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what we are talking about today

Daily Chemical Reaction

Risky Business – Manufacturer Job Losses In Europe Could Outpace Energy Transition Job Gains

Risky Business – Manufacturer Job Losses In Europe Could Outpace Energy Transition Job Gains

The European chemical industry faces near-to-medium-term cost and demand challenges that could cut its manufacturing base more than its energy transition gains.

NW European (and Asia) natural gas prices have increased considerably relative to US levels compared to their 4Q22 lows – a plus for North American chemical producers.

We highlight NW Europe polymer and ethylene profit trends relative to US and Asia and note the different responses to profit losses from Asian and European producers.

We discuss the challenges posed by Scope 1+2 emissions tied to energy & associated sector production that are easier to tackle relative to downstream scope 3 emissions.

Global container freight rates, on average, continue to trend toward 2019 levels, with Europe freight rates to the US holding up relative to most other routes from YTD highs.

Global Chemical Update – No Sleep Till Brooklyn (Or In 2023!)

Global Chemical Update – No Sleep Till Brooklyn (Or In 2023!)

C-MACC partner Graham Copley will present and discuss our global chemical market views at a Northeast Chemical Association event and meet with clients in New York City on December 8 and 9.

Global petrochemical feedstock prices fell more WoW than end-product prices across all major markets, spurring margin support in most product chains – the improvement is unlikely sustainable.

US natural gas and USGC ethane values decreased relative to Brent Crude and Ex-US naphtha values WoW – a positive for North American petrochemical producers compared to those in Europe and Asia.

Macro indicators for farm-input sellers modestly fell WoW. We highlight domestic fertilizer prices broadly declined WoW, and our screens display a decline in US corn prices relative to US soybeans.

Blow At High Dough – Elevated Prices & Government Incentives Lift Profit Cycle Risk For Some Chemicals

Blow At High Dough – Elevated Prices & Government Incentives Lift Profit Cycle Risk For Some Chemicals

The global commodity chemical industry faces profit cycle risk from energy producers expanding downstream and gov’t incentives favoring “new” technology deployments.

We discuss issues with the Freeport LNG start-up and NW Europe natural gas price strength relative to US levels, which is a near-term plus for US chemical producers.

We highlight Olin initiatives to maximize the values of the ECU and why this helps new technologies/other producers advance their projects, a potential long-term risk.

We discuss the Yara agreement to ship green fertilizer to Argentina to decarbonize potato production and the global EV deployment impact on power grid reliability.

We discuss the latest US job report, highlight announced layoffs at Amazon and Walmart, and flag Kroger’s view that food price inflation is beginning to moderate.

what we are saying about tomorrow

ESG, Recycling & climate 

Was COP27 a “Trade Fair for Natural Gas”? If So, Not So Bad

Was COP27 a “Trade Fair for Natural Gas”? If So, Not So Bad

COP27 was the ideal opportunity for the natural gas lobby to make its case, and while the purists are objecting – those focused on energy security cannot resist.

Gas oxy-combustion with CCS should see a boost as users look for baseload alternative to wind, solar and nuclear – hydro needs a low-cost breakthrough.

Labor remains a major bottleneck for energy transition as old energy jobs are still growing and not providing the labor pool for new energy – training is needed.

2023 is a critical possible tipping point for ESG investing, especially in the US – regulators need to step up to improve the image – but be impeded in the US.

Otherwise, we look at opportunities for chemical recycling and waste to energy, and more consolidation in RNG.

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