VINACHEM

A clearer picture on the ultimate level of US tariffs could lead to a surge in pent-up demand for chemicals and plastics, said the CEO of Dow.

“As we saw with COVID-19, the more people sit on the sidelines, the more there’s a build-up or a pent-up desire to do something… demand is going to come. And when it comes, it tends to bounce back in a big fashion,” said Jim Fitterling, CEO of Dow, in an interview with ICIS.

Fitterling spoke to ICIS on the sidelines of the American Chemistry Council (ACC) Annual Meeting.

Tariff uncertainty has caused businesses to put projects and other investments on hold, he noted.

“At the beginning of this year, I think everybody thought with the new administration [that] 2025 will be better than 2024. But as we sit here at the mid-point of 2025, I don’t think anybody’s predicting a big H2 spike [in demand],” said Fitterling.

“It would be crazy for me to try to predict it right now, but if we can get some certainty around the tariffs and what the levels are going to be, and a feeling that ‘this is it’, we can go forward from here. The sentiment will turn more positive, and the markets move on sentiment,” he added.

NAVIGATING TARIFFS

Dow is navigating the tariff environment well through an international trade operations team with decades of experience and great lines of communications in all markets, he noted.

“We haven’t seen any dramatic impact on our ability to move product and sell product because of tariffs,” said Fitterling.

However, the uncertainty has caused customers to pull back a bit, he added.

“But I think more of that has been worked out and things are starting to flow, and you’re starting to see that people are realizing that they’re not just going to be able to absorb these tariffs. They’re going to have to pass along [costs],” said Fitterling.

“Some of these costs [are being passed along] and some product is continuing to move. [But] I would say people in general are still very cautious,” he added.

The CEO cautioned that while the market may see greater clarity by July after the 90-day pause starting 9 April on higher levels of US reciprocal tariffs comes to an end, it could take longer.

DOW PE EXPORTS MOVING ALONG

Meanwhile, Dow’s exports of polyethylene (PE) from the US are running well, he said.

“Everybody was expecting a big hiccup [in exports] in the month of April, but things moved relatively well. And of course, China never put tariffs on imports of plastics materials, even on the ethane [feedstock],” said Fitterling.

On 24 April, an unofficial China proposed tariff exemption list of 131 US products worth around $46 billion, or 28% of total imports, including PE, along with other chemicals and key feedstock ethane, was circulated.

Two weeks prior to this, ICIS began picking up on some China PE importers asking for previously canceled US PE orders to be reinstated for June arrival, noted Harrison Jacoby, director of PE at ICIS.

“[China] didn’t put any tariffs on those because they need them, for their own manufacturing industry and to make the products that they turn around and re-export. It’s only logical,” he added.  – Source: ICIS –