HOUSTON (ICIS)–Under US President Donald Trump, US chemical companies will unlikely see the full-blown tariffs that he has proposed during his campaign, but they will operate under a faster growing economy with higher inflation and interest rates that will settle at an elevated rate, economists at Oxford Economics said on Monday. Oxford is forecasting what it calls a limited Trump scenario, under which his administration will not fully adopt the policies he proposed during his campaign. Tariffs will be limited, targeted and phased in, while Congress will limit growth in the government deficit by restraining some of his tax cuts and spending measures. Oxford’s baseline scenario for 2025 does not change much because it is assuming that Trump will focus most of his first year in office on extending the tax cuts of his earlier administration, said Ryan Sweet, chief US economist for Oxford Economics. He made his comments during a presentation. The consultancy’s forecast for 2025 GDP is a tenth of a point higher versus its estimate in October, he said. Inflation will rise by a tenth of a point in 2025. Trump is inheriting a strong economy, so there is little risk of recession. In these initial years, the biggest effect on the US economy will be tax cuts, and these should increase growth in GDP, said Bernard Yaros, lead US economist for Oxford. After 2026, Oxford assumes Trump will adopt some of his immigration restrictions, and it is expecting GDP growth to fall below its earlier forecast. Stricter immigration policies will reduce the supply of labor and slow down the consumption of goods and services. LIMITED TARIFFSOxford expects the Trump administration will not impose the widespread tariffs it proposed during its campaign, which included 60% duties on Chinese imports and baseline tariffs of 10-20% on all imports. Yaros said these campaign proposals were likely negotiating tactics. Sweet expects that Trump will require Congress to pass some of his tariffs, and legislators will not pass such high rates, Sweet said. In other cases, advisors and trade representatives will restrain Trump. For China, Trump will likely impose tariffs of 25% on major categories, such as machinery, electronics and chemicals, Yaros said. For the EU, Canada and Mexico, Trump will likely impose very targeted tariffs on steel, aluminum, base metals and motor vehicles, Yaros said. For Canada and Mexico in particular, Trump will unlikely adopt measures that will threaten the United States-Mexico-Canada Agreement (USMCA), the trade agreement that his administration signed during his first term. That trade deal was one of the signature achievements of Trump’s administration, so he will not want to pursue policies that will threaten the upcoming renewal of that agreement, Yaros said. While the tariffs will be limited, they will still be a drag on the economy by nudging inflation higher, reducing real consumer income, tempering consumer spending and encouraging the misallocation of resources, Yaros said. LIMITED TARIFFS REDUCE RETALIATION RISK FOR CHEMSOxford’s scenario will limit the risk of countries imposing retaliatory tariffs on US exports. US chemical producers were vulnerable to such tariffs because they purposely added capacity for export over the years, particularly for polyethylene (PE) and polyvinyl chloride (PVC). The magnitude of these exports and the existence of a global glut in plastics and chemicals would make US chemical exports a likely target for retaliatory tariffs. On the import side, the US does have deficits in key commodity chemicals, such as benzene. Targeted tariffs could carve out exceptions for benzene was well as other chemicals in which the US has a trade deficit, such as methyl ethyl ketone (MEK) and melamine. Targeted tariffs will likely rule out duties on imports of oil. US refineries rely on imports of heavier grades of oil to optimize the operations of some of their units. US shale oil makes up nearly all of the growth in the nation’s crude production, and that oil is made up of light grades. Meanwhile, tariffs could shield some chemicals from competition, such as epoxy resins. CONGRESS MAY LIMIT GROWTH IN DEFICITOxford pointed out that some moderate Republicans could restrain some of Trump’s tax and spending proposals to limit growth in the government deficit, Yaros said. Other economists have expressed concerns that the US will issue larger amounts of government debt to fund the growing deficit. That would lead to a cascade effect that could ultimately increase rates for US mortgages, which would slow down the housing market and the plastics and chemicals connected to that market. Still, all of Oxford’s scenarios forecast a rise in the government deficit. SLOWER RATE CUTS BY FEDOxford expects Trump’s policies will be inflationary, which will prompt the Federal Reserve to slow down the pace of cuts on their benchmark federal funds rate. It expects the federal funds rate will settle at 3.125%, versus its forecast of 2.75% that was made in October. TRUMP WILL PRESERVE MOST RENEWABLE TAX CREDITSTrump will likely preserve most of the tax credits in the Inflation Reduction Act (IRA) because most of them benefitted states controlled by his party, the Republicans, Yaros said. These include tax credits on renewable fuels, renewable power, hydrogen and carbon capture. The exception will include incentives for electric vehicles (EV), which Trump had singled out during his campaign, Yaros said. OXFORD’S FORECASTThe following chart shows Oxford’s new baseline forecast and compares it with a scenario under which the policies of the previous administration are maintained. The following chart shows Oxford’s forecast that assumes Trump will fully adopt all of his campaign proposals. This is not the consultancy’s baseline forecast because it does not expect such a full-blown Trump scenario will happen. Thumbnail shows the US Capitol. Image by  photo by Lucky-photographer.

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 8 November. Braskem’s US sales could benefit from higher tariffs on automotive – CFOBraskem’s operations in the US could benefit if president-elect Donald Trump hikes import tariffs related to the automotive sector, the CFO at the Brazilian polymers major said this week. Brazil’s Braskem lobbying for ADDs on Chinese PVC to be extended – CFOBraskem is lobbying the Brazilian government to extend antidumping duties (ADDs) on China-produced polyvinyl chloride (PVC), the CFO at the Brazilian polymers major said on Thursday. INSIGHT: Braskem’s tariffs-infused optimism risks turning into complacencyManagement at Brazil’s polymers major Braskem sounded on Thursday the most optimistic in many quarters after the Brazilian government – which indirectly has a stake on the company – sharply increased import tariffs to protect, in large part, Braskem’s market share. Mexico’s Braskem Idesa completes 87% of ethane terminalConstruction of Braskem Idesa’s ethane import terminal in Mexico had reached around 87% of physical completion as of September, the Brazilian petrochemicals major said during its Q3 earnings release and conference call on Thursday. Brazil central bank hikes rates 50 bps to 11.25%, seeks ‘credible’ fiscal policyBrazil’s central bank monetary policy committee (Copom) voted unanimously late on Wednesday to hike the main interest rate benchmark, the Selic, by 50 basis points to 11.25%, to fend off rising inflation and a depreciating Brazilian real. Chile’s manufacturing output falls in September, overall activity flatChile’s manufacturing output fell in September by 1.1%, month on month, the central bank’s monthly report about economic activity said this week. Brazilian police indict 20 in Braskem mining disaster caseBrazil’s Federal Police (PF) have closed their probe into Braskem’s rock salt mining operations in Maceió, state of Alagoas, naming 20 individuals as suspects. MOVES: Braskem appoints Roberto Ramos as CEOBraskem is to appoint Roberto Ramos CEO, effective 1 December, the Brazilian petrochemicals major said on Monday. PRICINGLatAm PE international prices stable to soft on competitive US exportsInternational polyethylene (PE) prices were assessed as stable to soft across Latin American (LatAm) countries on the back of competitive US export offers. LatAm PP domestic prices fall in Chile, Colombia, Mexico tracking lower feedstock costs, weak demandDomestic polypropylene (PP) prices fell in Chile, Colombia and Mexico, tracking lower feedstock costs and weak demand. In other Latin American (LatAm) countries, prices were unchanged this week.

HOUSTON (ICIS)–Recently released data from the US International Trade Commission shows imports of polyethylene terephthalate (PET) scrap have reached record highs, following a slight dip the previous quarter. This is in spite of recent efforts from the US Customs and Border Patrol (CBP) to shift imports of recycled polyethylene terephthalate (R-PET) flake material away from the plastic scrap harmonized schedule (HS) code and towards the PET HS code. Imports and exports of other types of plastic scrap remain relatively steady quarter on quarter (QoQ), though Canada and Mexico continue to fade as trade partners for plastic scrap. US remains a net importer of plastic scrap, largely on PET scrap imports PET scrap imported into US increased 22% QoQ YTD PET scrap exports to Mexico surpass 2023 volumes IMPORTS SURGE, LARGELY DRIVEN BY PETQ3 2024 trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915 – have increased 12% QoQ quarter on quarter, and 11% year on year when comparing with Q3 2023. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and also flake material. Imports totalled 129,137 tonnes in Q3, with PET making up 54% of that volume at 70,094 tonnes. This is the highest volume of PET scrap ever imported in a single quarter. Year to date (YTD) volume at 191,738 tonnes remains just shy of the 2023 total amount, 204,278. Demand for R-PET flake was solid throughout Q3, especially as ocean freight rates began to normalize from late spring highs. Moreover, the Q3 typically is the peak in bottled beverage demand, the largest end market for US R-PET resin. At this same time, market players noted that domestic PET bottle bale feedstocks were surprisingly limited in availability, adding to the increased interest in supplementary imported flake feedstocks for recyclers. Though this data could be impacted in the near future due to recent efforts from US Customs who have directed several market players to use the virgin PET HS code, 3907, when importing flake. Market players have traditionally used the plastic scrap code as it is a duty free item, whereas the PET code carries a 6.5% duty, unless the country of origin has a free trade agreement with the US. The top countries who have sent PET scrap to the US include Canada, Thailand and Japan, respectively. While Canada makes up 24% of PET scrap imports alone, of the top 10 origin countries, those based in Asia make up 44% of all PET scrap import volumes, followed by those in the Latin American region at 15%. Market participants confirm they have seen a notable rise in imported R-PET activity from Asia and Latin America, particularly due to their cost-competitive position when it comes to feedstock, labor and facility costs related to R-PET. As more imports from Asian and Latin American countries continue to increase, Canada and Mexico could both see a reversal of their previous growth trend on total scrap exports to the US. Imports of all other subcategories of plastic scrap, including polyethylene (PE), polystyrene (PS), and polyvinylchloride (PVC) were relatively steady. PE scrap imports made up 12% of Q3 plastic scrap imports, driven by shipments from Canada at 68% of the YTD volume, followed by Mexico at 17% of the YTD volume. Germany surprisingly has increased PE scrap exports to the US fourfold, though the total volume remains small, at 1,210 tonnes YTD. YTD, the US remains a net importer of plastic scrap. MEXICO REMAINS KEY BUYER OF US PET BALES Though exports of PET scrap, largely in the form of bales, fell QoQ tonnes, YTD volumes have already surpassed that of 2023. Mexico in particular continues to be a key end market for US bale material, making up 59% of the 18,362 tonnes of PET scrap exports. While the US has always exported a portion of domestic PET bale material to other countries, exports to Mexico have surged over the last year. This growing trade relationship is largely attributed to new capacity in Mexico, paired with strong local demand which has elevated local bale prices. As a result, Mexican recyclers have been purchasing US PET bales as a lower cost option with higher availability. YTD exports of PET scrap to Mexico are already 3,333 tonnes above 2023 total PET scrap volumes. Exports of US bales to Mexico, particularly from the Southern areas of the US such as Texas and parts of California, continue to challenge domestic recyclers, who struggle to secure adequate volumes of bale feedstock. Furthermore, as export demand continues put upwards pressure on bale pricing, local recyclers find themselves stuck between rising feedstock costs and very competitive import virgin and recycled pricing, thus unable to pass along those increased costs. PET scrap exports to Malaysia have also surpassed 2023 volumes, at present by over 2,400 tonnes. On the other hand, volumes to Germany are now 2,966 tonnes short of 2023, showing the shift from European demand to Asian and Mexican demand. Overall, exports of other types of plastic scrap continue to slow, following the Chinese National Sword and Basel Convention adoption several years ago. Total plastic scrap exports down QoQ but similar to levels seen this time last year. Canada and Mexico receive 56% of US plastic scrap exports, followed by several Asian countries including Malaysia, India, Vietnam and Indonesia which in total 28% of exports. PE continues to be a leading polymer type for US plastic scrap exports, coming in at 32,519 tonnes this quarter, roughly 32%. Insight by Emily Friedman

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 8 November. INSIGHT: Pile of chemical assets under strategic review grows. Who’s buying? Dow’s announcement that it will put its European polyurethanes (PU) business under strategic review adds to the growing pile of assets being evaluated for sale, restructuring or shutdown – mostly in Europe. A key question then becomes: Who, if anyone, could buy these assets? US Celanese to slash dividend, idle plants after big Q3 earnings miss Celanese plans to cut its quarterly dividend by 95% in Q1 2025 and idle plants in every region after third-quarter adjusted earnings fell well below guidance, the US-based acetyls and engineered materials producer said on Monday. Sharp auto decline drives massive Celanese earnings and outlook shortfalls; Acetyls plants idled A rapid decline in the automotive market, along with weak industrial demand – particularly in Europe – led to a major earnings shortfall for Celanese in Q3. Continued weakness and customer inventory destocking will drive an even bigger shortfall in Q4. INSIGHT: Trump to bring US chems more tariffs, fewer taxes, regulations US President-Elect Donald Trump has pledged to impose more tariffs, lower corporate taxes and lighten companies’ regulatory burden, a continuation of what US chemical producers saw during his first term of office in 2016-2020. INSIGHT: Trump to pursue friendlier energy policies at expense of renewables Oil and gas production, the main source of the feedstock and energy used by the petrochemical industry, should benefit from policies proposed by President-Elect Donald Trump, while hydrogen and renewable fuels could lose some of the support they receive from the federal government. Labor disruptions at Canada West and East coast ports continue The labor disruptions at Canada’s West and East coast ports continued on Friday while the chemical, fertilizer and other industries keep warning about impacts on manufacturers and the country’s overall economy.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at how chemical companies need to respond to demographic destiny. 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 8 November. Weak EU TIO2 market unaffected by China export drop; effects to come later The steep provisional EU antidumping duties (ADDs) on Chinese titanium dioxide (TiO2) have led to a staggering fall of 63% in Chinese exports of the product to Europe late in the third quarter of 2024 from the highs earlier this year, but the effects on supply are yet to be felt, illustrating just how weak demand is. Europe PET gathers momentum amid higher freight rates, weaker euro Polyethylene terephthalate (PET) in Europe is still a bed of uncertainty when it comes to actual end demand, but PET resin buyers are seeking to secure volumes nevertheless. Europe markets up, China down as Trump wins second term as US President European stock markets rallied in early trading while China bourses closed down as Donald Trump secured a second term in office as US President. UK’s Viridor to close Avonmouth mechanical recycling plant UK-headquartered recycler Viridor intends to close its Avonmouth mechanical recycling facility following a strategic review, the company announced on Tuesday. Eurozone manufacturing slump enters record-breaking 28th month, latest PMIs show The eurozone manufacturing economy is still contracting, albeit at a slightly slower pace, according to new purchasing manager indices (PMIs) which mark the longest downturn since data collection began in 1997.

LONDON (ICIS)–Discussions related to a new gas transit deal via Ukraine have been drawing significant interest from energy traders. Recent news articles related to the discussions have triggered steep price movements and ongoing market volatility To help the market get a better understanding of discussions to date, ICIS has produced this Q&A. The insight has been collected over recent weeks and verified with multiple sources involved in talks. For background on technical details, the expiry of the current transit agreement and implications for the region, please check our earlier Q&A. What we know so far Discussions started in earnest in spring, when companies from Austria, the Czech Republic, Hungary, Italy, Slovakia and Ukraine met to discuss the possibility  of setting up a regional trading hub, possibly selling Azeri-labelled gas transiting Ukraine from 2025. Since then, talks have focused on: Possible swaps between Russia and Azerbaijan. These may not involve just swaps of physical gas but also swaps of customers or other assets Price discounts offered to possible new customers The actual transit via Ukraine and the company or consortium of companies that could ship the gas from the Russian-Ukrainian border to EU markets The volume of transit The entry point(s) from Russia into Ukraine Possible arrangements to divert some of the gas to Ukrainian storage Transit tariffs What are the options to bring gas to the Ukrainian border? Option A: Physical swaps Depending on how much gas would be agreed for the Ukrainian transit, one option is to swap gas, with Russia supplying the Azerbaijani market and possibly replacing some of the Azeri volumes contracted by Turkey. Although Azerbaijan has imported Russian gas for internal consumption recently, it is questionable it would agree to allow Gazprom to increase supplies. Azerbaijani end consumers benefit from heavily subsidised prices. Although the Russian producer can offer price flexibility because of low production costs, supplies to Azerbaijan could be comparatively more expensive because of added transmission costs than locally produced gas. Turkey may be keen to retain its Azerbaijani imports. The incumbent BOTAS has a 6bcm/year supply contract until 2033 and another short-term contract for 3.7bcm/year which was recently renewed until 2030. Historically, the Azeri sale price to Turkey was around 12% cheaper than the long-term Russian contract price to BOTAS. Currently, the purchase price also includes the transit tariff estimated at $75/1000m3 (€6.50/MWh). Option B: Delivery on Russia-Ukraine border This option might involve a straightforward delivery of Russian gas on the Ukrainian border to a company or consortium of companies looking to transit it. This would be no different from what happens in Ukraine right now, where the incumbent Naftogaz takes receipt of the gas and organises transit from the Russian border in the east to the Slovak border in the west. Option C: Swaps with other producers Another option that has been discussed recently is Turkmenistan. The country’s 5.5bcm/year gas supply contract to Russia expired on 30 June 2024 and it may be invited to consider selling gas for transit via Ukraine. The Central Asia country is keen to diversify its markets in addition to supplying China and has recently been in talks with Turkey for exports. In the early 2010s, it supplied gas to Europe via a scheme involving Ukrainian and Russian companies. The joint venture was dismantled. Furthermore, the actual physical transit of Turkmen, Azeri or any other gas via Russia to Ukraine is blocked by Russia itself. The former Soviet countries had tried to sign an agreement for the free transport of gas via the Russian system as far back as 2013 but Russia blocked it, seeking to retain its regional monopoly over supplies to Europe. Option D: Swaps of clients or assets This option has also been discussed although details remain sparse. Individuals close to negotiations say talks between Gazprom and Azerbaijan’s SOCAR had cooled off in recent weeks, reporting mutual distrust, with Gazprom still aware that Azerbaijan supported and was involved in the construction of the Southern Gas Corridor designed to help Europe diversify away from Russian gas. Option E: Russian flows Although the Ukrainian government had repeatedly denied it would negotiate directly with Gazprom, Donald Trump’s victory in the US election could force Kyiv into bringing the war to a close and resuming negotiations with Russia. This option would be the most straightforward and possibly least costly from Russia’s point of view as any profits raised from the sale of transit gas would no longer have to be shared with intermediaries. However, it would be a very hard sell to the Ukrainian population which has endured significant hardship since Russia invaded. 2. Who would organise the transit via Ukraine? The options that had been discussed involved either one company, possibly SOCAR or a consortium of companies involving Slovakia’s SPP, Hungary’s MVM, Ukrainian companies, as well as other firms active in the region. Replying to questions from ICIS, MVM Zrt denied involvement in talks, noting the ‘group does not conduct the mentioned negotiations about the Ukrainian transit.’ It said that, regardless of what happens to the Ukrainian transit, it can guarantee security of supply for its portfolio. It said termination of the Ukrainian transit would have no impact on its portfolio. Also responding to questions from ICIS, the Ukrainian ministry of energy insisted the country’s official position on transit remained unchanged. It said transmission and storage operators have implemented all necessary measures and training to ensure stable operations in a zero-transit mode for Russian gas. It added it was actively working to expand sanctions for all Russian gas via pipeline and LNG. Gazprom, SOCAR and SPP did not respond to questions. 3. What about the transit risk? A first risk facing any company interested in facilitating the transit relates to the delivery point of gas and the measurement of volumes at exit points from Russia. The current interconnection agreement between the Ukrainian gas grid operator, GTSOU and the Russian counterpart Gazprom includes the Sokhranivka and the Sudzha border points. The former is under Russian occupation with the latter under Ukrainian occupation. Gas flows enter the country via Sudzha, in the Kursk province of Russia. Exit measurements on the Russian side are reportedly carried out further north into Russia. Whichever company took receipt of the Russian gas on the Ukrainian border would most likely require accurate readings to ensure they would not face legal disputes in the future. The transit risk via Ukraine itself may be reduced because the transmission system is vast and could allow the operator to divert gas to other routes within the network in case any segments were physically damaged. Gazprom reportedly asked for deliveries via Sokhranivka but if the border point and the associated Novopskov compressor station remain under Russian occupation it is unlikely any agreement would be reached to use this point. 4. Transmission tariffs The regulator NERC published the proposed transmission tariffs  for the upcoming regulatory period covering 2025-2029 on November 7. Under proposals going for public consultation on November 13, long-haul tariffs are set to more than double on current levels. The levels were calculated on a no Russian transit scenario and there are no tariffs included for the Sudzha and Sokhranovka border points with Russia. Nevertheless, a market source conceded  that overall tariffs could be adjusted in case a transit deal is reached at a later date. 5. Bringing gas to Europe Here too, there are multiple discussions involving multiple options. Slovakia: The main beneficiary of the transit would be Slovakia’s SPP which reportedly has a 3bcm/year supply contract with Gazprom until 2034. Yet market sources say the company is still keen to persuade other buyers, for example, Hungary’s MVM or German companies such as Uniper or RWE to secure additional volumes. On the other hand, there are reports that Ukraine has proposed Slovakia offtake higher volumes, some of which could be stored in Ukraine but the offer was declined by SPP because of additional costs the company does not envisage. The information was valid as of the end of October. There were no further details on whether discussions had advanced by the first half of November. Hungary Hungary no longer offtakes Russian gas directly via Ukraine as most of its supplies sold by Gazprom have been rerouted via Turkey and the Balkans. In recent months, companies such as state-owned supplier MVM have been ramping up imports via Serbia and Romania, accumulating gas in Hungary and selling it further to premium markets. Gas sourced in Bulgaria at significant discounts has offered attractive opportunities for Hungarian buyers. Austria The country has ramped up Russian imports entering the country via Ukraine and Slovakia by a third in the first ten months of 2024 compared to the same period in 2023. Market sources say that despite the availability of a compensation scheme  for companies looking to buy non-Russian gas, Austrian consumers continue to prefer Russian gas, possibly because of price discounts embedded in contracts. Moldova There were reports at the end of October that representatives of state company Moldovagaz had travelled to St Petersburg to discuss the possible resumption of Russian flows to the Right Bank of the River Nistru after exports to this region stopped at the end of 2022. The government is keen to keep a lid on gas prices to consumers ahead of parliamentary elections next year and resuming comparatively cheaper Russian gas may help. Representatives of the company, which is majority-owned by Gazprom, were expected to meet counterparts at the Ukrainian gas grid operator GTSOU, but the TSO refused to take part in the meeting, sources close to discussions told ICIS. There is strong opposition from wholesale companies which could be squeezed out if comparatively cheaper gas volumes reach the market. 6. Volumes and duration Sources say counterparties had been mulling anything between 4-15bcm/year. The bracket is wide and provides little indication as to what volumes would eventually be agreed, if at all. The CEE region is already oversupplied and, although many companies are keen to lock in cheaply priced volumes, they also know that surplus volumes would crash the market, limiting premium opportunities. They may also keep an eye on developments further out in 2026 when US and Qatari LNG production is set to double, adding further pressure to prices. Ironically, Gazprom is also aware that possible transit via Ukraine would compete with its TurkStream transit via Turkey and will likely seek to play one against the other in terms of volumes and duration of contracts. On the other hand, if Ukraine will agree to a deal, it may seek to negotiate higher volumes to ensure it covers transport costs. Finally, all counterparties will monitor the incoming European Commission and its commitment to phase out Russian gas by 2027. Depending on the signals they get, any transit arrangements would be short term. 7. Does a Trump US presidency change anything? Yes. Donald Trump has pledged to bring the war to an end, likely forcing Ukraine to resume direct talks with Russia, including possibly over the transit of Russian gas. If Ukraine agrees to the transit it may provide a signal to other buyers that it would be acceptable to restart Russian imports, including via Nord Stream. Unless the EU proceeds with sanctions of its own against Russian gas, it is possible that Gazprom would seek to rebuild its lost European market share. But this would coincide with a surge in US and Qatari LNG production from 2025 and 2026, which would help depress global gas prices and provide real competition including for European buyers. 8. All things considered, will the transit continue after 2024? Possibly, but much will depend on several factors, including the possibility that negotiations would drag on into the new year: Who will supply the gas? How will the transit be organised? What volumes will be involved? What does Ukraine get in exchange? How long will the new deal be signed for? 9. If there was to be an agreement, when should we expect an announcement? Hard to tell, although the upcoming COP29 forum in Baku in the second half of November may be a good opportunity to release further updates.

SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Monday as China’s much-awaited stimulus measures failed to impress markets, while the US is likely to put up more trade barriers against the Asian giant following the re-election of Donald Trump as president. Asian equities defy Wall Street’s 8 Nov gains; oil prices fall China Oct consumer inflation at 0.3% compared with 0.4% in Sept China central bank cuts yuan reference rate At 06:53 GMT, crude futures were down a few cents, with Brent crude down 6 cents at $73.93/barrel, and US crude down 5 cents at $70.33/barrel. At 04:00 GMT, Mitsui Chemicals was down close to 2% and Sumitomo Chemical fell by almost 2% in Tokyo, while the benchmark Nikkei 225 was down by 0.39% at 39,347.79. In Seoul, LG Chem was rangebound, with South Korea’s KOSPI Index slumping by more than 1%. In Hong Kong, PetroChina was down more than 4% as the Hang Seng Index slipped by 2.2% to 20,270.77. In Kuala Lumpur, PETRONAS Chemicals Group (PCG) slumped by nearly 5% while the stock market index dipped by 0.3%. On 8 November, US stocks rallied after Trump’s re-election as market players expect corporate tax cuts, deregulation and larger fiscal deficits under his administration starting 2025. The S&P 500 rose by 0.4% to 5,995.54 on 8 November, while the Dow Jones Industrial Average was up by 0.59%, and the Nasdaq Composite closed 0.10% higher. THE TARIFF ISSUE Threats of potential tariffs of 20% on all imported goods and a rate of 60% or more on Chinese are worrying investors in Asia. “The spectre of tariffs [is] likely to lead to somewhat lower global growth, higher US inflation, possibly fewer Fed[eral Reserve interest] rate cuts, stronger USD [US dollar], higher bond yields amid a general rise in geopolitical and trade tensions,” Japan-based Nomura Global Markets Research said in a note on 10 November. However, Nomura emphasized that the timing of Trump’s policy as well as tariffs are still “major unknowns”, and that milder policy action is likely to offset initial price-action. The effects of potential tariffs have already led to frontloading exports to the US in October, a trend likely to continue into H1 2025. Chinese exports in October were up nearly 13% year on year amid a rush to ship goods ahead of any trade protectionist move by the US once Trump is back in power next year. On Monday, the People’s Bank of China (PBOC) adjusted down its daily reference rate at yuan (CNY) 7.1786 to the US dollar, a decline not seen since late 2023. A weaker yuan would help boost competitiveness of Chinese exports amid threats of tariffs. CHINA MEASURES FAIL TO LIFT DOWNBEAT MOOD Investor sentiment was dampened by a weaker-than-expected stimulus measures announced by China following the National People’s Congress (NPC) meeting last week. The country’s top legislative body approved a bill on raising ceilings of local government debts, while allowing local governments to issue yuan (CNY) 6 trillion ($838 billion) of new bonds to swap with off-balance sheet debts, China finance minister Lan Fo’an had said on 8 November. Lackluster growth despite a stimulus package introduced in late September and a lack of further measures to encourage spending continues to weigh on sentiment. China’s consumer prices in October inched up by 0.3% year on year, slowing from the 0.4% growth in the previous month. The focus will now be on Singles’ Day, China’s equivalent of Black Friday in the US on Monday, where value-for-money purchases and online shopping will hopefully bolster overall consumption. “We suspect that given the shift toward value-for-money purchases and online shopping, we’ll continue to see solid growth numbers from the event that should comfortably outpace the overall consumption growth momentum,” Dutch-based bank ING said in a note on 7 November. Focus article by Jonathan Yee

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 8 November. Oil up by more than $1/bbl as OPEC+ delays output hike By Jonathan Yee 04-Nov-24 12:46 SINGAPORE (ICIS)–Oil prices rose by more than $1/barrel on Monday as oil cartel OPEC and its allies (OPEC+) delayed a planned December production increase by a month, and amid fears of an escalating conflict between Iran and Israel. India petrochemical demand enters seasonal lull post-holiday By Jonathan Yee 04-Nov-24 13:26 SINGAPORE (ICIS)–Oversupply and higher freight costs are driving down petrochemicals demand in India, with trades likely to remain subdued after the Diwali holidays. Saudi SABIC cuts 2024 capex; higher-margin investments eyed By Nurluqman Suratman 05-Nov-24 17:17 SINGAPORE (ICIS)–Saudi petrochemical giant SABIC has lowered its capital expenditure (capex) guidance for 2024 as it prioritizes investments in higher-margin opportunities to mitigate overcapacity in the face of poor global demand. Oil prices fall more than $1/barrel ahead of US election results By Nurluqman Suratman 06-Nov-24 15:32 SINGAPORE (ICIS)–Crude oil prices fell by more than $1/barrel on Wednesday in Asia following a rally in the US dollar as polls in the 2024 US presidential elections closed. INSIGHT: Asia faces tariff hikes after Trump’s re-election By Nurluqman Suratman 07-Nov-24 14:40 SINGAPORE (ICIS)–Donald Trump’s re-election as US president sets the stage for economic turbulence in Asia as regional businesses brace for significant increases in US tariffs. INSIGHT: Trump’s win to hit China economy as decoupling intensifies By Fanny Zhang 07-Nov-24 17:32 SINGAPORE (ICIS)–Donald Trump’s return to the White House could intensify trade frictions with China, fostering decoupling of the world’s two biggest economies, with Chinese exporters looking at making advance shipments to the US before new tariffs are imposed. PODCAST: China oxo-alcohols output to hit record high on new capacities By Claire Gao 07-Nov-24 19:00 SINGAPORE (ICIS)–China’s oxo-alcohols market will face a supply glut in the face of intensive new plant start-ups and tepid downstream demand. China Oct exports rise 12.7% as tariff fears spur frontloading By Jonathan Yee 08-Nov-24 12:56 SINGAPORE (ICIS)–China’s exports surged 12.7% year on year to $309 billion in October, driven by low base effects and a rush to ship goods ahead of a potential wave of tariffs from Donald Trump’s renewed US presidency.