Global Chemicals Diverge as Oil Stays High but Downstream Demand Remains Weak
🧪 The week of September 14–18 showed that oil near $100 did not lift the entire chemicals complex uniformly. In China, PX, PTA, MEG and PVC weakened into the end of the week as Brent eased, while products such as acetic acid and methanol still posted notable gains.
🏭 Europe remained a weak link. Cracker operating rates stayed around 65–70% even as Middle Eastern ethylene supply was disrupted by the conflict. Naphtha therefore continued to lag diesel and jet fuel, pointing more to weak cracker demand than to a simple shortage of feedstock.
⚙️ The divergence was also clear between the US and Asia. US Gulf crackers rely heavily on ethane, whose cost remained relatively stable, providing room for ethylene margins to improve. In contrast, Asian PDH operators faced greater pressure as propane and LPG prices rose alongside Middle East supply risks.
🌾 US fertilizers also moved in different directions. Retail urea rose more than 24% over the week and ammonium sulfate gained over 27%, while anhydrous ammonia fell more than 10%. Logistics, seasonality and product-specific supply conditions are creating very different price paths.
🇪🇺 Against this backdrop, France and the Netherlands convened 15 EU countries to discuss support for the chemicals sector. EU27 capacity utilization remains near 74%, while gas costs are still far higher than in the US and Chinese chemical imports into Europe continue to increase.
📊 A weekly decline in Brent therefore does not mean pressure across the chemicals sector has eased. Feedstocks, monomers, polymers and fertilizers are still responding to different drivers, keeping dispersion elevated into next week.
#Chemicals
$CL $NATGAS
🧪 The week of September 14–18 showed that oil near $100 did not lift the entire chemicals complex uniformly. In China, PX, PTA, MEG and PVC weakened into the end of the week as Brent eased, while products such as acetic acid and methanol still posted notable gains.
🏭 Europe remained a weak link. Cracker operating rates stayed around 65–70% even as Middle Eastern ethylene supply was disrupted by the conflict. Naphtha therefore continued to lag diesel and jet fuel, pointing more to weak cracker demand than to a simple shortage of feedstock.
⚙️ The divergence was also clear between the US and Asia. US Gulf crackers rely heavily on ethane, whose cost remained relatively stable, providing room for ethylene margins to improve. In contrast, Asian PDH operators faced greater pressure as propane and LPG prices rose alongside Middle East supply risks.
🌾 US fertilizers also moved in different directions. Retail urea rose more than 24% over the week and ammonium sulfate gained over 27%, while anhydrous ammonia fell more than 10%. Logistics, seasonality and product-specific supply conditions are creating very different price paths.
🇪🇺 Against this backdrop, France and the Netherlands convened 15 EU countries to discuss support for the chemicals sector. EU27 capacity utilization remains near 74%, while gas costs are still far higher than in the US and Chinese chemical imports into Europe continue to increase.
📊 A weekly decline in Brent therefore does not mean pressure across the chemicals sector has eased. Feedstocks, monomers, polymers and fertilizers are still responding to different drivers, keeping dispersion elevated into next week.
#Chemicals
$CL $NATGAS
