Daily Chemical Reactions

Fatal Attraction – 1Q23 US Petrochemical Margin Boost Will Lure Production, Profit Squeeze Ahead For Most
March 23, 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, LyondellBasell, ExxonMobil, Westlake, Albemarle, Sabic, Sinopec, Air Liquide, GE, Svante, Shell, Sika, Ineos, Lummus Technology, Envicco, Avantium, Kvadrat, Hyundai Moto Company, Advent Technologies, Indian Oil, Freeport LNG, Aramco, Petrobras, ENEOS, ADNOC, BHP, Mars, Starbucks, Ryanair, Boeing, BP, Centrica, Wacker, Pearl Polyurethane Systems, Umicore, Core Lithium

Daily Chemical Reaction

Fatal Attraction – 1Q23 US Petrochemical Margin Boost Will Lure Production, Profit Squeeze Ahead For Most

Key Points:

  • US petrochemical markets have lost much of the positive momentum seen in early 2023, and it could reverse abruptly in 2Q23 as domestic production rebounds amid now elevated margins.
  • We highlight an outlook for crude oil and natural gas values in 2023, with the state of Chinese demand being a swing factor, and show US ethylene production costs relative to Europe and Asia.
  •  US polyethylene producer nominations call for a contract price hike in March, though regional spot and feedstock market trends do not support it. Early-year positive momentum has lessened.
  • Global gov’t energy transition policies and regional differences are a focus at WPC. The EU set up a regulatory framework to enable the transition, but the US IRA creates a business case for it.
  • We discuss North American rail volume and Baltic Exchange Dry Index movements that, on a combined basis, suggest that production cutbacks have occurred in support of market balance.

See PDF below for all charts, tables and diagrams


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