The Weekly Catalyst
Global Chemical Update – Have You Ever Seen The Rain
- Our weekly data sheets confirm trends that we saw developing last week post Hurricane Laura, with the most pronounced price moves being seen by US polyethylene (& ethylene) values relative to USGC ethane values.
- In this report, we provide examples of commodity chemical prices and cost trends compared to NW Europe and Asia markets – we maintain a view that recent windfall profits will only work to spur global production after Laura.
- We discuss near-term benefits for some US producers, such as Dow, Olin and Formosa, relative to peers, such as Westlake, LyondellBasell and Sasol, who were more directly impacted by the storm. Though 3Q20 profit views for some US (and global producers) could rise, we take caution with 4Q20/1Q21.
- As discussed in our Sunday recap yesterday – we see this as a near-term windfall for the industry – fundamentals are expected to swing negative in 4Q
See PDF below for all charts and tables