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