SINGAPORE (ICIS)–The Asian spot market for butadiene (BD) saw a bullish start to 2025, as prices in both Chinese yuan and US dollar terms surged dramatically. In this latest podcast, ICIS senior editor Ai Teng Lim and industry analyst Elaine Zhang come together to discuss the factors moving prices and to take a peek into what may lie ahead for downstream demand. Domestic China prices surge on supply factors, raising imports too Uncertainties prevalent on whether downstream demand will hold out Supply outlook uneven between China and wider Asia

SINGAPORE (ICIS)–China posted a 5% full-year 2024 economic growth, in line with the government’s target, on the back of a strong Q4 performance, official data showed on Friday. The GDP growth last year, however, still represents a slowdown from the 5.2% expansion recorded in 2023. In October-December 2024, annualized GDP grew at a faster pace of 5.4%, compared with 4.6% in the previous quarter, spurred by stimulus measures, the National Bureau of Statistics (NBS) said on Friday. Despite the strong Q4 growth, the world’s second-biggest economy still faces difficulties and challenges amid widening impacts from changing external environment and inadequate domestic demand, NBS said. It added that the country will employ more pro-active and effective macroeconomic policies to expand demand, promote innovation, stabilize expectations and drive growth. China is a major importer of petrochemicals but its self-sufficiency has grown significantly over the years. Heavy capacity additions have turned the country into a net exporter of selected petrochemicals, including purified terephthalic acid (PTA). (adds thumbnail image, paragraphs 6-7) Thumbnail image: Steel Chimney, Huai’an, China – 03 January 2025 (Costfoto/NurPhoto/Shutterstock)

HOUSTON (ICIS)–Global commodities group Trafigura, in collaboration with US fertilizer producer CF Industries, announced the completion of the first co-loaded ammonia and propane shipment operation of its kind. In early January, the Green Power medium gas carrier completed a single voyage from the US to Europe loaded with ammonia from CF Industries and with liquefied petroleum gas (LPG) in separate tanks. The co-loaded vessel project was intended in part as a demonstration of capabilities needed for the efficient and economic transport of low-carbon ammonia to supply ports that may not require a full vessel of ammonia. The companies said the ability to co-load low-carbon ammonia with LPG is one pathway to supporting the scale up in availability of low emission fuels. It was noted that low-carbon ammonia continuing to be a leading alternative fuel candidate for applications such as coal co-firing as well as supporting the marine shipping industry transition from heavy fuel oil to alternatives with a lower-carbon intensity. “We transport LPG and ammonia from the US to Europe on similar ships on a regular basis,” said Patricio Norris, Trafigura global head of ammonia and LPG. “We can improve the economics for our customers and reduce emissions with fewer voyages by safely co-loading ammonia and LPG in the same vessel.” The ammonia was loaded onto the Green Power at CF Industries Donaldsonville, Louisiana, complex and LPG was loaded into separate tanks of the vessel in Corpus Christi, Texas. CF Industries said strict segregation requirements ensured that any crossover of liquid, condensate or vapor was prevented. After crossing the LPG was discharged via a ship-to-ship operation in the Mediterranean for use in domestic heating and the ammonia was discharged at Tees Port for CF Fertilisers UK. “We appreciate the partnership we have with Trafigura as we take steps together to help prepare for demand growth of low-carbon ammonia and the expected transition of the marine shipping industry to low-carbon ammonia as a fuel,” said Bert Frost, CF Industries executive vice president. “Ammonia is safely transported around the world by vessels daily, and this voyage reinforces the flexibility we have to serve emerging low-carbon ammonia demand as we innovate shipping methods with industry-leaders such as Trafigura.” This shipment follows Trafigura’s first ship-to-ship transfer of ammonia in July 2024 for CF Industries. The fertilizer producer is currently progressing a carbon capture and sequestration (CCS) project at Donaldsonville which will enable it to produce substantial volumes of low-carbon ammonia. The CCS project is expected to start-up during 2025.

HOUSTON (ICIS)–Brazil Potash announced it has signed a memorandum of understanding (MOU) between Potassio do Brasil, a subsidiary of the company, and fertilizer trading company Keytrade AG for potential offtake of up to 1 million short tons/year of potash from the Autazes Potash project. Located in the state of Amazonas with the proposed mine and processing facilities located 75 miles southeast of the state capital Manaus, the estimated $2.5 billion project would become Brazil’s largest potash project. The company said the initial annual production is projected be 2.4 million short tons yearly and believes it could potentially supply approximately 17% of the potash demand within the country with future plans to double output. Brazil Potash envisions not only reduce Brazil’s reliance on potash imports but also mitigating approximately 1.4 million short tons/year of emissions. “This MOU with Keytrade represents another important step towards Brazil Potash’s development and validates our strategic position in Brazil as a potential premier domestic potash supplier,” said Adriano Espeschit, Potassio do Brasil president. “Combined with our existing offtake agreement with AMAGGI, we have now secured potential commitments for approximately 1.5 million short tons of our planned 2.4 million short tons of annual potash production, providing strong foundational support for project financing.” The company noted that Brazil is critical for global food security as the country has among the highest amounts of fresh water, arable land and an ideal climate for year-round crop growth. Yet it is viewed as being vulnerable as it imports over 95% of its potash despite having what is anticipated to be one of the world’s largest undeveloped potash basins. Currently it is planned that the potash produced will be transported primarily using low-cost river barges through an inland system in partnership with logistical operators Amaggi.

SINGAPORE (ICIS)–The Indonesian rupiah fell to its weakest level in more than six months on Thursday following an unexpected loosening of monetary policy on 15 January to spur growth in southeast Asia’s largest economy. Rupiah weakened due to US policy uncertainty under Trump 2025 GDP growth forecast trimmed to 4.7-5.5% Inflation to remain within 1.5-3.5% target in 2025 The rupiah (Rp) was extending losses on Thursday, falling to as low as Rp16,383 against the US dollar in early trade. At 07:41 GMT, the rupiah was trading at Rp16,376 to the US dollar. In a surprise move, Bank Indonesia (BI) lowered its benchmark seven-day reverse repurchase rate by 25 basis points (bps) to 5.75% on 15 January. BI also reduced its deposit facility rate by 25bps to 5.00% and lending facility rate to 6.50%. “The decision is consistent with low projected inflation in 2025 and 2026…maintaining the rupiah exchange rate in line with economic fundamentals to control inflation within the target range and the need to bolster economic growth,” BI said in a statement. BI last slashed interest rates in September last year for the first time in over three years. However, it subsequently maintained a steady policy stance at later meetings to stabilize the rupiah, which had come under pressure due to uncertainty surrounding US policy under Donald Trump. “The rate cut was unexpected as BI previously emphasized that its near-term policy stance is aimed at rupiah stability amid strong US Dollar,” Malaysia-based equity research firm Kenanga said in a note on Thursday. “The shift reflects a focus on boosting growth amid slowing domestic expansion, low inflation, and rising global uncertainties, including geopolitical tensions, China’s weak recovery, and policy changes in the US,” it said. BI is expected to maintain an easing stance to bolster economic growth, Kenanga said, but concerns regarding rupiah stability may prompt a gradual and cautious approach, particularly as the US Federal Reserve may slow its rate cuts due to the resilience of the US economy. “We expect the rupiah to gradually strengthen by the end of 2025 on the expectations of lower US policy rate and an improving domestic economy, it said. “Nonetheless, we expect two more cuts, bringing BI’s policy rate to reach 5.25% in 2025.” SLOWER GROWTH PROJECTED BI on 15 January revised its 2025 GDP growth forecast to 4.7-5.5%, slightly lower than its previous projection of 4.8-5.6%. This downward revision is attributed to weaker exports, subdued household demand, and lower private investment. Indonesia is a net importer of several petrochemicals, including polyethylene (PE) and polypropylene (PP), as well as the world’s largest crude palm oil (CPO) producer – a key oleochemicals feedstock. Like most in Asia, Indonesia is export-oriented economy. Its full-year exports rose by 2.3% year on year to $264.7 billion, while imports increased by 5.3% to $233.66 billion, resulting in a trade surplus of around $31 billion, official data showed. For the month of December alone, the country’s trade surplus narrowed to $2.24 billion, marking the lowest surplus since July, as exports to key markets, including China, India, and Taiwan declined. Total exports for the month were up by 4.8% year on year at $23.46bn, while imports grew at a faster rate of 11.1% to $21.22 billion. For 2024, growth is expected to settle slightly below the midpoint of the 4.7-5.5% range, reflecting softer domestic demand. Indonesia’s GDP grew by 5.05% in 2023, slowing from the 5.31% expansion the previous year due to sluggish exports. BI in its statement highlighted that the global economy is experiencing growth divergence, with the US exceeding projections due to fiscal stimuli and technological investments, while Europe, China, Japan, and India face sluggish growth. The global economic growth for 2025 is expected to reach 3.2%, driven by the strong US economy, it noted. However, US policy and inward-looking trade policies are prolonging disinflation and strengthening expectations of dovish monetary policy, leading to increased global financial market uncertainty, BI said. “Global economic developments require a strong policy response, therefore, to mitigate the adverse impacts of global spillovers, maintain stability and drive domestic economic growth,” it added. In terms of inflation, CPI inflation averaged 2.3% in 2024, well within BI’s target range of 1.5-3.5%. Inflation is expected to remain within this target in 2025, supported by ample domestic capacity to meet demand. Focus article by Nurluqman Suratman

SINGAPORE (ICIS)–India’s currency – the rupee – slumped to a record low in the week, pushing up both domestic and import prices of some petrochemicals in the south Asian country amid stable demand. Strong US dollar sends Indian rupee tumbling Acetone, EVA import prices jump India inflation within central bank target range The Indian rupee (Rs) is currently trading at above Rs86 against the US dollar, having shed more than 3% since the early November, when Donald Trump won the US election. At 07:10 GMT, the rupee was trading at Rs86.49. A strong US dollar and heavy outflows of short-term investments sent the currency tumbled to a record low of Rs86.9964 on 14 January, according to foreign exchange platform xe.com. India’s demand for overseas goods will likely be dented as a weaker currency makes imports more expensive. PETROCHEMICAL BUYERS TURN CAUTIOUS With import prices of several products on uptrend amid the rupee weakness, some buyers have adopted a wait-and-see attitude on markets. India is a major importer of petrochemicals including polymers. Rupee’s tumble has notably adversely affected PE Black 100 pipe import offers from Gulf Cooperation Council (GCC) and Asian sellers as buyers switch to domestic PE Natural. PE Black 100 and PE Natural are specific grades of high-density polyethylene (HDPE) used primarily for high pressure water pipes. In the recycled polyethylene (rPE) and recycled polypropylene (rPP) markets, downstream converters in India that import cargoes from northeast Asia are feeling the pinch. Fewer India-bound rPE and rPP cargoes are expected in the coming weeks, compounded by high intra-Asia freight rates. For exporters of recycled polyethylene terephthalate (rPET), meanwhile, there was no upsurge in shipments despite the rupee’s weakness. India continues to position itself as net exporter of rPET cargoes,  mainly bound to long-haul buyers in the Americas and in Europe. India’s aggressive expansion of rPET materials have posed competition to other Asian producers, particularly those in southeast Asia. In the toluene di-isocyanate (TDI) and ethanolamines markets, market sentiment is mixed. “Import and domestic prices for India TDI are unchanged from last week, but sentiment is mixed due to positive demand versus the weak rupee/US dollar rate,” a market player said. TDI is primarily used in the production of flexible polyurethane foams, which are widely used in furniture, bedding, and automotive seating. Meanwhile, after several months of decline, ethanolamines’ domestic prices moved higher, with players attributing the sudden rebound on the steep devaluation of the rupee, while demand was stable. For ethylene vinyl acetate (EVA) and acetone, import and domestic prices have spiked while demand was stable. EVA restocking momentum and discussions have been weighed down by the falling rupee due to higher cost of imports, market players said. “I have not booked yet because of the currency depreciation; import costs have gone up so it has really impacted importers… we’ll wait for negotiations with suppliers,” said a distributor. For acetone, fresh import demand is being hampered by the weak rupee amid a prevailing supply surplus in the Indian domestic market. US DOLLAR TO REMAIN STRONG The US dollar remains strong on better-than-expected job growth in the world’s largest economy, while the unemployment rate fell to 4.1%, reducing the chances of interest rate cuts by the Federal Reserve in February. A weaker currency fuels inflation as it raises the cost of imported goods. “The RBI intervened extensively in the FX market last year but the appointment of a new central bank governor last month has raised market expectations of a less active intervention approach to smooth the rupee’s volatility,” Netherlands-based banking and financial service firm ING said in a note on 13 January. “The recent equity market correction, foreign institutional investor (FII) outflows and overvaluation of the Indian rupee suggest that the rupee will continue to face downward pressure in the near term,” ING added. DEC INFLATION EASES; NOV INDUSTRIAL OUTPUT UP 5% India’s inflation rate eased to a four-month low of 5.22% in December from 5.48% in the previous month, continuing its decline from 6.21% recorded in October, official data showed. The December figure was within the 2.0% to 6.0% tolerance band set by the Reserve Bank of India (RBI). Easing food prices had some analysts predicting a possible cut in RBI’s repurchase rate as early as February, but the weakness of the rupee could delay adoption of a looser monetary policy. “We maintain our base case for RBI to begin monetary policy easing via a 25 bps points reduction to the repo rate in the upcoming Feb 2025 … meeting,” Singapore-based UOB Global Economics & Markets Research analysts said in a 14 January macro note. Meanwhile, India’s factory output in November, as measured through the Index of Industrial Production (IIP), rose 5.2% year on year driven by growth in manufacturing activity and power generation. Manufacturing output growth in November accelerated to 5.8% year on year from 1.3% in the same period last year. In April to November 2025, industrial output posted a slower year-on-year growth of 4.1% from 6.5% in the previous corresponding period. India, which is a giant emerging market in Asia, is expected to post a slower GDP growth of 6.6% in the fiscal year ending March 2024, down from 7.2% in the previous year, based on RBI’s projections. Nonetheless, India is still predicted to be the fastest-growing country in Asia, according to ING, which forecasts 6.8% growth for India for the current fiscal year. Focus article by Jonathan Yee Additional reporting by Helen Lee, Clive Ong, Shannen Ng, Veena Pathare, Nadim Salamoun and Arianne Perez Thumbnail image: Indian rupee notes – 5 January 2025 (Firdous Nazir/NurPhoto/Shutterstock)

HOUSTON (ICIS)–HB Fuller plans to shut down nearly one-third of its plants globally and drastically reduce the number of warehouses it has in North America, the US-based adhesives producer said on Wednesday. When HB Fuller completes the shutdowns in its fiscal year of 2030, it will have 55 plants globally, down from 82, the company said. By the end of 2027, HB Fuller will have 10 warehouses in North America, down from 55. HB Fuller expects to cut annual pre-tax costs by $75 million/year by the time it completes the shutdowns. The company expects to spend $150 million over the next five years to shut down the sites. “Our manufacturing footprint consolidation, coupled with our planning and logistics reorganization, are important steps in our strategic plan to achieve an EBITDA margin consistently greater than 20%,” said Celeste Mastin, CEO. “These actions will not only reduce costs through improved capacity utilization, they will also enable us to better serve our customers and reduce future capital expenditure requirements.” As an adhesives producer, HB Fuller’s raw materials include tackifying resins, polymers, synthetic rubber, plasticizers, and vinyl acetate monomer (VAM).

HOUSTON (ICIS)–A ceasefire and hostage release agreement between Israel and Hamas announced on Wednesday is unlikely to have much of an impact on crude oil and chemical markets, though it could lower the geopolitical premium. The agreement was reached through diplomacy by the US, Egypt, and Qatar, and will be implemented for the most part by the incoming administration of President-elect Donald Trump, US President Joe Biden said in remarks from the White House. ICIS feedstocks analyst Barin Wise said he does not expect that the deal will have a meaningful impact on crude oil markets because the affected region is not oil producing. “This may trim the geopolitical premium in crude since it eliminates a hot spot in the Middle East,” Wise said. “However, if we look at the market today, crude is up big on other factors, more than offsetting any effect the ceasefire may have.” Crude prices surged on Wednesday largely in response to fresh US sanctions on Russia, which the International Energy Agency said could crimp global supply. Futures prices for WTI settled on Tuesday at $77.50/bbl and rose to $79.51/bbl before midday. WTI settled at $80.04/bbl on Wednesday. IMPACT ON SUEZ CANAL TRAFFIC The agreement could help with capacity constraints in commercial shipping as container ships have been avoiding the Suez Canal for more than a year because of attacks by Houthi rebels on commercial vessels. Ships have been forced to use the much longer route around the Cape of Good Hope, which tightened shipping capacity and pushed costs for shipping containers higher. The reopening of the Suez Canal would have the greatest impact on normalizing the Asia-to-Europe container shipping route, but would also affect Asia-US rates, as shipping capacity would surge once carriers were able to access the shorter route. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and 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. Thumbnail image shows a crude oil tanker. Photo by Shutterstock

LONDON (ICIS)–In December 2024, the European bioplastics industry met in Berlin at the European Bioplastics Conference (EBC) to discuss innovations, barriers to growth and the future outlook for production capacity, demand and changes in legislation. ICIS Recycling Analyst Alexandra Tomczyk attended the conference and updates us on the current state of play for the bioplastics market. Some of the key takeaways included: Global capacities are set to grow rapidly in the next 5 years It’s unclear how the rise of bioplastic packaging will impact the goals set in Packaging and Packaging Waste Regulations Bioplastics are only one of a range of tools needed to improve the sustainability of plastics