on
year in the first quarter, a 5% drop from the
same period last year.
Margins remained weak across the board as
commodity prices could not offset feedstock and
energy input expenses, “due to European
headwinds, sluggish economic activity, and
competitive pressures from players with better
cost structures”, the company said.
Crude Oil24-Apr-2025
SINGAPORE (ICIS)–South Korea and Vietnam are
stepping up efforts to clamp down on illegal
transshipments of goods to the US from third
countries, amid US concerns that third-country
shipments are being used to circumvent tariffs
imposed on China.
The Korea Customs Service has established an
investigation team to crack down on illegal
transshipments to align with US tariff
policies, it said in a statement on 21 April.
145% tariffs on China by the US has led to
suppliers seeking to move trade elsewhere, but
cases of origin fraud were detected South
Korea.
The agency identified multiple cases where
Chinese goods were transshipped through South
Korea, falsely labeled as Korean-made, and
exported to the US to evade high tariffs,
including anti-dumping duties, the statement
said.
It highlighted 75% of detected cases in early
2025 involving exports to the US, with a focus
on high-value goods, particularly batteries and
raw materials, used in production and export.
One highlighted case involved a
Chinese-established company in South Korea for
the import of 1.2 million Chinese-made
batteries, valued at Korean won (W) 74 billion
that were falsely labelled as Korean-made.
Meanwhile, Vietnam’s Ministry of Industry and
Trade (MOIT) issued a directive on 15 April
focusing on strengthening the management of
goods’ origin to counter fraud and protect the
country’s reputation as an exporter, the
government website reported.
It highlighted more stringent checks at customs
to comply with free trade agreement (FTA)
origin criteria, maintain trade benefits, and
avoid anti-dumping or anti-subsidy
investigations.
Strict penalties will be issued to those that
attempt to circumvent tariffs via illegal
transshipments and origin fraud, the directive
stated.
Vietnam has been slapped with 46% “reciprocal”
tariffs by the Trump administration, while
South Korea received 25% tariffs, with both
currently paused until early July.
Both countries are currently engaging in urgent
talks with US trade representatives as the
tariffs threaten to harm global economic growth
significantly.
South Korea’s GDP contracted by 0.1% year on
year in the first three months of 2025 amid
political chaos and a trade war between the US
and China, the Bank of Korea (BoK) said on
Thursday.
Visit the ICIS Topic Page: US tariffs,
policy – impact on chemicals and energy
Crude Oil24-Apr-2025
SINGAPORE (ICIS)–South Korea’s economy shrank
by 0.1% year on year in the first quarter as
domestic consumption remained in the doldrums
amid a prolonged political crisis, while
exports fell on US tariffs, central bank data
showed on Thursday.
On a seasonally adjusted quarter-on-quarter
basis, GDP contracted by 0.2% in the first
three months of 2025, shrinking for the first
time since Q2 2024, the Bank of Korea (BOK)
said in a statement.
Goods exports from Asia’s fourth-largest
economy slipped by 0.8% year on year in the
first quarter, reversing the 2.6% growth in Q4
2024.
Latest data for the first 20 days of April
point to further weakness for South Korea’s
exports, falling by 5.2% year on year.
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 0.9%
year over year in the first quarter, lower than
the 1.6% growth seen in the fourth quarter of
2024.
Manufacturing expanded at a slower pace of 0.4%
year on year in the first quarter, from the
2.2% growth in the last three months of 2024.
South Korea’s economy is facing headwinds on
multiple fronts.
The country is still reeling from the political
chaos triggered by former President Yoon Suk
Yeol’s surprise martial law declaration on 3
December, which lasted just a few hours, and
ultimately led to his removal from office on 4
April.
South Korea
will hold a snap election on 3 June to
replace Yoon after the country’s Constitutional
Court unanimously upheld a decision by the
legislature to impeach Yoon.
The trade-dependent economy is also grappling
with the impact of the US’ broad tariff scheme.
A 25% US reciprocal tariff announced for South
Korea that was supposed to take effect on 9
April was suspended by US President Donald
Trump for 90 days.
During this temporary suspension, South Korea
is subject to the 10% baseline tariff and its
auto industry remains affected by a 25% tariff
on automobiles, which is separate from the
reciprocal tariff and not paused.
The central bank forecasts a slower GDP growth
of 1.5% for South Korea this year, after
posting a 2.0% growth in 2024.
BoK governor Rhee Chang-yong on 17 April,
however, said that the growth forecast might
still be too optimistic, citing Trump’s tariff
policy and its sectoral tariffs, as well as
levies on China, which is South Korea’s biggest
market.
Visit the ICIS Topic Page: US tariffs,
policy – impact on chemicals and energy.
Thumbnail image: At a container pier in
South Korea’s southeastern port city of Busan
on 1 November
2023.(YONHAP/EPA-EFE/Shutterstock)
Speciality Chemicals23-Apr-2025
HOUSTON (ICIS)–Fitch Ratings lowered its
global automotive sector outlook to
“deteriorating” from “neutral”, and lowered its
US sales forecast by 6.7% to 15.2 million from
16.3 million because of US tariffs on auto
imports.
“Tariffs are likely to lead to production cuts
and increased costs, potentially driving
issuers’ profitability,” the ratings agency
said.
On 26 March, the US imposed a 25% tariff on all
imported automobiles and certain auto parts,
which went into effect on 2 April despite a
90-day delay on other announced tariffs.
“This measure poses a significant risk for
automakers importing vehicles manufactured in
Mexico, Canada, Japan, Korea and Germany to the
US,” Fitch said.
Patrick Manzi, chief economist at the National
Automobile Dealers Association (NADA), said
that if tariffs go into effect as planned, he
expects vehicle prices to increase, sales to
decrease, and production to fall – although the
degree is difficult to quantify.
US March sales of new light vehicles jumped 11%
on a seasonally adjusted basis from February as
buyers rushed to make purchases ahead of the
automotive tariffs.
ICIS senior economist for global chemicals
Kevin Swift said the surge was likely from
consumers and fleet owners pulling forward
purchases to beat the new tariffs.
Some respondents in the US Federal Reserve’s
Beige Book agreed with Swift’s assessment.
Some auto dealers in the Cleveland Fed region
reported that the threat of tariffs drove
customers to make purchases before potential
price increases.
“Several retailers had difficulty forecasting
the impacts of policy and economic uncertainty
on consumer demand, and they worried that
consumer spending would pull back further,” the
Cleveland Fed said.
The Beige Book is a summary of US economic
activity during the past six weeks among the 12
Federal Reserve districts with data for the
most recent report collected before 14 April.
Fitch’s action comes just after the ratings
agency cut its GDP growth assumptions for the
US by 0.4 percentage points in March and
a further 0.5 percentage points more
recently in a special update to its quarterly
outlook.
“Although we expect direct tariff implications
to vary among automakers, depending on their
production footprint, pricing power and supply
chain configuration, no issuer will be fully
immune to declining consumer confidence and
lower automotive demand,” Fitch said.
Fitch expects global automakers to increase
selling prices to account for the tariffs, with
some that are unable to raise prices
sufficiently making “painful adjustments” to
production and sales plans.
AUTO PARTS SUPPLY CHAINS
Fitch said impacts of tariffs on auto parts
suppliers are less transparent because of
complexities in their supply chains, including
productions hits from delays.
This impact will be partially offset as tariffs
are currently delayed for imports that are
compliant with the US-Mexico-Canada (USMCA)
free trade agreement. Fitch estimates that
about 60% of auto parts are USMCA-compliant.
Tariff-related uncertainties may lead to
fluctuations in production volumes, which
could weigh on chemicals demand.
CHEMS USED IN AUTOS
Demand for chemicals in auto production comes
from, for example, antifreeze and other fluids,
catalysts, plastic dashboards and other
components, rubber tires and hoses, upholstery
fibers, coatings and adhesives, Swift said.
Virtually every component of a light vehicle,
from the front bumper to the rear taillights,
features some chemistry.
The latest data indicate that polymer use is
about 423 pounds (192kg) per vehicle.
EVs and associated battery markets are an
important growth opportunity for the chemical
industry, with chemical producers separately
developing battery materials, as well as
specialty polymers and adhesives for EVs.
Visit the ICIS
topic page Automotive: Impact on Chemicals
Visit the ICIS
Topic Page: US tariffs, policy – impact on
chemicals and energy
Thumbnail image shows autos on a lot in
Colorado. Photo by David
Zalubowski/AP/Shutterstock
Crude Oil23-Apr-2025
LONDON (ICIS)–Chemicals imports and exports to
and from the EU increased in February,
according to the latest data released by
Eurostat on Wednesday.
The segment for chemicals and related products
recorded the highest growth in trade
balance of those outlined in February compared
to a year prior.
While imports rose by 16%, exports increased by
more than a third compared to February 2024.
Table shows monthly change in €billions
compared to the previous
year.Source: Eurostat
European chemicals producers have been
struggling to remain competitive with other
regions, due to a complex regulatory landscape
and higher energy prices.
The increase in exports demonstrates resilient
demand for specialised materials made in
Europe, especially if those products cannot be
manufactured elsewhere.
This builds on the growth in January,
when the chemicals segment was the only one to
record an increase compared to the previous
year.
Eurostat’s initial estimates is that the
overall EU trade balance in goods with the rest
of the world stood at a surplus of €23.0
billion in February, compared to €21.8 billion
a year prior. Data from Eurostat is subject to
revision following publication.
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