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