Daily Chemical Reactions

Chemical Rhapsody: Auto Market’s 2023 Crescendo, The Likely 2024 Refrain, And The Supplier Traffic Jam
August 18, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Celanese, DuPont, Huntsman, Dow, BASF, Covestro, Axalta, Lotte Chemical, OMV, Petchem, Rompetrol, Eastman, Braskem, SCG Chemicals, Evergrande, Bloom Energy, VinFast, Viridis, Microsoft, CNOOC, Aramco, Petrobras, Hawaiian Electric, Syngenta, Ford, General Motors, Tesla, Unigel, Cheniere, Chevron, Oxy, Shell, Wärtsilä, Odfjell, KKR, Walmart, US Steel, Ocean Winds, Carbon Engineering

Daily Chemical Reaction

Chemical Rhapsody: Auto Market’s 2023 Crescendo, The Likely 2024 Refrain, And The Supplier Traffic Jam

Key Points:

  • Automotive chemical suppliers have benefited from rising auto production in 2022/23, partly due to inventory rebuilding – we think significant headwinds will face auto chemical suppliers.
  • 2Q23 chemical sector reports displayed strength in autos, with many non-integrated suppliers to the auto market seeing price strength relative to input cost – we foresee lower margins ahead.
  • Global energy markets are broadly lower WoW, which we view as a risk facing global chemical prices following their QTD improvement, notably helped by rising crude oil prices in July.
  • We highlight takeaways from US DOE National Clean Hydrogen Strategy and Roadmap event that we attended today. We also broadly discuss the bio-plastic market and its development.
  • Auto inventory has risen in 2023 and closing in on more typical historical levels, while used car values are falling amid higher interest rates. We think the auto market will favor buyers in 2024.

See PDF below for all charts, tables and diagrams


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