SINGAPORE (ICIS)–Oil prices surged in early Asian trade on Monday, with Brent crude briefly crossing $81/barrel before easing, after the US bombed Iran’s nuclear facilities, raising fears of retaliation from Tehran via striking energy infrastructure in the Middle East or by blocking the Strait of Hormuz. Crude prices in $/barrel Product Latest (as of 01:27 GMT) Previous Change Brent August 78.95 77.01 1.94 WTI August 75.75 73.84 1.91 Both Brent and US WTI futures jumped by more than 3% earlier in the session to $81.40/bbl and $78.40/bbl, respectively, touching five-month highs before giving up some gains. US President Donald Trump on 22 June announced on social media that the US has bombed nuclear sites in Iran in a “very successful military operation”. It remains to be seen how Iran will respond to the unprecedented US strikes. Iran’s foreign minister said on 22 June that the Islamic Republic reserves “all options” to defend its sovereignty. Investors’ focus is now on the Strait of Hormuz, a vital passage for around 20-25% of global oil trade and 20-30% of liquefied natural gas (LNG) supplies. “Moving forward, the degree of potential upside risks to oil prices is dependent on the extent of disruptions to global oil and energy productions and supplies,” Japan-based analysts at MUFG Research said in a note. Thumbnail image: Protest against US President Donald Trump’s decision to bomb Iran, Washington, US – 22 June 2025 (JIM LO SCALZO/EPA-EFE/Shutterstock)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 20 June 2025. Japan’s core inflation rises to two-year high; rate hike pressure persists By Nurluqman Suratman 20-Jun-25 11:58 SINGAPORE (ICIS)–Japan’s core inflation rate climbed to 3.7% in May 2025, marking its highest level since January 2023. This has kept pressure on the Bank of Japan (BOJ) to resume interest rate hikes, official data showed on 20 June. Global PVC market braces for glut as protectionism rises and demand falters By Nurluqman Suratman 19-Jun-25 23:06 SINGAPORE (ICIS)–The global polyvinyl chloride (PVC) market is poised for a significant supply surplus, primarily driven by a surge in Chinese exports and an increasingly protectionist international trade environment, an industry analyst said on Thursday. China acetic acid prices soar on Middle East conflict, plants under review By Jady Ma 19-Jun-25 21:47 SINGAPORE (ICIS)–Methanol prices in China have surged this week, pushing up acetic acid prices in many regions across the country. However, any further upside will be subject to supply. Middle East tonnage tightens amid Israel-Iran conflict By Hwee Hwee Tan 19-Jun-25 13:36 SINGAPORE (ICIS)–Chemical freight is firming up in the Middle East on increasing maritime insurance and bunker costs, as regional tonnage supply tightens amid an ongoing military conflict between Israel and Iran. Japan May chemical exports fall 6%; overall shipments hit by US tariffs By Nurluqman Suratman 18-Jun-25 12:04 SINGAPORE (ICIS)–Japan’s chemical exports in May declined by 5.6% year on year to yen (Y) 928 billion ($6.4 billion), contributing to the first contraction in its overall shipments abroad in eight months which raises the risk of a technical recession in the world’s fourth-biggest economy. INSIGHT: China MEG import supply to tighten further on escalating Iran-Israel conflict By Cindy Qiu 17-Jun-25 11:00 SINGAPORE (ICIS)–On 13 June, Israel launched large-scale airstrikes on multiple regions in Iran. On the same day, Iran began multiple rounds of missile and drone attacks on Israel, sharply escalating the conflict between the two countries. Iran methanol plants shut as conflict with Israel continues By Damini Dabholkar 17-Jun-25 17:06 SINGAPORE (ICIS)–Iran’s methanol industry is facing significant disruption due to the conflict with Israel, leading to the shutdown of several key production facilities. Asia nylon supply tightened by Shenma blast, lifting price outlook By Isaac Tan 16-Jun-25 11:16 SINGAPORE (ICIS)–The nylon market in Asia is poised for near-term price support following an explosion at Shenma Group’s plant in Pingdingshan, which has led to tighter supply and triggered safety checks across the sector.

SAO PAULO (ICIS)–Mexico’s Port of Manzanillo is gradually recovering cargo handling capacity, which currently stands at around 60% of normal levels, according to the port’s authority, after weeks of operational disruptions caused by customs delays. The crisis, however, continues to impact costs and operations for most manufacturing companies, including chemicals, with analysts now expecting the backlog to be cleared in the next four weeks – an improvement from May’s pessimistic forecasts which envisaged the crisis lasting until September. The Pacific coast port, one of Mexico’s largest and the main entry point for imports from China and wider Asia, has struggled since mid-May due to personnel shortages at customs after authorities implemented some redundancies. That was followed, first, by workers’ protests, which caused internal blockades of the port, further creating significant delays in cargo processing, as well as strike action. All in all, Manzanillo was practically idle for several days in May. According to the Mexican Alliance of Transport Organizations, extended 24-hour customs operations and restructured truck appointments have enabled land freight transport to recover to 60% of usual pace. The Manzanillo Port Community implemented staggered entry times for import units, prioritising operations between 03:00 and 12:00 at the Specialized Container Terminal. Contecon Manzanillo, the operator of the facilities – a subsidiary of Manila-headquartered International Container Terminal Services (ICTSI Group) – coordinated with Mexico’s National Customs Agency to extend operations through ICTSI Group continuous shifts from 13-15 June, aimed at reducing wait times and preventing further container accumulation. The container backlog has forced some ships planning to dock at Manzanillo to divert to alternative ports including Lazaro Cardenas, further increasing costs, and transportation companies have said they are facing mounting expenses for diesel, travel, food, and lodging due to delays. Port operations are expected to return to normal within four weeks, requiring patience from importers, transporters and the entire logistics chain. PAMA HITS CHEMICALS HARDERFor chemicals players, the problems regarding delayed cargo and lack of personnel at customs points across Mexico, are being compounded by newly established customs regulations, which aimed to improve the clearance of goods at customs as well as the seizing of illegal goods. In practice, the so-called PAMA regulation has added costs in the form of bureaucracy, and in the case of chemicals, sharply slowed down the entry of imports into Mexico. PAMA is becoming the first thing sources mention when asked about logistics. “Things have not improved much since mid-May, at least as we see them. In fact, for us the situation is still terrible, and we are literally hemorrhaging money in payments to shipping companies, due to the delays, and to the port’s facilities, due to the materials we have been forced to store there,” said a source at a Mexican chemicals distributor this week. PAMA entails that companies now must give more information about the load. For example, if the declared weight of the load deviates in the slightest from the weight showed on the customs scale, this can be a reason to send the load back to square one, with a fine potentially also imposed, according to the source in chemicals distribution. In mid-May, the distribution source said they had had a container held for 45 days up to that point, because it could not be released due to a mismatch in the weight: it was missing two decimal places. After correcting the error and paying several fines because of it, the container could finally be released earlier in June. “We are finding PAMA to be a serious problem – many of our loads get stuck because of regulation-related issues, and our logistics are becoming a burdensome and time-consuming process. Moreover, the fines are disproportionate, ranging from 70% to 100% of the value of the merchandise,” they stated. Another source, this on the production side, concurred that Manzanillo’s crisis and delays have been a blow for chemicals companies, but also placed more importance on PAMA and its compliance than the current crisis at the port, which will sooner or later subside. “We were used to see many PAMA proceedings in rail or road transport, but now the authorities are extending that firm hand to the ports as well. And, because of the nature of chemicals, the authorities at times try to go deeper than their knowledge would allow them, making the process even more tedious,” said the producing source. “I am referring here to imports of products such as PE [polyethylene] and, more specifically, HDPE [high density polyethylene]. I am hearing from many players that several HDPE loads were subject to PAMA proceedings because of the big difference in prices [sold overseas and sold domestically], so the government argues imports are being made at lower prices – in other words, considering the load as dumping.” The source went on to say that because the authorities “do not know the market well” the ensuing investigations can in some case take months to be resolved, adding that PAMA rules – which are here to stay, unlike the Manzanillo port crisis – are becoming for the chemicals industry a considerable negative factor when importing into Mexico. Mexico’s chemicals trade group ANIQ and its peer for the plastics sector Anipac had not responded to a request for comment at the time of writing. According to importers, who are already having to endure sharply higher logistical costs due to the crisis – between 20% and 30% – the additional burden of the strict enforcement of PAMA regulations has also added to the financial woes, as the bureaucracy implied required more human resources than with the previous regulation. Mexican law firm Moreno Valdes explained in a note to clients that while most of the contingencies contemplated in PAMA would be precautionary measures and would not necessarily end in any fine, just the fact that authorities are stopping many more loads to analyze further adds delays to the already large delays. “Importers should understand that when the customs authority notifies a PAMA [proceeding], it means that this procedure involves the seizure of the goods and even the truck transportation. It is a precautionary measure, allowing the authority to obtain a guarantee against a possible breach of obligations by the importer,” said the law firm. “In other words, the merchandise will remain in Customs until the situation is clarified for the authority. There are many reasons why the authority usually initiates a PAMA. It may be that the cargo was not entered the country through the authorized place, or that it had prohibited merchandise, or because the importer is not accrediting the specific regulations that the merchandise must comply with when entering the country, among others.” Front page picture: Manzanillo’s port (Source: Port operator Contecon Manzanillo) Focus article by Jonathan Lopez Additional reporting by Bruno Menini

LONDON (ICIS)–Senior editor for recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Polish colourless (C) bale prices drop for some buyers after months of what some labelled ‘unsustainable’ high levels Hot weather expected to improve bale availability across Europe and could bring downward pressure Food-grade pellet enquiries rise along with temperatures July price talks start soon and some anticipate lower bids from buyers

SINGAPORE (ICIS)–India’s demand for polyvinyl chloride (PVC) will continue to grow at 8-10% on an annual basis despite some weakening in the domestic economy, an official from chloralkali producer DCM Shriram told ICIS on Friday. Strong domestic consumption shields the domestic industry from the turbulence in the global markets, company vice president and head of strategy Ankur Singh said in an interview on the sidelines of the 28th ICIS & ResourceWise World Chlor-Alkali Conference in Singapore. “Because of the strong local growth, we expect imports to continue,” he said, noting that India has limited domestic production and imports about 60% of its PVC requirements. India is expected to welcome 2 million tonnes/year of PVC capacity by mid-to-end 2027 but imports are still expected to continue growing, Singh said. PVC is mainly used in pipes, which has strong applications in agriculture and construction industries in India. “India being a agricultural economy, we expect that particular section [demand for irrigation pipes] to continue to grow,” the DCM Shriram official said. India’s plans to boost infrastructure spending also translates to strong PVC demand. “[The Indian government is] going to spend roughly $120 billion on infrastructure development in the next four to five years and part of that growth will translate into PVC growth as well,” Singh said. India, which is a giant emerging economy, posted a 6.5% GDP growth in the fiscal year ending March 2025. Growth has weakened to a four-year low amid global uncertainties over US tariffs. The conference runs from 19-20 June.

COLORADO SPRINGS, Colorado (ICIS)–Employment in the US chemical industry will continue growing even while it contends with a wave of retirements, the consultancy Deloitte said. CHEM EMPLOYEES NEEDED FOR GROWING INDUSTRYThe chemical industry grows at a multiple of GDP. As the global economy grows, so will the chemical industry, and that will require companies to hire employees, said Bob Kumpf, managing director at Deloitte. “Society expects us to innovate, whether it’s emerging technologies, whether it’s biotechnology, whether it’s all the downstream applications,” Kumpf said. “This is a growth sector.” Kumpf and others at Deloitte discussed a recent employment study by the consultancy during the annual meeting of the American Chemistry Council (ACC). Even if the nature of growth in the chemical industry is changing, it is not stopping, he said. “There is no peak materials in any views that we have.” While new technologies like AI and remote work are changing how people do their jobs, those technologies are not eliminating the need for labor. The following chart summarizes Deloitte’s forecasts for US employment trends in the oil and gas (O&G) industry as well as in the chemicals industry. Chemical companies will have to manage that growth in employment amid a wave of retirements. Deloitte expects that 20% of the current workforce will retire by 2030, said Kate Hardin, executive director at Deloitte. Deloitte broke down management strategies into four pillars consisting of talent ownership, composition, capability and mobility. TALENT OWNERSHIPChemical companies are relying on third-parties to manage digital upgrades and information technology services, while maintaining nearly 88% of its workforce as internal. COMPOSITIONThe study shows that chemical employment will rise in the following sectors: Site and plant workers Specialists and technicians Business support Customer engagement Leadership Among site and plant workers in the energy and chemicals industry, Deloitte expects rising global demand, regulatory changes and infrastructure will contribute to rising demand for these employees. For specialists and technicians, growth drivers are occupational health and safety, industrial engineers and material engineers. The study forecasts declines in chemical engineers. In the past, those chemical engineers had left for jobs in the pharmaceutical and biotechnology sectors, Hardin said. More recently, they are going into software development. For business support, employment growth will center around computer occupations, computer network architecture and training and development specialties. Overall, automation, outsourcing and AI will reduce employment for some job types. CAPABILITYDeloitte expects generative and agentic AI to make employees more productive. The consultancy broke down AI’s effects on employment into human-in-the-loop tasks, human-enabled tasks and human-exclusive tasks. For energy and chemical workhours as a whole, about one-third are expected to be human-in-the-loop tasks, in which machines and agentic AI lead the effort. Another third will be human enabled, under which humans augment digital technologies. The rest will be human exclusive, which covers tasks only people can do. For some of these human-exclusive tasks, there could be prolonged vacancies, especially for occupations such as mechanics, repairers and vehicle operators, according to the study. These jobs have high turnover, and chemical companies will compete with construction and other industrial sectors for these workers. MOBILITYDigitization is making more skills common among industries and sectors, giving employees and employers a wider pool from which to choose. Some chemical jobs can be remote, but a robust on-site workforce remains essential for running chemical plants. WORKFORCE AMONG FEW TOOLS CHEMS HAVE IN CHALLENGING ENVIRONMENTOnce more, chemical companies expect 2025 to be another challenging year in which they will need to look internally to increase revenue and profits. The overall economy will provide little – if any – help. At the same time, trade policy is changing and conflicts among nations are growing, all of which is making it difficult to plan and forecast demand. Workforce is one of the few areas chemical companies can control, and technology changes in AI and robotics are giving companies more options to reduce labor costs and increase productivity. The ACC Annual Meeting ended on 4 June.

SAO PAULO (ICIS)–Grupo Almatia continues seeking expansions outside its Colombian domestic market as the medium-term economic prospects and the government’s fiscal policy cast a shadow, according to the CFO at the chemicals distributor, formerly known as Quimico Plasticos. Jose Andres Toro added his voice to the many which, in the past week, have showed great concern about Colombia’s government decision to exercise an “escape” clause which allows for the so-called fiscal rule to be lifted in extraordinary circumstances. In a pre-election year and with the public finances offering little margin for the left-leaning government of Gustavo Petro to fulfill its promises to expand the welfare state, the cabinet has now decided to exercise a rule which is meant to be used in public emergencies or calamities. Chemicals sources and industrial groups have said companies’ borrowing costs could rise sharply if those costs for Colombia’s sovereign also rise, as expected, while the trade group representing plastics, Acoplastics, said in an interview with ICIS the fiscal issues were coming to add issues to an industry already under pressure due to China’s competition. But Almatia’s CFO described frustration with government spending increases because, in theory, they should have improved public services but, he said, that the spending programs have been unable to deliver tangible benefits to citizens. “It’s already proven it’s not making social investments. It’s not doing anything with that money; instead, what it’s doing is creating bureaucracy, creating jobs in the public sector,” said Toro. “In the province where we are based, Antioquia, the situation has become particularly acute. National projects with state funding have been abandoned by the government and we Antioquians reached into our pockets and are financing the projects ourselves, with our own resources, through the provincial government.” Beyond fiscal concerns, the company faces challenges from inflation and dramatically rising transportation costs affecting grassroots workers, said Toro, highlighting how gasoline subsidy removals have pushed fuel prices up by approximately 50%, far outpacing general inflation rates of 5-7%. “Transportation costs have risen much more than the average inflation rate because the government began to remove a subsidy that gasoline used to have. For someone who travels every day on the subway or the bus, those costs are multiplied,” he said. “With domestic growth stagnating at 2-3% annually, while inflation runs at around 5%, real economic performance is declining. In real terms, we’re not growing. We’re stagnant,” he said. Toro said a good example of Colombia’s issues would be the construction sector, where the downturn has proved especially acute, casting a shadow to the rest of the economy given that real estate is a sector of sectors, with many associated industries depending on it, not least the many plastics which Almatia sells to be used in multiple applications going into construction. Facing domestic market challenges, Grupo Almatia is slowly but decisively pursuing expansions across Latin American countries, said Toro. For now, the company has set up operations in markets close to Colombia because the majority of its facilities are there, and from them it delivers to other markets such as Ecuador, Peru, Guatemala and the Dominican Republic. CHINA COMPETITION: GOOD OR BAD?The executive detailed how Chinese suppliers have become increasingly competitive across chemical markets, though not to the exclusion of other international competitors, and conceded many of Almatia’s materials come from that country. China has been under fire for some time due to its “dumping” – selling industrial products at below production costs in overseas markets, just to dump excess products China does not need, which has hit producers hard in other, non-state-controlled economies which cannot compete with China’s heavily subsidized companies. “We’ve been working with several suppliers for several years, and they compete here like any other, like the Koreans, the Americans, the Arabs. For instance, in TiO2 [titanium dioxide], Chinese pricing remains competitive against Western suppliers without creating insurmountable advantages [for the Chinese],” said Toro. “Chinese prices are competitive compared to those coming from outside the West, but they’re not so markedly different that those from the West can’t compete. We import from 20 countries, and obviously prioritize the most competitive supply sources.” All in all, Toro conceded there are concerning price dynamics taking place currently in the petrochemicals industry, dynamics which could end up hitting all sides of the market if not corrected. “In PP [polypropylene] markets, for instance, monomer prices around $750-770/tonne should theoretically support resin prices near $980-990/tonne in regional markets,” said Toro. “However, freight and production costs don’t support these economics, suggesting either advantageous raw material sourcing or unsustainable pricing. And this pricing pressure affects non-integrated PP producers globally.” This interview took place on 16 June. Front page picture: A warehouse operated by Grupo Almatia in Antioquia, Colombia  Picture source: Grupo Almatia  Interview article by Jonathan Lopez

Auction for Route 1 capacity from Greece to Ukraine held on 23 June Regulator RAE expected to approve Greek VTP entry to ensure fair access terms Vertical Corridor will be long-term diversification solution for SEE LONDON (ICIS)– Traders expecting to export gas from Greece to Ukraine as part of a superbundled capacity product may be able to secure volumes from the domestic virtual trading point (VTP) rather than restricted entry points, Maria Rita Galli, CEO of the Greek gas transmission system operator, DESFA told ICIS in an interview. She said the five TSOs offering the product were looking to offer maximum flexibility on Route 1, as the bundled discounted capacity product spanning five south-east European countries will be offered for monthly auctions on the Regional Booking Platform (RBP) on 23 June. The CEO said she anticipated high interest, as over 200 stakeholders took part in a call with the five operators from Greece, Bulgaria, Romania, Moldova and Ukraine on 19 June. The capacity will be offered at a discounted rate on a temporary basis and companies could secure up to 90 million cubic meters monthly from Greece for exports to Ukraine. ROUTE 1 INCENTIVES The product excludes entry or exit into networks along the route, which allows them to bypass issues related to misalignment of gas quality among the five countries, which had been blocking companies from exporting gas from the Romanian VTP to Ukraine, for example. A regional trader told ICIS that under the Route 1 product, companies will not be expected to request a licence to use the Romanian transmission system. “For the first time in the history of post-Russian gas flows via Romania, Transgaz [the Romanian gas grid operator] does not require shippers to get a licence for transit,” the trader said. Although the route from Greece to Ukraine has large bidirectional capacity, it has been largely unused because of limited capacity offered by some operators and high transmission tariffs. A study published by Austrian-based consultancy WECOM on 19 June shows that it currently costs on average €9.65/MWh to book capacity at individual borders points along the Greece-Ukraine route. However, market sources say the bundled discounted Route 1 could cost around €7.5 – €8.00/MWh. CONCERNS Despite the attraction of cheaper tariffs, some companies had concerns the product may not be compliant with the provisions of the EU’s network codes. However, Sotirios Bravos, Desfa’s Chief Commercial Officer, said the arrangement was not a derogation from the codes but came ‘on top’ of their provisions. He said the volumes that would be auctioned would be relatively small and would not impinge on regional competition. “Ukraine needs additional volumes to fill their underground storage estimated between four to five billion cubic meters by the start of the heating season,” Bravos said. “If we look at other borders [with Ukraine] we see the capacity is oversubscribed. The quarterly capacity for July, August, September on the Hungarian-Ukrainian border was 400% higher than its reserve price,” he added. FAIR PLAYING FIELD He echoed the CEO’s views that the product would not discriminate against companies, and added that access to the Greek VTP, subject to pending approval by the regulator RAE this week, would create a level playing field for all participants. In the initial proposal, Route 1 restricted access to only a number of entry points in the domestic Greek system, which would have ensured that the gas shipped to Ukraine was of non-Russian origin. The EU is now working to introduce a ban on the import of spot and long-term Russian gas between 2026 and 2028. Galli said: “We are not in 2026 yet. I think when the ban is operational there will be no Russian gas on the VTP. As of today, we cannot physically exclude it,” she added. She said Greece was expecting to boost its interconnection capacity from 5.3billion cubic meters annual to 8.5bcm/year at the end of 2026. Nevertheless, Greece is set to make a major contribution to regional supply diversification thanks to its LNG terminals at Revithousa and Alexandroupolis as well as access to Caspian gas reaching the country via the Southern Gas Corridor. Although Route 1 is initially expected to be offered on a temporary basis to help Ukraine meet its storage needs this summer, Galli expects the full Trans-Balkan route, also known as the Vertical Gas Corridor, to become the backbone of an integrated south-east European gas market in the longer-term.

LONDON (ICIS)–The European Parliament and Council have provisionally agreed changes to simplify the EU’s carbon border adjustment mechanism (CBAM). The streamlined regulation adopts a new “de minimis” mass threshold of 50 tonnes, which will exempt most importers who import only small quantities of CBAM goods, such as SMEs and individuals. At the same time, environmental objectives would remain achievable because 99% of total CO2 emissions from imports of iron, steel, aluminum, cement and fertilizers would still be covered by the rules. MEPs voted in favour of the new CBAM regulation in May and it was provisionally agreed between the European Parliament and Council on Wednesday this week, 18 June. The European Parliament and Council must now formally adopt the package before it can enter into force, which would be 20 days after its publication in the Official Journal of the EU.