Daily Chemical Reactions

High and Dry – Europe Producer Woes Mount; Ex-US Market Developments Selectively Favor US Exports
August 18, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Westlake, Occidental, Shin-Etsu, Formosa Plastics, Olin, CF Industries, Babcock & Wilcox, LSI Industries, Phillips 66, DCP Midstream, North American Helium, Air Liquide, Svante, ProAmpac, SK Innovation, Amcor, Baker Hughes, Tatneft, EDF Renewables, Aramco, Chevron, YPF, SQM, Nutrien, Albemarle, Livent, Lithium Americas, Ganfeng Lithium, NRG Energy, Gevo, Mitsui & Co., Laredo Petroleum, BYD, Fusion Fuel, Origin, Exelon, Brenntag, OPEC, Uniper, AO World

Daily Chemical Reaction

High and Dry – Europe Producer Woes Mount; Ex-US Market Developments Selectively Favor US Exports

Key Points:

  • US chemical inventories remain elevated, but logistic and cost issues abroad favor exports, such as in PVC, which will help support US prices as inventories normalize.
  • Global natural gas prices are rising relative to Brent Crude and naphtha. US chemical producers are cost advantaged relative to most regions but still face higher costs.
  • Production issues and higher costs abroad favor global ammonia price support near multi-year highs. We take a constructive view of the global ammonia market.
  • We highlight progress at the CF Industries and Mitsui & Co. proposed new blue ammonia plant in Louisiana. Attractive returns remain the priority for investors.
  • West coast port terminal availability and North American rail traffic are rising, suggesting US logistic issues are lessening, unlike in Europe (and parts of Asia).

See PDF below for all charts, tables and diagrams

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