Daily Chemical Reactions

An Unbalanced World: North American Cost Advantage Drives Output – High-Cost Regions Face Closures
September 28, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
H.B. Fuller, PPG, Aramco, ExxonMobil, SABIC, Sinopec, Tecnicas Reunidas, Avangrid, BASF, Celanese, Mitsui, Harima, Neste, Allkem, Stratasys, SK Chemicals, Arclin, Belle Chemical, bp, Borealis, Brenntag, EnerSys, ABTC, TotalEnergies, Braskem, Samsung Engineering, Sepion Technologies, Anaergia, Petronas, Saint-Gobain, Arkema, Pactiv Evergreen, Albemarle, Caterpillar, Glencore, Loop Energy, QatarEnergy, Corteva, Shawkwei & Partners

Daily Chemical Reaction

An Unbalanced World: North American Cost Advantage Drives Output – High-Cost Regions Face Closures

Key Points:

  • Rising overseas production costs in 3Q23 spurred a production response from North American manufacturers, and the benefits are much more pronounced for this group than its customers.
  • The H.B. Fuller August-quarter (3QFY23) results missed expectations but reflect higher margins despite lower sales – input costs for non-integrated producers notably rose MoM in September.
  • Demand seasonally weakens in 4Q23 across most commodity chemical end markets, which we think will negatively impact Asia and European chemical producers, with Europe being worse off.
  • While higher crude oil values have proven favorable for North American commodity chemical profitability in September, it has put downward pressure on domestic refinery profitability MTD.
  • We discuss challenges facing the build-out of transmission infrastructure to support the energy transition, global CCS project growth, and mounting negative impacts from higher interest rates.

See PDF below for all charts, tables and diagrams

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