Daily Chemical Reactions

From Train To Boat: Higher US Rail Freight Suggests More US Polymer Exports – Not Good For Others
September 7, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Pertamina, Petrobras, Shell, TotalEnergies, BASF, SABIC, Sinopec, Synthomer, Zhejiang Petrochemical, Standard Lithium, Lanxess, Lummus, Shin-Etsu, Yokogawa, Phytochem, Evonik, JERA, Petronet, INPEX, Williams, Western Midstream, Enbridge, WestRock, Smurfit Kappa, Westlake, Kyocera, The Toro Company, Nestle, Argos, Fluor, Amundi, Brenntag, Coremax, Ineos, MTR Carbon Capture, Trafigura, Domtar, ProAmpac, Tellurian

Daily Chemical Reaction

From Train To Boat: Higher US Rail Freight Suggests More US Polymer Exports – Not Good For Others

Key Points:

  • 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

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