Daily Chemical Reactions

A Tale Of Two Trains: US Chemical Traffic Weak Due To Low Demand, Grain Weak Due To Lack Of Supply
June 23, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Nutrien, Bayer, CF Industries, FMC, Corteva, BASF, LyondellBasell, Formosa Plastics, Dow, Olin, SABIC, 3M, Braskem, Chandra Asri, Verde Bioresins, Vinmar, SASA Polyester, Thyssenkrupp Uhde, Johnson Matthey, Koch Fertilizer, Ashland, Mitsui, Celanese, Teknor Apex, Grupa Azoty, PKN Orlen, Bosch, Apogee Enterprises, ADM, Altus Power, Alcoa, Avangrid, Hyfé, Farmer Business Network, Tigo Energy, CarMax, Mitsubishi Chemical, Trafigura, Satellite Chemical

Daily Chemical Reaction

A Tale Of Two Trains: US Chemical Traffic Weak Due To Low Demand, Grain Weak Due To Lack Of Supply

Key Points:

  • US crop indicators point to higher prices and farmer incomes, while US commodity chemical indicators illustrate an oversupplied setting and rising margin pressure despite cost advantages.
  • Fertilizer and Agricultural Chemical equities have underperformed the Commodity Chemical sector YTD, but our findings suggest this trend will likely reverse in the near-to-medium term.
  • The percentage of the US crop facing drought increased to above 50% for corn and soybeans this week, with most of the production impact targeting the US highest-yielding I-states.
  • Commodity chemicals face more global production, Brent crude oil and Ex-US naphtha prices falling recently relative to US natural gas and USGC ethane, and a weak global demand setting.
  • We discuss our cautious view of Europe, several global ESG/clean energy developments worth consideration, and indications that auto markets are loosening and freight constraints are low.

See PDF below for all charts, tables and diagrams

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