Global Chemical Update – Out in the Middle

The Weekly Catalyst

Global Chemical Update – Out in the Middle

Key Points:

• Global polymer values, on average, declined WoW, with US and Asia reflecting more declines than Europe, increasing concerns that a winter-led raw material surge could further cut profits.
• USGC ethane held up WoW relative to Ex-US naphtha. However, Asia’s ethylene production costs have risen compared to the US (Ex. #15), primarily due to depressed Asia cracker co-product credits.
• US polymer-grade propylene (PGP) increased relative to USGC propane and Asia propylene values WoW. Domestic PDH-unit profits are ~50% below September levels but higher than October lows.
• Macro indicators for farm-input sellers held up WoW, given supportive corn, soybean, and canola prices. Ammonia prices fell in Europe WoW relative to the US amid a likely return of some production.