Sunday Thematic & Weekly Recap

Big Themes For 2024 – Weakness in Commodity Chems and Rising Cost of Decarbonization
January 7, 2024
Commodities Mentioned:
Copper, Nickel, Lithium, Ethylene, Crude Oil, Natural Gas, Propane, Propylene, Hydrogen, Sustainable Aviation Fuel (SAF), Ammonia, Ethanol, Polypropylene, Cobalt, Methanol, Polyethylene, NGLs, Benzene
Companies Mentioned:
Phillips 66, ExxonMobil, Denbury, Gulf Coast Sequestration, Oxy

C-MACC Sunday Thematic and Weekly Recap

Big Themes For 2024 – Weakness in Commodity Chems and Rising Cost of Decarbonization

  • Several key controversies will impact both corporate and investor behavior in 2024, but the struggle with basic chemical overcapacity globally and costly environmental goals/mandates should dominate.
  • While all the major industry watchers are calling for consolidation/rationalization in the ethylene chain, none is really following the thought through to the industry economics that would drive such decisions.
  • Decarbonizing costs may prove to be the nail in the coffin for some chemical sites, especially in Europe, but uncertainty around rescue/incentive packages in a year of unprecedented global elections may delay activity.
  • The price of oil is also a significant uncertainty in 2024, although we see the risk of OPEC keeping its act together and maintaining high prices as much higher than the risk that OPEC and oil prices collapse.
  • Otherwise, we look at weak metals pricing when investment is needed, the delicate climate pathway for big oil and gas, how the US could dominate blue hydrogen, and why Germany’s 70-year low emissions are bad news.

See PDF below for all charts, tables and diagrams


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