SAO PAULO (ICIS)–Cold weather in the US Gulf Coast on Tuesday is expected to disrupt petrochemicals operations in Texas and Louisiana as companies take preventive measures. Temperatures fell sharply overnight from Monday and are expected to stay lower than the average for the time of the year in coming days, with potential rain, sleet and snow. The Houston metropolitan got snow in the early hours of Tuesday. The city is to record freezing temperatures all nights this week to Friday (see bottom table). CHEMICALS PLANTSCrude and petrochemicals players’ memories of 2024’s disrupting cold snap in the Gulf Coast area are still fresh, with many fearing similar disruption this week as key petrochemicals hubs in the area are set to witness a similar cold snap. In such a scenario, companies have done all they could to minimize the disruption, although some factors could be outside their control despite the preparations. Germany’s chemicals major BASF said in a written response to ICIS late on Monday that its operations in Freeport, Texas, would “continue to run at as much capacity as possible” but conceded that potential snowfall could greatly complicate access to and from the site. As of Monday, BASF said: “[Due to the snow] roads possibly being impassable. As a result, BASF will have ride out crews arriving Monday evening and remaining until conditions improve, which is expected to be on Wednesday late morning,” said a spokesperson for the company. “Non-critical employees will work from home. The BASF site in Vidalia, Louisiana, will idle operations beginning Monday evening with a planned restart of Wednesday at noon.” As Houston recorded heavy snowfall overnight, BASF was enquired again about its impact on Freeport, but the company had not responded to the request at the time of writing. BASF’s spokesperson added the company’s sites in Geismar and North Geismar, in the state of Louisiana, would continue to run as normal. In another written response to ICIS, a spokesperson for Brazil’s polymers major Braskem said the company had activated its severe weather preparedness plan for its assets in La Porte, Seadrift, and Oyster Creek, all in Texas. “We will continue to monitor the severe weather and follow our protocols to ensure our team members and assets are safe during this time. We are working with our clients to minimize the impact of this weather event,” it added. A spokesperson for CPChem also said the company was monitoring the weather and “taking steps to prepare” its plants for any potential impact. A spokesperson for European chemicals major INEOS said the company’s olefins, polyethylene (PE) and polypropylene (PP) units “have initiated winter storm” protocols. LyondellBasell would not comment. A spokesperson for the company said to ICIS: “As a matter of practice, we don’t provide specific details about our units, operational status, production figures, or supply for competitive reasons.” Formosa Plastics shut its polyvinyl chloride (PVC) and chlor-alkali units at Baton Rouge, Louisiana, on 19 January, ahead of the cold snap, and was expected to restart them on 23 January. THREAT OF POWER OUTAGES AND GAS OUTAGESWhile industrial plants can avoid direct damage from cold weather, they can still be subject to power outages or the loss of natural gas supplies. If the forecasts for sleet and snow hold true, then this could cause powerlines to snap. Spikes in demand for heating can overwhelm the power grid in Texas, leading to widespread blackouts. Chemical plants and refineries rely on electricity to power motors and pumps. As of Tuesday, power supply should be sufficient to meet demand through 28 January, according to the Electric Reliability Council of Texas (ERCOT), which manages the flow of electricity in most of the state. The electricity grid in Texas was holding up reasonably well as of Tuesday morning, with nearly 48,000 power outages recorded according to Poweroutage.us. The figure is reasonably low for Texas’ grid standards and was much lower than the more than 80,000 outages reported in California, a US state with similar population to Texas which is still reeling from wildfires around Los Angeles. Cold temperatures can also affect the flow of natural gas, potentially causing freeze-offs during which water or hydrates freeze or can create blockages. One such freeze-off caused on Monday a shutdown of a scrubber at an amine treater in Winkler county in west Texas, according to a filing with the Texas Commission on Environmental Quality (TCEQ). Low temperatures could disrupt operations at the plants that process natural gas. Since 2021, cold weather has disrupted US natural gas production during every winter, according to the Energy Information Administration (EIA). PROLONGED STRETCH OF FREEZING TEMPERATURESThe following table shows the weather forecast for the Houston metropolitan area this week, with temperatures listed in Fahrenheit first and, in brackets, in Celsius. Tuesday Wednesday Thursday Friday High 36 (2.2) 42 (5.6) 48 (8.9) 52 (11) Low 22 (-5.6) 29 (-1.7) 29 (-1.7) 37 (2.8) Source: National Weather Service Eric Berger, an analyst at Houston’s weather blog Space City Weather, said on Tuesday that infrastructure disruption should have cleared by Wednesday morning, although in some locations it may last practically all day. “After a cold start, high temperatures on Wednesday are expected to reach 40 degrees [Fahrenheit] or even a little warmer under sunny skies. The combination of mostly sunny skies and sublimation should allow for roads to mostly dry out, but for some locations, this may not happen until after noon,” said Berger. “I realize the uncertainty is no fun, but such snow and ice events are relatively rare in Houston, so we are working on limited data about local roads and their response to icy conditions. Most of Houston will fall into the upper 20s [Fahrenheit] on Wednesday night.” Front page picture: Houston’s suburbs after heavy snowfall overnightSource: Adam Yanelli/ICIS Additional reporting by Al Greenwood

LONDON (ICIS)–Germany’s economic outlook deteriorated in January on the back of a bleak GDP forecast and increasing inflationary pressures, research group ZEW said on Tuesday. The ZEW Indicator for Economic Sentiment fell by 5.4 points from the previous month to 10.3 points. Source: ZEW The group said that two consecutive years of recession, with GDP contracting in 2023 and 2024, had caused expectations to fall. In December, Germany’s central bank cut its 2025 and 2026 GDP growth projections for the country. A lack of private household spending and subdued construction demand continue to stall Germany’s economy, the group’s president Achim Wambach said in a statement. “If these trends continue in the current year, Germany will fall further behind the other countries of the eurozone.” Domestic political uncertainty and a so-far unpredictable economic policy from the new Trump administration in the US also contributed to weaker sentiment, Wambach added. The current economic situation indicator for Germany rose slightly by 2.7 points but was still firmly in negative territory at (minus) -90.4 points. In the wider eurozone, the January outlook was more positive with a 1.0 point rise in the economic sentiment indicator to 18.0 points. The current situation was 1.2 points higher than in December but still negative at (minus) -53.8 points. “The ZEW index is in line with the sentiment expressed in the December PMI numbers, which signaled that the European economy remains weak despite our expectations of a pick-up in momentum,” advisory firm Oxford Economics added in a statement.

SINGAPORE (ICIS)–Shares of petrochemical firms in Asia and China’s commodity futures markets closed mixed on Tuesday, with no immediate announcement of new tariffs from the US on the first day of Donald Trump’s second term as president. South Korea’s LG Chem closed 4.75% lower in Seoul , while Japan’s Mitsubishi Chemical finished 1.85% higher in Tokyo. China’s state oil and gas firm PetroChina was down 1.40%, while chemicals major Sinopec ended down 1.62% in Hong Kong. The CSI 300 Index, a benchmark for Chinese mainland shares, edged up 0.08% to close at 3,832.61. Japan’s benchmark Nikkei 225 rose by 0.32% to settle at 39,027.98, while South Korea’s KOSPI Composite Index ended 0.08% lower at 2,518.03. Hong Kong’s Hang Seng Index finished the session 0.91% higher at 20,106.55. Singapore’s Straits Times Index (STI) was trading 0.27% lower at 3,797.61 at 08:44 GMT. Analysts said that markets have already pre-digested the “Trump effect”. In his presidential campaign, Trump had threatened to impose tariffs on all US imports. His first four-year term as US president in 2017-2021 sparked the US-China trade war. In China, six out of nine petrochemical futures markets posted declines on Tuesday.   CNY/tonne 21-Jan % change from previous session Linear low density polyethylene (LLDPE)                                   7,808 -0.3% Polyvinyl chloride (PVC)                                   5,304 0.6% Ethylene glycol (EG)                                   4,753 -0.2% Polypropylene (PP)                                   7,400 -0.7% Styrene monomer (SM)                                   8,520 0.0% Paraxylene *                                   7,420 -0.1% Purified terephthalic acid (PTA)*                                   5,192 -0.2% Methanol*                                   2,591 0.6% Polyethylene terephthalate  (PET)*                                   6,388 -0.2% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange Overall trading activity in China’s petrochemical markets is waning as many players have suspended trading to prepare for the upcoming Lunar new year holiday, which will last eight days from 28 January. ($1 = CNY7.28) Additional reporting by Nurluqman Suratman

MUMBAI (ICIS)–State-run Bharat Petroleum Corp Ltd (BPCL) has secured loans worth Indian rupee (Rs) 318.0 billion ($3.7 billion) for its refinery expansion and petrochemical project at its Bina site in the central Madhya Pradesh state. The company signed an agreement with a consortium of six lenders led by state-owned State Bank of India (SBI) for the loan, it said in a bourse filing on 17 January. In addition to SBI, the consortium of lenders includes Punjab National Bank, Union Bank of India, Canara Bank, Bank of India, and Export-Import Bank of India. The loan amount accounted for about 65% of the total project cost of Rs489.3 billion. The project will increase the refinery’s capacity by more than 41% to 11 million tonnes/year. It will also include a petrochemical complex comprising a 1.2 million tonnes/year ethylene cracker unit and will have units to produce downstream petrochemical products including linear low density polyethylene (LLDPE), high density PE (HDPE), polypropylene (PP), bitumen, benzene as well as gasoline, diesel and aviation turbine fuel. The company expects to commission the project by the fiscal year ending March 2028. Once operational, the new complex will significantly reduce India’s dependence on petrochemical imports, BPCL chairman and managing director G Krishnakumar said. In August 2024, BPCL chose US-based Lummus to provide technologies for the ethylene cracker and downstream units at the Bina complex. ($1 = Rs86.52)

HOUSTON (ICIS)–US President Donald Trump proposed no new tariffs on his first day of office, and instead instructed his administration to investigate the nation’s trade deficit and other areas of trade policy. The absence of any tariff proposal marks a contrast to his campaign platform and his subsequent threats after winning the election. Tariffs would expose the US chemical industry to disruptions in trade flows, increased costs for chemicals in which the nation has deficits and the threat of retaliatory tariffs on its  exports of polyethylene (PE), polyvinyl chloride (PVC) and other plastics and chemicals. Instead of proposing tariffs, Trump issued a memorandum that called for the following: The Secretary of Commerce to investigate the nation’s deficit and its consequences to the economy and to national security. The Secretary of the Treasury to investigate the creation of an External Revenue Service to collect tariffs and duties. The US Trade Representative to investigate any unfair trade practices. The US Trade Representative to prepare for the July 2026 review of the United States-Mexico-Canada Agreement (USMCA), which is the name of the countries’ trade agreement that replaced NAFTA. The US Secretary of the Treasury to investigate exchange rates. The US Trade Representative to review and recommend revisions to existing trade agreements. The US Trade Representative to negotiate bilateral or sector-specific agreements to open markets. The Secretary of Commerce to review policies and regulations regarding antidumping and countervailing duty laws. A review of several trade issues with China, including the Economic and Trade Agreement. This is also known as the phase one agreement, under which China failed to fulfil its import commitments. The absence of first-day tariff proposals does not mean that Trump will not make any later in his presidency. In some cases, the US president has the authority to propose them even without investigations. For example, the International Emergency Economic Powers Act (IEEPA) of 1977 allows the president to propose tariffs that would address a severe national security threat. It requires only a consultation with Congress. During Trump’s presidential campaign, he proposed the following tariffs: Baseline tariffs of 10-20% on all imports. Tariffs of 60% on imports from China. A reciprocal trade act, under which the US would match tariffs that other countries impose on its exports. After winning office, he threatened to impose tariffs of up to 25% on imports from Canada and Mexico and up to 10% on imports from China. Thumbnail image: Inauguration Ceremony for President Donald Trump in Washington, District of Columbia, United States – 20 January 2025 (By Chip Somodevilla/UPI/Shutterstock)

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Please don’t hide you your head beneath the sheets and hope that the scary slide, the first in today’s blog post, will somehow magically go away. It is what it is. Don’t waste anymore time in thinking that China’s economy is going to rebound sufficiently to absorb these vast surpluses in 2025. Then, as I discuss in today’s post and you can see from slides and two three this is what polymers producers need to do get through this crisis: Get more accurate capacity and production information ahead of your competitors in order to reduce losses by taking full advantage of short-term shifts in markets. Be ahead for your competitors on predicting new antidumping measures, safeguard duties and standard import duty changes. More closely monitor bilateral and multilateral trade negotiations. What are your government contacts like? You may need to engage more vigorously in lobbying for trade protection. Trump’s trade policy on China is unpredictable—from a potential trade war to improved relations. Build scenarios that reflect this wide range of potential outcomes. Track currency movements more closely. Build scenarios on the dollar as the Trump presidency doesn’t inevitability mean a stronger greenback. But the end of the 1992-2021 Chemicals Supercycle isn’t just about China: In a much more uncertain geopolitical environment, expect continued disruption of supply chains – for example, the Houthis and the Red Sea access to the Suez Canal. This isn’t necessarily going to go away because of the Israel-Gaza ceasefire. The climate change crisis is the “here and now”, affecting seasonal demand and pricing patterns – for example the impact on India of more intense and unpredictable monsoons. Recent droughts have significantly affected shipments through the Panama Canal, reducing water levels in Gatún Lake and forcing authorities to impose restrictions on vessel size and transit capacity. We are lucky in that the greatly increased complexity has occurred as a technology develops which will enable to model this complexity while saving a great of time and so costs. This is of course artificial intelligence which is as important a breakthrough as the inventions of steam power, electricity and the internet. But as an FT video highlights (see a link in the blog), two-thirds of desk-bound workers are not using AI at all. CEOs have bought the equivalent of Ferraris (state-of-the-art AI) without giving their employees driving lessons. Watch this space as I experiment with AI (I am giving myself driving lessons). Let’s discuss how AI can transform your chemicals business. 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.

HOUSTON (ICIS)–Temperatures along the US Gulf Coast should fall well below freezing later in the week and remain there for a prolonged stretch, threatening operations at chemical plants and refineries. Temperatures already reached freezing on Sunday, according to the National Weather Service. Temperatures should fall further Monday night, with a chance of rain, sleet and snow. Houston could get snow on Tuesday before temperatures plunge to 18 degrees Fahrenheit (-8 degrees Celsius). Temperatures will fall below freezing on Wednesday and Thursday nights. GULF COAST PLANTS WERE NOT BUILT FOR COLDUntil recently, temperatures rarely fell below freezing along the Gulf Coast, so it was unlikely that chemical companies designed their plants to be more resilient during frigid weather. Since 2021, freezes have become annual events along the Gulf Coast, and companies have started taking precautions. Dow escaped the freeze of December 2022 largely unscathed. However, during that same 2022 cold spell, TotalEnergies did shut down its polypropylene (PP) operations in La Porte, Texas, even though it took all possible precautions to prepare for the cold weather. THREAT OF POWER OUTAGES AND GAS OUTAGESEven if plants avoid damage from cold weather, they could still shut down if they lose power or natural gas. If the forecasts for sleet and snow hold true, then this could cause powerlines to snap. Spikes in demand for heating can overwhelm the power grid in Texas, leading to widespread blackouts. Chemical plants and refineries rely on electricity to power motors and pumps. As of Monday, power supply should be sufficient to meet demand through 26 January, according to the Electric Reliability Council of Texas (ERCOT), which manages the flow of electricity in most of the state. The following chart shows ERCOT’s power forecast. Source: ERCOT For natural gas, cold temperatures can cause freeze-offs, during which water or hydrates freeze and create blockages. One such freeze-off caused on Monday a shutdown of a scrubber at an amine treater in Winkler county in west Texas, according to a filing with the Texas Commission on Environmental Quality (TCEQ). Low temperatures could disrupt operations at the plants that process natural gas. Since 2021, cold weather has disrupted US natural gas production during every winter, according to the Energy Information Administration (EIA). PROLONGED STRETCH OF FREEZING TEMPERATURESThe following table shows the weather forecast for the Houston Hobby Airport. Figures are listed in Fahrenheit and Celsius. Monday Tuesday Wednesday Thursday Friday High 39 (4) 33 (1) 37 (3) 47 (8) 52 (11) Low 28 (-2) 18 (-8) 24 (-4) 29 (-2) 40 (4) Source: National Weather Service (Thumbnail shows ice that was caused by low temperatures. Image by David J Phillip/AP/Shutterstock) (recast paragraph 6 with context)

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 17 January. INSIGHT: Trump bump to boost US GDP growth I am reminded every four years when there is a new US administration of the 1966 Western action movie, “The Good, the Bad and the Ugly” starring Clint Eastwood, Eli Wallach and Lee Van Cleef as the good, the bad and the ugly. It is in this vein that we will review new policies from the incoming administration and their likely impact on the economy and the chemical industry. Crude buoyed by cold weather, sanctions, China recovery – oil CEO 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. Latest US sanctions could hit Russia oil supply – IEA 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. 2025 chemicals demand outlook highly uncertain on geopolitics – LANXESS CEO After two years of a severe downturn, the global demand outlook for chemicals in 2025 is extremely uncertain pending geopolitical and policy developments with a new US administration, upcoming elections in Germany and US-China relations, said the CEO of Germany-based specialty chemicals producer LANXESS. US steadies 2025 growth outlook as Europe struggles – IMF Global economic growth this year is expected to increase modestly compared to 2024, the International Monetary Fund (IMF) said on Friday, as stronger expectations of US growth offset an increasing bearish outlook for Europe. INSIGHT: US is adding no new ethylene capacity for first time since 2010 The oversupply of chemicals has caught up with one of the world’s lowest cost producers. In 2025, the US will add no new ethylene capacity, the first time since 2010. INSIGHT: US tariffs on Canadian oil would harm the US and Canada US President-elect Donald Trump is expected to quickly move forward with his proposed 25% tariff on all imports, including oil and energy, from Canada and Mexico after taking office on Monday 20 January.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which highlights Cefic’s report on the existential crisis facing Europe’s chemical industry. 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. Paul Hodges is the chairman of consultants New Normal Consulting.