Current Affairs
October 20, 2025
Propylene Inventories
They are at the top end of the historical range . . .
October 19, 2025
India Tariff Update
India’s exports to US plunge as Trump’s 50% tariffs bite
2 days ago
Abhishek DeyBBC News, Guwahati
India’s goods exports to the US, its largest foreign market, dropped sharply by 20% in September and nearly 40% in the last four months, as Trump’s steep tariffs took effect, data shows.
September was the first full month of Washington’s 50% tariffs on Indian goods, which kicked in on 27 August. This includes a 25% penalty for Delhi’s refusal to stop buying oil from Russia.
“US has become India’s most severely affected market since the tariff escalation began,” said Ajay Srivastava of Global Trade Research Initiative (GTRI), a Delhi-based think tank.
Negotiations for a trade deal between the two countries are under way, with the goal of concluding an agreement by next month.
According to GTRI, the most significant impact of the tariffs has been felt by labour-heavy sectors such as textiles, gems and jewellery, engineering goods, and chemicals, which have suffered the heaviest losses.
Shipments to the US have seen four consecutive months of decline, and are down 37.5% – from $8.8bn (£6.5bn) in May to $5.5bn in September.
The drop in exports have also contributed to India’s trade deficit (the gap between what a country imports and exports), which widened to a 13-month high of $32.15 billion in September.
Some of the reduction in exports to the US was cushioned by improved trade with countries like the UAE and China.
Trade negotiations between India and the US resumed last month after months of stalling over a number of differences. An Indian delegation is currently in the US for talks.
On Wednesday, Trump said that Indian Prime Minister Narendra Modi has agreed to stop buying Russian oil, as the US seeks to put economic pressure on the Kremlin as part of efforts to end the war in Ukraine.
A spokesperson of the Indian foreign ministry said discussions were “ongoing” with the US administration which had “shown interest in deepening energy co-operation with India”.
But major sticking points over trade still remain, including access to agriculture and dairy.
For years, Washington has pushed for greater access to India’s farm sector, seeing it as a major untapped market. But India has fiercely protected it, citing food security, livelihoods and the interests of millions of small farmers.
Until recently, the US was India’s largest trading partner, with bilateral trade reaching $190bn in 2024. Trump and Modi have set a target to more than double this figure to $500bn.
October 19, 2025
LTL Trucking Update
Some LTL producer prices record biggest rise in years
“2025 is pacing to be an above-average year for PPI growth,” C.H. Robinson noted in a monthly report.
Published Oct. 14, 2025
David TaubeReporter
Dive Brief:
- A producer price index for long-distance LTL rose 10.5% year over year in August — the biggest increase since November 2022, per preliminary federal data.
- The index measures price change from the sellers’ perspective and excludes imports. In contrast, the consumer price index is from the purchasers’ perspective and includes imports.
- “2025 is pacing to be an above-average year for PPI growth,” C.H. Robinson Worldwide said in a monthly report.
Dive Insight:
A 32-year average of LTL PPI is 4.6%, according to C.H. Robinson, but every month this year has exceeded that benchmark.
That above-average trajectory is also in contrast to 2022, which averaged negative 1.4%, and 2023 averaging 3.4%, according to a Trucking Dive analysis of Bureau of Labor Statistics data.
Diesel prices could be a key factor, where a year-over-year uptick reversed over two years’ worth of YoY declines, C.H. Robinson noted.
Since late July, diesel prices have consistently risen every Monday compared to a year ago. Increases were particularly pronounced in September, averaging from 3% to 6% higher than those in 2024, based on data from the U.S. Energy Information Administration.
The Oct. 6 national average was 3.5% higher YoY.
“With difficult comparables for diesel prices expected over the next several months, further increases in diesel costs are likely,” C.H. Robinson reported. “This upward pressure is expected to flow through to the LTL PPI, contributing to above-average y/y changes in 2025.”
But diesel prices are not a primary driver of the LTL PPI, and they have been down 7% to 8% for the first half of the year compared to the same timeframe a year ago, the brokerage giant said in an email to Trucking Dive.
And while the index may be trending toward an above-average year for the industry as a whole, “not everyone is experiencing above-average rates,” Greg West, C.H. Robinson’s VP for LTL, said in the email.
https://www.truckingdive.com/news/ltl-ppi-ch-robinson-2025-diesel/802438
October 13, 2025
M&A Update
GRACE MATTHEWS INSIGHTS
Fall 2025 Newsletter
Click the image to download the latest edition of Grace Matthews Insights
Market Update: Near-Term M&A Outlook is Improving
After recent market dynamics created uncertainty, business owners considering a sale are searching for ways to get comfortable when considering the timing of a sale process. Despite the year-to-date slowdown in M&A activity throughout the chemicals and materials value chain (largely due to uncertainty around global trade / tariffs), there are signs for optimism as we begin Q4 and head toward 2026. Market participants and leading indicators are pointing to an uptick in activity in the months ahead. For this edition of Grace Matthews Insights, we analyzed both market data and communications from industry executives to gauge recent conditions and the near-term outlook. The takeaways are encouraging.
The first half of 2025 was marked by a period of tariff-driven macroeconomic uncertainty that led many would-be sellers to hit the pause button on sale plans. Acquisitions (by deal count) of North American based chemicals and materials science companies declined more than 40% year-over-year. This occurred despite expectations for healthy levels of M&A activity as we entered 2025. We view this as a classic case of supply and demand imbalance. While many potential sellers of businesses (supply-side) stayed on the sidelines searching for clarity in market conditions and their own near-term outlook, potential buyers, both strategic buyers and private equity (demand-side), remain well-capitalized and eager to deploy capital.
We saw sequential improvement in transaction volumes in Q3 as conditions improved, and entering Q4, the tone throughout the industry is turning more optimistic. Based on our conversations with industry participants and a review of recent earnings transcripts from dozens of public company CEOs throughout the chemicals and materials industry, we note the following themes indicating where markets are at today and where they may be headed:
- Temporary Slowdown in M&A is Bouncing Back – The climate of uncertainty in the first half of the year caused many transactions to pause or delay as sellers waited for more clarity. This has started to turn, and deal activity is becoming more robust
- Earnings Remain Healthy as Tariff Effects Have Been Hit or Miss – Despite the uncertainty, earnings remain steady. Tariff announcements and subsequent pauses / trade agreements have directly impacted some markets more than others, but companies are adapting quickly
- M&A Remains a Priority, and Strategic Buyers are Well-Capitalized – Corporate acquirers are ready to deploy capital, with a focus on smaller and highly synergistic “bolt-on” deals. Balance sheets remain strong, with average public company Net Debt to EBITDA ratios hovering at comfortable levels around 2.0x
- Incentives to Invest in the U.S. – Tariffs and an overall healthy economic environment relative to other geographies are creating incentives for reshoring and foreign acquisitions of U.S. companies
- Private Equity in Need of Exits – The average duration of current private equity investments is the longest it has been in at least ten years, increasing pressure to realize investments (i.e., to sell or ‘exit’) and return capital to investors
- Emerging Trends Driving Future M&A – Tailwinds to watch in the coming quarters that could accelerate M&A include interest rate reductions, massive investments in infrastructure to support AI, and the ripple effects of China’s anti-involution policy on cross-border trade
Below, we expand on these themes by combining insights from industry executives and analyzing key market trends.
An Underwhelming First Half as Would-Be Sellers Hit Pause
Announced transactions in Q1 and Q2 2025 were off significantly from the same period in 2024. Acquisitions of North American chemicals and materials science companies declined over 40% during this period.
This came as a surprise to many forecasters (including Grace Matthews) who less than a year ago were anticipating a strong level of M&A activity in 2025, as interest rates were widely expected to continue to fall early in the year and a new administration, expected to be more pro-business, was set to take office. Needless to say, much has changed in the last twelve months.
A key driver of the change in sentiment and resulting reduction in M&A volumes was the uncertainty created by U.S. and retaliatory tariffs. After the April 2nd “Liberation Day” tariffs were announced, many potential sellers chose to focus on securing supply chains, implementing pricing initiatives, and assessing how customer demand might be impacted. As a result, the prevailing sentiment in the first half of the year was to “wait and see,” hoping that improved visibility and financial performance could lead to higher valuations (and more deal certainty) in the future.
Figure 1: Announced acquisitions of North American chemicals and materials science companies. Source: Capital IQ & Grace Matthews
Earnings Remaining Stable and M&A Outlook is Improving
Fortunately, much of the negative sentiment and uncertainty has begun to subside, and activity has been increasing. As shown in Figure 1, M&A volumes rebounded in Q3 2025 and were on par with Q3 2024. Despite the tumultuous tariff environment over the past several months, the overall chemicals and materials sector has navigated the situation quite well. Many industry participants were well prepared, perhaps because the last few years of industry shocks have hardened the chemical sector’s collective capability to weather uncertainty (few have forgotten the COVID shutdowns, Texas freeze, supply chain shortages and inflation, and freight cost increases). When tariffs were enacted, companies took action quickly and creatively in efforts to mitigate their impact. Where necessary, companies have shifted trade flows to domestic or lower tariff sources, substituted away from disadvantaged raw materials, optimized inventory levels, and taken selective pricing actions. Due to these actions, effects have been largely secondary for many companies, though select sectors with greater exposure to foreign-sourced materials have seen more meaningful direct impacts. In our opinion, managers in the chemicals and materials sector have never been performing better, and they have had to considering the challenges they have faced.
On net, many companies in the Grace Matthews Chemicals & Materials Index posted reasonable financial results through the first half of the year. As highlighted in Figure 2, the number of companies posting year-over-year EBITDA growth in Q1 and Q2 was consistent with 2024 (hovering around 55-60% of companies). Interestingly, though not surprisingly, the number of companies posting revenue growth jumped significantly in Q2 2025, as companies quickly pushed through price increases as tariffs took effect. Prior to that, the majority of companies dating back to the beginning of 2024 had been posting revenue declines, indicating overall softness in the market.
“Many of the headwinds are merely delays […] underlying drivers of long-term growth remain strong.”
– Christian Koch, CEO, Carlisle Companies
Figure 2: Percentage of companies in the Grace Matthews Chemicals & Materials Index with year-over-year growth in Revenue (left chart) and EBITDA (right chart).
Long-Term Fundamentals Remain Healthy, Multiple Drivers of Investment in the U.S.
On the topic of acquisitions, strategic buyers have remained committed to M&A, as investor pressure to demonstrate growth is ever-present. Sluggish organic growth in many markets tends to put even more pressure on large companies to pursue M&A. Numerous executives have recently cited that their M&A pipelines remain robust, with a focus on disciplined capital deployment. While buyers are cautious about large-scale, transformative “bet the farm” acquisitions, they are eager to invest in smaller bolt-on deals. Key areas of focus include targets with obvious synergies, those that grow market share in high-value end markets and geographies, expand capabilities, and opportunistic investments that arise when market dislocations occur.
Enabling these investments, balance sheets and availability of capital have remained quite healthy. Net Debt to EBITDA ratios are hovering just under 2.0x for the Grace Matthews Chemicals and Materials Index, in line with historical averages. As a rule of thumb, Net Debt under 4.0x EBITDA is manageable, and many public companies unofficially aim to stay at 3.0x or less to preserve flexibility. If borrowing costs decline, as some predict they will in the coming quarters, it will also help private equity buyers, who typically rely more on leverage than strategic buyers do to finance acquisitions.
One aspect of the current environment that should not be overlooked is the incentives U.S. tariffs are creating for both reshoring of manufacturing and for international buyers to seek investments in the U.S. Michael Battles, Co-CEO of Clean Harbors, commented during their second quarter earnings call that “reshoring is no longer a headline. It is becoming a funded reality.” We are seeing this play out in several of our recent and ongoing projects. Two of our closed engagements earlier this year involved a U.S.-based business that was acquired by an international buyer (one headquartered in Germany and another in India). In both instances, the acquirers had a limited presence in the U.S. and were seeking to establish a manufacturing footprint. The current environment only seems to be accelerating the growth in cross-border M&A that has been on the rise in recent years.
“Reshoring is no longer a headline.
It is becoming a funded reality.”
– Michael Battles, Co-CEO, Clean Harbors
Private Equity in Need of Exits
Another driver of near-term activity is the growing backlog of private equity investments. According to Pitchbook, the median holding period for private equity backed companies in the U.S. is now up to 3.8 years, the longest it has been in at least 10 years (see Figure 3). The acceleration from the end of 2024 to June 2025 is quite remarkable and another indicator that very few private equity firms exited investments in the first half of the year. It’s obvious that private equity firms have viewed market conditions for selling a business as sub-optimal in recent years. However, the upward trend we’re seeing will have to reverse at some point as pressure to return capital to investors grows. We are already seeing and hearing of an increasing number of private equity platforms being brought to market as we approach the end of the year.
Figure 3: Median holding period for U.S. private equity backed companies. 2025 data as of June 2025. Source: Pitchbook.
Other Trends Driving Future M&A
Another noteworthy development is the artificial intelligence boom. Serving this rapidly growing market requires huge investments, almost all of which require chemicals and materials inputs. Take, for example, Microsoft’s latest AI data center in Mt. Pleasant, WI called Fairwater. The site spans 315 acres, has a staggering 1.2 million square feet under roofs, 46 miles of deep foundation piles, 120 miles of underground cable, and 72 miles of mechanical piping. The inputs required to build and maintain something like this are almost too long to list: building products and construction chemicals for foundations and structures, metals and metal treatment chemicals for steel piping and structures, water treatment and refrigeration chemicals for cooling towers, fire suppression systems, diesel fuel and lubricants for generators, cleaning chemicals for server rooms to reduce static and prevent dust buildup, to name just a few. This phenomenon has and will continue to provide a boost in demand for companies serving these markets for years to come. Longer term, AI infrastructure will also create competition for electricity, raising potential issues for other energy consumers, including chemicals and materials manufacturers.
Other factors that can influence business owners’ confidence in launching sale processes include interest rates, consumer confidence, and housing starts. In the longer-term, we are also monitoring factors impacting cross-border trade and global production capacities. Specifically, as a result of higher U.S. tariffs on Chinese imports, many European companies allege that they are seeing an influx of Chinese producers dumping products into their markets. Yet another long-term variable is the potential ripple effects of China’s anti-involution policy, the Chinese government’s agenda to reduce overcapacity and price wars by promoting an orderly exit from outdated capacity. This will take time for its effects to be felt but could have positive implications for higher cost of production North American and European producers in markets threatened by low-cost Chinese suppliers. If meaningful capacity truly is taken out of some markets, this could provide a strong tailwind for Western producers.
Figure 4: Aerial view of Microsoft’s new AI datacenter campus in Mt. Pleasant, WI.
Looking Ahead: A Reason for Optimism
So what do we expect as we look ahead? In short, we are optimistic that M&A activity will accelerate over the coming 12-18 months. We see more factors pointing potential sellers to launch sale processes than those causing them to continue to wait. The fundamental drivers of M&A in chemicals and materials remain intact. Amid all the uncertainty throughout 2025, companies have proven to be quite resilient, despite slower organic growth. Large strategic buyers need acquisitions for growth. If anything, slower organic growth has made acquisitions even more important as growth catalysts. Likewise, private equity’s appetite for deals is not going anywhere, and they will increasingly turn to becoming sellers as they work through their growing backlogs.
Grace Matthews Chemicals & Materials Index (EV / EBITDA Multiples)
The Grace Matthews Chemical & Materials Index tracks the Enterprise Value / EBITDA ratios (“EV / EBITDA multiples” or “EBITDA multiples”) of ~100 publicly traded chemicals & materials companies that span multiple sub-sectors and geographies. The Index aggregates the latest reported financial data and stock prices and tracks valuation trends and operating metrics across different industry sectors. Index averages are equally weighted, as opposed to weighting by market capitalization.
Source: Capital IQ & Grace Matthews analysis.
Select Recent Chemicals and Materials Science Transactions
| Closed Date | Acquirer / Target | Target Description | Enterprise Value (EV) | EV / Sales | EV / EBITDA |
|---|---|---|---|---|---|
| Transaction values in $US millions | |||||
| Pending | Berkshire Hathaway / OxyChem | Producer of commodity chemicals, including chlorine, sodium hydroxide and others used for water treatment and healthcare | $9,700 | ||
| Pending | Givaudan / Belle Aire Creations (Rock Island Capital) | Full-service fragrance manufacturer | |||
| Pending | Advanced Drainage Systems / National Diversified Sales (sub. of Norma Group SE) | Manufacturer and supplier of water management, drainage, and stormwater solutions | $1,000 | 3.2x | 16.1x |
| Pending | Kemira / Water Engineering (Nolan Capital) | Provider of water treatment chemicals, consultation, and services | $150 | 2.5x | |
| Pending | Hivest Capital Partners / Novasol Chemicals | Global specialty chemicals distributor | |||
| Pending | Chemtrade / Polytec | Provider of turnkey water treatment solutions | $150 | 6.5x | |
| Pending | Avery Dennison / Business of Meridian Adhesives Group (American Securities) | Manufacturer of specialty adhesives for the U.S. flooring industry | $390 | 3.5x | |
| Pending | Solenis (Platinum Equity) / NCH Corporation | Manufacturer and distributor of industrial, commercial, and institutional maintenance products and services | |||
| Pending | Gemspring Capital / Goodyear Tire & Rubber (Polymer Chemicals Business) | Producer of synthetic rubber, primarily serving the automotive aftermarket space | $650 | 0.7x | 5.0x |
| Oct-25 | Arclin / Polymer Solutions Group (The Jordan Company) | Manufacturer of proprietary and custom polymer additives, dispersions and release agents | |||
| Sep-25 | Hydrite Chemical / Enterprise Specialty Products | Provider of foam control products | |||
| Aug-25 | Mason Wells / Calvary Industries | Manufacturer of metal pretreatments, cleaners, water treatment, and process chemicals | |||
| Aug-25 | Hawkins / StillWaters Technology | Distributor of water treatment chemicals and equipment | |||
| Aug-25 | SNF Group / Obsidian Chemical Solutions | Provider of specialty chemical solutions primarily for completion operations in the oil and gas industry | |||
| Aug-25 | Blue Sea Capital / MicroCare (Heartwood Partners) | Provider of branded consumables for non-discretionary precision cleaning applications | |||
| Jul-25 | South Coast Terminals / Lindau Chemicals | Manufacturer of specialty organic chemicals including advanced epoxy curing agents, promoters, and solvated organic copolymers | |||
| Jul-25 | Velocity Rail Solutions (Wind Point Partners) / Liquid Tech Solutions (Lindsay Goldberg) | Provider of route-based, mobile on-site refueling services to a diverse set of mission critical end markets | |||
| Jul-25 | Truelink Capital / Zep (New Mountain Capital) | Manufacturer of cleaning and maintenance products | |||
| Jul-25 | Pritzker Private Capital / Buckman | Specialty solutions provider for water treatment and industrial processes | |||
| Jun-25 | Aditya Birla Group / Cargill (Specialty Chemicals Business) | Manufacturer of formulated resins, curing agents, reactive diluents and polyaspartic resins | |||
| May-25 | Peninsula Polymers / Rodaj | Distributor serving the CASE, Packaging, and Specialty markets | |||
| May-25 | Hasa (Wind Point Partners) / Clearwater Chemicals | Texas-based water treatment provider for commercial and recreational pools, competitive aquatic systems, and water cooling tower systems | |||
| Apr-25 | Bertram Capital / Applied Adhesives (Arsenal Capital) | Distributor and manufacturer of adhesives for the packaging, product assembly, paper converting, and automotive markets | |||
| Apr-25 | Quaker Houghton / Dipsol Chemical | Supplier of surface treatment and plating solutions | $153 | 1.8x | 10.5x |
October 13, 2025
Container Rates
Surprise move by China carriers ahead of U.S. port fees
Weak demand sees trans-Pacific container rates fall by double-digits.
· Wednesday, October 08, 2025
It took China a generation to ascend to the top of the global maritime sector; it won’t take nearly that long for that country to brush off expensive U.S. port fees on its ships.
Cosco, China’s flag carrier and the world’s fifth-largest container line, and subsidiary Orient Overseas Container Line (OOCL) of Hong Kong said that they won’t levy surcharges to offset the fees on Chinese-built and operated ships calling U.S. ports to be implemented Oct. 14.
While other liner operators scramble to drop calls and shift some of their China tonnage, Cosco advised customers in the U.S. that it plans no changes to services ahead of the punitive fees formulated under the authority of the United States Trade Representative.
“It seems unlikely shippers will experience much of an impact once the new law takes effect,” said Judah Levine of analyst Freightos, in a note to clients.
The fees, which escalate in the coming years, could cost Cosco and OOCL as much as $2.1 billion in 2026, analysts say, but could be absorbed by subsidies from Beijing.
The ship tax, which aims to blunt China’s maritime dominance and boost American shipping and shipbuilding, charges China-owned or operated ships $80 per net tonnage for each voyage to the U.S. Non-Chinese operators will be charged the greater of $23 per net ton or $154 per twenty-foot equivalent unit (TEU) capacity. The fees apply up to five times annually per vessel; roll-on/roll-off (ro-ro) vehicle carriers will pay a rate of $14 per net ton. The fees increase by $5 per ton annually until April 2028.
The fees must be paid in advance of arrival via the Treasury Department’s Pay.gov platform, and vessels must show proof of payment or risk denial of entry or cargo operations at U.S. ports.
Beijing for its part in late September passed new maritime laws that allow it to levy its own retaliatory port fees, and bar access to ports and data for vessels from countries that discriminate against China.
“American lines such as Matson, and U.S.-flagged vessels make up a modest share of trans-Pacific volumes,” said Levine, “so this kind of response may not have an outsized impact, but does represent an escalation as the deadline approaches.”
Trans-Pacific spot container rates continued to fall following the Chinese Golden Week holiday. The Freightos Baltic Index saw Asia-U.S. West Coast rates drop 16% to what Levine termed “a possibly loss-making” $1,554 per forty foot equivalent unit (FEU). Prices to the East Coast fared worse, off 18% to $3,260 per FEU.
Asia-Europe settled at $2,000 per FEU, down 9%, and Asia- Mediterranean prices fell 6% to $2,217 per FEU, “with all these lanes at least 60% lower than this time last year and at or near their lowest levels since just before the start of the Red Sea crisis almost two years ago,” Levine said.
“That rates are falling to this degree while Red Sea diversions are still in place suggests that capacity growth is a big factor in lower rates across the industry,” said Levine, “with the eventual end of the war in Gaza primed to release even more capacity back into the market.”
Ocean container lines introduced approximately 1.18 million TEUs of new container shipping capacity in the first half of 2025, according to analyst Xeneta, up 3.8% from a year ago.
Whether general rate increases planned by carriers for mid-October hold could depend on capacity adjustments through blankings and service suspensions. October shows 67 sailings cancelled from China to the U.S. and 71 on the westbound trade, according to project44, higher than early-Covid levels.
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