Daily Chemical Reactions

Trading Places: Economic Trends Make It Difficult Not To Buy From China – European Struggles Acute
June 21, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Olin, Lanxess, Adnoc, Covestro, OMV, Huntsman, BASF, Dow, SABIC, LG Chem, Brenntag, Solvay, Umicore, Zhejiang Petroleum, Satellite Chemical, Idemitsu Kosan, Rio Tinto, Lynas, Röhm, FedEx, Petrobras, Petronas Chemicals, Cabot Corporation, LyondellBasell, Polystyvert, Ascension Clean Energy, Mitsui O.S.K, nVent, Rolls-Royce, 3M, Tesla, QatarEnergy, Pertamina, Shell, BP, Chandra Asri, TotalEnergies

Daily Chemical Reaction

Trading Places: Economic Trends Make It Difficult Not To Buy From China – European Struggles Acute

Key Points:

  • Global chemical producer outlook updates and industry indicators highlight elevated Western consumer demand headwinds and oversupplied Chinese products impacting the global market.
  • China currently benefits from lower inflation and interest rates relative to Western markets, with Europe facing the challenging setting of no significant cost advantages or demand drivers.
  • The potential combination of Adnoc and Covestro holds benefits beyond simple integration, as it could link a low-carbon feedstock into several markets, penalizing those without it.
  • We flag recent research highlighting our regular commentary that 2023 is not meeting most estimates set with 1Q results and why more chemical sector negative profit warnings are likely.
  • We highlight freight rates from China to US and Europe, showing that rates to Europe are below those to the US, and we discuss the troubling recent 10yr/2yr US yield curve inversion.

See PDF below for all charts, tables and diagrams

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