Global Weekly Catalyst No. 263

Base Chemical Global Analysis

Global Weekly Catalyst No. 263

• General Thoughts: Western spot ethylene and propylene movements dwarf avg. Asia movements YTD amid outages and higher feedstock costs, which we think favors lifting export-geared production in Asia in 1H25.
• Feedstocks & Energy: Global chemical feedstocks mostly rose WoW, with US propane among the strongest and US natural gas among the weakest – US costs grew relative to Asia and Europe during the past 30 days.
• Olefins: US spot ethylene and propylene increased significantly. WoW was helped by preemptive outages tied to severe winter weather in TX, which comes ahead of an above-average regional planned turnaround season.
• Other Base Chemicals: European methanol prices were among the weakest in base chemicals WoW, declining below US levels, and we continue to anticipate Western methanol values falling further toward Asia in 2025.
• Agriculture: Crop prices further strengthened WoW, which is a plus for farmer spending and nitrogen-based fertilizer demand, which we view as lessening price downside risk in 2H25 despite a likely uptick in production.
• Refining & Biofuels: US crude oil refinery margins rose, but US ethanol production margins modestly dropped last week. We are generally more cautious about US ethanol margins than US crude refiner margins in 1H25.

Exhibit 1 – Chart of the Day: Western spot ethylene and propylene price shifts dwarf average Asia movements YTD.

Source: Bloomberg, C-MACC Analysis, January 2025