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)

LONDON (ICIS)–UK manufacturers hit a two-and-a-half year high in cost inflation in April, as output, new orders and employment all fell. The UK Purchasing Managers’ Index (PMI) was pitched at 45.4 points in April, up from the 17-month low of 44.9 in March showing that the rate of decline softened on the previous month. A reading 50.0 points indicates contraction. “Manufacturers are also seeing an increasingly harsh cost environment, with purchase price inflation hitting a 28-month high, ”  Rob Dobson, Director at S&P Global Market Intelligence  said in the report published 1 May. Market sentiment is bearish on the prospect of US tariffs sending the global economy into disarray, causing a drop in intake of new work from domestic and international markets. New export orders fell at the quickest pace in almost five years on falling demand from the US, Europe, and mainland China. A drop in confidence was seen for business-to-business clients and end consumers. Business optimism for the coming twelve months dropped to a 29-month low, with only 47% of companies surveyed expecting a rise in output because of rising costs, lower staffing rates and stock levels. Job losses continued to fall for the sixth month in a row, and the second sharpest rate in five years (beaten only by February 2025). Despite poor demand, average lead times increased for the sixteenth straight month due to supply chain pressures including freight delays, as well as supplier constraints with low stock or staffing.

HOUSTON (ICIS)–Container ship arrivals at the port of Los Angeles are expected to fall by 35% next week when compared with the same week a year ago, the executive director of the port said. Gene Seroka, executive director of the Port of Los Angeles, said cargo from China makes up 45% of volumes through the port annually. “This is a precipitous drop in volumes with a number of American retailers stopping all shipments from China based on the tariffs,” Seroka said in an interview on CNBC. The expected slowdown comes after nine months of year-on-year increases in volumes as Chinese exporters accelerated shipments to circumvent the tariffs, and US retailers pulled volumes forward for the same reason. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers – such as polyethylene (PE) and polypropylene (PP) – are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. Seroka said he anticipates the fall in volumes to persist until a trade agreement is reached between China and the US. “Until some accord or framework is reached with China, the volumes coming out of there – save a couple of different commodities – will be very light at best,” Seroka said. Seroka thinks US retailers have about five to seven weeks of inventory, and that manufacturers likely also pulled forward components so there could be a delay before consumers notice any shortfalls. Rates for shipping containers from China have been relatively stable over the past six weeks despite the decrease in volumes. Over the past week, rates from southeast Asia and Vietnam rose above rates from China as the trade war contributes to shifting trade patterns. Shipowners have dramatically increased blank sailings amid efforts to support rates or at least stop the slide. Rates from Shanghai to New York have fallen by 49%, and rates from Shanghai to Los Angeles have fallen by 52% from the most recent highs in September, according to supply chain advisors Drewry and as shown in the following chart. Market intelligence group Linerlytica said ocean carrier Zim has withdrawn its Central China Express line after the last departure on 10 April. The line was launched in July 2024 and called at Shanghai, Ningbo, Los Angeles, Shanghai using five ships of 4,500-5,300 TEU (20-foot equivalent units). The last sailing was made by the 5,500 TEU Mississippi that departed from Ningbo on 10 April and made its last call at Los Angeles on 24 April 2025. Zim said the withdrawal was in response to a sharp drop in Chinese exports to the US following the imposition of punitive tariffs. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

HOUSTON (ICIS)–US based paints and coatings producer PPG has so far seen no changes in order patterns from its customers, and it has maintained its full-year guidance despite the tariffs imposed by the US. PPG’s customers did not pull orders forward to the first quarter, and outside of Mexico, PPG did not see any significant changes in demand in the first quarter or in the first four months of the second quarter, said Tim Knavish, PPG CEO. He made his comments during an earnings conference call. “We have not seen evidence of any curtailment of customer orders in our business,” he said. While PPG makes paints and coatings, it sells products to many end markets that are key for many chemical products, such as automotive, marine and aerospace. PPG’s Q1 organic sales rose by 1% year on year, volumes and pricing rose, and the company gained market share from competitors. PPG shares rose by more than 4% while overall US stock markets fell. LIMITED EXPOSURE TO TARIFFSMost of PPG’s operations buy raw materials locally at a rate of more than 95%, Knavish said. This limits their exposure to tariffs. The company has yet to see any significant changes to prices for its raw materials, he added. For two commodity feedstocks, epoxy resins and titanium dioxide (TiO2), PPG already withstood disruptions because these raw materials have been subject to anti-dumping and countervailing duties. Other upstream chemical products have excess supplies, Knavish said. For now, PPG’s suppliers are favoring volumes over pricing. If suppliers begin raising prices because of tariffs, PPG will work with customers to reformulate products, substitute costly feedstock and pass through costs through surcharges and other measures. In regards to the threat posed to sales by tariffs, PPG’s customers are spread around the world, and it is not heavily reliant on one country or region, Knavish said. Unlike commodity chemical producers, PPG does not rely on a continuous manufacturing process to make its products. It is a batch manufacturer, which makes it easier to adjust production to meet demand. PPG does not expect it will have to idle any of its lines, Knavish said. PROPOSED US TARIFFS HIT PPG MEXICAN BUSINESSIn Mexico, while PPG’s store retail sales were solid, its project business weakened because of uncertainty about US trade policy. In February, the US proposed 25% tariffs on imports from Mexico, and the threat caused a slowdown in projects from companies and government, said Tim Knavish. He made his comments during an earnings conference call. That side of the Mexican business should remain soft in the second quarter, but PPG expects a recovery during the rest of the year. Many of the projects in question were already in flight, and PPG has not seen any cancellations. Moreover, the US is limiting the 25% tariffs to imports that do not comply with the trade agreement with its North American neighbors, the US-Mexico-Canada Agreement (USMCA). “We still believe Mexico remains a strong growth country for PPG,” Knavish said. AEROSPACE YEARS-LONG BACKLOGPPG’s sales to the aerospace industry are benefiting from a years-long backlog in orders caused by the COVID pandemic. This has been a long-term trend, and in addition to coatings, aerospace consumes several plastics and chemicals including synthetic hydraulic fluids and their additives, polycarbonate (PC), fibres in seating, resins in wire and cable, adhesives and electronic chemicals used in avionics. They also use composites made with epoxy resins and polyurethanes for seat cushions. PPG’s aerospace backlogs extend to commercial, general aviation, after market and military, Knavish said. Vince Morales, chief financial officer, added that geopolitical turmoil is also increasing demand from the military. EUROPE BEGINS STABILIZINGFor the first time in several months, PPG is seeing some momentum in Europe, Knavish said. Industrial production is stabilizing and better order patterns are emerging in western Europe. Governments could increase spending, and Scandinavia is showing signs of recovery after two difficult years. Even the automobile sector is stabilizing. If the stabilization trend continues and if volumes increase slightly, then the improvement should provide a meaningful boost to PPG’s earnings due to past cost cutting in Europe, Knavish said. That said, Knavish stressed that PPG is not expecting a sharp recovery in Europe. PAVEMENT COATINGS SUPPORTED BY INFRASTRUCTURE SPENDINGPPG sees no stop to government infrastructure projects, which are supporting demand for pavement coatings. Also, road crews have a backlog of projects because 2024 had a lot of rain and bad weather. Demand should remain strong through the year, Knavish said. Pavement coatings are made with methyl methacrylate (MMA). AUTOSPPG has gained market share among original equipment manufacturers in the automobile industry, and those share gains should allow the company to outperform the market, for which demand forecast are slightly down, Knavish said. PPG auto refinish business is focusing on the entire system of applying the paints and coatings, which allows it to weather inherent bumpiness in the market. Focus article by Al Greenwood Thumbnail shows paint, one of the products made by PPG. Image by Shutterstock.

LONDON (ICIS)–The European phenol and acetone market has reacted with surprise to the news that Orlen is to decommission its phenol and acetone plant in Plock, Poland, by the end of this year. “This is an unexpected change,” one player said, with another commenting, “Wow, shocking news.” The company’s press office said in a statement that the decision was taken due to technical and environmental considerations. A phenol/acetone expansion was previously being considered at the site but the company said in its recent statement that the plant, which has been in operation for nearly 60 years, “would need an extensive and costly modernization. “In addition, it would also be necessary to adapt it to demanding environmental regulations, which would generate further investment expenditure. The revenue generated from phenol and acetone would not balance the cost of the necessary investments.” A market source commented, ” Interesting news considering the current market environment,” adding, “In the end it is not profitable enough.” Another added that the closure reflects the terrible situation for phenol/acetone producers. The European phenol and acetone market is oversupplied, with producers running at reduced rates and INEOS Phenol’s unit down in Antwerp, Belgium, for two and a half years for commercial reasons. High energy costs and poor demand from key sectors such as automotive and construction are ongoing challenges for the market, as well as increasing global capacity. Demand levels are currently further suppressed by tariff uncertainty. The Plock unit produces 55,000 tonnes/year of phenol and 34,000 tonnes/year of acetone, making it the smallest unit in Europe. The closure could mean more balance in eastern regions of Europe one source suggested. A seller commented that the while the drop in overall European supply is small  “anything helps.” Additional reporting by Will Conroy

LONDON (ICIS)–Poland’s Orlen on Wednesday confirmed that it has decided to decommission its phenol and acetone unit at the group’s Plock production plant by the end of this year. “This decision was taken due to technical and environmental considerations,” Orlen’s press office said in a statement. “The continued operation of the plant, which has been in operation for nearly 60 years, would necessitate an extensive and costly modernization. In addition, it would also be necessary to adapt it to demanding environmental regulations, which would generate further investment expenditure. The revenue generated from phenol and acetone would not balance the cost of the necessary investments.” The unit’s phenol and acetone capacities are 55,000 tonnes/year and 34,000 tonnes/year, respectively. Additional reporting by Jane Gibson Thumbnail image credit Shutterstock

LONDON (ICIS)–Poland has the potential to redraw the balance of power in Central and Eastern Europe by unleashing the shackles – restrictive gas storage obligations – which prevent the Polish gas market from breathing. As some in Europe push for a resumption of Russian gas imports, Poland is forging a different course, heightening the importance for the Polish Parliament to seize the moment and pass into law the new Draft Act Amending the Act on Stocks of Crude Oil, Petroleum Products, and Natural Gas adopted by the Chancellery of the Prime Minister on 22 April 2025. Until now, Poland’s gas market has been held back by an outdated storage obligation whereby energy companies had to shoulder the burden of maintaining mandatory gas stocks. This costly rule hindered market entry. The recent amendment, transfers the responsibility for managing strategic gas reserves to the Government Agency for Strategic Reserves (RARS), which will now handle gas stocks and will “buy and sell gas… through exchanges, tenders or contracts.” This is a step toward making Poland more attractive to traders and facilitating smoother gas flows across the region. In practical terms, this will increase market liquidity, promote competition, and attract more players to the Polish market. When in 2011 the CEO of Russian producer Gazprom Alexey Miller told a room of Europeans at the St. Petersburg International Economic Forum “Get over your fear of Russian or run out gas” it was a warning that many did not heed. Following the full-scale Russian invasion of Ukraine Poland successfully weaned itself away from Russian gas. Poland chose to create itself a new reality by diversifying its supply and now has the chance, by passing the storage reform to create a functioning gas hub which could become the cornerstone of regional energy security. The Polish gas-grid operator Gaz-System worked to build interconnections with Slovakia and Lithuania, built the Baltic pipeline from Norway through Denmark, slowly increased its capacity towards Ukraine and recently completed the expansion of the Swinousjce LNG terminal which has seen a record number of deliveries year-to-date. All of this has helped Poland reduce Russian gas imports to zero. With Ukraine’s energy infrastructure under siege from Russian rockets, Poland’s role in facilitating secure gas transit to Ukraine is vital. Prime Minister Donald Tusk recently emphasized that, “By importing U.S. LNG, we make Poland and Europe independent of Russian supplies.” Adding that this cooperation could enable Poland to “secure—and not subsidize—Ukraine with gas.” To do this Poland will need to continue work on expanding capacity towards Ukraine. Ukraine’s gas incumbent Naftogaz has secured 300 million cubic meters (mcm) of US LNG supplies from Poland’s Orlen so far this year but by easing storage obligations, Poland will make it easier for smaller traders and new players to enter the market and in time to tap into Ukraine’s 32.6 billion cubic meters (bcm) storage capacity. Bureaucratic hurdles, such as securing a trading licenses and Poland’s legal obligation to diversify its imports continue to create complications for traders and these should also be addressed urgently. In the end, this reform is about more than just market efficiency, it’s about regional energy security. Poland’s gas storage reform could lead to a more competitive gas market which would benefit not only Poland but also help increase gas supplies to Ukraine as it rebuilds and recovers from the war.