Cost Position Cross Overs & Dribbling Profits – Low-Cost Integration Critical To Stay On A Winning Team!

With US NGL exports set to surge ~60% by 2029, we expect NGL values to trend closer to Ex-US NGL prices, while we expect global naphtha markets to loosen relative to crude oil, implying a flatter chemical cost curve.
China’s relentless chemical production push, compounded by weak domestic demand and deflation, is forcing regional price declines, likely to keep global chemical export markets under downward pressure in 2025.
While US ethylene prices remain below Asia and Europe, increasing competition among domestic buyers and exporters and increased production abroad will likely curb the US ethylene merchant market advantage.
China’s weak PDH margins and continued capacity expansion in propylene contrast with the current market setting in the US and Europe, and while the US is in better shape due to its low-cost LPG, it is not without risk.
Otherwise, we discuss Chinese price deflation, challenges facing US LNG exporters, why low costs everywhere are critical in hydrogen, and our view that green enthusiasm is shifting to a more strategic, pragmatic path.

Companies Mentioned: ExxonMobil, Chevron, TotalEnergies, Woodside Energy, Phillips 66, Cheniere Energy, NextDecade, Venture Global LNG, Energy Transfer, Enterprise Products, ADNOC, Dow, LyondellBasell, Westlake, BASF, Celanese, NOVA Chemicals, Borouge, SABIC, PetroChina, OMV AG, LG Chem, Lotte Chemical, Saudi Advanced Petrochemical Company, JG Summit Petrochemicals, Versalis, Fertiglobe, CF Industries, Nutrien Ltd., LSB Industries, Petro Rabigh, Rossari Biotech, Air Products, Air Liquide, Linde, ABB, Yokogawa
Products Mentioned: Crude Oil, Natural Gas, LNG, LPG, Ethane, Propane, Butane, Naphtha, Ethylene, Propylene, Polyethylene, Polypropylene, Caprolactam, Methanol, Hydrogen, Ammonia, Lithium

Exhibit 1: The futures market shows the oil to US natural gas price spread nearing multi-year lows by year-end 2025.