Dazed and Confused: Is Shell’s Changing Strategy a Company or Industry Challenge?

Daily Chemical Reaction

Dazed and Confused: Is Shell’s Changing Strategy a Company or Industry Challenge?

Key Points:

• Global chemical market business conditions have worsened since 2021. We discuss slides from Shell’s 2021 and 2023 strategic updates to show how its view of its chemical business has shifted.
• Chemical production margins have bounced from YTD lows but remain notably lower YoY and could worsen further, putting production asset sellers in an incrementally more difficult spot.
• We highlight the recent lithium price drop following its mid-year bounce and declines in other critical mineral values, such as copper, cobalt, and nickel, signaling a global economic slowdown.
• We discuss recent strength in US refinery margins, a plus for commodity chemical supply, most notably propylene and benzene, and their input sellers, such as refining catalyst producers.
• We discuss analyst day commentary from Plug Power, an IMF report on fossil fuel subsidies, weakening global macroeconomic data, and still soft North American chemical rail traffic.

See PDF below for all charts, tables and diagrams