From Fields to Factories: Navigating 2025’s Uneven Market Terrain, Agriculture Leads the Way

C-MACC Sunday Executive Summary

From Fields to Factories: Navigating 2025’s Uneven Market Terrain, Agriculture Leads the Way

• US equity market performance YTD implies that most expect a better year in 2025 for fertilizer and agricultural chemicals and a relatively weak one for commodity chemicals – we agree and recommend staying selective.  
• Since early 2024, our research argued that a weak agriculture market in 2024 would be followed by crop price and farm income support in 2025, supporting our positive view toward farm input sellers relative to crop buyers.
• US commodity chemical equities underperformed in 2024, but global business conditions appear unlikely to improve much in 2025 – higher oil prices and/or substantial sector restructuring required to change this story.  
• We highlight the BASF preliminary result release for 4Q24, which missed street estimates and fell below its forecasted view – its chemicals segment was weaker than planned, but its agriculture segment showed strength.
• Otherwise, we discuss rising US natural gas and propane exports benefiting US integrated chemical producers more than feedstock buyers, flag recent propylene and ethylene trends, and provide views on US ethanol.

• Companies Mentioned: BASF, Nutrien, Corteva, CF Industries, Fertiglobe, LSB Industries, Koch Fertilizer, POET, Valero, ADM, Green Plains, The Andersons, Enterprise Products, Dow, Nova, SABIC, LyondellBasell, ExxonMobil, Borouge, Phillips 66, Chevron Phillips Chemical, Invista, Westlake, Olin, Woodside Energy, ArcelorMittal, Tata Steel Europe, Thyssenkrupp Steel, Salzgitter AG
• Products Mentioned: Corn, Natural Gas, Propane, Ethane, Propylene, Ethylene, Ammonia, Hydrogen, Steel, Lithium

Exhibit 1: The S&P 500 Fertilizer & Agriculture sub-sector Index has outperformed the S&P 500 Chemical sector YTD.

Source: Bloomberg, C-MACC Analysis, January 2025

See PDF below for all charts, tables and diagrams