The Weekly Catalyst
Global Chemical Update – The Hand That Feeds
Key Points:
- North American petrochemical producers saw the global cost curve shift in their favor in 1Q23. News of OPEC supply cuts kicked off 2Q23 with a bang, elevating relative Europe and Asia chemical costs.
- Chemical demand not keeping pace with supply will be a challenge for producer profitability in 2023. However, those lacking a cost advantage or supply outlet are much worse off than those having either.
- We view the European industry as the most “at risk” region and non-integrated buyers of crude-linked chemicals, such as benzene and propylene, as facing more risk than natural gas-linked products.