SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 3 January. NEWSBrazil’s manufacturing loses steam as new orders slow at home and abroadGrowth in Brazil’s petrochemicals-intensive manufacturing sectors slowed down considerably in December on the back of lower new orders and households’ squeezed budgets on rising inflation and high borrowing costs, analysts at S&P Global said on Thursday. Brazil economists expect weaker real, higher interest rates in 2025Brazilian economists surveyed by the central bank do not expect the depreciation in the real in past weeks to stay for much of 2025, with interest rates consequently expected at nearly 15%. Mexico manufacturing sector ends 2024 in contraction on domestic, overseas woesMexico’s petrochemicals-intensive manufacturing sector concluded 2024 in contraction on the back of lower new orders and acute woes in the export-intensive automotive sector, analysts at S&P Global said on Thursday. Colombia manufacturing falls into contraction on China competition, squeezed consumersColombia’s petrochemicals-intensive manufacturing sector fell into contraction at the end of 2024 as consumers’ squeezed pockets put a dent in demand and competition from Chinese products increased, analysts at S&P Global said on Thursday. Chile’s manufacturing up 1.9% in November, industrial output 1.7% higherChile’s petrochemicals-intensive manufacturing sectors posted output growth of 1.9% in November, year on year, the country’s statistical office INE said on Tuesday. Argentina’s YPF high crude production costs offset by stable operations, growing output – Fitch YPF remains one of the country’s economic hopes for coming years, with output and exports expected to grow, but Argentina’s state-owned energy major’s production costs remain higher than regional peers, US credit rating Fitch said on Friday. Argentina’s YPF divests lubricants subsidiary in Brazil to UsiquimicaArgentina’s state-owned oil and gas major YPF has signed an agreement to sell its Brazilian lubricants subsidiary to local chemicals producer Usiquimica. PRICINGLatAm PE prices unchanged on weak market activityDomestic and international polyethylene (PE) prices were assessed as unchanged across Latin American countries. LatAm PP prices stable on muted market activityDomestic and international polypropylene (PP) prices were assessed unchanged across Latin American countries. Unigel seeks January PS price increase in BrazilUnigel has announced a 15% price increase, excluding local taxes, on all grades of polystyrene (PS) sold in Brazil, as of 2 January 2025, according to a customer letter. Innova announces January PS price increase in BrazilInnova has announced a 15% price increase, excluding local taxes, on all grades of polystyrene (PS) sold in Brazil, effective 1 January 2025, according to a customer letter.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 3 January. Europe PX demand to remain downbeat in H1 2025 amid downstream rationalizations, imports Paraxylene (PX) demand pessimism in Europe is expected to continue in the first half of 2025 due to the rationalization of downstream purified terephthalic acid (PTA) plants in the region. Europe PMMA hoping for demand growth, but bracing for stagnant market The Europe polymethyl methacrylate (PMMA) market is bracing for 2025 to be “more of the same” with the challenges of 2024 continuing. Europe BDO demand pessimism to continue under the gloom of rising capacities in China There is a growing sense of apathy among players in the European butanediol (BDO) market when it comes to discussing demand hopes for 2025 as there are no expectations of an uptick and there is a prevalence of worry ahead of growing capacity in China in an already oversupplied market. Europe PP players eye pain points from old plants, tariff threats and limp manufacturing 2024 was dominated by supply-driven dynamics and 2025 looks unlikely to be much different for Europe’s polypropylene (PP) market.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 3 January. OUTLOOK ’25: Asia acetic acid supply glut to balloon on capacity expansion By Hwee Hwee Tan 30-Dec-24 11:00 SINGAPORE (ICIS)–Asia acetic acid supply is likely to outstrip demand on the back of China’s significant capacity growth into 2025, prompting producers to review regional plant run rates and supply contracts. OUTLOOK ’25: Asia ABS, SAN to start year on upbeat note By Angeline Soh 31-Dec-24 11:00 SINGAPORE (ICIS)–The acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) markets in Asia are expected to start the new year on an upbeat note after festivity-driven trades, amid caution about possible tariffs on exports to the US. OUTLOOK ’25: Volatile feedstock to weigh on Asia fatty alcohol mid-cuts in Q1 By Helen Yan 02-Jan-25 11:00 SINGAPORE (ICIS)–Buyers and sellers of fatty alcohols mid-cuts in Asia are expected to tussle over the market’s trajectory in the first quarter of 2025 amid volatile feedstock palm kernel oil (PKO) prices. Singapore Q4 economy grows 4.3%; whole-year GDP rises 4.0% By Jonathan Yee 02-Jan-25 11:45 SINGAPORE (ICIS)–Singapore’s GDP rose 4.3% in the fourth quarter of 2024, supported by an increase in public sector construction output, official advance estimates showed on Thursday. S Korea GDP forecast cut amid political uncertainty, trade headwinds By Nurluqman Suratman 02-Jan-25 14:38 SINGAPORE (ICIS)–South Korea’s finance ministry on 2 January slashed the country’s 2025 GDP growth forecast to 1.8% from a previous projection of 2.6% amid growing domestic demand and trade uncertainties. OUTLOOK ’25: Asia methanol demand still uncertain amid new capacities By Damini Dabholkar 03-Jan-25 11:00 SINGAPORE (ICIS)–The outlook for methanol in Asia continues to be uncertain, with factors such as additional capacity, seasonal gas issues and upcoming downstream demand expected to play a role in this.

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US surged this week as the deadline to avoid a strike at US Gulf and East Coast ports nears, while rates for liquid chemical tankers were flat to softer as ship owners await contract nominations. CONTAINER RATES Global average rates for shipping container rose by 3% this week, according to supply chain advisors Drewry, with rates to both US coasts topping that. The following chart from Drewry shows rates from Shanghai to New York rose by 6% and rates from Shanghai to Los Angeles rose by 7%. Drewry expects rates on the transpacific trade to rise in the coming week, driven by front-loading ahead of the looming International Longshoremen’s Association (ILA) port strike in January and the anticipated tariff hikes under the incoming Trump Administration. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said rates could continue to be pressured higher by January general rate increases (GRIs) from ship owners and from increased volumes ahead of the Lunar New Year holiday. “Pre-Lunar New Year demand will combine with higher-than-normal volumes for this time of year into the US,” Levine said. “And the post Lunar New Year dip in volumes will likely be less pronounced than usual too as many US shippers continue to frontload ahead of expected tariff increases.” 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. They also transport liquid chemicals in isotanks. A strike could have a direct impact on US PE exports. Year-to-date through November, PE exports accounted for 46.6% of overall PE sales with an average of 2.4 billion lb/month. Through October, 73% of seaborne US PE exports utilized ports that are facing the work stoppage threat. LIQUID TANKER RATES US chemical tanker freight rates held steady for most trade lanes this week, with only a few exceptions. Commentary was quiet again this week amid the start of the new year as most players are still on extended holidays. However, the USG to Brazil and West Coast India is starting 2025 off slightly lower. From the USG to India, there has been a slow start to the new year with limited activity on the market. There is some prompt space available for few prospects to fill. A broker said that most contract of affreightment (COA) charterers are or have been nominating their cargoes to move in January, while the spot market is virtually nonexistent. However, this does not mean that putting a ship on berth would be cheap. Sentiment for this route is slightly down, as some owners with partial space available are not able to reach full cargo currently. From the USG to Rotterdam, rates are facing some downward pressure in the new year compared to where they were at the end of December. It is likely that the market will pick back up in the next couple of weeks. Freight rates remain steady and will likely stay unchanged for the beginning of the year. With additional reporting by Kevin Callahan and Harrison Jacoby

HOUSTON (ICIS)–Union dockworkers and representatives for US Gulf and East Coast ports are expected to resume negotiations on a new master contract on 7 January, just more than a week ahead of the 15 January deadline. Meanwhile, global container shipping major Maersk is encouraging customers to pick up laden containers and return empty containers at US East and Gulf Coast ports before 15 January to help mitigate any potential disruptions at the terminals. Global container shipping major Hapag-Lloyd will implement US port strike surcharges on 20 January, the same day that President-elect Donald Trump will be inaugurated. All these factors are keeping upward price pressure on Asia-US container rates. ILA PORT STRIKE An October strike by the International Longshoremen’s Association (ILA), representing dockworkers, was paused after three days when an agreement on wages was reached with the United States Maritime Alliance (USMX), representing the ports. The parties set a 15 January deadline to negotiate the remaining issues – the key one being the implementation of automation at the ports. The union has criticized semi-automated rail-mounted gantry cranes (RMGs) for eliminating jobs and posing national security risks in a post on its website, while the USMX responded, defending automation as essential for port modernization and addressing land constraints. In a 12 December post on social media, President-elect Donald Trump expressed his support for dockworkers in the labor dispute. The Alliance for Chemical Distribution (ACD), an industry trade group, is urging both sides to push back the deadline, pointing to economic impacts felt after the short work stoppage in October. INCREASED TARIFFS Adding to shipping issues at the start of 2025 are possible tariff increases on imports from Canada, Mexico and China, as proposed by Trump. Trump has announced his intent to levy increased tariffs, primarily on imports from Canada, Mexico and China, including a high tariff rate of up to 60% against Chinese goods. Analysts at ocean and freight rate analytics firm Xeneta said that US importers who have goods or materials that can be stored and have access to warehousing likely have been bolstering their inventories, which could then be followed by a pause. A surge of imports ahead of possible tariffs would put upward pressure on rates. For recyclers with outbound materials, that could affect how and whether they can find empty containers, Xeneta 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), which are shipped in pellets. They also transport liquid chemicals in isotanks. Focus article by Adam Yanelli Thumbnail image shows a container ship. Photo by Shutterstock

Additional reporting by Jamie Stewart and Alex Froley  No day-ahead gas pipeline capacity was offered for transit at Ukraine’s Sudzha border point with Russia and no flows were nominated for 1 January 2025,  data published by capacity booking platform RBP and Ukraine’s gas grid operator GTSOU on 31 December 2024 showed. Although final nomination data will be expected later on 31 December 2024, the indication was that  Russian gas transit through Ukraine to Europe would cease on 1 January 2025 at 05:00 UTC. Writing to ICIS on 30 December, Ukraine deputy energy minister Mykola Kolysnyk said: “We have prepared for a potential unilateral transit termination by Gazprom at any moment, disregarding contractual obligations to European customers, as such actions have occurred before as a typical form of blackmail.” Although transit may be temporarily halted Ukraine and interested buyers in Slovakia and Hungary may strike a compromise later this month. But at least for now, the Ukrainian gas system is prepared for the unilateral termination of the transit. Polish gas grid operator Gaz-System will offer 5.1 million cubic meters (mcm)/day from 1 January in addition to an existing 6.4mcm/day interruptible capacity. Ukraine also has firm import capacity of 9.8mcm/day at the Bereg virtual interconnection point until the end of March 2025. Both can be extended. There are also expectations of increased reverse capacity at the Romanian border. Meanwhile, global LNG supplies are improving. The US, the world’s largest exporter, has all its plants running normally at present and is bringing new capacity online. Venture Global’s Plaquemines plant, which will build up to 13.3 million tonnes per annum (mtpa) in its initial phase, loaded its first cargo on 26 December. Meanwhile Cheniere announced first LNG production from its Corpus Christi stage III project on 30 December. Stage III will add seven 1.5mtpa trains, the first of which is now working. These plants will continue to build up output across 2025, and be added by further new facilities, including the 14.0mtpa LNG Canada. WHAT HAPPENED? As of late-afternoon London time on Tuesday 31 December, a five-year deal to transit Russian pipeline gas through Ukraine into Europe was set to expire within hours on 1 January, with no announcement of a new deal having materialised. Ukrainian grid operator TSOUA data, published at 16:22 local time, showed gas nominations at multiple Ukrainian border entry and exit points as zero for 1 January, including at the Sudzha border point with Russia. Earlier, nominations at the Sudzha point for 31 December stood at 40.4 million cubic meters/day, only marginally down from 30 December, the TSOUA data showed, meaning the 1 January figures were highly unlikely to be a data error. WHY DOES IT MATTER? The five-year Ukraine transit deal has kept a significant volume of Russian pipeline gas flowing into Europe since the start of 2020, including throughout the almost three-year long war between the two countries. More than 15 billion cubic meters of gas was transited from Russia to Europe via Ukraine in 2024. A similar volume will need to be replaced by alternative sources, mainly LNG. European energy markets have for weeks been positioning around expectations of a new transit deal being reached or, as has seemed increasingly likely as the year-end deadline has neared – not being reached. In the first half of December, the benchmark ICIS TTF Q1 ’25 lost 18% of its value to be assessed at €39.90/MWh, down from €48.30/MWh, but has since 16 December regained almost all of that value. At 11:00 London time on Tuesday morning, trade on the component months indicated a Q1 ’25 valuation at around €48.70/MWh, narrowly below its high for the year seen in late November. The ICIS midday close on 31 December had TTF Q1 ’25 priced just over €48.50/MWh, a modest day on day increase of 1.6%. These movements suggest the recent late-December positioning had all but priced in the end of the transit deal. TTF Winter ’25 was up nearly 2%, the largest forward-curve move on the day. WHAT NEXT? Recent European gas price movements, although still volatile compared with the rest of the year, pale in comparison to the extreme volatility seen during the late-2021 price crisis and the aftermath of Russia’s early-2022 invasion of Ukraine. While this means the full magnitude of any Russia-related supply shock is behind Europe, significant uncertainty will still be priced in over coming weeks and months as European traders get used to another new normal. Pricing movements indicate the market sees Europe’s expanded LNG import infrastructure as ample to meet demand spikes, but the continent must compete with Asian LNG buyers to secure what going forwards will be a larger overall share of marginal supply.

SAO PAULO (ICIS)–Brazilian economists surveyed by the central bank do not expect the depreciation in the real in past weeks to stay for much of 2025, with interest rates consequently expected at nearly 15%. In its last weekly survey among economists in 2024, the Banco Central do Brasil (BCB) said on Monday inflation expectations have also jumped considerably for 2025, with the annual rate now expected at nearly 5%. GDP growth, on the other hand, is expected to slow considerably. Brazil’s annual rate of inflation has been on the rise for months, reaching 4.87% in November. The central bank swiftly reversed its monetary policy easing, bringing the main interest rate benchmark, the Selic, up to 12.25%, and signaled it is to tighten further in 2025. In fact, some economists have said GDP quarterly growth could even turn negative towards the second half of 2025 after the economy overheated in 2024. The Brazilian real (R) has been the emerging markets currency which has depreciated the most in 2024 – it started the year trading at less than $1:R5.00, but as of Monday morning it was trading at $1:R6.18. Most economists expect the currency to recover slightly in 2025, but to stay at depreciated levels. A depreciated real feeds into inflation as it makes dollar-denominated imports more expensive. Higher inflation meanwhile prompts central banks to hike rates to slow price rises by cooling down borrowing. That, in turn, can slow down consumption of petrochemicals-intensive higher priced durable goods, as consumers shy away from purchasing under a high borrowing costs environment. BCB Focus Market Readout 2024 2025 Inflation (in %) 4.90 4.96 GDP(in %) 3.49 2.01 Exchange rate($:R) 6.05 5.96 Interest rates(in %) N/A 14.75 Brazil’s central bank weekly economic survey compiles answers of more than 100 economists and analysts. Meanwhile, the country’s largest financial daily Valor also published on Monday the results of its own survey among 76 analysts, with GDP expectations in line with those published by the central bank. They expect GDP growth of 2% in 2025, but the forecasts vary between 1.3% and 3%, showing wider uncertainty about next year’s outlook. Some analysts surveyed did not rule out a technical recession – two quarters with negative growth – towards the second half of 2025. “The unemployment rate is low, and the agricultural sector should be very strong. But the end point, at the end of next year, could be bad. The activity has been more resilient, but I believe that, in 2025, it will be much more difficult to achieve growth close to 3%, as we have seen in recent years,” said Cesar Garritano, chief economist at Somma Investimentos. “In quarterly variations, there is a lot of discussion about seasonal adjustment and, therefore, I prefer to compare the same periods year on year. But the estimates show that it is not possible to exclude the possibility of a technical recession.”

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 27 December. OUTLOOK ’25: US phenol/acetone production to remain curtailed on soft demandUS phenol demand will likely remain soft and weigh on acetone supply in H1 2025 as expectations for a rebound are tempered. OUTLOOK ’25: US PVC faces oversupply, export challengesThe US polyvinyl chloride (PVC) market is set to face significant headwinds in 2025, entering the year with abundant inventories, expanded production capacity and constrained export opportunities. OUTLOOK ’25: US chem tanker market growth to support favorable rates; container market readies for port labor issues, tariffsGrowth in the US liquid chemical tanker market is likely to support favorable rates in 2025, while the container shipping market could see upward pressure from possible labor strife at US Gulf and East Coast ports and proposed tariffs on Chinese imports. OUTLOOK ’25: LatAm chemicals pessimism persists as downturn could last to 2030For many players within Latin America petrochemicals, 2025 will only be one more stop on the long downturn journey as, for many, the market’s rebalancing will only take place towards the end of the decade.

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 27 December. NEWS OUTLOOK ’25: LatAm chemicals pessimism persists as downturn could last to 2030For many players within Latin America petrochemicals, 2025 will only be one more stop on the long downturn journey as, for many, the market’s rebalancing will only take place towards the end of the decade. Colombia GDP to grow ‘close to 3%’ in 2025 – central bankThe Colombian economy picked up strength at the end of 2024, and higher spending on gross capital formation such as petrochemical-intensive public works and machinery could see “close to 3%” growth in 2025, according to the country’s central bank. Peru declares state of environmental emergency on Petroperu’s oil spillPeru’s Ministry of the Environment (MINAM) declared late on Wednesday an environmental emergency after state-owned crude producer Petroperu admitted to an oil spill five days ago. Argentina’s consumers expect 2025 inflation to average 45% – pollArgentinians are buying into the success story of inflation, which has sharply come down in 2024, and expect the annual rate to average 45% in 2025, its lowest level since 2021, according to an opinion poll by Buenos Aires’ University Torcuato di Tella. Mexico’s manufacturing output up slightly in October, construction down 8.5%Output in Mexico’s petrochemicals-intensive manufacturing’s output rose by 0.5% in October, year on year, but production in construction fell considerably, the country’s statistic office Inegi said on Monday. PRICING OUTLOOK ’25: LatAm PP supply to remain long amid squeezed marginsLatin America polypropylene (PP) is expected to remain oversupplied in the first half of 2025, with producers’ margins likely to remain squeezed. OUTLOOK ’25: LatAm PE demand could finally improve from Q2 onwardsLatin American polyethylene (PE) demand should start slowly in 2025, but it could take a decisive turn for the better from Q2 onwards. OUTLOOK ’25: Ample LatAm PS supply meets poor demandThe Latin American polystyrene (PS) market will continue facing headwinds in 2025 on the back of weak demand across the region combined with plentiful supply.