HOUSTON (ICIS)–The 2025 Atlantic hurricane season is likely to be above normal, but slightly less so than its initial prediction, the National Oceanic and Atmospheric Administration (NOAA) said on Thursday in an update to its previous forecast. NOAA still anticipates 13-18 named storms, of which 5-9 will become hurricanes, and 2-5 of those will be major storms, as shown in the following graphic. Source: NOAA NOAA’s forecast in May was for 13-19 named storms, 6-10 hurricanes and 3-5 major hurricanes. The likelihood of above-normal activity is 50%, a 35% chance of a near-normal season, and a 15% chance of a below-normal season. “As the 2025 Atlantic Hurricane Season enters its historical peak, atmospheric and oceanic conditions continue to favor an above-normal season as NOAA first predicted in May,” NOAA said. The adjustments are for the entire season, which runs through 30 November, and include the four named storms that have already formed. Yesterday, researchers at Colorado State University’s (CSU) Weather and Climate Research department also maintained their prediction, with slight adjustments to the downside. 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. There is currently one named storm in the north Atlantic, Dexter, and two low pressure areas, none of which are expected to make landfall.

LONDON (ICIS)–Business sentiment in Germany’s chemical industry “significantly deteriorated” in July, from June, according to the latest survey by Munich-based research group ifo on Thursday. The weak industrial economy was weighing on demand for chemical products, both in Germany and abroad, ifo said. At the same time, the US tariffs on chemicals and pharmaceuticals were “significantly damaging” German companies’ US business, ifo said. The backlog of orders in the chemical industry is now at its lowest level since the financial crisis in 2009, ifo said. Meanwhile, companies were planning further job cuts, the group said. The ifo Business Climate Index for the chemical industry dropped to -19.2 points in July, from -9.5 in June. COMPANIES LOWER SALES OUTLOOKS Also on Thursday, Henkel and SGL Carbon announced that they lowered the outlooks for 2025 sales. Henkel now expects organic sales growth of 1.0-2.0%, down from its previous outlook of 1.5-3.5% growth. The updated outlook took into account, “the currently foreseeable effects of the global tariff agreements at this point in time and broadly correlates with current market expectations for Henkel’s business development over the course of the year”, said CEO Carsten Knobel. Henkel’s 2024 sales were €21.6 billion. SGL Carbon said that it expects full-year 2025 sales to decline by 10-15%, from 2024 sales of €1.026 billion. SGL’s previous outlook was for a 10% decline. “Increasing trade barriers, especially due to US tariff policy, are having a negative impact on the business development of our customers and sales markets,” SGL said. German chemical producers’ trade group VCI expects a 2.0% decline in the country’s chemical production (excluding pharmaceuticals) in 2025. Please also visit: US tariffs, policy – impact on chemicals and energy

HOUSTON (ICIS)–The US is relying increasingly on tariffs to influence the policies of other countries, which is injecting more uncertainty into chemical markets. The US is proposing tariffs of 25% on shipments from India in response to that country’s imports of Russian oil and petroleum products. These could take effect on 27 August. The US imposed tariffs of 40% on Brazilian imports in response to that country’s trial of a former president and its policies on digital speech. More tariffs could follow a section 301 investigation into Brazilian policies. The US said Canada’s intent to recognize Palestine as a state would make it difficult to reach a trade deal. POLITICAL TARIFFS INJECT MORE UNCERTAINTYThe latest proposals accelerate a trend that began at the start of the year, when the US imposed tariffs on imports from Canada, China and Mexico after accusing them of doing too little to control illegal immigration and drug smuggling. The US threatened to impose tariffs of 25% on imports from Colombia if that country did not accept US deportations of immigrants. The debate around a dedicated Palestinian state and the Russian-Ukrainian war have now joined the list of policies that will invite tariffs from the US. In the case of Russian oil, the US is imposing tariffs to compel a peace agreement. India was caught in the crossfire because it imports crude oil from Russia. More countries could become targets because the US is targeting Russian exports of petroleum products as well as crude oil. Russia is a significant exporter of diesel and gasoil, and Turkey, China and Brazil import large amounts from the country, according to the Centre for Research on Energy and Clean Air (CREA). It is unclear if the US will expand the tariffs to include other major exports from Russia, such as weapons and fertilizer. The US threat to Canada could presage potential tariffs on imports from other countries that are considering Palestinian statehood. The tariffs on Brazilian imports and the pending section 301 investigation point to more policies that could attract the ire of the US. The following lists the policies the US cited in its announcements of Brazilian tariffs and investigations: Regulations on digital speech that the US considers to be censorship Judicial trials against elected officials that the US considers to be political persecution Imposing what the US described as lower preferential tariffs on imports from “certain globally competitive trade partners” Failure to enforce anti-corruption and transparency measures Enforcement of intellectual property rights Deforestation TRADE UNCERTAINTY HAMMERED CHEM EARNINGSThe problem is not the merit of US aims but the methods it is using to achieve those goals. Sudden changes in trade policy make it difficult for companies to forecast demand and trade flows. During the recent earnings season, chemical companies said the uncertainty surrounding US trade policy has discouraged businesses and consumers from making purchases and business decisions. Dow said that US exports of polyethylene (PE) evaporated in April after the US announced its reciprocal tariff rates. Westlake, Tronox, LyondellBasell, Huntsman, Eastman and Arkema all mentioned uncertainty surrounding US tariffs and trade policies. Political tariffs are injecting more uncertainty into markets, because chemical companies do not know which countries and which policies will trigger tariffs from the US. TRADE UNCERTAINTY TO CONTINUEUS trade policy remains in flux. It is delaying its proposed tariffs on Mexican imports for 90 days. The legal basis of the most of the national tariffs is being challenged in court. If the US loses the case, then it could be forced to rescind the national tariffs that it imposed under the International Emergency Economic Powers Act (IEEPA). These cover the reciprocal tariffs, the immigration tariffs, the drug-smuggling tariffs, the Russian oil tariffs and the Brazilian tariffs. Meanwhile, the US is continuing a separate track of imposing tariffs on product families under Section 232. These would prove more durable because they are not subject to the litigation. These tariffs are proceeded by a lengthy investigation, but that does not insulate the process from surprises. When the US announced its investigation into copper, markets assumed that it would be followed by tariffs on refined copper. Instead, the US imposed 50% tariffs on imports of semi-finished copper products and intensive copper derivative products. However, the US could expand the tariffs to include other copper products. After 30 June, the president could consider universal tariffs on refined copper that would start at 15% on 1 January 2027 and rise to 30% on 1 January 2028. The following table summarizes the pending section 232 investigations and the deadlines to complete them. Product Start of investigation Report Due Timber, lumber 10-Mar 5-Dec Semiconductors 1-Apr 27-Dec Pharmaceuticals 1-Apr 27-Dec Medium duty trucks 22-Apr 17-Jan Heavy duty trucks 22-Apr 17-Jan Critical minerals 22-Apr 17-Jan Commercial aircraft 1-May 26-Jan Jet engines 1-May 26-Jan Polysilicon 1-Jul 28-Mar Unmanned aircraft systems 1-Jul 28-Mar Source: Bureau of Industry and Security The US has also broadened and increased tariffs on previously completed investigations, as shown in the following table. Product Tariff Automobiles 25% Auto parts 25% Steel 50% Aluminium 50% Copper 50% Source: President These tariffs have exceptions based on the country of origin and their portion of domestically produced content. Insight by Al Greenwood

HOUSTON (ICIS)–Researchers at Colorado State University’s (CSU) Weather and Climate Research department maintained their prediction of an above-average Atlantic hurricane season as the tropical Atlantic has warmed faster than normal over the past few weeks. The CSU team’s original prediction of 17 named storms during the Atlantic hurricane season, which began on 1 June and runs through 30 November, has been adjusted to 16 named storms. Of those 16 storms, researchers forecast eight to become hurricanes and three to reach major hurricane strength of Category 3 or higher. The original forecast called for nine storms to reach hurricane strength and four of those to be Category 3 storms or higher. The adjusted forecast includes the three storms that have already formed: Andrea, Barry and Chantal. 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 “So far, the 2025 hurricane season is exhibiting characteristics similar to 2001, 2008, 2011 and 2021,” Phil Klotzbach, a senior research scientist in the Department of Atmospheric Science at CSU and lead author of the report, said. “Our analog seasons generally had somewhat above-average Atlantic hurricane activity.” The team bases its forecasts on two statistical models, as well as four models that simulate recent history and predictions of the state of the atmosphere during the coming hurricane season. CSU researchers listed the following probabilities of major hurricanes making landfall in 2025: 48% for the entire US coastline (average from 1880–2020 is 43%). 25% for the US East Coast, including the Florida peninsula (average from 1880–2020 is 21%). 31% for the Gulf Coast from the Florida panhandle westward to Brownsville, Texas (average from 1880–2020 is 27%). 53% 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.

HOUSTON (ICIS)–The US plans to impose an additional tariff of 25% on shipments from Indian in response to that country’s imports of Russian crude oil and petroleum products, the government said on Wednesday. The US is considering similar tariffs on imports from other countries that import Russian crude oil or petroleum products. The additional tariffs on Indian imports will take effect on 27 August, and they would raise the duty on Indian imports to 50% once the earlier tariffs are included, the government said. The US is using the tariffs as part of a strategy to compel Russia to reach an agreement with Ukraine over those countries’ war between each other. The US alleges that Indian imports of Russian oil are undermining its diplomacy and sustaining Russia’s war effort. The proposed tariffs would not apply to the sectoral tariffs that the US has imposed on product families such as steel and aluminium under section 232. The US could modify the duties if India imposes retaliatory tariffs, if India addresses US concerns over petroleum imports or if Russia addresses US concerns over the war. The US made no mention of Russian shipments of fertilizer. Such shipments are significant, and their exclusion indicates that the US may not target them as part of its efforts to end the war. In a statement, India alleged that the proposed tariffs are unfair, unjustified and unreasonable. “We have already made clear our position on these issues, including the fact that our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India,” the country’s Ministry of External Affairs said in a statement. “India will take all actions necessary to protect its national interests.” The following summarizes other details of the proposed tariffs on Indian imports. It excludes many coal-based chemicals and some polymers listed in Annex II, which was published in April. It covers Russian crude oil or “petroleum products extracted, refined or exported from the Russian Federation, regardless of the nationality of the entity involved in the production or sale of such crude oil or petroleum products”. It covers indirect imports, which “includes purchasing Russian Federation oil through intermediaries or third countries where the origin of the oil can reasonably be traced to Russia”. The tariffs will take place “21 days after the date of this order, except for goods that (1) were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the US before 12:01 am eastern daylight time 21 days after the date of this order; and (2) are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 am eastern daylight time on 17 September 2025”. Thumbnail image: Containers, which feature prominently in international shipping (Image source: Shutterstock)

TORONTO (ICIS)–While the US has further raised its tariffs on goods from Canada, the compliance rate of Canadian chemical and plastics products with the US-Mexico-Canada (USMCA) trade agreement is high, meaning that those exports will be able to continue to enter the US tariff-free. USMCA compliance key advantage for Canada Canadian chemical and plastics exports fall Chemical railcar shipments steady US President Donald Trump last week raised the tariff rate on non-USMCA-compliant goods imported from Canada to 35%, from 25%, after the two countries failed to reach a deal by the 1 August deadline. In order to be USMCA-compliant, goods must meet the USMCA’s requirements for rules of origin. The 35% tariff is separate from the US sectoral tariffs on autos, aluminum, and steel. David Cherniak, policy manager, business and transportation at the Ottawa-based Chemistry Industry Association of Canada (CIAC), told ICIS that CIAC does not know the exact USMCA compliance rate for the entire chemical and plastics sector. “However, we estimate that it is very high, owing to the near-universal use of North American feedstocks in high-volume chemistry and plastic product production,” he said. USMCA CIAC is a strong supporter of USMCA and was actively engaged in the Canadian federal government’s consultation process in autumn 2024 in preparation for the agreement’s formal review beginning in 2026, Cherniak said. “We consistently advocate for the free and fair trade of chemistry and plastic products, in alignment with our industry partners in Washington and Mexico City,” he said. “It’s also important to emphasize that USMCA remains legally in force until 2036, providing a stable framework for North American trade in our sectors,” he said. Ideally, CIAC wants a return to the tariff-free relationship that existed before the Trump tariffs, Cherniak said. “It is important for the Canadian chemistry and plastics industry, indeed all of Canadian manufacturing, to have clarity and certainty when it comes to trade with this important partner,” he said. The US is by far the largest market for Canada’s chemical sector, absorbing 77% of its exports in chemicals and chemical products, according to CIAC data. EXPORTS FALL Overall Canadian exports of basic and industrial chemical, plastic and rubber products have fallen sharply year on year in recent months. However, Cherniak said the chemistry and plastics trade is influenced by broad macroeconomic trends, not just US tariffs. Globally, the chemistry and resin sectors remain in a cyclical downturn, with interest rates still high despite easing from recent peaks, he said. “These pressures intensified in April and May amid peak uncertainty in the US trade war,” he said. Also, declines in exports partly reflected falling product prices and a rebalancing of trade flows after companies “front loaded” buying to pull ahead of announced tariffs, Cherniak said. Data from Canada’s federal transport ministry, Transport Canada, showed that rail shipments in the chemicals sector were on par with 2024, he said, adding: “Public chemical companies also anticipate increased North American operating rates as the year progresses.” As for the 2025 outlook, CIAC’s earlier expectation of 1-4% growth in industrial chemicals shipments (sales), and 2-4% export growth, now seems too optimistic. Volumes were flat or down by 1-2% for the first seven months of 2025 as expectations for a stronger macroeconomic environment did not materialize, and trade uncertainty has added pressure, Cherniak said. Nevertheless, North America remains relatively strong economically and Canada’s chemical industry benefits from a feedstock cost advantage, with the benchmark Alberta natural gas price recently turning negative, he said. “As trade uncertainty eases and flows normalize, we remain confident in the outlook for the chemistry and plastics sectors,” he said. “I point back to the Transport Canada data. Through May we see that the volume of chemicals and resins shipped on railways is flat to 2024 even though prices have fluctuated dramatically,” he said. Meanwhile, the prolonged business cycle downturn, combined with ongoing tariff uncertainty, has delayed several major investments in the chemical industry, Cherniak said, but added: “We anticipate a renewed commitment to these projects as market conditions improve in the coming months.” ANALYSTS Analysts at Toronto-based Royal Bank of Canada said in a research note on Tuesday that the average effective US tariff rate on imports from Canada was just 2.4% in June, one of the lowest among US trading partners. The average US tariff rate for goods imports from all countries was 8.9% in June, according to the analysts’ estimates. While the effective tariff rate on imports from Canada would rise with the increase in the rate on products not compliant with the USMCA to 35%, that increase applied to a “relatively small share, we estimate around 6%” of Canadian exports to the US that are not USMCA compliant, they said. If the exemption for USMCA-compliant goods imported from Canada remains in place, Canada would have the lowest tariff rate of any major US trading partner, putting Canadian exporters in a stronger relative position to compete for US import market share than other countries, the analysts said. However, there are concerns that the overall US tariff hike on all countries has been so large, and that the uncertainties surrounding the tariff announcements have been so high, that US economic growth will slow, with negative implications for close US trading partners such as Canada, the analysts said. They went on to point to evidence of softening US labor markets, particularly in the US industrial sector, where ties with the Canadian economy are extremely close. CANADA WORKS TOWARDS NEW DEAL As it currently stands, Canada is one of the few major trading partners without a bilateral deal with the US, and it is also one of the few countries, along with China, to have retaliated against the tariffs. At the same time, however, as long as the USMCA exemption remains in place, much of Canada’s trade with the US is shielded from the Trump tariffs. Despite missing the 1 August deadline, the Canadian government continues to work towards an agreement with the US, with the objective of removing or cutting tariffs. However, Prime Minister Mark Carney has warned Canadians to expect that even with a deal, some of the US tariffs may remain in place. It remains unclear whether Canada will further raise its retaliatory tariffs, in response to the US tariff hike to 35% from 25%. Canada’s powerful provincial premiers (governors) are in disagreement over the retaliatory tariffs. Scott Moe, premier of resource-rich Saskatchewan has called for them to be removed, whereas the premier of Ontario, Doug Ford, wants them to be raised. Some commentators have said Canada should not rush into a bilateral deal but rather wait until US courts have made a final decision on the legality of Trump’s tariffs. Only US courts could protect against Trump’s unpredictable and politically motivated tariff policies, they said. Others, however, are urging the Canadian government to make a quick bilateral deal with the US, saying the country cannot rely on the USMCA and Trump may revoke the exemption for USMCA-compliant products at any time. Please also visit: US tariffs, policy – impact on chemicals and energy Thumbnail photo source: Government of Canada

France’s Damen Shiprepair halts Russian LNG fleet servicing Adds more logistical shipping challenges for Russia Denmark’s Odense yard to continue servicing Russian vessels LONDON (ICIS)–The French shipyard Damen Shiprepair in Brest has halted servicing Russia’s arctic LNG tankers, adding to the growing restrictions on Russia since its invasion of Ukraine. A spokesperson for Dutch parent company Damen told ICIS that it decided at the start of 2025 to stop repairing Russian LNG tankers. “Although the previous repairs were permitted under European sanctions legislation, we decided to refrain from further work on this type of ship,” the Damen spokesperson said. “This was the company’s own decision,” he added, “in line with Dutch foreign policy discouraging Dutch companies from supporting Russian LNG exports.” Following Damen’s decision, the Fayard-operated Odense yard in Denmark stands as the only Western facility continuing to service Russia’s arctic LNG fleet. For example, the 172,000cbm Boris Vilkitsky and Fedor Litke tankers – both chartered by Yamal – are currently near the Odense yard, ICIS data shows. About 15 Arc-7 ice-class Yamalmax vessels serve the 17.4mtpa Yamal LNG plant and have been serviced by Damen Shiprepair and Denmark’s Odense yard in recent years. The ice-class vessels were originally designed to transport LNG from Yamal to transshipment points in northwest Europe. GROWING CHALLENGES While the vessels are not directly sanctioned, ICIS senior LNG analyst Alex Froley said they may have to use shipyard services in Asia instead if European yards continue to limit availability. “While not a complete blocker to Yamal, it adds to a growing number of restrictions that add more friction and logistical challenges, following on from the ban on ship-to-ship transfers in European ports in March this year,” he said. The ban on the transshipment of Russian LNG through EU ports became effective from 26 March, for contracts concluded before 25 June 2024. “Russia now has to transfer cargoes in its own waters in Murmansk as a result of that change,” Froley said. This comes on top of a proposed roadmap, published earlier in May, to ban all European imports of Russian gas from 2028, which would likely redirect Russian volumes to Asia. Meanwhile, the sanctioned 13.2mtpa Arctic LNG 2 export plant has a total of 21 Yamalmax ships ordered between November 2019 and November 2020. The US Treasury has previously imposed sanctions on the 1.5mtpa Portovaya LNG and 0.66mtpa Vysotsk LNG plants, while the Yamal LNG and 10.9mtpa Sakhalin‑2 export plants have so far not been sanctioned. DANISH YARD TO CONTINUE REPAIRS Denmark’s Fayard, the operator of Odense shipyard, declined to comment on other companies’ decisions, but added it “fully supports Denmark and the EU’s stance towards Russia”. The spokesperson told ICIS that the EU aims to phase out Russian LNG and gas, but has assessed that gas from the Yamal LNG facility “remains a necessary part of Europe’s energy supply”. The export plant was not sanctioned in EU’s 18th and latest sanctions package from the EU, which was adopted by the end of July 2025, he said. “We support the EU’s plans and adhere to the current political guidelines and regulations, as we are interested in assisting the EU, and consequently we work in accordance with what the EU’s politicians decide,” the spokesperson added. It remains unclear whether the Danish yard can take over all the work previously handled by Damen for Russia’s LNG fleet. The EU sanctioned two key flag registries and a proposed Russian LNG export plant in its latest round of sanctions.

MADRID (ICIS)–Adapting to the green economy will be the key, long-term challenge for the EU and Spain’s chemicals sector, while the current focus on energy costs is misplaced, according to Spain’s main trade union. Daniel Martinez, head of chemicals at The Workers’ Commissions (CCOO), said the healthy performance in Spain’s chemical sector post pandemic had much to do with the so-called Iberian exception, a measure within the EU in the middle of the energy crisis in 2022 that allowed Spain and Portugal to considerably lower their electricity bills. In an interview with ICIS in July, Juan Labat, head of Spanish chemicals trade group Feique, said that while the Iberian exception had managed to considerably reduce electricity costs, the chemicals industry continued to be burdened by high taxes and costs for energy and emissions rights. According to Martinez, power costs for companies fell by an average of 70% under the Iberian exception until 2024. “The 70% energy subsidy has been very powerful, since the Iberian exception agreement was achieved at a moment when our EU competitors were paying much higher prices for their electricity bills amid Russia’s invasion of Ukraine,” said Martinez, adding that, similarly to the pharmaceuticals sector, the right support at the right time for petrochemicals allowed the industry to continue performing well. GOOD ENVIRONMENTAL MANAGEMENTBut to maintain a healthy chemicals industry in Europe, environmental compliance and waste management will increasingly become critical challenges for chemicals companies, he said. Those concerns, in the medium to long term, will become more important than traditional energy cost concerns. “It’s going to be crucial. We are particularly concerned about waste treatment capacity, regulatory compliance and the infrastructure needed to support continued industrial operations. For instance, the region of Madrid has a serious waste management problem that is not being addressed,” said Martinez. “Companies have problems with water treatment, waste, solvents, bleaches, soil contamination and air pollution. Either there’s a uniform approach from the central and regional governments, with the right investments, or companies will leave Spain because of this lack of the necessary infrastructure.” Martinez cited the example of Grupo Industrial Cristian Lay (CL), which in June announced the closure of its steel plant in Madrid’s Getafe region, after 60 years of operations. The move was driven by the facility’s proximity to areas where investment in residential developments, he said, deliver big returns. “The company wanted to invest €300 million in zero-emissions, carbon-neutral facilities but faced local political resistance. This is the wrong way forward – we must manage to keep those companies within Spain or they increasingly leave for other jurisdictions,” he said. “This is all connected to environmental policy, urban planning, and industrial competitiveness, and we must manage to balance all those factors to keep a healthy chemicals sector. POSITIVES – WITH CAVEATSMartinez said renewable energy is unlikely to fully replace fossil fuels for all industrial applications any time soon, but added that Spain has also made significant progress on that front thanks to renewables, citing significant developments in regions that have traditionally lacked industrial facilities. The Extremadura region, in the western part of Spain bordering on Portugal is a case in point, as it has lithium reserves that have prompted the construction of a gigafactory for batteries set to employ 3,000 workers. In Spain’s collective imagination, Extremadura has always been the poorest region, sparsely populated and with less than 1 million inhabitants. “Just in July, five energy storage projects have also been announced for Extremadura, which will add to the battery factory. This is the sort of investments possible in Spain thanks to the abundance of wind and sun [to produce the electricity for energy-intensive plants],” said Martinez. The region already covers more than 42% of its energy consumption via renewables, he said, and continues to attract international attention, including from Japanese investors interested in electric vehicle (EV) and cathode factories. “But it’s not all positive. Renewable energy projects face big delays: two to four years can pass from the moment a company designs the project until they grant the licenses. This must be sped up,” said Martinez. Spain remains one of the largest automobile producers within the EU, a petrochemicals-intensive sector that is quickly losing competitiveness to Chinese manufacturers focused on EVs. He said the EU will have to make great advances if it wants to keep its important automotive sector, noting China’s competitive advantages in EV pricing, with standard vehicles available for €20,000 and small cars for €13,000, creating significant competitive pressure for European manufacturers. Spain’s infrastructure challenges are also limiting EV adoption, said Martinez, arguing that there are only 45,000 electric chargers of which only one-third are operative. Adding to the challenges, he said electrifying petrol stations requires substantial electrical infrastructure investment, including nearby substations, which is not being built at the necessary speed. “I am also worried about the employment implications. Electric cars have 80% fewer components than combustion engine cars, so we must be prepared to potentially see significant job losses in traditional automotive manufacturing,” said Martinez. “While some analysts predict 800,000 new jobs from transport electrification, I remain very skeptical about full employment replacement. I don’t think EV production could ever be able to absorb that loss of employment. Moreover, modern manufacturing facilities rely heavily on engineering talent,, rather than traditional assembly workers. Front page picture: The Tarragona port and chemicals park in northeast Spain Picture source: Port of Tarragona Interview article by Jonathan Lopez

HOUSTON (ICIS)–US July sales of new light vehicles rose year on year and month on month, beating industry expectations, but the chief economist at the National Automobile Dealers Association (NADA) is maintaining its full-year forecast of 15.3 million units. Year to date, US sales of new light autos are up by 4.6% on a seasonally adjusted basis, as shown in the following chart from NADA. NADA said the year-on-year change could have been larger, but July 2024 sales data included sales that would have occurred in June 2024 were it not for the massive software outage that affected many dealerships across the country. Affordability continues to create headwinds for the industry. NADA cited data from JD Power & Associates estimating that tariffs are adding $4,275 in costs for vehicles, on average, keeping prices high and continuing to weigh on affordability. “Many OEMs [original equipment manufacturers] reported significant impacts to their bottom line due to tari­ffs,” Patrick Manzi, NADA chief economist, said. “It remains to be seen how long OEMs can absorb the price hikes before passing the costs along to consumers. We expect to have more clarity on changing OEM pricing strategies in the fall as 2025 models transition to 2026 models.” During a conference call to discuss Q2 earnings, Ford CEO Jim Farley said the company expects tariffs to be a $2 billion headwind in 2025. General Motors posted a 31.6% drop in Q2 adjusted earnings, citing $1.1 billion in tariff costs net impact. Industry analysts were anticipating increased activity in the electric vehicle (EV) market as just a few months remain before government tax incentives are set to expire, but while sales of battery EVs (BEVs) rose by 22.7% from the previous month, they were flat compared with the same month a year ago. The same is true for market share year-to-date for BEVs, which totaled 7.4% – also flat year on year, NADA said. Meanwhile, plug-in hybrids – some of which are also eligible for the EV tax credit – saw sales and market share decline slightly year on year. The most popular alternative-fuel segment continues to be hybrids, according to NADA, which posted a 37.7% year-on-year sales gain in July 2025. Year-to-date, hybrids have also picked up 3 percentage points of market share, as shown in the following chart from NADA. DEMAND OUTLOOK Jincy Varghese, ICIS demand analyst, said the auto industry remains exposed to trade tensions and is currently navigating a turbulent transition. “EV sales are growing, but consumer interest remains mixed because of concerns over charging infrastructure, among others,” Varghese said. “The International Energy Agency’s (IEA’s) forecast EV sales will exceed 20 million vehicles worldwide, or in other words, one in every four vehicles sold will be EV. Meanwhile, traditional ICE vehicle production remained below pandemic levels in North America and Europe.” Oxford Economics said in its North American 2025 outlook that higher costs and slower economic growth from the reciprocal tariff policy are expected to contribute to a 4% decline in sales for 2025. “Optimal production schedules will vary by manufacturer, but tariffs will likely have a significant distortionary effect on North American production in 2025 and beyond,” Oxford said. CHEMS USED IN AUTOS Demand for chemicals in auto production comes from, for example, antifreeze and other fluids, catalysts, plastic dashboards and other components, rubber tires and hoses, upholstery fibers, coatings and adhesives. Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry. The latest data indicate that polymer use is about 423 pounds (192kg) per vehicle. Meanwhile, EVs and associated battery markets are an important growth opportunity for the chemical industry, with chemical producers separately developing battery materials, as well as specialty polymers and adhesives for EVs. Focus article by Adam Yanelli Please also visit the ICIS topic page Automotive: Impact on Chemicals Visit the US tariffs, policy – impact on chemicals and energy topic page