C-MACC Perspectives No 17
May Price Forecast Update
- We are surprised by the strength of ethylene in Asia, as well as some other Chemical prices, and question whether China is building inventory, or more likely simply has too much ethylene capacity off-line for maintenance. If it was an inventory build, polyethylene prices would likely be strong also but they are not.
- While naphtha values have risen relative to crude from the extreme lows of April, the discount remains significant versus history and we still hold the view that as long as jet fuel demand remains depressed and gasoline does not bounce fully back to 2019 levels – naphtha will remain cheap.
- The rise is US ethane prices is consistent with more ethylene capacity and declining Permian output, but we would expect ethylene cutbacks to offset this in the near-term – the step change in ethane prices required to attract more volume from the Marcellus would make the US very uncompetitive.
See PDF Below for all charts referenced and price tables