Daily Chemical Reaction
- Chemical rail traffic and commodity profit trends indicate that a North American production response is happening; this may reverse in seasonally weaker 4Q unless we push more offshore.
- The global chemical production cost curve has steepened due to recent crude oil price strength relative to North American natural gas, benefiting the US but increasing headwinds for Europe.
- The benefits of value chain integration in chemicals are rising and shielding some producers in high-cost markets – we foresee more linkages to occur across regions as a rising sector theme.
- The US offshore potential for wind-based power remains high. However, sufficient wind speed is not enough – surging project costs amid expectations for falling power prices are a headwind.
- The total value of China exports fell again in August YoY; however, volume is more supported than price, and rising low-priced Chinese product availability is a sizable Western producer risk.
See PDF below for all charts, tables and diagrams