Polyurethanes

SINGAPORE (ICIS)–Tariff concerns and ample supply continue to exert pressure on petrochemical markets in both Asia and the Middle East, with regional demand staying weak, with consumption in India unlikely to pick up until September. Aromatics trade flows shift amid tariff uncertainty Monsoon season weighs on India demand GCC producers upbeat on Syria AROMATICS UNDER PRESSURE AMID TARIFFS In the aromatics market, supply is expected to be tight as increased tariff uncertainties continue `to disrupt traditional trade flows. Mixed xylene (MX) and downstream paraxylene (PX) were in steep backwardation, where in spot prices are higher than futures prices, amid freight constraints and high US demand. Benzene, which closely tracks falling crude prices, continued to underperform its aromatics peers. Benzene from South Korea has not been flowing into the US and were mostly going into China, market sources said. South Korea is a major exporter of aromatics products. Its overall petrochemical shipments in May declined by 20.8% year on year, weighed down by sharp falls in upstream crude prices. For solvent grade mixed xylenes, South Korea exported last month an estimated 50,696 tonnes, of which around 27% was destined for the US, according to ICIS data on 2 June. Strong exports to the US coincide with the start of the summer driving season in the northern hemisphere, when demand for octane boosters like MX and toluene, which goes into gasoline blending, picks up. This strong US gasoline demand expectation is supporting the supply tightness, despite weaker downstream activity in China. Asia’s aromatics tightness is likely to persist through June-August, as market participants adapt to tariff policies and freight cost pressures from front-loading following a trade war truce between the US and China. The US’ 90-day suspension on “reciprocal” tariffs on most countries except China ends on 9 July. A potential escalation of the US-China trade war after the 90-day truce could intensify uncertainties, though a resolution might stabilize flows by late Q3. For shipping, market players are expecting freight rates to start to drop again in July-August. MONSOON ONSET DEPRESSES INDIA PLASTICS DEMAND Prices for plastics in India are under pressure from the monsoon season, as well as more supply coming from China, market sources said. This year’s monsoon season, which typically runs from June-September, arrived eight days early and is projected to bring above-average rainfall, said the India Meteorological Department (IMD) on 24 May. During India’s monsoon period, manufacturing activity tends to moderate, especially the packaging sector as well as the food and beverage sector, weakening end-product demand. Concurrently, domestic supply is ample, pushing down prices for Indian polyethylene (PE), polypropylene (PP), high-density polyethylene (HDPE) and low-density polyethylene (LDPE). But post-monsoon season from September, demand is likely to pick up as agriculture and construction sector activity rises and the harvesting season commences. The festive season, which includes the Diwali (Hindu Festival of Lights) running from 18-23 October, is likely to increase demand for end-products such as plastics, hence, boost production leading to the holiday. Demand for chemicals such as PE, PP and PVC and synthetic rubbers is expected to improve after September. India’s strong domestic consumption would shield it from the US-China tariff war, whose impact on the south Asian nation’s petrochemical trades is mostly on sentiment and not on actual demand. China, however, has tried to push more material to India with cut prices amid the US-China trade war, as domestic demand in the world’s second-largest economy remained weak. The country is already redirecting PE and PP to Africa and India to offset reduced US access. But this offsetting has eased temporarily due to freight costs more than doubling in recent weeks. GCC SEES RENEWED OPPORTUNITY IN SYRIA In the Middle East, Syria is opening up following a regime change and the consequent lifting of sanctions by both the US and EU. A cargo of wheat arrived at the Syrian port of Tartous for the first time in around 11 years, according to news reports. The opening of Syria’s market – after years of civil war and international sanctions – bodes well for GCC petrochemical producers. The GCC bloc consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Suppliers are looking to increase their trades with Syria, as converters in the country begin running their plants at higher rates, with the possibility of new plants to be built. On 29 May, the Syrian government inked a $7 billion strategic Memorandum of Understanding (MoU) with a consortium of companies led by Qatar’s UCC Holding to develop power generation projects. More such agreements, particularly as trade increases, could pave the way for increased demand in the country for chemicals and chemical products, after civil war disrupted life in Syria since 2011. Focus article by Jonathan Yee Additional reporting by Aswin Kondapally, Nadim Salamoun, Jasmine Khoo, Samuel Wong, Melanie Wee, and Angeline Soh. Thumbnail image: At Qingdao Port in east China's Shandong Province, 4 June 2025. (Shutterstock)

09-Jun-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 June. China factory output contracts anew despite US-China tariff pause By Jonathan Yee 02-Jun-25 14:34 SINGAPORE (ICIS)–China’s official manufacturing purchasing managers’ index (PMI) in May remained below the expansion threshold of 50.0 but was up from the previous month amid a pause in the US-China tariff war. INSIGHT: Will feedstock optimization be enough to survive Asia C2 oversupply? By Josh Quah 03-Jun-25 12:00 SINGAPORE (ICIS)–Investing into feedstock slate projects is one survival strategy gaining steam among players – and was still very much in the conversations on the side lines of the APIC 2025 conference. S Korea faces economic crossroads as it heads to polls amid political turmoil, tariffs By Jonathan Yee 03-Jun-25 15:25 SINGAPORE (ICIS)–South Korea is at a crossroads as it heads to the polls on Tuesday, six months after ex-President Yoon Suk Yeol’s martial law declaration led to his removal from office, resulting in political turmoil that has been compounded by trade uncertainties and the tariffs imposed by the US on most of the world. INSIGHT: Asian manufacturing stutters in May as tariff headwinds continue By Nurluqman Suratman 04-Jun-25 11:00 SINGAPORE (ICIS)–Asia's factories largely remained under pressure in May, as subdued global demand and persistent uncertainty surrounding US trade policies continued to bite, according to the latest purchasing managers' index (PMI) data. S Korea final Q1 GDP shrinks 0.2% on quarter amid US tariffs By Jonathan Yee 05-Jun-25 12:40 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. China ethane crackers face feedstock challenge as US restricts supply By Fanny Zhang 05-Jun-25 16:43 SINGAPORE (ICIS)–Operations at China’s ethane crackers that rely solely on US supply will likely be disrupted, at least in the short term, as the US restricts exports of the feedstock gas. INSIGHT: Faced with intensifying ADDs, Asia’s PET producers mull options to stay in the industry By Judith Wang 06-Jun-25 10:00 SINGAPORE (ICIS)–Facing intensifying anti-dumping duties (ADDs) in key markets, Asian polyethylene terephthalate (PET) producers are having to find ways beyond simply slashing offers to stay in the business. Malaysia's PETRONAS to cut 5,000 jobs by yearend By Nurluqman Suratman 06-Jun-25 11:10 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. Mideast polyols to face pressure post-Eid amid softer costs, demand By Isaac Tan 06-Jun-25 14:52 SINGAPORE (ICIS)–Middle Eastern import prices for polyether polyols are likely to remain under pressure after the Muslim festival of Eid ul-Adha, weighed down by weaker feedstock costs in China and seasonally subdued downstream demand.

09-Jun-2025

HOUSTON (ICIS)–The US can maintain nearly all the plastic and chemical tariffs it imposed this year after an appeals court granted on Thursday the government's request to stay the judgment of a lower court. The stay will remain in place while the case is under consideration by the US Court of Appeals for the Federal Circuit. Earlier, the US lost a judgment over its tariffs in the US Court of International Trade. That lower court ruled that the president exceeded its authority when it imposed tariffs under the International Emergency Economic Powers Act (IEEPA). These IEEPA tariffs included nearly all of the duties that the US imposed in 2025 on imports of commodity plastics and chemicals. Had the appeals court rejected the government's request for a stay, then the US would have had 10 calendar days to withdraw the tariffs it imposed under IEEPA. The tariffs covered by the ruling include the following: The 10% baseline tariffs against most of the world that the US issued during its so-called Liberation Day event on 2 April. These include the reciprocal tariffs that were later paused. The US issued the tariffs under Executive Order 14257, which intended to address the nation's trade deficit. The tariffs that the US initially imposed on imports from Canada under Executive Order 14193. These were intended to address drug smuggling. The US later limited the scope of these tariffs to cover imported goods that do not comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement (USMCA). The tariffs that the US initially imposed on imports from Mexico under Executive Order 14194. These were intended to address illegal immigration and drug smuggling. Like the Canadian tariffs, these were later limited to cover imported goods that did not comply with the USMCA. The 20% tariffs that the US imposed on imports from China under Executive Order 14195, which was intended to address drug smuggling. Because the appeals court granted the government's request for a stay, the US can maintain the IEEPA tariffs. The ruling did not cover sectoral tariffs imposed on specific products like steel, aluminium and auto parts, and it does not cover the duties that the US imposed on Chinese imports during the first term of US President Donald Trump. IMPLICATIONS OF THE RULINGIf the ruling is upheld by the higher courts, it could bring some imports of plastics and chemicals back to the US while lowering costs of other products. While the US has large surpluses in many plastics and chemicals, it still imports several key commodities. US states that border Canada import large amounts of polyethylene (PE) and other plastics from that country because it is closer than the nation's chemical hubs along the Gulf Coast. Other significant imports include base oils, ammonia, polyethylene terephthalate (PET), methylene diphenyl diisocyanate (MDI), methanol and aromatics such as benzene, toluene and mixed xylenes (MX). RULING COULD REDIRECT CHINESE EXPORTS OF PLASTIC PRODUCTSThe IEEPA tariffs of the US caused countries to redirect exports of plastics and chemicals to other markets, particularly to Europe. The result depressed prices for those plastics and chemicals. If the ruling holds, some of those exports could return to the US and reduce the quantity of exports arriving in Europe. The IEEPA tariffs had a similar effect on the plastic products exports by China. Those exports were redirected to other countries, especially southeast Asia. These redirected shipments flooded those countries with plastic goods, displacing local products and lowering domestic demand for the plastics used to make those products. If the ruling is restored by higher courts, then it could direct many of those shipments back to the US, although they would unlikely affect shipments of auto parts. Those shipments are covered by the sectoral tariffs, and the court ruling did not void those tariffs. RULING REMOVES BASIS FOR RETALIATORY TARIFFS AGAINST US PLASTICS, CHEMSChina had already imposed blanket tariffs in retaliation to the IEEPA tariffs the US imposed on its exports. China unofficially granted waivers for US imports of ethane and PE, but those for liquefied petroleum gas (LPG) were still covered by the duty. China relies on such imports as feedstock for its large fleet of propane dehydrogenation (PDH) units, which produce on-purpose propylene. If upheld, the ruling could restore many of those exports and improve propylene margins for those PDH units. The EU was preparing to impose retaliatory tariffs on exports of nearly every major commodity plastic from the US. Other proposals would cover EU imports of oleochemicals, tall oil, caustic soda and surfactants from the US. Canada also prepared a list of retaliatory tariffs that covered US imports of PE, polypropylene (PP) and other plastics, chemicals and fertilizers. If the ruling holds, it would remove the basis for the proposed tariffs of Canada and the EU as well as the existing ones already imposed by China. RULING WOULD NOT ELIMINATE THREAT OF FUTURE TARIFFSEven if the higher courts uphold the ruling and bars tariffs under IEEPA, the US has other means to impose duties that are outside of the bounds of the ruling. Section 122 of the Trade Act of 1974. Such tariffs would be limited to 15%, could last for 150 days and address balance of payment deficits. Tariffs imposed under the following statutes would require federal investigations, which could delay them by several months. Section 338 of the Tariff Act of 1930. The president can impose tariffs of up to 50% against countries that discriminate against US commerce. Section 301 of the Trade Act of 1974, which addresses unfair trade practices. This was the basis on the tariffs imposed on many Chinese imports during the peak of the trade war between the two countries. Section 232 of the Trade Expansion Act of 1962, which addresses imports with implications for national security. Trump used this provision to impose tariffs on steel and aluminum. The US has started Section 232 on the following imports: Pharmaceutical and active pharmaceutical ingredient (APIs) – Section 232 Semiconductors and semiconductor manufacturing equipment – Section 232 Medium and heavy-duty trucks, parts – Section 232 Critical minerals – Section 232 Copper – Section 232 Timber and lumber – Section 232 Commercial aircraft and jet engines – Section 232 Ship-to-shore cranes assembled in China or made with parts from China – Section 301 Shipbuilding – Section 301 The case number for the appeal is 2025-1812. The original lawsuit was filed in the US Court of International Trade by the plaintiffs VOS Selections, Genova Pipe, Microkits, FishUSA and Terry Precision Cycling. The case number is 25-cv-00066. Thumbnail Photo: A container ship, which transports goods overseas. (Image by Costfoto/NurPhoto/Shutterstock) Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy

29-May-2025

HOUSTON (ICIS)–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)–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

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 16 May. INSIGHT: Markets rally as US, China de-escalate tariffs stand-offMarkets and chemicals stocks rallied on Monday in the wake of an agreement by the US and China to dramatically cut reciprocal tariff rates for 90 days, signalling the first step in a de-escalation of trade tensions. INSIGHT: Limited improvements in demand for toluene and downstream sectors in EuropeNo significant growth is expected for toluene consumption in the near future, with long markets for certain isocyanates, a disappointing start to the summer driving season and tepid benzene demand stymying near-term growth hopes. INSIGHT: Sale of SABIC assets in Europe could make strategic senseA sale by SABIC of its European petrochemical assets could make strategic sense as the company has production in the Middle East, US and China, which benefit from much lower production costs. Europe butac sellers voice concerns over cheaper Chinese imports amid weak demandButyl acetate (butac) sellers in Europe have grown increasingly concerned about competitively-priced imports from China. As spot buying appetite in the continent is already subdued, domestic sellers are facing intense competition to offload material. European OX market flatlines as construction demand struggles, tariff uncertainty continuesHopes for a pick-up in European orthoxylene (OX) demand for the rest of 2025 are fading among downstream phthalic anhydride (PA) producers, as orders from the key construction sector remain flat year on year in the early stages of the warm season.

19-May-2025

HOUSTON (ICIS)–The tariff deal that the US has reached with China did not eliminate the duties on steel, aluminium and auto parts, all of which could lower automobile production and reduce demand for the plastics and chemicals used to make the vehicles. The US maintained its 25% sectoral tariffs on Chinese imports of steel, aluminium and auto parts. It levies the same tariffs on imports from much of the world. Imports from Canada and Mexico can avoid the tariffs if they comply with the nations' trade agreement, known as the US-Mexico-Canada Agreement. Oxford Economics expects US auto production will fall by -2.0% to -0.9% year on year in 2025. Fitch Ratings, a credit rating agency, lowered its US auto sales forecast by 6.7% and warned of production cuts. WHY ARE AUTOS IMPORTANT TO CHEMSAutomobiles made in North American contain an average of 198 kg of plastic, according to ICIS, making them an important end market for producers. Polypropylene (PP) is the most commonly used resin in North American automobiles followed by polyurethanes and nylon, as shown in the following charts. In addition, automobiles are large end markets for paints and coatings. In all, the typical automobile has nearly $4,000 worth of chemistry WHAT CHEMS SAY ABOUT AUTOSCelanese, whose Engineered Materials segment is heavily dependent on autos, stressed the uncertainty about the effects that tariffs will have on this key end market during the second half of the year. It will prepare by reducing inventory, controlling costs and lowering operating rates if warranted by demand weakness. Polyurethanes producer Huntsman is seeing automobile build rates drop low-single digit percentages. By the time order patterns trickle through original equipment manufacturers (OEMs) and down to chemical companies, Huntsman is seeing double-digit drops in some order patterns. AdvanSix warned that uncertainty surrounding tariffs is affecting the market for nylon and other engineering plastics. Axalta Coating Systems, which makes auto paint, warned of a $50 million gross annualized charge from tariffs. Axalta lowered its 2025 sales guidance to $5,300-5,375 million from $5,350-5,400 million. Earnings guidance remained unchanged. Steps that Axalta could take to offset a portion of that hit include insourcing production capacity to domestic plants; sourcing raw materials locally; reformulating products; managing strategic inventory; and executing pricing actions. TARIFFS RAISE AUTO COSTS, THREATEN OUTPUTTariffs on auto inputs will increase costs for vehicles, and producers will likely pass through a portion of those higher costs to customers. The size of those cost pass throughs will play a large role in the tariffs' effects on chemical demand. Higher prices for automobiles will discourage sales. Lower sales will reduce auto production and cut demand for plastics and chemicals used to make those vehicles. THE EFFECT SO FAR ON AUTO BUILDSPrior to the announcement of the US and China trade deal, Ford estimated that the gross cost impact from the tariffs is $2.5 billion. Among that, half will come from imported and exported parts as well as the effect that steel and aluminium tariffs will have on domestic prices. The rest is from imported vehicles. Already, Stellantis halted production for two weeks at a plant in Windsor, Ontario Province, Canada, because of tariffs. AUTO'S EXPOSURE TO TARIFFSThe US auto industry's exposure to tariffs is not trivial because the country imports enormous amounts of auto parts, steel and aluminium. Many of these products are subject to 25% sectoral tariffs or 10% baseline tariffs. More than 50% of the content of cars assembled in the US is imported, according to a 3 May CNN article, citing US government statistics. AUTO PART TARIFFSThe following chart breaks down 2024 general imports by country for auto parts under the 8708 code of the harmonized tariff schedule (HTS). Figures are in billions of dollars. Source: US International Trade Commission (ITC) Not all auto parts will be hit by the 25% tariffs. Some parts are excluded. Those from Mexico and Canada will escape the levy if they comply with the USMCA. STEEL AND ALUMINIUM TARIFFSThe following chart shows 2024 general imports of iron and steel under the HTS codes 7206-7224. These codes cover iron and nonalloy steel; stainless steel; and other alloy steel. The chart breaks down the imports by country and lists the value in trillions of dollars. Source: ITC Metal imports from the UK will be exempt under a recent trade deal, as indicated by a press conference in that country. Imports from Canada and Mexico would be exempt from these tariffs if they comply with the USMCA. Not all of these steel imports would be used in automobiles But the chart does illustrate that the US imports iron and steel from many countries that will be covered by the 25% tariffs. The following chart provides a similar breakdown for 2024 general imports of articles of iron and steel under Chapter 72. Figures are in trillions of dollars. Source: ITC The following chart provides the country breakdown for 2024 general imports of aluminium and articles thereof under Chapter 76. Figures are in trillions of dollars. Source: ITC OTHER THREATS TO DOMESTIC AUTO PRODUCTIONTariffs are taxes, and taxes reduce economic growth. Slower GDP growth translates to lower sales and production. ICIS expects that US economic growth will slow to 1.5% in 2025 from 2.8% in 2024. Growth in 2026 could be 1.7%. The country has a 34% chance of slipping into a recession in the next 12 months. Many US consumers bought automobiles to avoid paying tariffs. Those purchases made ahead of the tariffs will come at the expense of future sales. US SELF-SUFFICIENT FOR MANY PLASTICS, CHEMS USED IN AUTOSMany of the plastics and chemicals used by the US auto industry are produced in abundance in the country, and that will limit customers' exposure to the nation's tariffs for those products used in automobiles. The US is self-sufficient in polypropylene (PP), polyvinyl chloride (PVC) and polyethylene (PE), a plastic used in packaging and fuel tanks. Nylon is excluded from the tariffs. Polyurethanes, the second most common polymer used in automobiles, are made with methylene diphenyl diisocyanate (MDI), and a substantial amount of US MDI imports comes from China. The US also relies on imports of acrylonitrile butadiene styrene (ABS), much of which comes from Mexico, South Korea and Taiwan. Additional reporting by Stefan Baumgarten, Joseph Chang and Jonathan Lopez Insight article by Al Greenwood (Thumbnail shows automobile. Image by Shutterstock)

15-May-2025

HOUSTON (ICIS)–US-listed shares of chemical companies surged on Monday after the US and China agreed to a 90-day pause on the tariffs they imposed on each other since 2 April. The lower rates take effect on 14 May. For the US, it will lower its 2025 tariffs on Chinese imports to 30% from 145%. The 30% tariff is made up of the 20% fentanyl tariffs that the US adopted earlier in 2025 as well as the 10% baseline tariff that the US has imposed on most of the world. For China, it will cut its 2025 tariffs on US imports to 10% from 125%. The 10% tariff matches the baseline rate that the US has imposed on Chinese imports. China also suspended the non-tariff measures that it has taken since 2 April. The agreement does not mention the tariffs that China had imposed in February on a limited number of US imports, including liquefied natural gas (LNG). Nor does the agreement mention the restrictions on antimony and other minerals that China announced in December 2024 as well as those on bismuth and other minerals announced in February 2025. Monday's pause does not change the tariffs that the two countries adopted during the first term of US President Donald Trump. Still, the agreement removes a substantial amount of tariffs that had brought trade between the two countries to a standstill. The following table shows the major indices followed by ICIS. Index 12-May Change % Dow Jones Industrial Average 42,132.68 883.30 2.14% S&P 500 5,805.53 145.62 2.57% Dow Jones US Chemicals Index 820.86 15.57 1.93% S&P 500 Chemicals Industry Index 876.52 13.94 1.62% PAUSE WILL RESTORE TRADE BETWEEN US AND CHINAPrior to Monday's announcement, trade between the US and China had nearly halted. The US exported large amounts of polyethylene (PE) and monoethylene glycol (MEG) to China. China, in turn, exported large amounts of methylene diphenyl diisocyanate (MDI), polyether polyols and polyester fibre to the US. The following charts show the chemical trade between the two countries. China imported large amounts of chemical feedstock from the US to supply its ethane crackers and propane dehydrogenation (PDH) units. China had supposedly waived its tariffs on US imports of ethane but maintained those on liquefied petroleum gas (LPG). The US imported large amounts of auto parts and other goods that incorporated large amounts of plastics and chemicals. The high US tariffs on Chinese goods caused China to divert shipments to southeast Asia and other parts of the world. Those increased shipments from China displaced locally manufactured goods, leading to a chain reaction that lowered demand for the plastics and chemicals that those local manufacturers used to make those products that were now being supplied by China. US CONTINUES TO ROLL BACK TARIFFSMonday's announcement is the most recent example of the US pausing its tariffs. These started with the pause that the US adopted on the 25% tariffs it imposed on imports from Canada and Mexico. Later, it paused the reciprocal tariffs that it imposed on most of the world on 2 April. The US maintained the 10% baseline tariffs that it announced that same day. The US later announced exemptions on semiconductors and electronics. Recently it reached an agreement with the UK that lowered the sectoral tariffs that the US imposed on automobile and other specific goods. PERFORMANCE OF US CHEM STOCKSThe following table shows the performance of the US-listed shares followed by ICIS. Name $ Current Price $ Change % Change AdvanSix 24.21 1.10 4.8% Avient 38.82 2.02 5.5% Axalta Coating Systems 32.73 1.63 5.2% Braskem 3.77 0.15 4.1% Chemours 11.88 0.82 7.4% Celanese 55.30 4.09 8.0% DuPont 71.17 4.40 6.6% Dow 31.34 1.86 6.3% Eastman 82.06 4.56 5.9% HB Fuller 56.59 2.06 3.8% Huntsman 12.96 0.91 7.6% Kronos Worldwide 7.63 0.35 4.8% LyondellBasell 60.80 3.87 6.8% Methanex 34.61 2.17 6.7% NewMarket 639.35 4.87 0.8% Ingevity 41.95 1.48 3.7% Olin 22.99 1.66 7.8% PPG 113.84 5.08 4.7% RPM International 114.26 3.73 3.4% Stepan 55.99 2.09 3.9% Sherwin-Williams 357.86 6.00 1.7% Tronox 5.78 0.53 10.1% Trinseo 2.62 0.10 4.0% Westlake 86.18 6.18 7.7% Thumbnail shows stock charts. Image by Shutterstock

12-May-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 2 May. China unofficial proposed tariff exemption list includes US PE, ethane but not EG China’s unofficial proposed tariff exemption list of 131 US products worth around $46 billion, or 28% of total imports, includes polyethylene (PE), along with other chemicals and key feedstock ethane, according to a document obtained by ICIS. US PPG's order patterns remain steady despite tariffs US based paints and coatings producer PPG has so far seen no changes in order patterns from its customers, and it has maintained its full-year guidance despite the tariffs imposed by the US. INSIGHT: US suppliers maintain propane exports despite tariffs China's tariffs on US shipments of liquefied petroleum gas (LPG) have yet to disrupt exports, and the companies that supply the material expect that will remain the case – even if prices fall. INSIGHT: CEOs face new problem as economy weakens, overcapacity worsens As the trade war puts a squeeze on already tepid economic growth, and deepens chromic global overcapacity in chemicals, CEOs may struggle to find fresh markets as they shift product flows to avoid the burden and uncertainty of tariffs. INSIGHT: Mexico renews nearshoring ambitions as tariffs woes ease As Mexico seems to have managed to navigate US President Donald Trump's first 100 days in office relatively unscathed, compared with other emerging, manufacturing hub emerging economies, the country now looks again at its potential as a nearshoring hub. US tariffs may create COVID-like whiplash on chem markets – Huntsman The shock of US tariffs has caused customers to halt chemical purchases due to the uncertain trade policy, and that pause is reverberating throughout chemical chains in ways that resemble the COVID-19 pandemic in 2020, the CEO of US-based polyurethanes producer Huntsman said on Friday.

05-May-2025

HOUSTON (ICIS)–The shock of US tariffs has caused customers to halt chemical purchases due to the uncertain trade policy, and that pause is reverberating throughout chemical chains in ways that resemble the COVID-19 pandemic in 2020, the CEO of US-based polyurethanes producer Huntsman said on Friday. Suppliers are panicking and lowering inventories, preserving working capital, strengthening balance sheets and pursuing other emergency measures, said Peter Huntsman, CEO. He made his comments during an earnings conference call. For example, the company is seeing automobile build rates drop low-single digit percentages, Huntsman said. By the time order patterns trickle through original equipment manufacturers (OEMs) and through to chemical companies, Huntsman is seeing double-digit drops in some order patterns. "It is not unlike what happens when someone tapped the brake on a fast-moving freeway and the car behind them applies greater pressure. Three or four cars further back, cars are literally skidding to a halt," he said. Huntsman does not expect the shock will last. "I would say this scenario is not unlike 2020, where supply chains and inventories froze and the world stood in a state of paralysis as consumers, manufacturers and suppliers tried to make sense of the short term," he said. If that's the case, then the disruptions should resolve themselves in the next few months as the US signs trade deals, companies establish alternate supply chains, and the initial shock of the tariff announcements recedes. Huntsman also noted what he described as a large disconnect between what is being ordered and what is being produced. "How do you match today's drop off in demand with the reality of what is being consumed in the broader market?" Huntsman asked. "The only parallel I've seen in the last 15-20 plus years is really 2020, when we saw a very, very rapid and sudden drop off in COVID and subsequently the bullwhip effect that came back in the later part of 2020 and went all the way to 2021." US MDI MARKET FACES LONG-TERM CHANGESNorth and South America have a trade deficit in methylene diphenyl diisocyanate (MDI), and imports account for 20-25% of total demand, Huntsman said. Most of those imports come from China. Trade tensions could have a longer effect on US MDI markets because of the nature of the tariffs and future duties that the US is considering. Since the first administration of US President Donald Trump, the US has imposed tariffs of more than 30% on Chinese shipments of MDI. During Trump's second term, the US has imposed additional tariffs of 145%. The effect of the tariffs is already choking off Chinese shipments, Huntsman said. More could come. The US International Trade Commission (ITC) is considering antidumping duties on Chinese imports of MDI. A preliminary investigation could be completed by the middle of September, Huntsman said. A final investigation to determine the size of antidumping duties could finish in February. A final ruling could be issued in March 2026. If approved, these duties could be 300-500%, and they could last for five years, Huntsman said. The cumulative effect of tariffs and antidumping duties would erect a formidable trade barrier on Chinese MDI imports. Huntsman does not expect European producers could fill in the gap. Higher manufacturing costs, tariffs and transportation account for an additional $400-500/tonne price difference for European MDI. "I do not see Europe backfilling Asian material that would otherwise be coming into the US. It has not been competitive to do that at least in the last three or four years," he said. HUNTSMAN EXPECTS NO CHANGES ON FOOTPRINTHuntsman does not expect that it will need to make any changes on its manufacturing footprint, he said. Most of the company's sales are derived from locally produced product. Huntsman produces all of its MDI in North America. "We're in an ideal location to benefit from this." In China, all of its MDI supply is produced domestically. Huntsman also makes polyols. (Thumbnail shows polyurethane foam, which is made with MDI, a chemical that could face longer term consequences from US tariffs. Image by Shutterstock.)

02-May-2025