Energy

Ukraine's high import needs spurs flurry of CEE gas-trading activity as more transmission corridors emerge Grid operators vie to offer attractive solutions, slashing tariffs or increasing capacity Increased CEE hub liquidity would breed further interest LONDON (ICIS)–Ukrainian gas incumbent Naftogaz has become the first company in central and eastern Europe (CEE) to use the Danish-Polish transit corridor for spot bookings to Ukraine, several traders active in the region told ICIS. Sources say there is a flurry of activity across theCEE gas market, driven primarily by high importing interest and soaring prices in Ukraine. Gas in Ukraine is trading at an estimated €9.30/MWh premium over the equivalent front-month TTF contract. A CEE trader said Naftogaz had made reservations on the Danish-Polish Baltic Pipe for a total of 1848MWh over three days to test the route, importing gas sourced on the local exchange. The Polish state incumbent Orlen holds a long-term booking for 8 billion cubic meters annually on the Baltic Pipe to Denmark. But the Danish grid operator Energinet is keen to market the remaining 2bcm/year capacity for North Sea gas or Danish VTP imports to other regional companies. A trader said the route was increasingly considered by companies due to the ease of doing business in Denmark. Anticipated lower short-term transmission tariffs in Poland and the doubling of firm export capacity from Poland to Ukraine were also cited as reasons. Last week Polish gas grid-operator Gaz-System and its Ukrainian counterpart, GTSOU announced the doubling of firm export capacity to Ukraine from six million cubic meters (mcm) daily to 11.5mcm/day from 1 July. LNG IMPORTS VIA POLAND, LITHUANIA Traders say they are also considering imports from Poland’s Swinoujscie  offshore terminal or Lithuania’s Klaipeda floating storage and regasification unit (FSRU). However, several noted that regional countries have limited market liquidity as the bulk of volumes is traded on the spot market. A source at the Klaipeda terminal told ICIS on 17 June that the company was planning to offer more regasification slots on a spot basis in upcoming months. He said that there are around 33 long-term contract unloadings each year, but operator KN Energies is planning to offer another four to five spot slots. He added  the terminal has a 30-day regasification capacity window which would fit the profile of standard monthly transmission-capacity bookings. RAPID CHANGES The CEE trader said the region was changing at a very rapid pace with grid operators vying to offer attractive solutions. Last month, transmission-system operators in south-east Europe said they would offer bundled firm export capacity from Greece to Ukraine at a discounted tariff. The first auction for Route 1 monthly bundled capacity will be held on 23 June and the five operators along the Trans-Balkan corridor will be holding a call with regional companies on 19 June to explain the new product. The CEE trader said: “We’ve seen a massive increase in firm export capacity from Poland to Ukraine. Moldova is reportedly planning to offer tariff discounts. “The Greek regulator is considering offering capacity for the superbundled capacity not only from LNG terminals but also from the VTP. Gaz-System said if Route 1 offers discounted tariffs they also may consider discounting tariffs. The southern route is more difficult from an operational point of view but it looks interesting,” the trader added.

17-Jun-2025

SINGAPORE (ICIS)–Singapore's petrochemical exports in May fell by 17.8% year on year to Singapore dollar (S$) 968 million ($756 million), weighing down on overall non-oil domestic exports (NODX), official data showed on Tuesday. The country's NODX for the month fell by 3.5% year on year to S$13.7 billion, reversing the 12.4% growth posted in April, data released by Enterprise Singapore showed. Non-electronic NODX – which includes chemicals and pharmaceuticals fell by 5.3% year on year to S$10 billion in May, reversing the 9.3% growth in April. Overall NODX to six of Singapore's top 10 trade partners declined in May 2025, with falls in shipments to the US, Thailand, and Malaysia, while those to Taiwan, Indonesia, South Korea, and Hong Kong increased. Singapore is a leading petrochemical manufacturer and exporter in southeast Asia, with more than 100 international chemical companies, including ExxonMobil and Aster Chemicals & Energy, based at its Jurong Island hub. ($1 = S$1.28)

17-Jun-2025

HOUSTON (ICIS)–Arrivals of container ships at the busy US West Coast ports of Los Angeles and Long Beach (LA/LB) are slowly returning to normal after the trade war between the US and China slowed cargo movement between the two nations, according to the Marine Exchange of Southern California (MESC). Kip Louttit, MESC executive director, said the registration process for vessels bound for LA/LB projects a slight uptick in the coming two weeks. Container ships on the way to LA/LB averaged 58.9/day in January, which fell to 47.2/day in May amid trade tensions between the US and China. The average has climbed to 51.8/day over the first 14 days of June, and 52.1/day over the past 17 days. “This is an indicator of a slight increase in ship arrivals over next 1-2 weeks,” Louttit said. Louttit said there are 17 container ships scheduled to arrive at the twin ports over the next three days, which is normal. Container ships at berth at the ports of LA/LB dipped from an average of 19.4/day in April to 15.6/day in May. The average was 12.3/day over the first six days of June but jumped to 15.1/day for all 14 days in June, with 21 at berth on Friday and 14 at berth on Saturday. Maritime information specialists at MESC said there are 49 container ships “blank sailing” that will skip Los Angeles or Long Beach through 1 August, which is two more than the previous week. Blank sailings are when an ocean carrier cancels or skips a scheduled port call or region in the middle of a fixed rotation, typically to control capacity. Peter Sand, chief analyst at ocean and freight rate analytics firm Xeneta, said capacity is returning to the transpacific trade – up 28% since mid-May – as carriers react to shippers rushing cargo during the 90-day window of lower tariffs. “This increased capacity and a slowing in the cargo rush should see a return of the downward pressure on spot rates we saw during Q1 prior to the ‘Liberation Day’ tariff announcement,” Sand said. Rates for shipping containers from east Asia and China to the US are at 10-month highs. 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), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks.

16-Jun-2025

This article reflects the personal views of the author and is not necessarily an expression of ICIS's position LONDON (ICIS)–In his latest article about Europe's position in our world of escalating military tensions and warfare director of Eurointelligence Wolfgang Munchau cited US chess player Bobby Fischer as saying: “Tactics flow from a superior position.” Munchau is positing that Europe is increasingly using 'tactics' as opposed to 'strategy'. His argument rings very true when it comes to Europe's energy policy and its stance towards Russia – the aggressor in the brutal Ukraine war that has now lasted for three years. The European Commission has recently announced the 18th sanctions package against Russia aimed at hitting its president Vladimir Putin where it hurts – energy exports – one of his main sources of income. “Russia's goal is not peace, it is to impose the rule of might. Therefore, we are ramping up pressure on Russia. Because strength is the only language that Russia will understand,” President of the European Commission Ursula von der Leyen and High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the European Commission (HR/VP) Kaja Kallas said in a joint statement on 10 June. To back up its strong words with actions the Commission is proposing a transaction ban for the sabotaged Nord Stream 1 and 2 pipelines that have been inactive since September 2022. "This means that no EU operator will be able to engage directly or indirectly in any transactions regarding the Nord Stream pipelines. There is no return to the past," the Commission's high officials said. The proposal to sanction Nord Stream 1&2 has puzzled many energy experts. "So, why is now Europe rushing to sanction these pipelines, which have not transported gas in almost three years?" asked postdoctoral fellow and energy observer Francesco Sassi. The measure is linked to EU’s Roadmap to phase out all imports of Russian energy by 2027, which it believes will help to end the war in Ukraine. “Every sanction weakens Russia's ability to fight. So, Russia wants us to believe that they can continue this war forever. This is simply not true,” Kallas said. The Commission may achieve its goal of inflicting financial pain on Putin’s war economy. But its rejection of Russian energy should be viewed in the wider context of Europe’s obsession with phasing out fossil fuels as such and its headlong pursuit of Net Zero goals and policies. Net Zero recently came under fire from the most unlikely critic – former British Prime Minister Tony Blair. “Despite the past 15 years seeing an explosion in renewable energy and despite electric vehicles becoming the fastest-growing sector of the vehicle market, with China leading the way in both, production of fossil fuels and demand for them has risen, not fallen, and is set to rise further up to 2030,” Blair said. “Leaving aside oil and gas, in 2024 China initiated construction on 95 gigawatts of new coal-fired energy, which is almost as much as the total current energy output from coal of all of Europe put together. Meanwhile, India recently announced they had reached the milestone of 1 billion tonnes of coal production in a single year,” he added. Blair concluded that any strategy based on “either “phasing out” fossil fuels in the short term or limiting consumption is a strategy doomed to fail”. In the past few years, it has become abundantly clear that European industries have been severely hurt by high energy prices to the point when they are closing down production and relocating to more industry-friendly parts of the world. When it comes to natural gas, Ukraine itself is struggling to secure adequate supplies for this winter, which is putting further upwards pressure on European hub prices and increasing Europe’s appetite for LNG, drawing cargoes away from other continents. So whose interests is the European Commission defending? And whom is it hurting the most? “We Westerners are, by our inclination, more tactical than strategic. We like to close in. That is not necessarily a bad thing, for as long as you have an underlying strategy in place,” Munchau concluded his analysis. Coming back to Bobby Fisher, what position of ‘superiority’ can Europe boast these days? If it is not an economic one, the rest is an empty moral posturing.

16-Jun-2025

MUMBAI (ICIS)–India’s DCM Shriram plans to acquire specialty chemicals producer Hindusthan Specialty Chemicals Ltd (HSCL) for Indian rupees (Rs) 3.75 billion ($44 million). “This move positions DCM Shriram for strategic expansion into the advanced materials segment, unlocking synergies with its existing chemicals portfolio,” the company said in a disclosure to the Bombay Stock Exchange (BSE) on 12 June. The acquisition of HSCL is expected to be completed by September, it added. HSCL has a facility at Jhagadia in the western Gujarat state which is located close to DCM Shriram’s existing chemicals complex. This will allow for quick integration and growth, DCM said. Apart from a 17,000 tonne/year liquid epoxy resin unit, HSCL also produces reactive diluents, hardeners, formulated resins and other products used in the aerospace, electronics, renewable energy, electric vehicles and defence sectors at the site. “This acquisition is a pivotal step in our chemicals growth strategy and a catalyst for DCM Shriram’s entry into advanced materials, which offers robust forward integration with our chlor-alkali platform, while positioning us at the intersection of India’s expanding presence in sunrise sectors like renewables, mobility, and aerospace,” DCM Shriram chairman and managing director Ajay Shriram said. DCM Shriram is a chlor-alkali producer in India with a combined production capacity of nearly 1 million tonnes/year at Jhagadia in Gujarat, and Kota in Rajasthan. In February 2024, the company had announced plans to invest Rs10 billion to set up a greenfield epoxy resins manufacturing plant. Separately, the company expects to begin operations at its 51,000 tonne/year epichlorohydrin (ECH) plant soon, a company source said. “The commissioning of the ECH plant has been delayed due to an issue in one of the equipment and was addressed by our technology suppliers,” he said. The ECH plant will be commissioned in phases, with the first phase of operations expected to begin this month, the company source said. ($1 = Rs86.05)

16-Jun-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: The global petrochemical industry is already battling a deep, structural downturn. While we've seen no impact on already dire polyethylene (PE) and polypropylene (PP) margins in northeast and southeast Asia from the trade war, the Israel-Iran crisis presents a new set of risks for polyolefins and all the other products. Today, I want to share a first pass at three headline scenarios for how this latest crisis could impact the global economy, and by extension, petrochemicals – Scenario 1: The Best-Case – De-escalation and Containment. International mediation leads to a swift reduction in direct confrontation. Retaliatory actions are limited, avoiding critical infrastructure. Diplomatic channels resume, potentially reigniting broader regional security talks. Oil Prices: Rapid return to pre-crisis levels; spikes short-lived. Inflation: Minimal sustained impact; stable energy costs. Supply Chains: Minor, localised disruptions; vital Strait of Hormuz remains secure. Investment: Quick rebound in confidence; risk assets recover. Scenario 2: The Medium-Case – Protracted Tensions and Proxy Conflicts Averted full-scale direct war, but high tensions persist. The region sees intensified "shadow wars" and proxy conflicts. Occasional targeted strikes or cyberattacks, but no full escalation. Diplomatic efforts are slow and largely ineffective. Oil Prices: Elevated and volatile due to persistent geopolitical risk. Inflation: Sustained upward pressure as higher energy costs feed into all sectors. Supply Chains: Increased shipping insurance, minor rerouting; higher logistics costs. Investment: Increased risk aversion; volatile equity markets; flight to safe havens. Scenario 3: The Worst-Case – Full-Scale Regional War & Strait of Hormuz Closure Direct military conflict spirals out of control, potentially drawing in other global powers. Iran close or severely disrupts the Strait of Hormuz. Oil Prices: Big surge to long-term historic highs. Inflation: Hyperinflationary pressures globally; severe cost-of-living crisis. Supply Chains: Widespread and severe paralysis of global trade; blockades, severe shortages. Global Recession/Depression: High probability of a severe global economic downturn. Financial Markets: Extreme volatility; sharp declines; systemic crisis risk. Conclusion: Understanding scenarios is crucial for strategic planning. Even "medium" level tensions will have significant, widespread consequences. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

16-Jun-2025

HOUSTON (ICIS)–US-listed shares of chemical companies fell sharply on Friday and performed worse than the overall market following the growing conflict between Israel and Iran. Iranian missiles hit Tel Aviv in a retaliatory attack that reportedly caused injuries, according to the Wall Street Journal. Most of the missiles were intercepted or fell short, according to Reuters and the Wall Street Journal, which reported the Israeli military. Earlier, Israeli warplanes attacked multiple sites in Iran. Following news of the attacks, the major US stock indices followed by ICIS fell, but not as sharply as shares of chemical companies. The following table shows the major indices followed by ICIS. Index 13-Jun Change % Dow Jones Industrial Average 42,197.79 -769.83 -1.79% S&P 500 5,967.97 -68.29 -1.13% Dow Jones US Chemicals Index 832.55 -12.02 -1.42% S&P 500 Chemicals Industry Index 885.14 -15.59 -1.73% The following table shows the US-listed shares followed by ICIS. Name $ Current Price $ Change % Change AdvanSix 23.99 -0.49 -2.00% Avient 34.3 -1.42 -3.98% Axalta Coating Systems 28.79 -1.37 -4.54% Braskem 3.67 -0.07 -1.87% Chemours 10.98 -0.49 -4.27% Celanese 54.63 -2.24 -3.94% DuPont 66.87 -1.57 -2.29% Dow 29.9 -0.24 -0.80% Eastman 76.19 -1.93 -2.47% HB Fuller 54.16 -1.92 -3.42% Huntsman 10.9 -0.64 -5.55% Kronos Worldwide 6.23 -0.22 -3.41% LyondellBasell 60.1 -0.03 -0.05% Methanex 36 1.57 4.56% NewMarket 648.7 -6.24 -0.95% Olin 20.38 -0.67 -3.18% PPG 106.3 -5.73 -5.11% RPM International 108.08 -6.78 -5.90% Stepan 54.42 -1.26 -2.26% Sherwin-Williams 335.88 -20.32 -5.70% Tronox 5.56 -0.23 -3.97% Trinseo 3.4 0.02 0.59% Westlake 77.3 -1.32 -1.68% Methanex shares rose after it passed a regulatory milestone in its $2.05 billion purchase of the methanol business of OCI Global. Meanwhile, Brent and WTI crude futures both rose by nearly $4/bbl. US producers idled three oil drilling rigs, bringing the total to 439, the lowest figure since October 2021. EUROPEAN SHARES FELL EARLIER IN THE DAYEarlier, Europe chemicals stocks and equities markets fell in morning trading on Friday in the wake of Israel’s strikes across Iran, including nuclear facilities, with the prospect of additional attacks chilling sentiment. The International Atomic Energy Agency (IAEA) confirmed on Friday that Iran’s Natanz nuclear enrichment facility had been struck in the first salvo of strikes that also hit residential areas as part of attacks on military leaders and nuclear scientists. Israel’s Prime Minister, Benjamin Netanyahu, stated on Friday that strikes will continue “for as many days as it takes” to remove nuclear enrichment facilities, as US Secretary of State Marco Rubio urged the Iranian government not to respond. The IAEA noted on Thursday that Iran is potentially in breach of its non nuclear-proliferation agreements for the first time since the early 2000s, but Rafael Mariano Grossi, director general of the nuclear watchdog, attacked the strikes on Friday. “Nuclear facilities must never be attacked, regardless of the context or circumstances,” he said, noting that there is presently no elevation at the Natanz site. MARKETS Oil prices soared in the wake of the strikes, with Brent crude futures jumping nearly $5/barrel on Friday to $74.31/barrel, the highest level since April, while WTI futures were trading at $73.15/barrel, the highest since January. Equities slumped as commodities surged, with Asia bourses universally closing in the red and all key European stock indices trading down in morning trading. The STOXX 600 chemicals index was trading down over 1% as of 10:30 BST, in line with general markets, with stock prices for a third of the 21 component companies down 2-3%. The hardest-hit were Fuchs, LANXESS and Umicore, which saw stocks fall 3.72%, 3.24% and 2.97% compared to Thursday’s close. The situation has also had a dramatic impact on fertilizers markets, with Iran a key global exporter of urea, and some contacts reporting disruption in Israel’s supply of gas to Egypt. SHIPPING Shipping could also face further disruption, with the UK’s Maritime Trade Operations (UKMTO) monitor publishing an advisory on Wednesday – before the start of the Israel  strikes – that increased Middle East military activity could impact on mariners. “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution,” the watchdog said. Around 20% of global oil trade passes through along the Strait of Hormuz, and any move by Iran to block the route could have a huge impact on freight traffic that is still disrupted by firms avoiding the Red Sea in the wake of Houthi strikes. Activity in the Red Sea is understood to have subsided in recent weeks after a US-Houthi ceasefire but shipping firms remain leery of the route, and the attacks on Iran could further inflame tensions in the region. Higher risk and insurance price hikes could also drive shipping prices through the region steadily higher. The upward movement for shipping prices had showed signs of plateauing this week, with China-Europe and China-US route charge steady week on week as of 12 June after weeks of surges, according to Drewry Supply Chain Advisors. Some freight indices continued to climb, however, with the Baltic Exchange’s dry bulk sea freight index up 9.6% as of 12 June, the highest level since October 2024. Thumbnail image: Iran Tehran Israel Strike – 13 June 2025. Iran's IRIB state TV reported explosions in areas of the capital of Tehran and counties of Natanz, Khondab and Khorramabad. (Xinhua/Shutterstock) Additional reporting by Tom Brown

13-Jun-2025

Energy markets price in increased risk following Israeli strikes on Iran but impact on fundamentals limited Retaliation from Iran highly likely, strong response expected given Israeli attack severity But energy market participants cautious on longer-term escalation risks, citing regional examples of geopolitical tension with limited lasting price impact Brent crude would need to near $100/bbl for oil-linked LNG contracts to match current LNG spot market prices Unfolding situation further supports already bullish picture for coming months across energy markets In the early hours of 13 June, Israel launched a wave of attacks targeting Iran’s nuclear programme, with strikes on nuclear infrastructure as well as the killing of scientists and military figures. Iran’s foreign minister called the attacks a “declaration of war” and vowed to retaliate. ICIS experts share views on the potential next steps and the future impact across the energy complex.  Did the strike take energy markets by surprise? (Matthew Jones, Head of Power Analytics) An Israeli strike on Iran’s nuclear capabilities has been a significant market risk for many months. Back in January, we predicted this occurrence in 2025. While there had not been much sign of an impending attack in the first few months of the year, there were reports in late May that Israel was preparing a move, while the US began to pull staff out of the Middle East on Tuesday 10 June, after news emerged that strikes could be imminent. The exact timing was not clear, but markets were aware of rapidly increasing risk. What price impact have we seen so far across the commodity complex? (Gemma Blundell-Doyle, Crude Market Reporter) Oil prices spiked by almost 10% on Friday morning, to their highest since January this year. Brent crude reached $78.48/barrel at 03:41 London time. At 14:30 it remained elevated at $74.33/barrel. (Rob Dalton, Senior Gas Market Reporter) European gas prices rose on Friday morning with the ICIS TTF front-month up 6% to €38.50 ($44.30)/MWh, a three-month high. (Anna Coulson, Senior Power Market Reporter) Bullish European gas supported power prices, with the German front month rising 2.2% from Thursday’s close to €82.75/MWh by 13:50 on Friday. (Ed Cox, Global LNG Editor) East Asian LNG (ICIS EAX) spot prices rose 8% on Friday to $13.43/MMBtu, the highest since March. Asian spot prices have been increasing since early June, in line with a firmer ICIS TTF. Global gas price forward curves 13 June 2025, Source: ICIS, CME Is the price impact risk-based, or have we seen a direct impact on fundamentals so far? (Gemma Blundell-Doyle) Oil fundamentals were on Friday afternoon unchanged. The National Iranian Oil Refining and Distribution Company said refining and storage facilities had not been damaged and continued to operate. (Rob Dalton) The immediate, price-driven response across the TTF was fuelled by rising risk premiums and speculative positioning, with particular concern surrounding the shutdown of Israel’s offshore gas fields. Market participants remain cautious about the longer-term risks of escalation, with many pointing to the 2024 Israel-Iran conflict as an example of geopolitical tension with limited lasting impact on pricing. (Ed Cox) No immediate fundamental LNG impact with outright spot LNG demand limited from key Asian buyers, partly due to market prices sitting well above oil-linked LNG contracts. LNG buyers closely monitor oil prices, which are still used to price most Asian LNG procurement. Most oil-linked contracts take a historic oil price of at least three months previous, so higher Brent today would impact LNG contracts later in the year. Brent would need to go closer to $100/bbl for oil-linked LNG contracts to match current LNG spot prices and to encourage buyers to switch to more spot offtake. ICIS understands that Egyptian fertilizer producers have already shut down at least three urea plants because of measures taken by Israel to temporarily halt gas production. Israel supplies over 30 million cubic metres/day of gas to Egypt, which already faces major supply shortages. Any extended reduction in Israeli gas supply could mean Egypt has to buy additional LNG cargoes to cover the shortage. Egypt has recently committed to buy what could be close to 10 million tonnes of LNG in 2025 and 2026 from a variety of sellers through large tenders. It may call on the market for additional cargoes which in turn could further support global spot prices. What next? (Matthew Jones) You could see different levels of response from Iran. The least consequential would be similar to the events of April 2024 playing out again, in which Iran fires missiles and drones at Israel, which shoots most of them down. Given Iran’s weak position this cannot be ruled out. But it seems more likely that Iran will attempt a stronger response given the severity of the Israeli attack. That could include attacks on targets in the Persian Gulf, including on tankers or oil refineries. Iran could conclude that creating energy market turbulence is the best way to get the US to restrain Israeli action. The most consequential response would be the closing of the Straits of Hormuz through which massive volumes of global oil and LNG travel. Such an event would have major bullish consequences for global energy markets but should be seen as low probability as Iran will be very reluctant to alienate key allies like China. It would also be physically very difficult for Iran to close the Strait even if it wanted to. (Ed Cox) For LNG, the narrative around a potential Straits of Hormuz closure will return, even if this would represent a major further escalation from Iran with little clarity on practical implementation. Almost 20% of global LNG production will pass through Hormuz from Qatar and the UAE in 2025 so the global LNG market will naturally focus closely on events. LNG and wider shipping flows via the nearby Suez Canal remain constrained due to the risk of attack and there is limited scope for a major impact on LNG shipping given the large number of new vessels coming to the market which is suppressing charter rates. But we should expect major LNG buyers to analyse current stocks and review emergency supply security plans in response to these events. Global LNG exports and share of trade using the Strait of Hormuz. Source: ICIS (Andreas Schroeder, Head of Gas Analytics) A wider Middle East conflict could have serious implications for Egyptian gas markets. The country has switched to becoming an importer of LNG since 2024 and is set to increase imports going forward. A major buy tender was issued recently. There is now talk of around 100-110 cargos needed overall in 2025 instead of the previously expected 60-70. We forecast 6.3 million tonnes of LNG imports, nearly tripling the 2.4 million tonnes of 2024. Egypt also receives LNG via pipeline from Jordan’s Aqaba import terminal, which imported 0.8 million tonnes in 2024. In addition, Israel is a major pipeline supplier to Egypt with around 10 bcm/year covering a fifth of Egyptian demand. Should a regional conflict escalate further, an extended stop of Israeli gas exports to Egypt could imply even stronger LNG intake into Egypt for the remainder of 2025. Egyptian LNG imports. Source: ICIS (Gemma) The US and Iran are set to meet in Oman on 15 June to continue ongoing nuclear talks. The Israeli strike on Iran will be on the agenda. US president Trump has urged Iran to make a deal regarding its nuclear programme and to prevent further attacks from Israel, bit it is unlikely Iran will concede without retaliation. Where could commodity prices go in coming days and weeks? (Ajay Parmar, Director, Energy & Refining) We expect Iran to retaliate and tensions to escalate further. This will likely cause oil prices to remain elevated for the coming weeks. If a resolution is found later this month, prices could begin to retreat, but for now, we see them remaining elevated in June and July as a result of this escalation. (Ed Cox) The TTF is ever more influenced by geopolitical events given Europe’s dependency on LNG imports. Often, TTF volatility does not match changes in regional gas fundamentals as traders are changing positions to consider wider macro views. It is possible the TTF could swing by 5-10% daily while uncertainty over further escalation continues. Even though oil pricing plays a limited role in European gas price formulation, it is likely the TTF would follow higher Brent in the context of an overall bullish energy market. (Rob Dalton) Even before recent developments, the near-term outlook for European gas markets had already tilted bullish due to a summer injection demand gap. An escalating conflict would heighten the risk of a broader move higher across the entire near curve, placing increased emphasis on refilling storage sites in the near term. How does the news impact your broader view of the current energy market complex? (Matthew Jones) We held a webinar on 12 June in which we presented a bullish view for the European energy commodity complex in H2 2025. We see significant upside risk to prices in the coming months, stemming from expectations for rising carbon prices, gas storage targets shifting volume risk to winter, the potential continuation of low wind speeds and fears over the return of stress corrosion issues at French reactors. The Israeli attack on Iran and the potential consequences we have outlined here further support that bullish picture for the coming months. (Ed Cox) From an LNG perspective, the fundamental outlook from Asia is not strong in the short term, largely due to weak economic performance from China. European gas looks more bullish. But the correlation between the TTF and Asian spot LNG is strong with the potential for prices in both markets to rise further on Middle East concerns, even if the immediate fundamental impact is focused on Israeli gas supply to Egypt.

13-Jun-2025

LONDON (ICIS)–Europe chemicals stocks and equities markets fell in morning trading on Friday in the wake of Israel’s missile strikes across Iran, including nuclear facilities, with the prospect of additional attacks chilling sentiment. The International Atomic Energy Agency (IAEA) confirmed on Friday that Iran’s Natanz nuclear enrichment facility had been struck in the first salvo of strikes that also hit residential areas as part of attacks on military leaders and nuclear scientists. Israel’s Prime Minister, Benjamin Netanyahu, stated on Friday that strikes will continue “for as many days as it takes” to remove nuclear enrichment facilities, as US Secretary of State Marco Rubio urged the Iranian government not to respond. The IAEA noted on Thursday that Iran is potentially in breach of its non nuclear-proliferation agreements for the first time since the early 2000s, but Rafael Mariano Grossi, director general of the nuclear watchdog, attacked the strikes on Friday. “Nuclear facilities must never be attacked, regardless of the context or circumstances,” he said, noting that there is presently no elevation at the Natanz site. MARKETS Oil prices soared in the wake of the strikes, with Brent crude futures jumping nearly $5/barrel on Friday to $74.31/barrel, the highest level since April, while WTI futures were trading at $73.15/barrel, the highest since January. Equities slumped as commodities surged, with Asia bourses universally closing in the red and all key European stock indices trading down in morning trading. The STOXX 600 chemicals index was trading down over 1% as of 10:30 BST, in line with general markets, with stock prices for a third of the 21 component companies down 2-3%. The hardest-hit were Fuchs, LANXESS and Umicore, which saw stocks fall 3.72%, 3.24% and 2.97% compared to Thursday’s close. The situation has also had a dramatic impact on fertilizers markets, with Iran a key global exporter of urea, and some contacts reporting disruption in Israel’s supply of gas to Egypt. SHIPPING Shipping could also face further disruption, with the UK’s Maritime Trade Operations (UKMTO) monitor publishing an advisory on Wednesday – before the start of the Israel  strikes – that increased Middle East military activity could impact on mariners. “Vessels are advised to transit the Arabian Gulf, Gulf of Oman and Straits of Hormuz with caution,” the watchdog said. Around 20% of global oil trade passes through along the Strait of Hormuz, and any move by Iran to block the route could have a huge impact on freight traffic that is still disrupted by firms avoiding the Red Sea in the wake of Houthi strikes. Activity in the Red Sea is understood to have subsided in recent weeks after a US-Houthi ceasefire but shipping firms remain leery of the route, and the attacks on Iran could further inflame tensions in the region. Higher risk and insurance price hikes could also drive shipping prices through the region steadily higher. The upward movement for shipping prices had showed signs of plateauing this week, with China-Europe and China-US route charge steady week on week as of 12 June after weeks of surges, according to Drewry Supply Chain Advisors. Some freight indices continued to climb, however, with the Baltic Exchange’s dry bulk sea freight index up 9.6% as of 12 June, the highest level since October 2024. Focus article by Tom Brown Thumbnail image: Iran Tehran Israel Strike – 13 June 2025. Iran's IRIB state TV reported explosions in areas of the capital of Tehran and counties of Natanz, Khondab and Khorramabad. (Xinhua/Shutterstock)

13-Jun-2025

LONDON (ICIS)–After two years of decline, Germany’s GDP could start growing again in 2025, economic research institutes said on Thursday. Although the trade and tariff conflicts are still weighing on export demand, billions of euros of planned government spending on infrastructure and defense would start supporting growth, they said. “Leading indicators support our view that, after two years of contraction, the industrial sector has reached the trough, albeit at a low level,” said Stefan Kooths, head of forecasting at the Kiel Institute for the World Economy (IfW Kiel). The recovery would be largely driven by domestic factors, with private consumption and corporate investment picking up after a two-year drought, he said. IfW Kiel noted that “significantly greater fiscal room” for the new federal government under Chancellor Friedrich Merz should help drive growth. Germany recently amended its constitution to enable more debt-financed spending. IfW Kiel revised its GDP growth forecast for Europe’s largest economy to 0.3% for 2025, from its previous expectation of zero growth, and for 2026 it expects GDP growth of 1.6%. However, it warned that the “erratic” US tariff policy was fueling uncertainty for Germany’s foreign trade. In addition, German exporters were hampered by “significantly reduced competitiveness”, it said. Another institute, ifo Munich, now forecasts 0.3% GDP growth in 2025, up from its earlier 0.2% projection, and it predicts 1.5% growth for 2026, up from its previous 0.8% assessment. After reaching its low point in the winter, Germany’s economy is now set for a “growth spurt”, partly driven by the government fiscal measures, ifo said. However, like IfW Kiel, ifo warned of the risks posed by US trade policies. The US import tariffs already imposed – and assuming they remain at the current level – would impact Germany’s economic growth by 0.1 percentage points in 2025 and 0.3 percentage points in 2026, ifo said. If a US-EU trade agreement is reached, growth in Germany could be higher, whereas an escalation could lead to a renewed recession, ifo said. A third institute, the Halle Institute for Economic Research (IWH), said if the US does not escalate its trade conflicts further, Germany’s GDP could grow by 0.4% in 2025, up from IWH’s previous 0.1% growth forecast. IWH also noted that the slow licensing for exports of rare earths from China has led to a shortage that is threatening production in parts of Germany’s manufacturing industry. In Germany’s chemical industry, producers’ trade group VCI currently expects chemical production (excluding pharmaceuticals) to fall by 2.0% this year. Please also visit US tariffs, policy – impact on chemicals and energy Thumbnail photo of Chancellor Friedrich Merz (Source: Christian Democratic Union party)

12-Jun-2025