LONDON (ICIS)–Covestro is acquiring Swiss multilayer adhesive films company Pontacol for an undisclosed sum as part of a strategic portfolio expansion, it said on Tuesday. The Germany-headquartered polymer materials producer said the deal would enable production capacity expansion for multilayer adhesive films in Europe and the development of new markets. The transaction, which is expected to close in the third quarter, includes two specialized production sites in Switzerland and Germany with 100 employees, focusing on different film technologies. Covestro said the film segment was growing worldwide, driven by increasing demand in future markets such as medical technology, mobility, and the textile industry.

SINGAPORE (ICIS)–Oil prices declined by more than $2/barrel on Tuesday afternoon in Asia, as US President Donald Trump said that the Israel-Iran ceasefire – which was confirmed by Israel – is now in effect. “The ceasefire is now in effect,” said Trump said in a social media post. Both Brent and WTI benchmarks were trading below $70/barrel as of 07:45 GMT. Crude prices in $/barrel Product Latest (as of 07:45 GMT) Previous Change Brent August 69.31 71.48 -2.17 WTI August 66.39 68.51 -2.12 Latest developments have eased concerns about the possible blockade by Iran of the Strait of Hormuz, which is vital for global energy trades. Trump had earlier announced on social media a “total and complete” ceasefire that will come into effect within 24 hours if both Israel and Iran maintain peace. At 06:20 GMT, the Israeli government released a statement declaring that its objectives in the conflict had been achieved, thanking Trump and the US for their “participation in eliminating the Iranian nuclear threat”. The statement from the Office of Israel Prime Minister Benjamin Netanyahu noted that Israel agreed to the ceasefire. “Israel will respond forcefully to any violation of the ceasefire,” it added. In a reversal from an earlier post denying a ceasefire, Iran foreign minister Abbas Araghchi in social media post on X that military operations on Israel had continued until “the very last minute” at 4am local time (00:30 GMT). Meanwhile, Islamic Revolution Guards Corps (IRGC) commander Mohammad Pakpour said that any renewed US aggression would be met with “even more crushing and regret-inducing responses”, according to Iranian state media. Following the easing of tensions in the Middle East, the focus should now return to core fundamentals, such as OPEC’s production ramp-up plans, global demand trends, and softening growth outlook – all of which argue for weaker oil prices, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note on Tuesday. US crude could fall below $65/barrel and resume its year-to-date bearish trajectory if tensions do not re-escalate, Ozkardeskaya said. (Adds details throughout) Visit the ICIS Israel-Iran conflict: impact on chemicals and energy topic page for latest updates and analysis

IPS talks to ICIS about its new BESS factory in Bulgaria and other developments The BESS production plant could speed up storage deployment in Bulgaria and in central and eastern Europe, boost grid stability Bulgaria eyes 10GWh BESS by end of 2026 WARSAW (ICIS)–To address rapidly growing demand for energy storage, International Power Supply (IPS) is set to officially open a new automated manufacturing facility of industrial and utility scale batteries in Bulgaria in September, Mariyana Yaneva, CEO at IPS, told ICIS in an exclusive interview. The manufacturing will launch with a 1.5GWh annual capacity, scaling to 3GWh by the end of 2025, IPS plans indicated. Yaneva said the move to produce industrial and utility scale battery energy storage systems (BESS) is “a natural next step for the company with 36 years of experience in R&D and manufacturing of power conversion systems and micro-grid solutions with projects ranging from the deserts of Saudi Arabia to Livingston Island in Antarctica.” In May, IPS announced the launch of the EXERON X-BESS 8, its latest innovation in utility-scale BESS. BENCHMARK PRODUCT The system delivers a rated capacity of up to 8.1MWh with an integrated 4MW inverter. This represents a new benchmark for power density and space efficiency in large-scale applications, IPS told ICIS. “Our objective is to deliver market value through a vertically integrated BESS designed to optimize total cost of ownership. The modular architecture of our system reduces costs associated with transportation, installation, and maintenance while the integrated power conversion system can support a wide range of applications, including grid-forming functionalities, offering asset operators the technical capability to stack revenues from power and systems services markets,” Yaneva added. “As a European manufacturer, we are also well positioned to capitalize on the noticeable shift in EU policy to support the development of cleantech industry in Europe through the upcoming NZIA requirements for public procurement as well as resilient and independent supply chains,” Yaneva told ICIS. “For the moment, investor interest in energy storage is very strong in Bulgaria and the wider region,” she said. This is also partially underpinned by available European funding schemes, “but equally so by the changing energy mix in those countries. For example, solar PV jumped from 4% in the annual energy mix of Bulgaria in 2020 to 14% in 2024,” she noted. Yaneva also told ICIS that, “As solar capture prices continue to decline and the spread between minimum and maximum prices in the day-ahead market widens, market conditions are increasingly favorable for arbitrage trading strategies”. In this context, she explained, BESS can play a “critical role” in enhancing energy management strategies for both renewable energy producers and industrial electricity consumers. Yaneva also said co-location or hybridization of generation and energy storage assets, especially solar-plus-storage, will be the new standard for continued development of the sector. As renewables make up an ever-increasing share of the generation mix, they will also have to take up more responsibilities with respect to the balancing of the system and the trading profiles that allow assets to capture a sustainable internal rate of return (IRR). BULGARIAN BESS TARGETS During a recent forum, Angelin Tsachev, executive director of the Bulgarian electricity transmission operator ESO also highlighted the large investor interest in the construction of electricity storage systems. Over the past nine months, BESS connection applications reached a total capacity of over 11GW and a storage capacity of nearly 32GWh. The preliminary contracts concluded are for a capacity of over 7.5GW and a storage capacity of 23GWh. Two independent energy storage facilities have already been put into operation: One has a power of 10MW and a storage capacity of 27MWh. The other has an installed power of 125MW and a storage capacity of almost 500MWh, ESO said. IPS is a preferred supplier to several co-located and stand-alone projects that will also start operations in Bulgaria by the end of the year. The capacity of the first production line is fully booked by the end of the year, Yaneva added. “Should the European Commission and national authorities extend the deadline for project implementation under the NRRP schemes beyond March 2026, as is already indicated by the latest voting in European Parliament, this will allow us to absorb more of the local demand, but in any case, we are looking for partners to expand on other European markets too,” Yaneva told ICIS.

MUMBAI (ICIS)–India’s Dhunseri Ventures Ltd (DVL) plans to invest rupee (Rs) 22.4 billion ($260 million) to expand its packaging film capacity through brownfield and greenfield expansions, a company official said on Tuesday. The expansion would be done through its wholly owned subsidiary Dhunseri Poly Films Pvt Ltd (DPFPL). DPFPL plans to invest Rs10 billion to build a 61,000 tonne/year biaxially oriented polyethylene terephthalate (BOPET) unit and a 95,000 tonne/year biaxially oriented polypropylene (BOPP) line at its existing complex at Panagarh in the eastern West Bengal state, the official said. The company expects to begin operations at the new plants by calendar year 2029, he added. Currently, DPFPL operates a 51,000 tonne/year BOPET line at the Panagarh complex. Separately, the company plans to set up two BOPP lines with a combined production capacity of 128,000 tonnes/year at Kathua in the Jammu Division of the Indian Union territory of Jammu and Kashmir. The project is expected to cost Rs12.4 billion and the company plans to begin operations at the plant by early 2027, the official said. The parent firm DVL currently operates two PET resin plants with a combined capacity of 696,000 tonne/year in West Bengal and northern Haryana state through its joint venture subsidiary IVL Dhunseri Petrochem Industries Ltd (IDPIL). IDPIL is an equal joint venture between Thailand’s Indorama Ventures Ltd (IVL) and DVL. The joint venture firm also operates a 540,000 tonne/year PET unit in Egypt. In September 2024, IDPIL formed a JV with Indian bottling company Varun Beverages to establish several greenfield PET recycling facilities in India. The joint venture has begun construction of two plants – one at Kathua and the second unit at Khurdha in Odisha state in eastern India. The plants are expected to become operational in 2025. ($1= Rs86.20)

HOUSTON (ICIS)–There is now 96% of the soybean acreage planted with the corn crop 97% emerged, according to the latest crop progress report from the US Department of Agriculture (USDA). Corn emergence climbed slightly over the past week to stand at 97%, which is above the 96% from 2024 but trails the five-year average of 98%. For corn conditions, there is now 2% being listed as very poor, with 4% still poor and 24% being rated as fair. The crop ranked as good has decreased to 56%, with 14% as excellent. In the first update on corn silking, there is 4% of the crop at this crucial stage, which is equal to the 4% from 2024 and is just above the five-year average of 3%. Soybeans plantings have reached 96%, which matches the 96% rate achieved in 2024, but the current pace is just behind the five-year average of 97%. All the states surveyed are above 86% on their soybean sowings except for Tennessee at 84% and Kentucky at 82% completed. Soybean emergence is at 90%, which is ahead of the 89% level from the 2024 season and equal to the five-year average of 90%. In the first update on the crop blooming, the USDA said 8% of the acreage has reached this stage, which is just ahead of the 7% from 2024 and the five-year average of 7%. Soybean conditions were left unchanged with 2% very poor, 5% as poor, 27% fair, 56% as good and those as excellent at 10%. Cotton plantings are at 92%, with sorghum sowings 84% completed.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 20 June. Colombia’s fiscal issues could hit plastics amid relentless China competition pressures Colombia’s plastics industry is managing to navigate through a turbulent period for the country’s macroeconomics and growing at over 3%, but the cabinet’s fiscal issues and intensifying Chinese imports pose risks, according to the president of trade group Acoplasticos. US PP recycler PureCycle to reach 1 billion lb/year capacity by 2030 PureCycle plans to reach 1 billion lb/year (454,000 tonnes/year) of capacity in the US by 2030, Europe and Asia, the US-base recycler of polypropylene (PP) said on Tuesday. Petchems spreads may be lower for longer post downturn, now expected to stretch to 2028 – Fitch The global petrochemicals downturn could potentially stretch to 2028, but the years-long crisis due to overcapacities may leave a lasting mark – lower for longer margins, according to a chemicals analyst at credit rating agency Fitch. Global PVC market braces for glut as protectionism rises and demand falters The global polyvinyl chloride (PVC) market is poised for a significant supply surplus, primarily driven by a surge in Chinese exports and an increasingly protectionist international trade environment, an industry analyst said on Thursday. Mexico’s chemicals imports increasingly hit by customs rules, adding to Manzanillo port crisis woes Mexico’s Port of Manzanillo is gradually recovering cargo handling capacity, which currently stands at around 60% of normal levels, according to the port’s authority, after weeks of operational disruptions caused by customs delays.

HOUSTON (ICIS)–The growing conflict over Iran’s nuclear program is part of a larger trend of heightened geopolitical risk that will likely persist for years, increasing costs for chemical companies while lowering growth. Geopolitical and trade conflicts are making supply chains less resilient and more costly. Conflict is increasing uncertainty, which is causing companies and consumers to delay investments and purchases. Conflict creates its own feedback loop by making escalation more likely, which contributes to more uncertainty and volatility. VOLATILITY IS HERE TO STAYIan Bremmer, president of the Eurasia Group consultancy, talked about conflicts and geopolitical risk prior to the Iranian conflict at the annual meeting held earlier in June by the American Chemistry Council (ACC). Bremmer’s comments were timely and prescient, because he stressed that geopolitical risk has increased. A little more than a week after he spoke, Israel launched its attack on Iran. The US later attacked multiple nuclear sites in Iran. “The geopolitical volatility we’re facing right now is deep, it’s structural, and it’s going to be with us for probably a decade or more,” Bremmer said. “This is going to be a very fraught geopolitical environment, and that will lead to greater costs for all of your industries, all of your companies.” Already, conflicts have reached their highest level since the end of the Second World War, according to the Uppsala Conflict Data Program. The following chart shows the number of state-based conflicts by level of intensity. Recent conflicts include the following: Yemen Civil War Myanmar Civil War Russia and Ukraine Israel and Hamas in Gaza Israel and Hezbollah in Lebanon India and Pakistan Ethiopian conflicts Conflicts in the eastern provinces of the Democratic Republic of the Congo WHY CONFLICTS ARE HERE TO STAYBremmer gave three reasons why conflicts are becoming more common and why risk will remain heightened. Russia was never integrated into the West following the collapse of the Soviet Union, he said. China’s economic and diplomatic integration took place while it maintained one-party rule and a state-driven economy, Bremmer said. In the past 10 years, China’s economy has become more state driven. “The West, and especially the United States, is deeply unhappy about that,” Bremmer said. “And that creates major conflict between the two most important economies in the world.” In Bremmer’s opinion, the most important reason behind the increase in geopolitical risk is the lack of confidence that US voters have in their traditional elites. That leadership includes the political class as well as the media, universities, bankers and corporations. This loss of confidence among US voters has caused weakening support for global causes traditionally supported by the country, such as promoting collective security, global trade, the rule of law and democracy, Bremmer said. These three trends have been building up for years, and it will take years for them to sort themselves out, Bremmer said. CONFLICT RAISES COSTS, SLOWS GROWTH FOR CHEMSBy their nature, conflicts make markets less accessible. A nation under fire cannot readily import or export goods and services. Chemical companies lose access to lower cost energy, feedstock, equipment and raw materials. Similarly, they lose access to their most attractive export markets. Tensions and conflicts sever global supply chains. Their replacements are more regional and more resilient but also more costly because they lack economies of scale and, often, less expensive labor and raw materials. Conflicts make trade sanctions and tariffs more likely. Conflict creates uncertainty, which discourages companies and consumers from making investments and buying goods. In fact, US chemical companies have said that the biggest effect of recent tariffs has not been the actual duties but the uncertainty about how long they will last and whether more tariffs will be imposed. Conflict can influence oil prices, especially when the source of those tensions is in crude-producing countries and regions like Russia and the Middle East. Chemical prices tend to rise and fall with those for oil. The conflict over Iran’s nuclear program has raised questions about whether Iran will close the Strait of Hormuz. DISRUPTIONS CAUSED BY WAR BETWEEN IRAN, ISRAELWith that, chemical companies can expect more of the disruptions that have characterized the war between Iran and Israel. Israeli attacks on Iran’s gas field in South Pars caused that country to shut down millions of tonnes of methanol capacity. That reduced Iranian methanol shipments to China, which used the chemical as a feedstock to make olefins. Higher methanol costs have raised Chinese prices of acetic acid. Iran also shut down its ethylene glycol (EG), ammonia and urea plants for safety reasons. Israel’s BAZAN Group had shut down all operations at its refinery and its subsidiaries at its complex in Haifa Bay after a missile attack, according to S&P Global Ratings. The conflict caused Israel to suspend gas shipments to Egypt, which led to shutdowns of a chlor-alkali plant, some polyethylene (PE) lines and urea production. After US attacks on Iranian nuclear sites, its parliament has expressed support for closing the Strait of Hormuz, according to media reports. If Iran shuts down the Strait of Hormuz, that would not only restrict oil exports from Gulf nations, it would also restrict petrochemical exports from Kuwait and other Gulf nations as well as Qatari exports of liquefied natural gas (LNG) and liquefied petroleum gas (LPG). China’s fleet of propane dehydrogenation (PDH) units relies on imports of LPG for feedstock, and Qatar is among the world’s largest exporters. Insight article by Al Greenwood Thumbnail shows an Iranian missile in Israel. Image by ATEF SAFADI/EPA-EFE/Shutterstock.

ICIS data shows Qatar, UAE LNG production in line with normal range Growing focus on Iran’s Hormuz Strait closure rhetoric Over 80% of Qatari LNG goes to Asia but highly relevant for Europe LONDON (ICIS)–LNG production from Qatar and the UAE – the two countries that sit the other side of the Strait of Hormuz from global buyers – continues as normal, according to ICIS data. Disruption to shipping signals is making the accurate tracking of LNG vessels harder, and more ballast Qatari vessels are waiting east of Hormuz than normal before going to Ras Laffan to load. ICIS data on Monday 23 June showed that 43 vessels had loaded from Ras Laffan in the last 15 days, unchanged from the same period last year. This is down by one from the previous 15-day period, but this is not an unusual deviation given the scale of 77.4mtpa production. A total of four cargoes loaded from the UAE’s Das Island over the past 15 days, up by one from last year, down by one from the previous 15 days, according to ICIS data. ICIS analysts have observed a number of vessels near Qatar registering false positions via their AIS signal data. But ICIS identified the laden 138,000cbm Disha as having crossed Hormuz east on Sunday 22 June, as well as the 152,000cbm Al Areesh and the 174,000cbm Al Sakhamah. The 138,000cbm Raahi appears to have crossed west in ballast on 23 June. KEY LNG TRADE FLOWS Global gas and LNG spot prices have moved up since early June due to growing security concerns in the Middle East, and are back to the highest levels since February. While the TTF now reacts immediately to major geo-political news given the depth of market participants, liquidity, and Europe’s dependency on LNG imports, East Asian spot LNG pricing remains less liquid, and highly influenced by the European market. That said, the ICIS East Asia Index remains at a volatile premium to the TTF, despite limited new LNG demand signals from Asian buyers. Since the start of 2024, 82% of Qatari LNG has gone to Asian markets, according to ICIS data, with Europe now accounting for a much smaller share. Rising US LNG production has stepped in to dominate Europe’s LNG supply. The UK, for example, now imports much more from the US than it does from Qatar. Major LNG buyers continue to analyse potential risks to current supply from the Middle East situation, and are well aware of the impact even a small reduction in Qatari deliveries would have. While this would hit Asian buyers most directly, it would also impact European markets if higher Asian spot prices pulled US LNG away from Europe. BULLISH PRICES An Asian price premium of up to $0.50/MMBtu to the TTF – typical of the last month – would likely mean sufficient US LNG flows to both Europe and Asia to cover demand and reflects a reasonably well-balanced market. In the event of a cut in supply to Asia, the EAX would rise, taking the TTF with it given Europe’s dependency on LNG. The Asian premium to TTF would likely need to rise to at least $2/MMBtu to pull much larger volumes of US LNG away from Europe. Further TTF price rises would filter through across European energy markets. In Asia, most LNG is still sold on an oil price link which is currently well below spot prices – although oil prices would naturally also be impacted by Hormuz disruption. It is unlikely, however, that outright gas and LNG prices would substantially deviate between the two regions as both would compete for cargoes. Higher spot LNG prices would also dent demand from many Asian buyers. Any extended closure of Hormuz appears highly unlikely given likely pressure that would come from major economic and military powers against Iran. But even short-term disruption could lift LNG and gas prices and lead to significant scrambling from sellers and buyers needing to use all available optimization and risk management tools at their disposal. Alex Froley contributed to this story

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which suggests it would be prudent to plan for further escalation of the trade and military wars in H2. 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.