Daily Chemical Reactions

Kill A Word – Recession Or Not; Demand Indicators Suggest Mounting Headwinds Relative To Supply
July 28, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Shin-Etsu Chemical, Orbia, Olin, Westlake, Formosa Plastics, Ineos, Sinopec, Ashland, Shell, Valero, TotalEnergies, ExxonMobil, Silgan, LSB Industries, Nutrien, Corteva, Mosaic, CF Industries, Lotte Chemical, Methanex, Pilbara Minerals, Rio Tinto, Siam Cement Group, Stepan, Avient, S-Oil, Tokuyama, BASF, Black & Veatch, Posco Chemical, Mitsubishi Chemical, Archaea Energy, Solvay, Sekisui Chemical, Sunnova, Itero

Daily Chemical Reaction

Kill A Word – Recession Or Not; Demand Indicators Suggest Mounting Headwinds Relative To Supply

Key Points:

  • The 2Q US GDP drop (the 2nd consecutive quarterly drop) may be spurring a debate over the definition of recession, but our 2H22 sector profit concerns are irrefutable.  
  • We flag oil and gas sector 2Q reports and expand on our views that those with the most aggressive energy transition plans are being penalized by the stock market.
  • US commodity petrochemical producers face lower prices and lingering high costs in 3Q22. However, most still maintain a sizable global cost advantage.
  • We highlight Shell and Valero updates on their clean-energy initiatives with their 2Q reports and happenings that favor the passage of a US climate bill.
  • We discuss US GDP taking a step lower in 2Q22, indicating a recession led by inflation, primarily triggered by energy, holding many similarities to the 1970s.

See PDF below for all charts, tables and diagrams

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