HOUSTON (ICIS)–HB Fuller plans to shut down nearly one-third of its plants globally and drastically reduce the number of warehouses it has in North America, the US-based adhesives producer said on Wednesday. When HB Fuller completes the shutdowns in its fiscal year of 2030, it will have 55 plants globally, down from 82, the company said. By the end of 2027, HB Fuller will have 10 warehouses in North America, down from 55. HB Fuller expects to cut annual pre-tax costs by $75 million/year by the time it completes the shutdowns. The company expects to spend $150 million over the next five years to shut down the sites. “Our manufacturing footprint consolidation, coupled with our planning and logistics reorganization, are important steps in our strategic plan to achieve an EBITDA margin consistently greater than 20%,” said Celeste Mastin, CEO. “These actions will not only reduce costs through improved capacity utilization, they will also enable us to better serve our customers and reduce future capital expenditure requirements.” As an adhesives producer, HB Fuller’s raw materials include tackifying resins, polymers, synthetic rubber, plasticizers, and vinyl acetate monomer (VAM).

HOUSTON (ICIS)–A ceasefire and hostage release agreement between Israel and Hamas announced on Wednesday is unlikely to have much of an impact on crude oil and chemical markets, though it could lower the geopolitical premium. The agreement was reached through diplomacy by the US, Egypt, and Qatar, and will be implemented for the most part by the incoming administration of President-elect Donald Trump, US President Joe Biden said in remarks from the White House. ICIS feedstocks analyst Barin Wise said he does not expect that the deal will have a meaningful impact on crude oil markets because the affected region is not oil producing. “This may trim the geopolitical premium in crude since it eliminates a hot spot in the Middle East,” Wise said. “However, if we look at the market today, crude is up big on other factors, more than offsetting any effect the ceasefire may have.” Crude prices surged on Wednesday largely in response to fresh US sanctions on Russia, which the International Energy Agency said could crimp global supply. Futures prices for WTI settled on Tuesday at $77.50/bbl and rose to $79.51/bbl before midday. WTI settled at $80.04/bbl on Wednesday. IMPACT ON SUEZ CANAL TRAFFIC The agreement could help with capacity constraints in commercial shipping as container ships have been avoiding the Suez Canal for more than a year because of attacks by Houthi rebels on commercial vessels. Ships have been forced to use the much longer route around the Cape of Good Hope, which tightened shipping capacity and pushed costs for shipping containers higher. The reopening of the Suez Canal would have the greatest impact on normalizing the Asia-to-Europe container shipping route, but would also affect Asia-US rates, as shipping capacity would surge once carriers were able to access the shorter route. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and shipped in tankers, container ships transport polymers – such as polyethylene (PE) and polypropylene (PP) – are shipped in pellets. They also transport liquid chemicals in isotanks. Thumbnail image shows a crude oil tanker. Photo by Shutterstock

LONDON (ICIS)–In December 2024, the European bioplastics industry met in Berlin at the European Bioplastics Conference (EBC) to discuss innovations, barriers to growth and the future outlook for production capacity, demand and changes in legislation. ICIS Recycling Analyst Alexandra Tomczyk attended the conference and updates us on the current state of play for the bioplastics market. Some of the key takeaways included: Global capacities are set to grow rapidly in the next 5 years It’s unclear how the rise of bioplastic packaging will impact the goals set in Packaging and Packaging Waste Regulations Bioplastics are only one of a range of tools needed to improve the sustainability of plastics

LONDON (ICIS)–The latest tranche of US sanctions on Russia’s oil trade could affect flows from the country, while weather-related production shut-ins in North America could also impact global supply, the International Energy Agency (IEA) said. Announced on 10 January, the US imposed aggressive new sanctions on Russia’s oil trade, naming 183 vessels, including Russia-owned tankers and the ”shadow vessels” understood to be utilized to evade trade blockades. The shadow fleet refers to ships indirectly owned or controlled by Russia through shell companies or intermediaries to evade detection and sanctions. Over 100 of the sanctioned tankers had transported Russian crude to China and/or India in 2024, according to Matt Wright, lead freight analyst at data and analytics firm France-based Kpler. “When it comes to buyers, China and India, in general, tend to steer clear of dealing directly with tankers and entities blacklisted by the US Treasury,” he said in a note earlier this week. US moves “may affect oil supply flows” the IEA said in its latest oil market report, but official purchases of Russia crude will still be possible at certain price points. “Exports on non-shadow tankers remain viable for Russian oil purchased below price caps,” the IEA said. Further complicating the early 2025 supply picture is scope for production constraints in the US in the event of extreme weather, with a winter freeze last year cutting output in the US and Canada by over 1.8 million barrels/day. A smaller drop is expected this year, but there could still be scope for weather in the region to tighten supplies, the IEA said. Potential for additional US sanctions on Iran-origin oil to be introduced by the new administration could also hit global supplies, the agency added, with sentiment already driving some players to pill back from oil supplies from Iran and Russia. “There is heightened speculation that the incoming US administration will take a tougher stance on Iran’s oil exports, compounding the impact of US Treasury sanctions on Tehran,” the IEA said. 1.5 million barrels day of additional supply is expected from non-OPEC countries this year , and total output growth of 1.8 million/barrel day against 1.05 million barrels/day demand growth, according to the agency. While supply growth is likely is likely to be sufficient to cover demand, the fresh Russia sanctions could provide more headroom for OPEC+ signatory countries to release more barrels into the market after delaying the end dates for some production cuts. OPEC, also releasing its latest market predictions on Wednesday, left 2025 demand growth forecasts unchanged at 1.4 million barrels/day, and non-OPEC+ supply growth projections at 1.1 million barrels/day amid global GDP expansion of 3.1%. The cartel projects that demand and non-OPEC supply growth will remain around 2025 levels next year. Focus article by Tom Brown Thumbnail photo: An oil pipeline running through Alaska, US (Source: Shutterstock)

LONDON (ICIS)–Inflation in the UK eased by 0.1 percentage point in December as compared with the previous month, slightly tapering the steady upward movement of consumer pricing in the country in recent months. UK inflation dipped to 2.5% in December compared with 2.6% the previous month as upward movement for transport costs was offset by lower hotel and restaurant prices, according to the UK Office for National Statistics (ONS). Upward price pressure from services, which has remained stubbornly high, eased slightly to 4.4% compared with 5% in November. A decline in inflation levels could potentially reduce pressure on the UK government after a decline in the value of the sterling and a surge in borrowing costs amid unease over public spending cuts, global volatility over the prospect of fresh US tariffs, and inflation.

LONDON (ICIS)–The German economy contracted 0.2% in 2024 – the second consecutive year of economic decline for the eurozone’s biggest economy – driven by energy costs, increasing export competition and economic uncertainty, according to the first calculations from the Federal Statistical Office (Destatis). As the country rounds off two years of economic decline, preliminary data for Q4 2024 points to a 0.1% decline, the agency added, with a full announcement incorporating more data scheduled for 30 January. Manufacturing output dropped 3% in the year, according to Destatis, with production in energy-intensive industries such as chemicals and metal-working hit particularly hard. The decline in the construction sector was even sharper, with output shrinking 3.8% over the course of the year. “Cyclical and structural pressures stood in the way of better economic development in 2024,” said Destatis president Ruth Brand.

SINGAPORE (ICIS)–Chinese oil company CNOOC and Anglo-Dutch energy major Shell have taken a final investment decision (FID) to expand their joint petrochemical complex in Daya Bay, Huizhou in southern China. The expansion by their joint venture firm CNOOC and Shell Petrochemicals Co (CSPC)  is expected to be completed in 2028, Shell said in a statement. Financial details of the investment were not disclosed. The expansion will include a third cracker with a planned capacity of 1.6 million tonne/year of ethylene; as well as associated downstream derivatives units producing chemicals including linear alpha olefins It will also include a new facility which will produce 320,000 tonnes/year of high-performance specialty chemicals such as polycarbonates (PC) and carbonate solvents. CSPC is a 50-50 joint venture owned by Shell Nanhai BV, a subsidiary of Shell, and CNOOC Petrochemicals Investment Ltd, an affiliate of CNOOC. (Recasts first two paragraphs for clarity)

HOUSTON (ICIS)–Ocean carriers will increase blank sailings around the Lunar New Year holiday to support elevated container rates, but now that the labor issues at US Gulf and East Coast ports have been resolved, some analysts think rate growth will slow, or shippers could even see lower rates. Emily Stausbøll, senior shipping analyst at ocean and freight rate analytics firm Xeneta, said spot rates may now begin to fall but warned that shippers still face other supply chain threats in 2025. “Looking ahead, it is likely spot rate growth will now soften on trades into the US from Asia, suggesting a brighter outlook for shippers negotiating new long-term contracts,” Stausbøll said. “Shippers must remain cautious, however, because it will not take much for freight rates to begin spiraling once again, particularly given the ongoing conflict in the Red Sea and the return of [President-elect Donald] Trump to the White House, which could escalate the US-China trade war,” Stausbøll said. Alan Murphy, CEO of Sea-Intelligence, defines the four-week Lunar New Year period as the week of the holiday plus the following three weeks. Murphy said carriers have so far scheduled blanked capacity of 9.0%, which is in sharp contrast with the 22.8% blanked in 2024, and the average reduction of 18.3% from 2016-2019. For context, the blanked percentage in 2021 (where pandemic demand was surging) was higher at 10.7%. “Under normal circumstances, this would mean significant blank sailings announcements in the upcoming weeks, since it is highly unlikely that carriers would be satisfied with this level of excess capacity,” Murphy said. “This would result in a situation reminiscent of 2023 and 2024, where significant capacity cuts were made very close to Lunar New Year.” CHANGING ALLIANCES Several major carriers are restructuring alliances in 2025, which is also adding some uncertainty to shipping. Shipping alliances are agreements between carriers to collaborate globally on specific trade routes. This will be the most significant shift in alliances since 2017, according to analysts at freight forwarder Flexport. The changes will see Mediterranean Shipping Co (MSC) breaking from the 2M alliance with Maersk and will service customers alone with its expanded fleet now the largest in the market. MSC said it will incorporate more direct call services. Maersk and Hapag-Lloyd will form the Gemini Alliance, with a reduced number of port calls that they say will improve reliability. The Ocean alliance consists of OOCL, Evergreen, COSCO, and CMA CGM. The Premier alliance will be made up of Ocean Network Express (ONE), South Korean shipping line HMM, and Taiwan’s Yang Ming. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said it remains to be seen if there will be any improved service metric from the shifts. “The rollout and adjustment period will probably stretch into March,” Levine said. “This is going to coincide with easing seasonal demand, so it could be a factor that pushes rates down if we do see some competitiveness between the new alliances that they compete for customers.” Levine also said the adjustment period could lead to increased schedule disruptions as vessels are being moved into place for these new services. CEASEFIRE, SUEZ CANAL On a side note, container ships have been avoiding the Suez Canal for more than a year because of attacks by Houthi rebels on commercial vessels. A ceasefire in the Gaza conflict could potentially end attacks in the Red Sea, reopening the Suez Canal. This would have the greatest impact on normalizing the Asia-to-Europe container shipping route but would also affect Asia-US rates as shipping capacity would surge once carriers no longer must divert away from the Suez Canal. 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. They also transport liquid chemicals in isotanks. Focus article by Adam Yanelli

HOUSTON (ICIS)–The rally in crude markets could get continued support from cold weather, sanctions and a recovery in demand from China, the CEO of US crude producer Hess said on Tuesday. Oil markets are important to the US chemical industry because prices for crude influence prices for several commodity petrochemicals. Since the first day of trading in 2025, front-month Brent crude futures have risen by nearly 7%. Oil demand could be several hundreds of thousands of barrels of oil a day higher because of the cold winter, said John Hess CEO of Hess and chairman of the American Petroleum Institute (API), an oil trade group. He made his comments during API’s State of American Energy presentation. A further rise in oil demand could come from continued economic growth in the US and a recovery in China. “They are going to do everything they can to stimulate their economy,” he said “I would not bet against China for two years in a row.” During the end of 2024, Hess suspects that oil demand shrank in China because of the slowdown in the nation’s economy. The third leg of support for oil markets will come from geopolitical tensions, Hess said. On 10 January, the US Department of the Treasury introduced more sanctions on vessels that carry Russian oil. “The initial numbers that are out there are up to a million barrels a day of impact of supply that might have trouble getting into the market for Russia,” Hess said. “There could be another 1 million barrels a day from Iran.” If sanctions and other factors cause a large enough spike in oil prices, Saudi Arabia and other members of OPEC have spare capacity that they can use to stabilize the oil market, he said. PROSPECTS FOR PERMIT REFORM, EXTENDING TAX CUTSSenator John Thune (Republican, South Dakota) said Congress may opt to address energy, military spending and border security in one bill and extending tax cuts in a second bill. The tax bill will make permanent nearly all of the 2017 Tax Cuts and Jobs Act (TCJA). This was a campaign promise made by Donald Trump, who will be sworn into office on 20 January. WAYS TO ROLL BACK EV PERKSThune said Congress could use the Congressional Review Act (CRA) to repeal a waiver that California needed to adopt its Advanced Clean Car II (ACC II) program, which gradually phased out sales of vehicles powered by internal combustion engines. The California program is a lynchpin for similar programs adopted by 12 other states and territories. If California loses its waiver, then those other states and territories cannot adopt their programs. The fate of the ACC II program could become a legal dispute over state versus federal power that would need to be settled in court. Trump’s predecessor, President Joe Biden, introduced two other auto programs that critics say are so strict, they act as effective bans on ICE vehicles. The Environmental Protection Agency’s (EPA’s) recent tailpipe rule, which gradually restricts emissions of carbon dioxide (CO2) from light vehicles. The Department of Transportation’s (DoT’s) Corporate Average Fuel Economy (CAFE) program, which mandates stricter fuel-efficiency standards. Thune doubts that Congress can use the CRA to roll back the tailpipe rule. Nonetheless, Trump may find other ways to scale back or repeal the tailpipe rule and the stricter CAFE standards during his first days in office. Even though EVs make up a small share of overall US auto sales, they are important to the chemical industry because they consume more plastics than their counterparts that are powered by internal combustion engines. EVs are also creating demand for new polymers and fluids that can meet their unique material challenges. Thumbnail shows snow. Image by Xinhua/Shutterstock