Daily Chemical Reactions

Oil Prices or Outages Likely Need To Increase To Spur Global Restocking; 1H24 Could Resemble 2H23 More Than 1H23
November 7, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
LyondellBasell, Dow, ExxonMobil, Westlake, Celanese, Fertiglobe, Aramco, Air Products, LInde, Covestro, ADNOC, Shell, bp, Enbridge, Sempra, Henkel, Solvay, Braskem, Oxiteno, Evonik, SK Innovation, CF Industries, Nutrien, LSB Industries, Yara, Neste, Topsoe, Kinder Morgan, HGenium, New Fortress Energy, Cooper Energy, Unigel, Duke Energy, SABIC, Trinseo, Borealis, Albemarle, Piedmont Lithium

Daily Chemical Reaction

Oil Prices or Outages Likely Need To Increase To Spur Global Restocking; 1H24 Could Resemble 2H23 More Than 1H23

Key Points

  • 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


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