News and analysis

SAO PAULO (ICIS)–President Donald Trump said on Monday the US will impose 25% import tariffs, effective 2 April, to any country buying Venezuelan crude oil and gas. As the US aims to increase financial pressure on the Venezuelan regime of Nicolas Maduro, Trump said that the tariffs made sense “for numerous reasons”, adding as one of them that Venezuela had “purposefully and deceitfully” sent “tens of thousands” of suspected criminals. Many of them, he said, belong to the Tren de Aragua, a powerful criminal gang which has exponentially grown from Venezuela to several other Latin American countries. Tren de Aragua has been designated now as a foreign terrorist organization. “Among the gangs they [Venezuela’s regime] sent to the US is Tren de Aragua… We are in the process of returning them to Venezuela – it is a big task! In addition, Venezuela has been very hostile to the US and the freedoms which we espouse,” said Trump on a post on Truth Social, the social media network he owns. “Therefore, any country that purchases oil and/or gas from Venezuela will be forced to pay a tariff of 25% to the US on any trade they do with our country. All documentation will be signed and registered, and the Tariff will take place on 2 April 2025.” A TARIFF ON ALL, BY THE BACKDOORIn a post on social media network X, formerly Twitter, the CEO of US logistics platform provider Flexport said the measure, if implemented as announced on Monday, could amount to an import tariff in practically all countries. While Venezuela’s crude oil output has greatly diminished in the past two decades due to mismanagement and corruption, it had posted a recovery as of late, not least because of the US’s easing of sanctions under the previous administration. That recovery, while still far from Venezuela’s crude oil and gas production peak, in output is currently sold and purchased and resold around the world, hence why Flexport’s CEO Ryan Petersen said the US could end up taxing all countries a 25% tariff. “Almost every country buys some oil or gas from Venezuela, so this is effectively a 25% tariff on the whole world if it goes through,” said Petersen. “The number one importer of Venezuelan oil is, of course, the US.”

24-Mar-2025

SAN ANTONIO (ICIS)–The American Fuel & Petrochemical Manufacturers (AFPM) stressed on Monday the need for open markets and warned about the dangers that tariffs pose to the industry – while welcoming proposals by the new US administration that will cut red tape and address longstanding regulatory challenges. "We need open markets and fair trade," said Chet Thompson, president and CEO of the AFPM. He made his comments during the group's International Petrochemical Conference (IPC). "Trade policies are critical to our industries, so make no mistake, no matter what you hear, tariffs and closed markets will increase costs for consumers," Thompson said. "They will make US feedstocks and products less competitive globally." The new administration of President Donald Trump has adopted several tariffs and has proposed new ones. Tariffs could increase the costs of raw materials used by the petrochemical and refining industries, such as heavier grades of crude oil and minerals used to make catalysts and plastic additives. US tariffs also expose the petrochemical industry to retaliation because of the magnitude of its trade surplus. Already Canada and the EU have proposed retaliatory tariffs on shipments of polyethylene (PE) made in the US. FAVORABLE REGULATORY ENVIRONMENTOutside of tariffs, the new administration is adopting a regulatory climate that is more favorable to petrochemicals than that of the previous president, Joe Biden. "It feels like a heavy weight has been lifted, and we have a little room to breathe," Thompson said. The new administration has enthusiastically embraced oil and gas production. The Environmental Protection Agency (EPA) is conducting a review of many policies with the intent of considering longstanding issues of the petrochemical industry. Something as seemingly mundane as an executive order removing government restrictions on plastic straws represents a change in sentiment that favors petrochemical producers. Under the previous administration, federal agencies introduced regulations that increased costs for petrochemical producers while producing little – if any – benefit to the industry. Legislators were proposing moratoria on new plastic plants. Early in Biden's term, he accused oil companies of price gouging. The former president imposed restrictions on oil production and halted the issuance of liquefied natural gas (LNG) permits. AFPM POLICY GOALSThompson outlined five policy goals that the AFPM has shared with the new administration. Consumer choice. Government should not adopt policies that restrict access for plastics and chemicals. Nor should the government impose moratoria on new plastic plants or impose caps on plastic production. US policies should make the most of its reserves of oil and natural gas. Embrace open markets and fair trade. Adopt permit reform to make it easier for companies to build plants, pipelines and infrastructure such as bridges and ports. Pursue an all-of-the-above policy for energy and materials. "Every objective forecast says the world is going to need more energy and more petrochemicals of all kinds, not less," Thompson said. That need to produce more will come with an even greater responsibility for petrochemical producers to be more sustainable and to foster the circular economy. AFPM ADVOCATES PARTICIPATION IN UN PLASTIC TREATYThompson stressed that the petrochemical industry and the US need to continue participating in the UN plastic treaty negotiations. The next UN meeting on the treaty (INC 5.2) is expected be held 5-14 August 2025 in Geneva, Switzerland. "We will continue to advocate for this administration to remain at the table to reach a consensus on a global agreement to end plastic waste," he said. "We must stay involved in this process." Hosted by the AFPM, the IPC runs through Tuesday. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Visit the Logistics: Impact on chemicals and energy topic page

24-Mar-2025

SAO PAULO (ICIS)–Braskem’s shares were down nearly 0.75% in Monday afternoon trading after the company issued another statement to say that, officially, there has been no progress in its main shareholder Novonor’s intention to sell its stake, according to the Brazilian polymers major. In a filing with the stock exchange, Braskem said it had “sought clarification from its major shareholders” following media reports about a potential sale process. The two shareholders are Novonor – formerly Odebrecht – with a controlling stake, and Brazil’s state-owned energy major Petrobras. Some shares also trade on the stock. To reports in Brazilian and foreign media about a potential Novonor stake sale, the two shareholders sent Braskem the same responses they have been sending for the past few years when this situation recurrently arises. And it does arise often, because Novonor has for years now been trying to unload its stake – valued at around $10 billion – so it can pay down debt after the company was at the center of Brazil’s largest corruption scandal in the 2010s, the Lava Jato. However, Novonor has so far failed to find a buyer after several attempts, due to Braskem’s liabilities related to the disaster in the state of Alagoas in 2018 caused by its mining activities. Over the weekend, Sao Paulo's daily Estadao reported that Novonor's creditors would be designing a new strategy to dispose of the Braskem stake consisting in the creditors keeping the stake themselves until the value of the shares rises, to then sell it on. TAGGING ALONGPetrobras, according to Braskem regulations, would be able to exercise tag-along rights, also called right of first refusal: ie, in the event of sale of shares held by Novonor in Braskem, Petrobras would have the right to sell its stake under the exact same terms as Novonor. “Petrobras reiterates that no decision has been taken regarding its participation in Braskem and continues studying alternatives," said the energy major. Novonor, meanwhile, said that after all the years it has been trying to dispose of its stake to get its finances back on track, “until the present moment there has not been” any material or binding development in the discussions held with several companies. Tag-along rights, also referred to as co-sale rights, function as a protective measure for minority shareholders in companies, with provisions enabling them to participate – or "tag along" – when a majority shareholder sells their stake, ensuring they can exit the investment under identical terms. Conversely, drag-along rights give majority shareholders the authority to compel – or "drag" – minority shareholders into participating in a sale, potentially against their wishes.

24-Mar-2025

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the likely impact of Germany’s decision to end the debt brake, and Europe’s new spend on defence. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.

24-Mar-2025

LONDON (ICIS)–Conditions for the eurozone private sector continued to thaw in March, driven by the strongest reading for manufacturing in almost three years, while the sector slumped deeper into contraction in the UK. Flash purchasing managers’ index (PMI) data for March showed that both manufacturing and service sectors back on growth footing, despite a drop in new orders, according to data from S&P Global. The eurozone composite PMI stood at 50.4 compared to 50.2 last month, while manufacturing firmed from 48.9 to 50.7, and services slipped slightly to 50.4 but remained in growth territory. A PMI reading of above 50.0 signifies growth. Manufacturing sector growth – the first time in two years and the highest level since mid-2022 – comes as UK industrial production sank deeper into contraction territory, falling from 46.9 last month to 44.6 in March. The decline, driven by global economic uncertainty and potential US tariffs, according to S&P, comes despite a strong rebound in the country’s private sector driven by services. The flash UK composite index for March firmed to 52.0, a six-month high, driven by a surge in service sector activity to 53.2. “The signal from the flash PMI is an economy eking out a modest expansion in March, consistent with quarterly GDP growth of just 0.1%, but with employment continuing to be cut thanks to concern over costs and the uncertain outlook,” said S&P Global Market Intelligence chief business economist Chris Williamson. Manufacturing sector output firmed in Germany as the government agreed a huge new spending bill for defence and infrastructure investment, while activity in France fell for the seventh consecutive month. Eurozone input cost inflation moderated after several months of increases, also softening in the UK despite steeper service sector costs, with the overall level remaining substantially above long-term averages. Despite more robust German performance compared to France, the extent of the decline in the country has been far more significant, with more ground to be made up, according to Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB). “Germany outperformed its key European trading partner France in March in both manufacturing output and services activity. Still, if we zoom out and look over the past two years, France’s industry has only contracted by about 1% since early 2023, while Germany’s has dropped by roughly 8%. In this respect, Germany has a lot of catching up potential,” he said. HCOB helps to assemble to eurozone PMI data.

24-Mar-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 21 March. Mexico's ethane terminal to raise raw materials availability, benefiting wider petrochemicals – CEO Mexico’s new ethane import terminal in the state of Veracruz is poised to transform the country's struggling petrochemical sector by alleviating critical raw material shortages, according to the chief at the facility. AFPM '25: US PVC to face headwinds from tariffs, economy The US polyvinyl chloride (PVC) market is facing continued headwinds as tariff-related uncertainties persist heading into this year's International Petrochemical Conference (IPC). The domestic PVC market is expected to grow between 1-3% in 2025 but continues to face challenges in housing and construction. Meanwhile, export markets continue to wrestle with the threat of protectionist policies and tariffs at home and abroad. INSIGHT: Major macro reversal as Europe and China prepare to ramp up stimulus while US aims to cut spending In the global chemical and economic landscape, the US has for many years been the ‘cleanest shirt in the dirty laundry basket’ with slowing but steady GDP growth, abundant and cheap energy, big government stimulus for infrastructure projects and a tilt towards reshoring. INSIGHT: US sustainability companies hit by two bankruptcies US sustainability companies are starting to buckle, with a chemical recycling plant and a bioplastic producer both going bankrupt. US sanctions first China teapot refinery for alleged Iran oil purchases The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned a teapot refinery in Shandong, China for allegedly “purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil”. AFPM '25: US polyurethane industry braces for cascade effect of tariffs US polyurethane prices for toluene diisocyanate (TDI), methylene diphenyl diisocyanate (MDI) and a variety of polyether and polyester polyols continue to see increase pressure as the market assesses the impacts of potential tariffs on imports from Canada and Mexico, heading into this year’s International Petrochemical Conference (IPC). AFPM ’25: Summary of Americas market stories Here is a summary of chemical market stories, heading into this year’s International Petrochemical Conference (IPC). Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas.

24-Mar-2025

LONDON (ICIS)–The chemicals sector M&A market could see the start of a revival this year, with private equity firms and other strategic investors keen to put war chests of capital to work in a muted growth environment, but political and economic factors remain a concern. In this podcast, ICIS Insight editor Tom Brown speaks to Federico Mennella, managing director for industrials at investment bank DC Advisory, about the economic outlook and shifting trends in global chemicals dealflow. Rebound still expected but timing has been pushed back towards the end of the year on trade uncertainty, energy pricing and economic stability Strategic investors have war chests of cash and are looking to M&A in difficult organic growth environment Interest strong for North America chemical sector opportunities due to competitive energy pricing Questions over whether a financial investor could do something with Europe assets that the current owner cannot Private equity continues to drive M&A Increasing trend for bids for assets not in play More flexibility in transactions, with investors taking certain assets out of a wider package Global M&A activity has remained below pre-pandemic levels in size and volume Slight rebound occurring, multiples slightly lower Financing costs remain elevated compared to pre-COVID era Disconnect between buyers and sellers on valuations narrowing 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.

24-Mar-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 21 March. Europe spot PE prices freeze mid-March on tariffs, no sign of panic Polyethylene (PE) spot prices in Europe are flat in mid-March after news of the EU-US tariffs brought trading activity to a halt, although little "panic" was seen in the week to 14 March. German economic sentiment rallies to pre-war levels on government spending plans Business sentiment in Germany jumped this month to the highest level since the onset of the Russia-Ukraine war, driven by expectations of higher government spending and the recent interest rate cut from the European Central Bank (ECB). LyondellBasell, Covestro confirm closure of Maasvlakte, Netherlands POSM site LyondellBasell and Covestro have confirmed the shutdown of the joint venture propylene oxide/styrene monomer (POSM) plant, the companies announced on Tuesday. INSIGHT: Major macro reversal as Europe and China prepare to ramp up stimulus while US aims to cut spending In the global chemical and economic landscape, the US has for many years been the ‘cleanest shirt in the dirty laundry basket’ with slowing but steady GDP growth, abundant and cheap energy, big government stimulus for infrastructure projects and a tilt towards reshoring. Europe domestic base oils market shrugs off tariffs threat Concerns in the European base oils market about the imminent US-EU trade dispute are limited to the wider economic impact long term, but participants dismissed an immediate effect given an exclusion for oil and oil products. INSIGHT: How short will Europe PE get if tariff war sticks? As the prospect of EU tariffs on US polyethylene sinks in, players in Europe will be gauging how exposed the region is, how short the market could get, and where replacements could come from, if tariffs are prohibitively high.

24-Mar-2025

SINGAPORE (ICIS)–In this video, ICIS analyst Jady Ma shares insights on the expanding acetic acid capacity in China and the new price point published in the ICIS acetic acid daily report from 24 March. Central China’s share in domestic acetic acid capacity expected to rise to 17% following Handsome Chemical’s new plant start-up around May Trading activities in Central China on the rise amid intensive start-up of new downstream capacities in recent two years Inter-regional trade flows become more flexible, arbitrage margins between central China and other regions drawing more attention ICN

24-Mar-2025

SINGAPORE (ICIS)–Indonesian producer Chandra Asri is reconfiguring how it develops its second petrochemical complex project (CAP-2), a company spokesperson told ICIS on Monday. The CAP-2 project's commencement will now begin with downstream units, starting with a chlor alkali – ethylene dichloride (CA-EDC) plant in Cilegon, company corporate director Suryandi said. Chandra Asri, whose operations are based in Banten, Cilegon province, is currently Indonesia’s sole cracker operator. Its CA-EDC project, which will be operated by its subsidiary Chandra Asri Alkali, will be able to produce 400,000 tonnes/year of caustic soda and 500,000 tonnes/year of EDC. Construction will begin in the early second half of 2025 and will take around two years to complete, according to Suryandi. Start-up will be pushed back to 2027 from the previous target of end-2026. "We are mindful of the challenges posed by global market volatility and Indonesia's petrochemical industry. As a result, the CAP-2 Project is currently being reconfigured," Suryandi said. The move follows Chandra Asri's tie-up with trading firm Glencore to acquire the Singapore petrochemical assets of Anglo-Dutch energy giant Shell. Suryandi added that the CA-EDC plant will be integrated into Chandra Asri's existing petrochemical complex and will utilize ethylene produced by the facility. "With the establishment of the CA-EDC plant, the company reaffirms its commitment to reducing Indonesia’s dependence on Chlor Alkali imports and contributing to the supply of EDC, which currently faces a regional deficit," he added. Chandra Asri in its initial plans said that the CAP-2 complex will increase the company's annual overall production capacity to more than 8 million tonnes from 4.2 million tonnes. Based on the original plan, the CAP-2 complex would include a new naphtha cracker as well as downstream units including butadiene, an aromatics recovery plant, high density polyethylene (HDPE) plant and a low density polyethylene (LDPE) plant and a polypropylene (PP) plant. The LDPE plant was to be the first in Indonesia. Thumbnail image: Chandra Asri's petrochemical manufacturing site in Cilegon, Banten province, Indonesia (Source: Chandra Asri website)

24-Mar-2025