Daily Chemical Reactions

Kick Start My Heart – Indicators Support US Production Revival – Can the Market Handle it?
February 15, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Avient, ICL, Nutrien, CF Industries, Celanese, Covestro, BASF, Wanhua Chemical, Owens Corning, Univar, Brenntag, TotalEnergies, PTT Global Chemical, Evonik, Asahi Kasei, Osaka Soda, Kaneka, Idemitsu, Arlanxeo, Ecolab, Posco Holdings, Peabody Energy, BP, Sasol, Freeport LNG, TC Energy, Glencore, Boeing, Airbus, Idemitsu Kosan, Superior Drilling Products, Mawson Infrastructure Group, Nova Chemicals, Wabtec, Kraft Heinz, Pirelli

Daily Chemical Reaction

Kick Start My Heart – Indicators Support US Production Revival – Can the Market Handle it?

Key Points:

  • US industrial production limped higher into 2023, but the curbs have tightened commodity markets while the US input/energy cost advantage rose. A domestic production revival is ahead.
  • US natural gas prices have fallen ~30% during the past 30 days, while Brent crude values rose ~10% – this has steepened the cost curve in favor of North American chemical producers.
  • We view a steep petrochemical production cost curve, led by high crude prices, as a likely must-have for domestic commodity producers to exceed consensus 2H23 profit estimates.
  • We highlight more specialty chemical producer outlooks calling for higher prices in 2H23 based on strong demand and lower input costs due to oversupply – we do not think they will have both.
  • We highlight numerous ESG/clean energy findings, including Aker Carbon Capture 4Q results, and discuss multiple end-market demand indicators that keep our relative global concerns high.

See PDF below for all charts, tables and diagrams


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