ICIS Supply and Demand Database

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)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: High bale costs across Europe still major concern for recyclers Margins are squeezed as flake, pellet price talks continue Cost-conscious buyers battle with high R-PET costs compared to PET Cheaper R-PET imports also still offered into Europe

23-May-2025

UK energy price cap for July-September set at £1,720 for an average household This has risen £152 year on year, but is £129 lower than the Q2 cap Forward prices for Q4 ‘25 at premium to Q3 ‘25 anticipating higher winter demand By Anna Coulson and Ethan Tillcock LONDON (ICIS) –The UK energy price cap for July-September will be higher than the third quarter of 2024, energy regulator Ofgem said on 23 May, but will fall compared to the price cap in the second quarter of 2025. Ofgem stated that the recent fall in wholesale prices is the main driver of the overall price cap reduction, accounting for around 90% of the fall, with the remainder primarily due to changes to operating cost allowances suppliers can recover. If forward prices for delivery in the fourth quarter of 2025 remain at current levels, the wholesale component of the cap for the period October-December is expected to be higher than the third quarter. RISING PRICES ICIS assessed the British NBP gas Q3 ‘25 contract at an average of 94.400p/th from 18 February to 16 May, which was the period used by Ofgem to calculate wholesale energy costs for the upcoming cap. This is 35% higher than the Q3 ’24 contract average over equivalent dates in the previous year. Several factors are likely to have contributed to elevated wholesale gas prices. The end of Russian gas transit via Ukraine cut around 15.5bcm/year of remaining supply to Europe at the start of the 2025. European gas reserves finished the winter withdrawal season down significantly year on year, increasing forecast summer injection demand annually. This supported British hub prices as higher prices on the continent drive exports via the BBL and Interconnector pipelines. Investment funds amassed large net long positions in European gas futures amid speculation of a tight summer injection market. Hub prices declined towards the end of the period, trading lower on US tariffs driving global demand reduction forecasts, and the EU easing storage regulations, reducing expected summer injection demand. Gas is a key price driver for the UK power market due to its role in power generation, with power prices tracking the upward trend in NBP prices. ICIS assessed the UK power baseload Q3 ‘25 contract at an average £80.64/MWh between 18 February and 16 May, 25% higher than the Q3 ‘24 over equivalent dates. The Q3 ’25 UK power contract is at a premium to the European equivalents, indicating that the UK is likely to import power through the front quarter. Q4 CAP OUTLOOK On 22 May, ICIS assessed the NBP Q4 ‘25 contract at 94.525p/th, 7.950p/th above the Q3 ‘25 contract. On the same day, the UK power baseload Q4 ‘25 contract was £87.00/MWh, £6.85/MWh above the corresponding Q3 ’25 contract. European gas markets continue to exhibit sensitivity to multiple regulatory and geopolitical drivers. US tariffs are likely bearish for global demand due to stifling economic growth; however, de-escalation may continue in the coming months. Reduced gas storage targets at the EU level may push increased risk across the region from the injection season into Winter ’25 delivery. Entering the fourth quarter, cold weather and low wind generation present risks as this would increase heating and gas-for-power demand, with several periods of dunkelflaute in the previous winter causing demand surges. French nuclear availability is another key driver for UK power prices through the fourth quarter. ICIS assessed the UK power baseload Q4 ’25 contract at €102.41/MWh on 22 May, €25.61/MWh above the French contract, indicating that the UK is likely to import power from France. Data from EDF on 22 May shows that French nuclear availability is scheduled to average 57.1GW from 1 October to 31 December, 15.1GW above the 2020-24 average amid the recent commissioning of the 1.6GW Flamanville 3 plant. However, downward revisions in French nuclear availability through the fourth quarter of 2025 would be a bullish driver for French and UK power prices BACKGROUND Introduced in January 2019, the price cap sets the maximum price that energy suppliers can charge end-users for each unit of energy. .

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

HOUSTON (ICIS)–US trucking activity edged lower in April as the industry has yet to experience a recovery as it deals with tariff uncertainty and softening economic indicators, according to the American Trucking Associations (ATA) seasonally adjusted For-Hire Truck Tonnage Index. The index fell by 0.3% in April after contracting by 1.5% in March, as shown in the following chart. Source: American Trucking Associations ATA chief economist Bob Costello said the index has fallen for two consecutive months after surging in February to its highest since May 2024. “Unfortunately, a recovery that was expected this year hasn’t transpired as the industry deals with a freight market in flux from tariffs and softening economic indicators,” Costello said. The not seasonally adjusted index, which calculates raw changes in tonnage hauled, equaled 112.0 in April, 2.2% below March’s reading of 114.6. Both indices are dominated by contract freight, as opposed to traditional spot market freight. RATES EDGE HIGHER ON ROADCHECK WEEK Broker-posted spot rates in the FTR Transportation Intelligence Truckstop system for dry van and refrigerated equipment soared during the week ended 16 May (week 19) due to the annual International Roadcheck roadside inspection event, which was held 13-15 May. FTR’s Trucking Conditions Index reading for March improved to a positive 0.28 reading from -0.21 in February, as shown in the following chart. Avery Vise, FTR’s vice president of trucking, said more volatility is expected in the near term. “After a strong first quarter in freight volume – at least partially due to a pull-forward of imports in advance of tariffs – we expect more volatility in the months ahead as shippers respond to US trade policy shifts,” Vise said. “The recent short-term agreement between the US and China greatly reduces the potential near-term hit to freight volumes, but we still expect uncertainty and higher costs for consumers to be drags on the economy and freight,” Vise said. WHITE HOUSE ORDER COULD REDUCE DRIVERS Vise said a wild card that market participants are watching is whether renewed scrutiny concerning truck drivers’ English language skills and non-domicile commercial driver’s licenses (CDLs) will affect the driver supply significantly. US President Donald Trump signed an executive order recently aimed at, “ensuring anyone behind the wheel of a commercial vehicle is properly qualified and proficient in English”. ATA Senior Vice President of Regulatory & Safety Policy Dan Horvath said the executive order responds to its concerns on the uneven application of this existing regulation and looks forward to working with regulators on an enforcement standard. A distributor in the US chemical markets said it has not seen any disruptions in its trucking operations and suggested enforcement could be difficult. Trump’s order reversed a 2016 policy that said commercial vehicle drivers should not be placed out-of-service for English language proficiency (ELP) violations. The Commercial Vehicle Safety Alliance (CVSA), a nonprofit organization comprised of local, state, provincial, territorial and federal commercial motor vehicle safety officials and industry representatives, issued updated guidance this week that ELP violations will be out-of-service offenses again beginning 25 June.

22-May-2025

HOUSTON (ICIS)–Chemical plants along the US Gulf Coast will face another active hurricane season, but any potential disruptions will be partially if not entirely offset by excess global capacity and weaker demand growth. Meteorologists expect up to 10 hurricanes in the Atlantic basin during this year's hurricane season, which starts in June and lasts through November The global supply glut of plastics and chemicals will continue in 2025 and beyond Global plastic and chemical demand will weaken because of tariffs and a prolonged manufacturing downturn BUSY HURRICANE SEASONMeteorologists expect a busy hurricane season as shown in the following table: AccuWeather CSU US 30-Year Average Hurricanes 7-10 9 6-10 7 Major hurricanes 3-5 4 3-5 3 TOTAL 13-18 17 13-19 14 *Major hurricanes have wind speeds of at least 111 miles/hour (178 km/hour) Sources: AccuWeather, Colorado State University (CSU), US National Oceanic and Atmospheric Administration (NOAA) Hurricanes directly affect the chemical industry because plants and refineries shut down in preparation for the storms, and they sometimes remain down because of damage. Power outages can last for days or weeks. Hurricanes shut down ports, railroads and highways, which can prevent operating plants from receiving feedstock or shipping out products. Most US petrochemical plants and refineries are on the Gulf Coast states of Texas and Louisiana, making them prone to hurricanes. Other plants and refineries are scattered farther east in the states of Mississippi, Alabama and Florida, a peninsula that is also a hub for phosphate production and fertilizer logistics. Hurricanes can shut down LNG terminals, most of which are concentrated along the Gulf Coast. If the outages last long enough, it can cause a local glut of natural gas and a decline in prices. US prices for ethane tend to rise and fall with those of natural gas, so a prolonged shutdown of LNG terminals would lower feedstock costs – especially if the hurricane also shuts down ethane crackers. Petrochemical plants outside of the US are becoming increasingly reliant on that country's exports of ethane, ethylene and liquefied petroleum gas (LPG), a feedstock for crackers and for propane dehydrogenation (PDH) units. Most of these terminals are on the Gulf Coast, leaving them vulnerable to disruptions caused by hurricanes. HOTTER SUMMER COULD REDUCE THROUGHPUT AT GAS PLANTSExtremely high temperatures can reduce the throughput of Texan natural gas processing plants, which extract ethane and other natural gas liquids (NGLs) from raw natural gas. Such reductions took place in 2024 during the peak summer months of August and September, when temperatures are typically at their highest in many parts of Texas. Texas has natural gas processing plants in the western and fractionation hubs in the eastern parts of the state. For both regions, summer temperatures should be 1-2°F higher than normal, according to AccuWeather, a meteorology firm. That amounts to 0.6-1.0°C higher. CHEM OVERCAPACITY GROWS BIGGERThe effect of any shutdowns of chemical plants will be blunted by excess global capacity. Companies have continued to start up new plants, despite the oversupply of plastics and chemicals. ICIS FORECASTS WEAKER 2025 DEMAND GROWTHAny disruptions to chemical production would take place amid weaker demand growth. ICIS forecasts that 2025 demand growth for most commodity plastics will slow from 2024 and remain well below levels in 2018 and earlier. The following chart ICIS past demand growth rates and forecasts for 2025. Source: ICIS Growth rates are slower in part due to uncertainty caused by US trade policy. ICIS expects global GDP to expand by 2.2% in 2025, down from 2.8% in 2024. Global manufacturing is expected to contract globally. The following breaks down forecasts for national purchasing managers' indices (PMI). Anything below 50 indicates contraction. Sources: Institute for Supply Management, S&P Global and JP Morgan RESUMPTION OF TARIFFS WOULD FURTHER WEAKEN DEMANDIn July, the US could resume imposing its higher reciprocal tariffs against much of the world, including the EU, following a 90-day pause announced in April. The EU is preparing a list of retaliatory tariffs that covers many US imports of commodity chemicals and plastics, including the following: Caustic soda Acetic Acid Vinyl acetate monomer (VAM) Polyethylene (PE) Polypropylene (PP) Polystyrene (PS) Acrylonitrile butadiene styrene (ABS) Polyvinyl chloride (PVC) Polyethylene terephthalate (PET) The US and EU may extend the pause or reach a trade agreement that would do away with the need for retaliatory tariffs. But if the two sides fail to reach an agreement, then the EU's retaliatory would likely reduce demand for US plastics and chemicals. Demand for US plastics and chemicals could take another hit in mid-August if the US and China resume triple-digit tariffs following their 90-day pause. The pause would expire right before hurricane season reaches its peak in the US. Insight article by Al Greenwood Thumbnail shows a hurricane. Image by NOAA.

22-May-2025

PANAMA CITY (ICIS)–The Panama Canal is working to develop new products and services for different client segments while managing capacity constraints that have affected operations, particularly following the severe drought impacts of 2024, an executive at the Panama Canal Authority (PCA) said. Arnoldo Cano, manager of strategic planning at the PCA, outlined plans to make the canal more resilient through future droughts. Additionally, the PCA is working with private and public bodies to come up with new business lines which can guarantee a healthy financial performance. Cano was speaking to delegates at the logistics conference organized annually by the Latin American Petrochemical and Chemical Association (APLA). LARGER VESSELS"The canal's growth practically since its opening has not been driven by an increase in the number of transits – the growth in volume and canal business has really been driven by growth in transit size, as vessels transit roughly the same number of transits each year but are evidently much larger," said Cano. “The expansion with a third set of locks has allowed a significant increase in the number of massive transits, almost a multiplication of cargo volume from that route." However, this growth was severely impacted by the 2024 drought, which caused a significant drop in both transit numbers and cargo volumes. Cano said that ensuring water supply represents one of the most important initiatives to minimize the probability of similar disruptions recurring. Beyond water security, the canal is developing new business models to serve different types of clients more effectively. The current booking system operates on a first-come, first-served basis with prior reservations to ensure maximum capacity utilization. "This model has been successful for certain types of clients, especially service clients and data clients who benefit from the system. But we need alternative approaches,” said Cano. “We continue exploring alternatives for clients never registered in different businesses, who we think could benefit enormously from different schemes to ensure canal capacity is available to clients, so they have certainty of access to a transit slot when they need to make the decision to transit through the canal." The Panama Canal connects more than 180 ports worldwide, making it a critical nexus for international shipping. Cano said the PCA is working hard to develop “flexible solutions” that provide certainty regarding transit dates, costs and capacity availability while maintaining the waterway's sustainability. The PCA continues working on initiatives both independently and in collaboration with government and private sector partners to enhance the value proposition beyond simply reducing transportation costs through shorter routes, he concluded. The APLA logistics conference ran in Panama City on 20-21 May.

22-May-2025

PANAMA CITY (ICIS)–Latin America's chemicals transportation sector is grappling with a severe driver shortage, an aging workforce, and mounting safety challenges that threaten regional supply chains, according to industry executives this week. The trucking industry across the region faces multiple structural problems, with the average driver’s age reaching approximately 55 years, with younger workers showing reluctance to join the profession. In Mexico, the problem has become especially acute, according to Pablo Alvarez, a consultant at Excellence Freight, who estimated the country suffers from a shortage of nearly 100,000 truck operators, with similar patterns emerging across other Latin American countries. Alvarez was speaking to delegates at the logistics conference organized annually by the Latin American Petrochemical and Chemical Association (APLA). ROAD SECURITY, TOUGH LIFESYTYLE“Road security has emerged as a primary concern deterring potential drivers. Organized crime, kidnappings, assaults, murders, and the risk of death are some of the major factors deterring them,” said Alvarez. “With drivers carrying valuable chemical cargoes sometimes worth millions of dollars, they are becoming attractive targets for criminal organizations.” The lifestyle demands of long-haul trucking further compound recruitment challenges for chemicals firms. While wages are quite competitive as the industry tries to overcome the driver shortages, truck operators frequently spend extended periods away from home, with some trips lasting up to 10 days to cross regional borders. This creates work-life balance issues that particularly affect efforts to attract younger workers and women to the profession. As wages are already competitive, companies must therefore improve working conditions beyond just salaries, said Martin Rojas, an executive at the International Road Transport Union (IRU). "After a long trip, probably 10 days to reach the destination, being received properly is very important. We see practices where drivers wait 12 hours for loading or unloading only to be rushed through the remainder of their tasks, and that is simply not good,” said Rojas. Infrastructure limitations further complicate operations, with many drivers forced to park alongside highways due to insufficient rest facilities. Meanwhile, long wait times at border crossings also add to operational inefficiencies and driver frustration. WIDER LATIN AMERICAThe labor shortage has broader implications for Latin America's chemical industry, which relies heavily on road transportation to move products across the region's vast distances. Companies are beginning to explore collaborative approaches to address working conditions, professional development, and industry image to make trucking a more attractive career. "We have much more to offer operators than just wages. This is a great opportunity for the industry to help the transportation sector fulfill this region's needs and attract people to work as transport operators,” concluded Rojas. The APLA logistics conference in Panama City was held on 20-21 May.

22-May-2025

LONDON (ICIS)–The European Parliament made the decision to impose higher tariffs on fertilizers and certain agricultural products from Russia and Belarus on Thursday. The new rates are expected to come into effect from 1 July, to give stakeholders time to prepare for the changes. The move is a significant one, aimed at addressing both food security concerns within the EU and limiting financial resources available to Russia amid its ongoing conflict with Ukraine. Tariffs on nitrogen-based fertilizers will increase gradually over three years, starting from 6.5% + €40/tonne from 1 July 2025 and potentially reaching around 100%. This steep rise in tariffs is designed to make trade economically unfeasible. An additional duty of 50% will be applied to specific farm produce imported from these countries. EU tariffs for urea, AN, CAN and UAN of Russian origin Time period Proposed tariff From 1 July 2025 until 30 June 2026 6.5% ad valorem + €40/tonne From 1 July 2026 until 30 June 2027 6.5% ad valorem + €60/tonne From 1 July 2027 until 30 June 2028 6.5% ad valorem + €80/tonne From 1 July 2028 6.5% ad valorem + €315/tonne ad valorem "according to the value" The primary goal of these tariffs is twofold: To safeguard EU food security by reducing dependency on imports that may be compromised due to geopolitical tensions. To limit the revenue streams that support Russian military operations in Ukraine. These measures could lead to increased prices for fertilizers and affected agricultural products within the EU, impacting farmers’ production costs. There may also be shifts in supply chains as producers seek alternative sources or adjust their strategies in response to higher import costs. This action reflects broader efforts by the EU to respond strategically to international conflicts while ensuring stability within its own markets. Thumbnail image source: Shutterstock

22-May-2025

BARCELONA (ICIS)–Participants at the Asia Petrochemical Industry Conference (APIC) expect chronic oversupply conditions hurting the chemical sector will start to rebalance by 2028-2030. China overcapacity, trade war is causing an unprecedented crisis Polyethylene (PE), polypropylene (PP), paraxylene (PX) in structural oversupply Hopes for rebalancing by 2028-2030 as plants shut down, capacity build slows Demand is flat but India is the exception – a beacon of growth for the region Taiwan, Thailand struggle to compete against China, Middle East Trade war will cause “cataclysmic” changes in global trade Sustainability still seen as a growth driver, especially for polymers Growing reliance on US ethane for chemical production in Asia In this Think Tank podcast, Will Beacham interviews John Richardson from the ICIS market development team and ICIS deputy news editor for Asia, Nurluqman Suratman. 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.

22-May-2025