While North American Petrochemical Producers Cash In, European & Asian Producers Face Restructuring

Key Findings

General Thoughts: US spot ethylene margins are at/near YTD highs as production issues spurred prices and costs declined – the US ethylene advantage to remain greater than Europe and Asia even as this trend reverts to normal.
Supply Chain/Commodities: We discuss headwinds facing the European chemical industry that we think will keep its restructuring activities elevated, highlight OxyChem and Shin-Etsu updates, and global spot PVC and PE trends.
Energy/Upstream: Brent Crude oil and Ex-US naphtha values remain elevated relative to US natural gas and USGC ethane, and we discuss Asia and Europe natural gas prices strengthening recently compared to US levels.
Sustainability/Energy Transition: We highlight Li-Cycle and PureCycle business updates and outlook comments, packaging industry sustainability target concerns, and the Occidental Stratos project on plan for 2025 start-up.
Downstream/Other Chemicals: We highlight the China CPI increase in July relative to a shrinking PPI, US used car values reflecting support following a period of declines and slowing German manufacturing order books in July.

Exhibit 1: US ethylene production margins rise to a YTD high in 3Q24, while Europe and Asia struggle to turn positive.