Daily Chemical Reactions

Plenty Of Focus on The Carts Enabling Energy Transition, Much More Needed on The Horses  
March 19, 2024
Commodities Mentioned:
LLDPE, Lactic Acid, Phosphoric Acid, Copper, Ethylene, Methane, Natural Gas, LNG, Coal, Biofuels, Carbon, Lithium, Polylactic Acid, Hydrogen
Companies Mentioned:
Enterprise Products, AkzoNobel, Cabot Corporation, Shin-Etsu, Toray, Trinseo, Tata Steel, W.R. Grace, Chemanol, Ineos, EcoPro, Lenzing, Alaska LNG, Aramco, CNOOC, Exxon Mobil, Chevron, Idemitsu, Nippon Steel, Shell, Gunvor Group, Air Liquide, Alto Ingredients, Axens, ExxonMobil, JX, Iberdrola, Statkraft, VinFast, ADNOC, Korkia, Econous Green Energy, LG Chem, Li-Cycle, Lhyfe, New Energy Blue, Nvidia, Orsted, Radius Recycling, Prevented Ocean Plastic

Daily Chemical Reaction

Plenty Of Focus on The Carts Enabling Energy Transition, Much More Needed on The Horses  

Key Findings

  • General Thoughts: Our meetings at CERA differ from last year, as our discussions are now less about concepts and more about project return challenges – clean power timing/availability issues are rising and need more attention.
  • Supply Chain/Commodities: We follow our recent ethylene market and webcast highlighting North American advantages to flag the likely uptick of US investment in this area and Enterprise Products export market ambitions.
  • Energy/Upstream: We compare Europe, Asia, and US natural gas prices and highlight that recent strength in crude oil prices is a positive for strength in North American petrochemical cost positions in the global market.
  • Sustainability/Energy Transition: We discuss NREL research highlighting the needed link between power hubs and industrial (consumer) hubs, which we agree with but view as likely too costly to implement promptly.
  • Downstream/Other Chemicals: We highlight several global demand indicators, including a positive US home builder sentiment survey, but also argue that demand for most products appears far from robust globally.

Exhibit 1: Elevated project financing costs hindering clean energy and sustainable expansions is a core theme at CERA.

Source: Bloomberg, C-MACC Analysis, March 2024

See PDF below for all charts, tables and diagrams

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