Daily Chemical Reactions

Special Affair – Weak Chemical Sector Conditions Persisted Into 1Q; Falling Feedstock Costs Help Some
January 27, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Eastman, Dow, Olin, Westlake, Shin-Etsu, Formosa Plastics, Oxy, Trinseo, Tata Chemicals, Vertex Hydrogen, TotalEnergies, Chevron, Imperial Oil, Technip Energies, Topsoe, Steeper Energy, Syzygy Plasmonics, Reliance, Origin Materials, Ørsted, Eversource, Equinor, BP, Shell, OCI NV, Phillips 66, Tetra Tech, Eni, Nucor, Chem One, Plug Power, Hasbro, Intel, Airbus, Posco, Shrieve Chemical

Daily Chemical Reaction

Special Affair – Weak Chemical Sector Conditions Persisted Into 1Q; Falling Feedstock Costs Help Some

Key Points:

  • US consumer spending fell for the second consecutive month in December, led by a drop in durable goods demand – most chemical chains remain bloated in 1Q23.
  • We discuss the significant weakness in US natural gas prices during the past 30 days, which is a plus for US petrochemical producers relative to those in Europe and Asia.
  • Chemical sector 4Q reports and 2023 outlooks suggest that some chemical product chains are much leaner than others, and we flag our constructive view of Chlor-Vinyls.
  • Eastman highlights progress on its circular economy milestones in 2022 and targets for 2023, though investor confidence appears low in this project’s risk-adjusted returns.
  • We highlight that Airbus is hiring to help with product delays, while many other durable goods producers, such as Intel and Hasbro, foresee a weaker demand setting.

See PDF below for all charts, tables and diagrams


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