Daily Chemical Reaction
China Crisis: It Is the Economic Activity in China That Matters – Need More Working with Fire and Steel
Key Points:
- China remains the biggest wildcard for 2023, with an OK year not likely to be good enough, especially for chemical makers. It is hard to see how 2023 improves; we may need to wait a year.
- While global natural gas prices are falling, there is more interest in US natural gas, especially if the summer is warm. Meanwhile crude oil price forecasts fall – we expect OPEC intervention.
- We like the Livent/Allkem deal as it is a breath of fresh air in a market that is otherwise stale. The deal brings scale, supply diversity and synergies – all may be important sooner or later.
- We discuss scale in the sustainability section, Air Products’ possibly misplaced quest for it in hydrogen and Bloom and others need for it to lower the cost of electrolysis and fuel cells.
- Chinese indicators are improving in some cases and wobbling in others, but we remain well short of the level of China recovery that we believe is needed to save 2023.
See PDF below for all charts, tables and diagrams