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)

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.