Daily Chemical Reactions

A Change Is Gonna Come – Most Expect Weak 2H Before Rebound Next Year, Typical View Amid Soft 3Q Conditions!
August 4, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
LyondellBasell, AdvanSix, PPG, Axalta, AkzoNobel, Corteva, Nutrien, CF Industries, BASF, Bayer, FMC, Cargill, Air Products, Linde, Albemarle, Livent, Allkem, Pembina Pipeline, Energy Transfer, Chesapeake, Bloom Energy, EnLink, Oxy, Westlake, Intrepid Potash, Trinseo, ExxonMobil, ConocoPhillips, Mitsui Chemicals, Williams, The AZEK Company, Solvay, OCI, Baker Hughes, TotalEnergies, Technip Energies, Azmut, Phillips 66, Air Liquide, Cummins, Enbridge  

Daily Chemical Reaction

A Change Is Gonna Come – Most Expect Weak 2H Before Rebound Next Year, Typical View Amid Soft 3Q Conditions!

Key Points:

  • Most chemical producers anticipate a weak 2H23 before improvement in 2024 – we view some markets, such as fertilizer and selectively in specialties, as better poised to improve than others.
  • Commodity chemical prices (and margins) fell in late 2Q23 and into 3Q, and most expect lower QoQ results in 3Q – Lyondell views its O&P margins as now bouncing around the cycle bottom.
  • The uptick in oil prices relative to natural gas has recently increased optimism for higher US chemical margins in August – a near-term trend favoring commodity chemical equity values.
  • We follow our evaluation of Linde and Air Liquide 2Q23 results last week with thoughts on the Air Products posting and the likely reasons APD has underperformed peers since August 2020.
  • Chemical end market demand views remain varied, with most casting a negative global view of 2H23 beyond autos and seasonal farm input demand – we remain most positive on agriculture.

See PDF below for all charts, tables and diagrams


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