Energy

SINGAPORE (ICIS)– South Korea has elected Lee Jae-myung of the Democratic Party (DP) as the country's new president, six months since ex-President Yoon Suk Yeol imposed an hours’ long martial law on 3 December 2024. Lee secured 49.4% of the votes cast on 3 June, beating the 41.2% garnered by his rival Kim Moon-soo of the People Power Party (PPP). Lee was proclaimed winner by the National Election Commission on Wednesday and will take office immediately, with no transition period. The snap election was called after Yoon's impeachment. During a speech after his win, Lee pledged to revive the economy and recover people's livelihoods. Other policy focuses of the new administration include a more balanced foreign policy relationship between China and the US, investments in AI and technology, and a focus on renewable energy, said Michael Wan, analyst at MUFG Global Markets Research, in a note on Wednesday. Also high on the new administration’s agenda will be trade negotiations with the US, a deadline for which has been set for 8 July, right before ‘reciprocal’ tariffs on South Korean goods take effect.

04-Jun-2025

BARCELONA (ICIS)–As chemical producers gain access to more renewable energy and portfolios evolve, distributors and downstream customers can look forward to a growing amount of low carbon, low fossil-content products. Distributors can help communicate sustainability data up and down industrial value chains Full life-cycle analysis required to truly measure a product’s environmental footprint Vital to have standard measurements for carbon footprint Chemical industry has a 25-year innovation cycle, more investment needed to accelerate this Wave of low carbon products expected in next 2-3 years Azelis is sticking to its environmental targets Customers drive demand for more low carbon products Renewable energy will cut fossil content of distributor product portfolios Smaller chemical companies drive low carbon innovation in Asia Reshoring will drive national or regional chemical value chains In this Think Tank podcast, Will Beacham interviews Michael Heite, group sustainability director for Azelis, John Richardson from the ICIS market development team and Paul Hodges, chairman of New Normal Consulting. Click here to enter the ICIS Innovation Awards. Closing date 12 June.  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.

03-Jun-2025

LONDON (ICIS)–InterContinental Energy (ICE), developer of the world’s largest planned hydrogen project, could cut the premium of renewable ammonia over carbon-price-adjusted grey ammonia by more than 50%, ICIS data shows. Speaking to ICIS at the World Hydrogen Summit 2025 in Rotterdam, the Netherlands, ICE co-founder and chief executive officer Alexander Tancock explained to ICIS that the company’s large-scale hydrogen projects could produce hydrogen at $3/kg or ammonia at $650/ton. ICE projects are some of the largest renewable energy and hydrogen projects on earth. The company is developing three projects, two in Australia – Australian Renewable Energy Hub (AREH) and Western Green Energy Hub (WGEH) – and one in Oman called Green Energy Oman (GEO). The combined potential hydrogen output from all three projects, once built, would be 8.4 million tons of hydrogen per annum (MTPA), 0.5MTPA more than total hydrogen consumption combined across the EU 27, the UK, Iceland, Liechtenstein, Norway and Switzerland in 2023, according to the Clean Hydrogen Observatory. CUTTING THE GREEN PREMIUM WITH LOW-COST AMMONIA Taking into account freight costs for Australia to Germany of $155/ton, sourced by ICIS on 28 May, ICE $650/ton renewable ammonia could theoretically land in Europe with a delivered cost of $805/ton. Comparatively, ICIS assessed its carbon-adjusted ammonia (the emissions from grey ammonia are covered by the carbon price) into north-west Europe price at $524/ton on 22 May. The resultant premium of the renewable ammonia production from ICE’s future projects over carbon-adjusted ammonia based on today’s spot market would be $281/ton. Tancock told ICIS that the company intends to produce first molecules by 2032, meaning the premium is likely to change over the next seven years as the ammonia sector adapts to the energy transition – and the EU carbon price potentially rises. However, considering ICE’s renewable ammonia against alternative sources already discussed in the market, the company’s projections offer market participants a new look at the premium sustainable projects could hold as the market develops. Comparatively, in July 2024 H2Global announced the winner of its pilot auction, where Fertiglobe bid a delivered price of renewable ammonia of €1000/ton ($1130/ton). The German H2Global program procures international volumes of hydrogen or hydrogen derivatives with the ambition of re-selling them on the European market. Hintco, the coordinator of H2Global, noted at the time that it anticipates prices to be lower in the future due to supply-chain efficiencies and scaling of the hydrogen market. Fertiglobe deliveries are guaranteed from 2028, around four years ahead of when ICE could produce its first molecules. ACHIEVING LOW COSTS Although Tancock explained that the ammonia production would likely serve the Asian market, the market information is nonetheless a sign of potential cost reductions. Tancock explained several key components behind the projects that ICE is developing which supports lower-cost hydrogen and ammonia. When selecting a location, Tancock said that it would ideally have “lots of wind, lots of sun…ideally wind at night, sunny during the day, because that would then give you a much higher capacity factor… We looked for political stability, a track record of delivering huge infrastructure projects, finance, proximity to markets…the Middle East and Australia [are] markets where all of that comes together”. He said that there are other locations where these things come together, but ICE chose to focus on Australia and the Middle East. “If you look [at] how long it takes to permit a project in Australia, it’s five-to-seven years…Europe, it can be even longer, US as well.” Timing is another key element to reducing costs. “Any large project takes a really long time because of permitting process, design process. The other thing is, there’s a real decline in the cost curve right now of equipment, whether it’s wind, solar or electrolysers.” Tancock believes that the cost curve is slowing for wind and in solar, but that “it’s still quite steep in electrolysers”. Therefore “the ideal time to start bringing on really large projects will be the 2030s, because if you bring them on too early, you’re sort of locked in quite a high cost base”. ICE aims to bring its electricity-generating capacity online ahead of its electrolysers. Tancock explained that ICE will try to sell electricity to local offtakers and that “there should be some announcements later this year about [selling the projects’ power supply]” as two of them are located near to industry, providing energy-intensive offtakers. Another key component of lower-cost hydrogen and ammonia supply is the ICE patented P2(H2)Node system. The ICE nodes operate on the basis of co-locating electrolysis plants with wind and solar, removing the need to either connect to or build electricity transmission lines, and also through removing any losses that come as a result of using high-voltage lines. Reduced infrastructure due to co-location and reduced need for electricity transmission systems account for a 10% reduction in capital expenditure and a 10% increase in efficiency. READY DEMAND AND OFFTAKE STRUCTURES ICE intends to deliver its first electrons before the end of the decade and first molecules potentially in 2032, Tancock said. Supporting such timelines is the clear identification of demand and offtakers. For its ammonia, ICE is considering selling from its WGEH project into markets such as Korea, Japan, Singapore and China, where Tancock noted shipping as a potential offtake sector. However, some of the primary offtake will be local to the projects themselves. “If you look at our two projects in Australia, the northern project is sitting in the Pilbara, which is the world’s biggest iron ore producer. And just to put statistics on that, 800 million tons a year come out of the Pilbara. If we turned all 26GW [of our project’s capacity] into green iron, we would [cover] 4-5% of that…You would need about 600GW to decarbonize the Pilbara.” Similarly, for ICE’s project in Oman, Tancock explained the proximity to Europe as a benefit, but expanded to say that “Oman is currently…a trans-shipment location for iron ore. So, they import iron ore and turn [it] into pellets, which then get exported,” he said. Oman is currently seeking to decarbonize its export iron pellets, which the ICE GEO project could support and sell into. Nonetheless, Tancock noted that offtake is still the key issue for the development of projects. “The technical aspects all bring challenges, but they’re solvable. In that sense, it’s really questions about offtake,” he said. “So it’s about bringing the costs of our energy down, and then discussing with strategic offtakers who are looking to offtake in the 2030s and beyond.” ICE is currently in discussion with potential offtakers, Tancock explained, stating that on the molecule side “we’ll be signing those in 2027, 2028, so we’re working towards those offtakes at the moment”. Project developers speaking to ICIS regularly consider both the duration of offtake agreements and the total percentage of the project’s output that they would sign under a long-term deal. For ICE, Tancock stated that its projects’ output would need to be entirely contracted. “In the moment, I can’t see us doing much merchant. Now, you know, some people will say ‘oh we could do 80% contracted, 20% merchant,’ [but] all [of] that [is] to be seen…But I would anticipate it’ll be 100% allocated.” When discussing duration, Tancock said that the ideal would be “very long term” but that it’s unlikely to be achievable at the moment, although “those are conversations that are ongoing”. Reflecting on contracting, Tancock explained that he believed there is a role for governments to support. “You will see governments come in a little bit to help facilitate some of these earlier offtakers.” “They did it for LNG, they did it for [nuclear power]. They’ve done it for renewables. They’ve done it for oil and gas. So I think you will see that,” he said. “The first LNG shipments were all backed by very long-term offtakes…20-year offtakes.” GOVERNMENT MANDATES Expanding on the role of governments, Tancock highlighted that obligations for renewable or sustainable products were the right direction for the market to go. Discussing renewable energy, Tancock said that this was driven by government demand, penalties etc. However, Tancock noted that “the harder part we have with molecules is molecules tend to be traded a lot…The molecules come from here and they’re there. So that’s the trickier part we’re facing now when we’re trying to introduce green molecules…how do you, on an intra-regional and intercontinental level, manage that flow? Because if the benefits are flowing through to Oman, why would the German taxpayer keep paying?” As a solution, Tancock drew from recent successes with the International Maritime Organisation (IMO), stating “this [the IMO] is a global regulator who’s now put a global tax [on its stakeholders]”, meaning “no country pays, and no country suffers more than anyone else”. For hydrogen and ammonia, “things are happening,” Tancock said, such as the development of green corridors between different countries. “Until we get that, it’s very difficult to see sustained demand in some sectors…IMO is game changing. I think the IMO will show, is showing, that it can be done, but it will take now coordination,” Tancock said.

02-Jun-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 30 May. Brazil’s PE market assumes ADDs on US, Canada material to be imposed from June Brazil’s polyethylene (PE) sellers this week are encouraging customers to bring forward purchases on the assumption that the government is to impose antidumping duties (ADDs) on US and Canadian material from June. US ethylene market braces for supply ramp-up as demand stays unsettled After a heavy turnaround season that began in January, the US ethylene market is preparing for a wave of fresh output that threatens to tip the sector back into oversupply as demand continues to face economic and trade policy headwinds. Brazil postpones decision on US-Canada PE antidumping duties Brazil's foreign trade committee Gecex has postponed a meeting where it was expected to decide on imposing antidumping duties (ADDs) polyethylene (PE) imports from the US and Canada. UPDATE: US trade court rules against Trump's emergency tariffs on global goods A US court ruled on Wednesday that the president cannot impose global tariffs under an emergency act, voiding all but the sectoral ones that the nation imposed against nearly every country in the world. INSIGHT: Court ruling to remove nearly all US chem tariffs imposed in 2025 A court ruling will leave the US some room to impose tariffs on imports of plastics and chemicals, but if it remains in place, it will eliminate virtually all the duties that the country imposed on those materials – opening the way for other countries to lift their retaliatory tariffs imposed on the nation's substantial exports of petrochemicals. Appeals court allows US to maintain chem tariffs The US can maintain nearly all the plastic and chemical tariffs it imposed this year after an appeals court granted on Thursday the government's request to stay the judgment of a lower court. Tricon Energy emphasizes ability to pivot quickly in face of tariff volatility – CEO In an increasingly volatile and uncertain world with a constantly changing US tariff regime throwing fuel on the fire, agility to adjust and pivot is more important than ever for a global chemical distributor, said the CEO of US-based Tricon Energy.

02-Jun-2025

SINGAPORE (ICIS)–South Korea's petrochemical shipments declined by 20.8% in May while its semiconductor exports surged, official data showed on 1 June. Petrochemical exports in May fell largely due to international oil prices falling below $65/barrel, which caused a fall in petrochemical unit prices by 13.8% from 1-25 May, South Korea’s Ministry of Trade, Industry and Energy (MOTIE) said in a statement. The country's overall exports fell by 1.3% year on year to $57.2 billion in May – the first year-on-year decline since January – while imports fell by 5.3% year on year to $50.3 billion. “Exports to both of our key markets – the US and China – declined, and it appears that US tariff measures are affecting the global economy as well as South Korea’s exports,” said Minister of Trade, Industry and Energy Ahn Duk-geun. Semiconductor exports recorded their second-highest performance of all time as demand for artificial intelligence (AI)-related products increased, rising by 21.2% year on year to $13.8 billion in the month, while automobile exports fell by 4.4% year on year. By region, exports to the US, the world’s largest economy, fell by 8.1% year on year amid tariffs imposed on the country. Exports to China, the second largest economy in the world, fell by 8.4% on drops in petrochemical and semiconductor shipments. A broad 10% US tariff has been in effect since early April, while higher tariffs, including a 25% duty on South Korea, are currently suspended for 90 days. However, the US on 31 May threatened to double steel and aluminium tariffs to 50% from 25% currently. In response to the US tariffs, Ahn said South Korea’s government would work with their US counterparts on a “mutually beneficial solution”, while also implementing tariff response vouchers worth won (W) 84.7 billion ($61.7 billion) ($1 = W1,373.70) (recasts lead and paragraph 8 for clarity) Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

02-Jun-2025

SINGAPORE (ICIS)–China’s official manufacturing purchasing managers’ index (PMI) in May remained below the expansion threshold of 50.0 but was up from the previous month amid a pause in the US-China tariff war. Official PMI contracts for second straight month Trade-war pause lifts demand China Q2 GDP to post 4.9% annualized growth – UOB The official purchasing managers’ index (PMI) of the world’s second-biggest economy inched up to 49.5 in May from April’s reading of 49.0, data from the National Bureau of Statistics (NBS) showed. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction. Trade tensions between with the US eased in May following an agreement between the world’s two biggest economies to suspend tariffs on each other until August. China is a major importer of petrochemicals whose self-sufficiency has been growing over the years due to strong capacity expansion. “Some US-related companies reported that foreign trade orders were restarted at an accelerated pace, and import and export conditions improved,” NBS senior statistician Zhao Qinghe said. The official manufacturing PMI surveys large state-owned enterprises. Both production and demand in May improved compared with the previous month’s, indicating an acceleration in both manufacturing and new orders, according to the NBS. Production index rose to 50.7 in May from 49.8 in the previous month, while new orders index inched up to 49.8 from 49.2 over the same period. Production of equipment, high-tech and consumer goods improved, registering readings above 50. China’s non-manufacturing PMI, comprising services and construction, eased to 50.3 in May from 50.4 in April, nudging up the composite PMI (which includes the improved reading for manufacturing) to 50.4 compared with the previous month’s 50.2. OUTLOOK In a research note on Monday, economists at Singapore-based UOB Global Markets & Research said the trade truce would provide “some near-term support for [GDP] growth”, which is projected at 4.9% for Q2. However, UOB added that the growth pace would slow to 4.2% year on year in the second half of the year amid continued uncertainty over ongoing trade discussions between the US and China, as well as where the tariff rates will land eventually. “China’s stimulus will lend further support to stabilize its outlook,” said UOB. Focus article by Jonathan Yee Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: At a port in Qingdao City in Shandong, east China on 27 May 2025. (Shutterstock)

02-Jun-2025

SINGAPORE (ICIS)–Japan’s manufacturing purchasing managers’ index (PMI) continued to contract in May, with a reading below 50 for the 11th consecutive month. The May number at 49.4, however, inched up from 48.7 in the previous month as downturn in new orders eased, au Jibun Bank said on Monday. A PMI reading above 50 indicates expansion, while a lower number denotes contraction. "Business conditions faced by Japanese manufacturers deteriorated at the softest pace in 2025 so far in May," the bank said in a statement. Operating conditions for investment goods makers in Japan improved in May, while conditions deteriorated at a softer pace across the intermediate goods segment. A softer decline in overall new work received by Japanese manufacturers in May contributed to the improved index. Total new business fell modestly, generally linked to subdued demand amid US tariffs and increased "client hesitancy". The decline in new export orders also moderated since April. Softer demand conditions led to a further reduction in factory output across Japan during May. The rate of contraction was modest, though it quickened slightly from April. Optimism strengthened for the year-ahead outlook for output, rising from April's near five-year low, au Jibun Bank said. "Growth projections were often supported by forecasts of firmer global demand conditions and new product releases," it said. However, some firms expressed concerns over US tariffs, inflation, and a shrinking population. Manufacturers in Japan signaled another marginal deterioration in supplier performance during May. A number of companies suggested that material and labor shortages at some vendors had stretched delivery times. Average input costs faced by Japanese goods producers increased at a softer pace in May, with the rate of inflation the weakest in 14 months. At the same time, selling price inflation also eased in May, with charges rising at the softest rate in nearly four years. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: At a port in Tokyo, Japan, 12 May 2025. (FRANCK ROBICHON/EPA-EFE/Shutterstock)

02-Jun-2025

BARCELONA (ICIS)–As the 12 June deadline for entries to the ICIS Innovation Awards approaches, a judge and a 2024 winner describe why this topic is so important for the future of the chemical industry and society. Innovation breaks down silos, encourages collaboration Enables industrial value chains to decarbonize Chemical industry provides essential raw materials Awards are a chance to gain external recognition for your innovations Deadline is 12 June, entry is free and quick – click here for full details In this Think Tank podcast, Will Beacham interviews Alessia Ielo, global sustainable solutions manager for Brenntag Essentials and Ian Temperton, CEO of Plastic Energy. 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.

30-May-2025

Fauzeya Rahman and Paula Xiao conributed to this article The global LNG market could be bound for oversupply from 2027 with new production coming online, which could make spot LNG prices more competitive with long-term contracts. The question remains which hub could be the winner for term contract indexation against the backdrop of continuously weak oil prices LONDON (ICIS)–New trends in LNG contracts are on the horizon driven by prices and supply. Lower global oil prices are pushing Chinese LNG buyers to consider further oil-linked long-term contract offtake this year. But other price-links could become more attractive for long-term contracts this decade, even if oil price weakness continues. Rising LNG supply should make spot prices more competitive and see contracts linked to alternative hubs like East Asia spot thrive in the second half of the 2030s. “We are saying that 2027 will be the start of global oversupply , which will be a lower price bet,” said ICIS lead analyst Alex Siow at the World Gas Conference in Beijing. Which long-term contracts will be the most attractive – whether East Asia spot-linked, Henry Hub-linked or oil-linked – remains an open question, and one that Siow says many traders in Asia are asking about. For many in the market, this is also a return to previous market trends. “In the long-term spot gas prices in Europe and Asia have generally traded below oil, with oil setting a ceiling only occasionally in peak winter demand periods,” said ICIS LNG analyst Alex Froley. “This long-term trend was completely smashed during 2022-23 when the end of Russian pipe supplies to Europe left the market severely short. “But in the future the traditional pattern is likely to re-assert itself, with spot gas trading back below oil parity as more supply comes into the global gas market.” For now, market participants are waiting to see if lower oil prices last. Oil price weakness OPEC members, led by Saudi Arabia, initiated higher production volumes in April to pressure OPEC+ members like Kazakhstan to come back in line with lower production targets, eventually pushing oil prices higher again. This propelled oil prices to fall below $60/barrel (bbl). Although there has been some price recovery since, these remain weak and Saudi’s plans to continue higher production are ongoing. The ability of countries like Iraq and Kazakhstan to sell cheap oil without affecting the national budget means some sources estimate prices averaging $60/bbl could continue for a year or more. Saudi Arabia and state-owned Saudi Aramco must in the meantime subsidize high production against national spending, despite low production costs. Ongoing disagreements over production are not the only weight dragging on oil prices. Long-term, there is disagreement over whether the world is approaching peak-oil demand now, or will do so in the 2040s, as the OPEC cartel argues. Given global tariffs and growing alternatives in renewables and gas, upcoming demand in key economies like China also makes for a blurry picture. Chinese demand Spot LNG demand versus supply will be key in determining competitiveness between hubs in the short term. Demand in Asia has been low this year, “with sufficient pipeline gas in China keeping downstream [markets] from purchasing”, said a trading source in China. PetroChina auctioned off-contract pipeline gas capacities on 15 May, with significant price advantages to imported LNG. Lower LNG demand in China this year has also been attributed to tariff-related production cuts in industry, which are riddled with uncertainty. But domestic challenges in sectors like construction are also denting offtake, said traders. Hub choices now and beyond 2026 Demand in the region will be a key element that helps determine where local prices settle. If oil prices average around $60/bbl over the next 18 months, a quick calculation using standard formula indicates that Northeast Asia spot-price linked contracts have the potential and range to go the lowest, with Henry Hub being the floor, (around $4-5/MMBtu), according to Siow. Chinese buyers are also studying current long-term contracts in oil for possible switches over summer, but are not the only choice. They also said they are studying hub links for new long-term contracts and potential negotiations over existing ones. Oil-linked and TTF-linked long-term contracts are neck and neck, both are estimated at around $9/MMBtu in the coming 18 months, he said. But it has also hit back against analyst expectations that LNG supply could significantly exceed demand. “We are going to have 1.5 to 2 billion people on this earth in the next 20 to 30 years. And we have one billion people around the world today that don’t have basic electricity… we are not worried at all about having a supply glut,” QatarEnergy Chief Executive Saad al-Kaabi said this week. QatarEnergy will expand LNG production from next year. Henry Hub outlook Higher demand mainly driven by US natural gas exports has lifted the Henry Hub spot price average for 2025 and 2026 from earlier predictions, according to the US Energy Information Administration (EIA). The EIA forecasts that Henry Hub spot prices will average $4.10/MMBtu in 2025 and $4.80/MMBtu in 2026, as LNG feedgas demand from expanding projects continues to provide bullish signals for the Henry Hub benchmark. The ongoing low crude oil price environment will also likely cap oil-production and associated gas-production growth, supporting US natural gas prices. But if Henry Hub prices maintain this higher trend, this could then encourage producers to increase domestic production, balancing the market. For now, “ICIS estimates that global oversupply should last for a decade from 2027 to 2037… if this turns out to be correct, Northeast Asia LNG spot may turn out to be the true winner, given oversupply will greatly incentivize spot market,” said Siow. Claire Pennington Fauzeya Rahman and Paula Xiao contributed to reporting Pic credit goes here hello

30-May-2025

HOUSTON (ICIS)–The US can maintain nearly all the plastic and chemical tariffs it imposed this year after an appeals court granted on Thursday the government's request to stay the judgment of a lower court. The stay will remain in place while the case is under consideration by the US Court of Appeals for the Federal Circuit. Earlier, the US lost a judgment over its tariffs in the US Court of International Trade. That lower court ruled that the president exceeded its authority when it imposed tariffs under the International Emergency Economic Powers Act (IEEPA). These IEEPA tariffs included nearly all of the duties that the US imposed in 2025 on imports of commodity plastics and chemicals. Had the appeals court rejected the government's request for a stay, then the US would have had 10 calendar days to withdraw the tariffs it imposed under IEEPA. The tariffs covered by the ruling include the following: The 10% baseline tariffs against most of the world that the US issued during its so-called Liberation Day event on 2 April. These include the reciprocal tariffs that were later paused. The US issued the tariffs under Executive Order 14257, which intended to address the nation's trade deficit. The tariffs that the US initially imposed on imports from Canada under Executive Order 14193. These were intended to address drug smuggling. The US later limited the scope of these tariffs to cover imported goods that do not comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement (USMCA). The tariffs that the US initially imposed on imports from Mexico under Executive Order 14194. These were intended to address illegal immigration and drug smuggling. Like the Canadian tariffs, these were later limited to cover imported goods that did not comply with the USMCA. The 20% tariffs that the US imposed on imports from China under Executive Order 14195, which was intended to address drug smuggling. Because the appeals court granted the government's request for a stay, the US can maintain the IEEPA tariffs. The ruling did not cover sectoral tariffs imposed on specific products like steel, aluminium and auto parts, and it does not cover the duties that the US imposed on Chinese imports during the first term of US President Donald Trump. IMPLICATIONS OF THE RULINGIf the ruling is upheld by the higher courts, it could bring some imports of plastics and chemicals back to the US while lowering costs of other products. While the US has large surpluses in many plastics and chemicals, it still imports several key commodities. US states that border Canada import large amounts of polyethylene (PE) and other plastics from that country because it is closer than the nation's chemical hubs along the Gulf Coast. Other significant imports include base oils, ammonia, polyethylene terephthalate (PET), methylene diphenyl diisocyanate (MDI), methanol and aromatics such as benzene, toluene and mixed xylenes (MX). RULING COULD REDIRECT CHINESE EXPORTS OF PLASTIC PRODUCTSThe IEEPA tariffs of the US caused countries to redirect exports of plastics and chemicals to other markets, particularly to Europe. The result depressed prices for those plastics and chemicals. If the ruling holds, some of those exports could return to the US and reduce the quantity of exports arriving in Europe. The IEEPA tariffs had a similar effect on the plastic products exports by China. Those exports were redirected to other countries, especially southeast Asia. These redirected shipments flooded those countries with plastic goods, displacing local products and lowering domestic demand for the plastics used to make those products. If the ruling is restored by higher courts, then it could direct many of those shipments back to the US, although they would unlikely affect shipments of auto parts. Those shipments are covered by the sectoral tariffs, and the court ruling did not void those tariffs. RULING REMOVES BASIS FOR RETALIATORY TARIFFS AGAINST US PLASTICS, CHEMSChina had already imposed blanket tariffs in retaliation to the IEEPA tariffs the US imposed on its exports. China unofficially granted waivers for US imports of ethane and PE, but those for liquefied petroleum gas (LPG) were still covered by the duty. China relies on such imports as feedstock for its large fleet of propane dehydrogenation (PDH) units, which produce on-purpose propylene. If upheld, the ruling could restore many of those exports and improve propylene margins for those PDH units. The EU was preparing to impose retaliatory tariffs on exports of nearly every major commodity plastic from the US. Other proposals would cover EU imports of oleochemicals, tall oil, caustic soda and surfactants from the US. Canada also prepared a list of retaliatory tariffs that covered US imports of PE, polypropylene (PP) and other plastics, chemicals and fertilizers. If the ruling holds, it would remove the basis for the proposed tariffs of Canada and the EU as well as the existing ones already imposed by China. RULING WOULD NOT ELIMINATE THREAT OF FUTURE TARIFFSEven if the higher courts uphold the ruling and bars tariffs under IEEPA, the US has other means to impose duties that are outside of the bounds of the ruling. Section 122 of the Trade Act of 1974. Such tariffs would be limited to 15%, could last for 150 days and address balance of payment deficits. Tariffs imposed under the following statutes would require federal investigations, which could delay them by several months. Section 338 of the Tariff Act of 1930. The president can impose tariffs of up to 50% against countries that discriminate against US commerce. Section 301 of the Trade Act of 1974, which addresses unfair trade practices. This was the basis on the tariffs imposed on many Chinese imports during the peak of the trade war between the two countries. Section 232 of the Trade Expansion Act of 1962, which addresses imports with implications for national security. Trump used this provision to impose tariffs on steel and aluminum. The US has started Section 232 on the following imports: Pharmaceutical and active pharmaceutical ingredient (APIs) – Section 232 Semiconductors and semiconductor manufacturing equipment – Section 232 Medium and heavy-duty trucks, parts – Section 232 Critical minerals – Section 232 Copper – Section 232 Timber and lumber – Section 232 Commercial aircraft and jet engines – Section 232 Ship-to-shore cranes assembled in China or made with parts from China – Section 301 Shipbuilding – Section 301 The case number for the appeal is 2025-1812. The original lawsuit was filed in the US Court of International Trade by the plaintiffs VOS Selections, Genova Pipe, Microkits, FishUSA and Terry Precision Cycling. The case number is 25-cv-00066. Thumbnail Photo: A container ship, which transports goods overseas. (Image by Costfoto/NurPhoto/Shutterstock) Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy

29-May-2025