The Weekly Catalyst
- US ethylene production economics, based on ethane feedstock, held up WoW, as cost deflation helps support domestic ethylene profit and integrated domestic polymer margins despite lower prices.
- US propane prices rose WoW and US propylene prices declined, pinching domestic PDH production margins, and we foresee domestic PP prices falling with PGP values into 2024 amid higher production.
- Ammonia and methanol producers benefited WoW from price support and lower natural gas costs, though we see more risk with methanol prices reversing near term amid rising Asia price discounts.
Exhibit #1 – Chart of the day: The US chemical cost advantage has increased relative to 2019 levels.
Source: Bloomberg, C-MACC Analysis, December 2023