Global Chemical Prices Experience Volatility and Divergence

Global chemical prices are currently experiencing significant volatility and divergence as of mid-September. This is largely attributed to strong fluctuations in crude oil prices, regional supply-demand mismatches, and shifting downstream purchasing patterns. While certain basic raw materials remain resilient due to maintenance-related supply constraints, synthetic rubber prices have strengthened. In contrast, polyolefins are under downward pressure due to weak demand.

The recent surge in international oil prices, driven by geopolitical conflicts in the Middle East, has been a primary cost driver for the chemical industry. Incidents such as the suspension of Saudi Arabia's East-West Pipeline and disruptions in the Strait of Hormuz have pushed Brent crude futures above $100 per barrel. This has provided significant cost-side support for bulk basic chemicals.

Additionally, chemical plants globally have entered their autumn maintenance cycles, which has helped to offset the pressure of ample supply, leading to divergent price trends across different regions. In North America, for instance, multiple ethylene plants are scheduled for maintenance, which is expected to tighten spot supplies.

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