The Weekly Catalyst
- We remain more confident in the slope of the global chemical cost curve and supply improvement staying in favor of current low-cost producers in 1H24 than in a global demand uptick lifting all regions.
- North American petrochemical producers enjoy a sizable production cost advantage relative to Asia and NW Europe, and we discuss Ex-US naphtha rising to a 2H23 high last week compared to US ethane.
- Higher Ex-US prices will likely prove more supportive of US PVC prices in the near-to-medium term than US PP, whose domestic price is higher and has recently risen relative to NW Europe and Asia.
Exhibit #1 – Chart of the day: Ex-US polyethylene (PE) production cost trends are helping support US PE prices.
Source: Bloomberg, C-MACC Analysis, November 2023