North American Commodity Chemical Margins Strengthen In 1Q24 – Will It Last?

Feedstock Market Trends: The North American natural gas/NGL advantage increased WoW relative to Ex-US petrochemical producers, pushing USGC ethylene spot margins based on ethane feedstock to a YTD high.
Chemical Market Trends: NW Europe base chemical prices reflected the most notable improvement WoW, with Asia reflecting the most weakness – a development that significantly benefits US exporters to Europe.
Polymer Market Trends: Western PE prices rose relative to Asia WoW, notably benefiting North American integrated PE producer margins. Global PP values were mostly unchanged, and US spot PP fell below PGP.
Agriculture Market Trends: Corn prices fell again WoW, pushing implied US farmer income lower and putting downward pressure on fertilizer use estimates. US ethanol margins fell WoW to a YTD low amid ample supply.

Exhibit 1 – Chart of the Day: North American polymer prices showed the largest gain WoW relative to feedstock costs.