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