Daily Chemical Reactions

Soul To Squeeze – Global Feedstock Costs Rise WoW, Few Immune But Some Much Better Positioned
August 19, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Navigator Holdings, Enterprise Products, Dow, Enbridge, Northern Oil & Gas, PrimeEnergy Resources, Nestlé, Krones, Nutrien, CF Industries, LSB Industries, Nova Chemicals, Westlake, LyondellBassell, Albemarle, Livent, SQM, Marathon Petroluem, Phillips 66, Santos, Shell, Azelis, Ganfeng Lithium, Deepak Fertilisers, Jera, BASF, Capstone Green Energy, LG Energy Solution, Yara, Equinior, Fisker, Westwater Resources, Deere, J.B. Hunt, Maersk, Tosoh

Daily Chemical Reaction

Soul To Squeeze – Global Feedstock Costs Rise WoW, Few Immune But Some Much Better Positioned

Key Points:

  • Global energy prices march higher WoW in absolute terms, while there is less upward momentum in global petrochemical prices, implying sector margin compression.
  • US Natural Gas prices increased relative to Brent Crude WoW, pushing this price ratio lower, a negative development for US petrochemicals. US refinery margins rise WoW.
  • We discuss the weakness in 2Q22 lithium processor margins, as spodumene values have outpaced lithium prices, and we flag US non-integrated polymer margins risk.
  • We further discuss 45Q and note that methane emissions from unconventional gas are high, with most being vented rather than captured – this is expensive to remedy.
  • European CO2 values hit a record high this week, and we also discuss numerous other findings ranging from takeaways from the Deere 2Q22 report to relative USD strength.

See PDF below for all charts, tables and diagrams

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