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