Daily Chemical Reactions

Polypropylene Problems: A Global Supply Glut Symphony, Singing ‘Stayin’ Oversupplied’ Into 2H23
June 28, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Ineos, Aramco, ExxonMobil, Braskem, LyondellBasell, Grupa Azoty, Alpek, TotalEnergies, SABIC, Formosa Plastics, Idemitsu, Anaconda Systems, Johnson Matthey, Wacker, Arkema, PI Advanced Materials, MOL, Lummus, Maire Tecnimont, Trafigura, Nova Chemicals, Plastic Energy, BHP, Enterprise Products, Borealis, Yara, ASML, General Mills, Ford, Lordstown Motors, BCI Minerals, Highfield Resources, DSM, Petronas, Volvo, Element 1, Envision

Daily Chemical Reaction

Polypropylene Problems: A Global Supply Glut Symphony, Singing ‘Stayin’ Oversupplied’ Into 2H23

Key Points:

  • Spot polypropylene price spreads between major global regions have returned to pre-COVID levels, but prices (and profits) are lower, putting most 2023 outlooks set with 1Q results at risk.
  • 2Q23 commodity chemical profit conditions in most global regions have worsened, on average, since the quarter start, as global cost curves have flattened, suggesting an oversupplied 3Q23.
  • We discuss Ineos movement of US LNG to support its global chemical production and why the lengthening of corporate value chains combining energy and chemicals will remain a global trend.
  • We consider electricity grid transmission and interconnection equipment and related permit delays as significant clean energy growth constraints and discuss IEA net zero target feasibility.
  • We discuss recent movements in the US Dollar relative to major foreign currencies along with US export/trade gap shifts, and we flag housing data showing price declines despite low supply.

See PDF below for all charts, tables and diagrams

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