ICIS Supply and Demand Database

SINGAPORE (ICIS)–Indonesia’s central bank kept its policy rate unchanged at 5.75% on Wednesday, a day after local stocks closed nearly 4% lower, on concerns over the country’s economic growth prospects and government finances. Jakarta composite index shed 3.8% on 18 March Rupiah remains under control, central bank says Economy projected to grow by 4.7-5.5% in 2025 Bank Indonesia (BI) kept the benchmark seven-day reverse repurchase rate steady at 5.75% and left its overnight deposit facility and lending facility rates unchanged at 5.00% and 6.50%, respectively. The rupiah (Rp), which initially fell in early trade, stabilized after BI’s announcement at Rp16,515 per US dollar, near its lowest level in five years. The BI’s move to keep rates stable was “consistent with efforts to keep the 2025 and 2026 inflation forecasts” within the target of 2.5% plus or minus one percentage point; “maintain rupiah exchange rate stability in line with fundamentals amidst persistent high global uncertainty, and contribute to economic growth”, the central bank said in a statement. BI also said that the rupiah exchange rate remains under control, supported by stabilization policies. The rupiah strengthened by 0.94% against the US dollar in March after weakening by 1.69% in February 2025, “influenced by reduced foreign capital inflows into regional stocks, including Indonesia, in line with global uncertainty”, BI said. “Bank Indonesia is looking for opportunities to lower rates, but a rate cut this month may come too soon following the policy easing in January. We look for the next policy rate cut in Q2,” said Lloyd Chan, senior currency analyst at Japan-based MUFG Global Markets Research Asi, in a note. In January, the central bank issued a surprise rate interest rate cut to support economic growth amid expectations of continued low inflation in 2025 and 2026. The move had sent the rupiah tumbling to a six-month low against the US dollar. BI’s decision comes after its benchmark Jakarta Composite Index (JCI) had slumped by 5%, triggering a temporary trading halt, and fell by as much as 7% at one point upon resuming trade, partly fueled by speculations that finance minister Sri Mulyani Indrawati is resigning. Sri Mulyani late on 18 March dispelled the resignation rumors, according to media reports, saying she will stay on as the finance chief, emphasizing that Indonesia’s fiscal health remains sound and the budget deficit for 2025 will stay at 2.5% of GDP. A budget deficit is a shortfall that occurs when government expenditures exceed revenues. The JCI was volatile in early Wednesday trade, initially tumbling by more than 1%, before rebounding to trade 1.42% higher at 6,311.66 as of 09:00 GMT. Indonesia’s sole cracker operator Chandra Asri's shares were up by 13.4% on Wednesday. Indonesia is a net importer of several petrochemicals, including polyethylene (PE) and polypropylene (PP); while it is a major exporter of crude palm oil (CPO) and its downstream oleochemicals. ELEVATED FISCAL RISKS Japan’s Nomura Global Markets Research in a note said that it continues to see elevated fiscal risks and forecast a widening of the fiscal deficit to 2.9% of GDP in 2025, from 2.3% last year and versus the government's target of 2.5%. “Recent changes pushed by President [Subianto] Prabowo, including an expansion of his priority programs, will cost an additional 0.9% of GDP, by our estimate,” Nomura said. The Indonesian government has not introduced any new revenue-generating measures, instead relying on enhanced tax administration efforts, which are expected to have a limited impact, it said. “President Prabowo’s instruction to perform budget cuts worth 1.3% of GDP could provide some offset, but this will likely be very difficult to achieve, given public pushback, in our view, and would weigh on domestic demand,” Nomura said. “Local sentiment, in our view, has dropped significantly, as these domestic policy concerns are exacerbating external risks.” 2025 GROWTH Indonesia's economic growth is projected to remain strong in the range of 4.7-5.5% in 2025, despite persistent global uncertainties, BI said. Southeast Asia’s largest economy expanded by 5.03% in 2024, slowing from the 5.05% growth in 2023. Prabowo’s government aims to increase the real GDP growth rate to 8% within two to three years, from the 5% average over the past 10 years (excluding the Covid pandemic years of 2020-2021). This optimistic outlook is supported by robust household consumption, bolstered by consumer confidence, government spending and seasonal demand, BI said. Increased private investment, driven by positive producer sentiment and expanding order volumes, is expected to contribute significantly to this growth, it said. While external factors present challenges, particularly in mining and processing, growth in non-oil and gas exports and the agricultural sector are anticipated to offset these effects. Focus article by Nurluqman Suratman

19-Mar-2025

SINGAPORE (ICIS)–Asia and Mideast isocyanates prices climbed rapidly immediately after the Lunar New Year holiday, followed by sharp corrections in mid to end-February. Ample supply has weighed on overall sentiment, and limited recovery in demand is expected for the rest of March. Ample Asian supply to keep buyers in China, SE Asia cautious MDI supply lengthy despite NE Asian producers' turnarounds Post-Ramadan demand recovery expected in Mideast but players still pessimistic In this podcast, ICIS markets editor Shannen Ng and markets reporter Isaac Tan discuss market conditions and expectations for the near future.

19-Mar-2025

HOUSTON (ICIS)–As the landmark year, 2025, swiftly passes, many within the US recycled polyethylene terephthalate (R-PET) industry doubt the demand and market growth promised by voluntary brand goals and regulatory post-consumer recycled (PCR) content minimums will come to fruition. Despite this reality, the market has and will continue to see slow progress, with forecast growth even in the face of trade and macroeconomic uncertainties heading into this year’s Plastics Recycling Conference (PRC). MARKET SNAPSHOTOver the course of 2024, average US R-PET market prices saw increases across the board ranging from 2 cents/lb to over 6 cents/lb. More muted growth is expected throughout 2025. At present, East Coast bale, flake and pellet prices remain steady, on sufficient supply and unchanged demand trends despite March typically being a period of transition for the market. On the West Coast, bale prices remain under pressure from Mexican export interest, though domestic players are muted. Flake and pellet prices have shifted in line with bales, but remain under pressure from competitive recycled and virgin imports. Demand expectations across the US for the full spring season are mixed. Historically, demand from thermoformers who cater towards agricultural markets increases in the spring and summer alongside growing season. At the same time, demand from the beverage industry also tends to increase in the spring in preparation for summer bottled beverage consumption. Though, this year, ramp-up timing and intensity remains uncertain due to the impacts of tariffs and inflation on consumer spending. On the fiber side, demand is expected to remain weak and is typically not as seasonally driven. BRAND DEMAND AND SUPPLY LANDSCAPEWhen assessing PCR demand, there are two factors of influence: firstly, the overall product demand as referenced above, but then secondly, the transition from virgin packaging materials to recycled content. Hinging on the same macroeconomic uncertainty, late last year and early this year several brands have publicly stated it is likely they will miss their 2025 sustainability goals. Under this mentality, PCR sellers have noted that many brand and converter customers have downsized PCR growth plans throughout this year as a cost-savings mechanism. This comes as the most recent fast-moving consumer goods (FMCG) data suggests slowing progress, or even in the case of the 2023 Canadian Plastics Pact annual report, negative progress. According to the latest Ellen MacArthur Foundation Global Commitment report, nearly 1.6 million tonnes of additional recycled plastic would be needed for signatories to meet their 2025 targets, as compared to 2023 PCR volumes. On top of the overarching trend, much of the market presently remains in wait-and-see mode due to the whiplash effect of proposed US tariffs, though few players are heard to be operating strongly with consistent year-round demand. The fragmentation of the market persists, as was highlighted during off-peak season last year, and underscores the evolving landscape of polyethylene terephthalate (PET) recycling infrastructure. While some large players who have become entrenched as a premier provider of R-PET see strong order books, other standalone players continue to struggle. Adding to the mixed messaging, several players expect expanded capacity in 2025 such as Republic Services, D6 and Circularix, while another player, Evergreen, has announced a partial facility closure. Future investments in R-PET, whether domestic or international, have largely been paralyzed by the risk that market sentiment and trade policies could shift with each administration, and investments take several years to come to fruition. POLICYWhile not a primary driver of US international trade, plastic scrap and recycled plastic do have strong exposure to international markets, particularly Canada and Mexico as waste is regional and typically market economics hinge on location proximity. To be clear, the proposed 25% tariff on imported goods from Canada and Mexico does include recycled plastic and plastic scrap. When looking at bale and flake supply, tariffs could push US recyclers who are close to Mexico and Canada away from international supply, and towards domestic volumes, thus further straining the limited collection system. The US imported 133 million lbs of PET scrap in 2024, with Canada leading the globe as the US's strongest PET scrap trade partner, followed by Thailand, Ecuador and Japan. Moreover, several US converters and brands have partnered with Canadian and Mexican recyclers over the last several years and now may seek supply relationships with domestic recyclers to avoid additional tariff-related costs. This could be seen as a positive force for the domestic recycling market, though players expect little further support from the current administration, as sustainability and environmental progress has not been identified as a key priority. No federal policies are expected. Despite the ongoing negotiations of the Global Plastics Treaty, based on President Trump's second withdrawal from the Paris Climate Accord, it is unlikely the US will support another global sustainability effort. Instead, state-level legislation is expected to continue carrying PCR momentum, with several proposed extended producer responsibility (EPR) bills as well as some PCR mandates active within various state legislatures. Moreover, as existing policies continue to take shape, such as defining the regulations of California’s Senate Bill 54, or the implementation of Oregon’s EPR program starting this July, the industry hopes that regulation provides a stronger foundation for recycled plastic market growth over voluntary goals which shift with economic sentiment. Hosted by Resource Recycling Inc, the PRC takes place on 24-26 March in National Harbor, Maryland. ICIS will be presenting "Shaping the Future of Recycled Plastics: Trends and Forecasts" on Monday, 24 March at 11:15 local time in room Potomac D. As well as attending our session, we would love to connect with you at the show – please stop by our booth, #308. Visit the Recycled Plastics topic page 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 Focus article by Emily Friedman

18-Mar-2025

HOUSTON (ICIS)–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. The domestic PVC market has been healthy to start the year but has been saddled with excess supply following capacity additions in late Q4. The new capacity, coupled with strong run rates, resulted in high levels of inventory to start the year. This added supply comes in contrast to a US housing market plagued by high prices and high borrowing costs. The pressure of these variables, coupled with exceptionally cold weather, was evident in January housing statistics, where housing starts slumped 9.8% to a 1.366-million-unit pace led by a steep 13.5% decline in the multifamily segment. Despite this, production and sales remained firm in February. Production was expected to decline in March due to turnarounds by two US producers. There was some positive economic news with 30-year mortgage rates easing in March and falling to their lowest levels of 2025 at 6.63% in early March before inching to 6.65% in mid-March. Still, current levels were well above levels considered necessary to spur demand, generally considered to be around 5.0-5.5%. Additionally, inflation appeared to stabilize in February, coming in at 2.8%, lower than the forecast 2.9% and below January levels of 3%. Despite these developments, consumer confidence remains weak. The US PVC export market will also face its share of challenges coming primarily via protectionist policies. Potential 25% tariffs on Mexico and Canada could present challenges as the US exports significant volumes of PVC to each country and then brings back the converted goods for use in medical, building and construction, auto and industrial applications. Reciprocal tariffs could increase the cost of these imports and dent US PVC demand. Additionally, US PVC exports face existing and potential tariff threats from a number of other trading partners including India, Canada, Mexico, Brazil and the EU. Given the challenges in the domestic market and current growth levels, US producers will need to export more than one-third of their production to maintain operating rates in the mid-80s% range, a tall task considering adequate supply and the proliferation of tariffs and antidumping duties (ADDs). To the south, the Latin America PVC market also faces significant challenges, with demand trends differing across key regional markets. A combination of economic pressures and the potential of US tariffs is reshaping the landscape, influencing both supply and demand dynamics. In Brazil, PVC demand remains weak, largely due to persistently high interest rates and ongoing economic uncertainty. These factors have led to buyer hesitancy, reducing the country's dependence on US PVC imports. The outlook for Brazil’s construction sector in 2025 presents a mixed scenario that could influence PVC market dynamics in different ways. The Brazilian Chamber of the Construction Industry (CBIC) projects a 2.3% growth in the sector’s GDP. At the same time, Sinduscon-SP and Fundacao Getulio Vargas (FGV) have a slightly more optimistic forecast, expecting a 3.0% expansion. This growth is primarily driven by ongoing projects and newly contracted developments set to begin in the coming months, particularly in infrastructure and real estate. However, broader macroeconomic factors may temper this momentum. The expectation of slower economic growth, higher inflation exceeding the target ceiling and rising interest rates could cool investment and business activity. If these conditions lead to tighter credit and reduced consumer confidence, demand for new real estate developments could soften, impacting the need for PVC-based materials used in construction applications like pipes, fittings and profiles. Colombia is also experiencing economic difficulties, though the exact demand trends remain unclear. The overall sentiment is cautious, with expectations for stable-to-weak demand in the near term. Meanwhile, Argentina faces persistent investment shortfalls in critical sectors, which continue to hinder PVC demand. This adds to the difficulties for US exporters separately aiming to maintain market share in the country. Mexico, as a key importer of US PVC, brings in around 350,000 tonnes annually. However, the introduction of new tariffs is expected to raise costs for downstream segments that export goods to the US, which reduces the competitiveness of US exports and demand could soften. Pricing dynamics are also likely to shift, if the additional tariff scenario among Mexico, Canada and the US changes in April, as the US Gulf PVC producers could face lower operational rates if demand from their primary export destinations declines. This could lead to production cutbacks, raising per-unit production costs. For the Americas as a whole, uncertainty remains a prevalent theme. 2025 looks to be a challenging year and the effect of proposed tariffs from the Trump administration and retaliatory tariffs on PVC demand is unclear, with economic and inflationary factors adding further uncertainty to the 2025 outlook. Policy and economic health will continue to drive demand in 2025 and producers will need to manage production and inventories closely, control costs and target alternative outlets for exports to mitigate the risks that lie ahead. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. 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 Focus article by Kevin Allen and Daniel Lopes Thumbnail source: Shutterstock

18-Mar-2025

BARCELONA (ICIS)–Moves by Germany and across Europe to boost defence spending could give a significant uplift to the region’s beleaguered chemical industry. Need to maintain robust national or regional supply chains may benefit chemical industry in Europe, which is threatened with closures German defence/infrastructure spending boost could be 2% of GDP, larger than increase linked to German reunification, post-war Marshall Plan Rising defence spending in Europe would help boost electricity demand significantly, estimates vary from 7%-30% Data-driven technology for defence would also raise electricity demand Will raise demand for gas and renewable-based power Europe will need to become more self-sufficient in energy, driven by renewables In this Think Tank podcast, Will Beacham interviews ICIS gas and cross-commodity expert, Aura Sabadus; Nigel Davis and John Richardson from the ICIS market development team; and Paul Hodges, chairman of New Normal Consulting. 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.

18-Mar-2025

Taiwan’s incumbent announces higher March prices CPC continues to grapple with LNG costs Island ramps up receiving LNG capacity SINGAPORE (ICIS)–Taiwan’s main power company announced a hike in its posted prices for natural gas in March, citing globally higher LNG prices, according to an official notice . This comes as it faces pressure to buy more LNG supplies from the US and manage a sharp energy transition from nuclear and coal power generation fuels. Electricity prices will rise by 3%, while industrial users will face a 10% increase, as CPC Corp grapples with mounting financial pressure. The price adjustments come amid a sustained surge in global LNG costs that has pushed up prices of imported LNG cargoes into the island. According to data collected by ICIS, spot cargoes into Taiwan have ticked up in the recent months, at higher prices. CPC has held onto a policy to absorb the increase costs for residential users, a practice set to continue in March, despite a government-approved pricing formula that typically passes on these costs to consumers. However, with the company’s debt ratio reaching 93%, absorbing such losses is becoming unsustainable, according to the notice. Soaring LNG prices, driven by a cold snap and heightened European demand as well as EU stockpiling regulations have led to stiff competition for LNG. All of which has stretched Taiwan’s energy budget in the past months. The state-owned company has mostly absorbed losses to shield residential users from price hikes, holding rates for users steady through January and February citing ongoing Lunar New Year festivities alongside its price-stabilization policy. While industrial prices last rose in December, residential rates have remained unchanged for months and were even cut last May. At the same time, Taiwan has also looked to shore up its trade ties with the US after President Donald Trump took office and began issuing a slew of import tariffs and calling for more onshoring of manufacturing from trade partners with a surplus, such as Taiwan. In response, Taiwan has said it could invest in the proposed Alaska LNG project and buy more US LNG cargoes. As well, Taiwan Semiconductor Manufacturing Company (TSMC) has also pledged to invest in high-end chip manufacturing in the US. Taiwan also relies on de facto US military support as it faces a push for reunification with the Chinese mainland that could be enforced by a blockade of post and incoming LNG shipments. Taiwan has some offtake from the US including deals with TotalEnergies for Cameron LNG, and supplies from US producer Cheniere. LNG TO BECOME DOMINANT ENERGY SOURCE Even as the island grapples with high costs of bringing in LNG cargoes, it remains committed to its LNG push, expanding infrastructure at a rapid clip . Taiwanese incumbents, both the state-owned CPC Corp and Taiwan Power Co (Taipower) are investing in large-scale LNG storage tanks, regasification units, and gas-fired power plants. For instance, under expansion plans, Taipower will add 2.7mtpa by 2026 and another 3mtpa by 2029, taking its total receiving capacity to close to 11mpta. Meanwhile, Yung An terminal will be boosted by 2mtpa. Still, energy security remains a key concern as Taiwan leans heavily on imported liquefied natural gas to meet rising demand. “Taiwan has no piped gas and minimal domestic production, so LNG accounts for nearly 100% of the country’s gas supply,” said ICIS analyst Yuanda Wang. This leaves the island vulnerable to price swings alongside geopolitical uncertainty. Compounding the challenge is a nuclear-free policy shuttering two nuclear reactors . Taiwan will become fully nuclear-free in May 2025 as the 950MW Maanshan Unit 2 shuts down, leaving an 8.8TWh power shortfall , according to forecasts by ICIS. Last year, Jane Liao, a vice president at CPC, told a conference that the utility expects to see more LNG purchases into 2025 on the back of the retirement Taiwan’s nuclear plants. “We need to continue the purchasing,” Liao added. Premier Cho had also in July reaffirmed the commitment to reduce reliance on coal. As the island phases out these sources, it will inevitably turn to LNG to fill in the gap in its energy mix. ICIS modeling forecasts Taiwan’s power demand will rise by 12.5% in the first quarter of 2025, with LNG imports expected to hit 21.1 million tonnes in 2025. As energy prices rise and Taiwan doubles down on its LNG ambitions, businesses and consumers brace for higher costs. The island now faces a delicate balancing act: maintaining price stability while deepening its long-term reliance on LNG. (ICIS analyst Yuanda Wang contributed to this story)

18-Mar-2025

COATZACOALCOS, Mexico (ICIS)–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. Cleantho de Paiva, CEO at the Terminal Quimica Puerto Mexico (TQPM) in Veracruz’s municipality of Coatzacoalcos, said the terminal should start up in May and be able to import 80,000 barrels of ethane, mostly from the US. Natural gas derivative ethane has become the prime choice to produce polymers in North America after the US’s shale gas boom in the 2010s. The ethane will be primarily delivered to polyethylene (PE) major Braskem Idesa, a joint venture between the Brazilian and Mexican chemicals producers of the same name. TQPM is, at the same time, a joint venture between Braskem Idesa and Dutch company Advario. ICIS visited TQPM on 15 March – a few pictures shown at the bottom. FINALLY, START-UP PLANNED FOR MAYThe terminal’s years-long construction is a key project of Braskem Idesa, which until now has been dependent on supply of inputs mostly from Mexico’s crude oil major Pemex, supply which at a time was unstable and below what had been agreed. The situation became so critical that Braskem Idesa, which operates one of Latin America's newest PE complexes, was forced to seek alternative supply arrangements. Industry analysts have pointed to Pemex's supply shortfalls as a major constraint on Mexico's petrochemical sector growth. The terminal’s financing was at some point in doubt, although the parties agreed to inject further cash last year so it could be finalized in 2025. TQPM will make it easier for Braskem Idesa to secure inputs necessary to produce PE, without depending on Pemex, whom at the same time would be able to redirect the inputs it was delivering to the PE producer to other petrochemicals companies. A common theme for Mexican chemicals companies is the lack of raw materials, so any additional supply is always welcome news, said de Paiva. "This project has a very important impact on the development of the national petrochemical industry, because it's precisely to complement access to raw materials that we lack today. With a capacity to import up to 80,000 barrels per day of ethane, this will significantly exceed the 63,000 barrels Braskem Idesa currently requires for its operations,” said de Paiva. “The issue of the lack of ethane in the country is structural. Since the US is the largest producer and exporter of petrochemical ethane, building this terminal gives us access to import sufficient raw material. "When the terminal comes into operation, Pemex, which currently has an obligation to supply a certain amount to Braskem Idesa, will no longer have it and will be able to direct this raw material to its own petrochemical complexes and also resume its operating capacity," he added. This cascading effect could benefit Mexico's broader petrochemical industry, potentially allowing Pemex to better serve other domestic manufacturers once relieved of its Braskem Idesa commitments. De Paiva described this as a “structuring” event for Mexico’s manufacturing industry as it could allow the country's petrochemical industry to return to operating its plants at higher capacities. The executive offered a segment-by-segment assessment of Mexico's chemical industry, noting varying conditions across different product categories. He said polypropylene (PP) production, led by Indelpro – a joint venture between Mexico’s Alpek and the US’s LyondellBasell – as well as production of polyethylene terephthalate (PET) are performing quite well. It is the PE market which faces significant shortages, said de Paiva. PEMEX ASSETSAddressing questions about the state of Pemex's aging petrochemical assets, de Paiva suggested that proper maintenance and technological upgrades could extend the operational life of even decades-old facilities. Some players in Mexico’s chemicals industry think there is room for joint ventures with the private sector to revive some of Pemex’s assets. That was the opinion of Martin Toscano, director for Mexican operations at Germany’s chemicals major Evonik, in an interview with ICIS. Other players, however, think the only way forward would be privatization so Pemex, which recurrently needs bailing out from the Mexican Treasury, would stop being a burden for the taxpayer, according to Javier Soriano, director at chemicals distributor Quimisor. De Paiva said he could not opine about Pemex’s assets, but did say that if plants are properly maintained they should be able to run for decades after start-up. "Petrochemical plants must operate for 30, 40, even 50 years, but they must maintain a continuous maintenance and technological upgrade program. Braskem's experience in Brazil offers a glimpse of this: the company successfully operates plants of similar age, but with consistent investments in modernization,” said de Paiva. Before being appointed CEO at TQPM – a position he will keep for some time after the start-up in May, he said – de Paiva spent decades working for Braskem in Brazil, his country of origin. The terminal's completion comes at a critical time for Mexico's manufacturing sector, which has been looking to capitalize on nearshoring opportunities as global companies seek to reduce dependence on Asian supply chains. Industry experts suggest that resolving raw material constraints could position Mexico's petrochemical sector for significant growth, particularly given its proximity to the US market and competitive labor costs. De Paiva concluded saying that once TQPM is up and running, that will create room for Braskem Idesa to think about potential expansions. The terminal’s storage tanks, being painted The dock where two Braskem Idesa-owned vessels will unload the ethane, to come mostly from the US Work was energetic even on a Saturday (15 March) as TQPM’s two partners want to inaugurate the facility in less than two months Miniature TQPM; right bottom, detail of area’s map and the pipelines (yellow line) connecting the terminal with Braskem Idesa’s facilities, some 10km away Pictures source: ICIS  Interview article by Jonathan Lopez

17-Mar-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 14 March. US energy secretary optimistic as tariff proposals in early days The US is still in the early stages of its tariff proposals, which could increase the costs of the steel and aluminium needed for oil and gas production, but vigorous dialogue about their effect on the economy is taking place behind closed doors, the secretary of energy said on Monday. AFPM ’25: Shippers weigh tariffs, port charges on global supply chains Whether it is dealing with on-again, off-again tariffs, new charges at US ports for carriers with China-flagged vessels in their fleets, or booking passage through the Panama Canal, participants at this year's International Petrochemical Conference (IPC) have plenty to talk about. AFPM ‘25: US tariffs, retaliation risk heightens uncertainty for chemicals, economies The threat of additional US tariffs, retaliatory tariffs from trading partners, and their potential impact is fostering a heightened level of uncertainty, dampening consumer, business and investor sentiment, along with clouding the 2025 outlook for chemicals and economies. INSIGHT: Tariff war escalates as EU new round of retaliation includes US PE, plastic products Yet another front is opening up on the US tariff war – this one with the EU. In retaliation for US 25% tariffs on steel and aluminium imports that took effect on 12 March, the EU plans to not only roll out old measures, but launch new more significant tariffs directly targeting US polyethylene (PE) and other plastic products. AFPM '25: INSIGHT: New US president brings chems regulatory relief, tariffs The new administration of US President Donald Trump is giving chemical companies a break on regulations and proposing tariffs on the nation's biggest trade partners and on the world. Dow to announce decisions on European asset footprint on Q1 and Q2 earning calls – CFO Dow plans to announce decisions from its European asset review on its Q1 and Q2 earnings calls, its chief financial officer (CFO) said. Canada’s new prime minister to focus on trade diversification and security Canada’s new prime minister, Mark Carney, will focus on diversifying the country’s trade relationships and improving its security, he said on Friday after officially taking over from Justin Trudeau. AFPM ’25: LatAm chemicals face uncertain outlook amid oversupply, trade policy woes Latin American petrochemicals face ongoing challenges from oversupplied markets and poor demand, with survival increasingly dependent on government protectionist measures.

17-Mar-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 14 March. European naphtha slides as demand wanes, refineries roar back Sentiment in Europe's naphtha spot market was weighed down by upstream crude volatility, weak blending demand and limited export opportunities in the week to 7 March despite ample liquidity in the physical space. Flagship Maasvlakte POSM plant to close in October – union The largest propylene oxide/styrene monomer (POSM) production complex in Europe is expected to close in October, union FNV said on Tuesday, after an agreement was reached between operator LyondellBasell and employees at the site. Europe chems stocks claw back losses as markets firm despite tariffs European chemicals stocks firmed in early trading on Wednesday as markets rebounded from the sell off of the last week, despite the onset of US tariffs on aluminium and steel and Europe’s pledge to retaliate. 'Game changer' for Europe PE as EU plans retaliatory tariffs on US European polyethylene (PE) players are braced for a potentially big impact from the EU’s retaliatory tariffs on plastics from the US, in the latest twist of the growing trade war. INSIGHT: Can the chemicals sector tap into Europe’s rearmament era? Europe’s drive to drastically ramp up defence spending is likely to drive a wave of investment into the region’s beleaguered industrial sector, but existing military spending patterns and technical requirements could limit uplift for chemicals.

17-Mar-2025

SINGAPORE (ICIS)–Weak downstream demand, exacerbated by economic and geopolitical uncertainties, keeps sentiment bearish and buyers cautious across petrochemical markets in Asia. Sluggish demand to continue into Q2 amid oversupply China’s surging exports a concern among Asia producers China, South Korea prepare stimulus measures amid US tariffs REGIONAL PRODUCERS FEEL STRAIN China’s aggressive capacity expansion which led to increased exports has been exerting pressure on other Asian producers. For caprolactam (capro), the country turned into a net exporter in 2024, with shipments doubling from two years ago. This flood of Chinese exports has intensified regional competition, forcing capro plant closures in Japan and Thailand due to unsustainable margins. In the ethylene vinyl acetate (EVA) market, massive capacity expansions in the next three years are projected to push China’s production capacity to 63% of the global total by 2027. As a result, the country’s EVA imports are likely to decline further, while exports are projected to continue increasing. In the naphtha market, supply constraints due to limited arbitrage cargoes and higher demand from new cracker start-ups in China and Indonesia have driven intermonth spreads to the highest levels seen in a year on 11 March. Refinery maintenance in China has also further restricted domestic naphtha supply, tightening overall availability in Asia. For aromatics such as benzene, toluene, xylene, paraxylene (PX), and mixed xylene (MX), prices fell in the week ended 14 March, weighed down by ample inventories and subdued demand. For acetone, prices have risen on tight supply because of plant maintenance, squeezing the margins of downstream isopropanol (IPA) producers, with LG Chem planning to shut its plant for a month from end-March. Meanwhile, palm oil prices in southeast Asia remain elevated due to lower production and stock levels, prompting a shift to cheaper alternatives like soybean oil in key markets such as India. Meanwhile, palm oil prices in southeast Asia remain elevated due to lower production and stock levels, prompting a shift to cheaper alternatives like soybean oil in key markets such as India. Consequently, downstream fatty alcohols prices increased. Although plants in Malaysia and Indonesia have expanded capacities, these will be offset by expected turnarounds during March to May. BEARISH SENTIMENT AMID TRADE WARS Industry players are navigating highly volatile markets amid the revival of the US-China trade war, with fears of a more widespread trade disruption amid the US’ protectionist measures under President Donald Trump. Buyers are generally cautious about building too much inventory amid continued weakness in demand. In the MX market, buyers in southeast Asia are maintaining sufficient inventories and avoiding additional spot purchases. For methyl methacrylate (MMA), domestic market in China remains sluggish due to high stocks and lackluster demand, while a strong US dollar was further dampening export demand. Similarly, the vinyl acetate monomer (VAM) market is also facing weak demand in China, with traders struggling to offload high inventories due to slow spot trade activity. US’ tariffs on all steel and aluminum imports which took effect on 12 March are adding to regional economic concern, particularly for South Korea, which is as major steel exporter to the world’s biggest economy. China, whose economy has been slowing down, plans “promote reasonable wage growth by strengthening employment support in response to economic conditions”, to boost domestic consumption, its State Council said on 16 March. Among the new economic stimulus measures are implementing paid annual leaves for workers, expanding property income channels and accelerating development in new technologies. Focus article by Jonathan Yee Additional reporting by Jasmine Khoo, Angeline Soh, Samuel Wong, Isaac Tan, Chris Qi, Helen Yan, Rita Wang, Elaine Zhang, Yvonne Shi, Li Peng Seng and Joanne Wang Thumbnail image: Qingdao Port Trade, China – 13 March 2025 (Costfoto/NurPhoto/Shutterstock)

17-Mar-2025