Chemicals

SAO PAULO (ICIS)–The plastics transformation sector in Brazil is facing increased costs for all major thermoplastic resins as antidumping investigations target imports from key supplier countries, the president of trade group Abiplast told ICIS. Jose Ricardo Roriz said potential antidumping duties (ADDs) against polyethylene (PE) imports from the US and Canada, for which a final decision could be made as soon as this week, will raise cost pressures in the manufacturing sector. The government body that focuses on overseas trade, the Foreign Trade Chamber (Gecex), will meet on 29 May and several sources expect it to make a decision on ADDs during the meeting. The proposal for ADDs on US and Canadian PE was brought forward by polymers major Braskem in July 2024, prompting Gecex to open its probe in November 2024. If approved, the ADDs will complete antidumping coverage on all principal thermoplastic resins used in manufacturing, including PE, polypropylene (PP), polyvinyl chloride (PVC) and polyethylene terephthalate (PET). "The impact [of the ADDs on PE] will create pressure on costs, which ultimately affects not only the plastic transformation sector, but all industrial chains that use these products as inputs," said Roriz. If enforced, the duties will pose a significant challenge for the manufacturing sector which relies heavily on imported resins to produce a wide range of products including construction, automotives, packaging and consumer goods. Roriz said the ADDs or other trade defense mechanisms are being misused and reiterated Abiplast’s staunch opposition to them. "We are against these movements that turn trade defense instruments into simple tools for closing and reserving markets," he said. GROWING PROTECTIONISMGecex is investigating another proposal for PVC ADDs brought about by Braskem and caustic soda and chlorine derivatives producer Unipar, who claim they are subject to unfair competition. In April, Gecex also began a probe into potential PET dumping from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. In the meantime, the Brazilian government re-imposed ADDs on US-origin PP last year. In 2023, it reintroduced a tax break for the purchase of inputs by chemical companies, called REIQ, which was withdrawn by the previous centre-right administration. In October 2024, the government approved higher import tariffs on dozens of chemicals. Earlier this year, it also approved programs contemplating state subsidies or credit lines at a favorable rate for chemicals companies such as Presiq.

27-May-2025

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the impact of rising interest rates on key chemicals markets – housing and autos. 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.

27-May-2025

SINGAPORE (ICIS)–Singapore's chemicals production declined 3.2% year on year in April amid tariff-led front-loading, official data showed on 26 May, while a pause in 'reciprocal' tariffs could support further growth in H2 2025. Petrochemicals production falls 3.4% in April year on year Overall chemicals cluster output down 3.1% in Jan-Apr 2025 GDP forecast of 2.0% in anticipation of fiscal measures – Nomura The “other chemicals” segment grew 4.1%, driven by increased fragrance output for consumer products, while petrochemicals, petroleum and specialties segments declined by 3.4%, 4.6% and 5.7% respectively last month, the Economic Development Board (EDB) said. High inventory drove declines in petrochemicals and petroleum refined products output, and maintenance shutdowns affected the production of mineral oil additives in the specialties sector. Overall, the chemicals cluster's output declined by 3.1% in the first four months of 2025 compared to the same period last year. Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Shell, based at its Jurong Island hub. Overall, general manufacturing output grew 5.9% year on year in April, declining from the 6.8% growth figure recorded in March. Excluding biomedical manufacturing, output rose by 8.1%. On a three-month moving average basis, overall output rose by 4.6% compared to the same period last year. Seasonally adjusted month-on-month figures showed a 5.3% increase in April, and excluding biomedical manufacturing, a 4.7% increase. “Growth momentum in the second half of 2025 could continue to experience some bouts of resilience given the current pause on reciprocal tariffs and … truce on US-China trade tensions opens a window for continued front-loading by exporters,” said Jester Koh, Associate Economist at Singapore-based UOB Global Economics & Markets Research. However, Koh warned of “payback effects” from front-loading that could result in an even more protracted decline in trade and manufacturing activity in the later half of the year, and into the first half of 2026. UOB raised Singapore’s 2025 growth forecast to 1.7% from 1.5% previously, but lowered its 2026 growth projection to 1.4%, from 1.6%. Concurring with Singapore’s own GDP growth forecast of 0-2% for 2025, Nomura maintained their forecast of 2.0%, in anticipation of large fiscal support measures, which would be worth around 1.0% of GDP. Focus article by Jonathan Yee

27-May-2025

SAO PAULO (ICIS)–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. – Braskem’s PE ADDs proposal could be approved this week – Sources said prices are increasing ahead of measure – ADDs on PVC still being analyzed by government According to several sources, the ADDs on US and Canada PE could be approved by the government’s body for foreign trade, the Foreign Trade Chamber (Gecex), at a meeting to take place on 29 May. Gecex’s investigation into possible PE dumping by the US and Canada into Brazil started in November after local polymers major Braskem filed the proposal arguing unfair competition. ADDs are tariffs imposed on imported goods that are sold at prices lower than their normal value, potentially harming domestic producers, and are widely used as a protectionist measure from unfair competition. Brazilian PE sellers are this week encouraging their customers to bring purchases forward, warning them that the ADDs could potentially be effective from as soon as 2 June. While this could be seen as a strategy by sellers to prop up their sales, the assumption that the ADDs on US and Canada’s PE will be imposed is not senseless, given that it would follow a series of protectionist measures implemented by the government of Luiz Inacio Lula da Silva in the past two years. ICIS put to Gecex the markets’ assumptions about an almost certain green light for the ADDs, but in a written response it said it would not comment. “We cannot make any comments or provide information regarding the progress of the investigation. Likewise, we cannot make any inferences regarding market information provided by third parties,” said Gecex. These ADDs would be provisional, while Gecex would have up to 18 months to decide whether they will become permanent. If PE dumping from the US and Canada could not be proved in the end, the measure would cease to exist. If proved, the measure could become permanent until further notice. NOT RESPONSIBLE FOR HIGHER COSTSIn two letters to customers seen by ICIS, two distribution companies warned about the ADDs, with one of them taking for granted they will be imposed and be effective in June. Global chemicals distributor Vinmar’s Brazil subsidiary warned their customers that any potential “financial loss” from the potential ADDs would not be assumed by the distributor but by the customer. “We are on the verge of the potential entry into force of ADDs on PE imported from the US and Canada. We would like to emphasize that Vinmar, as always, cannot be held responsible for any financial loss of the importer if any import tariffs are implemented or adjusted during the logistic process of delivering the cargo to its recipient,” said Vinmar in the letter. “The cargo cannot be canceled or undergo any adjustment of price/commercial condition as a form of compensation, even if the cargo has not complied with the maximum agreed shipping deadline.” To cover its back entirely, Vinmar concluded the letter clarifying to its customers that “logistic process of delivering the cargo” means from beginning to end: since the containers are loaded, in this case in the US or Canada, until delivery at the port of destination in Brazil. Vinmar had not responded to a request for further comment at the time of writing. Another distributor’s letter to customers said: “As of June 2025, the ADDs will come into effect, which will directly impact costs of PE materials. In addition, Braskem announced a price adjustment for June, which should result in increases in the cost of materials.” Braskem had not responded to a request for comment at the time of writing. A source at a distributor said on Monday, however, that these warnings about potential price increases outside a company’s control are common in the chemicals sector. Consequently, the source said its company had been including in contracts with its customers a clause from the beginning of 2025 highlighting the Gecex investigation, so it can cover its back on the potential higher costs emanating from the ADDs. Meanwhile, Gecex continues investigating another proposal for ADDs on polyvinyl chloride (PVC) brought forward by Braskem and Brazilian caustic soda and chlorine derivatives produce Unipar, also arguing unfair competition. Management at Braskem has publicly stated they were lobbying the government for this measure to be approved, since PVC is one of the plastics which is suffering the most the global oversupply and the consequent low prices. Gecex is currently working on the “preparation of the final report” for those ADDs on PVC, according to information on its website as of Monday. Gecex also started in April an investigation into potential polyethylene terephthalate (PET) dumping in material coming from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek. MORE PROTECTIONISMIf approved, the ADDs on PE from the US and Canada would add to a list of protectionist measures implemented by the Brazilian government of Luiz Inacio Lula da Silva in the past two years, such higher import tariffs for dozens of chemicals from October 2024. Meanwhile, the Brazilian government re-imposed ADDs on US-origin PP and has approved programs contemplating state subsidies or credit lines at favorable rates for chemicals companies, such as Presiq. Brazil’s chemicals producers – represented by trade group Abiquim and including names such as Braskem, Unipar, and Unigel – have been lobbying for protectionist measures against what they see as unfair competition from overseas markets such as the US and China. Aided by lower production costs, companies in those two countries, but also others such as Canada or nations in the Middle East, are blamed by Brazil’s domestic producers for their historically low operating rates, hovering around 60-65%, and the closure of some plants which were not competitive. In an interview with ICIS earlier in May, the director general at Abiquim said the continuation of protectionist measures was key for Brazilian chemicals producers to stay afloat. "Nothing has fundamentally changed in our situation in the past few months. The scenario remains the same, perhaps even worsening with [US President Donald] Trump's trade measures, and we continue suffering with low capacity utilization rates,” said Andre Passos. “Brazil's chemical production has been on a downward trajectory since 2016. Capacity utilization level of our plants [has gone] from above 80% before 2016 to around 60% now." However, importers of polymers and other petrochemicals are understandably on the opposite side of the debate. They argue measures such as high import tariffs or ADDs negatively affect manufacturers who are dependent on chemicals imports and increase inflation, affecting consumers’ purchasing power. Around half of Brazil’s chemicals demand is covered by imports, given the country’s trade deficit in chemicals, a common feature in the wider Latin America. Trade group Abiplast, representing plastic transformers, has repeatedly showed opposition to protectionist measures which increase costs for importers. Front page picture: Port of Santos in Sao Paulo, Latin America’s largest Source: Port of Santos Authority Additional reporting by Bruno Menini Focus article by Jonathan Lopez

26-May-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 23 May. Europe PE, PP sentiment shifts positive for some players on US-China tariff climbdownSentiment is shifting firmer for some polyethylene (PE) and polypropylene (PP) players in the past week, driven largely by the de-escalation of the US-China tariff war. Germany, Europe chemicals bounce back, but pessimism persistsGermany and Europe’s chemical sector bounced back strongly in the first quarter of 2025, but the outlook for the rest of the year remains clouded by fears over the impact of the trade war. Germany’s chemical industry remains weak, despite Q1 ‘sprint’ – VCI economistThe strong performance of Germany’s chemical-pharmaceuticals industry in the 2025 first quarter cannot mask the underlying weakness in chemicals, according to the chief economist of German chemical producers’ trade group VCI. EU backs tariff hike for fertilizers from Russia and BelarusThe European Parliament made the decision to impose higher tariffs on fertilizers and certain agricultural products from Russia and Belarus on Thursday. US to hit EU imports with 50% tariffs starting 1 JuneUS President Donald Trump has warned of plans to impose a  50% tariff on imports from the EU starting on 1 June.

26-May-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. I could present a dozen charts such as the main one in today's post on polypropylene (PP) — for example on polyethylene (PE), ethylene, propylene and styrene—and the patterns would be similar though, of course, the numbers would differ. During the pandemic, while demand dipped in many places, China’s PP consumption rose—from 7% growth in 2019 to 9% in 2020, then stayed strong at 7% in 2021. The same trend played out across other chemicals and polymers. This was the “China in, China out” story: Rising imports of feedstocks to make finished goods that lockdown-affected, cash-rich Westerners were snapping up, backed by stimulus. Margins climbed—not just from demand, but also from refinery feedstock shortages as fuel demand dropped and refinery rates were cut. But 2022 marked a shift. As ICIS Data and Analytics illustrates, multiple headwinds kicked in: The Evergrande Turning Point, China's constantly deteriorating demographics, and a China petrochemicals self-sufficiency drive dating back to 2014. Focusing on China's PP self-sufficiency and exports: China's PP capacity as a percentage of domestic demand is expected to surge from 89% in 2014 to 134% by 2028. In 2020, China’s PP exports were around 500,000 tonnes. In 2023 they reached 1.3m tonnes and climbed to 2.4m tonnes in 2024. ICIS data suggests China’s exports in 2025 could reach 3.1m tonnes. On current trends, China’s exports to ASEAN could exceed 1 million tonnes to ASEAN in 2025 versus less than 900,000 tonnes in 2024. The trade war? Hard to say if it's moved the needle. These structural trends were in motion long before it began—and they’ll likely outlast it too. Sentiment swings (as seen since April’s “Liberation Day”) will keep influencing prices and buying patterns, but the fundamentals remain. The Chemicals Supercycle is over. What comes next? That’s the big question. 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.

26-May-2025

SINGAPORE (ICIS)–Thailand's PTT Global Chemical (GC) is deepening its commitments to feedstock flexibility, high-value specialty and bio-based & green chemicals, as CEO Narongsak Jivakanun urges regional coordination within ASEAN to tackle global supply chain disruptions and overcapacity. Supply chain reorganization a major concern Proposes regional coordination, not just joint ventures GC targets net-zero emissions by 2050 Highlighting the unprecedented challenges facing the chemical industry currently, Jivakanun said, “We've all seen the same situations. It’s simply a period of high uncertainty, making it challenging to manage the business daily.” The CEO was speaking with ICIS on the sidelines of the two-day Asia Petrochemical Industry Conference (APIC) in Bangkok, Thailand, which ended on 16 May. Jivakanun added that “the recent tariffs will blur the picture”. He noted that supply chain issues are a dominant concern, with companies reorganizing their business operations to circumvent potential tariffs and trade barriers. “I think everyone's trying to figure out how best to reorganize their supply chain,” Jivakanun noted. He observed “a big uptick in terms of volumes” before 2 April, followed by a slowdown in some value chains and a trade flow change. CALL FOR ASEAN COLLABORATION AMID OVERSUPPLY Addressing the pervasive industry concern of oversupply, Jivakanun called for regional coordination among ASEAN member countries. “What I envision and propose to all the players is coordination,” Jivakanun said, distinguishing this approach from conventional joint ventures. “We may look at Southeast Asia as a region. If we were to build an ecosystem or supply chain for the future specialty market, we should know where we're heading in terms of market end-use and then work backward,” Jivakanun explained. He believes “now is the time for us to think about that.” He acknowledged data suggesting 2028 would be a turning point for chemicals oversupply conditions, expressing hope for “more careful, more disciplined” capacity building. In response to questions about the current downturn in demand, Jivakanun said “Everyone is trying to keep their assets going as much as they can, aligning with marginal cost.” He added that such conditions are “not sustainable,” anticipating further industry consolidation and rationalization. FOCUS ON THREE STRATEGIC AREAS GC has diversified considerably from being a purely commodity-based business primarily focused in Thailand, and is now focusing on three strategic areas: feedstock flexibility, diversification into bio-based products, and specialty chemicals. GC commands robust feedstock flexibility, allowing it to utilize a wide range of raw materials from ethane to propane and liquid naphtha, he said. “GC derives ethane from the gas fields in Thailand, and we'll continue to maximize that. Now, GC sees an opportunity to bring ethane from the US,” Jivakanun said. This strategic import project will see “400,000 tonnes of ethane from the US to Thailand,” enhancing cost savings from alternative feedstocks. The company expects to begin receiving imported ethane in 2029. This move comes as more companies, from Europe to India and China, are growing comfortable with long-distance ethane shipments, driven by the competitiveness of US shale gas. ADVANCING BIO/GREEN CIRCULARITY AND NET-ZERO ASPIRATIONSBio-based initiatives are among the key focuses for GC. The company began with oleochemicals through its joint venture Emery Oleochemicals, and developed PLA biopolymer via NatureWorks. A significant milestone is the upcoming PLA biopolymer production plant in Thailand, which will utilize sugarcane as a raw material. “The plant is due to be completed by the end of the year and start commercial operation next year,” Jivakanun said. While acknowledging increasing supply in the market, he emphasized that demand growth will stem from “new application” development, citing examples in 3D printing, tea bags, and coffee capsules, particularly driven by Asian markets. More recently, GC has expanded into the biorefinery business, launching an initiative this year using co-processing technology. The co-processing technology allows GC to integrate “non-fossil fuel-based feedstocks into our petroleum-based refinery with very minimal modification,” Jivakanun explained, enabling the production of bio-based products. GC is also Thailand’s first commercialized producer of sustainable aviation fuel (SAF), employing the mass balance approach and is certified by the ISCC CORSIA standard. These efforts align with GC’s commitment to becoming a net-zero company by 2050 through a three-pronged approach: optimizing production to reduce carbon footprint, diversifying to low-carbon and high-value businesses, and implementing CCUs. The company is collaborating with PTT Group on a major CCU infrastructure project in Thailand, and is openly inviting international cooperation in this area. “These strategies define how we aim to grow our business while simultaneously decarbonizing our footprint,” Jivakanun added As for the third pillar, Jivakanun said that one of the company’s growth platform is centered on building regional hubs. “We believe these hubs are vital solutions for the future,” Jivakanun said. GC’s wholly owned subsidiary allnex is now replicating its hub model in India after successfully establishing one in China, with its Phase 1 capacity expansion expected to finish by year-end. The company’s final investment decision for a new allnex southeast Asia hub in Thailand is expected by early next year, leveraging its fully integrated infrastructure in Map Ta Phut, Rayong. Interview article by Nurluqman Suratman Thumbnail image: A PTTGC production facility. (Source: GC company factsheet)

26-May-2025

HOUSTON (ICIS)–Asia-US rates for shipping containers rose this week, leading ocean carriers to rush to ramp up capacity to handle an expected surge in bookings. Rates from online freight shipping marketplace and platform provider Freightos rose by 3% to both US coasts, while rates from supply chain advisors Drewry showed a 2% increase on rates from Shanghai to Los Angeles and a 4% rise in rates from Shanghai to New York, as shown in the following chart. Following the latest US-China trade developments, Drewry expects an increase in spot rates in the coming week as carriers are reorganizing their capacity to accommodate a higher volume of cargo bookings from China. Kyle Beaulieu senior director, head of ocean Americas at Flexport, said during a webinar this week that carriers who initiated blank sailings and discontinued services to the US are now resuming services. Beaulieu said there were 10 China-US services that were halted, and as of today, six are planning to resume from Week 22 to Week 24. Beaulieu said ports in the Pacific Northwest have been the biggest beneficiaries so far as that is the shortest route to the US. Alan Murphy, CEO, Sea-Intelligence, said carriers who were reducing transpacific capacity due to the decrease in bookings from China amid 145% tariffs are now working to ramp up capacity prior to the 14 August deadline. This means that typical peak season volumes now must be shipped no later than mid-July. Judah Levine, head of research at Freightos, said there is still confusion on whether July and August deadlines mean goods need to be loaded at origins by those dates – as was the case with the 9 April tariff deadline – or that goods must arrive in the US by then. “The latter would significantly shorten these lower-tariff windows,” Levine said. “Ocean shipments from Asia would have to move in the next week or two to arrive before 9 July.” Levine noted that carriers have separately come out with mid-month general rate increases (GRIs) from $1,000-3,000/FEU (40-foot equivalent unit) and have similar GRIs planned for 1 June and 15 June with aims to get rates up to $8,000/FEU. “If successful, rate levels would be about on par with the Asia – US West Coast 2024 high reached last July,” Levine said. “Daily transpacific rates as of Monday have already increased about $1,000/FEU to the East Coast and $400/FEU to the West Coast to about $4,400/FEU and $2,800/FEU, respectively.” 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 liquid chemical tanker freight rates as assessed by ICIS held steady this week despite upward pressure for several trade lanes. There is upward pressure on rates along the US Gulf-Asia trade lane as charterers are seeking to send cargos to the region following the pause on tariffs. The announcement caused a significant uptick in spot activity. The increase in interest should be significant but almost certainly short lived as cargoes rush to arrive prior to the 90-day expiration date. Several parcels of monoethylene glycol (MEG) and methanol were seen quoted in the market. Similarly, rates from the USG to Rotterdam were steady this week, even as space among the regular carriers remains limited. Contract tonnage continues to prevail and given the limited available space; spot demand remains relatively good. Several larger sized cargos of styrene, methanol, MTBE and ethanol were seen in the market. Several outsiders have come on berth for both May and June, adding to the available tonnage for completion cargos. Easing demand for clean tankers has attracted those vessels to enter the chemical sector. For the USG to South America trade lane, rates remain steady with a few inquiries for methanol and ethanol widely viewed in the market. Overall, the market was relatively quiet with fewer contract of affreightment (COA) nominations, putting downward pressure on rates as more space has become available. On the bunker side, fuel prices have declined as well, on the back of lower energy prices, as a result week over week were softer. 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

23-May-2025

LONDON (ICIS)–US President Donald Trump has warned of plans to impose a  50% tariff on imports from the EU starting on 1 June. In a post on the Truth Social platform, which is owned by Trump, on Friday, the US President said negotiations with the EU “were going nowhere” and said the bloc “has been very difficult to deal with”. “Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the US of more than $250,000,000 a year, a number which is totally unacceptable,” the post on social media read. Trump went on to stipulate that no tariff would be applied if the product was built or manufactured in the US, but did not clarify how this would pertain to raw materials higher up the value chain. As a net importer, the repercussions for the European chemicals industry may be cushioned from direct tariffs, although this could have more of an impact for certain products like benzene or paraxylene (PX). The EU has declined to respond to the latest announcement. On 9 May, the EU launched a public consultation to determine which US products should be subject to levies, including many chemicals and plastics. The consultation is scheduled to remain open until 10 June, as the EU Commission also consults on restricting certain EU steel scrap and chemical products worth €4.4bn to the US. A 50% duty is an escalation from the previous 20% tariff announced by President Trump on 2 April, when levies of varying degrees were applied to most international trading partners, including a 10% baseline rate for the majority of countries. Tensions between the US and EU eased after a 90-day pause was agreed in early April to allow time for discussions to pave the way for a deal palatable to both parties. Since the initial announcement, the US secured a deal with the UK, with a 10% tariff for auto parts (down from 27.5%), keeping the previously announced baseline 10% rate in place. In exchange, the US will have increased access to UK chemicals, ethanol, and beef markets. The US also agreed a 90-day pause with China on 12 May, allowing Chinese imports to the US to be subject to a 30% tax instead of the 145% tariff, with US goods to China held at a 10% rate instead of 125%. thumbnail photo source: Shutterstock

23-May-2025

SINGAPORE (ICIS)–Malaysia-based LOTTE Chemical Titan (LCT) has signed a three-year naphtha sales contract with Saudi Aramco, according to the company in a bourse statement. The naphtha, estimated at between 300,000-400,000 tonnes/year, will be supplied by Aramco’s unit in Singapore, said LCT on Friday. “Aramco is a major feedstock supplier of naphtha … and has been our long-term supplier,” the company said. The contract will run from July 2025 to June 2028, while the pricing will be based on the market price. LCT operates 12 plants across two sites in Malaysia and holds a 40% share in LOTTE Chemical USA Corp. It has three polyethylene plants in Indonesia through PT LOTTE Chemical Titan Nusantara. LCT is a subsidiary of South Korean major LOTTE Chemical Corp under the LOTTE Group.

23-May-2025