Daily Chemical Reactions

Pressure Drop – Global Non-Integrated Commodity & Specialty Margins Reflect Substantial Near-Term Risk
October 12, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Covestro, Huntsman, Dow, BASF, Wanhua, Aramco, Lotte Chemical, Grupa Azoty, Kemira, Givaudan, Orion, Iberdrola, Sherwin-Williams, Sinopec, Lummus, SK Capital, Vinfast, Marubeni, Plug Power, Arcadia eFuels, Shell, Hengli Petrochemical, TotalEnergies, LG Chem, ExxonMobil, Chevron, Petrobras, Eni, Envision, Fortescue, Idemitsu, Toyota, Gunze, The Azek Company, Merck, Flint Hills, ABB, Honeywell

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


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