Daily Chemical Reaction
China Strikes Back – Geopolitical Risks, Critical Mineral Supply Chain Controls, and Petrochemical Plot Twist
- China has risen more as a risk than an opportunity for Western markets in 2023, as geopolitical tensions and relative economic trends have lifted energy security and industrial health concerns.
- China holds an enviable spot in critical mineral processing and related product manufacturing –its export controls on chip-making materials could broaden to others, lifting Western headwinds.
- The self-sufficiency push in China petrochemicals did not raise many red flags when its growth prospects were robust, regional markets tight, and its costs were high – the setting has changed.
- Meaningful efforts to increase clean hydrogen demand are underway – a plus for integrated product profitability. However, the ability to source consistent green power remains a constraint.
- We discuss recent weakness in the Chinese yuan relative to the US Dollar, highlight significant improvements in auto and part availability, and flag more product demand than supply concerns.
See PDF below for all charts, tables and diagrams