Base oils

MUMBAI (ICIS)–India’s central bank on Friday reduced its benchmark interest rate for the third consecutive time, while retaining its 6.5% GDP growth forecast for the fiscal year ending March 2026. 50-basis point cut bigger-than-expected; monetary policy stance revised to “neutral” Banks’ cash reserve ratio cut by 100bps to 3.0% FY2025-26 average inflation forecast cut to 3.7% from 4.0% The Reserve Bank of India (RBI) delivered a surprise 50-basis point (bps) cut in its policy interest rates to 5.50%, while changing its monetary policy stance to “neutral” from “accommodative”. Market players were expecting a 25bps cut, like in the two previous monetary policy meetings. “After having reduced the policy repo rate by 100 basis points in quick succession since February 2025, the RBI is left with very limited space to support growth,” it said. “Hence, the RBI’s monetary policy committee (MPC) decided to change the stance from accommodative to neutral,” the central bank said. The neutral stance will allow the central bank to maintain flexibility in adjusting policy rates based on prevailing economic conditions. The RBI first lowered its repo rate by 25bps to 6.25% in February after keeping it unchanged for two years; followed by another 25bps cut in April. The central bank also cut its cash reserve ratio (CRR) by 100 basis points to 3.0%, in a bid to boost liquidity in the financial system and encourage credit growth. It had last cut the CRR – which is the percentage of a bank’s total deposits that must be parked with the central bank – in December 2024, as it was trying to rev up economic activity. India’s central bank conducts its monetary policy review every two months. While GDP growth projections for financial year 2025-26 have been retained at 6.5%, “geopolitical tensions and weather vagaries may pose headwinds,” RBI governor Sanjay Malhotra said. India – a major importer of petrochemicals – is the third biggest economy in Asia and is a giant emerging market. Its GDP growth rate in fiscal year ending March 2025 weakened to a four-year low of 6.5% amid global uncertainties over US tariffs. “The uncertainty around the global economic outlook has ebbed somewhat since April in the wake of temporary tariff reprieve and optimism around trade negotiations. However, it continues to remain elevated to weaken sentiments and lower global growth prospects,” the central bank said. While trade policy uncertainty continues to weigh on India’s merchandise export prospects, the conclusion of free trade agreement (FTA) with the UK and progress with other countries will help domestic trade, it added. Meanwhile, the RBI has brought down its retail inflation projection for the current financial year to 3.7% from the earlier projected 4.0%, citing a sharp correction in food prices. In April, India’s retail inflation eased to a six-year low of 3.16% as food prices increased at a slower pace. “Inflation has softened significantly over the last six months. The outlook now gives us the confidence of not only a durable alignment of headline inflation with the target of 4% but also the belief that during the year, it is likely to undershoot the target at the margin,” Malhotra said. Core inflation is expected to remain benign with an easing of international commodity prices in line with the anticipated global growth slowdown, he added. Inflation forecasts New (6 June) Previous forecast Financial year 2025-26 3.7% 4.0% April-June (Q1) 2.9% 3.6% July-September (Q2) 3.4% 3.9% October-December (Q3) 3.9% 3.8% January-March (Q4) 4.4% 4.4% Source: RBI Focus article by Priya Jestin

06-Jun-2025

SINGAPORE (ICIS)–Malaysian state energy giant PETRONAS is shedding 10% of its workforce by the end of the year to navigate challenging operating conditions, primarily driven by falling crude prices. Some 5,000 staff to be affected by the ongoing "right-sizing" process will be notified by the end of this year, PETRONAS president and CEO Tengku Muhammad Taufik Tengku Aziz was quoted as saying by state media Bernama. The company chief held a press briefing in Kuala Lumpur on 5 June to make the announcement. "PETRONAS 2.0 will be run differently, organized differently, will have different work processes, and to move towards that, we will have to correct the work process," he said. The company did not immediately respond to ICIS’ queries on the job cuts. PETRONAS aims for a lean and nimble operation, even if oil prices were to reach $100 per barrel, Muhammad Taufik said. "There is a logic, an assumption set, and a projection that backs it up. Over time, we have seen this—those who have tracked our history will know that when the fields were easier, our profit before tax margin was around 35 to 40 per cent," he said. "Today, it is [between] 25% and 38%. These margins are going to shrink further … So the value-added (PETRONAS) 2.0 has to transform into an organization that monetizes molecules commercially and competitively, not just at home, but also abroad," he said. In 2024, PETRONAS reported a 32% year-on-year decline in its after-tax profit to Malaysian ringgit (M$) 55.1 billion ($13 billion), as revenue fell by 7% due to lower average realized prices. Its petrochemicals arm – PETRONAS Chemicals Group – had a 30.7% slump in net profit over the same period to M$1.18 billion, despite a 7% increase in sales to M$30.7 billion. PETRONAS' budget is predicated on Brent crude trading between $75/barrel and $80/barrel. Currently, the crude benchmark is hovering near $65/barrel, marking a roughly 13% decrease year on year, influenced by global trade tensions and increased output by OPEC and its allies (OPEC+). ($1 = M$4.23) Thumbnail image: PETRONAS Twin Towers in Kuala Lumpur, Malaysia – 15 March 2025 (Md Rafayat Haque Khan/ZUMA Press Wire/Shutterstock)

06-Jun-2025

COLORADO SPRINGS, Colorado (ICIS)–A new regulatory threat for the US chemical industry is emerging from the alignment of two wings of the nation's main political parties, which could use what critics describe as pseudoscience to adopt restrictive and unneeded policies. The two wings are what the American Chemistry Council (ACC) described as the one in the Democratic party aligned with nongovernmental organizations (NGOs) and the one in the Republican party aligned with the MAHA movement. MAHA stands for Make American Healthy Again, and it is a motto coined by Robert Kennedy Jr, the secretary of the US Department of Health and Human Services. Short term, any new policies will likely arise in states because the current federal administration has imposed a high threshold for new regulations. POSSIBLE STATE-LEVEL THREATS FROM NEW HEALTH REGULATIONSWhile new regulations could arise on the state level, those policies could draw some inspiration from the federal government through the so-called MAHA Report issued by the US Department of Health and Human Services. The first pages of the report highlight "aggregation of environmental chemicals" as one of the four areas that could address what it described as a rise in childhood chronic diseases. The report includes a 12-page section entitled "the cumulative load of chemicals in our environment". Instead of recommending policy, the MAHA report calls for more research in the following chemistries: Per-and polyfluoroalkyl substances (PFAS). These are used to make fluorochemicals and fluoropolymers Microplastics Fluoride salt added to water to prevent tooth decay Phthalates that are used to make plasticizers Bisphenols that are used to make polycarbonate (PC) and epoxy resins Pesticides, herbicides and insecticides. The report mentioned glyphosate and atrazine The report also singled out the following classes of chemicals, as shown in the following table: Heavy Metals Waterborne Contaminants Air Pollutants Industrial Residues Pesticides Persistent Organic Pollutants Endocrine-Disrupting Chemicals Physical Agents Source: US Department of Health and Human Services It must be noted that the report explicitly rejects the EU's REACH regulatory system. Even if the report did propose new regulations, they would have to reach a high threshold. The administration of US President Donald Trump said it will require 10 federal regulations to be removed for every new one introduced. However, a new administration could adopt regulations based on the report after Trump's term of office ends in four years. US states do not have to wait for Trump to leave office to adopt regulation that address the issues raised in the report. Already, the states of Florida and Utah have banned fluoride from public water. CHEM INDUSTRY ALREADY RESEARCHING CONCERNS RAISED BY REPORTThe ACC stressed that it supports making the nation healthy. "Everyone supports that. We support it," American Chemistry Council (ACC) CEO Chris Jahn said. He made his comments on the sidelines of the ACC Annual Meeting. With that in mind, the two share the same goals. "We look forward to working with them to make sure that we keep everyone safe, especially children," Jahn said. Moreover, he said the ACC has conducted research on many of the report's concerns, and research is its main call for action. The ACC said its Long-Range Research Initiative (LRI) is focused on ways to assess chemicals for safety. It has also invested in research in microplastics, Jahn said. The federal government already addresses many of the report's concerns under its agencies, such as the Environmental Protection Agency (EPA), Jahn said. The Food and Drug Administration (FDA) regulates food contact and food contamination. As it stands, Jahn said the chemical industry is the most heavily regulated manufacturing sector, and its regulatory burden has doubled in the past 20 years. Regulation is appropriate, but it must be risk-based, science-based and fact-based, Jahn said. "Sound science and sound process leads to sound regulation." NEW REGULATIONS ON HOLD WITH NEW PRESIDENTThe surge of new regulations that characterized the term of the previous president has ended with Trump's inauguration, but that was expected because it happens every time a new president takes office, Jahn said. "They freeze everything in place so they can evaluate what's in the queue, so there's nothing new there. Every president does that." As the administration gets settled in, it may need to adopt new regulations to achieve policy goals. If the administration does propose new regulations, the ACC has proposed existing rules it could purge and that would count multiple times in meeting the 10-rule threshold. One such regulation is the plastics significant new use rule (SNUR), Jahn said. "We've given them a list of over 30 regulations that they could take a fresh look at," Jahn said. "We have plenty of suggestions and opportunities for them to address the 10 for one." The ACC Annual Meeting ran through Wednesday. Insight article by Al Greenwood Thumbnail image: Texas flag. (Source: Westlight)

05-Jun-2025

SAO PAULO (ICIS)–Logistical mayhem at Mexico’s largest port of Manzanillo is hitting imports of chemicals and industrial goods after a strike in May by customs personnel worsened an already poor performance. Players in the distribution sector have said practically all products coming to Manzanillo in Colima state, the port of entry for Asian imports into Mexico with around 40% of the country’s container cargo, are affected as queues are extending to days and affecting the related road and rail transport. The situation has become so dysfunctional that many companies are opting to change their logistical plans and opting to send cargo to the Lazaro Cardenas Port, 350km south in the state of Michoacan. “We're paying a fortune in delays. It is taking days to get a date to make your shipments, and when they give you a date, it keeps moving forward several times, adding to the increasing costs we are facing. We are reducing as much as we can any operation involving Manzanillo,” a chemical's distributor source said. Due to chemicals trade’s safety requirements, the source added the company’s logistical woes had been widened by the implementation of a new Administrative and Customs Matter Proceeding (PAMA in its Spanish acronym) system introduced in 2024, which has increased the checks and costs for many of the shipments. In a written statement to ICIS, a spokesperson for logistical firm Logistica de Mexico (LDM) said the company is turning increasingly pessimistic about the port’s crisis, adding it now expects the crisis could take up three months to normalize. In a letter to customers seen by ICIS, one of the operators at the port of Manzanillo, SSA Marine Mexico, said the crisis “continues without significant improvement” because the resumption of operations after the strike at the end of May had been “partial and with insufficient” staff. The Port of Manzanillo is the largest containerized port in Mexico, with 70% of cargo coming from Asia entering Mexico through it. It handles around 35 million tonnes/year of cargo. STRIKE WORSENS POOR PERFORMANCEUp to May, the Port of Manzanillo already suffered performance problems, attributed by trade unions representing workers at Mexico’s National Customs Agency of Mexico (ANAM) to the lack of staff compounded by poor working conditions for workers. Internal protests escalated during May, with the government increasing presence of military personnel from the Navy (Secretaria de Marina) and deepening the rift. By mid-May, the crisis reached boiling point and protestors “completely blocked” access, the Navy said in a statement on 15 May. An intermittent strike followed, with hours-long stoppages, which practically paralyzed the port up to the week commencing on 23 May. Talks between the government and trade unions continue, with the latest round held on Thursday, but progress has been slow. As well as salary demands, trade unions have said customs workers at the facility have faced workplace harassment, exploitation and unjustified dismissal. The Association of Terminals and Operators of Manzanillo (ASTOM) has been quoted on Mexican news outlets this week saying it expects a resolution the crisis to be found as soon as this week or early next week. ASTOM had not responded to a request for comment at the time of writing. “Right now, Manzanillo is saturated, with congestion at all the port’s terminals. Even if you get customs clearance after making the payment, you will be given an appointment for the actual shipment one week later. It’s become completely dysfunctional,” said the source at the chemicals distributor. “It’s hard to have an estimate for when the delays will be cleared. This is a situation now affecting all importing and exporting companies using this important facility. Because of the location of our facilities, Lazaro Cardenas port does not work so well for us – otherwise we would have already diverted to that port.” UP TO 12 WEEKS RESOLUTION – ALL GOING WELLIn its written statement to ICIS, the spokesperson for LDM confirmed what the company’s CEO, Jose Ambe, said earlier this week in an interview with Mexican news outlet El Mañana in which he gave the most pessimistic assessment of how long the crisis could linger: three months. "Although we see that the authorities are taking some measures to restore operations and partially resume activities, to be honest, the port's full normalization will take between eight and 12 weeks. This is based on the flow we are seeing, the containers that are delayed, and the lack of personnel," Ambe said. "The port has been opened but a bottleneck was created, which meant it couldn't be moved, and there is a lack of personnel to address this. There are still protests from port and customs workers, who continue to protest amid the lack of personnel.” Ambe concluded saying that unjustifiably dismissed personnel will likely have to be reinstated and authorities may need to meaningfully improve the customs employees’ working conditions for the crisis to overcome the impasse. In its letter to customers dated 30 May, SSA Marine Mexico gave a hint of how the crisis deepened in May, a month when 45% of import containers had not been delivered and 32% of export containers had not been shipped, while 40% of scheduled empty containers have not been received and shipped. The letter went on to say that, as a response to the crisis, ANAM had adjusted the issuance of appointments, according to the operational capacity of Manzanillo’s customs office, which caused SSA Marine Mexico's  capacity to fall from 1,800 import appointments/day to 1,100/day. “This backlog has limited operational capacity at both terminals. If the scheduled appointments for 2 June [the letter was dated 30 May] are not met, the terminals will be severely affected, increasing the utilization of our yards, generating delays of more than two days in the berthing of upcoming vessels, and affecting our operations in general,” said the company. SSA Marine Mexico had not responded to a request for comment at the time of writing. The crisis now affects the entire supply chain – from the large terminal operators with more financial muscle to individual truck drivers for whom one day delay upend tight finances. A representative for the Manzanillo Freight Transporters Union (UTCM) said in a TV interview this week that costs for truck drivers are shooting up as the crisis extends. “For a typical carrier, it costs between [Mexican pesos (Ps)] 2,500-2,800/day ($130-146/day) if the truck is waiting, not able to load and has to wait. And, if you manage to get the load, the process of entering the port and then re-route to leave the port can take between eight and 12 hours,” they stated. UTCM was contacted for further comment but had not responded at the time of writing. AND THEN, THERE IS PAMAIn 2024, the Mexican government implemented the PAMA regulations aiming to improve the clearance of goods at customs facilities and the seizing of illegal goods. In practice, the detailed regulation has added costs in the form of bureaucracy and, in the case of chemicals, sharply slowed down the entry of imports into Mexico. PAMA entails companies now must give more information about the load. For example, if the declared weight of the load deviates in the slightest from the weight showed on the customs scale, this can be a reason to send the load back to square one, with a fine potentially also imposed, according to the source in chemicals distribution. “Right now, we have a container which has held for 45 days, and we can't release it. There was a mismatch in the weight: it was missing two decimal places. We paid a fine, and corrected the error, but to no avail: today [4 June] we are still battling to release that container,” said the source. “It is a very serious problem – many of our loads get stuck because of PAMA-related issues, and becomes a burdensome, time-consuming process. Moreover, the fines are disproportionate, ranging from 70% to 100% of the value of the merchandise. And, since May, this problem has been compounded by Manzanillo’s crisis.” Insight by Jonathan Lopez  Thumbnail image: One of Manzanillo Port's terminal. (Image source: Manzanillo's port authority (ASIPONA Manzanillo))

05-Jun-2025

LONDON (ICIS)–LyondellBasell has entered into exclusive talks with an industrial investor for the sale of four European production sites, slightly over a year after launching a review of its asset base in the region. The company entered into the talks with AEQUITA, a Germany-based investment group specialising in turnarounds and carve-outs. Other assets acquired by the firm include a bake disc technology company purchased from Bosch, a cloud solutions business from Fujitsu, and a glass manufacturer from Saint-Gobain. AEQUITA is in position to take control of four sites of the nine operated by LyondellBasell in Europe in the deal, spanning France, Germany, Spain and the UK. Sites to be sold Site Production (tonnes/year) Berre, France Ethylene (465,000 tonnes/year) LDPE (320,000 tonnes/year PP (350,000 tonnes/year Propylene (255,000 tonnes/year) Munchsmunster, Germany Ethylene (300,000 tonnes/year) HDPE (320,000 tonnes/year) Propylene (190,000 tonnes/year) Carrington, UK PP (210,000 tonnes/year) Tarragona, Spain PP (390,000 tonnes/year) That leaves LyondellBasell with its Knapsack and Wesseling, Germany, site – collectively its largest production centre in Europe – as well as Frankfurt, Germany; Moerdijk, Netherlands; Brindisi, Italy and Tarragona, Spain. Collectively, the sites represent a “scaled” olefins and polyolefins platform with operations close to customer demand, LyondellBasell said, although the size of the crackers in the portfolio are smaller than many capacities that have come on-stream in the last few years. “We are confident in our ability to accelerate their development under AEQUITA’s ownership approach,” said Christoph Himmel, Managing Partner at AEQUITA. The current agreement entered into takes the form of a put option deed, which grants the owner the right but not the obligation to sell an asset at a specific price. In this case, AEQUITA has agreed to purchase at the agreed-upon terms if LyondellBasell opts to exercise the option after concluding works council consultation processes. The financial terms of a sale have not yet been disclosed, but the current timeline would see the deal close in the first half of 2026, LyondellBasell added. The Europe review is part of a wider shift in footing towards three key pillars for the business. Announced in 2023, this is based on prioritizing spending on businesses where the company “has leading positions in expanding and well-positioned markets”, growing circular solutions earnings to $1 billion/year by 2030, and shifting from cost controls to a broader idea of value creation. The company’s strategy for its remaining European asset base will be based around sustainability and the circular economy, according to Lyondell CEO Peter Vanacker. “Europe remains a core market for LyondellBasell and one we will continue to participate in following this transaction with more of a focus on value creation through establishing profitable leadership in circular and renewable solutions," he said. Update adds detail throughout Thumbnail photo: LyondellBasell's site in Wesseling, Germany, one of the European assets it is retaining (Source: LyondellBasell)

05-Jun-2025

SINGAPORE (ICIS)–South Korea’s revised real GDP shrank by 0.2% on-quarter, unchanged from advanced estimates in April, the first on-quarter contraction in nine months, central bank data showed on Thursday. Exports fall 0.6% on drop in chemical products GDP growth forecasted at 1.0% – OECD US trade negotiations, economic policy on new president Lee’s agenda Real GDP growth shrank 0.1% year-on-year in January-March 2025 amid political turmoil from a martial law declaration as well as US tariffs, the Bank of Korea (BoK) said in a statement. Both manufacturing and exports decreased by 0.6% quarter on quarter, mainly on drops in production and export of chemical products as well as machinery and equipment. Private consumption decreased by 0.1% as consumers spent less on services such as recreation, sport, and culture, while government consumption remained at the same level as the previous quarter. South Korea elected its new president Lee Jae-myung on 4 June, ending six months of chaos wrought by former President Yoon Suk Yeol’s declaration of martial law, Singapore-based UOB Global Economics & Market Research said in a note on 4 June. His immediate goals will be to boost the economy and “restore livelihoods” while balancing US trade negotiations with China relations, as the two world’s largest economies continue talks towards ending a trade war. Lee has until 8 July, when a 90-day suspension on 25% “reciprocal” tariffs imposed by US President Donald Trump will be lifted, to negotiate a US trade deal. A supplementary spending package worth 0.1% of GDP, or won (W) 13.8 trillion ($10 billion), was approved by the government in May, while Lee has announced an economic task force to boost growth. Talks have been ongoing since April but with no definitive result due to South Korea’s presidential void. The country announced a snap election on 8 April after Yoon was impeached and removed from office. “Despite external uncertainties, the domestic outlook may start to pick up after the presidential election,” UOB said, forecasting a 1.0% GDP growth for 2025. The Organisation for Economic Co-operation and Development (OECD) expects the South Korean economy to recover in 2026, projecting growth by 2.2% in 2026, it said in a report on 3 June. However, the BoK sharply lowered its GDP forecast for 2025 to 0.8% from 1.5% previously, warning that tariffs and economic uncertainty would lead to weaker exports. “Going forward, domestic demand is expected to recover modestly but at a slower pace, while exports are expected to slow further due to the impact of US tariffs,” the BoK said on 29 May. Focus article by Jonathan Yee Thumbnail image: Mandatory Credit: Aerial view of a container pier in South Korea's southeastern port city of Busan (Source: YONHAP/EPA-EFE/Shutterstock) Visit the US tariffs, policy – impact on chemicals and energy topic page

05-Jun-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Is the petrochemicals industry really a free market? Or have we been telling ourselves a comforting fiction? As we sift through margins, P&Ls, and operating rates to predict a recovery, we might be asking the wrong questions. Let’s rewind to 2014. While China’s state media signalled a major push toward self-sufficiency in petrochemicals, many Western analysts dismissed it — seeing China through the lens of profit maximisation. But I was told way back in 2000 that China’s strategy had just as much to do with jobs and economic value creation as with profits. Fast forward to today: polyester fibres, , polyethylene terephthalate (PET) film and bottle grade resins, purified terephthalic acid (PTA), styrene and polypropylene (PP),— China is nearly or completely self-sufficient in these markets. The drivers? National security, supply certainty, and industrial policy. And it’s not just China. Middle East investments — underpinned by cheap feedstocks, state ownership, and now oil demand substitution — follow similar, non-market logic. If key players haven’t been led by market signals alone, what happens next? Despite the deepest downturn in petrochemical history — likely to stretch into 2028 — new capacities keep rising. Not from those chasing short-term profit, but from those with long-term, state-backed agendas. Just a modest rise in China’s PP operating rates above the ICIS base case assumption could flip China into being a net exporter by 2027. The trade war may play a role here, as it has increased supply security concerns. True, there are more private petrochemical companies in China than ten years ago. But this latest wave of investment is more state-owned-enterprise-led than the previous one. And private companies can also benefit from local and central government support Saudi investments in refinery-to-petrochemicals will persist. More ethane crackers in the Middle East will be built. China’s plant-build costs are often 50%+ lower than the U.S., thanks to relentless innovation support. So… what does this mean for producers operating on pure market terms? Can they survive, let alone thrive, in a landscape shaped by strategic ambition rather than shareholder return? Your thoughts are welcome. Let’s start the conversation. 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.

04-Jun-2025

COLORADO SPRINGS, Colorado (ICIS)–US-based chemical distributor Univar Solutions has better positioned itself for growth and resilience with a sharper focus on key industries, said the head of its Ingredients + Specialties (I+S) business. More than a decade earlier when the specialties business was underperforming, Univar undertook a major shift in strategy by setting up four focus industries – food ingredients, pharmaceuticals, coatings and beauty care – to run them as standalone business units, recalled Nick Powell, CEO of Global I+S. “Everybody in each of those business units, that's all they did – focus on those industries. Prior to that, any seller, product manager or technical person may have served an oil refinery in the morning, and in the afternoon a food customer – no differentiation, no ability to sell our value,” said Powell in an interview with ICIS. Powell spoke to ICIS on the sidelines of the American Chemistry Council (ACC) Annual Meeting) This new business model worked well in Europe where Powell led the changes, and was then replicated in the Americas and Asia-Pacific but with different leadership for each region, he said. Then Univar CEO David Jukes, who assumed the role in 2019, decided to globalize all of the distributor’s businesses into six focus industries – each of them under a single leader, said Powell. SIX FOCUS INDUSTRIESThese six focus industries now fall under two segments. The I+S division now has three focus industries – CARE (beauty & personal care, homecare & industrial cleaning), Health & Nutrition (food ingredients, pharmaceutical ingredients) and Performance Materials (coatings, adhesives, sealants and elastomers (CASE), lubricants and metalworking). The Chemical Distribution & Services (CD&S) division also has three focus industries – General Industrial, Refining & Chemical Processing, and Service Solutions. Univar’s online platform ChemPoint is its third division, focused on demand creation and multi-channel digital marketing campaigns for a wide range of chemicals and ingredients. “In essence, we’re able to adjust to the very specific needs of suppliers who are producing products that go into those spaces, or our customers who want to be treated differently, depending on their market,” said Powell. And in each of the focus businesses, Univar has specialists that can connect the value the supplier has in its product portfolio to the value it can generate for a customer, typically by helping solve a technical problem or producing a new product from its globalized network of laboratories that goes to market, he pointed out. The strategy has been “extremely successful” for Univar, allowing it to outperform its peers, he noted. GLOBALIZATION AND CUSTOMER WINSWith the globalization of the focus industries, Univar is able to provide suppliers the same type and level of service in any region, adding local nuance when appropriate, said the executive. “That gives them confidence that we can deliver for them. We found that suppliers have really liked that business model, and a number of them have been awarding us large pieces of new business in geographies where we've not dealt with them in those product portfolios,” said Powell. In February 2025, Univar announced an expanded distribution partnership with BASF, securing the exclusive right to serve as a distributor of LuquaSorb Superabsorbent Polymers (SAPs) in the US and Canada in industrial applications. In January 2025, Univar Solutions announced an exclusive distribution agreement for the US, Canada and Puerto Rico with dsm-firmenich, adding its skin actives and bioactive skin care ingredients including synthetic peptides, organically grown plant extracts and other natural ingredients. In November 2024, Univar announced a new exclusive distribution agreement with Syensqo to become, effective 1 January 2025, the sole distributor of its beauty care ingredients across the US and Canada. “We are able to demonstrate to them that we have this large specialty and ingredients business inside the portfolio that’s staffed by technical people who are able to take their products to market and gain value for them,” said Powell. “They were able to do that in conjunction with our solution centers (labs), helping customers solve problems or create new products to go and take more share in their marketplaces,” he added, calling the strategy a game changer of growth” for Univar. The ACC Annual Meeting runs through Wednesday. Interview article by Joseph Chang

03-Jun-2025

COLORADO SPRINGS, Colorado (ICIS)–US-based chemical distributor Univar Solutions is helping customers deal with tariffs with its strong in-region sourcing network, its head of Ingredients and Specialties (I+S) said. “In every meeting I've had here and probably every meeting I've had in the last three to four months, tariffs have become the number one topic. Nobody seems to have an answer of where this is headed or what's coming next, and so we're having to deal with the here and now, and sometimes the here and now can be very different by the time you think you've got a plan,” said Nick Powell, CEO of Global I+S at Univar Solutions. Powell spoke to ICIS on the sidelines of the American Chemistry Council (ACC) Annual Meeting. “We're very fortunate in that greater than 90% of our products are sourced within region – not just in the US but Latin America, Asia and EMEA. We're not importing a huge amount of products, so there's not a massive financial penalty from tariffs,” said Powell. Where the distributor is impacted by tariffs, it is passing costs along to customers as are its competitors, he said. However, Univar is able to offer customers local buying options that can replace imported products, the executive noted. “The fact that we have a high level of our product portfolio sourced in-region allows us to offer them offsets for those imported products. We're getting a lot of interest from customers and are generating new relationships and new business that way,” said Powell. After the COVID pandemic in 2020 and other events that led to supply disruptions, there was a shift in customer mindset of wanting to onshore sourcing of chemical raw materials and intermediates, he explained. “I’m not so sure that many actually took a huge amount of action around that, but I think what’s happening [now] is those thoughts are resonating in their minds, and forcing them into action,” said Powell. “I think they realize there’s a structural change in the way economies are trading with each other, structural changes in trade flows, import duties and taxation. And for them to be competitive, they absolutely have to drive change now,” he added. “We are seeing a change in behavior. The fact that we’re 90%-plus regionally sourced means that we have something to offer. It’s opening up a lot of new dialogue for us,” said Powell. CERTAINTY OF SUPPLY"It's not just about cost but certainty of supply," he added. “If you're buying a product from Asia, you may be able to suck up the import duty disparity, but how certain can you be of continuity of supply? So both those factors are playing into customers’ minds right now,” said Powell. Univar is uniquely positioned to help customers in these aspects, not only because of a high level of in-region supply, but also particularly in North America because of its large infrastructure footprint which allows the company to provide reliable delivery and service, he pointed out. INDIRECT IMPACT ON CONSUMER CONFIDENCEWhile US tariffs are not having a direct negative impact on Univar’s business, they are causing a great deal of uncertainty among consumers of end-products and the companies that make those end-products, ultimately resulting in lower demand, he pointed out. “We're certainly in a market that is impacted by lack of consumer confidence right now. We're seeing some change in customer behavior. Customers are very much ordering just-in-time and supply chains are empty,” said Powell. “They have no confidence or a lack of confidence in what their own end-consumer demand is going to be next month. So they're not buying raw materials until they have a greater insight into that,” he added. CHANGE IN TRADE FLOWS INTENSIFY COMPETITIONUS tariffs are also leading to a change in trade flows and more intensified competition in Europe and Latin America, as Asian producers seek to sell more product to non-US outlets. “It’s producing a lot more competitive environments from both a volume and a pricing perspective. The European market is already in somewhat of a state of turmoil. It's not helping any of us in that space, whether you're a producer or a distributor,” said Powell. The ACC Annual Meeting runs through Wednesday. Interview article by Joseph Chang

03-Jun-2025

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

02-Jun-2025