Daily Chemical Reactions

Any Way You Slice It – China Holds The Key To 2H23 (& 2024). Upstream Integration Importance Grows!
July 28, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Chevron, ExxonMobil, OMV, Eastman, Braskem, Arkema, BASF, Bp, Sekisui, Coromandel International, Zeon, Hanwha Solution, S-Oil, Songwon, Chemours, Lotte Chemical, Dow, Infineon, SolarEdge, Methanex, K+S, Honeywell, Elementis, Tronox, Ecopol, Tokuyama, Avient, Clariant, Ishihara Chemical, Mitsubishi Electric, Mitsubishi Power, TotalEnergies, Shell, Hess, Repsol, First Solar, Avangrid, Aramco

Daily Chemical Reaction

Any Way You Slice It – China Holds The Key To 2H23 (& 2024). Upstream Integration Importance Grows!

Key Points:

  • Chemical sector 2Q23 updates highlighted continued weakness in 2H23, with many cutting profit outlooks – though some anticipate a strong 2024, most estimates are likely too high.
  • Chinese commodity chemical growth is a primary culprit of global oversupply in 2023, and the inflow of discounted Russian crude, cutting its chemical feedstock costs, is likely a key driver.
  • Commodity markets will likely stay oversupplied in 2024, highlighting global risks with China and pushing Western producers more toward integrated models relative to non-integrated ones.
  • Downstream, derivative chemical producers generally envision a similar 2H23 setting relative to 1H23, but most count on raw material, which may be put at risk if energy prices increase.
  • Global inflation headwinds have moderated, and macroeconomic expectations for 2H23/2024 could prove “less negative” than some expect, but we are yet to factor in notable improvement.

See PDF below for all charts, tables and diagrams

Client Login

Learn About Our Subscriptions and Request a Trial

Contact us to gain full access and experience our services!

Request a Free Trial