Sunday Thematic & Weekly Recap

1Q Sucks! The Benefit of Reporting Earnings Late – More Near-Term Perspective
March 3, 2024
Commodities Mentioned:
Polyethylene, Ethylene, Coatings, Electric Power, Industrial Gases, Hydrogen, Ammonia
Companies Mentioned:
Dow, LyondellBasell, Westlake, PPG, Chart Industries, Covestro, Clariant, Arkema, AkzoNobel, CP Chem, QatarEnergy, Shell, Chevron, Hess, CNOOC, Chemours, DuPont, Air Liquide, LSB, CF Industries, BP

C-MACC Sunday Thematic and Weekly Recap

1Q Sucks! The Benefit of Reporting Earnings Late – More Near-Term Perspective

  • Those reporting earnings late in the quarter are again sending a different message than those who reported early. Early reports were full of 2H 2024 hope, albeit without data; recent reports focus on 1Q weakness.
  • As we noted last week, greater demand uncertainty should direct more free cash towards share buybacks in 2024, but we would also expect to see more business realignments – divestments and mergers – see PPG below.
  • This week we published a “White Paper” on ethylene and concluded that the current unwillingness in the industry to accept that we face a prolonged downcycle will only change with progressive evidence – like 1Q.
  • We also published our first US price expectations report in a joint initiative with PXi – we hope that this will provide those in the major US polymer chains with an additional tool to help navigate month-end settlements.
  • Otherwise, we look at a possible move from PPG to unlock value, power prices, why the industrial gas companies can look like they are doing well in weak markets, hedging on hydrogen, and ESG investing woes.

  • Companies Mentioned: Dow, LyondellBasell, Westlake, PPG, Chart Industries, Covestro, Clariant, Arkema, AkzoNobel, CP Chem, QatarEnergy, Shell, Chevron, Hess, CNOOC, Chemours, DuPont, Air Liquide, LSB, CF Industries, BP
  • Products Mentioned: Polyethylene, Ethylene, Coatings, Electric Power, Industrial Gases, Hydrogen, Ammonia

Exhibit 1: Durable and consumable goods spending fell in January – not a good early indicator for chemicals

Source: Bureau of Economic Analysis, C-MACC Analysis, February 2024

See PDF below for all charts, tables and diagrams


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