Daily Chemical Reactions

China Crisis – But More and More Competitive
August 25, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Sinopec, PetroChina, Orlen, Covestro, Adnoc, Braskem, Trinseo, AOC, Verde, Ineos, Sibur, Nabaltec, Indorama Ventures, Polykemi, Evonik, Nouryon, E3 Lithium, Equitrans Midstream, Celanese, Charybdis, Monarch Energy, Topsoe, Duke Energy, Equinor, Gunvor, Titan LNG, Delfin Midstream, Mitsui, Nucor, Polestar, Smoltek, Hadean Energy, Westinghouse, Amazon, Apple, Ford, GM, Stellantis, Parker Hannifin

Daily Chemical Reaction

China Crisis – But More and More Competitive

Key Points:

  • Consumer price expectations for Asia in 2023 have fallen from mid-2023 levels on an absolute basis and relative to the West – a plus for consumers but a negative for Western manufacturers.
  • China’s self-sufficiency push has lifted chemical capacity, and likely sizable benefits from cheap Russian crude are substantial oversupply drivers – notably negative for broader Asia and Europe.
  • Covestro faces mounting pressure to combine with Adnoc, and we argue that this union makes sense as it would link Adnoc’s low-cost feedstock with Covestro’s currently high-cost production.
  • We discuss carbon capture benefits from 45Q, that demand for RNG will likely arise from areas beyond generating clean electricity, and provide views on sustainable packager differentiation.
  • Global chemical end-product demand indicators continue to erode, led by China, and we flag mounting concerns with the German economy and US consumer spending trends in 2H23.

See PDF below for all charts, tables and diagrams

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