The Weekly Catalyst
Global Chemical Update – Can I Count on You (Demand)?
Key Points:
- US August propylene contracts face modest downward pressure MoM based on spot trends, and end-market indicators suggest ample supply in 2H23/2024, absent production cuts or an energy shock.
- Asia spot polypropylene (PP) prices relative to polymer-grade propylene (PGP) have fallen notably since 2019, while US and European PP-to-PGP spreads are higher and reflect greater risk in 2H23/2024.
- Polypropylene (PP), and other propylene derivatives, have notable demand ties to the auto market. While auto production has risen in 2023 YTD relative to 2022, we view a 2024 slowdown as likely.