The Chemical Reaction
This Ill Wind Blows No Good – Hurricane Laura Presents More Global Risk Than Prior US Storms
- The path and strength of Hurricane Laura puts it in position to be more disruptive than prior US hurricanes on global chemical markets – this is the result of a US energy/chemical industry increasingly geared toward exports. The path of Laura more closely aligns with Rita (and Ike) than with Harvey.
- We frame the path of Hurricane Laura, flag major USGC petrochemical and refinery facilities, and foresee potential US olefin (notably ethylene) price strength – though lingering COVID demand weakness in some markets along with already high relative US prices will likely limit the longevity of the blow.
- Other items worth note today include strong new home sales and upticks in building materials (supports our positive view of PVC), Asia polyester waiting for a demand recovery and the Phillips Carbon Black June-quarter report.
- Hurricane Rita caused an immediate negative reaction in stock prices but there was a quick recovery in response to increased product pricing.
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