Global chemical market overview for May 04–09 as supply shocks spread from petrochemicals to fertilizers and battery materials

📌 The global chemical market remained dominated by disruptions around the Strait of Hormuz, squeezing petrochemical supply from the Gulf and Asia. PE, PP, ethylene, MEG, methanol, ammonia, and urea all faced upward price pressure as many Asian plants cut cracker operating rates, while China prioritized fuel production over chemical feedstocks.
💡 Basic chemicals saw notable gains, with North American PE up around 10 cents/lb, LyondellBasell’s PE orders rising 20%, PP orders up 15%, European PP prices 15% higher than Q4/2025, and European ethylene near €1,695/ton. This helped margins improve sharply in the short term for US producers and part of the European market.
⚠️ A new pressure point came from sulfur and sulfuric acid after China halted most sulfuric acid exports from May 01, while sulfur flows from the Gulf were also disrupted. Global sulfur prices jumped to around $740–765/ton, adding cost pressure to phosphate fertilizers, copper mining, nickel HPAL, and EV battery material chains.
🔎 The regional picture is becoming more divided. The US benefits from cheap ethane and high operating rates, Europe is gaining some replacement orders from Asia but remains constrained by high energy costs and weak demand, while Asia faces the heaviest pressure from expensive feedstocks, logistics stress, and localized shortages.
⏱️ Specialty chemicals, fine chemicals, electronic materials, pharma inputs, and battery materials remain more resilient than commodity chemicals. However, higher logistics costs, raw materials, and precursors are gradually passing downstream, increasing price risks for pharmaceuticals, autos, electronics, and agriculture.
✅ Overall, the past week was the strongest period in months for Western producers’ margins, but this remains a supply-driven boost rather than a sustainable recovery. If Hormuz tensions persist and China does not ease acid exports, prices may stay elevated through Q2–Q3; if geopolitical risks cool, the market could quickly return to pressure from Chinese overcapacity and weak end-demand.
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