【Overseas Highlights】India Extends Tariff Exemption For Petrochemicals By Half A Month! European Union (EU) PET Bottle New Regulations Come Into Effect; Sumitomo Merges Polyolefins Business

News Highlights:

Raw Material News - India's only TDI facility resumption postponed again, tariff exemption extended for another half month, providing short-term opportunities for exports to India.

Policy Highlights: EU PFAS Ban to Take Effect in August!

Automotive News - DEKRA Shanghai Headlight Laboratory Obtains ARAI Witness Recognition in India

Macroeconomic NewsThousands died from extreme heat in Spain in June! Chinese air conditioning companies Rush order

Price InformationThe central parity rate of the RMB against the US dollar is 6.8088, down 21 points.

The following are details of international news:

India’s only TDI plant has delayed its restart again; the tariff exemption has been extended by another half month, creating a new short-term opportunity for exports to India.

India’s Ministry of Finance has issued the latest customs notification, once again extending the import basic customs duty exemption policy for 40 categories of petrochemical and chemical products, including polyurethane raw materials. The duty-free window has been extended from the original deadline of June 30 to July 15.

Earlier, India’s Ministry of Finance announced the temporary tariff exemption policy on April 1, 2026, and implemented it from April 2, 2026. It was originally scheduled to expire on June 30, 2026, with an initial period of only three months, and has now been extended by an additional 15 days.

First confirmation based on chemical recycling calculation methodology: The European Commission adopts a proposal for determining recycled content in PET bottles.

The European Commission has adopted new rules on the recycling of single-use plastic beverage bottles made primarily of polyethylene terephthalate (PET). For the first time, these rules establish a methodology for calculating, verifying and reporting chemically recycled content. This is also part of the “Plastics Package” published by the Commission in December 2025.

The new rules will ensure transparency in calculating the recycled content of new single-use PET bottles. This is crucial for creating a level playing field and providing investment certainty for the plastics recycling industry. The new rules apply to any recycling technology, including chemical recycling and mechanical recycling technologies. This will help Member States achieve the recycled content targets set out in the Single-Use Plastics Directive.

Sumitomo Chemical Integrates PP and LLDPE Businesses into Prime Polymer Joint Venture

On July 1, Sumitomo Chemical announced that the agreement related to the integration of its domestic polyolefin business in Japan had officially taken effect. The integration will be carried out in two stages using an absorption-type company split structure: Prime Polymer will take over the relevant business, while Sumitomo Chemical will acquire a 20% stake in Prime Polymer. Subject to the completion of the relevant regulatory approvals, the entire integration agreement will be formally implemented on July 1, 2026.

7.7 billion euros deal concluded! BASF's coatings business spin-off realized.

On June 30, 2026, BASF received approximately EUR 5.8 billion in pre-tax cash proceeds.

Following the completion of the transaction, BASF will hold a 40% equity stake in the new company, Schivetu (formerly BASF’s coatings business).

BASF and Carlyle announced the coatings business transaction on October 10, 2025, which has obtained all necessary regulatory approvals and was officially completed on June 30, 2026. The enterprise value of the transaction is 7.7 billion euros. On June 30, 2026, BASF received approximately 5.8 billion euros in pre-tax cash proceeds. After the completion of the transaction, BASF holds a 40% equity stake in Siewt (formerly BASF's coatings business division).

The EU PFAS ban will be implemented in August!

There are only 2 months left until the EU PPWR regulation officially takes effect on August 12, 2026. The PFAS control threshold for films used in food contact, outdoor functional applications, and electronic protection will come into full force. This new regulation will no longer restrict only PFOA and PFOS; instead, it sets mandatory limits for tens of thousands of per- and polyfluoroalkyl substances (PFAS). Customs inspections will be carried out on-site, with no buffer period for inventory. Goods exceeding the limits will be detained directly and the entire shipment may be returned.

For a long time, fluorinated coatings, fluorinated processing aids, and ePTFE fluorinated breathable membranes have been widely used in food packaging exported to Europe, outdoor TPU composite films, and electronic insulation films, thanks to their water- and oil-repellent properties and high-barrier performance. Today, all of these original materials have crossed compliance red lines. Many film manufacturers still face issues such as uncleared inventory, untested alternative materials, and a lack of end-to-end supply chain control. If shipments are made to the EU after August, they may face huge freight losses, order breaches, and permanent termination of cooperation by overseas customers.

SK Hynix has filed an application for an IPO listing on Nasdaq.

SK hynix has filed an F-1 registration statement with the U.S. Securities and Exchange Commission (SEC), officially launching its initial public offering (IPO) process in the United States. The company plans to issue American Depositary Shares (ADSs) and has applied to list on the Nasdaq Global Select Market under the ticker symbol “SKHY.” According to the prospectus, each ADS will represent a certain proportion of SK hynix common shares. Key terms of the offering, including the offering size, offering price, and the ADS-to-share ratio, have not yet been disclosed and will be determined based on the share price in the Korean market and prevailing market conditions. Upon completion of the offering, SK hynix will remain listed on Korea’s KOSPI while also achieving a U.S. listing.

DEKRA's Shanghai Automotive Lighting Laboratory has obtained witnessed recognition from India's ARAI.

Recently, DEKRA’s Shanghai Lighting Laboratory has officially obtained witnessed recognition accreditation from the Automotive Research Association of India (ARAI), further expanding its cross-border compliance service capabilities. Based on the principle of test data uniqueness, DEKRA can provide Chinese automotive lighting and vehicle component companies with one-stop services for EU UN ECE certification and India ARAI witnessed certification, significantly lowering the compliance barriers for overseas expansion and helping Chinese-made lighting products efficiently enter the two major overseas markets of Europe and India.

Overseas Macro Markets:

More than a thousand people died from high temperatures in Spain in June! Chinese air-conditioning companies Recently, many parts of Europe have been experiencing persistent high temperatures, breaking heat records and issuing heat warnings. According to estimates released by Spanish authorities on July 1, the number of deaths related to high temperatures in Spain in June exceeded one thousand.

[Sources: The U.S. is trying to persuade Iran to abandon the tolls for the Strait of Hormuz] According to U.S. officials quoted on July 1, the U.S. government is attempting to convince Iran to forgo the tolls for the Strait of Hormuz. The official stated that accepting the agreement proposed by the U.S. would yield greater benefits for Iran. If the U.S. lifts all sanctions, Iran could develop and... Revenue from oil and other resources would be 100 times higher than income generated by charging transit fees in the Strait of Hormuz. The report also said that the United States and Iran reached an understanding on June 28 to ease tensions in the Strait of Hormuz for one week in order to advance the implementation of the memorandum of understanding. However, analysts believe this means conflict could erupt again after July 4. Compared with reaching a final agreement, the current preliminary agreement appears more likely to collapse.

[Vance Says U.S. Military Action Against Iran Has Produced Considerable Results] U.S. Vice President Vance said in a podcast program aired on June 30 that, from the perspective of oil transportation, the Strait of Hormuz is currently open and oil shipment volumes have increased, with “some days actually higher than before the war began.” Vance also said that the United States has achieved quite considerable military results in its military action against Iran. The U.S. could choose to reach a long-term agreement with Iran, but only if Iran makes major changes. In addition, the U.S. could also choose to take further action against Iran after consolidating its existing gains, but that depends on what U.S. President Trump thinks.

[U.S. media reports: Saudi Arabia fears that the U.S. "Freedom Plan" operation will be called off within 48 hours, prompting the White House to launch a "full lobbying" effort] "The dispute over the opening of the Strait of Hormuz has further widened the rift in U.S.-Saudi relations." The Wall Street Journal reported on July 1 that the U.S. initiated a so-called "Freedom Plan" operation in May to guide stranded vessels out of the Strait of Hormuz, which faced concerns and obstruction from Saudi Arabia, forcing the U.S. to call off the operation within less than 48 hours of its launch.

[Pakistan expects the next round of U.S.-Iran talks to be held after Khamenei’s funeral] On July 2, Pakistan’s Ministry of Foreign Affairs issued a statement saying that, as mediators, Qatar and Pakistan held talks in Doha separately with U.S. and Iranian negotiators, and made positive progress on issues related to implementing the U.S.-Iran memorandum of understanding.

Price Information:

The RMB midpoint against the U.S. dollar was set at 6.8088, down 21 pips. The previous trading day’s midpoint was 6.8067, the previous trading day’s official closing rate was 6.7935, and the overnight session closed at 6.7880.

[Upstream Raw Material USD Market Prices]

On July 1, CFR Northeast Asia ethylene is stable at $815/ton, and CFR Southeast Asia is stable at $790/ton.

The average price of propylene in Northeast Asia was stable at USD 890/mt FOB Korea, while the CFR China average price was stable at USD 920/mt.

North Asia refrigerated cargo delivered-at-port prices: propane at $590-598/ton; butane at $590-598/ton.

The CFR South China refrigerated cargo prices for August delivery were USD 641–651/mt for propane and USD 661–671/mt for butane.

The CIF price of frozen goods in Taiwan is propane at $590-598 per ton; butane at $590-598 per ton.

[LLDPE USD market price]

Film: USD 930/ton (CFR Huangpu)

[HDPE US Dollar Market Price]

Thin film: USD 1,080/ton (CFR Qingdao);

Hollow: 1242 USD/ton (CFR Yantian);

Injection molding: USD 1,200/ton (CFR Yantian).

[LDPE USD Market Price]

Thin film: USD 1,250/ton (CFR Huangpu);

[PP USD Market Price]

Homopolymer: USD 1,200/ton (CFR Huangpu);

Copolymer: USD 1,200/ton (CFR Nansha);

Membrane material: $1480/ton (CFR Huangpu);

Transparent: USD 1,440/ton (CFR Huangpu).