Daily Chemical Reactions

Oil-Infused Chemical Dance: Cost Curve Steepening Rubs Low-Cost Positions The Right Way, BASF Takes Action
August 22, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Cheniere, BASF, Ineos, Adnoc, Aramco, Covestro, Braskem, TotalEnergies, BHP, Petronas Chemicals, Shell, BP, ExxonMobil, Yansab, Westlake, Earthstone Energy, Indorama Ventures, Amcor, DuPont, Grupa Azoty, Nippon Shokubai, Mitsubishi Heavy Industries, Wood Group, Northvolt, Blackrock, Woodside, Lummus, Biohydrogen, China BlueChemical, Ningbo Ronbay New Energy, Pupuk Indeia, SolarEdge, Xcel Energy, Li-Cycle, OneRock Energy, Black & Veatch, Capstone Energy, ReNew, Neste, ENEOS, Ecovyst

Daily Chemical Reaction

Oil-Infused Chemical Dance: Cost Curve Steepening Rubs Low-Cost Positions The Right Way, BASF Takes Action

Key Points:

  • Global chemical prices have rebounded from mid-year lows, partly due to higher crude oil and related feedstocks, displaying the benefit of being a low-cost producer through business cycles.
  • Petronas Chemicals reports 2Q23 results that showcase SE Asia regional price (and profit) headwinds from an over-supplied China that will likely worsen during the remainder of 2H23.
  • The BASF agreement with Cheniere to supply it with US LNG reflects many similarities with other emerging global agreements linking low-cost feedstock to high-cost chemical operations.
  • We highlight sustainability efforts in SE Asia along with those from Petronas, and we note the size of hydrogen production incentives that dwarf those targeting related end-product demand.
  • Record low vacancy rates and positive home product supplier and builder views have lifted sentiment in US housing. A delayed market hit from higher interest rates remains in the cards.

See PDF below for all charts, tables and diagrams


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