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Gas28-Jul-2025
By Gretchen Ransow and Lars
Kjoellesdal
EU-US trade deal to include $750 billion in
energy strategic-sector purchases
Experts doubt objectives can be met
Further details to be “sorted out” in
coming weeks
LONDON (ICIS)–The EU agreed to purchase $750
billion in strategic sectors, including gas,
oil, nuclear fuel and AI chips over three
years, as part of a trade deal announced on 27
July.
However, experts have cast doubts about whether
the overall figures can be achieved, as well as
the timings for replacing Russian fuels, while
market reaction was muted in the aftermath of
the announcement.
European Commission president Ursula von der
Leyen told reporters the agreement would amount
to $250 billion per year for the remain three
years of US president Donald Trump’s term.
She said this would help the EU replace Russian
oil and gas, which the bloc has proposed to
phase out by 2027.
The bloc also intends to end Russian supply of
nuclear fuels, but the plans and end date for
this have not yet been released.
The deal also imposes a 15% US import tariff on
most EU goods, avoiding a threatened 30% rate
ahead of a 1 August deadline.
Von der Leyen described the agreement as a
framework deal, meaning it would involve the
publicly announced figures, but the “details
have to be sorted out and that will happen over
the next weeks”.
The announcement did not clarify how the $750
billion would be split between the identified
sectors.
ANALYSIS
Andreas Schroeder, head of gas analytics at
ICIS, described the $250 billion annual target
as unrealistic.
“As the global LNG market has a value of just
little over $200 billion at current prices, it
is hard to imagine how US LNG exports to EU
alone can help bringing value anywhere close to
$250 billion [per year],” Schroeder said.
Gas expert Anne-Sophie Corbeau said on LinkedIn
that the agreement did not make sense and would
require the EU to triple its purchases of US
energy, accounting for current exchange rates.
Total EU energy imports from the US were around
$70 billion in 2024, according to Eurostat.
“The EU needs to import a lot more in volumes,
diverting away from [other suppliers], while
assuming that oil and gas prices will remain
high/increase,” she said while noting Europe is
trying to lower energy costs and Trump wants
cheaper oil.
Corbeau also underlined the political agreement
would not force markets’ hands.
“And always remember, neither the [European
Commission] nor the [White House] can dictate
where super flexible US LNG goes,” she said.
The US exported around 2.4 billion MMBtu of LNG
to the EU over the last twelve months,
according to ICIS LNG analyst Alex Froley.
These US exports to the EU – at current prices
of about $11/MMBtu – would equate to roughly
$75 billion over three years, or around $25
billion/year.
This means the EU could hit around 10% of its
$750 billion target through purchases of LNG,
at current rates of imports and prices.
“US output will expand further over that
period, which could allow some additional
increase in purchases, but unlikely by a very
large amount,” Froley added. Additionally, ICIS
forecasts European TTF prices to decline going
into 2026-2027 due to global oversupply.
MARKET MOVES
The deals announcement had limited impact on
benchmark TTF gas prices.
TTF August ’25 contracts shed value in early
trade, slumping to €32/MWh around 12:00 London
time before retracing their losses in the
afternoon.
Ethylene28-Jul-2025
MADRID (ICIS)–Brazil’s petrochemicals sector
is set to suffer a prolonged slump that will
threaten profitability if government does not
intervene, according to an analyst at credit
ratings agency Moody’s.
Carolina Chimenti, analyst for Brazilian
chemicals at the agency, added that Braskem’s
future would be particularly troubled – as
Brazil and Latin America’s largest
petrochemicals producer faces margin
compression and limited free cash flow
generation amid the challenging environment,
she said.
“The problem is that we are in the middle of a
very stiff down cycle that we think is going to
last longer than other down cycles,” said
Chimenti.
“Without government support, without a new REIQ
[an expired tax break for chemicals companies,
for which Congress is debating a replacement],
the margins would be very compressed and the
company would not generate positive free cash
flow considering the payments of Alagoas.”
Braskem’s Alagoas liabilities relate to
payments stemming from geological damage caused
by its salt mining operations in the northern
Brazilian state.
But even excluding these payments, the analyst
added, cash generation would remain limited
even with potential cost-cutting measures.
“I think Braskem, which is a profitable
company, should be able to generate positive
free cash flow throughout the cycles. The issue
is that this is not a normal cycle, it’s a very
difficult condition and they have specific
issues related to Alagoas,” she added.
Braskem had not responded to a request for
comment at the time of writing.
FEEDSTOCK
DISADVANTAGEChimenti said
Brazil’s petrochemicals industry suffers from
structural disadvantages compared with US
producers, particularly regarding feedstock
costs.
Brazilian chemicals producers rely primarily on
naphtha-based production, while US competitors
benefit from cheaper ethane derived from shale
gas.
“Brazil sits so close to the backyard of the
US. It’s one of the biggest export markets and
it’s also one of the closest. That’s the other
disadvantage you have – Brazil is so close to a
market that has much lower feedstock costs.
Converting to ethane-based production would
require substantial investments – all this
during the downturn,” said Chimenti.
“They don’t have that money. They have some
projects, especially the gas project in Rio.
The main asset they have is Braskem-Idesa in
Mexico, which runs on ethane but has its own
challenges. They don’t have this internal cash
generation as of now and they would need to
secure funding at a moment when I’m not sure
the funding would be there for them, or at
least it wouldn’t be cheap for them.”
Braskem has been
negotiating with Brazil’s state-owned energy
major Petrobras a supply deal for natural
gas for months, but talks are still ongoing.
However, even if Petrobras provided gas
supplies, structural differences between
Brazilian and US extraction complicate the
situation, said the Moody’s analyst.
“Gas extraction in Brazil is not as competitive
as in the US. The US went through a massive
investment period after the shale discoveries
and they were able to create an infrastructure
in which you could supply the petrochemicals
industry with gas,” said Chimenti.
“The oil extracted in the US is very light oil
and so it sucks up a lot of methane. Whereas
the oil that’s extracted in Brazil doesn’t come
with a lot of methane. That’s fundamentally the
Petrobras problem – they don’t have that
methane to, let’s say, lend the gas ‘cheaply’.”
POLICY SUPPORT
POTENTIALTo replace REIQ, the
Brazilian parliament is debating the so-called
Presiq legislation, which also contemplates tax
breaks for chemicals producers.
“This would have a material impact for Braskem.
The company is estimating it could have a
positive impact of around $400-500 million in
additional EBITDA [earnings before interest,
taxes, depreciation, and amortization]. But in
the long term, Braskem needs to make these
investments [to switch to ethane] to improve
its competitiveness in the current
environment,” said the analyst.
“So, more gas-based production and ramping up
the operations in Mexico [at Braskem Idesa]:
these kind of things to try to diverge from the
need for government support to improve
profitability during down cycles.”
Front page picture: Braskem’s Duque de
Caxias site in Brazil’s state of Rio de
Janeiro
Source: Braskem
Interview article by Jonathan
Lopez
Speciality Chemicals28-Jul-2025
LONDON (ICIS)–Trading in European chemicals
company shares was subdued on Monday in the
wake of the EU agreeing a trade deal with the
US, with trade group VCI claiming the proposed
tariffs are too high for the sector.
US President Donald Trump and European
Commission President Ursula von der Leyen on
Sunday agreed a deal to cut
proposed tariffs on EU exports to 15% from the
30% duties previously set to come into effect
this week.
The EU has also committed to purchase $750
billion-worth of US energy products, including
liquefied natural gas, oil and nuclear fuels.
The scale of the increase in purchasing such an
escalation would require would be fairly
difficult to achieve in the next few years,
according to ICIS director of energy and
refining Ajay Parmer.
“The EU is unlikely to be able to meet the
level of purchases of US energy outlined in
this latest deal. To have crude purchases meet
just half of the required $250 billion/year
energy purchases, the EU would need to more
than double its US oil purchases,” he said.
“This is unrealistic, due to the huge shift in
trade flows required, and is highly unlikely to
come to fruition in the next few years,” he
added.
The bloc is also expected to invest a further
$600 billion on unspecified investments on top
of current investment levels, US President
Donald Trump said in Scotland on 27 July.
“We are agreeing that the tariff straight
across for automobiles and everything else will
be a straight-across tariff of 15%,” Trump
added.
The single 15% tariff rate is all-inclusive,
according to von der Leyen, meaning no
additional duties are expected to be applied on
top of that for any sector.
The parties have agreed to exempt certain
sectors from the tariffs entirely, including
natural resources, aircraft, semiconductor
equipment and “certain chemicals”, von der
Leyen said, without specifying what products
may be exempt in the space. 50% US levies on
European aluminium and steel remain.
The European Commission had not responded to
requests for comment at the time of
publication.
In a speech on Sunday, von der Leyen expressed
hopes that the deal would provide sufficient
clarity to dispel the pall of uncertainty that
has hung over investment decisions and
purchasing habits over much of 2025.
“Today with this deal, we are creating more
predictability for our businesses. In these
turbulent times, this is necessary for our
companies to be able to plan and invest,” she
said.
While a 30% cliff face – sufficient to
effectively prohibit trade, according to
Commission ministers – has been avoided, market
reaction has been muted so far. France’s CAC 40
index was trading up 0.08% compared to Friday’s
close in early afternoon trading, while
Germany’s DAX fell 0.28%.
The STOXX index of listed European chemicals
players was also trading slightly down on
Monday, 0.38% below Friday’s close, with the
bulk of companies in the index trading modestly
down.
BASF and Solvay saw the sharpest falls, with
shares trading down 1.82% and 2.1%,
respectively.
While narrowly avoiding more substantial
tariffs on EU exports and the introduction of
countermeasures by the Commission that could
have seen further escalation from the US, the
resolution falls short of a win for Europe,
according to Belgian Prime Minister Bart de
Wever.
“This is a moment of relief but not of
celebration,” he said.
Germany-based chemicals trade group VCI
concurred, stating that the current projected
level of tariffs is too high for the sector.
“Anyone who counts on a hurricane is grateful
for a storm,” said VCI managing director
Wolfgang Grosse Entrup.
“Nevertheless, the price for both sides is
high. Europe’s exports are losing
competitiveness. The US customers pay the
tariffs,” he added.
Focus article by Tom
Brown

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Ethylene28-Jul-2025
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 25 July
INTERVIEW: US proposed 50% tariff on Brazil
and threat of retaliation a concern – ACC
official
The proposed US tariff of 50% on imports from
Brazil, and the potential for retaliation as
Brazil has suggested is a major concern for
the US chemical industry, said an American
Chemistry Council (ACC) official.
US Dow halves dividend as chem downturn to
last longer than expected
Dow cut its dividend by 50% on Thursday
because the downturn in the chemical industry
is entering its third year and it will last
longer than expected.
INTERVIEW: Europe chemicals hit bottom,
policy shift a long-term positive – Covestro
CEO
The European chemical industry has hit bottom
and there are positive developments for
structural reforms that could lead to a
brighter future, said the CEO of
Germany-based Covestro.
INTERVIEW: US offers strategic advantages for
investment but tariff certainty needed –
Covestro CEO
The US has a strategic competitive advantage
when it comes to investment in chemicals, but
tariff and trade certainty is needed, said
the CEO of Germany-based Covestro.
INSIGHT: Japan chems, markets, breathe sigh
of relief after US deal
Japanese markets breathed easier on Wednesday
after news of a reduction in tariff rates
from the US, but the deal also underlines the
US’ willingness to maintain rates above the
10% baseline set out in April on key trading
partners.
INTERVIEW: US chemical distributors clamor
for tariff clarity – ACD CEO
US chemical distributors are calling for
trade agreements with key trading partners
that would bring some level of certainty to
tariff levels, said the head of the Alliance
for Chemical Distribution (ACD).
Economic bear indicators continue to
proliferate ahead of August tariff
day
Global macroeconomic trends are pointing
further down into the second half of the year
ahead of the 1 August US tariffs date, with
2025 set to be one of the weakest years for
oil demand growth in 16 years and downside
risks prevailing.
Ethylene28-Jul-2025
MADRID (ICIS)–Venezuelan authorities have
reportedly withdrawn tax benefits for Brazilian
products under a 2012 bilateral agreement,
causing difficulties for exporters and
potentially breaching zero-tariff arrangements
between the neighboring countries.
The Federation of Industries of the State of
Roraima (Fier) has reported receiving
complaints from businesspeople since 18 July
about unexpected tariff charges on previously
exempt Brazilian imports.
“We receive information directly from business
owners because we are responsible for issuing
certificates of origin, which guarantee
Brazilian products enter Venezuela with zero
tariffs. But even with the certificate, the
products are being subject to tariffs,” said
Ivan Gonzalo, foreign trade analyst at Fier,
quoted by Brazilian media outlet
Globo.
According to the same media outlet, Brazil’s
foreign ministry – also called Itamaraty – said
it has been monitoring reports in coordination
with the Ministry of Development, Industry,
Commerce and Services (MDIC).
Fier, Itamaraty, the MDIC, the Venezuelan
embassy in Brasilia, and the Venezuelan
ministry of foreign relations had not responded
to a request for comment at the time of
writing.
The Brazilian Embassy in Caracas is
investigating with Venezuelan authorities to
clarify the situation under Economic
Complementarity Agreement No. 69 (ACE 69),
which prohibits import taxes between the
countries.
Local media reported rates ranging from 15% to
77% on previously exempt products, though Fier
could not confirm specific amounts.
The uncertainty has prompted Brazilian
companies to temporarily suspend shipments.
Bilateral trade between Brazil and Venezuela
has suffered ups and downs after the Venezuelan
dictatorship plunged the country into crisis in
the 2010s through mismanagement and widespread
corruption.
According to Itamaraty, trade rose in the 2000s
and the early 2010s, reaching $6 billion in
2013, before Venezuela’s crisis hit hardest.
“Between 2013 and 2019, it [trade] fell by
almost 92%, dropping to $501 million. More
recently, it has grown again, reaching $1.6
billion in 2024, and has become a major export
destination for Brazil’s northern states,
especially Roraima and Amazonas,” said the
ministry.
“In 2024, Brazil exported $1.2 billion to
Venezuela and imported $422 million from the
country. Sugars and molasses, vegetable fats
and oils, and chemical fertilizers are the main
products on the trade agenda.”
However, local reports in Roraima said trade
with Venezuela represents 46.1% of the state’s
exports.
Polyethylene28-Jul-2025
MADRID (ICIS)–Petrobras has appealed to
Brazil’s antitrust regulator CADE to secure
its participation in Nelson Tanure’s bid to
control petrochemicals major Braskem,
according to the Brazilian state-owned energy
major.
Petrobras – which controls 36.1% of Braskem
capital structure – claims it has been
excluded from negotiations even though it is
one of the company’s largest shareholders.
In May, Brazilian entrepreneur Nelson
Tanure’s investment fund Petroquimica Verde
made an offer to
acquire Novonor’s 38.3% stake in Braskem.
The Novonor stake is a controlling one as it
has 51.1% of the voting rights. Petrobras has
47% of the voting rights.
However, according to a Braskem shareholder
agreement between Petrobras and Novonor, the
energy major has pre-emptive and tag-along
rights in the event of a direct or indirect
sale of the shares held by Novonor.
“Petrobras has requested to join as a third
party in the merger review proceedings
evaluating the possible purchase of shares in
NSP Inv, a subsidiary of Novonor, which
controls Braskem, by Nelson Tanure,” said
Petrobras.
The Petrobras appeal to CADE comes less than
a week after the antitrust regulator approved Tanure’s
proposal without restrictions.
However, CADE said the deal can only proceed
if Tanure fulfills the Novonor shareholders’
agreement obligations with Petrobras and
succeeds in talks with former Odebrecht’s
creditor banks, which hold Braskem shares as
collateral for debts of around Brazilian
reais (R) 15 billion ($2.7 billion).
“For this reason, the company requested that
the competition agency allow it to join the
proceedings as an interested third party,”
added Petrobras.
As in previous communications, Petrobras said
no decision has been made about its stake in
Braskem.
Braskem, Novonor and Petroquimica Verde have
yet to reply to a request for comment at the
time of writing.
Petrochemicals28-Jul-2025
LONDON (ICIS)–Click
here to see the latest blog post on
Chemicals & The Economy by Paul Hodges,
which looks at the collapse underway in the
chloralkali/PVC sector, and Dow’s Q2 results.
Editor’s note: This blog post is an opinion
piece. The views expressed are those of the
author and do not necessarily represent those
of ICIS. Paul Hodges is the chairman of
consultants New
Normal Consulting.
Polyethylene28-Jul-2025
SINGAPORE (ICIS)–Click here to see the
latest blog post on Asian Chemical Connections
by John Richardson: The US-EU trade deal,
setting a 15% baseline tariff, is generating
mixed reactions across Europe. Is this truly a
“good” deal, or simply essential damage
control?
My latest blog post dives into the nuances,
weighing the gains against the significant
costs for the European economy. This, of
course, comes at a time of major restructuring
pressure on European petrochemicals. As the
dust settles, further posts will assess what
the deal could mean this particular European
industry.
Key Pros for Europe:
Averted Trade War Catastrophe: Successfully
avoided the threatened 30% US tariffs and
massive EU retaliation, preventing severe
economic turmoil and widespread supply chain
disruption.
Restored Stability & Predictability:
The 15% baseline offers a clearer cost
structure for businesses, aiding long-term
planning amidst ongoing uncertainty.
Maintained Crucial Market Access: Despite
higher costs, European goods (like automobiles)
retain access to the vital US market, averting
potential exclusion.
Strategic Sector Protection:
“Zero-for-zero” tariffs secured for key
high-value sectors like aircraft, certain
chemicals, generic drugs, and semiconductor
equipment.
Preserved Transatlantic Ties: Maintained a
crucial diplomatic relationship vital for
broader global cooperation.
Key Cons for Europe:
Higher Overall Tariff Burden: 15% is
significantly above historical averages,
imposing a new, ongoing cost burden on European
exporters.
Increased Costs: US importers face higher
costs, either leading to increased consumer
prices or reduced European profit margins.
Impact on Key Export Sectors: Automakers,
for example, face reduced competitiveness and
potential acceleration of costly reshoring
efforts.
Unresolved Tariffs & Concessions: 50%
US tariffs on steel/aluminium remain, while
Europe has pledged substantial US LNG &
military equipment purchases, plus major
investments.
Fragmented Trade Landscape: The deal
creates a patchwork of tariffs, not a return to
free trade, and highlights Europe’s defensive,
limited negotiating position.
This agreement underscores the ongoing
fragility of global trade relations. It’s a
pragmatic retreat to safeguard the broader
economic relationship.
Editor’s note: This blog post is an opinion
piece. The views expressed are those of the
author, and do not necessarily represent those
of ICIS.
Ethylene28-Jul-2025
SINGAPORE (ICIS)–South Korean S-Oil’s thermal
crude-to-chemical project in Ulsan is now 77.7%
complete and is on track for mechanical
completion in H1 2026, even as the company’s Q2
net loss widened.
As of 16 July, major towers of the project
called “Shaheen” – Arabic for “falcon” – had
been installed, with installation of cracking
heater in progress, the South Korean refiner
said on 25 July.
Installations of the thermal crude-to-chemical
(TC2C) reactor and key units, as well as linear
low density polyethylene and high-density
polyethylene (LLDPE/HDPE) reactors &
extruders were all completed, it added.
S-Oil is 63%-owned by Saudi Aramco, the world’s
biggest exporter of crude oil.
The company’s Q2 net loss widened to South
Korean won (W) 66.8 billion ($48 million) as
its petrochemical business swung into an
operating loss of W34.6 billion from a profit
of W109.9 billion in the same period last year.
in billion won (W)
Q2 2025
Q2 2024
Yr-on-Yr % change
H1 2025
H1 2024
Yr-on-Yr % change
Revenue
8,048.5
9,570.8
-15.9
17,039.0
18,879.3
-9.7
Operating income
-344.0
160.6
–
-365.5
614.8
–
Net income
-66.8
-21.3
–
-111.3
144.9
–
Refining operating profit
-441.1
-95.0
–
-497.9
155.4
–
Petrochemical operating profit
-34.6
109.9
–
-109.2
157.9
–
Lube operating profit
131.8
145.8
-9.6
241.5
301.4
-19.9
Compared with Q1, Q2 paraxylene (PX) market
rebounded on fresh demand from a new purified
terephthalic acid (PTA) facility in China and
benzene market weakened due to reduce US
imports following the imposition of tariffs.
Polypropylene (PP) and propylene oxide (PO)
markets recovered amid tighter supply from
regional maintenance and easing tension between
the US and China.
For Q3, the company expects PX to be firm due
to plant turnarounds and start-ups of new
downstream PTA facilities, with the benzene
market likely to be resilient, as demand from
new downstream facilities offsets decreased US
imports.
PP and PO markets may remain supported as
tariff uncertainties fade, despite ongoing
capacity additions in China, the company
predicts.
($1 = W1,380)
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