News and analysis

HOUSTON (ICIS)–Senate Bill 543 was passed in 2023, but it was not until 1 January 2025 that the ban on polystyrene foam was implemented. According to The Oregon Department of Environmental Quality (DEQ), “[The] 2023 Senate Bill 543 (ORS 459.465 to 459.477) prohibits food vendors from using polystyrene foam containers for prepared food, prohibits the sale of polystyrene foam containers or polystyrene foam packing peanuts, and prohibits the sale of foodware containers with added perfluoroalkyl or polyfluoroalkyl substances (PFAS)." “PFAS are a group of chemicals that are considered “emerging environmental contaminants” because public knowledge about their harmful effects and how they are regulated are relatively new or undeveloped. PFAS are water soluble and highly mobile, and can accumulate in living organisms. Many newer PFAS transform into highly persistent perfluorinated chemicals in the environment, and can last for hundreds to thousands of years, depending on the PFAS compound,” according to The Oregon DEQ. What does this mean for polystyrene in Oregon? Well, the bill states that food vendors must not use polystyrene foam containers when selling, offering for sale, serving or dispensing prepared food to a consumer. Examples of this include to-go containers that many use to take home leftovers or to pick up food-orders. This also applies to polystyrene foam plates and cups. Although food vendors must not use polystyrene foam, the bill also states that a person may not sell, offer for sale or distribute in or into the state polystyrene foam containers or polystyrene foam packaging peanuts. Also, a person may not sell, offer for sale or distribute in or into the state a foodware container containing intentionally-added PFAS. The Oregon DEQ noted that businesses with existing inventory of the examples above may not use or sell the material after 1 January 2025.

05-Feb-2025

LONDON (ICIS)–Senior editor, recycling Matt Tudball talks to Helen McGeough, global recycling analytics team lead about some of the key topics that will be discussed at the upcoming ICIS PET Value Chain Conference on 6-7 March in Amsterdam. Topics include: Improving the supply chain for recycled PET Getting access to good-quality feedstocks Deposit return schemes (DRS) growing in Europe Impact of high feedstocks on R-PET prices Spreads between virgin PET and R-PET

05-Feb-2025

SAO PAULO (ICIS)–Brazil's chemical industry posted a $48.7 billion trade deficit in 2024 as imports surged to $63.9 billion, driven by “predatory pricing” from US and Asian suppliers, the country’s chemicals trade group Abiquim said. Asian suppliers, moreover, benefited from discounted Russian raw materials and, in China’s case, from heavy subsidies from the state, the trade group added. The overall deficit, while substantial, remained below the 2022 record of $63 billion, though Abiquim noted this was primarily due what it described as “predatory import pricing” which cushioned the “real imbalance” in the trade balance." Import volumes rose 11.5% to 65.3 million tonnes of chemicals, with fertilizer intermediates accounting for 41.1 million tonnes, up 7.4% from 2023. This marked the highest import volume since records began in 1989, as Asian suppliers leveraged cheaper Russian materials amid the war in Ukraine. Abiquim’s CEO said 2024 had been challenging for Brazil’s chemicals producers, although the year was also marked by the higher import tariffs approved for 30 chemical products, which gave the sector a boost in November and December, said Andre Passos. Following October's tariff implementation, domestic production rose 6.35% in the final two months, he added. The trade group’s CEO said higher tariffs were a welcome step but much more needed to be done to protect Brazil’s chemicals producers’ operations and their transition to the green economy. “We know that this [higher tariffs] is just the first step and it is essential to keep facing up to the extremely adverse international scenario, with excess production capacity for chemical products in the world and heavy subsidy programs in the world’s main chemical producers,” said Passos. “We are crossing the gateway to the low-carbon economy and the chemical industry is ready to lead this transition. Low-carbon chemistry is related to the use of technologies that reduce or neutralize greenhouse gas emissions. “Renewable chemistry, carbon capture and storage, and chemical recycling are some examples of this leadership that can be exercised by the Brazilian chemical industry,” he concluded. ASIA DOMINATES Asian suppliers, excluding the Middle East, dominated imports with a 31% share worth $19.6 billion, creating an $18 billion regional trade gap. The deficit with Asia has steadily worsened from $10bn in 2020 to $16.2bn in 2023, said Abiquim, reflecting China’s overcapacities and the country’s switch from net importer to next exporter for most chemicals. Domestic manufacturers faced increased competition across all segments, with imports of resins and elastomers jumping 32.4%, organic chemicals 14.3%, inorganics 9.1%, and other industrial chemicals 9.3%. Import prices averaged 6.3% lower than 2023, leading to domestic plant closures, said Abiquim. Brazilian chemical exports rose 4.3% to $15.2 billion, though volumes dipped 0.2%. The sector maintained its position as the country's third-largest manufacturing exporter, behind food products at $66.5 billion and base metals at $23.2 billion, said Abiquim.

05-Feb-2025

MUMBAI (ICIS)–India’s Supreme Petrochem Ltd (SPL) expects to commission the first phase of its 70,000 tonne/year acrylonitrile butadiene styrene (ABS) plant in Nagothane in April-June, a company source said on Wednesday. Another 70,000 tonne/year ABS unit will be added at the site in the western Maharashtra state, in the second phase of the project, the source said. SPL expects the two phases to cost Indian rupees (Rs) 8.5 billion ($98 million), when the project was announced in 2023. “Mechanical completion of the first phase of our mass ABS project is expected by end of March 2025 and commissioning is scheduled for the first quarter of financial year 2025-26,” the source said. The company’s fiscal year begins in April. “There is an available market for domestically manufactured product,” the source said, citing that “nearly over 50% of the country’s ABS requirement or around 140,000 tonnes, is currently being imported”. Separately, the company plans to invest Rs8 billion to build a greenfield petrochemical complex at Karnal in the northern Haryana state. It plans to build a 100,000 tonne/year polystyrene (PS) unit and a 50,000 tonne/year expandable PS (EPS) unit, along with downstream products such as including 3D panels, PS sheeting, extruded PS, among others. “Pre-project activities for that site are going on right now,” the source said. “The new projects will meet increased demand for PS and EPS in domestic and export markets in the years ahead,” he added. SPL can produce more than 300,000 tonnes/year of PS; 118,000 tonnes/year of EPS and other downstream products at its two facilities at Nagothane in Maharashtra; and Manali in the southern Tamil Nadu state, according to the company’s website. ($1 = Rs87.13)

05-Feb-2025

SINGAPORE (ICIS)–Asahi Kasei's net income surged by 68.1% year on year in the nine months to December 2024, supported by improved petrochemical prices and lower fixed costs, the Japanese chemicals major said on Wednesday. in Japanese yen (Y) billions Apr-Dec 2024 Apr-Dec 2023 % Change Sales 2,259.3 2,064.1 9.5 Operating income 164.4 98.5 66.9 EBITDA 299.8 233.4 28.4 Net income 98.5 58.6 68.1 Basic Materials (Core Petrochemicals) Business in Japanese yen (Y) billions Apr-Dec 2024 Apr-Dec 2023 % Change Sales 241.7 219.2 10.3 Operating income 12 -8.4  – The company's basic materials unit swung to an operating profit of Y12 billion ($78.2 millon) in April-December 2024 on the back of higher sales revenues, the company said in a statement. Asahi Kasei has revised its year to March 2025 forecasts for sales and operating income reflect an seasonal dip in demand and increased fixed costs in the final quarter of the fiscal year. Overall sales are now expected to reach Y3.04 trillion, a 9.3% increase from the previous fiscal year. However, this new projection represents a 0.9% decrease from the company's November estimate. Full-year operating income is now projected to reach Y200 billion, up 42.1% from actual 2023 figures, and up by 2.6% from the company’s previous forecast. Asahi Kasei expects its net income for the full year to surge to ¥110 billion, more than double the ¥43.8 billion recorded in the previous fiscal year. The company aims continue to "advance its business portfolio transformation; accelerating studies on structural transformation of petrochemical chain-related businesses centered on basic materials while advancing investment in growth businesses", it added. In January this year, Asahi Kasei ceased operations at its Thailand-based joint venture PTT Asahi Chemical. ($1 = Y153.43) Thumbnail image: At a port in Tokyo, Japan 9 December 2024. (FRANCK ROBICHON/EPA-EFE/Shutterstock)

05-Feb-2025

LONDON (ICIS)–The ICIS Dutch TTF near-curve market fell on Tuesday morning, which traders in part attributed to China’s intention to introduce a 15% tariff on US LNG from 10 February. While any reduction in US LNG to China due to the tariffs could in theory mean more LNG to Europe, traders recognized the overall market impact may be limited. “China’s LNG imports from the US are already quite low – but as long as tariffs are in place China won’t import from the US, especially with the TTF already so high,” said one trader. A second trader said that the development was bearish for European gas markets in the short term, while other traders also noted minimal impact due to the current intake of US LNG into China. Large Chinese LNG buyers have over 20mtpa in new long-term contracts from the US due to start in the next few years. But right now, much US LNG to China is sold on a spot basis – with China only accounting for 5% of total US LNG exports in 2024, according to ICIS data. Two or three US cargoes have been delivered to China each month between November-December 2024, according to ICIS data. Europe and the UK – excluding Turkey – took in 49% of US LNG in 2024 in comparison, due to more favorable market pricing. LEARNING FROM HISTORY In 2018 and 2019 China imposed tariffs on US LNG: 10% to start, before rising to 25%. It came as US LNG was ramping up quickly, with production doubling over 2019. ICIS data shows some reduction in US LNG to China on a 10% tariff and then a complete stop under a 25% tariff. This time the proposed tariff is put at 15%. A range of sellers supply US cargoes into Chinese terminals. While adding 15% to the cost of buying a US contractual cargo of LNG for delivery into China may still allow for a reasonable seller margin – especially if sold on a spot basis – the destination-free nature of US LNG offtake means cargoes can relatively easily be shipped instead to other markets. Chinese LNG buyers themselves are increasingly developing positions in Europe and trading the TTF, for example. Large sellers may be able to optimize and draw on other supply source to cover positions into China to avoid the tariff. Australia and Qatar are much larger LNG suppliers than the US to China currently, with large volumes sold under term contracts, but perhaps limited flexibility to ramp up additional sales if needed. The tariffs come with Chinese LNG demand down by 25% year on year in January and no immediate urgency to pull in additional spot volumes. However, ICIS forecasts a 6% rise in China’s 2025 LNG imports from 2024, supported by the government’s stimulus plan which already took the potential impact of US tariffs into account. Summer demand could be strong on higher temperatures lifting gas demand for power generation. A desire not to import from the US would cause a headache for Chinese LNG importers if they need to ramp up demand at short notice. Global LNG production is expected to rise by 16.3 million tonnes in 2025 due to the addition of new US and Canadian LNG. The market will closely follow the expected dialogue between Trump and Chinese President Xi Jinping later this week.

04-Feb-2025

SAO PAULO (ICIS)–Brazilian chemicals producer Unigel has concluded its debt restructuring process worth Brazilian reais (R) 5.1 billion ($885 million) after a Sao Paulo business court greenlit the plans drawn up by creditors. Unigel said it would be able to deleverage its debts by around 50% with the restructuring process’ conversion of R5.1 billion of existing debt into new financial instruments. The restructuring puts an end to the decades-long private ownership of Unigel in the hands of its founder, 88-year-old Henri Armand Szlezynger. “The execution of the RE [restructuring] Plan marks a pivotal transition in Unigel’s governance framework, with Option A [main] Creditors now holding a 50% stake in the company’s equity structure,” said Unigel. The new majority owners headhunted for the CEO position the Brazilian executive Dario Gaeta, with decades of experience at industrial and agricultural companies. Up to 2024, he was chief operating officer at ethanol producer Atvos and, prior to that, he was the CEO at Tiete Agroindustrial, another company in the sugar and ethanol sector, according to Gaeta’s LinkedIn profile. Former CEO Roberto Noronha has been demoted to board member, and the vice president who has overseen the restructuring, Daniel Zilberknop, an old name in Unigel, has been appointed chairman of the board. Unigel’s new board composition Position Name Representative Chairman of the Board Daniel Zilberknop Independent CEO Dario Gaeta Not provided Board Member Marc Buckingham Szlezynger Cigel Board Member Roberto Noronha Santos Cigel Board Member Pedro Wongtschowski Cigel Board Member Fabio de Barros Pinheiro Creditors Board Member Kofi William Bentsi-Enchill Creditors Board Member Gregorio Mario Charnas Creditors The restructuring plan also signals an exit from the fertilizers sector, as already outlined at the beginning of the restructuring process by creditors. High prices for natural gas – fertilizers’ main feedstock – was the main cause for that part of the business to start faltering, dragging the rest behind it in the end. Some plants which were leased to Unigel by Brazil’s state-owned energy major Petrobras are reportedly on course to return under Petrobras’ umbrella, even if Unigel may continue operating them. Unigel, then, is to remain mostly what it was before it ventured into fertilizers and was caught up in a major sector downturn. The company mostly produces styrenics and acrylics. For products and capacities, see bottom table. SULPHURIC ACID PLANTEarlier in January, Unigel presented plans to finish construction of its sulphuric acid plant in the state of Bahia, which had been paused as the company's financial woes increased. Unigel said it would invest $36.8 million to finish up the plant in Camacari, aiming to start it up by September. Production capacities were not disclosed. When fully functioning, the plant will allow Unigel to reduce its acid purchases in the open market. Acid is a key chemical used in many other chemical and industrial processes. Jonathan Szwarc, head of Latin America credit research at data firm specializing in leveraged capital markets Debtwire, who covered Unigel in the past, said by reducing its dependency on imports the sulphuric acid plant was a sound project from which Unigel’s could start building up its recovery. “The numbers for that project are sound. From my time covering Unigel, I remember the return on investment was expected to be very healthy: in up to four years, the company expects to have paid off the investment, such are the large amounts of acid it has to purchase in the open market,” said Szwarc. Earlier this month, Unigel also presented, for the first time in several quarters, a financial forecast for earnings before interest, taxes, depreciation, and amortization (EBITDA) up to 2030. The company has not published any financial results since 2023, a provision contemplated under Brazilian corporate law for companies in financial distress. For 2025, Unigel said it expected upsides coming from a 5% increase in Brazil’s styrene import tariff ($4 million positive contribution) and a higher rate in the REIQ tax benefit system for chemicals companies ($14 million). According to Unigel, its EBITDA could rise to $182 million by 2030. Unigel forecasts 2025 2026 2027 2028 2029 2030 EBITDA (in $ million) 49 142 164 176 173 182 Whether Unigel’s medium-term forecasts are realized remains to the seen, as it ultimately is a company in very deep financial distress for the past year and a half, operating in a market – petrochemicals – which is going through one of the longest sector’s downturns. “2030 is indeed quite a long forecast on this occasion. But, of course, for a judge to approve your restructuring plan you must present some sort of credible plan: detailed forecasts on financials, on spreads, on production…” said Szwarc. “Whether those forecasts end up realized, that’s another matter. But as we say in this world – an Excel [spreadsheet] can withstand almost anything,” he concluded, ironically. ($1 = R5.76) Additional information by Yashas Mudumbai Focus article by Jonathan Lopez 

04-Feb-2025

BARCELONA (ICIS)–As US president Donald Trump revives his trade war, business leaders may seek certainty by switching to local and regional supply chains. Businesses need stability, certainty to make investment decisions Trade war could drive more national/regional industrial and chemical supply chains But reshoring can be very expensive and time-consuming New technologies such as 3-D printing and AI support local production Export-dependent US chemicals have a lot to lose from a trade war US exported more than 10 million tonnes of polyethylene (PE) to Europe in 2023 In this Think Tank podcast, Will Beacham interviews Nigel Davis from the ICIS market development team and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson's ICIS blogs.

04-Feb-2025

UPDATE: China retaliates with 15% tariff on US LNG SINGAPORE (ICIS)–China has announced a 15% tariff to be imposed on coal and LNG imports from the United States as a retaliation to US trade tariffs, the country’s Ministry of Commerce said in a statement. “In accordance with the Tariff Law of the People’s Republic of China, the Customs Law of the People’s Republic of China, the Foreign Trade Law of the People’s Republic of China and other laws and regulations and the basic principles of international law, and with the approval of the State Council, additional tariffs will be imposed on some imported goods originating from the United States starting from 10 February 2025.” A 10% tariff will also be imposed on crude oil, agricultural machinery, and a score of other products. US president Donald Trump and Chinese President Xi Jinping are expected to talk this week on trade and other issues. The US has imposed 10% tariffs on Chinese goods starting 4 February. “This will drive even more US volumes into Europe, and leave portfolio players with suboptimal logistical flows,” said Saul Kavonic, oil and gas analyst with research firm MST Marquee. “Chinese buyers will pay the tariffs, so will be trying to minimize the US volumes they take contractually, and swap that out for non-US volumes. This benefits other regional producers such as Australia, who will be seen as relatively more reliable after this. “The negative impact on US LNG from these tariffs will only partly offset the strong appetite from other buyers to procure more US LNG under pressure from Trump to rebalance trade deficits. The tariffs will create material market inefficiencies, which will benefit some LNG traders in the regions. It may push prices higher everywhere on the margin, as flows become suboptimal.” CHINA IMPORTS China imported 4.4 million tonnes of LNG from the United States in 2024, ICIS data shows, out of a total of 79.24 million tonnes. If the tariff is enforced and stays beyond the upcoming negotiations expected this week between US President Donald Trump and Chinese President Xi Jinping, importers could optimize the US-based positions by diverting them elsewhere. However, the imposition of tariffs on energy by the Chinese government fundamentally means higher energy costs for the country, which increases the cost of industrial production and inflationary pressure. The growing tensions in the commercial relationship between the countries could also equate to reluctance by Chinese buyers to commit to new long-term positions with US-based suppliers. Political tensions with the US could turn Chinese buyers to alternative sources of LNG and pipeline gas, including Russia. The move is the latest in a series of tariff exchanges that so far have involved Canada and Mexico in addition to China. The market anticipates that the next wave of tariffs could target members of the European Union. EU states are unlikely to impose retaliatory tariffs on imported energy, as the cost of gas is already growing following the halt of Russian pipeline gas supplies to the region. Roman Kazmin

04-Feb-2025

MUMBAI (ICIS)–India is set to roll out a 20% ethanol-blended (E20) fuel mandate by March – about nine months ahead of schedule – as there will be enough availability of the environment-friendly additive in the domestic market without endangering sugar production. 2.5% price hike for C-heavy molasses to deter feedstock diversion away from sugar Rice feedstock prices reduced to boost production Auto companies to soon launch 100% ethanol vehicles For the year ending October 2025, the Indian government has approved on 29 January a 2.5% hike in the procurement price of ethanol made from C-heavy molasses, which contain the least sugar among three types of available sugarcane feedstock. India’s ethanol supply year (ESY) is from November to October. The price adjustment acts as an incentive for producers to use the C-heavy feedstock to make ethanol, instead of the A and B molasses that typically go into sugar production. Domestic oil manufacturing companies (OMC) such as Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) will now have to pay a higher price for ethanol made from C-heavy molasses. The government-determined ethanol price was last revised in November 2022. Meanwhile, to further encourage ethanol production, the government on17 January 2025 reduced the price of rice feedstock by more than 24% to Rs22.50/kilogram (kg) amid a surplus. Rice and maize are alternative feedstocks for ethanol production. This decision has helped to make ethanol produced from rice feedstock more economically viable, Grain Ethanol Manufacturers Association (GEMA) treasurer Abhinav Singal said. The government had banned the use of rice as feedstock for ethanol production from July 2023 to August 2024. Notwithstanding the lifting of the ban, ethanol producers were still finding rice prices too high to make production economically viable. “Stability in feed prices will boost ethanol production from rice. The earlier rate was unviable for the units,” Singal said. Nearly 65% of the ethanol produced in the country is sourced from sugarcane while the remaining 35% comes from grains, including maize and rice. India will achieve 20% blending of ethanol in gasoline in the next two months and will soon be able to blend more than 20% ethanol in gasoline if the need arises, India’s petroleum and natural gas minister Hardeep Singh Puri said at the Auto Expo 2025 on 21 January. In 2023-24, there was a phased roll-out of 20% ethanol in select outlets across the country, with full implementation initially targeted by 2030. The target full implementation was brought forward to 2025-26 as ethanol availability is now assured following a series of measures taken over the past two years, industry sources said. “We have increased ethanol blending in fuel from 1.5% per cent in 2014 to 10% in May 2022, which was well ahead of the November 2022 deadline and now the target of 20% blending has also moved forward significantly,” he added. “Our current distillation capacity, which is at about 16.83 billion litres, is projected to cross 17 billion litres, and will leave us with ample opportunity to blend beyond 20%,” he added. India achieved ethanol blending of 18.2% in gasoline in December 2024, official data show. The government is currently working on a plan to bring down retail prices of ethanol for use as fuel in vehicles with flexible fuel engines, India’s road transport and highways minister Nitin Gadkari said at the Sugar-Ethanol and Bio Energy India Conference on 30 January. Around nine companies in India will soon be launching cars and two-wheelers that run on 100% ethanol, he added. Major automobile manufacturers, including Mahindra & Mahindra, Toyota, Hyundai, and Tata, will introduce 100% ethanol-powered vehicles over the next five months, with two-wheeler makers also adopting the technology, he said. Focus article by Priya Jestin ($1 = Rs87.08)

04-Feb-2025