Daily Chemical Reaction
Hungry Heart – Energy Sector Boosts Investments In Petrochemicals Amid ESG Pressure & Growth Concerns
Key Points:
- Despite weak global commodity chemical fundamentals, capital investment in this area reflects support as energy sector participants push their portfolios downstream.
- We discuss the drop in Brent Crude relative to US natural gas WoW and add to our general views on global petrochemical cost curve developments in 4Q22 and 1H23.
- We highlight US propylene and ethylene spot market movements compared to their October contract settlement prices and price developments for both into the yearend.
- We flag the importance of cutting emissions from the fertilizer sector to decarbonize food markets and discuss the rising low-carbon ammonia demand beyond fertilizer.
- Our chemical sector supply concerns are much lower than demand concerns into 2023 – we flag freight rates, rail traffic statistics, and retailer reports supporting our view.
See PDF below for all charts, tables and diagrams