The second round of US and China tariffs, comprising 25% on US$16bn of imports on each side and going into effect on 23 August, is likely to hit US commodity chemical exports to China far harder, as the impact on comparable China exports to the US would be negligible. However, the overall impact on high-volume commodity chemical markets may be less than anticipated, at least from this latest round. The first round of 25% on US$34bn in had excluded chemicals.
US commodity chemical products will be mostly impacted based on exports to China, as a percentage of total production in 2017 includes MEG, styrene, EVA copolymers, LLDPE, HDPE, and ethylene dichloride.
Meanwhile, Eurozone business’ optimism hit a two-year low as demand cooled down, prices increased and worries about geopolitical tensions mounted, according to IHS Markit. The flash composite purchasing managers index (PMI) increased slightly in August, month-on-month, to 54.4 points, but growth in private output was the weakest since January 2017. The PMI, incorporating manufacturing and service sectors, was slightly up from 54.3 points in July but still below 54.9 points posted in June.
