Titanium dioxide (TiO2)

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

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US are already facing upward pressure amid the 90-day tariff pause, but Wednesday’s ruling by a federal court could add fuel to the trend, according to shipping analysts. “The decision of the US Court of International Trade to deem [US President Donald] Trump’s sweeping tariffs as unlawful is good news for shippers – but it could signal the beginning of the next era of confusion in global supply chains,” analysts at ocean and freight rate analytics firm Xeneta said. Emily Stausboll, Xeneta senior shipping analyst, said that even if the appeal fails, Trump will not throw in the towel, and he has other levers to pull to achieve the same outcome as the sweeping tariffs. “We only have to look at the US government proposal to introduce port fees on China-affiliated ships and the SHIPS for America Act to understand the range of options at Trump’s disposal in the ongoing trade wars,” Stausboll said. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said the 90-day pause on 145% tariffs on Chinese goods has already driven a sharp rebound in ocean freight demand. “Shippers have been frontloading to beat the August expiration,” Levine said. “This ruling may add fuel to that trend, especially if tariffs are actually suspended – even temporarily.”’ Levine said that some shippers deterred by the 30% tariffs may now rush to move goods before the appeals process concludes or new tariff mechanisms are activated. “That could increase container demand even further, adding to the strength of the early start to peak season,” Levine said. RULING ADDS UNCERTAINTY Lars Jensen, president of consultant Vespucci Maritime, said the ruling by the court adds a new level of uncertainty for US importers. “Not only do they have to contend with the risks associated with changing tariffs, now it is also cast into doubt whether or not the announced tariffs will even be implementable – and this also raises the question whether tariffs paid in recent weeks can ultimately be reclaimed,” Jensen said in a post on LinkedIn. If, after appeals, the tariffs are ultimately found to be unlawfully implemented, shippers should have a good case for getting the paid tariffs back, Jensen 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. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

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

HOUSTON (ICIS)–Asia-US rates for shipping containers rose this week, leading ocean carriers to rush to ramp up capacity to handle an expected surge in bookings. Rates from online freight shipping marketplace and platform provider Freightos rose by 3% to both US coasts, while rates from supply chain advisors Drewry showed a 2% increase on rates from Shanghai to Los Angeles and a 4% rise in rates from Shanghai to New York, as shown in the following chart. Following the latest US-China trade developments, Drewry expects an increase in spot rates in the coming week as carriers are reorganizing their capacity to accommodate a higher volume of cargo bookings from China. Kyle Beaulieu senior director, head of ocean Americas at Flexport, said during a webinar this week that carriers who initiated blank sailings and discontinued services to the US are now resuming services. Beaulieu said there were 10 China-US services that were halted, and as of today, six are planning to resume from Week 22 to Week 24. Beaulieu said ports in the Pacific Northwest have been the biggest beneficiaries so far as that is the shortest route to the US. Alan Murphy, CEO, Sea-Intelligence, said carriers who were reducing transpacific capacity due to the decrease in bookings from China amid 145% tariffs are now working to ramp up capacity prior to the 14 August deadline. This means that typical peak season volumes now must be shipped no later than mid-July. Judah Levine, head of research at Freightos, said there is still confusion on whether July and August deadlines mean goods need to be loaded at origins by those dates – as was the case with the 9 April tariff deadline – or that goods must arrive in the US by then. “The latter would significantly shorten these lower-tariff windows,” Levine said. “Ocean shipments from Asia would have to move in the next week or two to arrive before 9 July.” Levine noted that carriers have separately come out with mid-month general rate increases (GRIs) from $1,000-3,000/FEU (40-foot equivalent unit) and have similar GRIs planned for 1 June and 15 June with aims to get rates up to $8,000/FEU. “If successful, rate levels would be about on par with the Asia – US West Coast 2024 high reached last July,” Levine said. “Daily transpacific rates as of Monday have already increased about $1,000/FEU to the East Coast and $400/FEU to the West Coast to about $4,400/FEU and $2,800/FEU, respectively.” 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 HOLD STEADY US liquid chemical tanker freight rates as assessed by ICIS held steady this week despite upward pressure for several trade lanes. There is upward pressure on rates along the US Gulf-Asia trade lane as charterers are seeking to send cargos to the region following the pause on tariffs. The announcement caused a significant uptick in spot activity. The increase in interest should be significant but almost certainly short lived as cargoes rush to arrive prior to the 90-day expiration date. Several parcels of monoethylene glycol (MEG) and methanol were seen quoted in the market. Similarly, rates from the USG to Rotterdam were steady this week, even as space among the regular carriers remains limited. Contract tonnage continues to prevail and given the limited available space; spot demand remains relatively good. Several larger sized cargos of styrene, methanol, MTBE and ethanol were seen in the market. Several outsiders have come on berth for both May and June, adding to the available tonnage for completion cargos. Easing demand for clean tankers has attracted those vessels to enter the chemical sector. For the USG to South America trade lane, rates remain steady with a few inquiries for methanol and ethanol widely viewed in the market. Overall, the market was relatively quiet with fewer contract of affreightment (COA) nominations, putting downward pressure on rates as more space has become available. On the bunker side, fuel prices have declined as well, on the back of lower energy prices, as a result week over week were softer. 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

23-May-2025

HOUSTON (ICIS)–The 90-day pause on reciprocal tariffs on all imports from China provided importers with a new deadline, but not much relief, according to a survey of more than 100 small-to-midsized businesses. Conducted by online freight shipping marketplace and platform provider Freightos between 14-17 May, respondents to the survey said the pause has done little to ease their concerns. Small importers remain deeply anxious, are shifting behavior – including changing shipment timing or even considering winding down businesses – and are starting to adapt for the long term. “While some are assessing domestic manufacturing, very few actually have,” Freightos said when noting key takeaways from the survey. “Meanwhile, delays in shipments as a result of tariffs led to significant gaps that importers are struggling to fill,” Freightos said. Other findings include: 31% of respondents are more concerned now than in April; 48% are equally as concerned; 20% less concerned 42% of importers rated the degree to which their business was disrupted as a full 10/10 disruption score, with an average rating of 7.5/10; down from April, when a full 60% of importers rated their degree of disruption as a 10/10 Some respondents said that they were unable to import goods as the 30% tariffs were still too high for small businesses, that expenses shot up leaving importers upside down on some deals, and that they see no way to plan ahead amid what seemed like daily changes and confusion. ADAPTING Respondents said they have found ways to adapt to the changing environment, including: 47% paused shipments and are now increasing imports following the reprieve’s implementation 15% changed suppliers as a result of the changes 7% decreased imports as a whole Since many businesses delayed shipments in April and are now urgently shipping to restock, there is increased potential of bullwhip effects that lead to persistent disruptions regardless of tariff changes going forward, Freightos said. DOMESTIC SOURCING While one of the stated goals of the tariffs was to change US sourcing patterns, changes remain minimal – 30% of businesses are considering it and only 6% have actually done so, the survey showed. The slight shift in sourcing patterns and the pauses in ordering from China likely contributed to reduced traffic at the West Coast ports of Los Angeles and Long Beach. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said the ports of Los Angeles and Long Beach are seeing fewer arrivals than normal. Only 92 container ships arrived in Los Angeles and Long Beach between 1-19 May, whereas 108 would be normal, Louttit said. He also noted about 40 container ship blank sailings that will skip Los Angeles or Long Beach through 5 July. Blank sailings are when an ocean carrier cancels or skips a scheduled port call or region in the middle of a fixed rotation, typically to reduce capacity to support freight rates. 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. Thumbnail image by Shutterstock

21-May-2025

Additional reporting by Andreas Schroeder, Eduardo Escajadillo and Ghassan Zumot CCS could prove a game-changer for Germany's long-term energy vision Easing of debt brake could stimulate demand in new sectors Debate around resurrecting Nord Stream may be unhelpful now LONDON (ICIS)–Germany’s long-term energy policies are likely to witness critical adjustments as the new government will be looking to strike a balance between climate action, security of supply and economic competitiveness. Speaking to ICIS, Timm Kehler, CEO of the German and Hydrogen Industry (formerly Zukunft Gas), Germany’s foremost gas advocacy group, said the new administration remains committed to the country’s 2045 climate neutrality target but the means to achieve the goals are likely to undergo a sea-change. The new government has already announced its decision to lift a long-standing opposition to nuclear production, which is set to ensure the technology is treated on a par with renewable energy in EU legislation. Another game-changer might be the approval of carbon capture storage which would allow Germany to carry out plans to import gas and build gas-fired power plants while being able to transport and export carbon dioxide. OPPORTUNITIES Kehler said there are discussions on lifting the current ban on CCS and aligning with the London Protocol, an international agreement regulating the export of waste including CO2, which will provide clear signals for Germany to use gas while remaining committed to climate targets. This would open the door to a variety of opportunities including securing natural gas supplies on a longer-term basis and continuing to burn the fuel in critical sectors if it is used as feedstock for clean blue hydrogen, with the resulting carbon dioxide stored in CCS. One area that will be under scrutiny will be the decarbonization of heating, the second largest gas consuming sector after industry, which burns around 254TWh (24billion cubic meters) annually. “The decarbonisation of the heating sector is an emotional and complicated issue,” Kehler said. “It was a major breaking point of the previous government and has created headaches in the business because it’s not clear how they would tackle issues. There is a campaign to get rid of gas-fired heating but it’s not clear what that means in practice.” STIMULATING DEMAND Kehler said the ability of the current government to ease the debt brake and pave the way for a multi-billion-euro stimulus for investments in infrastructure, including energy, would implicitly lift demand for natural gas and electricity. Several areas of growth could include the construction sector, where Germany has been falling significantly below targets to expand the housing stock. Another area would be defence. “We see a shift towards investments in defence which could have an impact on the German economy,” he said. “The Coalition Treaty [an agreement signed by Germany’s mainstream centre right and centre left parties CDU/CSU and SPD] focuses on lead markets where the state has influence and which could decarbonise quicker such as green steel and defence technology, which could be a driver for new economic activity,” he added. Kehler said some sectors such as the chemical industry which was severely hit by rising energy costs in the wake of Russia’s invasion of Ukraine have seen a modest comeback but added that a share of the production that closed down or relocated may be lost for now. IMPORTS Despite the economic difficulties faced by Germany following the energy crisis of 2022, he questioned the viability of a possible regulated industrial price for electricity or gas that would help consumers to reduce costs. He said a more efficient option would be to reduce taxes to a minimum level rather than subsidise grid transmission tariffs to keep costs low. The expected surge in gas production globally could bring additional benefits to industrial consumers and Kehler believes that closer relations with the US, as the world’s largest exporter of natural gas, could be beneficial both economically and politically. He said current discussions on the potential return of Russian gas supplies via the idled Nord Stream 1 or 2 corridors were not particularly helpful. “From the point of view of supply we have lots of idle routes through Ukraine or Yamal [via Belarus and Poland] and before we have a discussion on Nord Stream we should put the focus on those transport routes in case Russian gas comes online. “However, we don’t see that [the return of Russian gas] happening, in fact we see the EU discussion moving in opposite direction [towards banning Russian gas imports],” he added. Kehler admitted that natural gas was very much part of the geopolitical discussions between the US and Russia and related to the future of Ukraine in a post-war scenario. Note: This piece previously referred to The German and Hydrogen Industry as Kukunft Gas. Zukunft Gas was renamed The German and Hydrogen Industry in 2024 to reflect its greater emphasis on the transformation of the gas industry and on hydrogen.

21-May-2025

BANGKOK (ICIS)–Asia's petrochemical industry leaders are navigating a complex global landscape marked by unprecedented challenges, with a renewed focus on sustainability, innovation, and regional collaboration, industry leaders said on Friday. Oversupply, sluggish demand, trade conflicts weigh on industry Challenges open doors for transformation through digital innovation, efficiency Protectionist trade policies cast shadow over global economic activity Facing economic volatility, supply chain disruptions, and increasing environmental demands, top executives from across the region attending the Asia Petrochemical Industry Conference (APIC) in Bangkok emphasized that the industry must adapt to ensure continued prosperity. APIC 2025 with the theme “Ensuring a Transformed World Prosperity” runs on 15-16 May. "We are now standing at a defining crossroads," Federation of Thai Industries, Petrochemical Industry Club (FTIPC) chairman Apichai Chareonsuk said, acknowledging formidable pressures on the industry. He cited “economic volatility, supply chain uncertainties, and rising expectations for environmental responsibility" among the list of complex challenges facing the petrochemical industry. However, he viewed these challenges as opportunities for progress. "These challenges are also opening doors to transformation- through digital innovation, resource efficiency, and sustainable development," Chareonsuk said. INDIA AS BEACON OF GROWTH India, a giant emerging market in Asia, nonetheless, is a "beacon of growth” fueled by burgeoning end-use sectors, according to the country’s Chemicals and Petrochemical Manufacturers’ Association (CPMA) secretary general Shekhar Balakrishnan. The south Asian country is emerging as one of the fastest-growing economies in the world, he noted. This growth, he explained, is underpinned by a robust rise in end-use sectors, including automobiles, infrastructure, construction, among others. These sectors, he added, have propelled the petrochemical industry to new heights, adding that "the Indian petrochemical industry has entered a new phase of growth". "As I speak, a new world-scale cracker is in its last stage of commissioning," Balakrishnan said. Hindustan Petroleum Corp Ltd (HPCL) is slated to begin commercial operations at its refinery and petrochemical complex at Barmer in India's western Rajasthan state this year. The complex can produce 820,000 tonnes/year of ethylene and 400,000 tonnes/year of propylene. Furthermore, he noted that across the country, "new investments covering a broad spectrum of petrochemicals are materializing to augment India’s production capabilities further and make the petrochemical industry in this part of the world even more robust". Balakrishnan also drew attention to the widespread commitment to environmental responsibility in the region. "I will be failing in my duty if I do not highlight the tremendous efforts that organizations in India and the Asian region are making towards sustainability," he remarked. He stressed the balance between the industry's essential role and the need for responsible practices. "Petrochemicals are essential enablers of modern life … However, the collective challenge before us is to adopt smart, sustainable processes and technologies,” the CPMA secretary-general said. "The industry is actively embracing the circular economy, especially in polymers, creating huge opportunities for reuse and recycling while addressing the global crisis of material waste," he added. Balakrishnan highlighted the success of the Extended Producer Responsibility (EPR) framework in India. "This is already yielding significant societal benefits and setting the stage for sustainable industrial growth." "For instance, India today recycles over 90% of polyethylene terephthalate (PET) bottles into value-added articles." PROTECTIONIST POLICIES PROLIFERATE Japan Petrochemical Industry Association (JPCA) chairman Koshiro Kudo said that "protectionist trade policies around the world" are casting a shadow over global economic activity. He also pointed to the disruptive influence on the industry of "growing geopolitical risks, fluctuations in tariff policies, economic security issues, problems in China’s real estate market, and the increasing frequency of natural disasters caused by climate change". In Japan, the operating rate of ethylene plants “has remained below 90% since May 2022, and has recently dropped to around 80%, continuing in a very challenging situation." Kudo also emphasized the industry's environmental obligations, stating that it "is also expected to play a role in maintaining the balance of the ecosystem by recycling CO2 [carbon dioxide], as well as supplying materials”. Achieving sustainability necessitates that "international cooperation and technological innovation in the petrochemical industry are essential, and it is necessary to fully leverage the power of chemistry", he said. JPCA's two-phase approach to structural reform is to focus first on applying available technologies to reduce greenhouse gas emissions and developing innovative technologies for further emission reductions, and then on applying new technologies to achieve sustainable development goals, Kudo said. He emphasized the need to transform petrochemical complexes into "environmentally friendly 'sustainable complexes' through technological innovation" to function as environmental and energy infrastructure hubs. Kudo also drew attention to the demographic challenge of declining birth rates across Asia. He stressed the need to utilize technologies such as digital transformation, "green" transformation, and artificial intelligence to improve plant operation efficiency, facilitate technology transfer, accelerate R&D, and improve safety. Korea Chemical Industry Association (KCIA) chairman Hak-Cheol Shin described the current market as an "unprecedented crisis marked by global oversupply, sluggish demand, and full-scale trade conflicts" which calls for regional unity. "Amidst growing uncertainties in the global trading order, closer solidarity and cooperation among us are more crucial than ever to ensure the sustainable growth of our industry." "The external environment surrounding the petrochemical industry this year is more complex and challenging than ever before," he said. Shin warned that “the implementation of US tariff policies is expected to bring about cataclysmic changes in global trade". Exacerbating business challenges were "persistent oversupply centered around China" and "instability in raw material procurement stemming from the reorganization of global supply chains", he said. If downstream industries weaken due to tariff shocks, the petrochemical industry's growth momentum may also diminish, the KCIA chief said. Shin urged a proactive response to both market dynamics and increasing environmental demands. REGIONAL UNITY IS KEY "At this critical juncture, APIC members must demonstrate stronger solidarity and leadership than ever before," KPIA's Shin said. "While addressing internal and external risks such as trade conflicts and global oversupply, we must also remain fully responsive to the growing societal demands for enhanced environmental regulations, including carbon neutrality and key elements of the UN Plastics Treaty." Shin stressed the need to "enhance operational efficiency, optimize energy utilization, and shift toward high-value-added products through the adoption of cutting-edge technologies" to minimize environmental impacts and reinforce competitiveness. "As we navigate global challenges – from climate change to economic volatility – our industry stands at the forefront of delivering solutions that balance growth, sustainability, and societal progress," Malaysian Petrochemicals Association (MPA) president Bahrin Asmawi  said. Various initiatives are underway in line with Malaysia's National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 (NIMP 2030). These include investments in carbon capture, utilization, and storage (CCU), green hydrogen, and utilizing bio-based feedstocks, as well as accelerating adoption of renewable energy in production and chemical recycling. Asmawi stressed the indispensable nature of collaboration, saying: "No single entity can drive transformation alone." MPA is committed to fostering partnerships with the government, investors, technology providers, and communities, he said. Asmawi also proposed a united front among APIC members to address trade policy challenges, particularly suggesting that regional cooperation could lead to "better effective negotiating deals" in the context of recent US tariff announcements. Petrochemical Industry Association of Taiwan (PIAT) chairman Mihn Tsao emphasized in his key address at APIC 2025 "both the urgency and the opportunity of our time." The industry is "called upon to deliver not only economic value but also social and environmental responsibility," he said. "Innovation, sustainability, and partnership are no longer optional – they are essential to our continued development." Despite facing significant global headwinds in 2024, including geopolitical tensions, supply chain disruptions, inflation, and climate change, Tsao noted the Taiwanese industry's resilience and "steadfast commitment to transformation". This transformation, he explained, included intensified investments in green innovation, AI-driven process optimization, and sustainable material development. Taiwan has a formal commitment to net-zero emissions by 2050 through its "Climate Change Response Act" and the introduction of carbon fee regulations in 2024 as a "critical turning point", he said. Future focus areas must include developing high-value, low-carbon production, driving technological innovation through AI, and deepening international cooperation to secure competitiveness. "Collaboration across borders and industries is essential in addressing the global challenges we face: decarbonization, overcapacity, shifting geopolitical dynamics, and the fragmentation of the multilateral trading system." For Singapore, efforts to transform its industry in line with national sustainability goals, include the Singapore Green Plan 2030 and the national net-zero ambition by 2050, Singapore Chemical Industry Council (SCIC) chairman Henri Nejade said. This transformation includes the development of Jurong Island into a Sustainable Energy & Chemicals Park focusing on sustainable products, sustainable production, and Carbon Capture and Utilization (CCU). Government initiatives like the establishment of a Future Energy Fund also support low-carbon and next-generation energy solutions. Nejade also emphasized the importance of regional cooperation in navigating regulatory landscapes through initiatives like the ASEAN Regulatory Co-operation Platform (ARCP). The ARCP is an industry-led initiative to drive greater engagements and capacity building involving all the regulators and industry representatives from all the 10 ASEAN member states. Such cooperation helps "address non-tariff barriers, thus helping to create conducive business environments." Insight article by Nurluqman Suratman Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: Leaders of the Asia Petrochemical Industry Conference (APIC) member countries. The event runs on 15-16 May in Bangkok, Thailand. (Nurluqman Suratman)

16-May-2025

HOUSTON (ICIS)–US importers rushed to book space on container ships out of China after the two countries agreed to a 90-day pause on reciprocal tariffs, according to data from shipping analyst Vizion. Ben Tracy, vice president of strategic business development at Vizion, said in a LinkedIn post that the rolling seven-day average for bookings from China to the US jumped to 21,530 TEUs (20-foot equivalent units) this week from 5,709 TEUs last week, an increase of 277%. “We are definitely starting to see the bookings return now that this temporary pause is in effect,” Tracy said. Ryan Petersen, CEO of US logistics platform provider Flexport, said in a social media post on Tuesday that ocean freight bookings from China to the US jumped by 35% on the first day since the pause. “A big backlog is looming,” Petersen said. “Soon the ships will be sold out.” The surge in traffic along the trade lane immediately contributed to a rise in spot rates, as was expected. Lars Jensen, president of consultant Vespucci Maritime, said this week that many carriers had already announced GRIs (general rate increases) for the Pacific trade before US President Donald Trump announced the ceasefire in the trade war. “This is not because the carriers were able to forecast this exact development, but rather because the carriers are in the habit of pre-emptively announcing GRIs,” Jensen said. “If market conditions are then strong, these might stick, otherwise they go unnoticed.” Rates for shipping containers are already showing increases week on week. Rates from online freight shipping marketplace and platform provider Freightos showed minimal increases earlier this week, but rates from supply chain advisors Drewry on Thursday showed significant increases of 19% from Shanghai to New York and 16% from Shanghai to Los Angeles. Arrivals at the West Coast ports of Los Angeles and Long Beach were slowing while the reciprocal tariffs were in place, but the ports saw record volumes in March and April as importers pulled forward volumes before the tariffs went into effect. May volumes are expected to be down by as much as 10%, according to officials at the Port of Long Beach. 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. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

15-May-2025

SINGAPORE (ICIS)–China is turning to hydrogen as a potential lever in efforts to decarbonize its aluminium industry, as regulators tighten emissions rules, and global buyers demand greener materials. While still in early stages of deployment, hydrogen is gaining attention for its possible role in high-temperature heating, increasing renewables in grid, and emissions reduction. The move aligns with China’s broader ambition to peak carbon emissions in the aluminium sector by 2025 and support global net-zero targets by 2050, as set by the International Aluminium Institute (IAI). Carbon market expansion enhances hydrogen’s value in aluminium Early adoption may offer global market edge Significant potential, but barriers remain In March 2025, China’s Ministry of Ecology and Environment expanded the national carbon trading market to include aluminium, steel, and cement – raising market coverage from 40% to more than 60% of national emissions. This inclusion means aluminium producers will face growing pressure to curb emissions or bear rising compliance costs. The High-Quality Development Plan for the Aluminium Industry (2025–2027), recently released by the Chinese government, makes clean energy substitution a policy priority. The strategy encourages increased use of renewable electricity and pilot applications of hydrogen in key production processes. EMISSIONS PROFILE HIGHLIGHTS DECARBONIZATION URGENCY China’s aluminium sector is responsible for 85% of emissions in the country’s nonferrous metals industry. In 2023, aluminium-related emissions hit 530 million tonnes, including 420 million tonnes from electrolytic smelting, according to the China Nonferrous Metals Industry Association. In 2024, the country produced roughly 43.7 million tonnes of electrolytic aluminium, around 60% of global output. In 2023, China produced about 41.59 million tonnes of electrolytic aluminium, and the segment consumed over 500 billion kilowatt-hours of electricity, with each tonne of aluminium requiring at least 12,000 kWh and emitting an average of 12.7 tonnes of carbon dioxide (CO2), according to the National Bureau of Statistics, National Energy Agency and Ministry of Ecology and Environment. Most emissions are tied to primary production. Industry estimates suggest over 95% of the aluminium sector’s emissions stem from upstream processes such as mining, refining, and smelting, with energy use (electricity and heat) accounting for three-quarters of the total. Coal remains the dominant power source in China’s aluminium sector. The IAI and International Energy Agency (IEA) outline three primary decarbonization pathways: transitioning to low-carbon electricity, reducing process emissions, and boosting recycling rates. GREEN ELECTRICITY TARGETS DRIVE INFRASTRUCTURE INVESTMENT The IEA estimates the carbon intensity of aluminium’s power supply must fall by 60% by 2030. Globally, about 55% of aluminium smelters rely on captive power. In China, more than 60% of aluminum smelters owned captive coal-fired power generators by September 2023, according to Ministry of Ecology and Environment. Electricity represents 30%-40% of aluminium production costs in China, according to industry sources. With renewable energy uptake still limited and preferential electricity pricing being phased out, aluminium producers are under pressure to diversify power sources and enhance flexibility via storage. The Chinese government requires the sector to raise clean electricity use to above 30% by 2027, up from less than 25% in 2023. This is spurring investment in hydropower, wind, solar, and hydrogen storage. Shanghai Metals Market data show green electricity accounted for over 25% of smelting power in 2024. In provinces such as Yunnan, Qinghai, and Sichuan, the share exceeded 80%, while coal-dominant Xinjiang and Shandong remained low at below 5% in 2023. One pilot example is Dongfang Hope Group’s Xinjiang facility, which uses a wind-solar-hydrogen integrated system to meet 95% of its electricity demand, positioning it as a “zero-carbon aluminium” site. HYDROGEN GAINS TRACTION IN HIGH-TEMPRETURE HEATING Reducing non-electric emissions – especially from alumina refining – presents another challenge. Emerging technologies such as mechanical vapor recompression (MVR), electric calcination, and hydrogen-based burners are being tested, although large-scale deployment remains years away. Hydrogen’s high heat value and clean combustion make it a candidate to replace natural gas or coal in calcination and smelting. The IEA’s Hydrogen Review 2024 highlights multiple global trials: In Australia, Rio Tinto and Sumitomo are piloting hydrogen calcination at the Yarwun refinery with a 2.5 MW electrolyser and a retrofitted calciner with a hydrogen burner. Norway’s Hydro tested aluminum smelting fired by hydrogen and produced 225 tonnes of green aluminium at its Navarra plant in Spain, approved by electric vehicles manufacturer Irizar. Tokyo Gas and LIXIL in Japan tested hydrogen heat treatment for aluminium, finding no impact on product quality. Hydrogen-based aluminium production still carries a steep price tag – up to $5,000 per tonne versus $2,000 using conventional methods. Analysts say the economics could shift if green hydrogen costs fell below $2 per kg. In China, Aluminum Corporation of China Limited (Chalco)’s Qinghai subsidiary launched a 15% hydrogen blend in natural gas for anode calcination, cutting CO2 emissions by 370,000 tonnes annually. CARBON TRADING ADDS FINANCIAL INCENTIVE With the aluminium sector now in China’s emissions trading scheme, carbon becomes a direct item in aluminium companies’ cost structures. The government supports reducing Scope 2 emissions – those from purchased electricity – via renewable energy contracts and green certificate (REC) purchases. These instruments allow companies to offset emissions and potentially trade surplus emissions carbon allowances. China issued 80 million RECs in 2023, but aluminium producers bought less than 5%; with expanded policy incentives, this could rise to 15–20% by 2027, according to industry sources. Green hydrogen, as a quantifiable emissions reducer, may also be monetized through carbon credits. China’s aluminium decarbonization strategy depends on simultaneous progress across power substitution, process innovation, and recycling. Hydrogen is not the only solution, but it is fast becoming part of the mix. Though significant development potential for adopting hydrogen, there are still barriers ahead. High hydrogen production and logistics costs, limited infrastructure with few cost-effective delivery routes to factories, and underdeveloped technologies like hydrogen calcination will continue to limit scale-up. Still, with the carbon market expanding and global demand for green aluminium rising, for China’s aluminium companies, investing early in hydrogen may help secure a greener foothold in an increasingly climate-conscious global supply chain. Analysis by Patricia Tao Visit the Hydrogen Topic Page for more update on hydrogen

12-May-2025

HOUSTON (ICIS)–Rates for shipping containers were stable to higher this week as carriers have reduced capacity by 4-5% along the trade route amid efforts to stop the slide in prices, but capacity could surge and put downward pressure on rates if the Red Sea ceasefire holds. On 6 May, US president Donald Trump announced that a peace deal had been struck between the US and Houthi rebels, which would bring attacks against shipping to an end in the Red Sea. Since the start of 2024, traffic through the Suez Canal has collapsed and remains at roughly half pre-Gaza conflict levels. CONTAINER RATES Rates from online freight shipping marketplace and platform provider Freightos were flat week on week, and supply chain advisors Drewry showed a 4% increase in rates from Shanghai to New York and a 5% increase from Shanghai to Los Angeles, as shown in the following chart. Drewry expects rates to be less volatile in the coming week as carriers are reorganizing their capacity to reflect a lower volume of cargo bookings from China. Judah Levine, head of research at Freightos, said many US importers have paused orders out of China, but shippers (as well as manufacturers) can hold out only so long before consumers will start to see empty shelves or higher prices. Import cargo at the nation’s major container ports is expected to see its first year-on-year decline in over a year and a half this month as the effect of tariffs increases, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates as shown in the following chart. Alan Murphy, CEO, Sea-Intelligence, said carriers have reduced capacity by 4-5% in April and May on the transpacific trade lane. “When we look across what was deployed in April and what is scheduled for May combined, blanked capacity accounts for 19% of the total Asia to North America West Coast (NAWC) planned capacity, and 17% of the total Asia to North America East Coast (NAEC) planned capacity, across those two months,” Murphy said. “But a high level of blank sailings does not automatically translate into a large reduction of capacity year on year, if the originally planned level of capacity, without blank sailings, constituted a large increase in capacity deployment on a year-on-year basis,” Murphy said. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said the ports of Los Angeles and Long Beach are seeing fewer arrivals than normal. “For example, only 22 arrived the first five days of May, whereas 28.5 arrivals would be normal,” Louttit said. “Only nine are scheduled to arrive in the next three days, whereas 17 in three days would be normal.” 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 UNCHANGED US chemical tanker freight rates assessed by ICIS were steady this week with rates remaining unchanged week on week despite continuing to see downward pressure for several trade lanes. For yet another week, there is downward pressure on rates along the USG-Asia trade lane as charterers are still in wait-and-see mode. Besides contract of affreightment (COA) cargoes, there is very little seen in the market. The tariffs and uncertainty continue to dampen the spot market, pressuring rates. As a result, owners are sending fewer vessels and therefore keeping rates stable for now due to the lack of available tonnage. Similarly, rates from the USG to ARA and all other trade lanes also held steady. Although COA volumes are lower there are also fewer spot inquiries available. Despite the lack of interest, rates remain unchanged as the clean petroleum products (CPP) market continues to remain soft leaving those vessels to participate in the chemical sector and pressuring chemical rates lower. However, several cargoes of styrene, methanol and caustic soda continue to be seen in the market. From the USG to Brazil, this trade lane had seen more inquiries, but there is plenty of available space for the balance of May lending downward pressure to spot rates. This is leaving most owners still trying to fill up prompt partial space to WCSAM and to ECSAM for 2H May. Rates are soft and have lost some ground. During the past week large parcels of MEG and caustic soda were seen in the market and as well as a CPP cargo further demonstrating the length in the market and weighing down on rates. Along the USG to India route the spot market is stable and with its usual slow pace. No new cargoes have been heard from the US. With additional reporting by Will Beacham and Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

09-May-2025