HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 9 May. INSIGHT: Mexico’s automotive tariffs raise specter of recession, rest of LatAm more resilient Mexico remains the potential largest victim of the change in US trade policy, but practically no country in the world would be spared from an impact, analysts said this week. US Celanese to cut rates if demand falters further in increasingly ‘uncertain’ H2 – execs Celanese will aim to weather what is becoming an increasingly “uncertain” second half of 2025 by reducing inventories and keeping firm cost controls, but also by reducing operating rates if demand is not there, the CEO at the US-based acetyls and engineered materials producer said on Tuesday. Braskem-Idesa launches its ethane import terminal in Mexico Braskem-Idesa (BI) officially launched the Terminal Quimica Puerto Mexico (TQPM) on Wednesday, according to a notice from the company. US-UK announce trade deal to open up markets for chemicals, ethanol, agriculture, autos, steel and aluminium, aircraft The US and UK announced the first trade deal since the US 2 April ‘Liberation Day’ tariffs which would open up UK market access for US chemicals, machinery, beef, ethanol and other agricultural products, government officials said. Canada’s Pembina assures on US tariffs and Path2Zero delay Pembina Pipeline does not expect material near-term impacts from the US tariffs or from the delay of Dow’s Path2Zero petrochemicals project in Alberta province, the top executives of the Canadian midstream energy company told analysts in an update on Friday.

LONDON (ICIS)–Ridley Corporation has agreed to acquire Dyno Nobel’s fertilizer distribution business for (Australian dollar) A$300 million, the Australian animal nutrition company said on Monday. The deal to buy IPF Distribution includes an option to acquire its Geelong North Shore property for A$75 million. The Phosphate Hill fertilizer manufacturing operations, and the closure and remediation costs associated with the Gibson Island and Geelong manufacturing operations are excluded from the deal, Ridley said. IPF Distribution is part of Incitec Pivot Fertilisers, a manufacturer and distributor of fertilizers within the wider business of explosives maker Dyno Nobel. Completion of the transaction is expected by Q3 2025 and no later than 30 November, subject to certain agreed conditions.

LONDON (ICIS)–Fertiglobe has agreed to acquire Wengfu Australia’s distribution assets as part of a strategic expansion strategy, the urea and ammonia producer said on Monday. The acquisition will expand the Abu Dhabi-headquartered firm’s downstream reach and enhance access to Australian customers. It currently supplies around 600,000 tonnes/year of urea to the country. The purchase price of Wengfu will be based on net asset value plus a premium of around $8 million, with the final amount to be determined at closing. “Acquiring Wengfu’s assets marks a strategic step in our value-driven growth strategy and accelerates our commercial footprint in Australia, one of the world’s fastest-growing agricultural regions,” said Fertiglobe CEO Ahmed El-Hoshy. Fertiglobe said the transaction was expected to be 2.8% and 4.1% earnings per share (EPS) accretive before synergies in 2026 and 2027 respectively. Closing of the deal is subject to customary regulatory and legal approvals, it added in a statement.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at Apple’s dilemma on how to deal with the trade tariff war. 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)–The US and China have agreed to de-escalate trade war with sharp cuts on tariffs by 14 May 2025, for an initial period of three months, according to a joint statement issued on Monday by the world’s two biggest economies. The statement was a result of a two-day closed-door discussions between officials of the two sides in Geneva, Switzerland over the weekend. The US will suspend the 24% tariffs on Chinese goods for 90 days, while retaining the remaining ad valorem rate of 10% announced on 2 April.  Tariffs announced on 8 April and 9 April will be removed. On China’s side, Beijing will lower its tariffs on US imports to 10% and suspend the 24% duties for 90 days, with other charges to be scrapped. Additionally, China will adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the US since 2 April 2025. After taking these actions, the parties will establish a mechanism to continue discussions about economic and trade relations, the statement said. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 9 May. Covestro Q1 EBITDA halves, but in line with expectationsCovestro’s Q1 2025 earnings before interest, tax, depreciation and amortization (EBITDA) halved compared to last year, but were at the upper end of its forecast, the German producer announced on Tuesday. European orthoxylene contract price for May falls to six-month lowThe Europe orthoxylene (OX) contract price for May has fallen by €50/tonne to its lowest level in six months, driven by softer feedstock mixed xylenes (MX)  and gas costs in April. European Commission to begin investigation into PET imports from Vietnam, TurkeyThe initiation of an investigation by the European Commission into polyethylene terephthalate (PET) imports into the EU from Vietnam and Turkey is imminent, sources said. LOGISTICS: Red Sea ceasefire could boost Suez Canal, collapse freight rates, heap pressure on Europe chemicalsThe ceasefire between the US and Houthis in Yemen may crash freight rates and increase import pressure on chemical producers in Europe if it is permanent and traffic returns to the Suez Canal.

Serbian utility EPS inks long-term PPA from 168MW wind farms This could accelerate energy plans, boost PPA plans and have a bearish impact on spot power prices in the region The country plans to have 1.3GW renewable capacity by 2027 WARSAW (ICIS)–The signing of a new power purchase agreement (PPA) is set to support Serbia’s energy transition plans by 2027, local traders told ICIS. This comes as state utility Elektroprivreda Srbije (EPS) announced a 15-year PPA from two wind farms (Alibunar 1 and Alibunar 2) with a total 168MW capacity, EPS said on 8 May. “EPS will take over all the produced electricity, and the purchase and balancing price is determined on market principles, which provides an incentive to investors and allows EPS to make additional profits. This energy will also provide significant, additional security for the operation of our electricity system and the supply,” said Dusan Zivkovic, CEO of EPS. “EPS receives cheap green energy, while investors benefit from a guaranteed 15-year PPA and an auction premium. As an association, we advocate for the third round of auctions to take place as soon as possible, alongside the adoption of appropriate regulations and a new three-year auction plan,” said Danijela Isailovic, manager at local renewable group OIE Serbia, in a statement on 8 May. In 2028, this capacity will be increased by 1GW from self-balancing power plants EPS is developing with a strategic partner, and renewable production is expected to reach 50% of EPS’s total electricity output, added Zivkovic. MARKET IMPACT “This PPA is a milestone for Serbia as it will be a bearish driver for the local market spot market as renewable capacity takes over a large percentage of the current coal output,” a local trader told ICIS. EPS’s PPA will encourage the local industry to forge more PPA deals, added another market participant. “Over the coming years, we expect at least an additional 1GW of auction-winning plants to be built and new PPAs to be signed,” a local developer told ICIS. TRANSITION PLANS The large investors’ interest in Serbia’s recent second renewable tender is set to support Serbia’s energy transition plans by 2027, energy minister Dubravka Dedovic Handanovic said in February. The total capacity awarded was 645MW and the offered prices were “competitive”, resulting in €50.9/MWh for solar and €53.5/MWh for wind, “significantly below market levels”, said Handanovic. Both auctions are supported through a contract-for-difference (CfD) scheme for 15 years. All renewable plants should be online by 2027 as the country targets at least 1.3GW of new renewable capacity by the same period. Currently, Serbia has 4.4GW of coal-fired power, with coal and gas units representing 75% of the country’s energy mix, grid operator EMS data indicated.

SINGAPORE (ICIS)–Saudi Aramco’s first-quarter net income fell by 4.6% year on year to Saudi riyal (SR) 97.5 billion ($26 billion), weighed down by a combination of higher cost and lower oil prices. in SR billions Q1 2025 Q1 2024 % Change Sales 405.65 402.04 0.9 Operating profit 191.36 202.05 -5.3 Net Profit 97.54 102.27 -4.6 Its total revenue in the first three months of 2025 increased by 0.9% year on year on higher sales volumes for gas and refined and chemical products, as well as higher traded volumes of crude oil, the company said in a filing on the Saudi bourse on 11 May. Aramco’s average realized crude oil prices in Q1 2025 stood at $76.3/bbl, down from $83.0/bbl in the same period last year. “Global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty impacting oil prices,” Aramco president & CEO Amin Nasser said in a statement. Saudi Aramco’s Q1 capital expenditures of $12.5 billion “support long-term strategic growth”. New oil and gas discoveries in Saudi Arabia, which is the world’s biggest exporter of crude oil, “reflects sustained advantage in exploration”, the company said. In February 2025, Aramco entered a definitive to acquire 25% equity stake in Unioil Petroleum Philippines to support strategic growth in downstream value chain. In the following month, Aramco completed acquisition of 50% equity interest in Blue Hydrogen Industrial Gases Co aims to capitalize on emerging opportunities for lower-carbon energy. ($1 = SR3.75) Thumbnail image: A view of Shaybah oilfield in Rub Al-Khali, Saudi Arabia – 17 December 2018 (By VALDRIN XHEMAJ/EPA-EFE/Shutterstock)

SINGAPORE (ICIS)–China is turning to hydrogen as a potential lever in efforts to decarbonize its aluminium industry, as regulators tighten emissions rules, and global buyers demand greener materials. While still in early stages of deployment, hydrogen is gaining attention for its possible role in high-temperature heating, increasing renewables in grid, and emissions reduction. The move aligns with China’s broader ambition to peak carbon emissions in the aluminium sector by 2025 and support global net-zero targets by 2050, as set by the International Aluminium Institute (IAI). Carbon market expansion enhances hydrogen’s value in aluminium Early adoption may offer global market edge Significant potential, but barriers remain In March 2025, China’s Ministry of Ecology and Environment expanded the national carbon trading market to include aluminium, steel, and cement – raising market coverage from 40% to more than 60% of national emissions. This inclusion means aluminium producers will face growing pressure to curb emissions or bear rising compliance costs. The High-Quality Development Plan for the Aluminium Industry (2025–2027), recently released by the Chinese government, makes clean energy substitution a policy priority. The strategy encourages increased use of renewable electricity and pilot applications of hydrogen in key production processes. EMISSIONS PROFILE HIGHLIGHTS DECARBONIZATION URGENCY China’s aluminium sector is responsible for 85% of emissions in the country’s nonferrous metals industry. In 2023, aluminium-related emissions hit 530 million tonnes, including 420 million tonnes from electrolytic smelting, according to the China Nonferrous Metals Industry Association. In 2024, the country produced roughly 43.7 million tonnes of electrolytic aluminium, around 60% of global output. In 2023, China produced about 41.59 million tonnes of electrolytic aluminium, and the segment consumed over 500 billion kilowatt-hours of electricity, with each tonne of aluminium requiring at least 12,000 kWh and emitting an average of 12.7 tonnes of carbon dioxide (CO2), according to the National Bureau of Statistics, National Energy Agency and Ministry of Ecology and Environment. Most emissions are tied to primary production. Industry estimates suggest over 95% of the aluminium sector’s emissions stem from upstream processes such as mining, refining, and smelting, with energy use (electricity and heat) accounting for three-quarters of the total. Coal remains the dominant power source in China’s aluminium sector. The IAI and International Energy Agency (IEA) outline three primary decarbonization pathways: transitioning to low-carbon electricity, reducing process emissions, and boosting recycling rates. GREEN ELECTRICITY TARGETS DRIVE INFRASTRUCTURE INVESTMENT The IEA estimates the carbon intensity of aluminium’s power supply must fall by 60% by 2030. Globally, about 55% of aluminium smelters rely on captive power. In China, more than 60% of aluminum smelters owned captive coal-fired power generators by September 2023, according to Ministry of Ecology and Environment. Electricity represents 30%-40% of aluminium production costs in China, according to industry sources. With renewable energy uptake still limited and preferential electricity pricing being phased out, aluminium producers are under pressure to diversify power sources and enhance flexibility via storage. The Chinese government requires the sector to raise clean electricity use to above 30% by 2027, up from less than 25% in 2023. This is spurring investment in hydropower, wind, solar, and hydrogen storage. Shanghai Metals Market data show green electricity accounted for over 25% of smelting power in 2024. In provinces such as Yunnan, Qinghai, and Sichuan, the share exceeded 80%, while coal-dominant Xinjiang and Shandong remained low at below 5% in 2023. One pilot example is Dongfang Hope Group’s Xinjiang facility, which uses a wind-solar-hydrogen integrated system to meet 95% of its electricity demand, positioning it as a “zero-carbon aluminium” site. HYDROGEN GAINS TRACTION IN HIGH-TEMPRETURE HEATING Reducing non-electric emissions – especially from alumina refining – presents another challenge. Emerging technologies such as mechanical vapor recompression (MVR), electric calcination, and hydrogen-based burners are being tested, although large-scale deployment remains years away. Hydrogen’s high heat value and clean combustion make it a candidate to replace natural gas or coal in calcination and smelting. The IEA’s Hydrogen Review 2024 highlights multiple global trials: In Australia, Rio Tinto and Sumitomo are piloting hydrogen calcination at the Yarwun refinery with a 2.5 MW electrolyser and a retrofitted calciner with a hydrogen burner. Norway’s Hydro tested aluminum smelting fired by hydrogen and produced 225 tonnes of green aluminium at its Navarra plant in Spain, approved by electric vehicles manufacturer Irizar. Tokyo Gas and LIXIL in Japan tested hydrogen heat treatment for aluminium, finding no impact on product quality. Hydrogen-based aluminium production still carries a steep price tag – up to $5,000 per tonne versus $2,000 using conventional methods. Analysts say the economics could shift if green hydrogen costs fell below $2 per kg. In China, Aluminum Corporation of China Limited (Chalco)’s Qinghai subsidiary launched a 15% hydrogen blend in natural gas for anode calcination, cutting CO2 emissions by 370,000 tonnes annually. CARBON TRADING ADDS FINANCIAL INCENTIVE With the aluminium sector now in China’s emissions trading scheme, carbon becomes a direct item in aluminium companies’ cost structures. The government supports reducing Scope 2 emissions – those from purchased electricity – via renewable energy contracts and green certificate (REC) purchases. These instruments allow companies to offset emissions and potentially trade surplus emissions carbon allowances. China issued 80 million RECs in 2023, but aluminium producers bought less than 5%; with expanded policy incentives, this could rise to 15–20% by 2027, according to industry sources. Green hydrogen, as a quantifiable emissions reducer, may also be monetized through carbon credits. China’s aluminium decarbonization strategy depends on simultaneous progress across power substitution, process innovation, and recycling. Hydrogen is not the only solution, but it is fast becoming part of the mix. Though significant development potential for adopting hydrogen, there are still barriers ahead. High hydrogen production and logistics costs, limited infrastructure with few cost-effective delivery routes to factories, and underdeveloped technologies like hydrogen calcination will continue to limit scale-up. Still, with the carbon market expanding and global demand for green aluminium rising, for China’s aluminium companies, investing early in hydrogen may help secure a greener foothold in an increasingly climate-conscious global supply chain. Analysis by Patricia Tao Visit the Hydrogen Topic Page for more update on hydrogen