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European energy markets brace as Russia-Ukraine gas transit deal expiry imminent, 1 January nominations at zero
Additional reporting by Jamie Stewart and Alex Froley  No day-ahead gas pipeline capacity was offered for transit at Ukraine’s Sudzha border point with Russia and no flows were nominated for 1 January 2025,  data published by capacity booking platform RBP and Ukraine’s gas grid operator GTSOU on 31 December 2024 showed. Although final nomination data will be expected later on 31 December 2024, the indication was that  Russian gas transit through Ukraine to Europe would cease on 1 January 2025 at 05:00 UTC. Writing to ICIS on 30 December, Ukraine deputy energy minister Mykola Kolysnyk said: “We have prepared for a potential unilateral transit termination by Gazprom at any moment, disregarding contractual obligations to European customers, as such actions have occurred before as a typical form of blackmail.” Although transit may be temporarily halted Ukraine and interested buyers in Slovakia and Hungary may strike a compromise later this month. But at least for now, the Ukrainian gas system is prepared for the unilateral termination of the transit. Polish gas grid operator Gaz-System will offer 5.1 million cubic meters (mcm)/day from 1 January in addition to an existing 6.4mcm/day interruptible capacity. Ukraine also has firm import capacity of 9.8mcm/day at the Bereg virtual interconnection point until the end of March 2025. Both can be extended. There are also expectations of increased reverse capacity at the Romanian border. Meanwhile, global LNG supplies are improving. The US, the world’s largest exporter, has all its plants running normally at present and is bringing new capacity online. Venture Global’s Plaquemines plant, which will build up to 13.3 million tonnes per annum (mtpa) in its initial phase, loaded its first cargo on 26 December. Meanwhile Cheniere announced first LNG production from its Corpus Christi stage III project on 30 December. Stage III will add seven 1.5mtpa trains, the first of which is now working. These plants will continue to build up output across 2025, and be added by further new facilities, including the 14.0mtpa LNG Canada. WHAT HAPPENED? As of late-afternoon London time on Tuesday 31 December, a five-year deal to transit Russian pipeline gas through Ukraine into Europe was set to expire within hours on 1 January, with no announcement of a new deal having materialised. Ukrainian grid operator TSOUA data, published at 16:22 local time, showed gas nominations at multiple Ukrainian border entry and exit points as zero for 1 January, including at the Sudzha border point with Russia. Earlier, nominations at the Sudzha point for 31 December stood at 40.4 million cubic meters/day, only marginally down from 30 December, the TSOUA data showed, meaning the 1 January figures were highly unlikely to be a data error. WHY DOES IT MATTER? The five-year Ukraine transit deal has kept a significant volume of Russian pipeline gas flowing into Europe since the start of 2020, including throughout the almost three-year long war between the two countries. More than 15 billion cubic meters of gas was transited from Russia to Europe via Ukraine in 2024. A similar volume will need to be replaced by alternative sources, mainly LNG. European energy markets have for weeks been positioning around expectations of a new transit deal being reached or, as has seemed increasingly likely as the year-end deadline has neared – not being reached. In the first half of December, the benchmark ICIS TTF Q1 ’25 lost 18% of its value to be assessed at €39.90/MWh, down from €48.30/MWh, but has since 16 December regained almost all of that value. At 11:00 London time on Tuesday morning, trade on the component months indicated a Q1 ’25 valuation at around €48.70/MWh, narrowly below its high for the year seen in late November. The ICIS midday close on 31 December had TTF Q1 ’25 priced just over €48.50/MWh, a modest day on day increase of 1.6%. These movements suggest the recent late-December positioning had all but priced in the end of the transit deal. TTF Winter ’25 was up nearly 2%, the largest forward-curve move on the day. WHAT NEXT? Recent European gas price movements, although still volatile compared with the rest of the year, pale in comparison to the extreme volatility seen during the late-2021 price crisis and the aftermath of Russia’s early-2022 invasion of Ukraine. While this means the full magnitude of any Russia-related supply shock is behind Europe, significant uncertainty will still be priced in over coming weeks and months as European traders get used to another new normal. Pricing movements indicate the market sees Europe’s expanded LNG import infrastructure as ample to meet demand spikes, but the continent must compete with Asian LNG buyers to secure what going forwards will be a larger overall share of marginal supply.
Americas top stories: weekly summary
HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 27 December. OUTLOOK ’25: US phenol/acetone production to remain curtailed on soft demandUS phenol demand will likely remain soft and weigh on acetone supply in H1 2025 as expectations for a rebound are tempered. OUTLOOK ’25: US PVC faces oversupply, export challengesThe US polyvinyl chloride (PVC) market is set to face significant headwinds in 2025, entering the year with abundant inventories, expanded production capacity and constrained export opportunities. OUTLOOK ’25: US chem tanker market growth to support favorable rates; container market readies for port labor issues, tariffsGrowth in the US liquid chemical tanker market is likely to support favorable rates in 2025, while the container shipping market could see upward pressure from possible labor strife at US Gulf and East Coast ports and proposed tariffs on Chinese imports. OUTLOOK ’25: LatAm chemicals pessimism persists as downturn could last to 2030For many players within Latin America petrochemicals, 2025 will only be one more stop on the long downturn journey as, for many, the market’s rebalancing will only take place towards the end of the decade.
Latin America stories: weekly summary
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 27 December. NEWS OUTLOOK ’25: LatAm chemicals pessimism persists as downturn could last to 2030For many players within Latin America petrochemicals, 2025 will only be one more stop on the long downturn journey as, for many, the market’s rebalancing will only take place towards the end of the decade. Colombia GDP to grow ‘close to 3%’ in 2025 – central bankThe Colombian economy picked up strength at the end of 2024, and higher spending on gross capital formation such as petrochemical-intensive public works and machinery could see “close to 3%” growth in 2025, according to the country’s central bank. Peru declares state of environmental emergency on Petroperu’s oil spillPeru’s Ministry of the Environment (MINAM) declared late on Wednesday an environmental emergency after state-owned crude producer Petroperu admitted to an oil spill five days ago. Argentina’s consumers expect 2025 inflation to average 45% – pollArgentinians are buying into the success story of inflation, which has sharply come down in 2024, and expect the annual rate to average 45% in 2025, its lowest level since 2021, according to an opinion poll by Buenos Aires’ University Torcuato di Tella. Mexico’s manufacturing output up slightly in October, construction down 8.5%Output in Mexico’s petrochemicals-intensive manufacturing’s output rose by 0.5% in October, year on year, but production in construction fell considerably, the country’s statistic office Inegi said on Monday. PRICING OUTLOOK ’25: LatAm PP supply to remain long amid squeezed marginsLatin America polypropylene (PP) is expected to remain oversupplied in the first half of 2025, with producers’ margins likely to remain squeezed. OUTLOOK ’25: LatAm PE demand could finally improve from Q2 onwardsLatin American polyethylene (PE) demand should start slowly in 2025, but it could take a decisive turn for the better from Q2 onwards. OUTLOOK ’25: Ample LatAm PS supply meets poor demandThe Latin American polystyrene (PS) market will continue facing headwinds in 2025 on the back of weak demand across the region combined with plentiful supply.

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Colombia GDP to grow ‘close to 3%’ in 2025 – central bank
SAO PAULO (ICIS)–The Colombian economy picked up strength at the end of 2024, and higher spending on gross capital formation such as petrochemical-intensive public works and machinery could see “close to 3%” growth in 2025, according to the country’s central bank. The Banco de la Republica published this week minutes of its monetary policy committee meeting earlier in December which resulted in an interest rate cut of 25-basis points to 9.5%. In its final assessment of the economy’s performance in 2024, the central bank said inflation was converging towards its target of 3%, but said it will do so “more slowly than projected” on due to a weaker Colombian peso and higher for longer US interest rates. The rate of inflation in Colombia stood at 5.2% in November, down from 5.41% in October, the fifth month of decline. The central bank also called on Gustavo Petro’s cabinet to be realistic about public finances and fiscal discipline, and questioned whether fiscal parameters the government had set itself for 2025 will be met. TO-PREPANDEMIC LEVELSHowever, overwhelming sentiment in the minutes was one of optimism about an economy which has a more secure footing in healthier growth, with an increase in gross capital formation a key part of that. In fact, after sluggish growth posted since the pandemic, next year the Colombian economy could hit some of the indicators in line with those pre-2020. Economic growth reached 2.0% in Q3, said the bank, driven by a 20.3% jump in gross capital formation. The Economic Tracking Indicator showed 3.1% growth in October. Gross capital formation measures economy-wide investment in fixed assets plus inventory changes. Fixed assets include infrastructure improvements, machinery and equipment purchases, and construction of buildings like schools, homes, offices, and industrial facilities. “They [board members] consider there is room to further propel the rebound in gross capital formation enjoyed during the third quarter to ensure greater economic dynamism that will bring the Colombian economy closer to the growth rates observed before the pandemic. In this regard, they note that the 1.8% GDP growth projected for Colombia in 2024 is lower than the average GDP expansion recently estimated for Latin America (2.1%),” said the minutes. “They stress that the recent recovery in specific components of gross fixed capital formation, such as civil works and machinery and equipment, which contribute more than 50% to fixed investment, suggests that an improvement of close to 3.0% could be reached in 2025 for Colombia, which is higher than the forecast for Latin America (2.3%), and will help it recover the position it held for almost a decade before 2020.” Healthy economic indicators can also lead to higher prices on the back of strong demand, so the central bank also adopted a cautious stance on monetary easing. The bank projects slower inflation convergence to target in 2025, citing currency depreciation pressures and their impact on prices, adding that additional inflationary pressures are expected from minimum wage increases and regulated price adjustments. Market volatility has increased due to concerns over 2025 budget financing gaps and recent reforms to regional funding transfers, while external pressures have increased due to tighter global financial conditions, a slower pace of US interest rates cuts and falling commodity prices which have affected Colombia’s terms of trade. Colombia’s state-owned energy major Ecopetrol is a key income generator for the Treasury. “They [board members] agreed that 2025 may bring a challenging macroeconomic scenario that requires vigilance and harmonization in both monetary and fiscal policy design,” the bank said. Earlier in December, Colombia’s statistical office DANE said industrial production expanded 1.1% in October year on year, while the nation’s leading economic indicator showed broad-based growth acceleration across major sectors. The reading was in line with the manufacturing PMI index for November, which showed broad-based improvement on better demand. Meanwhile, DANE’s main economic indicator for activity across the economy, also published earlier in December, rose 2.94% in October, year on year, an improvement from September’s downwardly revised 1.07% increase. Within petrochemicals, however, the story may be more mixed as domestic producers will continue to face stiff competition from competitive imports. All petrochemicals players interviewed by ICIS at the annual meeting of the Latin American Petrochemical and Chemical Association (APLA) held in Colombia’s Cartagena in November, spoke of challenging market conditions in 2025. This included Ecopetrol’s petrochemicals division, its subsidiary producing polypropylene (PP) Essentia and plastics distributor Grupo Almatia. Prices closed the year with decreases. Latin American PP values, for instance, fell in Colombia and Chile on the back of competitive offers from abroad as well as lower feedstock costs. Focus article by Jonathan Lopez 
VIDEO: China EVA year-end performance strong on tight supply, solid demand
SINGAPORE (ICIS)–ICIS senior analyst Joanne Wang discusses the recent rebound in China’s ethylene vinyl acetate (EVA) prices and gives a brief outlook for 2025. Some EVA plants switch to low density polyethylene (LDPE) production in Q4 on profit considerations EVA producers’ Q4 inventory low after destocking in the first three quarters Photovoltaic industry resumes replenishment in Q4, boosting demand ICN
Latin America stories: weekly summary
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 20 December. NEWS Brazil’s chemicals likely to avoid higher tariffs as bilateral trade favors US – AbiquimBrazil’s chemicals producers are confident the sector would be mostly spared from potentially higher US import tariffs as the latter maintains a clear trade surplus in bilateral commerce, the country’s trade group Abiquim said to ICIS. Argentina’s manufacturing, construction output falls in OctoberOutput in Argentina’s petrochemicals-intensive construction and manufacturing kept falling in October, year on year, the country’s statistical office Indec said on Friday. Mexico’s central bank cuts rates by quarter point to 10.0%, signals further cutsMexico’s central bank on Thursday cut interest rates by 25 basis points (bps) to 10.0% and hinted at steeper cuts ahead. Colombia’s central bank lowers rates by quarter of a point to 9.5%Colombia’s central bank on Friday lowered its benchmark interest rate by 25 basis points (bps) to 9.5%. Argentina’s YPF agrees with Shell to continue building LNG export projectYPF and global energy major Shell have signed an agreement to develop the first phase of a liquefied natural gas (LNG) export project, the Argentinian state-owned oil and gas major said. Brazil’s chemicals output up 1.6% in OctoberBrazil’s chemicals output rose by 1.6% in October, year on year, while plastics and rubber production increased by 4.9%, according to the country’s statistical office IBGE. Brazil central bank steps up currency defence as real slidesBrazil’s central bank has mounted four currency interventions this week, spending nearly $6 billion to stem the decline in the Brazilian real (R). Chile cuts rates as growth concerns outweigh inflation risksChile’s central bank cut its benchmark interest rate this week by 25 basis points (bps) to 5.0%, balancing concerns over stubborn inflation with signs of economic weakness. Pemex remains ‘financially vulnerable’ as output flattens, crude prices fall – FitchMexico’s state-owned crude major Pemex “remains financially vulnerable” as its output is likely to flatten and crude oil prices are set to fall, US credit rating agency Fitch said. MOVES: Brazil Potash appoints fertilizer industry veteran Schmidt as board executive chairmanProducer Brazil Potash, which is advancing the $2.5 billion Autazes project within the state of Amazonas, has appointed fertilizer industry veteran Mayo Schmidt as the executive chairman of its Board of Directors effective 6 January. PRICING LatAm PE domestic, international prices stable as year draws to closeDomestic and international polyethylene (PE) prices were assessed as unchanged across Latin American countries. LatAm PP domestic, international prices steady as 2024 endsDomestic and international polypropylene (PP) prices were steady across Latin American countries. Braskem Idesa seeks January PE price increase in MexicoBraskem Idesa (BI) is seeking a price increase of $110/tonne on high density polyethylene (HDPE) and for low density polyethylene (LDPE) as of 1 January, according to a customer letter.
Americas top stories: weekly summary
HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 20 December. CP Chem’s US, Qatar JV projects on track for 2026 startup – Phillips 66 Two world-scale joint venture projects being developed by Chevron Phillips Chemical and QatarEnergy remain on track to start operations in 2026, Phillips 66 said on Monday. Canada in turmoil as finance minister resigns, CEOs worry about fiscal policies Canadian CEOs and business trade groups are warning about the state of Canada’s fiscal policies. US Fed cuts rate by quarter point, expects fewer cuts in 2025 The Federal Reserve lowered on Wednesday its benchmark interest rate by a quarter point while reducing the number of cuts it expects to make in 2025. INSIGHT: US Gulf chems face more freezing spells amid warmer winters Chemical plants and refineries along the Gulf Coast of the US will likely face another winter that will be warmer than usual but punctuated with brief periods of freezing temperatures, which could disrupt operations. Oil prices fall on stronger US dollar, looming US government shutdown Oil prices fell sharply on Friday on a stronger US dollar and amid a looming US government shutdown over the failure to pass a budget bill in the House of Representatives. SHIPPING: Asia-US container rates surge as volumes pulled forward ahead of strike, tariffs Rates for shipping containers from east Asia and China to the US surged this week as importers pulled volumes forward ahead of the possible restart of the US Gulf and East Coast port strike and anticipated tariff hikes under the incoming Trump Administration.
UK economy weaker than first thought in Q3 with zero GDP growth
LONDON (ICIS)–The UK economy was weaker than initially thought in Q3 with GDP showing zero growth, according to official data on Monday. There was no growth in the services sector, while a 0.7% increase in construction was offset by a 0.4% fall in production. The Q3 GDP figure was revised down from a first estimate of 0.1% growth, the Office for National Statistics (ONS) said. Quarterly growth has trended down throughout 2024 with GDP at 0.7% in Q1, 0.4% in Q2 and 0% in Q3. On a monthly basis, GDP fell by 0.1% in September and October, according to the ONS. Last week, the Bank of England (BoE) held its key interest rate at 4.75% as inflation continued to firm despite weakening industrial activity. Economic growth in the eurozone and EU has been more positive with Q3 GDP rising by 0.4% in both blocs from the previous quarter.
Europe top stories: weekly summary
LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 20 December. Stagnant manufacturing, overcapacity, looming trade war weigh on Europe chems in 2025 Europe’s petrochemical sector will be under even more pressure in 2025 as demand from the region’s manufacturing sector remains in contraction, global overcapacity gets worse and amid the possibility of increased exports from China and the US. Europe melamine December contracts roll over, Q4 contracts rise on margin pressure European December melamine contracts were assessed steady, in line with market feedback. Europe paraxylene December contract price up €5/tonne The Europe paraxylene (PX) December contract reference price rose €5/tonne from November’s levels. German business sentiment weakest since May 2020 German business sentiment dropped to its lowest point since May 2020 in December, according to the latest data from the Ifo Institute on Tuesday. Eurozone private sector closes out 2024 in contraction as manufacturing slows The eurozone private sector ended the year on a bearish note as output contracted driven by a weakening manufacturing sector, which offset a return to growth for services.
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