|
Dow Canadian Investment Reduced, Total Idles EU Cracker, US Tariffs
April 25, 2025
The global polymer industry is facing significant uncertainty as major producers adjust investment and operational plans amid shifting economic and geopolitical landscapes.
Dow has slowed its proposed multi-billion dollar Polyethylene expansion in Canada, reducing 2025 capital investment plans by $1 billion to $2.5 billion while citing regulatory delays and a lack of long-term policy clarity. The company had previously announced intentions to build the world's first net-zero carbon Ethylene and derivatives complex in Alberta. The decision could constrain future North American supply growth, particularly for high-performance Polyethylene grades, and may shift investment focus toward the US Gulf Coast or other international hubs.
Meanwhile, TotalEnergies has shut down its steam cracker in Gonfreville, France, due to ongoing market weakness and elevated feedstock costs. The unit, with a capacity of around 600,000 metric tons per year of Ethylene, has been offline since early April. The outage may extend well into the summer unless demand fundamentals improve. This could further tighten monomer availability across Europe and place upward pressure on spot polymer prices, especially Polyethylene and to a lesser extent Polypropylene.
Nippon Sanso Holdings Corporation has announced divesting its stake in Thailand based Taiyo Gases Company which produces LPG and other industrial gases like nitrogen and oxygen citing a strategic review leading its effort to streamline their global asset portfolio to align operations with the company's long term goals.
In the US, markets are closely watching the impact of a renewed push for protectionist trade policies as President Donald Trump expanded tariffs before providing a 90-day delay on most trade partners except China. Despite walking back around half of the tariffs on China and announcing plans for further negotiations heightened uncertainty is increasing market volatility. Market participants face challenging unknowns as concerns of trade disruptions that could affect global polymer flows and pricing remain, particularly in key export markets. Supply chain planners are already bracing for potential disruptions, with some buyers accelerating procurement ahead of expected tightening later this year.
China also exempted some US imports from tariffs while asking domestic companies to identify critical goods they would like free of levies, which signal Beijing's concerns about the trade war's fallout. The reprieve for Chinese imports follows de-escalatory statements from Washington, and suggests the world's two largest economies and trading partners were prepared to negotiate toward mutually beneficial trade terms following the firming 'tit for tat' rhetoric that preceded.
LLDPE prices were mixed globally as slow trading activity in Asia amid economic uncertainty and shifting trade flows led to lower prices, while prices in the US and EU held closer to steady as supply / demand remained in better balance. Manufacturers have reported cancelled US bound sailings from Asia amid heightened trade uncertainty due to tariffs. European prices were unaffected by reduced Ethylene prices and weak demand from packaging and construction sectors. US buyers remain cautious keeping inventories low and only procuring for short-term needs while resellers help cover supply gaps for spot material needs. LDPE prices in China rose following tariffs announced by the Trump administration, meanwhile prices in Europe stayed flat. Latin American and Asian buyers are taking advantage of shifting trade flows to offer well priced material well aware the US export options have narrowed.
|
|