Pricing

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)–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

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

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 25 April. INSIGHT: Europe chems players move to the side lines on tariff upheavalThe market volatility following the intensification of tariff threats has cast a pall over European chemicals sector activity, with players avoiding committing to long-term orders if possible in the face of demand uncertainty and currency volatility. TotalEnergies to shut oldest Antwerp cracker due to oversupply in EuropeTotalEnergies will turn off its oldest steam cracker in Antwerp, Belgium by the end of 2027, the producer announced on Tuesday. Tariff fears slow eurozone private sector growth in AprilFears over the impact of tariffs on trade slowed private sector momentum in the eurozone and pushed the UK sector back into contraction as new orders slowed and confidence waned across Europe. Dow expands Europe asset review, delays Canada cracker projectDow 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. INSIGHT: Pricing gap between Europe and other regions continues to widenEver since the announcement of a series of tariffs against selected countries from the US, the eyes of chemicals market players have been firmly fixed on how trade patterns will evolve between key regions such as northeast Asia, northwest Europe and the US Gulf.

28-Apr-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 25 April. China PC import prices near five-year low on poor demand By Li Peng Seng 21-Apr-25 12:41 SINGAPORE (ICIS)–Import prices of polycarbonates (PC) in China sank to their lowest in nearly five years recently and the bleakness will linger as demand will stay slow due to trade wars and ample supplies. US LPG supply diverted from China triggers sharp propane price fall in Japan, South Korea By Jiayi Chang 21-Apr-25 19:50 SINGAPORE (ICIS)–The US-China tariff dispute has severely disrupted established global energy trade flows. The abrupt suspension of US liquid petroleum gas (LPG) exports to China, a key trade route, has led to a sharp collapse in propane prices across Japan and South Korea. INSIGHT: China PP capacity expansion to peak in 2025; trade war to hit supply By Lucy Shuai 22-Apr-25 11:28 SINGAPORE (ICIS)–Global and Chinese polypropylene (PP) capacity additions will peak in 2025 and then slow down, with the US-China trade war expected to affect overall supply. S Korea's Apr export decline point to rising challenges from US tariffs By Nurluqman Suratman 22-Apr-25 12:05 SINGAPORE (ICIS)–South Korea's exports fell by 5.2% year on year in the first 20 days of April, an indication of the significant impact of US tariffs on Asia's fourth-largest economy. US tariffs enlarge woes in Asia chemical freight market By Hwee Hwee Tan 23-Apr-25 15:49 SINGAPORE (ICIS)–Vast uncertainty stemming from the US’ tariff moves has squashed hopes of any near-term recovery for Asia chemical tanker market. Cost push, tight supply buoy up few Asia petrochemicals amid general slump By Jonathan Yee 23-Apr-25 16:24 SINGAPORE (ICIS)–While the US-led trade war has roiled Asia’s petrochemicals market, sending prices of some on free fall, a selected few products have bucked the trend due to rising feedstock cost and tightening supply, but the support may be temporary amid global economic headwinds. PODCAST: Asia propylene market seeks balance in tariff chaos By Seymour Chenxia 23-Apr-25 16:56 SINGAPORE (ICIS)–Asia's propylene (C3) market is likely to see tighter short-term supply as China's propane dehydrogenation (PDH) producers now face surging propane import costs because of US-China tariff hikes. Downstream demand and end-user consumption could be negatively impacted by tariff barriers. INSIGHT: Sluggish demand weighs on Asia C3 despite propane hikes By Julia Tan 23-Apr-25 22:13 SINGAPORE (ICIS)–Tighter supply from end-May onwards is likely to support near-term Asia propylene (C3) pricing on expectations that tariffs levied on US-origin propane will make it untenable for Chinese PDH units to sustain existing operating rates. Saudi Arabia, India plan to jointly build two oil refineries By Priya Jestin 24-Apr-25 17:05 MUMBAI (ICIS)–Two oil refineries will be built in India as part of Saudi Arabia’s $100-billion investment pledged to the south Asian nation which would cover cooperation in multiple areas, including energy and petrochemicals. Asia ACN sentiment turns bearish on weak China market By Corey Chew 25-Apr-25 12:24 SINGAPORE (ICIS)–China’s domestic acrylonitrile (ACN) market has weakened as Shandong Yulong’s new capacity resulted in an oversupply amid weak demand. INSIGHT: Trade tensions to hasten Canadian low carbon ammonia exports to Asia, hitting prospects of US projects By Bee Lin Chow 25-Apr-25 15:38 SINGAPORE (ICIS)–Canadian ammonia exports are exempted from the prohibitively high levy imposed on Canadian exports to the US, thanks to the US-Mexico-Canada trade agreement.

28-Apr-2025

HOUSTON (ICIS)–Rates for shipping containers from southeast Asia and Vietnam have risen above rates from China to the US as tariffs – and a 90-day pause on reciprocal tariffs – are already shifting global trade patterns. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said he is now seeing the shifting global trade patterns caused by the tariffs play out in ocean freight rates. “Falling demand out of China has coincided with shippers rushing imports out of Vietnam, which is subject to a 90-day pause on reciprocal tariffs,” Sand said. “Seeing the relationship between these two trades turn on its head is an early indication of the potential for tariffs to shift global trade on its axis.” Sand, using Xeneta data, said importing into the US West Coast from China was more expensive than importing from Vietnam on 16 March. But by 25 April, Vietnam has become the more expensive of the two trades, as shown in the following chart. In another example, the spread in rates between China and southeast Asia trades into US West Coast has widened from $7/FEU (40-foot equivalent unit) on 31 March to $181/FEU on 25 April (with southeast Asia the more expensive). “As shippers stopped or slowed exports from China due to the tariffs, they have accelerated exports from southeast Asia countries, which has caused the spread in freight rates on these trades to widen,” Sand said. AVERAGE GLOBAL RATES TICK LOWER Average global container rates edged lower by 2% week on week, accord to supply chain advisors Drewry and as shown in the following chart. Drewry expects rates to continue to decline in the coming week due to uncertainty stemming from reciprocal tariffs. Blank sailings have surged again this week as carriers strive to maintain rates or at least stop the slide. Alan Murphy, CEO of Sea-Intelligence, said the impact of the trade war has led shippers to pause, or outright cancel, shipments. “This in turn reduces demand for capacity on container vessels, to which carriers respond by cancelling sailings,” Murphy said. Murphy said this level of escalation in blanked capacity illustrates a dramatic change in the market. “Partly from the perspective of the magnitude of the blank sailings, which are more akin to what we tend to see seasonally following Chinese New Year in January/February and Chinese Golden Week in October,” Murphy said. Rates from online freight shipping marketplace and platform provider Freightos also fell over the week, with rates to both US coasts down by 5%. Judah Levine, head of research at Freightos, said some vessels are leaving China only half full because of canceled orders. Levine said some retailers have inventory from front-loading deliveries over the past few months and are taking a wait-and-see approach. PORT CHARGES TARGETING CHINA-LINKED SHIPS Levine said revised guidelines from the US Trade Representative (USTR) targeting China’s dominance in the maritime industry should not lead to the significant port call omissions and congestion that many feared would result from the original per port call proposal. Market intelligence group Linerlytica said that although port fees on Chinese operated and Chinese-built ships are retained, carriers will be able to circumvent the fees by swapping out all of the affected ships in the next 180 days as the fee will no longer apply on the operators’ fleet composition or prospective orders but only on ships calling at US ports on a per voyage basis. 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. LIQUID TANKER RATES HOLD STEADY US chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged from last week despite rates continuing to be pressured downward for several trade lanes. There is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode, and besides contract of affreightment (COA) cargoes there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, weighing on rates. The usual spot cargoes of methanol from Jose to China are the only ones reported, leaving methanol requirements from the region active to Asia. Similarly, rates from the USG to ARA and all other trade lanes also held steady. The spot market to Europe gained momentum with a relatively good number of inquiries following the Easter holidays.  Despite the increased interest rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft, leaving those vessels to participate in the chemical sector. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for May lending downward pressure to spot rates and leaving most owners still trying to fill up prompt part space to both South American coasts for 1H May. Rates are soft and have lost some ground. The USG to India route has seen an uptick in inquiries over the last week with no confirmed fixtures. Market talk of a trade deal between the US and India have sparked some interest leaving the rates flat for the time being and expected to remain unchanged in the near term. With additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

25-Apr-2025

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Upwards pressure on NWE colourless bales, colourless and mixed coloured flake Buyers in eastern Europe seek lower bale prices Asian food-grade pellet imports cheaper on weaker dollar

25-Apr-2025