Global Chemical Update – Colder Weather

Key Points:

Global chemical demand headwinds and supply tailwinds are pressuring producer profitability, and we think outages are likely needed to push prices notably higher. Our indicators suggest a weak 1Q23.
North American polyvinyl chloride (PVC) led global polymer prices higher WoW, per our estimate, which also showed NW Europe polypropylene (PP) posted the greatest downtick during the period.
Brent Crude and Ex-US naphtha values declined WoW relative to US natural gas and USGC ethane, favoring global petrochemical production and, most negatively, for North American producers.
Macro indicators for farm-input sellers improved WoW. Corn values moved higher relative to soybeans, and ammonia-based fertilizer prices, on average, were unchanged though margins fell.