What Am I Gonna Do With You? Existing European Asset Base Significant, Strategic Activity Far From Over

Daily Chemical Reaction

What Am I Gonna Do With You? Existing European Asset Base Significant, Strategic Activity Far From Over

Key Points:

• The European chemical industry is cost-disadvantaged, and its end markets are mostly mature, but its sizable existing production base could offer opportunities for some amid the turbulence.
• We discuss reports of Adnoc pursuing Covestro, as its interest likely focuses on backward integrating this business with low-cost, low-carbon feedstock, increasing its competitive position.
• Integrating energy and chemical value chains is a global market trend that will gain positive momentum this decade, in our view, shifting the global cost curve in favor of integrated models.
• We discuss the Hexpol June-quarter results and the Wacker 2023 profit guidance reduction highlighting soft end-market conditions – a common view posted with recent sector updates.
• We highlight Cefic views of developing a circular plastics economy in Europe, which we argue will require a mix of chemical and mechanical recycling and consumer acceptance to succeed.

See PDF below for all charts, tables and diagrams