Hot Pursuit – North American Cost Advantage Spurs Investment, Varied Constraints Emerge for Some

Daily Chemical Reaction

Hot Pursuit – North American Cost Advantage Spurs Investment, Varied Constraints Emerge for Some

Key Points:

• The North American chemical producer cost advantage remains significant relative to overseas peers, as is the case for domestic energy producers, suggesting sizable integration benefits.  
• We discuss the Ineos initiative to move upstream into chemical feedstock production with its announced Eagle Ford Investment and highlight Cheniere’s positive US LNG growth outlook.
• We highlight a broadly constructive ammonia and fertilizer market outlook for 2023 from LSB Industries, which aligns with our view. We also discuss Arkema and Solvay volume commentary.
• We highlight the Denbury 4Q22 results and its comments on EPA permits allowing US CO2 sequestration growth and flag its recent strategic investment in Aqualung Carbon Capture.
• North American chemical rail volume remains depressed YTD, suggesting production cutbacks, while we link weak European chemical export expectations to demand and its high-cost position.

See PDF below for all charts, tables and diagrams