Daily Chemical Reaction
Smokestack Frightening? Industrial Production Remains Cutback Globally; Ugly Trends Develop Before Halloween
- US industrial production remained lower YoY in July due to oversupply overshadowing its energy-advantaged cost position – Europe and Asia run rates are lower for different reasons.
- USGC ethane prices have fallen relative to US natural gas, a positive trend for domestic ethylene producers as Ex-US naphtha values reflect strength relative to Brent Crude prices.
- We flag the sizable ammonia price drop YoY, noting low prices limiting capacity expansions, despite ammonia emerging as an essential energy carrier in the global decarbonization tool kit.
- We also highlight the weakness in China lithium prices amid indications of slowing demand that will impact most European and North American lithium markets and producer profits.
- Global freight rate indicators suggest limited supply issues beyond low water in the Panama Canal, and we flag mixed demand indicators in the US relative to broadly weak trends in China.
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