Global Weekly Catalyst No. 278

Base Chemical Global Analysis

Global Weekly Catalyst No. 278

• General Thoughts: The deepening structural crisis in petrochemicals reveals a broader truth: in a fragmented, volatile world, survival hinges less on scale than on strategic clarity, adaptability, and purposeful reinvention.
• Feedstocks & Energy: A flattening global chemical cost curve, amid diverging feedstock shifts, signals deflationary price pressure and intensifies the competitive imperative for efficiency, integration, and regional advantage.
• Olefins: The US olefin cost advantage erodes as weak derivative pricing, tight propylene spreads, and weak ethylene spot values pressure margins, especially for non-integrated buyers navigating the volatile cost setting.
• Other Base Chemicals: European and Asian benzene prices fell sharply versus the US, setting the stage to lift US imports amid US downstream margin pressure. Separately, global methanol prices further weakened last week.
• Agriculture: Global ammonia markets face downward pressure, and those with flexible contracting, channel pull-through, and product upgrade optionality are best poised for resilience during the remainder of 2025.
• Refining & Biofuels: US crude oil refiners regained margin improvement YoY last week. US ethanol producers face mounting pressure from weak prices and relatively high input costs, likely triggering capacity cuts by 2H25.

Exhibit 1 – Chart of the Day: The crude oil-to-natural gas ratio has fallen YTD – Futures markets foresee a lower 2H25.  

Source: Bloomberg, C-MACC Analysis, May 2025