Global Chemical Update – Lower Prices To Follow Lower Costs For Most

The Weekly Catalyst

Global Chemical Update – Lower Prices To Follow Lower Costs For Most

• Global chemical feedstock prices mostly fell WoW, resulting in downward pressure on spot chemical prices – US natural gas and USGC ethane are two of the weakest global chemical feedstocks MoM.
• Global polymer markets were mixed WoW, with Ex-US prices falling relative to mostly unchanged US polymer values. US PP reflects more downside risk relative to PE and PVC in 1H24, in our view.
• Weakness in Ex-US natural gas prices MoM is now showing up in European ammonia prices, which we think will put downward pressure on global prices (and margins) into 2024 for most producers.

Exhibit #1 – Chart of the day: The US chemical cost advantage has risen MoM, most notably in ethylene.

Source: Bloomberg, C-MACC Analysis, December 2023