LONDON (ICIS)– With the end of the Russian gas transit via Ukraine, Denmark and Poland are positioning themselves as a viable transit corridor for supplies to central and eastern Europe. The pending relaxation of Poland’s gas storage rules and a more efficient calculation of transmission tariffs is beginning to draw traders’ attention. Ukraine has ramped up imports and traders have booked firm quarterly capacity on the Ukrainian-Polish border for the first time ever in May. Although there are risks, including the possible resumption of gas flows via Nord Stream pipelines, Clement Johan Ulrichsen, head of gas market at Denmark’s grid operator Energinet and Stanislaw Brzeczkowski, chief engineer in the gas market division of the Polish counterpart, Gaz-System, tell ICIS that the Baltic Sea Gas Corridor offers a reliable and competitive alternative in the short and long-term.

LONDON (ICIS)–Expectations for a flurry of Chinese wax volumes to reach Europe in June sent bearish ripples through domestic spot prices for paraffin wax this week, despite the US and China agreeing to a temporary trade truce. Following Monday’s news that the US-China trade tariffs will be reduced for 90 days, there was little immediate positive impact on prices for domestic wax grades. In fact, spot prices were under pressure as the market is expected to absorb wax volumes originating in China from June onwards. Over the last month, Chinese wax sellers have been dropping their offers aiming to entice European buyers. The sale strategy looked to avoid the US import duties announced in April and find alternatives homes. European producers held back from bowing to pressure from the more affordable Chinese wax material and kept prices steady for several weeks. This week, ICIS published ranges for 52-54 °C, 56-58 °C and 60-62 °C shed value as the assessed timeframe is for cargoes loading or delivered four-to-six weeks forward from the date of publication. Chinese CIF-origin wax volumes also showed some weakness this week, inching down $30/tonne to $1,180-1,220/tonne, as freight rates fell further. Sources voiced expectations for some of the downwards trend to reverse slightly. The US-China truce may drive some sellers to review their strategy and take advantage of the 90-day drop in tariffs. But this may prove to be short-lived. This is because of the month-long shipping time for cargoes of Chinese wax to reach the US and the fact that the current deal ends in three months. This means any cargoes that begin the trip to the US in over two months time will be vulnerable to political developments and exposed to a deal falling through at the last minute should the vessel arrive after the 90-days period.

HOUSTON (ICIS)–The tariff deal that the US has reached with China did not eliminate the duties on steel, aluminium and auto parts, all of which could lower automobile production and reduce demand for the plastics and chemicals used to make the vehicles. The US maintained its 25% sectoral tariffs on Chinese imports of steel, aluminium and auto parts. It levies the same tariffs on imports from much of the world. Imports from Canada and Mexico can avoid the tariffs if they comply with the nations’ trade agreement, known as the US-Mexico-Canada Agreement. Oxford Economics expects US auto production will fall by -2.0% to -0.9% year on year in 2025. Fitch Ratings, a credit rating agency, lowered its US auto sales forecast by 6.7% and warned of production cuts. WHY ARE AUTOS IMPORTANT TO CHEMSAutomobiles made in North American contain an average of 198 kg of plastic, according to ICIS, making them an important end market for producers. Polypropylene (PP) is the most commonly used resin in North American automobiles followed by polyurethanes and nylon, as shown in the following charts. In addition, automobiles are large end markets for paints and coatings. In all, the typical automobile has nearly $4,000 worth of chemistry WHAT CHEMS SAY ABOUT AUTOSCelanese, whose Engineered Materials segment is heavily dependent on autos, stressed the uncertainty about the effects that tariffs will have on this key end market during the second half of the year. It will prepare by reducing inventory, controlling costs and lowering operating rates if warranted by demand weakness. Polyurethanes producer Huntsman is seeing automobile build rates drop low-single digit percentages. By the time order patterns trickle through original equipment manufacturers (OEMs) and down to chemical companies, Huntsman is seeing double-digit drops in some order patterns. AdvanSix warned that uncertainty surrounding tariffs is affecting the market for nylon and other engineering plastics. Axalta Coating Systems, which makes auto paint, warned of a $50 million gross annualized charge from tariffs. Axalta lowered its 2025 sales guidance to $5,300-5,375 million from $5,350-5,400 million. Earnings guidance remained unchanged. Steps that Axalta could take to offset a portion of that hit include insourcing production capacity to domestic plants; sourcing raw materials locally; reformulating products; managing strategic inventory; and executing pricing actions. TARIFFS RAISE AUTO COSTS, THREATEN OUTPUTTariffs on auto inputs will increase costs for vehicles, and producers will likely pass through a portion of those higher costs to customers. The size of those cost pass throughs will play a large role in the tariffs’ effects on chemical demand. Higher prices for automobiles will discourage sales. Lower sales will reduce auto production and cut demand for plastics and chemicals used to make those vehicles. THE EFFECT SO FAR ON AUTO BUILDSPrior to the announcement of the US and China trade deal, Ford estimated that the gross cost impact from the tariffs is $2.5 billion. Among that, half will come from imported and exported parts as well as the effect that steel and aluminium tariffs will have on domestic prices. The rest is from imported vehicles. Already, Stellantis halted production for two weeks at a plant in Windsor, Ontario Province, Canada, because of tariffs. AUTO’S EXPOSURE TO TARIFFSThe US auto industry’s exposure to tariffs is not trivial because the country imports enormous amounts of auto parts, steel and aluminium. Many of these products are subject to 25% sectoral tariffs or 10% baseline tariffs. More than 50% of the content of cars assembled in the US is imported, according to a 3 May CNN article, citing US government statistics. AUTO PART TARIFFSThe following chart breaks down 2024 general imports by country for auto parts under the 8708 code of the harmonized tariff schedule (HTS). Figures are in billions of dollars. Source: US International Trade Commission (ITC) Not all auto parts will be hit by the 25% tariffs. Some parts are excluded. Those from Mexico and Canada will escape the levy if they comply with the USMCA. STEEL AND ALUMINIUM TARIFFSThe following chart shows 2024 general imports of iron and steel under the HTS codes 7206-7224. These codes cover iron and nonalloy steel; stainless steel; and other alloy steel. The chart breaks down the imports by country and lists the value in trillions of dollars. Source: ITC Metal imports from the UK will be exempt under a recent trade deal, as indicated by a press conference in that country. Imports from Canada and Mexico would be exempt from these tariffs if they comply with the USMCA. Not all of these steel imports would be used in automobiles But the chart does illustrate that the US imports iron and steel from many countries that will be covered by the 25% tariffs. The following chart provides a similar breakdown for 2024 general imports of articles of iron and steel under Chapter 72. Figures are in trillions of dollars. Source: ITC The following chart provides the country breakdown for 2024 general imports of aluminium and articles thereof under Chapter 76. Figures are in trillions of dollars. Source: ITC OTHER THREATS TO DOMESTIC AUTO PRODUCTIONTariffs are taxes, and taxes reduce economic growth. Slower GDP growth translates to lower sales and production. ICIS expects that US economic growth will slow to 1.5% in 2025 from 2.8% in 2024. Growth in 2026 could be 1.7%. The country has a 34% chance of slipping into a recession in the next 12 months. Many US consumers bought automobiles to avoid paying tariffs. Those purchases made ahead of the tariffs will come at the expense of future sales. US SELF-SUFFICIENT FOR MANY PLASTICS, CHEMS USED IN AUTOSMany of the plastics and chemicals used by the US auto industry are produced in abundance in the country, and that will limit customers’ exposure to the nation’s tariffs for those products used in automobiles. The US is self-sufficient in polypropylene (PP), polyvinyl chloride (PVC) and polyethylene (PE), a plastic used in packaging and fuel tanks. Nylon is excluded from the tariffs. Polyurethanes, the second most common polymer used in automobiles, are made with methylene diphenyl diisocyanate (MDI), and a substantial amount of US MDI imports comes from China. The US also relies on imports of acrylonitrile butadiene styrene (ABS), much of which comes from Mexico, South Korea and Taiwan. Additional reporting by Stefan Baumgarten, Joseph Chang and Jonathan Lopez Insight article by Al Greenwood (Thumbnail shows automobile. Image by Shutterstock)

By Jennifer Sanin and Tatjana Jovanovic This article reflects the personal views of the authors and is not necessarily an expression of ICIS’s position. LONDON (ICIS)–The EU’s choice to oust dissenters from the decision-making process on a Russian gas ban is an act of political desperation. Recently, the European Commission presented its plan to end Russian fossil fuel imports by 2027 but failed to offer much detail until the release of legislative proposals in June. While decisions on sanctions require a unanimous vote to pass, legislation can pass via “qualified majority”. Restricting trade with a country seems like the definition of a sanction, but the EU’s choice to make it a legislative issue conveniently sidelines the inevitable dissent from less compliant member states. Both Slovakia and Hungary , whose main gas supplier is Russia, have vehemently rejected the proposal and are seeking joint action to counter it. More and more eastern European populations further impoverished by high energy costs are turning against the EU’s stance on Russian energy. The common scare tactic of Russian gas supply weaponization can not be wielded against these states, as they are clearly more concerned about the EU cutting off their access to affordable energy than Russian President Vladimir Putin himself. Intelligence agencies and media outlets can blame the trend on “Russian interference” all they like, but reliance on costly and volatile global LNG is hardly conducive to a stable energy price for consumers. “Not being supplied by Russian gas means getting dependent on the US, which is not really reliable at the moment,” one trader said. “Hard to get the gas over unless you reverse flow from west EU,” another trader added. “And relying on LNG as well… so I get [their concerns].” Indeed, the cost of firm annual transit from Netherlands to Slovakia totals €3.27/MWh compared with just €1.36/MWh to pull on Hungary’s Turkstream volumes, which themselves are contracted at a discount to the TTF. A moral argument? Diversity of supply ought to mean just that: a mix of all possible sources, including the huge fuel-rich land just over the border. Business itself does not necessarily bend to geopolitical shifts. For a long time after Russia’s invasion, Ukraine continued making money off transiting its aggressor’s gas to Europe. Plenty of US and European trading partners either violate human rights outright or hold deeply opposing cultural values – China’s oppression of Uyghurs, Saudi Arabia’s war in Yemen, Sharia law in Qatar to give a few examples. Following the logic of doing business exclusively with “morally righteous” partners, Europe would have to limit its trade to only include secular Western states. The outcome of the war can not rationally be linked to eastern Europe’s consumption of Russian gas, and the ban is blatantly an ideological one. Cheap Russian gas? One riposte to the concept of “cheap” Russian gas is to say that Gazprom supplied European companies under legacy oil-linked contracts, which eventually turned out more expensive than hub pricing amid gas market liberalisation. Already in 2015, many of these legacy contracts were re-written to incorporate TTF linkage . Then in 2018, the Russian energy giant adapted by selling excess volumes on an electronic sales platform at TTF-linked prices, which ICIS covered extensively at the time. Anyway, specific contract terms are a distraction from the crucial point that Russian pipeline gas is a flexible and abundant source of supply that would ease volatility across Europe, not just regional hubs. Slovak energy company SPP recently argued that lack of infrastructure capacity makes eastern Europe more vulnerable to supply crunches. This could be addressed with infrastructure expansion but uncertainty around Europe’s fossil fuel phase-out and a possible Russia-Ukraine peace deal makes such projects hard to plan. Speculators’ paradise One could also ask who stands to gain from such a volatile energy price environment while European consumers and industry suffer. The total removal of Europe’s most flexible supply source would almost inevitably expose the markets to price swings, and a volatile environment is most attractive for wealthy speculative traders. TTF front-month at-the-money implied volatility – the option market’s measure of a contract’s future price swings – skyrocketed after the invasion and has hovered over 50% ever since. That is much higher than the benchmark contract for most liquid commodity, Brent crude M+2, and therefore more lucrative for high-risk speculative traders. At-the-money July ’25 Brent implied volatility stood at around 30% on 14 May. The market impact of heightened speculative activity is a hotly debated topic , specifically its impact on inflating prices (in the case of net longs)– but most sources polled by ICIS agree it can exacerbate volatility. This begs the question… who are the winners of the EU’s political grandstanding? While it is no secret that eastern Europe is often used as a playground for West versus East, this latest proposal may have gone a step too far.

BANGKOK (ICIS)– South Korea’s petrochemical production is projected to decline by 1.4% in 2025, with export volumes expected to contract by 4.2%, while domestic demand is forecast to increase by 2.3%. Industry to remain export-driven Domestic consumption to reverse 6.6% contraction in 2024 Economic recovery likely limited “The operating rate is expected to decline slightly due to continued oversupply and the rapid pace of production expansion from China,” the Korea Petrochemical Industry Association (KPIA) said in a report prepared for the Asia Petrochemical Industry Conference (APIC) 2025. The conference is being held in Bangkok, Thailand on 15-16 May. “[With] trade protectionism spreading worldwide, it is expected that operating rates will be further adjusted due to a decline in [exports],” KPIA said. Full-year petrochemical production for 2025 is expected to shrink to 20.7 million tons, as economic recovery is expected to be limited, amid an oversupply in China. However, purchases are expected to gradually pick up, especially in major demand centers. South Korea’s petrochemical production in 2024 declined by 1.4% to 21.1 million tons. Its petrochemical export volumes in 2025 are projected to decline further to 12.3m tons, after shrinking by 3.1% in 2024. South Korea is a major exporter of synthetic resins, synthetic fiber and synthetic rubber, with overseas sales accounting for a substantial portion of total production of these products. S Korea 2025 Petrochemical Industry Forecasts (in ‘000 tons) Products Production Exports Exports share to total output (%) 2024 actual export growth (%) 2025 projected export growth (%) Synthetic resins 14,946 9,533 63.8 -1.1 0.3 Synthetic fibre raw materials 5,193 2,401 46.2 -2.6 -6.1 Synthetic rubber 614 387 63.0 0.6 -2.9 Source: KPIA “In 2025, the petrochemical industry is expected to face even more difficult times ahead … Overall, the export-driven growth trend is expected to continue,” the KPIA said. Domestic petrochemical consumption this year is projected to grow by 2.3% to 9.5m tons, reversing a 6.6% contraction in 2024. Due to intensifying competition with low-priced Chinese products, however, the pace of domestic demand recovery is expected to be limited, according to KPIA. Focus article by Jonathan Yee

LONDON (ICIS)–Economic growth in the UK strengthened in the first quarter with GDP estimated to have grown by 0.7%, according to official data on Thursday. The economy accelerated from the previous quarter when GDP grew by just 0.1%, the Office for National Statistics (ONS) said in its first estimate, which is subject to revision. The rate of growth in Q1 is the strongest in a year, since the first quarter of 2024 when GDP grew by 0.9%. Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 0.9% 0.5% 0% 0.1% 0.7% Growth in Q1 2025 was driven by an increase of 0.7% in the services sector. Production also grew, by 1.1%, while the construction sector remained flat, the ONS said. The Q1 figures were recorded before “Liberation Day” US trade tariffs were announced at the start of April, with these likely to be reflected in future economic data.

BANGKOK (ICIS)–Sluggish domestic demand weighed on Japan’s petrochemical industry, resulting in reduced production volumes in 2024 compared with previous years, according to the Japan Petrochemical Industry Association (JPCA). 2024 ethylene output falls 6.3% Production of five major plastics shrink by 5% Japan economy forecast to grow by 1.2% in 2025 “Although some crackers in Southeast Asia and East Asia are reducing production, there are plans for capacity increases in crackers that significantly exceed demand in China,” JPCA said in a report prepared for the Asia Petrochemical Industry Conference (APIC) 2025. The conference is being held in Bangkok, Thailand from 15-16 May. Operating rates of crackers in Japan are expected to remain lowered, as with previous years, JPCA said. Japan’s ethylene production in 2024 fell 6.3% year on year to 4.99 million tonnes, as domestic crackers have operated at below 90% of capacity since August 2022, with the monthly average run rate falling below 80% five times in 2024. Japan’s real GDP growth rate in 2024 was 0.1% amid weak exports, neutral growth in private consumption, and a slight increase in government consumption. For the whole of 2024, the country’s total production of five major plastics – namely, linear density polyethylene (PE), high density PE (HDPE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC) – declined to 5.7 million tonnes, lower by 5.2% from 2023. Production (in thousand tonnes) Product 2024 2023 % change Ethylene 4,989 5,324 -6.3 LDPE 1,160 1,219 -4.8 HDPE 656 665 -1.4 PP 1,935 2,075 -6.8 PS 549 564 -2.7 PVC 1,406 1,496 -6.0 Styrene monomer (SM) 1,297 1,428 -9.2 Ethylene glycol (EG) 276 264 4.6 Acrylonitrile (ACN) 303 341 -11.2 Sources: METI, Japan Styrene Industry Association (PS, SM) and Vinyl Environmental Council (PVC) Domestic demand as ethylene equivalent in 2024  inched up by 1.4% to 3.92 million tonnes, according to JPCA data. While the global economy is expected to grow steadily in 2025, there is a risk of deterioration in the global economy and a corresponding decline in demand due to geopolitical issues, JPCA said, citing Russia’s invasion of Ukraine, the Israel-Hamas war, as well as the tariff policy of the US Trump administration. The latter has caused costs of raw material prices to soar, JPCA said. Meanwhile, Japan’s real GDP growth rate for 2025 is projected to accelerate to 1.2%, supported by increased exports, sustained growth in personal consumption, and increases in capital investment, said JPCA. Higher wage hikes in 2025 should help boost domestic consumption, it said. In the report, JPCA called on the petrochemical industry to adopt new roles and responsibilities in achieving carbon neutrality and advancing a recycling-oriented society. The report outlined a two-stage timeline: first, to reduce greenhouse gas emissions from existing facilities by immediately deploying currently available technologies; and second, to establish sustainable development goals by gradually introducing new technologies into society. “Not only corporate efforts but … collaboration and system design throughout the supply chain are required,” JPCA said. Focus article by Jonathan Yee

BANGKOK (ICIS)–External factors continue to pressure Thailand’s petrochemical industry, driven by new capacity additions from low-cost producers, particularly those in the Middle East, according to a report by the Federation of Thai Industries, Petrochemical Industry Club (FTIPC). Global PE, PP, PX oversupply weigh on Thai industry Trade tensions threaten Thailand export growth Proposed US tariff hikes could disrupt supply chains Despite these obstacles, the industry is on a gradual recovery path, driven by increasing demand in key sectors such as food packaging, pharmaceuticals, and electronics, the FTIPC said in a report released for the Asia Petrochemical Industry Conference (APIC) 2025. The two-day conference in Bangkok, Thailand, ends on 16 May. However, domestic consumption remains under pressure due to high household debt levels, which could impact the demand for durable goods and related petrochemical products. Here is a summary of the FTIPC’s outlook for petrochemical products produced in Thailand this year: Southeast Asia’s second-largest economy expanded in 2024 by 2.5%, accelerating from the 2.0% growth in 2023. Household consumption growth over the period slowed to 4.4% from 6.9% in 2023. The Bank of Thailand in March said that it expects Thailand’s economy to grow just above 2.5% in 2025, falling short of earlier projections, as high household debt and structural challenges in manufacturing continue to hinder an uneven recovery. While signs of recovery are evident, the industry still grapples with significant challenges, particularly global oversupply in polyethylene (PE), polypropylene (PP), and paraxylene (PX), the FTIPC said. “This oversupply continues to strain profit margins,” it said. Additionally, geopolitical tensions, trade restrictions, and economic slowdowns in major export markets such as China and Europe pose further risks to growth. Thailand is currently facing a 36% tariff on its exports to the US, with a temporary pause on these tariffs set to expire in July. “The United States has raised concerns among Thai industries, particularly those heavily dependent on exports, by proposing tariff increases,” FIPTC said. “If implemented, these tariff hikes could disrupt supply chains, elevate production costs, and pose significant challenges for Thai exporters,” it added. “Higher import duties may reduce competitiveness and profitability, forcing businesses to reassess their market strategies and cost structures,” it said. Looking ahead, Thailand’s petrochemical sector must navigate a volatile global market while capitalizing on domestic demand growth. Strategic investments in feedstock diversification, sustainability, and advanced manufacturing are crucial for the sector’s success. “To remain competitive, industry leaders will need to focus on cost optimization, innovation, and regional collaboration to strengthen their market position and drive long-term growth,” the FTIPC said. Furthermore, Thailand’s PTT Global Chemical (PTTGC) is set to become the country’s first chemical producer to integrate US-imported ethane as an alternative feedstock. Under the agreement, PTTGC will secure an annual supply of 400,000 tons of ethane to meet growing market demand in a highly competitive environment. The company expects to begin receiving imported ethane in 2029. PTTGC has entered into long-term agreements with key partners, including Very Large Ethane Carriers (VLECs) service agreements with parent firm PTT Public Co (PTT) and Malaysia’s liquefied gas transportation firm MISC. Additionally, PTTGC has signed a long-term terminal service agreement with Thai Tank Terminal C (TTT) to facilitate the delivery and storage of ethane at the Map Ta Phut Terminal in Rayong. Meanwhile, the Thai plastics industry is facing growing competition from finished goods imported from China and competitive supplies from the Middle East. This influx of lower-cost products is intensifying market pressure, potentially affecting domestic manufacturers in Thailand. Moreover, China’s oversupply across sectors like EVs, electronics, and plastics has impacted manufacturing in Southeast Asia, including Thailand. Thailand’s overall polymer consumption has seen a slight increase last year. However, Thai converters are facing significant challenges from geopolitical uncertainties, a global economic slowdown, and high inflation rates, exacerbated by a rise in major polymer imports from China and the Middle East. Insight article by Nurluqman Suratman Thumbnail image: At the Thai-Chinese Rayong Industrial Zone, located at the east coast of Thailand on 29 December 2021. (Xinhua/Shutterstock)

This article reflects the personal views of the author and is not necessarily an expression of ICIS’s position. Romanian pro-EU candidate favours free trade but is less outspoken on clean energy Polish and Romanian presidential candidates’ position on Russia could sway EU policies Rise of populist parties across CEE could lead to fragmentation of markets LONDON (ICIS)– Romanians and Poles will be heading to the polls on Sunday and their vote could hardly be more consequential for the direction of energy markets in central Europe and arguably the EU as a whole. Apart from holding presidential elections on the same day, there are many other notable similarities. As mayors of Bucharest and Warsaw, educated at elite EU universities, Romania’s presidential candidate Nicusor Dan and his Polish counterpart Rafal Trzaskowski have strong pro-EU agendas. At the opposite end, Romania’s populist far-right candidate George Simion and Poland’s Karol Nawrocki prefer to champion the cause of the EU-disillusioned grassroots. But there are also differences. While Dan and Trzaskowski promote the EU’s market-based economic model, the Romanian candidate is less outspoken in favour of clean forms of generation than his Polish counterpart. Simion, on the other hand, embraces economic nationalism, with a strong emphasis on state control over natural resources. He bemoans the abnormal weight of spot trading in the Romanian gas market, caused primarily by heavy market regulation and taxation, but proposes the continuation of state intervention. Like Nawrocki, he advocates preserving coal-fired generation but acknowledges the role of renewables in the installed capacity mix. Perhaps the most critical point in the candidates’ electoral campaigns remains their position on Russia. Unlike Simion, leader of the far right AUR party, who has been more amenable to a rapprochement with Moscow, Nawrocki continues his Law and Justice Party’s anti-Russia narrative. Nevertheless, Simion’s recent fleeting trip to Poland to endorse the conservative candidate elicited sarcastic remarks from the Polish prime minister Donald Tusk who said the encounter ‘had made Russia happy.’ If elected, their position on Russia will matter to the wider EU market on several accounts. In Romania’s case, a Simion win would swell the chorus of populist eastern European leaders such as Hungary’s Viktor Orban or Slovakia’s Robert Fico opposing Russian sanctions and favouring the resumption of Russian oil and gas supplies to Europe. With a standing ban on entering Ukraine and Moldova, Simion has already expressed opposition to supporting Ukraine’s war efforts and insisted on protecting Romania’s interests rather than supporting neighbouring countries. This raises questions about his commitment to facilitating the expansion of cross-border electricity and gas interconnections with Ukraine and Moldova and ultimately threatens to undermine Kyiv and Chisinau’s EU membership bids. Although Nawrocki’s political stance on Russian fossil imports is unclear it is equally uncertain whether as an EU sceptic he would lend support to EU Russian sanctions. In hindsight, Romania and Poland have benefited from substantial EU funds, collectively raking in over €300 billion since their accession in 2007 and 2004. Even so, large swathes of the population remain disillusioned as distortive national economic policies have been preventing an equitable distribution of funds. This is symptomatic of all central and eastern European countries, where the population felt left behind, even though their countries had been net beneficiaries of EU support since accession. The emergence of populist movements with strong nationalist, interventionist and anti-EU agendas across central and eastern Europe may not lead to a full breakup of the bloc but threatens to fragment energy markets and inject further political instability in an already volatile environment. As central and eastern Europe’s largest countries, the outcome of Sunday’s elections in Romania and Poland will provide a tantalizing insight into the direction that the EU will take and policies that it intends to pursue in the long term.