Daily Chemical Reactions

The Energizer Bunny or Flopsy – What To Expect From The Chinese New Year – Hopes Are High
January 20, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
PPG, AkzoNobel, Covestro, BASF, Air Products, Reliance, Aramco, Elkem, Lanxess, H.B. Fuller, Repsol, Eramet, Venator, SABIC, Saudi Kayan, Nuberg, Kinder Morgan, Sol Systems, ABEI Energy, Eagle LNG, Neste, Gevo, BP, Shell, Meghmani Finechem, RecycLiCo, Elementis, Unigel, Topsoe, TotalEnergies, Cal-Maine Foods, Ericsson, Petronas, Solvay, Continental AG, Wayfair

Daily Chemical Reaction

The Energizer Bunny or Flopsy – What To Expect From The Chinese New Year – Hopes Are High

Key Points:

  • While all eyes are on China as the growth engine for 2023, its costs are high, and North America has the availability and cost advantage to take export share from China.
  • US natural gas and ethane values are more than 45% and 30% lower than 30 days ago, while Crude and Ex-US naphtha have risen, elevating the US chemical cost advantage.
  • We discuss PPG 4Q22 results and emerging non-integrated producer expectations of input cost relief in 2023 that supplier production cuts in 1H23 could push to 2H23.
  • Davos discussions are focused on the energy transition incentive inequality between the US and Europe – calls for Europe to respond will face affordability challenges.
  • Macro indicators suggest slowing output, whether it is used car availability, mortgage price reductions to stimulate house purchases, or layoffs – all eyes/hope on China.

See PDF below for all charts, tables and diagrams

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