Retrospect 2024: EU–US Chemical Trade Insights

Trade between the European Union (EU) and the United States (US) in chemicals is one of the world’s most significant bilateral exchanges. In 2024, this trade relationship remained robust, with total goods trade reaching around $976 billion . Within this broad commerce, solvents – key chemical products like acetone, isopropanol, toluene, xylenes, and various alcohols, ketones, and esters – play an important role. Solvents are critical inputs for industries ranging from pharmaceuticals and cosmetics to paints, coatings, and electronics. This report focuses on the solvent segment of EU–US chemical trade in 2024, examining: import/export volumes of major solvents, regulatory developments shaping trade, price trends and market dynamics, and supply chain issues affecting availability and trade flows. Insights are backed by the latest data and industry analysis.

Import and Export Volumes of Key Solvents

Both the EU and US are major producers and consumers of chemical solvents, and significant quantities are exchanged across the Atlantic each year. In general, Europe tends to import more bulk petrochemical solvents, while exporting higher-value specialty chemicals to the US . The United States remains the EU’s top partner in chemical trade – in 2023 the US accounted for about 24% of EU chemical imports and 26% of EU chemical exports . This includes many solvent products categorized under “organic chemicals,” the second-largest trade category after pharmaceuticals.

• Trade Volumes: Exact 2024 solvent-specific trade volumes are not fully published yet, but available data indicate substantial trade. For example, the US globally exported over 311,000 metric tons of propyl and isopropyl alcohol (major solvents) in 2023 . The US was also among the top exporters of aromatic solvents like toluene, shipping about 122,000 tonnes of toluene worldwide in 2023 . The EU similarly produces and trades large quantities; as a bloc it exported over $214 million worth of toluene in 2023 . A significant share of these volumes is exchanged bilaterally – the US serves as a key supplier of petrochemical solvents to Europe, while Europe sends some solvent products (and lots of formulated chemicals) to the US. Overall, petrochemicals (a category including many solvents) dominated EU chemical imports in 2023 , reflecting Europe’s reliance on foreign sources for base chemicals. This trend likely continued in 2024, especially as European production was constrained (see below).

• Key Solvents in Trade: Important solvents traded between the regions include acetone, isopropanol (IPA), ethyl acetate, butyl acetate, methyl ethyl ketone (MEK), methyl isobutyl ketone (MIBK), and aromatic solvents like toluene and mixed xylenes . For instance, acetone is a noteworthy case: Europe’s acetone supply in 2024 was influenced by reduced phenol production (acetone is a by-product), causing some tightening in availability and a need for imports . The US, with its large phenol-acetone capacity, was positioned to export acetone to deficit regions. Similarly, isopropanol – produced from propylene – saw transatlantic trade flows, especially as the US ramped up output during periods of strong demand (e.g. for sanitizers and pharmaceuticals), and Europe managed oversupply during weak demand phases. In summary, tens of thousands of tonnes of these solvents moved between the EU and US in 2024, helping balance regional surpluses and deficits.

Regulatory Developments Impacting Solvent Trade

Regulatory policies in 2024 had a notable impact on solvent markets and trade, as both jurisdictions tightened rules on certain chemicals and addressed trade policy concerns:

• EU Chemical Regulations: The EU continued implementing its stringent chemicals legislation. Notably, N,N-dimethylformamide (DMF) – a solvent used in pharmaceuticals and polymers – was officially restricted in the EU from December 2023 due to reproductive toxicity concerns . Companies in 2024 had to comply by limiting worker exposure or substituting DMF, which likely affected demand for imports of this solvent. Additionally, the EU progressed on updating chemical hazard classifications. In September 2024, it notified the WTO of a draft update to the CLP (Classification, Labelling and Packaging) Regulation to revise hazard classifications for 32 substances . While many updates were for specialty chemicals, any reclassification of solvents as more hazardous can impact trade (through stricter handling requirements or even usage bans in certain applications). Moreover, the EU’s broader Green Deal and Chemicals Strategy continued to push for safer, lower-emission chemicals, encouraging “green solvents” and potentially phasing down solvents with high volatility or toxicity. These regulatory trends in Europe may have reduced EU demand for some traditional solvents and influenced sourcing (favoring suppliers who meet EU standards).

• US Chemical Regulations: In the US, 2024 saw major actions under the Toxic Substances Control Act (TSCA) targeting solvent chemicals. Methylene chloride (dichloromethane) – a widely used solvent in paint strippers and industrial processes – was subject to a new risk management rule. In April 2024, the EPA finalized a ban on most uses of methylene chloride due to serious health risks . This rule prohibits manufacturing, processing, or distribution for consumer use and many industrial uses, with only critical-use exceptions under strict workplace controls. The regulation will curtail domestic use and also restrict imports of methylene chloride-containing products, thereby directly affecting solvent trade. Similarly, the EPA has been advancing proposals to restrict trichloroethylene (TCE) and perchloroethylene (PCE) (degreasing and dry-cleaning solvents) , with final rules expected by early 2025. The anticipation of these rules in 2024 led industries to begin shifting to alternatives, impacting demand for these solvents. Overall, US regulatory tightening on hazardous solvents may reduce its exports (as domestic producers scale back) and also limit imports of those solvents into the US market.

• Trade Policy and Tariffs: EU–US trade in chemicals during 2024 was also influenced by trade policy developments. Fortunately, the two sides avoided major new trade barriers in 2024 – a far cry from the tariff wars of a few years prior. The Airbus/Boeing dispute tariffs on chemicals (which had hit products like acetone and other chemicals in 2019–2020) remained suspended, providing stability to solvent trade flows. However, late 2024 brought some uncertainty over steel and aluminum tariffs: the expiration of a tariff truce raised the specter of US import duties on EU metals and potential EU retaliation. Industry observers warned that if talks failed, EU counter-tariffs could target US chemical exports . By the end of 2024 this “looming trade war” was not realized, but it underscored how geopolitical trade decisions could quickly alter transatlantic chemical flows. Meanwhile, the EU and US continued cooperation through their Trade and Technology Council, discussing alignment on critical chemical regulations and supply chain security (though no specific trade agreements on solvents were reached in 2024). In summary, regulatory stringency on hazardous solvents increased on both sides, and while direct tariff actions on chemicals were avoided in 2024, the policy environment remains one to watch for its potential to disrupt solvent trade.

Price Trends and Market Dynamics

The solvent market in 2024 was characterized by soft demand, ample supply in many segments, and consequently pressure on prices, especially in Europe. Both global economic conditions and industry-specific factors shaped these trends:

• Weak Demand and Overcapacity: A sluggish macroeconomic backdrop in 2024 kept downstream demand for solvents muted. Sectors like construction and automotive – big consumers of paints, coatings, and thus solvents – struggled on both sides of the Atlantic. Europe’s chemical industry faced “weak demand, persistently high energy prices, and a looming trade war” environment , leading to what analysts called “dire straits” for many producers. Hard times in Europe’s automotive sector directly meant lower solvent demand for coatings and adhesives . In the US, the housing market slump reduced demand for construction-related solvents (paint thinners, etc.). For instance, US ethyl acetate (a solvent for paints/inks) demand was expected to face headwinds from the slow residential construction market . Globally, solvent capacity has grown in recent years (with new, efficient plants in China, the Middle East, and the US), so supply outpaced the lackluster demand. This imbalance led to excess inventories and competitive export offers, particularly affecting Europe – European producers had to contend with a glut of lower-cost exports from newer plants in the US, China, and Middle East flooding the market . The result was intense price competition and, in some cases, European plant shutdowns to curb oversupply.

• Price Declines in Europe: European solvent prices trended downward through much of 2024. Ample supply and tepid consumption created a buyer’s market. Isopropanol (IPA), for example, saw sustained price declines in Europe during Q3 and Q4 2024 . German export prices for IPA fell steadily in late 2024 as producers liquidated inventory and buyers delayed purchases, expecting even lower prices . By year-end, European IPA export prices had slumped to around $1500/MT (FD Northwest Europe) amid an oversupplied market and cautious sentiment . A similar story played out for acetone and other solvents: in Q4 2024, European acetone prices were under pressure. An oversupply of phenol (acetone’s co-product) earlier in the year had forced production cuts, briefly tightening acetone in Europe , but demand was so soft that it “continued to suppress price increases” . With cheap imports available and buyers holding off, European solvent prices hit multi-year lows in some cases (for instance, contract toluene prices in Europe dropped by over $200/ton from the prior year by mid-2024) . Overall, 2024 was a bearish year for solvent pricing in Europe, aside from short-lived fluctuations due to maintenance outages or feedstock blips.

• Mixed Trends in the US: In the United States, solvent market dynamics were a bit more mixed. Early-mid 2024 saw some price support from isolated supply constraints. For example, in Q3 2024 US IPA prices actually rose on a yearly basis, fueled by a surge in demand from pharmaceuticals and personal care, combined with tight supply of propylene feedstock . A series of factors – low producer inventories, a jump in upstream crude and freight costs, and even hurricanes disrupting oil production – tightened US IPA availability and let producers achieve price increases in Q3 . Acetone in the US similarly experienced a volatile year: after a weak first half, Q3 acetone prices in the US were down ~26% year-on-year under pressure from weak demand, but they saw some stability in Q4 as production issues (e.g. a major producer’s temporary shutdown) offset sluggish consumption . By late 2024, many US solvent prices had eased again as demand remained “lackluster” into the winter. The American Chemistry Council reported overall US chemical output (excluding pharma) fell about 0.4% in 2024 amid “repressed end-use markets” . Still, US producers benefited from competitive feedstock costs (shale gas-based) and were often able to export surplus solvents profitably. Trade has been a bright spot for US chemical producers, who leveraged cost advantages to ship products abroad . In summary, US solvent markets in 2024 were somewhat buffered by cheaper production and steady demand in certain segments (like pharmaceuticals and cosmetics), whereas Europe’s markets were more uniformly depressed.

• End-Use and Niche Dynamics: Different end-use industries had varying impacts on solvent trade. Pharmaceutical and personal care demand (for high-purity solvents like IPA or ethanol) stayed relatively firm on both sides, helping to support trade in those solvents. Electronics manufacturing (a growing sector) also drove demand for ultra-pure solvents. On the other hand, paints and coatings saw reduced consumption due to weak construction and automotive output, hurting demand for solvents such as glycol ethers, acetates, and aromatics. The “just-in-time” buying patterns adopted by customers in 2023 continued in 2024 – buyers kept inventories low and purchased only as needed, which added to the volatility and kept apparent demand low. Additionally, seasonal trends mattered: for instance, US solvent demand typically rises in Q2 for summer fuel blending and coating season, and this was anticipated to lift paraxylene/toluene consumption for PET and gasoline in Q2 2024 . However, any seasonal uptick was modest given the broader economic headwinds. One positive note was that adhesives and packaging industries maintained steady solvent demand (e.g. ethyl acetate for inks and glues) , preventing an absolute collapse in those markets. In effect, 2024’s market dynamics forced solvent producers to cut margins and lean on export outlets, with pricing largely dictated by the lowest-cost global supplier.

Supply Chain Issues Affecting Availability and Trade Flows

Several supply chain factors in 2024 influenced solvent availability and trade flows between the EU and US:

• Energy and Feedstock Constraints: Energy prices and feedstock availability continued to shape supply. Europe, heavily reliant on natural gas (for chemical energy and feedstock) and naphtha (oil) to produce petrochemicals, struggled with high input costs . Although gas prices had come down from the 2022 peak, they remained above US levels, undermining European competitiveness. The Russia–Ukraine war’s effect on natural gas and crude oil prices persisted into 2024 , squeezing European solvent producers’ margins and in some cases limiting operating rates. This led to periodic tightness for some Europe-made solvents whenever producers cut runs to save costs. For example, producers of propylene oxide (source of propylene glycol solvents) and other intermediates announced plant closures or curtailments in Europe due to these pressures . In the US, feedstock supply was generally ample, but events like hurricanes on the Gulf Coast disrupted oil and gas output and in turn petrochemical feedstocks in late summer . A notable instance was a force majeure at a major US acetone producer (Shell) in Q3, temporarily crimping supply . These disruptions were short-lived, but they prompted US consumers to draw on inventories or imports. Overall, Europe’s feedstock disadvantage meant it increasingly leaned on imported solvents, while the US saw mostly internal disruptions that it managed through stockpiles and export pauses.

• Freight and Logistics Challenges: After the extreme logistics turmoil of the pandemic years, 2024’s freight situation was a mixed bag. Global shipping costs, which had fallen sharply in 2023, began rising again by late 2024. By early 2024, European importers were facing higher freight rates for chemicals, with increased demurrage costs and longer transit times due to various disruptions . One trader noted that rising bunker fuel prices and logistical hiccups were adding around €20–30 per tonne in freight costs for imported commodity chemicals . These extra costs pinched margins on transatlantic solvent trade and made some buyers consider sourcing locally to avoid uncertainty . For instance, a late-2023 Suez Canal disruption caused by a grounded vessel led to delays, reminding everyone that critical chokepoints can snarl supply lines . In the US, port operations in 2024 were relatively smooth (the West Coast port labor dispute was settled by late 2023), but trucking and rail bottlenecks intermittently affected chemical deliveries. Additionally, both EU and US industries remained wary of potential labor strikes; there were “concerns over potential labor strikes” affecting chemical plants and logistics in 2024, which created market jitters (for example, the threat of a US rail strike or European transport strikes, none of which fully materialized in 2024 but did influence inventory decisions). The net impact of logistics issues was moderate – not as catastrophic as 2021’s freight crisis, but enough to sometimes delay shipments and contribute to regional price differences.

• Inventory and Supply Planning: Supply chain dynamics led to strategic adjustments by companies. With memories of past shortages still fresh, buyers in 2024 often kept safety stocks of critical solvents (pharmaceutical firms, for instance, maintained inventories of IPA and ethanol to avoid supply risk). Conversely, for more common solvents, many buyers shifted to a “buy as needed” approach given the expectation of falling prices . This behavior – delaying purchases in a falling market – actually exacerbated the oversupply and price drops in Europe, as mentioned. Producers, on their side, had to manage inventories carefully: in Europe they were “liquidating inventories to reduce storage costs” by the end of the year. In the US, producers held leaner inventories and were quick to cut export volumes or output when domestic hiccups (like storms) occurred, to prioritize local customers. The transatlantic trade flows acted as a balancing mechanism: when Europe had a deficit (due to turnarounds or cutbacks), US suppliers increased exports, and when the US had tight moments, European or Asian suppliers filled the gap. Shipping solvent in bulk (via tankers or ISO containers) is relatively straightforward, so supply chain agility was high. The main constraint was cost and timing rather than physical unavailability.



• Quality and Compliance Factors: Another often-overlooked supply aspect is meeting regulatory specs. As regulations tightened, some solvent shipments required more paperwork (e.g. REACH compliance documentation for imports to EU, or verifying no banned impurities in US-bound shipments). In 2024, there were a few instances of trade friction due to quality standards – for example, an EU importer might reject a solvent batch that didn’t meet updated purity or classification requirements. These were minor issues overall but did prompt exporters to ensure compliance (a part of supply chain management).

In sum, the 2024 supply chain for solvents was marked by high reliability but at higher cost. Geographic imbalances were smoothed out by active trade: the US, benefitting from cheaper feedstocks and economies of scale, exported solvents to Europe, while Europe managed to maintain supply to its customers even as local production faltered. Logistics and production hiccups caused only temporary disruptions. The rising cost of moving chemicals and the ever-present threat of disruptions encouraged both EU and US industries to bolster supply chain resilience – whether by diversifying suppliers, increasing on-site storage for critical solvents, or investing in local production for strategic chemicals.

Conclusion and Outlook

2024 was a challenging year for the EU–US solvent trade in terms of market economics, but the transatlantic supply chain proved adaptable. Import and export volumes of key solvents remained significant, even as Europe’s chemical output shrank and U.S. producers leveraged their cost advantage. Regulatory developments on both sides introduced stricter rules for hazardous solvents, shaping the mix of products traded (with safer, compliant solvents gaining ground). Prices largely favored buyers – especially in Europe – due to weak demand and plentiful supply, although U.S. markets saw pockets of firmness when supply tightened. Supply chain issues, from energy feedstock crunches in Europe to logistical cost inflation, affected trade flows but did not stop them; instead, they highlighted the need for agility and planning in the solvent business.

Looking ahead, many of these themes are expected to continue into 2025. Industry analysts predict a modest rebound in chemical demand if economic conditions improve , which could firm up solvent prices from their 2024 lows. However, the structural challenges remain: Europe’s high production costs and regulatory burdens versus the U.S.’s feedstock advantage and export push . This suggests the EU will likely keep importing base solvents (and potentially more, if European plant closures proceed ), while the U.S. will seek to grow its chemical exports as a “bright spot” for the industry . Both sides will need to navigate the evolving regulatory landscape – for instance, ensuring alternative solvents are in place as old ones are phased out – which could create new trade opportunities (e.g. bio-based or “green” solvents demand rising in the EU, possibly supplied by innovative U.S. producers).

In conclusion, the EU–US solvent trade in 2024 underscored the interdependence of the two economies. Europe depended on U.S. (and other foreign) suppliers for many solvents amid its production woes, while U.S. chemical producers relied on export markets like Europe to absorb their surplus . Market dynamics were unfavorable in 2024, but the steady flow of transatlantic trade helped prevent shortages and cushion the impact. As the sector moves forward, solvent trade will continue to be shaped by the push-pull of regulation, cost competitiveness, and global supply chain resilience. Both the EU and US are committed to a stable trade relationship, and this should help them jointly tackle any headwinds in the chemical solvent market in the years to come.

Sources:

1. Eurostat – EU trade in chemicals and related products, 2023 ; EU–US goods trade 2023

2. Cefic – Facts & Figures 2024: Trade Developments

3. Statista – Propyl/Isopropyl Alcohol export data 2023 ; WITS – Toluene exports by country 2023

4. ICIS – EPCA ’24 Solvents Market Podcast Summary ; 2024 Americas Outlook: Ethyl Acetate ; Butyl Acetate & Glycol Ethers Outlook

5. S&P Global Platts – Phenol/Acetone H2 2024 Outlook ; Freight Rate Impact on Petrochemicals (Dec 2023)

6. ChemAnalyst – Q4 2024 Acetone Europe ; Q4 2024 IPA Europe and Q3 NA ; Q3 2024 Acetone NA

7. Chemical & Engineering News – ACC Year-End 2024 Outlook ; European industry plant closures (Feb 2025)

8. Chemistry World – “Supply struggles as demand shrinks” (Dec 2024)

9. U.S. EPA – TSCA Methylene Chloride Ban 2024 ; Hunton Andrews Kurth – EPA risk management rule May 2024 (regulatory summary)

10. WTO Notification – EU CLP Regulation draft (Sept 2024) (classification updates for hazardous substances)