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, 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)

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.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 17 January. 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. Europe jet fuel prices lift off with Brent surge, but demand fails to take flight Jet fuel spot prices in Europe climbed in the week to 14 January, mirroring a rally in upstream Brent crude and gasoil values. However, activity in the physical market remained sluggish, weighed down by low buying interest and abundant supply. 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. Europe naphtha climbs on Brent gains amid sluggish buying, weaker margins Open-spec naphtha (OSN) spot quotations in Europe have been on an upward trajectory, rallying on the back of firming Brent crude values. This was despite subdued blending requirements and poor feedstock demand which kept market liquidity low. PP and PE Africa markets rebalance, some price rises emerge amid lacklustre demand Spot prices in the African polypropylene (PP) and polyethylene (PE) markets were mostly stable in the first full week of January, although upward momentum was felt in high density polyethylene (HDPE) and low density polyethylene (LDPE) due to tightening supply.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 17 January. UPDATE: Oil jumps by more than $1/bbl on fresh US sanctions on Russia By Nurluqman Suratman 13-Jan-25 11:54 SINGAPORE (ICIS)–Oil prices surged by more than $1/barrel on Monday on supply disruption concerns following latest round of US sanctions against Russia’s energy sector. Strong upstream market, seasonal demand support Asia isomer MX By Jasmine Khoo 14-Jan-25 12:10 SINGAPORE (ICIS)–Strong overall performance in crude oil futures is poised to lend support to Asia’s isomer grade mixed xylenes (MX) market in the near term, although uncertainty looms over the region ahead of the incoming Donald Trump administration in the US. China posts record trade surplus in 2024; trade tensions threaten exports By Nurluqman Suratman 14-Jan-25 17:30 SINGAPORE (ICIS)–China has been rushing to ship out goods ahead of new US tariffs under the Trump administration which should keep exports growth strong in the short term, but external demand is projected to slow in line with a weaker global economy in 2025. ICIS China Dec petrochemical index inches up; Jan demand hazy By Yvonne Shi 15-Jan-25 15:55 SINGAPORE (ICIS)–The ICIS China Petrochemical Price Index in December increased by an average of 1.2% from the previous month, largely on account of tight supply in some markets, with players not expecting a strong demand recovery in the near term. China PP cargoes pre-sold at lower prices may impact post-holiday demand By Lucy Shuai and Zhibo Xiao 15-Jan-25 12:01 SINGAPORE (ICIS)–Downstream factory activity in China has been gradually winding down ahead of the Lunar New Year holidays from 28 January-4 February, resulting in weaker spot demand for polypropylene (PP). India petrochemical prices rise as rupee tumbles to all-time low By Jonathan Yee 16-Jan-25 15:25 SINGAPORE (ICIS)–India’s currency – the rupee – slumped to a record low in the week, pushing up both domestic and import prices of some petrochemicals in the south Asian country amid stable demand. Indonesian rupiah tumbles to 6-month low after surprise key rate cut By Nurluqman Suratman 16-Jan-25 15:48 SINGAPORE (ICIS)–The Indonesian rupiah fell to its weakest level in more than six months on Thursday following an unexpected loosening of monetary policy on 15 January to spur growth in southeast Asia’s largest economy. PODCAST: Asia BD bullish on supply constraints, but demand outlook hazy By Damini Dabholkar 17-Jan-25 13:32 SINGAPORE (ICIS)–The Asian spot market for butadiene (BD) saw a bullish start to 2025, as prices in both Chinese yuan and US dollar terms surged dramatically. In this latest podcast, ICIS senior editor Ai Teng Lim and industry analyst Elaine Zhang come together to discuss the factors moving prices and to take a peek into what may lie ahead for downstream demand.