The Weekly Catalyst
Shifting Gears: USGC Propane Now The Most Advantaged US Ethylene Feedstock; Global Polymer Markets To Weaken In 4Q
- Polymer Market Trends: Global spot polymer prices mainly were lower WoW amid supply improvement and weak demand, with the upstream costs of Ex-US integrated producers, on average, falling more than in the US.
- Chemical Market Trends: Global spot ethylene prices fell WoW, with US spot ethylene values declining more than Ex-US values, while global spot propylene prices also weakened, with the US seeing a more modest drop.
- Feedstock Market Trends: The price of USGC spot propane has decreased ~35% during the past 30 days, while USGC spot ethane has risen 41% – US spot integrated ethylene economics from propane is now advantaged.
- Agriculture Market Trends: Crop prices are up WoW, a plus for agriculture. Global ammonia prices are also higher, but so are global natural gas costs – US spot ammonia margins remain near YTD highs entering 4Q24.
Exhibit 1 – Chart of the Day: US spot integrated cash costs to produce ethylene from propane feedstock fell below ethane feedstock costs for the first time since August 2021 last week – a trend favoring more propylene production.
Source: Bloomberg, C-MACC Analysis, September 2024
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