Daily Chemical Reactions | Sunday Thematic & Weekly Recap

Harmonies Amplify Emotion, Puts the Grim Reaper In Motion
July 19, 2020
Commodities Mentioned:
Brent Crude, Naphtha, Natural Gas, Benzene, Ethane, Ethylene, Propylene, Polyethylene, Polypropylene, Polyvinyl Chloride, Caustic Soda, Lithium, Xylenes, PB Rubber, ABS, N-Propanol, SB Rubber, Butyl Rubber, Natural Rubber. Methanol, Ethylene Glycol, LNG
Companies Mentioned:
Sherwin Williams, Avient, Sasol, Nova, Braskem, Huntsman, Hexion, Olin, Kraton, ASIX, AkzoNobel, BASF, Covestro, Lanxess, Intertape, Advanced Petro. Co., Aramco, Celanese, Clariant, Orbia, Westlake, Adani Gas, Dow, LyondellBasell, CP Chem, Formosa, Axalta, HB Fuller, Methanex, Ineos, ExxonMobil, Total, Enterprise Products, PTTGCA, MISC Bhd, Zhejiang Petro., Nissan, Tesla, PPG, Reliance, PetroChina, Borealis, Evonik, Air Liquide, Alpek, Ashland, Shell, Sensient, Daelim, Petronas, ME Glycol, LNG Canada, Mitsubishi Corp, KOGAS

C-MACC Sunday Recap

Harmonies Amplify Emotion, Puts the Grim Reaper In Motion

  • Supply and demand imbalances create price reactions that can extend to create harmonies, decreasing or increasing comfort levels shortly before the tempo changes direction. Today there is a high level of comfort in both US chemical prices (up) and recent corporate commentary (3Q recovery) reassuring many while the Grim Reaper is likely sharpening his blade
  • This week we discussed strength in multiple US chemical products (notably, Propylene and Polyethylene), likely a step behind a strong June pick up in incentives to export – mainly to China – as the market reacted to some outage-led shortages. But China prices now face downward pressure, and COVID surges, suggesting short lived pricing power in the US and a tougher 3Q.
  • Non-integrated buyers (notably PPG and Alpek) with 2Q reports highlighted likely lower margins in 2H20 – partly driven by higher feedstock costs but do not factor in the emerging downshift in 2H20 recovery expectations and this is a notable concern in our view. 2H20 demand appears likely to disappoint.   

This week we discussed 22 Chemical and related products and 54 Companies

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