Daily Chemical Reactions

January Stars – Early-Year Demand Remains In Question, Global Cost Positions Stay In Focus
January 4, 2024
Commodities Mentioned:
Ammonia, Chlor-Alkali, Ethanol, Corn, Soybean, Hydrogen, Crude Oil, Natural Gas, Ethylene, LNG, PVC, Nitrogen, Propylene, Polypropylene, EPDM, Phenol, Acetone, Cobalt, Ammonium, Nitrate, Lithium, Methanol, Biodiesel, Recycled, Metals, SAF, Polyethylene
Companies Mentioned:
BASF, CF Industries, Nutrien, LSB Industries, Koch Fertilizer, Carrefour, Cathay Pacific, GM, Lindsey Corporation, Perma-Pipe International, QatarEnergy, Cal-Maine Foods, Radius Recycling, Spearmint Energy, Equinor, BP, Avangrid, Fisker, Tesla, Hokuriku, First Solar, Arbor Wood, EcoVantage, i3 Energy, NextChem, Sinopec, Blue Bird, Shell

Daily Chemical Reaction

January Stars – Early-Year Demand Remains In Question, Global Cost Positions Stay In Focus

Key Findings

  • General Thoughts: We argued that ammonia prices had returned to a holding pattern following their rise in 2H23 – demand-driven upside risk looks limited in the near term, but we hold a constructive long-term view.
  • Supply Chain/Commodities: Weakness in Ex-US natural gas prices has favored lower ammonia and Chlor-alkali chain prices in 1Q24. At the same time, Ex-US ethylene production costs have not seen similar weakness.
  • Energy/Upstream: We discuss the significant production growth pushing up North American oil and natural gas exports, and whether US energy outflows will disrupt global energy markets in 2024.
  • Sustainability/Energy Transition: We discuss the push to curb single-use plastic to eliminate waste and argue that waste management, not plastic, is the enemy. We also discuss changes for shipping fuels and SAF in 2024.
  • Downstream/Other Chemicals: We discuss the Radius Recycling business update, the Lindsey outlook on Agriculture irrigation equipment, as a glimpse into farmer capital spending trends, and global freight rates.

See PDF below for all charts, tables and diagrams


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