Germany’s 2.5GW offshore wind auction failed to attract any bids Market participants believe this failure could jeopardise Germany’s target of 30GW offshore wind by 2030 Industry urges government to reform auction design with support of two-way CFDs LONDON (ICIS)– For the first time, a German offshore wind tender failed to attract any bids. Now market participants are warning this could lead to reduced volumes in future offshore wind tenders, potentially impacting capacity targets for 2030. On 6 August, the German Federal Network Agency (BNetzA) announced no bids were received for two of its offshore wind sites in the North Sea, totalling 2.5GW of capacity. The tender was for the investigated areas of N-10.1 and N-10.2, with volumes of 2,000MW and 500MW and planned commissioning dates of 2031 and 2030, respectively. THREAT FOR FUTURE OFFSHORE WIND CAPACITY One German power trader told ICIS that as a result of the failed auction, volumes for future offshore wind tenders could possibly be reduced. A German power analyst shared a similar view, noting that the outcome could help prompt a revision of Germany’s 2030 offshore targets to be lowered in this year’s energy monitoring report, expected at the end of August 2025. “I assume there will be a reduction in capacity. Nevertheless, a timely revision is needed in order to achieve even lower targets,” the analyst said. ICIS long-term power analytics currently projects installed German offshore wind capacity to reach 25GW by 2030, 5GW short of the 2030 national target. The same analyst explained that lower offshore wind targets would generally have a pronounced bullish impact on the far end of the curve, but added that a downward correction of projected electricity demand for 2030 would almost neutralise the effect. A weak industrial demand and slow growth in e-mobility and heat pumps could potentially deteriorate demand forecasts for the coming years. On 7 August, ICIS assessed the German Baseload Cal ’27, Cal ’28 and Cal ’29 power contracts at €80.975/MWh, €73.100/MWh and €71.275/MWh, respectively. CALLS FOR AUCTION DESIGN REFORM In a response to request for information, BNetzA told ICIS it had “no information on motivations that caused potential bidders to refrain from submitting bids,” while the German Federal Ministry for Economic Affairs and Energy (BMWE) stated it was reviewing the outcome and would engage with stakeholders. Although no official reasons have been given, a spokesperson from the German Federal Association for Offshore Wind Energy (BWO) told ICIS that key factors included: excessive risk exposure from permitting uncertainty, rising costs and grid delays, the absence of a revenue stabilization mechanism like Contracts for Difference (CFDs), and misalignment between tender schedule and long lead times of offshore projects. “The postponed auction is, of course, a disaster for offshore wind power, but it can still be seen as a predictable failure,” said the German power analyst. The same analyst acknowledged that economic factors and technical issues in the tender areas likely contributed to the auction results, but highlighted that the auction design might have played a more significant part, noting “the UK has shown that potential investors are ready to step in if the auction system is right.” Nonetheless, the same source noted CFDs also have problems and should not be viewed as a sole solution. Germany’s offshore wind tenders currently use a negative bidding model, while the UK uses two-way CFDs – a model which offshore industry experts have previously said would help de-risk projects and provide a reliable revenue stream for offshore wind in Germany. Although the UK has seen some success for offshore wind in CFD auctions, with 3.4GW awarded to new offshore wind projects in the most recent auction held in 2024, the UK has introduced reforms to the scheme ahead of the seventh auction round. On the same day of the announcement, lobby groups such as Wind Europe and the BWO urged the German government to reform its auction design, stressing the need for a reliable CFD system. Denmark, which similarly failed to attract bids for its 3GW offshore wind tender in December 2024 and also used negative bidding model, recently announced it would re-tender the capacity using two-way CFDs.

BARCELONA (ICIS)–Rising overcapacity, AI and protectionism may drive a swift transition in chemical production and markets over the next 5-10 years. Commodity chemicals may be produced mainly by large state-owned enterprises Smaller, privately-owned companies may switch to high value composites, specialties, low-carbon chemicals High-cost regions such as Europe could protect their essential commodity chemicals production Protective measures need to be taken in next 3-6 months to rescue EU commodity chemicals A lot more commodity capacity closures required to keep operating rates healthy AI will have a massive impact on chemical companies and markets AI will enable us to navigate and analyze increasingly chaotic markets AI could drive job losses, disrupt economies Climate change will alter seasonal and geographic demand patterns Electronics, property, auto markets are depressed Q2 chemicals results are very poor in all regions In this Think Tank podcast, Will Beacham interviews John Richardson from the ICIS market development team, ICIS Insight Editor Tom Brown and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson’s ICIS blogs.

LONDON (ICIS)–Senior Editor for Recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Drops in FD NWE bale, flake and food-grade pellet prices Eastern Europe colourless, blue flake down UK flake rolls over while southern Europe discussions delayed due to holidays

SINGAPORE (ICIS)–LG Chem swung to a second-quarter net loss year on year to won (W) 112 billion ($80.8 million), amid soft demand caused by US tariffs and Middle East instability, the South Korean producer said on 7 August. in Korean won (W) billion Q2 2025 Q2 2024 % Change Sales 11,418 12,242 -6.7 Operating profit 477 392 21.5 EBITDA 1,715 1,549 10.7 Net income -112 60 – Sales in LG Chem’s petrochemicals division fell 5.7% year on year to W4.7 trillion in the second quarter, while recording an operating loss of W90.4 billion amid buying hesitation and “unfavorable foreign-exchange effects”, the company said. “In the third quarter, the company aims to improve profitability through the normalization of new capacity additions for key products in North America and Asia and ongoing cost‑reduction initiatives,” said LG Chem in a statement. Overall demand is expected to remain “subdued” in the third quarter despite US tariff uncertainties having been resolved, as a 15% tariff on South Korean exports takes effect. LG Energy Solution’s Q2 operating profit turned positive to W492 billion, driven by an improved product mix from increased North American production and cost reduction efforts. LG Chem holds a controlling 81.8% stake in LG Energy Solution, the leading car battery maker in the country that supplies to electric vehicle majors such as Tesla. ($1= W1,387)

HOUSTON (ICIS)–The 2025 Atlantic hurricane season is likely to be above normal, but slightly less so than its initial prediction, the National Oceanic and Atmospheric Administration (NOAA) said on Thursday in an update to its previous forecast. NOAA still anticipates 13-18 named storms, of which 5-9 will become hurricanes, and 2-5 of those will be major storms, as shown in the following graphic. Source: NOAA NOAA’s forecast in May was for 13-19 named storms, 6-10 hurricanes and 3-5 major hurricanes. The likelihood of above-normal activity is 50%, a 35% chance of a near-normal season, and a 15% chance of a below-normal season. “As the 2025 Atlantic Hurricane Season enters its historical peak, atmospheric and oceanic conditions continue to favor an above-normal season as NOAA first predicted in May,” NOAA said. The adjustments are for the entire season, which runs through 30 November, and include the four named storms that have already formed. Yesterday, researchers at Colorado State University’s (CSU) Weather and Climate Research department also maintained their prediction, with slight adjustments to the downside. Hurricanes directly affect the chemical industry because plants and refineries shut down in preparation for the storms, and they sometimes remain down because of damage. Power outages can last for days or weeks. Hurricanes shut down ports, railroads and highways, which can prevent operating plants from receiving feedstock or shipping out products. Most US petrochemical plants and refineries are on the Gulf Coast states of Texas and Louisiana, making them prone to hurricanes. Other plants and refineries are scattered farther east in the states of Mississippi, Alabama, and Florida – a peninsula that is also a hub for phosphate production and fertilizer logistics. There is currently one named storm in the north Atlantic, Dexter, and two low pressure areas, none of which are expected to make landfall.

LONDON (ICIS)–Business sentiment in Germany’s chemical industry “significantly deteriorated” in July, from June, according to the latest survey by Munich-based research group ifo on Thursday. The weak industrial economy was weighing on demand for chemical products, both in Germany and abroad, ifo said. At the same time, the US tariffs on chemicals and pharmaceuticals were “significantly damaging” German companies’ US business, ifo said. The backlog of orders in the chemical industry is now at its lowest level since the financial crisis in 2009, ifo said. Meanwhile, companies were planning further job cuts, the group said. The ifo Business Climate Index for the chemical industry dropped to -19.2 points in July, from -9.5 in June. COMPANIES LOWER SALES OUTLOOKS Also on Thursday, Henkel and SGL Carbon announced that they lowered the outlooks for 2025 sales. Henkel now expects organic sales growth of 1.0-2.0%, down from its previous outlook of 1.5-3.5% growth. The updated outlook took into account, “the currently foreseeable effects of the global tariff agreements at this point in time and broadly correlates with current market expectations for Henkel’s business development over the course of the year”, said CEO Carsten Knobel. Henkel’s 2024 sales were €21.6 billion. SGL Carbon said that it expects full-year 2025 sales to decline by 10-15%, from 2024 sales of €1.026 billion. SGL’s previous outlook was for a 10% decline. “Increasing trade barriers, especially due to US tariff policy, are having a negative impact on the business development of our customers and sales markets,” SGL said. German chemical producers’ trade group VCI expects a 2.0% decline in the country’s chemical production (excluding pharmaceuticals) in 2025. Please also visit: US tariffs, policy – impact on chemicals and energy

HOUSTON (ICIS)–The US is relying increasingly on tariffs to influence the policies of other countries, which is injecting more uncertainty into chemical markets. The US is proposing tariffs of 25% on shipments from India in response to that country’s imports of Russian oil and petroleum products. These could take effect on 27 August. The US imposed tariffs of 40% on Brazilian imports in response to that country’s trial of a former president and its policies on digital speech. More tariffs could follow a section 301 investigation into Brazilian policies. The US said Canada’s intent to recognize Palestine as a state would make it difficult to reach a trade deal. POLITICAL TARIFFS INJECT MORE UNCERTAINTYThe latest proposals accelerate a trend that began at the start of the year, when the US imposed tariffs on imports from Canada, China and Mexico after accusing them of doing too little to control illegal immigration and drug smuggling. The US threatened to impose tariffs of 25% on imports from Colombia if that country did not accept US deportations of immigrants. The debate around a dedicated Palestinian state and the Russian-Ukrainian war have now joined the list of policies that will invite tariffs from the US. In the case of Russian oil, the US is imposing tariffs to compel a peace agreement. India was caught in the crossfire because it imports crude oil from Russia. More countries could become targets because the US is targeting Russian exports of petroleum products as well as crude oil. Russia is a significant exporter of diesel and gasoil, and Turkey, China and Brazil import large amounts from the country, according to the Centre for Research on Energy and Clean Air (CREA). It is unclear if the US will expand the tariffs to include other major exports from Russia, such as weapons and fertilizer. The US threat to Canada could presage potential tariffs on imports from other countries that are considering Palestinian statehood. The tariffs on Brazilian imports and the pending section 301 investigation point to more policies that could attract the ire of the US. The following lists the policies the US cited in its announcements of Brazilian tariffs and investigations: Regulations on digital speech that the US considers to be censorship Judicial trials against elected officials that the US considers to be political persecution Imposing what the US described as lower preferential tariffs on imports from “certain globally competitive trade partners” Failure to enforce anti-corruption and transparency measures Enforcement of intellectual property rights Deforestation TRADE UNCERTAINTY HAMMERED CHEM EARNINGSThe problem is not the merit of US aims but the methods it is using to achieve those goals. Sudden changes in trade policy make it difficult for companies to forecast demand and trade flows. During the recent earnings season, chemical companies said the uncertainty surrounding US trade policy has discouraged businesses and consumers from making purchases and business decisions. Dow said that US exports of polyethylene (PE) evaporated in April after the US announced its reciprocal tariff rates. Westlake, Tronox, LyondellBasell, Huntsman, Eastman and Arkema all mentioned uncertainty surrounding US tariffs and trade policies. Political tariffs are injecting more uncertainty into markets, because chemical companies do not know which countries and which policies will trigger tariffs from the US. TRADE UNCERTAINTY TO CONTINUEUS trade policy remains in flux. It is delaying its proposed tariffs on Mexican imports for 90 days. The legal basis of the most of the national tariffs is being challenged in court. If the US loses the case, then it could be forced to rescind the national tariffs that it imposed under the International Emergency Economic Powers Act (IEEPA). These cover the reciprocal tariffs, the immigration tariffs, the drug-smuggling tariffs, the Russian oil tariffs and the Brazilian tariffs. Meanwhile, the US is continuing a separate track of imposing tariffs on product families under Section 232. These would prove more durable because they are not subject to the litigation. These tariffs are proceeded by a lengthy investigation, but that does not insulate the process from surprises. When the US announced its investigation into copper, markets assumed that it would be followed by tariffs on refined copper. Instead, the US imposed 50% tariffs on imports of semi-finished copper products and intensive copper derivative products. However, the US could expand the tariffs to include other copper products. After 30 June, the president could consider universal tariffs on refined copper that would start at 15% on 1 January 2027 and rise to 30% on 1 January 2028. The following table summarizes the pending section 232 investigations and the deadlines to complete them. Product Start of investigation Report Due Timber, lumber 10-Mar 5-Dec Semiconductors 1-Apr 27-Dec Pharmaceuticals 1-Apr 27-Dec Medium duty trucks 22-Apr 17-Jan Heavy duty trucks 22-Apr 17-Jan Critical minerals 22-Apr 17-Jan Commercial aircraft 1-May 26-Jan Jet engines 1-May 26-Jan Polysilicon 1-Jul 28-Mar Unmanned aircraft systems 1-Jul 28-Mar Source: Bureau of Industry and Security The US has also broadened and increased tariffs on previously completed investigations, as shown in the following table. Product Tariff Automobiles 25% Auto parts 25% Steel 50% Aluminium 50% Copper 50% Source: President These tariffs have exceptions based on the country of origin and their portion of domestically produced content. Insight by Al Greenwood

HOUSTON (ICIS)–Researchers at Colorado State University’s (CSU) Weather and Climate Research department maintained their prediction of an above-average Atlantic hurricane season as the tropical Atlantic has warmed faster than normal over the past few weeks. The CSU team’s original prediction of 17 named storms during the Atlantic hurricane season, which began on 1 June and runs through 30 November, has been adjusted to 16 named storms. Of those 16 storms, researchers forecast eight to become hurricanes and three to reach major hurricane strength of Category 3 or higher. The original forecast called for nine storms to reach hurricane strength and four of those to be Category 3 storms or higher. The adjusted forecast includes the three storms that have already formed: Andrea, Barry and Chantal. Hurricanes are rated using the Saffir-Simpson Hurricane Wind Scale, numbered from 1 to 5, based on a hurricane’s maximum sustained wind speeds, with a Category 5 storm being the strongest. Saffir-Simpson Hurricane Wind Scale Category Wind speed 1 74-95 miles/hour 2 96-110 miles/hour 3 111-129 miles/hour 4 130-156 miles/hour 5 157+ miles/hour “So far, the 2025 hurricane season is exhibiting characteristics similar to 2001, 2008, 2011 and 2021,” Phil Klotzbach, a senior research scientist in the Department of Atmospheric Science at CSU and lead author of the report, said. “Our analog seasons generally had somewhat above-average Atlantic hurricane activity.” The team bases its forecasts on two statistical models, as well as four models that simulate recent history and predictions of the state of the atmosphere during the coming hurricane season. CSU researchers listed the following probabilities of major hurricanes making landfall in 2025: 48% for the entire US coastline (average from 1880–2020 is 43%). 25% for the US East Coast, including the Florida peninsula (average from 1880–2020 is 21%). 31% for the Gulf Coast from the Florida panhandle westward to Brownsville, Texas (average from 1880–2020 is 27%). 53% for the Caribbean (average from 1880–2020 is 47%). Hurricanes directly affect the chemical industry because plants and refineries shut down in preparation for the storms, and they sometimes remain down because of damage. Power outages can last for days or weeks. Hurricanes shut down ports, railroads and highways, which can prevent operating plants from receiving feedstock or shipping out products. Most US petrochemical plants and refineries are on the Gulf Coast states of Texas and Louisiana, making them prone to hurricanes. Other plants and refineries are scattered farther east in the states of Mississippi, Alabama, and Florida – a peninsula that is also a hub for phosphate production and fertilizer logistics.

HOUSTON (ICIS)–The US plans to impose an additional tariff of 25% on shipments from Indian in response to that country’s imports of Russian crude oil and petroleum products, the government said on Wednesday. The US is considering similar tariffs on imports from other countries that import Russian crude oil or petroleum products. The additional tariffs on Indian imports will take effect on 27 August, and they would raise the duty on Indian imports to 50% once the earlier tariffs are included, the government said. The US is using the tariffs as part of a strategy to compel Russia to reach an agreement with Ukraine over those countries’ war between each other. The US alleges that Indian imports of Russian oil are undermining its diplomacy and sustaining Russia’s war effort. The proposed tariffs would not apply to the sectoral tariffs that the US has imposed on product families such as steel and aluminium under section 232. The US could modify the duties if India imposes retaliatory tariffs, if India addresses US concerns over petroleum imports or if Russia addresses US concerns over the war. The US made no mention of Russian shipments of fertilizer. Such shipments are significant, and their exclusion indicates that the US may not target them as part of its efforts to end the war. In a statement, India alleged that the proposed tariffs are unfair, unjustified and unreasonable. “We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” the country’s Ministry of External Affairs said in a statement. “India will take all actions necessary to protect its national interests.” The following summarizes other details of the proposed tariffs on Indian imports. It excludes many coal-based chemicals and some polymers listed in Annex II, which was published in April. It covers Russian crude oil or “petroleum products extracted, refined or exported from the Russian Federation, regardless of the nationality of the entity involved in the production or sale of such crude oil or petroleum products”. It covers indirect imports, which “includes purchasing Russian Federation oil through intermediaries or third countries where the origin of the oil can reasonably be traced to Russia”. The tariffs will take place “21 days after the date of this order, except for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the US before 12:01 am eastern daylight time 21 days after the date of this order; and (2) are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 am eastern daylight time on 17 September 2025”. Thumbnail image: Containers, which feature prominently in international shipping (Image source: Shutterstock)