Daily Chemical Reactions

A Cracked Shell – Double Down or Exit Chemicals?
October 6, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Shell, ExxonMobil, Enterprise Products, Valero Energy, Marathon Petroleum, LyondellBasell, Dow, Mura Technology, Chevron, Phillips 66, Air Products, Air Liquide, Celanese, DuPont, BASF, Petronas Chemicals, Sumitomo Chemical, Li-Cycle, Albemarle, Pilbara Minerals, Livent, SQM, Worley, Northvolt, Issaquena Green Power, W.R. Grace, Nordex, Nexam Chemical, Macquarie, Mitsubishi Chemical, Fortescue, First Solar, Cummins, Altura Power, Suncor Energy, Sekisui Chemical

Daily Chemical Reaction

A Cracked Shell – Double Down or Exit Chemicals?

Key Points:

  • Global commodity chemical markets have experienced a significant downturn in 2022, which we think is prompting many difficult strategic business reviews, such as at Shell.
  • Indicative refinery margins posted by Shell with its 3Q update show declines from YTD highs but are still higher YoY, reflecting a significant free cash flow driver for refiners.
  • Global commodity chemical margins have declined relative to 2022 highs and face significant headwinds in 4Q22. Lithium markets remain an international outlier.
  • We discuss the Air Products green hydrogen project in New York, Shell’s efforts to build a USGC low-carbon fuel facility, and other relevant clean energy observations.
  • We discuss WTO forecasts for slowing global trade, flag European price inflation views by country, and flag low MS river water levels negatively impacting US product flows.

See PDF below for all charts, tables and diagrams

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