Daily Chemical Reactions

US Polymer Market Beach Party in Motion – The Risk of An Unhappy Ending Remains High
July 8, 2020
Commodities Mentioned:
Polyethylene, Ethylene, Ethane, Naphtha, Oil, Natural Gas, Caustic Soda, Butanediol
Companies Mentioned:
LyondellBasell, Dow, ExxonMobil, CP Chem, SABIC/Aramco, Olin, Westlake, OxyChem, Shintech, Formosa, Shell, Valvoline

Daily Chemical Reaction

US Polymer Market Beach Party in Motion – The Risk of An Unhappy Ending Remains High   

Key Points:
  • The surge in Asia ethylene values amid curtailed global operating rates is now a well-known story, but we find few highlighting the likelihood that the story will reverse as supply returns – we discuss with HDPE chain exhibits.
  • USGC polyethylene reflects outsized price strength relative to US ethylene, and this spread holds most of the profit margin for US integrated producers – we discuss the possibility that it will contract within 4-7 months and deliver profit headwinds for US producers, such as LyondellBasell and CP Chem.
  • Other items of note today range from Asia naphtha support relative to Brent Crude, to US caustic movements, to more industry restructurings.

See PDF below for all charts 

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