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C-MACC has extensive expertise in the chemical and related industries. With a background in both finance and chemistry, we offer services that provide market analysis, news discovery, expert perspectives, and valuable data. Our services are used by corporations and investment firms to gain insights and make informed decisions.

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what we are talking about today

Daily Chemical Reactions

Tougher Than The Rest – Disruptions Support US Propylene, Oil Price Weakness Favors Lower Global Chemical Prices

Tougher Than The Rest – Disruptions Support US Propylene, Oil Price Weakness Favors Lower Global Chemical Prices

Global crude oil price weakness will expedite chemical price declines and likely curb early 2024 forecasts, putting regional buyers of products in limited supply due to disruptions in a tough spot.

We discuss 2H23 US propylene market strength amid continued production issues, which have pushed domestic prices above Europe and Asia, cutting non-integrated buyer competitiveness.

Brent crude fell ~3.5% to below US$75/bbl, and US natural gas fell ~4.5% today, suggesting the production cost curve favors US chemical producers, but global prices face downward pressure.

We discuss the ExxonMobil business update, more takeaways from COP28 and impracticalities facing calls for a phasing out of fossil fuels, and EU CO2 prices falling to a new YTD low this week.

Negative macroeconomic data points and evidence of falling prices are increasing confidence that gov’t interest rate hikes are over, but conditions could notably worsen before they improve.

North America Ethylene Chain Cost Advantage Significant To Asia & Europe, But Not Without Risk Of Turbulence In 2024   

North America Ethylene Chain Cost Advantage Significant To Asia & Europe, But Not Without Risk Of Turbulence In 2024   

The US ethylene production cost advantage is sizable relative to Asia and Europe, and its spot and contract ethylene prices are below Asia and Europe, which is a plus for its derivative spreads.

Crude oil and Ex-US natural gas values rose relative to US natural gas values in 3Q23, boosting chemical prices and US sector profit. Oil and Ex-US natural gas prices have fallen from 2H23 highs.

We foresee downward pressure on global chemical prices moving into 2024 amid more global production and still tepid demand, putting negative pressure on domestic chemical margins.

We also discuss why blue production should be viewed constructively as an enabler of clean product transition and why emission reductions should be more in focus than fossil fuel cuts.

German sentiment toward trade/exports continued to shrink in November, and we flag the surge in US manufacturer unfilled orders but a drop in new orders and weak China macro trends.

How The Markets Look 

The Weekly Catalyst

Global Chemical Update – US Costs Fall More than Prices, For Most

Global Chemical Update – US Costs Fall More than Prices, For Most

US ethylene production economics, based on ethane feedstock, held up WoW, as cost deflation helps support domestic ethylene profit and integrated domestic polymer margins despite lower prices.

US propane prices rose WoW and US propylene prices declined, pinching domestic PDH production margins, and we foresee domestic PP prices falling with PGP values into 2024 amid higher production.

Ammonia and methanol producers benefited WoW from price support and lower natural gas costs, though we see more risk with methanol prices reversing near term amid rising Asia price discounts.

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weekly sERVICE

Hydrogen Economy Update 

The Cost Of Developing Hydrogen Vectors Without Blue Is Too High

The Cost Of Developing Hydrogen Vectors Without Blue Is Too High

Wherever carbon capture and storage are possible, blue hydrogen will likely be cheaper than green.

It is also the only near-term option for hydrogen at scale, which is important for the fuels markets.

Regional average costs say green needs huge incentives, but there will be small pockets of low costs.

While tax incentives give the US a major blue hydrogen advantage, blue in other regions beats green.

The incentives/encouragement to get blue hydrogen moving are minor versus the same for green.

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Valuable insights for critical subjects

Sustainaility & Energy Transition

Food, Fuel and Materials: Competing for Inputs, Fuel has the Edge.

Food, Fuel and Materials: Competing for Inputs, Fuel has the Edge.

Looking at the Virgin Atlantic flight this week, noted below, we see an increasing risk that incentives to produce renewable fuels drag up input prices for others.

The Ingevity closure in Louisiana is largely a function of the plant feedstock being bid away by renewable fuels – supported by incentives, not available to materials.

COP28 is challenged, both by the focus on the role of the oil and gas sector and with a widening funding gap partly driven by a crisis of investor confidence.

Dow’s Alberta project gets the green light coincident with Canada considering a CCS incentive – this would make the project look better and might attract others.

Otherwise, we look at China’s race ahead in renewable power and the additional competitive edge that it would yield, as well as challenging targets in Europe.

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what we are covering

Sunday Thematic & Weekly Recap 

Oil versus Equities – Sending Very Different Messages for 2024

The lack of reaction in oil prices to the proposed new OPEC cuts suggests that the oil market is paying far more attention to weakening demand than before.

By contrast, the rally in equities, especially in the US, suggests an “all is well” attitude, likely backward-looking (revised GDP numbers) and likely too bullish.

Industrial growth is not supporting the resilience of the US economy – while investments are rising, production is not – consumers are borrowing to spend.

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2022 C-MACC Coverage of Companies and Commodities

C-MACC companies coverage
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