Daily Chemical Reaction
Electric Avenue – Rising Demand To Support Clean Energy Mineral Index, Greater Risk In Other Chains
Key Points:
- Our clean energy mineral price index declined for the fifth consecutive month in August, but the rate of decline has moderated. We do not foresee a collapse in 2H22.
- We flag the modest improvement WoW in Brent Crude and Ex-US naphtha relative to US natural gas and USGC ethane, though the ratios are notably below YTD highs.
- Global ethylene margins remained negative in Asia, NW Europe, and the US last week, and further polymer price declines have pushed integrated producer profits lower.
- We discuss the significant EU hydrogen demand growth set by REPowerEU targets for 2030 and flag the notable benefits from 45Q for CCUS and falling EU CO2 values.
- The US Dollar reflects sizable strength relative to the Euro and Yen, a mounting headwind for US exporters, and freight rates from China to the US fell again WoW.
See PDF below for all charts, tables and diagrams