Chemicals Update: Mixed Q2 Results for the Chemical Industry Amid Trade Tensions and Uncertainty

The first half of 2025 remained challenging for most petrochemical producers, as a wave of tariff threats disrupted product flows and shifted trade dynamics across key regions. Expanding capacity in China—and its growing role as a global exporter—intensified competitive pressure, weighing heavily on margins elsewhere. However, Chinese producers themselves were not immune, as rising domestic supply placed pressure on local margins. These headwinds were further compounded by volatile feedstock prices and persistently weak demand from end-use sectors. Meanwhile, tightening environmental regulations—especially in Europe—added another layer of pressure on producers already facing squeezed profitability.

Below is a summary of some of the recently released financial results from major chemical producers from the various regions.

The results across regions underline the dual pressures of weak demand due to various factors and Chinese oversupply, which have weighed on both profitability and shipping volumes. While North and South America saw deep losses from disrupted trade flows and plant outages, Europe struggled with high energy costs and production setbacks. In contrast, Middle Eastern and Indian players managed modest gains through higher volumes and new capacity projects, pointing to rising outbound shipments from the region.

As a result of these developments liquid chemical flows in H1 2025 were reduced overall, leading to softer freight rates and underutilized tonnage. Growth in renewable fuels and Middle Eastern capacity expansions provided some offset, but volumes remain insufficient to balance the decline in petrochemical trade. Unless global end-user demand revives in H2 2025, chemical shipping will continue to face overcapacity, lower freight rates, and margin pressure, with only selective growth from niche and Middle Eastern exports providing support.

By Plamen Aleksandrov, Head of Research – Chemicals and Svitlana Synoha, Market Analyst, Chemicals, SSY.