Daily Chemical Reaction
Global Demand Upturn Needed To Absorb Oversupply, Elevate Production In Low-Cost Areas – Unlikely In 2H23
- US industrial production declined in June for the second consecutive month, reflecting the first annual decrease in 28 months and portending unfavorably for near-term chemical profitability.
- Global chemical market oversupply indications remain elevated in all major regions, and we discuss the drop in Singapore chemical exports and falling imports at the Antwerp-Bruges port.
- North American petrochemical producers remain well positioned due to their still sizable cost advantage, but it is not without challenges, especially considering rising domestic competition.
- The ability to source cheap, high-capacity-factor clean energy is critical to the success of green hydrogen developments, and it is much more difficult to access than many headlines suggest.
- A common theme in our research is that global demand is riskier than chemical producers and broader industry abilities to meet it in 2023/24 – numerous sector updates support our view.
See PDF below for all charts, tables and diagrams