Global Weekly Catalyst No. 350

Base Chemical Global Analysis

Global Weekly Catalyst No. 350

• General Thoughts: Regional advantage changes with the process and the buyer; rising propane and weaker PGP have put modeled US PDH margins below Asia, even as advantaged USGC ethane favors domestic crackers.
• Feedstocks & Energy: Asia’s naphtha premium widened despite flat weekly crude, but freight and cautious buyers limit arbitrage; USGC ethane retains its advantage, with export prices governing any incremental gains.
• Olefins: Asian olefin supply remains constrained, but cautious buyers limit gains; European ethylene and propylene rose as butadiene fell, and USGC spot ethylene and propylene prices moved lower.
• Other Base Chemicals: INEOS idling three UK chemical plants may increase European acetic acid imports and reduce local methanol use; US benzene’s premium is shaped by freight, and electricity shapes European chloralkali returns.
• Agriculture: India’s urea tender may reduce subsidy costs without lowering growers’ prices; European ammonia import growth requires operating fertilizer plants, and sulfur costs squeeze Indian phosphate producers.
• Refining & Biofuels: A US diesel export ban could fill storage, curb refinery runs and reduce gasoline output despite thin stocks; ethanol’s wider modeled margin faces a sales test if output recovers.

Exhibit 1 – Chart of the Day: Estimated US PDH Margins Fall Below Asia as Propane Rises and PGP Weakens

Source: Bloomberg, C-MACC Estimates, September 2026