Recycled PET (R-PET)

SAO PAULO (ICIS)–Brazil's foreign trade committee Gecex has postponed a meeting where it was expected to decide on imposing antidumping duties (ADDs) polyethylene (PE) imports from the US and Canada. The decision has created uncertainty in the country's PE market, which widely expected the ADDs to be implemented from June. In a note on its website, Gecex stated the “meeting will be rescheduled” but offered no further details. A spokesperson for Gecex said to ICIS it did not have any further information to offer. Gecex's meeting this week planned to discuss its investigation into allegations by Braskem, Brazil's sole PE producer, that US and Canadian producers are exporting PE to Brazil below fair market value. According to market sources, Braskem had already been communicating to customers price increases on the back of the expected ADDs. Earlier this week, Gecex increased ADDs on US polyvinyl chloride (PVC) from from 8.2% to 43.7%. Gecex is also investigating potential polyethylene terephthalate (PET) dumping from Malaysia and Vietnam, following ADDs proposals by Indorama and Alpek. The plastics transformation sector in Brazil said ADDs in place and those potentially implemented in the near future increase costs for all major thermoplastic resins, raising input costs for manufacturers. Unsurprisingly, the trade group representing producers Abiquim said the fears about higher costs due to ADDs “do not hold up” when taking into account a beleaguered chemicals production sector with historically low operating rates. Front page picture: Port of Santos in Sao Paulo, Latin America’s largest Source: Port of Santos Authority

28-May-2025

SAO PAULO (ICIS)–Brazil has approved plans to raise antidumping duties (ADDs) on polyvinyl chloride (PVC) imports from the US from 8.2% to 43.7%. The decision, taken late Tuesday, implements one of Brazil’s highest ADDs rates. The sharp hike in duties was taken after a proposal filed in 2024 by local polymers major Braskem and caustic soda and chlorine derivatives producer Unipar, Brazil’s main PVC producers. “The proposal to increase in ADDs applied to imports of suspension polyvinyl chloride (PVC) resin originating in the US was granted, due to a change in circumstances, from 8.2% to 43.7%,” said Gecex, Brazil's body in charge of foreign trade. Gecex is also investigating potential polyethylene (PE) dumping from the US, a proposal brought forward by Braskem, as well as potential polyethylene terephthalate (PET) dumping from Malaysia and Vietnam, following proposals by Indorama and Alpek. The plastics transformation sector in Brazil has said ADDs in place and those potentially implemented in the near future are increasing costs for all major thermoplastic resins, raising input costs for manufacturers. Unsurprisingly, the trade group representing producers Abiquim has said the fears about higher costs due to ADDs “do not hold up” when taking into account a beleaguered chemicals production sector with historic low operating rates.

28-May-2025

SAO PAULO (ICIS)–Fears within the Brazilian manufacturing sector about rising input costs and higher inflation if antidumping duties (ADDs) are imposed on US and Canadian polyethylene (PE) “do not hold up” when taking into account a beleaguered chemicals production sector, according to trade group Abiquim. A spokesperson for the trade group, which largely represents the chemicals producing side, said the low operating rates across the country’s chemical plants were partly a result of unfair global competition, and fully supported ADDs being imposed on US and Canadian PE. Brazil’s government body for foreign trade, the Foreign Trade Chamber (Gecex), is to meet on 29 May to take a decision on the matter. The investigation into possible PE dumping by the US and Canada started in November after a proposal by local polymers major Braskem, which has a commanding voice in Abiquim. “The narrative that specific anti-dumping duties, applied to correct unfair trade operations, could pose inflationary risks in the plastics processing production chain and affect production levels in the economy as a whole, simply does not hold up, given that Brazil is a price taker in thermoplastic resins (i.e. it follows variations in the international market),” said Abiquim. “[Moreover] There is an average idle capacity of 36% in the Brazilian chemicals sector (data from 2024) that can be reversed with the implementation of ADDs. Trade defence investigations in Brazil follow a rigorous and technical procedure, focusing on determining dumping margins, damage to the domestic industry and the causal link between the two.” If those technical parameters are met, Gecex will implement the ADDs “in the interest” of the country, adding that the ADDs would strictly follow World Trade Organization (WTO) rules regarding unfair trade. “Allowing dumping is not justified by any reason, since it allows the distortion of international trade rules, allowing the sale of products often below production cost only to aggressively capture the market,” added Abiquim. GROWING PROTECTIONISMHowever, trade groups representing import-heavy manufacturing companies, in a country where half of chemicals demand is covered by imports, have warned that those ADDs and other protectionist measures implemented by Luiz Inacio Lula da Silva’s administration increase input costs and, ultimately, inflation. The truth is that Lula’s cabinet does listen to industrial producers. The main constituency of the president’s Workers’ Party (PT) is industrial workers, and the health of manufacturing employment is key for its electoral prospects. As the 2026 general election looms, those voters may consider their support for the PT if manufacturing, which already came late to the post-pandemic recovery compared with other sectors, starts faltering again in 2025. This is precisely the argument from the other side. Increasing costs manufacturers could their hit their activity and ultimately employment in manufacturing as a whole could be negatively affected. In a written statement to ICIS this week, Jose Ricardo Roriz, president of the trade group representing plastic transformers Abiplast, reaffirmed his opposition to protectionist measures which increase costs for importers. But that side of the argument has so far failed to turn its lobbying into concrete actions. Since he took office in January 2023, Lula’s cabinet has approved most of the protectionist measures chemical producers demanded. In 2023, it reintroduced a tax break for the purchase of inputs by chemical companies, called REIQ, which was withdrawn by the previous center-right administration. In 2024, the administration re-imposed ADDs on US-origin PP and approved higher import tariffs on dozens of chemicals. Meanwhile, Gecex is investigating another proposal to implement ADDs on polyvinyl chloride (PVC), a proposal by Braskem and caustic soda and chlorine derivatives producer Unipar. In April, Gecex also began a probe into potential polyethylene terephthalate (PET) dumping from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. Brazil’s Congress is currently debating a bill contemplating state subsidies or credit lines at a favorable rate for chemicals companies, called Presiq. If approved, the program could be the “savior” of struggling chemicals producers, according to Abiquim's director general Andre Passos in an interview with ICIS.

28-May-2025

HOUSTON (ICIS)–The US delay of its proposed 50% tariffs on EU imports will still leave its polymers vulnerable to retaliatory tariffs. The new deadline is 9 July. For US exports, the EU has already drafted a list of targets for retaliatory tariffs, part of its second round of €95 billion in tariffs on US imports. A full list of all the proposed imports can be found here. This is on top of the first round of €21 billion in tariffs on US imports. A full list of all the proposed imports can be found here. In all, the EU could impose tariffs on nearly every major polymer from the US, including polyethylene (PE), polypropylene (PP), polystyrene (PS), polyvinyl chloride (PVC) and polyethylene terephthalate (PET). The EU is also considering tariffs on US imports of surfactants, fatty acids, fatty alcohols, and tall oil, a feedstock used to make renewable diesel, sustainable aviation fuel (SAF) and renewable naphtha. The following table lists some of the many plastics and chemicals proposed on the EU's second round of tariffs. CN CODE DESCRIPTION 28151200 sodium hydroxide "caustic soda" in aqueous solution "soda lye or liquid soda" 29053926 butane-1,4-diol or tetramethylene glycol [1,4-butanediol] having a bio-based carbon content of 100% by mass 29091910 tert-butyl ethyl ether (ethyl-tertio-butyl-ether, etbe) 29152100 acetic acid 29153200 vinyl acetate 29291000 isocyanates 32061100 pigments and preparations based on titanium dioxide of a kind used for colouring any material or produce colorant preparations, containing >= 80% by weight of titanium dioxide calculated on the dry matter (excl. preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 and 3215) 32061900 pigments and preparations based on titanium dioxide of a kind used for colouring any material or produce colorant preparations, containing < 80% by weight of titanium dioxide calculated on the dry matter (excl. preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 and 3215) 34023100 linear alkylbenzene sulphonic acids and their salts 34023990 anionic organic surface-active agents, whether or not put up for retail sale (excl. linear alkylbenzene sulphonic acids and their salts, and aqueous solution containing by weight 30-50% of disodium alkyl [oxydi(benzenesulphonate)]) 34024100 cationic organic surface-active agents, whether or not put up for retail sale 34024200 non-ionic organic surface-active agents, whether or not put up for retail sale (excl. soap) 34024900 organic surface-active agents, whether or not put up for retail sale (excl. soap, anionic, cationic and non-ionic) 34025010 surface-active preparations put up for retail sale (excl. organic surface-active preparations in the form of bars, cakes, moulded pieces or shapes, and organic surface-active products and preparations for washing the skin in the form of liquid or cream) 38030010 crude tall oil 38030090 tall oil, whether or not refined (excl. crude tall oil) 38170050 linear alkylbenzene 38170080 mixed alkylbenzenes and mixed alkylnaphthalenes, produced by the alkylation of benzene and naphthalene (excl. linear alkylbenzene and mixed isomers of cyclic hydrocarbons) 38231100 stearic acid, industrial 38231200 oleic acid, industrial 38231300 tall oil fatty acids, industrial 38231910 fatty acids, distilled 38231930 fatty acid distillate 38231990 fatty acids, industrial, monocarboxylic; acid oils from refining (excl. stearic acid, oleic acid and tall oil fatty acids, distilled fatty acids and fatty acid distillate) 38237000 fatty alcohols, industrial 38260010 fatty-acid mono-alkyl esters, containing by weight => 96,5 % of esters "famae" 38260090 biodiesel and mixtures thereof, not containing or containing < 70 % by weight of petroleum oils or oils obtained from bituminous minerals (excl. fatty-acid mono-alkyl esters containing by weight >= 96,5 % of esters "famae") 39013000 ethylene-vinyl acetate copolymers, in primary forms 39019080 polymers of ethylene, in primary forms (excl. polyethylene, ethylene-vinyl acetate copolymers, ethylene-alpha-olefins copolymers having a specific gravity of < 0,94, ionomer resin consisting of a salt of a terpolymer of ethylene with isobutyl acrylate and methacrylic acid and a-b-a block copolymer of ethylene of polystyrene, ethylene-butylene copolymer and polystyrene, containing by weight <= 35% of styrene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms) 39021000 polypropylene, in primary forms 39023000 propylene copolymers, in primary forms 39029010 a-b-a block copolymer of propylene or of other olefins, of polystyrene, ethylene-butylene copolymer and polystyrene, containing by weight <= 35% of styrene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms 39029020 polybut-1-ene, a copolymer of but-1-ene with ethylene containing by weight <= 10% of ethylene, or a blend of polybut-1-ene with polyethylene and/or polypropylene containing by weight <= 10% of polyethylene and/or <= 25% of polypropylene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms 39031100 expansible polystyrene, in primary forms 39031900 polystyrene, in primary forms (excl. expansible) 39032000 styrene-acrylonitrile copolymers "san", in primary forms 39033000 acrylonitrile-butadiene-styrene copolymers "abs", in primary forms 39039090 polymers of styrene, in primary forms (excl. polystyrene, styrene-acrylonitrile copolymers "san", acrylonitrile-butadiene-styrene "abs", copolymer solely of styrene with allyl alcohol, of an acetyl value of >= 175 and brominated polystyrene, containing by weight >= 58% but <= 71% of bromine, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms) 39041000 poly"vinyl chloride", in primary forms, not mixed with any other substances 39042100 non-plasticised poly"vinyl chloride", in primary forms, mixed with other substances 39042200 plasticised poly"vinyl chloride", in primary forms, mixed with other substances 39051200 poly"vinyl acetate", in aqueous dispersion 39051900 poly"vinyl acetate", in primary forms (excl. in aqueous dispersion) 39052100 vinyl acetate copolymers, in aqueous dispersion 39052900 vinyl acetate copolymers, in primary forms (excl. in aqueous dispersion) 39053000 poly"vinyl alcohol", in primary forms, whether or not containing unhydrolyzed acetate groups 39061000 poly"methyl methacrylate", in primary forms 39071000 polyacetals, in primary forms 39072911 polyethylene glycols, in primary forms 39072920 polyether alcohols, in primary forms (excl. bis(polyoxyethylene) methylphosphonate and polyethylene glycols) 39072999 polyethers in primary forms (excl. polyether alcohols, polyacetals and copolymer of 1- chloro-2,3-epoxypropane with ethylene oxide) 39073000 epoxide resins, in primary forms 39074000 polycarbonates, in primary forms 39075000 alkyd resins, in primary forms 39076100 poly"ethylene terephthalate", in primary forms, having a viscosity number of >= 78 ml/g 39076900 poly"ethylene terephthalate", in primary forms, having a viscosity number of < 78 ml/g 39079110 unsaturated liquid polyesters, in primary forms (excl. polycarbonates, alkyd resins, poly"ethylene terephthalate" and poly"lactic acid") 39079190 unsaturated polyesters, in primary forms (excl. liquid, and polycarbonates, alkyd resins, poly"ethylene terephthalate" and poly"lactic acid") 39079980 polyesters, saturated, in primary forms (excl. polycarbonates, alkyd resins, poly"ethylene terephthalate", poly"lactic acid", poly"ethylene naphthalene-2,6-dicarboxylate" and thermoplastic liquid crystal aromatic polyester copolymers) 39089000 polyamides, in primary forms (excl. polyamides-6, -11, -12, -6,6, -6,9, -6,10 and -6,12) 39091000 urea resins and thiourea resins, in primary forms 39092000 melamine resins, in primary forms 39093100 poly"methylene phenyl isocyanate" "crude mdi, polymeric mdi", in primary forms 39094000 phenolic resins, in primary forms 39095010 polyurethane of 2,2'-"tert-butylimino"diethanol and 4,4'-methylenedicyclohexyl diisocyanate, in the form of a solution in n,n-dimethylacetamide, containing by weight >= 50% of polymer 39095090 polyurethanes in primary forms (excl. polyurethane of 2,2'-"tert-butylimino"diethanol and 4,4'-methylenedicyclohexyl diisocyanate, in the form of a solution in n,ndimethylacetamide) Source: EU CN CODE DESCRIPTION 39011010 linear polyethylene with a specific gravity of < 0,94, in primary forms 39011090 polyethylene with a specific gravity of < 0,94, in primary forms (excl. linear polyethylene) 39012010 polyethylene in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms, of a specific gravity of >= 0,958 at 23°c, containing <= 50 mg/kg of aluminium, <= 2 mg/kg of calcium, of chromium, of iron, of nickel and of titanium each and <= 8 mg/kg of vanadium, for the manufacture of chlorosulphonated polyethylene 39012090 polyethylene with a specific gravity of >= 0,94, in primary forms (excl. polyethylene in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms, of a specific gravity of >= 0,958 at 23°c, containing <= 50 mg/kg of aluminium, <= 2 mg/kg of calcium, of chromium, of iron, of nickel and of titanium each and <= 8 mg/kg of vanadium, for the manufacture of chlorosulphonated polyethylene) 39014000 ethylene-alpha-olefin copolymers, having a specific gravity of < 0,94 , in primary forms 39081000 polyamides-6, -11, -12, -6,6, -6,9, -6,10 or -6,12, in primary forms Source: EU

27-May-2025

SAO PAULO (ICIS)–The plastics transformation sector in Brazil is facing increased costs for all major thermoplastic resins as antidumping investigations target imports from key supplier countries, the president of trade group Abiplast told ICIS. Jose Ricardo Roriz said potential antidumping duties (ADDs) against polyethylene (PE) imports from the US and Canada, for which a final decision could be made as soon as this week, will raise cost pressures in the manufacturing sector. The government body that focuses on overseas trade, the Foreign Trade Chamber (Gecex), will meet on 29 May and several sources expect it to make a decision on ADDs during the meeting. The proposal for ADDs on US and Canadian PE was brought forward by polymers major Braskem in July 2024, prompting Gecex to open its probe in November 2024. If approved, the ADDs will complete antidumping coverage on all principal thermoplastic resins used in manufacturing, including PE, polypropylene (PP), polyvinyl chloride (PVC) and polyethylene terephthalate (PET). "The impact [of the ADDs on PE] will create pressure on costs, which ultimately affects not only the plastic transformation sector, but all industrial chains that use these products as inputs," said Roriz. If enforced, the duties will pose a significant challenge for the manufacturing sector which relies heavily on imported resins to produce a wide range of products including construction, automotives, packaging and consumer goods. Roriz said the ADDs or other trade defense mechanisms are being misused and reiterated Abiplast’s staunch opposition to them. "We are against these movements that turn trade defense instruments into simple tools for closing and reserving markets," he said. GROWING PROTECTIONISMGecex is investigating another proposal for PVC ADDs brought about by Braskem and caustic soda and chlorine derivatives producer Unipar, who claim they are subject to unfair competition. In April, Gecex also began a probe into potential PET dumping from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. In the meantime, the Brazilian government re-imposed ADDs on US-origin PP last year. In 2023, it reintroduced a tax break for the purchase of inputs by chemical companies, called REIQ, which was withdrawn by the previous centre-right administration. In October 2024, the government approved higher import tariffs on dozens of chemicals. Earlier this year, it also approved programs contemplating state subsidies or credit lines at a favorable rate for chemicals companies such as Presiq.

27-May-2025

SAO PAULO (ICIS)–Brazil’s polyethylene (PE) sellers this week are encouraging customers to bring forward purchases on the assumption that the government is to impose antidumping duties (ADDs) on US and Canadian material from June. – Braskem’s PE ADDs proposal could be approved this week – Sources said prices are increasing ahead of measure – ADDs on PVC still being analyzed by government According to several sources, the ADDs on US and Canada PE could be approved by the government’s body for foreign trade, the Foreign Trade Chamber (Gecex), at a meeting to take place on 29 May. Gecex’s investigation into possible PE dumping by the US and Canada into Brazil started in November after local polymers major Braskem filed the proposal arguing unfair competition. ADDs are tariffs imposed on imported goods that are sold at prices lower than their normal value, potentially harming domestic producers, and are widely used as a protectionist measure from unfair competition. Brazilian PE sellers are this week encouraging their customers to bring purchases forward, warning them that the ADDs could potentially be effective from as soon as 2 June. While this could be seen as a strategy by sellers to prop up their sales, the assumption that the ADDs on US and Canada’s PE will be imposed is not senseless, given that it would follow a series of protectionist measures implemented by the government of Luiz Inacio Lula da Silva in the past two years. ICIS put to Gecex the markets’ assumptions about an almost certain green light for the ADDs, but in a written response it said it would not comment. “We cannot make any comments or provide information regarding the progress of the investigation. Likewise, we cannot make any inferences regarding market information provided by third parties,” said Gecex. These ADDs would be provisional, while Gecex would have up to 18 months to decide whether they will become permanent. If PE dumping from the US and Canada could not be proved in the end, the measure would cease to exist. If proved, the measure could become permanent until further notice. NOT RESPONSIBLE FOR HIGHER COSTSIn two letters to customers seen by ICIS, two distribution companies warned about the ADDs, with one of them taking for granted they will be imposed and be effective in June. Global chemicals distributor Vinmar’s Brazil subsidiary warned their customers that any potential “financial loss” from the potential ADDs would not be assumed by the distributor but by the customer. “We are on the verge of the potential entry into force of ADDs on PE imported from the US and Canada. We would like to emphasize that Vinmar, as always, cannot be held responsible for any financial loss of the importer if any import tariffs are implemented or adjusted during the logistic process of delivering the cargo to its recipient,” said Vinmar in the letter. “The cargo cannot be canceled or undergo any adjustment of price/commercial condition as a form of compensation, even if the cargo has not complied with the maximum agreed shipping deadline.” To cover its back entirely, Vinmar concluded the letter clarifying to its customers that “logistic process of delivering the cargo” means from beginning to end: since the containers are loaded, in this case in the US or Canada, until delivery at the port of destination in Brazil. Vinmar had not responded to a request for further comment at the time of writing. Another distributor’s letter to customers said: “As of June 2025, the ADDs will come into effect, which will directly impact costs of PE materials. In addition, Braskem announced a price adjustment for June, which should result in increases in the cost of materials.” Braskem had not responded to a request for comment at the time of writing. A source at a distributor said on Monday, however, that these warnings about potential price increases outside a company’s control are common in the chemicals sector. Consequently, the source said its company had been including in contracts with its customers a clause from the beginning of 2025 highlighting the Gecex investigation, so it can cover its back on the potential higher costs emanating from the ADDs. Meanwhile, Gecex continues investigating another proposal for ADDs on polyvinyl chloride (PVC) brought forward by Braskem and Brazilian caustic soda and chlorine derivatives produce Unipar, also arguing unfair competition. Management at Braskem has publicly stated they were lobbying the government for this measure to be approved, since PVC is one of the plastics which is suffering the most the global oversupply and the consequent low prices. Gecex is currently working on the “preparation of the final report” for those ADDs on PVC, according to information on its website as of Monday. Gecex also started in April an investigation into potential polyethylene terephthalate (PET) dumping in material coming from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. MORE PROTECTIONISMIf approved, the ADDs on PE from the US and Canada would add to a list of protectionist measures implemented by the Brazilian government of Luiz Inacio Lula da Silva in the past two years, such higher import tariffs for dozens of chemicals from October 2024. Meanwhile, the Brazilian government re-imposed ADDs on US-origin PP and has approved programs contemplating state subsidies or credit lines at favorable rates for chemicals companies, such as Presiq. Brazil’s chemicals producers – represented by trade group Abiquim and including names such as Braskem, Unipar, and Unigel – have been lobbying for protectionist measures against what they see as unfair competition from overseas markets such as the US and China. Aided by lower production costs, companies in those two countries, but also others such as Canada or nations in the Middle East, are blamed by Brazil’s domestic producers for their historically low operating rates, hovering around 60-65%, and the closure of some plants which were not competitive. In an interview with ICIS earlier in May, the director general at Abiquim said the continuation of protectionist measures was key for Brazilian chemicals producers to stay afloat. "Nothing has fundamentally changed in our situation in the past few months. The scenario remains the same, perhaps even worsening with [US President Donald] Trump's trade measures, and we continue suffering with low capacity utilization rates,” said Andre Passos. “Brazil's chemical production has been on a downward trajectory since 2016. Capacity utilization level of our plants [has gone] from above 80% before 2016 to around 60% now." However, importers of polymers and other petrochemicals are understandably on the opposite side of the debate. They argue measures such as high import tariffs or ADDs negatively affect manufacturers who are dependent on chemicals imports and increase inflation, affecting consumers’ purchasing power. Around half of Brazil’s chemicals demand is covered by imports, given the country’s trade deficit in chemicals, a common feature in the wider Latin America. Trade group Abiplast, representing plastic transformers, has repeatedly showed opposition to protectionist measures which increase costs for importers. Front page picture: Port of Santos in Sao Paulo, Latin America’s largest Source: Port of Santos Authority Additional reporting by Bruno Menini Focus article by Jonathan Lopez

26-May-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 23 May. Europe PE, PP sentiment shifts positive for some players on US-China tariff climbdownSentiment is shifting firmer for some polyethylene (PE) and polypropylene (PP) players in the past week, driven largely by the de-escalation of the US-China tariff war. Germany, Europe chemicals bounce back, but pessimism persistsGermany and Europe’s chemical sector bounced back strongly in the first quarter of 2025, but the outlook for the rest of the year remains clouded by fears over the impact of the trade war. Germany’s chemical industry remains weak, despite Q1 ‘sprint’ – VCI economistThe strong performance of Germany’s chemical-pharmaceuticals industry in the 2025 first quarter cannot mask the underlying weakness in chemicals, according to the chief economist of German chemical producers’ trade group VCI. EU backs tariff hike for fertilizers from Russia and BelarusThe European Parliament made the decision to impose higher tariffs on fertilizers and certain agricultural products from Russia and Belarus on Thursday. US to hit EU imports with 50% tariffs starting 1 JuneUS President Donald Trump has warned of plans to impose a  50% tariff on imports from the EU starting on 1 June.

26-May-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. I could present a dozen charts such as the main one in today's post on polypropylene (PP) — for example on polyethylene (PE), ethylene, propylene and styrene—and the patterns would be similar though, of course, the numbers would differ. During the pandemic, while demand dipped in many places, China’s PP consumption rose—from 7% growth in 2019 to 9% in 2020, then stayed strong at 7% in 2021. The same trend played out across other chemicals and polymers. This was the “China in, China out” story: Rising imports of feedstocks to make finished goods that lockdown-affected, cash-rich Westerners were snapping up, backed by stimulus. Margins climbed—not just from demand, but also from refinery feedstock shortages as fuel demand dropped and refinery rates were cut. But 2022 marked a shift. As ICIS Data and Analytics illustrates, multiple headwinds kicked in: The Evergrande Turning Point, China's constantly deteriorating demographics, and a China petrochemicals self-sufficiency drive dating back to 2014. Focusing on China's PP self-sufficiency and exports: China's PP capacity as a percentage of domestic demand is expected to surge from 89% in 2014 to 134% by 2028. In 2020, China’s PP exports were around 500,000 tonnes. In 2023 they reached 1.3m tonnes and climbed to 2.4m tonnes in 2024. ICIS data suggests China’s exports in 2025 could reach 3.1m tonnes. On current trends, China’s exports to ASEAN could exceed 1 million tonnes to ASEAN in 2025 versus less than 900,000 tonnes in 2024. The trade war? Hard to say if it's moved the needle. These structural trends were in motion long before it began—and they’ll likely outlast it too. Sentiment swings (as seen since April’s “Liberation Day”) will keep influencing prices and buying patterns, but the fundamentals remain. The Chemicals Supercycle is over. What comes next? That’s the big question. 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.

26-May-2025

HOUSTON (ICIS)–Asia-US rates for shipping containers rose this week, leading ocean carriers to rush to ramp up capacity to handle an expected surge in bookings. Rates from online freight shipping marketplace and platform provider Freightos rose by 3% to both US coasts, while rates from supply chain advisors Drewry showed a 2% increase on rates from Shanghai to Los Angeles and a 4% rise in rates from Shanghai to New York, as shown in the following chart. Following the latest US-China trade developments, Drewry expects an increase in spot rates in the coming week as carriers are reorganizing their capacity to accommodate a higher volume of cargo bookings from China. Kyle Beaulieu senior director, head of ocean Americas at Flexport, said during a webinar this week that carriers who initiated blank sailings and discontinued services to the US are now resuming services. Beaulieu said there were 10 China-US services that were halted, and as of today, six are planning to resume from Week 22 to Week 24. Beaulieu said ports in the Pacific Northwest have been the biggest beneficiaries so far as that is the shortest route to the US. Alan Murphy, CEO, Sea-Intelligence, said carriers who were reducing transpacific capacity due to the decrease in bookings from China amid 145% tariffs are now working to ramp up capacity prior to the 14 August deadline. This means that typical peak season volumes now must be shipped no later than mid-July. Judah Levine, head of research at Freightos, said there is still confusion on whether July and August deadlines mean goods need to be loaded at origins by those dates – as was the case with the 9 April tariff deadline – or that goods must arrive in the US by then. “The latter would significantly shorten these lower-tariff windows,” Levine said. “Ocean shipments from Asia would have to move in the next week or two to arrive before 9 July.” Levine noted that carriers have separately come out with mid-month general rate increases (GRIs) from $1,000-3,000/FEU (40-foot equivalent unit) and have similar GRIs planned for 1 June and 15 June with aims to get rates up to $8,000/FEU. “If successful, rate levels would be about on par with the Asia – US West Coast 2024 high reached last July,” Levine said. “Daily transpacific rates as of Monday have already increased about $1,000/FEU to the East Coast and $400/FEU to the West Coast to about $4,400/FEU and $2,800/FEU, respectively.” 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. LIQUID TANKER RATES HOLD STEADY US liquid chemical tanker freight rates as assessed by ICIS held steady this week despite upward pressure for several trade lanes. There is upward pressure on rates along the US Gulf-Asia trade lane as charterers are seeking to send cargos to the region following the pause on tariffs. The announcement caused a significant uptick in spot activity. The increase in interest should be significant but almost certainly short lived as cargoes rush to arrive prior to the 90-day expiration date. Several parcels of monoethylene glycol (MEG) and methanol were seen quoted in the market. Similarly, rates from the USG to Rotterdam were steady this week, even as space among the regular carriers remains limited. Contract tonnage continues to prevail and given the limited available space; spot demand remains relatively good. Several larger sized cargos of styrene, methanol, MTBE and ethanol were seen in the market. Several outsiders have come on berth for both May and June, adding to the available tonnage for completion cargos. Easing demand for clean tankers has attracted those vessels to enter the chemical sector. For the USG to South America trade lane, rates remain steady with a few inquiries for methanol and ethanol widely viewed in the market. Overall, the market was relatively quiet with fewer contract of affreightment (COA) nominations, putting downward pressure on rates as more space has become available. On the bunker side, fuel prices have declined as well, on the back of lower energy prices, as a result week over week were softer. Additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

23-May-2025

SAO PAULO (ICIS)–Braskem’s stock rose sharply in Friday trading after reports citing unnamed sources said Brazilian entrepreneur Nelson Tanure would be seeking to acquire Novonor’s controlling stake at the petrochemicals major. At some point, Braskem’s share rose nearly 10% on Friday, taking the whole Ibovespa stock index in Sao Paulo higher. By afternoon trading, however, the stock had moderated the gain although it was still rising nearly 6%, compared with the previous close on 22 May. The offer was first reported by Brazilian daily O Globo, with financial daily Valor Economico and news agency Reuters subsequently also publishing reports confirming the bid, citing also unnamed sources. According to those sources, Tanure would be intending to indirectly assume control previously held by Novonor (called formerly Odebrecht) through one of his investment funds. The proposal includes maintaining Novonor in the shareholding structure with a minority stake of 3%-5%, signaling a gradual transition strategy. Novonor currently holds 50.1% of Braskem's voting shares, while Brazil’s state-owned energy major Petrobras controls 47%. However, the transaction depends on negotiations with Novonor’s creditor banks – Bradesco, Itaú, Banco do Brasil, Santander, and Brazil’s investment bank BNDES – which hold Braskem shares as collateral for debt estimated at Brazilian reais (R) 15 billion ($2.65 billion). These banks currently control 50.1% of Braskem's common shares, representing 38.3% of total capital. Any control change must also consider Petrobras' position as the second-largest shareholder with significant strategic influence. In a written response to ICIS, Braskem said it would not comment. Novonor and Petrobras had not responded to a request for comment at the time of writing. Braskem's financial metrics have been suffering for several quarter due to the global petrochemicals oversupply and low prices, which have hit hard some of the company's key products such polyethylene (PE), polypropylene (PP), or polyvinyl chloride (PVC). Earlier in May, however, it said it had swung to a net profit during Q1 2025, compared to a net loss in the same quarter a year earlier. Its sales and earnings, however, continued shrinking during Q1 in the year-on-year comparison. Braskem(in $ million) Q1 2025 Q1 2024 Change Q4 2024 Q1 2025 vs Q4 2024 Sales 3,331 3,618 -8% 3,285 1% Net profit/loss 113 -273 N/A -967 N/A Recurring EBITDA 224 230 -2% 102 121% WHO IS TANURE While it has been elusive for most media outlets to put a figure on Nelson Tanure’s fortune – even the well-known Forbes magazine has not put a figure on it and has not included him in its Rich List – the entrepreneur is considered one of Brazil’s richest men. His businesses span in a wide range of sectors such energy (mostly electric utilities), civil construction through its firm Gafisa; oil and gas through PetroRio and investments in the exploration of natural resources; telecommunications, with participations in operators Oi and TIM Brasil; and healthcare, with Alliance Health and diagnostic laboratories, among others. UNSUCCESSFUL DISPOSAL SO FARNovonor has attempted to sell its Braskem stake for years without conclusion. Previous interested parties included Abu Dhabi’s energy major Adnoc, Saudi Arabia’s SABIC – now part of oil major Aramco – and Brazilian conglomerate J&F, owned by the Batista brothers. J&F reportedly offered R10 billion for Novonor's stake, but neither this nor the other transactions materialized. Novonor suffers from high leverage since the 2010s, when the company was at the center of the large, Latin America-wide corruption scandal known as Lava Jato in the mid-2010s. The scandal also engulfed personalities from the first administration of the Workers Party (PT), the party of President Luiz Inacio Lula da Silva, now back in power again and at the time led by him and his successor Dilma Rousseff. ($1 = R5.67)

23-May-2025