News and analysis

HOUSTON (ICIS)–Rates for shipping containers from southeast Asia and Vietnam have risen above rates from China to the US as tariffs – and a 90-day pause on reciprocal tariffs – are already shifting global trade patterns. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said he is now seeing the shifting global trade patterns caused by the tariffs play out in ocean freight rates. “Falling demand out of China has coincided with shippers rushing imports out of Vietnam, which is subject to a 90-day pause on reciprocal tariffs,” Sand said. “Seeing the relationship between these two trades turn on its head is an early indication of the potential for tariffs to shift global trade on its axis.” Sand, using Xeneta data, said importing into the US West Coast from China was more expensive than importing from Vietnam on 16 March. But by 25 April, Vietnam has become the more expensive of the two trades, as shown in the following chart. In another example, the spread in rates between China and southeast Asia trades into US West Coast has widened from $7/FEU (40-foot equivalent unit) on 31 March to $181/FEU on 25 April (with southeast Asia the more expensive). “As shippers stopped or slowed exports from China due to the tariffs, they have accelerated exports from southeast Asia countries, which has caused the spread in freight rates on these trades to widen,” Sand said. AVERAGE GLOBAL RATES TICK LOWER Average global container rates edged lower by 2% week on week, accord to supply chain advisors Drewry and as shown in the following chart. Drewry expects rates to continue to decline in the coming week due to uncertainty stemming from reciprocal tariffs. Blank sailings have surged again this week as carriers strive to maintain rates or at least stop the slide. Alan Murphy, CEO of Sea-Intelligence, said the impact of the trade war has led shippers to pause, or outright cancel, shipments. “This in turn reduces demand for capacity on container vessels, to which carriers respond by cancelling sailings,” Murphy said. Murphy said this level of escalation in blanked capacity illustrates a dramatic change in the market. “Partly from the perspective of the magnitude of the blank sailings, which are more akin to what we tend to see seasonally following Chinese New Year in January/February and Chinese Golden Week in October,” Murphy said. Rates from online freight shipping marketplace and platform provider Freightos also fell over the week, with rates to both US coasts down by 5%. Judah Levine, head of research at Freightos, said some vessels are leaving China only half full because of canceled orders. Levine said some retailers have inventory from front-loading deliveries over the past few months and are taking a wait-and-see approach. PORT CHARGES TARGETING CHINA-LINKED SHIPS Levine said revised guidelines from the US Trade Representative (USTR) targeting China’s dominance in the maritime industry should not lead to the significant port call omissions and congestion that many feared would result from the original per port call proposal. Market intelligence group Linerlytica said that although port fees on Chinese operated and Chinese-built ships are retained, carriers will be able to circumvent the fees by swapping out all of the affected ships in the next 180 days as the fee will no longer apply on the operators’ fleet composition or prospective orders but only on ships calling at US ports on a per voyage basis. 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 chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged from last week despite rates continuing to be pressured downward for several trade lanes. There is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode, and besides contract of affreightment (COA) cargoes there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, weighing on rates. The usual spot cargoes of methanol from Jose to China are the only ones reported, leaving methanol requirements from the region active to Asia. Similarly, rates from the USG to ARA and all other trade lanes also held steady. The spot market to Europe gained momentum with a relatively good number of inquiries following the Easter holidays.  Despite the increased interest rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft, leaving those vessels to participate in the chemical sector. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for May lending downward pressure to spot rates and leaving most owners still trying to fill up prompt part space to both South American coasts for 1H May. Rates are soft and have lost some ground. The USG to India route has seen an uptick in inquiries over the last week with no confirmed fixtures. Market talk of a trade deal between the US and India have sparked some interest leaving the rates flat for the time being and expected to remain unchanged in the near term. With 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

25-Apr-2025

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Upwards pressure on NWE colourless bales, colourless and mixed coloured flake Buyers in eastern Europe seek lower bale prices Asian food-grade pellet imports cheaper on weaker dollar

25-Apr-2025

SINGAPORE (ICIS)–A subsidiary of Sweden-based fashion retailer H&M, Syre, has announced a Memorandum of Understanding (MoU) with Binh Dinh province in Vietnam to build a circular textile recycling plant, the company said on Friday. Syre, a joint venture between H&M and technology investment firm Vargas, announced plans to build a Gigascale recycling plant in Binh Dinh, which will produce up to 250,000 tonnes of high-quality polyethylene terephthalate (PET) chips from textile waste. “Syre has an ambition to support Vietnam in its green transition and as a global leader in the circular textile industry,” said Dennis Nobelius, CEO of Syre. “The partnership with the Binh Dinh Province will, with the right conditions in place, be a great opportunity to jointly lead the textile shift,” Nobelius added. Investment details have not been finalized, Nobelius said. "Binh Dinh offers an excellent investment environment, being a hub for clean energy … with synchronized infrastructure … and favorable climate conditions,” said Vietnam Prime Minister Pham Minh Chinh on 23 April. Syre is a circular textile-to-textile recycling firm with one plant in North Carolina in the US under construction, to be operational in mid-2025. The North Carolina plant will have a capacity of up to 10,000 tonnes/year of circular polyester. In 2024, Syre raised $100 million in funds to construct its plants in North Carolina and other locations such as Vietnam.

25-Apr-2025

SINGAPORE (ICIS)–Canadian ammonia exports are exempted from the prohibitively high levy imposed on Canadian exports to the US, thanks to the US-Mexico-Canada trade agreement. However, the trade tensions would inevitably motivate Canada to be less reliant on its closest neighbour market and accelerate diversification of its ammonia exports to Asia from the Prince Rupert Port in western Canada. Stronger push for Canada to diversify ammonia exports despite US tariff exemption Prince Rupert Port – an emerging low carbon ammonia export and bunkering hub US Gulf Coast low carbon ammonia projects to face strong competition Prince Rupert Port has the shortest shipping distances between North America and Asia hence its direct shipping route to Asia stands to undermine the competitiveness of low carbon ammonia exports from the US Gulf Coast. Besides comparatively longer shipping distances, shipments from the US Gulf Coast to Asia have also been faced with seasonal congestions at the Panama Canal. Key industry stakeholders in Japan and South Korea have been in talks with US companies to jointly produce low carbon ammonia in the US Gulf Coast States of Texas and Louisiana for export to Asia. Among the announced US projects, the joint venture between Japan’s largest energy company JERA Company (JERA), global investment and trading company Mitsui & Company and US fertilizer producer CF Industries have progressed to Final Investment Decision. The first ammonia exports from Prince Rupert Port to Asia are likely to be low carbon trades spearheaded by two of Japan’s largest trading houses Itochu and Marubeni. Low carbon ammonia exports from Prince Rupert Port would position Canada as a key stakeholder in an emerging low carbon commodity ecosystem comprising major bunkering hubs such as Amsterdam, Algeciras, Singapore and Port Zayed, key exporters including the UAE, Saudi Arabia, Qatar, Oman, Egypt, India, Malaysia, Thailand, Indonesia, Australia and the US, and importers including countries in Europe, Japan and South Korea (please see map below). Note: Includes proposed and ongoing investments Low carbon ammonia supplies via the Prince Rupert Port will also facilitate development of a low carbon marine fuel bunkering service that could potentially be in direct competition with the proposed low carbon bunkering services at the US ports of Los Angeles and Long Beach. Demand for low carbon ammonia bunker fuels on the US west coast is expected to be driven by car-carrying vessels calling at Port Bernicia and container vessels at Port Oakland. The Canadian government has been inviting foreign investments to develop a new liquid chemicals export route from the Prince Rupert Port as the port has been seeing declining trades volumes in recent years due to shifting global trade flows and competition with other North American ports. AltaGas and Royal Vopak are jointly building an export facility on the Ridley Island, British Columbia, that includes a large-scale liquefied petroleum gas (LPG) and bulk liquids terminal with rail, logistics and marine infrastructure. As vessels can be configured to alternate between LPG and ammonia cargoes, ammonia can be one of the outbound trades to benefit from the export facility at Ridley Island. While diversifying overseas markets to pre-empt risks, including tariff or non-tariff trade barriers, would make sense for any exporters, it is particularly crucial for ammonia producers as stringent safety standards for the transportation and handling of ammonia means alternative export channels are not easily set up. Canada exported about 1.08 million tonnes of ammonia to the US last year, around 19% of its total annual ammonia capacity of about 5.62m tonnes, and almost all Canadian ammonia exports have been for the US market at least since 2020, according to the ICIS Supply and Demand database. With contributions from Kieran Cosgrove, Song Hea Beom and Sylvia Traganida INSIGHT article by Chow Bee Lin

25-Apr-2025

SINGAPORE (ICIS)–China is considering exempting some chemical imports from the US, including ethane, polyethylene (PE) and styrene polymers, from tariffs, according to an unofficial document obtained by ICIS on Friday. Based on the document titled "First Batch List of Reciprocal Tariff Exempted Commodities", ethane, other acyclic hydrocarbons, linear low-density PE (LLDPE) imports from the US, will be exempted from China’s announced additional 125% levies. Other proposed exemptions are PE, ethylene polymers and styrene polymers in their primary shapes. The itemized list has 131 products, including drugs, vaccines, motors and some electronic components. The list, which started making rounds in the Chinese markets late on 24 April, could not be confirmed with China Customs at the time of writing. Additional reporting by Fanny Zhang Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

25-Apr-2025

SINGAPORE (ICIS)–Two fatty alcohol plants in Selangor in the western coast of Malaysia are shut for nearly a month due to disruption of gas supply caused by a pipeline fire in the area on 1 April, market sources said on Friday. Edenor Technology’s 80,000 tonne/year fatty alcohol plant and KLK OLEO's 300,000 tonne/year plant suffered unplanned outages because of the incident, they said. According to gas distributor Gas Malaysia Energy Services (GMES), gas supplies to a total of 192 plants in Selangor were cut off after a blaze raged at PETRONAS Gas Bhd’s (PGB) main pipeline near Putra Heights for more than seven hours on 1 April, Edenor Technology, in a letter to its clients dated 22 April obtained by ICIS, said that the push-back of gas supply restoration in Selangor “has further affected our production facility in Telok Panglima Garang … and it will lead to further delays in some of our upcoming deliveries”. Edenor stated that gas distributor GMES indicated that full restoration of natural gas supply will be delayed to 1 July from an earlier estimate of 20 April. Meanwhile, KLK OLEO, the oleochemicals manufacturing division of Kuala Lumpur Kepong Berhad (KLK), has yet to respond to ICIS’ queries on the issue at the time of writing.

25-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 major Ravago’s Mexican subsidiary. Pedro Escalona, sales director at Entecresins Mexico, said demand for most polymers has notably picked up in the past weeks, with order 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 Clarification: Re-casts subsidiary name in paragraph two. Entec Polymers, as written previously, is Ravago's subsidiary in the US

24-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.)

24-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

24-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.

24-Apr-2025