Sunday Thematic & Weekly Recap

Shell Game: What To Do With an Unprofitable Poorly Run Business?
June 12, 2023
Commodities Mentioned:
Plastics, PVC, Polyethylene, Polypropylene, PU, PC, PET, Critical Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha, Ethylene, CCS, Solar, PFAS, Carbon, Paper, Biofuels, RNG, Lithium, Water
Companies Mentioned:
Chevron Phillips Chemical, INEOS, Nova Chemicals, Formosa Plastics, LyondellBasell, Dow, ExxonMobil, Braskem, PPG, Celanese, Lotte Chemical, OMV, Brenntag, Covestro, Ascend Performance Materials, BASF, Solvay, Sapio, Siam Cement, PetroVietnam, Air Liquide, Denka, Toyo Ink, Perstorp, Maire Tecnimont, Gail, Univar, SABIC, Chemours, ALPLA, Polymer Resources, Cheniere, Samsung Heavy Industries, Phillips 66, OQ Chemicals, Shell, Nestle, Chevron, Orbia, Oxy, Westlake, Shin-Etsu, Axens, Ecolab, M. Holland, Febo, LG Energy Solution, Bloom Energy, TotalEnergies, Corbion, Ryze Hydrogen, Cenovous, Orlen, Adani, Albemarle, Pembina Pipeline, Tigo Energy, Mitsubishi Gas Chemical, Ofgem, Brown-Forman, The Azek Company, Serta Simmons, Fisker, Norges, bp, Repsol, Petronas, Technip, Linde, Borealis, Versalis, Eastman, Indorama, Corbios, Mars, The Absolute Company, Nucor, Aemetis, Tesla, Ford, Nutrien, CF Industries, LSB Industries, OCI Global, Yara, Corteva, FMC, Bayer, PKN Orlen, Grupa Azoty, Trafigura, Williams, Asahi Kasei, Mitsui, Enbridge, Ascend Elements, Clean Energy, Entegris, Croda, Western Resources, NuStar, Vertex Energy, Talos Energy, Hystar, Schneider, BAE Systems, Stamicarbon, NuScale Power, Aramco, Livista Energy, Technip Energies, W.R. Grace, Victrex, Johnson Matthey, Orsted, Toray, LG Chem, Air Products, Superior Graphita, Elkem, American Battery Technology Co., Sinopec Mitsui, Bunge

C-MACC Sunday Thematic & Weekly Recap 172

Shell Game: What To Do With an Unprofitable Poorly Run Business?

  • Ten years ago, it would have been easy for shareholders to call for Shell to exit chemicals had the business shown the losses and operating problems it has today.  
  • This may still be the right option, but valuation is challenging, and those that could drive the highest synergies might prefer to invest in feedstocks today.
  • It is unlikely that the new Shell leadership is enamored by the losses or the operating challenges and would look for change. A clever hybrid deal is possible. 
  • We discuss a deteriorating market backdrop for chemicals; not conducive to M&A – at least not cash deals, especially when European assets are in the mix.
  • Otherwise, we look at the uncertain developing ag market in 2023, more weakness in China, what OPEC is signaling, and why lawyers are gearing up for ESG.

See PDF below for all charts, tables and diagrams

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