Daily Chemical Reaction
Most Chemical Outlooks For 2024 Assume The Current Cost Curve Will Hold – Is This Prudent?
- General Thoughts: Most chemical producers anticipate a better year in 2024, driven by improving end-demand outside the US, notably in 2H24 – the impact of potential oil price shifts lacks adequate appreciation in most views.
- Supply Chain/Commodities: We discuss takeaways from the LyondellBasell 4Q23 business update and earnings conference call, the ExxonMobil and Eastman 4Q results, and a few global chemical profit trend developments.
- Energy/Upstream: Brent Crude oil and Ex-US natural gas values declined into the week’s close, following the US natural gas move lower early this week, which we discuss and highlight a few views from Chevron and Shell.
- Sustainability/Energy Transition: We discuss LyondellBasell and Eastman circular product business outlooks, and we also flag the notable weakness in EU carbon prices and show US EV buyer incentives unlikely to surge demand.
- Downstream/Other Chemicals: China became the largest global vehicle exporter in 2023, nudging past Japan as its global EV market presence expands. We also show Eastman’s 2024 outlook by end-market, among other views.
Exhibit 1: The US ethylene production cost advantage is more significant than 2015-19 compared to Europe and Asia.
Source: Bloomberg, C-MACC Analysis, February 2024
See PDF below for all charts, tables and diagrams