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. Russian supply to top purchasers India, China may be hit Oil gains in recent weeks partly driven by strong winter demand US may tighten sanctions on Iran oil exports under Trump The new sanctions, imposed on 10 January, mark the US’ most sweeping measures yet, targeting companies and vessels engaged in Russia’s oil production and exports. “The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” US treasury secretary Janet Yellen had said on 10 January. “With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.” The sanctions were imposed on 183 vessels, of which 143 are tankers, said Matt Wright, lead freight analyst at data and analytics firm France-based Kpler said in a note. The tankers included are a combination of Russian-owned and “shadow fleet” vessels. The package of sanctions is the largest to target the Russian shipping market since the invasion in 2022, Wright said. “Shadow fleet” refers to ships indirectly owned or controlled by Russia through shell companies or intermediaries to evade detection and sanctions. The latest sanctions targeted 117 crude oil tankers, with 102 of them transported Russian crude to China and/or India at least once in 2024, and 11 exclusively moving arctic crude from oil fields to export terminals within Russia, according to Wright. “When it comes to buyers, China and India, in general, tend to steer clear of dealing directly with tankers and entities blacklisted by the US Treasury,” he said. China’s state-owned Shandong Port Group on 7 January issued a ban on vessels listed under the US Office of Foreign Assets Control (OFAC) from docking at its facilities – a precautionary step to avoid potential liabilities as President-elect Donald Trump prepares to return to the White House in just two weeks, Wright said. In 2024, nearly half of China’s seaborne imports of Russian crude oil were sourced through the eastern province of Shandong, according to Wright. Shandong province is home to a high concentration of independent small or “teapot” refineries, which play a significant role in oil imports of the world’s second-biggest economy. “The new sanctions disrupting Russian oil exports are expected to drive up Russian crude price differentials in China and India in the short term, potentially reaching parity with non-sanctioned grades of similar quality,” he added. India, which is a giant emerging market in Asia, has significantly increased imports of Russian oil since the Ukraine invasion, taking advantage of discounted prices and becoming one of the top buyers of Russian crude. The newly sanctioned tankers handled over 530 million barrels of Russian crude exports last year, accounting for about 42% of Russia’s total seaborne crude exports, according to Kpler data. Over half of this volume or around 300 million barrels was shipped to China, making up roughly 61% of China’s seaborne imports of Russian oil. The bulk of the remaining volume went to India, accounting for nearly a third of the south Asian nation’s total intake of Russian oil, it said. The US Department of State said that is also taking steps to reduce Russia’s energy revenues by blocking two active liquefied natural gas (LNG) projects, a large Russian oil project, and third-country entities supporting Russia’s energy exports. Russia’s foreign ministry on 11 January denounced the US sanctions against its energy sector, saying that it would respond to the country’s “hostile” actions. Crude prices have surged in recent weeks, driven by winter demand, falling US stockpiles, and speculation that the incoming Donald Trump administration in the US will tighten sanctions on Iranian oil exports. Meanwhile, Texas refineries are bracing for an onslaught of cold, snow and freezing rain as the first major winter storm sweeps the southern region of the US, with January projected to be the coldest in 11 years. Focus article by Nurluqman Suratman (Updates with latest prices in interactive, adds details throughout)  Thumbnail image: A foreign oil tanker at Qingdao port in Shandong province, China, on 29 November 2024.(Costfoto/NurPhoto/Shutterstock)

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Last year, ICIS estimated that China’s polypropylene (PP) capacity exceeding its demand was 6.9m tonnes. This is expected to reach 11.6m tonnes in 2025, which would be an increase of 68%. As recently as 2009, China’s PP capacity was 4.4m tonnes short of local demand. It was only in 2021 – the year of the Evergrande Turning Point and following China’s 2014 decision to push much harder towards chemicals and polymers self-sufficiency – that China moved into a slight surplus of 0.3m tonnes. The surplus jumped to 2.2m tonnes in 2022 as China’s long-term economic downturn began to take hold. Now let us look at China’s percentage shares of total global PP capacity exceeding demand from 1992 onwards, when the Chemicals Supercycle began. In 2009, China’s percentage share of total global PP capacity exceeding demand was minus 53% This year, China’s percentage share is expected to reach no less than 46%, ten percentage points higher than 2024, eclipsing all other regions which are expected to be in the single digits. Just how difficult this year will turn out to be will of course depend on the strength of China’s demand growth A Chinese economist suggests that last year’s real GDP growth in China was less than 2.5% rather than the official government estimate of 5%. China’s population may have been 130m lower in 2020 than the official government estimate, according to the ICIS economist Kevin Swift. The lower the economic growth then of course the lower the demand growth for PP and other chemicals and polymers and the greater the overhang of China’s PP capacity versus local demand, further reducing China’s need for PP imports. In January-November 2024, China’s exports of PP reached 2.2m tonnes versus 1.3m tonnes in 2024 and only 425,000 tonnes as recently as 2020. There is obviously the potential for exports to be even higher in 2025 in an environment of weak local demand growth and the capacity additions. How much higher will depend on the levels of protectionism. PP producers elsewhere may well, I believe, seek more antidumping, safeguard and tariff protection. We must also consider how the pace of China’s PP capacity and production growth will be affected by its ability to indirectly export PP as packaging for or components of finished goods. Increased protectionism could again play a role here, in reaction to the belief that China as aggressively raised its exports of low, medium and high-value manufactured goods since 2021 in order to compensate for the collapse of the real-estate bubble. Take a deep breath, stand back from the market noise, think what the ICIS data is telling you and build scenarios to get through 2025. 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.

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. Product Latest Previous Change Brent March 81.26 79.76 1.50 WTI February 78.14 76.57 1.57 The new sanctions, imposed on 10 January, mark the US’ most sweeping measures yet, targeting major Russian oil exporters, insurance firms, and more than 150 tankers. “The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” US treasury secretary Janet Yellen had said on 10 January. “With today’s actions, we are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and financial facilitation in support of Russia’s oil exports.” The US Department of State said that is also taking steps to reduce Russia’s energy revenues by blocking two active liquefied natural gas (LNG) projects, a large Russian oil project, and third-country entities supporting Russia’s energy exports. Russia’s foreign ministry on 11 January denounced the US sanctions against its energy sector, saying that it would respond to the country’s “hostile” actions. Crude prices have surged in recent weeks, driven by winter demand, falling US stockpiles, and speculation that the incoming Donald Trump administration in the US will tighten sanctions on Iranian oil exports. Meanwhile, Texas refineries are bracing for an onslaught of cold, snow and freezing rain as the first major winter storm sweeps the southern region of the US, with January this year projected to be the coldest in 11 years.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 10 January. China to accelerate hydrogen use in transportation, industrial sectors after 2035 By Patricia Tao 06-Jan-25 14:32 SINGAPORE (ICIS)–China is aggressively promoting hydrogen in transportation and industrial sectors as part of its transition from fossil fuels. Vietnam Q4 GDP expands 7.55%, full-year ’24 growth at 7.09% By Jonathan Yee 06-Jan-25 16:39 SINGAPORE (ICIS)–Vietnam’s economy expanded by 7.55% year on year in the fourth quarter on recovering global demand even amid heavy losses from Typhoon Yagi, official preliminary data showed. Malaysia’s ADDs on China’s PET exports weigh on spot discussions By Judith Wang 08-Jan-25 15:09 SINGAPORE (ICIS)–Malaysia’s announcement of provisional antidumping duties (ADDs) on polyethylene terephthalate (PET) imports from China and Indonesia has cast a shadow on spot discussions. PODCAST: Asia ethylene to be impacted by US turnarounds, supply from northeast Asia By Damini Dabholkar 08-Jan-25 16:17 SINGAPORE (ICIS)–Asia ethylene editor Josh Quah and analyst Aliena Huang talk about the Asia outlook for ethylene arbitrage cargoes for 2025 with markets editor Damini Dabholkar. INSIGHT: China govt summit emphasises stabilising growth, sets tone for 2025 petchems demand By Joey Zhou 08-Jan-25 17:25 SINGAPORE (ICIS)–The Central Economic Work Conference (CEWC) held in Beijing from December 11th to 12th provided a general direction for China’s economic development in 2025. China’s Shandong Port bars entry of US-sanctioned vessels By Fanny Zhang 08-Jan-25 21:04 SINGAPORE (ICIS)–China’s Shandong Port Group has stopped US-sanctioned vessels from calling into ports under its control, according to a company notice. India acetic acid supply tightens; prices on rebound By Hwee Hwee Tan 09-Jan-25 14:06 SINGAPORE (ICIS)–India’s spot market for acetic acid imports staged a surprise recovery from late December, buoyed by fears of curtailed supplies from China into January. China’s PPI deflation persists; more economic stimulus expected in 2025 By Fanny Zhang 09-Jan-25 16:10 SINGAPORE (ICIS)–China is expected to announce more stimulus policies in 2025 to boost lackluster growth and reverse a prolonged deflation in wholesale prices, according to analysts. INSIGHT: China’s polyolefin industry seeks higher-end products amid structural overcapacity By Zhibo Xiao 09-Jan-25 19:11 SINGAPORE (ICIS)–China’s rapid expansion in PP and PE production has led to structural overcapacity in PP and a shrinking supply-demand gap for PE. Meanwhile, the shifting consumption landscape has driven a surge in demand for high-end polyolefin materials, creating a substantial market gap. Weak demand, stiff competition prompt Asia rPET producers to cut prices By Arianne Perez 10-Jan-25 10:51 SINGAPORE (ICIS)–Majority of recycled polyethylene terephthalate (rPET) flakes and pellets producers cut spot cargo prices as January opens in attempts to stoke buying interest from downstream buyers.

SINGAPORE (ICIS)–Here are the 2025 Asia Outlook stories which ran on ICIS news from 23 December 2024 to 3 January 2025. Click on a headline to read the full story. 2025 OUTLOOKS SUMMARY OUTLOOK ’25: Asia naphtha Q1 sentiment upbeat on better demand Asia’s naphtha market has rebounded from oversupply and weak demand, with sentiment expected to be lifted higher by gasoline buying interest, refinery maintenance and new cracker startups. OUTLOOK ’25: New C2 capacity in SE Asia may transform landscape While southeast Asian ethylene markets will see – by far – a smaller capacity expansion in 2025 compared to northeast Asia, expansion in the former is already shaping up to be significantly more impactful. INSIGHT: NE Asia C2 oversupply makes for soft landing in 2025 Northeast Asia ethylene markets are facing a wave of new China-led capacities in 2025 that will tip the fundamental scales further into oversupply for the continent. OUTLOOK ‘25: Asia, India brace for potentially more ethanolamines from China Participants in southeast Asia and India are bracing for a potential deluge of Chinese cargoes flowing into their markets in the first quarter of 2025. OUTLOOK ‘25: SE Asia PE to see sluggish start to 2025 as slow demand persists The southeast Asian polyethylene (PE) market is expected to face a sluggish start to the new year, with strong pricing competition and slow demand likely to guide sentiment. OUTLOOK ’25: China PE faces surge in domestic capacity, trade challenges Despite expectations for a mild recovery in China’s polyethylene (PE) demand in 2025, supported by the country’s stimulus policies, a supply-demand imbalance is likely to exert pressure on both domestic and foreign PE markets. OUTLOOK ‘25: South Asia PE, PP face supply pressure India’s polyethylene (PE) and polypropylene (PP) markets are expected to face sustained pressure amid healthy domestic supply. However, strong domestic demand growth is likely to aid market rebalancing to some extent. OUTLOOK ’25: Tourism, plant turnarounds, geopolitics to shape Mideast PP/PE markets Weak market demand and an overall bearish sentiment were prevalent in both the Gulf Cooperation Council (GCC) and East Mediterranean (East Med) polymer markets in Q4 2024. OUTLOOK ’25: Demand for premium rPE, rPP cargoes from Asia to gain support from brands Sustainability targets of major brand owners will continue to lend support to the uptake of high-quality recycled polyolefins with certifications, in 2025. OUTLOOK ’25: Asia C3 poised for sustained capacity expansions, increased spot talks Oversupply has been a running theme for the Asian propylene (C3) market for the past few years, as many C3 plants started up in the post-pandemic period while consumer demand struggled to keep up as economic recovery slowed. OUTLOOK ’25: China propylene market may enter a new cycle on fewer new PDH units expected China’s propylene market will continue to see new units come onstream in 2025, and the market may enter a new phase of structural transformation with the new capacities mainly coming from steam crackers and propane dehydrogenation (PDH) units. OUTLOOK ’25: Supply overhang maintains pressure on SE Asia PP market Southeast Asia’s polypropylene (PP) market will continue to see pressure from oversupply, which will lengthen further as new projects in China commence commercial operation. OUTLOOK ’25: China’s PP supply-demand imbalance to intensify, exports to continue China’s polypropylene (PP) market is expected to become increasingly imbalanced in 2025, driven by continued export growth and a decline in imports. OUTLOOK ’25: China BD supply and demand to increase, exports to balance market In 2025, butadiene (BD) capacity in China will expand and supply tightness in the local market is expected to ease compared with 2024. OUTLOOK ’25: Asia ACN supply growth to outpace demand, margins under pressure The acrylonitrile (ACN) market is likely to face another challenging year for regional producers with oversupply and competition from China to keep the wider Asia market under pressure. OUTLOOK ’25: Asia BDO remains a buyer’s market amid oversupply The Asia 1,4-butanediol (BDO) market is expected to come under even more pressure, with capacities in China still increasing and demand not keeping up with the expansions. OUTLOOK ’25: China BDO to remain mired in supply glut China’s supply surplus in 1,4-butanediol (BDO) is expected to extend into 2025 amid a heavy schedule of new capacities – a situation that is likely to see domestic suppliers press for new solutions. OUTLOOK ’25: Asia PBT demand weakness continues, capacities stay idled In 2024, the Asian polybutylene terephthalate (PBT) market saw regional producers facing more competition from China-origin materials due to overcapacity there. OUTLOOK ’25: Uneven automotive sector growth weighs on Asia synthetic rubber demand Import demand for various synthetic rubber grades in Asia – from styrene-butadiene-rubber (SBR), polybutadiene rubber (PBR) to acrylonitrile-butadiene-rubber (NBR) – will lean on how recovery and growth of major downstream industries behave. OUTLOOK ’25: Asia PX looks to downstream demand growth, gasoline markets The paraxylene (PX) markets in Asia may fare better in 2025 than in 2024 due to capacity expansions in the downstream purified terephthalic acid (PTA) sector amid controlled run rates at PX facilities. OUTLOOK ’25: Asia MX to face persistent headwinds from lackluster derivatives demand The Asia mixed xylenes (MX) market is likely to see an extension of its existing demand struggles and bearish market sentiment going into 2025, with limited significant fundamental upturn expected in the long run. OUTLOOK ’25: Asia SM market focuses on China exports, contract-spot trade-offs For Asia’s styrene monomer (SM) market players, the year 2024 was marked by squeezed margins, slow consumption recovery and a gradually transforming trade landscape. OUTLOOK ’25: China styrene expansion slows, all eyes on trade flows The pace of styrene capacity expansion in China is expected to slow in 2025, with only four units being put into operation including Shandong Chambroad Petrochemicals, Shandong Yulong PC, PetroChina Jilin and PetroChina Guangxi. OUTLOOK ’25: Asia PS/EPS to see further competition and track SM changes Despite slow global end-consumption recovery for polystyrene (PS) and expandable polystyrene (EPS), Asian suppliers’ margins remained at workable levels, with production adjustment and flexible inventory management in second-half 2024. OUTLOOK ’25: Asia benzene to begin new year on upbeat note The benzene markets in Asia are expected to rebound in H1 2025 from the traditional slowdown seen in Q4 2024, on the back demand drivers from both the East and the West. OUTLOOK ’25: China benzene to remain tightly balanced, supply growth to lag demand China’s benzene market is expected to remain tightly balanced into 2025 on expectations of a rise in both supply and demand, although supply tightness may ease next year compared with 2024. OUTLOOK ‘25: Asia toluene market gears up for volatility, demand likely modest Asia toluene markets are bracing for a challenging trading environment, amid anticipated moderate demand in the first half of 2025 and increased supply. OUTLOOK ’25: China toluene seeks export opportunities amid subsiding gasoline demand The average price of China toluene during January-November 2024 fell by around 4% compared to the full-year average in 2023, according to ICIS data. OUTLOOK ’25: Asia PET capacity additions to slow; trade flow shift continues Asia’s polyethylene terephthalate (PET) new capacity expansions are expected to slow down in 2025, while the global trade flow may shift further with more trade restrictions against Chinese exports. OUTLOOK ’25: Asia PTA supply growth to outstrip demand, margins under pressure The purified terephthalic acid (PTA) market is expected to face a challenging year in 2025, with further expansion in supply, while demand is likely unable to catch up with the supply growth. OUTLOOK ’25: China PTA supply glut to increase despite slowing capacity expansion The capacity growth of China’s purified terephthalic acid (PTA) is expected to slow to about 8.3 million tonnes/year in 2025, down from 11.25 million tonnes/year in 2023. The 2024 capacity addition of 7.2 million tonnes/year was also lower than the 2023 level. OUTLOOK ‘25: China MEG market to see limited new capacities, slowing demand growth Planned new China monoethylene glycol (MEG) capacity for 2025 is still relatively limited, and fundamentals may not exert significant pressure, providing some support to the MEG market. OUTLOOK ’25: China DEG supply remains high, cautious outlook for demand Despite a lack of new capacity, domestic diethylene glycol (DEG) output still rose sharply in 2024 driven by improved co-product monoethylene glycol (MEG) margins. OUTLOOK ’25: China’s capro self-sufficiency reshapes Asia trade The caprolactam (capro) market in the Asia-Pacific region in 2024 saw China achieve self-sufficiency as it shifted its trade status from a net importer to a net exporter. China looks to solidify its position as a key exporter in the region with an additional 600,000 tonnes/year of capro capacity to come online in 2025. OUTLOOK ’25: China strengthens position in Asia-Pacific nylon trade The Asia-Pacific nylon market in 2024 saw demand grow largely in the Chinese domestic market due to increased demand for industrial plastics. OUTLOOK ’25: China caps ACN run rates, looks to increase exports The supply of acrylonitrile (ACN) in China’s domestic market is expected to increase significantly in 2025, especially because Sinopec Zhenhai Refining & Chemical (ZRCC) and Sinochem Quanzhou are due to start up new units in the first half of the year. OUTLOOK ’25: Asia EDC suppliers to focus on contractual commitments amid suppressed demand Asia’s ethylene dichloride (EDC) spot market is expected to remain structurally thin into 2025 due to lackluster downstream performance. OUTLOOK ’25: Mideast PVC trade shifts expected amid India ADDs, China supply growth Polyvinyl chloride (PVC) supply is expected to improve in the coming year with new capacities to the tune of 2 million tonnes slated to come online in China. OUTLOOK ’25: Asia caustic soda demand growth likely to be uneven Asia’s caustic soda spot market holds an optimistic demand outlook for certain markets, but players acknowledge that difficulties remain as market players head into 2025. OUTLOOK ’25: Producers tweak Asia VAM plants as China supply-demand rebalances Tightening supply is expected to support vinyl acetate monomer (VAM) spot prices in Asia amid differing downstream demand outlooks for China and other major Asia markets. OUTLOOK ’25: Asia MMA trade flows shift significantly The winds of change are blowing hard for the methyl methacrylate (MMA) industry in Asia, with market players having witnessed significant shifts in trade flows and price influences in 2024. OUTLOOK ’25: China MMA to face export opportunities amid capacity changes worldwide Global supply and demand growth for methyl methacrylate (MMA) is expected to be roughly balanced in 2025, with capacity growth mainly concentrated in China and the US. OUTLOOK ’25: New capacity to weigh on Asia phenol/acetone market Asia’s phenol/acetone to feedstock spread may remain in the negative territory for the fourth consecutive year amid new capacities and a gloomy demand outlook even as the industry undergoes capacity consolidation. OUTLOOK ’25: China phenol to face persistent supply-demand challenges China’s phenol capacity will continue to expand in 2025, but this will meet limited demand increases due to downstream margin pressure. OUTLOOK ’25: China’s acetone market to see increases in both supply and demand In 2025, both supply and demand for acetone in China are expected to increase, but there are market concerns that issues in some downstream sectors may limit the actual demand growth. OUTLOOK ’25: China to dominate growth of Asia EVA supply, demand 2024 marked the year that China shifted to lower imports of ethylene vinyl acetate (EVA), and 2025 is set to see capacity additions in China increasingly meet demand growth – mainly from the downstream photovoltaics (PV) sector. OUTLOOK ’25: Asia PO imports demand likely to weaken further Asia’s propylene oxide (PO) import markets are likely to face further weakening in demand in 2025, with supply in China set to lengthen. OUTLOOK’25: China PO market faces challenge of oversupply China’s propylene oxide (PO) capacity is expected to continue to grow in 2025 even as downstream capacity expands. Players largely hold the view oversupply will continue. OUTLOOK ’25: Asia polyols demand outlook mixed but pessimism dominant Demand in the Asian region for slabstock polyether polyols is expected to be flat for the first half of 2025, with the outlook for H2 hazy but largely pessimistic. OUTLOOK ’25: Middle East polyols face supply pressures The Middle East polyols markets are expected to remain under pressure in 2025 due to persistent excess supply, relatively weak demand, and ongoing supply chain disruptions. These challenges are compounded by the addition of new polyols and propylene oxide (PO) capacities, macroeconomic uncertainties, and the volatility of upstream feedstock markets. OUTLOOK ’25: Asia isocyanates demand likely hampered, supply lengthy Asian import markets of methylene diphenyl diisocyanate (MDI) and toluene diioscyanate (TDI) are set to face lengthy supply in 2025, and the downstream sectors are likely to continue facing headwinds. OUTLOOK ’25: Middle East isocyanates face demand, freight challenges In 2024, the isocyanates market in the Middle East experienced significant disruptions in shipping and supply chains due to a prolonged regional conflict. Despite these challenges, imports of polymeric methylene diphenyl diisocyanate (PMDI) increased year on year, while export volumes remained steady. Toluene diisocyanate (TDI) trade volumes were largely stable across both imports and exports. OUTLOOK ’25: Asian PC market downturn to persist Asia’s polycarbonate (PC) market is expected to remain downbeat in the next quarter as import demand is anticipated to be subdued but supplies will stay persistently high. OUTLOOK ’25: Asia’s bisphenol A market faces challenges in 2025 Asia’s bisphenol A (BPA) market will remain hampered by ample supplies and weak demand through the first quarter of 2025 as trade wars impact exports of countries involved in the conflict and further erode consumer confidence. OUTLOOK ’25: China BPA capacity to expand further, export outlets sought New Chinese bisphenol A (BPA) capacities are expected to come into operation in 2025, which may reduce the country’s reliance on imports and help China turn into a major exporter to broader Asia. OUTLOOK ’25: Asia’s MA demand anticipated to pick up in Q1 on stimulus measures Asia’s maleic anhydride (MA) demand is expected to strengthen in early 2025 on restocking ahead of the Lunar New Year holidays. China’s planned economic stimulus measures to boost its domestic economy is likely to lend positive support to MA demand. OUTLOOK ’25: SE Asia to drive phthalic anhydride demand in early 2025 Sellers of lower priced Chinese origin phthalic anhydride (PA) material are expected to focus on southeast Asia post Lunar New Year, where demand is expected to remain firm in the first quarter of 2025. OUTLOOK ’25: China plasticizers demand to remain subdued amid ample domestic supplyChina’s import market for plasticizers will likely continue to see thin trade in 2025, as demand for imports has steadily dwindled amid ample domestic supplies. OUTLOOK ’25: China 2-EH to face supply-demand headwinds in Q1 China’s 2-ethyl hexanol (2-EH) market will face a challenging year in 2025, particularly in the first quarter, as a result of more ample supply and uncertainty in downstream demand. OUTLOOK ’25: Asia to become net MIBK exporter in new year An excess methyl isobutyl ketone (MIBK) capacity emerging in Asia has dampened spot prices in the region and widened the arbitrage for trade across the Atlantic heading into 2025. OUTLOOK ’25: Asia acetic acid supply glut to balloon on capacity expansion Asia acetic acid supply is likely to outstrip demand on the back of China’s significant capacity growth into 2025, prompting producers to review regional plant run rates and supply contracts. OUTLOOK ‘25: China acetic acid to rely on cost support amid supply growth While China’s acetic acid market experienced fluctuations in 2024 , the mismatch in the growth of upstream and downstream capacities allowed acetic acid suppliers to maintain relatively healthy margins for most of the time. OUTLOOK ’25: China acrylic acid supply to rise, exports and run rates monitored China’s acrylic acid market is expected to see increasing supply in 2025 due to start-ups of new plants, and participants may turn their attention to the export market in the face of weak growth potential in domestic demand. OUTLOOK ’25: China NBA supply to remain limited, demand to pick up in Q1 China’s domestic n-butanol (NBA) supply may remain tight in the first quarter of 2025, due to no unit start-up plans, multiple scheduled maintenance outages and low import volumes, while the launch of new downstream capacities may boost demand. OUTLOOK ’25: Lack of demand outlets may limit growth for Asia adipic acid Asia’s adipic acid markets have been through a tough 2024 on both demand and supply fronts. OUTLOOK ’25: Asia LAB remains stagnant, continues to underperform mid-cut fatty alcohols The Asia linear alkylbenzene (LAB) market remained mostly flat in the fourth quarter of 2024, and the malaise in the market looks set to continue into 2025. OUTLOOK ’25: Asia ABS, SAN to start year on upbeat note The acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) markets in Asia are expected to start the new year on an upbeat note after festivity-driven trades, amid caution about possible tariffs on exports to the US. OUTLOOK ’25: Asia melamine demand could gain momentum, H2 ’25 capacity additions monitored Asia’s melamine market could see some support in early 2025 from improving demand in China’s export market as buyers replenish inventories ahead of the Lunar New Year at end-January. OUTLOOK ‘25: Asia IPA margin pressure to persist amid new capacity Isopropanol (IPA) makers in Asia are bracing for a challenging start to 2025 as production margins remain poor and upcoming new capacity in China could disrupt market balance. OUTLOOK ‘25: Asia MEK tight supply may ease; cost pressure to persist Asia’s methyl ethyl ketone (MEK) markets gleaned support from tightened China supply in H2 December. OUTLOOK ’25: Asia glycol ethers face demand headwinds, BG may tighten in Q2 The butyl glycol (BG) markets in Asia could see ample supply against a backdrop of tepid demand in Q1 2025, but supply could tighten in Q2. OUTLOOK ’25: Asia ECH, LER oversupply to endure, ADD investigations to shape trade flows Asia’s epichlorohydrin (ECH) and liquid epoxy resins (LER) markets will continue to grapple with regional oversupply, while antidumping duty (ADD) investigations of Asian LER makers in the US and Europe will shape trade flows. OUTLOOK ’25: Asia fatty acids demand to remain tepid in Q1 on upstream oil palm volatility Asia’s fatty acids demand for the first quarter of 2025 is expected to be tepid, due to volatility in the upstream oil palm complex and weak consumer confidence. OUTLOOK ’25: Volatile feedstock to weigh on Asia fatty alcohol mid-cuts in Q1 Buyers and sellers of fatty alcohols mid-cuts in Asia are expected to tussle over the market’s trajectory in the first quarter of 2025 amid volatile feedstock palm kernel oil (PKO) prices. OUTLOOK ’25: Asia glycerine Q1 supply may rise on Indonesia mandate Asia’s glycerine supply may increase in the first quarter of 2025 as Indonesia is poised to increase its biodiesel mandate to B40 in January 2025, up from B35 in 2024. OUTLOOK ’25: Asia soap noodles demand tepid in Q1 on upstream volatility Asia’s soap noodles demand is likely to remain tepid in the first quarter of 2025 amid expected continued volatility in upstream crude palm oil (CPO) and palm kernel oil (PKO) markets. OUTLOOK ’25: Asia FAE demand to remain tepid in Q1 amid squeezed margins Asia’s demand for fatty alcohol ethoxylates (FAE) is likely to remain stable in the first quarter of 2025, but spot offers may be revised up due to squeezed margins. OUTLOOK ‘25: Asia Group II/III base oils supply to rise, demand to improve from March An increase in the supply of Asia Group II base oils is expected to gain traction from around mid-2025, with supply of heavy grade 500/600N likely to remain relatively tighter than that of light grade 150N. OUTLOOK ’25: Asia Group I base oils to navigate supply tightness Entering into 2025, structural supply tightness of Group I base oils will remain the key market driver.  Where substitution is more likely, such as for SN150 and SN500, price dynamics will also depend on supply length for Group II 150N and 500N. On the other hand, brightstock availability will be a challenge amid supply disruptions in 2025. OUTLOOK ’25: China base oils demand unlikely to rebound sharply; imports to fall further Overall demand for base oils in China is unlikely to improve significantly in 2025, because the domestic economy will still face challenges. Base oils imports have been in a downtrend since 2020, and the market share of domestically produced cargoes has been continuously rising, which will extend into 2025. OUTLOOK ’25: Asia’s oxo-alcohols market braces for oversupply, squeezed margins Asia’s oxo-alcohols spot markets are poised for a rocky year ahead due to oversupply and weak derivative margins, while a large buy-sell gap between Chinese buyers and Asian exporters will likely lead to more merchant volumes. OUTLOOK ’25: Asia AA, acrylates to see increased competition, slow demand growth The Asia glacial acrylic acid (AA) and acrylates market is going to see capacity expanding at a faster pace in 2025 than the expected demand growth in Asia. OUTLOOK ‘25: Asia etac, butac demand skewed towards conservative in H1 2025 Asia ethyl acetate (etac) and butyl acetate (butac) markets are bracing for a challenging demand landscape over the first half of 2025, factoring in supply length and macroeconomic concerns. OUTLOOK ’25: Asia chemical freight unlikely to stir in Q1 2025 The chemical tanker market in Asia is expected to soften into Q1 2025, with lackluster demand persisting amid a likely warmer winter in the northern hemisphere. OUTLOOK ’25: Asia methanol demand still uncertain amid new capacities The outlook for methanol in Asia continues to be uncertain, with factors such as additional capacity, seasonal gas issues and upcoming downstream demand expected to play a role in this. OUTLOOK ’25: China’s methanol demand growth may outpace supply increase amid slowing expansion China’s methanol market may remain balanced to tight in the first half of 2025, as supply increase may fall behind demand growth, but domestic and overseas supply are expected to sustain modest growth. OUTLOOK ’25: Asia MTBE demand to depend on gasoline, China’s oversupply remains The outlook for Asian methyl tertiary butyl ether (MTBE) remains uncertain, with factors such as added supply in China, volatility in crude prices and demand for gasoline expected to impact market movements in the coming months. OUTLOOK ’25: China MTBE supply-demand imbalance to intensify, exports remain key More capacity expansions and a lack of growth in gasoline blending amid sluggish domestic gasoline demand will keep methyl tertiary butyl ether (MTBE) producers in China under heavy pressure to maintain domestic sales in 2025, with exports still their main area for growth momentum. OUTLOOK ‘25: China titanium dioxide makers poised for challenges ahead Players in Asia’s spot titanium dioxide (TiO2) market are set to start the new year with two big questions.

HOUSTON (ICIS)–The tentative agreement between US Gulf and East Coast ports and dockworkers has taken some of the pressure off rates for shipping containers from Asia to the US, but the threat of tariffs proposed by President-elect Donald Trump is likely to support higher prices moving forward. Supply chain advisors Drewry expect importers to continue front-loading volumes ahead of anticipated tariff hikes. Global average rates from Drewry rose by 2% this week, as shown in the following chart. Rates from Shanghai to Los Angeles surged by more than 13%, and rates from Shanghai to New York jumped by almost 10%, as shown in the following chart from Drewry. Rates from online freight shipping marketplace and platform provider Freightos showed a similar surge, with rates to the West Coast soaring by 23% and rates to the East Coast jumping by 13%. Upward pressure on rates persists as imports are expected to continue to surge because of potential increases in tariffs, according to the National Retail Federation (NRF). “The new [ILA] contract brings certainty and avoids disruptions, and we hope to see it ratified as soon as possible,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. But Gold said because the agreement came at the last minute, retailers were already bringing in spring merchandise early to ensure that they would be well-stocked to serve their customers in case of another disruption, resulting in higher imports. “The surge in imports has also been driven by President-elect Trump’s plan to increase tariffs because retailers want to avoid higher costs that will eventually be paid by consumers,” Gold said. “The long-term impact on imports remains to be seen.” The Global Port Tracker from the NRF and Hackett Associates, shows in the following chart that US ports handled 2.17 million TEUs (20-foot equivalent units) in November, although the ports of New York and New Jersey have yet to report final data. That was down 3.2% from October but up 14.7% year over year. Ports have yet to report December data, but Global Port Tracker projected the month at 2.24 million TEU, up 19.2% year over year. That would bring 2024 to 25.6 million TEU, up 15.2% from 2023. January is forecast at 2.16 million TEU, up 10% year over year; February at 1.87 million TEU, down 4.5% because of Lunar New Year factory shutdowns in China. Thumbnail image shows a container ship. Photo by Shutterstock

SAO PAULO (ICIS)–Brazil’s annual rate of inflation fell slightly in December to 4.83%, compared with November’s 4.87%, according to the country’s statistics office IBGE on Friday. However, the Consumer Price Index (IPCA in its Portuguese acronym) rose in December by 0.52%, compared with November, which was a clear acceleration in price increases after November’s monthly increase stood at 0.39%, from October. The price increases month on month in December could be a sign that the inflation crisis in Brazil post global inflation crisis will still take time to abate. High inflation is likely to prop up higher interest rates, something petrochemicals-intensive manufacturing companies do not like as it keeps customers away from purchasing higher-priced durable goods, which is a key end market for chemicals, as they wait for borrowing costs to come down. INFLATION WELL ABOVE TARGET…Brazil’s annual rate of inflation closed 2024 well above the central bank’s target of keeping price rises at around 3%, which is the main mandate the bank has. As long as price rises remain well above that 3%, the Banco Central do Brasil (BCB) has said it will continue tightening monetary policy – bucking the global trend post-inflation crisis, a countermove which started in August 2024 as Brazil’s inflation started ticking back up. Last year, inflation was greatly propped up by food prices. As 2024 represented a true baptism of fire for Brazil regarding climate change, it was precisely climate events which reduced some harvest or greatly damaged others, filtering down to the final consumer. “The index was driven by the rise in food items, which were influenced by adverse weather conditions, at various times of the year and in different parts of the country,” said Fernando Goncalves, IBGE’s manager for the IPCA. “Furthermore, as in 2023, gasoline was responsible for the largest contribution to the indicator in 2024.” As price rises gave a respite in the last month of 2024, so has the real in the first days of 2025, although the gains have been modest, and the exchange rate remains well below the levels of a year earlier. At the beginning of 2023, Brazil’s currency was trading at $1:R4.86. In Friday’s morning trading, it was quoted at $1:R6.10, an improvement from the $1:R6.29 lows posted on 18 December, when concerns among investors about the Treasury’s fiscal deficit were at its peak. Brazilian real exchange rateVersus US dollar. Last 12 months Source: Trading Economics  …MEANS MORE TIGHTENINGMost analysts and economists concur inflation will remain above target for much of 2025 and, in turn, they expect further monetary policy tightening to cool down borrowing and with it the economy, hopefully bringing prices down as a consequence, as the theory goes. On 6 January, the weekly survey among economics compiled by the BCB showed the consensus now stands at an average of 4.99% for the annual inflation rate, on average, in 2025. Consequently, after having been upgrading their forecast for several weeks now, this week’s survey showed economists expect the main interest rate benchmark, the Selic, to end 2025 at a hefty 15%. The Selic was set in December at 12.25%, when the BCB showed it was serious about its mandate and went hard with a 100 basis points (bps) increase. In previous occasions, the central bank had cut or hike rates by 25bps, or 50bps. Following inflation data on Friday, analysts at Capital Economists overall agreed with the general line of higher inflation will prompt higher rates, but differed quite a lot on how high the Selic will end up 2025 at. “The fall in Brazil’s headline inflation rate in December, coupled with the rebound in the real over the past couple of weeks, will not be enough to stop Copom following through with further hikes to the Selic rate at its upcoming meetings,” they said. “Copom is likely to be concerned by signs that underlying price pressures continue to build – we estimate that the central bank’s preferred measure of underlying core services inflation rose again to 5.8%, year on year, its highest reading since mid-2023. “In short, there is little in this IPCA release that will prevent Copom following through with its guidance at its meeting in December that it will deliver a further two 100bp of hikes to the Selic rate, to 14.25%, over its next two meetings.” They went on to say that Brazilian economists “may have got a little carried away” by the fiscal deficit crisis, with the Selic expected at 15%. Capital Economics expects it to end 2025 at 13.25%, although it added that will be “contingent on officials doing enough to prevent investors’ fiscal concerns” mounting further. Brazil interest rates, Selic benchmark Change in %. Last 24 months Source: Banco Central do Brasil via Trading Economics Focus article by Jonathan Lopez

BARCELONA (ICIS)–Chemicals leaders must plan for a year in which powerful trends will alter the markets they serve, promising another period of rapid change across the industry landscape. Global overcapacity will get worse this year, ICIS Supply & Demand data show Depressed demand set to continue Donald Trump tariffs may change trade flows, fuel inflation China economy will continue to struggle Disinformation will make it difficult to navigate trends Look for pockets of growth from low carbon agenda In this Think Tank podcast, Will Beacham interviews Nigel Davis and John Richardson from the ICIS market development team and Paul Hodges, chairman of New Normal Consulting. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here. Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson’s ICIS blogs.

SINGAPORE (ICIS)–Global economic growth is projected to remain at 2.8% in 2025, unchanged from 2024, weighed by trade tensions spurred by the incoming Donald Trump administration in the US as well as geopolitical risks, according to a United Nations (UN) report. The US and China – the world’s biggest economies – are projected to grow at a slower pace but will be offset by modest recoveries in the EU, Japan, the UK, as well as robust performance in India and Indonesia, the UN World Economic Situation and Prospects 2025 report stated. The UN estimates China’s economic growth at 4.9% in 2024 and 4.8% in 2025; while the US’ 2024 GDP growth is expected at 2.8%, which will slow down to 1.9% this year amid “weaker labor market performance, modest income growth, and looming cuts in public spending”. “Despite continued expansion, the global economy is projected to grow at a slower pace than the 2010–2019 (pre-pandemic) average of 3.2%,” according to the report released on 9 January. Challenges such as weak investment, slow productivity growth, high debt levels, and demographic pressures continue to weigh on economic growth. Various uncertainties and downside risks continue to cloud the near-term economic outlook as well, notably geopolitical tensions and rising trade and technological tensions, the report said. Global trade volume is projected to grow by 3.2% in 2025, subject to these growing uncertainties, the UN added. The incoming Trump administration and his ‘America First’ policies, which include tariffs levied on all foreign goods, will be a major source of uncertainty in the near-term. Global inflation has continued its downward trend, with headline inflation projected to continue easing to 3.4% in 2025 from 4.0% last year and 5.6% in 2023, according to the UN report.