Daily Chemical Reactions | Sunday Thematic & Weekly Recap

US Ethylene – Headed Back To An International Clearing Price?
June 6, 2021
Commodities Mentioned:
PVC, Polypropylene, Polyethylene, Polystyrene, PET, Ethylene, Propylene, Benzene, Polyols, Methanol, Polyvinyl Acetate, Lithium, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha, Bisphenol A, HDPE, LNG, Timber, Base Oil
Companies Mentioned:
Dow, LyondellBasell, ExxonMobil, CP Chemical, OxyChem, Westlake, Borealis, Sherwin-Williams, PPG, Axalta, DuPont, Huntsman, Aramco, BASF, Inter Pipeline, Brookfield, Pembina, Denka, Eastman Chemical, Methanex, Indorama Ventures, Lanxess, LG Chem, Mitsui Chemicals, Polyplex, Repsol, SABIC, W.R. Grace, Albemarle, Siam Cement, Origin Materials, bp, Sekisui Chemical, Lummus, Kao, Haldor Topsoe, Nova Chemicals, Formosa, INEOS, Total Energies, Petrobras, Givaudan, IMCD, Johnson Matthey, Nexeo Plastics, Siegfried, Sumitomo Chemical, Enterprise Products, Senege, Lotte Chemical, SK Global Chemical, Suncor, Versalis, Volkswagen, Tesla, CATL, Evergreen, BMW, Croda, Azelis, Flint Hills, Arkema, Pinnacle Polymers, SIBUR, Pemex, Lukoil, Saudi Chemical Co., Wanhua, Trinseo, Petron, Reliance, Kinder Morgan, Linde, Chart Industries, Williams, Technip Energies, Solvay, Worley, Shell, Chevron, Total, Purecycle Technologies, NOVA Chemical, Closed Loop Partners, Venture Global LNG, Engine No. 1

C-MACC Sunday Thematic & Weekly Recap 69

US Ethylene – Headed Back To An International Clearing Price?

  • USGC spot ethylene has returned to levels last seen in late 2020 after reaching highs in 1H21 – only production outages (weather) could cause a rebound.
  • The imminent start-up of a new US ethylene facility will likely put further downward pressure on the spot market, but the US is oversupplied without it.
  • The cost curve allows the US to place ethylene wherever it wants. Asia prices are at a five-year low for the time of year relative to the US, but too low.     
  • The magnitude of the impact on derivatives depends on how much demand can grow as the global economy accelerates and whether weather disruptions occur.
  • Our latest ESG and Climate work focuses on a very bleak outlook for oil majors that supports our expectations for some radical M&A and restructuring.

Last week we discussed 23 Chemicals and related products and 88 Companies.

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