The Weekly Catalyst

The Weekly Catalyst

Global Chemical Update – Sweetness in Weakness

Key Points:

• Energy companies looking to push their value chains downstream into petrochemicals should view weak 2H23 chemical market conditions as more of an opportunity than a reason to look elsewhere.
• North American integrated polymer margins have broadly fallen from their 1H23 highs amid higher production costs and lower prices – the US holds a production cost advantage over Europe and Asia.
• US natural gas and USGC ethane prices increased WoW relative to Brent Crude and Ex-US naphtha, favoring a flatter petrochemical cost curve that benefits Europe and Asia producers more than the US.