Global Chemical Update – Falling Down

Key Points:

Global polymer prices have fallen more than integrated production costs in 3Q driving sizable production margin declines, especially in the US, which has seen the most YoY margin compression.
Brent Crude and Ex-US naphtha increased relative to US natural gas and USGC ethane WoW, suggesting a slight steepening of the global chemical cost curve, but it remains significantly flatter YoY.
US and NW Europe benzene values fell significantly again WoW relative to Asia. We also highlight downward pressure on US methanol spot values relative to NW Europe and Asia.
US ethanol margins fell WoW, as corn prices rose more than ethanol prices, and US ethanol now reflects a slight premium to RBOB gasoline. Global ammonia prices were also mostly unchanged WoW.