Daily Chemical Reactions

Lonely Teardrops – Depressed US Spot Ethylene Sits Mostly Alone & Stranded; A Setting Likely To Change
May 18, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Navigator Holdings, Enterprise Products, Nova Chemicals, Celanese, Dow, LyondellBasell, Shell, Cepsa, Valero, Evonik, Nufarm, Solvay, Delo, Henkel, OQ Chemicals, Marathon Petroleum, Petrobras, Sinopec, ADM, Aspen Technology, Monro, Williams, PPG, TotalEnergies, Sonatrach, Azelis, Entegris, Técnicas, Eagle Materials, Dole, Teva, Walmart, Home Depot, Target, T.J. Maxx, Universal Display Corp., Syngenta

Daily Chemical Reaction

Lonely Teardrops – Depressed US Spot Ethylene Sits Mostly Alone & Stranded; A Setting Likely To Change

Key Points:

  • The North American ethylene spot market continues to face derivative production cutbacks and limits on its ability to serve higher-cost US export consumers – a setting likely to change.
  • We discuss shifts in the global ethylene production cost curve and recent beneficiaries of cheap US ethylene and outage-supported derivative prices that could face headwinds in 2H23.  
  • Weakness in crude values and supportive fuel prices spurred a rebound in US refinery margins during the past three weeks, with many counting on strong summer fuel demand for support.
  • Energy companies demanding positive medium-term returns from green energy investments continue to rise – a plus for their shareholders, but likely to revive already high activist pressure.
  • We discuss Walmart results and comments on consumer spending, which we compare with the recent Home Depot, Target, and T.J. Maxx results – shoppers increasingly turn to bargains.

See PDF below for all charts, tables and diagrams


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