Polyurethanes

SINGAPORE (ICIS)–South Korea is initiating full emergency response measures as US steel and aluminum tariffs take effect, aiming to mitigate the impact on its economy, which is already grappling with weak exports and domestic consumption. US reciprocal tariffs, automotive tariffs to bite Hyundai Steel enters emergency mode due to tariff-induced financial strain 2024 export surplus at risk as global tariff war escalates The South Korean Ministry of Trade, Industry and Energy (MOTIE) convened a meeting with stakeholders on 12 March to strategize in response to the US' newly implemented 25% tariffs on steel and aluminum imports. The MOTIE meeting was organized to "further strengthen the joint public-private emergency response system in preparation for the US administration's steel and aluminum tariff measures, the anticipated imposition of reciprocal tariffs in early April, and tariffs on specific items such as automobiles", the ministry said in a statement. "We will further strengthen the response system ahead of the anticipated imposition of reciprocal tariffs in early April and do our utmost to protect the interests of our industry," industry minister Ahn Duk-geun said. "We will closely conduct high-level and working-level consultations with the US, including the head of the Office of Trade, and monitor the response trends of other major countries to minimize any disadvantages to our industry," he added. South Korea's trade minister Cheong In-kyo is currently in the US from 13 to 14 March to discuss trade issues including reciprocal tariffs and investment projects with his counterparts, MOTIE said in a statement on 12 March. Cheong will meet with officials at the US Trade Representative for consultations on the tariff issue, as well as investment plans by South Korean companies in the world’s biggest economy. According to data from the US International Trade Administration (ITA), South Korea was the fourth-largest exporter of steel to the US last year, accounting for 9% of Washington's steel imports. The northeast Asian country was also the fourth-biggest exporter of aluminum to the US, comprising about 4% of US aluminum imports. Hyundai Steel Co, South Korea's second-largest steelmaker after POSCO, has entered emergency management mode due to increasing market pressures, local media reported on Friday. The company has implemented a 20% salary reduction for all executives, effective 13 March, according to South Korean news agency Yonhap. Further measures include a review of voluntary retirement options for staff, along with plans to drastically reduce operational expenses, including limiting overseas travel. The US tariffs on all steel imports have significantly worsened the company's financial outlook, the Korea Times said. EMERGENCY EXPORT MEASURES The South Korean government on 18 February announced emergency export measures consisting of four pillars: tariff responses; a record won (W) 366 trillion ($253 billion) in export financing; export market diversification; and additional marketing and logistics support. South Korea is a major importer of raw materials like crude oil and naphtha, which it uses to produce a variety of petrochemicals, which are then exported. The country is a major exporter of aromatics such as benzene toluene and styrene. Government officials have expressed concern that export conditions are expected to worsen considerably in the first half of the year but improve in the second half, defining the current situation as “an emergency” and “the last opportunity to maintain the export growth momentum”. South Korea achieved record-breaking exports and a trade surplus in 2024, with exports reaching $683.7 billion and the trade balance showing a $51.6 billion surplus. A major concern is increased risks amid the trade protectionist stance of the US under President Donald Trump which could trigger a full-scale global tariff war. In February, South Korea’s export growth inched up 1% year on year to $52.6 billion, accompanied by the first decline in chip exports in 16 months which offset strong automobile and smartphone shipments. "The first half of the year is expected to be particularly difficult for exports due to the convergence of three major challenges: the launch of the new US administration, continued high interest rates and exchange rate volatility, and intensifying competition and oversupply in advanced industries," according to S Korea’s government ministries. Concerns include falling prices of major export items and a decrease in import demand in key markets as well as expectations of weak oil prices following the end of production cuts by OPEC and its allies (OPEC+) and the US pro-fossil fuel policies. South Korea’s slowing import demand, the US’ increased local production, EU’s electric vehicle market challenges and global contractions in manufacturing and construction markets are also causes for concern. These factors are expected to particularly affect exports of major items such as semiconductors, automobiles, petrochemicals, and machinery in the first half of the year. There are also worries about lower exports in critical sectors due to falling unit prices and oil prices, along with the risk of reduced demand in the US and EU for automobiles and general machinery due to market challenges and the contraction of the construction market. South Korea's GDP growth this year is projected at 1.5%, down from its previous estimate of 1.9% and lower than the 1.6% to 1.7% range indicated in January. For 2024, South Korea's final GDP growth was confirmed at 2.0%, matching the preliminary estimate released in January. The economy is experiencing a slowdown in the recovery of domestic demand, including consumption and construction investment, coupled with continued employment difficulties, particularly in vulnerable sectors, according to the Ministry of Economy and Finance's monthly economic report released in Korean on Friday. "While geopolitical risks persist in the global economy, uncertainties in the trade environment are also expanding, such as the realization of tariff impositions by major countries," it said. "The government will continue to work hard on supporting exports and responding to uncertainties in the trade environment." Focus article by Nurluqman Suratman Thumbnail image: Trade cargo containers at Busan port, South Korea – 1 February 2025. (YONHAP/EPA-EFE/Shutterstock)

14-Mar-2025

HOUSTON (ICIS)–The new administration of US President Donald Trump is giving chemical companies a break on regulations and proposing tariffs on the nation's biggest trade partners and on the world. RELIEF FROM RED TAPEThe new administration marks a sharp break from the previous one of the former president,Joe Biden. He proposed a wave of regulations towards the end of his administration that increased costs while providing little benefit to the chemical industry. Several proposed rules under that previous administration will likely fall by the wayside, said Eric Byer, president and CEO of the Alliance for Chemical Distribution (ACD), a trade group that represents chemical distributors. So far under Trump, the regulatory climate has been mostly positive, Byer said. Trump pledged to reduce regulations, and late in his campaign, said he would purge 10 regulations for every one introduced by his administration. The government is conducting earnest analyses of the economic effects of rules, something that the previous administration had glossed over, Byer said. LESS RIGID ENVIRONMENTAL RULESThe Environmental Protection Agency (EPA) is reviewing how it evaluates existing chemicals for safety under its main program, known as TSCA. Among items it could review is the whole chemical approach that the agency adopted under the previous administration. That approach made it likely that the EPA would determine that a chemical posed an unreasonable risk. Such a finding would expose the chemical to more restrictions. For environmental regulations in general, the EPA announced numerous reviews of existing regulations that could have far-reaching effects on costs. The following lists some of the regulations under review: The National Emission Standards for Hazardous Air Pollutants (NESHAPs). The standards for chemical manufacturing will be among those that the EPA will initially review. The greenhouse gas reporting program. The Risk Management Program (RMP). One RMP rule compromised plant safety by requiring companies to share information that had been off limits since the 9/11 terrorist attacks, according to trade groups. The Technology Transitions Program. Currently, the program restricts the use hydrofluorocarbons (HFCs), which are used to make refrigerants and blowing agents for polyurethanes. Terminating the environmental justice and diversity, environment and inclusion (DEI) arms of the EPA. Environmental justice has made it harder to build chemical plants. Particulate matter national ambient air quality standards (PM 2.5 NAAQS). The review could lead to guidance from the EPA that increases both the flexibility and clarity of permitting obligations for chemical plants, according to the ACC. A rule by the previous administration that intended to account for what it described as the social cost of carbon. The Waters of the US Rule. The EPA wants to review the rule to reduce permitting and compliance costs. ENDING FAVORABLE EV RULESThe EPA is reviewing the tailpipe rule that was adopted by the previous administration. The tailpipe rule gradually reduced the carbon dioxide (CO2) emissions of automobiles. Critics have said that this and other regulations from the previous administration were so strict, they acted as bans on vehicles powered by internal combustion engines (ICE). The EPA will also review the standards for model years 2027 and later light-duty and medium-duty vehicles. The Department of Transportation (DOT) wants to reset the Corporate Average Fuel Economy (CAFE) standards, which critics say unduly favor electric vehicles (EVs) by being too strict. SUPERFUND TAX MAY BE RESCINDEDThe Republican controlled government could repeal the Superfund tax, which was imposed in 2022 on several building-block petrochemicals and their derivatives. Confusion arose over how to calculate the taxes for the derivatives. The government also seems to lack the resources to administer the program. So far, legislators have introduced bills in both legislative chambers that would repeal the tax, including Senate Bill 1195 and House of Representatives Bill 640. These would likely need to be part of a larger tax bill. Byer of the ACD said the repeal will not be easy. However, it does have a chance to succeed, and the effort is getting traction among legislators. The ACD, the ACC and the American Fuel & Petrochemical Manufacturers (AFPM) were among the trade groups that signed a letter urging Congress to repeal the tax. TARIFFS POSE RISK TO CHEMSThe tariffs adopted and being proposed by the US could increase costs of imports of steel and aluminium needed to build new plants and repair existing ones. They also increase the costs of minerals used to make catalysts as well as regional imports of plastics and chemicals. US tariffs also expose its chemical industry to retaliatory tariffs. US tariffs could cause short term logistical disruptions because companies will be re-arranging supply chains to avoid the taxes and to secure materials from new suppliers that could be farther away. "I think we will see some near-term reconfiguration of moving products because of the tariffed countries, predominantly China, Mexico and Canada," Byer said. "Either way, people will reconfigure. My hope is that the reconfiguration part will only last a few weeks to a few months at most so we can get back to just doing straight on trade deals and supply chain movements without to deal with tariff stuff." Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Insight article by Al Greenwood Thumbnail Photo: US Capitol. (By Lucky-photographer)

13-Mar-2025

SINGAPORE (ICIS)–South Korea's headline inflation eased in February, giving the central bank flexibility to loosen monetary policy to boost economic activity amid a slowdown. 1.9% average inflation forecast kept for 2025-2026 Feb PMI reading in contraction mode at 49.9 Feb exports rebound weaker than expected Consumer price inflation in Asia’s fourth-largest economy eased last month to 2% on a year-on-year basis, slowing from the six-month high of 2.2% in January, data from Statistics Korea showed on Thursday. After staying below the central bank's 2% target in September-December 2024, inflation spiked in January due to rising global oil prices, compounded by weakness of the Korean won. "Going forward, consumer inflation is expected to fluctuate around the target level amid mixed factors of a weak local currency and low demand pressure," the Bank of Korea (BOK) said in a statement. The won (W) has strengthened 2% against the dollar this year, reaching around W1,440 against the US dollar on Thursday, after tumbling to its weakest level in almost 16 years in early January, with the downward pressure aggravated by a prolonged domestic political instability. Core inflation, which excludes volatile food and energy prices, also eased in February to 1.8%, from 1.9% in the previous month. South Korea's trade-reliant economy is facing numerous challenges, including the protectionist policies of the US’ Trump administration. In response to these headwinds and with inflation largely in line with expectations, the BOK has adopted a more accommodative monetary policy stance, cutting its benchmark interest rate three times since October 2024. On 25 February, the central bank cut its policy interest rates by 25 basis points to 2.75% as it revised down its GDP forecasts. GDP growth this year is projected at 1.5%, down from its previous estimate of 1.9% and lower than the 1.6% to 1.7% range indicated in January. For 2024, South Korea's final real GDP growth was confirmed at 2.0%, matching the preliminary estimate released in January, the BOK said on 5 March. Meanwhile, the central bank maintained its inflation average forecast of 1.9% for both this year and next. "Export growth has weakened amid a slump in consumption, driven by increased political uncertainties following the declaration of martial law and by a deterioration in weather conditions," the BOK said. "Trends in the domestic demand recovery and in export growth are forecast to be lower than previously expected due to deteriorating economic sentiment and due to U.S. tariff policies," it stated. South Korea is a major importer of raw materials like crude oil and naphtha, which it uses to produce a variety of petrochemicals, which are then exported. The country is a major exporter of aromatics such as benzene toluene and styrene. The country is experiencing a political crisis stemming from President Yoon Suk Yeol's controversial declaration of martial law in December, which has led to his impeachment and arrest. Its Constitutional Court is deciding President Yoon's fate, reviewing his impeachment after weeks of public trials, with his insurrection trial expected to take months and a verdict potentially reached by late 2025 or early 2026, according to media reports. ECONOMY LOSING STEAM South Korea’s industrial production shrank in January, with noted declines across output, consumption and investments. January’s overall industry output in January fell 2.7% year on year, reversing a 1.7% increase in December, official data showed on 4 March. Industrial output in South Korea's manufacturing and mining sector decreased by 2.3% in January compared with the same month last year. The services and construction sector output declined by 0.8% and 4.3%, respectively. Data released over the weekend showed that February exports rose 1.0% year on year, a sharp reversal of the 10.2% decline in January. Imports also increased, rising by 0.2% compared to a 6.4% drop in January, though this was below market expectations of a 2.6% rise. "While the timing of the Lunar New Year holiday adds volatility to the data, underlying momentum weakened in February,” Dutch banking and financial information services provider ING said in a note. The Lunar New Year, which is celebrated in most parts of northeast and southeast Asia, fell on 29 January. Conversely, car exports rebounded strongly by 17.7% year on year in February after falling in the previous three months. “Carmakers are likely to push their products out as early as possible before the reciprocal tariffs come into effect,” ING said. “We expect exports to remain a growth driver for the economy in the first quarter of 2025. Despite the moderation in exports, a sharper decline in imports should boost the positive contribution from net exports in Q1 2025.” MANUFACTURING PMI BACK IN CONTRACTION  S&P Global’s manufacturing PMI for South Korea dipped to 49.9 in February from 50.3 in January, even though output and new orders increased. This suggests that exports are likely to maintain their upward trajectory, while the domestic economy is acting as a drag on overall growth. “As suggested by the local business survey, business confidence remained weak amid political instability in Korea and uncertainty surrounding global trade,” ING said. “We expect the domestic political situation to become clearer in two weeks following the Constitutional Court ruling on the impeachment of President Yoon,” it added. “But US trade policy is likely to remain a headwind for businesses,” ING said. Focus article by Nurluqman Suratman Thumbnail image: At a container pier in South Korea's southeastern port city of Busan on 1 November 2023.(YONHAP/EPA-EFE/Shutterstock)

06-Mar-2025

HOUSTON (ICIS)–US-listed shares of chemical companies fell sharply – many by more than 5% – on Monday as the US proceeds with plans to impose tariffs on Canada, Mexico and China, its three biggest trading partners. The selloff in chemical shares was sharper than that for the general market. The following table shows the stock indices followed by ICIS. Index 3-Mar Change % Dow Jones Industrial Average 43,191.24 -649.67 -1.48% S&P 500 5,849.72 -104.78 -1.76% Dow Jones US Chemicals Index 851.42 -17.99 -2.07% S&P 500 Chemicals Industry Index 901.32 -17.93 -1.95% Shares of every US-listed company followed by ICIS fell. TUESDAY'S TARIFFSUnless the nations reach last-minute deals, the US will impose 25% tariffs on all imports from Mexico, 10% tariffs on all energy imports from Canada and 25% tariffs on all other imports from Canada. The US will also proceed with an additional 10% that it proposed on all imports from China, according to a post from the White House’s Rapid Response account on social media platform X. This is on top of the 10% in new tariffs that the US already imposed earlier in 2025 on imports from China. EFFECT ON US MARKETSWhile the US has large trade surpluses in polyethylene (PE), it still imports large amounts of the plastic from Canada. Many of these imports go to processors in the bordering states of Illinois, Michigan and Ohio. These states are far from most of the plastic plants in the US, which are concentrated in Texas and Louisiana. Processors in these states that border Canada will need to pay the tariffs or pay higher shipping costs to secure material from suppliers farther away. The US also imports notable amounts of purified terephthalic acid (PTA) from Canada and Mexico as well as methylene diphenyl diisocyanate (MDI) from China. The US receives large Canadian shipments of ammonia and potassium chloride, which is also known as muriate of potash (MOP). At least one company, Canada's Chemtrade Logistics, said it expected to pass a larger part of the tariffs to its customers. Chemtrade Logistics exports sodium chlorate, chlorine and sulfuric acid to the US. RETALIATIONChina already has retaliated by imposing tariffs on US imports of coal, liquefied natural gas (LNG), crude oil, farm equipment and some vehicles. China has restricted exports of antimony and bismuth. Antimony is used to make catalysts for polyethylene terephthalate (PET), and bismuth is used to make catalysts for polyurethanes. Canada had proposed retaliatory tariffs of 25% on Canadian dollars (C$) 155 billion ($107 billion) worth of US imports. The tariffs would be imposed in two phases. The first phase would cover C$30 billion of US imports of beverages, cosmetic, paper products and some finished plastics products, among others. Canada was preparing a second list, worth C$125 billion. All three countries could impose retaliatory tariffs on the substantial exports of PE, polyvinyl chloride (PVC) and other ethylene derivatives from the US. OTHER POSSIBLE US TARIFFSThe US has threatened to impose tariffs of 25% on imports from the EU. On 12 March, the US will impose tariffs of 25% on all imports of steel and aluminium, a move that will remove exemptions that it granted to some countries. The US will expand the tariff to cover more products made of steel and aluminium. In early April, the US said it would introduce retaliatory tariffs on imports from the rest of the world. These tariffs will consider what the US considers non-tariff trade barriers, such as value added tax (VAT) systems. CHEM STOCK PERFORMANCEThe following table shows the performances of US-listed shares followed by ICIS. Symbol Name $ Current Price $ Change % Change ASIX AdvanSix 26.82 -1.10 -3.94% AVNT Avient 41.23 -1.54 -3.60% AXTA Axalta Coating Systems 35.1 -1.11 -3.07% BAK Braskem 3.52 -0.17 -4.61% CC Chemours 13.86 -1.09 -7.29% CE Celanese 47.02 -3.92 -7.70% DD DuPont 78.83 -2.53 -3.11% DOW Dow 36.06 -2.05 -5.38% EMN Eastman 94.46 -3.39 -3.46% FUL HB Fuller 55.73 -1.01 -1.78% HUN Huntsman 16.04 -0.89 -5.26% KRO Kronos Worldwide 8.43 -0.32 -3.66% LYB LyondellBasell 73.41 -3.42 -4.45% MEOH Methanex 41.47 -2.57 -5.84% NEU NewMarket 562.65 -7.46 -1.31% NGVT Ingevity 45.24 -2.42 -5.08% OLN Olin 23.87 -1.52 -5.99% PPG PPG 111.72 -1.50 -1.32% RPM RPM International 123.09 -0.80 -0.65% SCL Stepan 58 -3.375 -5.50% SHW Sherwin-Williams 356.73 -4.75 -1.31% TROX Tronox 7.02 -0.615 -8.06% TSE Trinseo 4.62 -0.30 -6.10% WLK Westlake 108.71 -3.59 -3.20% ($1 = C$1.45) Please also visit the US tariff, policy – impact on chemicals and energy topic page Thumbnail shows money. Image by ICIS.

04-Mar-2025

LONDON (ICIS)–Recent escalations in the US-China tariff war are set to create waves in the Asian and European import markets for methylene diphenyl diisocyanate (MDI). Isocyanates Europe editor Zubair Adam and Asia editor Shannen Ng show case the key developments. The two main isocyanates are polymeric MDI  and toluene di-isocyanate (TDI), used mainly for the production of polyurethane (PU) rigid and flexible foams used in insulation, construction, upholstery, mattresses and automotive seats.

03-Mar-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 February. Egypt eyes 3.1m tonne/year capacity at proposed $7bn petrochemical complex By Nurluqman Suratman 24-Feb-25 12:58 SINGAPORE (ICIS)–Egypt’s proposed $7 billion petrochemical complex in New Alamein City is slated to produce 3.1 million tonnes/year of "eight specialized" products, according to project leader Shard Capital Partners. INSIGHT: Suez Canal shipping cautiously picks up amid Israel-Hamas ceasefire By Nurluqman Suratman 24-Feb-25 15:12 SINGAPORE (ICIS)–Forty-seven ships have re-routed to the Suez Canal in Egypt since early February, indicating a cautious pick-up of activity in the crucial trade lane – the shortest connection between Asia to Europe – amid a ceasefire between Israel and Palestine militant group Hamas in Gaza. Middle East, Pakistan PP/PE trade activity expected to be slow throughout Ramadan By Nadim Salamoun 24-Feb-25 16:24 DUBAI (ICIS)–Trade activity for polypropylene (PP) and polyethylene (PE) in the East Mediterranean (East Med), Pakistan, and GCC (Gulf Cooperation Council) markets has already slowed down by mid-February ahead of the Ramadan seasonal lull, and is expected to remain slow until the end of Eid al-Fitr during the first week of April. INSIGHT: China PE demand growth to lag capacity growth for 2025 By Amy Yu 25-Feb-25 13:00 SINGAPORE (ICIS)–Inner Mongolia Baofeng’s new 550,000 tonne/year coal-based PE facility is set to start trial runs in late February, marking the third new unit for the company following two similar facilities starting the commercial operation in November 2024 and January 2025. India’s Mar methanol supply to tighten after Qatar Fuel Additives announces FM By Damini Dabholkar 26-Feb-25 13:28 SINGAPORE (ICIS)–Qatar Fuel Additives Co (QFAC) on 25 February announced a force majeure on its methanol supply after shutting down its 1.1 million tonnes/year plant in Mesaieed due to a technical issue. INSIGHT: India petrochemical production pivots to imported ethane feed By Priya Jestin 26-Feb-25 16:00 MUMBAI (ICIS)–A growing number of petrochemical companies in India are looking at using more ethane instead of the more expensive naphtha as feedstock for production, which may help reduce the south Asian country’s trade deficit with the US in the coming years. INSIGHT: China benzene market sees narrow fluctuations on strong cost, snug supply, slow demand recovery By Yoyo Liu 26-Feb-25 19:28 SINGAPORE (ICIS)–Crude-based benzene prices fluctuated moderately at high levels after the Lunar New Year (28 January-4 February) holidays, on elevated crude, ethylbenzene (EB) futures and falling port inventories. Slow demand recovery continues to weigh on the market, with upcoming spring turnarounds and inventory depletion in focus. SE Asia, Mideast petrochemical markets slow ahead of Ramadan By Jonathan Yee 27-Feb-25 12:41 SINGAPORE (ICIS)–Trades in southeast Asian and Middle East petrochemical markets have slowed down ahead of Ramadan, when working hours would be shorter in some markets in March. Asia MMA sentiment dampened by China local price volatility By Jasmine Khoo 27-Feb-25 13:01 SINGAPORE (ICIS)–Asia's methyl methacrylate (MMA) sentiment has been impacted by price volatility observed in the Chinese domestic market in recent weeks, with most market players adopting a cautious stance towards trade. INSIGHT: Asia, Europe could bear brunt of US tariffs on Chinese MDI By Shannen Ng 27-Feb-25 16:37 SINGAPORE (ICIS)–Recent escalations in the US-China tariff war are set to create waves in the Asian and European import markets for methylene diphenyl diisocyanate (MDI). Asia petrochemical shares fall after Trump vows additional 10% tariff on China By Jonathan Yee 28-Feb-25 11:16 SINGAPORE (ICIS)–Asian petrochemical shares fell on Friday after US President Donald Trump said he would impose additional 10% tariffs on Chinese goods from 4 March. Thai SCG Chemicals signs EPC deal for Vietnam ethane storage tanks By Nurluqman Suratman 28-Feb-25 15:01 SINGAPORE (ICIS)–Thai producer Siam Cement Group Chemicals (SCGC) on 27 February said that it has signed the engineering, procurement, and construction (EPC) contract for the construction of ethane storage tanks at the Long Son Petrochemicals Complex (LSP) in Vietnam.

03-Mar-2025

HOUSTON (ICIS)–The US will proceed with its proposed 25% tariffs on most goods from Canada and Mexico, and the nation will increase tariffs on imports from China by another 10%, all effective on 4 March, the president said on Thursday. In addition, the US will proceed with its proposed reciprocal tariffs on 2 April, President Donald Trump said on social media. The 4 March date still leaves time for the US to reach some agreement with Canada or Mexico to cancel or delay the proposed tariffs. The US agreed to a 30-day delay with Canada and Mexico on 3 February, the day before it had initially planned to impose the tariffs. On Wednesday, 26 February, Mexico's president said such an agreement was in the works. No agreement was reached with China, so the 10% tariffs went into effect. China retaliated by imposing tariffs on US imports of coal, liquefied natural gas (LNG), crude oil, farm equipment and some vehicles. RATIONAL FOR THE TARIFFSThe US will proceed with the tariffs, because Trump said illegal drugs that are made in China continue to enter the country from Canada and Mexico. "Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China," Trump said on social media. "We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled. China will likewise be charged an additional 10% Tariff on that date." THE PROPOSED TARIFFSUnder the proposal, the US will impose tariffs of 25% on all imports from Mexico. It would impose tariffs of 25% on all Canadian imports except energy. Energy imports from Canada would receive tariffs of 10%. Canada had already proposed retaliatory tariffs of 25% on Canadian dollar (C$) 155 billion ($108 billion) worth of US imports. The tariffs would be imposed in two phases. The first phase would cover C$30 billion of US imports of beverages, cosmetic, paper products and some finished plastics products, among others. Canada was preparing a second list, worth C$125 billion. EFFECT ON CHEMICALSCanada is a large source of imports of polyethylene (PE) to plastic processing hubs in the bordering states of Michigan, Illinois and Ohio. In addition, Canada exports PE to Texas. Canada also exports notable amounts of polypropylene (PP) and ammonia to the US. The nation accounts for nearly 90% of all US imports of potassium chloride, also known as muriate of potash (MOP). Mexico and Canada export meaningful amounts of purified terephthalic acid (PTA) to the US. China exports notable amounts of methylene diphenyl diisocyanate (MDI). Mexico and China are important sources of the main feedstock used to make fluorochemicals and fluoropolymers. OTHER TARIFFS PROPOSALS The US has threatened to impose tariffs of 25% on imports from the EU. On 12 March, the US will impose tariffs of 25% on all imports of steel and aluminium, a move that will remove exemptions that it granted to some countries. The US will expand the tariff to cover more products made of steel and aluminium. Please also visit the US tariff, policy – impact on chemicals and energy topic page ($1 = C$1.44) Thumbnail photo: Containers. (By XINHUA/Shutterstock)

27-Feb-2025

ANTWERP (ICIS)–The lack of momentum in the fourth quarter and weak prospects for 2025 only serve to build pressure for further restructuring in European petrochemicals. Three plant closures have been announced already in 2025 and it is highly likely that there are more to come. Europe suffers competitively from high energy costs, a regulatory burden that global producers do not encounter elsewhere, and a lack of tangible incentives for change. Overcapacity in the major building block petrochemicals and polymers clearly does not bode well for local producers but the sector’s challenges run deeper than that. Following the industry-led and ground-breaking Antwerp Declaration from Europe’s energy intensive industries last year, and the Draghi report on European Competitiveness in September, more might have been expected from the European Commission’s Clean Industrial Deal proposals. The industry consensus is that there is likely to be welcome change to some aspects of EU policy but that implementation is achingly slow. The sector is frustrated with lack of access to new sources of hydrocarbons and Europe's push to cut carbon seemingly at all costs, while deindustrialisation is looking like less of an empty threat and more of a reality A large group of business leaders discussed the just published Clean Industrial Deal with Commission President Ursula von der Leyen in Antwerp on Wednesday. Industry looks now to EU heads of state to take action on key aspects of the Antwerp Declaration that are largely addressed in the Clean Industrial Deal at an EU Council meeting in March. The Commission’s focus in its Clean Industrial Deal is on innovation – including pumping €100bn into a decarbonisation investments, paid for from the EU’s Emissions Trading Scheme (ETS), for example, and simplifying complex emissions reporting rules and the Carbon Border Adjustment Mechanism (CBAM) proposals. It seeks to tackle high energy prices by focusing still further on renewables, on nuclear power and on better grid connections and more efficient gas and electricity markets. Europe has to adapt to harsher competition, von der Leyen said at the event, a point that industry leaders have been pressing home for many years. On the side lines of the meeting, industry leaders were focused on energy, regulation and competitiveness. “We need lower and competitive energy prices,” Yves Bonte, CEO of polyamides and engineering materials producer DOMO told ICIS. He added that the Deal was promising more predictable regulation and going a long way to addressing key elements of last year’s Antwerp Declaration. He called it “a good step in the right direction” but noted that more clarity was needed on implementation. Peter Huntsman, CEO of polyurethanes and systems producer Huntsman, was forthright. With this new clean industrial deal Huntsman does not have the ability to compete, he said. He spoke of de-industrialisation in Europe and the impact on sectors such as aerospace and automobiles. "As our customers leave Europe, we’ll have to move with them,” he added. Huntsman used to have 60% of its business in Europe but that has dwindled. The company had employed 10,000 there but now the headcount is under 2,500, production has dropped 90%. Huntsman does not believe that the Commission’s proposals will lead to anything that is going to make energy in Europe more competitive. He pointed to US energy competitiveness, its fracking and exploitation of hydrocarbon resources. “Europe needs to develop its own hydrocarbons,” he said. Europe needs more competitive hydrocarbons, Tom Crotty, Group Director of INEOS told ICIS, on Wednesday, adding that this is where the US is getting it right. “The US will be even more competitive over the next few years,” he suggested and warned of a “vicious cycle of decline” for petrochemicals in Europe. A more virtuous cycle would be one in which Europe had more competitive energy and its industries were given greater opportunities to invest through mechanisms comparable to the Inflation Reduction Act in the US, he suggested. Europe’s petrochemicals operating and regulatory environment is seen as being disincentivising. “It [the Clean Industrial Deal] is a step forward, but it is too little, too late,” Crotty said. No INEOS executives were among the 400 business leaders in Antwerp on Wednesday, a sign of the frustration with slow progress at the European level since the Antwerp Declaration, but the frustration goes deeper than that. In an open letter to European politicians, INEOS chairman and CEO, Sir Jim Ratcliffe, said that chemicals in Europe is facing extinction. “Government policies have resulted in enormously high energy prices and crippling carbon tax bills,” he said. The company’s gas bill is €100 million higher than its US equivalent and its electricity bill €40 million higher. “The carbon tax bill is rising towards a shocking €100 million,” he added. “The industry is in crisis with such huge disadvantages. Instead of investing in growth for the future, it is fighting for survival. “Government policies will shut all petrochemicals in Europe. All our major competitors are planning for withdrawal from Europe as government has failed to act time after time,” Ratcliffe added. Decarbonisation is the focus of the Commission while deindustrialisation is seen as a death knell for larges swathes of the chemicals sector. “Decarbonising Europe by deindustrialisation is idiotic,” Ratcliffe said. This is a by no means a static situation, of course, and industry executives have doubled down in asking what needs to happen to lift and sustain Europe’s chemical and industrial competitiveness. The commitment to Europe is strong. The Clean Industrial Deal shows that the European Commission is listening to industry. Also speaking to ICIS and on the side lines of the event, Kim Hedegaard, CEO of Power-to-X at technology and catalysts provider TOPSOE, pointed out that the EU’s policies are not just about the next four to five years but about providing the framework that can promote greater industrial sustainability. There is not enough stimulus in Europe, he suggested, that might underpin that sustainability and positively influence the risk picture. Hedegaard is “cautiously optimistic,” however. “Nothing is static when you talk about climate, energy or politics,” he said. Insight by Nigel Davis

27-Feb-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 21 February. US to start antidumping probe on China MDI imports on 5 March The US International Trade Commission (ITC) will start on 5 March a preliminary antidumping probe on imports of methylene diphenyl diisocyanate (MDI) from China, acting on a petition from BASF and Dow Chemical. BASF to sell Brazil paints business to Sherwin-Williams, other moves ahead BASF is to sell its Brazilian decorative paints business to Sherwin-Williams for $1.15 billion and is set to begin exploring options for other parts of its coatings portfolio, the Germany-headquartered chemicals major said on Monday. US Celanese shares fall 23% to 2013 levels amid weak guidance Shares of Celanese fell by 23% in afternoon trading to reach lows last seen in 2013, after the company gave weak guidance for the first two quarters of the year and implied that growth would come from costing cutting and efficiency programs – and not from any widespread increase in demand. DATA WATCH: Europe's competitive weakness in chemicals clear amid US exchange rate decline Europe's lack of competitiveness in petrochemicals production is widely talked about in the industry, particularly in relation to China's expanding capacities and drive for self sufficiency. Cornerstone to close US ACN plant in June on financial, economic challenges US-based Cornerstone announced on Thursday the decision to mothball its acrylonitrile (ACN) operations in Waggaman, Louisiana, effective 30 June. Oversupplied global nylon market needs restructuring – US AdvanSix The global nylon market has too much capacity, and it needs more restructuring to balance supply and demand, the CEO of US-based nylon producer AdvanSix said on Friday.

24-Feb-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 21 February. China PC import prices fall on ample supply; outlook bleak By Li Peng Seng 17-Feb-25 14:02 SINGAPORE (ICIS)–Import prices of moulding-grade and extrusion-grade polycarbonate (PC) in China have fallen to a three-week low recently amid ample supplies and weak demand as buyers would only purchase on a need-to basis. Thailand Q4 GDP grows 2.5%, US trade policy uncertainty weighs on outlook By Nurluqman Suratman 17-Feb-25 16:44 SINGAPORE (ICIS)–Thailand's economy grew 2.5% year on year in 2024, boosted by a 3.2% expansion in the fourth quarter on the back of robust exports and private consumption. However, headwinds from global trade disputes threaten its growth outlook for 2025, official data showed on Monday. Reduced SE Asia PP supply opens door wider for China exports By Lucy Shuai 18-Feb-25 15:44 SINGAPORE (ICIS)–Polypropylene (PP) plant shutdowns in southeast Asia open up more export opportunities for China, which is currently beset with oversupply. Asia ethyl acetate, butyl acetate find support from modest demand pick-up By Melanie Wee 18-Feb-25 15:58 SINGAPORE (ICIS)–Asia-Pacific ethyl acetate (etac) markets are seeing improved demand, which is helping to absorb regional supply. Asia's naphtha seen firm short term on supply concerns By Li Peng Seng 19-Feb-25 12:37 SINGAPORE (ICIS)–Asia's naphtha sentiment has further strengthened as supplies arriving in March from the west, namely Europe, Africa, the Americas and the Mediterranean, are lower than expected due to reasons which include gasoline demand and ongoing geopolitical conflicts. US potential 25% tariffs on auto imports could hurt Japan, S Korea By Nurluqman Suratman 19-Feb-25 14:21 SINGAPORE (ICIS)–US President Donald Trump's plan to impose tariffs of around 25% on vehicle imports places South Korea and Japan in the line of fire, as they are the top sources of automobiles outside of North America. S Korea’s S-Oil earmarks W3.5 trillion for Shaheen project in 2025 By Pearl Bantillo 19-Feb-25 16:29 SINGAPORE (ICIS)–S-Oil plans to spend about South Korean won (W) 3.5 trillion ($2.4 billion) in its Shaheen crude-to-chemical project in Ulsan, which accounts for the bulk of the refiner’s capital expenditure (capex) set for the year. Asia fatty alcohols capacity expansions in Q2 to curb spot interest for mid-cuts C12-14 By Helen Yan 20-Feb-25 10:25 SINGAPORE (ICIS)–Expectations of expanded fatty alcohols supply in southeast Asia are likely to dampen buyers’ sentiment and curtail spot interest in the second quarter. Indonesia central bank keeps policy interest rate at 5.75%, for now By Nurluqman Suratman 20-Feb-25 14:28 SINGAPORE (ICIS)–Indonesia's central bank left its policy interest rate unchanged at 5.75% on 19 February, citing elevated global uncertainty, but sees room for monetary policy easing down the road. INSIGHT: Production outages to support Feb Asia petchems price rebound By Joey Zhou 20-Feb-25 19:11 SINGAPORE (ICIS)–Asia petrochemical prices are expected to rise in February from the previous month, mainly due to production outages in oversea markets (excluding China). However, the magnitude of price gains will be limited by new capacities and sluggish demand. Mideast polyols hold steady; prices balanced by cost push, oversupply By Isaac Tan 21-Feb-25 13:48 SINGAPORE (ICIS)–Polyols prices in the Middle East held steady in the week ended 20 February as oversupply conditions outweighed a cost push from rebounding feedstock propylene oxide (PO).

24-Feb-2025