Recycled PET (R-PET)

COLORADO SPRINGS, Colorado (ICIS)–Chemical companies can find more ways to grow profits beyond cost cutting as they enter another year of slow economic growth in the longest downturn in years. Early in 2025, chemical companies lost faith that economic growth will be strong enough to contribute to profit growth, and that drought could extend into 2026. A five-year global chemical buyer value study conducted by the consultancy Accenture shows areas where chemical companies can wring value out of their operations that go beyond cost-cutting. The study was conducted in December 2024-February 2025. Cost cutting is not off the table. The study found that chemical companies have overestimated their customers' preferences for some products and services. MULTI-YEAR DOWNTURNThe downturn in the chemical industry started about three years ago after consumers stopped splurging on big-ticket items following the pandemic. Higher inflation caused interest rates to increased, which raised house prices and depressed demand for plastics and chemicals used in construction. Consumers moved less because they could not afford new or existing houses, so that lowered demand for durable goods like furniture and appliances. The war between Russia and Ukraine caused a surge in energy costs. In Europe energy prices never returned to levels before the conflict. Higher costs lowered demand and contributed to de-industrialization in Europe. This year, tariffs and uncertain trade policy from the US have made companies and consumers more reluctant to purchase goods and make investments. The performance of US-listed shares of chemical companies illustrates how difficult these past few years have been for the industry. The following lists Wednesday’s closing prices for the US listed companies followed by ICIS and their 52-week highs. Figures are in dollars/share. Company Price 52 Week High AdvanSix 24.81 33.00 Avient 36.06 54.68 Axalta 30.29 41.66 Braskem 3.75 7.71 Chemours 11.87 25.80 Celanese 58.19 150.31 DuPont 69.40 90.06 Dow 30.68 57.22 Eastman 80.04 114.50 HB Fuller 56.58 87.67 Huntsman 12.04 25.12 Kronos 6.73 14.37 LyondellBasell 61.12 100.46 Methanex 35.05 54.49 NewMarket 667.15 667.15 Olin 21.80 52.17 PPG 113.01 137.24 RPM 115.11 141.79 Stepan 56.53 94.77 Sherwin-Williams 357.13 400.42 Tronox 6.01 20.29 Trinseo 3.39 7.05 Westlake 80.19 156.64 For now, a recession is not in the outlook, but neither is a strong recovery. ICIS expects that US economic growth will slow to 1.5% in 2025 from 2.8% in 2024. Growth in 2026 could be 1.7%. The country has a 34% chance of slipping into a recession in the next 12 months. HOW TO GROW IN A SLOW GROWTH WORLDChemical companies don't have to wait for the recovery to increase profits, according to the chemical buyer study from Accenture. It found that 36% of chemical customers are willing to pay 5% or more above market price if their needs are fully met, and 43% are willing to buy 10% or more if all of their product and service needs are met, the study said. Chemical companies can increase revenue if they know where to look. The following table shows the top 10 customer needs for 2025, according to the Accenture study. Product Performance Reliable Delivery Quality Technical Support Product Consistency Data Privacy & Cybersecurity Secure & Seamless Transactions Trust Product Innovation Brand Strength Product Offerings Source: Accenture Making high-quality molecules will always be a priority, but chemical companies can do a better job of meeting their customers' needs by targeting services, Accenture said. Many underestimated needs cited by customers centered around services. The following table lists the top 10 services valued by chemical customers. Reliable delivery Quality technical support Data privacy and cybersecurity Secure and seamless transactions 24/7 access Order flexibility Complaint resolution Easy access to product info. & regulatory support E-commerce Comprehensive product support & expert guidance Source: Accenture New technologies are opening more opportunities for chemical companies to stand out by improving their services. Accenture mentioned the following: AI-based transport management solutions E-commerce platforms for seamless transactions Web portals and large language model-supported platforms for 24/7 access. CUSTOMER NEEDS HAVE EVOLVED SINCE 2020Chemical companies can extract more value by updating their priorities to keep up with the changing demands from their customers. The following table lists the top five needs that customers are underestimated by chemical companies. It compares those needs with Accenture's list from 2020. 2025 2020 24/7 access Packaging customization Reliable delivery Reliable delivery Product consistency Water conservation Environmental health & safety compliance Complaint resolution Product innovation Digital interfaces & experiences/chatbots Source: Accenture HOW TO CUT THE RIGHT COSTSCompanies may still have some fat they can cut, based on the Accenture study. It showed a gap between what customers want and what chemical companies think they want. The following lists the top five overestimated needs by chemical companies in 2025 and compares them with those in 2020. 2025 2020 Renewable-based products Value-added services Market intelligence Product consistency Product customization Quality technical support Value-added services Product sampling/trails Local/regional supply source Recyclable products Source: Accenture Renewable-based products, which also covers recycled materials, can demand a premium, but it may fall short of what producers need to generate a profit. While 74% of chemical customers are willing to pay more for sustainable products, only 38% are willing to pay a premium of more than 5%, according to Accenture. Only 13% are willing to pay a premium of at least 15%. That is short of the premium of 20% that is likely to be needed to produce sustainable products. HOW CAN CHEMICAL COMPANIES GET ON THE SAME PAGE AS THEIR CUSTOMERSChemical companies have a tendency to focus on innovation even when it does not align with their customers' needs, because that is the nature of a science-based industry, said Denise Dignam, CEO of Chemours, a US-based producer of pigment and fluoromaterials. She spoke on a panel that discussed the findings of Accenture's study during the annual meeting held by the American Chemistry Council (ACC). “We are scientists. We like innovation," she said. Chemical companies need to be mindful that customers value mundane but critical services like supply chain logistics. One strategy to keep customer needs front and center is to rely on front-line sales people, said Alastair Port, executive president of Indorama Ventures: Indovinya. Port cautioned against relying too heavily on point-of-time surveys. Someone who fills out those surveys is providing feedback that is tied to one moment in time. It does not encompass overall satisfaction with the company's products and services. Ed Sparks, CEO of catalyst producer WR Grace, said technical resources and sales people are the best resources for gauging the actual needs of customers. Their collect data from their interactions with customers, convert it into information that can then become market intelligence. Companies that produce commodity chemicals can find ways to stand out even when their products vary little from their competitors, Port said. Buyers of commodity chemicals vary greatly in size. Smaller ones may not have innovation departments or elaborate purchasing departments. Commodity chemical producers can tailor their services to match the needs of their varied customers. Chemical producers can replicate molecules, but they cannot replicate service, Sparks said. WR Grace's refining catalyst business has a prominent service component, under which the company helps refiners optimize their operations. “That service component is really hard to replicate,” Sparks said. The ACC Annual Meeting ended on 4 June. Insight article by Al Greenwood Thumbnail shows money. Image by ICIS.

12-Jun-2025

HOUSTON (ICIS)–Arrivals of container ships fell in May at the US West Coast ports of Los Angeles (LA) and Long Beach (LB) amid a trade war between the US and China but has shown a slight uptick in June while the two nations continue to negotiate a trade deal. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said the ports of LA/LB, said May container ship arrivals were at 5.0/day, slightly below the 5.7/day that was the average prior to the pandemic. Through the first five days of June, arrivals are at 5.6/day, which is still slightly below the pre-pandemic norm. Import cargo at the nation’s major container ports is expected to surge in the near term amid a pause in reciprocal tariffs between the US and China, according to the Global Port Tracker report released today by the National Retail Federation (NRF) and Hackett Associates as shown in the following chart. NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said this is the busiest time of the year for US retailers as they enter the back-to-school season and prepare for the fall-winter holiday season. “Retailers had paused their purchases and imports previously because of the significantly high tariffs,” Gold said. “They are now looking to get those orders and cargo moving in order to bring as much merchandise into the country as they can before the reciprocal tariff and additional China tariff pauses end in July and August.” Gold said many retailers suspended or canceled orders after US President Donald Trump announced a 145% tariff on China in April but have resumed imports after tariffs were reduced to 30% and a 90-day pause that will last until 12 August was announced. The higher reciprocal tariffs on other nations have also been paused until 9 July as the administration negotiates with those countries. ASIA-US RATES SURGE Rates for shipping containers from Asia to the US have spiked over the past couple of weeks – and have almost doubled over the past four weeks – as demand has surged ahead of the possible reinstatement of tariffs while capacity remains tight. Rates from supply chain advisors showed drastic increases over the past two weeks, and weekly rates from online freight shipping marketplace and platform provider Freightos came out today with Asia-USWC rates at $5,488/FEU (40-foot equivalent unit) and at $6,410/FEU to the East Coast. 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. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page Thumbnail image shows a container ship. Photo by Shutterstock

10-Jun-2025

LONDON (ICIS)–Recent revisions of recycled content targets from major brands have led to questions about just how committed companies are to reducing their consumption of virgin plastic. But what are the underlying issues behind such decision? In this third episode of Sustainably Speaking, ICIS senior executive, business solutions group John Richardson is joined by Mark Victory and Matt Tudball, senior editors for recycling Europe, and Helen McGeough, global analyst team lead for plastic recycling at ICIS, to dive deeper into this topic. Key topics in the discussion include: Revised down recycled content targets do not mean lower recyclate demand The impact on current and future investment decisions for both mechanical and chemical recycling The importance of improving access to good-quality feedstocks The role of consumers and consumer pressure Spreads between packaging and non-packaging grades remain high, particularly for recycled polyolefins The impact of regulation on the US and European markets

10-Jun-2025

SAO PAULO (ICIS)–Mexico is well-positioned to benefit from the global trade reorganization started by the US as it takes a stronger stance against China and replicate the resounding success of the 1990s, when the first North America free trade agreement (FTA) NAFTA was signed, the president of the country’s chemicals trade group ANIQ said. José Carlos Pons, who is also the CFO at Mexican chemicals producer Alpek, said Mexico, the wider North America and the world at large still face some persistent Chinese overcapacity of industrial goods which are flooding markets, but said North America together would face that threat in a better position. Pons has just started his tenure as ANIQ president at a time when the trade group is navigating shifts in trade policies as well as domestic issues such as the potential for – or lack of – nearshoring as well as policy issues in which companies fully disagree with the left-leaning government of Claudia Sheinbaum. Pons did not want to enter into much detail about the latter, however, because as he explained in the first part of this interview, ANIQ’s lobbying strategy is to now go “hand in hand” with the government. According to him, Sheinbaum is honestly trying to fix the beleaguered, state-owned energy major Pemex, which would at the same time greatly help chemicals raw material supply reliability. NAFTA, USMCA, SOMETHING ELSE? Soon after taking office in January, US President Donald Trump imposed hefty import tariffs on Mexico and Canada because, he said, the two countries should do more on migration and fentanyl trade – a powerful drug which has caused havoc across the US. However, when the tariffs were about to kick off, the US announced it was pausing them for one month. It was a timely decision for Mexico: the country is almost completely dependent on the fate of the US economy, as it exports around 80% of its output north of the border. That dependance is what makes Corporate Mexico wary of even contemplating a break-up of the now called USMCA FTA, the successor to NAFTA which Trump negotiated during his first term. Pons is optimistic in all fronts – home front and external front – as a relatively young executive who arrives to the helm of ANIQ in some of the most challenging times for Mexico in the past three decades. "I do feel on the side of the optimists. All this issue of tariffs and economic reorganization of imports and exports in the world – if the US plays a strong role against Asia, as I believe it will end up playing, then what can happen is that Mexico is super well-positioned for greater investments," said Pons. “Mexico has natural advantages in serving the US market. Today in many of the industries we are a very relevant supplier to the US. We are connected by pipeline, so to speak, to the US. When there is a competitive supply that Mexico has, Mexico remains the most convenient place to source for the US – it is next door.” It has been widely reported that USMCA renegotiations, for which the deadline is 2026, are in full swing and both officials from Mexico and Canada have recently said they are hopeful USMCA will be renegotiated and revived, ultimately making North America stronger versus other big economies. "I think that commercial logic and economic logic will prevail. Trump, if he understands anything very well, it is economic logic and from that point of view I believe that the logic of Canada-US-Mexico integration will stand out. The last renewal of the free trade agreement was positive in general, with no major changes," said Pons. "In fact, I think we put some order on some of the issues, some of them affecting chemicals, so from that point of view it has been favorable for us. We are understandably focused on the short-term news, but if we take a slightly longer-term view, I think it [current renegotiations] can end up benefitting the region.” Following on with the soft lobbying ANIQ is deploying, he praised the cabinet for keeping a cold head before adversity and having gone through momentous crisis points relatively unscathed. Moreover, Sheinbaum’s popularity ratings are almost unheard of in democracies: around 80% of Mexicans have a positive view of her. “I perceive a Mexican government that is calm, serene, looking more at the long term than the short term, not reacting hastily to attacks, as if taking certain pauses. If you remember, after some tariffs were imposed on Mexico in February, Sheinbaum said the Mexican government would 'answer in a week' – they purposefully wanted to give space for conversations to happen,” said Pons. "I think it has been handled well, it has been handled with composure and I think that is just what is needed." When pressed about domestic policy issues including a judicial reform which has sparked fears among most experts in Mexico and abroad, because it could weaken the rule of law rather than strengthen it, Pons was cautious but conceded companies are concerned: without legal certainty, investments come harder. "One of the important work areas is legal certainty and we are worried as an industry about the change that could occur to legal certainty with this change," he said. "I think we have to understand exactly the implications of this judicial reform, of the new judges we are going to have." CHINA FORMIDABLE RISEOn Chinese competition, which has hit chemicals hard as there is oversupply for the main petrochemicals and polymers, Pons did say the scale of overcapacity affecting global markets is huge, unheard of, and conceded there are still many question marks surrounding how this will end – and when. "We have seen that in practically all sectors there is excess capacity. China has been very aggressive. For instance, take polyester textile fibers as an example – if today the whole world closed its production capacity and China maintained its capacity, there would still be 30% excess capacity," said Pons. He mentioned polyethylene terephthalate (PET), which happens to be one of the main products which Alpek manufactures and he oversees as CFO. "It is no surprise that most countries already have trade protections against China. For example, in one of the businesses I participate in at the company, PET has a 105% antidumping duty [ADD] in the US against China. Mexico just decreed an antidumping duty against PET as well. So, it is very clear that all governments understood that there is an intention that is not commercial, not fair trade, which is what we seek as an industry." Pons did not think the West at large – or, more specifically, market, democratic economies – had been caught off-guard by the rapid ascent of China in the industrial goods global league. "In fact, what much of the industry I represent has been doing is improving its competitiveness. There are many investments going on. Mexico's companies are investing $1.5 billion in maintenance and competitiveness. "All those projects and millions of dollars are focused on improving and putting us on par in competitiveness against the Chinese," said Pons. The first part of this interview was published on 6 June on ICIS news, under the headline "Mexico’s Pemex turnaround key to unlock $50 billion chemicals investments – ANIQ". Click here to read it.  Front page picture: Facilities operated by Mexico's polyethylene (PE) producer Braskem Idesa  Source: ICIS Interview article by Jonathan Lopez

09-Jun-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 June. Europe HDPE spot dragged sub-€1,000/tonne by US offers as US Q1 imports ride highSpot prices for high-density polyethylene (HDPE) in Europe have fallen below €1,000/tonne as local buyers receive highly discounted US offers against a backdrop of high imports from the US in the first quarter of 2025 and gaping spreads between the regions. Higher tariffs on Russia embolden European producers to lift nitrate pricesEmboldened by the European Parliament’s decision to go ahead with higher import duties on Russian fertilizers, nitrate producers in Europe have raised prices despite strong objections from the farming community. Europe pharmaceutical IPA slightly softer, stable demand despite peak seasonEuropean spot pricing for premium pharmaceutical grade isopropanol (IPA) has softened slightly, while prices for technical and cosmetic grades are stable amid steady conditions. European paraxylene contract price for April, May settles following contentious negotiationsEurope paraxylene (PX) contracts for April and May have been finalized in a double settlement. LyondellBasell enters exclusive talks for Europe asset divestmentsLyondellBasell has entered into exclusive talks with an industrial investor for the sale of four European production sites, slightly over a year after launching a review of its asset base in the region. Asia-Europe shipping prices jump on US-China trading windowContainer prices for Asia cargoes to Europe jumped sharply week on week amid a general surge in freight costs as players look to lock down shipments from China to the US during the pause in reciprocal tariffs between the countries. Limited demand for Europe PET mitigates impact of higher freight ratesDemand for European polyethylene terephthalate (PET) has been blighted by poor weather conditions, economic apathy and significant import arrivals. LyondellBasell Europe divestment assets had lost money for years – CEOThe assets LyondellBasell has entered exclusive talks to sell to private equity investor AEQUITA had been cash negative on average to the company over the last five years, with CEO Peter Vanacker welcoming a “clean exit” from the businesses.

09-Jun-2025

SINGAPORE (ICIS)–Tariff concerns and ample supply continue to exert pressure on petrochemical markets in both Asia and the Middle East, with regional demand staying weak, with consumption in India unlikely to pick up until September. Aromatics trade flows shift amid tariff uncertainty Monsoon season weighs on India demand GCC producers upbeat on Syria AROMATICS UNDER PRESSURE AMID TARIFFS In the aromatics market, supply is expected to be tight as increased tariff uncertainties continue `to disrupt traditional trade flows. Mixed xylene (MX) and downstream paraxylene (PX) were in steep backwardation, where in spot prices are higher than futures prices, amid freight constraints and high US demand. Benzene, which closely tracks falling crude prices, continued to underperform its aromatics peers. Benzene from South Korea has not been flowing into the US and were mostly going into China, market sources said. South Korea is a major exporter of aromatics products. Its overall petrochemical shipments in May declined by 20.8% year on year, weighed down by sharp falls in upstream crude prices. For solvent grade mixed xylenes, South Korea exported last month an estimated 50,696 tonnes, of which around 27% was destined for the US, according to ICIS data on 2 June. Strong exports to the US coincide with the start of the summer driving season in the northern hemisphere, when demand for octane boosters like MX and toluene, which goes into gasoline blending, picks up. This strong US gasoline demand expectation is supporting the supply tightness, despite weaker downstream activity in China. Asia’s aromatics tightness is likely to persist through June-August, as market participants adapt to tariff policies and freight cost pressures from front-loading following a trade war truce between the US and China. The US’ 90-day suspension on “reciprocal” tariffs on most countries except China ends on 9 July. A potential escalation of the US-China trade war after the 90-day truce could intensify uncertainties, though a resolution might stabilize flows by late Q3. For shipping, market players are expecting freight rates to start to drop again in July-August. MONSOON ONSET DEPRESSES INDIA PLASTICS DEMAND Prices for plastics in India are under pressure from the monsoon season, as well as more supply coming from China, market sources said. This year’s monsoon season, which typically runs from June-September, arrived eight days early and is projected to bring above-average rainfall, said the India Meteorological Department (IMD) on 24 May. During India’s monsoon period, manufacturing activity tends to moderate, especially the packaging sector as well as the food and beverage sector, weakening end-product demand. Concurrently, domestic supply is ample, pushing down prices for Indian polyethylene (PE), polypropylene (PP), high-density polyethylene (HDPE) and low-density polyethylene (LDPE). But post-monsoon season from September, demand is likely to pick up as agriculture and construction sector activity rises and the harvesting season commences. The festive season, which includes the Diwali (Hindu Festival of Lights) running from 18-23 October, is likely to increase demand for end-products such as plastics, hence, boost production leading to the holiday. Demand for chemicals such as PE, PP and PVC and synthetic rubbers is expected to improve after September. India’s strong domestic consumption would shield it from the US-China tariff war, whose impact on the south Asian nation’s petrochemical trades is mostly on sentiment and not on actual demand. China, however, has tried to push more material to India with cut prices amid the US-China trade war, as domestic demand in the world’s second-largest economy remained weak. The country is already redirecting PE and PP to Africa and India to offset reduced US access. But this offsetting has eased temporarily due to freight costs more than doubling in recent weeks. GCC SEES RENEWED OPPORTUNITY IN SYRIA In the Middle East, Syria is opening up following a regime change and the consequent lifting of sanctions by both the US and EU. A cargo of wheat arrived at the Syrian port of Tartous for the first time in around 11 years, according to news reports. The opening of Syria’s market – after years of civil war and international sanctions – bodes well for GCC petrochemical producers. The GCC bloc consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Suppliers are looking to increase their trades with Syria, as converters in the country begin running their plants at higher rates, with the possibility of new plants to be built. On 29 May, the Syrian government inked a $7 billion strategic Memorandum of Understanding (MoU) with a consortium of companies led by Qatar’s UCC Holding to develop power generation projects. More such agreements, particularly as trade increases, could pave the way for increased demand in the country for chemicals and chemical products, after civil war disrupted life in Syria since 2011. Focus article by Jonathan Yee Additional reporting by Aswin Kondapally, Nadim Salamoun, Jasmine Khoo, Samuel Wong, Melanie Wee, and Angeline Soh. Thumbnail image: At Qingdao Port in east China's Shandong Province, 4 June 2025. (Shutterstock)

09-Jun-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 June. China factory output contracts anew despite US-China tariff pause By Jonathan Yee 02-Jun-25 14:34 SINGAPORE (ICIS)–China’s official manufacturing purchasing managers’ index (PMI) in May remained below the expansion threshold of 50.0 but was up from the previous month amid a pause in the US-China tariff war. INSIGHT: Will feedstock optimization be enough to survive Asia C2 oversupply? By Josh Quah 03-Jun-25 12:00 SINGAPORE (ICIS)–Investing into feedstock slate projects is one survival strategy gaining steam among players – and was still very much in the conversations on the side lines of the APIC 2025 conference. S Korea faces economic crossroads as it heads to polls amid political turmoil, tariffs By Jonathan Yee 03-Jun-25 15:25 SINGAPORE (ICIS)–South Korea is at a crossroads as it heads to the polls on Tuesday, six months after ex-President Yoon Suk Yeol’s martial law declaration led to his removal from office, resulting in political turmoil that has been compounded by trade uncertainties and the tariffs imposed by the US on most of the world. INSIGHT: Asian manufacturing stutters in May as tariff headwinds continue By Nurluqman Suratman 04-Jun-25 11:00 SINGAPORE (ICIS)–Asia's factories largely remained under pressure in May, as subdued global demand and persistent uncertainty surrounding US trade policies continued to bite, according to the latest purchasing managers' index (PMI) data. S Korea final Q1 GDP shrinks 0.2% on quarter amid US tariffs By Jonathan Yee 05-Jun-25 12:40 SINGAPORE (ICIS)–South Korea’s revised real GDP shrank by 0.2% on-quarter, unchanged from advanced estimates in April, the first on-quarter contraction in nine months, central bank data showed on Thursday. China ethane crackers face feedstock challenge as US restricts supply By Fanny Zhang 05-Jun-25 16:43 SINGAPORE (ICIS)–Operations at China’s ethane crackers that rely solely on US supply will likely be disrupted, at least in the short term, as the US restricts exports of the feedstock gas. INSIGHT: Faced with intensifying ADDs, Asia’s PET producers mull options to stay in the industry By Judith Wang 06-Jun-25 10:00 SINGAPORE (ICIS)–Facing intensifying anti-dumping duties (ADDs) in key markets, Asian polyethylene terephthalate (PET) producers are having to find ways beyond simply slashing offers to stay in the business. Malaysia's PETRONAS to cut 5,000 jobs by yearend By Nurluqman Suratman 06-Jun-25 11:10 SINGAPORE (ICIS)–Malaysian state energy giant PETRONAS is shedding 10% of its workforce by the end of the year to navigate challenging operating conditions, primarily driven by falling crude prices. Mideast polyols to face pressure post-Eid amid softer costs, demand By Isaac Tan 06-Jun-25 14:52 SINGAPORE (ICIS)–Middle Eastern import prices for polyether polyols are likely to remain under pressure after the Muslim festival of Eid ul-Adha, weighed down by weaker feedstock costs in China and seasonally subdued downstream demand.

09-Jun-2025

SAO PAULO (ICIS)–Mexico’s chemicals sector is ready to potentially invest $50 billion in the next decade if key challenges are addressed, including performance at state-owned energy major Pemex, according to the president of trade group ANIQ. Jose Carlos Pons, who is also the CFO of Mexican chemicals producer Alpek, said ANIQ is in constant contact with the Mexican government about potential projects private companies and Pemex could jointly implement, some of them related Pemex assets in petrochemicals which are idled or running at low capacities. Pons, who was appointed ANIQ's president in May, said that the $50 billion in investments would mean the chemicals industry could double its contribution to GDP from 2% to 4.5%. He said ANIQ is in contact with the ministries of energy and economy (Secretaria de Energia and Secretaria de Economia, respectively) about these plans. The two ministries, as well as Pemex, had not responded to a request for comment at the time of writing. IT IS (ALMOST) ALL ABOUT PEMEX Pemex, which is the largest and key supplier of raw materials to the Mexican chemicals industry, has for years suffered performance problems, with output dwindling below 2 million barrels/day, despite targets to surpass that threshold, and having become the most indebted oil major with obligations of around $100 billion. However, ANIQ puts many hopes in the new administration under Claudia Sheinbaum and in what it sees as an honest intention to turn around Pemex, adding that the trade group wants to go “hand in hand” with the government to spur the investments in petrochemicals. The cabinet has announced plans to cut costs at the major as well as petrochemicals and fertilizers expansions at the company. However, potential and ambitious investment plans – both from Pemex itself and private companies – hinge on several critical factors. “If we were able to turn Pemex around, by improving its supply of key raw materials; if we were able to work on the energy side and achieve competitiveness; if we were able to create the infrastructure so that we wouldn't depend so much on imports; and if we simplified our country's administration, then there could undoubtedly be that potential [of $50 billion chemicals investments],” said Pons. Out of those $50 billion, Pons said that around two-thirds would go primarily to maintenance investments to improve Pemex's petrochemicals operational capacity. "Today, we have a great opportunity for Pemex to operate its plants at greater capacity, and the way to achieve that goal would be to give the plants operational reliability. Ensuring that the different parts of each of the plants have operational reliability will ultimately increase the output of those plants," she said. "Pemex has now an interesting opportunity. Throughout all the areas where it operates, without a doubt, this administration and the previous one have dedicated resources to turning it around. It's very important to us that they're doing this." Efforts to turn around Pemex, however, have so far failed. The previous administration by Andres Manuel Lopez Obrador started its tenure with a target for output to surpass 2 million barrels/day target, which it finally ditched. Some analysts have said Pemex’s woes are too deep and make the company’s survival very difficult. Others, however, think the major is ‘too big to fail’, and therefore will continue to be bailed out by the Treasury as it has been the case for years. "Pemex is very important to us, so we don’t even want to consider a Pemex that fails. Today, it provides us with gas, with many raw materials. The situation is complex, and the fact that it is among the priorities reflects the government's intentions. But these huge titans take time, but with the right investments and decisions [it can happen],” said Pons. “That's why we want to work hand in hand with the government. The project is so large that we all need to get involved. What we want is to tell them and indicate what we think the priorities are and where we want to help them." Pons said ANIQ has established working groups with both the Ministry of Energy and Ministry of Economy to advance these objectives, with regular conversations. "We want to understand in greater detail what the government's expectations are and under what conditions they are expecting them to happen,” said Pons. “Without a doubt, for the private sector to invest, there must be a certain economic logic, whether it's guaranteed supply contracts with priority or a preferential price, so that the investment is paid for." There would also be other, country-wide challenges to be addressed, however. Pons mentioned for the chemicals investment plans to succeed there would be a need to improve other key energy supplies such as electricity, water and natural gas. And yet another added challenge for Mexico: infrastructure. Pons mentioned ANIQ is optimistic about the government’s Plan Mexico, ambitious measures touching nearly all aspects of the economy with the target of putting Mexico among the world’s 10 largest economies. It is now considered to be placed between the 12th and 15th world economic ranking – depending on source and its methodology to calculate GDP. FRIENDLY LOBBYINGPons was pressed about the rather friendly lobbing ANIQ is currently exercising when it comes to the policies of Sheinbaum, who has implemented reforms ‘Corporate Mexico’ is not happy about, such as a judicial reform which has raised alarm bells about the damage it could cause to the state of law, therefore to corporate law. But he would not expand much about those issues, because he said ANIQ is right now focused on helping bring about the abovementioned investment plans, and the trade group has opted for that tone rather the festy lobbying tone other trade groups can use. “What we want most is to work together with the government. What I truly want in my tenure as president is very important to me: for the government to understand that we must work together and that we believe Plan Mexico is truly something important,” said Pons. “So, rather than creating an enemy in the government, what I want to work on is to work hand in hand with them and for them to understand that this won't work if we don't work together. We'll do it when necessary [a more robust lobbying], but right now what I want most is to reach out to the government, for them to understand that we're going to work together.” ICIS will publish on Monday (9 June) the second part of this interview, with ANIQ president's take on the US shift in trade policy and the role of China in the global economy Front page picture: Facilities operated by Mexico's polyethylene (PE) producer Braskem Idesa  Source: ICIS Interview article by Jonathan Lopez

06-Jun-2025

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US spiked again this week – and have almost doubled over the past four weeks – as demand has surged ahead of the possible reinstatement of tariffs while capacity remains tight. Supply chain advisors Drewry said the latest sudden, short-term strengthening in supply-demand balance in global container shipping has reversed the trend of declining rates which had started in January. Rates from Shanghai to Los Angeles spiked by 57% this week while rates from Shanghai to New York jumped by 39%, according to Drewry and as shown in the following chart. The drastic increases are seen from other shipping analysts as well. On the Shanghai Containerized Freight Index (SCFI), the Shanghai-USWC rate rose by 58% to $5,172/FEU (40-foot equivalent unit), the largest week-on-week percentage gain since 2016 as strong demand has coincided with tight supply, though capacity is increasing as carriers resume previously suspended services and reinstate blank sailings. Sea-Intelligence CEO Alan Murphy said almost 400,000 TEUs (20-foot equivalent units) are coming back online in the near term. “If we aggregate it across June/July for Asia-USWC, then in June, the lines are increasing capacity 12.8% compared to before the tariff pause, and in July, the capacity injection is increasing to 16.5% compared to the pre-pause situation,” Murphy said. “Capacity has also ramped up sharply compared to just a week ago, with this injection of capacity equaling 397,000 TEU across the two months.” The growth in capacity is shown in the following chart from Sea-Intelligence. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said the spike is likely because shippers are so concerned about getting goods moving during the 90-day window that they are willing to pay more. “Right now, it seems carriers are telling shippers to jump, and some are replying ‘how high?’,” Sand said. “This will not last because capacity is heading back to the transpacific and the desperation of shippers to get supply chains moving again will ease once boxes are on the water and inventories begin to build up,” Sand said. “Spot rates are expected to peak in June before downward pressure returns.” Rates from online freight shipping marketplace and platform provider Freightos have yet to capture the dramatic increase, but Judah Levine, head of research at the company, said 1 June general rate increases (GRIs) are starting to push daily prices up sharply. “Rates have spiked 72% to the West Coast since last week to $4,765/FEU and 44% to the East Coast to $5,721/FEU, with more increases likely and additional hikes announced for mid-month,” Levine said. Analysts at US logistics platform provider Flexport said they expect a further rush of cargo from southeast Asia to the US West Coast toward the end of June. Flexport analysts expect carriers to be back to full capacity on the transpacific eastbound trade lane by the end of June, noting that week 23 capacity is 11% below standard levels but is expected to exceed standard levels by 3% by week 25. 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. LIQUID TANKER RATES US chemical tanker freight rates assessed by ICIS were mostly unchanged. However, rates decreased from the US Gulf to Europe. The USG to Rotterdam route is overall steady as weaker demand is being offset by limited availability, particularly for larger parcels. Larger requirements are well represented, with several larger lots of methanol, methyl tertiary butyl ether (MTBE) and caustic soda fixed or indicated to the ARA. There was also some interest in sending some smaller lots of glycols and styrene. From the USG to Asia, the uptick in interest to rush glycols to beat the deadline to China seems to have all but ended as the market saw only a few new inquiries. On the other hand, several larger parcels of methanol were either fixed or quoted to the region. As contract of affreightment (COA) volumes are being firmed, and due to the absence of market participants, freight rates have eased some, with more downward pressure on smaller parcels. On the USG to Brazil trade lane, the market has been steady, leading rates to remain unchanged week on week. There was a stable level of spot activity with only a handful of new requirements. Overall, the market remains slow despite several cargoes being quoted and fixed. Despite the uptick in inquiries there is not enough significant activity that would suggest any increase in demand, with caustic soda, glycols and styrene the most active. The regular owners have space remaining and are trying to fill space while supporting current freight levels. Activity typically picks up during summer months, but this is not currently being seen. As a result, freight rates are now expected to remain steady for the time being. Focus story by Adam Yanelli Additional reporting by Kevin Callahan Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Logistics: Impact on chemicals and energy topic page

05-Jun-2025

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Majority of June deals heard so far rollover from May UK flake talks on going Some signs of lower interest for colourless flake EU Commission's DG Environment confirms only EU-origin waste currently suitable for Single Use Plastics Directive 25% target

05-Jun-2025