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