Global Polyolefin Market Price Support & Coating Producer Cost Relief Unlikely To Co-Exist In 2024

Companies Mentioned: Dow, Sherwin-Williams, LyondellBasell, Nova Chemicals, BASF, Borealis, E3 Lithium, Elementis, Evonik, Givaudan, Linde, Vedanta, DuPont, Helium One, Formosa, Hexcel, Novatek, Mura Technology, Valero Energy, Chesapeake, Chevron, Tallgrass Energy, Xcel Energy, Kinder Morgan, Murphy Oil Corporation, Hemisphere Energy, Baker Huges, Aker Carbon Capture, Alfen, Alight, H&M, Babcock & Wilcox, Cyan, Drax, Daimler Truck, Masdar, Topsoe, Circulus Holdings
Commodities Mentioned: Polyethylene, Olefins, Polyolefins, Acetone, Phenol, Lithium, Hydrogen Peroxide, Helium, Crude Oil, Naphtha, Ethylene, Natural Gas, Fossil Fuel, Bio-Propane, Hydrogen

Key Findings

General Thoughts: Western polyolefin margins strengthened in early 2024 relative to Asia, helped by Middle East logistical, lower natural gas/NGL feedstock prices, and crude oil feedstock strength hurting Asia more than Europe.
Supply Chain/Commodities: We discuss Dow and Sherwin-Williams 4Q23 and outlook commentary, highlighting Dow’s crude oil and chemical cycle views that could challenge Sherwin-Williams 2024 input cost relief guidance.
Energy/Upstream: We discuss Valero 4Q23 results and their constructive view of US refinery margins, which have risen into 2024, amid a heavy maintenance outage period. We compare European LPG price levels to Naphtha.
Sustainability/Energy Transition: We highlight the Dow Path2Zero petrochemical expansion project in Canada, mounting clean energy incentive concerns due to election risk in the US, and the IEA electricity 2024-26 forecast.
Downstream/Other Chemicals: We observe reports noting retailer movements to just-in-time inventory in 2024 amid supply confidence and demand uncertainties, and we also display China-to-Europe freight rate strength.

Exhibit 1: Western polyolefin margins have risen into 2024 relative to Asia due to supply issues and cost benefits.