Daily Chemical Reactions

The Battle Within – North America Cost Advantage Incentivizes Production, Price Competition To Rise
December 20, 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, Sabic, Sinopec, Shell, Brenntag, Univar, Lenzing, Sika, K+S, Trinseo, Vopak, Altana, ASK Chemicals, LG Chem, Ascension Clean Energy, Topsoe, Linde, Lotte Chem, TPC Group, Henkel, Versalis, Perstorp, Borealis, Elkem, BASF, Citgo Petroleum, LyondellBasell, OCI N.V., Azelis, Eni, Covestro, Mitsui, Ineos, Ecolab, Lafarge, Schnitzer Steel

Daily Chemical Reaction

The Battle Within – North America Cost Advantage Incentivizes Production, Price Competition To Rise

Key Points:

  • European chemical producer cutbacks will unlikely offset oversupplied Asian markets to support prices into 2023, limiting US cost benefits and forcing a battle from within.
  • We flag plant closures at Trinseo in Europe and Mitsubishi in the UK due to high gas costs and weak demand and discuss raw material margins sending mixed signals.
  • We highlight the downward move in US polyethylene spot values relative to the November contract and discuss how Shell product placement will disrupt the market.
  • We discuss why it is easier for a chemical company like LyondellBasell to tackle Scope 3 emissions than an oil and gas company and flag a few clean project developments.
  • Recent weakness in the USD relative to the Euro (& other currencies) pose headwinds for product imports, and we note a few US housing market indicators worth noticing.

See PDF below for all charts, tables and diagrams

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