Daily Chemical Reactions

Under Pressure: With Varied And Conflicting Macro Data The Most Obvious Call Is Negative For Europe
February 17, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
AdvanSix, Orion Engineered Carbons, Air Liquide, Repsol, Shell, Energy Transfer, Enbridge, Vitol, Sinopec, Reliance, Grupa Azoty, Tata Steel, Solvay, Hengyi Industries, IMCD, Nutrien, Williams, CenterPoint Energy, NGL Energy Partners, Chevron Phillips Chemical, Charter Next Generation, LG Chem, Piedmont Lithium, PBF Energy, Eni, Stepan, Antero, Keyera, Talos Energy, EDF, Chevron, Westlake, Oxy, PPG, Axalta, Olin

Daily Chemical Reaction

Under Pressure: With Varied And Conflicting Macro Data The Most Obvious Call Is Negative For Europe

Key Points:

  • Western consumers will likely face another year of higher prices relative to Asia, but it puts European producers most at risk with its cost disadvantage and outsized consumer headwinds.
  • Global natural gas prices have declined recently, but US prices have fallen more significantly relative to other regions, so much so that some foresee the potential cutback of US production.
  • US polyethylene contracts rose in January, keeping the contract premium elevated. It likely displays more of a desire to keep benchmark pricing high than the actual state of the market.
  • We discuss weakness in the PPI for recycled resin in January, which suggests a notable margin squeeze for mechanical recyclers, and why securing substantial renewable power is a challenge.
  • We highlight regional economic slides from a chemical producer, which illustrate consensus expectations for these markets, and note why we think China expectations may be too high.

See PDF below for all charts, tables and diagrams

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