APPEC: US tariffs, EV adoption may reshape Asian aromatics trade flows

The ongoing trade tensions amid US tariffs, along with the global shift toward electric vehicles, will impact Asian aromatics trade flows in the near term, S&P Global Energy analysts said at APPEC 2025 in Singapore Sept. 9.

With global gasoline demand expected to peak in the next two to three years, long-term disruptions to the use of popular blendstocks such as toluene and mixed xylenes are expected in Asia, Eshwar Yenigalla, senior analyst, petrochemicals, Energy, said at the conference.

The main cause of that disruption is the increasing global adoption of electric vehicles, Yenigalla said.

He added that demand disruptions in the near term would also arise due to the rapid adoption of ethanol mandates in China and India.

Prominent changes are also being seen in the West, Kate Lee, senior research analyst at Energy, said.

This year, US styrene exports have been stable compared to recent years despite a drop in benzene imports. Stockpiling of benzene has helped US styrene producers, who were further aided by the rise in selective toluene disproportionation margins last year, Lee added.

The market is also closely watching the impact of US tariffs on Asian benzene imports and a potential throttling of styrene demand given the country's role as a major exporter of the product, Lee said.

Additionally, market participants are waiting to see how the anti-involution stance by China shapes up. With the rationalization of old and dated chemical production units expected, demand and supply cues could change greatly in the near term, Lee Joyce, director, olefins & derivatives, Southeast Asia, at Energy, said.

India in focus

Indian supply and demand remained a key point of discussion at the conference, hosted by Energy, with the country attempting to thwart the impact of the recently imposed US tariffs.

India has been at the centre of the ongoing trade tensions with heavy tariffs of 50% imposed by the US on some chemicals.

But despite the tariffs, India has managed to avoid a major slump in economic growth through efforts like its recently changed domestic taxes and its attempts to woo China and Russia, one participant said.

Furthermore, some positive long-term effects of these trade tensions on the country's aromatics market can be expected, Wing Zhang, principal analyst, Asia paraxylene and purified terephthalic acid, Energy, said.

India has been investing heavily in upgrading its own domestic PTA production amid these tensions, Zhang said.

Zhang added that after India's planned PTA capacity expansions, the country's share among global PTA capacity will rise to 9% from almost 3% currently.

In terms of securing PX as a feedstock for its domestic production, the country may also add to its existing upstream capacity, though for now, only state-owned Indian Oil Corp. has plans for that, as it looks to start an 800,000 mt/year PX plant, Zhang said.