CIA Chief Executive: UK chemical production in decline due to geopolitics, tariffs, overcapacity

UK chemical production has been in sharp decline for the past four years, for several reasons, according to Steve Elliott, Chief Executive of the Chemical Industries Association (CIA; London), as per Chemweek.

“There’s ongoing geopolitical tensions, obviously the war [in Ukraine], tariff uncertainty and overcapacity from markets like China, where we’re just not able to compete on price,” Elliott said in an interview June 12 with BBC Radio’s Today news and current affairs program. He was responding to a newspaper report about of the potential closure of Ineos Group Ltd.’s petrochemical complex at Grangemouth, UK

The UK chemical industry hit a peak during the pandemic, when it was “driving a lot of solutions to get through COVID,” Elliott said. “[W]e’ve come off a high in 2021, and our production in the UK by volume has fallen by nearly 40% since.”

During the interview, Elliott stressed the importance of the Grangemouth complex to the UK economy. “It’s a major provider of raw materials for the basis for manufacturing in the UK,” he said.

Elliott also underlined the difficulties that Grangemouth faces. “The challenges that Ineos is facing are the perfect storm of an ongoing lack of demand and then those energy-, carbon- and actually some broader regulatory-related costs,” he said. “And the cumulative impact is making life very tough for what the [UK government’s] industrial strategy, that has just been announced, has called a key, foundational sector to drive growth.”

The CIA has welcomed the UK industrial strategy but called for rapid implementation.

“The industrial strategy — having one — is good for the UK, it’s a positive signal of longer-term certainty,” Elliott told the BBC. “There are elements in it, like energy relief, particularly around electricity costs relief — some of that will be relatively immediate for energy-intensive industries, but some of it won’t come through until 2027. So, I guess, many of us are saying, ‘great, we needed it yesterday, but the requirement now is urgency to deliver it.’”

On carbon costs, the UK chemical industry needs “breathing space and a transitional period of time to enable us to go on delivering not only net-zero solutions, but all the critical national infrastructure that we are part of, and we regularly underpin. And we drive a lot of the growth sectors as well that have been identified [in the strategy],” Elliott said.

The chemical and petrochemical plant closures that have been announced in the UK recently should elicit a greater sense of urgency from the UK government, Elliott said.

“We’ve already seen this year a number of site closures in the chemical space and broader energy-intensive manufacturing community,” he said. “We’ve seen strategic reviews, we’ve seen profit warnings. What we’re saying is: deliver on the industrial strategy now and in relieving the cost of electricity, don’t simply switch that from electricity costs to gas costs. And also on the carbon costs, from 2027 to 2030, let’s keep the number of allowances or free credits as they are, as a minimum, and don’t tighten them any harder because all you’ll do is sacrifice the very businesses and the very sector that is going to underpin the net-zero transition.”

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Chevron Phillips Chemical has successfully completed the expansion of its low-viscosity polyalphaolefins production unit in Beringen, Belgium, significantly boosting its manufacturing capacity in Europe, as per Chemweek.

The project has doubled the site’s LV PAO production capacity to 120,000 metric tons per year, establishing it as the largest decene-based LV PAO facility in Europe by volume.

“Beringen has a proud legacy of operational excellence and innovation in PAO production,” said Antoine Janssens, general manager for Europe, the Middle East and Africa. “This expansion strengthens that legacy, enhances integration with our existing assets, and reinforces CPChem’s position as a global leader in the specialty chemicals market.”

LV PAOs are essential components in a wide array of applications, including automotive and industrial lubricants, as well as emerging technologies such as electric vehicles, wind turbines and immersion cooling. As industries worldwide seek more sustainable and high-performance solutions, demand for LV PAOs continues to rise.

“This expansion reflects our commitment to growth and innovation,” said Frank Derudder, EMEA PAO/NAO manager. “We’re scaling up to meet global demand while maintaining the high quality our customers rely on.”

The upgraded facility incorporates advanced electrification technologies to reduce reliance on natural gas, helping lower emissions and improve long-term energy efficiency. CPChem is also exploring renewable electricity to further minimize the site’s environmental footprint.

Strategically located in the heart of Europe, the Beringen site benefits from a skilled local workforce, robust supply chain infrastructure and proximity to key feedstocks and markets.

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Rare earths producer Neo Performance Materials (Toronto) has reported second-quarter net income of $5.69 million, up from $883,000 in the year-ago quarter on net sales up 6.7% year over year to $114.7 million, as per Chemweek.

Adjusted EBITDA totaled $19.0 million, up 41.8%. Sales grew in the magnets and rare metals businesses but declined in chemicals and oxides.

The company has also increased its full-year 2025 adjusted EBITDA guidance to $64 million-$68 million from $55 million-$60 million. “Our performance for the first half of 2025 is ahead of expectations and reflects strong execution across the business,” said Neo Performance Materials CEO Rahim Suleman. “The results were driven by continued strength in our key end markets and solid operational performance across all our segments, including 31% volume growth in [permanent magnets business] Magnequench.”

Neo’s board also concluded a strategic review, under which it “resolved to accelerate the implementation of Neo’s strategic plan,” the company said. “This approach will prioritize strengthening Neo’s established leadership position in rare earth magnetics and critical materials.”

As part of that plan, the company plans to open its permanent magnets facility at Narva, Estonia in September 2025.

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The Surface Treatment global business unit of BASF’s Coatings division, operating under the Chemetall brand, has been selected to supply innovative PET recycling washing solutions for Circular Plastics Company’s new plastic recycling plant in Vung Tau, Vietnam, said BASF.

Chemetall will provide a range of novel technologies tailored for Circular Plastics Company’s facilities, which recycle post-consumer PET plastics into food-grade products in Myanmar and Vietnam. They include Gardoclean® cleaning agents, Gardobond® additives for PET/polyolefin separation and defoaming. The integration of these technologies substantially improves the quality of treated flakes, boosts productivity, and reduces energy and resource consumption. The solutions also enable the plastic recycler to produce washed flakes that comply with food contact standards.

“We are excited that our successful collaboration with Circular Plastics Company continues to strengthen, extending from Myanmar to Vietnam. As the plastics recycling industry evolves in Southeast Asia, Chemetall is dedicated to growing alongside our customers by offering differentiated PET and plastics recycling solutions and expertise that enhance quality, drive efficiency, and support the positive development of a circular economy,” said Evelyn Shen, Vice President, Chemetall Asia Pacific.

“At CPC, we are committed to producing the highest-quality food-grade rPET, and Chemetall has been an exceptional partner in helping us achieve that goal. Their advanced wash chemistry not only enhances the purity and performance of our recycled materials but also aligns perfectly with our values of innovation and environmental responsibility. We’re proud to work with a global leader like Chemetall whose solutions are as forward-thinking as our vision for circularity in Asia,” said Marc Rudolf von Rohr, Group Chief Operating Officer, Circular Plastics Company.

Amidst the growing demand for recycled plastics in the emerging markets of Southeast Asia, the collaboration between Chemetall and Circular Plastics Company exemplifies a shared commitment to leveraging innovations to tackle process challenges, create value for new material cycles, and achieve circular economy goals.

Chemetall offers a specialized portfolio of cleaning technologies and process expertise for the plastics recycling industry, enabling customers to elevate operational productivity and product quality, while supporting the industry’s shift toward a more sustainable future.

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Russia's payment balance for foreign goods trade had a surplus of $9.3 billion in June 2025, up 5.9% from $8.7 billion in May, the Central Bank of Russia said on its website, as per Interfax.

The surplus fell 21.4% year-on-year, compared to $11.8 billion in June 2024.

It decreased 19.2% year-on-year to $57.3 billion in January-June 2025, versus $70.9 billion a year previously.

Russia's exports fell 0.9% from $33.1 billion in May to $32.8 billion in June and decreased 8% from $35.7 billion in June 2024. They also decreased 5.9% year-on-year to $196.1 billion in January-June 2025, compared to $208.1 billion a year previously.

Russia's imports fell 3.4% from $24.4 billion in May to $23.6 billion in June and were down 1.3% from $23.9 billion in June 2024. They increased 1% to $138.7 billion in January-June, versus $137.4 billion a year previously.
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