Serbia eyes new gas interconnectors with Romania and North Macedonia by 2030 This could ensure domestic supply, serve as a transit route to Europe Srbijagas and Russia’s Gazprom in talks for a new long-term gas deal WARSAW (ICIS)– Serbia plans to build gas interconnectors with Romania and North Macedonia, diversifying its own gas needs and supporting supply security in the Balkan region over the coming years, as indicated by the country’s energy strategy released on 10 June. Balkan gas traders told ICIS that Serbia is expected to receive gas supplies from two routes: Romania’s Neptune Deep field and Azerbaijan. “Having three different gas supply options will guarantee Serbia’s energy security and diversification,” a local trader said. The government energy strategy released on 10 June said the country aims to build a 1.6 billion cubic meters (bcm)/year pipeline interconnection with Romania and 1.2bcm/year with North Macedonia. Both projects should be operational by 2030 as the government seeks private funding to aid their development. Serbia seeks to establish new supply routes: one from Greece’s new Alexandroupolis LNG terminal, where Serbian state supplier Srbijagas has booked 300 million cubic meters of capacity per year and a second from Romania’s Neptune Deep gas field. The Romanian field is expected to have 100bcm in reserves with the first gas output expected in 2027. “The North Macedonia route is expected to boost Azeri flows to Serbia and the region,” a second trader added. Back in November 2023, Srbijagas and Azerbaijan’s SOCAR signed a one-year gas supply contract of up to 400mcm supplied in 2024 with an option for 1bcm/year volumes in the following years. This winter Azeri gas flowed via the 1.8bcm/year Serbia-Bulgaria interconnector. GAZPROM TALKS Serbian gas supply will remain uninterrupted in the summer months thanks to the signing of a short-term gas deal with Russian producer Gazprom, the chief executive of Serbia’s incumbent Srbijagas, Dusan Bajatovic, said in a briefing on 27 May. Srbijagas’s current three-year deal for 2.2bcm/year  of supply expired on 31 May and the two firms signed an agreement covering the period 1 June- 31 September 2025 for 6 million cubic meters/day. Srbijagas and Gazprom are now negotiating a new long-term supply contract.

SINGAPORE (ICIS)–As China steps up efforts to meet its dual carbon targets, hydrogen is becoming a practical and strategic tool to cut emissions from the country’s highly carbon-intensive cement industry. Cement industry under carbon pressure From hydrogen as substitute to carbon utilization for new value Five-year window open for low-carbon pilots Cement accounts for around 13-14% of China’s total carbon dioxide (CO2) emissions, ranking it the third-largest industrial source after power and steel. Facing mounting pressure from both international carbon regulations and domestic policy, China can tap hydrogen as a promising route toward meaningful emissions reductions. China’s cement industry is estimated to have emitted about 1.20 billion tonnes of CO2 in 2023, down for a third straight year. Emissions stood at 1.23 billion tonnes of CO2 in 2020, when China’s cement clinker output peaked at 1.58 billion tonnes, and cement output hit 2.38 billion tonnes, according to China Building Materials Federation. Around 60% of this comes from the chemical reaction when limestone is heated to make clinker, a process that is difficult to change in the short term due to raw material constraints. Another 35% comes from fossil fuels combustion to generate heat for clinker production, which is a key substitution target. As of March 2025, China’s national ETS (Emissions Trading Scheme) expanded to include cement, alongside steel and aluminum, hence, the cement sector is also now fully exposed to carbon pricing. However, despite policy urgency, due to technical and equipment retrofitting complexities, the sector has moved slowly. The next five years will represent a pivotal window to scale pilot projects and validate decarbonization pathways. TWO ROUTES: CLEANER COMBUSTION & CARBON USE Hydrogen can help reduce emissions from cement mainly in two ways: fossil fuel substitution and carbon utilization. Fuel substitution with hydrogen is the immediate decarbonization leverage. Hydrogen can directly replace coal or gas in kilns. Its high calorific value and zero-carbon combustion profile make it an ideal fuel. However, because of its weak flame radiation and explosion risk, hydrogen is usually mixed with other fuels in current tests. European players lead the change: Cemex, a leading global building materials manufacturer, completed hydrogen retrofits at all its European cement plants by 2020, targeting a 5% CO2 reduction by 2030. Heidelberg Materials, another cement giant actively exploring hydrogen applications, achieved 100% net-zero fuel operation at its UK Ribblesdale plant in 2021, using a mix of 39% hydrogen, 12% meat and bone meal, and 49% glycerin. Another option is to combine CO2 capture from kiln exhausts with renewable hydrogen to synthesize e-methanol or e-methane. E-methanol and e-methane are synthetic fuels made by combining captured CO2 with renewable hydrogen using renewable electricity. LafargeHolcim, as one of the largest cement producers in the world, has multiple hydrogen decarbonisation projects across Europe. It is leading with its HyScale100 project in Germany, which aims to install electrolyzers at its Heide refinery, and combine electrolyzed hydrogen with CO2 from its Lägerdorf plant to produce e-methanol starting 2026. This model not only reduces emissions but also builds links across industries to create a circular carbon economy. CHINA: FROM POLICY PUSH TO PILOT PROJECTS Policy support is gaining momentum in China. The 2024 Special Action Plan for Cement Energy Saving and Carbon Reduction aims to raise alternative fuel use to 10% by 2025, explicitly naming hydrogen. The Ministry of Industry and Information Technology (MIIT) sets out a 2030 goal to commercialize low-carbon kilns using hydrogen. Amid the decarbonization policy signals, China’s major cement producers are also stepping up: The Beijing Building Materials Academy of Scientific Research (BBMA) under Beijing Building Materials Group (BBMG) completed China’s first industrial trial in December 2024 using >70% hydrogen in calcination. Anhui Conch Cement Company used 5% hydrogen in pre-calciners, cutting 0.01 tonnes of CO2 per tonne of clinker, albeit with an added cost of yuan (CNY) 32.7/tonne. Tangshan Jidong Cement is building a full hydrogen supply chain in partnership with China National Chemical Engineering. Hydrogen is also being produced on-site using waste heat from clinker kilns to power electrolysis – a promising approach to localize supply and enhance energy efficiency. CHALLENGES STILL AHEAD Despite policy and pilot momentum, commercialization hydrogen use in China’s cement sector still faces barriers. Renewable hydrogen costs are too high for wide use. Studies suggest it would need to fall below $0.37/kg to be cost-effective in cement under carbon trading. Hydrogen is hard to store and transport, and its flame instability requires kiln retrofits and safety systems. China also lacks unified national technical standards for using hydrogen in cement, slowing adoption. Hydrogen may not yet be ready for mass rollout, but it is clearly part of the future of cement in China. As production costs fall, carbon markets grow, and hydrogen technologies mature, hydrogen could become a real driver of change in one of China’s hardest-to-decarbonize sectors. Insight article by Patricia Tao

SINGAPORE (ICIS)–China’s exports to the US are expected to rebound in June as exporters ramp up frontloading efforts before the 90-day trade truce between the two global economic superpowers expires in August. China May exports to US shrink 34.5% year on year China’s imports from the US fall by 18.6% US-bound freight rates from China remain elevated Despite the tariff rollback in mid-May, US-bound exports fell by 34.5% year on year in May to $28.8 billion, a sharper decline than the 20.9% fall recorded in April, official data showed on 9 June. “The boost from the US tariff rollback should be more significant in June, as it might take a couple of weeks to restore the logistics network that was disrupted by what had nearly become a US-China trade embargo,” Japan’s Nomura Global Markets Research said in note. “This could be because, as bilateral trade collapsed in April amid exceptionally high tariffs imposed by the two countries, many container ships for US-China shipping lanes were re-routed to other lanes.” A 90-day trade truce between China and the US was agreed on 12 May but ongoing negotiations face threats from slow rare-earth shipment approvals. US tariffs on Chinese goods were at 30% from 14 May to 12 August, while China levies 10% duties on US imports. The sharp recovery in container bookings and freight rates also indicate an incoming rebound in US-bound exports in June, according to Nomura. “The temporary trade truce will provide room for exports to strengthen in June-August before the momentum reverses with payback from the strong frontloading to-date,” said Ho Woei Chen, an economist at Singapore-based UOB Global Economics & Markets Research. China’s imports from the US fell by 18.6% year on year to $10.8 billion in May, a steeper decline than the 13.9% fall recorded in April, “perhaps due to similar issues with near-term shipping capacity”, Nomura noted. As a result, the US share in China’s total exports fell further to 9.1% in May from 14.7% for the whole of 2024. Following substantial export contraction and a less severe import decline, China’s trade surplus with the US decreased further to $18.0 billion in May from $20.5 billion in April. OVERALL EXPORT GROWTH SLOWS China’s overall exports fell by 4.8% year on year to $316.1 billion in May, slowing from the 8.1% growth in April. Imports fell by a steeper rate of 3.4% year on year to $212.9 billion in May, from the 0.2% contraction in April. China’s overall trade surplus increased 25% year on year to $103.2 billion in May. Export growth to its largest market, ASEAN, which is also widely viewed as a major rerouting pathway for Chinas’ US-bound shipments, slowed to 14.8% year on year in May from 21.1% in April. This was mainly a result of base effects, as growth of exports to ASEAN surged to 24.8% year on year in May last year from 13.0% a month earlier, Nomura noted. Among ASEAN countries, Vietnam and the Philippines took in higher volumes of Chinese exports in May. China’s exports to the EU, Canada and Australia improved in May, as exporters shifted to developed markets other than the US. “The acceleration of exports to other economies has helped China’s exports remain relatively buoyant in the face of the trade war,” Lynn Song, chief economist for Greater China at Dutch banking and financial information services firm ING said in a note. EXPORTS IN MAJOR CATEGORIES MIXED IN MAY China’s ships and semiconductors registered solid double-digit export growth, while shipments of motor vehicles and auto parts also picked up. Demand for chips, in particular, continued to benefit from the pause in US tariffs on technology products such as smartphones, computers, and semiconductors. However, exports of rare earth materials shrunk sharply, and products such as handbags, footwear, toys, and furniture declined due to a drop in US demand. US-CHINA TRADE TALKS RESUME Following a rapid re-escalation in late May, trade tensions between the US and China eased on 5 June following a phone call between US President Donald Trump and China President Xi Jinping. It set the stage for a new round of dialogue between their top trade officials in London this week. Ahead of the trade talks, China reportedly approved temporary export licenses to rare earth suppliers of the top three US automakers, as Trump claimed Xi agreed to restart the flow of rare earth minerals. “As US and China resumed trade negotiations this week, China’s Commerce Ministry confirmed that it has granted approval to some applications for the export of rare earths which will likely lead to a recovery in rare earth exports in June,” UOB’s Ho said. “Following the Phase 1 trade deal in 2020, we think an eventual trade deal this time would likely commit China to reduce its trade surplus with the US by increasing its US imports,” she said. While the baseline tariff rate for China is likely to be raised, the two countries may find common ground on the Trump administration’s concerns regarding China’s involvement in the fentanyl trade, according to Ho. “This could potentially lead to a removal of the 20% fentanyl-related tariff, in the optimistic scenario. Thus, it is conceivable that the “final” US tariff rate on imports from China may settle between 30% to 60%.” CONTAINER FREIGHT RATES ON THE RISE US-bound freight rates have remained elevated, while growth in weekly container throughput dropped to 1.3% year on year on 8 June from 10.2% a week earlier, which “dims the outlook of China’s overall exports”, Nomura said. The China Containerized Freight Index (CCFI), which tracks average shipping prices from China’s 10 major ports, rose 3.3% week on week as of 6 June, it said. This included a 1.6% increase to Europe and a 4.1% rise to the US East Coast. In contrast, the Ningbo Container Freight Index (NCFI), tracking outbound container shipping costs, eased 0.4% week on week on 6 June, according to Nomura. Specifically, it saw a 9.1% decline to the US West Coast and remained unchanged for the US East Coast during the same period. Internationally, the Freightos Baltic Index (FBX), reflecting spot rates for 40-foot containers across 12 global trade lanes, surged by 52.3% week on week on 6June, “indicating a significant jump in global shipping costs”, Nomura said. Focus article by Nurluqman Suratman Please also visit US tariffs, policy – impact on chemicals and energy Thumbnail image: Containers pile up at Longtan Container Terminal of Nanjing Port in Nanjing City, Jiangsu Province, China, on 9 June 2025. (Costfoto/NurPhoto/Shutterstock)

SAO PAULO (ICIS)–Mexico is well-positioned to benefit from the global trade reorganization started by the US as it takes a stronger stance against China and replicate the resounding success of the 1990s, when the first North America free trade agreement (FTA) NAFTA was signed, the president of the country’s chemicals trade group ANIQ said. José Carlos Pons, who is also the CFO at Mexican chemicals producer Alpek, said Mexico, the wider North America and the world at large still face some persistent Chinese overcapacity of industrial goods which are flooding markets, but said North America together would face that threat in a better position. Pons has just started his tenure as ANIQ president at a time when the trade group is navigating shifts in trade policies as well as domestic issues such as the potential for – or lack of – nearshoring as well as policy issues in which companies fully disagree with the left-leaning government of Claudia Sheinbaum. Pons did not want to enter into much detail about the latter, however, because as he explained in the first part of this interview, ANIQ’s lobbying strategy is to now go “hand in hand” with the government. According to him, Sheinbaum is honestly trying to fix the beleaguered, state-owned energy major Pemex, which would at the same time greatly help chemicals raw material supply reliability. NAFTA, USMCA, SOMETHING ELSE? Soon after taking office in January, US President Donald Trump imposed hefty import tariffs on Mexico and Canada because, he said, the two countries should do more on migration and fentanyl trade – a powerful drug which has caused havoc across the US. However, when the tariffs were about to kick off, the US announced it was pausing them for one month. It was a timely decision for Mexico: the country is almost completely dependent on the fate of the US economy, as it exports around 80% of its output north of the border. That dependance is what makes Corporate Mexico wary of even contemplating a break-up of the now called USMCA FTA, the successor to NAFTA which Trump negotiated during his first term. Pons is optimistic in all fronts – home front and external front – as a relatively young executive who arrives to the helm of ANIQ in some of the most challenging times for Mexico in the past three decades. “I do feel on the side of the optimists. All this issue of tariffs and economic reorganization of imports and exports in the world – if the US plays a strong role against Asia, as I believe it will end up playing, then what can happen is that Mexico is super well-positioned for greater investments,” said Pons. “Mexico has natural advantages in serving the US market. Today in many of the industries we are a very relevant supplier to the US. We are connected by pipeline, so to speak, to the US. When there is a competitive supply that Mexico has, Mexico remains the most convenient place to source for the US – it is next door.” It has been widely reported that USMCA renegotiations, for which the deadline is 2026, are in full swing and both officials from Mexico and Canada have recently said they are hopeful USMCA will be renegotiated and revived, ultimately making North America stronger versus other big economies. “I think that commercial logic and economic logic will prevail. Trump, if he understands anything very well, it is economic logic and from that point of view I believe that the logic of Canada-US-Mexico integration will stand out. The last renewal of the free trade agreement was positive in general, with no major changes,” said Pons. “In fact, I think we put some order on some of the issues, some of them affecting chemicals, so from that point of view it has been favorable for us. We are understandably focused on the short-term news, but if we take a slightly longer-term view, I think it [current renegotiations] can end up benefitting the region.” Following on with the soft lobbying ANIQ is deploying, he praised the cabinet for keeping a cold head before adversity and having gone through momentous crisis points relatively unscathed. Moreover, Sheinbaum’s popularity ratings are almost unheard of in democracies: around 80% of Mexicans have a positive view of her. “I perceive a Mexican government that is calm, serene, looking more at the long term than the short term, not reacting hastily to attacks, as if taking certain pauses. If you remember, after some tariffs were imposed on Mexico in February, Sheinbaum said the Mexican government would ‘answer in a week’ – they purposefully wanted to give space for conversations to happen,” said Pons. “I think it has been handled well, it has been handled with composure and I think that is just what is needed.” When pressed about domestic policy issues including a judicial reform which has sparked fears among most experts in Mexico and abroad, because it could weaken the rule of law rather than strengthen it, Pons was cautious but conceded companies are concerned: without legal certainty, investments come harder. “One of the important work areas is legal certainty and we are worried as an industry about the change that could occur to legal certainty with this change,” he said. “I think we have to understand exactly the implications of this judicial reform, of the new judges we are going to have.” CHINA FORMIDABLE RISEOn Chinese competition, which has hit chemicals hard as there is oversupply for the main petrochemicals and polymers, Pons did say the scale of overcapacity affecting global markets is huge, unheard of, and conceded there are still many question marks surrounding how this will end – and when. “We have seen that in practically all sectors there is excess capacity. China has been very aggressive. For instance, take polyester textile fibers as an example – if today the whole world closed its production capacity and China maintained its capacity, there would still be 30% excess capacity,” said Pons. He mentioned polyethylene terephthalate (PET), which happens to be one of the main products which Alpek manufactures and he oversees as CFO. “It is no surprise that most countries already have trade protections against China. For example, in one of the businesses I participate in at the company, PET has a 105% antidumping duty [ADD] in the US against China. Mexico just decreed an antidumping duty against PET as well. So, it is very clear that all governments understood that there is an intention that is not commercial, not fair trade, which is what we seek as an industry.” Pons did not think the West at large – or, more specifically, market, democratic economies – had been caught off-guard by the rapid ascent of China in the industrial goods global league. “In fact, what much of the industry I represent has been doing is improving its competitiveness. There are many investments going on. Mexico’s companies are investing $1.5 billion in maintenance and competitiveness. “All those projects and millions of dollars are focused on improving and putting us on par in competitiveness against the Chinese,” said Pons. The first part of this interview was published on 6 June on ICIS news, under the headline “Mexico’s Pemex turnaround key to unlock $50 billion chemicals investments – ANIQ”. Click here to read it.  Front page picture: Facilities operated by Mexico’s polyethylene (PE) producer Braskem Idesa  Source: ICIS Interview article by Jonathan Lopez

SAO PAULO (ICIS)–A Brazilian judge has ordered customs workers to end their nearly seven-month strike after the government argued the industrial action was causing financial harm as goods pile up at ports and customs facilities across 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.