Daily Chemical Reactions

Ethylene Blues: Global Oversupply Worsening And Contagion Spreading Downstream – US Costs Help
June 6, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Dow, LyondellBasell, Chevron Phillips Chemical, Nova Chemical, Lotte Chemical, OMV, Brenntag, Covestro, Ascend Performance Materials, BASF, Solvay, Sapio, Siam Cement, PetroVietnam, Air Liquide, Denka, Toyo Ink, Perstorp, Maire Tecnimont, Gail, Univar, OQ Methanol, SABIC, Chemours, ALPLA, Polymer Resources, Cheniere, ExxonMobil, Samsung Heavy Industries, Phillips 66, OQ Chemicals, Shell, Nestle, Chevron

Daily Chemical Reaction

Ethylene Blues: Global Oversupply Worsening And Contagion Spreading Downstream – US Costs Help

Key Points:

  • The global ethylene industry faces a considerable challenge with oversupply amid a sluggish demand setting – Europe faces much stiffer headwinds than most of Asia and North America.
  • US spot ethylene spot prices have fallen to a multi-year low, though domestic producers are still profitable. We highlight the US spot and contract setting relative to NW Europe and Asia.
  • NW Europe and Asia naphtha values reflect multi-year highs relative to USGC ethane, but this regional feedstock ratio excludes likely Chinese benefits from sourcing discounted Russian crude.
  • Solar and wind projects appear relatively easy to finance – this environment could rapidly lead to the broadening of inefficient projects and a greater reliance on storage than most envision.
  • The global cost of shipping cargoes declined rapidly in May, and we discuss commentary from Hapag-Lloyd, Old Dominion Freight Lines, and other news to frame the state of this market.

See PDF below for all charts, tables and diagrams


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