Daily Chemical Reactions

From Lumber to China Spot Trends, Part 2 – A Case for US PVC; US PE Contract Premiums in Question
August 20, 2020
Commodities Mentioned:
Naphtha, Crude, Ethane, Natural Gas, Ethylene, Polyvinyl Chloride (PVC), Caustic Soda, Chlorine, Polyethylene (PE), Polyethylene Terephthalate (PET), Polypropylene (PP), Base Oils, Butanediol (BDO)
Companies Mentioned:
Westlake, Orbia, Shintech, Formosa, Dow, LyondellBasell, CP Chem, ExxonMobil, Poly-America, Sinopec, SIBUR, Stavrolen, Shell, Maersk, Occidental

Daily Chemical Reaction

 

From Lumber to China Spot Trends, Part 2 – A Case for US PVC; US PE Contract Premiums in Question    

 

Key Points:

  • We discuss recent US polyvinyl chloride (PVC) market price strength, which is a plus for producer profit support in 3Q20 – in our view, tight natural gas and ethane are more of a late 3Q concern than an export-led PVC price drop.
  • We frame the September polyethylene (PE) price hike nominations relative to spot market trends – if current US spot PE prices are considered, the full Sept. PE contract price hike would result in a 10yr. high contract premium.
  • Other items worth note today include weakness in US chemical rail traffic WoW, a fire hitting a PE film manufacturing site in TX and US PET demand getting further support from a near-term shortage of aluminum cans.

See PDF below for all charts

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