From Feedstock to Fallout:Strategic Signals In A Disordered Market

Key Findings

General Thoughts: Global methanol prices are firming on ex-US natural gas strength, global supply concerns, and China spot support, though we see headwinds ahead for buyers amid a weak global downstream demand setting.
Supply Chain/Commodities: We discuss announced layoffs at SQM, with some linking it to a weak lithium market. However, we do not see evidence that its lithium expansion plans are halting as it fights to maintain market share.
Energy/Upstream: Even as USGC ethane rallies on tentative China export signals, we do not view the US ethylene production cost advantage as at risk, and its below-average discount to US natural gas prices could hold in 2H25.
Sustainability/Energy Transition: European efforts to bolster green subsidies risk undermining their unified climate ambition by privileging deep-pocketed hubs; however, this should help drive much-needed scale.
Downstream/Other Chemicals: Global chemical supply chains face currency volatility and freight rate swings, compelling many to recalibrate hedges, diversify routes, and manage inventory to address an uncertain setting.