Daily Chemical Reactions

Cruel Summer: Above Average Temperatures Could Lift US Nat Gas vs Crude – Less US Competitive Edge
May 19, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
ExxonMobil, Chevron Phillips Chemical, LyondellBasell, Dow, Nova Chemical, Olin, Oxy, Westlake, Shin-Etsu, Enterprise Products, Invista, Shell, QatarEnergy, Berkshire Hathaway, Aramco, Saipem, AkzoNobel, Covestro, IMCD, Livent, Allkem, SQM, Albemarle, Maire Tecnimont, Syngenta, Hokkaido Electric, Mol, Western Potash, Croda, Arkema, Foot Locker, Walmart, NEOM, Codelco, Ford, Disney

Daily Chemical Reaction

Cruel Summer: Above Average Temperatures Could Lift US Nat Gas vs Crude – Less US Competitive Edge

Key Points:

  • US natural gas and USGC ethane prices rise relative to Brent Crude and Ex-US naphtha WoW, a negative development for US commodity chemical profits that puts some 2Q views in question.
  • We flag the drop in US propane values relative to ethane amid mostly unchanged US spot ethylene and propylene WoW. Domestic PDH operators reflect improved economics WoW.
  • We discuss the SQM 1Q23 earnings disappointment, its efforts to expand lithium production amid high demand expectations, and the uptick in China spot lithium prices from 1yr lows.
  • Crop prices remain well above 2019-1H23 levels, keeping expectations of farmer income and spending high, and we discuss the Syngenta push for its equity IPO amid this favorable backdrop.
  • We discuss efforts to expand global carbon capture networks, the mounting headwinds facing European recyclers, and the tepid global freight and cargo setting keeping demand concerns high.

See PDF below for all charts, tables and diagrams


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