Synthetic rubbers

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US spiked again this week – and have almost doubled over the past four weeks – as demand has surged ahead of the possible reinstatement of tariffs while capacity remains tight. Supply chain advisors Drewry said the latest sudden, short-term strengthening in supply-demand balance in global container shipping has reversed the trend of declining rates which had started in January. Rates from Shanghai to Los Angeles spiked by 57% this week while rates from Shanghai to New York jumped by 39%, according to Drewry and as shown in the following chart. The drastic increases are seen from other shipping analysts as well. On the Shanghai Containerized Freight Index (SCFI), the Shanghai-USWC rate rose by 58% to $5,172/FEU (40-foot equivalent unit), the largest week-on-week percentage gain since 2016 as strong demand has coincided with tight supply, though capacity is increasing as carriers resume previously suspended services and reinstate blank sailings. Sea-Intelligence CEO Alan Murphy said almost 400,000 TEUs (20-foot equivalent units) are coming back online in the near term. “If we aggregate it across June/July for Asia-USWC, then in June, the lines are increasing capacity 12.8% compared to before the tariff pause, and in July, the capacity injection is increasing to 16.5% compared to the pre-pause situation,” Murphy said. “Capacity has also ramped up sharply compared to just a week ago, with this injection of capacity equaling 397,000 TEU across the two months.” The growth in capacity is shown in the following chart from Sea-Intelligence. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said the spike is likely because shippers are so concerned about getting goods moving during the 90-day window that they are willing to pay more. “Right now, it seems carriers are telling shippers to jump, and some are replying ‘how high?’,” Sand said. “This will not last because capacity is heading back to the transpacific and the desperation of shippers to get supply chains moving again will ease once boxes are on the water and inventories begin to build up,” Sand said. “Spot rates are expected to peak in June before downward pressure returns.” Rates from online freight shipping marketplace and platform provider Freightos have yet to capture the dramatic increase, but Judah Levine, head of research at the company, said 1 June general rate increases (GRIs) are starting to push daily prices up sharply. “Rates have spiked 72% to the West Coast since last week to $4,765/FEU and 44% to the East Coast to $5,721/FEU, with more increases likely and additional hikes announced for mid-month,” Levine said. Analysts at US logistics platform provider Flexport said they expect a further rush of cargo from southeast Asia to the US West Coast toward the end of June. Flexport analysts expect carriers to be back to full capacity on the transpacific eastbound trade lane by the end of June, noting that week 23 capacity is 11% below standard levels but is expected to exceed standard levels by 3% by week 25. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES US chemical tanker freight rates assessed by ICIS were mostly unchanged. However, rates decreased from the US Gulf to Europe. The USG to Rotterdam route is overall steady as weaker demand is being offset by limited availability, particularly for larger parcels. Larger requirements are well represented, with several larger lots of methanol, methyl tertiary butyl ether (MTBE) and caustic soda fixed or indicated to the ARA. There was also some interest in sending some smaller lots of glycols and styrene. From the USG to Asia, the uptick in interest to rush glycols to beat the deadline to China seems to have all but ended as the market saw only a few new inquiries. On the other hand, several larger parcels of methanol were either fixed or quoted to the region. As contract of affreightment (COA) volumes are being firmed, and due to the absence of market participants, freight rates have eased some, with more downward pressure on smaller parcels. On the USG to Brazil trade lane, the market has been steady, leading rates to remain unchanged week on week. There was a stable level of spot activity with only a handful of new requirements. Overall, the market remains slow despite several cargoes being quoted and fixed. Despite the uptick in inquiries there is not enough significant activity that would suggest any increase in demand, with caustic soda, glycols and styrene the most active. The regular owners have space remaining and are trying to fill space while supporting current freight levels. Activity typically picks up during summer months, but this is not currently being seen. As a result, freight rates are now expected to remain steady for the time being. Focus story by Adam Yanelli Additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

05-Jun-2025

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

05-Jun-2025

COLORADO SPRINGS, Colorado (ICIS)–Uncertainty surrounding tariffs is tempering what could be a recovery in US demand for polypropylene (PP), executives at Braskem said on Wednesday. Uncertainty about the final makeup of tariffs and their effects on end markets have caused consumers and companies to delay purchases, said Alexandre Elias, vice president, PP, North America and Europe, Braskem. Elias made his comments in an interview with ICIS on the sidelines of the annual meeting of the American Chemistry Council (ACC). Companies are reluctant to build inventories and make investments – especially industrial PP customers that have long investment cycles, Elias said. TARIFFS HAVE COUNTERVAILING EFFECTS ON AUTOAutomobiles are one of the main end markets for PP, and the tariffs have had mixed effects on production, contributing to the uncertainty of PP demand from the sector. The US has imposed tariffs on imports of automobiles and auto parts, which could ultimately stimulate local production and PP demand. Prior to those tariffs, consumers splurged on automobiles to beat the tariffs. All of that pre-buying lowered inventories of US autos, said Bill Diebold, vice president – commercial, Braskem America, polyolefins. US producers will ultimately replenish those inventories, which will further increase auto output and PP demand. On the other hand, consumer confidence has fallen after the introduction of the tariffs and that tends to slow demand growth for automobiles and other durable goods that are made with PP. Chinese restrictions on shipments of rare earth magnets could cause some automobile companies to shut down production within weeks if they cannot find workarounds, according to an article from the Wall Street Journal, a business publication. The US recently increased its tariffs on imports of steel and aluminium to 50% from 25%, which would increase production costs for US automobiles and potentially make them less affordable. The future of the tariffs themselves is uncertain because the US frequently changes the rates. It could impose new tariffs, and the courts could rule that the US lacks authority to impose them under a key provision. The interactions of all of these variables make it difficult to forecast PP demand from the US automobile industry, Elias said. PP DEMAND REMAINS FLAT YEAR ON YEARIn the US, PP demand is up in Q2 versus Q1 but flat year on year, Diebold said. Similarly demand improved in Q1 versus Q4, the latter of which was a challenging time for the US market, Diebold said. Packaging, another major end market for PP, remains strong. PP is enjoying a boost from a wave of product substitutions, Elias said. Over the years, many polystyrene (PS) processors have switched to PP because of its price. Many of those substitutions have played out, but a smaller wave is now taking place. That said, uncertainty could be capping the potential of product substitutions from other processors. LPG RESTRICTIONS TO CHINA COULD ALTER PP TRADE FLOWSGlobal trade flows of PP could change significantly if the US restricts exports of liquefied petroleum gas (LPG) to China. China relies heavily on US LPG shipments to provide feedstock for its large fleet of propane dehydrogenation (PDH) units, which produce on-purpose propylene. The US already has imposed restrictions on exports of ethane to China, which would disrupt a few ethane crackers in the country. If trade tensions rise, it could expand the restrictions to cover LPG. Global markets got a taste of the ramifications of restricted LPG shipments earlier this year when China increased tariffs on US imports by triple digits. Had China maintained those increases, Chinese propylene production would likely fall, according to ICIS. China could still procure LPG from exporters from other parts of the world, but that would increase costs and make some production uncompetitive. Lower Chinese propylene production would have a cascading effect. It could lower domestic production of PP and cut down on Chinese exports to other parts of Asia. That, in turn, could allow domestic Asian producers to sell more material locally, allowing them to be less aggressive about exporting PP, Elias said. "This could have a significant impact on trade flows globally," Elias said. In fact, restrictions on US LPG shipments to China would likely have a bigger effect on PP trade flows then actual tariffs on the resin. So far, the introduction of US tariffs has had little direct effect on US PP, because the market is relatively balanced. In 2023 and 2024, apparent consumption was about 85% of total production in the US, according to the ICIS Supply and Demand Database. Braskem does have an option to export PP from a terminal in Charleston, South Carolina, but this terminal functions more as a way to take advantage of arbitrage opportunities and leverage its PP plants in North America, Elias said. As an option, it has worked well. LITTLE NEED FOR NEW PROPYLENE CAPACITYBraskem relies on third parties for propylene for its PP plants in the US. So far, there is no need for Braskem to build its own propylene capacity, Elias said. The US is long in propylene, as illustrated by the global competitiveness of its exports, he said While Braskem has relied on propylene imports from Canada, trade tensions between it and the US have eased. Were trade tensions to resume and cause an increase in tariffs, Braskem could manage around it, Elias said. The ACC Annual Meeting runs through Wednesday. Focus article by Al Greenwood Thumbnail shows a product made with PP. Image by Shutterstock.

04-Jun-2025

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

04-Jun-2025

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

03-Jun-2025

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

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 30 May. Thailand’s GC deepens focus on specialties amid overcapacity – CEO By Nurluqman Suratman 26-May-25 11:16 SINGAPORE (ICIS)–Thailand's PTT Global Chemical (GC) is deepening its commitments to feedstock flexibility, high-value specialty and bio-based & green chemicals, as CEO Narongsak Jivakanun urges regional coordination within ASEAN to tackle global supply chain disruptions and overcapacity. INSIGHT: Asia oxo-alcohols prices expected to face downward pressure in H2 2025 By Lina Xu 26-May-25 12:00 SINGAPORE (ICIS)–Asia’s oxo-alcohols market is forecast to face significant downward pricing pressure in the second half of 2025, driven by rapid capacity expansion in China and an uncertain recovery in downstream demand. Asia fatty alcohol mid-cuts demand to soften as feedstock PKO declines By Helen Yan 27-May-25 11:18 SINGAPORE (ICIS)–Asia fatty alcohols market may see a further softening in demand as buyers hold back their purchases, given the decline in the feedstock palm kernel oil (PKO) costs in the past month. INSIGHT: China's polyolefins demand shifts towards domestic consumption due to export uncertainty By Amy Yu 27-May-25 12:00 SINGAPORE (ICIS)–China’s polyolefins demand for 2025 is expected to reach 85 million tonnes, up by 3% year on year, driven by the domestic market in the face of the uncertain outlook of China-US trade negotiations. UPDATE: Japan's Asahi Kasei to discontinue MMA, CHMA, PMMA, SB latex businesses By Nurluqman Suratman 27-May-25 15:42 SINGAPORE (ICIS)–Japanese chemicals major Asahi Kasei on Tuesday said that it will be discontinuing its businesses for methyl methacrylate (MMA) monomer, cyclohexyl methacrylate (CHMA), polymethyl methacrylate (PMMA) resin and styrene-butadiene (SB) latex. Singapore April chemicals output down 3.2%; H2 2025 outlook firm By Jonathan Yee 27-May-25 15:26 SINGAPORE (ICIS)–Singapore's chemicals production declined 3.2% year on year in April amid tariff-led front-loading, official data showed on 26 May, while a pause in 'reciprocal' tariffs could support further growth in H2 2025. ASEAN leaders voice 'deep concerns' over US tariffs By Nurluqman Suratman 28-May-25 11:19 SINGAPORE (ICIS)–Southeast Asian leaders at the 46th ASEAN Summit in Kuala Lumpur, Malaysia have voiced "deep concern" over the US' recent move to impose unilateral sweeping tariffs. INSIGHT: India PVC imports brace for monsoon dip, but policy twists could stir the market By Aswin Kondapally 30-May-25 10:02 MUMBAI (ICIS)–India’s Polyvinyl chloride (PVC) imports are expected to moderate in the coming months due to seasonal patterns, as monsoon conditions typically dampen demand from key sectors such as construction and agriculture.

02-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)–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

BARCELONA (ICIS)–ExxonMobil is selling its refinery at Gravenchon, France, to Canadian refining group North Atlantic. The two companies have entered exclusive negotiations for North Atlantic to acquire an 82.89% controlling interest in Esso Société Anonyme Française SA and 100%  of ExxonMobil Chemical France. Filing of a tender offer is expected in the first quarter of 2026 for the deal which includes Exxon’s refinery at the Gravenchon site, the second largest refinery in France. The  transaction will be submitted to local trade unions in accordance with French law. In 2024, ExxonMobil sold its Fos-Sur-Mer refinery near Marseille, France, along with fuel terminals in Toulouse and Villette. The company also closed its cracker and downstream production  at Gravenchon in 2024. At the time, the company said the site had lost more than €500 million since 2018 and despite efforts to improve the site’s economics, it remained uncompetitive. According to the ICIS Supply & Demand Database ExxonMobil still has some small chemicals capacities at Gravenchon and nearby Port Gerome including propylene, polyalphaolefins and oligomers. Local trades union, CSEC, said in a press release that ExxonMobil would market chemicals and specialty products on behalf of the new owners. ExxonMobil did not reply to a request for confirmation of this. It also has large base oils capacities in France including 12,000 barrels/day at Port Jerome and 3,200 barrels/day at Gravenchon. In a statement released on 28 May, North Atlantic said it has the ambition to consolidate Gravenchon as a center of French energy and industry for decades and to grow North Atlantic into a transatlantic energy champion. Located on a 1,500-acre site in the Normandy region of France, the combined facility is one of the largest integrated chemical complexes in western Europe. The refinery includes two distillation trains, several conversion units and associated logistics facilities. The site has the capacity to process 230,000 barrels/day of crude oil and other feedstocks, according to North Atlantic. North Atlantic said it aims to develop Gravenchon into a green energy hub to accelerate the deployment of low-carbon fuels and renewable power. The company said it is committed to maintain employment and existing compensation and benefits. Ted Lomond, president and CEO of North Atlantic and president of North Atlantic France said: “This is a pivotal moment for North Atlantic as we enhance our transatlantic presence and commitment to energy security through innovative energy solutions aligned with global energy needs”. Ajay Parmar, ICIS director of energy and refining said: “My view is that Exxon is choosing to sell assets where profitability has been and likely will continue to be dented going forward. Refinery margins in Europe have returned back to around their pre-COVID levels this year, after a few years of bumper profits post-pandemic.” He added: “These refinery assets are less profitable and so the company is probably looking to divest for this reason. Exxon/Esso also sold off the Fos-Sur-Mer refinery last year – I think the strategy is to steadily exit these lower margin businesses.” Photo: Part of an oil refinery complex (Shutterstock) Focus article by Will Beacham

28-May-2025