LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the growing risk of a Depression, while investors are busy being distracted with Bitcoin. 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.

SINGAPORE (ICIS)–South Korea’s petrochemical shipments declined by 20.8% in May despite strong semiconductor demand, official data showed on 1 June. Petrochemical exports in May fell largely due to international oil prices falling below $65/barrel, which caused a fall in petrochemical unit prices by 13.8% from 1-25 May, South Korea’s Ministry of Trade, Industry and Energy (MOTIE) said in a statement. The country’s overall exports fell by 1.3% year on year to $57.2 billion in May – the first year-on-year decline since January – while imports fell by 5.3% year on year to $50.3 billion. “Exports to both of our key markets – the US and China – declined, and it appears that US tariff measures are affecting the global economy as well as South Korea’s exports,” said Minister of Trade, Industry and Energy Ahn Duk-geun. Semiconductor exports recorded their second-highest performance of all time as demand for artificial intelligence (AI)-related products increased, rising by 21.2% year on year to $13.8 billion in the month, while automobile exports fell by 4.4% year on year. By region, exports to the US, the world’s largest economy, fell by 8.1% year on year amid tariffs imposed on the country. Exports to China, the second largest economy in the world, fell by 8.4% on drops in petrochemical and semiconductor shipments. A broad 10% tariff has been in effect since early April, while higher tariffs, including a 25% duty on South Korea, are currently suspended for 90 days. However, the US on 31 May threatened to double steel and aluminium tariffs to 50% from 25% currently. In response to the US tariffs, Ahn said South Korea’s government would work with their US counterparts on a “mutually beneficial solution”, while also implementing tariff response vouchers worth won (W) 84.7 billion ($61.7 billion) ($1 = W1,373.70)

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 30 May. Europe PA market expected to face continued weak demand; supply projected to remain balanced to long Weakened demand and stable supply in the Europe phthalic anhydride (PA) market are expected to continue into June. Moody’s downgrades Sasol on weak chems, oil markets Moody’s has cut its rating for Sasol from stable to negative on the back of “continued operating performance deterioration” in the face of weak chemicals and oil markets, the agency said on Thursday. ExxonMobil to sell its Gravenchon, France refinery to Canada’s North Atlantic ExxonMobil is selling its refinery at Gravenchon, France, to Canadian refining group North Atlantic. Clariant rejects fresh €1 billion damages claim from OMV Clariant has rejected OMV’s claim for around €1 billion in damages for competition law infringement, the Swiss producer announced.

SINGAPORE (ICIS)–China’s official manufacturing purchasing managers’ index (PMI) in May remained below the expansion threshold of 50.0 but was up from the previous month amid a pause in the US-China tariff war. Official PMI contracts for second straight month Trade-war pause lifts demand China Q2 GDP to post 4.9% annualized growth – UOB The official purchasing managers’ index (PMI) of the world’s second-biggest economy inched up to 49.5 in May from April’s reading of 49.0, data from the National Bureau of Statistics (NBS) showed. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction. Trade tensions between with the US eased in May following an agreement between the world’s two biggest economies to suspend tariffs on each other until August. China is a major importer of petrochemicals whose self-sufficiency has been growing over the years due to strong capacity expansion. “Some US-related companies reported that foreign trade orders were restarted at an accelerated pace, and import and export conditions improved,” NBS senior statistician Zhao Qinghe said. The official manufacturing PMI surveys large state-owned enterprises. Both production and demand in May improved compared with the previous month’s, indicating an acceleration in both manufacturing and new orders, according to the NBS. Production index rose to 50.7 in May from 49.8 in the previous month, while new orders index inched up to 49.8 from 49.2 over the same period. Production of equipment, high-tech and consumer goods improved, registering readings above 50. China’s non-manufacturing PMI, comprising services and construction, eased to 50.3 in May from 50.4 in April, nudging up the composite PMI (which includes the improved reading for manufacturing) to 50.4 compared with the previous month’s 50.2. OUTLOOK In a research note on Monday, economists at Singapore-based UOB Global Markets & Research said the trade truce would provide “some near-term support for [GDP] growth”, which is projected at 4.9% for Q2. However, UOB added that the growth pace would slow to 4.2% year on year in the second half of the year amid continued uncertainty over ongoing trade discussions between the US and China, as well as where the tariff rates will land eventually. “China’s stimulus will lend further support to stabilize its outlook,” said UOB. Focus article by Jonathan Yee Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: At a port in Qingdao City in Shandong, east China on 27 May 2025. (Shutterstock)

SINGAPORE (ICIS)–Japan’s manufacturing purchasing managers’ index (PMI) continued to contract in May, with a reading below 50 for the 11th consecutive month. The May number at 49.4, however, inched up from 48.7 in the previous month as downturn in new orders eased, au Jibun Bank said on Monday. A PMI reading above 50 indicates expansion, while a lower number denotes contraction. “Business conditions faced by Japanese manufacturers deteriorated at the softest pace in 2025 so far in May,” the bank said in a statement. Operating conditions for investment goods makers in Japan improved in May, while conditions deteriorated at a softer pace across the intermediate goods segment. A softer decline in overall new work received by Japanese manufacturers in May contributed to the improved index. Total new business fell modestly, generally linked to subdued demand amid US tariffs and increased “client hesitancy”. The decline in new export orders also moderated since April. Softer demand conditions led to a further reduction in factory output across Japan during May. The rate of contraction was modest, though it quickened slightly from April. Optimism strengthened for the year-ahead outlook for output, rising from April’s near five-year low, au Jibun Bank said. “Growth projections were often supported by forecasts of firmer global demand conditions and new product releases,” it said. However, some firms expressed concerns over US tariffs, inflation, and a shrinking population. Manufacturers in Japan signaled another marginal deterioration in supplier performance during May. A number of companies suggested that material and labor shortages at some vendors had stretched delivery times. Average input costs faced by Japanese goods producers increased at a softer pace in May, with the rate of inflation the weakest in 14 months. At the same time, selling price inflation also eased in May, with charges rising at the softest rate in nearly four years. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy. Thumbnail image: At a port in Tokyo, Japan, 12 May 2025. (FRANCK ROBICHON/EPA-EFE/Shutterstock)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 30 May. Thailand’s GC deepens focus on specialties amid overcapacity – CEO By Nurluqman Suratman 26-May-25 11:16 SINGAPORE (ICIS)–Thailand’s PTT Global Chemical (GC) is deepening its commitments to feedstock flexibility, high-value specialty and bio-based & green chemicals, as CEO Narongsak Jivakanun urges regional coordination within ASEAN to tackle global supply chain disruptions and overcapacity. INSIGHT: Asia oxo-alcohols prices expected to face downward pressure in H2 2025 By Lina Xu 26-May-25 12:00 SINGAPORE (ICIS)–Asia’s oxo-alcohols market is forecast to face significant downward pricing pressure in the second half of 2025, driven by rapid capacity expansion in China and an uncertain recovery in downstream demand. Asia fatty alcohol mid-cuts demand to soften as feedstock PKO declines By Helen Yan 27-May-25 11:18 SINGAPORE (ICIS)–Asia fatty alcohols market may see a further softening in demand as buyers hold back their purchases, given the decline in the feedstock palm kernel oil (PKO) costs in the past month. INSIGHT: China’s polyolefins demand shifts towards domestic consumption due to export uncertainty By Amy Yu 27-May-25 12:00 SINGAPORE (ICIS)–China’s polyolefins demand for 2025 is expected to reach 85 million tonnes, up by 3% year on year, driven by the domestic market in the face of the uncertain outlook of China-US trade negotiations. UPDATE: Japan’s Asahi Kasei to discontinue MMA, CHMA, PMMA, SB latex businesses By Nurluqman Suratman 27-May-25 15:42 SINGAPORE (ICIS)–Japanese chemicals major Asahi Kasei on Tuesday said that it will be discontinuing its businesses for methyl methacrylate (MMA) monomer, cyclohexyl methacrylate (CHMA), polymethyl methacrylate (PMMA) resin and styrene-butadiene (SB) latex. Singapore April chemicals output down 3.2%; H2 2025 outlook firm By Jonathan Yee 27-May-25 15:26 SINGAPORE (ICIS)–Singapore’s chemicals production declined 3.2% year on year in April amid tariff-led front-loading, official data showed on 26 May, while a pause in ‘reciprocal’ tariffs could support further growth in H2 2025. ASEAN leaders voice ‘deep concerns’ over US tariffs By Nurluqman Suratman 28-May-25 11:19 SINGAPORE (ICIS)–Southeast Asian leaders at the 46th ASEAN Summit in Kuala Lumpur, Malaysia have voiced “deep concern” over the US’ recent move to impose unilateral sweeping tariffs. INSIGHT: India PVC imports brace for monsoon dip, but policy twists could stir the market By Aswin Kondapally 30-May-25 10:02 MUMBAI (ICIS)–India’s Polyvinyl chloride (PVC) imports are expected to moderate in the coming months due to seasonal patterns, as monsoon conditions typically dampen demand from key sectors such as construction and agriculture.

SAO PAULO (ICIS)–Braskem has firmly denied it was preparing polyethylene (PE) price increases for June in anticipation of antidumping duties (ADDs) on US and Canadian imports, with a spokesperson at the Brazilian petrochemicals major calling such claims “absolutely unfounded”. In a phone interview with ICIS, the spokesperson also rejected suggestions Braskem had already communicated potential price rises for June on expected ADDs. The spokesperson later confirmed on Friday that Braskem’s PE prices would roll over in June from May. The proposal to implement ADDs on PE was brought forward in 2024 by Braskem, who is the sole PE producer in Brazil. The company has had to grapple with higher production costs than peers in North America, where natural gas-based ethane is widely available and has allowed a revival in polymers manufacturing. “The idea that we were putting up prices for May or for June based on a supposed decision regarding ADDs is absolutely unfounded. Braskem is not the one who sets the price: as the market knows, Braskem sets its prices accordingly to competitive market conditions rather than predetermined strategies,” said the spokesperson. The company’s representative also deemed necessary to distinguish between general import duties, which affect all countries importing into Brazil, and ADDs, which in this case would only target two countries, if Gecex finally deems PE from US and Canada contravened free trade rules. “For this particular case, it would not be the case that all imports would be affected – only the imports that are from the US,” concluded the spokesperson. PE imports from the US and Canada represented in 2024 around 75% of all of Brazil’s PE imports, according to the ICIS Supply and Demand Database. BUSY WEEK ENDS WITH A ROLLOVERBrazil’s policymakers and polymers players leave behind a busy week in which political decisions get mixed with business planning, irremediably affected by the low operating rates at most Brazilian and Latin American chemical plants. Hit by abundant and lower-priced imports, Brazil’s chemicals plants operating rates stand at around 60-65%, according to trade group Abiquim, which represents producers. Braskem’s statement on Friday sought to clarify several points of the many published this week about Brazil’s trade policy, but mostly the claim by market players that Braskem had already decided to increase prices on expectations of ADDs being imposed on US material. It stressed that any future price adjustments would not be related to antidumping measures, “because they are not in place”, and argued it was not aware yet of what way June pricing would go. It has been an intense week for trade policymakers, with the foreign trade committee Gecex sharply increasing ADDs on US PVC from 8.2% to 43.7%, despite the US being only the second largest supplier to Brazil, well behind Colombia. Meanwhile, Gecex postponed without explanation a meeting where it was expected to decide on imposing ADDs on PE imports from the US and Canada, planned for 29 May but rescheduled last minute, leaving Brazil’s PE market in uncertainty. Latin America has been one of the most vulnerable regions hit by the global petrochemicals oversupply and low prices. As around half of Brazil and the wider region chemicals demand is covered by imports, it is global prices that dictate the domestic pricing policies – a quintessential ‘price-taker’ status. After a considerable list of protectionist measures have been implemented in Brazil, fears among importers about rising input costs and overall national inflation rates are increasing. Small and large manufacturers up and down the country, which depend on imports for their production, will now face higher bills due to higher import tariffs on several chemicals as well as several ADDs in place for petrochemicals. However, Abiquim has said the measures’ influence on inflation would be minimal, adding they are sensible when taking into consideration that they would in part cushion the nation’s beleaguered chemicals producers from even lower operating rates or, in the worst-case scenario, plant closures. Additional reporting by Bruno Menini

Naftogaz expected to ramp up CEE gas imports Company scrambling to refill storage as it compensates for lost production Grid operators mull balance-of-month bundled capacity tender for TBP after initial auction falls through LONDON (ICIS)–The Ukrainian gas incumbent Naftogaz is expected to import up to 1 billion cubic meters (bcm) of gas from central and eastern European countries in July after reportedly securing more European funding, traders told ICIS. The company said on 30 May it had been in talks with international lenders including the European Bank for Reconstruction and Development (EBRD) to secure financial support to repair and increase local gas production. However, traders active in Ukraine said the incumbent may also have snapped up a €400 million credit line that would allow it to buy between 0.8bcm and 1bcm in July. Upcoming purchases are likely to be consistent with the incumbent import strategy since the beginning of the year. Naftogaz did not reply to questions by publication time. HIGH DEMAND The company has been scrambling to buy gas on central European hubs as it ended the storage season with limited stocks and a large part of its domestic gas production had been destroyed following Russian missile attacks earlier this year. Traders say Naftogaz would need to import around 5bcm by the start of the cold season in November to ensure it reaches a storage target of just over 13bcm. At the end of May Ukraine was importing just over 20 million cubic meters (mcm)/day from Poland, Hungary and Slovakia, but traders say offtakes should ramp up to at least 24mcm/day in June to ensure it secures close to 4bcm by the end of the injection season. However, in order to increase imports it needs access to additional capacity. NEW BUNDLED CAPACITY TENDER Ukraine has been in talks with countries in southeast Europe, including Romania, Moldova, Bulgaria and Greece to launch a bundled capacity transmission product for exports of gas directly from Greece to Ukraine. The first auction held on 29 May fell through because companies did not have sufficient time to prepare. However, a source at one of the regional gas grid operators told ICIS they were assessing the possibility of launching a balance-of-month product for delivery of gas in the second half of June, followed by monthly bundled capacity for the period July–September 2025.

BARCELONA (ICIS)–As the 12 June deadline for entries to the ICIS Innovation Awards approaches, a judge and a 2024 winner describe why this topic is so important for the future of the chemical industry and society. Innovation breaks down silos, encourages collaboration Enables industrial value chains to decarbonize Chemical industry provides essential raw materials Awards are a chance to gain external recognition for your innovations Deadline is 12 June, entry is free and quick – click here for full details In this Think Tank podcast, Will Beacham interviews Alessia Ielo, global sustainable solutions manager for Brenntag Essentials and Ian Temperton, CEO of Plastic Energy. 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.