Daily Chemical Reactions

Help Me Make It Through The Night – Global Cost Curve Steepening Will Combat Oversupply Setting, For Some
January 18, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
BASF, Covestro, Yara, CF Industries, Nutrien, Dow, Nova Chemicals, Westlake, Enterprise Products, ExxonMobil, BP, Shell, Phillips 66, Chevron, TotalEnergies, Cleveland-Cliffs, Alcoa, SABIC, Atmonia, Evonik, PureCycle, Braskem, Henkel, Asahi Kasei, NACL Industries, Lonza, Clontarf Energy, Sika, Saudi Chemical, Orica, OQ, Lotte Chemical, Sekisui Chemical, Nanya Plastics, Toray, Oriental Energy, RYAM, Danone, Samyang

Daily Chemical Reaction

Help Me Make It Through The Night – Global Cost Curve Steepening Will Combat Oversupply Setting, For Some

Key Points:

  • We are more concerned about chemical demand than supply in 2023. A steepening of global production cost curves may help offset tepid demand in support of prices.
  • Crude oil values have increased relative to US, Europe, and Asia natural gas prices since late 2022, all eyes are on reopening China and a possible oil demand boost.
  • BASF’s earnings miss is in line with cost pressures and demand pressures in Europe none of which look likely to correct quickly – more permanent plant closures likely.
  • We challenge the hydrogen hub idea and believe that the focus should be on power first. We also look at litigation which is stepping up in the face of apparent inactivity.  
  • As global container freight rates return to pre-covid norms, China may get an export boost, but lack of demand may drive some trade challenges as 2023 unfolds.

See PDF below for all charts, tables and diagrams


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