Driving On “Crude” Control – Global Chemical Prices Sped Up With Crude In 2H23, Benefits To Hit The Brakes Into Year End

Daily Chemical Reaction

Driving On “Crude” Control – Global Chemical Prices Sped Up With Crude In 2H23, Benefits To Hit The Brakes Into Year End

Key Points:

• The crude oil price rebound in 2H23 lifted global commodity chemical prices, favoring North American profit relative to Asia and Europe. Its impact on specialty results is much more mixed.
• 3Q23 global commodity chemical profit fell relative to 2Q. Still, North American profit in 2H23 is higher than expected at mid-year, leading to strength at Dow compared to many Ex-US peers.
• Specialty chemical results are mixed and likely to remain that way, and we discuss trends at Sherwin-Williams relative to Hexcel, and why 2023 raw material benefits may not recur in 2024.
• We discuss the consolidation in multiple portions of the energy market, flag potential delays in energy transmission capacity favoring fossil fuels over renewables, and global NOC positioning.
• Macroeconomic uncertainties, higher interest rates, and curbed lending, such as at European banks, are driving up project costs and causing the abandonment of many early-stage projects.

See PDF below for all charts, tables and diagrams