We compare spot polyethylene (PE) price developments in the US with overseas markets and show integrated profit margins between regions – we model US tightness dissipating on a relative basis as production returns. Dow highlights that 3Q20 conditions are better than expected (this aligns with others and our view), LyondellBasell pushes PP price hikes for October and we note several other corporate items (e.g. Repsol, Polyplastics, PPG, Eni, Arkema) Other items worth note today include industry comments noting increasing Asia petrochemical supply ahead in 4Q20, US container rates hitting record highs and Ford announcing plans for its F150 electric pick-up truck.
China polyvinyl chloride (PVC) prices move higher this week both on an absolute basis and relative to other major polymer values – we highlight a few items supporting our view that Asia demand is pulling PVC values higher. USGC refinery operating rates bounced higher WoW, USGC PDH units reflect a profit and USGC propane co-product integrated cracker feedstock costs reflect a similar level to ethane – with these items consider, we continue to see PGP support near-term (relative to ethylene) and discuss our case. Other items worth note today range from price increases in US polyester polyols, to USGC naphtha and propane setting sail to Asia, to mounting global news surrounding the Hydrogen market as a clean energy resource.
We find initial evidence that recent global polymer price upticks in part as a result of US disruptions is spurring production abroad – we think Asia spot trends relative to US values and Asia integrated margins support our case. We now see a limited chemical sector impact from Hurricane Sally, discuss the 3M update and re-issuance of 2020 profit views at Brenntag and Uponor, and highlight the Celanese acetyl intermediate price hikes issued overnight. Other items worth note today include additional costs for Braskem chlor-alkali ahead of a planned late 2020 restart, views on refinery investments to spur chemical production, and thoughts on more global chemical projects.