Puff The Magic Dragon, Lives By The Sea, Blowing Cheap Products & Deflation Your Way

Companies Mentioned: Air Liquide, Dow, Axalta, ONGC, Shell, Asahi Kasei, ArcelorMittal, Compass Minerals, Lotte Fine Chemical, Braskem, Repsol, Ravago, Kao, JSR, Sherritt, UPL, BP, ConocoPhillips, ExxonMobil, SK Innovation, TotalEnergies, Petrobras, Murphy, Air Products, EnerSys, Eni, Ford, Canva, Eneos, LG Chem, GM, SolarWinds, Syngenta, Vestas, Li Metal, Neste, Chevron, Fluor, GLC Recycle, Google
Commodities Mentioned: Steel, PET, Methanol, Polypropylene, Aluminum, Benzene, Propylene, Ammonia, Ethylene, Crude Oil, Natural Gas, PGP, Propane, Carbon, Hydrogen, Lithium

Key Findings

General Thoughts: Chinese consumer price deflation YoY in January 2024 is a plus for its exports and global consumers but negative for Western manufacturers and their energy transition plans amid cheap alternatives.
Supply Chain/Commodities: We discuss Lotte Fine Chemical 4Q23 results, the recent strength in US spot benzene, and why US natural gas cost weakness is not translating into higher margins for many amid falling global prices.
Energy/Upstream: We highlight the YTD strength in US refinery margins amid some production issues, the recent movement in refinery-grade propylene relative to polymer-grade, and US and Asia propane market developments.
Sustainability/Energy Transition: We discuss why there are not enough carbon offsets to solve all problems and why you cannot economically compete with Taylor Swift and Bill Gates (and other incremental buyers) in this area.
Downstream/Other Chemicals: We flag the Maersk business updates, discuss global freight rates, where strength has mostly occurred between China, the US, and Europe, and show North American chemical rail traffic trends.