Global Chemical Market Enters a Cautious Cooling Phase After the Hormuz Shock

🧪 The week of June 15–21 marked a notable shift for the global chemical and fertilizer markets, as the U.S.–Iran framework agreement raised expectations that trade flows through the Strait of Hormuz could gradually recover. After months of pressure from Middle East supply disruptions, the market is now moving from crisis response toward a more controlled normalization phase.
🛢️ Oil and naphtha prices eased as part of the geopolitical risk premium was removed, helping reduce input-cost pressure across several basic chemical chains. Ethylene, propylene and selected downstream products continued to trade with a softer tone, reflecting both lower feedstock costs and demand that has yet to show a clear recovery.
🚢 However, the reopening of Hormuz does not mean trade flows can normalize immediately. Vessel backlogs, insurance costs, safety checks and damage at some Middle Eastern production facilities remain key bottlenecks. As a result, liquid chemicals, ammonia, methanol and fertilizers may still face localized supply risks in the near term.
🌾 In fertilizers, the market focus has shifted from the earlier price spike to actual access to physical supply. Urea and ammonia prices have eased from crisis highs, but import demand from India, seasonal agricultural needs and China’s cautious export policy could keep prices above pre-conflict levels.
🏭 Regional divergence remains clear. North America continues to benefit from competitive gas and feedstock costs, while Europe is still pressured by energy costs, margins and global competition. In Asia, Chinese demand is showing signs of returning, but buying sentiment remains cautious due to macro uncertainty and oversupply in some product chains.
📉 Overall, the global chemical market is cooling but not yet fully stabilized. Prices may stay below crisis peaks, while the pace of normalization will depend on logistics clearance, Middle East plant recovery, Chinese demand and major fertilizer tenders in the coming weeks.
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