The Weekly Catalyst
Global Chemical Update – Noise Turns to Signals
- Three items signal higher global ethylene cracker operating rates ahead: 1) Butadiene springs to life; 2) ethylene derivative values rise (e.g. polyethylene rose in all major regions) despite lower ethylene values globally WoW; and 3) Feedstock spreads (e.g. Asia naphtha/US ethane) were unmoved WoW.
- These items unite to suggest future headwinds for US ethylene derivative exporters as they should drive a reversal in pricing strength narrowing export netbacks. Today, however, there is still plenty of incentive to export
- Methanol values tick higher on a global scale WoW while USGC natural gas values fell – this is a plus for US producers/exporters, such as Methanex. Despite the forward curve we believe that natural gas will remain weak.
See PDF below for all charts and tables