Mixed Emotions – US Spot Polyolefin Price Strength Links to Supply Concerns, As Other Regions Deal With Oversupply

The Weekly Catalyst

Mixed Emotions – US Spot Polyolefin Price Strength Links to Supply Concerns, As Other Regions Deal With Oversupply

• Polymer Market Trends: US spot polymer prices generally reflect strength relative to overseas markets WoW, with US polyethylene (PE) reflecting the most strength and NW Europe polypropylene (PP) being the weakest.
• Chemical Market Trends: Global base and intermediate spot chemical prices were mixed WoW, and we note the FM declaration at Celanese on acetic acid and VAM, and SABIC production issues in Mexico due to drought.  
• Feedstock Market Trends: The North American chemical production cost advantage lessened relative to most peers abroad WoW, as US natural gas and ethane prices rose relative to Ex-US natural gas and naphtha prices.
• Agriculture Market Trends: Global ammonia values were largely unchanged WoW, with strength in US natural gas prices hurting domestic producer margins relative to peer Ex-US ammonia production margins last week.  

Exhibit 1 – Chart of the Day: Global chemical feedstock costs are mostly lower than their 2023 averages. However, the price of many chemicals and polymers is higher in the US than in Asia and Europe relative to their 2023 averages.

Source: Bloomberg, C-MACC Analysis, June 2024