Daily Chemical Reactions

Blow At High Dough – Elevated Prices & Government Incentives Lift Profit Cycle Risk For Some Chemicals
December 2, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Olin, Chlorum, Oxy, Orbia, Westlake, Dow, OMV, BASF, Covestro, AkzoNobel, Huntsman, Freeport LNG, INEOS, Ashta Chemicals, Shell, Sasol, TC Energy, SABIC, Ube, Petrobras, Chevron, Valero, Repsol, TotalEnergies, Cepsa, Posco Group, ExxonMobil, Yara, Ford, Tesla, Carlyle, Blackstone, JERA, Kroger, Amazon, Walmart

Daily Chemical Reaction

Blow At High Dough – Elevated Prices & Government Incentives Lift Profit Cycle Risk For Some Chemicals

Key Points:

  • The global commodity chemical industry faces profit cycle risk from energy producers expanding downstream and gov’t incentives favoring “new” technology deployments.
  • We discuss issues with the Freeport LNG start-up and NW Europe natural gas price strength relative to US levels, which is a near-term plus for US chemical producers.
  • We highlight Olin initiatives to maximize the values of the ECU and why this helps new technologies/other producers advance their projects, a potential long-term risk.
  • We discuss the Yara agreement to ship green fertilizer to Argentina to decarbonize potato production and the global EV deployment impact on power grid reliability.
  • We discuss the latest US job report, highlight announced layoffs at Amazon and Walmart, and flag Kroger’s view that food price inflation is beginning to moderate.

See PDF below for all charts, tables and diagrams

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