Methanol

HOUSTON (ICIS)–US-listed shares of chemical companies fell sharply on Friday and performed worse than the overall market following the growing conflict between Israel and Iran. Iranian missiles hit Tel Aviv in a retaliatory attack that reportedly caused injuries, according to the Wall Street Journal. Most of the missiles were intercepted or fell short, according to Reuters and the Wall Street Journal, which reported the Israeli military. Earlier, Israeli warplanes attacked multiple sites in Iran. Following news of the attacks, the major US stock indices followed by ICIS fell, but not as sharply as shares of chemical companies. The following table shows the major indices followed by ICIS. Index 13-Jun Change % Dow Jones Industrial Average 42,197.79 -769.83 -1.79% S&P 500 5,967.97 -68.29 -1.13% Dow Jones US Chemicals Index 832.55 -12.02 -1.42% S&P 500 Chemicals Industry Index 885.14 -15.59 -1.73% The following table shows the US-listed shares followed by ICIS. Name $ Current Price $ Change % Change AdvanSix 23.99 -0.49 -2.00% Avient 34.3 -1.42 -3.98% Axalta Coating Systems 28.79 -1.37 -4.54% Braskem 3.67 -0.07 -1.87% Chemours 10.98 -0.49 -4.27% Celanese 54.63 -2.24 -3.94% DuPont 66.87 -1.57 -2.29% Dow 29.9 -0.24 -0.80% Eastman 76.19 -1.93 -2.47% HB Fuller 54.16 -1.92 -3.42% Huntsman 10.9 -0.64 -5.55% Kronos Worldwide 6.23 -0.22 -3.41% LyondellBasell 60.1 -0.03 -0.05% Methanex 36 1.57 4.56% NewMarket 648.7 -6.24 -0.95% Olin 20.38 -0.67 -3.18% PPG 106.3 -5.73 -5.11% RPM International 108.08 -6.78 -5.90% Stepan 54.42 -1.26 -2.26% Sherwin-Williams 335.88 -20.32 -5.70% Tronox 5.56 -0.23 -3.97% Trinseo 3.4 0.02 0.59% Westlake 77.3 -1.32 -1.68% Methanex shares rose after it passed a regulatory milestone in its $2.05 billion purchase of the methanol business of OCI Global. Meanwhile, Brent and WTI crude futures both rose by nearly $4/bbl. US producers idled three oil drilling rigs, bringing the total to 439, the lowest figure since October 2021. EUROPEAN SHARES FELL EARLIER IN THE DAYEarlier, Europe chemicals stocks and equities markets fell in morning trading on Friday in the wake of Israel’s strikes across Iran, including nuclear facilities, with the prospect of additional attacks chilling sentiment. The International Atomic Energy Agency (IAEA) confirmed on Friday that Iran’s Natanz nuclear enrichment facility had been struck in the first salvo of strikes that also hit residential areas as part of attacks on military leaders and nuclear scientists. Israel’s Prime Minister, Benjamin Netanyahu, stated on Friday that strikes will continue “for as many days as it takes” to remove nuclear enrichment facilities, as US Secretary of State Marco Rubio urged the Iranian government not to respond. The IAEA noted on Thursday that Iran is potentially in breach of its non nuclear-proliferation agreements for the first time since the early 2000s, but Rafael Mariano Grossi, director general of the nuclear watchdog, attacked the strikes on Friday. “Nuclear facilities must never be attacked, regardless of the context or circumstances,” he said, noting that there is presently no elevation at the Natanz site. MARKETS Oil prices soared in the wake of the strikes, with Brent crude futures jumping nearly $5/barrel on Friday to $74.31/barrel, the highest level since April, while WTI futures were trading at $73.15/barrel, the highest since January. Equities slumped as commodities surged, with Asia bourses universally closing in the red and all key European stock indices trading down in morning trading. The STOXX 600 chemicals index was trading down over 1% as of 10:30 BST, in line with general markets, with stock prices for a third of the 21 component companies down 2-3%. The hardest-hit were Fuchs, LANXESS and Umicore, which saw stocks fall 3.72%, 3.24% and 2.97% compared to Thursday’s close. The situation has also had a dramatic impact on fertilizers markets, with Iran a key global exporter of urea, and some contacts reporting disruption in Israel’s supply of gas to Egypt. SHIPPING Shipping could also face further disruption, with the UK’s Maritime Trade Operations (UKMTO) monitor publishing an advisory on Wednesday – before the start of the Israel  strikes – that increased Middle East military activity could impact on mariners. “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution,” the watchdog said. Around 20% of global oil trade passes through along the Strait of Hormuz, and any move by Iran to block the route could have a huge impact on freight traffic that is still disrupted by firms avoiding the Red Sea in the wake of Houthi strikes. Activity in the Red Sea is understood to have subsided in recent weeks after a US-Houthi ceasefire but shipping firms remain leery of the route, and the attacks on Iran could further inflame tensions in the region. Higher risk and insurance price hikes could also drive shipping prices through the region steadily higher. The upward movement for shipping prices had showed signs of plateauing this week, with China-Europe and China-US route charge steady week on week as of 12 June after weeks of surges, according to Drewry Supply Chain Advisors. Some freight indices continued to climb, however, with the Baltic Exchange’s dry bulk sea freight index up 9.6% as of 12 June, the highest level since October 2024. Thumbnail image: Iran Tehran Israel Strike – 13 June 2025. Iran's IRIB state TV reported explosions in areas of the capital of Tehran and counties of Natanz, Khondab and Khorramabad. (Xinhua/Shutterstock) Additional reporting by Tom Brown

13-Jun-2025

LONDON (ICIS)–OCI Global has secured US regulatory clearance for the $2.05 billion sale of its methanol business to Methanex, representing the last approval needed for the deal to move forward, the Netherlands-based producer said on Thursday. Methanex had originally agreed to acquire the business in September 2024, encompassing OCI’s Us and European methanol production assets. The deal is expected to close on 27 June, subject to closing conditions, OCI said. Under the definitive agreement with OCI, the $2.05 billion purchase price will consist of $1.15 billion in cash, the issuance of 9.9 million common shares of Methanex valued at $450 million – based on a $45 per share price – and the assumption of $450 million in debt and leases. OCI is expected to become the second largest shareholder in Methanex following the transaction, owning about 13% of its shares. The company’s methanol arm operates a facility in Beaumont, Texas, with annual production capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia, as well as s 50% interest in another Beaumont site co-run with Proman. The deal also includes a 1 million tonne/year methanol facility in Delfzijl, Netherlands, currently not in production due to unfavourable natural gas pricing, and OCI’s HyFuels business.

12-Jun-2025

SINGAPORE (ICIS)–As China steps up efforts to meet its dual carbon targets, hydrogen is becoming a practical and strategic tool to cut emissions from the country’s highly carbon-intensive cement industry. Cement industry under carbon pressure From hydrogen as substitute to carbon utilization for new value Five-year window open for low-carbon pilots Cement accounts for around 13-14% of China's total carbon dioxide (CO2) emissions, ranking it the third-largest industrial source after power and steel. Facing mounting pressure from both international carbon regulations and domestic policy, China can tap hydrogen as a promising route toward meaningful emissions reductions. China’s cement industry is estimated to have emitted about 1.20 billion tonnes of CO2 in 2023, down for a third straight year. Emissions stood at 1.23 billion tonnes of CO2 in 2020, when China’s cement clinker output peaked at 1.58 billion tonnes, and cement output hit 2.38 billion tonnes, according to China Building Materials Federation. Around 60% of this comes from the chemical reaction when limestone is heated to make clinker, a process that is difficult to change in the short term due to raw material constraints. Another 35% comes from fossil fuels combustion to generate heat for clinker production, which is a key substitution target. As of March 2025, China's national ETS (Emissions Trading Scheme) expanded to include cement, alongside steel and aluminum, hence, the cement sector is also now fully exposed to carbon pricing. However, despite policy urgency, due to technical and equipment retrofitting complexities, the sector has moved slowly. The next five years will represent a pivotal window to scale pilot projects and validate decarbonization pathways. TWO ROUTES: CLEANER COMBUSTION & CARBON USE Hydrogen can help reduce emissions from cement mainly in two ways: fossil fuel substitution and carbon utilization. Fuel substitution with hydrogen is the immediate decarbonization leverage. Hydrogen can directly replace coal or gas in kilns. Its high calorific value and zero-carbon combustion profile make it an ideal fuel. However, because of its weak flame radiation and explosion risk, hydrogen is usually mixed with other fuels in current tests. European players lead the change: Cemex, a leading global building materials manufacturer, completed hydrogen retrofits at all its European cement plants by 2020, targeting a 5% CO2 reduction by 2030. Heidelberg Materials, another cement giant actively exploring hydrogen applications, achieved 100% net-zero fuel operation at its UK Ribblesdale plant in 2021, using a mix of 39% hydrogen, 12% meat and bone meal, and 49% glycerin. Another option is to combine CO2 capture from kiln exhausts with renewable hydrogen to synthesize e-methanol or e-methane. E-methanol and e-methane are synthetic fuels made by combining captured CO2 with renewable hydrogen using renewable electricity. LafargeHolcim, as one of the largest cement producers in the world, has multiple hydrogen decarbonisation projects across Europe. It is leading with its HyScale100 project in Germany, which aims to install electrolyzers at its Heide refinery, and combine electrolyzed hydrogen with CO2 from its Lägerdorf plant to produce e-methanol starting 2026. This model not only reduces emissions but also builds links across industries to create a circular carbon economy. CHINA: FROM POLICY PUSH TO PILOT PROJECTS Policy support is gaining momentum in China. The 2024 Special Action Plan for Cement Energy Saving and Carbon Reduction aims to raise alternative fuel use to 10% by 2025, explicitly naming hydrogen. The Ministry of Industry and Information Technology (MIIT) sets out a 2030 goal to commercialize low-carbon kilns using hydrogen. Amid the decarbonization policy signals, China’s major cement producers are also stepping up: The Beijing Building Materials Academy of Scientific Research (BBMA) under Beijing Building Materials Group (BBMG) completed China’s first industrial trial in December 2024 using >70% hydrogen in calcination. Anhui Conch Cement Company used 5% hydrogen in pre-calciners, cutting 0.01 tonnes of CO2 per tonne of clinker, albeit with an added cost of yuan (CNY) 32.7/tonne. Tangshan Jidong Cement is building a full hydrogen supply chain in partnership with China National Chemical Engineering. Hydrogen is also being produced on-site using waste heat from clinker kilns to power electrolysis – a promising approach to localize supply and enhance energy efficiency. CHALLENGES STILL AHEAD Despite policy and pilot momentum, commercialization hydrogen use in China’s cement sector still faces barriers. Renewable hydrogen costs are too high for wide use. Studies suggest it would need to fall below $0.37/kg to be cost-effective in cement under carbon trading. Hydrogen is hard to store and transport, and its flame instability requires kiln retrofits and safety systems. China also lacks unified national technical standards for using hydrogen in cement, slowing adoption. Hydrogen may not yet be ready for mass rollout, but it is clearly part of the future of cement in China. As production costs fall, carbon markets grow, and hydrogen technologies mature, hydrogen could become a real driver of change in one of China’s hardest-to-decarbonize sectors. Insight article by Patricia Tao

10-Jun-2025

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US spiked again this week – and have almost doubled over the past four weeks – as demand has surged ahead of the possible reinstatement of tariffs while capacity remains tight. Supply chain advisors Drewry said the latest sudden, short-term strengthening in supply-demand balance in global container shipping has reversed the trend of declining rates which had started in January. Rates from Shanghai to Los Angeles spiked by 57% this week while rates from Shanghai to New York jumped by 39%, according to Drewry and as shown in the following chart. The drastic increases are seen from other shipping analysts as well. On the Shanghai Containerized Freight Index (SCFI), the Shanghai-USWC rate rose by 58% to $5,172/FEU (40-foot equivalent unit), the largest week-on-week percentage gain since 2016 as strong demand has coincided with tight supply, though capacity is increasing as carriers resume previously suspended services and reinstate blank sailings. Sea-Intelligence CEO Alan Murphy said almost 400,000 TEUs (20-foot equivalent units) are coming back online in the near term. “If we aggregate it across June/July for Asia-USWC, then in June, the lines are increasing capacity 12.8% compared to before the tariff pause, and in July, the capacity injection is increasing to 16.5% compared to the pre-pause situation,” Murphy said. “Capacity has also ramped up sharply compared to just a week ago, with this injection of capacity equaling 397,000 TEU across the two months.” The growth in capacity is shown in the following chart from Sea-Intelligence. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said the spike is likely because shippers are so concerned about getting goods moving during the 90-day window that they are willing to pay more. “Right now, it seems carriers are telling shippers to jump, and some are replying ‘how high?’,” Sand said. “This will not last because capacity is heading back to the transpacific and the desperation of shippers to get supply chains moving again will ease once boxes are on the water and inventories begin to build up,” Sand said. “Spot rates are expected to peak in June before downward pressure returns.” Rates from online freight shipping marketplace and platform provider Freightos have yet to capture the dramatic increase, but Judah Levine, head of research at the company, said 1 June general rate increases (GRIs) are starting to push daily prices up sharply. “Rates have spiked 72% to the West Coast since last week to $4,765/FEU and 44% to the East Coast to $5,721/FEU, with more increases likely and additional hikes announced for mid-month,” Levine said. Analysts at US logistics platform provider Flexport said they expect a further rush of cargo from southeast Asia to the US West Coast toward the end of June. Flexport analysts expect carriers to be back to full capacity on the transpacific eastbound trade lane by the end of June, noting that week 23 capacity is 11% below standard levels but is expected to exceed standard levels by 3% by week 25. 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 US chemical tanker freight rates assessed by ICIS were mostly unchanged. However, rates decreased from the US Gulf to Europe. The USG to Rotterdam route is overall steady as weaker demand is being offset by limited availability, particularly for larger parcels. Larger requirements are well represented, with several larger lots of methanol, methyl tertiary butyl ether (MTBE) and caustic soda fixed or indicated to the ARA. There was also some interest in sending some smaller lots of glycols and styrene. From the USG to Asia, the uptick in interest to rush glycols to beat the deadline to China seems to have all but ended as the market saw only a few new inquiries. On the other hand, several larger parcels of methanol were either fixed or quoted to the region. As contract of affreightment (COA) volumes are being firmed, and due to the absence of market participants, freight rates have eased some, with more downward pressure on smaller parcels. On the USG to Brazil trade lane, the market has been steady, leading rates to remain unchanged week on week. There was a stable level of spot activity with only a handful of new requirements. Overall, the market remains slow despite several cargoes being quoted and fixed. Despite the uptick in inquiries there is not enough significant activity that would suggest any increase in demand, with caustic soda, glycols and styrene the most active. The regular owners have space remaining and are trying to fill space while supporting current freight levels. Activity typically picks up during summer months, but this is not currently being seen. As a result, freight rates are now expected to remain steady for the time being. Focus story by Adam Yanelli 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

05-Jun-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

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

HOUSTON (ICIS)–Asia-US container rates surged this week as trade between the US and China is expected to surge amid the 90-pause on reciprocal tariffs between the two nations. Rates from online freight shipping marketplace and platform provider Freightos showed minimal increases in the low-single digits, but rates from supply chain advisors Drewry showed significant increases of 19% from Shanghai to New York and 16% from Shanghai to Los Angeles, as shown in the following chart. Following the latest US–China trade developments, Drewry expects an increase in Transpacific spot rates in the coming week due to shortage in capacity. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said the 90-day pause is expected to lead to a surge of activity, where spot rates will peak and then flatten as carriers redeploy capacity to match demand over the next two to four weeks. “The US-China announcement on the temporary lowering of tariffs fired the starting gun for shippers to rush as many imports as they can during the 90-day window of opportunity,” Sand said. “There is no time to waste for these shippers and the rush of cargo will put upward pressure on spot rates on Transpacific trades.” But Sand said that a deeper dive into data shows shippers paying prices towards the market mid-high for rates agreed post the US-China announcement, while legacy agreements struck before 12 May will continue to keep a lid on the bubbling market averages for a short time. The following chart shows Xeneta’s rates from North China to the US Gulf. Judah Levine, head of research at Freightos, also expects to see a surge in imports. “We are likely to see a significant demand rebound in the near term as shippers replenish inventories that may have started to run down in the past month and as many Chinese manufacturers have high levels of finished goods already ready to ship,” Levine said. With an August deadline for the possible return of higher tariff levels, it is also likely that the near-term ocean demand rebound will mark the start of more frontloading, Levine said. “If so, it would also mark the early start of this year’s peak season, which could end earlier than usual as well for the same reasons,” Levine said. TANKER RATES STABLE TO LOWER US chemical tanker freight rates assessed by ICIS were stable to lower this week with rates for parcels from the US Gulf (USG) to Asia dropping once again. Rates from the USG to Asia ticked lower both for smaller parcels and larger parcels. Overall, market activity is weaker for most destinations to Asian ports, prompting owners to reposition tonnage to bridge the gap between southeast Asia and northern destinations. Overall, along this route there is very little quoted, aside from the usual contract of affreightment (COA) volumes there has not been much activity, besides the usual methanol and monoethylene glycol (MEG) cargoes. From the USG to Brazil, the market COA volumes remain steady as there were some inquiries and much less space is available for May for part cargoes, as COA nominations appear completed for the month. According to one ship broker, “owners are reporting very limited parcel space available”. The usual mix of caustic soda and methanol seems to be most visibly seen quoted in the market. For the USG to Rotterdam, there are some bits of cargo space still available for May. Most of the outsider vessels that were on berth have already sailed, and only the regulars remain at this time as they push tonnage availability which is all but full. However, there were steadier quotes styrene, methanol and caustic seen in the market this week for June loadings. Freight rates are now expected to remain steady for the time being. With additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

16-May-2025

HOUSTON (ICIS)–Rates for shipping containers were stable to higher this week as carriers have reduced capacity by 4-5% along the trade route amid efforts to stop the slide in prices, but capacity could surge and put downward pressure on rates if the Red Sea ceasefire holds. On 6 May, US president Donald Trump announced that a peace deal had been struck between the US and Houthi rebels, which would bring attacks against shipping to an end in the Red Sea. Since the start of 2024, traffic through the Suez Canal has collapsed and remains at roughly half pre-Gaza conflict levels. CONTAINER RATES Rates from online freight shipping marketplace and platform provider Freightos were flat week on week, and supply chain advisors Drewry showed a 4% increase in rates from Shanghai to New York and a 5% increase from Shanghai to Los Angeles, as shown in the following chart. Drewry expects rates to be less volatile in the coming week as carriers are reorganizing their capacity to reflect a lower volume of cargo bookings from China. Judah Levine, head of research at Freightos, said many US importers have paused orders out of China, but shippers (as well as manufacturers) can hold out only so long before consumers will start to see empty shelves or higher prices. Import cargo at the nation’s major container ports is expected to see its first year-on-year decline in over a year and a half this month as the effect of tariffs increases, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates as shown in the following chart. Alan Murphy, CEO, Sea-Intelligence, said carriers have reduced capacity by 4-5% in April and May on the transpacific trade lane. “When we look across what was deployed in April and what is scheduled for May combined, blanked capacity accounts for 19% of the total Asia to North America West Coast (NAWC) planned capacity, and 17% of the total Asia to North America East Coast (NAEC) planned capacity, across those two months,” Murphy said. “But a high level of blank sailings does not automatically translate into a large reduction of capacity year on year, if the originally planned level of capacity, without blank sailings, constituted a large increase in capacity deployment on a year-on-year basis,” Murphy said. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said the ports of Los Angeles and Long Beach are seeing fewer arrivals than normal. “For example, only 22 arrived the first five days of May, whereas 28.5 arrivals would be normal,” Louttit said. “Only nine are scheduled to arrive in the next three days, whereas 17 in three days would be normal.” 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 UNCHANGED US chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged week on week despite continuing to see downward pressure for several trade lanes. For yet another week, there is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode. Besides contract of affreightment (COA) cargoes, there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, pressuring rates. As a result, owners are sending fewer vessels and therefore keeping rates stable for now due to the lack of available tonnage. Similarly, rates from the USG to ARA and all other trade lanes also held steady. Although COA volumes are lower there are also fewer spot inquiries available. Despite the lack of interest, rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft leaving those vessels to participate in the chemical sector and pressuring chemical rates lower. However, several cargoes of styrene, methanol and caustic soda continue to be seen in the market. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for the balance of May lending downward pressure to spot rates. This is leaving most owners still trying to fill up prompt partial space to WCSAM and to ECSAM for 2H May. Rates are soft and have lost some ground. During the past week large parcels of MEG and caustic soda were seen in the market and as well as a CPP cargo further demonstrating the length in the market and weighing down on rates. Along the USG to India route the spot market is stable and with its usual slow pace. No new cargoes have been heard from the US. With additional reporting by Will Beacham and Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

09-May-2025

SINGAPORE (ICIS)–SABIC swung to a net loss of Saudi riyal (SR) 1.21 billion ($323 million) in the first quarter on the back of higher feedstock prices and operating costs, the Saudi Arabian chemicals giant said on 4 May. in Saudi Riyal (SR) billion Q1 2025 Q1 2024 % Change Sales 34.59 32.69 5.8 EBITDA 2.5 4.51 -44.6 Net income -1.21 0.25 The company reported a Q1 revenue increase driven by higher sales volumes, though this gain was partially tempered by lower average selling prices, it said in a filing on the Saudi bourse, Tadawul. Despite this revenue growth, Q1 net profit faced pressure from a rise in other operating expenses, primarily due to a one-time SR 1.07 billion cost associated with a strategic restructuring expected to yield future cost reductions. QUARTER ON QUARTER PERFORMANCESABIC’s sales volume and average selling prices were relatively stable quarter over quarter, supported by higher production volumes in the chemicals and polymers units, although this was offset by lower overall sales volumes. In the first quarter, revenue of the petrochemicals segment was at SR31.5 billion, representing a quarter-over-quarter decrease of 1%, primarily driven by continued oversupply and weaker demand. While methanol prices improved, monoethylene glycol (MEG) prices were flat amid higher supply and weak demand, along with polypropylene (PP). Meanwhile, polyethylene (PE) prices were supported by global demand, but offset by additional supply. Polycarbonate (PC) prices were lower in the first quarter, mainly due to weak demand across major markets and oversupply. OUTLOOK Manufacturing Purchasing Managers Index (PMI) growth remained slow over the quarter, indicating business pessimism, SABIC CEO Abdulrahman Al-Fageeh said. “Our growth projects are progressing according to plan, including the Petrokemya MTBE plant and SABIC Fujian complex,” Al-Fageeh said. “We are focused on driving operational excellence, advancing transformation, and pursuing selective growth, while maintaining financial discipline and delivering long-term value,” added Al-Fageeh. SABIC projects an expenditure range of $3.5-4.0 billion for the year. SABIC is 70%-owned by energy giant Saudi Aramco. Thumbnail shows a SABIC production facility (Source: SABIC) ($1 = SR3.75)

05-May-2025

HOUSTON (ICIS)–Rates for shipping containers from southeast Asia and Vietnam have risen above rates from China to the US as tariffs – and a 90-day pause on reciprocal tariffs – are already shifting global trade patterns. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said he is now seeing the shifting global trade patterns caused by the tariffs play out in ocean freight rates. “Falling demand out of China has coincided with shippers rushing imports out of Vietnam, which is subject to a 90-day pause on reciprocal tariffs,” Sand said. “Seeing the relationship between these two trades turn on its head is an early indication of the potential for tariffs to shift global trade on its axis.” Sand, using Xeneta data, said importing into the US West Coast from China was more expensive than importing from Vietnam on 16 March. But by 25 April, Vietnam has become the more expensive of the two trades, as shown in the following chart. In another example, the spread in rates between China and southeast Asia trades into US West Coast has widened from $7/FEU (40-foot equivalent unit) on 31 March to $181/FEU on 25 April (with southeast Asia the more expensive). “As shippers stopped or slowed exports from China due to the tariffs, they have accelerated exports from southeast Asia countries, which has caused the spread in freight rates on these trades to widen,” Sand said. AVERAGE GLOBAL RATES TICK LOWER Average global container rates edged lower by 2% week on week, accord to supply chain advisors Drewry and as shown in the following chart. Drewry expects rates to continue to decline in the coming week due to uncertainty stemming from reciprocal tariffs. Blank sailings have surged again this week as carriers strive to maintain rates or at least stop the slide. Alan Murphy, CEO of Sea-Intelligence, said the impact of the trade war has led shippers to pause, or outright cancel, shipments. “This in turn reduces demand for capacity on container vessels, to which carriers respond by cancelling sailings,” Murphy said. Murphy said this level of escalation in blanked capacity illustrates a dramatic change in the market. “Partly from the perspective of the magnitude of the blank sailings, which are more akin to what we tend to see seasonally following Chinese New Year in January/February and Chinese Golden Week in October,” Murphy said. Rates from online freight shipping marketplace and platform provider Freightos also fell over the week, with rates to both US coasts down by 5%. Judah Levine, head of research at Freightos, said some vessels are leaving China only half full because of canceled orders. Levine said some retailers have inventory from front-loading deliveries over the past few months and are taking a wait-and-see approach. PORT CHARGES TARGETING CHINA-LINKED SHIPS Levine said revised guidelines from the US Trade Representative (USTR) targeting China’s dominance in the maritime industry should not lead to the significant port call omissions and congestion that many feared would result from the original per port call proposal. Market intelligence group Linerlytica said that although port fees on Chinese operated and Chinese-built ships are retained, carriers will be able to circumvent the fees by swapping out all of the affected ships in the next 180 days as the fee will no longer apply on the operators’ fleet composition or prospective orders but only on ships calling at US ports on a per voyage basis. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES HOLD STEADY US chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged from last week despite rates continuing to be pressured downward for several trade lanes. There is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode, and besides contract of affreightment (COA) cargoes there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, weighing on rates. The usual spot cargoes of methanol from Jose to China are the only ones reported, leaving methanol requirements from the region active to Asia. Similarly, rates from the USG to ARA and all other trade lanes also held steady. The spot market to Europe gained momentum with a relatively good number of inquiries following the Easter holidays.  Despite the increased interest rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft, leaving those vessels to participate in the chemical sector. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for May lending downward pressure to spot rates and leaving most owners still trying to fill up prompt part space to both South American coasts for 1H May. Rates are soft and have lost some ground. The USG to India route has seen an uptick in inquiries over the last week with no confirmed fixtures. Market talk of a trade deal between the US and India have sparked some interest leaving the rates flat for the time being and expected to remain unchanged in the near term. With additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

25-Apr-2025