The Weekly Catalyst
Global Chemical Update – Heartache on the Dance Floor
Key Points:
- Global commodity chemical producers faced headwinds WoW, as monomer and polymer prices on average fell relative to feedstock costs. Western markets saw the most pronounced price declines.
- In energy & feedstock markets, U.S natural gas and USGC ethane notably increased relative to Brent Crude and Ex-US naphtha values – this setting reflects cost headwinds for U.S. producers.
- A stand-out item in commodity chemical markets is the significant U.S. polypropylene (PP) price decline WoW relative to overseas markets, U.S. polymer grade propylene (PGP), and U.S. propane.
- U.S. crop prices continue to reflect downward pressure, and North American fertilizer margins broadly shrunk WoW amid a combination of lower prices and higher production costs WoW.
- We also flag our research, A Change Is Gonna Come – Commodity Chemical Availability Improvements Are Now Well Anticipated, And That’s An Issue, that argued U.S. commodity chemical producers facing a tough 2H22 is now the consensus view, and positive surprise risk lacks appreciation.
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