Daily Chemical Reaction
Oil Prices or Outages Likely Need To Increase To Spur Global Restocking; 1H24 Could Resemble 2H23 More Than 1H23
- We remain more confident in supply improvement and the slope of the global chemical cost curve staying in favor of current low-cost producers in 2024 than in a substantial demand revival.
- Chemical sector 3Q23 reports have mostly beaten estimates, while 4Q outlooks have mostly fallen short – we discuss Celanese and flag concerns that Street estimates for 2024 are too high.
- We discuss the wave of LNG capacity poised to come online and the potential impact on US natural gas prices looking out 3-5 years, and we highlight Aramco’s recent strategic update.
- Cost overruns are rattling investor confidence. They are rising as a theme surrounding global clean energy and chemical projects – we discuss Air Products 3Q results and its growth projects.
- Global customer inventory destocking is a significant chemical sector theme in 2023, and many expect headwinds to persist in 4Q23 – we view a substantial restock as likely to occur in 1Q24.
See PDF below for all charts, tables and diagrams