Daily Chemical Reactions

European Chemical Producers In The Freezer – Temperature Falling As North America & China Exports Control Thermostat
November 29, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Methanex, Versalis, LyondellBasell, Dow, SABIC, ExxonMobil, OMV, Cheniere, Phillips 66, Chevron Phillips Chemical, Marathon Petroleum, Valero, ARC Resources, Borealis, TotalEnergies, Ineos, DuPont, Corteva, Chemours, Elementis, Johnson Matthey, IMCD, AkzoNobel, Philips Carbon Black, Petronas Chemicals, Petrobras, Clariant, Ingevity, PlantSwitch, Topsoe, RWE, Vestas, Schneider Electric, ADM, Adani Power, FREYR Battery, Braskem, The AZEK Company, Saint-Gobain

Daily Chemical Reaction

European Chemical Producers In The Freezer – Temperature Falling As North America & China Exports Control Thermostat

Key Points:

  • Global chemical markets will likely remain oversupplied in 2024. However, the trade balances between regions will likely further shift, with Europe being one of the most troubled global spots.
  • We discuss more announced chemical production closures in Europe, start-ups in China, and the ACC outlook for US volume growth, along with flagging news from Petronas and Methanex.
  • We highlight the Elliott letter to Phillips 66, our thoughts on the proposed board additions, and their comparison of P66 with refiners, but their lack of a comparison for its chemicals business.
  • We discuss the rise in European natural gas prices in 2H23 and high Eurozone electricity prices, which we argue is a headwind for its existing industry and country-level energy transition.
  • European bank lending has considerably decreased in 2023 amid higher rates and economic uncertainty, and freight rates suggest EU product supply availability from imports has improved.

Exhibit #1: China benefits from competitive exports and lower relative freight rates to Europe.

Source: Bloomberg, C-MACC Analysis, November 2023

See PDF below for all charts, tables and diagrams


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