Daily Chemical Reaction
It’s Raining Hard – Without A Cost Umbrella, You Better Learn How To Swim! The Water Will Likely Deepen In 2024!
- There is more confidence in high oil prices and recent cost curve developments holding than in demand in most 2H23 business updates, and most expect oversupplied chemical markets in 2024.
- US commodity chemical producer profit, such as at LyondellBasell, has improved relative to overseas profitability in 2H23 – the continuation of a wide oil-to-gas spread supports this trend.
- Non-integrated commodity and specialty chemical producers reported higher margins in 3Q23, but margin support into 2024 is a concern for most – we discuss Covestro, Invista, and Eastman.
- Sustainability initiatives continue to mount globally, and while the diversity of plans is a plus for picking winners, there is a growing industry concern there are too many cooks in the kitchen.
- We discuss differences in macroeconomic news flow by region and show Covestro end-market views of the variances by global product chain, as there are few indications of a surge into 2024.
See PDF below for all charts, tables and diagrams