The Weekly Catalyst
Global Chemical Update – Handle With Care
- Global polymer margins on avg. reflect little change WoW, as gains in the US resulting from falling feedstock values were offset by weakness in NW Europe due to lower polymer prices. We continue to foresee a rocky 2H22 profit setting for producers, such as Dow and LyondellBasell.
- USGC ethane values remain at the low end of the five-year range relative to US natural gas and have recently declined relative to Ex-US naphtha values, which is a plus for domestic ethylene producers.
- US ethanol margins improved WoW, and we note that US ethanol prices reflect a growing premium relative to RBOB gasoline. This setting is positive for US ethanol producers, such as ADM and Poet.
- Macro indicators for farm-input sellers are generally positive. US (& global) ammonia price support WoW relative to US natural gas is a plus for domestic producers, such as Nutrien and CF Industries.