The Chain (Opportunity) – Have the Stars Aligned For Midstream To Move Downstream? We Think So!

Daily Chemical Reaction

The Chain (Opportunity) – Have the Stars Aligned For Midstream To Move Downstream? We Think So!

Key Points:

• An opportunistic setting has developed for energy players to deploy strong cashflows towards growth downstream in chemicals to improve long-term risk-adjusted returns.
• USGC NGL gross frac spreads remain elevated, pushing fractionators to run hard and expand – a positive input market trend for the domestic petrochemical industry.
• We discuss estimates of “lost production” of chemicals in Europe due to high energy costs in 2022 and why the recent re-start of some production may prove temporary.
• We show a flow diagram from Sealed Air to frame the complexity with most circular product initiatives and discuss why the Linde/SLB collaboration makes sense for CCS.
• Global container freight rates on avg. continue to trend toward 2019 levels, enhancing our confidence that product demand is a greater concern than availability in late 2022.

See PDF below for all charts, tables and diagrams