Daily Chemical Reactions

And It Stoned Me – Global Ethylene Margins Are Negative, And Global Polymer Margins Are Falling
August 26, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Dow, LyondellBasell , Nova Chemicals, Westlake, PetroChina, Oxy, Celanese, Wood Mackenzie, Eni, Callon, Total Energies, Novatek, Shell, Valero, Air Liquide, BASF, Bachem, Indorama, INEOS, Lonza, Nabaltec, Posco Chemical, 1PointFive, Sasol, Solenis, Yara, CF Industries, Covestro, Cummins, Denbury, Technip Energies, Agilyx, Amazon, BlackRock, FedEx, Panasonic

Daily Chemical Reaction

And It Stoned Me – Global Ethylene Margins Are Negative, And Global Polymer Margins Are Falling

Key Points:

  • The US ethylene production cost advantage remains sizable relative to Asia, but the problem is that neither region is making money! US polymer margins reflect a downward trend in 3Q.  
  • US natural gas and ethane values have significantly increased YTD. Though we expect supply increases for both in 2023/24, we also think overseas demand will remain substantial.
  • We discuss indications that some Chinese producers are selling products at a loss but trying to make up for it with volume, while some US producers have cut production to reduce inventory.  
  • We view the shift in 45Q values from the inflation reduction act as beneficial for Occidental’s DAC facility in the Permian and highlight significant global growth ahead of CCUS.
  • We flag the downward trend in the Baltic Exchange Dry Index, that North American Chemical rail traffic is improving, and German manufacturer export sentiment faces downward pressure.

See PDF below for all charts, tables and diagrams

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