Daily Chemical Reactions

T-R-O-U-B-L-E – Global Chemical Price Weakness Well Known, 2H23 Margin Risk Still Higher Than Most Envision
July 14, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Shin-Etsu, Olin, Westlake, Methanex, OCI, LyondellBasell, Celanese, Mitsui, OMV, ExxonMobil, Denbury, EMS Group, Ineos, Elkem, CHS Inc., NextDecade, Shell, PreZero, Symrise, Energy Transfer, BP Energy Partners, BP, Pemex, Marubeni, Bison Low Carbon Ventures, Röhm, Johnson Matthey, Hempel, BYD, Tesla, Nissan, Mazda, Amazon, Vestas, Nordex, Valmont Industries, CF Industries, Orsted, Ameresco

Daily Chemical Reaction

T-R-O-U-B-L-E – Global Chemical Price Weakness Well Known, 2H23 Margin Risk Still Higher Than Most Envision

Key Points:

  • Polymer price weakness relative to 1H23 highs is well known, and most expect a weak market in 2H23. Feedstock cost swings, such as the jump in USGC ethane WoW, are now the wild card.
  • We discuss the spat between Olin and Shintech during a period of low profitability, highlight weakness in global methanol prices, and flag more weak chemical sector 2Q results and outlooks.
  • US refinery margins have risen from 1H23 lows, and asset utilization rose last week to near the high end of the prior five-year range – a plus for domestic propylene and benzene production.
  • We highlight several views of the ExxonMobil acquisition of Denbury but argue that the move is fairly simple – ExxonMobil is adding significant flexibility to its CO2 management capabilities.
  • US Fed statistics suggest that supply chain health is high, and falling rate hike concerns amid moderating inflation put downward pressure on the US Dollar – a positive trend for US exports.

See PDF below for all charts, tables and diagrams


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