Daily Chemical Reaction
Different Risks, Different Rewards – Energy Sector Push To Chemicals Helped By Chemical Sector Woes
Key Points:
- Chemical producers face stiff profit headwinds due to high costs and oversupply in 2H22 – an opportunistic setting for energy players evaluating chemical investments.
- USGC NGL gross frac spreads remain elevated, pushing fractionators to run hard and expand – a positive input market trend for the domestic petrochemical industry.
- US ethane-based ethylene producers remain low-cost relative to Asia and Europe but reflect negative margins, and US polyethylene prices reflect notable weakness in 3Q.
- Global solar market growth ambitions continue to trend upwards while risks linked to Chinese supply chains appear increasingly brushed aside – this concerns us.
- We note takeaways from the Donaldson quarterly results, discuss the China August PMI posting, and highlight 10yr US bond yields since 1962, among other findings.
See PDF below for all charts, tables and diagrams