Global Weekly Catalyst No. 352

Base Chemical Global Analysis

Global Weekly Catalyst No. 352

• General Thoughts: European and Asian chemical producers buying feedstocks risk output cuts as limited pricing power constrains recovery of input costs elevated by continued Middle East disruption.
• Feedstocks & Energy: Diverging feedstock prices improved US liquids purchase economics and Asian LPG discounts last week but reduced European switching savings, leaving margin recovery dependent on product pricing.
• Olefins: Regional olefin price gains remain vulnerable without stronger derivative consumption or deeper operating cuts, as producer updates show weaker margin indicators without comparable utilization declines.
• Other Base Chemicals: Base chemical price gains offer limited earnings relief as benzene buyers defer purchases, European power costs squeeze chlor-alkali returns, and Chinese methanol production retains incentives to continue.
• Agriculture: Cheaper urea does not ensure better farm economics as corn prices weaken, inland ammonia firms, and European energy exposure sustains incentives to import ammonia rather than restart production.
• Refining & Biofuels: Strong US refining spreads face renewed Chinese export competition, and ethanol producers risk surrendering corn savings if output exceeds the volumes domestic blending and exports can absorb.

Exhibit 1 – Chart of the Day: European And Asian Ethylene Premiums Enhance US Buyers’ Cost Advantage

Source: Bloomberg, C-MACC Estimates, October 2026