Global Weekly Catalyst No. 287

Base Chemical Global Analysis

Global Weekly Catalyst No. 287

• General Thoughts: Base chemical prices remain below 1Q25 averages mid-year, and without sharper cost curve separation or major supply disruptions, a meaningful rebound to 1Q levels in 2H25 appears increasingly unlikely.
• Feedstocks & Energy: Global feedstock compression has redrawn cost leadership in base chemicals, favoring integrated low-cost producers as high-cost, merchant assets face rising structural and margin headwinds.
• Olefins: US ethylene contract prices rose in June and will likely strengthen again in July. However, we expect them to stay below European and Asian levels through 2H25, reflecting a relative plus for US merchant buyers.
• Other Base Chemicals: US VCM production issues helped press US spot EDC prices lower last week. We also discuss benzene and methanol price shifts, showing regional cost tension and shifting derivative competitiveness.
• Agriculture: Ammonia prices were unchanged last week. We are cautious about near-term margin developments due to a likely 2H25 supply uptick and our cautious corn price view. Still, we’re constructive in the long term.   
• Refining & Biofuels: US crude oil refining margins and ethanol production margins rose last week, mainly benefiting from higher prices – we remain more concerned with refiner output in 2H25 than ethanol production.

Exhibit 1 – Chart of the Day: US contract ethylene moves modestly higher MoM in June; 16% below the 1Q25 average.

Source: Bloomberg, C-MACC Analysis, July 2025