Daily Chemical Reactions

High Crude Oil Prices Favor Commodity Chemical Price Support, A Negative For Specialty Chemical Input Costs
October 19, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Dow, LyondellBasell, ExxonMobil, Westlake, PPG, Stepan, Lotte Chemical, Alcoa, Kinder Morgan, Minerals Technologies, Avangrid, Ford, Tesla, Ace Green Recycling, Gurit, Sinopec, Sibur, Covestro, EDF, Johnson Matthey, BP, Versalis, Novamont, BHP, Abel & Cole, Equinor, EnerVenue, Redwood Materials, Sipchem, Worley, Umicore, Clariant, Shell, Asahi Kasei, Liontown Resources, Danimer Scientific, Freeport-McMoRan, Rohm

Daily Chemical Reaction

High Crude Oil Prices Favor Commodity Chemical Price Support, A Negative For Specialty Chemical Input Costs

Key Points:

  • Chemical sector followers are looking past 3Q23 reports to profit indicators for 4Q and 1H24 – visibility is limited, suggesting crude oil movements will be a primary indicator to gauge health.
  • If crude oil prices hold current levels relative to natural gas into year-end, it is a plus for US commodity chemical profits compared to Europe and Asia and limits 2024 price downside risk.
  • Specialty producers face the 4Q23 challenge of overcoming higher input costs in a low visibility demand setting that appears unlikely to improve QoQ much more than seasonal in 1Q24.
  • The report’s sustainability section focuses on continued issues with offshore wind, the need for COP28 to focus on emission reductions rather than attacking fossil fuels, and battery storage.
  • Our downstream demand findings target North American rail traffic, truck cargo freight rates, and movements in the Baltic Exchange Dry Index, combining to paint a picture of ample supply.

See PDF below for all charts, tables and diagrams


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