COLORADO SPRINGS, Colorado (ICIS)–Uncertainty surrounding tariffs is tempering what could be a recovery in US demand for polypropylene (PP), executives at Braskem said on Wednesday. Uncertainty about the final makeup of tariffs and their effects on end markets have caused consumers and companies to delay purchases, said Alexandre Elias, vice president, PP, North America and Europe, Braskem. Elias made his comments in an interview with ICIS on the sidelines of the annual meeting of the American Chemistry Council (ACC). Companies are reluctant to build inventories and make investments – especially industrial PP customers that have long investment cycles, Elias said. TARIFFS HAVE COUNTERVAILING EFFECTS ON AUTOAutomobiles are one of the main end markets for PP, and the tariffs have had mixed effects on production, contributing to the uncertainty of PP demand from the sector. The US has imposed tariffs on imports of automobiles and auto parts, which could ultimately stimulate local production and PP demand. Prior to those tariffs, consumers splurged on automobiles to beat the tariffs. All of that pre-buying lowered inventories of US autos, said Bill Diebold, vice president – commercial, Braskem America, polyolefins. US producers will ultimately replenish those inventories, which will further increase auto output and PP demand. On the other hand, consumer confidence has fallen after the introduction of the tariffs and that tends to slow demand growth for automobiles and other durable goods that are made with PP. Chinese restrictions on shipments of rare earth magnets could cause some automobile companies to shut down production within weeks if they cannot find workarounds, according to an article from the Wall Street Journal, a business publication. The US recently increased its tariffs on imports of steel and aluminium to 50% from 25%, which would increase production costs for US automobiles and potentially make them less affordable. The future of the tariffs themselves is uncertain because the US frequently changes the rates. It could impose new tariffs, and the courts could rule that the US lacks authority to impose them under a key provision. The interactions of all of these variables make it difficult to forecast PP demand from the US automobile industry, Elias said. PP DEMAND REMAINS FLAT YEAR ON YEARIn the US, PP demand is up in Q2 versus Q1 but flat year on year, Diebold said. Similarly demand improved in Q1 versus Q4, the latter of which was a challenging time for the US market, Diebold said. Packaging, another major end market for PP, remains strong. PP is enjoying a boost from a wave of product substitutions, Elias said. Over the years, many polystyrene (PS) processors have switched to PP because of its price. Many of those substitutions have played out, but a smaller wave is now taking place. That said, uncertainty could be capping the potential of product substitutions from other processors. LPG RESTRICTIONS TO CHINA COULD ALTER PP TRADE FLOWSGlobal trade flows of PP could change significantly if the US restricts exports of liquefied petroleum gas (LPG) to China. China relies heavily on US LPG shipments to provide feedstock for its large fleet of propane dehydrogenation (PDH) units, which produce on-purpose propylene. The US already has imposed restrictions on exports of ethane to China, which would disrupt a few ethane crackers in the country. If trade tensions rise, it could expand the restrictions to cover LPG. Global markets got a taste of the ramifications of restricted LPG shipments earlier this year when China increased tariffs on US imports by triple digits. Had China maintained those increases, Chinese propylene production would likely fall, according to ICIS. China could still procure LPG from exporters from other parts of the world, but that would increase costs and make some production uncompetitive. Lower Chinese propylene production would have a cascading effect. It could lower domestic production of PP and cut down on Chinese exports to other parts of Asia. That, in turn, could allow domestic Asian producers to sell more material locally, allowing them to be less aggressive about exporting PP, Elias said. “This could have a significant impact on trade flows globally,” Elias said. In fact, restrictions on US LPG shipments to China would likely have a bigger effect on PP trade flows then actual tariffs on the resin. So far, the introduction of US tariffs has had little direct effect on US PP, because the market is relatively balanced. In 2023 and 2024, apparent consumption was about 85% of total production in the US, according to the ICIS Supply and Demand Database. Braskem does have an option to export PP from a terminal in Charleston, South Carolina, but this terminal functions more as a way to take advantage of arbitrage opportunities and leverage its PP plants in North America, Elias said. As an option, it has worked well. LITTLE NEED FOR NEW PROPYLENE CAPACITYBraskem relies on third parties for propylene for its PP plants in the US. So far, there is no need for Braskem to build its own propylene capacity, Elias said. The US is long in propylene, as illustrated by the global competitiveness of its exports, he said While Braskem has relied on propylene imports from Canada, trade tensions between it and the US have eased. Were trade tensions to resume and cause an increase in tariffs, Braskem could manage around it, Elias said. The ACC Annual Meeting runs through Wednesday. Focus article by Al Greenwood Thumbnail shows a product made with PP. Image by Shutterstock.

LONDON (ICIS)–The European Commission has confirmed to ICIS that only recycled polyethylene terephthalate (R-PET) produced using plastic waste in the EU can currently count towards the 25% recycled content target set out under the Single Use Plastics Directive (SUPD). In an email to ICIS, a spokesperson for the Directorate-General for Environment (DG-ENV) stated that the 25% target laid out in the SUPD can ‘only be achieved using post-consumer plastic waste generated from plastic products that have been placed on the EU market’. This expands on Point 4 of Implementing Decision 2023/2683 having regard to Directive (EU) 2019/904 (the SUPD), which states: ‘Post-consumer plastic waste needs to be understood as waste generated from plastic products that have been placed on the market.’  The confirmation from the Commission clarifies what many R-PET market participants had already assumed – but not necessarily confirmed – that the 25% target can only be reached by using waste that has come from within the EU. It therefore rules out the use of plastic waste or material produced from plastic waste that has been placed on a market outside the EU. FUTURE CHANGESThe Commission confirmed that it is currently preparing an implementing act, planned for Q4 2025, that will extend the calculation, verification and reporting methodology to cover all recycling technologies, including chemical recycling. This will repeal and replace the existing act and contains a broader definition of ‘recycled plastic’ which will be the same as the Packaging and Packaging Waste Regulation (PPWR) and will cover recyclates ‘stemming from post-consumer plastic waste generated from plastic products that have been placed on markets outside of the EU’. Article 7 of the PPWR sets out the 30% recycled content target for PET bottles by 2030, in which paragraph 3(a), among other things, states that recycled content shall be recovered from post-consumer plastic waste that: “…has been collected within the Union pursuant to this Regulation or the national rules transposing Directives 2008/98/EC and (EU) 2019/904, as relevant, or that has been collected in a third country in accordance with standards for separate collection to promote high-quality recycling equivalent to those referred to in this Regulation and Directives 2008/98/EC and (EU) 2019/904, as relevant.” R-PET market participants have welcomed the clarification although there are concerns that bringing the SUPD in line with the PPWR – in terms of allowing recycled produced from waste placed on markets outside of the EU – will open up the European market to cheaper imports of recycled material. The Commission is currently drafting the methodology for calculation and verification of the PPWR’s recycled content targets due in December 2026.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Is the petrochemicals industry really a free market? Or have we been telling ourselves a comforting fiction? As we sift through margins, P&Ls, and operating rates to predict a recovery, we might be asking the wrong questions. Let’s rewind to 2014. While China’s state media signalled a major push toward self-sufficiency in petrochemicals, many Western analysts dismissed it — seeing China through the lens of profit maximisation. But I was told way back in 2000 that China’s strategy had just as much to do with jobs and economic value creation as with profits. Fast forward to today: polyester fibres, , polyethylene terephthalate (PET) film and bottle grade resins, purified terephthalic acid (PTA), styrene and polypropylene (PP),— China is nearly or completely self-sufficient in these markets. The drivers? National security, supply certainty, and industrial policy. And it’s not just China. Middle East investments — underpinned by cheap feedstocks, state ownership, and now oil demand substitution — follow similar, non-market logic. If key players haven’t been led by market signals alone, what happens next? Despite the deepest downturn in petrochemical history — likely to stretch into 2028 — new capacities keep rising. Not from those chasing short-term profit, but from those with long-term, state-backed agendas. Just a modest rise in China’s PP operating rates above the ICIS base case assumption could flip China into being a net exporter by 2027. The trade war may play a role here, as it has increased supply security concerns. True, there are more private petrochemical companies in China than ten years ago. But this latest wave of investment is more state-owned-enterprise-led than the previous one. And private companies can also benefit from local and central government support Saudi investments in refinery-to-petrochemicals will persist. More ethane crackers in the Middle East will be built. China’s plant-build costs are often 50%+ lower than the U.S., thanks to relentless innovation support. So… what does this mean for producers operating on pure market terms? Can they survive, let alone thrive, in a landscape shaped by strategic ambition rather than shareholder return? Your thoughts are welcome. Let’s start the conversation. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

SINGAPORE (ICIS)– South Korea has elected Lee Jae-myung of the Democratic Party (DP) as the country’s new president, six months since ex-President Yoon Suk Yeol imposed an hours’ long martial law on 3 December 2024. Lee secured 49.4% of the votes cast on 3 June, beating the 41.2% garnered by his rival Kim Moon-soo of the People Power Party (PPP). Lee was proclaimed winner by the National Election Commission on Wednesday and will take office immediately, with no transition period. The snap election was called after Yoon’s impeachment. During a speech after his win, Lee pledged to revive the economy and recover people’s livelihoods. Other policy focuses of the new administration include a more balanced foreign policy relationship between China and the US, investments in AI and technology, and a focus on renewable energy, said Michael Wan, analyst at MUFG Global Markets Research, in a note on Wednesday. Also high on the new administration’s agenda will be trade negotiations with the US, a deadline for which has been set for 8 July, right before ‘reciprocal’ tariffs on South Korean goods take effect.

SAO PAULO (ICIS)–Brazil’s customs auditors have announced a new five-day “zero clearance period” at the Port of Santos on 2-6 June in which no physical inspections will be carried out, according to a letter to customers by logistics company Unimar seen by ICIS. The action at Santos – Latin America’s largest port – extends a strike started in 2024 which has disrupted logistics for months. The port is a key exit and entry point for some chemicals and a wide range of industrial goods, as well as of fertilizers imports feeding Brazil’s powerful agricultural sector. “Brazil’s Superior Courts have ruled that industrial action cannot entirely paralyze essential public services, such as the clearance of perishable cargo. Judicial intervention may be required to ensure the continuity of critical operations, assessed on a case-by-case basis,” said Unimar’s letter. “Currently, marine terminals at major ports have reported that most cargo is cleared automatically via the system, except for those not classified under the ‘Green Channel.’ Therefore, the strike is expected to primarily impact cargo that requires physical inspections.” Under normal conditions, average clearance times at Santos are five to seven days for imports and one to two days for exports – the action plan up to 6 June may cause delays for cargo requiring physical inspection, while clearance of vessel spare parts at major airports typically takes three to five days. Brazil’s Superior Courts have ruled that industrial action cannot entirely paralyze essential public services, such as clearance of perishable cargo. Judicial intervention may be required to ensure continuity of critical operations on a case-by-case basis. A YEAR-LONG STRIKEThe strike by customs workers, with no sign of resolution in sight, is about to reach one year of duration, some of the longest strikes by civil servants ever seen in Brazil. Smaller strikes started to take place in mid-2024 but then escalated into a comprehensive two-month stoppage. Several rounds of talks between the union representing tax auditors and the government have failed to reach agreement. The union is demanding salary increases and better working conditions, including maintenance and upgrades at ageing customs points across Brazil. President Luiz Inácio Lula da Silva’s government is attempting to control spending amid investor concerns about the fiscal deficit. Chemicals players have said to ICIS they are increasingly concerned about rising logistics costs, in part due to the strike. The trade group Brazilian Association of Distributors of Chemical and Petrochemical Products (Associquim) warned that companies handling perishable goods or materials requiring quick delivery – pharmaceuticals, food products – are facing particular difficulties. “We have chemical products that have to have a special place for storage, and if too much accumulates in those special storage places, then it will filter down to the end-user, and create a safety problem,” said Associquim president Rubens Medrano earlier this year. NEW SYSTEM DEPLOYMENT AT RISKSomething most logistics players have mentioned and remain a key concern is how the strike could threaten the implementation of Brazil’s New Import Process on the Single Foreign Trade Portal, approved in 2023 to reduce delivery times and costs. The system’s third and most critical phase is due in the second half of 2025. Trade group the Brazilian Machinery Builders’ Association (Abimaq) estimated the new system could save companies Brazilian reais (R) 40bn ($7.07bn) annually when fully implemented, nearly halving delivery times from nine days to five days through increased electronic processing. Meanwhile, the trade group representing chemicals producers Abiquim has equally warned that prolonged strike action could negatively impact the current implementation phase of the import system designed to simplify processes and reduce logistics costs. The Santos Port Authority had not responded to a request for comment at the time of writing. Front page picture: The Port of Santos in Sao Paulo state Picture source: Santos Port Authority  Additional reporting by Sylvia Traganida

LONDON (ICIS)–Gas grid operators on the Trans-Balkan corridor have been working to enable traders to access natural gas via Greek LNG terminals or pipelines for shipments to Ukraine at a unified discounted tariff. The bundled transmission capacity product launched in May could open opportunities for diversification and tightening security of supply. Nevertheless, many traders say the format may not be compliant with EU network codes and insist they had limited information prior to the first auction held in May. As the five TSOs are preparing a new round of auctions, the Greek regulator RAE has started a consultation and companies are expected to submit their views by 9 June 2025. ICIS reporter Aura Sabadus has collected 15 questions from gas traders active regionally and invited Sotirios Bravos (DESFA), Nikola Delev, (Bulgartransgaz), Marius Lupean, (Transgaz), Liviu Duminica, (VMTG) and Andrii Prokofiev (GTSOU) to answer them in detail.

COLORADO SPRINGS, Colorado (ICIS)–US-based chemical distributor Univar Solutions has better positioned itself for growth and resilience with a sharper focus on key industries, said the head of its Ingredients + Specialties (I+S) business. More than a decade earlier when the specialties business was underperforming, Univar undertook a major shift in strategy by setting up four focus industries – food ingredients, pharmaceuticals, coatings and beauty care – to run them as standalone business units, recalled Nick Powell, CEO of Global I+S. “Everybody in each of those business units, that’s all they did – focus on those industries. Prior to that, any seller, product manager or technical person may have served an oil refinery in the morning, and in the afternoon a food customer – no differentiation, no ability to sell our value,” said Powell in an interview with ICIS. Powell spoke to ICIS on the sidelines of the American Chemistry Council (ACC) Annual Meeting) This new business model worked well in Europe where Powell led the changes, and was then replicated in the Americas and Asia-Pacific but with different leadership for each region, he said. Then Univar CEO David Jukes, who assumed the role in 2019, decided to globalize all of the distributor’s businesses into six focus industries – each of them under a single leader, said Powell. SIX FOCUS INDUSTRIESThese six focus industries now fall under two segments. The I+S division now has three focus industries – CARE (beauty & personal care, homecare & industrial cleaning), Health & Nutrition (food ingredients, pharmaceutical ingredients) and Performance Materials (coatings, adhesives, sealants and elastomers (CASE), lubricants and metalworking). The Chemical Distribution & Services (CD&S) division also has three focus industries – General Industrial, Refining & Chemical Processing, and Service Solutions. Univar’s online platform ChemPoint is its third division, focused on demand creation and multi-channel digital marketing campaigns for a wide range of chemicals and ingredients. “In essence, we’re able to adjust to the very specific needs of suppliers who are producing products that go into those spaces, or our customers who want to be treated differently, depending on their market,” said Powell. And in each of the focus businesses, Univar has specialists that can connect the value the supplier has in its product portfolio to the value it can generate for a customer, typically by helping solve a technical problem or producing a new product from its globalized network of laboratories that goes to market, he pointed out. The strategy has been “extremely successful” for Univar, allowing it to outperform its peers, he noted. GLOBALIZATION AND CUSTOMER WINSWith the globalization of the focus industries, Univar is able to provide suppliers the same type and level of service in any region, adding local nuance when appropriate, said the executive. “That gives them confidence that we can deliver for them. We found that suppliers have really liked that business model, and a number of them have been awarding us large pieces of new business in geographies where we’ve not dealt with them in those product portfolios,” said Powell. In February 2025, Univar announced an expanded distribution partnership with BASF, securing the exclusive right to serve as a distributor of LuquaSorb Superabsorbent Polymers (SAPs) in the US and Canada in industrial applications. In January 2025, Univar Solutions announced an exclusive distribution agreement for the US, Canada and Puerto Rico with dsm-firmenich, adding its skin actives and bioactive skin care ingredients including synthetic peptides, organically grown plant extracts and other natural ingredients. In November 2024, Univar announced a new exclusive distribution agreement with Syensqo to become, effective 1 January 2025, the sole distributor of its beauty care ingredients across the US and Canada. “We are able to demonstrate to them that we have this large specialty and ingredients business inside the portfolio that’s staffed by technical people who are able to take their products to market and gain value for them,” said Powell. “They were able to do that in conjunction with our solution centers (labs), helping customers solve problems or create new products to go and take more share in their marketplaces,” he added, calling the strategy a game changer of growth” for Univar. The ACC Annual Meeting runs through Wednesday. Interview article by Joseph Chang

COLORADO SPRINGS, Colorado (ICIS)–US-based chemical distributor Univar Solutions is helping customers deal with tariffs with its strong in-region sourcing network, its head of Ingredients and Specialties (I+S) said. “In every meeting I’ve had here and probably every meeting I’ve had in the last three to four months, tariffs have become the number one topic. Nobody seems to have an answer of where this is headed or what’s coming next, and so we’re having to deal with the here and now, and sometimes the here and now can be very different by the time you think you’ve got a plan,” said Nick Powell, CEO of Global I+S at Univar Solutions. Powell spoke to ICIS on the sidelines of the American Chemistry Council (ACC) Annual Meeting. “We’re very fortunate in that greater than 90% of our products are sourced within region – not just in the US but Latin America, Asia and EMEA. We’re not importing a huge amount of products, so there’s not a massive financial penalty from tariffs,” said Powell. Where the distributor is impacted by tariffs, it is passing costs along to customers as are its competitors, he said. However, Univar is able to offer customers local buying options that can replace imported products, the executive noted. “The fact that we have a high level of our product portfolio sourced in-region allows us to offer them offsets for those imported products. We’re getting a lot of interest from customers and are generating new relationships and new business that way,” said Powell. After the COVID pandemic in 2020 and other events that led to supply disruptions, there was a shift in customer mindset of wanting to onshore sourcing of chemical raw materials and intermediates, he explained. “I’m not so sure that many actually took a huge amount of action around that, but I think what’s happening [now] is those thoughts are resonating in their minds, and forcing them into action,” said Powell. “I think they realize there’s a structural change in the way economies are trading with each other, structural changes in trade flows, import duties and taxation. And for them to be competitive, they absolutely have to drive change now,” he added. “We are seeing a change in behavior. The fact that we’re 90%-plus regionally sourced means that we have something to offer. It’s opening up a lot of new dialogue for us,” said Powell. CERTAINTY OF SUPPLY”It’s not just about cost but certainty of supply,” he added. “If you’re buying a product from Asia, you may be able to suck up the import duty disparity, but how certain can you be of continuity of supply? So both those factors are playing into customers’ minds right now,” said Powell. Univar is uniquely positioned to help customers in these aspects, not only because of a high level of in-region supply, but also particularly in North America because of its large infrastructure footprint which allows the company to provide reliable delivery and service, he pointed out. INDIRECT IMPACT ON CONSUMER CONFIDENCEWhile US tariffs are not having a direct negative impact on Univar’s business, they are causing a great deal of uncertainty among consumers of end-products and the companies that make those end-products, ultimately resulting in lower demand, he pointed out. “We’re certainly in a market that is impacted by lack of consumer confidence right now. We’re seeing some change in customer behavior. Customers are very much ordering just-in-time and supply chains are empty,” said Powell. “They have no confidence or a lack of confidence in what their own end-consumer demand is going to be next month. So they’re not buying raw materials until they have a greater insight into that,” he added. CHANGE IN TRADE FLOWS INTENSIFY COMPETITIONUS tariffs are also leading to a change in trade flows and more intensified competition in Europe and Latin America, as Asian producers seek to sell more product to non-US outlets. “It’s producing a lot more competitive environments from both a volume and a pricing perspective. The European market is already in somewhat of a state of turmoil. It’s not helping any of us in that space, whether you’re a producer or a distributor,” said Powell. The ACC Annual Meeting runs through Wednesday. Interview article by Joseph Chang

BARCELONA (ICIS)–As chemical producers gain access to more renewable energy and portfolios evolve, distributors and downstream customers can look forward to a growing amount of low carbon, low fossil-content products. Distributors can help communicate sustainability data up and down industrial value chains Full life-cycle analysis required to truly measure a product’s environmental footprint Vital to have standard measurements for carbon footprint Chemical industry has a 25-year innovation cycle, more investment needed to accelerate this Wave of low carbon products expected in next 2-3 years Azelis is sticking to its environmental targets Customers drive demand for more low carbon products Renewable energy will cut fossil content of distributor product portfolios Smaller chemical companies drive low carbon innovation in Asia Reshoring will drive national or regional chemical value chains In this Think Tank podcast, Will Beacham interviews Michael Heite, group sustainability director for Azelis, John Richardson from the ICIS market development team and Paul Hodges, chairman of New Normal Consulting. Click here to enter the ICIS Innovation Awards. Closing date 12 June.  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.