Finance
US tariffs worsen petrochemical sector challenges, executives warn
Published by Global Banking and Finance Review
Posted on September 9, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 9, 2025
2 min readLast updated: January 22, 2026
US tariffs are intensifying challenges for the petrochemical sector, leading to market shifts and a potential 15% drop in global trade.
By Mohi Narayan
SINGAPORE (Reuters) - U.S. tariffs are increasingly pressuring the already challenged petrochemicals sector, with China, the top producer, shifting its exports to Asia, industry executives said at a conference in Singapore on Tuesday.
The disruption could lead to a 15% drop in the global petrochemical trade, a TotalEnergies executive told the APPEC conference.
"If tariffs remain in place, petrochemicals trading will see another 15% drop on top of the 34% drop it has seen in the last five years," TotalEnergies' head of petrochemical trading, Ganesh Gopalakrishnan, told Reuters on the sidelines of the conference.
Petrochemical trading houses that do not own assets are struggling to survive, said Gopalakrishnan, adding that overcapacity had led to the 34% decline in trading over the past five years.
Tariffs are also making countries more protectionist, Sanjiv Vasudeva, executive vice president and chief market officer of Haldia Petrochemicals, told the conference.
It has become more difficult to plan investments for the short term because of overcapacity and volatility, Vasudeva said, adding that Indian consumption remains good with a stable growth rate - a rare bright spot for petrochemicals.
Tariffs are pushing Chinese products into "our traditional markets," said Bahrin Asmawi, chief commercial officer of Malaysia's Petronas Chemicals Group.
Petronas Chemicals Group is diversifying into specialty chemicals as exports of products from resins to end-products have been displaced by China's push into Asian markets in the aftermath of U.S. tariffs, Asmawi told Reuters on the sidelines of the event.
"Our main market is South Asia, Thailand, Indonesia, Malaysia, Vietnam," he said. "And all these are being supplied, being attacked by China because they cannot supply into the U.S.", he said. Petronas Chemicals has acquired two firms in Europe in order to gain technology to bring to Asia, he said.
(Reporting by Mohi Narayan; Writing by Colleen Howe; Editing by Sonali Paul)
The petrochemical sector involves the production of chemicals derived from petroleum or natural gas, including plastics, fertilizers, and synthetic fibers.
Market volatility refers to the degree of variation in trading prices over time, indicating the level of risk and uncertainty in a market.
Trading houses are companies that engage in the buying and selling of goods, commodities, or financial instruments, often operating on a global scale.
Overcapacity occurs when the supply of goods exceeds the demand, leading to reduced prices and profitability for trading firms.
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