Daily Chemical Reaction
High and Dry – Europe Producer Woes Mount; Ex-US Market Developments Selectively Favor US Exports
- 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).
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