Daily Chemical Reaction
American Pie – North American Energy Advantage Tasty, But Some Still Passing Gas To Tighten Derivative Supply
- 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.
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