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2022 C-MACC Coverage of Companies and Commodities

what we are talking about today

Daily Chemical Reaction

February Snow – Rising Supply, Chilly Demand To Put Some Early 2023 Chemical Margin Upticks On Ice

February Snow – Rising Supply, Chilly Demand To Put Some Early 2023 Chemical Margin Upticks On Ice

Production cuts in 2H22 helped trim inventories and lift chemical prices in early 2023 – we discuss recent propylene and polypropylene price trends and headwinds ahead.

We highlight rising energy company growth ambitions in chemicals and alternatives amid growing ESG pressure, and we flag the potential Freeport LNG restart in the US.

We flag Enterprise Products chemical and refined products results in 4Q22 and show US ethylene and propylene (PDH) margins relative to NGL fractionation spreads.

We note challenges facing Eastman in molecular recycling, the role of mechanical and molecular recycling in a circular economy, and a few renewable fuels commentaries.

Global container freight rates on avg. and the Baltic Exchange Dry Index have weakened to 2019 levels recently amid improving supply chain health worldwide.

Hold On, I’m Comin’ – US Petrochemical Margins Have Improved In 1Q23, Supply Response Ahead

Hold On, I’m Comin’ – US Petrochemical Margins Have Improved In 1Q23, Supply Response Ahead

Multiple US petrochemical producers highlight that margins have bottomed with their 4Q business reports, but a sector supply response could reverse recent improvements.

We discuss the BP 2023 energy outlook, as its demand forecasts for oil and natural gas show why most cautiously approach significant long-term investments in this area.

We highlight 4Q22 chemical segment results from ExxonMobil and Phillip 66, flag the drop in HDPE integrated margins at CP Chemical and discuss its growth ambitions.

We discuss the Johnson Matthey and Plug Power JV and highlight why many new, small-scale energy transition technologies could face challenges as the scale increases.

We cautiously approach the raised IMF economic forecast for 2023 as we continue to find more signs of lukewarm global consumer demand than signs of improvement.

Global Chemical Update – Smoke Gets In Your Eyes

Global Chemical Update – Smoke Gets In Your Eyes

Spot intermediate chemical raw material spreads/implied margins do not always give clear regional profit pictures. Elevated European PVC-to-EDC spreads help show its issues relative to the US and Asia.  

US spot polymer prices in the US and Asia rose WoW relative to feedstock costs. In contrast, the opposite occurred in Europe – European price premiums are contracting compared to the US and Asia.

Global energy and chemical feedstock costs were mixed WoW, with the upward trend in the North American cost advantage relative to Asia and Europe stalling after considerable gains since late 2022.

what we are saying about tomorrow

ESG, Recycling & climate 

Power Base: We Are Sailing Too Close to The Wind (and Sun)

Power Base: We Are Sailing Too Close to The Wind (and Sun)

The Europeans are closer to wind and solar tipping points and are concerned about baseload power and the exorbitant cost of getting there with wind and solar.

Alternative and accepted baseload low-carbon power is needed – hydro can help but not enough. Nuclear and natural gas with CCS are both logical and economical.

Meanwhile, the incentive war is heating up as the IRA pulls investments to the US. In our view, Europe does not have the cash to compete – the UK has options.

Recycling headlines are picking up as our anticipated shortfalls of recycled materials is more broadly recognized – some economics get worse each day.

We also discuss the lithium market, its value, and emissions. We also highlight the likely decline in auto and EV demand and its likely impact on many in 2023.

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what we are covering

Sunday Thematic & weekly recap 

Surprise Surprise! This Earnings Season Features Catching Knives

Surprise Surprise! This Earnings Season Features Catching Knives

In chemicals and energy, we were dealing with the effect of large numbers and rapidly moving prices and margins in 4Q 2022 – most estimates have been missed.

In the chemical sector, we are likely witnessing the effect of too much hope and disbelief that things can fall apart as quickly as they have in Europe and Asia.

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