LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Higher offers for colorless bales, colorless and mixed colored flake in NWE High bale prices still a major concern for recyclers across Europe Flake demand looking good for May, food-grade pellet has room to improve

LONDON (ICIS)–Demand in the EU and US epoxy markets remains muted and sentiment has become even more cautious, as players navigate the changing and complex tariff landscape. In this podcast, Heidi Finch – who covers the Europe epoxy market – and fellow senior editor Tarun Raizada – who covers the US epoxy market – share insights on key topics including tariffs, effects on sentiment, demand and profitability struggles. Europe epoxy sentiment diluted in April; as US President Donald Trump’s tariffs add to demand caution; competition from South Korea and within Europe US epoxy price momentum slowed in April as players scrambled to assess impact on supply chain of duty/tariff fallout Profitability still a challenge; but benzene drop in Europe provides some relief Sentiment cautious in US moving forward as demand outlook far less favorable amid extended tariff uncertainty Trump tariffs cast a cloud over the downstream outlook, EU players hope trade deals will be reached Podcast editing by Nick Cleeve

SINGAPORE (ICIS)–Asia’s petrochemical markets are poised for a resurgence in activity following the May Day holidays, with discussions subdued as buyers await signs of recovery and producers restart plants over the coming months. Producers to restart plants, refill inventories after holidays Delayed purchases until after holidays US has contacted China for trade talks – Chinese state media The May Day or Labor Day holiday is celebrated in China from 1-5 May, and in most other Asian countries on 1 May. Japan and South Korea also observe several days of holiday in May. Feedstock propane supply-demand fundamentals are being weighed on by the ongoing US-China trade war, which is affecting the cost of propane imports and could lead to reduced operating rates for propane dehydrogenation (PDH) units. This may tighten propylene supply in the longer term, potentially supporting prices if demand picks up. Demand has been sluggish in the propylene market, weighing prices down as producers maintain low inventories ahead of 1 May. However, after the Labor Day holiday, there is an expectation of increased supply, which may lead to a more balanced supply-demand scenario as they resume normal operations. Separately, the glycerine market in Asia is expected to see a notable pick-up in restocking activities after the holidays. Chinese buyers, who have been holding back purchases due to a sluggish downstream epichlorohydrin (ECH) market and uncertainties surrounding the US-China trade war, are likely to return to the market. “We will wait until after the Labor Day holidays before we commit to any purchases as we expect the downstream ECH market to slow down after the holidays,” a Chinese buyer said. The ECH market, a key downstream sector for glycerine, is anticipated to experience a price drop after the holidays due to demand remaining weak amid the US-China trade war. Asia’s butyl glycol (BG) import prices were assessed as lower this week amid a bearish market sentiment amid unimproved demand conditions. In southeast Asia, the glycol ethers market is undergoing price adjustments as producers lower offers in anticipation of the Labor Day holidays. China’s export prices for propylene glycol ether (PGE) also softened as sellers looked to increase sales before the holiday. Meanwhile, propylene glycol prices are expected to remain stable as market participants await the outcomes of the holiday period. In China, domestic prices have held steady, but the overall sentiment remains cautious due to the impact of the holiday on production and logistics. The stability in pricing reflects balanced supply-demand fundamentals, though any unexpected disruptions post-holiday could lead to short-term volatility. PRODUCERS ADJUSTING OUTPUT The acetic acid market is experiencing softening spot prices due to lengthening supply as plants restart operations following maintenance turnarounds. However, the holiday period is likely to further influence supply dynamics, with some producers adjusting output to manage inventory levels. In China, a new plant tied to a downstream ethylene vinyl acetate (EVA) unit has come online. It is among other plants in Asia with a combined capacity of nearly 1.8 million tonnes/year which have either already restarted or are restarting in May, EVA-linked vinyl acetate monomer (VAM) demand is generally expected to slow as June approaches, when a pricing policy in China – which has spurred a rush in solar panel installations across the country – comes into effect. Concerns of slowing demand were kept on the boil in Asia ethyl acetate (etac) markets amid fluid developments surrounding trade tensions between the US and China, and its potential ripple effect on sentiment in the days ahead. Notably, market players were conscious of weakening product spreads or etac production margins. Eroding margins have thus left regional suppliers with little room to scale back asking levels, despite the current market climate that was viewed as largely skewed towards buyers. EYES ON POSSIBLE TRADE TALKSAs the US-China trade war persists, both sides have indicated a willingness to engage with each other on trade talks. On Friday, a spokesperson of China’s Ministry of Commerce said that senior US officials have “repeatedly expressed their willingness” to negotiate with China on tariffs, according to state media outlet CCTV. The spokesperson said that the US has sent requests hoping to talk to China, and the Asian country is currently evaluating them. “China’s position is consistent. If we fight, we will fight to the end; if we talk, the door is open,” the spokesperson said. Meanwhile, US President Donald Trump has maintained that trade talks are ongoing between the two largest economies in the world, which Chinese state media denied. Amid US tariffs, manufacturing activity continued to remain sluggish across Asia, including China and Japan. In April, China’s manufacturing activity shrank as export orders weakened due to the escalating trade war with the US. The official purchasing managers’ index (PMI) dropped to 49.0, indicating contraction, down from 50.5 in March. Japan’s manufacturing PMI rose to 48.7 in April from 48.4 in March, marking the tenth consecutive month of contraction. Focus article by Jonathan Yee Additional reporting by Seymour Chenxia, Helen Yan, Julia Tan, Joy Foo and Matthew Chong and Melanie Wee.

SINGAPORE (ICIS)–Manufacturing purchasing managers’ indices (PMIs) tumbled across most of Asia in April, led by a decline in new orders amid global trade uncertainty that will likely continue to weigh on exports and production. China, South Korea new export orders contract significantly amid trade uncertainty China’s manufacturing PMI falls into contraction, 16-month low in April Production may be shifting to India amid evolving trade landscape This is the first PMI reading since US president Donald Trump imposed 10% baseline tariffs on all countries and a 145% tariff on China; already, six out of eight economies that have reported April data as of 2 May have PMIs in contractionary territory. A robust PMI above the 50-threshold, signaling expansion in a country’s manufacturing sector, generally corresponds with increased petrochemical output, as greater industrial activity fuels demand for essential inputs such as plastics, rubbers, and solvents. “Unsurprisingly, export-oriented economies in the region are bearing the brunt of the tariff hit, with new export orders in China and [South] Korea having fallen sharply into contractionary territory,” Japan’s Nomura Global Markets Research said in a note. The PMIs of domestic-oriented economies such as India and the Philippines, however, are holding up, with the latter experiencing a boost in activity owing to upcoming elections, it noted. “This suggests domestic demand will be pivotal in serving as a growth cushion against external shocks, which means policy stimulus, particularly on the fiscal side, is likely to gain traction,” Nomura analysts said. A combination of escalation and de-escalation in tariff policy is likely to breed uncertainty and lead to a slowdown in capital expenditure, they added. South Korea’s manufacturing sector health deteriorated more sharply in April,  marking the lowest reading since September 2022 and the third consecutive month of worsening business conditions. April saw a sharper contraction in production levels at South Korean factories, with output falling significantly at the beginning of the second quarter, according to S&P Global. This marked the second consecutive month of declining production, as companies frequently attributed the decrease to falling new orders and the impact of US trade policy. The latter also affected foreign markets, as South Korean goods producers recorded the first reduction in new export orders in six months, it added. Japan’s manufacturing PMI, meanwhile, inched higher to 48.7 in April from 48.4 in March but new orders and new export sales continued to weaken. While consumer goods producers enjoyed a “renewed improvement in the health of its sector,” operating conditions weakened for both intermediate and investment goods segments, according to au Jibun Bank. Overall new work fell at a solid pace that was the quickest since February 2024, the bank noted, with firms frequently pointing to “subdued client spending at home and abroad.” With manufacturing slowing down and weakening exports, Japan’s economic outlook is tilted to the downside, prompting the Bank of Japan to substantially lower its growth forecasts for the year on 1 May. CHINA PMI FALLS BACK INTO CONTRACTIONManufacturing activity in bellwether China fell to a 16-month low in April as the impact of tariffs started hitting producers. China’s official April manufacturing PMI fell to 49.0 from 50.5, marking a 16-month low. By category, the most significant monthly decline was in new export orders, dropping to 44.7 from 49.0, illustrating the initial impact of tariffs. Overall, the new orders sub-index decreased to 49.2 from 51.8, and the production sub-index also contracted, to 49.8. The PMI data indicates a potential strengthening of deflationary pressures, Dutch banking and financial services firm ING said. Specifically, the ex-factory price sub-index reached a seven-month low of 44.8, while the raw materials purchase prices sub-index fell to a 22-month low of 47.0. Furthermore, the import sub-index, at 43.4, hit its lowest point since January 2023, suggesting that a significant drop in US demand due to tariffs could intensify price competition among manufacturers, according to ING. A silver lining was a better-than-expected Caixin PMI reading, which surprisingly remained in expansion at 50.4. Markets had been expecting this PMI gauge to underperform, ING said, adding, “this is because the survey sample size traditionally has a larger proportion of exporters and private firms”. TARIFFS A LOSE-LOSE PROPOSITIONWhile China appears to be holding up well in the early stages of the tariff test of endurance, there is a “clear negative shock taking place”, ING noted. “But, all things considered, survey data suggests the shock may be less than what the more bearish market participants feared.” China’s exports to the US represent around 14-15% of total shipments, much of which may have ground to a halt in April, ING chief economist, Greater China, Lynn Song said. “We suspect the shock on Chinese US-bound exports will be significant, causing a double-digit year-on-year decline in both exports and imports,” he added. The import frontloading in the first quarter of the year likely enables companies to do this for some time, with varying estimates on how long these inventories would last, ING said. “We expect April’s trade to show the biggest decline in terms of China’s exports to the US. This is because importers have been in wait-and-see mode, hoping trade talks might lead to lower tariffs,” it said. However, once inventories are depleted, assuming there’s no easy substitution product available, companies will face a choice between paying tariffs or discontinuing sales, ING added. SIGNS OF PRODUCTION SHIFTING TO INDIAIndian manufacturing surged in April, fueled by the quickest output growth since June 2024 amid strong order books. The HSBC India manufacturing PMI edged up to 58.4 in April from 58.1, signaling the sector’s strongest overall improvement in 10 months, driven by accelerated increases in inventories, hiring, and production. “The notable increase in new export orders in April may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements,” said Pranjul Bhandari, chief India economist at HSBC. Input prices increased slightly faster, but the impact on margins could be more than offset by the much faster rise in output prices, of which the index jumped to the highest level since October 2013, Bhandari added. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy Insight article by Nurluqman Suratman

SINGAPORE (ICIS)–Borouge’s net profit rose 3% year on year to $281 million in the first quarter, driven by “record” monthly production and an increase in sales volumes, the United Arab Emirates (UAE)-based polyolefins maker said on 30 April. in $ millions Q1 2025 Q1 2024 % Change Revenue 1,420 1,302 9 Adjusted EBITDA 564 567 -0.6 Net profit 281 273 3 Borouge’s revenue for Q1 2025 was $1.42 billion, with sales volumes for polyethylene (PE) up 8% year on year and polypropylene (PP) up 13%. Both PE and PP materials attracted premium prices, contributing to its revenue along with increased sales volumes, Borouge said. The company said it continued strong operations and achieved its highest ever monthly production in March. Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the first quarter stood at $564 million, broadly stable year on year. “Borouge is firmly positioned on an accelerated growth trajectory having demonstrated remarkable resilience and operational excellence over the past couple of years,” said Hazeem Sultan Al Suwaidi, the CEO of Borouge. A new entity, Borouge Group International, combining Borouge and Borealis, along with the newly acquired Nova Chemicals, is expected to be founded in Q1 2026 subject to legal and regulatory approvals. Also, once fully operational, the Borouge 4 plant will add 1.4 million tonnes/year of capacity and is expected to contribute approximately $900 million in annual EBITDA through a typical business cycle, Borouge said. Borouge 4 is being developed by Borouge and will be transferred to Borouge Group International at cost upon completion. “Borouge is also closely monitoring tariff developments and is positioning itself to support its customers in key markets. The management remains confident in the company’s ability to deliver outperformance and maintain a competitive edge, even amid market volatility,” the company said.

SINGAPORE (ICIS)–Shell had $449 million in adjusted earnings in the first quarter of 2025 for its chemicals and products division on better margins, the UK-based oil and gas major said on Friday. Chemicals and products division performance Q1 2025 Q1 2024 Change Adjusted earnings ($m) 449 1,615 N/A Plant utilisation 81% 75% 8% Chemical margin ($/tonne) 126 138 -8.7% For Q1 2025, Chemicals had negative adjusted earnings of $137 million while Products accounted for $586 million of adjusted earnings, Shell said. The adjusted earnings reflected higher products margins, mainly driven by higher margins from trading and optimization, as well as higher refining margins. There were also lower operating costs in the first quarter as well, but these net gains were offset by comparative unfavorable tax movements. Lower planned and unplanned maintenance led to higher plant utilisation. Chemicals manufacturing plant utilisation is expected to be approximately 74-82%, taking into account the sale of the Energy and Chemicals Park in Singapore, which was completed in April.

LONDON (ICIS)–From Trump’s tough tariffs talk to pivotal recycling legislation, ICIS senior analysts and editors pick their top themes from the 11th ICIS World Polyolefins Conference in Cologne. Joining senior editor manager Vicky Ellis on the podcast are senior editor Ben Lake, senior analyst for PE Lorenzo Meazza, ICIS consultant Les Bottomley, senior recycling analyst Egor Dementev, and senior analyst Alex Tomczyk. They discuss highlights from the conference – including examples of tariffs from US history, how Europe’s market views the tariffs headache, one speaker’s view that AI could be “better at purchasing chemicals” than human buyers, and how polyolefins must get their head out of the sand on Packaging and Packaging Waste Regulation (PPWR) rules or lose to other packaging. Podcast edited by Zubair Adam

HOUSTON (ICIS)–The Panama Canal will close the west lane of the Pedro Miguel lock for five days later this month for maintenance, but reduced traffic because of the trade war between the US and China should mean smooth sailing for shippers. In an update, analysts at shipping broker NETCO said the trade war between the US and China has led to reduced traffic, shorter wait times and lower auction prices at the vital waterway, which likely means disruptions because of the maintenance will be minimal. TARIFF IMPACT ON TRANSITS The analysts said the number of unbooked regular-size vessels is slowing with fewer than 50 arrivals projected over the next week. Previously, the availability of auction slots was limited to two per day for regular-sized vessels. With slowing demand for slots, auction prices are coming down, NETCO said, with the highest bid last week coming in at $65,000, down from the previous week’s highest bid of $101,000. NETCO said this indicates that the situation at the canal is improving. Average waiting times are also falling, with southbound vessels waiting 0.4 days and northbound vessels waiting 1.2 days over the past week. NETCO said the improved situation at the canal is because of the softer market conditions as well as the PCA’s operational adjustments. “However, this stability is fragile and closely tied to subdued traffic levels – particularly in container, liquefied natural gas (LNG), and tanker segments,” NETCO said. “As global trade demand begins to rebound in the second half of 2025, increased pressure on the canal could reintroduce bottlenecks and cost volatility. Ongoing monitoring of transit slot availability, auction pricing, vessel queues, and rainfall patterns will be key to anticipating whether current efficiencies can be sustained or if renewed congestion is likely.” MAINTENANCE The Panama Canal Authority (PCA) will conduct a dry chamber maintenance on the west lane of the Pedro Miguel lock from 27-31 May, at which time the east lane will remain open, but passage will take additional time. Available slots in the Panama locks will be reduced to 16 for the maintenance period. Per the PCA’s Transit Reservation System, four booking slots will be offered to supers in the second tiebreaker competition from 13-17 May for booking dates during the maintenance period, with no booking slots available for regular vessels. No booking slots will be offered during the third booking period for supers or regular vessels. The following table shows the reduction of slots for the maintenance period. Other restrictions during the maintenance period are that no more than seven supers can be booked in each direction, and of these, no more than two with daylight restrictions in each direction. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

HOUSTON (ICIS)–China’s tariffs on US shipments of liquefied petroleum gas (LPG) have yet to disrupt exports, and the companies that supply the material expect that will remain the case – even if prices fall. China has imposed additional 125% tariffs on US shipments of LPG, which it uses as feedstock for its on-purpose propylene plants. LPG is a by-product of oil and gas production, and the US will make the material regardless of the price of the material. The US market has limited capacity to absorb its LPG output, so prices for the material will fall until they are low enough to clear the international market. CHINA’S PDH UNITS RELY ON LPG FOR FEEDSTOCKPropane dehydrogenation (PDH) has become the largest route to produce propylene in China, taking up around 32% of the total based on effective capacity, according to ICIS Supply and Demand Database. Nearly all of the feedstock for these PDH units is imported with the exception of a few producers that obtain propane from their refineries. China has imported 29.24 million tonnes of propane in 2024, with 17.32 million tonnes or 59% from the US, according to customs data. US LPG EXPORTS UNCHANGEDEnterprise Products, the largest US exporter of LPG, said nominations at its docks for May indicate that its customers are not changing their order patterns from prior months. “We have not seen a disruption on exports of ethane or LPG,” said Tug Hanley, Enterprise senior vice president, pipelines & terminals. He made his comments during an earnings conference call. Enterprise does not have any contracts with Chinese entities, he said. Instead, its counterparties are international companies that are experienced with handling trade disruptions such as tariffs. Jim Teague, co-CEO of Enterprise, said the market is already rerouting LPG between among the biggest suppliers in the US and the Middle East and the biggest importers in China and India. US CANNOT CEASE LPG PRODUCTIONLPG is a by-product of oil and gas production, and, so far, crude prices support output. The biggest contributor to new oil production in the US is the Permian basin, and production will remain in maintenance mode if WTI crude futures remain at $55-60/barrel, according to Enterprise. WTI remains within that range. Even if US oil production remains flat between now and 2027, production of natural gas and natural gas liquids (NGLs) like LPG and ethane will continue growing. As oil wells age, they produce larger shares of gases. In Enterprise’s scenario for flat oil production, US NGL production will increase by 200,000 barrels/day. US propane consumption is not keeping up with production. In 2025 it should rise to 810,000 barrels/day from 2024’s 750,000 barrels/day, according to the short term energy outlook from the Energy Information Administration (EIA). It will remain at 810,000 barrels/day in 2026. The US does have capacity to store LPG, but it cannot do so indefinitely, said Hanley of Enterprise. “Price will solve that.” If tariffs, weaker demand growth or a combination of the two pressure LPG prices lower, then it could increase petrochemical margins among crackers that import the feedstock from the US. Several do so in Europe. In the US, propane’s attractiveness as a raw material for ethylene production would depend on prices for ethane, the nation’s predominate feedstock for crackers. Cracking propane produces larger shares of propylene, so its sales price would have to be considered. US Gulf propane-based ethylene contract margins have occasionally exceeded those for ethane-based production, as shown in the following chart. US COMPANIES PLAN MORE LPG EXPORTSEnterprise and ONEOK have made no changes to their plans to expand LPG export capacity. Enterprise is building the Neches River Terminal in Orange County, that can export 360,000 barrels/day of propane when completed in the first half of 2026 Enterprise is expanding the Enterprise Hydrocarbons Terminal (EHT) on the Houston Ship Channel that will increase LPG export capacity by 300,000 barrels/day by the end of 2026. ONEOK and MPLX are building an LPG terminal in Texas City, Texas under the Texas City Logistics joint venture. When completed in early 2028, it can export 400,000 barrels/day of LPG. Energy Transfer is expanding its Nederland NGL terminal that will increase export capacity by up to 250,000 barrels/day in mid 2025. It did not specify the NGLs. Targa is pursuing a two-phase LPG expansion project at it terminal in Galena Park, Texas, that will increase total LPG export capacity to 19 million barrels/month when completed in Q3 2027. Insight by Al Greenwood Additional reporting by Seymour Chenxia (Thumbnail shows a PDH unit, which converts propane into propylene. Image by Enterprise Products)