Global chemical markets face a wider supply shock as petrochemical, fertilizer, and battery-material chains tighten
📌 The global chemical market remained under pressure from disruptions around the Strait of Hormuz, squeezing supply from the Gulf and Asia. PE, PP, ethylene, MEG, methanol, ammonia, and urea all moved higher as Asian crackers cut operating rates and China prioritized fuel over chemical feedstocks.
💡 Basic chemicals showed clear price strength, with North American PE up around 10 cents/lb, LyondellBasell’s PE orders rising 20%, PP orders up 15%, European PP prices 15% above Q4/2025, and European ethylene near €1,695/ton. This gave US producers and parts of Europe a short-term margin boost.
⚠️ A second pressure point came from sulfur and sulfuric acid after China halted most sulfuric acid exports from May 01, while Gulf sulfur flows were also disrupted. Sulfur prices jumped to around $740–765/ton, raising costs for phosphate fertilizers, copper mining, nickel HPAL, and EV battery materials.
🔎 The regional split is becoming sharper. The US benefits from cheap ethane and high utilization, Europe is gaining replacement orders from Asia but still faces high energy costs, while Asia is hit hardest by expensive feedstocks, freight stress, and localized shortages.
⏱️ Specialty chemicals, fine chemicals, electronic materials, pharma inputs, and battery materials remain more resilient than commodity chemicals. Still, higher logistics, raw materials, and precursor costs are gradually passing downstream into agriculture, autos, electronics, and healthcare.
✅ Overall, this was one of the strongest weeks in months for Western chemical margins, but it remains a supply-driven boost rather than a durable recovery. If Hormuz tensions persist and China keeps acid exports tight, prices may stay elevated through Q2–Q3; if risks ease, the market could quickly return to pressure from Chinese overcapacity and weak end-demand.