Daily Chemical Reactions

Slow Burn – Global Chemical Market Oversupply To Keep Most Cost Curve Benefits In Check, For Now
January 13, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Westlake, Oxy, Shin-Etsu Chemical, Olin, Formosa Plastics, Orbia, Equate, MEGlobal, Maersk, Evonik, Clariant, Asian Paints, Nova Chemicals, Shell, Röhm, Cheniere, TotalEnergies, Freeport LNG, PKN Orlen, Plug Power, Nestlé, ConocoPhillips, TSMC, Octopus Hydrogen, Greenergy, Saint-Gobain, Tesla, Nuvera, Allison Transmission, CF Industries, Nutrien, LSB Industries, Chevron Phillips Chemical, QatarEnergy, Citigroup, JPMorgan, Goldman Sachs

Daily Chemical Reaction

Slow Burn – Global Chemical Market Oversupply To Keep Most Cost Curve Benefits In Check, For Now

Key Points:

  • Recent global chemical production cost movements and US price support have lifted domestic market sentiment, but our study suggests low run rates will limit the benefit.
  • US natural gas and USGC ethane values fall further WoW relative to Crude and Ex-US naphtha values, continuing a beneficial trend for domestic petrochemical producers.
  • We discuss European chemical production, US propane-based ethylene production costs rising relative to ethane, and the input implications of recent crop price shifts.
  • We discuss efforts to decarbonize product transportation markets and obstacles facing SAF. We also see the diversity in types of packaging is a challenge for recyclers.
  • China import and export volumes declined meaningfully in late 4Q22, and we also flag US crop exports to China and weak early 2023 North American chemical rail volume.

See PDF below for all charts, tables and diagrams

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