LONDON (ICIS)–Construction output in the eurozone and EU fell for the second consecutive month in June, statistics agency Eurostat said on Thursday. Seasonally adjusted production in construction in June fell by 0.8% in the eurozone compared to May and was lower by 0.5% in the wider EU. In May, construction output fell by 2.1% in the eurozone and by 1.9% in the EU following strong growth in April. Total construction, % change with the previous month 2025 January February March April May June Eurozone 0.7 -1.2 0.0 4.5 -2.1 -0.8 EU 0.4 -1.1 -0.1 3.8 -1.9 -0.5 In the eurozone for June, building construction decreased by 1.8%; civil engineering increased by 0.5%; and specialized construction activities decreased by 0.2%. For the EU, building construction decreased by 1.6%; civil engineering decreased by 0.1%; and specialized construction activities increased by 0.3%. On a year-on-year basis, overall June construction output was up by 1.7% in the eurozone and by 1.9% in the EU. The construction sector is a key consumer of chemicals, driving demand for a wide variety of chemicals, resins and derivative products, such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibers, among many others.

LONDON (ICIS)–Business activity in the eurozone rose to a 15-month high in August, driven by the manufacturing sector, where production increased at the fastest pace in almost three and a half years. New orders returned to growth in August, ending a consecutive 14-month decline, S&P Global said in its flash Purchasing Managers’ Index (PMI) statement on Thursday. The eurozone composite PMI rose to a 15-month high of 51.1, up from 50.9 in July, according to data from the market intelligence group and the Hamburg Commercial Bank (HCOB), with output rising in each of the past eight months. The manufacturing output PMI hit a 41-month high in August, while manufacturing increased to a 38-month high. “Things are getting better. Economic activity has picked up in both manufacturing and services,” said HCOB chief economist Cyrus de la Rubia. “Overall, we’ve seen a slight acceleration in growth over the past three months. Despite headwinds like US tariffs and general uncertainty, businesses across the eurozone seem to be coping reasonably well.” In the UK, the composite PMI rose in August to a 12-month high, although driven by the services sector rather than manufacturing. “The flash UK PMI survey for August indicated that the pace of economic growth has continued to accelerate over the summer after a sluggish spring, the rate of expansion now at a one-year high. The services sector has led the expansion, but manufacturing also showed further signs of stabilizing,” said S&P chief business economist Chris Williamson.

SINGAPORE (ICIS)–Indonesia’s fledgling Butonas Petrochemical is preparing a 1 million tonnes/year methanol plant in Bojonegoro, East Java, to fill the country’s domestic demand and national energy goals from 2029, according to the company’s president Ignatius Tallulembang. Plant will run on natural gas and carbon dioxide feedstocks Methanol demand is expected to surge as Indonesia scales up its renewable fuel programs Butonas also planning to build a bioethanol plant The methanol plant is designated as one of 77 national strategic projects for the 2025-2029 period, as outlined by Indonesian President Prabowo Subianto. Indonesia consumes around 2.35 million tonnes/year of methanol, with domestic supply from Kaltim Methanol Industri (KMI) limited to around 680,000 tonnes, leaving an import gap of 1.75 million tonnes that the methanol facility in Bojonegoro is designed to help close, Tallulembang told ICIS. Butonas Petrochemical was founded in 2021 to aid in Indonesia’s evolving energy and environmental challenges through “bold, scalable solutions” and leading the country’s transition to low carbon energy, according to Tallulembang. PLANT COMMISSIONING IN 2029 Butonas aims to commission the plant in 2029 to coincide with the full implementation of B40 and B50 biodiesel blending mandates that require fatty acid methyl ester (FAME) production. “Methanol is a key component in biodiesel synthesis, and demand is expected to rise sharply as Indonesia scales up its renewable fuel programs,” said Tallulembang. The B40 biodiesel mandate, which contains 40% palm oil, aims to increase domestic energy security, reduce fossil fuel imports, and support the palm oil industry. Butonas has selected French gas firm Air Liquide as its technology provider, and the steam methane reforming (SMR) design is “optimized for scalability, energy integration, and environmental performance”, said Tallulembang. The 130-hectare plant will run on 90 million cubic feet of treated natural gas and 24 million cubic feet of carbon dioxide, sourced directly from the nearby JTB Gas Processing Facility operated by Pertamina EP Cepu, Tallulembang said. Negotiations for the Gas Sales Agreement (GSA) with the gas operator are well advanced, with signing targeted in the fourth quarter of 2025, Tallulembang confirmed. The co-utilization of vented carbon dioxide will help lower emissions while enhancing methanol yield, aligning with global low-carbon standards, he said. A date has not been set for plant construction to begin currently, with land acquisition still in the works. STRATEGIC SHIFTS POSSIBLEIn the face of domestic and international competition faced by Indonesia’s evolving biofuel and petrochemical sectors, Butonas says it is focused on building a platform for “long-term value creation” to meet Indonesia’s methanol needs and reduce its reliance on imports. The plant, once running, can save the Indonesian government an estimated 5 million tonnes/year of diesel, or 38 billion barrels, and replace them with FAME, saving money via foreign currency exchange as well, Tallulembang said. Although the plant will primarily supply the domestic market initially, operations are being structured to allow for regional exports if market dynamics shift, Tallulembang said. “That optionality is key to navigating future volatility,” added Tallulembang. The process design selected for the plant is also tied to “scalability, energy integration and environmental performance”. “That gives us a cost and compliance edge as regulations tighten and carbon pricing mechanisms evolve,” Tallulembang said. Butonas is also planning to build a bioethanol plant alongside the methanol plant to support Indonesia’s clean energy transition, but it is currently in “early development” and has been placed on the back burner as the methanol plant takes priority. Tallulembang said the bioethanol plant remains an important part of Butonas’ long-term strategy. “By reducing import dependency and supporting clean fuel programs, we’re contributing directly to Indonesia’s energy security, current account improvement, and long-term sustainability goals.” Thumbnail photo shows Ignatius Tallulembang, the President of Butonas Petrochemical Indonesia (Source: Butonas) Interview article by Jonathan Yee

LONDON (ICIS)–UK inflation increased in July to its highest level in 18 months, according to official data on Wednesday. The Consumer Prices Index (CPI) rose by 3.8% in the 12 months to July, up from 3.6% in June. The increase was mainly driven by transport, particularly air fares, the Office for National Statistics (ONS) said in a statement. Monthly inflation has generally trended up over the past year, with the July 2025 figure the highest recorded since January 2024, when the rate was 4.0%. This current rate is way above the Bank of England’s target of close to but not exceeding 2%. At its latest meeting, the bank’s monetary policy committee cut interest rates as it tries to balance a sluggish economy against rising inflation.

SINGAPORE (ICIS)–Malaysia’s overall exports in July jumped by 6.8% year on year, due to front-loaded shipments before the US’ reciprocal tariffs took effect on 7 August. The export growth reversed two months of contraction and was primarily driven by a 22.5% year on year jump in electrical & electronic (E&E) exports, preliminary official data showed on 19 August. Total imports in July grew 0.6% year on year, resulting in a trade surplus of ringgit (M$) 14.98 billion ($3.54 billion). July exports to the US grew 3.8% year on year to M$18.47 billion amid higher exports of E&E products, manufactures of metal and rubber products. Exports to other major trading partners such as mainland China (6.8% year on year), Singapore (22.2%) and Taiwan (46.6%) also grew in July amid front-loading of shipments. Chemical and chemical product exports shrank 10.7% year on year in July. Although Malaysia’s prospects were boosted by the US reducing ‘reciprocal’ tariffs to 19% from 25% previously, its trade outlook is still subject to downside risks for the rest of the year, said Singapore-based UOB Global Economics & Markets Research in a note on 19 August. Uncertainty persists regarding US-China trade talks after reciprocal tariffs were further suspended to 10 November, and the effect of 19% tariffs will be reflected starting this month, UOB said. In light of these downside risks, the bank kept its 2025 full-year export growth forecast at 3.8% tentatively, down from the country’s 5.8% shipment growth in 2024. Visit US tariffs, policy – impact on chemicals and energy ($1 = M$4.23)

SINGAPORE (ICIS)–Japan’s chemical exports fell by 7.3% year on year to yen (Y) 961 billion in July, weighing on overall shipments abroad which declined for the third straight month, official data showed on Wednesday. Exports of organic chemicals fell by 19.4% year on year to Y149.3 billion in July, while shipments of plastic materials dipped by 2.3% to Y296.8 billion, according to data published by the Ministry of Finance. By volume, exports of plastic materials fell by 4.0% year on year to 452,847 tonnes in August. Japan’s overall exports fell by 2.6% year on year to Y9.36 trillion in July, while imports were 7.5% lower at Y9.48 trillion. This resulted in a trade deficit of around Y118 billion last month. Japanese exports of automobiles and motor vehicle parts to the US plunged 27.1% and 17.4%, respectively, in July after Washington imposed a 10% baseline tariff in April on top of a separate 25% duty on cars. A 15% reciprocal tariff on Japanese imports as well as automobiles and auto parts took effect on 7 August following a trade deal reached between Tokyo and Washington in July. Elsewhere, Japan’s exports to China fell by 3.5% year on year in July, continuing the losing streak for the fifth straight month, while those to the EU slipped 3.4% and those to southeast Asia were down by 2.9%. Japan’s economy grew at a faster-than-expected annualized rate of 1.0% in the second quarter, driven by robust exports that weathered trade tensions with the US, according to preliminary government data released last week.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Is AI a new dawn for humanity, or a bubble waiting to burst? Is the trade war a mere inconvenience, or a threat to global stability? In a world filled with contradictory “facts” and endless noise, analysts can no longer rely on single forecasts. This is especially true in our post-Chemicals Supercycle world, where complexity is the only certainty. This is why I believe in scenario planning—it’s the only sensible approach. My latest analysis explores three potential futures for the US and global economies over the next three years, shaped by the interplay of AI innovation and trade policy, with a focus of course on the petrochemical implications. Best-Case: Pragmatism PrevailsTrade normalises, AI focuses on practical applications. Petrochemical markets see booming demand and stability, speeding up rebalancing and reducing the need for extensive plant closures. Medium-Case: The Divided EconomyPersistent trade friction meets continued AI hype. Petrochemicals see trade routes shift and demand growth slow, requiring more extensive capacity closures. Worst-Case: Political ParalysisA catastrophic double shock: a trade war that chokes off supply chains and an “AI winter” that bursts the tech bubble. Petrochemical markets face fragmentation and a deep contraction, forcing massive capacity shutdowns. Understanding these divergent outcomes is critical for strategic decision-making. 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)–The US government has slowed down the introduction of new regulations and provided the chemical industry with some significant policy wins, although fostering rail competition had some setbacks. CHEMS GET BREAK FROM NEW REGULATIONSThe administration of President Donald Trump has introduced a policy that is requiring federal agencies to purge 10 regulations if they want to adopt a new one. The new policy is discouraging federal agencies from introducing new regulations, said Eric Byer, president and CEO of the Alliance for Chemical Distribution (ACD). “They know if they issue regulations, they have to find 10 they have to whack.” The federal government is also focused on purging regulations that are duplicative or unnecessary, Byer said. Many agencies that are key for chemical regulations are pursuing this, including the Department of Transportation (DoT), the Occupational Safety and Health Administration (OSHA), the Department of Homeland Security (DHS) and the Environmental Protection Agency (EPA). Notably, the EPA embarked on a widespread review of regulations that directly affect the chemical industry. Plants that rely on ethylene oxide (EO) to sterilize medical equipment no longer need to comply with the EO provision in the National Emission Standards for Hazardous Air Pollutants (NESHAP). The EPA also allowed several chemical plants to be excluded from the Hazardous Organic NESHAP (HON) rule. Many of them produce commodity plastics and petrochemicals, as shown here. Recently, the House Appropriations Committee of the House of Representatives have included language in an appropriations bill that will prohibit funding the Integrated Risk Information System (IRIS) of the EPA, according to the ACC. The IRIS program has led to what the ACC describes as overly restrictive regulations governing formaldehyde, EO, hexavalent chromium and inorganic arsenic. A bill introduced in Congress would permanently prohibit the use of IRIS assessments in federal rulemaking. ACC GOALS FOR TSCAThe ACC is targeting provisions in nation’s safety program that are causing the EPA to miss deadlines to approve new chemicals for commercial use and that is making reviews for existing chemicals more cumbersome. The program is known as the Toxic Substances Control Act (TSCA). For new chemicals, the ACC wants the New Chemical Framework Rule to be rescinded because it fixes none of the problems that is causing the EPA to consistently miss its 90-day deadline to complete reviews for new chemicals. For existing chemicals, the ACC flagged the Risk Evaluation Framework Rule, which, among other things, assumed that employees were not properly using personal protective equipment (PPE) when handling chemicals. SETBACK FOR US RAIL COMPETITIONAn appeals court had recently suspended the nation’s reciprocal switching program and sent it back for review to the Surface Transportation Board (STB), the nation’s main railroad regulator. The chemical industry has supported reciprocal switching and argued that it would open rail carriers to more competition and improve service. Under reciprocal switching, one railroad carrier handles a customer’s cargo on behalf of another railroad carrier. The STB finalized a rule in mid-2024 that was intended to make reciprocal switching easier to request when rail service was proven to be inadequate. The new rule was challenged by railroad companies, and the metrics used to measure inadequate service failed to pass muster before the US Court of Appeals for the Seventh Circuit. A better approach could be focusing on competition instead of service, said Jeff Sloan, senior director of regulatory affairs for the ACC. The STB can make service or competition the rationale for granting reciprocal switching. Competition may not face the same restrictions that left the current rule vulnerable to lawsuits. Moreover, the administration of US President Donald Trump has placed a priority on fostering competition, Sloan said. REPORTED RAIL MERGERS WOULD ERODE COMPETITIONCompetition could erode further if the rail industry further consolidates as reported by the media. The Wall Street Journal reported that Union Pacific is in preliminary talks to acquire Norfolk Southern. Reuters reported on 22 July that BNSF Railway hired Goldman Sachs as a banker while CSX is seeking a banker. Warren Buffet, chairman of Berkshire Hathaway, which owns BNSF, later denied BNSF is working with Goldman to acquire a competitor, in an interview with CNBC. Those companies make up four of the six Class I freight railroads in North America. If those mergers took place, they would reduce the number to four. “These mergers end up costing time and money for our businesses on the shipper side,” Byer said. The recent merger between Canada Pacific (CP) and Kansas City Southern has already compromised service, according to a 17 June letter from the chairman of the STB. Customers are suffering from delays, missed switches and congestion as part of the merger’s technology changeover, according to the letter. CHEMS MAY GET ANOTHER CHANCE TO REPEAL SUPERFUND TAXThe chemical industry with another opportunity to repeal the Superfund tax if the House of Representatives considers another tax bill in the autumn, Byer said. The tax imposed duties on several building-block chemicals and their derivatives. The chemical industry has advocated for the removal of the tax, and the tax bill offered it one of its best chances to get it repealed. The chemical industry’s last opportunity to repeal the tax was in the tax bill passed earlier in 2025. It made many favorable provisions of 2017’s Tax Cuts and Jobs Act (TCJA) permanent. However, it did not repeal the Superfund tax, since legislators did not want to overburden the bill with too many provisions. Other opportunities could be an omnibus bill in the autumn or another tax bill in the spring, Byer said. US HAS OPENING TO REVISIT CHEMS ANTITERRORISM PROGRAMThere are tentative signs that the US could have a chance to revive its national chemical-site antiterrorism program, known as the Chemical Facility Anti-Terrorism Standards (CFATS). The program lapsed two years ago, leaving the chemical industry without a national anti-terrorism program at a time of heightened geopolitical risk. A new representative, Andrew Garbarino (Republican-New York) was chosen as the next chairman of the House Committee on Homeland Security. The new chairman could create an opening to reconsider reviving the CFATS program. Additional reporting by Joseph Chang Insight article by Al Greenwood Thumbnail shows US Congress. Image by Lucky-photographer

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 15 August. Oil falls ahead of US-Russia talks as China tariffs deadline looms Oil prices on Monday extended the steep losses seen last week, as upcoming talks between the US and Russia on 15 August raised the prospect of a ceasefire pact with Ukraine and an increase in global supply. Brazil’s Unipar cushioned from US tariffs but end markets feeling the heat – CEO Unipar faces minimal direct exposure to US tariffs but is suffering indirect effects as global supply chains are hit by trade tensions creating high levels of uncertainty, the CEO at the Brazilian chloralkali and vinyls producer said. China, US agree to suspend reciprocal tariffs until 10 Nov China and the US have agreed to suspend tariffs on each other’s goods for an additional 90 days to 10 November, following US President Donald Trump’s executive order signed on 11 August. US Celanese expects continued soft demand from most end markets Celanese will continue to focus on self-help measures in the second half of the year amid continued soft demand across most end markets, the US-based acetyls and engineered materials producer said on Tuesday. Higher OPEC+ supply to fuel global crude market imbalance – IEA The supply-demand imbalance in global crude markets is set to increase sharply as producing cartel OPEC+ unwinds output cuts from September while new sanctions on the third and fifth-largest producers hit those countries’ supply, the International Energy Agency (IEA) said on Wednesday. Brazil launches R30 billion ‘Sovereign Brazil Plan’ to counter US tariffs Brazil’s President Luiz Inacio Lula da Silva signed late on Wednesday a provisional measure with support measures for Brazilian exporters facing US tariffs totaling Brazilian reais (R) 30 billion ($5.5 billion). INSIGHT: US tariff policy, uncertainty to continue hitting chemical distributors US tariff policy will continue to negatively impact US chemical distributors, adding costs and complexity that will especially hit smaller and medium-size businesses, said the head of the Alliance for Chemical Distribution (ACD) and panelists at the 2025 ChemEdge conference in Louisville, Kentucky. ACD to fight ‘like crazy’ against Union Pacific/Norfolk Southern mega rail merger – CEO The Alliance for Chemical Distribution (ACD) will fight “like crazy” against the proposed mega merger between US rail giants Union Pacific and Norfolk Southern in what could become the first US transcontinental railroad, said the CEO of the ACD.