Daily Chemical Reaction
To The Tune of Chaos – Chemical Producer Strategic Reviews Rise Amid Weak Fundamentals, High Macro Risk
- Global petrochemical markets began 3Q23 reflecting lower levels of profitability compared to 1H23, and conditions appear more likely to worsen in 2H23 than improve from current levels.
- We highlight petrochemical producer strategic acquisitions, industry consolidation evaluations, and upstream integration reviews being put in motion globally to lift relative competitiveness.
- Chemical sector investors will likely be reluctant to shift focus from 2H23 to potential price improvement in 1H24 until profit expectations reset lower and downside risk concerns lessen.
- We follow our recent views on C-MACC clean energy minerals monthly price index strength in June with concern about the knock-on effect of China export controls on chip-making materials.
- US and China manufacturing closed 2H23 with weak postings, freight rates between Asia and the West are falling, and Europe and Latin America are targets of excess Asia and US supply.
See PDF below for all charts, tables and diagrams