Sunday Thematic & Weekly Recap

Unevenness Of Basic Chemical “Costs”: Challenging Rationalization
September 24, 2023
Commodities Mentioned:
Plastics, PVC, Polyethylene, Polypropylene, PU, PC, PET, Critical Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha, Methanol, Ammonia, Ethylene, Propylene, Fossil Fuels, Oil, Hydrocarbons, Nuclear Power, Critical Minerals, Batteries, ICE, Renewables, Raw Materials, Wind, RNG, SAF, Fuels
Companies Mentioned:
Nutrien, CF Industries, LSB Industries, Koch Fertilizer, Methanex, OCI Global, Sungas Renewables, Carbon Sink, Nippon Paint, Jiangsu Sailboat, KBR, Orica, Indigo Paints, OMV, Solvay, Covestro, Anson Resources, Fertiglobe, E3 Lithium, Nova Chemicals, Bachem, INEOS, Kemira, Borealis, Systemiq, BASF, Lonza, Petronas, Pertamina, TotalEnergies, Eneos, PTT Global Chemical, Ami Organics, Saudi Kayan, Grupa Azoty, BP, LG Energy Solution, ExxonMobil, Chevron, Woodside, Reliance Industries, Shell, Dow, Origin Materials, Henkel, Sinopec, Vopak, Trafigura, MOL, Zeon, EQT, New Fortress, Unipec, Adani Green Energy Ltd, European Energy, LanzaJet, Technip Energies, Toray Industries, SABIC Agri-Nutrients, Sunnova, Danimer Scientific, Chevron Phillips Chemical, M. Holland, Scale Microgrids, Cabot Corporation, SABIC, Equinor, General Mills, Aramco, Elementis, Enbridge, Glencore, Air Liquide, ADNOC, Enterprise Products, Braskem, Lanxess, Cinis Fertilizer, Arxada, PolyQuest, Brenntag, Cargill, Merck KGaA, Phillips 66, LyondellBasell, Indian Oil Corp, One Energy, HydrogenPro, INTILION, Orbia, Saint-Gobain, Pemex, NextEra, Nouryon, Invista, Berry, OPAL Fuels, Gulfport Energy, South Jersey Industries, OPEC, Olin, PPG, Axalta, Air Products, Linde, Albemarle, SQM, Livent, Oneok, Nordex, RWE, Allianz, Xcel Energy, LCY Chemical, Ampol, Ascend Elements, Weyerhaeuser, SSE Renewables, Mitsubishi Electric, Oceaneering, Flux Power, Orion S.A.

C-MACC Sunday Thematic & Weekly Recap 187

Unevenness Of Basic Chemical “Costs”: Challenging Rationalization

  • Our pre-COVID study showing long-term chemical profitability headwinds was early, but now materializing – the market is in trouble, and a fix looks challenging.
  • A combination of overbuilding and a step down in demand growth poses a major threat to the industry, and we suspect that it will look structurally different in 2030.
  • Integration/job dependence may expose companies as marginal producers who otherwise look reasonably safe on the cost curve, leading to lower/painful prices.
  • Highly integrated hydrocarbon producers like ExxonMobil, Aramco, and ADNOC, and integrated Chinese producers will win. Shell should keep Singapore.
  • Otherwise, we look at US auto exposure, why the Ag sector is working again, cash shortfalls and regulation hurdles for hydrogen, and the elusive “peak oil”.

Last week, we discussed 31 Chemicals and Related Products and 122 Companies.1

See PDF below for all charts, tables and diagrams

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