HOUSTON (ICIS)–US November sales of new light vehicles ticked higher from the previous month and rose compared with the same month a year ago, but proposed tariffs on Mexican and Canadian imports by President-elect Donald Trump could create further headwinds for the industry. Data from the US Bureau of Economic Analysis (BEA) shows year-to-date sales up by 1.7%. The following chart shows US auto sales from 1989 to present. Note: Gray bars show when the US was in a recession Auto sales are important because the auto industry is a key end market for chemicals demand. Although automobile sales and foreign truck sales were weak, this was offset by a strong gain in domestic light truck sales, according to Kevin Swift, senior economist for global chemicals at ICIS. “Affordability has been an issue in this market and is showing signs of improvement, which, if continued, will provide further tailwinds,” Swift said. But shares of publicly traded US automakers fell last week after Trump announced that he plans on levying 25% tariffs on all products from Canada and Mexico as well as an additional 10% tariff on goods from China – all three of which are critical sources for the auto industry’s global supply chain. Swift said the latest report indicates that US consumers continue to be in the market for new vehicles and that continued improvement in sales will benefit industrial production. Swift said that inventories on dealer lots have improved by almost 46% compared with the same month a year ago, which should also help boost sales. CHEMS USED IN AUTOS Demand for chemicals in auto production comes from, for example, antifreeze and other fluids, catalysts, plastic dashboards and other components, rubber tires and hoses, upholstery fibers, coatings and adhesives, Swift said. Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry. The latest data indicate that polymer use is about 423 pounds (192kg) per vehicle. Meanwhile, electric vehicles (EVs) and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for EVs. Please also visit the ICIS topic page Automotive: Impact on Chemicals

SINGAPORE (ICIS)–Days before the shock declaration of martial law in South Korea by President Yoon Suk-yeol, political wranglings stalled the 2025 budget deliberations of Asia’s fourth-biggest economy. Opposition DPK wants heavy cut in 2025 national budget Impeachment looms for President Yoon No impact on petrochemical operations/trades “Tensions between the ruling PPP [People Power Party] and main opposition Democratic Party of Korea (DPK) have escalated as both sides have been unable to come to a consensus on the budget,” according to BMI Country Risk & Industry Research, a unit of Fitch Solutions Group in a note on Wednesday. DPK has proposed heavy cuts – to the tune of won (W) 4.1 trillion ($2.9 billion) – to the Yoon administration’s proposed budget of W677.4 trillion for next year, which represents a 3.2% increase from 2023. “As things stand, Yoon’s proposed 2025 budget … faces the risk of being watered down to KRW673.3trn amid strong opposition from the DPK which holds a parliamentary majority,” BMI stated. QUITE AN UNEXPECTED MOVE Most South Koreans, including players in the petrochemical industry, like the rest of the world, were baffled at Yoon’s declaration of emergency martial law late on 3 December. The last time the highly industrialized country in Asia faced martial law was in 1979, and no recent developments in the geopolitical and financial sectors of the country indicated that such a drastic measure would be taken. At close to midnight, Yoon had declared martial law – which meant military rule and curbs on civil rights – on national television noting that it was meant to crack down on pro-North Korean forces and protect the constitutional order in the country. “Martial law was quite surprising for us to hear because it hasn’t happened in the last 40 years,” said a soda ash distributor. The declaration of martial law and its withdrawal hours later has thrown South Korea into political instability. It was highly disruptive for market sentiment that for a time, suspension of trading was mulled, but was eventually called off when the martial law was rescinded about six hours after it was declared. South Korea’s Ministry of Finance and Economy and the Bank of Korea assuaged market fears of disruption by offering “unlimited liquidity support” to ensure market stability, immediately after the martial law declaration. The won weakened near two-year lows against the US dollar on 3 December at around W1,440 but recovered to around W1,412 levels as of Wednesday afternoon. The benchmark KOSPI composite index closed off lows at 2,464.00, down 1.44% from the previous day, after falling nearly 2% in intraday trade. “For now, we expect limited implications for the economy and financial markets as the Bank of Korea and the Ministry of Finance have responded swiftly by reassuring investors,” BMI said. “Notably, the central bank committed to boosting short-term liquidity and enacting measures to stabilise the FX [foreign exchange] markets, which aligns with our view that risks around the South Korean won, should remain contained for now,” it added. The central bank held an emergency monetary policy meeting on Wednesday morning, with the Monetary Board deciding “to keep all options open and to actively take market stabilization measures until markets are fully stabilized”. In late November, the BoK issued its second interest rate cut in as many months to prop up the economy, while trimming its GDP growth forecasts for this year to 2.2%, and for 2025 to 1.9%. In Q3, the country’s GDP growth decelerated to 1.5% from a 2.3% pace set in Q2. The South Korean economy is expected to face added pressure next year amid US threats to impose tariffs on all imported goods. Like most of Asia, the country is heavily reliant on exports, with China and the US as its biggest trade partners. South Korea’s export growth in November weakened to 1.4% year-on-year to $56.4 billion, while imports shrank by 2.4% to $50.7 billion, indicating domestic weakness. YOON’S FUTURE UNCERTAIN Calls for Yoon’s resignation is mounting, with lawmakers from DPK saying that if he does not resign immediately, steps will be taken to have him impeached. “We anticipate heightened political uncertainty in the near term. Yoon is now under intense pressure to resign. If he does not, we expect that it is only a matter of time before he is impeached,” BMI said. “If so, we believe Prime Minister Han Duck-soo will step in as interim leader, paving the way for elections to be held within 60 days, in accordance with the constitution,” it added. According to Korean news agency Yonhap, opposition parties – DPK and five others, including the Rebuilding Korea Party and Reform Party, submitted on Wednesday afternoon a motion to impeach President Yoon to the National Assembly. The motion – which was signed by 190 opposition lawmakers and one independent lawmaker, with no support from any ruling party lawmakers – will be reported to a parliamentary plenary session on 5 December and then put to a vote on either 6 December or 7 December. South Korea’s law requires that an impeachment motion be put to a vote between 24 and 72 hours after the motion is reported to a plenary session, Yonhap said. Yoon, an inexperienced politician, became the 20th president of the country in May 2022 and is currently serving the third of his five years of office. Previously, he was South Korea’s chief prosecutor. In its note, BMI noted that PPP leader Han Dong-hoon had urged Yoon to explain his decision and to dismiss defense minister Kim Yong-hyun, who advised the president to declare martial law “even as the finance and foreign ministers advised against it”. “The silver lining we think is that the swift reversal of the martial law underscores the resilience of South Korea’s institutions,” it said. NO IMPACT ON PETROCHEMICAL TRADESPlayers in the petrochemical industry are monitoring the political developments but noted no immediate impact on the commodities markets. “Politically, [it is] still unstable as the President is getting pressure to resign,” a source at a phenol/acetone producer said. South Korea is a major exporter of ethylene, as well as aromatics such as benzene, toluene and styrene monomer (SM). “At this moment the situation has settled down, but we’ll see how the government will respond to the issue,” the soda ash distributor said. “From the industrial side there is no huge impact because plants/factories are always running at full capacity so now we don’t see any impact,” he said. “But long-term impact, we’ll need to see how other foreign companies and assets may move out of South Korea,” the distributor added. For the time being, players are more pre-occupied with unsteady port operations in Daesan because of heavy winds which are affecting trades and cargo deliveries. Meanwhile, South Korea’s petrochemical industry has its own troubles stemming from Asia’s overcapacity. In the case of of major player Lotte Chemical, which swung into a net loss of W514 billion in Q3 2024, the company is making big changes to its  portfolio, selling or closing commodities businesses as it refocuses on higher margin specialties. South Korean industries, including chemicals, rely heavily on exports to China, whose self-sufficiency has grown over the years. Insight article by Pearl Bantillo ($1 = W1,414) Additional reporting by Fanny Zhang, Jonathan Chou, Evangeline Cheung, Helen Lee, Shannen Ng, Josh Quah and Clive Ong

MUSCAT (ICIS)–Thailand’s PTT Global Chemical (PTTGC) is expected to begin producing sustainable aviation fuel (SAF) at its refinery in Map Ta Phut early next year, the company’s CEO Narongsak Jivakanun said. “We are commissioning, although it is on a small scale, but it is an important step – SAF [production] in Q1 next year using our existing oil refinery but blended with non-fossil fuel based raw material,” Jivakanun told ICIS on the sidelines of the 18th Annual Gulf Petrochemicals and Chemicals (GPCA) Forum in Muscat, Oman. The company plans to produce 500,000 liters of SAF per month, using up to 1,700 tonnes of used cooking oil per month as feedstock. SAF is used as a direct replacement for traditional fossil-based jet fuel to power aircraft. Moreover, by leveraging the mass balance approach, the change in how the refinery accommodates use of alternative feedstock in the production of SAF enables it to claim a portion of its downstream aromatics, polymers, and olefins output as non-fossil chemical products, he said. PTTGC is the first Thai company to upgrade its refinery with advanced technology to accommodate used cooking oil as feedstock. The company’s biorefinery project is a component of the company’s three-pronged growth strategy – “Step Change, Step Out and Step Up” – which, in part, prioritizes business sustainability through decarbonization efforts, according to Jivakanun. PTTGC is also on track to fully start up a new fully integrated polylactic acid (PLA) unit at the Nakhon Sawan Biocomplex (NBC) by the end of next year, he said. The PLA project is being carried out by NatureWorks, the equal joint venture firm between the US’ Cargill and PTTGC and will use sugarcane sourced locally as feedstock. THAI SPECIALTIES HUB AMBITIONS  Allnex, a global specialty chemicals subsidiary of PTTGC, is currently planning to expand its specialty resins production in Map Ta Phut with an aim to develop the site to become a hub for selected coating resins serving the southeast Asia region, according to Jivakanun. “The plan is to develop a hub in Map Ta Phut so that they can share the infrastructure that [PTT]GC already has, utilities, the engineering and operational support,” he said. “Expertise sharing between GC and allnex will enhance potential of value engineering resulted in cost savings into the project.” The project is in the stage of finalizing the scope with an aim to produce specialty resins that most fit customer demands and requirements Allnex specializes in the production of industrial coating resins and additives. “We will go through the feasibility study as usual and we aim to confirm the investment for allnex Map Ta Phut hub within next year,” Jivakanun added. Interview article by Nurluqman Suratman

MUMBAI (ICIS)–India’s PCBL Ltd began commercial operations at its 20,000 specialty chemicals expansion project at its Mundra complex in the western Gujarat state on 28 November. This plant forms the second and final phase of the company’s 40,000 tonne/year brownfield expansion project, the company said in a disclosure to the Bombay Stock Exchange (BSE) on 29 November. The company began operations at the first phase of the project in July 2023. The enhanced capacity will allow PCBL to meet growing demands of its existing customers and also explore new opportunities, it said. The company, formerly known as Phillips Carbon Black Ltd, produces more than 40 grades of performance and specialty chemicals which service various segments like the tyres, engineering plastics, inks & coatings, and batteries industries.

President Yoon Suk Yeol faces backlash over martial law Yoon a strong advocate for nuclear power at home, abroad Legislators are calling for resignation, impeachment SINGAPORE (ICIS)– South Korea President Yoon Suk Yeol’s short-lived martial law declaration on the midnight of 4 December shocked the country, raising concerns on whether he can finish the term set to end in 2027 without being impeached, and putting uncertainty on Korea’s energy policies, should the office change hands, including strong support for LNG as a transition fuel and phasing out coal. The opposition Korea Democratic Party already filed motions to impeach Yoon on the afternoon of 4 December. If the impeachment passes via the National Assembly, it would need to go through a judicial review and then a new election would be called in 60 days if upheld. Yoon and his People Power Party are a minority in the legislature and have faced opposition roadblocks to ambitious energy policies that were a sharp change from predecessor Moon Jae In. NUCLEAR Yoon, who was elected in 2022, is a supporter of a growing nuclear power footprint at home and exports of nuclear plants, including recent efforts with the Czech republic, and vowed to increase the share of nuclear in the energy mix to above 30% by 2030. Moon had declared that nuclear would be completely phased out since his term in 2017. On 12 September 2024, Korea’s Nuclear Safety and Security Commission (NSSC) granted the construction permit for Shin-Hanul 3 and 4 reactors. This means four nuclear plants are underway by 2038. Korea would further export 10 nuclear plants by 2030 under his envision, to potential buyers all over the world. “The Democratic Party is not pro-nuclear, if they are elected after Yoon’s impeachment they might not start new projects but also not likely to kill the ongoing projects and export efforts due to NDC (National Determined Contribution) concerns”, a Korean academic familiar with the matter told ICIS. “Nuclear is quite essential to achieve Korea’s carbon neutral goals”, he added. The country has a 2050 net-zero carbon target. LNG DEMAND South Korea relies heavily on fossil fuels for power generation. Imported LNG powers over a quarter of the Korean economy. This number is projected to decrease due to rising share of nuclear and renewables. South Korea’s Ministry of Trade, Industry and Energy MOTIE on 19 November said it has formed a “Coal-Fired Power Generation Transition Council” among five companies for an updated roadmap on phasing out coal plants due by the first quarter of 2025. But the country’s LNG import grew by 7.5% from 39.34mtpa in 2023 (January-November), to 42.31mtpa in the same period of 2024, ICIS data shows. “Short-term LNG demand will indeed be lower because of new coal power plants and renewables, but LNG need won’t be diminishing in the next ten years, because electricity consumption will grow due to data centers, semi-conductor industry and more abnormal temperatures,” the Korean scholar said. South Korea is the world’s third largest LNG importer and has extensive power infrastructure to feed high-end manufacturing. As well, South Korean shipyards have completed 500 LNG tankers for export since 1994, according to the Ministry of Trade, Industry, and Energy (MOTIE) in April 2024. Also in November, MOTIE announced pilot bidding for an LNG capacity market. The newly introduced liquefied natural gas (LNG) capacity market is a competitive bidding process for new and new collective energy sources using LNG as the main fuel. The country has also worked closely with Qatar on LNG supply agreements and on shipping – as well as on US projects via private companies. EAST SEA DRILLING In June, the president announced exploratory drilling for fossil fuels off its eastern shore, which could supply the country with oil and gas from four to 29 years, according to estimates. The first drilling will begin in the later half of this month, and the initial results will be released in H1 2025, according to Korean media. It remains unclear what results the exploitation will deliver by then, and whether a change of power will put an end to the project. At the same time, Yoon’s latest poll rating slid to 25%, Korean media reported. The Korean won weakened to just above 1,400 to the US dollar on 4 December from levels just above 1,300 won at the end of October, making imports more expensive at least in the short term, as the country’s main labor union called for a general strike and Yoon’s resignation. The Bank of Korea and South Korea’s Finance Ministry pledged steps for stability, including 10 trillion won ($7.07 billion) in stock market stabilisation funds if needed via the financial regulator. (Roman Kazmin contributed to this article)

HOUSTON (ICIS)–US Cargill announced that as part of a strategic effort introduced earlier this year designed to strengthen the almost 160-year-old company that the agribusiness major will be reducing their global workforce by approximately 5%. The process and timeline for this to be implemented was not revealed but the company said it will be different under the circumstance as it must comply with employment laws and practices in each geography. Yet with an estimated nearly 8,000 jobs set to be eliminated, Cargill acknowledges it was not an easy choice to make this move, and said this new long-term strategy not only continues their legacy but carries forward values and core strengths that have defined their success. “As we look to the future, we have laid out a clear plan to evolve and strengthen our portfolio to take advantage of compelling trends in front of us, maximize our competitiveness, and, above all, continue to deliver for our customers,” said a Cargill in a statement. The company said as the world is changing it remains committed to transforming even faster to deliver for customers and fulfil the purpose of nourishing the world. “To strengthen Cargill’s impact, we must realign our talent and resources to align with our strategy. Unfortunately, that means reducing our global workforce by approximately 5%. This difficult decision was not made lightly. We will lean on our core value of putting people first as we support our colleagues during this transition,” Cargill said. Operating in 70 countries with approximately 1,000 locations worldwide Cargill handles not only food products and ingredients from the start of the supply chain with farmers all the way to the final consumer. They also undertake agricultural solutions including fertilizers and industrial products.

HOUSTON (ICIS)–Australian fertilizer firm Minbos Resources, who is advancing the Cabinda Phosphate project in Angola, announced it has received the first funding from the Angolan Sovereign Wealth Fund for $6.4 million and expects to finalize the construction contract this month. The company said mobilization to the phosphate fertilizer plant, located at Subantando, a new industrial area between the mine site and Cabinda city, is also planned to commence this month with phase 1 to include earthworks, access roads, drainage and concrete foundations. Another $2.43 million will be released upon mobilization of the civil contractor and upon aligning the governance arrangements of the Angolan subsidiaries, with a third disbursement of $1.17 million upon finalizing project insurances and presentation of supplier quotations for project long lead items. Minbos Resources managing director Lindsay Reed said the receipt of this funding and the commencement of construction marks the end of one journey for the company and the beginning of another with the focus now switching to construction activities, sales and marketing and advance their future as a producer of phosphate fertilizer. The Cabinda project, located in northeast Angola, is being developed based on an initial name plate capacity of 150,000 tonnes/year of enhanced phosphate rock with initial production calculated at 50,000 tonnes/year. Previously Minbos said expansion will come in two stages with it planning to add a second and third granulation circuit to reach a name plate capacity of 450,000 tonnes/year after eight years of operations.

TORONTO (ICIS)–Canada’s investment tax credits and its price on carbon emissions have been key in attracting investments in low-carbon projects, led by Dow’s Path2Zero petrochemicals complex under construction in Alberta province. But will these incentives survive a likely change in government next year, with the Conservatives expected to oust Prime Minister Justin Trudeau’s Liberals? Conservatives to scrap carbon tax Industrial carbon pricing critical for low-emission investments Carbon capture advantage might be lost The Chemistry Industry Association of Canada (CIAC) highlighted the election and uncertainties surrounding incentives and programs for low-carbon investments as a risk factor for the industry in its 2025 outlook webinar last week. As the country is moving into the election campaign season, “it is hard to say exactly where we are going politically,” said David Cherniak, CIAC policy manager, Business and Transportation. Companies were making investment decisions based on the incentive programs, and “we see the programs working, companies are getting ready to spend, and in the case of Dow, already spend real money to lower emissions and raise production here in Canada,” he said. In 2023 Dow made a final investment decision on Path2Zero and started construction in April 2024. Carbon pricing is seen as critical for the viability of such projects. CIAC supports industrial pricing and is advocating the importance of the government programs for winning chemistry investments, Cherniak said. The argument for low-carbon chemical production was clear, he said. Around the world the chemical industry’s customers were demanding low-carbon solutions and products, “irrespective of what Canada does,” he continued. As such, the real question is, “Do we want those chemistry products that meet that demand to come from somewhere else or do we want them to come from Canada?” Carbon pricing and programs offering incentives for low-carbon chemical production plants were “key building blocks” to get those facilities built in Canada, he said. If the low-carbon projects are not built in Canada they would be built elsewhere and Canada would end up ending importing their products, he said. “We think it’s way better to utilize Canada’s resources here, and see those investments won, and that is the message we are taking to all parties as we get ready for the election in 2025,” he said. However, “the political winds are blowing,” not just on the federal level but also with a likely election in Canada’s economically most powerful province, Ontario, he said. Canada has seen drastic policy reversals after changes in government before, with impacts on the chemical industry: In 2011 a Conservative government took Canada out of the Kyoto climate change accord, to which an earlier Liberal government had signed up, making Canada the world’s only country to exit Kyoto. On the provincial level, a new Conservative government in 2018 abolished a cap-and-trade carbon trading system a previous Liberal government had set up. AXE THE TAX On the federal level, the opposition Conservatives are far ahead of the Trudeau’s Liberals in opinion polls on the election, which must be held by 20 October 2025 but will likely be called earlier. Under a relentless “Axe the Tax” campaign, the Conservatives have committed to abolishing the Liberals’ consumer carbon tax, which took effect in 2019 and is currently at Canadian dollar (C$) 80/tonne (US$57/tonne), rising to C$170/tonne by 2030. However, the Conservatives have yet to state what they will do about industrial carbon pricing. Industrial carbon pricing is implemented by Canada’s provinces, with the federal government providing a “back-stop” with its “Output-Based Pricing System (OBPS)” that sets minimum requirements to ensure that heavy emitters pay for emissions. Industrial carbon pricing is making a bigger contribution to Canada’s emissions reductions than the consumer carbon tax, according to a study earlier this year. ANALYSTS Analysts at Capital Economics said in a recent report that with a likely change in government there is a high chance that Canada’s carbon tax will soon be scrapped. Positive impacts on inflation from the abolition of the tax would be temporary and any boost to the economy would be small, they said. However, “removing the carbon tax will remove an important investment incentive, both in reducing emissions in Canada’s high-emitting sectors and in emerging ‘green’ sectors,” the analysts said. If the future carbon price in Canada is expected to be zero, rather than rising to C$170/tonne by 2030, “that could weigh heavily on investment in Canada’s emergent ‘green’ industries that rely on a price on carbon to justify their development,” they said. They noted as a key example carbon capture, utilization and storage (CCUS), where Canada has an advantage over other nations, although CCUS is not without critics. Oil-rich Alberta province, which is home to a large proportion of Canada’s petrochemicals production, sees itself among the leaders in developing CCUS technology. Dow’s project leverages on Alberta’s carbon capture infrastructure. In June, Shell made a final investment decision (FID) to proceed with a carbon capture project at its refining and chemicals site in the province, where in 2015 it started up a first carbon capture facility. The Conservative Party of Canada and Dow did not respond to requests for additional comment. (US$1=C$1.40) Focus article by Stefan Baumgarten, with additional reporting by Jonathan Lopez Thumbnail photo of Dow’s manufacturing site in Fort Saskatchewan; photo source: Dow

BARCELONA (ICIS)–Plastics and chemical producers need to find more effective ways to tackle the problem of plastic waste after UN treaty negotiations ended without agreement at the weekend. Consumer demand will drive improvements in plastic waste management Chemical companies need to reconnect with brands/consumers We will move out of current ‘trough of despair’ about recycling End of globalization may mean national/regional treaties are more effective UN Intergovernmental Negotiating Committee concluded in Busan, South Korea, on 1 December, with no definitive agreement Around 100 countries backed proposals, with a small number of hold-outs In this Think Tank podcast, Will Beacham interviews ICIS market engagement executive Nigel Davis 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.