Global Weekly Catalyst No. 341

Base Chemical Global Analysis

Global Weekly Catalyst No. 341

• General Thoughts: July’s feedstock and energy cost increase has survived this week’s pullback, leaving 2H26 earnings dependent on which producers can protect margins without pricing customers out or restoring production too quickly.
• Feedstocks & Energy: Despite weakness at the start of the week, Brent remains ~22% above its late-June level, keeping Asian naphtha and European delivered feedstock costs high enough to preserve North America’s advantage.
• Olefins: Higher costs lifted olefin prices across Europe and Asia in July, but easing crude costs and new Chinese capacity should limit further gains in Asia, while US propylene remains tied to PDH restarts and grade availability.
• Other Base Chemicals: July’s energy shock has widened regional gaps, favoring US methanol economics and European benzene, as firmer caustic pricing remains insufficient to overcome weak chlorine returns globally.
• Agriculture: Urea has rebounded before buyers rebuilt coverage, making Brazil’s order conversion decisive, as phosphate curtailments support prices and stable potash preserves growers’ limited nutrient flexibility.
• Refining & Biofuels: Tight global fuel markets keep refinery margins elevated, but ethanol producers raised output as corn costs increased, widening the earnings gap and delaying sustained margin recovery through 2H26.

Exhibit 1 – Chart of the Day: Elevated Feedstock Costs Pressure European and Asian Ethylene Production Economics.

Source: Bloomberg, C-MACC Estimates, July 2026