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