Daily Chemical Reactions

Competing Sustainability Themes – Producers: “Build It, They Will Come!” Buyers: “Build It, I May Buy From You!”   
September 15, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
OQ Group, PPG, CF Industries, Posco, LG Chem, Nutrien, VinFast, IHI, ExxonMobil, Tesla, Reliance Industries, Orion S.A., FuelCell, Vital Energy, Advanced Energy, Fastenal, Murphy Oil, TotalEnergies, Petrobras, Casa dos Ventos, Perma-Pipe Int., Ecovyst, ConocoPhillips, Siemens Energy, Indigo Ag, Enel, Vestas, Nova Chemicals, Lanxess, BASF, Anson Resources, CycleØ, Grupa Azoty, Saudi Kayan, Sika, Golden Minerals, Gevo, Freeport LNG, Forsee Power

Daily Chemical Reaction

Competing Sustainability Themes – Producers: “Build It, They Will Come!” Buyers: “Build It, I May Buy From You!”

Key Points:

  • The sustainability push across the chemical industry is underway, and all agree that higher prices are needed to drive growth – will it come forth? Confidence varies by product chain.
  • Our discussions at the CMA World Chemical Forum mostly align with our concerns on virgin polymer market oversupply in the medium term, a headwind for the renewable product push.
  • We find similarities in the ammonia market, as current market prices reflect levels below the cost of green production and suggest only some blue ammonia projects are economically viable.
  • We discuss the CF Industries and Posco news of their evaluation of a clean ammonia project in Louisiana, which comes after the recent Nutrien postponement of their blue Geismar project.
  • We discuss the US refining market strength and the movement of chemical products in and out of Europe. We also flag US and China retail sales figures and the recent USD strengthening.

Exhibit #1: Green, and in some cases blue, Ammonia is not profitable at US$400/mt.

Source: Ammonia Energy Association, Bloomberg, Energy Bot, C-MACC Analysis, September 2023

See PDF below for all charts, tables and diagrams

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