Daily Chemical Reactions

Push It – Wherever You Are In Chemicals, Price Support In 1H24 Is Critical To Lift YoY Profit
February 16, 2024
Commodities Mentioned:
Aluminum, Acrylic Acid, Butadiene, Propylene, Potassium Carbonate, Lactic Acid, Crude Oil, Natural Gas, Naphtha, LNG, Carbon, Hydrogen, Bio-based Nylon, E-Methanol, Lithium, Polypropylene, Polycarbonate, Bio-Polyamide
Companies Mentioned:
Lake Charles Methanol II, AdvanSix, Albemarle, ExxonMobil, BASF, Eneos, Eni, Gujarat Fluorochemicals, IG Petrochemicals, JSW Steel, Styrenix, Sika, Kansai Paint, MEGlobal, Nouryon, Nocil, Shell, Versalis, Enterprise Products, Chesapeake, Dangote Refinery, Enterprise, Energy Transfer, Gabon, Bloom Energy, Aker, BP, ADNOC, Borealis, Croatia, Carbios, Corre Energy, Centrica, EnerSys, Evonik, Equinor, Ford, GM, Heidelberg Materials, LG Chem

Daily Chemical Reaction

Push It – Wherever You Are In Chemicals, Price Support In 1H24 Is Critical To Lift YoY Profit

Key Findings

  • General Thoughts: Chemical feedstock and intermediate costs are mixed YTD, with some chains seeing near-term margin benefits relative to weakness in others, but price support is critical for most to lift 1H24 profit YoY.
  • Supply Chain/Commodities: We highlight AdvanSix 4Q23 results and outlook commentary, discuss a few items in methanol and ammonia, and note considerable price strength in US crude oil linked US commodity chemicals.
  • Energy/Upstream: We discuss the IEA electricity price outlook, rising corporate commentary about an upcoming lack of power supply relative to demand, and why this shortage is concerning for the US “green” build out.
  • Sustainability/Energy Transition: We flag a study noting hydropower, due to its high-capacity factor, should play a major role in the clean electricity build out for industry alongside intermittent sources, notably solar and wind.
  • Downstream/Other Chemicals: We highlight Oxy views of the DAC market, comment on North American rail traffic as an export market gauge and US Dollar movements, and flag several chemical end-user business updates.

Exhibit 1: The PPI for US chemicals and allied products, which comprise mostly intermediates, surged into 2024, but the PPI for US plastic resin & materials was much less reactive on average due to persistent global market oversupply.

Source: Bloomberg, C-MACC Analysis, February 2024

See PDF below for all charts, tables and diagrams

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