Ethylene oxide (EO)

SINGAPORE (ICIS)–Malaysia's revised sales and services tax (SST) framework officially takes effect on 1 July, with the expanded scope now set to include a 5% tax on an extensive range of petrochemical products, including polyethylene (PE) and polypropylene (PP). Critical raw materials for downstream industries affected Capital expenditure items like machinery now taxed Malaysian industry body calls for further delay in implementation The government had first announced the revision of items subject to the sales tax on 18 October 2024, as part of its fiscal consolidation strategy under the 2025 budget. Under the updated framework, more than 4,800 harmonized system (HS) codes will now fall under the 5% sales tax bracket. Goods exempted from the updated sales tax include specific petroleum gases and other gaseous hydrocarbons that are currently under HS code 27.11. These include liquefied propane, butanes, ethylene, propylene, butylene, and butadiene. In their gaseous state, the list includes natural gas used as motor fuel. The measure, aimed at broadening the country's tax base and increasing revenue, was originally slated to begin on 1 May, but was delayed for two months after manufacturers urged policymakers to refrain from adding to their financial burden. The July revision of Malaysia's sales tax and the expansion of the service tax scope involve several key changes. The sales tax rate for essential goods consumed by the public will remain unchanged, while a 5% or 10% sales tax will be applied to discretionary and non-essential goods. The scope of the service tax will be broadened to include new services such as leasing or rental, construction, financial services, private healthcare, education, and beauty services. This includes critical raw materials for various downstream industries, from plastics and packaging to automotive manufacturing. Previously, many of these materials were zero-rated under the SST. The Federation of Malaysian Manufacturers (FMM) has publicly criticized the decision, calling it "highly damaging to industries” in a statement released on 12 June. According to estimates by the Ministry of Finance, the SST expansion is expected to generate around ringgit (M$) 5 billion in additional government revenue in 2025. “Although this may support the government’s fiscal objectives, the additional tax burden will be largely borne by businesses and has serious implications for operating costs, investment decisions, and long-term business sustainability,” FMM president Soh Thian Lai said in a statement. Soh highlighted that with this expansion, around 97% of goods in Malaysia's tariff system will now be subject to sales tax, representing a significant departure from a previously narrower tax base, to one where nearly all categories including industrial and commercial inputs are now taxable. Under the new sales tax order, 4,806 tariff lines are now subject to 5% tax, covering a wide range of previously exempt goods, according to the FMM. These include high-value food items, as well as a broad spectrum of industrial goods, such as industrial machinery and mechanical appliances, electrical equipment, pumps, compressors, boilers, conveyors, and furnaces used in manufacturing processes, it said. The 5% rate also applies to tools and apparatus for chemical, electrical, and technical operations, significantly broadening the range of taxable inputs used in production and operations. “The expanded scope now places a direct tax burden on machinery and equipment typically classified as capital expenditure. This includes items critical to upgrading production lines, automating processes, and scaling operations,” Soh said. The FMM "strongly urges the government to further delay the enforcement of the expanded SST scope beyond the scheduled date of 1 July", until the review is complete, and industries are ready. They also calling for a broader exemption list, especially for capital expenditure items like machinery and equipment, and a re-evaluation of including construction, leasing, and rental services, which they warn will "increase operational expenses and are expected to cascade through supply chains." “We are deeply concerned and caution that the untimely implementation of the expanded scope of taxes will exert inflationary pressure, as businesses already grappling with rising costs … may have no choice but to pass these additional burdens on to consumers,” the FMM added. The FMM has urged the government to postpone the implementation, citing insufficient lead time for businesses to adapt and calling for a comprehensive economic impact assessment. Malaysia’s manufacturing purchasing managers’ index (PMI) continued to contract in May, with a reading of 48.8, according to financial services provider S&P Global. Beyond the direct sales tax on goods, the revised SST also introduces an 8% service tax on leasing and rental services for commercial or business goods and premises. This could further compound cost burdens for capital-intensive sectors, including parts of the petrochemical industry that rely on leased machinery and industrial facilities. Focus article by Nurluqman Suratman Thumbnail image: PETRONAS Towers, Kuala Lumpur (Sunbird Images/imageBROKER/Shutterstock)

17-Jun-2025

HOUSTON (ICIS)–US railroad Norfolk Southern has advised customers that it will increase demurrage and storage charges for railcars in its yards to $110/railcar from $60/railcar, according to a customer notice on its website. The notice said that there will be no changes made to the existing service credit program. “This adjustment reflects our ongoing commitment to maintaining a safe, efficient, and reliable service – particularly in the handling and transport of hazardous materials,” the railroad said. Norfolk Southern said the increase will help support enhancements to the fluid movement of cargo. “A fluid, well-optimized network ensures that shipments move more predictably and reliably, minimizing delays and maximizing the availability of equipment when and where it’s needed most,” the railroad said. Some market participants suspect that other railroads could follow with similar increases on growing concerns of stagnant inventory on rail networks. DELAYS SEEN FROM CPKC CUTOVERChemical market participants on the CPKC system saw significant delays moving material in east Texas, Louisiana, and parts of Mississippi in May because of issues merging its operations system following the merger between Canadian pacific and Kansas City Southern in 2023. Speaking at the Wells Fargo Industrials & Materials Conference on Tuesday, CPKC chief operating officer Mark Redd acknowledged that there were issues with the cutover in those areas. Redd said some customers felt the brunt of some first-mile/last-mile customer service during the cutover. A market participant told ICIS that the issue caused delays and impacted shipments severely and affected the tracking of ethylene glycol (EG) shipments.

12-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

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

02-Jun-2025

HOUSTON (ICIS)–A US court ruled on Wednesday that the president cannot impose global tariffs under an emergency act, a judgment that would void many of the tariffs that the nation imposed in 2025 against nearly every country in the world. The administration of US President Donald Trump filed a notice that it was appealing the ruling. Under the judgment issued by the US Court of International Trade, the US has 10 calendar days to withdraw the following tariffs: – 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 the flow of illicit drugs. 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 the flow of immigrants and illicit drugs. 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 the flow of illicit drugs. The US imposed these tariffs under the International Emergency Economic Powers Act (IEEPA), which gives the president authority to take actions to address a severe national security threat. To justify the use of the IEEPA, Trump declared that the trade deficit, drug smuggling and illegal immigration constituted national emergencies. If the ruling stands, it would remove the tariffs that the US has imposed on many imports of commodity plastics and chemicals. By extension, the ruling would remove the threat of retaliatory tariffs that other countries could impose on the nation's substantial exports of polyethylene (PE), polyvinyl chloride (PVC) and other ethylene derivatives. The court's order does not cover the sectoral tariffs that the US has imposed on specific products such as steel and aluminium. In addition, it does not cover the Section 301 tariffs that the US imposed against Chinese imports during Trump's first term. These tariffs were intended to address unfair trade practices. RATIONALE BEHIND THE COURT'S JUDGMENTThe US constitution delegates the power to impose tariffs to congress. Although congress has delegated trade authority to the president, it had set clear limitations that allowed the legislature to retain the power to impose tariffs. The IEEPA does not delegate unbounded tariff authority to the president, the court said. "Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional." The authority that congress delegated to the president under IEEPA is limited and does not include the power to impose any tariffs, the court said. COURT FINDS NO EMERGENCYEven if the president could impose tariffs under IEEPA, the trade deficit does not constitute an emergency, the court ruled. The US already has a statute to address trade deficits under Section 122. "Section 122 removes the president’s power to impose remedies in response to balance-of-payments deficits, and specifically trade deficits, from the broader powers granted to a president during a national emergency under IEEPA by establishing an explicit non-emergency statute with greater limitations," it said. In addition, the court found that drug trafficking and illegal immigration fail to meet the emergency threshold established under IEEPA. To meet that threshold, the emergency must have a substantial part of its source outside of the US and it must pose a threat to the nation's national security, foreign policy or economy. Also, the emergency must be unusual and extraordinary. The action that the president takes must deal directly with the threat. The court found that the tariffs fail to directly deal with drug trafficking and illegal immigration. While they may provide the US with leverage to negotiate agreements, such leverage does not meet the threshold of addressing the emergency at hand. The 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 shows containers, which are used in international trade. Image by Costfoto/NurPhoto/Shutterstock. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy

29-May-2025

HOUSTON (ICIS)–The US delay of its proposed 50% tariffs on EU imports will still leave its polymers vulnerable to retaliatory tariffs. The new deadline is 9 July. For US exports, the EU has already drafted a list of targets for retaliatory tariffs, part of its second round of €95 billion in tariffs on US imports. A full list of all the proposed imports can be found here. This is on top of the first round of €21 billion in tariffs on US imports. A full list of all the proposed imports can be found here. In all, the EU could impose tariffs on nearly every major polymer from the US, including polyethylene (PE), polypropylene (PP), polystyrene (PS), polyvinyl chloride (PVC) and polyethylene terephthalate (PET). The EU is also considering tariffs on US imports of surfactants, fatty acids, fatty alcohols, and tall oil, a feedstock used to make renewable diesel, sustainable aviation fuel (SAF) and renewable naphtha. The following table lists some of the many plastics and chemicals proposed on the EU's second round of tariffs. CN CODE DESCRIPTION 28151200 sodium hydroxide "caustic soda" in aqueous solution "soda lye or liquid soda" 29053926 butane-1,4-diol or tetramethylene glycol [1,4-butanediol] having a bio-based carbon content of 100% by mass 29091910 tert-butyl ethyl ether (ethyl-tertio-butyl-ether, etbe) 29152100 acetic acid 29153200 vinyl acetate 29291000 isocyanates 32061100 pigments and preparations based on titanium dioxide of a kind used for colouring any material or produce colorant preparations, containing >= 80% by weight of titanium dioxide calculated on the dry matter (excl. preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 and 3215) 32061900 pigments and preparations based on titanium dioxide of a kind used for colouring any material or produce colorant preparations, containing < 80% by weight of titanium dioxide calculated on the dry matter (excl. preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 and 3215) 34023100 linear alkylbenzene sulphonic acids and their salts 34023990 anionic organic surface-active agents, whether or not put up for retail sale (excl. linear alkylbenzene sulphonic acids and their salts, and aqueous solution containing by weight 30-50% of disodium alkyl [oxydi(benzenesulphonate)]) 34024100 cationic organic surface-active agents, whether or not put up for retail sale 34024200 non-ionic organic surface-active agents, whether or not put up for retail sale (excl. soap) 34024900 organic surface-active agents, whether or not put up for retail sale (excl. soap, anionic, cationic and non-ionic) 34025010 surface-active preparations put up for retail sale (excl. organic surface-active preparations in the form of bars, cakes, moulded pieces or shapes, and organic surface-active products and preparations for washing the skin in the form of liquid or cream) 38030010 crude tall oil 38030090 tall oil, whether or not refined (excl. crude tall oil) 38170050 linear alkylbenzene 38170080 mixed alkylbenzenes and mixed alkylnaphthalenes, produced by the alkylation of benzene and naphthalene (excl. linear alkylbenzene and mixed isomers of cyclic hydrocarbons) 38231100 stearic acid, industrial 38231200 oleic acid, industrial 38231300 tall oil fatty acids, industrial 38231910 fatty acids, distilled 38231930 fatty acid distillate 38231990 fatty acids, industrial, monocarboxylic; acid oils from refining (excl. stearic acid, oleic acid and tall oil fatty acids, distilled fatty acids and fatty acid distillate) 38237000 fatty alcohols, industrial 38260010 fatty-acid mono-alkyl esters, containing by weight => 96,5 % of esters "famae" 38260090 biodiesel and mixtures thereof, not containing or containing < 70 % by weight of petroleum oils or oils obtained from bituminous minerals (excl. fatty-acid mono-alkyl esters containing by weight >= 96,5 % of esters "famae") 39013000 ethylene-vinyl acetate copolymers, in primary forms 39019080 polymers of ethylene, in primary forms (excl. polyethylene, ethylene-vinyl acetate copolymers, ethylene-alpha-olefins copolymers having a specific gravity of < 0,94, ionomer resin consisting of a salt of a terpolymer of ethylene with isobutyl acrylate and methacrylic acid and a-b-a block copolymer of ethylene of polystyrene, ethylene-butylene copolymer and polystyrene, containing by weight <= 35% of styrene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms) 39021000 polypropylene, in primary forms 39023000 propylene copolymers, in primary forms 39029010 a-b-a block copolymer of propylene or of other olefins, of polystyrene, ethylene-butylene copolymer and polystyrene, containing by weight <= 35% of styrene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms 39029020 polybut-1-ene, a copolymer of but-1-ene with ethylene containing by weight <= 10% of ethylene, or a blend of polybut-1-ene with polyethylene and/or polypropylene containing by weight <= 10% of polyethylene and/or <= 25% of polypropylene, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms 39031100 expansible polystyrene, in primary forms 39031900 polystyrene, in primary forms (excl. expansible) 39032000 styrene-acrylonitrile copolymers "san", in primary forms 39033000 acrylonitrile-butadiene-styrene copolymers "abs", in primary forms 39039090 polymers of styrene, in primary forms (excl. polystyrene, styrene-acrylonitrile copolymers "san", acrylonitrile-butadiene-styrene "abs", copolymer solely of styrene with allyl alcohol, of an acetyl value of >= 175 and brominated polystyrene, containing by weight >= 58% but <= 71% of bromine, in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms) 39041000 poly"vinyl chloride", in primary forms, not mixed with any other substances 39042100 non-plasticised poly"vinyl chloride", in primary forms, mixed with other substances 39042200 plasticised poly"vinyl chloride", in primary forms, mixed with other substances 39051200 poly"vinyl acetate", in aqueous dispersion 39051900 poly"vinyl acetate", in primary forms (excl. in aqueous dispersion) 39052100 vinyl acetate copolymers, in aqueous dispersion 39052900 vinyl acetate copolymers, in primary forms (excl. in aqueous dispersion) 39053000 poly"vinyl alcohol", in primary forms, whether or not containing unhydrolyzed acetate groups 39061000 poly"methyl methacrylate", in primary forms 39071000 polyacetals, in primary forms 39072911 polyethylene glycols, in primary forms 39072920 polyether alcohols, in primary forms (excl. bis(polyoxyethylene) methylphosphonate and polyethylene glycols) 39072999 polyethers in primary forms (excl. polyether alcohols, polyacetals and copolymer of 1- chloro-2,3-epoxypropane with ethylene oxide) 39073000 epoxide resins, in primary forms 39074000 polycarbonates, in primary forms 39075000 alkyd resins, in primary forms 39076100 poly"ethylene terephthalate", in primary forms, having a viscosity number of >= 78 ml/g 39076900 poly"ethylene terephthalate", in primary forms, having a viscosity number of < 78 ml/g 39079110 unsaturated liquid polyesters, in primary forms (excl. polycarbonates, alkyd resins, poly"ethylene terephthalate" and poly"lactic acid") 39079190 unsaturated polyesters, in primary forms (excl. liquid, and polycarbonates, alkyd resins, poly"ethylene terephthalate" and poly"lactic acid") 39079980 polyesters, saturated, in primary forms (excl. polycarbonates, alkyd resins, poly"ethylene terephthalate", poly"lactic acid", poly"ethylene naphthalene-2,6-dicarboxylate" and thermoplastic liquid crystal aromatic polyester copolymers) 39089000 polyamides, in primary forms (excl. polyamides-6, -11, -12, -6,6, -6,9, -6,10 and -6,12) 39091000 urea resins and thiourea resins, in primary forms 39092000 melamine resins, in primary forms 39093100 poly"methylene phenyl isocyanate" "crude mdi, polymeric mdi", in primary forms 39094000 phenolic resins, in primary forms 39095010 polyurethane of 2,2'-"tert-butylimino"diethanol and 4,4'-methylenedicyclohexyl diisocyanate, in the form of a solution in n,n-dimethylacetamide, containing by weight >= 50% of polymer 39095090 polyurethanes in primary forms (excl. polyurethane of 2,2'-"tert-butylimino"diethanol and 4,4'-methylenedicyclohexyl diisocyanate, in the form of a solution in n,ndimethylacetamide) Source: EU CN CODE DESCRIPTION 39011010 linear polyethylene with a specific gravity of < 0,94, in primary forms 39011090 polyethylene with a specific gravity of < 0,94, in primary forms (excl. linear polyethylene) 39012010 polyethylene in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms, of a specific gravity of >= 0,958 at 23°c, containing <= 50 mg/kg of aluminium, <= 2 mg/kg of calcium, of chromium, of iron, of nickel and of titanium each and <= 8 mg/kg of vanadium, for the manufacture of chlorosulphonated polyethylene 39012090 polyethylene with a specific gravity of >= 0,94, in primary forms (excl. polyethylene in blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms, of a specific gravity of >= 0,958 at 23°c, containing <= 50 mg/kg of aluminium, <= 2 mg/kg of calcium, of chromium, of iron, of nickel and of titanium each and <= 8 mg/kg of vanadium, for the manufacture of chlorosulphonated polyethylene) 39014000 ethylene-alpha-olefin copolymers, having a specific gravity of < 0,94 , in primary forms 39081000 polyamides-6, -11, -12, -6,6, -6,9, -6,10 or -6,12, in primary forms Source: EU

27-May-2025

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

26-May-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 23 May. Taiwan crackers to run at 60-70% of capacity in 2025 – PIAT By Jonathan Yee 19-May-25 13:26 SINGAPORE (ICIS)–Taiwan's ethylene crackers are expected to run at 60-70% of capacity on average this year amid heightened regional competition and weak downstream demand, according to the Petrochemical Industry Association of Taiwan (PIAT). Singapore Apr petrochemical exports up 1.4%; NODX surges 12.4% By Jonathan Yee 19-May-25 17:37 SINGAPORE (ICIS)–Singapore’s petrochemical exports in April rose 1.4% year on year to Singapore dollar (S$) 1.13 billion ($868.6 million), amid continued overall frontloading activities by exporters, official data showed on 16 May. South Korea’s April base oils exports to India stay high By Iain Pocock 20-May-25 15:05 SINGAPORE (ICIS)–South Korea’s base oils exports to India stayed higher than usual in April for a third month. Thailand Q1 GDP grows 3.1%, but trade war weighs on outlook By Jonathan Yee 20-May-25 16:45 SINGAPORE (ICIS)–Thailand’s GDP grew by 3.1% in the first quarter of 2025, but the southeast Asian country has slashed its GDP forecast amid looming US tariffs and uncertainty over a global trade war, official data showed on 19 May. INSIGHT: Rising supply, falling crude, weigh on Asia petrochemical product prices in May By Jimmy Zhang 20-May-25 17:48 SINGAPORE (ICIS)–A substantial proportion of petrochemical prices in Asia are expected to decrease in May, on the back of downward pressure declining crude oil values and rising supply. Asia fatty acids demand to pick up on lower offers amid decline in upstream palm oil prices By Helen Yan 21-May-25 11:49 SINGAPORE (ICIS)–Asia’s fatty acids demand is expected to pick up, as spot offers are being revised lower due to higher upstream inventories and declines in feedstock crude palm oil (CPO) and palm kernel oil (PKO) prices. INSIGHT: Tariff cuts support China petchems rebounds, market fundamentals remain a dominant factor By Yvonne Shi 22-May-25 12:00 SINGAPORE (ICIS)–The temporary climbdown by the US and China on trade tariffs indicates that downward pressure on China's economy may be relieved, but still-bearish market fundamentals will also continue to exert a pull on market pricing. Mideast polyols face pressure despite feedstock, freight gains By Isaac Tan 23-May-25 14:17 SINGAPORE (ICIS)–Spot prices for polyols in the Middle East rose in the week ending 22 May, buoyed by stronger feedstock and freight costs from China. However, gains may be short-lived amid weak regional demand and a seasonal slowdown in construction toward the peak summer months. Indonesia central bank cuts GDP growth forecast on rising global challenges By Nurluqman Suratman 23-May-25 14:54 SINGAPORE (ICIS)–Bank Indonesia (BI) anticipates a more challenging economic landscape for 2025, lowering its growth forecast to a range of 4.6-5.4%, as persistent global challenges and heightened uncertainty surrounding US tariff policy are expected to weigh on the outlook.

26-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 NOAA 30-Year Average Hurricanes 7-10 9 6-10 7 Major hurricanes 3-5 4 3-5 3 Total named storms 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

SINGAPORE (ICIS)–Taiwan's ethylene crackers are expected to run at 60-70% of capacity on average this year amid heightened regional competition and weak downstream demand, according to the Petrochemical Industry Association of Taiwan (PIAT). Economic uncertainty, US tariffs and geopolitical risk are pressure points for the industry, the industry body said in a report released at the Asia Petrochemical Industry Conference (APIC) 2025 on 15-16 May in Bangkok. Taiwan’s ethylene capacity is about 4.0 million tonnes; while its propylene capacity is about 3.4 million tonnes, according to PIAT. Despite a potential short-term rebound in prices for Taiwan’s petrochemical sector in 2025, continued capacity extensions in China will “intensify market price competition”, PIAT said. For 2025, it forecasts a 2.7% growth for both supply and demand of ethylene, with a projected 61% surge in exports. Propylene, on the other hand, is expected to post a 2.2% contraction in both supply and demand, with exports expected to more than double. Ethylene (in tonnes) 2024 2025 (estimated) change Supply Production 2,596,243 2,650,000 2.1% Import 228,176 250,000 9.6% Total 2,824,419 2,900,000 2.7% Demand Domestic 2,818,820 2,891,000 2.6% Export 5,599 9,000 60.8% Total 2,824,419 2,900,000 2.7% Year End Capacity (tonnes/year) 4,005,000 4,005,000  Propylene (in tonnes) 2024 2025 (estimated) change Supply Production 2,315,130 2,363,700 2.1% Import 309,100 202,600 -34.5% Total 2,624,230 2,566,300 -2.2% Demand Domestic 2,566,418 2,400,500 -6.5% Export 57,812 165,800 186.8% Total 2,624,230 2,566,300 -2.2% Year End Capacity (tonnes/year) 3,370,500 3,370,500 Source: PIAT China is expected to increase its 2025 ethylene capacity by approximately 7.8 million tonnes, or by 15%, to 60.99 million tonnes. But ethylene derivative consumption is expected to grow at a slower rate of 12.6%, and ethylene demand is expected to rise by just 6%, PIAT said, posing a challenge for neighboring suppliers that have historically relied on exports to China. Taiwanese producers have either reduced operating rates or remained idle over the past three years, while ethylene exports to China dropped to zero last year. “Given weak downstream demand and regional competition, cracker utilization rates are expected to average 60%-70% in 2025,” PIAT said in the report. Meanwhile, Taiwan’s demand for propylene is expected to weaken further due to weak downstream demand, particularly for polypropylene (PP) and epichlorohydrin (ECH). China's ongoing capacity expansion also continues to pressure Taiwanese producers, said the PIAT. Since 2024, Taiwan’s propylene exports to China have been subject to tariffs, posing a challenge for accessing the Chinese market. According to PIAT data, major petrochemical production dropped 2.39%, exports were down by 4.3% and demand fell by 1.1% in 2024 from the previous year. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image At the port city of Keelung, Taiwan on 20 March 2025. (RITCHIE B TONGO/EPA-EFE/Shutterstock)

19-May-2025