Global Chemical Update – Is The US Cost Position As Good As it Gets?

Global Chemical Update

Global Chemical Update – Is The US Cost Position As Good As it Gets?

• On average, global polymer and monomer prices fell MoM, with feedstock cost variances being the chief determinant of margin differences – US producers have benefited relative to Asia and Europe.
• Asia ethylene production margins hit a YTD low last week, as its naphtha costs increased relative to monomer and polymer prices. US ethylene production margins are near YTD highs to close in 2023.
• Ex-US natural gas price weakness MoM has provided some producers, such as in ammonia, cost relief, but North America’s relative cost advantage compared to pre-COVID levels remains significant.  

Exhibit #1 – Chart of the day: North America’s chemical cost advantage has improved relative to 2019 levels.

Source: Bloomberg, C-MACC Analysis, December 2023