Daily Chemical Reaction
Hell Of A View – US PVC Price Discounts Relative to Europe And Asia Have Risen, Limiting Downside Risk
Key Points:
- US integrated polymer producers face falling prices and higher costs in 2H22. We discuss the collapse in US PVC prices (and margins) and why our medium-term view is constructive.
- Global natural gas prices continue to surge, led by strength in NW Europe, though there is much less strength in crude oil markets – a negative trend for the US petrochemical cost advantage.
- We highlight a few takeaways from the Ineos 2Q22 report and that we foresee sector profit expectation cuts ahead. We also discuss why base metal prices have recently found support.
- We further the discussion from our recent research focused on the risk that government funds to spur the energy transition are likely to be misspent as more long-shot projects seek support.
- China freight rates to the US East and West Coasts declined further WoW, suggesting lower US import product costs. We also highlight Euro weakness WoW relative to the USD.
See PDF below for all charts, tables and diagrams
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