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.”

SAO 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 Q1 2024 – and production down 3.8%, year on year, 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 somehow stabilized but remain at high levels and clearly remain at levels which are making domestic producers’ performance very challenging. 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, tried to put a positive and external spin to Brazil’s chemicals producers woes, reminding the country’s chemicals producers – and those in the wider Latin America – are ‘price takers’ in the global markets, due to the heavy, overall dependence on imports. “[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.” 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.

LONDON (ICIS)–Covestro is acquiring Swiss multilayer adhesive films company Pontacol for an undisclosed sum as part of a strategic portfolio expansion, it said on Tuesday. The Germany-headquartered polymer materials producer said the deal would enable production capacity expansion for multilayer adhesive films in Europe and the development of new markets. The transaction, which is expected to close in the third quarter, includes two specialized production sites in Switzerland and Germany with 100 employees, focusing on different film technologies. Covestro said the film segment was growing worldwide, driven by increasing demand in future markets such as medical technology, mobility, and the textile industry.

SINGAPORE (ICIS)–Oil prices declined by more than $2/barrel on Tuesday afternoon in Asia, as US President Donald Trump said that the Israel-Iran ceasefire – which was confirmed by Israel – is now in effect. “The ceasefire is now in effect,” said Trump said in a social media post. Both Brent and WTI benchmarks were trading below $70/barrel as of 07:45 GMT. Crude prices in $/barrel Product Latest (as of 07:45 GMT) Previous Change Brent August 69.31 71.48 -2.17 WTI August 66.39 68.51 -2.12 Latest developments have eased concerns about the possible blockade by Iran of the Strait of Hormuz, which is vital for global energy trades. Trump had earlier announced on social media a “total and complete” ceasefire that will come into effect within 24 hours if both Israel and Iran maintain peace. At 06:20 GMT, the Israeli government released a statement declaring that its objectives in the conflict had been achieved, thanking Trump and the US for their “participation in eliminating the Iranian nuclear threat”. The statement from the Office of Israel Prime Minister Benjamin Netanyahu noted that Israel agreed to the ceasefire. “Israel will respond forcefully to any violation of the ceasefire,” it added. In a reversal from an earlier post denying a ceasefire, Iran foreign minister Abbas Araghchi in social media post on X that military operations on Israel had continued until “the very last minute” at 4am local time (00:30 GMT). Meanwhile, Islamic Revolution Guards Corps (IRGC) commander Mohammad Pakpour said that any renewed US aggression would be met with “even more crushing and regret-inducing responses”, according to Iranian state media. Following the easing of tensions in the Middle East, the focus should now return to core fundamentals, such as OPEC’s production ramp-up plans, global demand trends, and softening growth outlook – all of which argue for weaker oil prices, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note on Tuesday. US crude could fall below $65/barrel and resume its year-to-date bearish trajectory if tensions do not re-escalate, Ozkardeskaya said. (Adds details throughout) Visit the ICIS Israel-Iran conflict: impact on chemicals and energy topic page for latest updates and analysis

IPS talks to ICIS about its new BESS factory in Bulgaria and other developments The BESS production plant could speed up storage deployment in Bulgaria and in central and eastern Europe, boost grid stability Bulgaria eyes 10GWh BESS by end of 2026 WARSAW (ICIS)–To address rapidly growing demand for energy storage, International Power Supply (IPS) is set to officially open a new automated manufacturing facility of industrial and utility scale batteries in Bulgaria in September, Mariyana Yaneva, CEO at IPS, told ICIS in an exclusive interview. The manufacturing will launch with a 1.5GWh annual capacity, scaling to 3GWh by the end of 2025, IPS plans indicated. Yaneva said the move to produce industrial and utility scale battery energy storage systems (BESS) is “a natural next step for the company with 36 years of experience in R&D and manufacturing of power conversion systems and micro-grid solutions with projects ranging from the deserts of Saudi Arabia to Livingston Island in Antarctica.” In May, IPS announced the launch of the EXERON X-BESS 8, its latest innovation in utility-scale BESS. BENCHMARK PRODUCT The system delivers a rated capacity of up to 8.1MWh with an integrated 4MW inverter. This represents a new benchmark for power density and space efficiency in large-scale applications, IPS told ICIS. “Our objective is to deliver market value through a vertically integrated BESS designed to optimize total cost of ownership. The modular architecture of our system reduces costs associated with transportation, installation, and maintenance while the integrated power conversion system can support a wide range of applications, including grid-forming functionalities, offering asset operators the technical capability to stack revenues from power and systems services markets,” Yaneva added. “As a European manufacturer, we are also well positioned to capitalize on the noticeable shift in EU policy to support the development of cleantech industry in Europe through the upcoming NZIA requirements for public procurement as well as resilient and independent supply chains,” Yaneva told ICIS. “For the moment, investor interest in energy storage is very strong in Bulgaria and the wider region,” she said. This is also partially underpinned by available European funding schemes, “but equally so by the changing energy mix in those countries. For example, solar PV jumped from 4% in the annual energy mix of Bulgaria in 2020 to 14% in 2024,” she noted. Yaneva also told ICIS that, “As solar capture prices continue to decline and the spread between minimum and maximum prices in the day-ahead market widens, market conditions are increasingly favorable for arbitrage trading strategies”. In this context, she explained, BESS can play a “critical role” in enhancing energy management strategies for both renewable energy producers and industrial electricity consumers. Yaneva also said co-location or hybridization of generation and energy storage assets, especially solar-plus-storage, will be the new standard for continued development of the sector. As renewables make up an ever-increasing share of the generation mix, they will also have to take up more responsibilities with respect to the balancing of the system and the trading profiles that allow assets to capture a sustainable internal rate of return (IRR). BULGARIAN BESS TARGETS During a recent forum, Angelin Tsachev, executive director of the Bulgarian electricity transmission operator ESO also highlighted the large investor interest in the construction of electricity storage systems. Over the past nine months, BESS connection applications reached a total capacity of over 11GW and a storage capacity of nearly 32GWh. The preliminary contracts concluded are for a capacity of over 7.5GW and a storage capacity of 23GWh. Two independent energy storage facilities have already been put into operation: One has a power of 10MW and a storage capacity of 27MWh. The other has an installed power of 125MW and a storage capacity of almost 500MWh, ESO said. IPS is a preferred supplier to several co-located and stand-alone projects that will also start operations in Bulgaria by the end of the year. The capacity of the first production line is fully booked by the end of the year, Yaneva added. “Should the European Commission and national authorities extend the deadline for project implementation under the NRRP schemes beyond March 2026, as is already indicated by the latest voting in European Parliament, this will allow us to absorb more of the local demand, but in any case, we are looking for partners to expand on other European markets too,” Yaneva told ICIS.