Daily Chemical Reactions

Steep Global Cost Curve & China Demand Strength Will Limit US Ethylene Chain Profit Risk – If They Persist!
March 1, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Dow, Nova Chemicals, OxyChem, Westlake, PPG, X-Energy, Huntsman, Nel, LyondellBasell, Braskem, Clariter, BASF, Synthomer, Solvay, Solenis, Kolb, Archroma, IMCD, Yulong Petrochemical, BP, Chevron, Neste, Ecopetrol, Honeywell, Enviva, Viridi, New Fortress, Dollar Tree, Donaldson, TotalEnergies, Kohl’s, Li-Cycle, Heelstone Renewable Energy, Rogers Corp., Clean Harbors, Invista

Daily Chemical Reaction

Steep Global Cost Curve & China Demand Strength Will Limit US Ethylene Chain Profit Risk – If They Persist!

Key Points:

  • US and Asia polymer prices have risen YTD but for different reasons. A steep global chemical cost curve and rising China demand will help limit US margin losses as its production returns.
  • We discuss US polyethylene (PE) contract developments relative to global spot market levels, flag recent movements in a few US monomers, and display current US propylene contract trends.
  • We highlight recent weakness in Asia and Europe natural gas values, though they remain much higher than US levels, and current support in Ex-US naphtha values relative to USGC ethane.
  • We highlight the need for low cost and reliable clean energy, we discuss why hydropower and nuclear are more reliable than wind and solar due to their higher ongoing capacity factors.
  • We discuss optimistic views toward a post-covid China economic revival in 2023, which the recent China PMI reading supports, and we flag market signals taken from a few retail reports.

See PDF below for all charts, tables and diagrams


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