Synthetic rubbers

Optimising outcomes with in-depth coverage of key commodities

Discover the factors influencing synthetic rubbers markets

There are endless potential uses for synthetic rubbers which can be found in everything from vehicle tyres to footwear. Spikes in demand occur frequently due to the breadth of downstream sectors in play, as well as the changeable market dynamics of each. Synthetic rubbers market players therefore need fast and easy access to accurate, relevant and timely information. This way, the right decisions can be made quickly.

Using an established international network of market experts, we are able to provide the speed, breadth and depth of coverage needed, along with benchmark prices to use in your negotiations. We monitor frequently traded synthetic rubbers varieties: styrene butadiene rubber (SBR); polybutadiene rubber (PBR); acrylonitrile butadiene rubber (NBR); and elastomer ethylene propylene diene monomer (EPDM) – so you can be sure to discover exactly the information you need.

Other butadiene/c4 and rubbers that we cover

Learn about our solutions for synthetic rubbers

Pricing, news and analysis

Maximise profitability in uncertain markets with ICIS’ full range of solutions for synthetic rubbers, including current and historic pricing, forecasts, supply and demand data, news and analysis.

Data solutions

Learn about Insight, Hindsight and Foresight, our dedicated commodity solutions accessible through our subscriber platform, ICIS ClarityTM or Data as a Service channels.

Synthetic rubbers news

South Korea prepares full emergency response as US tariffs take effect

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

INSIGHT: War, AI, hijack energy transition; world pivots to fossil fuels

HOUSTON (ICIS)–Conflict has caused nations to adopt energy policies that favor security, affordability and reliability over sustainability as they seek to meet rising energy demand for artificial intelligence (AI) among developed countries and rising populations among developing ones. Energy security was brought to the fore by the war between Russia and Ukraine and the subsequent shock to EU industry, according to comments made at the CERAWeek by S&P Global energy conference. Executives at CERAWeek were exuberant about the prospects of rising demand for energy, particularly natural gas. Global demand for oil could reach a plateau by the middle of the next decade, although it could continue to rise as populations grow in emerging economies. RISING ENERGY DEMANDFollowing demand shocks such as war and COVID, governments want  sources of energy that are secure, reliable and affordable. "Energy realism is taking center stage," said Sultan Ahmed Al Jabr, CEO of the Abu Dhabi National Oil Co. (ADNOC). He made his comments at CERAWeek. "Sustainable progress is not possible without access to reliable, affordable and secure sources of energy." Murray Auchincloss, the CEO of BP, noted that every government to which he spoke after his appointment stressed the need for affordable and reliable energy. At the same time, the world will need more energy because of population growth, adoption of middle-class habits in emerging economies and AI. Applications like ChatGPT use up to 10 times the energy of a simple web search, Al Jabr said. By 2030, demand for power from data centers in the US will triple, accounting for 10% of consumption. ADNOC is putting money behind its predictions by establishing XRG, an energy investment company with an enterprise value of more than $80 billion. ADNOC and others expect LNG will play a large role in meeting growing demand for reliable and affordable power. Between now and 2050, LNG demand should rise by 65%, according to XRG. In fact, international gas is one of XRG's three platforms. US energy producer ConocoPhillips is also optimistic about the prospects for LNG, said Ryan Lance, CEO. He sees a growing market shipping low-cost natural gas from North America to higher cost regions in Europe and Asia. OIL HITS PLATEAUUnder current trends, global demand should continue growing slowly until reaching a plateau in the mid-2030s, said Helen Currie, chief economist of ConocoPhillips. In the industrialized world, oil demand is declining, said Eirik Warness, chief economist of Equinor. He expects oil demand to reach a plateau by the end of the decade. One factor behind tapering oil demand is China. It is weaning itself off of petroleum-based fuels in favor of nuclear and renewables for security reasons, said Jeff Currie, chief strategy officer for Carlyle. While these sources of energy have higher upfront costs, they have much lower operational costs when compared with fossil fuels, and they provide a secure source of energy. PROSPECT FOR US OIL PRODUCTIONCEOs at ConocoPhillips and Occidental Petroleum expect US oil production to reach a plateau later in the decade. After that, it should slowly taper using current technology. But energy companies have demonstrated a track record for innovation. If successful, they could extend the production life of US oilfields. Occidental is conducting pilot tests to determine whether it can use carbon dioxide (CO2) in unconventional oil fields like shale, said Vicki Hollub, CEO. The goal is to double oil recovery rates to 20% from 10%. Using CO2 in enhanced oil recovery is already an established technique in conventional fields, and Occidental is building a business around it using direct air capture (DAC). IMPLICATIONS FOR US CHEMSUS ethylene plants rely predominantly on ethane as a feedstock, and its cost tends to rise and fall with that for natural gas. At the least, rising gas demand could establish a floor on prices for the fuel and potentially lead to spikes as supply struggles to keep up with demand. At the same time, prices for petrochemicals tend to rise and fall with those for crude oil. Flat or falling demand for oil could set a ceiling on prices for petrochemicals. CERAWeek by S&P Global runs through Friday. Insight article by Al Greenwood (Thumbnail shows an LNG tanker. Image by Xinhua/Shutterstock)

12-Mar-2025

AFPM ‘25: US tariffs, retaliation risk heightens uncertainty for chemicals, economies

HOUSTON (ICIS)–The threat of additional US tariffs, retaliatory tariffs from trading partners, and their potential impact is fostering a heightened level of uncertainty, dampening consumer, business and investor sentiment, along with clouding the 2025 outlook for chemicals and economies. The US chemical industry, a massive net exporter of chemicals and plastics to the tune of over $30 billion annually, is particularly exposed to retaliatory tariffs. Chemical company earnings guidance for Q1 and all of 2025 is already subdued, with the one common theme from the investor calls being little-to-no help expected from macroeconomic factors this year. Tariffs only cloud the outlook further. Tariffs have long been a feature of US economic and fiscal policy. In the period to the 1940s, tariffs were used as a major revenue source to fund the federal government before the introduction of the income tax and were also used to protect domestic industries. After 1945, a neo-liberal world order arose, which resulted in a lowering of tariffs and other trade barriers and the rise of globalization. With the collapse of the Doha Round of trade negotiations in 2008, this drive stalled and began to reverse. Heading into this year’s International Petrochemical Conference (IPC) hosted by the American Fuel & Petrochemical Manufacturers (AFPM), it is clear that the neo-liberal world order has ended. Rising geopolitical tensions and logistics issues from COVID led many firms to diversify supply chains, leading to reshoring benefiting India, Southeast Asia, Mexico and others, and to the rise of a multi-polar world. It is also resulting in the rise of tariffs and other trade barriers around the world, most notably as US trade policy. FLUID US TRADE POLICYThe US administration’s policy stance on tariffs has been very fluid, changing from day to day. It is implementing 25% tariffs on steel and aluminium imports on 12 March and has already placed additional tariffs of 20% on all imports from China as of 4 March (10% on 4 February, plus 10% on 4 March). On 11 March, the US announced steel and aluminium tariffs on Canada would be ramped up to 50% in retaliation for Canadian province Ontario placing 25% tariffs on electricity exports to the US. Later, Ontario suspended the US electricity surcharge, and the US did not impose the 50% steel and aluminium tariff. The US had placed 25% tariffs on imports from Canada (10% on energy) and Mexico on 4 March but then on 5 March exempted automotive and then on 6 March announced a pause until 2 April. China retaliated by implementing 15% tariffs on US imports of meat, fish and various crops, along with liquefied natural gas (LNG) and coal. Canada retaliated with 25% tariffs on C$30 billion worth of goods on 4 March and then with the US pause, is delaying a second round of tariffs on C$125 billion of US imports until 2 April. Mexico planned to retaliate on 9 March but has not following the US pause. US President Trump has also threatened the EU with 25% tariffs. We have a trade war and as 1960s Motown artist Edwin Starr sang, “War, huh, yeah… What is it good for?… Absolutely nothing.” Canada, Mexico and China are the top three trading partners of the US, collectively making up over 40% of US imports and exports. The three North American economies, until recently, had low or non-existent tariffs on almost all of the goods they trade. This dates back to the 1994 NAFTA free trade agreement, which was renegotiated in 2020 as the USMCA (US-Mexico-Canada Agreement). A reasoning behind the tariff threats on Canada and Mexico is to force Canada and Mexico to stop illegal drugs and undocumented migrants from crossing into the US. These tariffs were first postponed in early February after both countries promised measures on border security, but apparently more is desired. But the US also runs big trade deficits with both countries. Here, tariffs are seen by the administration as the best way to force companies that want US market access to invest in US production. IMPACT ON AUTOMOTIVEUS automakers are the most exposed end market to US tariffs and potential retaliatory tariffs, as their supply chains are even more highly integrated with Mexico and Canada following the USMCA free trade deal in 2020. The USMCA established Rules of Origin which require a certain amount of content in a vehicle produced within the North America trading partners to avoid duties. For example, at least 75% of a vehicle’s Regional Value Content must come from within the USMCA partners – up from 62.5% under the previous NAFTA deal. Supply chains are deeply intertwined. In the North American light vehicle industry, materials, parts and components can cross borders – and now potential tariff regimes – more than six times before a finished vehicle is delivered to the dealer’s lot. US prices for those goods will likely rise. The degree to which they rise (extent to which tariffs costs will pass through) depends upon availability of alternatives, structure of the domestic industry and pricing power, and currency movements. In addition, some of the Administration’s polices dealing with deregulation, energy, and tax will have a mitigating effect on the negative impact of tariffs for the US. The 25% steel and aluminium tariffs will add nearly $1,500 to the cost of a light vehicle and will result in lower sales for the automotive industry which has been plagued in recent years by affordability issues. If it had been implemented, the 50% tariff on steel and aluminium imports from Canada would only compound the pricing impact. All things being equal, 25% tariffs on the metals would push down sales by about 525,000 units but some of the favorable factors cited above as well as not all costs being passed through to consumers will partially offset the effects of higher metal prices. Partially is the key word. Since so many parts, components, and finished vehicles are produced in Canada and Mexico, US 25% tariffs on all imports from Canada and Mexico would add further to the price effects. The economic law of demand holds that as prices of a good rise, demand for the good will fall. ECONOMIC IMPACTTariffs will dampen demand across myriad industries and markets, and could add to inflation. By demand, we mean the aggregate demand of economists as measured by GDP. Aggregate demand primarily consists of consumer spending, business fixed investment, housing investment, and government purchases of goods and services. Tariffs would likely add to inflation but the effects would begin to dissipate after a year or so. By themselves, the current round of tariffs on steel and aluminium and on goods from Canada, Mexico and China will dampen demand due to higher prices. Plus, as trading partners retaliate, US exports would be at risk. Preliminary estimates suggest the annual impact from these tariffs – in isolation – on US GDP during the next three years could average 1.4 percentage points from baseline GDP growth. Keep in mind that there are many moving parts to the economy and that the more favorable policies could offset some of this and, as a result, the average drag on GDP could be limited to a 0.5 percentage point reduction from the baseline. POTENTIAL GDP IMPACT OF US TARIFFS – 20% ON CHINA, 25% ON MEXICO AND CANADA Real GDP is a good proxy for what could happen in the various end-use markets for plastic resins and the reduction of US economic growth. In outlying years, however, tariffs could support reshoring and business fixed investment. The hits on Mexico and Canada would be particularly. China’s economic growth would be affected as well. But China can shift exports to other markets. Mexico and Canada have fewer options. Resilience will be key to growing uncertainty and will lead to shifting trade patterns and new market opportunities. This is where scenarios, sound planning and strategies, and leadership come into play. US EXPORTS AT RISK, SUPPLY CHAINS TO SHIFTUS PE exports are particularly vulnerable to retaliatory tariffs. The US is specifically targeting tariffs on countries and regions that absorb around 52% of US PE exports – China, the EU, Mexico and Canada, according to an ICIS analysis. Aside from PE, the US exports major volumes of PP, ethylene glycol (EG), methanol, PVC, styrene and vinyl chloride monomer (VCM), along with base oils to countries and regions targeted with tariffs. The US exports nearly 50% of PE production with China and Mexico being major outlets. China has only a 6.5% duty on imports of US PE, having provided its importers with waivers in February 2020 that took rates to pre-US-China trade war levels. The US-China trade war under the first US Trump administration started in 2018 with escalating tariffs on both sides, before a phase 1 deal was struck in December 2019 that removed some tariffs and reduced others. After the waivers offered by China to importers in February 2020, US exports of PE and other ethylene derivatives surged before falling back in 2021 from the COVID impact. They then rocketed higher through 2023 and remained at high levels in 2024. Since 2017, the year before the first US-China trade war, US ethylene and derivative exports to China are up more than 4 times, leaving them more exposed than ever to China. With tariff escalation, chemical trade flows would shift dramatically. Just one example is in isopropanol (IPA). Shell in Sarnia, Ontario, Canada, produces IPA, of which over 85% is shipped to the US, mainly to the northeast customers, said ICIS senior market analyst Manny Borges. “It is a better supply chain for the customers instead of shipping product from the US Gulf,” said Borges. “With the increase in tariffs, we will see several customers shifting volumes to domestic producers or countries where the tariffs are not applied,” he added. US IPA producers are running their plants at around 67% of capacity on average and have sufficient capacity to supply the entire domestic market, the analyst pointed out. This dynamic, where US producers supply more of the local market versus imports, would likely play out across multiple product chains as well, especially in olefins where the US is more than self-sufficient. Even as the US is more than self-sufficient in, and a big net exporter of PE, ethylene glycols, polypropylene (PP) and polyvinyl chloride (PVC), it imports significant quantities from Canada. In the event of a 25% tariff on imports from Canada, US producers could easily fill the gap, although logistics would have to be reworked. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Insight article by Kevin Swift and Joseph Chang

12-Mar-2025

Flagship Maasvlakte POSM plant to close in October – union

LONDON (ICIS)–The largest propylene oxide/styrene monomer (POSM) production complex in Europe is expected to close in October, union FNV said on Tuesday, after an agreement was reached between operator LyondellBasell and employees at the site. The Maasvlakte, Netherlands, plant, which has been offline for most of the last 12 months, will close on 1 October, according to an FNV representative, after the majority of union members at the site backed a deal on severance pay. “The plant at Maasvlakte will close definitely at October 1st,” the representative said. “A vast majority of our union members at Lyondell has voted in favor of a social plan in which the company and the trade unions have come to an agreement on a severance pay and outplacement,” the representative added. LyondellBasell declined to comment on the plans, with a spokesperson stating that no definitive decisions have been made at any of their operations. Joint venture partner Covestro also declined to comment. The unit was taken down for economic reasons between July and October 2024, before being brought down again in December. With a production capacity of 315,000 tonnes/year of PO and 680,000 tonnes/year of SM, the complex is the largest production facility of its type in Europe, but has faced increasing challenges as global capacities have grown and energy costs increased. The Netherlands site is among six in Europe that LyondellBasell placed under strategic review late last year, with the rest centered in the company’s core olefins and polyolefins (O&P) business. The five O&P sites under scrutiny in Europe are in Berre, France; Muenchmuenster, Germany; Brindisi, Italy; Tarragona, Spain; Carrington, UK; and Maasvlakte, Netherlands. Including Maasvlakte, around 15.1 million tonnes/year of chemicals production capacity is currently being rationalised, with the wave of closures rocking the industry increasingly rippling out to other regions, particularly Asia. Thumbnail photo: The Maasvlakte site (Source: LyondellBasell) Additional reporting by Fergus Jensen

11-Mar-2025

INSIGHT: New US administration pivots to fossil fuels

HOUSTON (ICIS)–The new administration of US President Donald Trump has pivoted wholeheartedly to fossil fuels, with the energy secretary warning on Monday the dangers of focusing solely on climate change while emphasizing the world's continued reliance on oil and natural gas for producing energy. "There is no physical way that wind, solar and batteries can replace natural gas," said Chris Wright, US secretary of energy. He made his comments during the CERAWeek by S&P Global energy conference. At the start of his speech, Wright stressed the ways that fossil fuels dominate the energy industry. Moreover, Wright argued that the world will need more fossil fuels because of rising demand for energy from artificial intelligence (AI) and from consumers in the developing world, who want to adopt middle-class lifestyles. BREAK FROM BIDENWright and Trump mark a sharp break from the previous administration of Joe Biden, which was marked by antipathy towards fossil fuels and incoherence. While Biden was adopting restrictive policies, his energy secretary urged oil producers to make more crude. Such energy contractions are so far lacking in Trump's administration. Wright repeated the president's sentiments and went as far as to pull out a marker and sign an order during a press briefing, something the president has done during the first weeks of his administration. CLIMATE CHANGE TAKES BACK SEATWright said consumers became collateral damage when the previous administration focused on climate change at the expense of promoting reliable and affordable sources of energy. "We will end the quasi-religious policies on climate change that imposed endless sacrifice on citizens," he said. "The Trump administration will treat climate change for what it is," Wright said. It is a global side effect for creating a modern world and the benefits that come with it, and dealing with it is a tradeoff, he said. "Everything in life involves tradeoffs." That said, Wright said he is a climate realist and not a denialist. He highlighted nuclear fission and fusion, both emission-free sources of power. He mentioned advances in geothermal energy and noted the growth in solar power. The administration's policies towards wind energy reflect cost and outrage from people who live near the projects, he said. Wright said the administration does not oppose electric vehicles (EVs), but only the policies that restrict consumer choice and lavish incentives to wealthy people who do not need them. "We need thoughtful, rational policies on energy and honest assessments on climate change," he said. SENTIMENT WILL NOT DIRECTLY BOOST OIL OUTPUTWright's comments went over well with the energy conference, with the audience burst in spontaneous applause. While the US energy industry will welcome a cooperative administration, sentiment alone will not have large or immediate effect on energy production. US oil and gas production grew despite the antipathy and incoherence of the Biden administration because much of it has taken place on the private lands of the Permian basin. Private land is free from federal restrictions and moratoria on leases. Oil and gas producers will gauge demand growth and costs before they increase output. Wright acknowledged that energy companies rely on market signals, and not government decree, to make investment decisions. But the administration can play a role by adopting policies that encourage investment and make it easier for companies to obtain the permits needed to build infrastructure and large-scale projects. TARIFFS VERSUS ENERGYOne contradiction in the administration is its embrace of fossil fuels and tariffs as a central tool in economic and industrial policy. If the US adopts tariffs, they will increase costs of steel and aluminium, key raw materials for oil and gas production. They would also increase costs of imported grades of heavy oil. US refineries are built to process heavier grades of crude. If faced with tariffs, US refiners could pay the tax or find alternative suppliers that could still cost more. Otherwise, refiners would need to underutilize their plants or invest in costly retrofits that would allow them to process larger amounts of domestically produced lighter grades of oil. Wright said the US is still in the early stages of its tariff proposals, but vigorous dialogue about their effect on the economy is taking place behind closed doors. Oil and natural gas are important for the chemical industry because they are the predominant source of feedstock and energy. Chemical prices tend to rise and fall with those for gas. In the US, feedstock costs tend to rise and fall with those for natural gas because ethylene plants predominantly rely on ethane as a raw material. CERAWeek by S&P Global runs through Friday. Insight article by Al Greenwood Thumbnail shows an oil pump jack. Image by Shutterstock.

10-Mar-2025

US energy secretary optimistic as tariff proposals in early days

HOUSTON (ICIS)–The US is still in the early stages of its tariff proposals, which could increase the costs of the steel and aluminium needed for oil and gas production, but vigorous dialogue about their effect on the economy is taking place behind closed doors, the secretary of energy said on Monday. "I think we are early in this," said Chris Wright, secretary of the US Department of Energy. He made his comments during the CERAWeek by S&P Global energy conference. "We have, behind closed doors, vigorous debates on tariffs," Wright said. "It's definitely not a quasi-religious, dogmatic thing. It's a dialogue." While the debate on tariffs is in its early days, Wright said he is optimistic about the outcome of the policies of the new administration because of the business background of the president and the record of his first term of office in 2016-2020. CLASHING POLICIESThe administration has enthusiastically expressed support for oil and gas production in the US with President Donald Trump saying "Drill, baby drill" during his speeches. At the same time, the government has embraced tariffs as a key tool of economic and industrial policy. This includes tariffs on steel and aluminium, key raw materials needed in the oil and gas industry. 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. The US could also go ahead in early April on proposals to impose 25% tariffs on all imports from Mexico, 10% tariffs on all energy imports from Canada and 25% tariffs on most other imports from Canada. The US is also considering imposing 25% tariffs on imports from the EU. These countries are major suppliers of steel and aluminium to the US. Already, higher costs in materials as well as labor have raised costs for several fuel and chemical projects. US-based chemical producer Westlake stressed that it would conduct a cost analysis to take inflation into account before it would consider expanding a joint venture cracker. More companies could give more large-scale projects second thoughts if tariffs cause further inflation in raw materials. Oil and natural gas are important for the chemical industry because they are the predominant source of feedstock and energy. Chemical prices tend to rise and fall with those for gas. In the US, feedstock costs tend to rise and fall with those for natural gas because ethylene plants predominantly rely on ethane as a raw material. CERAWeek by S&P Global runs through Friday. Thumbnail shows Chris Wright, secretary of the US Department of Energy. Image by ICIS.

10-Mar-2025

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 7 March. LyondellBasell to build metathesis unit to make propylene LyondellBasell has approved plans to build a metathesis unit in Channelview, Texas, that will convert ethylene into propylene, the producer said on Monday. INSIGHT: US to export more chem feedstocks amid drought of US cracker projects US production of ethane, propane and other natural gas liquids (NGLs) will continue to grow while domestic demand for these chemical feedstocks will likely remain flat, a trend that is contributing to a surge in new terminal projects that will export these products to growing markets overseas. Chem shares plunge as US proceeds with 25% Canadian, Mexican tariffs 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. INSIGHT: Retaliatory tariffs to compound pain for US chemicals and key end markets The US ramping up additional tariffs on China to 20% and kicking off 25% tariffs on Mexico and Canada (10% on energy) as of 4 March will hit chemical and key end markets and products as players rush to reconfigure supply chains. US to delay automobile tariffs for one month The US will grant a one-month tariff exemption for the nation's automobile industry, the government said on Wednesday. US to delay tariffs on USMCA-compliant goods from Mexico for one month – Trump The US will delay until 2 April imposing tariffs on Mexican goods that fall under the US-Mexico-Canada Agreement (USMCA), President Donald Trump said on Thursday, 6 March in a post on Truth Social. Wall Street turns more bearish on US chemicals on tariff uncertainty Wall Street analysts are turning more negative on the earnings outlook for chemical companies on increasing US tariff uncertainty. Canada delays second phase of retaliatory tariffs, Ontario plans electricity export tax Canada is delaying its second phase of retaliatory tariffs on goods imported from the US to 2 April, a minister announced on Thursday evening. INSIGHT: US tariffs may persist as they become policy pillar The US government is coming to embrace tariffs as a central part of its economic and fiscal policies, a development that could see such measures persist and threaten margins for the nation's chemical producers.

10-Mar-2025

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 7 March. China Feb manufacturing activity rebounds on seasonality By Fanny Zhang 03-Mar-25 11:47 SINGAPORE (ICIS)–China's official manufacturing purchasing managers' index (PMI) in February marked a return to expansion territory after a soft January reading as factories resumed operations after the Lunar New Year (LNY) holiday. INSIGHT: China set to maintain "around 5%" growth target By Nurluqman Suratman 04-Mar-25 11:00 SINGAPORE (ICIS)–China's "Two Sessions" this week will be closely watched as the government work report is released, outlining the country's policy priorities for the year amid escalating trade tensions with the US. UPDATE: ADNOC, OMV agree on polyolefins JV worth $60 billion By Jonathan Yee 04-Mar-25 16:45 SINGAPORE (ICIS)–Austria’s OMV and the UAE’s Abu Dhabi National Oil Co (ADNOC) on Tuesday agreed to form a $60 billion joint venture (JV) by combining polyolefins businesses Borouge and Borealis following two-year talks. Asia acetic acid market softens on easing supply, downstream turnarounds By Hwee Hwee Tan 05-Mar-25 14:05 SINGAPORE (ICIS)–Asian spot prices for acetic acid imports and exports are being dampened by lengthening supply and softening demand tied to a downstream sector. China targets record 2025 budget deficit to rev up economy By Fanny Zhang 05-Mar-25 14:50 SINGAPORE (ICIS)–China has set its 2025 fiscal deficit target at a record yuan (CNY) 5.66 trillion ($780 billion), equivalent to around 4% of GDP, to fund the government’s stimulus measures and ensure the world’s second-biggest economy would post a 5% growth. Thai central bank lowers interest on slower economic growth, global trade tensions By Jonathan Yee 05-Mar-25 15:34 SINGAPORE (ICIS)–Slower than expected economic growth and downside risks such as escalating global trade tensions spurred by US trade policy led Thailand’s central bank to cut its key interest rate by 0.25 percentage points to 2.00 on 26 February, the Bank of Thailand (BOT) said. PODCAST: Asia propylene demand curbed by weaker PO margins By Damini Dabholkar 06-Mar-25 00:07 SINGAPORE (ICIS)–The northeast Asian propylene import markets have been weighed down by lengthening supply amid restarts at propane dehydrogenation (PDH) units. However, lower affordability levels from derivatives such as propylene oxide (PO) have also curbed import demand. China PP suppliers persist with export end goal amid margin challenges By Jackie Wong 06-Mar-25 11:08 SINGAPORE (ICIS)–Despite poor margins for polypropylene (PP), suppliers in China are expected to continue to persevere with their plans to expand their export sales network and win market shares in southeast Asia. South Korea Feb inflation eases amid growing economic headwinds By Nurluqman Suratman 06-Mar-25 13:50 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. Thai PTTGC hopes to snap out of losses; eyes US ethane feed for crackers By Nurluqman Suratman 07-Mar-25 14:46 SINGAPORE (ICIS)–Imports of US ethane feedstock will be a key component of Thai producer PTT Global Chemical's (PTTGC) broader strategy to recover from recent losses, alongside initiatives to enhance competitiveness and expand into high-value businesses.

10-Mar-2025

SHIPPING: Asia-US container rates fall on rising capacity; liquid tanker rates mixed

HOUSTON (ICIS)–Shipping container rates from Asia to both US coasts fell again this week as capacity has grown and as volumes have fallen after frontloading to beat tariffs, and liquid tanker rates rose on the transatlantic eastbound route and fell on the US Gulf to Asia trade lane. CONTAINER RATES Rates from Shanghai to Los Angeles fell by 9% this week, according to supply chain advisors Drewry, while rates from Shanghai to New York fell by 6%, as shown in the following chart. Rates to both US coasts are now at their lowest of the year, according to Drewry data. Global average rates in Drewry’s World Container Index fell by 3% and are also at their lowest over the past year, as shown in the following chart. Drewry expects rates to continue to decrease next week due to increased shipping capacity. Rates from online freight shipping marketplace and platform provider Freightos showed significant decreases this week, although their rates are slightly higher than Drewry’s. Judah Levine, head of research at Freightos, said that tariffs – or the threat of tariffs – led to many importers frontloading volumes to beat the announced levies. “The president’s proposed 60% tariffs on Chinese goods could go into effect as soon as April – as could a wider application of reciprocal tariffs on numerous countries – meaning the window to receive goods before then is about closed,” Levine said. Levine said that the combination of a seasonal slump in demand and the possible end of frontloading likely drove the sharp fall in transpacific ocean rates last week. “If frontloading of the past few months was significant enough, we could also expect to see subdued peak season demand and rates as a result,” Levine said. 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 MIXED US chemical tanker freight rates assessed by ICIS were mixed week on week. Trade routes from the US remain mixed with several trade lanes slightly higher and others lower. Cargo moving into Asia weakens following the recent tariff announcements and this route has recently seen a decrease of cargoes, as the tariffs have all but halted any spot activity for this trade lane. As a result, rates have dipped from the previous week. On the other hand, the rates from USG to Rotterdam experienced upward pressure. For this trade lane freight rates for March have strengthened, given the amount of space left. A shipowner said it is expecting the trend to continue throughout March, with higher contract of affreightment (COA) utilization leaving very little available space. From the USG to Brazil, this market has remained relatively unchanged but is experiencing some downward pressure. While the market continues to be active it is further influenced by freight availability and a swing in trade lane dynamics. Demand remains soft particularly for larger parcels further pressuring some downward movement. On the USG to India trade lane, the market remains extremely soft with plenty of space available as outsiders have entered the market. As a result, this has placed downward pressure, and rates could fall further on the route if this persists. Several inquiries were seen for monoethylene glycol (MEG), methanol, ethanol, and vinyl acetate monomer (VAM), but few fixtures were seen in the market. With additional reporting by Kevin Callahan

07-Mar-2025

South Korea Feb inflation eases amid growing economic headwinds

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

Events and training

Events

Build your networks and grow your business at ICIS’ industry-leading events. Hear from high-profile speakers on the issues, technologies and trends driving commodity markets.

Training

Keep up to date in today’s dynamic commodity markets with expert online and in-person training covering chemicals, fertilizers and energy markets.

Contact us

In today’s dynamic and interconnected chemicals markets, partnering with ICIS unlocks a vision of a future you can trust and achieve. Our unrivalled network of chemicals industry experts delivers a comprehensive market view based on trusted data, insight and analytics, supporting our partners as they transact today and plan for tomorrow.

Get in touch to find out more.