LONDON (ICIS)–Europe chemicals stocks and equities markets fell in morning trading on Friday in the wake of Israel’s missile strikes across Iran, including nuclear facilities, with the prospect of additional attacks chilling sentiment. The International Atomic Energy Agency (IAEA) confirmed on Friday that Iran’s Natanz nuclear enrichment facility had been struck in the first salvo of strikes that also hit residential areas as part of attacks on military leaders and nuclear scientists. Israel’s Prime Minister, Benjamin Netanyahu, stated on Friday that strikes will continue “for as many days as it takes” to remove nuclear enrichment facilities, as US Secretary of State Marco Rubio urged the Iranian government not to respond. The IAEA noted on Thursday that Iran is potentially in breach of its non nuclear-proliferation agreements for the first time since the early 2000s, but Rafael Mariano Grossi, director general of the nuclear watchdog, attacked the strikes on Friday. “Nuclear facilities must never be attacked, regardless of the context or circumstances,” he said, noting that there is presently no elevation at the Natanz site. MARKETS Oil prices soared in the wake of the strikes, with Brent crude futures jumping nearly $5/barrel on Friday to $74.31/barrel, the highest level since April, while WTI futures were trading at $73.15/barrel, the highest since January. Equities slumped as commodities surged, with Asia bourses universally closing in the red and all key European stock indices trading down in morning trading. The STOXX 600 chemicals index was trading down over 1% as of 10:30 BST, in line with general markets, with stock prices for a third of the 21 component companies down 2-3%. The hardest-hit were Fuchs, LANXESS and Umicore, which saw stocks fall 3.72%, 3.24% and 2.97% compared to Thursday’s close. The situation has also had a dramatic impact on fertilizers markets, with Iran a key global exporter of urea, and some contacts reporting disruption in Israel’s supply of gas to Egypt. SHIPPING Shipping could also face further disruption, with the UK’s Maritime Trade Operations (UKMTO) monitor publishing an advisory on Wednesday – before the start of the Israel  strikes – that increased Middle East military activity could impact on mariners. “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution,” the watchdog said. Around 20% of global oil trade passes through along the Strait of Hormuz, and any move by Iran to block the route could have a huge impact on freight traffic that is still disrupted by firms avoiding the Red Sea in the wake of Houthi strikes. Activity in the Red Sea is understood to have subsided in recent weeks after a US-Houthi ceasefire but shipping firms remain leery of the route, and the attacks on Iran could further inflame tensions in the region. Higher risk and insurance price hikes could also drive shipping prices through the region steadily higher. The upward movement for shipping prices had showed signs of plateauing this week, with China-Europe and China-US route charge steady week on week as of 12 June after weeks of surges, according to Drewry Supply Chain Advisors. Some freight indices continued to climb, however, with the Baltic Exchange’s dry bulk sea freight index up 9.6% as of 12 June, the highest level since October 2024. Focus article by Tom Brown Thumbnail image: Iran Tehran Israel Strike – 13 June 2025. Iran’s IRIB state TV reported explosions in areas of the capital of Tehran and counties of Natanz, Khondab and Khorramabad. (Xinhua/Shutterstock)

LONDON (ICIS)–The EU’s trade surplus fell in April from the previous month, driven down by a sharp decline in the chemicals sector. The EU’s April trade balance fell to €7.4 billion, down from €35.5 billion in March, official data showed on Friday. “This drop was primarily driven by the contraction of the chemicals sector surplus, which fell from €41.6 billion to €20.4 billion – a reduction of over 50%,” statistics agency Eurostat said in a statement. Source: Eurostat In the eurozone, the trade surplus fell in April to €9.9 billion, down from €37.3 billion in March. Chemicals almost halved to €22.1 billion from €42.8 billion. On a year-on-year basis, the April trade surplus was lower in both blocs but by a lesser magnitude, attributed to declines in the machineries and vehicles sector. The EU chemicals trade balance was slightly higher in April, increasing to €20.4 billion from €19.5 billion in the same month of 2024. Source: Eurostat Prices for Europe chemicals fell in April on weak demand and uncertainty over US trade tariffs.

HOUSTON (ICIS)–US railroad Norfolk Southern has advised customers that it will increase demurrage and storage charges for railcars in its yards to $110/railcar from $60/railcar, according to a customer notice on its website. The notice said that there will be no changes made to the existing service credit program. “This adjustment reflects our ongoing commitment to maintaining a safe, efficient, and reliable service – particularly in the handling and transport of hazardous materials,” the railroad said. Norfolk Southern said the increase will help support enhancements to the fluid movement of cargo. “A fluid, well-optimized network ensures that shipments move more predictably and reliably, minimizing delays and maximizing the availability of equipment when and where it’s needed most,” the railroad said. Some market participants suspect that other railroads could follow with similar increases on growing concerns of stagnant inventory on rail networks. DELAYS SEEN FROM CPKC CUTOVERChemical market participants on the CPKC system saw significant delays moving material in east Texas, Louisiana, and parts of Mississippi in May because of issues merging its operations system following the merger between Canadian pacific and Kansas City Southern in 2023. Speaking at the Wells Fargo Industrials & Materials Conference on Tuesday, CPKC chief operating officer Mark Redd acknowledged that there were issues with the cutover in those areas. Redd said some customers felt the brunt of some first-mile/last-mile customer service during the cutover. A market participant told ICIS that the issue caused delays and impacted shipments severely and affected the tracking of ethylene glycol (EG) shipments.

HOUSTON (ICIS)–The US Department of Agriculture (USDA) is forecasting lower beginning and ending corn stocks and left soybean supply and use unchanged in the June World Agricultural Supply and Demand Estimate (WASDE) report. For the corn, crop area and yield forecast are unchanged with planted area at 95.3 million acres and yield of 181.0 bushels per acre. The next update on area and yield will come when the USDA releases its acreage report on 30 June. The monthly update stated that beginning corn stocks are down 50 million bushels reflecting a forecast increase in exports for 2024-2025. The agency said exports are raised 50 million bushels, based on reported US Census Bureau shipments through the month of April, inspection data during the month of May, and current outstanding sales. Corn ending stocks are lowered 50 million bushels to 1.8 billion bushels. The season-average farm price is unchanged at $4.20 per bushel. For soybeans the June WASDE had no changes on supply and use. The US season-average soybean price remains forecasted at $10.25 per bushel. The next WASDE report will be released on 11 July.

LONDON (ICIS)–OCI Global has secured US regulatory clearance for the $2.05 billion sale of its methanol business to Methanex, representing the last approval needed for the deal to move forward, the Netherlands-based producer said on Thursday. Methanex had originally agreed to acquire the business in September 2024, encompassing OCI’s Us and European methanol production assets. The deal is expected to close on 27 June, subject to closing conditions, OCI said. Under the definitive agreement with OCI, the $2.05 billion purchase price will consist of $1.15 billion in cash, the issuance of 9.9 million common shares of Methanex valued at $450 million – based on a $45 per share price – and the assumption of $450 million in debt and leases. OCI is expected to become the second largest shareholder in Methanex following the transaction, owning about 13% of its shares. The company’s methanol arm operates a facility in Beaumont, Texas, with annual production capacity of 910,000 tonnes of methanol and 340,000 tonnes of ammonia, as well as s 50% interest in another Beaumont site co-run with Proman. The deal also includes a 1 million tonne/year methanol facility in Delfzijl, Netherlands, currently not in production due to unfavourable natural gas pricing, and OCI’s HyFuels business.

LONDON (ICIS)–After two years of decline, Germany’s GDP could start growing again in 2025, economic research institutes said on Thursday. Although the trade and tariff conflicts are still weighing on export demand, billions of euros of planned government spending on infrastructure and defense would start supporting growth, they said. “Leading indicators support our view that, after two years of contraction, the industrial sector has reached the trough, albeit at a low level,” said Stefan Kooths, head of forecasting at the Kiel Institute for the World Economy (IfW Kiel). The recovery would be largely driven by domestic factors, with private consumption and corporate investment picking up after a two-year drought, he said. IfW Kiel noted that “significantly greater fiscal room” for the new federal government under Chancellor Friedrich Merz should help drive growth. Germany recently amended its constitution to enable more debt-financed spending. IfW Kiel revised its GDP growth forecast for Europe’s largest economy to 0.3% for 2025, from its previous expectation of zero growth, and for 2026 it expects GDP growth of 1.6%. However, it warned that the “erratic” US tariff policy was fueling uncertainty for Germany’s foreign trade. In addition, German exporters were hampered by “significantly reduced competitiveness”, it said. Another institute, ifo Munich, now forecasts 0.3% GDP growth in 2025, up from its earlier 0.2% projection, and it predicts 1.5% growth for 2026, up from its previous 0.8% assessment. After reaching its low point in the winter, Germany’s economy is now set for a “growth spurt”, partly driven by the government fiscal measures, ifo said. However, like IfW Kiel, ifo warned of the risks posed by US trade policies. The US import tariffs already imposed – and assuming they remain at the current level – would impact Germany’s economic growth by 0.1 percentage points in 2025 and 0.3 percentage points in 2026, ifo said. If a US-EU trade agreement is reached, growth in Germany could be higher, whereas an escalation could lead to a renewed recession, ifo said. A third institute, the Halle Institute for Economic Research (IWH), said if the US does not escalate its trade conflicts further, Germany’s GDP could grow by 0.4% in 2025, up from IWH’s previous 0.1% growth forecast. IWH also noted that the slow licensing for exports of rare earths from China has led to a shortage that is threatening production in parts of Germany’s manufacturing industry. In Germany’s chemical industry, producers’ trade group VCI currently expects chemical production (excluding pharmaceuticals) to fall by 2.0% this year. Please also visit US tariffs, policy – impact on chemicals and energy Thumbnail photo of Chancellor Friedrich Merz (Source: Christian Democratic Union party)

COLORADO SPRINGS, Colorado (ICIS)–Chemical companies can find more ways to grow profits beyond cost cutting as they enter another year of slow economic growth in the longest downturn in years. Early in 2025, chemical companies lost faith that economic growth will be strong enough to contribute to profit growth, and that drought could extend into 2026. A five-year global chemical buyer value study conducted by the consultancy Accenture shows areas where chemical companies can wring value out of their operations that go beyond cost-cutting. The study was conducted in December 2024-February 2025. Cost cutting is not off the table. The study found that chemical companies have overestimated their customers’ preferences for some products and services. MULTI-YEAR DOWNTURNThe downturn in the chemical industry started about three years ago after consumers stopped splurging on big-ticket items following the pandemic. Higher inflation caused interest rates to increased, which raised house prices and depressed demand for plastics and chemicals used in construction. Consumers moved less because they could not afford new or existing houses, so that lowered demand for durable goods like furniture and appliances. The war between Russia and Ukraine caused a surge in energy costs. In Europe energy prices never returned to levels before the conflict. Higher costs lowered demand and contributed to de-industrialization in Europe. This year, tariffs and uncertain trade policy from the US have made companies and consumers more reluctant to purchase goods and make investments. The performance of US-listed shares of chemical companies illustrates how difficult these past few years have been for the industry. The following lists Wednesday’s closing prices for the US listed companies followed by ICIS and their 52-week highs. Figures are in dollars/share. Company Price 52 Week High AdvanSix 24.81 33.00 Avient 36.06 54.68 Axalta 30.29 41.66 Braskem 3.75 7.71 Chemours 11.87 25.80 Celanese 58.19 150.31 DuPont 69.40 90.06 Dow 30.68 57.22 Eastman 80.04 114.50 HB Fuller 56.58 87.67 Huntsman 12.04 25.12 Kronos 6.73 14.37 LyondellBasell 61.12 100.46 Methanex 35.05 54.49 NewMarket 667.15 667.15 Olin 21.80 52.17 PPG 113.01 137.24 RPM 115.11 141.79 Stepan 56.53 94.77 Sherwin-Williams 357.13 400.42 Tronox 6.01 20.29 Trinseo 3.39 7.05 Westlake 80.19 156.64 For now, a recession is not in the outlook, but neither is a strong recovery. ICIS expects that US economic growth will slow to 1.5% in 2025 from 2.8% in 2024. Growth in 2026 could be 1.7%. The country has a 34% chance of slipping into a recession in the next 12 months. HOW TO GROW IN A SLOW GROWTH WORLDChemical companies don’t have to wait for the recovery to increase profits, according to the chemical buyer study from Accenture. It found that 36% of chemical customers are willing to pay 5% or more above market price if their needs are fully met, and 43% are willing to buy 10% or more if all of their product and service needs are met, the study said. Chemical companies can increase revenue if they know where to look. The following table shows the top 10 customer needs for 2025, according to the Accenture study. Product Performance Reliable Delivery Quality Technical Support Product Consistency Data Privacy & Cybersecurity Secure & Seamless Transactions Trust Product Innovation Brand Strength Product Offerings Source: Accenture Making high-quality molecules will always be a priority, but chemical companies can do a better job of meeting their customers’ needs by targeting services, Accenture said. Many underestimated needs cited by customers centered around services. The following table lists the top 10 services valued by chemical customers. Reliable delivery Quality technical support Data privacy and cybersecurity Secure and seamless transactions 24/7 access Order flexibility Complaint resolution Easy access to product info. & regulatory support E-commerce Comprehensive product support & expert guidance Source: Accenture New technologies are opening more opportunities for chemical companies to stand out by improving their services. Accenture mentioned the following: AI-based transport management solutions E-commerce platforms for seamless transactions Web portals and large language model-supported platforms for 24/7 access. CUSTOMER NEEDS HAVE EVOLVED SINCE 2020Chemical companies can extract more value by updating their priorities to keep up with the changing demands from their customers. The following table lists the top five needs that customers are underestimated by chemical companies. It compares those needs with Accenture’s list from 2020. 2025 2020 24/7 access Packaging customization Reliable delivery Reliable delivery Product consistency Water conservation Environmental health & safety compliance Complaint resolution Product innovation Digital interfaces & experiences/chatbots Source: Accenture HOW TO CUT THE RIGHT COSTSCompanies may still have some fat they can cut, based on the Accenture study. It showed a gap between what customers want and what chemical companies think they want. The following lists the top five overestimated needs by chemical companies in 2025 and compares them with those in 2020. 2025 2020 Renewable-based products Value-added services Market intelligence Product consistency Product customization Quality technical support Value-added services Product sampling/trails Local/regional supply source Recyclable products Source: Accenture Renewable-based products, which also covers recycled materials, can demand a premium, but it may fall short of what producers need to generate a profit. While 74% of chemical customers are willing to pay more for sustainable products, only 38% are willing to pay a premium of more than 5%, according to Accenture. Only 13% are willing to pay a premium of at least 15%. That is short of the premium of 20% that is likely to be needed to produce sustainable products. HOW CAN CHEMICAL COMPANIES GET ON THE SAME PAGE AS THEIR CUSTOMERSChemical companies have a tendency to focus on innovation even when it does not align with their customers’ needs, because that is the nature of a science-based industry, said Denise Dignam, CEO of Chemours, a US-based producer of pigment and fluoromaterials. She spoke on a panel that discussed the findings of Accenture’s study during the annual meeting held by the American Chemistry Council (ACC). “We are scientists. We like innovation,” she said. Chemical companies need to be mindful that customers value mundane but critical services like supply chain logistics. One strategy to keep customer needs front and center is to rely on front-line sales people, said Alastair Port, executive president of Indorama Ventures: Indovinya. Port cautioned against relying too heavily on point-of-time surveys. Someone who fills out those surveys is providing feedback that is tied to one moment in time. It does not encompass overall satisfaction with the company’s products and services. Ed Sparks, CEO of catalyst producer WR Grace, said technical resources and sales people are the best resources for gauging the actual needs of customers. Their collect data from their interactions with customers, convert it into information that can then become market intelligence. Companies that produce commodity chemicals can find ways to stand out even when their products vary little from their competitors, Port said. Buyers of commodity chemicals vary greatly in size. Smaller ones may not have innovation departments or elaborate purchasing departments. Commodity chemical producers can tailor their services to match the needs of their varied customers. Chemical producers can replicate molecules, but they cannot replicate service, Sparks said. WR Grace’s refining catalyst business has a prominent service component, under which the company helps refiners optimize their operations. “That service component is really hard to replicate,” Sparks said. The ACC Annual Meeting ended on 4 June. Insight article by Al Greenwood Thumbnail shows money. Image by ICIS.

LONDON (ICIS)–UK GDP fell in April following growth the previous month, the Office for National Statistics (ONS) announced on Thursday. Monthly GDP fell by 0.3%, following a 0.2% rise in March, although rose by 0.7% in the three months to April, compared with the three months to January. This followed 0.7% growth in the first quarter. Both the fall in output for April and the wider trend of growth were driven by activity in the services sector, falling 0.4% on the previous month, but rising by 0.6% over the three-month period. Overall production fell by 0.6% in April, driven by a decline in manufacturing, but also rose by 1.1% in the three months to April. This was reflected in output for the chemicals industry, which tracked a 0.13 percentage point (pp) decline for the month, but rose by 0.11pps over the past three months. In contrast, production of rubber and plastics products rose by 0.04pps for both periods. Sentiment has been clouded in the second quarter, due to the possibility of tariffs rolled out from the US. In the wake of US president Donald Trump’s Liberation Day announcement on 2 April, the UK has managed to secure a trade deal with the US, the EU, and other trading partners. The impact of new terms has not yet been felt in the market, and wider global macroeconomic conditions remain unclear.

HOUSTON (ICIS)–Researchers at Colorado State University’s Weather and Climate Research department maintained their prediction of an above-average Atlantic hurricane season, with a probability that 33% of major storms could make landfall in the US Gulf. The CSU team predicts 17 named storms during the Atlantic hurricane season, which began on 1 June and runs through 30 November. Of those 17 storms, researchers forecast nine to become hurricanes and four to reach major hurricane strength of Category 3 or higher. Hurricanes are rated using the Saffir-Simpson Hurricane Wind Scale, numbered from 1 to 5, based on a hurricane’s maximum sustained wind speeds, with a Category 5 storm being the strongest. Saffir-Simpson Hurricane Wind Scale Category Wind speed 1 74-95 miles/hour 2 96-110 miles/hour 3 111-129 miles/hour 4 130-156 miles/hour 5 157+ miles/hour While still very early in the season, researchers said it is showing characteristics as seen in 1996, 1999, 2008, 2011, and 2021. In 1996, there were six major hurricanes, which was the most since 1950, but none entered the US Gulf. In 1999, five storms reached Category 4, with none threatening the US Gulf. Storms in both years made landfall on the US East Coast in North Carolina. Hurricane Ike, one of five major hurricanes in 2008, made landfall in Galveston near the entrance to the Houston Ship Channel, causing chemical plants and refineries in the region to struggle to restart. Hurricane Irene was the only hurricane to make landfall in 2011, striking near Cape Lookout, North Carolina. It was one of seven hurricanes that season, of which four became major hurricanes. In 2021, there were 21 named storms with seven becoming hurricanes, four of which were major storms and several entered the US Gulf. Hurricane Ida was the most destructive, making landfall in Louisiana and leading to many plant shutdowns. The report also includes the following probability of major hurricanes making landfall in 2025: 51% for the entire US coastline (average from 1880–2020 is 43%) 26% for the US East Coast, including the Florida peninsula (average from 1880–2020 is 21%) 33% for the US Gulf Coast from the Florida panhandle westward to Brownsville, Texas (average from 1880–2020 is 27%) 56% for the Caribbean (average from 1880–2020 is 47% Hurricanes directly affect the chemical industry because plants and refineries shut down in preparation for the storms, and they sometimes remain down because of damage. Power outages can last for days or weeks. Hurricanes shut down ports, railroads and highways, which can prevent operating plants from receiving feedstock or shipping out products. Most US petrochemical plants and refineries are on the Gulf Coast states of Texas and Louisiana, making them prone to hurricanes. Other plants and refineries are scattered farther east in the states of Mississippi, Alabama, and Florida – a peninsula that is also a hub for phosphate production and fertilizer logistics. Additional reporting by Al Greenwood