Risk On? Could 2024 be Another Year of Fear?

We have a very recent example of how agendas and strategies change in the face of significant dislocation and uncertainty with COVID, but the geopolitics of 2024 (and possibly weather) could create great corporate risk.
We rank the risks as follows, with the US taking the lead: The US election and significant risk of policy changes, Ukraine and broader fractures in the EU, the Middle East and oil prices, and China – growth and policy.
The challenge for any multi-national corporate in today’s environment is multiple sources of uncertainty and unpredictability which we believe may lead to a broad “wait and see” attitude in 2024 – lower investment.
Those that rely on large industrial corporate investment will be most vulnerable – this could be a bad year for engineering and construction, outside renewable power, and those expecting a ramp up in hydrogen spending.
Otherwise, we look at polymers, following our first dedicated report, some early profitability data for 4Q 2024, the surge in Chinese production, other ways to capture carbon, and we will have to wait a while for E-Fuels.

Companies Mentioned: INEOS, OMV, Shell, BayStar, Sasol, Dow, ExxonMobil, CP Chem, LyondellBasell, Lotte, Westlake, Celanese, LanzaTech, Synata Bio
Products Mentioned: Ethylene, Propylene, Polyethylene, PVC, Hydrogen, E-Fuels, Benzene, Cumene, Styrene, SAF, CO2

Exhibit 1: The WEF Global risks ranked by severity over the short and long term – survey published January 2024