Chemical Market Overview – March 2025

The chemical market in March 2025 reflected ongoing supply chain volatility, fluctuating raw material prices, and shifting demand patterns across multiple sectors. While propylene and ethylene continued to see supply constraints and price movements, crude oil prices saw a significant decline due to OPEC production adjustments and weak global demand. The impact of Canadian tariffs on specific imports further influenced market trends, particularly in the alcohols and glycol ethers segment. With refinery operational rates fluctuating and several maintenance turnarounds affecting output, industry stakeholders are actively navigating uncertainties to ensure business continuity.

Propylene and Derivatives

March 2025 saw further volatility in the propylene market, with chemical-grade propylene settling at 46.5 cents per pound and polymer-grade propylene at 48.0 cents per pound. This marks a 4-cent increase from February, driven primarily by supply disruptions caused by unplanned PDH unit outages. Additionally, steam cracker production decreased slightly due to planned maintenance, further tightening availability. Demand for polypropylene (PP) and its derivatives remained strong, supporting price hikes across key downstream applications, including automotive and packaging materials. Propylene oxide experienced another price increase of approximately $3.40 per ton, reflecting higher feedstock costs and supply constraints.

Ethylene and Ethylene Derivatives

Ethylene prices in March continued their recent downward trend, decreasing by 1.25 cents per pound to settle at 36.75 cents per pound. Inventory levels remained under pressure due to ongoing turnarounds and reduced production capacity caused by winter storm Enzo’s lingering effects. While demand for ethylene glycol and polyethylene remained relatively stable, ethylene oxide pricing softened due to lower raw material costs. Looking ahead, the market is expected to tighten further in Q2 2025 as major shutdowns persist.

Aromatics and Solvents

Acetone prices increased in March as large buyer settlements reached 57.125 cents per pound, reflecting higher feedstock costs and stable demand from the methyl methacrylate (MMA) sector. However, demand from the construction and automotive industries remained lackluster. The benzene contract price settled at $3.13 per gallon, maintaining its February level. Domestic inventories remained strong, bolstered by an unplanned outage at a major Texas styrene facility. With export demand for styrene monomer on the rise, benzene inventories are expected to decline going into Q2.

Alcohols and Glycol Ethers

The alcohols market faced continued price volatility, with isopropyl alcohol (IPA) experiencing fluctuations due to supply and demand imbalances. The looming threat of Canadian tariffs added further uncertainty, though supply levels remained adequate to meet current demand. P-series glycol ethers saw an announced price increase of $0.10 per pound, driven by climbing feedstock costs and anticipated demand surges in Q2. E-series glycol ethers followed a similar trend, with market tightness expected to continue.

Chlorinated Products and Inorganics

Chlorine supply showed ample availability despite lower operating rates, which declined slightly due to planned turnarounds. However, demand remained soft in the water treatment and refrigerant sectors. Caustic soda prices, on the other hand, increased in March due to multiple supply-side disruptions, including a force majeure declaration and operational issues at key production facilities. With Northeast Asian export prices strengthening, further upward pressure on U.S. caustic soda prices is expected in the coming months.

Crude Oil and Energy-Related Chemicals

Crude oil prices declined sharply in March, dropping from $73 per barrel in February to approximately $66 per barrel by mid-month. OPEC’s decision to increase production starting in April, combined with sluggish demand growth and trade-related concerns, contributed to the price drop. Natural gas prices saw an increase, with the March contract closing at $3.91 per MMBtu, reflecting heightened energy demand and growing LNG export activity. Meanwhile, methanol prices remained elevated due to ongoing facility outages and constrained supply, with further price fluctuations expected as production levels stabilize.

Agricultural and Renewable Feedstocks

Palm oil prices showed signs of stabilization following previous weather-related disruptions, while caprylic acid prices remained high due to persistent supply shortages. Soybean oil experienced a mid-February price spike before returning to January levels. The introduction of Canadian tariffs on canola oil imports has the potential to shift demand toward soybean oil, adding further market complexity. Beef fat tallow (BFT) saw a notable price increase of nearly $0.06 per pound due to strengthening biofuel demand and regulatory developments surrounding clean fuel incentives.

Transportation and Logistics

Diesel fuel prices remained relatively stable, with the national average closing at $3.697 per gallon at the end of February. Spot trucking rates held steady, though tightening capacity and seasonal factors could drive further cost increases in the months ahead. Railcar delays persisted in select regions, affecting chemical shipments, while ocean freight rates declined by 10% in February, as reflected in Drewry’s WCI Composite Index.

Outlook for Q2 2025

As the industry enters Q2, market participants will closely monitor supply chain developments, particularly in propylene and ethylene markets. Refinery maintenance turnarounds, geopolitical factors, and tariff-related trade shifts will play a crucial role in shaping price movements. Procurement professionals should continue leveraging strategic sourcing practices to manage cost pressures and ensure supply security.

While volatility remains a key theme, ongoing investments in supply chain resilience and risk mitigation strategies will be critical in navigating the evolving landscape. Industry stakeholders must remain proactive in monitoring raw material trends, optimizing logistics operations, and securing alternative supplier agreements to mitigate disruptions and maintain profitability.