Daily Chemical Reaction
American Pie – North American Energy Advantage Tasty, But Some Still Passing Gas To Tighten Derivative Supply
Key Points:
- Oversupplied global markets in some chemicals, such as polyvinyl chloride and ammonia, have pinched near-term profits and masked their advantaged regional cost and competitive positions.
- We highlight the wide oil-to-gas ratio as reflecting significant positives for Enterprise Products. We share its more constructive view of oil than natural gas, a positive for US chemical producers.
- We flag global ammonia price weakness, still sizable US margin premiums relative to Europe, and note little new capacity growth rather than planned conversions to green and blue products.
- We highlight efforts from Marathon Petroleum to cut GHG emissions and drive sustainability in a period of high existing refinery profits and display Sealed Air circularity views in packaging.
- The DuPont demand outlook highlights headwinds from electronic and construction markets but pockets of support, such as aerospace. Our overall view of durable good demand is cautious.
See PDF below for all charts, tables and diagrams
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