Global Weekly Catalyst No. 277

Base Chemical Global Analysis

Global Weekly Catalyst No. 277

• General Thoughts: Asia Ex-China ethylene production units with the flexibility to crack LPG and South Korean PDH facilities may benefit from US-to-China LPG trade disruptions, creating margin support amid oversupply.
• Feedstocks & Energy: Natural gas prices fell sharply across all major regions last week, outpacing decreases in crude and Ex-US naphtha; USGC propane and ethane firmed but face limited upside amid likely supply growth.
• Olefins: Compressed USGC PDH margins, negative US spot propane cracking economics, and a historically tight PGP-to-RGP spread point to near-term upside risk for US PGP spot prices, further hurting downstream buyers.
• Other Base Chemicals: Global methanol spot prices continue to weaken, pressured by lower natural gas and derivative, including MTO, uncertainty, leaving US players like Methanex well positioned but facing headwinds.
• Agriculture: Global ammonia prices held steady last week, but weaker global natural gas markets, a rising 2H25 global ammonia supply setting, and current corn markets point to mounting downward price pressure ahead.
• Refining & Biofuels: US crude refinery margins hold near YTD highs on production issues and softer crude, while US ethanol margins stay weak, with policy shifts or cheaper corn as the most likely primary upside catalysts.

Exhibit 1 – Chart of the Day: USGC PDH margins fall to a YTD low in absolute terms and relative to Asia and Europe.  

Source: Bloomberg, C-MACC Analysis, April 2025