Sector News

Key petchem end markets most affected by US-China tariffs – UBS

April 10, 2018
Energy & Chemical Value Chain

Chemical end markets like agriculture, automobile and aircrafts are most likely to be impacted by the growing tensions between the US and China over trade tariffs, Swiss investment bank UBS said on Monday.

On 4 April, China’s Ministry of Commerce announced a 25% increase in tariffs on 106 products originating from the US.

One of the products impacted is E-series glycol ethers, for which US anti-dumping duty (ADD) rates will increase to 37.5%-75.5% from 12 April, up from 10.6%-14.1% currently in place since January 2013.

A Dow Chemical source said to ICIS on 6 April that in order to avoid the highest rate (75.5%) imposed on the company’s US glycol ether exports, it was planning to change its global trade flows, ending US glycol ethers exports to China.

“[Dow will] cut immediately all supplies from north America to China,” the source said.

“This is going to disrupt current trade flows, especially for Dow as we got a very high tax rate and we’re one of the main exporters in the US. We plan to supply even more from Saudi Arabia to China,” it added.

Dow is a partner at joint venture Sadara Chemical in Saudi Arabia with the country’s crude oil major Aramco. The facility has the capacity to produce 200,000 tonnes/year of glycol ethers.

Other chemical majors are also likely to be rethinking their global trade strategies, with petrochemical markets impacted in the process.

The list of end markets compiled by UBS affects chemical imports to China are estimated to be worth nearly $2.2bn, including propane, acrylonitrile (ACN) and lubricants, according to UBS.

Whereas the total value of products impacted are valued over $48bn, accounting for over 30% of total US exports to China.

Consequences for end markets could prove significant, with key products affected including soybeans ($14bn), automobile ($13bn), aircrafts ($10bn), plastics and chemicals ($6bn), liquid gas ($2bn), cotton ($1bn) and other agricultural products such as corn, beef and tobacco.

China accounts for over 60% of the US’ total soybean exports, 10% of total auto-motives and 10% of total aircraft exports.

Companies most likely to be impacted in the automobile industry include BASF, Umicore, Johnson Matthey and Ems-Chemie.

Meanwhile, K+S, Yara and ICL are estimated to be most impacted in agriculture, according to UBS.

Pictured above: Dow and Aramco’s joint venture Sadara Chemical in Saudi Arabia. The US producer has said it will increase exports to China from the facility
Source: Sadara Chemical

By Eashani Chavda

Source: ICIS News

comments closed

Related News

February 17, 2024

INEOS Inovyn launches Ultra Low Carbon Chlor-Alkali range

Energy & Chemical Value Chain

INEOS Inovyn announces a new Ultra Low Carbon range (ULC) of Chlor-Alkali products that reduce the carbon footprint of caustic soda, caustic potash and chlorine by up to 70% compared to industry averages. The new range uses renewable energy sources to power INEOS Inovyn manufacturing sites.

February 17, 2024

Solvay completes coal phase-out at Wyoming soda ash plant

Energy & Chemical Value Chain

Solvay operates seven soda ash plants worldwide. Beyond Green River, coal is being phased out at two of the company’s plants in France and Germany. By the end of 2024, the Rheinberg, Germany site will become the first soda ash plant in the world to be powered primarily with renewable energy.

February 17, 2024

Chemours names new board member

Energy & Chemical Value Chain

The Chemours Company has named Pamela Fletcher to its board of directors, effective March 1. Fletcher, formerly the chief sustainability officer at Delta Air Lines Inc., takes the seat of Sandra Phillips Rogers, who has opted not to stand for reelection to the company’s board.

How can we help you?

We're easy to reach