Daily Chemical Reactions

Wrong Place, Wrong Time – BASF & German Troubles Far From Over, More Strategic Action Needed
February 24, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
BASF, Ineos, Celanese, Origin Materials, Mitsui, Pembina Pipeline, ABB, Linde, Versalis, Orbia, Univar, UPL, Chevron, QatarEnergy, Marathon Oil, Evonik, Roquette, ADNOC, Oceaneering, Southwestern Energy, Trinseo, Alliant Energy, Edison International, Holly Energy, Evergy, Mosaic, Loop Energy, Engie, Beacon, Carvana, Boeing, Nikola, Lordstown Motors, Nissan, Tata Steel, TSMC, Redfin

Daily Chemical Reaction

Wrong Place, Wrong Time – BASF & German Troubles Far From Over, More Strategic Action Needed

Key Points:

  • European chemical producers face the challenges of a global production cost disadvantage and a generally mature consumer growth profile, spurring some to make aggressive strategic moves.
  • BASF estimates global chemical production growth will outpace GDP and industrial production growth in 2023 – a consensus view, but demand and cost curve shifts could adjust the order.
  • Many non-integrated specialty chemical producers expect price support but falling costs in 2H23 – this setting will likely require an unlikely combo of demand strength and lower oil prices.
  • BASF initiatives to transform the Ludwigshafen Verbund site to net zero emissions by 2045, may be more expensive than closure! We also flag Origin Materials’ very big year in 2023.
  • We highlight the recent movement in US used-car values and inventory and that some global auto-build views for 2023 provide suppliers hope despite falling consumer affordability.

See PDF below for all charts, tables and diagrams

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