Daily Chemical Reactions

Hopeful Exuberance? Many Chemical Companies Note Trough Conditions, Expect Significant 2H23 Advance
April 28, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
ExxonMobil, Chevron, OMV, Borouge, LyondellBasell, Valero, Neste, Olin, Eastman, Covestro, Lanxess, Yara, Versalis, W.R. Grace, U.S. Steel, Ineos, Chemours, Umicore, NewMarket, Nobian, Nouyan, Orbia, Sinopec, Messer, Worley, Xcel Energy, EQT, DTE Energy, World Fuel Services, TotalEnergies, Nextchem, Atul, Greenland Resources, Rio Tinto, Hess, Tesla, Southwestern Energy, Energy Transfer

Daily Chemical Reaction

Hopeful Exuberance? Many Chemical Companies Note Trough Conditions, Expect Significant 2H23 Advance

Key Points:

  • Expectations for a chemical market advance later this year continue to increase. Even with demand growth, global oversupply in many products will likely keep pressure on earnings.
  • 1Q23 results for chemicals are better because of lower costs rather than robust markets, and expectations for operating rates in 2023 are low even in cost-advantaged regions like the US.
  • Energy companies are posting lower results based on lower commodity prices, but earnings are high and refining margins strong, suggesting that LyondellBasell should rethink its closure.
  • Given the very high capital costs, do the economics of some of the molecular recycling initiatives make commercial sense? We also discuss Neste’s strong renewable fuels business.
  • Durable goods data is inflated by aircraft and auto demand, while other components are weaker. Autos may have demand challenges later in the year – aircraft demand should stay high.

See PDF below for all charts, tables and diagrams


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