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Lower storage targets to apply for 2025, MEP confirms These may be enacted in July, if negotiators can agree a compromise by the end of June Next round of talks set for 3 June BRUSSELS (ICIS)–Revisions to Europe’s gas storage targets will apply to 2025 once agreed, with talks likely to wrap up quickly, a MEP involved in the negotiations confirmed to ICIS on 14 May. Jens Geier, who represents the European Parliament’s centre-left Socialist & Democratic group in compromise negotiations to agree the final law, told ICIS the intention was to implement the rules for the current gas storage filling season. Speaking at a policy debate on affordable energy convened by Energy Traders Europe in Brussels, Geier said the majority of lawmakers agreed on a need to avoid sending market signals about when to buy gas. “You don’t have to be a socialist to believe that when Germany has to buy, it has to fill up [stocks by two more percentage points] for the first of August, it’s an invitation to raise prices,” Geier said, talking about speculation over changing filling targets. ICIS assessments have shown a correlation between agreement in each step of the revision process and the spreads between the Dutch TTF Q3 '25 and front-winter contracts. The discount averaged €0.548/MWh below Winter ’25 between 9-23 April, correlating with details of the Council position. The discount then widened to €0.955/MWh from 24 April-7 May, after the ITRE committee vote suggested a speedy resolution to negotiations. This is in stark contrast with the first three months of 2025, when the Dutch TTF Q3 ’25 held an average premium of €2.769 over Winter ’25. TRILOGUE TALKS A delegation from the Parliament began so-called trilogue negotiations on 13 May, with EU countries, represented by the Council of the EU, and with the European Commission also attending. The talks aim to find a compromise between positions adopted by the Council and the Parliament. Geier said the first round of discussions went well and that co-legislators were like-minded about not needing the “harsh regulation” of 90% filling targets. “We can believe in the traders that they will provide security of supply,” Geier said, calling for trust in the market backed by penalties if it failed to deliver. Geier told the panel he thought a maximum of two more rounds of talks at political level would be needed to agree a deal, saying most of the work would be done at technical level. He also said he hoped the deal could be concluded before Poland’s Council presidency concludes in June, telling ICIS he hoped the final deal could be endorsed by the full parliament in July. An EU source confirmed the next discussions would take place on 3 June, after a very positive first round.

14-May-2025

SAO PAULO (ICIS)–Brazilian President Luiz Inacio Lula da Silva had already got several investment deals in the bag midway through his five-day state visit to China – among others, Envision Group has committed $1.0 billion in Latin America’s largest economy to produce sugar-based sustainable aviation fuel (SAF). Green hydrogen, ammonia also within Envision plans for its ‘Net-Zero Industrial Park Energy production, energy storage on focus in Brazil, China firms talks, deals China’s insatiable hunger for grain sees Brazil as the counterweight to US supply SAF: LARGE SCALEWhile Envision Group’s announcement did not disclose any financial details about its Brazilian SAF plans, Brazil’s Planalto Presidential Palace press services said in a separate statement the firm’s investment would stand at around $1.0 billion. The announcement came soon after Lula met Envision’s management in Beijing. “Envision will develop Latin America's first Net-Zero Industrial Park in Brazil. Anchored by the production of SAF, the park will establish a complete green fuel value chain while advancing the development of green hydrogen and green ammonia,” said the company. “We will build Latin America’s first Net Zero Industrial Park in Brazil, creating a green ecosystem centered on SAF, green hydrogen, green ammonia, and renewable energy systems,” said Envision on a post on social media network LinkedIn. “By leveraging Brazil’s abundant renewable resources to drive sustainable growth and continuously innovating to lower the cost of green fuels, this collaboration [is to] contribute positively to Brazil's green transition and reindustrialization.” IT’S ALL (MOSTLY) ABOUT ENERGY The Brazilian president is due to meet “several companies” this week while in his visit to China, eyeing not only investments in Brazil but also partnerships with Brazilian institutions and the creation of research centers. The main objective for the latter would be to generate “technological development” in the energy sector, said the cabinet’s chief of staff, Rui Costa, who is travelling with the President. According to the Brazilian government, agreements with Chinese companies will involve projects in renewable energy – wind and solar energy but also some hybrid projects which will focus primarily on energy storage in Brazilian territory. “Brazil is one of the countries that has invested the most in wind and solar energy, but today it lacks the ability to store this energy,” said Costa. Apart from Envision, CGN Power also said it would invest Brazilian reais (R) 3.0 billion ($535 million) in a wind, solar, and energy storage hub. Lula also met the chairmen of automotive group GAC and the chairman of Windey Energy Technology Group. Within automotive, electric vehicles (EVs) major Great Motor Wall (GMW) said it would invest R6.0 billion in car manufacturing facilities in Brazil. Finally, another deal to highlight would be China’s semiconductor company Longsys commitment to invest R650 million to expand capacity at its Brazilian subsidiary Zilia, potentially helping avoid US tariffs on China-made chips. Meanwhile, Lula also found time in his first two days of state visit to meet with the CEO of Norinco, a conglomerate in the defense sector but whose reach expands also to infrastructure projects such highways, railways, hydroelectric plants, and water treatment plants. On May 13, Lula and China’s President Xi Jinping also had a one-on-one, although the pair had already met a few days earlier in Moscow. RELENTLESS GROWTH IN BILATERAL TRADE According to figures by the Brazilian cabinet, China has since 2009 been Brazil’s largest trading partner. Bilateral trade stood in 2023 at $157.5 billion, with Brazil exporting to China goods worth $104.3 billion and importing goods worth $53.1 billion from China. The growth in bilateral trade continued up to the first quarter of this year. According to the same information by Brazil’s cabinet, between January and March trade between Brazil and China stood at $38.8 billion – Brazil exported $19.8 billion and imported $19 billion. Among the main products exported by Brazil are crude petroleum oils, soybeans, and iron ore and concentrates. Brazil, in turn, mainly imports from China vessels, telecommunications equipment, electrical machinery and appliances, valves and thermionic tubes (valves). MOSCOW STOPOVER CRITICISMBefore landing in China over the weekend, Lula had visited Russia and took part on 10 May in Moscow’s Red Square military parade in which the country remembers the victory of the Soviet Union against Germany. Lula defended his presence in Red Square and argued that did not disqualify him as a potential peace mediator between Russia and Ukraine, the latter suffering a full-scale invasion by the former since 2022. Lula has always sought to develop Brazil’s soft power influence and as a global mediator. Since Russia invaded Ukraine in 2022, however, he has at times stated that Moscow and Kyiv bear equal responsibility for the war, calling them both to settle their differences through dialogue. Front page picture: Lula (left) meeting with Chinese officials in Beijing  Picture source: Brazil's Planalto presidential palace press services Insight by Jonathan Lopez ($1=R5.61)

14-May-2025

BANGKOK (ICIS)–Tough times lie ahead for the Asia’s petrochemical industry amid continued oversupply and a global economic downturn because of US tariffs, but a pivot to sustainable products can help. US-China trade war threatens industries Oversupply, weak demand signal prolonged downturn; plant closures loom Energy transition offers feedstock opportunities Global megatrends, including geopolitics, energy transition, and sustainability are fundamentally reshaping petrochemical demand patterns and the entire industry. The US-China trade war de-escalated this week as both sides agreed to bring down tariffs on each other significantly by 14 May. An all-out trade war between the US and China, the world’s two-biggest economies, could trigger a global recession. There is also a possibility that amid high trade tensions with the US, China could flood the global market with excess products, which may prompt building of trade barriers by other countries After striking an initial agreement to bring down tariffs from more than 100%, the US and China are expected to continue with trade negotiations. In the meantime, uncertainty is dominating markets, leading to soft demand. DIFFICULTIES The petrochemical industry is facing significant challenges, including oversupply, cost volatility, and regulatory shifts, ICIS Chemical Analytics vice president Alexander Lidback said. Amid persistently low demand, firms are shutting plants around the world, notably in Europe, and without significant shutdowns, polyolefin oversupply could persist into the mid-2030s, forcing companies into survival mode. The industry will need to "go through worse to get better", with 2027/2028 being a potential turning point for survival, Lidback said. China's increased capacity, which was "underestimated", is also a contributing factor to oversupply, and global polyolefins capacity significantly exceeds demand currently, ICIS senior consultant John Richardson said. Adaptation through plastics circularity and innovation could be a way for companies to survive, although this also presents its own difficulties, said Bala Ramani, director of sustainability consulting and Asia strategy advisor at ICIS. All three will be speaking at the Asia Petrochemical Industry Conference (APIC) in Bangkok, Thailand on 15-16 May, discussing market challenges and opportunities in the sector. The theme for APIC 2025 is "Ensuring a Transformed World Prosperity”, with a particular focus on “Action for Planet with Innovation and Collaboration”. CIRCULARITY There is a need amid the current demand downturn to adapt to the changing landscape -one of which is by exploring plastics circularity and alternative feedstocks. Sustainable polyolefins present as “interesting opportunity”, especially for integrated polyolefins producers to leverage existing assets for driving incremental value, Ramani said. “By embracing a multi-faceted production model, the polyolefins industry can reduce its environmental footprint, meet evolving regulatory demands, and unlock new value streams in a resource-constrained world,” said Ramani. The path towards circularity sustainability for polyolefins involves several approaches: mechanical recycling, circular polyolefins derived from pyrolysis oil, and bio-circular polyolefins derived from bio-naphtha or other hydrogenated bio-derived oil. Pyrolysis is expected to become a complementary solution alongside mechanical recycling in tackling plastic pollution. In turn, polyolefins producers can maximize the value of pyrolysis oil integration by strategically aligning feedstock procurement, technology, and processing configurations, Ramani said. Europe leads with robust regulations and collaboration, eyeing over 13 million tonnes of sustainable polyolefins by 2040. Asia, however, lags, stymied by fragmented policies despite interest for sustainable polyolefins from markets such as India, Japan and South Korea. “In Asia, early adoption by a few markets and global brands, combined with evolving yet fragmented policies, is building momentum and opportunities, with future growth hinging on regulatory alignment and infrastructure development,” Ramani said. Regulatory fragmentation among Asian countries compared with EU regulatory mandates makes sustainable polyolefins market tricky to scale. South Korea and Japan are paving the way for sustainable polyolefins demand, although Asian investments are likely to target developed markets such as the EU, before pivoting to local and regional markets in the long term. Were EU recycled content targets to be adopted in Asia, the region could unlock over 18 million tonnes of sustainable polyolefins demand by 2040. But while alternative feedstocks and sustainable polyolefins offer opportunities for producers, their widespread adoption faces other hurdles including regulatory uncertainty, high costs, technology scalability and insufficient waste infrastructure. “Amid ongoing industry challenges, sustainable polyolefins are set to drive resilience through resource efficiency, regulatory compliance, and new value creation enabled by circular production models,” Ramani said. Insight article by Jonathan Yee Click here to view the ICIS Recycled Plastics Focus topic page.  Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: Panorama from Golden Mount, skyline of Bangkok, Thailand, (By Walter G Allgöwer/imageBROKER/Shutterstock)

14-May-2025

Italian TSO Terna has likely been curtailing solar generation on sunny days with low demand according to traders and publicly available data Market participants told ICIS that curtailments could be bullish for Italian gas and power prices Curtailments aim to safeguard grid stability and could indicate Terna taking cautious approach following Iberian blackout in April LONDON (ICIS)–Several market participants told ICIS that recent curtailments of Italian solar output by the national transmission system operator (TSO) Terna could have a bullish impact on power prices by replacing cheap renewable generation with more expensive gas-fired output. “The Italian TSO has likely been curtailing solar generation, as the forecasts don’t match up with the actual generation levels, especially on festive days with low demand,” a trader told ICIS. A second trader added that the effect would be “decidedly bullish on power and gas". BEAR OR BULL? Italian solar curtailments are indicative of grid oversupply, which is potentially a bearish indicator for power prices. On 1 May, amid the Labor Day national holiday, low demand and sunny weather, pressures Italian electricity prices to zero or near-zero for seven consecutive hours (11:00-17:00) across all zones. Italian load peaked at 27.7GW on 1 May, some 9.3GW below the peak load average for the month of May so far. The combination of low demand and strong solar led to actual solar generation, as reported by Terna, falling behind ENTSO-E’s Day-ahead forecast for 1 May, a discrepancy which could indicate curtailments. Despite being an indicator of oversupply, according to ICIS Italian power analyst Luca Urbanucci, the impact of the curtailments is ultimately bullish. “If Terna is curtailing solar generation more, this means that low-cost renewable generation is being replaced by something more expensive, like gas”, said Urbanucci. A third trader agreed with this view, claiming that “the impact will be more bullish than bearish”. Perhaps in anticipation of increased prospects of solar curtailments, on 27 March the Italian regulator Arera issued Resolution 128/2025/R/EFR to compensate solar producers for curtailed energy, extending a mechanism that previously applied only to wind power. GRID SECURITY The first trader told ICIS that curtailments were “probably made because Terna is having difficulties balancing the grid”. The first trader also explained Terna’s curtailments could be due to safety reasons. "Curtailments are made in order to have more gas-fired power plants running, so that if solar generation should suddenly and unexpectedly drop due to a passing cloud, gas-fired generation can be quickly ramped up and offset the loss,” the same trader said. A second Italian power analyst noted that “we are also witnessing unplanned import reductions made likewise with the goal of leaving more space for Italian CCGTs”. Keeping additional combined-cycle gas turbines (CCGTs) online could provide both additional grid inertia and ramping capability for the Italian grid. The second trader suggested that the curtailments might be linked to the Italian TSO taking a more cautious approach after the major Iberian blackout on 28 April. However, ICIS's Urbanucci was skeptical regarding any recent change in Terna’s approach, stating that he did not believe that “Terna’s recent behavior has been particularly influenced by what happened in Spain.” “The Italian TSO has always been quite conservative in avoiding risks of overloading the grid,” said Urbanucci. In April, Italian solar generation was 15.7% higher than in April 2024. Terna did not reply to questions from ICIS by the time of publishing.

14-May-2025

TORONTO (ICIS)–The government of Canada’s oil-rich Alberta is freezing the province's industrial carbon price at Canadian dollar (C$) 95/tonne ($68/tonne). The decision to freeze the price indefinitely was in response to the US tariffs, which were increasing costs, disrupting supply chains and creating uncertainty for industry, making it challenging to operate efficiently and stay globally competitive, the government said. The freeze would provide certainty and economic relief to companies in oil and gas, electricity, petrochemical, manufacturing, cement, pulp and paper, mining, and forestry, Premier (Governor) Danielle Smith and environment minister Rebecca Schulz said in a webcast press conference on Monday. Smith said that Canada could not get too far ahead of the US in terms of climate policies, otherwise “billions of dollars of investments” would go to the US, instead of Canada. Schulz added that a price above C$100/tonne would make Alberta “wildly uncompetitive.” The price had been scheduled to rise to C$110/tonne in 2026 and continue increasing to C$170/tonne by 2030 – in line with Canada’s federal industrial carbon pricing system, which sets minimum standards. Smith and Schulz said that the government would talk to companies that have been making investments in Alberta, based on industrial carbon pricing. Schulz added that she had already reached out to Dow, NOVA Chemicals and others to “signal” the government’s new direction, given that “it is a very different time that we are in right now.” “It is unfair to artificially increase a carbon tax to benefit a small amount of projects and then leave the entire rest of industry in a position where they are uncompetitive,” she said. “We can’t make the entirety of industry uncompetitive to save one specific project,” she added. Dow announced last month that it is delaying its flagship Canada Path2Zero net zero carbon cracker and downstream polyethylene (PE) project at Fort Saskatchewan, Alberta, until market conditions improve and would not likely revisit it until the end of this year. Trade group Chemistry Industry Association of Canada (CIAC) supports industrial carbon pricing as a tool to encourage companies to reduce emissions in a cost-effective way. However, the trade group has suggested that in light of the ongoing trade and tariff tensions, Canada may want to review its industrial carbon pricing rules. In related news, Alberta's neighboring Saskatchewan province paused its industrial pricing system, effective 1 April. ($1 = C$1.40) Additional reporting by Joseph Chang Please also visit US tariffs, policy – impact on chemicals and energy Thumbnail photo source: Dow

13-May-2025

SINGAPORE (ICIS)–Japanese automaker Nissan Motor Corp announced on Tuesday a slate of new cost-saving measures, including job cuts of 11,000, after swinging to a net loss of yen (Y) 670.9 billion ($4.5 billion) in the fiscal year ending 31 March 2025. in Japanese yen (Y) billion 1 April 2024-31 March 2025 (FY 2024) 1 April 2023-31 March 2024 (FY 2023) % Change Net Revenue 12,633.20 12,685.70 -0.4 Operating Profit 69.8 568.7 -87.7 Net Income -670.9 426.6 Global sales stood at 3.346 million units, impacted by intensified sales competition. The latest results come after the collapse of multi-billion-dollar merger talks with rival Honda in February 2025 and follows a November 2024 announcement of 9,000 job cuts. The latest reductions will bring the total job losses at Japan's third-largest carmaker to around 20,000 in the last fiscal year. Nissan also plans to streamline its production by reducing its global plant count from 17 to 10 by 2027. Petrochemicals make up roughly a third of an average vehicle's raw material costs. The automotive industry is a crucial driver of demand for chemicals such as polypropylene (PP), nylon, polystyrene (PS), and styrene butadiene rubber (SBR). Nissan said that it expects business to "continue be challenging with intense competition, forex and inflationary pressure". "Yet, our efforts related [to] U.S. Tariff policy under our mitigation strategy, we are prioritizing US-built products, optimizing local capacity, reallocating tariff-exposed production, and working closely with suppliers to localize and adapt swiftly to market demands," the company said. "Given the uncertainty related to tariff environment, the guidance for operating profit, net income and auto free cash flow for the fiscal year are currently to be determined," it added. ($1 = Y147.9)

13-May-2025

MUMBAI (ICIS)–India has proposed to impose counter duties on select products from the US in response to American tariffs on steel and aluminium, the South Asian nation said in a notice to the World Trade Organization (WTO) on 12 May. The US's tariffs on steel and aluminium were introduced as safeguard measures on 12 March 2025. India reserves the right to suspend concessions or other obligations that are substantially equivalent to the adverse effects of the measure to India's trade, India said in its statement to the WTO. “The proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the United States,” it added. “The US safeguard measures would affect $7.6 billion imports into the US of the relevant products originating in India, on which the duty collection would be $1.91 billion,” the notice said. In April, India had sought consultations with the US under the WTO's safeguard agreement, following the US decision to impose these tariffs. On the request for consultation, the US informed the global trade body that its decision was based on national security grounds and should not be considered as safeguard measures. The US first implemented safeguard measures on imports of certain steel and aluminium products in March 2018. It imposed ad valorem tariffs of 25% and 10% respectively. This was extended in January 2020. It was revised again in February 2025 for an unlimited duration and was raised to 25%. In response, India in June 2019 imposed duties on 28 US products, including almonds, walnuts, phosphoric acid, and iron and steel products among others. The proposal assumes significance as both countries are negotiating a bilateral trade agreement (BTA) with an Indian official team expected to visit the US this month for trade talks. The BTA seeks to more than double bilateral trade between the two countries to $500 billion by 2030. Total goods trade between the two countries stood at around $129.2 billion in calendar year 2024, as per official data. Visit the US tariffs, policy – impact on chemicals and energy topic page for the latest update on the US-China 90-day pause with significantly reduced tariffs while negotiations take place.

13-May-2025

SINGAPORE (ICIS)–Asian chemical shares were mostly higher on Tuesday, after the US and China agreed to significantly reduce tariffs on each other for 90 days. At 01:30 GMT on Tuesday, Japan’s Mitsui Chemicals rose by 0.94%, while Asahi Kasei slipped by 0.54% in Tokyo. South Korean producer LG Chem was down 2.38% in Seoul. Malaysia’s PETRONAS Chemicals Group (PCG) was up by 1.71% in Kuala Lumpur, while palm oil and oleochemicals major Wilmar International rose by 0.98% in Singapore. Japan's bellwether Nikkei 225 was up by 1.84% at 38,335.75, while South Korea's KOSPI Composite inched up by 0.30% to 2,615.03. In China, Hong Kong’s Hang Seng index was up 2.98% at 23,549.46, and the Shenzhen Composite bourse rose by 1.70% to 2,004.13. US chemical stocks closed higher overnight following news of the trade deal. In the US-China agreement announced on 12 May, the US will lower tariffs on imports from China to 30% from the previous “unsustainable” 145%, consisting of a baseline 10% tariff on top of the 20% fentanyl-related tariff. China, meanwhile, lowered its tariffs on the US to just 10% from 125%, while also suspending non-tariff countermeasures taken against the US since 2 April. These new measures will take place by 14 May and last for 90 days, according to a joint statement by both parties. The parties will then continue discussions about economic and trade relations, the statement said. However, uncertainty persists as US President Donald Trump seeks talks with China President Xi Jinping. Meanwhile, the US' hefty "reciprocal” tariffs on other major Asian economies such as Japan, South Korea, India and southeast Asian countries – first announced on 2 April and then suspended for 90 days – may be implemented in early July. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: At the terminal of Shanghai Port in eastern China on 11 May 2025. (Costfoto/NurPhoto/Shutterstock)

13-May-2025

HOUSTON (ICIS)–The US Department of Agriculture (USDA) is projecting an increase in corn area and yield which would result in record supplies with lower soybean production forecast, according to the May World Agricultural Supply and Demand Estimate (WASDE) report. The current corn crop is projected at 15.8 billion bushels, up 6% year on year on increases to both area and yield. Planted area of 95.3 million acres if realized would be the highest in over a decade. The yield projection of 181.0 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. The smaller beginning stocks will partially be offsetting the increase in production, but total corn supplies are forecast at 17.3 billion bushels. Corn used for ethanol is unchanged relative to a year ago at 5.5 billion bushels, based on expectations of essentially flat motor gasoline consumption and exports. Feed and residual use is projected higher to 5.9 billion bushels on larger supplies and lower expected prices. US corn exports for 2025-2026 are forecast up from a year ago to 2.7 billion bushels, with lower prices driving a forecast increase in world trade. Exports for competitor countries such as Argentina and Ukraine are higher than a year ago. The US is projected to be the world’s largest exporter, with fractional decline in global market share. Ending stocks are being calculated higher at 385 million bushels, with total corn supply rising more than use, and if realized would be the highest in absolute terms since 2019-2020. The season-average farm price is projected at $4.20 per bushel, down 15 cents from the April update. For soybeans, the outlook shows slightly lower supplies, higher crush, reduced exports and lower ending stocks. The soybean crop is projected lower at 4.34 billion bushels based on trend yield and lower area. Soybean supplies are down less than 1% as there was higher beginning stocks but that is facing lower imports and production. The USDA noted that higher beginning stocks and rising soybean production in South America have lifted exportable supply, and despite higher global demand, the US share of global exports is now expected to be at 26%, down from the 28% level a year ago. The May WASDE calculates that soybean exports will be 1.815 billion bushels, down 35 million bushels, and soybean ending stocks are projected at 295 million bushels, a decrease of 55 million bushels. The season-average soybean price is forecast at $10.25 per bushel, compared with $9.95 per bushel in 2024-2025. The next WASDE report will be released on 12 June.

12-May-2025

HOUSTON (ICIS)–US farmers continue to make good progress on their sowing efforts and have now completed 62% of corn plantings with soybeans at 48%, according to the latest crop progress report from the US Department of Agriculture (USDA). Some states have experienced additional poor weather, highlighted by heavy rainfall, but the current corn rate is above the 47% achieved in 2024 and the five-year average of 56%. North Carolina is now the top state with 86% of their acreage completed, followed by Texas at 84%. There is now 28% of the corn crop which has emerged. This current pace is ahead of the 21% level from 2024 and the five-year average of 21%. For soybeans, 48% of the crop is planted as farmers are outpacing 2024’s rate of 34% as well as the five-year average of 37%. Louisiana continues to be the leading state with 81% of the crop planted, followed by Mississippi at 71%. Cotton plantings have reached 28%, with sorghum now 26% sowed and spring wheat is 66% completed.

12-May-2025