Chemicals, Olefins, Polymers, Solvents & Intermediates
May 13, 2025
European chemical market hopeful, but wary about US-Chinese tariff pause
By Chichi Ubani
HIGHLIGHTS
Tariff uncertainty complicates near-term purchases
Trade flow shifts anticipated
Participants in the European chemicals market were cautiously optimistic May 13 that the 90-day pause in US-China tariffs would lead to more certainty around demand outlooks. The pause is to start May 14.
The tariff escalation between the US and China made it difficult for chemicals traders to plan near-term purchases.
A rubber producer said the tariff pause is a "sign of good news for the market," but his company is remaining prudent about any further changes.
Other market sources were not as optimistic about this improving market demand.
"We don't know what's going to happen," a polymer recycler said. "We're still waiting to see. We used to import and export bales with the US, but we stopped and are now being very cautious."
An acrylonitrile butadiene styrene producer said he expected trade flows to shift slightly in response to the tariff pause. He said he expects China to send more exports to the US within the 90-day window, which should divert attention away from the European market, which could be a positive sign for domestic ABS demand.
However, the tariff pause is not expected to have a significant impact in the short term, with companies already adjusting their plans for the second quarter.
Executives at US-based polystyrene producer Trinseo had said before the tariffs pause was announced that they had withdrawn their full-year guidance because of the changing market conditions.
"Tariffs or disruptions to trade create an uncertain demand environment," CEO Frank Bozich said May 8 during the company's first-quarter earnings call.
US-based polymer producer Avient had shared a similar sentiment.
"While the direct impact from tariffs is not expected to be significant, we cannot underestimate the impact tariffs can have on overall market demand," Avient CEO Jamie Beggs said during his company's Q1 earnings call May 6. "Several public reports have confirmed a slowing demand environment in the US, which is also corroborated by some of our customers."