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what we are talking about today

Daily Chemical Reaction

Global Chemical Update – Pushing The Boat Out

Global chemical price moves WoW favor US profitability. While a plus for sector views with 3Q reports, the trend does not tell the whole story for 4Q21.     
Avg. Western polymer and monomer values mixed relative to Asia WoW. Higher PVC values and falling US Natural gas/NGLs are stand-outs.  
Other global commodity trends flagged in this report comprise monomer, polymer, and feedstock indicators relevant to gauging sector profitability.

Prop Me Up (Beside The Jukebox) – US Commodity Producers Take Action Where Able To Support Prices

Commodity chemical producers take action to keep prices supported, and market structure developments gain focus.  We discuss several relevant 3Q21 business updates and global commodity developments worthy of notice.  
We highlight pertinent chemical sector corporate updates (e.g., Celanese, Olin, Gail, Borealis, Air Liquide, Ube Industries, Sika, Posco & others).
We flag our latest ESG research and other ESG items worth note, ranging from recent carbon capture project updates to zero-emission initiative news.
We note numerous other pertinent chemical sector items

The River of Dreams – Commodity Inflation Remains A Hot Topic With 3Q21 Reports, Beneficiaries Vary

Commodity market inflation remains a hot topic with sector 3Q21 reports. We flag a few significant examples and trends to keep in mind into 2022.     
We highlight pertinent chemical sector corporate updates (e.g., Dow, PPG, Stepan, Tata, Asian Paints, Alpek, Olin, Valero, PTTGC & other news).  
We compare US total rail traffic to US chemical rail traffic, flag several relevant consumer demand statistics, and discuss commodity chemical trends.
We flag several ESG items worth mentioning, ranging from multiple sector project updates to C-MACC research examining decarbonization efforts.
We note numerous other relevant chemical sector items in this report.

what we are saying about tomorrow

ESG, Recycling & climate 

Decarbonizing Is Becoming A Thing – Thankfully

Air Products announced a US blue hydrogen/ammonia investment last week, the first firm pledge to very large-scale carbon capture & sequestration in the US.
Whether Air Products is the first to inject CO2 in the US Gulf is secondary to its confirmation of the value of CCS. Also, beyond economics, investors approved it.
Large-scale CCS is needed if green energy shortfalls predicted by the EIA and IEA are correct – CCS is the insurance against underinvestment in clean fuels.
COP26 could surprise us on the upside, but only because expectations are spectacularly low – including expectations around how to travel through Glasgow!
Otherwise, we push back on the Biden pension plan – ESG is not ready yet – and we discuss carbon use, carbon pricing, and misinformation.

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what we are covering

Sunday Thematic & weekly recap 

Olin – Underinvesting To Over-Earn Is Act I; We Question Act II

The turnaround at Olin has been notable and is a function both of better markets and of a radically different corporate strategy – which is currently working.
The commodity chemical industry has a history of repeating a strategy of growing capacity and hoping for positive outcomes – the Olin strategy is different.
Similar to the “early harvest” strategy at LyondellBasell and the one taken in acetyls at Celanese, Olin appears set to make some good money and create value.
LyondellBasell has not had a great “second act,” and Celanese’s is yet to play out. Olin’s Act I strategy has a limited duration – we discuss drivers of Act II
Otherwise, we discuss the cost concerns reflected in most earnings reports to date, and we look at the focus on carbon as it is now impacting chemicals. 

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