Chemicals
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Mexico's trade surplus widens in Nov
Mexico's trade surplus widens in Nov
Mexico City, 23 December (Argus) — Mexico's trade surplus widened slightly in November from the previous month, despite sharp declines in both exports and imports in the non-oil category. Mexico posted a $663mn trade surplus in November, statistics agency Inegi said, up from a $606mn surplus in October, though on lower overall trade volumes. Total exports reached $56.4bn, while imports stood at $55.7bn, compared with $66.1bn and $65.5bn, respectively, in October. The result contrasted with the $391mn deficit forecast by Mexican bank Banorte. Inegi attributed the wider surplus to an increase in the non-oil trade surplus to $2.84bn in November from $2.74bn in October, alongside a widening of the oil trade deficit to $2.18bn from $2.13bn. Within non-oil trade, manufacturing exports fell by 16pc to $52.1bn in November from the prior month, while automotive exports declined by 2.2pc to $15.8bn, following a 4.8pc increase in October. The US absorbed 79pc of Mexico's light vehicle exports from January-November, with Mexico supplying 17pc of total US auto imports over the 11-month period, according to Mexican auto industry association AMDA. The "others" component of non-oil manufacturing exports dropped by 20pc to $36.3bn in November, nearly erasing October's 23pc gain to $45.5bn. The cumulative impact of US tariffs on Mexican goods is becoming clearer. Mexican bank Banco Base estimates the US levied an effective 4.69pc tariff on Mexican goods through September — below the 25pc blanket rate due to exemptions for goods complying with the USMCA free trade agreement. "The low tariffs have allowed Mexican exports to continue growing, particularly computer equipment, which rose by 83.39pc year to date through September compared with the same period in 2024, with a tariff of just 0.17pc," the bank said. Those "contrast sharply with passenger cars, which face a 15.29pc tariff," which maintain expectations of 7pc annual export growth in 2025, according to the bank. Agricultural exports rose by 3.8pc to $1.4bn in November after increases of 7.2pc in October and 4.1pc in September. Oil-related exports totaled $1.55bn in November, down from $1.82bn in October, including $1.03bn in crude and $514mn in refined products on lower prices and volumes. Mexico's crude export basket averaged $57.66/bl, down by $0.84/bl from October and $8.09/bl lower compared with a year earlier. Crude export volumes fell to 597,000 b/d in November from 717,000 b/d in October, remaining well below the 1.088mn b/d exported in November 2024. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: New PE capacity favorable to buyers in 2026
Viewpoint: New PE capacity favorable to buyers in 2026
Houston, 23 December (Argus) — With 2mn t/yr of new US polyethylene (PE) capacity set to start up in the second half of 2026, pricing power may stay in domestic buyers' hands for much of the year, particularly if producers struggle to find homes for the new resin. Golden Triangle Polymers, a joint venture between Chevron Phillips Chemical and QatarEnergy, is expected to start up 2mn t/yr of high density polyethylene (HDPE) capacity in Orange, Texas, by the middle of next year, aimed almost entirely at the export market. While the US remains a low-cost producer, the new volume will have to compete with growing global supply, including around 4mn t/yr of new PE capacity projected to start up in Asia in 2026. With the key China market becoming more self-sufficient, it may be difficult for the global market to absorb the new capacity. There are some potential bright spots for US producers in the global market, including the potential for a free-trade agreement with the EU, which would further open up EU countries for more US volume. But if enough new export destinations are not found, market participants have said material will back up in the US/Canada domestic market, keeping supplies loose, and making it difficult for producers to raise domestic contract prices. As new PE capacity has been added in the US, the percentage of sales going to exports has continued to rise. In 2022 — prior to the start-up of more than 3.3mn t/yr of new capacity from Shell, Baystar, Nova and Dow that took place from 2023 through 2025 — total exports averaged 39pc of total sales, according to data from the American Chemistry Council (ACC). In 2025, year-to-date through November, exports averaged 48pc of total sales. New capacity is one factor that can cause export prices to decline, as supplies increase in the market. As an example, Dow started up its new 600,000 t/yr HDPE/LLDPE swing unit in Freeport, Texas, in June 2025, with the full ramp-up beginning in July. From July through 12 December, US LLDPE butene export prices declined by around 18pc. Over the same period, US/Canada contract prices held steady every month from July through November, with expectations that December contracts also may settle flat as three US producers have not announced an increase for the month. There were a variety of reasons for the flat contract pricing in the second half of 2025, including weak domestic demand. But one main factor was plentiful supply, and low export prices, as US/Canada producers fought for market share in the global market. "[The US] is so over-supplied," said one US PE buyer. "The economic factors are in the buyers' favor right now." For January, most US/Canada producers have announced price increases of between 5-7¢/lb. Suppliers are expected to push hard for a price increase in January, with many market participants expecting some level of a price increase to stick in the first quarter. But with little expectation for improved demand in 2026, buyers, distributors and traders said they expect the market to remain well-supplied, which will make it difficult for further contract increases. "I think we will continue in a buyers' market for a couple more years," said one US trader. Producers are wary about global oversupply, but believe there will be some additional capacity rationalization in other regions that will help create more export opportunities. Geopolitical events such as the Ukraine-Russia conflict, Venezuela embargoes, trade tariffs, and anti-dumping duties have contributed as well to a volatile market for finished goods that could also limit demand growth next year. Low ethane/ethylene prices also contribute to lower PE prices but this downward trend is expected to change as US olefins exports increase in 2026, resulting in a more balanced supply/demand market. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Indonesia allocates 2026 biodiesel blend volumes
Indonesia allocates 2026 biodiesel blend volumes
Singapore, 23 December (Argus) — Indonesia has allocated 15.6mn kilolitres to domestic biodiesel producers for its 2026 biodiesel-fossil diesel blending programme, the ministry of energy and mineral resources (ESDM) announced on 22 December. Total allocated biodiesel blend volumes will remain unchanged in 2026, with 7.45mn kl allocated to public service obligation (PSO) and 8.19mn kl to non-PSO (NPSO) firms. The ESDM this year allocated 7.6mn kl and 8mn kl to PSO and NPSO firms respectively under the 40pc biodiesel blend mandate. Indonesia reshuffled blend volumes earlier in December to shift an allocated 480,000 kl from PSO to NPSO fuel suppliers. But volume allocations will increase if Indonesia moves to a 50pc biodiesel blend mandate in the second half of 2026 . Fuel suppliers under the PSO receive subsidies from the oil plantation fund management agency (BPDP) to fund the difference between palm oil-based biodiesel and the indexed price of diesel, while NPSO fuel suppliers do not. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: BZ demand to see little change in 2026
Viewpoint: BZ demand to see little change in 2026
Houston, 22 December (Argus) — US benzene (BZ) demand is expected to remain steady in the first quarter of 2026 because of low operating rates for BZ derivatives, sources said. Operating rates for BZ derivatives were low in 2025 because of weak demand and a busy turnaround season, with several styrene monomer (SM), cumene and phenol producers conducting turnarounds. At least one US Gulf coast styrene producer is expected to perform a turnaround in the first quarter that is estimated to run 20-30 days, another source said. Ethylbenzene (EB) demand into gasoline blending may finally see its seasonal lull, as high-octane, low-Reid vapor pressure (RVP) blendstocks are typically in low demand from October-March, when US gasoline specifications allow high-RVP blendstocks like butane to enter the blend pool. In late 2025, EB demand remained steady into gasoline blending because of strong demand for high-octane aromatic blendstocks to offset low-octane light naphtha, which was blended into the gasoline pool to keep up with the demand for US gasoline exports. But, with expensive feedstock BZ heading into 2026, EBSM producers cannot sell EB above breakeven levels, which caused EBSM producers to reduce operating rates, sources said. When spot BZ reaches a premium to feedstock reformate prices, EB becomes a less competitive blendstock because of its production cost ( see chart ). This disposition of ethylbenzene's value as a blendstock opens competition for other aromatic blendstocks like toluene and mixed xylenes to enter the gasoline pool. North American EBSM operating rates are expected to remain at 48-60pc in early 2026, according to a generic Argus model with operating rates informed by market participants. SM export demand is anticipated to remain limited. The arbitrage to Europe is closed for December-loading cargoes to arrive in January, Argus data show. Buying interest could emerge from Latin America, which typically takes 20,000-25,000 metric tonnes (t) of SM from North America every two or three months, depending on polystyrene (PS) production rates. Cumene demand is expected to remain flat in 2026 on steady, though sluggish, downstream demand for phenol and acetone, which have big shares in the construction, automobile, appliances and resin industries. A source said sellers are taking customers' spending and borrowing power into deeper consideration when exploring spot and new contract opportunities to mitigate selling risk. Phenol is anticipated to see little fundamental change in 2026, sources said. There are few expected phenol turnarounds for maintenance in the first half of the year, and sources expect consumption to remain comparable to 2025. New housing permits declined in 2025 compared to 2024, according to US Census Bureau data, which led to fewer homes being built and less phenol demand. About half of all phenol produced in the US goes into the construction sector. Phenol and cyclohexane demand from the automotive industry may decline in 2026 on lower automobile manufacturing leading into the new year. Domestic automobile production trailed lower throughout 2025 as many producers were operating below full output rates. In August, US automobile production dipped below 100,000 units for the first time since January, according to the US Bureau of Economic Analysis (BEA). Before January, monthly domestic automobile production last dipped below 100,000 units in September 2021. The automotive industry makes up nearly 22pc of phenol consumption. Benzene supply is expected to remain low in 2026 on reduced US production and fewer imports because of US tariff policies that add costs for traders. On production, some market participants expect selective toluene disproportionation (STDP) unit operating rates to remain low in 2026 because BZ prices rose in late 2025 on tight supply, not strong demand, sources said. Though STDP margins look healthy on paper moving into 2026, if STDP operators raise production rates, the higher BZ supply would depress prices and margins to the point where STDP operators decide to turn run rates down again or idle their units, another source said. The US is historically in a net BZ deficit and usually relies on BZ imports to add supply when BZ production lags demand. With US tariff policies adding costs to those imports, shipments of BZ from Europe and Asia have largely declined. Market participants said they expect this trend to continue in 2026 without changes to US tariff policy. By Jake Caldwell Ethylbenzene economics vs Benzene and Reformate $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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