Daily Chemical Reaction
Supplying Pressure – Chemical Product Availability Indicators Rise, Commodity Margins To Struggle
Key Points:
- The recent pullback in global energy costs relative to YTD highs favors greater global chemical capacity to produce in markets already facing an oversupplied situation.
- European natural gas prices have fallen considerably relative to US levels, and global energy prices have fallen from YTD highs. We expect a highly volatile late-year setting.
- We highlight Covestro, Sherwin-Williams, Hexcel, and Air Liquide 3Q22 results and discuss demand and profit trends that favor specialties over commodities near term.
- Most global government programs advocate for aggressive energy transition targets, but a lengthy permitting process remains a success-limiting factor for many policies.
- Container freight rates from China and the US continue to fall, the Chinese yuan has depreciated relative to the US Dollar, and global demand growth headwinds are high.
See PDF below for all charts, tables and diagrams