Daily Chemical Reactions

“Luke, You Were Our Father” – Lithium Wars – Another Commodity Facing The Dark Side of Overconfidence?
May 4, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Albemarle, Shell, LyondellBasell, Ineos, Westlake, Denbury, Evonik, Mosaic, CF Industries, Nutrien, Henkel, Sinochem, Solvay, OCI, Innospec, Ingevity, CP Chemical, Kumho Petrochemical, New Fortress, Phillips 66, BP, TotalEnergies, Vitol, Trafigura, Merceria, Gunvor, SABIC, Sempra, North American Helium, Altus Power, Ecovyst, Borealis, Odfjell, Maersk, Tata Chemicals, DSM

Daily Chemical Reaction

“Luke, You Were Our Father” – Lithium Wars – Another Commodity Facing The Dark Side of Overconfidence?

Key Points:

  • The lithium spot price collapse relative to early 2023 estimates has caused producer Albemarle to cut its full-year profit outlook – an example of a reversal in commodity market overconfidence.
  • A central theme from the 1Q23 reporting season is that a period of security supply concerns in 2022 preceded the recent period of oversupply, resulting in some overstated commodity swings.
  • We discuss the differences in Phillips 66 and LyondellBasell olefin and polyolefin operating rate views for 2Q23 and display the weakness in Shell production rates in 1Q23 relative to 4Q22.
  • We discuss Westlake 1Q23 results and why we remain constructive on US Chlor-Vinyls in the medium-term, and we switch gears also to flag Denbury results and frame our CCS market views.
  • Global crop markets remain tight, supporting farmer spending and benefiting seed and crop protection producers more YTD than those producing fertilizer that faces a period of oversupply.

See PDF below for all charts, tables and diagrams

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