SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Tuesday, tracking Wall Street’s rout overnight on fears of a US recession caused by tariffs. At 01:30 GMT, Taiwan’s Formosa Petrochemical Corp was down 4.2% in Taipei; South Korea’s LG Chem and Hanwha Solutions were down by 3.24% and 4.28%, respectively, in Seoul; and Malaysia’s PETRONAS Chemicals Group (PCG) slipped 2.17% in Kuala Lumpur. Japan’s benchmark Nikkei 225 fell by 2.75% to 36,008.90; South Korea’s KOSPI Composite was down by 2.18% at 2,514.36; and China’s CSI 300 index slipped by 0.39% to 3,928.80, with Hong Kong’s Hang Seng Index down 0.88% at 23,573.53. Uncertainty over US President Donald Trump’s tariffs reigns as some levies imposed on Canada and Mexico, such as automotives, were delayed to 2 April; while 25% tariffs on all steel and aluminium imports are set for 12 March. For aluminium, the tariffs were raised from 10% previously. On Chinese imports, the US’ 20% tariffs took effect from 4 March, to which China responded with retaliatory levies on US poultry and agriculture products such as chicken, corn, beef and wheat, which took effect on 10 March. Trump’s actions of announcing the tariffs and then deferring the measure on trading partners – particularly Canada and Mexico – were creating confusion in the equities markets. This uncertainty would add inflationary pressures and raise prices of goods in the world’s biggest economy, analysts said. Oil prices also dipped on Tuesday morning in Asia amid the US tariff uncertainty even as the country threatens to impose further sanctions on Iranian and Russian energy. At 01:40 GMT, Brent crude oil futures were down 0.40% to $69.00/bbl, while US West Texas Intermediate futures fell 0.58% to $65.65/bbl. Thumbnail image: At Qingdao port in Shandong province, China on 6 March 2025. (Costfoto/NurPhoto/Shutterstock)

HOUSTON (ICIS)–The new administration of US President Donald Trump has pivoted wholeheartedly to fossil fuels, with the energy secretary warning on Monday the dangers of focusing solely on climate change while emphasizing the world’s continued reliance on oil and natural gas for producing energy. “There is no physical way that wind, solar and batteries can replace natural gas,” said Chris Wright, US secretary of energy. He made his comments during the CERAWeek by S&P Global energy conference. At the start of his speech, Wright stressed the ways that fossil fuels dominate the energy industry. Moreover, Wright argued that the world will need more fossil fuels because of rising demand for energy from artificial intelligence (AI) and from consumers in the developing world, who want to adopt middle-class lifestyles. BREAK FROM BIDENWright and Trump mark a sharp break from the previous administration of Joe Biden, which was marked by antipathy towards fossil fuels and incoherence. While Biden was adopting restrictive policies, his energy secretary urged oil producers to make more crude. Such energy contractions are so far lacking in Trump’s administration. Wright repeated the president’s sentiments and went as far as to pull out a marker and sign an order during a press briefing, something the president has done during the first weeks of his administration. CLIMATE CHANGE TAKES BACK SEATWright said consumers became collateral damage when the previous administration focused on climate change at the expense of promoting reliable and affordable sources of energy. “We will end the quasi-religious policies on climate change that imposed endless sacrifice on citizens,” he said. “The Trump administration will treat climate change for what it is,” Wright said. It is a global side effect for creating a modern world and the benefits that come with it, and dealing with it is a tradeoff, he said. “Everything in life involves tradeoffs.” That said, Wright said he is a climate realist and not a denialist. He highlighted nuclear fission and fusion, both emission-free sources of power. He mentioned advances in geothermal energy and noted the growth in solar power. The administration’s policies towards wind energy reflect cost and outrage from people who live near the projects, he said. Wright said the administration does not oppose electric vehicles (EVs), but only the policies that restrict consumer choice and lavish incentives to wealthy people who do not need them. “We need thoughtful, rational policies on energy and honest assessments on climate change,” he said. SENTIMENT WILL NOT DIRECTLY BOOST OIL OUTPUTWright’s comments went over well with the energy conference, with the audience burst in spontaneous applause. While the US energy industry will welcome a cooperative administration, sentiment alone will not have large or immediate effect on energy production. US oil and gas production grew despite the antipathy and incoherence of the Biden administration because much of it has taken place on the private lands of the Permian basin. Private land is free from federal restrictions and moratoria on leases. Oil and gas producers will gauge demand growth and costs before they increase output. Wright acknowledged that energy companies rely on market signals, and not government decree, to make investment decisions. But the administration can play a role by adopting policies that encourage investment and make it easier for companies to obtain the permits needed to build infrastructure and large-scale projects. TARIFFS VERSUS ENERGYOne contradiction in the administration is its embrace of fossil fuels and tariffs as a central tool in economic and industrial policy. If the US adopts tariffs, they will increase costs of steel and aluminium, key raw materials for oil and gas production. They would also increase costs of imported grades of heavy oil. US refineries are built to process heavier grades of crude. If faced with tariffs, US refiners could pay the tax or find alternative suppliers that could still cost more. Otherwise, refiners would need to underutilize their plants or invest in costly retrofits that would allow them to process larger amounts of domestically produced lighter grades of oil. Wright said the US is still in the early stages of its tariff proposals, but vigorous dialogue about their effect on the economy is taking place behind closed doors. Oil and natural gas are important for the chemical industry because they are the predominant source of feedstock and energy. Chemical prices tend to rise and fall with those for gas. In the US, feedstock costs tend to rise and fall with those for natural gas because ethylene plants predominantly rely on ethane as a raw material. CERAWeek by S&P Global runs through Friday. Insight article by Al Greenwood Thumbnail shows an oil pump jack. Image by Shutterstock.

HOUSTON (ICIS)–The US is still in the early stages of its tariff proposals, which could increase the costs of the steel and aluminium needed for oil and gas production, but vigorous dialogue about their effect on the economy is taking place behind closed doors, the secretary of energy said on Monday. “I think we are early in this,” said Chris Wright, secretary of the US Department of Energy. He made his comments during the CERAWeek by S&P Global energy conference. “We have, behind closed doors, vigorous debates on tariffs,” Wright said. “It’s definitely not a quasi-religious, dogmatic thing. It’s a dialogue.” While the debate on tariffs is in its early days, Wright said he is optimistic about the outcome of the policies of the new administration because of the business background of the president and the record of his first term of office in 2016-2020. CLASHING POLICIESThe administration has enthusiastically expressed support for oil and gas production in the US with President Donald Trump saying “Drill, baby drill” during his speeches. At the same time, the government has embraced tariffs as a key tool of economic and industrial policy. This includes tariffs on steel and aluminium, key raw materials needed in the oil and gas industry. On 12 March, the US will impose tariffs of 25% on all imports of steel and aluminium, a move that will remove exemptions that it granted to some countries. The US will expand the tariff to cover more products made of steel and aluminium. In early April, the US said it would introduce retaliatory tariffs on imports from the rest of the world. These tariffs will consider what the US considers non-tariff trade barriers, such as value added tax (VAT) systems. The US could also go ahead in early April on proposals to impose 25% tariffs on all imports from Mexico, 10% tariffs on all energy imports from Canada and 25% tariffs on most other imports from Canada. The US is also considering imposing 25% tariffs on imports from the EU. These countries are major suppliers of steel and aluminium to the US. Already, higher costs in materials as well as labor have raised costs for several fuel and chemical projects. US-based chemical producer Westlake stressed that it would conduct a cost analysis to take inflation into account before it would consider expanding a joint venture cracker. More companies could give more large-scale projects second thoughts if tariffs cause further inflation in raw materials. Oil and natural gas are important for the chemical industry because they are the predominant source of feedstock and energy. Chemical prices tend to rise and fall with those for gas. In the US, feedstock costs tend to rise and fall with those for natural gas because ethylene plants predominantly rely on ethane as a raw material. CERAWeek by S&P Global runs through Friday. Thumbnail shows Chris Wright, secretary of the US Department of Energy. Image by ICIS.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 7 March. LyondellBasell to build metathesis unit to make propylene LyondellBasell has approved plans to build a metathesis unit in Channelview, Texas, that will convert ethylene into propylene, the producer said on Monday. INSIGHT: US to export more chem feedstocks amid drought of US cracker projects US production of ethane, propane and other natural gas liquids (NGLs) will continue to grow while domestic demand for these chemical feedstocks will likely remain flat, a trend that is contributing to a surge in new terminal projects that will export these products to growing markets overseas. Chem shares plunge as US proceeds with 25% Canadian, Mexican tariffs US-listed shares of chemical companies fell sharply – many by more than 5% – on Monday as the US proceeds with plans to impose tariffs on Canada, Mexico and China, its three biggest trading partners. INSIGHT: Retaliatory tariffs to compound pain for US chemicals and key end markets The US ramping up additional tariffs on China to 20% and kicking off 25% tariffs on Mexico and Canada (10% on energy) as of 4 March will hit chemical and key end markets and products as players rush to reconfigure supply chains. US to delay automobile tariffs for one month The US will grant a one-month tariff exemption for the nation’s automobile industry, the government said on Wednesday. US to delay tariffs on USMCA-compliant goods from Mexico for one month – Trump The US will delay until 2 April imposing tariffs on Mexican goods that fall under the US-Mexico-Canada Agreement (USMCA), President Donald Trump said on Thursday, 6 March in a post on Truth Social. Wall Street turns more bearish on US chemicals on tariff uncertainty Wall Street analysts are turning more negative on the earnings outlook for chemical companies on increasing US tariff uncertainty. Canada delays second phase of retaliatory tariffs, Ontario plans electricity export tax Canada is delaying its second phase of retaliatory tariffs on goods imported from the US to 2 April, a minister announced on Thursday evening. INSIGHT: US tariffs may persist as they become policy pillar The US government is coming to embrace tariffs as a central part of its economic and fiscal policies, a development that could see such measures persist and threaten margins for the nation’s chemical producers.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The global economy is teetering on uncertainty—trade wars, US policy shifts, and China’s economic challenges are all fuelling concerns about a potential recession. But in times of complexity, businesses must make bold, strategic moves rather than retreat into hesitation. One critical decision? Investing in Artificial Intelligence (AI). Some sceptics are comparing today’s AI boom to the 1990s dot-com bubble, but this is a fundamental misunderstanding of AI’s transformative power. Unlike the internet gold rush, where speculation outpaced real-world applications, AI is already revolutionizing industries—from chemicals and manufacturing to finance and healthcare. Widespread AI adoption – 72% of companies have implemented AI in at least one business function Backed by industry giants – Microsoft, Google, and Nvidia are leading AI innovation, not unproven startups Real economic impact – Businesses are seeing measurable gains in efficiency, decision-making, and profitability Mature technological infrastructure – Cloud computing, data analytics, and machine learning have created a solid foundation for AI’s expansion The real risk? Pulling back on AI investments. In a world of post-Chemicals Supercycle complexity, businesses that fail to leverage AI will fall behind. AI isn’t just another tech wave—it’s a paradigm shift, more transformative than even the internet itself. 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.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which focuses on how geopolitics now drives decision-making. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. 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 7 March 2025. Europe glycerine spot prices rise on prolonged shortages Constrained crude glycerine availability evident over an extended length of time has exerted upward pricing pressure on all glycerine grades in the European market, resulting in spot prices rising this week. INSIGHT: Half a decade on from the pandemic, feedstock pricing volatility remains widespread and perhaps irreversible Next week marks half a decade since major lockdowns were enforced across Europe in response to the coronavirus pandemic, and the obvious thing to do would be to reflect back on how much life has changed over the past five years. Europe colorless PET bottle bale prices rise for first time since Q2 2024 Reduced supply and higher demand from the downstream recycled polyethylene terephthalate (R-PET) flake sector have seen colorless (C) post-consumer PET bottle bale prices in northwest Europe (NWE) rise for the first time since April 2024. Europe chems stocks tank amid tariff-driven global sell-off European chemicals stocks fell on Tuesday in line with a wider market sell-off as the US prepares to impose wide-ranging tariffs on Mexico and Canada and China announced retaliatory tariffs on the US, deepening global trade tensions. BASF not looking to tailwinds for 2025 earnings growth BASF expects to increase earnings in 2025, with most units other than chemicals expected to contribute to annual growth, but it is not expecting much support from economic tailwinds this year.

Bangladesh has issued tenders covering 23 spot cargoes since start of 2025 Reformed tender process under new government Tender re-issuance with high premiums and few bids SINGAPORE (ICIS)–Bangladesh’s state-run energy company Petrobangla is grappling with overdue payments to liquefied natural gas (LNG) suppliers, as an interim government seeks to tackle a dollar shortage, reform pricing to recover costs of gas sold downstream and expand its outreach on public tenders, according to sources interviewed by ICIS. As the global LNG markets remain tight, the unresolved debts are prompting concerns that suppliers could reduce or halt spot procurements, which would have severe consequences for Bangladesh’s energy security. “For the debt, it’s not possible right now to pay it off,” said a source familiar with the matter said to ICIS on condition of anonymity. “We have financial constraints… there are a lot of outstanding payments.” Despite this, the source emphasised that the situation is not as bleak as been reported, stating that “payment has improved since December.” Petrobangla and the Ministry of Finance did not respond to requests for comment. In its most recently awarded tender that closed on 2 March, Bangladesh paid $15.73/MMBtu TotalEnergies for a 9-10 March cargo, nearly two dollars above the ICIS East Asia Index (EAX) in early March. Since the start of 2025, Bangladesh has managed to buy six cargoes out of 23 sought through tenders , some re-issued, up to 9 March, according to ICIS LNG Edge. The most recent tender saw RPGCL issue seek two cargoes with one cargo for 25-26 March and one for 30-31 March that closed on 9 March at 1000 and 1005 local time respectively, according to a website notice on 6 March. WORKING ON THE PROBLEM Petrobangla and the government are working with multilateral lenders to secure dollar loans and funding to reduce arrears and reform energy policies that cover the subsidised costs of LNG imports. They have also moved to work with private commercial banks alongside government-owned ones. Sources said that LNG-import arrears are being whittled down to around $340 million now, from levels at about $455 million earlier this year. The sales and purchase terms for spot LNG cargoes to Bangladesh typically allow a payment window of around two weeks, though some suppliers may extend it to as much as 25 days. Among companies that participate regularly in Bangladesh LNG tenders—TotalEnergies, Gunvor, Vitol and Excelerate Energy—prices offered to RPGCL are at a premium to benchmark Asian levels because a credit premium is applied. Sources said Petrobangla has faced pressure from sellers to clear outstanding payments for spot LNG cargoes or forfeit monetary guarantees with the state bank. ICIS contacted Vitol, Gunvor and QatarEnergy who either offered no comment or did not reply. CAUSE AND EFFECT The ongoing payment crisis stems from Bangladesh’s shrinking foreign currency reserves, which have fallen sharply in the wake of rising commodity prices and global inflationary pressures. These economic challenges, paired with high LNG prices could create a double whammy for the country. When probed on burgeoning debt, risk premiums and suppliers confidence, no forthcoming plans on repayment emerged, but a source pointed at the transitions taking place in politics. Meanwhile, Petrobangla continues to issue tenders, somewhat regularly. “Yes, the tenders are being reissued as we are not getting cargoes at a ‘convenient price’, causing us to have to re-tender,” the source explained. “Both factors—high asking prices from suppliers and low bidding interest” are causing tenders to go unawarded and re-issued. Despite the difficulties, Bangladesh has managed to run its two terminals with no incidents so far this year after a series of snafus last summer. The source stated that Petrobangla continues to receive its contracted long-term cargoes “regularly” and there has not been a halt of contracted deliveries, given that the company has not “crossed an extreme limit that would lead to delivery stoppage”. Looking ahead, Petrobangla is cautiously optimistic. “We are looking towards securing March cargoes. But we still have hope,” the official said, when speaking to ICIS late February. A Petrobangla source said plans for 2025 are for 115 LNG cargoes with 59 from the spot market and 56 from long-term suppliers, which if reached, a 33% increase from 2024. Last year, Bangladesh imported 86 LNG cargoes — 56 from long-term suppliers and 30 from spot market, the official added. The country started importing spot cargoes in 2020, to cover gas shortages that resulted from a depletion of domestic gas reserves. But Petrobangla must rely on government subsidies to sustain imports. The government has increased domestic gas prices but these are still insufficient to cover the cost of LNG imports.

SINGAPORE (ICIS)–Sentiment in Asia’s petrochemical markets remains cautious with prices of some products – particularly in the southeastern region – were rising on tight supply, amid escalating trade tensions between the US and its major trading partners, including China. China’s oversupply-driven exports weigh on markets; post-Lunar New Year demand weaker than expected US tariff fears cause jitters across downstream industries Methanol supply constraints persist TRADES REMAIN SUBDUED Market activity in key chemical segments remains muted as buyers were staying on the sidelines, waiting for clarity on US trade policies and overall demand recovery. In the benzene market, South Korea’s January exports to the US slumped by 81% year on year to 15,000 tonnes, according to ICIS data. The decline was attributed to increased European supply to the US. “The market is cautious as everyone is waiting for more clarity on US tariff policies,” a trader said. South Korea faces potential hefty tariffs under the US’ plan to impose reciprocal tariffs from 2 April, even though the two countries have an existing free trade agreement. In the caprolactam (capro) market, producers are grappling with poor margins while supply within China continues to grow. “Capro margins have been bad for six months now, and demand didn’t pick up post-Lunar New Year,” said a Chinese producer. Chinese producers were exporting more to southeast Asia and Europe, in view of a general oversupply of petrochemicals and muted demand in the domestic market and following the US’ new 20% tariffs on all Chinese goods. For polypropylene (PP), China has ramped up exports to Vietnam and other southeast Asian nations which were exerting downward pressure on prices. With more Chinese capacity coming online, this trade flow is likely to continue. Chinese producers are increasingly willing to accept lower margins to capture market share in the polyolefin markets, creating ripple effects across Asia and beyond, forcing regional producers to adjust pricing strategies to remain competitive. However, these actions could be met with antidumping duties (ADD) as southeast Asian governments act to protect domestic producers. SHIPPING SECTOR WARY OF US POLICIES US protectionism is on the rise again under President Donald Trump’s administration, with an ongoing probe being conducted on China’s shipbuilding industry, which may be slapped with potential duties of up to $1.5 million per vessel. This move aims to deter reliance on Chinese-built ships and, instead, encourage investment in the US shipbuilding sector. China dominates the global shipbuilding industry, with over 81% of new tankers being built in the country, according to shipbroker Xclusiv in a November report. The fear is that if these tariffs come through, immediate cost impacts will be felt, especially on long-haul trades. Meanwhile, weaker freight demand post-Lunar New Year has also softened freight rates. Most downstream producers in China resumed operations in H2 February, after an extended holiday break. China was on official holiday from 28 January to 4 February. The northeast Asia winter was milder than expected, which reduced seasonal trade flows. DISRUPTIONS TIGHTEN SUPPLY While some chemical markets struggle with oversupply, others are experiencing tight supply due to plant outages. For methanol, supply is constrained in Malaysia, with Petronas’ unit experiencing operational issues, and Sarawak Petchem’s unit shut from late January. Iranian methanol plants have also been offline due to winter gas shortages, pushing Indian import prices up by $60/tonne within a week. Meanwhile, Russian supply disruptions due to drone attacks have tightened naphtha availability, strengthening prices. On the acetic acid front, plant turnarounds in China, Malaysia, and Japan initially tightened supply, but these units have since restarted, thereby improving availability of the material. OUTLOOK MIXED Market players remain wary of near-term price movements as supply and demand fundamentals shift across regions. March shipments for PE and PP in southeast Asia have largely been sold out, while Indonesian buyers are reluctant to commit to April purchases amid the Muslim fasting month of Ramadan, which started 1 March. Ramadan is observed in most parts of southeast Asia including Indonesia, southeast Asia’s biggest economy with a predominantly Muslim population. With uncertainties surrounding US’ trade policies, Chinese exports, and geopolitical risks, market sentiment remains mixed. Players are closely monitoring tariff developments and the potential impacts of further supply disruptions in key markets. Focus article by Jonathan Yee Additional reporting from Seng Li Peng, Isaac Tan, Tan Hwee Hwee, Angeline Soh, Jasmine Khoo, Julia Tan, Josh Quah, Damini Dabholkar, Doris He, Jackie Wong Thumbnail image: At Qingdao Port in Shandong province, China on 6 March 2025. (Costfoto/NurPhoto/Shutterstock)