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Brazil’s Petrobras mulls acetic acid, MEG plants in Rio as part of $6 billion capex plan
SAO PAULO (ICIS)–Petrobras is mulling production plants for acetic acid and monoethylene glycol (MEG) at its site in Rio de Janeiro as part of its 2025-2029 capital expenditure plans of Brazilian reais (R) 33 billion ($6.08 billion), the Brazilian state-owned energy major said this week. Ethylene supply, necessary for acetic acid and MEG plants, uncertain Investments in Rio could indicate favorable Petrobras-Braskem dynamics October 2026 may bring new Petrobras CEO, new capex plans While Petrobras fell short of giving more details on the petrochemicals investments, the company was more specific on capex plans for base oils and several fuels, including biofuels. In base oils, a company executive said earlier in the week at an industry event in Rio that the company is targeting 2029 for first production from its Group II base oils project at the Boaventura Energy Complex, also called as the municipality is in, Itaborai. The acetic acid and MEG plants would also be built at the complex. See bottom table for current capacities at the stie, according to ICIS Supply & Demand database. “A study for the production of acetic acid and MEG is under evaluation at the Boaventura Complex. Acetic acid is an important raw material for the production of paint, PET [polyethylene terephthalate], and the broader chemical industry,” it said. “Brazil currently imports its entire acetic acid demand and complements MEG demand with imports.” The company had not responded to a request for additional comment at the time for writing. For instance, to produce acetic acid and MEG Petrobras would need a supply of ethylene, which is in short supply in Rio unless petrochemicals major Braskem expanded its cracker in the state. Petrobras is the second largest shareholder in Braskem – with a stake of 36.1% although voting rights of 47% – and both companies are at the same time in talks on natural gas supply to Braskem’s Duque de Caxias complex in Rio. In coming years, the company will aim to switch feedstock at the site, from the current plans mostly running on crude-based naphtha into natural gas-based ethane facilities, currently more competitive. Analysts have said those investment plants will require large sums in coming years, but most of all would need the up-to-date elusive gas on natural gas, which basically depends on Petrobras given its dominance in the Brazilian market. In June, Braskem said the deal on gas, if reached, could unlock investments at its site of R4.3 billion. In fact, on Friday afternoon Petrobras released another statement which mentioned Braskem as investing R4 billion in Duque de Caxias, would add to the R29 billion Petrobras is to invest and making the total R33 billion. The first statement had mentioned those two figures but linked the R4 billion to another project operating in synergy with its assets. On Friday, the statement read: “Of the total to be invested, R29 billion will be contributed by Petrobras and R4 billion by Braskem, in a project that works in synergy with Petrobras assets,” it said. Also, in the previous release it did mention Braskem’s R4 billion figure, but, as it had been the official position up to now, those interments were subject to final approvals. Braskem’s own positioning on Friday is indeed the same. In a statement sent to ICIS late on Friday, the company said the potential investments – which it has always said would be R4.3 billion instead of Petrobras’ figure – remained only a potential because the deal with Petrobras has not yet been signed. Petrobras had not responded to a request  for comment at the time of writing. FUELS, LUBRICANTSApart from targeting production 12,000 barrels/day of base oils Group II by 2029, Petrobras’ special products commercial manager, Ulysses Donadel, also said at the industry event the company is mulling production of re-refined base oils (RRBO). Later, Petrobras’ statement on capex this week gave more clarity on capacities. It said it will also increase capacities for production of S-10 diesel (up by 76,000 barrels day) and jet fuel, up by 20,000 barrels/day. The plans also include a “dedicated” biofuels facility for production of 19,000 barrels/day of hydrotreated vegetable oil (HVO) and sustainable aviation fuel (SAF). “The project also includes two gas-fired power plants at the Boaventura Complex, which will participate in capacity reserve auctions. The engineering project for the power plants has been approved, and the units will leverage synergies with the infrastructure of the Itaborai Natural Gas Processing Unit (UPGN),” said Petrobras. “A lubricant oil re-refining project with a capacity of 30,000 cubic meters (cbm)/month, or 6,300 barrels/day, is also under evaluation at Reduc [its other side in Rio, included in the same complex as Duque de Caxias]. “With the operation of the Boaventura Complex for Group II lubricant oil production, Reduc may repurpose existing units to re-refine used oil, applying the circular economy concept to generate high-value products from waste,” it added. The company said the co-processing test is expected to take place this year after it had been authorized by Brazil’s oil and gas regulator the ANP. Petrobras said initial tests had proved reductions in emissions. As part of its green efforts, the company said it will build a new thermal power plant at Reduc to replace obsolete steam and power generation equipment, with expected capex of R860 million. “Investments of up to R2.4 billion in maintenance shutdowns at Reduc are also planned from 2025 to 2029, to ensure the integrity, reliability, and safety of the facilities. Major shutdowns are scheduled for 2026 in the delayed coking and hydrotreatment units of the refinery,” the company added. UNCERTAINTIESIn May, Petrobras said it had started commercial operations at the second module of that Natural Gas Processing Unit (NGPU) at the Boaventura Energy Complex, an expansion which stalled in the mid-2010s as the company got embroiled the Latin American-wide corruption scandal known as Lava Jato. Brazil’s rampant corruption levels have dwarfed many industrial plans before, but in the case of Petrobras there is an additional factor. That factor is the company controlled by any government in office in Brasilia. Petrobras’ CEO is directly appointed by the president, and it basically has the same status as a minister. Current polling shows the current center-left cabinet of Luiz Inacio Lula da Silva may struggle to revalidate the coalition of parties which support it in Parliament in the general election to be held in October 2026. In other words, a new president may appoint a new CEO – Lula has appointed two since 2023 – and it remains to be seen whether there will be new priorities. Moreover, some of the investments mulled in the sizeable capex plans to 2029 depend not only on Petrobras but other players in the chain. Front page picture: Rio de Janeiro’s Duque de Caxias/Reduc complex Picture source: Petrobras Focus article by Jonathan Lopez Additional reporting by Al Greenwood
US Woodside, Mexico’s Pemex joint oil venture 25% complete, remains on budget and time
SAO PAULO (ICIS)–Woodside’s Trion crude oil joint venture with Mexico’s state-owned Pemex is 25% complete and construction is running on budget and on time with expected start-up date for 2028, the US energy producer said to ICIS. The Trion project is expected to produce 100,000 barrels/day. Woodside is Trion’s operator and has a 60% stake. Pemex holds the remaining 40%. Total capital expenditure (capex) is set to stand at s $7.2 billion. This week, Woodside and Pemex’s project was mentioned by the International Energy Agency (IEA) as one of the few projects coming up in the Mexican oil and gas sector, and one of the few ones where a foreign company has a significant participation, given the dominant role Pemex plays in the Mexican market. In its annual Oil 2025 report, the IEA said Mexico is set to become the country where oil production falls the most in the next five years, decreasing to 1.29 million barrels/day by 2030. If realized, the figure would represent less than half of the nearly 3 million barrels/day Mexico was producing in the early 2000s. Woodside said Trion’s 100,000 barrels/day would increase Mexico’s oil production by approximately 7% when operational. Mexico’s oil output stood in 2024 at 1.97 million barrels/day. For years, Mexico’s government has fallen short of setting up targets or issuing forecasts. However, if Trion is to add 7% to national output with 100,000 barrels/day when operational in 2028, Woodside’s calculations would be in line with those of the IEA, which expects national output to be at around 1.47 million barrels/day in 2028. Woodside had not responded to a further enquiry to clarify that point at the time of writing. Even taking into consideration Trion’s expected output, the IEA still forecasts total output to fall further in 2029 and 2030. Crude output  (in million barrels) 2024 2025 2026 2027 2028 2029 2030 Mexico 1.97 1.84 1.74 1.60 1.47 1.40 1.29 Source: IEA “As the only foreign oil and gas company operating in the deepwater, Woodside is proud to partner with Mexico to develop the Trion Project and help achieve the country’s energy goals. Trion is a nationally significant project being pursued in partnership with Pemex. It is progressing on budget and on schedule for start-up in 2028 and it is now over 25% complete,” said Woodside. “The project is estimated to increase national oil production by approximately 7% and generate more than $10 billion in cumulative taxes and royalties for Mexico over its life. The expected returns from the development exceed Woodside’s capital allocation framework targets and will deliver enduring value to Woodside shareholders as well as the people of Mexico.” Woodside did not address questions about Pemex’s role as a partner in the joint venture, considering some of the company’s governance running problems, nor whether partial or full privatization of the oil major would help  the country recover some output it has lost or is expected to lose. Pemex and Mexico’s ministry of energy (Secretaria de Energia) had had not responded to ICIS’ requests for comment at the time of writing. The Trion project is located in the Perdido Fold Belt, 180 kilometers off the Mexican coastline and 30 kilometers south of the US-Mexico maritime border and is at a water depth of 2,500 meters approximately. Front page picture: Trion Project Picture source: Woodside
PODCAST: ‘Can we stop pretending that key economies are fundamentally strong? They are not.’
LONDON (ICIS)–As geopolitical tensions cooled, the chemicals industry did not have time to react to the spike in oil prices, and the seasonal demand drop in Europe could be more severe than the traditional summer lull. China polypropylene flooding global market, outpacing domestic demand Chemicals industry as leading indicator warns of wider economic ill-health Shutdown of plants in Europe is massive crisis Vietnam 20% tariff from US will weigh on both economies Risks of US cutting social security and international relief funding Key economies not as strong as presented Climate change needs to be a priority for businesses CEOs beset with challenging conditions Working patterns reshaped by climate change Stark landscape provides opportunities for innovators to thrive In this Think Tank podcast, Morgan Condon interviews John Richardson from the ICIS market development team, 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.

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VIDEO: Europe R-PET July colorless flake, bale prices drop in parts of Europe
LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Colorless bale prices drop in NWE, Eastern Europe and Italy Colorless flake reductions in NWE, Eastern Europe and Southern Europe Mixed colored flake, food-grade pellet prices stable for now
PODCAST: Energy Community has come a long way in reaching founding goals, director
LONDON (ICIS)– The Energy Community celebrates its 20th anniversary this year. Established in the aftermath of the Balkans war and the accession of many central European countries to the EU, the institution faces similar challenges now, being instrumental in supporting Ukraine’s energy resilience in the face of Russian attacks and assisting contracting parties on their path towards EU energy market integration. In this interview, Energy Community director, Artur Lorkowski, tells ICIS journalist Aura Sabadus about the pending opening of the EU energy chapter for Ukraine, Moldova and Bosnia-Herzegovina as part of their accession negotiations as well as the work done to engage observer countries such as Armenia and Norway. 
Europe chemicals producer prices in May fell at faster rate than previous months
LONDON (ICIS)–European chemicals producer prices continued to fall in May at a more significant rate than previous months, according to the latest data from Eurostat on Friday. Prices for chemicals manufacturers fell by 1.0% in the EU and 0.9% in the eurozone, supported by declines in key producing countries. Germany saw the most moderate decline at 0.5% on April prices. The biggest decline was recorded by Spanish producers, down 1.4%, following a 1.0% decrease a month prior, while France tracked a 1.1% drop compared with a 1.5% drop in April. Lower prices for the chemicals sector outstripped the fall in overall industrial producer prices, which was 0.6% lower for both regions. The main driver for decreases was energy pricing, which dropped 2.3% in the EU and 2.1% in the eurozone, with all other segments for remaining relatively stable on the previous month. This decline in energy pricing was key to lower chemicals prices for May, as this provided some leverage for producers to offer more competitive rates while providing some buffer to margins. Poor demand in Europe has meant that producers could not sustain prices at higher levels, despite a challenging business environment, as cheap imports remain abundant for many commodities. Overall producer prices continue tracking declines at less substantial than a year prior, although they remain significantly higher than 2021 levels, when markets were reshaped in the aftermath of the pandemic. Source: Eurostat Eurostat data is subject to revision. Thumbnail image source: Shutterstock
PODCAST: Europe PX, OX, mixed xylene chemical demand faces hardship
LONDON (ICIS)–In this podcast, ICIS market editors Zubair Adam and Miguel Rodriguez Fernandez discuss the low levels of xylene consumption in Europe. Mixed xylene consumption lethargic due to US tariff uncertainty PX demand remains low on competitive PET, PTA imports Europe PX exports to US also affected by US tariffs Mixed xylenes (MX) are traded in two grades. The isomer-grade xylene is used mainly to produce paraxylene (PX) and orthoxylene (OX). The main application for solvent grade is as a raw material for dyes, organic pigments, perfumes and medicines, and as a general solvent for paints and agricultural pesticides. PX is widely used as a building block to manufacture other industrial chemicals, notably purified terephthalic acid (PTA) and dimethyl terephthalate (DMT). OX is used mostly to produce phthalic anhydride (PA), an important intermediate that leads principally to various coatings and plastics.
SHIPPING: Asia-US container rates plunge further as capacity outstrips demand
HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US continued to slide this week as demand has eased and capacity has lengthened. Global average rates fell by almost 6% and are just below $3,000/FEU (40-foot equivalent unit) and around four-month lows, according to supply chain advisors Drewry and as shown in the following chart. Drewry’s rates from Shanghai to Los Angeles dropped by 15% week on week, while rates from Shanghai to New York fell by 11%, as shown in the following chart. “This decline is a direct result of the low demand for US-bound cargo and is a sign that the recent surge in US imports, which occurred after the temporary halt of higher US tariffs, will not have the lasting impact we had initially expected,” Drewry said. Drewry expects spot rates to continue to decline next week as well due to excess capacity and weak demand. Drewry’s container forecaster continues to see softening rates in the second half of the year, with the timing and volatility of rate changes dependent on US President Donald Trump’s future tariffs and on capacity changes related to the introduction of the US penalties on Chinese ships, which are uncertain. Rates from online freight shipping marketplace and platform provider Freightos also showed significant decreases to both US coasts. Judah Levine, head of research at Freightos, said the US’s 12 May tariff reduction on Chinese goods spurred a rebound in China-US container volumes that seems to be losing steam. “Possibly expecting a longer demand surge, carriers have also added what is now too much capacity to the transpacific, especially to the West Coast,” Levine said. Even with these tariff-driven pressures that pushed rates up sharply in June, however, the peaks for both lanes were at least $1,000/FEU lower than prices a year ago and may point to overall capacity growth in the container market, Levine said. 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), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. CONTAINER IMPORT TARIFFS AVERAGE 21% – MAERSKUS importers averaged an effective 21% tariff on all containerized imports, according to container shipping major Maersk. In a market update, the carrier said visibility has worsened and trade barriers have increased since the US formally announced its tariff package to the world on 2 April, the carrier said. “On average, companies are currently paying an effective average tariff rate of approximately 21% relative to container load on all US imports,” according to Maersk’s container-weighted effective average tariff rate metric. At its peak, shortly after 2 April, the average effective rate was 54%. The following chart from Maersk shows the container-weighted average effective tariff rate on US imports from 5 November. “For now, most country-specific import tariffs are paused while long-term deals are being negotiated, with deadlines coming up in July and August,” Maersk said. LIQUID TANKER RATES EDGE LOWER ON TRANSATLANTIC Rates for liquid chemical tankers ex-US Gulf were largely stable this week, except for declines along the US Gulf (USG) to Europe trade lane. This route remains largely dependent on strong contract volumes as most of the regular carriers were able to fill any excess capacity. Despite the limited available space, spot cargoes were not really discussed in the market this week as any spot interest is all but nonexistent along this trade lane. Most of the spot cargoes reported were diethylene glycol (DEG), styrene and caustic soda. From the USG to Asia, spot rates remain soft, particularly for smaller parcels but remain steady for larger parcels as the lingering uncertainty around tariffs continues to weigh on the market. The market overall has been relatively weak, leaving owners to remain flexible on rates to complete voyages. Spot cargoes of monoethylene glycol (MEG) and ethanol were seen in the market for July and early August dates. At present, owners are awaiting final contract nominations so it is still unclear whether any additional space will be available. If nominations are slower than expected, this would open additional space and could push rates lower. On the USG to Brazil trade lane, the market has been steady leading rates to remain unchanged week on week. There was a stable level of spot activity with only a handful of new requirements, however, there was a slight uptick in spot inquiries but not enough to influence a change in rates. Most frequently discussed in the market were ethanol and caustic soda cargoes.  Several traders reported inquiries about a one-year period contract of affreightment (COA) of various easy chemicals, starting in September for 5,000 tonnes/month. Bunker fuel prices continue to remain strong, on the back of higher energy prices due to the ongoing middle east crisis and volatility. Additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page
Brazil’s protectionism benefits few but ‘suffocates’ plastics transformers, manufacturing – Abiplast
SAO PAULO (ICIS)–Brazil’s highly protectionist model to cushion domestic producers from overseas competition is suffocating other parts of the production chain in a country obliged to import around half of its chemicals demand, the trade group representing plastics transformers Abiplast said this week. Instead of helping to maintain or expand industrialization, those “misguided” protectionist policies have contributed to the opposite in past decades, added Abiplast. The trade group’s statement could be seen as part of its lobbing against antidumping duties (ADDs) in place or being studied on several polymers, as well as the import tariffs on several chemicals implemented in October 2024 for 12 months and which continuation must be decided upon in coming weeks. COSTS ON TRANSFORMERSAbiplast said some of the higher import tariffs implemented in 2024 or ADDs in place have hit its member companies hard as they have to pay more key materials such the widely used polymers: polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), or polyethylene terephthalate (PET). “We are the only country in the world to apply antidumping measures on PP against the US, while other essential resins such as PVC, PET and PE continue to be protected by heavy tariffs. This model, which is repeated systematically, has suffocated the industry, hindering our competitiveness and innovation,” said Abiplast. “[The hike in import tariffs in 2024] Deepened the cost gap we face: we pay up to 40% more for plastic resins than our international competitors. The result: more expensive products for Brazilians, higher inflation, and less capacity to compete globally. This protectionist policy, instead of strengthening, accelerates the country’s deindustrialization.” Abiplast members are not only being hit by higher costs but by lost work as companies are increasingly opting to import finished products, instead of buying them from local transformers as their final prices have risen due to the higher tariffs. According to its calculations, imports of finished plastic products grew by 29% in 2024, a figure which could even be higher this year since the hike in tariffs only affected the last quarter of 2024. The increase will be inevitable because, “we suffocate those who transform and create opportunities”, in Brazil as companies buy finished product abroad due to high prices at home, ultimately propping up other countries’ manufacturing sectors, said Abiplast. “We cannot accept that the defense of strategic inputs devastates important sectors and destroys jobs. The government urgently needs to take a strategic look at the development of the entire productive sector, in order to strengthen the country’s economy,” said Abiplast. “If it wants to promote innovation, sustainability and competitiveness, it must break with the logic of permanent protection of raw materials and balance the tariff escalation. Brazil can no longer be a prisoner of policies that support a few and harm many.” UNPLEASANT REALITIESAbiplast finished saying that, while Brazil’s policymakers and analyst at large are highly critical of the US’ protectionist shift with Donald Trump as president, the reality in Brazil does not differ much from that of the US. In Brazil, sharply higher US import tariffs announced and then paused by US President Donald Trump in April came to be known as the ‘tarifaco’ – which could be translated as the big tariff hit. The difference between the US and Brazil’s ‘tarifacos’ is that Brazil’s has been going on for decades and it has been suffered in silence by many companies in manufacturing, said Abiplast. “While the world is perplexed by Donald Trump’s super tariff package against China, here we have been living with a silent tarifaco for years,” it concluded. Brazil’s Ministry of Development, Industry, Trade and Services, which oversees foreign trade policies under the body Gecex, had not responded to a request for comment at the time of writing. Abiquim, which represents chemicals producers such as Braskem or Unipar, and which has actively lobbied for most of the protectionist measures Abiplast criticizes, had not responded to a request for comment at the time of writing. Thumbnail image: Santos Port in Sao Paulo state, Latin America’s largest port (Image source: Port of Santos Authority)
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