Daily Chemical Reactions

Where Is The US Advantage!? US Refinery Margins Near YTD Highs, NGL Frac & Chemical Margins Near YTD Lows
August 17, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Westlake, Formosa Plastics, OxyVinyls, Shin-Etsu, Olin, Covestro, Siegfried, Energy Transfer, Erex, US Steel, Cleveland Cliffs, Braskem, SCG Chemicals, TotalEnergies, Unigel, Petrobras, Piedmont Lithium, The Toro Company, Kimball Electronics, Walmart, Electriq Power, Anaergia, Avangrid, Lithium Americas, Caramuru Alimentos, SQM, ADNOC, Citgo Petroleum, BP, ExxonMobil, Chevron, Marathon Petroleum, ADM, Valero, The Andersons, Cargill, Poet Biorefining, Enterprise Products, Borouge, Odfjell, Stolt-Nielson, CES Energy

Daily Chemical Reaction

Where Is The US Advantage!? US Refinery Margins Near YTD Highs, NGL Frac & Chemical Margins Near YTD Lows

Key Points:

  • Energy and chemical sector strategic ties will strengthen as value-chain integration benefits rise – a lengthy period of low margins, even in cost-advantaged areas, will hasten this trend.
  • Relative to the start of 2011, US refining margins are 3x higher, while US spot ethylene margins (using ethane feedstock), US PDH margins, and US NGL fractionation margins are ~50% lower.
  • US polyvinyl chloride (PVC) producers are pushing to lift US contract prices, and higher export values will help their efforts. We also highlight continued weakness in North American rail traffic.
  • Despite US refinery margins near YTD highs, US ethanol prices and margins are trending lower from their peak. We also discuss global CO2 emissions and offshore wind growth headwinds.
  • The US Dollar has fallen relative to most major currencies YTD but has strengthened compared to the Chinese Yuan, and we also highlight notable strength in US treasury and mortgage rates.

See PDF below for all charts, tables and diagrams

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