Leonardo: Welcome to this Chemical Conversations podcast brought to you by the Argus Pine Chemicals and the Argus C5 and Hydrocarbon Resins services.
I am Leonardo Siqueira, editor of pine chemicals at Argus.
Steve: I am Steve Williams, vice-president for C5 and Hydrocarbon Resins.
Leonardo: And today, we’re talking about global tackifier supply chains in light of the upcoming World Adhesives Conference (WAC) in London this coming 16 to 18 September in London.
We’re presenting at WAC and we hope to meet the market participants there at the Argus tabletop during the event.
Steve: For those maybe not familiar with WAC and global adhesives, this is world’s largest adhesives and sealants event that happens every four years. So many market participants will be there to discuss some of the topics we’ll be touching on today.
Leonardo: That’s right, Steve.
Global tackifier supply chains continue to shift as tariffs redirect trade flows and geopolitics disrupt sourcing and pricing.
Since 2025, we’ve seen shifts in US trade policy, and this year, markets have been affected by geopolitical friction, including the US-Iran conflict, which affected tackifier markets earlier this year.
The provisional halt in oil shipments out of Hormuz because of the conflict caused some initial issues to the naphtha streams supplying feedstock to Asia-Pacific HCR suppliers.
Steve, can you, please, give us some context on what’s happened back then in March and April, in Asia-Pacific tackifier markets as a result of this conflict and where we stand now?
Steve: With reduced flows of crude oil and naphtha to the key tackifier producing countries including China, Korea, Taiwan and Japan, we saw reduced feedstock availability for many of the naphtha-based ethylene crackers in those same countries. Ultimately, this led to lower rates at these crackers and in more extreme cases, cracker shutdowns. This of course meant that C5 and C9 feedstock supply to downstream consumers including tackifier producers was reduced, and we saw many rate reductions and tackifier producer shutdowns as a result. In China, the problem of reduced feedstock production was aggravated by increased volumes of crude C5’s and C9’s being returned to the gasoline and diesel pool instead of being available for C5 and C9 derivative production during March and early April.
We continue to see upstream feedstock production in Korea, Taiwan and Japan at reduced levels, both as a result of reduced crude and naphtha flows, but also due to a number of ongoing ethylene plant rationalization initiatives in these three countries. Some of these rationalization activities are being accelerated as a result of the shortage of feedstock. This means some of the key tackifier producers in those countries are having to run at reduced rates, or try to import feedstocks to keep tackifier production rates at higher levels.
In the case of China, the situation is a little less serious. After initial concerns about having sufficient motor fuels with the strait of Hormuz restrictions, availability of both crude C5 and crude 9 feedstocks has improved, with the result being that most Chinese tackifier facilities that were running prior to the US-Iran conflict have feedstock to remain operational other than in a few specific instances. Domestic demand for most tackifiers has been weak in China as prices rose strongly with higher energy pricing and then fell again over the last several months. Tackifier prices remain higher in China than in later February but have given back much of the gains since that time. In the west, sizable price increases were the norm in April and May following Asia-Pacific, but with prices starting to reverse course lower more slowly with what has generally been adequate supply from domestic suppliers and imports after the initial panic buying in March and early April.
Of course, the prognosis for the markets can change as the situation in the Middle East seems to change from week to week with no clear end in sight.
Leonardo, I am wondering what were and have been until recently the effects of these same factors in the rosin and rosin ester markets?
Leonardo: Rosin markets and rosin ester markets were priced lower relative to Asia-Pacific and mainly Chinese C5 HCR. There was a premium of several hundred dollars or euros per metric tonne on a del basis either for European, or South American rosin esters exported to Europe or the US, compared to imported Asian tackifiers.
But the conflict in the Middle East provisionally shortened feedstock supply to Asia-Pacific, which made Chinese C5 HCR prices for both adhesives and road marking applications skyrocket in March and April at the peak of this situation.
As a result, gum rosin and rosin ester prices in China – a key price maker in international pine chemicals markets – went up and eventually become more attractive relative to the synthetic tackifier.
Participants describe tackifier buyers in China as more flexible switching feedstocks. With C5 HCR tackifier supply limited, buyers switched to rosin esters. That gave momentum to Chinese gum rosin and rosin esters, and also Brazilian gum rosin and pine oleoresin prices.
That because China was on the offseason and their stocks were low, so China needed to come to the market and import thousands of tons of elliottii gum rosin from Brazil to produce their rosin esters.
In general, I think we can agree that Asia-Pacific structural excess capacity won’t go away soon. Even though it’s increasingly difficult to predict the outcome of geopolitical conflict in the global tackifier trade, what can we expect in other regions like the US and Europe, given they’re now left with minimal local HCR supply?
Steve: There is no question that hydrocarbon based tackifier consumers in the US and Europe will need to increasingly import supply from Asia-Pacific to help meet demand, especially in light of recent ExxonMobil plant shutdowns in both Europe and the US. With tackifier production outside of China in Asia-Pacific more at risk in the future, this will mean every more imports of Chinese tackifiers, even to the US where significant import tariffs remain for Chinese imports. If a consumer is looking to grow production, China is the only country with growth in tackifier supply to help meet that demand. Europe has for some time been a significant importer of Asia-Pacific and Chinese tackifiers, but for the US, which until recently was a net exporter of hydrocarbon based tackifiers, this is a newer development. Since later 2025, we are seeing a significant reduction in hydrocarbon based tackifier exports from the US, while import volumes from China, Korea and Singapore have increased noticeably.
Domestic producers of tackifiers in both Europe and the US will have customers wanting to purchase at least some of their portfolio from domestic production to reduce supply chain costs and risks, of course provided the domestic supply option is viewed as cost competitive.
Leonardo, as participants weigh in different potential scenarios, what can we expect in global rosin ester markets? What are the things to watch out for?
Leonardo: There are different factors affecting rosin ester tackifier supply, demand and pricing globally, depending on region, and on the interplay between geopolitical risk, supply chain restrictions and market dynamics.
Several adhesive formulators in Europe, for example, sought additional rosin ester tackifier volumes in March and April on war fears. They wanted to build safety stocks as there were force majeure announcements at certain HCR producers and the geopolitical scenario was too uncertain.
With the conflict easing, and traffic eventually resuming at the strait of Hormuz and HCR tackifier supply restored, Brazil and Chinese rosin and rosin ester prices retreated.
If the conflict eases permanently, there’s a chance that rosin and rosin derivative prices and demand may soften a bit, but they’re likely to remain above pre-war levels for the short-term. That’s one scenario.
The other one is the worsening of the conflict in the Middle East, prolonged or the permanent closure of Hormuz, which could again place upward price pressure on markets.
In fact, although Brazilian rosin retreated at bit as a result of weaker demand in Europe, Chinese elliottii gum rosin and rosin esters for adhesives slightly rebounded in early August because of the renewed tensions in the Middle East.
Another thing to factor in are feedstock price competitiveness. Crude tall oil based rosin ester tackifiers, the so-called TOR esters, have been competitive relative to Brazilian and European gum rosin esters as CTO is cheaper than Brazilian pine oleoresin feedstock.
Reestablished or new supply chain routes can also play a role as buyers tend to diversify and prepare for continued risk.
Steve, as we wrap up this podcast, what things will HCR markets be looking for in the coming months?
Steve: It will be interesting to watch the speed and ultimate level to which tackifier pricing retreats in Europe and the US. Recent price increases had improved sales margins on top of the increases in feedstock costs, but as we all know, margins for HCR producers have been on the weaker side as China continues to vastly grow production and exports, so there will be resistance to prices returning to pre US-Iran conflict levels in the west.
In terms of supply, China remains the key for global hydrocarbon tackifier markets. Barring a substantial decrease in Chinese production, it appears markets will generally be adequately supplied, and with what has been weaker demand in China for most tackifiers helping in the short term, with the larger domestic producers in China looking to move additional tackifier volumes outside of China.
Leonardo, it’s been a pleasure joining you today for this latest podcast.
Leonardo: The pleasure has been mine, Steve. I think these will be some of the topics discussed at the World Adhesives Conference in London.
If you’re attending the conference, feel free to reach out to either Steve or I, or meet us at our tabletop or on the sidelines for a chat.
Steve: Always happy to discuss the trends affecting our markets. Leonardo, I remind everyone that you can always email us at steven.williams@argusmedia.com or leonardo.siqueira@argusmedia.com.
Leonardo: Thanks for listening. Stay tuned for future episodes.
