Daily Chemical Reactions

Don’t Go Breaking My Heart – European Chemical Producer Woes To Rise As US Production Fills Out
February 7, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
DuPont, BP, Dow, LyondellBasell, Covestro, Ineos, Linde, KBR, Mitsubishi Chemical, Tallgrass, Green Plains, New Fortress, OCI, Yansab, Chemanol, Symrise, Givaudan, Nippon Shokubai, Croda, SK Geocentric, Jiangte Motor, Idemitsu, Toray Industries, Repsol, Orica, Evonik, Baker Hughes, Shell, Schneider Electric, Ube, Maire Tecnimont, Cummins, Mueller Industries, Nestle, Tyson Foods, AGCO

Daily Chemical Reaction

Don’t Go Breaking My Heart – European Chemical Producer Woes To Rise As US Production Fills Out

Key Points:

  • Chemical profit trends in the US favor the return of its entire production, likely reversing the recent price run-up, and its cost advantage and cheap freight rates lift European producer risk.
  • The DuPont 4Q22 profit update and 2023 outlook, and its equity value response following the release, suggest many are looking past a weak 1H23 setting to improvement in 2H23 and 2024.
  • We highlight recent US, NW Europe, and Asia natural gas movements and global LNG export capacity additions in 2023 relative to annual capacity additions between 2012 and 2022.
  • We discuss ESG compliance cost inflation on a global scale and BP growth capital spending that targets lower implied ROI energy transition investments relative to oil and gas through 2030.
  • We discuss the movements in global freight rates, noting that China to Europe rates have recently jumped while US rates to Europe remain compared to the 2017-2019 average level.

See PDF below for all charts, tables and diagrams

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