Daily Chemical Reactions | Sunday Thematic & Weekly Recap

Stocking Up: Inventory Build Bubble Should Stall But Not Fall
July 18, 2021
Commodities Mentioned:
PVC, Polypropylene, Polyethylene, Polystyrene, PET, MDI, Propylene, Ethylene, Benzene, Methanol, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha, Chlorine, Ethylene DiChloride, Styrene, SBR, Acetic Acid, Rare Earths, Olefins, Polyolefins, VCM, Lithium, LNG
Companies Mentioned:
BASF, Covestro, Dow, Huntsman, Wanhua, LyondellBasell, ExxonMobil, Westlake, Nova Chemicals, SABIC, OxyChem, Borealis, Advent, Evonik, PPG, Sherwin-Williams, AkzoNobel, Gujarat Heavy Chemicals, PTTGC, Inter Pipeline, Repsol, Sasol, Aramco, Shell, CNOOC, TotalEnergies, Petro Rabigh, Vinnolit, Sinopec, Denka, Air Liquide, Lotte Chemical, Shin-Etsu, Formosa Plastics, Enterprise Products, Flint Hills, Braskem, Berry Global, Axalta, Basic Chemical Industries, Haldor Topsoe, IFF, Lanxess, LSI, LG Chem, Pawling, Standard Lithium, Vopak, West Virginia Methanol, Citgo, Sinochem, Oriental Energy, MEGlobal, Honeywell UOP, Polyplastic, Shintech, Olin, Celanese, Halliburton, Ineos Styrolution, CeramTec, Sk Siltron, Solvay, Chesapeake, Pemex, Delta Air Lines, Daimler, Chevron, Lyft, GM, Gazprom, TSMC, Jeep, Methanex, Southern Chemical, Natgasoline, Mitsui Chemical, Pembina, Linde, CNCEC, Compass Minerals, EMS-Chemie, Verdant, Cheniere, Reliance Industries, Vale, Equinor, Cummins, ServiceMax, Volkswagen, Levi’s, BHP, bp, Energy Transfer, Eastman, Ineos, CP Chem

C-MACC Sunday Thematic & Weekly Recap 75

Stocking Up: Inventory Build Bubble Should Stall But Not Fall

  • Our discussions suggest the inventory build that supply chain disruptions have prompted will peak shortly, but it is unlikely to reverse quickly
  • Investments to diversify supply chains will take time and while we wait we would expect a larger inventory cushion than we have seen over the last decade.
  • Manufacturing investment in the US and Europe would be broadly positive for the chemical and polymer industry but Industrial Gases should do best.
  • While it may be time to fold on the chemical sector from an investment perspective for a while, we are less convinced that historical proxies work anymore
  • We propose a different recycling thesis – one that maximizes pyrolysis and minimizes consumer responsibility – it is more likely to work.     

Last week we discussed 27 Chemicals and related products and 97 Companies.

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