This report comments on the differences in regional chemical production during the first two months of 2021 that generally support our view of global commodity market trends and a few notable variances between regions. We flag pertinent global chemical sector corporate items (e.g., Covestro profit guidance update; ExxonMobil, Clariant, Zhejiang Petrochemical, & Sasol facility news; Multiple industry items & sector ESG announcements). This report’s other items today include the US port of Long Beach posting record activity levels in March and the strengthening of international freight rates, the Covestro business update this week that we view positively for peer urethane & polyol producers, and the broad-based global initiatives to curb greenhouse gas emissions. We note cow methane emission cuts as an example.
This report comments on continued strength in global commodity chemical markets amid healthy global demand and lingering pockets of supply chain issues across numerous product chains. A quick return to normal is unlikely. We highlight pertinent chemical sector corporate items (e.g., CP Chemical, LyondellBasell, Nova Chemicals, Formosa Plastics, & OMV business updates; Multiple supply items, Capex targets, & notable sector ESG announcements). This report’s other relevant items include MDI prices keeping pace with raw material increases amid healthy demand and broad-based supply chain issues, thoughts on recent advanced recycling initiatives, and highlights a few key indicators pointing to continued strength in freight rates in 2Q21.
US polymer price premiums reflect nearly a five-year high relative to avg. Asia levels. This report frames this US premium in a setting of recent declines in US monomer values, tight European markets, & elevated freight rates. Other items highlighted in this report: Ex-US naphtha values fall relative to US ethane WoW; US Butadiene rises WoW, while ethylene and propylene markets further loosen; Global polymer values hold up on average WoW relative to monomer values, suggesting rising polymer production ahead.
While ESG inflows accelerate, definition and accountability remain a challenge, with the rewards of being an ESG darling creating an incentive to stretch claims and selectively interpret data. Regulators need to step in but are moving too slowly. LyondellBasell introduced an important set of recycling/renewable labels for its polymers this week. The labels indicate the source of polymer production and make packaging decisions easier for consumers – we applaud this first-mover step. While the US continues its inevitable congressional battle around climate change initiatives, carbon values are rising outside the US, driving investment decisions that could leave the US uncompetitive for some materials.