Higher Chemical Prices Rely On Higher Energy Costs In 2024, Rare Earth & Critical Mineral Markets Notably Rely On China    

Daily Chemical Reaction

Higher Chemical Prices Rely On Higher Energy Costs In 2024, Rare Earth & Critical Mineral Markets Notably Rely On China

Key Points

• The price of manufactured goods in the US faces downward pressure into year-end amid lower global input costs – crude oil price strength is a likely requirement for notable price hikes in 1H24.
• Global petrochemical production costs have significantly declined with lower crude oil and natural gas prices since 3Q23, favoring lower chemical prices in most chains at year-end 2023.
• China is a key cause of global chemical sector oversupply, but it strategically moves to tighten Western refined and processed rare earth markets that could challenge many net-zero targets.
• We discuss the improved energy setting for Europe in 4Q23, given its natural gas prices have fallen relative to the US. However, this price spread remains well above mid-year 2023 levels.
• North American rail traffic strengthened WoW, with chemical volume showing notable gains due to its ability to export its cost advantage, while farm product volume seasonally weakened.

See PDF below for all charts, tables and diagrams