Daily Chemical Reactions

Western Inflation Has Slowed, But Is Far From Negative –Price Deflation In China Is A Threat To Western Industry
November 9, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
BASF, Lotte Chemical, Henkel, American Vanguard, Ascent Industries, Sinopec, QatarEnergy, EuroChem, Innospec, Rio Tinto, ExxonMobil, Enbridge, Nova Chemicals, Amcor, Nippon Shokubai, Mitsubishi Gas Chemical, Mitsui Chemicals, Kuraray, Arkema, Corteva, Ashland, Pilbara Ports, Yara, Nippon Soda, Enviva, FREYR Battery, Forsee Power, Sunnova, Atmos Energy, Eni, Saipem, Petrobras, Braskem, Pemex, Aspen Technology, OMV, Siemens Energy, KBR, Vestas

Daily Chemical Reaction

Western Inflation Has Slowed, But Is Far From Negative –Price Deflation In China Is A Threat To Western Industry

Key Points:

  • China appears well positioned to benefit from much lower relative inflation than Europe and the US for the third consecutive year – this development is negative for Western manufacturers.
  • Chinese chemical growth is the primary culprit of global oversupply in 2023 – it has limited North American cost benefits and put sizable pressure on Europe and Asia Ex-China profitability.
  • We discuss China’s October 2023 consumer and producer product price deflation, 3Q23 results from Lotte Chemical, and recent movements in global petrochemical feedstocks and cost curves.
  • The mixture of relatively lower China prices and its sustainability and green energy growth also pose a risk to the Western energy transition, which is desperate for higher prices/project returns.
  • We compare US, European, and Chinese PMI postings, highlight North American rail data and related trends relevant to chemicals and associated markets, and discuss other macro trends.

See PDF below for all charts, tables and diagrams


Client Login

Learn About Our Subscriptions and Request a Trial

Contact us to gain full access and experience our services!

Request a Free Trial

Archives