News and analysis

LONDON (ICIS)–Economic growth in the eurozone expanded in Q1, with GDP growing by 0.4% compared with the previous quarter, according to official data on Wednesday. The economy also grew in the wider EU, with seasonally adjusted GDP increasing by 0.3%, statistics agency Eurostat said in a flash estimate, which is subject to revision. 2024 Q2 2024 Q3 2024 Q4 2025 Q1 Eurozone 0.2 0.4 0.2 0.4 EU 0.3 0.4 0.4 0.3 Ireland (+3.2%) saw the highest increase compared with the previous quarter, followed by Spain and Lithuania (both +0.6%). Hungary (-0.2%) was the only member state to record a decrease, Eurostat said. On a year-on-year basis, Q1 GDP rose by 1.2% in the eurozone and by 1.4% in the EU.

30-Apr-2025

SINGAPORE (ICIS)–China’s manufacturing activity shrank in April as export orders weakened amid the intensifying trade war with the US, official data showed on Wednesday. New orders, production indexes down from March Caixin PMI down to 50.4 in April from 51.2 in March 2% of China’s GDP directly affected by US tariffs – Nomura The official purchasing managers’ index (PMI) dropped to 49.0 in April, down from the March reading of 50.5, which was the highest in 12 months, data from the National Bureau of Statistics (NBS) showed. A PMI reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 signals contraction. Reciprocal trade tensions escalated in April as punishing US tariffs of up to 145% on many Chinese goods took effect, prompting Beijing to retaliate with fresh duties of up to 125% on imports from the US. China's exports soared over 12% in March as businesses rushed out shipments to front-run the implementation of steep tariffs. Production and demand slightly declined compared to the previous month, indicating a slowdown in both manufacturing and new orders, according to the NBS. The new order index dipped to 49.2%, down 2.6 percentage points from March, while the production index went down to 49.8%, slowing by 2.8 percentage points from the previous month. Key sectors, including equipment manufacturing, high-tech manufacturing and consumer goods, declined in April. The non-manufacturing PMI was down to 50.4% in April from 50.8% in the prior month, and the composite PMI stood at a higher 51.4 in March as compared to February’s 51.1. Separately, the monthly PMI figure by private news outlet Caixin fell to a low of 50.4 in April from 51.2 in March, the lowest reading since January. Caixin's manufacturing PMI survey focuses on smaller, export-oriented companies, with a greater emphasis on private sector firms. “A renewed fall in new export orders … often attributed to the impact of tariffs, led to a slower and only marginal rise in total new work. As a result, production growth likewise eased on the month,” Caixin said. As business optimism fell, firms also lowered inventory levels, while job cuts also resumed amid reduced capacity pressures, Caixin added. Both supply and demand grew at a slower clip despite continued market improvements, while new export orders declined at the fastest rate since July 2023 due to US tariffs of 145%, said Wang Zhe, a senior economist at Caixin Insight Group. “The impact of the tariffs on the supply side, however, was relatively limited. Manufacturers continued to absorb existing orders, keeping the gauge measuring output in expansionary territory for the 18th consecutive month,” Wang said. A cloudy market outlook is resulting in subdued business and consumer confidence are subdued, making it harder to boost domestic demand. “The ripple effects of the ongoing China-US tariff standoff will gradually be felt in the second and third quarters. As such, policymakers should be well prepared, with action taken sooner rather than later,” Wang said. Despite the deepening trade conflict, the path to de-escalation through dialogue remains unclear. While some reports have surfaced suggesting potential negotiations or a tiered approach to tariff reduction from the US side, conflicting statements from US officials and denials from Beijing indicate that formal, substantive trade talks are not currently underway. TARIFFS TO DAMPEN GROWTH “Assuming a 50% loss of exports to the US, China might lose ~1.1% of GDP directly in the near term. The actual loss will surely be larger as the shock ripples through to other sectors, especially the services sectors that facilitate merchandise exports,” said Japan-based Nomura Global Markets Research in a note on 28 April. “The US and China could reach a deal, but the timing, scale, and content of such a deal during this game of chicken is very uncertain, as political leaders resist being the first to blink." Chinese foreign ministry spokesperson Guo Jiakun said on 29 April that the tariff war “was initiated by the US”, adding that the US “should seek dialogue based on equality, respect and mutual benefits” and cease its threats and pressures. He was responding to US Treasury Secretary Scott Bessent saying on 28 April that he believed “it's up to China to de-escalate, because they sell five times more to us than we sell to them”. Thumbnail image shows Qingdao port in Shandong province (Source: Costfoto/NurPhoto/Shutterstock) Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy Focus article by Jonathan Yee

30-Apr-2025

BARCELONA (ICIS)–The trade war is already hurting consumer and business sentiment and may help cause a global recession as demand collapses amid rampant chemicals overcapacity. US retailers fear empty shelves, fueling inflation Uncertainty, chaos is hurting business, dampening consumer sentiment China chemicals demand growth could be negative in 2025 China may exempt $46 billion of US goods from tariffs including ethane, polyethylene (PE), styrene polymers Huge drop in May bookings for China imports through US ports Power back to normal in Spain after nationwide outage on 28 April, chemical plants restarting System should be resilient to adapt to swings in solar and wind production In this Think Tank podcast, Will Beacham interviews John Richardson from the ICIS market development team, Paul Hodges, chairman of New Normal Consulting and ICIS gas and cross-commodity expert Aura Sabadus. 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.

29-Apr-2025

LONDON (ICIS)–Europe's oxo-alcohols and derivatives markets have been largely characterized by uncertainty and cautious behavior. Offtake from the coatings sector but increases in spring, but sentiment is subdued as players are struggling to plan amid ongoing tariff uncertainty and wider economic weakness. Oxo-alcohols and butyl acetate reporter Marion Boakye joins acrylate esters editor Mathew Jolin-Beech and glycol ethers editor Cameron Birch to discuss current conditions along the oxo-alcohols value chain.  

29-Apr-2025

LONDON (ICIS)–There are signs of a resilient undercurrent of demand for sustainable chemicals that could accelerate over the coming years in spite of tough economic conditions for businesses and consumers, according to Accenture’s chemicals lead. Spending on capital goods has diminished since the consumer purchasing spree during the COVID-19 lockdown years, with manufacturing in Europe on a contraction footing for most of the last three years. Hopes for a slow build back to a stronger market cycle this year have been diminished in the face of the economic hit from trade tensions, but sustainable products demand has been a more resilient sub-set of chemicals products. The sector is defined by Accenture as chemicals for the manufacture of more environmentally-friendly products and conventional products that feed into the wider sustainability trend, such as materials for the solar photovoltaic or electric vehicle sectors. “What is becoming clearer and clearer is the end user still is asking for environmentally friendly, sustainable products. All the brand owners, OEMs, made their commitments and that is pulling through the value chain,” said Bernd Elser, global head of Accenture’s chemicals and natural resources practice. The professional services firm projects that the market for “sustainability-related” chemicals will grow from $340 billion in 2023 to $570 billion by 2028, driven by downstream moves such as L’Oreal’s commitment to 95% bio-based ingredient and H&M targeting 100% sustainable packaging by 2030. 51% of respondents of a consumer survey carried out by the firm in 2023 reported being motivated to purchase and consume more eco-friendly products. The number of consumers willing to pay a premium for green products is accelerating in the US, according to a series of surveys by PDI Technologies. The percentage of respondents claiming to be willing to pay more for sustainable products increased from 66% to 68% between 2022 and 2023, up to 80% in 2024. “There is a price premium for certain segments if you look at the announcements of brand owners and OEMs, which I think is amazing, because if you’ve followed that sector, we didn't see these announcements a few years back. So no one would admit there's a decent market segment which is willing to pay,” Elser said. “But if you look at what the consumer is asking for and what the brand owners are publicly stating, I think something is changing in the market,” he added. SECTOR HESITANCE Other analyst firms have produced data over the last few years showing that, in terms of upstream chemicals investment and publicly-announced end user demand, the sector lags many other industries such as steel. The grim market conditions for European manufacturing, slower than expected growth in the electric vehicle market and the worst downsizing in decades for sectors like German automotive may be a driver of industry hesitance. With bottom cycle market conditions persisting for years and spending, it is understandably difficult to commit to large-scale new capital expenditure in the face of deep widespread cost-cutting. Several large consumer names have also begun to soft pedal their sustainability targets, with Coca Cola shifting its 2030 goals to 2035, and reducing the target for recycled content in its packaging from 50% to 35-40%. Despite some softening in company targets, the direction of travel remains for demand to continue to firm over the next few years, pointing to a likely period of supply imbalance as end user companies draw closer to their stated deadlines. “We’re still left with a big gap if you look at company announcements, especially of brand owners; they communicated targets which require significant supplies, and they set targets with very aggressive timelines,” Elser said. “I still think that there is a significant supply demand imbalance, where the communicated demand is a lot bigger than what you find in real capacity out there,” he added. SLOW RAMP-UP Despite the likelihood of an uptick in sustainability-related demand as 2030 and the various decarbonization and sustainability targets tied to it draws closer, the odds of a sharp shift in chemicals production trends is unlikely, according to Elser. “I think there will not be a big jump all at once, the market is not changing from one day over the next,” he said. “This is an asset-intensive industry, it takes six, seven years to build a large-scale asset. So I wouldn't expect that kind of disruption, which you may see in other sectors,” he added. A potentially more bullish factor on supply is the case of small and medium size producers, where specific developments could be harder to track than multinationals, but could be an under-represented source of product. “We don't have the full view on the market, especially if you talk about mid and smaller companies, it might be harder to get the full transparency on demand,” Elser said. Given the timeline to greenlight, construct and bring onstream substantial new capacity, the window for new facilities to be announced in time for 2030 is narrowing. Despite still limited large-scale greenfield investment, options like mass balance, sustainable drop-in feedstock alternatives for existing plants, and retrofitting existing infrastructure could mean the supply gap may not be as cavernous as it may look on paper. “Let's not forget, you still have that whole angle of mass balancing, which gives you a bit of room, where you use an existing asset, you feed in a certain share of recycled, renewable feedstock,” Elser said. “If you look at announcements, product launches, new solutions which are sustainability related, there are thousands out there. And if you look at large-scale capacity announcements, not a lot.” These more incremental shifts present a means of taking the temperature of market demand without having to commit hundreds of millions of euros to a large-scale new unit. “There must be a huge area where you do mass balancing, or basically find ways to do that with existing assets, which, I think it's logical if you want to test the market and try to grow into that market,” he added. Insight by Tom Brown

29-Apr-2025

LONDON (ICIS)–Europe melamine editor Melissa Hurley interviews senior editor Sylvia Traganida, deputy managing editor Deepika Thapliyal, and market reporters Joy Foo and Connor Phillips. Market factors to consider ahead of May: Asia melamine market grappling with weak demand and increasing supply Asia exports dropped in March but expected to flow into Europe in May/June Reduced melamine supply in Europe offset by ongoing sluggish demand conditions No tariff impact on US melamine so far Global urea demand expected to slow from H2 May China not resuming urea exports yet despite the domestic season ending Subdued European ammonia demand; waiting for nitrates market to pick up Natural gas TTF prices soften, but European fertilizer producers reluctant to ramp up production due low demand To listen in a separate window, click here. Additional reporting from Sylvia Traganida, deputy managing editor Deepika Thapliyal, market reporters Joy Foo and Connor Phillips.

29-Apr-2025

SINGAPORE (ICIS)–Borouge has announced a series of expansion projects to boost growth worth $165 million-$200 million in earnings, the United Arab Emirates (UAE) polymers major said on 28 April. Borouge’s second ethane unit's nameplate capacity will be boosted by an additional 15%, or 230,000 tonnes/year, and is to be completed in Q4 2028 by Linde Engineering, the company said. The fourth and fifth polyethylene (PE) units will also be expanded by Target Engineering Construction, increasing nameplate capacity by about 30%, to 700,000 tonnes/year from 540,000 tonnes/year, for each unit. The project is scheduled to be ready for start-up in Q1 2027. In total, polyolefins production capacity is expected to be boosted to over 6.6 million tonnes/year by 2028. “… We are strategically positioned for accelerated growth. The expansions of our ethylene and polyethylene capabilities will enable Borouge to meet growing market demands, unlock new revenue streams, and further strengthen our global market position,” said Borouge CEO Hazeem Sultan Al Suwaidi. Borouge is 54%-owned by Abu Dhabi National Oil Co (ADNOC) and 36%-owned by Austria plastics manufacturer Borealis.

29-Apr-2025

HOUSTON (ICIS)–US farmers have completed 24% of the intended corn plantings with soybeans now at 18%, according to the latest crop progress report from the US Department of Agriculture (USDA). The current pace of the corn crop does slightly trail the 25% achieved in 2024 but is ahead of the five-year average of 22%. Texas continues to be the top state with 74% of their corn planted, followed by North Carolina at 60%. There is now 5% of the corn crop that has emerged, which is behind the 6% from last season but is above the five-year average of 4%. For soybeans, 18% of the crop is sowed, which is ahead of both the 17% rate in 2024 and the five-year average of 12%. Louisiana remains the leading state with 70% of their acreage completed, followed by Mississippi at 54%. Cotton plantings are 15% completed with sorghum 21% sowed, while spring wheat is at 30%.

28-Apr-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 25 April. US chemical stocks may already be signaling recession – analyst Plunging US chemical stock prices may already be signaling a recession by year-end 2025, one Wall Street analyst said. Fire, winter freeze push US Ascend into bankruptcy Ascend Performance Materials was already reeling from overcapacity in China and an industrial recession when its main complex caught on fire and a freeze shut down its operations in Texas – events that contributed to the bankruptcy of the nylon 6,6 producer. IMF cuts GDP growth forecasts for China to 4.0%; India to 6.2% The International Monetary Fund (IMF) has cut its growth forecasts for China, India and other developing Asian economies following latest escalation in US-led trade war. US tariffs enlarge woes in Asia chemical freight market Vast uncertainty stemming from the US’ tariff moves has squashed hopes of any near-term recovery for Asia chemical tanker market. Fitch Ratings lowers global auto outlook due to tariffs, forecasts 6.7% fall in US sales Fitch Ratings lowered its global automotive sector outlook to “deteriorating” from “neutral”, and lowered its US sales forecast by 6.7% to 15.2 million from 16.3 million because of US tariffs on auto imports. Dow expands Europe asset review, delays Canada cracker project Dow is to widen its strategic review of European assets and delay work on its planned Canada net-zero cracker project on the heels of a first-quarter net loss. Chems in longest slump in decades as tariffs stifle demand – Dow CEO 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. Mexico’s improved fortunes on US tariffs propping up petchems demand – Entec exec 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. INSIGHT: China mulls tariff exemptions for US ethane, other chemicals China is considering exempting from tariffs some US goods worth about $46 billion, including chemicals such as ethane, polyethylene (PE) and styrene polymers. LyondellBasell to mitigate tariff impact with global supply network – CEO LyondellBasell has optionality to mitigate tariff impacts with its global supply network across the US, Europe, Middle East and China, its CEO said.

28-Apr-2025

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which highlights the risk of empty shelves in US retail stores as Trump’s tariff war continues. 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.

28-Apr-2025