Daily Chemical Reaction
Behind Blue Eyes – Ammonia Price Weakness & CCS Hurdles Pose Challenges, Cheap Natural Gas Is Critical
- Blue hydrogen (and ammonia) reflect different challenges relative to green, as one requires cheap natural gas and a place to store/consume carbon, and the other requires cheap energy.
- The global retrofit and “blue” capacity build-out has taken off in regions with cheap natural gas. Still, these projects are not without risk – we highlight a few factors requiring consideration.
- Global ammonia prices have fallen YTD, with US producers still profitable relative to Europe. We flag rising ammonia derivative prices and why our long-term market views are constructive.
- We follow the Shell capital markets day with additional views after comparing takeaways with others, flag a slowdown in European chemical production, and note production issues in India.
- North American rail traffic reflects continued weakness in chemical movements YTD relative to 2022, while we highlight surging motor vehicle and part shipments implying loosening conditions.
See PDF below for all charts, tables and diagrams