SAO PAULO (ICIS)–A Brazilian judge over the weekend ordered custom workers to end their nearly seven-month-long strike after the government brought the case because of financial harm, as goods to export and import pile up in customs up and down the country. The prolonged strike has significantly disrupted Brazil’s customs operations, affecting imports and exports at major ports including Sao Paulo state’s Santos, Latin America’s largest, with companies working with perishable goods and time-sensitive materials experiencing the largest impact. Superior Court of Justice judge Benedito Goncalves also imposed a daily Brazilian reais (R) 500,000 ($89,800) fine on Sindifisco, in case of non-compliance. Moreover, the judge ordered an end to what can be perceived as standard operations, but in which auditors carry out their duties slowly, as part of their industrial action. “Although the Constitution guarantees the right to strike for public servants, it also protects the public interest by ensuring the continuity of essential services,” the ruling said, as cited by state-owned news agency Agencia Brasil. If confirmed, the order would put an end to a strike which started in November 2024 and which workers had just doubled down on in early June, expanding the areas where they would not be carrying out audits. The chemicals and fertilizers industries, as well as many other industrial sectors, were growing concerned about the industrial action and its long-term impact, not least because the Federal Revenue is currently implementing a new simplified import system, the last phase of which is to occur in the second half of 2025. THE LONGEST STRIKEEmployees at customs points started their protest in earnest in mid-2024, first with partial stoppages or other type of pressure action. However, talks with the government on what they deem poor salary increases never made any meaningful progress. Then, in November 2024, the strike which has been legally ended now started. Employees say they have had just one pay rise since 2016 – that Lula granted them in 2023 soon after taking office, a 9% increase, which would be far from enough to regain the loss of purchasing power. They also demand full payment of the efficiency bonus. Since talks with the government were going nowhere by May, employees doubled down the pressure in early June, calling a five-day “zero clearance period” in which practically any non-automative checks would not be carried out. The government quickly filed a case on 3 June deeming the latest move illegal, as it would be harming the state’s constitutionally mandated provision of essential services. Additionally, the prolonged strike was casting a financial shadow over the state’s ability to collect taxes. As the cabinet tries to reconcile cutting the fiscal deficit and expanding the welfare state, Finance Minister Fernando Haddad said in parliament in May the strike was high up on the list as one of the causes for its ministry to have to re-work the national accounts as tax proceeds are now to be lower than initially expected. “This volume of contingency [lower revenues] is because some circumstances occurred after the Budget was submitted. These are facts that need to be evaluated: The first fact is that there was no compensation for the payroll tax relief,” said Haddad, as quoted by state-owned Agencia Brasil. “The second problem is the partial shutdown of the Federal Revenue service, which affects the performance of the [tax] collection.” THE END – OR NOTHowever, Sindifisco published a statement on Saturday saying that “to date” it had not been formally notified of the court’s decision. Sindifisco had not responded to a request for comment at the time of writing. “Since 3 June, when the Union [state] filed a request to declare the tax auditors’ strike, the union’s legal department has been working non-stop to take appropriate actions, such as those that have already been carried out, but also in defining strategies and possibilities for action in the legal field,” said Sindifisco. “The [union’s] national directorate states that the strike of tax auditors is legitimate and follows all the provisions of the relevant legislation.” ($1 = R5.56) Front page picture source: Brazil’s Federal Revenue press services Additional reporting by Bruno Menini

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 6 June. Clarity on US tariffs could cause big bounce in chemicals demand – Dow CEO A clearer picture on the ultimate level of US tariffs could lead to a surge in pent-up demand for chemicals and plastics, said the CEO of Dow. Brazil customs workers up strike pressure with new ‘zero clearance’ period at Santos port Brazil’s customs auditors have announced a new five-day “zero clearance period” at the Port of Santos on 2-6 June in which no physical inspections will be carried out, according to a letter to customers by logistics company Unimar seen by ICIS. Tariff-driven uncertainty puts lid on potential recovery in US PP – Braskem Uncertainty surrounding tariffs is tempering what could be a recovery in US demand for polypropylene (PP), executives at Braskem said on Wednesday. China ethane crackers face feedstock challenge as US restricts supply Operations at China’s ethane crackers that rely solely on US supply will likely be disrupted, at least in the short term, as the US restricts exports of the feedstock gas. INSIGHT: New regulatory threats emerging for US chems A new regulatory threat for the US chemical industry is emerging from the alignment of two wings of the nation’s main political parties, which could use what critics describe as pseudoscience to adopt restrictive and unneeded policies. Asia-Europe shipping prices jump on US-China trading window Container prices for Asia cargoes to Europe jumped sharply week on week amid a general surge in freight costs as players look to lock down shipments from China to the US during the pause in reciprocal tariffs between the countries. Mexico’s Pemex turnaround key to unlock $50 billion chemicals investments – ANIQ Mexico’s chemicals sector is ready to potentially invest $50 billion in the next decade if key challenges are addressed, including performance at state-owned energy major Pemex, according to the president of trade group ANIQ.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at how robotaxis are starting to move into the mainstream. 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.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 June. Europe HDPE spot dragged sub-€1,000/tonne by US offers as US Q1 imports ride highSpot prices for high-density polyethylene (HDPE) in Europe have fallen below €1,000/tonne as local buyers receive highly discounted US offers against a backdrop of high imports from the US in the first quarter of 2025 and gaping spreads between the regions. Higher tariffs on Russia embolden European producers to lift nitrate pricesEmboldened by the European Parliament’s decision to go ahead with higher import duties on Russian fertilizers, nitrate producers in Europe have raised prices despite strong objections from the farming community. Europe pharmaceutical IPA slightly softer, stable demand despite peak seasonEuropean spot pricing for premium pharmaceutical grade isopropanol (IPA) has softened slightly, while prices for technical and cosmetic grades are stable amid steady conditions. European paraxylene contract price for April, May settles following contentious negotiationsEurope paraxylene (PX) contracts for April and May have been finalized in a double settlement. LyondellBasell enters exclusive talks for Europe asset divestmentsLyondellBasell has entered into exclusive talks with an industrial investor for the sale of four European production sites, slightly over a year after launching a review of its asset base in the region. Asia-Europe shipping prices jump on US-China trading windowContainer prices for Asia cargoes to Europe jumped sharply week on week amid a general surge in freight costs as players look to lock down shipments from China to the US during the pause in reciprocal tariffs between the countries. Limited demand for Europe PET mitigates impact of higher freight ratesDemand for European polyethylene terephthalate (PET) has been blighted by poor weather conditions, economic apathy and significant import arrivals. LyondellBasell Europe divestment assets had lost money for years – CEOThe assets LyondellBasell has entered exclusive talks to sell to private equity investor AEQUITA had been cash negative on average to the company over the last five years, with CEO Peter Vanacker welcoming a “clean exit” from the businesses.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. THE notion of a “replacement society” – where chemicals demand declines due to ageing populations and strained pensions – is a concept that I began to challenge last month. Today’s post, using recent data and research, adds to last month’s proposition that demographics will reshape demand rather than cause it to collapse – Spending per person typically peaks in middle age. But it shifts, it doesn’t disappear. Data from the US and UK show older households spend less on clothing or dining out — but far more on healthcare and home-based services. OECD, Eurostat and the IMF’s Silver Economy analysis all shows healthcare demand surging with age. And while pension systems are under fiscal pressure, that doesn’t mean spending collapses. Goldman Sachs finds life expectancy is up 5% since 2000 — and working lives are 12% longer. UBS and Cerulli forecast an $80+ trillion wealth transfer from Boomers to Millennials and Gen Z. That’s a powerful source of future consumption. The claim that we’ve bought most of the things we need underestimates human creativity. People didn’t “need” EVs, wearables or AI-enhanced homes a decade ago. Now they’re mainstream. UBS sees “longevity” as a transformational innovation opportunity — spanning healthcare, tech, finance and consumer goods. Not all the world is ageing. Sub-Saharan Africa and India are driving global population growth. Their demand for infrastructure, appliances, transport and services could more than offset shrinking demand elsewhere. But don’t forget China. Its population could shrink to as little as 373m by the end of the century. Can demand growth in India, Africa etc., where populations are growing, compensate for China’s demographic challenges? Can China improve healthcare and pension systems to help compensate for the economic drag of a shrinking population? Here’s my take: We’re not necessarily heading for a demand collapse. We could instead see a world shaped by longer lives, new technologies, government policy and the economic rise of younger regions. Climate change may be a bigger negative for chemicals consumption than demographics. Adaptation to climate change won’t be fixed by market forces alone. This will be the subject of future posts. What do you think? Are we overplaying demographic decline? How do we, as a chemicals industry, adapt to the climate change challenge? 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.

SINGAPORE (ICIS)–Tariff concerns and ample supply continue to exert pressure on petrochemical markets in both Asia and the Middle East, with regional demand staying weak, with consumption in India unlikely to pick up until September. Aromatics trade flows shift amid tariff uncertainty Monsoon season weighs on India demand GCC producers upbeat on Syria AROMATICS UNDER PRESSURE AMID TARIFFS In the aromatics market, supply is expected to be tight as increased tariff uncertainties continue `to disrupt traditional trade flows. Mixed xylene (MX) and downstream paraxylene (PX) were in steep backwardation, where in spot prices are higher than futures prices, amid freight constraints and high US demand. Benzene, which closely tracks falling crude prices, continued to underperform its aromatics peers. Benzene from South Korea has not been flowing into the US and were mostly going into China, market sources said. South Korea is a major exporter of aromatics products. Its overall petrochemical shipments in May declined by 20.8% year on year, weighed down by sharp falls in upstream crude prices. For solvent grade mixed xylenes, South Korea exported last month an estimated 50,696 tonnes, of which around 27% was destined for the US, according to ICIS data on 2 June. Strong exports to the US coincide with the start of the summer driving season in the northern hemisphere, when demand for octane boosters like MX and toluene, which goes into gasoline blending, picks up. This strong US gasoline demand expectation is supporting the supply tightness, despite weaker downstream activity in China. Asia’s aromatics tightness is likely to persist through June-August, as market participants adapt to tariff policies and freight cost pressures from front-loading following a trade war truce between the US and China. The US’ 90-day suspension on “reciprocal” tariffs on most countries except China ends on 9 July. A potential escalation of the US-China trade war after the 90-day truce could intensify uncertainties, though a resolution might stabilize flows by late Q3. For shipping, market players are expecting freight rates to start to drop again in July-August. MONSOON ONSET DEPRESSES INDIA PLASTICS DEMAND Prices for plastics in India are under pressure from the monsoon season, as well as more supply coming from China, market sources said. This year’s monsoon season, which typically runs from June-September, arrived eight days early and is projected to bring above-average rainfall, said the India Meteorological Department (IMD) on 24 May. During India’s monsoon period, manufacturing activity tends to moderate, especially the packaging sector as well as the food and beverage sector, weakening end-product demand. Concurrently, domestic supply is ample, pushing down prices for Indian polyethylene (PE), polypropylene (PP), high-density polyethylene (HDPE) and low-density polyethylene (LDPE). But post-monsoon season from September, demand is likely to pick up as agriculture and construction sector activity rises and the harvesting season commences. The festive season, which includes the Diwali (Hindu Festival of Lights) running from 18-23 October, is likely to increase demand for end-products such as plastics, hence, boost production leading to the holiday. Demand for chemicals such as PE, PP and PVC and synthetic rubbers is expected to improve after September. India’s strong domestic consumption would shield it from the US-China tariff war, whose impact on the south Asian nation’s petrochemical trades is mostly on sentiment and not on actual demand. China, however, has tried to push more material to India with cut prices amid the US-China trade war, as domestic demand in the world’s second-largest economy remained weak. The country is already redirecting PE and PP to Africa and India to offset reduced US access. But this offsetting has eased temporarily due to freight costs more than doubling in recent weeks. GCC SEES RENEWED OPPORTUNITY IN SYRIA In the Middle East, Syria is opening up following a regime change and the consequent lifting of sanctions by both the US and EU. A cargo of wheat arrived at the Syrian port of Tartous for the first time in around 11 years, according to news reports. The opening of Syria’s market – after years of civil war and international sanctions – bodes well for GCC petrochemical producers. The GCC bloc consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Suppliers are looking to increase their trades with Syria, as converters in the country begin running their plants at higher rates, with the possibility of new plants to be built. On 29 May, the Syrian government inked a $7 billion strategic Memorandum of Understanding (MoU) with a consortium of companies led by Qatar’s UCC Holding to develop power generation projects. More such agreements, particularly as trade increases, could pave the way for increased demand in the country for chemicals and chemical products, after civil war disrupted life in Syria since 2011. Focus article by Jonathan Yee Additional reporting by Aswin Kondapally, Nadim Salamoun, Jasmine Khoo, Samuel Wong, Melanie Wee, and Angeline Soh. Thumbnail image: At Qingdao Port in east China’s Shandong Province, 4 June 2025. (Shutterstock)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 June. China factory output contracts anew despite US-China tariff pause By Jonathan Yee 02-Jun-25 14:34 SINGAPORE (ICIS)–China’s official manufacturing purchasing managers’ index (PMI) in May remained below the expansion threshold of 50.0 but was up from the previous month amid a pause in the US-China tariff war. INSIGHT: Will feedstock optimization be enough to survive Asia C2 oversupply? By Josh Quah 03-Jun-25 12:00 SINGAPORE (ICIS)–Investing into feedstock slate projects is one survival strategy gaining steam among players – and was still very much in the conversations on the side lines of the APIC 2025 conference. S Korea faces economic crossroads as it heads to polls amid political turmoil, tariffs By Jonathan Yee 03-Jun-25 15:25 SINGAPORE (ICIS)–South Korea is at a crossroads as it heads to the polls on Tuesday, six months after ex-President Yoon Suk Yeol’s martial law declaration led to his removal from office, resulting in political turmoil that has been compounded by trade uncertainties and the tariffs imposed by the US on most of the world. INSIGHT: Asian manufacturing stutters in May as tariff headwinds continue By Nurluqman Suratman 04-Jun-25 11:00 SINGAPORE (ICIS)–Asia’s factories largely remained under pressure in May, as subdued global demand and persistent uncertainty surrounding US trade policies continued to bite, according to the latest purchasing managers’ index (PMI) data. S Korea final Q1 GDP shrinks 0.2% on quarter amid US tariffs By Jonathan Yee 05-Jun-25 12:40 SINGAPORE (ICIS)–South Korea’s revised real GDP shrank by 0.2% on-quarter, unchanged from advanced estimates in April, the first on-quarter contraction in nine months, central bank data showed on Thursday. China ethane crackers face feedstock challenge as US restricts supply By Fanny Zhang 05-Jun-25 16:43 SINGAPORE (ICIS)–Operations at China’s ethane crackers that rely solely on US supply will likely be disrupted, at least in the short term, as the US restricts exports of the feedstock gas. INSIGHT: Faced with intensifying ADDs, Asia’s PET producers mull options to stay in the industry By Judith Wang 06-Jun-25 10:00 SINGAPORE (ICIS)–Facing intensifying anti-dumping duties (ADDs) in key markets, Asian polyethylene terephthalate (PET) producers are having to find ways beyond simply slashing offers to stay in the business. Malaysia’s PETRONAS to cut 5,000 jobs by yearend By Nurluqman Suratman 06-Jun-25 11:10 SINGAPORE (ICIS)–Malaysian state energy giant PETRONAS is shedding 10% of its workforce by the end of the year to navigate challenging operating conditions, primarily driven by falling crude prices. Mideast polyols to face pressure post-Eid amid softer costs, demand By Isaac Tan 06-Jun-25 14:52 SINGAPORE (ICIS)–Middle Eastern import prices for polyether polyols are likely to remain under pressure after the Muslim festival of Eid ul-Adha, weighed down by weaker feedstock costs in China and seasonally subdued downstream demand.

SAO PAULO (ICIS)–Mexico’s chemicals sector is ready to potentially invest $50 billion in the next decade if key challenges are addressed, including performance at state-owned energy major Pemex, according to the president of trade group ANIQ. Jose Carlos Pons, who is also the CFO of Mexican chemicals producer Alpek, said ANIQ is in constant contact with the Mexican government about potential projects private companies and Pemex could jointly implement, some of them related Pemex assets in petrochemicals which are idled or running at low capacities. Pons, who was appointed ANIQ’s president in May, said that the $50 billion in investments would mean the chemicals industry could double its contribution to GDP from 2% to 4.5%. He said ANIQ is in contact with the ministries of energy and economy (Secretaria de Energia and Secretaria de Economia, respectively) about these plans. The two ministries, as well as Pemex, had not responded to a request for comment at the time of writing. IT IS (ALMOST) ALL ABOUT PEMEX Pemex, which is the largest and key supplier of raw materials to the Mexican chemicals industry, has for years suffered performance problems, with output dwindling below 2 million barrels/day, despite targets to surpass that threshold, and having become the most indebted oil major with obligations of around $100 billion. However, ANIQ puts many hopes in the new administration under Claudia Sheinbaum and in what it sees as an honest intention to turn around Pemex, adding that the trade group wants to go “hand in hand” with the government to spur the investments in petrochemicals. The cabinet has announced plans to cut costs at the major as well as petrochemicals and fertilizers expansions at the company. However, potential and ambitious investment plans – both from Pemex itself and private companies – hinge on several critical factors. “If we were able to turn Pemex around, by improving its supply of key raw materials; if we were able to work on the energy side and achieve competitiveness; if we were able to create the infrastructure so that we wouldn’t depend so much on imports; and if we simplified our country’s administration, then there could undoubtedly be that potential [of $50 billion chemicals investments],” said Pons. Out of those $50 billion, Pons said that around two-thirds would go primarily to maintenance investments to improve Pemex’s petrochemicals operational capacity. “Today, we have a great opportunity for Pemex to operate its plants at greater capacity, and the way to achieve that goal would be to give the plants operational reliability. Ensuring that the different parts of each of the plants have operational reliability will ultimately increase the output of those plants,” she said. “Pemex has now an interesting opportunity. Throughout all the areas where it operates, without a doubt, this administration and the previous one have dedicated resources to turning it around. It’s very important to us that they’re doing this.” Efforts to turn around Pemex, however, have so far failed. The previous administration by Andres Manuel Lopez Obrador started its tenure with a target for output to surpass 2 million barrels/day target, which it finally ditched. Some analysts have said Pemex’s woes are too deep and make the company’s survival very difficult. Others, however, think the major is ‘too big to fail’, and therefore will continue to be bailed out by the Treasury as it has been the case for years. “Pemex is very important to us, so we don’t even want to consider a Pemex that fails. Today, it provides us with gas, with many raw materials. The situation is complex, and the fact that it is among the priorities reflects the government’s intentions. But these huge titans take time, but with the right investments and decisions [it can happen],” said Pons. “That’s why we want to work hand in hand with the government. The project is so large that we all need to get involved. What we want is to tell them and indicate what we think the priorities are and where we want to help them.” Pons said ANIQ has established working groups with both the Ministry of Energy and Ministry of Economy to advance these objectives, with regular conversations. “We want to understand in greater detail what the government’s expectations are and under what conditions they are expecting them to happen,” said Pons. “Without a doubt, for the private sector to invest, there must be a certain economic logic, whether it’s guaranteed supply contracts with priority or a preferential price, so that the investment is paid for.” There would also be other, country-wide challenges to be addressed, however. Pons mentioned for the chemicals investment plans to succeed there would be a need to improve other key energy supplies such as electricity, water and natural gas. And yet another added challenge for Mexico: infrastructure. Pons mentioned ANIQ is optimistic about the government’s Plan Mexico, ambitious measures touching nearly all aspects of the economy with the target of putting Mexico among the world’s 10 largest economies. It is now considered to be placed between the 12th and 15th world economic ranking – depending on source and its methodology to calculate GDP. FRIENDLY LOBBYINGPons was pressed about the rather friendly lobbing ANIQ is currently exercising when it comes to the policies of Sheinbaum, who has implemented reforms ‘Corporate Mexico’ is not happy about, such as a judicial reform which has raised alarm bells about the damage it could cause to the state of law, therefore to corporate law. But he would not expand much about those issues, because he said ANIQ is right now focused on helping bring about the abovementioned investment plans, and the trade group has opted for that tone rather the festy lobbying tone other trade groups can use. “What we want most is to work together with the government. What I truly want in my tenure as president is very important to me: for the government to understand that we must work together and that we believe Plan Mexico is truly something important,” said Pons. “So, rather than creating an enemy in the government, what I want to work on is to work hand in hand with them and for them to understand that this won’t work if we don’t work together. We’ll do it when necessary [a more robust lobbying], but right now what I want most is to reach out to the government, for them to understand that we’re going to work together.” ICIS will publish on Monday (9 June) the second part of this interview, with ANIQ president’s take on the US shift in trade policy and the role of China in the global economy Front page picture: Facilities operated by Mexico’s polyethylene (PE) producer Braskem Idesa  Source: ICIS Interview article by Jonathan Lopez

LONDON (ICIS)–Ukraine’s electricity and gas-grid operators could lose vital funding and their certification as independent companies after the ministry of energy changed their corporate-governance charter without prior consultation with international institutions and donors, EU and Ukrainian market sources told ICIS. Several stakeholders said the changes relate to the way the CEOs of the two operators, Ukrenergo and GTSOU, are appointed or dismissed by their supervisory boards. They added that this could now empower the ministry of energy, as the sole stakeholder, to influence the process. An EU source said the changes could lead to a “fundamental rollback of corporate governance,” which is required to protect state companies from political interference and potential corrupt practices. AMENDMENTS Under the amendments introduced on 19 May, the supervisory board of Ukrenergo, which is made up of four independent members and three Ukrainian government representatives, can no longer appoint or dismiss the CEO with a simple majority of international members. The amendments stipulate that the appointment of the CEO would require a qualified majority of five members, including at least one government representative. At GTSOU the supervisory board is made up of five members, three independent and two government representatives. But the rule for voting in a CEO has also changed from a simple majority of three to a qualified majority of four, also including at least one government representative. Although the changes were introduced in mid May, they only became public in the first week of June, when the supervisory-board members of Ukrenergo were expecting to appoint a new CEO. The previous CEO, Volodymyr Kudrytskyi, was dismissed by the government in September 2024, leading to the resignation of two independent board members, citing political pressure. A new competition was organised and the three shortlisted candidates were sourced from within Ukrenergo. However, the supervisory board members who met in Kyiv in June could not appoint the CEO because of the latest charter changes. These effectively allow board members from the government to veto the process. The gas-grid operator is in a similar situation. The previous CEO, Dmytro Lyppa, resigned in February 2025 and GTSOU’s supervisory board is also expected to appoint a new CEO. Ukrainian stakeholders say the Ukrenergo supervisory board is now seeking independent legal opinions as the latest changes could “undermine” corporate governance. DONOR AGREEMENT The independence of state-owned enterprises such as Ukrenergo is a critical condition when it comes to attracting international funding. This will be needed to repair much of the power and gas infrastructure destroyed in Russian attacks. Ukrainian and EU stakeholders told ICIS the transmission-system operator (TSO) charters had been previously agreed with international donors such as the European Bank for Reconstruction and Development (EBRD), as well as with the Energy Community. The latter is an international institution tasked to extend the EU’s single energy market to southeast Europe, which granted their certification as independent operators. In their initial format, the charters gave greater weight to the independent supervisory board members in their responsibilities to appoint or dismiss CEOs to protect companies from state interference and ensure that international donations are not embezzled. EU and Ukrainian market sources confirmed that all EBRD loans as well as credit from other international financial institutions contain covenants that clearly state that the company’s charter cannot be changed without prior approval from the banks that have already provided the loans. A Ukrainian market source said the ministry of energy, as the sole shareholder of both grid operators, is required to get confirmation from the Energy Community on changing the corporate governance charter. They insisted this had not been done. International stakeholders have repeatedly raised concerns about the independence of state-owned enterprises in Ukraine after the government dismissed CEOs at the incumbent Naftogaz, GTSOU, Ukrenergo. The ministry of energy, EBRD and the Energy Community did not reply to questions from ICIS.