The Matrix: Global Agriculture Best Positioned, Crude Oil Price Shifts To Sway Commodity & Specialty Margins

Daily Chemical Reaction

The Matrix: Global Agriculture Best Positioned, Crude Oil Price Shifts To Sway Commodity & Specialty Margins

Key Points:

• US wholesale prices rose in September due to higher energy and food costs, benefiting North American agricultural and commodity chemical producers relative to peers in Asia and Europe.
• Chemical market values fell from mid-1H23 highs into 3Q, on average, relative to the total goods PPI, but both rose in September – a negative trend for non-integrated chemical margins.
• We maintain a positive view of North American agricultural chemical and fertilizer producers, as most benefit from a global cost advantage and a healthy end-market demand backdrop.
• We highlight Exxon-Pioneer merger news and discuss the tight linkage of oil price movements to global commodity chemical prices in an oversupplied market focused on marginal production.
• Chinese wind development costs have plummeted relative to the West, and rising Western project costs and uncertainties linked to the energy transition are a concern that is growing.

See PDF below for all charts, tables and diagrams