Daily Chemical Reaction
China Oversupply Holds More Risk Than Rewards, Global Economic Pressures Weigh On Energy Transition Demand
- Low prices and high financing costs are stalling energy transition and chemical sector growth investments in a weak macroeconomic setting, increasingly relying on consumers for support.
- We highlight earnings reports from Livent, DuPont, and Huntsman, and we discuss rising sector commentary targeting competitive pressure from Chinese chemical and critical mineral supply.
- Numerous chemical companies have cut profit guidance for 2023, but Street estimates for 2024 are not falling enough, and many appear too high – this poses a risk for sector equities.
- We discuss significant troubles in the US offshore wind market, flagging commentary from Orsted and BP, and the broadening impact of higher interest rates on energy transition projects.
- North American oil and gas producers continue advancing efforts to benefit from higher-priced export markets, while domestic manufacturers struggle despite their global cost advantages.
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