Jonathan Lopez
27-Nov-2025
SAO PAULO (ICIS)–Fitch Ratings has downgraded a portion of Mexican polyethylene (PE) producer Braskem Idesa’s debt obligations to the “restricted default” (RD) credit rating after the company was unable to pay interest on one of its bonds.
The missed coupon payment was for a bond maturing in 2029 and was due last week. After a five-day grace period, the producer did not manage to find the cash to fulfill its obligation.
According to Fitch’s methodology, an RD rating applies to an issuer that has an uncured payment default – the 2029 bond’s coupon – but has not filed for bankruptcy or ceased operations. Moreover, the agency kept some debt obligations under the C rating it gave them last week.
“Braskem Idesa skipped an interest payment due on 18 November on its $900 million senior secured notes … The rating [RD] action follows the company’s failure to cure the missed interest payment … during the company’s ongoing negotiations with creditors,” said Fitch.
“Possible debt restructuring: Braskem Idesa announced on 8 September that it had hired a financial advisor to evaluate financial alternatives for its strained liquidity and capital structure. The company may enter a debt restructuring process in the near to medium term.”
The downgrade to RD is the third rating action taken by Fitch in the past two weeks. First, the agency downgraded Braskem Idesa’s rating from CCC+ to CC, down from ‘CCC+, then further downgraded it again C once it entered the contractual grace period.
All ratings fall under the category of ‘non-investment grade’ debt, also referred to as junk debt. Fitch’s rating scale has 11 notches – from AAA to D (default). See the agency’s rating scale here.
Braskem Idesa is a joint venture between Brazil’s polymers major Braskem – which holds a 75% stake – and Mexico’s Grupo Idesa.
It operates a 1.05 million tonne/year polyethylene (PE) plant in Coatzacoalcos, in the Mexican state of Veracruz.
Braskem Idesa and Braskem had not responded to a request for comment at the time of writing.
MEXICAN WOES, BRAZILIAN WOES
The financial woes at Braskem Idesa could end up with parent company Braskem’s controlling stake being diluted as it tries to negotiate with an ad-hoc group of bondholders to achieve a sustainable capital structure and preserve operations for the Mexican subsidiary, said analysts at investment bank BTG Pactual earlier this week.
BTG Pactual identified two primary dilution scenarios. Grupo Idesa could increase its 25% stake or, bondholders could convert debt into equity, which could significantly alter the ownership structure, given Braskem Idesa’s $2.2 billion total debt.
“With Braskem Idesa holding $46 million in cash as of Q3 2025, it was widely expected that the company would have difficulties meeting its coupon payments in the short term,” BTG Pactual said.
In this week’s credit rating action, Fitch conducted a recovery analysis assuming a liquidation approach to valuation, with Braskem Idesa’s inventory ciphered at Mexican pesos (Ps) 1.7 billion ($93 million) valued at 50% and property, plant, and equipment of Ps29.4 billion valued at 50%, yielding total liquidation value of Ps31.2 billion with a 10% administrative claim.
If Braskem Idesa filed for bankruptcy protection, Fitch would downgrade its rating to D but will hold on for now as it reassess ratings after completion of any debt restructuring to reflect the new capital structure, the agency said.
Fitch expects the Mexican producer’s leverage ratio to reach 22.4 times (22.4x) debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) at year-end, far exceeding parent company Braskem’s ratio above 10x. A leverage ratio of 3.0x or below is considered financially sound.
The crisis compounds challenges for Braskem, which is also facing financial difficulties while undergoing a potential control change to investment fund IG4 Capital, which reportedly could be announced imminently.
($1 = Ps18.34)
Front page picture: Braskem Idesa’s production facilities in Coatzacoalcos
Source: Braskem Idesa
Graeme Paterson
27-Nov-2025
LONDON (ICIS)–Wacker Chemie is to cut more than 1,500 jobs worldwide as part of a €300 million per year cost-saving target, it said on Thursday.
Most of the job cuts will be at the group’s sites in Germany as the company aims to make significant savings in production and administration.
The project, which was launched in October under the name of PACE, will start in the first quarter of 2026 and is expected to be completed by the end of 2027.
“We are currently working on measures to achieve our cost-saving targets,” said Wacker president and CEO Christian Hartel.
“The aim is to reduce our costs to a competitive level through savings. This will put Wacker back on the road to success.”
Hartel added that high energy prices and bureaucratic obstacles in Germany were continuing to hamper development of the chemical industry.
The specialty chemicals producer lowered full-year guidance in its third-quarter earnings as weak global demand and lower selling prices caused it to swing to a net loss.
Jonathan Yee
27-Nov-2025
SINGAPORE (ICIS)–Profits generated by Chinese industrial firms fell 5.5% on year in October, data from the National Bureau of Statistics (NBS) showed on Thursday.
Factors for the contraction include a higher base in the same period last year as well as a rapid growth in financial expenses, said NBS statistician Yu Weining.
Development in new quality productivity in traditional industries has shown initial success, with profits in bio-based chemical fiber manufacturing increasing 61.2% between January-October, while recycled rubber manufacturing profits grew by 15.4% during the same period.
Growth on industrial profits in January-October stood at 1.9%.
Coordinated policy measures will aim to bolster domestic demand and advance new growth drivers, Yu said.
Jonathan Yee
27-Nov-2025
SINGAPORE (ICIS)–Aster Chemicals and Energy (Aster) has ordered advanced compressor solutions from Japanese firm Hitachi Asia Ltd (Hitachi) that will double the Singapore-based firm’s ethylene (C2) export capacity on Bukom Island.
Hitachi will deliver two new compressor units for scheduled delivery in January 2027, which will be used to install a parallel C2 chiller system, Aster said in a statement on Thursday.
“The project will also deepen synergy between Bukom and the Chandra Asri cracker facility on Cilegon, unlocking further integration and optimisation across the regional C2 derivatives value chain,” Aster said.
Aster, a joint venture between Indonesia’s Chandra Asri and global commodities trader Glencore, owns a refinery with a capacity of 237,000 barrels/day alongside a 1.1 million tonne/year naphtha cracker on Bukom Island.
It further has 2.5 million tonnes/year of downstream chemical assets on Jurong Island.
Priya Jestin
27-Nov-2025
MUMBAI (ICIS)–India’s Gujarat Narmada Valley Fertilizers and Chemicals (GNFC) plans to set up a 163,000 tonne/year ammonium nitrate (AN) melt project for Indian rupees (Rs) 4.5 billion ($50 million) at its complex at Bharuch in the western Gujarat state, a company source said on Thursday.
The new plant, which will almost double the company’s AN melt capacity to 338,000 tonnes/year is expected to commence operations by July 2027.
The company already operates a 175,000 tonne/year AN melt plant at its Bharuch complex.
“This project is a downstream project. The upstream projects for this were approved last year,” the source said, adding that work is ongoing to increase the company’s ammonia and nitric acid capacities.
The company is currently in the process of setting up a 200,000 tonne/year weak nitric acid (WNA) plant and is increasing its ammonia capacity by 50,000 tonnes/year at its Bharuch complex.
GNFC can currently produce 347,000 tonnes/year of WNA and 445,500 tonnes/year of ammonia at its Bharuch complex as per the company website.
Separately, the company is also exploring the possibility of building a 150,000 tonne/year bisphenol A (BPA) plant and a 100,000 tonne/year polyols unit, the company source said.
GNFC is currently conducting market surveys and feasibility studies for the two projects, he added.
($1= Rs89.23)
Asia-US container rates fall as capacity continues to outweigh demand
Adam Yanelli
26-Nov-2025
HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US fell significantly week on week as available capacity continues to outstrip demand, according to shipping analysts.
Rates from global logistics company Freight Right on its TrueFreight Index (TFX) experienced significant weekly decreases, as shown in the following chart.
Robert Khachatryan, founder and CEO of Freight Right Logistics, said spot rates to the West Coast continued their rapid decline this week, now falling to the $1,350-1,500/FEU (40-foot equivalent unit) range, with some carrier-specific lows touching $1,350/FEU.
“This marks the fifth or sixth consecutive weekly drop, driven by slow demand and an extremely short holiday week in the US,” Khachatryan said.
Rates to the East Coast also fell, now averaging about $1,900/FEU, shrinking the typical spread between West and East Coast from $800-900/FEU to just $600-700/FEU.
“Both lanes are effectively at or near their ‘rock-bottom’ levels for the year,” Khachatryan said. “The market anticipated declines in late November, but not to this extreme, and not at month-end heading into December.”
Rates to the West Coast from online freight shipping marketplace and platform provider Freightos plunged by 32% from the previous week and fell by 8% to the East Coast.
Judah Levine, head of research at Freightos, said rates remain slightly above the low for the year, hit in early October.
“The current overcapacity on the East-West lanes is the main reason that carriers’ November transpacific GRIs (general rate increases) – which had pushed West Coast rates up by $1,000/FEU this month to about $3,000/FEU – have now fizzled,” Levine said.
Market intelligence group Linerlytica said the outlook for the rest of the year remains gloomy as TEU-mile (20-foot equivalent unit-mile) demand growth has slipped below the growth in vessel supply.
“Carriers’ reluctance to withdraw capacity during the slack winter season has hurt freight rates across key routes with the transpacific rates facing the greatest stress,” Linerlytica said.
Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers – such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.
They also transport liquid chemicals in isotanks.
LIQUID TANKER RATES TO BRAZIL SURGE
US chemical tanker trade lanes were overall unchanged this week for most routes, while vessel demand continues to remain soft. Overall, the spot market was quiet due to a holiday shortened trading week.
One exception is rates for the USG to Brazil trade as they perk up and as interest to this region remains steady, supported by steady COA (contract of affreightment) volumes. Space is becoming very tight until the end of the year, keeping rates firm in this direction.
USG to ARA remains muted for spot and solid for contractual cargoes and as CPP (clean petroleum products) tonnage continues to participate in the chemical sector. The market to this region has had a few new inquiries, but COA volumes have increased, supporting the trade lane. If it persists, it could continue to pressure the market even further.
For the USG to Asia, there seems to be limited available space as COA volumes remain strong. Due to the lack of any new spot fixtures rates remain unchanged. Although, if this should persist, rates could be pressured upward. There seems to be interest in December for the usual parcels of glycol, methanol, and ethanol.
Bunker prices remain lower mainly due to the continued plunge in energy prices week on week.
Additional reporting by Kevin Callahan
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