Daily Chemical Reactions

Mixed Signals Downstream – USGC Commodity Chemical Price Support & Impacts In Question
August 6, 2020
Commodities Mentioned:
Ethylene, Propylene, Ethane, Natural Gas, Crude Oil, Polypropylene, Polyethylene, Polyvinyl Chloride, Vinyl Chloride, Ethylene Di-Chloride, Caustic Soda, Lithium, Carbon Black. Coal
Companies Mentioned:
Albemarle, Westlake, Olin, Borealis, Brenntag, GCP Applied Technologies, Henkel, Orion Engineered Carbons, Posco Chemical, SABIC, Tokai Carbon, Trans-Pacific Petrochemical Indotama (TPPI)

Daily Chemical Reaction

 

Mixed Signals Downstream – USGC Commodity Chemical Price Support & Impacts In Question

 

Key Points:

  • We evaluated 10 sector earnings reports this morning and find early 2H20 end market signals remain mixed for sector downstream products, but we also find that evidence continues to emerge that commodity chemical price strength in late 2Q/into 3Q20 is heavily production issues driven.
  • We frame the US ethylene contract settlement for July relative to Asia spot prices, and we see weakness in Asia in 2H20 limiting further US upticks.
  • Other items worth note today range from record high China PVC imports in June, European packaging market strength offering support for wide PE-to-ethylene spreads, and elemental bromine markets finding support in 3Q20.

See PDF below for all charts 

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