Daily Chemical Reactions

The Push and The Squeeze – 3Q23 Global Chemical Price Surge To Hurt Downstream Margins In Seasonally Weak 4Q
September 27, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Dow, Enterprise Products, Huntsman, Covestro, Arkema, BASF, Wanhua, DuPont, Devon Energy, BP, SABIC, ExxonMobil, Brenntag, Itochu, Wacker, Brazil Potash, Minbos Resources, Galp, Evonik, Pertamina, Lukoil, SK Energy, Worley, QatarEnergy, Opal Fuels, TotalEnergies, RWE, Shell, Energy Transfer, Cleveland-Cliffs, Li-Cycle, Hithium, Soluna Holdings, Nel Hydrogen, Smiths Group, Sipchem, Samsung, Marubeni

Daily Chemical Reaction

The Push and The Squeeze – 3Q23 Global Chemical Price Surge To Hurt Downstream Margins In Seasonally Weak 4Q

Key Points:

  • Non-integrated commodity chemical and specialty producers faced more input cost pressure in 3Q than planned mid-year due to higher feedstock costs and, in some cases, supplier outages.
  • Global chemical prices broadly increased in 3Q23, but some have substantially outperformed others, such as US propylene, which has outpaced overseas markets due to domestic outages.
  • Some chemical downstream markets, such as building products and those targeting energy efficiency, reflect more support than others – low-cost integrated producers are best in class.
  • We discuss a BP solar development set to provide energy to an ExxonMobil/SABIC chemical JV and China’s position as a low-cost renewable producer being a sizable risk for Western producers.
  • The negative impact of higher interest rates appears as a rising burden for global consumers, and some markets are shifting as a result, such as the move to smaller, cheaper homes in the US.

See PDF below for all charts, tables and diagrams


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