Daily Chemical Reaction
River Of Tears – Could European Shortages Be A Lifeline for US Producers As Costs Float Higher?
Key Points:
- The global petrochemical production cost curve favors US producers, but lower prices and higher costs to still drive margin compression for most in 2H22.
- Ex-US naphtha prices reflect a multi-year low discount relative to Brent Crude, while USGC ethane now reflects a multi-year low premium relative to USGC natural gas.
- European production woes and logistic issues favor price support in the region, which is a modest plus for tighter global chemical markets and US export prices.
- We discuss lower 45Q qualifying limit benefits proposed in the inflation reduction act and critique hydrogen use for power relative to other sources.
- US consumers are paying more for fewer items at Home Depot while seeking more discount items at Walmart. Our 2H22 demand concerns remain high.
See PDF below for all charts, tables and diagrams
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