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