Daily Chemical Reaction
Waiting On A Miracle – Chemical Producers Begin To Cut 3Q Profit Views, 4Q Estimates Also Need Attention
Key Points:
- Chemical producers are increasingly cutting 3Q profit expectations but fail to give 4Q views despite Street estimates likely being too high – this is a missed opportunity.
- US refinery margins have fallen relative to 2022 highs but remain significantly higher than in 2019. We think capacity additions based only on fossil fuels are hard to justify.
- We highlight Dow and LyondellBasell views of 3Q22 profit trends and discuss why we think US polyethylene (PE) contract prices face further downward pressure in 2H22.
- We flag the IEA monthly electricity statistic posting that displays monthly OECD solar power production and shows the reliance on other power sources during winter.
- North American chemical rail traffic statistics improved YoY last week, and YTD traffic is higher. We also discuss recent US retail sales and industrial production postings.
See PDF below for all charts, tables and diagrams