HOUSTON (ICIS)–US-based adhesives producer HB Fuller raised its guidance because of the success of its focus on pricing, cost cutting and portfolio management and not because it sees signs that it will get any additional help from the economy. “Looking ahead, we expect a continued challenging operating environment characterized by a high level of uncertainty and constrained demand. Also, while the dollar has recently weakened, we expect currencies to remain unpredictable,” HB Fuller CEO Celeste Mastin said. She made her comments during an earnings conference call. “Our assumption is that volumes will be constrained for the remainder of the year.” The company’s new guidance expects slightly weaker volumes in the second half of the year, Mastin said. Profits and margins will grow, however, because of pricing actions and raw material purchasing leverage. HB Fuller is typically the first major US-listed chemical company to release its results during the earnings season, as its fiscal year runs through November. As a result, HB Fuller’s comments provide a preview about the trends that other chemical companies could discuss during their earnings presentations. When companies discussed Q1 earnings earlier in 2025, they had discounted any help that macroeconomics could have on their performance. Instead, any growth in profits would have to come from self-help measures like pricing and cost cutting. While HB Fuller is just one company, its comments show that, so far, that trend is holding, and self-help will likely play a large role in companies’ performance during the earnings season. After HB Fuller revealed its higher earnings guidance, its shares rose by nearly 11% on Thursday. The following table shows HB Fuller’s latest earnings guidance and compares it with its previous forecast. Figures are in millions of dollars. Current Previous Revenue Down 2-3% Down 2-4% Organic Revenue 0-2% 0-2% Adjusted EBITDA 615-630 600-625 Source: HB Fuller LIMITED TARIFF EXPOSUREHB Fuller had adopted a strategy of producing in the same regions from which it sells to its customers, which strengthens customer service and limits its exposure to tariffs, Mastin said. Overall, 97% of what HB Fuller makes is sold in the same region, she said. In the US, the figure is 99%. In China, it is 96%. For those parts of HB Fuller’s business that are exposed to tariffs, the company will address it through sourcing and pricing. The larger question that HB Fuller and other chemical companies have is the effect that tariffs will have on volumes. “The way we look at that is we need to be prepared for potentially lower volumes given potentially more constrained economies,” Mastin said. END MARKET SNAPSHOTAs a global adhesives producer, HB Fuller serves many of the same end markets as upstream commodity chemical producers. Many of its applications go into packaging, construction, automobiles and electronics. HB Fuller is also exposed to the solar industry. HB Fuller selling adhesives to more applications within the automotive sector, particularly in Asia Pacific. In the past, its adhesives had been used in interior trim of automobiles, Mastin said. These are expanding to exterior trim, powertrains, sealing applications and thermal management for batteries and braking systems. The company is benefiting from the trend of automobile producers adding more electronics to their vehicles, Mastin said. HB Fuller also noted strength in medical applications. The company has gained share in flexible packaging. Its electronics business continues to take market share. Mastin noted wins in aerospace and defense in the US, particularly in radar assemblies, pressure sensors, tires and fighter jet fiber-optic communications. Demand from residential construction remains slow, but this end market makes up less than 6% of HB Fuller’s revenue. Roofing remains strong. Demand for adhesives from solar panel producers had fallen because of overcapacity in the industry. HB Fuller has been responding to this weakness by targeting more differentiated applications within the solar industry HB Fuller noticed a temporary pause in exports from China during Q2, and that could extend for a couple more months, Mastin said. After that, volumes should improve because of new designs being introduced by electronics producers. During Q2, HB Fuller saw weakness from end-of-line packaging and beverage labelling applications Costs for raw materials continue to decline, but they remain higher from year-ago levels, Mastin said. HB Fuller responded by reallocating raw materials to different suppliers during Q1. Those moves should have an effect on the company through the second half of its fiscal year. As an adhesives producer, HB Fuller’s raw materials include tackifying resins, polymers, synthetic rubber, plasticizers and vinyl acetate monomer (VAM). The company’s adhesives are used in construction, packaging, automobiles and other end markets shared by many plastics and chemicals. Thumbnail Photo: Adhesive. (Image by Shutterstock)

TORONTO (ICIS)–Canadian auto industry companies must consider all options – from shifting production to the US to preparing for bankruptcy – as they face uncertainties posed by US tariffs, lawyers at Toronto-based law firm Torys said in a webinar. The auto industry is a key end market for the chemical and plastics industries, with shifts or changes in one sector impacting the other. In Canada, the auto industry “matters, it matters a lot,” said lawyers Adam Slavens and Ryan Lax, and went on to note that the industry generates more than Canadian dollar (C$) $100 billion (US$73 billion) in annual revenue and contributes more than C$19 billion to GDP. Slavens and Lax said tariffs were a “blunt tool” for US President Donald Trump to use in trying to shift auto manufacturing from Canada and Mexico to the US. The north American auto industry is integrated, and it would take the US years to expand plants or build new ones and set up the required supply chains, they said. However, Canadian-based auto and parts companies could not just hunker down and hope that the next president will reverse course after Trump’s term ends in early 2029, they said. The thrust of Trump’s policies will likely last, and the tariff and trade issues have become “a new normal” as the US consensus around free trade has weakened, they said. As it stands, although USMCA-compliant autos and auto parts made in Canada can, for the time being, continue to enter the US tariff-free, no final deal has been reached, creating uncertainty that makes it hard to make investment decisions, they said. There was a “fundamental uncertainty” over the outcome of the tariff dispute and the re-negotiations of the US-Mexico-Canada (USMCA) trade deal, they added. The questions facing decision makers in the auto industry today were “Where to build the next plant? Where to spend the next investment dollar, in the US or Canada?” – decisions that were hard to make given the level of uncertainty, they said. “Folks don’t know how to plan for their businesses, in view of the uncertainty and the unpredictability, there are no clear rules of the game that folks can be assured will apply for the coming five or ten years,” Lax added. MITIGATION The lawyers suggested a number of measures for Canadian-based auto firms to mitigate or withstand the impacts of tariffs, including: Shift some production to the US. Review intra-company transfer pricing to reduce tariff liabilities. Become indispensable by focusing on niche components neither a US nor a Mexican competitor can offer. Expand outside of North America, although this was a “difficult proposition” given that the European auto industry has its “own issues”. Review supply chain contracts, on the “very good assumption” that someone in the supply chain will have “an issue, at some point” over the near or long term. Review contracts with customers or suppliers to determine liability for tariff costs. Consider force majeure, renegotiate or terminate contracts. Include forced majeure clauses covering tariff risks in new contracts. For the time being, hold back on spending and avoid capital investments, to improve cash flow. Avoid hiring new employees. If the business is already in “a greater degree of distress”, consider restructuring under Canada’s Companies’ Creditors Arrangement Act (CCAA). Furthermore, firms should apply for “remissions” or exemptions from Canadian retaliatory tariffs, the lawyers said. Trump’s primary aim seems to be to keep Chinese vehicles out of the market, the lawyers said, citing remarks by the US ambassador to Canada on 25 June during a webinar that Slavens and Lax attended. The US wants an integrated north American auto manufacturing industry, the ambassador stated, and he said “there can’t not be a deal with Canada”, according to the lawyers. As such, a US-Canada trade deal should be a matter of time and the uncertainties would eventually go away – although Canada might end up with less auto investments than historically, they said. Once there is more clarity, private equity firms may step in and build an investment thesis around Canada’s remaining auto industry, they added. AUTOS AND CHEMICALS The automotive industry is a major global consumer of petrochemicals that contribute more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals, such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). 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, according to Kevin Swift, ICIS Senior Economist for Global Chemicals. Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry, with the latest data indicate that polymer use is about 423 pounds (192kg) per vehicle, Swift said. Meanwhile, electric vehicles (EVs) and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers developing battery materials, as well as specialty polymers and adhesives for EVs. (US$1= C$1.37) Thumbnail photo of cars Honda assembles at Alliston, 100km north of Toronto, where the Japanese auto major is postponing a multi-billion dollar investment in electric vehicles and batteries (Photo source: Honda) Please visits the ICIS topic pagesAutomotive: Impact on chemicals US tariffs, policy – impact on chemicals and energy

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. “Those who cannot remember the past are doomed to repeat it.” Winston Churchill’s words resonate because of parallels between China’s real estate-bubble and its current surge in high-tech manufacturing. The last bubble led to extraordinary and unsustainable demand for petrochemicals, ultimately going “pop” in late 2021 with the Evergrande default. This shift meant Chinese petrochemicals demand growth projections plummeted from 6-8% per annum to a more realistic 1-4%, contributing significantly to today’s record oversupply. Now, a new narrative emerges around a potential tech bubble, particularly in electric vehicles (EVs), solar panels and batteries Here’s why we should pay close attention: EV Market Overcapacity: China’s vehicle production exploded to over 31 million units in 2024, leading to intense competition. Of the 169 automakers operating in China today, more than half hold less than 0.1% market share. Only a handful, like BYD, Li Auto, and Series, are consistently profitable, while many others are burning cash. This has triggered aggressive price wars, with market leader BYD implementing significant price cuts. Solar & Battery Oversupply: Chinese solar companies faced sharp declines in 2024, with companies seeing a 28.8% drop in revenue and a 72.2% plunge in profits. The average operating rate in China’s automotive battery industry was 49.5% in 2024. In 2023, China’s lithium-ion battery production alone was enough to meet global demand, with total global capacity at nearly 2,600 GWh. The Export Challenge & Protectionism: To manage surpluses, Chinese high-tech companies are aggressively exporting. However, this is clashing with rising protectionism. The US has imposed a 100% tariff on Chinese EVs, and the EU has also applied duties. China’s growth model has historically relied on investment, often debt-financed, over consumption. This, combined with worsening demographics—with projections showing China’s population potentially falling to as little as 373 million by 2100 (down from 1.41 billion in 2022 and a projected 1.2-1.3 billion by 2050)—raises critical questions about the sustainability of this high-tech push and its broader economic implications. Just as the previous credit caused significant disruption to the global petrochemicals industry, we cannot afford to ignore the risks of a high-tech bubble bursting. What are your thoughts? Is history set to repeat itself, or can China navigate these challenges differently? 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.

HOUSTON (ICIS)–The US trucking industry saw slightly lower volumes moved in May as negative consequences of tariff effects are beginning to emerge, according to industry analysts. The American Trucking Associations (ATA) seasonally adjusted For-Hire Truck Tonnage Index fell by 0.1%, as shown in the following chart. Source: American Trucking Associations ATA chief economist Bob Costello said seesaw freight demand patterns make it difficult to discern any clear pattern in the market. “Excluding the services economy – the largest part of economic activity – the goods market is all over the map, thus impacting freight levels,” Costello said. “Construction is soft, manufacturing is up and down, and consumers are cautious.” April data was revised higher, to a 0.5% increase from a 0.3% decrease. The not seasonally adjusted index, which calculates raw changes in tonnage hauled, equaled 112.0 in April, 2.2% below March’s reading of 114.6. Both indices are dominated by contract freight, as opposed to traditional spot market freight. The May Freight Index – Shipments report from Cass Information Systems showed a 0.4 decrease month on month and a 4.0% decrease year on year, not seasonally adjusted, as shown in the following chart. Source: Cass Information Systems When seasonally adjusted, the decrease was -3.4%. “The trade war is having a variety of effects, with pre-tariff consumer spending still supporting freight demand,” Cass said. “The negative consequences of tariff effects are partly reflected in May data, as pre-tariff inventory stocking has started to turn to destocking, and those stocks will start to thin in the coming months.” After rising 13% in 2021 and 0.6% in 2022, the index declined 5.5% in 2023 and 4.1% in 2024, according to Cass data. So far, it is trending toward another decline in 2025, Cass said. In June, the shipments component of the Cass Freight Index is likely to decline 2% year on year on the normal seasonal pattern. The Trucking Conditions Index (TCI) from FTR Transportation Intelligence, which combines five major conditions in the US full-load truck market into a single index, held steady in April, as shown in the following chart. Source: FTR Transportation Intelligence FTR’s index lags the other two indices by one month. “Although overall market conditions changed only marginally, the underlying factors shifted greatly,” FTR said. “Freight rates were still technically a negative contribution within the TCI, but they improved sharply versus March.” FTR said freight volume swung from the largest positive of all factors in March to the largest negative in April. Avery Vise, FTR’s vice president of trucking, said tariffs and supply chain moves to minimize them have distorted freight market dynamics even though the overall TCI implied essentially neutral trucking conditions in February through April. “As we finalize data for May and beyond, those factors and swings in diesel prices are likely to expose the true instability in the freight market,” Vise said. “Meanwhile, developments such as rapidly rising truck insurance premiums and, plausibly, tighter scrutiny over truck drivers’ English language skills could serve to tighten capacity in the coming months. Uncertainty over the market’s direction remains quite high.”

SÃO PAULO (ICIS)–Brazil’s chemicals production posted its worst performance in over three decades during Q1 2025, with operating rates at 62% – down from 65% in the same quarter of 2024 – and production falling by nearly 4%, chemicals producers’ trade group Abiquim said on Wednesday. Continued poor performance of chemicals producers came about despite a hefty rise in import tariffs for dozens of chemicals implemented in October 2024, which producers were hoping would in part ease the pressure from abundant and more competitive overseas product. Year to date, imports have stabilized somewhat but remain at high levels that continue to challenge domestic producers’ performance. That stabilization gave way to Abiquim saying the protectionist measure is “yielding positive results” because in Q1 2025, import penetration fell to 43%, down from 53% in 2024. However, in the 12-month period to March 2025, import penetration reached 49% of all industrial chemical products consumed domestically in Brazil. Several subsectors posted double-digit increases in imports year on year; thermoplastic resins (up 23.7%); other inorganic products (31.2%); organic chemicals (27.4%); synthetic fiber intermediates (28.6%); and industrial solvents (14.7%). Basic petrochemicals imports rose by 8.6%. Brazil’s polymers major Braskem, Latin America’s largest petrochemicals producer and a commanding voice at Abiquim, said its operating rates in Q1 stood at 74%, flat year on year but an improvement from Q4’s 70%. “This [operating rates at 62%] is the lowest average level of operation in the entity’s entire historical series, which dates back to 1990. Sectors such as fertilizer intermediates (43%), plastic intermediates (45%), synthetic fiber intermediates (51%) and plasticizer intermediates (53%) showed idleness levels above the 38% average,” said Abiquim. “These figures make clear the sector’s persistent loss of competitiveness on the global stage, especially in the face of unfair competition from imported inputs, especially from the US and Asia, in addition to the high costs of energy, natural gas, and taxation.” The high influx of imports was again visible in the ever-rising chemicals trade deficit, which reached $49.82bn in the 12 months to March 2025, higher than the previous high of $48.68bn. Andre Passos, Abiquim’s CEO, attempted to offer a positive external perspective on Brazilian chemical producers’ difficulties, noting that these companies play a ‘price taker’ role in global markets due to heavy overall dependence on chemical imports – a characteristic shared by most Latin American economies. “[Therefore, chemicals production in Brazil is also] being impacted by fluctuations in the price of a barrel of oil, petrochemical naphtha and natural gas, as well as influenced by the conflict between Russia and Ukraine, in addition to global supply and demand conditions,” said Passos. “The fluctuation of the Brazilian real in relation to the US dollar also has a significant impact on prices practiced in the domestic market.” Still on protectionist measures, the current administration has increased some anti-dumping duties (ADDs) already in place, whilst considering new ones following cases brought by chemical producers to the government’s foreign trade body Gecex. In May, Gecex raised ADDs on US polyvinyl chloride (PVC) from 8.2% to 43.7%, whilst ADDs on US and Canadian polyethylene (PE) remain under review. A May meeting scheduled to debate these was postponed at the last minute, with deliberation now set for Monday, 30 June. MORE PROTECTION: STIMULUS PROGRAM Producers are putting many hopes in a new stimulus program being debated in parliament, called Presiq, which could replace a tax break known as REIQ which favored certain purchases of inputs. More in line with the times, Presiq is due to “target the sector’s recovery through intelligent tax incentives” based on low-carbon projects, said Abiquim. “Presiq can be even more structuring for the economy. In addition to reducing the trade deficit of the chemical sector and having as one of its goals, to operate up to 95% of the installed capacity of its plants, we can have an estimated positive impact of Brazilian reais (R) 112bn [$20.2bn] on GDP, generating up to 1.7 million direct and indirect jobs,” said Passos. “The programme could generate an additional R65.5bn in tax revenue whilst addressing structural competitiveness challenges facing Brazil’s chemical industry.” Some sources in Brazil’s chemicals market, however, said to ICIS that protectionist measures coming from a willing government will not be sufficient to save chemical producers from the hard reality of the Brazilian market. On the one hand, production costs are much higher in Brazil than in competing regions such as North America or Middle East, and production in Latin America remains mainly naphtha-based, deriving from crude oil. Competitors in North America are thriving thanks to abundant, natural gas-based ethane. Braskem intends to switch gradually to ethane, but that will require large investments in coming years while finances remain pressured by the global downturn, not to mention reliable supply of natural gas is yet to be secured as the company continues negotiating with the country’s state-owned energy major Petrobras. Finally, Brazilians go to the polls in October 2026, and a change in government could also bring a change in trade policy in the form of less protectionism. In that scenario, chemicals producers could find themselves still in the midst of the global downturn – forecast by some to last until 2028, by others until 2030 – and without the state’s protection. Front page picture: Chemicals facilities in Brazil Source: Abiquim Additional reporting by Bruno Menini

LONDON (ICIS)–Portugal’s energy regulator, the Energy Services Regulatory Authority (ERSE), has approved a pilot project by gas transmission system operator REN Gasodutos to inject hydrogen into the country’s national gas transmission network. The 18-month demonstration project, announced on 24 June, aims to assess the performance of infrastructure designed to handle up to 10% hydrogen blends, test coordination procedures between transmission and distribution operators, and validate a new gas quality control system. The hydrogen-natural gas blend will be distributed to a group of customers in the Braga district. Since the expected hydrogen concentration levels are in accordance with the operational limits of the natural gas burning equipment, no restrictions are expected for customers. This initiative supports the Portuguese national hydrogen strategy, which targets 15% renewable hydrogen injected into the natural gas network and 2-2.5GW installed electrolyzer capacity by 2030. ICIS data shows Portuguese gas demand totalled 3.4 billion cubic meters (bcm) in 2024, which would require approximately 0.5bcm (45,000 tons) of renewable hydrogen to meet the 15% target should it be implemented at national level. However, final hydrogen volumes may vary due to different energy levels compared to the same volume of natural gas. In February, REN announced the winners of the first renewable gas auction for renewable hydrogen, funded through the Portuguese Environmental Fund. This awarded long-term contracts for renewable hydrogen injection into the Portuguese gas network, committing to 119.30GWh/year (3,500 tons/year at lower heating value) of renewable hydrogen, priced at €127/MWh (approximately €3.80/kg at lower heating value). REN said at the time that blending would begin by 2028. REN is one of the five partners behind the Iberia-France-Germany H2Med hydrogen infrastructure project, which aims to facilitate Iberian hydrogen production to supply Germany by 2030. On 24 June, the partners signed the €7 million grant agreement for EU funding to support the development of the 248km 100% hydrogen CelZa pipeline, which will link Portugal and Spain.

TORONTO (ICIS)–The chances for new investments in Canada’s chemical and other industries have sharply improved under the new government, executives at trade group Chemistry Industry Association of Canada (CIAC) said in a webinar. The Liberals on 28 April won a fourth consecutive term – but under a new prime minister, Mark Carney, who in March took over from Justin Trudeau. Before becoming prime minister, Carney was a senior executive at a Toronto-based asset management company. Prior to that, he was the governor of two central banks: The Bank of Canada (2008-2013), during the Great Financial Crisis; and the Bank of England (2013-2020), during Brexit. Scott Thurlow, CIAC legal counsel, Chemicals Management, said Carney’s government was likely the most business-friendly government since the end of the Second Word War. “There is no such thing as a tax credit that this government won’t like if they think it will attract one dollar of additional investment,” he said. Thurlow’s only reservation was that the current finance minister seemed to spend too much time on “protecting” government-supported investments that were announced when he was industry minister under Trudeau. These investments were mostly in electric vehicle (EV) and battery projects, which received more than Canadian dollars (C$) 50 billion (US$36 billion) in government support. Christine Nahas, CIAC policy manager, said that Carney’s was a “conservative-liberal” rather than just a liberal government. Carney has adopted some of the Conservatives’ positions, especially on the development of Canada’s energy and mineral resources. Nahas said that the government would be looking at investments through an economic lens, with a strong focus on competitiveness and strengthening the economy. She added that Carney has committed to establishing Canada as an “energy superpower”, with accelerated project timelines in both clean and conventional energies. STABLE GOVERNMENT Thurlow and Nahas noted that while the Liberals won the largest number of seats in parliament, they do not have a majority, meaning they need support from at least one of the three opposition parties to pass legislation. As such, the opposition has “some leverage” to delay or amend legislation, they said. However, it was “highly, highly unlikely” that the opposition parties would join to bring down the government in a no-confidence vote, the executives said. Two of the opposition parties were in trouble after losing the elections, they explained. For one, there were questions about the leadership of the Conservatives, who had been far ahead in opinion polls for nearly two years – until the US tariff threat emerged and the Liberals in March forced Trudeau’s resignation. Furthermore, the left-leaning New Democratic Party (NDP), on which Trudeau’s minority government had relied, has been reduced to just seven seats, meaning it can be excluded from parliamentary committees, they noted. The Liberals won 169 seats, three short of the 172 needed for a majority in the 343-seat lower house, the House of Commons. PATH2ZERO DELAY Asked about CIAC’s view of Dow’s recent decision to delay its Path2Zero petrochemicals project in Alberta province, Thurlow said that the delay was due to changes in global commodities markets since Dow started planning that project. “The world economy has changed just a little bit since then, and it has been changing very quickly in the last couple of months,” he said. The delay was unrelated to Canada’s industrial carbon pricing, which remained intact, with the country remaining on track for a carbon price of C$170/tonne by 2030, he said. While Carney suspended the consumer carbon tax, he retained Canada’s federal industrial carbon pricing. With the consumer carbon tax gone, it was likely that the government would increase the industrial carbon price to meet its “very aggressive” emissions reduction targets, Thurlow noted. A higher carbon price would support more projects like Path2Zero. In related news, the Liberals, with support from the Conservatives, last week passed new legislation to speed up “nation-building projects” and remove barriers to interprovincial trade. However, critics have said that this “One Canadian Economy Act” to fast-track big infrastructure and energy projects risks infringing on the rights of Canada’s indigenous peoples. (US$1 = C$1.37) Thumbnail photo of Canada’s flag (Source: Government of Canada)

LONDON (ICIS)–The EU’s candidate list of hazardous chemicals has reached a landmark 250 entries after the addition of three new substances. Two of the ‘substances of very high concern’ (SVHC), which are used in cosmetics, personal and automotive care products, are very persistent and bioaccumulative, the European Chemicals Agency (ECHA) said in a statement. A third substance, used in textile treatment products and dyes, was described as toxic for reproduction. Of the 250 entries on the candidate list, some cover groups of chemicals so the overall number of impacted individual chemicals is higher. Under the EU’s Reach regulation, chemical companies have certain obligations if a substance they deal with is included in the candidate list, such as providing information on safe usage. Substances on this list may later be placed on the authorisation list, meaning they cannot be used unless companies apply for authorization and the European Commission authorizes continued use. Earlier this month, the EU announced a plan to streamline chemicals data with a scheme called the one substance, one assessment (OSOA) package. This aims to build a common platform to integrate existing databases and enable easier, earlier detection and action of risks from newer products.

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US are plummeting this week as general rate increases (GRIs) that took effect on 1 June failed to hold. Market intelligence group Linerlytica said rates collapsed under the weight of excess capacity. “Freight rates to the US West Coast have recorded their largest weekly losses in the last two weeks as their failure to retain any of their 1 June rate hikes have also put the peak season surcharge for contract customers at risk,” Linerlytica said in a Week 25 market update. “The early end to the transpacific peak season has not yet dragged down rates on the secondary routes that remain supported by buoyant cargo volumes, while charter rates also remain firm with very limited open tonnage.” Carriers pulled excess capacity out of the Asia-US trade lane in May after US President Donald Trump imposed exorbitant tariffs on China and have rushed to bring back capacity once the two nations reached agreement on a new trade deal. Rates on the global Shanghai Containerized Freight Index (SCFI) have given back all the increases from the past three weeks, with rates to the US West Coast falling by 20% week on week and rates to the US East Coast down by 7.5% from the previous week. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. They also transport liquid chemicals in isotanks. STRAIT OF HORMUZ Global shipping concerns surrounding the Strait of Hormuz in the Middle East have eased amid a ceasefire between Israel and Iran. Lars Jensen, president of consultant Vespucci Maritime, said in a LinkedIn post on Tuesday that the strait remains fully open and operational, adding that global container shipping major Hapag-Lloyd is continuing operations through the strait per normal. Carriers continue to avoid the Red Sea and Suez Canal because of threats of attacks from Yemen-backed Houthi rebels. Jensen said the Houthis likely will no longer feel bound by the ceasefire they made with the US in early May regarding not attacking US vessels in the Southern Red Sea and in the Gulf of Aden following the US bombing of nuclear facilities in Iran. The Houthis said previously that US ships in the Red Sea will be targeted if US launched any military attack against Iran. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page Thumbnail image shows a container ship. Photo by Shutterstock.