Daily Chemical Reactions

Broken Halos – Chemical Demand Metrics Fall; Many “Clean” Projects To Prove Inefficient (Need Prayer)
December 15, 2022
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Aramco, TotalEnergies, CF Industries, Mitsui & Co., Thyssenkrupp Uhde, Arkema, ExxonMobil, Dow, Uniper, Shell, Honeywell, Johnson Matthey, Wanhua Chemical, Sika, GE, EcoBlue, Kumiai Chemical, Ultium Cell, American Potash, Minbos Resources, MEGlobal, BASF, StePac, Eni, Williams, Clariant, Denbury, Vision RNG, Waste Connections, Schnitzer Steel, Enterprise Products, CubicPV, Orion Engineered Carbons, Plug Power, Air Products

Daily Chemical Reaction

Broken Halos – Chemical Demand Metrics Fall; Many “Clean” Projects To Prove Inefficient (Need Prayer)

Key Points:

  • While supply chain and cost pressure problems have eased, implying a production boost, the demand setting for most is not robust enough to support global margins.
  • We discuss the recent decline in US refinery utilization after a downward shift in sector profitability, and we flag that refinery margins remain higher than the 2019 average.
  • We highlight that ethylene production in Asia for most of 2022 has occurred at a loss, and more capacity is ahead, and we discuss the drop-off in US chemical rail traffic.
  • We echo commentary from our latest ESG weekly, noting that CCS is a cost, and the cost will escalate process inefficiency – we highlight an example CCS project from Asia.
  • We highlight rising US corporate financing costs and likely impacts on M&A, and we also flag US rail traffic trends and highlight views on growth in Asia YoY in 2023.

See PDF below for all charts, tables and diagrams

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