The Weekly Catalyst
Global Chemical Margins Outperformed Refinery Margins In 3Q24; Chemical Margins Are Now Seeing Significant Drops!
- Chemical Market Trends: On average, global spot base chemical prices declined further WoW despite mostly rising upstream feedstock costs – US spot PDH margins reflected a significant decrease in per-unit profit WoW.
- Polymer Market Trends: Global spot polymer prices were flat-to-lower WoW. US integrated polyethylene spot margins stand out, as they plummeted to a YTD low last week after reaching a YTD high in early September.
- Feedstock Market Trends: USGC spot propane prices rose more than USGC ethane WoW, but propane is ~4% higher MoM while ethane is up ~75% – both are higher than their 3Q lows relative to crude oil/Ex-US naphtha.
- Agriculture Market Trends: We discuss US corn price movements relative to soybeans and Ex-US natural gas strength relative to US levels WoW favoring positive margin trends for North American ammonia producers.
Exhibit 1 – Chart of the Day: Shell’s global indicative chemical margins in 3Q24 rose to their highest level since 3Q21, but its global indicative refining margin in 3Q24 fell to its lowest level since 3Q21. Now, chemical margins are falling.
Source: Shell 3Q24 Update – Shell estimated indicative margins are an approximation of its global chemical and refining margins calculated using third-party databases and vary from its actual results – description in LINK, C-MACC Analysis, October 2024
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