Global Chemical Update – Crude Awakening

The Weekly Catalyst

Global Chemical Update – Crude Awakening

Key Points:

• Global chemical prices have risen from mid-year lows, with higher crude oil and related feedstocks being a primary driver and yielding significant relative benefits for low-cost North American producers.
• NW Europe petrochemical markets saw significantly higher costs WoW and essentially unchanged prices, compressing its production margins relative to Asia and upping its potential for plant closures.
• Ex-US ammonia price strength helped pull US prices notably higher WoW, lifting domestic margins, and we reiterate our constructive near-to-medium-term profit view for domestic fertilizer producers.