Daily Chemical Reaction
Turning Points – Agricultural Chemicals To Face Fewer 4Q & 1H24 Challenges Than Commodity & Specialty Chemicals
- Fertilizer and agricultural chemical equities have bounced from recent lows relative to the overall S&P Chemicals index, led by rising underlying commodity prices, such as ammonia.
- Commodity chemical equities bounced from YTD lows in early 3Q, partly due to strength in crude oil values lifting export prices, spurring a US production response and price risk for 4Q23.
- We are more optimistic about the fertilizer and agricultural chemical market than commodity petrochemicals, as we see fewer end-market demand challenges and less risk with oversupply.
- Many mid-year specialty chemical 2H23 profit predictions factored in falling raw material prices, not expecting the surge in crude oil values. This sector is at risk of 2H23 downgrades.
- We also discuss US rail traffic data, recent movements in base chemical and feedstock prices, 2H23 trends in lithium values and batteries, and highlight numerous other relevant items.
See PDF below for all charts, tables and diagrams