Daily Chemical Reactions

Night-Night – High Inventory, Demand Concerns, & Logistic Issues Put More Sector Production To Bed  
August 25, 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, Olin, Formosa Plastics, Dow, LyondellBasell, Braskem, ExxonMobil, Altana, Tosoh, Pilbara Minerals, Shell, Ohmium, Lotte Chemical, Lotte Fine Chemical, Sumitomo Corp, BOC, Clariant, Elkem, RPM, World Energy, EverWind, Linde, PKN Orlen, Grupa Azoty, BASF, Sulzer, ABB, Ineos, Covestro, Chart Industries, Energy Transfer, Adani, Plug Power, Albemarle

Daily Chemical Reaction

Night-Night – High Inventory, Demand Concerns, & Logistic Issues Put More Sector Production To Bed  

Key Points:

  • Global demand concerns, lingering logistic issues, and elevated inventory levels are spurring US chemical production cuts despite its shrinking but still notable low-cost global position.  
  • Brent Crude and Ex-US naphtha values reflect multi-year lows relative to US natural gas and NGLs – the trend highlights an erosion of the US petrochemical production cost advantage.
  • We highlight the Olin announcement to close more Chlor-alkali capacity and discuss why we view it as good news for US Chlor-Vinyl producers, such as Westlake, Shintech, and OxyChem.  
  • We discuss the hydrogen alliance between Canada and Germany, flag more global green hydrogen developments and likely global trade routes, and note a few ammonia market trends.  
  • Evidence of slowing global demand is broadly mounting as end-product sellers increasingly cut sales and profit outlooks amid high inventory, lessening activity, and shifting consumer habits.

See PDF below for all charts, tables and diagrams

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