Daily Chemical Reactions

Higher Financing Costs – Negative Clean Product Growth, Positive For Keeping Commodity Market Growth In Check
October 18, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
BASF, Celanese, Shell, Trinseo, Covestro, Nova Chemicals, Nutrien, CF Industries, Brenntag, Prologis, Evonik, Sinopec, Pemex, Asahi Kasei, SK Chemicals, Aramco, Perstorp, Unipar, Chandra Ashri, Eneos, Codelco, Lithium Power, Mitsubishi Chemical, Linde, Idemitsu, PPG, Orbia, Ascend Elements, Ganfeng Lithium, Hy2gen, Haldia Petrochemicals, UPM, Marathon Oil, Glencore, Chevron, Plus Power, NatureWorks, Kolibri Global Energy, E3 Lithium

Daily Chemical Reaction

Higher Financing Costs – Negative Clean Product Growth, Positive For Keeping Commodity Market Growth In Check

Key Points

  • Financing costs and the needed return rates to advance projects have risen with interest rates – a headwind for the energy transition but a plus for limiting chemical capacity amid oversupply.
  • We are attending Day 2 of the GridFwd conference today, with topics discussing rising clean energy project costs and the higher prices and greater transparency needed to spur its build-out.
  • Recent strength in crude oil, spurred in part by the conflict in the Middle East, is positive for US chemical profit relative to Europe and Asia but is a cost headwind for global specialty producers.
  • We highlight the drop in refinery margins, show ethanol prices relative to gasoline, and flag a report noting the link between oil prices and US Permian productivity and natural gas output.
  • The Chinese Yuan reflects nearly a decade low relative to the US Dollar, which we view as a plus for Chinese exports, and we also discuss US homebuilding and European construction stats.

See PDF below for all charts, tables and diagrams


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