Pressure Drop – Global Non-Integrated Commodity & Specialty Margins Reflect Substantial Near-Term Risk

Daily Chemical Reaction

Pressure Drop – Global Non-Integrated Commodity & Specialty Margins Reflect Substantial Near-Term Risk

Key Points:

• The global impact of 2H23 oil market shifts on regional integrated commodity chemical profit is less difficult to gauge than for non-integrated commodity and derivative chemical producers.
• We view non-integrated commodity and derivative chemical producer margins, especially in oil-linked products, as at risk in 2H23 relative to most expectations set with 2Q result postings.
• We also discuss Lotte Chemical exiting a China JV amid intense competition, which we view as a risk for Western firms facing Chinese competition less focused on profit than employment.
• In contrast, Aramco continues to push investment into China, using upstream integration as its competitive edge to chase growth through local chemical production in an oversupplied market.
• This report also discusses the e-fuels market and a few notable recent events in the energy sector, and we highlight US September inflationary data and a few other relevant macro trends.

See PDF below for all charts, tables and diagrams