Global Weekly Catalyst No. 292

Global Weekly Catalyst No. 292

General Thoughts: Global feedstock cost deflation suggests chemical prices face downward pressure despite most cost curve slopes staying intact; North American and Middle Eastern producers hold relative advantages.
Feedstocks & Energy: Brent crude oil and Ex-US naphtha prices declined last week, reflecting generally similar weakness as US and Ex-US natural gas prices, nudging most cost curves lower while leaving slopes largely intact.
Olefins: US spot olefin prices declined last week, European spot olefin prices increased, and Asian spot olefin values remained unchanged. European spot price premiums invite arbitrage and heighten product pull-in risk.
Other Base Chemicals: US and Europe methanol prices rose again last week relative to Asia, with margins seeing the most improvement in Europe. Western producers like Methanex are in a better position than regional buyers.
Agriculture: Global ammonia prices, on average, were flat-to-up last week, with North America showing the most relative improvement. With corn prices at a YTD low, we continue to take a cautious near-term demand view.
Refining & Biofuels: US ethanol production margins increased last week to a new YTD high amid falling corn costs and firm spot ethanol and co-product prices. US refinery margins also rose last week, helped by lower oil prices.