Daily Chemical Reactions

Tougher Than The Rest – Polypropylene Markets Face Many Durable Challenges, A Long Hard Road Ahead
December 8, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
ExxonMobil, Chevron, Braskem, Formosa Plastics, Pinnacle Polymers, Inter Pipeline, Air Products, AES, Aramco, Ioneer, Shell, BP, OQ, Röhm, SABIC, Solvay, Berry Global, Ineos, Borealis, Eneco, MOL, Trafigura, CATL, Evergreen, Sunwoda, Amogy, Ballard Power Systems, Williams, Entergy, Dominion Energy, Coterra Energy, SK Enmove, Phillips 66, Valero, Enterprise Products, Clorox, Blackstone

Daily Chemical Reaction

Tougher Than The Rest – Polypropylene Markets Face Many Durable Challenges, A Long Hard Road Ahead

Key Points:

  • North American polypropylene (PP) prices face downward pressure into year-end as global production and logistic improvements position supply to outpace demand.
  • US refinery margins have declined from YTD highs, but US refiners remain profitable, and already elevated utilization rates implied limited additional propylene supplies.
  • We discuss recent contract price declines for US PP and propylene, and we reiterate our cautious view of US PP producer profits amid likely margin pressure into 2023.
  • We highlight the Air Products and AES green hydrogen project and projected capital investment at ExxonMobil and Chevron that support their emission reduction goals.
  • We highlight recent weakness in North American chemical rail traffic, the drop-off in US truck utilization, and US jobless claims moving higher – our macro view is cautious.

See PDF below for all charts, tables and diagrams

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