Daily Chemical Reactions

Reality Bites – Global Chemical Producer Strategic Reviews To Increase As Sector Challenges Persist
March 5, 2024
Commodities Mentioned:
Ethylene, Polyethylene, Polypropylene, Lithium, Glycerin, PVC, Crude Oil, Natural Gas, Naphtha, Ethane, rPET, Hydrogen, Carbon
Companies Mentioned:
Air Liquide, Methanex, Westlake, Olin, Indorama, BASF, Bora LyondellBasell, Advanced Petrochemical, AkzoNobel, Bayer, Evonik, Frontier Lithium, Henkel, MOL, NextChem, Odfjell, Sumitomo Chemical, Univar, Versalis, Mitsubishi Chemical, Mitsui Chemicals, Italmatch, Aramco, ExxonMobil, Chevron, Chesapeake, Vitol, Petronas, TC Energy, Oneok, Crescent Energy, Ranger Energy Services, Origin Materials, Bunge, Syngenta, Agilyx, AmSty, Aldi

Daily Chemical Reaction

Reality Bites – Global Chemical Producer Strategic Reviews To Increase As Sector Challenges Persist

Key Findings

  • General Thoughts: Indorama Ventures is taking action to shift its global chemical production portfolio to focus on cost position, integration, and sustainable product growth – we expect more similar sector announcements ahead.
  • Supply Chain/Commodities: Weak China chemical demand is pushing its low-priced products offshore, and North America is using low-cost product costs to export to high-cost areas – European premium prices are the bullseye.
  • Energy/Upstream: We discuss the recent movements in crude oil values relative to US natural gas and display the substantial chemical production cost advantage of most North American producers relative to Asia and Europe.
  • Sustainability/Energy Transition: We highlight Indorama’s efforts, like several of its global peers, to produce and sell competing recycled and virgin materials, and we discuss other recycled products and renewable fuels news.
  • Downstream/Other Chemicals: We discuss consumer goods companies facing the challenges of increasing profit in a slow-growth global economy and growing resistance to price hikes from consumer pushback and substitutes.

Exhibit 1: US ethylene expansions are based on its advantaged global cost position, while China’s ethylene expansions have been more demand-driven. Our ethylene market webcast next week, sign up HERE, will provide our global view.

Source: Bloomberg, C-MACC Analysis, March 2024

See PDF below for all charts, tables and diagrams

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