Global Weekly Catalyst No. 296

Base Chemical Global Analysis

Global Weekly Catalyst No. 296

• General Thoughts: Global commodity chemical markets remain margin-compressed, oversupplied, and policy-sensitive, with investors watching for stabilization yet hesitating to pivot toward a 2026 improvement story.
• Feedstocks & Energy: Global feedstock shifts cap chemical price upside risk and erode North America’s cost edge, reinforcing expectations of weaker market fundamentals and oversupply pressures into late 2H25.
• Olefins: Global olefin dynamics highlight US ethylene weakness, European margin compression, Asian losses, and selective butadiene resilience, underscoring oversupply and looming derivative spread risk through 2H25.   
• Other Base Chemicals: Base chemicals diverge as China’s acetyl-chain recovery lifts select producers. At the same time, global benzene oversupply and fragile chlor-alkali economics underscore Europe’s vulnerability and 4Q25 risks.
• Agriculture: Global ammonia markets stabilize at elevated levels, with North America and the Middle East advantaged, while looming supply growth restrains near-term optimism but underpins 2027 fundamentals.
• Refining & Biofuels: US ethanol margins hit fresh 2025 highs on structural demand and policy momentum, while refiners’ resilience rests more precariously on crude volatility and outage-driven opportunism into year-end.  

Exhibit 1 – Chart of the Day: US commodity chemical equities have fallen YTD relative to the S&P and feedstock ratios. 

Source: Bloomberg, C-MACC Analysis, September 2025