History is a Study of Surprises – Europe’s Petrochemical Lifeline or Last Stand?

Key Findings

General Thoughts: We discuss proposed European retaliatory tariffs on US goods, including polyethylene (PE), which is occurring alongside recent improvements in the EU cost position likely to benefit its manufacturers.
Supply Chain/Commodities: We highlight the recent decline in US spot ethylene, polymer-grade propylene (PGP), and benzene, which implies lower US derivative prices, which continue to face a broadly weak export market.
Energy/Upstream: We follow our commentary on global refinery margins benefiting from lower crude oil prices to further our discussion of China refinery operating rates movements amid a substantial new facility start-up.
Sustainability/Energy Transition: We discuss European chemical and refineries using green hydrogen to help their decarbonization efforts. We highlight a recent project at BASF and TotalEnergies, among other European efforts.
Downstream/Other Chemicals: We discuss the decline in March homebuilder sentiment falling to a multi-month low. We also flag ongoing restructuring across Europe, China industrial activity, and recent US Dollar weakness.