News and analysis

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 18 April 2025. INSIGHT: China SM feedstocks, end-products outlook clouded by US tariffs By Aviva Zhang 17-Apr-25 12:18 SINGAPORE (ICIS)–Escalating US-China trade tensions have driven significant fluctuations in China’s styrene monomer (SM) market, with feedstock import costs and constraints on end- products exports to continue to affect the market. INSIGHT: ICIS cuts April Asia chemical forecast as recession fears hit global market By Ann Sun 17-Apr-25 12:0 SINGAPORE (ICIS)–Uncertainty surrounding US tariff policies and the potential for a global recession continues to weigh on global oil prices, projecting a decline in chemical prices as a consequence. The knock-on effect on end markets, coupled with conservative business sentiment, will shape the price trend. Asia petrochemicals slump as US-China trade war stokes recession fears By Jonathan Yee 16-Apr-25 17:34 SINGAPORE (ICIS)–US “reciprocal” tariffs are prompting a shift of trade flows and supply chains as market players in Asia seek alternative export outlets for some chemicals, while overall demand remains tepid amid growing fears of a global recession. INSIGHT: US tariff barriers put further downward pressure on the Asian aromatics market By Jenny Yi 16-Apr-25 17:01 SINGAPORE (ICIS)–The macroeconomic repercussions from the escalating US-China trade war and potential for reduced end-market demand are expected to exert additional pressure on Asian aromatics markets. CHINAPLAS ’25: Asia polyolefin players gather for clarity amid US trade war By Jackie Wong 16-Apr-25 14:34 SINGAPORE/SHENZHEN, China (ICIS)–Polyolefin market players from Asia are gathering in China this week for an annual industry event under a cloud of uncertainty as the US embarks on a trade war that could potentially redefine trade flows in the region. China Q1 GDP growth at 5.4%; outlook dims amid trade war with US By Nurluqman Suratman 16-Apr-25 12:31 SINGAPORE (ICIS)–China's economy expanded by 5.4% year on year on the first quarter, unchanged from the previous quarter, official data showed on Wednesday, but the world’s second-biggest economy is generally expected to weaken due to the tit-for-tat trade war with the US. INSIGHT: Asia C2 awaits tariff response from Chinese ethane crackers By Josh Quah 16-Apr-25 12:00 SINGAPORE (ICIS)–Asia ethylene markets have settled into a disquieting calm belying the tumult of the past 10 tariff-packed days. The spotlight is now sharply on a segment of players – crackers that crack ethane into ethylene – that may have an impact on the import-export market depending on their response to the US-China trade war. INSIGHT: China propylene supply to fall amid trade tensions with US By Seymour Chenxia 15-Apr-25 14:4 SINGAPORE (ICIS)–Escalating US-China trade tensions are expected to raise production cost for Chinese propane dehydrogenation (PDH) plants and weaken overall domestic demand for propylene (C3) at the same time. Singapore slashes 2025 GDP growth on escalating US-China trade war By Jonathan Yee 14-Apr-25 12:06 SINGAPORE (ICIS)–Singapore's Ministry of Trade and Industry (MTI) on Monday cut the country's 2025 GDP growth forecast to 0-2% from a previous 1-3%, citing escalating US-China trade tensions and the impact of reciprocal tariffs on global trade. INSIGHT: China-US trade war to hurt NGL trades both ways By Lillian Ren 14-Apr-25 14:39 SINGAPORE (ICIS)–As one of the largest petrochemical producers globally, China plays a vital role in taking in US’ natural gas liquids (NGLs) such as ethane, propane and butane for propylene and ethylene production. High tariffs are expected to rule out US NGLs products from China market, which, in turn, will hurt buyers and producers in both countries. INSIGHT: China new energy storage capacity to surge by 2030 By Anita Yang 14-Apr-25 16:19 SINGAPORE (ICIS)–New energy storage plays a crucial role in ensuring power balance in China, especially in effectively addressing the intermittent issues of new energy generation. It helps alleviate the dual pressures of power supply security and consumption.

21-Apr-2025

HOUSTON (ICIS)–Newly announced port fees by the US Trade Representative (USTR) are less substantial than the proposal from February, but a shipping analyst expects vessel supply to decrease and rates to climb on certain routes. Theodor Gerrard-Anderson, chemical freight analyst at Lighthouse Chartering, said that most bulk liquid shipowners will not be affected by the USTR’s final plan for port fees on China-linked vessels, but major Chinese operators will see impacts from Annex I. And despite exemptions in Annex II, Gerrard-Anderson anticipates tighter vessel supply and higher rates for vessels transiting the US Gulf. Annexes I and II from the USTR’s final plan are the applicable sections for the bulk liquid transportation market. The effects from Annex I, which focuses on service fees on Chinese vessel operators and vessel owners of China, will be impacted as many of these owners have established a meaningful presence in the US market and maintain large contract of affreightment (COA) portfolios for trading specialty chems and bulk liquid cargoes, Gerrard-Anderson said. Annex II, which essentially impacts the rest of the bulk liquid transportation market, includes exemptions for tankers less than 80,000 deadweight tonnage (DWT) even if they are built in China, and for ships on short sea trades of less than 2,000 nautical miles. Special purpose-built vessels for the transport of chemical substances in bulk liquid forms will not be charged. Another exemption, designed to help maintain US exports, is that ships arriving ballast will not be charged to ensure tonnage is available for export. Analysts at shipping broker NETCO said that most vessels in their segment are exempt under Annex II. On the container shipping side, the softening of the fee structure reduces the risk of severe port congestion and could ease overall upward pressure on freight rates, according to an analyst at ocean and freight rate analytics firm Xeneta. Emily Stausbøll, Xeneta senior shipping analyst, said it is significant that the final proposal has fees levied on a net tonnage basis per US voyage, rather than cumulative fees for every port the ship calls at. "We must look carefully at the potential impact of the revised port fees, but changes will be welcomed by the ocean container shipping industry given the significant criticism levelled at the initial proposal during the public hearing,” Stausbøll said. “The fact fees will not be imposed on every port call is particularly important because it lowers the risk of congestion had carriers decided to cut the number of calls on each service into the US,” Stausbøll said. “This port congestion had the potential to cause severe disruption and upward pressure on freight rates.” Stausbøll said costs could still be very high for Chinese carriers and carriers operating Chinese-built vessels – particularly for ships with the largest capacity. "The latest announcement should still be viewed in the context of the original proposal, which offered dire consequences,” Stausbøll said. “The situation has changed for the better, but it isn't a great victory for the ocean container shipping industry because these fees still add further pressure at a time when businesses are already trying to navigate the spiraling tariffs announced by the Trump Administration." 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.

18-Apr-2025

TORONTO (ICIS)–Canada will continue resorting to retaliatory tariffs against the US – regardless of which party, the incumbent Liberals or the opposition Conservatives, wins the upcoming 28 April federal election. In an election debate on Thursday evening, Prime Minister Mark Carney and Pierre Poilievre, leader of the Conservatives, both said that retaliatory tariffs were necessary to deter the US tariff threat. However, Carney said that Canada could not impose full-scale “dollar-for-dollar” counter-tariffs, given that the US economy is more than 10 times larger than Canada’s economy. Rather, the Liberals would aim at counter-tariffs that have maximum impact on the US, but only minimum impact on Canada. In opinion polls about the elections, the Liberals are currently on track for their fourth consecutive victory since 2015. Carney took over from former Prime Minister Justin Trudeau on 14 March. AUTO EXEMPTION Carney also confirmed that the government will be granting exemptions to its 25% retaliatory tariffs on US autos that took effect on 9 April. The exemptions will apply to automakers that maintain production and investments in Canada, he said. According to information on the website of Canada’s finance ministry, a “performance-based remission framework” would allow automakers that continue to manufacture vehicles in Canada to import “a certain number” of US-assembled, USMCA-compliant vehicles into Canada, free of retaliatory tariffs. The number of tariff-free vehicles a company is permitted to import would be reduced if there are reductions in the automakers’ Canadian production or investments, according to the ministry. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Please also visit the ICIS topic pages:Automotive: Impact on chemicals, and US tariffs, policy – impact on chemicals and energy Thumbnail photo of Stellantis' Canadian auto assembly plant at Windsor, Ontario, where production was suspended because of tariff uncertainties (photo source: Stellantis)

18-Apr-2025

LONDON (ICIS)–Trading interest dipped on the European Group I base oils market this week, as the ongoing US trade tariffs made some market participants hesitant. The growing lack of clarity has become an unwelcome aspect of market conditions. This week, domestic Group I prices failed to show any movement, with pricing information heard in the market within published ICIS ranges. Some traders were also away from their desks ahead of the Easter holiday. Brightstock remained in tight supply, while demand for SN500 rose slightly. SN150 continued to face competition from re-refined base oils in Europe, though less than in previous months. A source voiced concerns over the growing volatile situation in wider commodity markets as financial and currency markets react to news from The White House. “The market is crazy and we need to see what will happen,” they said. “Stability would be nice,” they added. The US tariffs upheaval is bound to ripple into all commodities, though some impact is indirect. Furthermore, retaliatory measures from the EU would impact US goods heading to Europe. But base oils are exempt from tariffs, along with oil and oil products. But an impact may be felt in the base oils market if the wider world demand outlook suffers and if the global economy is hit. Long-term commitments in contracts are also being avoided in other chemical markets. Last week’s announcement of a 90-day pause on the implementation of the latest tariffs round, except for China, partly eased investors’ concerns. With the US-China trade war escalating and new US sanctions being announced on Iran, crude oil prices were also reacting. With base oils being derived from vacuum gasoil, a key oil product, this may mean some indirect impact on the base oils market. On Thursday, crude oil prices were on the rise as the new US sanctions targeted the export of Iranian oil, focusing on shippers and importers in China. Base oils are used to produce finished lubes and greases for automobiles and other machinery.

17-Apr-2025

HOUSTON (ICIS)–The US is taking steps that could lead to tariffs on imports of up to 50 critical minerals, many of which are used to make catalysts for key processes used by refiners and chemical producers. If the US ends up imposing the tariffs on the critical minerals, then they would take the place of the reciprocal tariffs. REFINING CATALYSTS AND AROMATICS MARKETSFluorspar is used to make hydrofluoric acid, a catalyst used in alkylation units. These units convert isobutane and propylene into alkylate, a high-octane blendstock. Cerium and lanthanum are used to make catalysts for fluid catalytic cracking (FCC) units. These units convert gas oils into gasoline and refinery grade propylene (RGP). If the US imposes tariffs on these catalysts and if the tariffs cause large enough price increases, then refiners could alter their operations to reduce their costs. If refiners lower alkylation operating rates, they may rely on other high-octane blendstock such as toluene or mixed xylenes (MX). Changes in alkylation and FCC rates would concurrently affect supply and demand for RGP. ANTIMONY AND PETChinese restrictions on antimony already have led producers to propose price increases for polyethylene terephthalate (PET), which relies on the mineral as a catalyst. If the US imposes tariffs on antimony, then it would further increase prices from the other countries that export the mineral to the US. BISMUTH AND POLYURETHANESBismuth is used as a catalyst for making polyurethanes. One such bismuth-based catalyst won an innovation award. OTHER CATALYSTSIridium, neodymium, rhodium, ruthenium, ytterbium and yttrium are all used to make catalysts, according to the US Geological Survey (USGS). Palladium and platinum are used in catalytic converters in automobiles. TIO2 AND PAINTS MARKETSThe US also considers titanium and zirconium as critical minerals. It is unclear if the US would impose tariffs on titanium metal or titanium oxide. However, the US list of critical minerals implies that the tariffs could include titanium oxide. Titanium oxide is the feedstock that is used to make titanium dioxide (TiO2), a white pigment that is used to make paints opaque. Producers of paints and coatings are already facing higher costs from US tariffs on steel. In 2023, Sherwin-Williams estimates that plastic and metal containers made up 15% of its product's costs. A tariff on titanium oxide would further increase costs for paints and coatings producers. Zirconium is a byproduct of processing mineral sands that contain titanium. TiO2 producers Tronox and Chemours operate such mines. Tronox's are in Australia and South Africa, and Chemours has mines in the US states of Florida and Georgia. FLUORSPAR AND FLUOROMATERIALSFluorspar is also the upstream feedstock for fluorochemicals and fluoropolymers. Polyurethane foams use fluorochemicals as blowing agents. Fluoropolymers include Teflon. These are becoming increasingly important in 5G equipment, semiconductor fabrication plants and lithium-ion batteries. Fluoropolymers are also used as membranes in hydrogen fuel cells and chlor-alkali plants. BARITE, CESIUM USED IN OIL PRODUCTIONBarite is used to make drilling mud. Cesium is used to make cesium formate drilling fluids, which are used by oil and gas producers. FLAME RETARDANTSAluminum and antimony are used to make flame retardants. INVESTIGATION TO PRECEDE ANY TARIFFSBefore the US imposes any tariffs on critical minerals, it will conduct an investigation under section 232 of the Trade Expansion Act of 1962. The US has used that section to impose tariffs on other products such as steel and aluminium. The scope of the investigation will include the 50 minerals deemed critical by the USGS, processed critical minerals and derivative products. Derivative products include semi-finished goods and final products "such as permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components and advanced optical devices", according to the order. The secretary of commerce will have 180 days to submit a final report of the investigation to the president. Recommendations will include tariffs and policies the US could adopt that would promote more production of critical minerals. LIST OF CRITICAL MINERALSThe following table shows the minerals that the US considers critical. Aluminium Magnesium Antimony Manganese Arsenic Neodymium Barite Nickel Beryllium Niobium Bismuth Palladium Cerium Platinum Cesium Praseodymium Chromium Rhodium Cobalt Rubidium Dysprosium Ruthenium Erbium Samarium Europium Scandium Fluorspar Tantalum Gadolinium Tellurium Gallium Terbium Germanium Thulium Graphite Tin Hafnium Titanium Holmium Tungsten Indium Vanadium Iridium Ytterbium Lanthanum Yttrium Lithium Zinc Lutetium Zirconium Source: USGS Insight article by Al Greenwood (Thumbnail shows a fuel pump that dispenses gasoline, which relies on critical minerals for production. Image by Shutterstock.)

17-Apr-2025

LONDON (ICIS)–The European Central Bank (ECB) dropped its key interest rates on Thursday in a bid to stabilize economic activity in the eurozone in the wake of disruption caused by US tariff announcements. The bank cut its rates by 25 basis points, reducing the deposit facility interest rate to 2.25%. Marginal lending rates dropped from 2.90% to 2.65% and the refinancing rate was settled at 2.40% from 2.65%. Rates have fallen consecutively throughout the year, as eurozone inflation came back down to 2.2% in March, nearing ECB target levels of 2%. The prospect of a pause on cuts diminished with the volatility caused on ‘Liberation Day’ on 2 April, when US President Donald Trump’s shift in trade policy defied more moderate expectations. Global markets were riled by President Trump’s dramatic tariff rollout on around 60 countries, before rescinding many of his retaliatory tariffs for many trading partners, including the eurozone. Initially, the eurozone had been hit with a 20% tariff and was taking steps to respond in kind, before both sides agreed to a 90-day pause. The EU remains subject to a 10% baseline tariff, with 25% duties on some automotive parts, steel, and aluminum. This has left economic sentiment weak, with the euro tracking significant gains over the US dollar in response to the volatility. Manufacturing has also been hit by the tariffs, with the International Energy Agency (IEA) predicting oil demand growth to fall from 1.03 million barrels/day to 0.73 million barrels/day in 2025, and the World Trade Organization (WTO) expecting global trade to slow by 0.2% year on year. Click here to visit our topic page on the impact of US tariffs on the chemicals and energy industries

17-Apr-2025

SAO PAULO (ICIS)–Brazil's chemicals industry is facing its worst performance in 30 years, with the producing companies in the sector operating at just 60% of installed capacity during January and February, the country’s trade group Abiquim said. According to the Abiquim-Fipe Economic Monitoring Report (RAC), all key indicators showed a decline in the two-month period, year on year: production fell by 5.6%, domestic sales dropped 0.8%, and national demand for industrial chemical products decreased by 4.0%. As domestic producers' market share diminishes, imports continue reaching Brazil’s shores at pace, with the country’s chemicals trade deficit continuing to increase. In the 12 months to February 2025, it reached $49.59 billion, up from $48.68 billion in the same 12-month comparable period a year prior. Imports now represent 49% of total domestic demand, with significant increases in thermoplastic resins (28.3%), other inorganic products (26.7%), and organic chemicals (25.1%). IDLENESSChemical plants’ 40% idleness average level in January-February was the worst recorded since data collection began in 1990, said the trade group, which represents mostly chemicals producers. Some product groups posted even higher idleness rates, such intermediates for fertilizers (44%), intermediates for plastics (48%), intermediates for synthetic fibers (41%), and intermediates for plasticizers (61%). February’s results were particularly concerning, with production plummeting 10.1% compared to January, domestic sales decreasing 4.5%, and national apparent consumption dropping 17.1%. Abiquim said companies attributed this poor performance to operational problems, idle units, plants in hibernation, low demand, raw material restrictions, electricity supply variations, and fewer operating days in February. Despite the clouds, prices for chemical products rose 5.1% between January and February 2025, with real prices increasing 3.6% when accounting for inflation. In dollar and euro terms, real prices are 11.3% and 11.2% higher, respectively, compared to 2024. Abiquim’s executive president, Andre Passos, preferred to see the glass half full – despite all evidence pointing to it being half empty – and said two state programs for the chemicals sector had the potential to turn things around by the end of this decade and “save” Brazilian chemicals. Passos said the breaks on some input materials, called REIQ, including provisions linking tax incentives to investments, was a re-implementation linked to investments to create new or expand existing capacities. Passos added that, only in 2025, companies could invest up to Brazilian reais (R) 1 billion thanks to the provisions included in the REIQ bill. ‘SAVE THE SECTOR’This week Abiquim focused on another bill, the Special Program for Sustainability of the Chemical Industry (Presiq). The Presiq acronym may be heard more often from now on if what Abiquim’s Passos said about it comes to pass – if implemented in full and correctly, Presiq could become the savior the struggling chemicals industry has for years been looking for. Earlier in April, Brazil’s parliament passed what could be considered the country’s response to the EU Green Deal or to the US IRA, now in danger of extinction: widespread tax incentives for companies going greener and embracing low-carbon processes and technologies. Presiq itself is an ambitious project which, beyond attracting more low-carbon investments, aims to bring the sector to near full capacity, targeting 95% utilization rates by the end of this decade. Presiq has two financial lines – one aimed at credits for the purchase of less polluting inputs and raw materials, such as natural gas versus other more polluting fossil fuels; secondly, the program will offer investment credits of up to 3% of invested value for petrochemical plants and chemical industries committed to expanding installed capacity. Starting in 2027, Presiq budgeted up to R4 billion for financial credits, and up to R1 billion for investment credits. “The Brazilian chemical sector is facing a delicate moment, aggravated by the trade war between the US and China. The government must take urgent measures to strengthen the national chemical industry, just as its international competitors have done with incentive programs,” said Passos. "The new law [Presiq] will help reduce the deficit in the chemical industry, and it could become an important source of revenue. It will also add value to the country through the sustainable use of natural resources. This plan can save the sector." Front page picture: Chemicals facilities in Brazil Source: Abiquim ($1 = R5.93)

16-Apr-2025

Lack of clarity around EU storage targets 2025 likely to persist Ambiguous wording in proposals may apply to 2025, but depends on outcome of negotiations Parliament committee to vote on 24 April LONDON (ICIS)–The EU's 2025 storage filling targets remain unclear at the start of the injection season but accelerated efforts to adopt negotiating positions may signal policymakers's will to find a speedy compromise. “At this stage, the implementation date of the regulation is still being discussed within the Council and is afterwards still subject to negotiations with the Parliament. Therefore, it is an ongoing discussion between member states for the moment and no decision has been made yet,” an EU official told ICIS about whether new rules were likely to apply to 2025. EU countries’ representatives signed off an approach to amending the bloc’s gas storage rules on 11 April, agreeing to extend targets for two more years but introducing greater flexibility in how countries meet targets. This agreement is a step forward, but negotiations cannot begin until the European Parliament signs off its position in early May. An open question is whether the law’s implementation date could be moved forward, changing rules for 2025. While the TTF Summer ’25 premium to the following winters was as much as €6.4/MWh in January, the summer contract expired at a premium of €0.05/MWh on 31 March, ICIS data showed. The TTF Q3 ’25 premium over Winter ’25 collapsed after 31 March, flipping to a discount of €0.025/MWh on 7 April. The spread widened over the following week, with ICIS assessing the front winter €0.7/MWh above the front quarter on 15 April. Poland, which holds the rotating presidency of member states until June, has expressed a desire to reach a provisional deal by the end of its mandate, but the timescales remain uncertain. MARKET IMPACT Industry association Eurogas called for any new provisions to be made clear and communicated no later than the end of June 2025 in a position paper on 10 April, saying uncertainty around changes to the November 2025 target “creates additional challenges for market operators in making informed decisions.” Eurogas also called for more clarity around lower targets, postponement of deadlines and how flexibility for filling trajectories could work. The body called for the Commission to specify flexibilities in advance to improve predictability for market participants and to confirm how any deadlines would be postponed “rather than making last-minute decisions that could disrupt trading strategies.” EXTENSION NEGOTIATIONS Because the gas storage regulation is what is known as ordinary legislation, it must be agreed between the EU’s co-legislators. This means the Council of the EU, comprised of the member states, and the European Parliament will both adopt positions stemming from the European Commission’s initial proposal and then negotiate a compromise. The European Commission in March proposed to prolong the targets beyond their existing expiry at the end of the year, alongside guidance for the current filling season. The guidance for 2025 signalled the Commission would allow more flexibility in how countries replenish stocks, allowing countries to deviate from intermediate targets in 2025 to fill stocks “at optimal purchase prices”. The Commission said it would consider market developments and those effects before deciding on any enforcement steps, but that the November target was essential to ensure security of supply. The guidance reconfirmed that if a country missed the 90% 1 November target, they should strive to reach it in December and so on – provisions that have been in place since the rules were introduced in 2022. COUNCIL POSITION The text agreed on 11 April is the Polish presidency’s basis for negotiations with the European Parliament. EU countries’ representatives in the Coreper committee signed off the document, the result of multiple drafts based on negotiations at expert level. The agreed text does not specify an implementation date for the amended rules to enter into force. The Council proposes allowing countries to meet the 90% target on any date between 1 October and 1 December and allowing countries to deviate from the target by up to 10 percentage points in “unfavourable” market conditions. The deviation would be allowed under unfavourable market conditions, including examples “such as indications of possible market manipulations, or of trading activities hindering cost-effective storage filling”. The examples of unfavourable conditions include market manipulation and trading activities, which suggests a continued view among policymakers that the market itself it part of the problem. This may signal further interventions and continued uncertainty. It also makes explicit that intermediary targets are indicative. PARLIAMENT POSITION As the Council wrapped up its work ahead of negotiations, the European Parliament’s committee on industry, research and energy (ITRE) held its first debate on the Commission’s proposal on 9 April. The appointed rapporteur, the committee’s chair Boris Budka, is tasked with steering the file through the Parliament. His initial recommendation may no changes to the Commission’s proposed text, but committee MEPs proposed many amendments. Budka and shadow rapporteurs – representatives for the Parliament’s other party groupings – are now working to find a compromise text from proposed amendments. The views of largest political groupings – representing around two-thirds of seats – were aligned, in support of lower filling targets and greater flexibility. This signals a speedy resolution to the parliamentary process. An EU official confirmed be put to a committee vote on 24 April and if approved can move to a vote by the wider European Parliament in the plenary session from 5-8 May. The centre-right EPP group called for the rules to apply for 2025. Andrea Wechsler told the committee that “we call for the immediate application of this regulation in 2025, upon publication, and not 2026”. The EPP view was very similar to the Council’s final mandate, calling for a return to market-based mechanisms, with an 80% target, flexible deadline between October and December, and removal of filling trajectories. The centre-left S&D also advocated for lower targets and abandoning the intermediate targets, but called for punitive measures for failing to reach the targets to help ensure compliance. The Parliament and the Council can then begin trilogue talks once both groups have finalised these negotiation positions, aimed at finding a compromise between both versions. OPEN QUESTION While the Polish presidency’s stated aim is to find an agreement by the end of June, any delay on either side or protracted negotiations risks additional delay and further uncertainty. Another risk is that market participants anticipate changes and delaying injections, causing prices and demand to spike later in the summer. While some EU countries such as Germany have called for lower targets, shippers still need to inject. Germany’s ministry of economy and climate protection (BMWK) told ICIS it supported less rigid storage filling requirements but expected market participants to meet their obligations to fill stocks.

16-Apr-2025

LONDON (ICIS)–Inflation in the UK fell in March from the previous month, partly driven by a fall in motor fuel costs as energy prices eased, official data showed on Wednesday. The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to March 2025, down from 2.8% in the year to February, the Office for National Statistics (ONS) said. Easing price rises for recreation and culture, and motor fuels were the main factors pushing inflation down. The lower rate in March marks a two-month downward trend as UK consumer price rises also fell in February. March inflation in the eurozone was also down month on month, to 2.2% from 2.3% in February, with lower energy prices the biggest driving factor, statistics agency Eurostat confirmed on Wednesday following flash data released on 1 April.

16-Apr-2025

SINGAPORE (ICIS)–US “reciprocal” tariffs are prompting a shift of trade flows and supply chains as market players in Asia seek alternative export outlets for some chemicals, while overall demand remains tepid amid growing fears of a global recession. US-China trade war 2.0 keeps market players on edge Regional traders wary amid US’ 90-day tariff suspension SE Asia prepares for US trade talks as China president visits Vietnam, Malaysia, Cambodia Trades across the equities and commodities markets last week have been highly volatile since the start of April in the wake of US President Donald Trump’s reciprocal tariffs, the highest of which was imposed on China. The higher-than-expected tariffs sparked concerns over a possible global recession that sent crude prices slumping last week, dragging down downstream aromatics products such as benzene and toluene. Trump had raised the reciprocal tariffs for China three times in as many days – from 34%, to 84% and to 125% on 9-11 April – with China responding in kind. Including the combined 20% tariffs imposed in the past two months, the US’ effective additional tariffs for China stand at 145%. In the polyethylene (PE) market, prices are softening as US-bound export orders shrink, while polypropylene (PP) exports from China to southeast Asia look set to decline. Most polyolefin players in Asia and beyond are currently attending the 37th International Exhibition on Plastics and Rubber Industries (Chinaplas) in Shenzhen, China, which will run up to 18 April. Some China-based market players said the event could provide them an opportunity to explore alternative markets by deepening their relationships with buyers in southeast Asia. Exports of chemicals and plastics used in automobiles to the US, meanwhile, are likely to shrink as well amid auto tariffs from the world’s biggest economy. Apart from PP, exports nylon, butadiene (BD), and styrene butadiene rubber (SBR) to the US are expected to decline. Trump, on 14 April, said he is considering possible exemptions to his 25% tariffs on imported automobiles and parts. His tariffs on all car imports took effect on 3 April, while those on automotive parts will take place no later than 3 May. The automotive sector is a major downstream industry for petrochemicals. China’s PE imports from the US spiked in early 2025 but this is expected to reverse sharply because of the trade war between the two countries. However, China has a substantial number of naphtha and coal-based PE plants starting up in 2025 with a combined PE capacity of more than 8 million tonnes, which should reduce the country’s dependence on imports. The US will also need to redirect surplus PE to alternative markets amid dwindling Chinese demand. Market players expect demand in the second quarter to be worse than the first three months of 2025 amid hefty US reciprocal tariffs hanging over countries in Asia when Trump’s three-month pause lapses. Implementation of the US’ reciprocal tariffs were suspended on 9 April, for 90 days, providing some reprieve to about 60 countries, except China. Freight rates between China and the US have already decreased due to the trade war as demand evaporates. However, vinyl acetate monomer (VAM) prices in India are bucking the general downtrend and have firmed up as the chemical is not directly subjected to US tariffs. VAM is primarily used in the production of adhesives, textiles, paints and coatings. SE ASIA PREPARE TRADE TALKS The 10-member ASEAN group pledged that they will not impose retaliatory tariffs on the US following an emergency meeting, opting to negotiate with the US. Among the nations scheduled for talks with the US are Vietnam, Thailand and Indonesia – all of which were slapped with high tariffs of up to 46%. Thailand intends to scrutinize imports more thoroughly to prevent cheap imports from China entering the country, as the US has warned against such “third-country” methods of evading tariffs. Anti-dumping duties are also being considered by Malaysia and Indonesia against China to counter an expected rise in cheap imports to their countries. Trade flows are still expected to change as China steps up talks and partnerships with the EU, as well as with southeast Asian countries such as Malaysia, Vietnam and Cambodia. While several Asian nations are lining up for discussions with the US government, China and the US have yet to schedule a meeting, heightening concerns of economic headwinds in the coming year. Singapore has revised down its GDP growth forecast for 2025 to between 0-2% on account of the US-China trade war, and other countries are expected to follow suit. Before the pause on reciprocal tariffs, the World Trade Organization (WTO) had forecast trade growth to contract by 1.0% in 2025, from 3.0% previously. Meanwhile, China President Xi Jinping is currently in southeast Asia – with state visits to Vietnam, Malaysia and Cambodia – up to 18 April, to forge stronger economic ties with its Asian neighbors amid an escalating trade war with the US. China posted an annualized Q1 GDP growth of 5.4%, unchanged form the previous quarter, while there is a consensus that the Asian economic giant would weaken from Q2 onward. Focus article by Jonathan Yee Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Additional reporting by Samuel Wong, Izham Ahamd, Jackie Wong, Hwee Hwee Tan, Joanne Wang, Lucy Shuai, Jonathan Chou, Angeline Soh, Melanie Wee, Shannen Ng and Josh Quah

16-Apr-2025