Agriculture Sector Confidence Rebounds; Commodity Chemical Concerns Stay High Despite US Advantages

Companies Mentioned: Linde, Air Products, Dow, Nova Chemicals, LyondellBasell, Nutrien, CF Industries, LSB Industries, Aramco, Adama, Idemitsu, Borealis Baystar, Mitsui, Kureha, OCI, LANXESS, Huntsman, Centaurus Metals, Chemours, Covestro, MEGlobal, Enbridge, Freeport LNG, GAIL (India), Osaka Gas, Phillips 66, RWE, Vitol, ExxonMobil, SABIC, Sinopec, Total, AES Corporation, LanzaTech, Tesla, Sumitomo Metal Mining, Fisker, Nissan, Renault, SunCoke Energy
Commodities Mentioned: Ethylene, Polyethylene, Polysilicon, Propylene, Coal, Crude Oil, Natural Gas, LNG, Hydrogen, Carbon, Lithium, Steel, Biofuels, Ethanol

Key Findings

General Thoughts: Rising confidence in an agriculture market bottom has spurred US fertilizer and agricultural chemical equities YTD relative to commodity chemicals where concerns of price weakness later this year are high.
Supply Chain/Commodities: We follow our polymer pricing expectation report yesterday with more commentary on the US polyethylene market and news of further commodity chemical restructurings in Asia due to oversupply.
Energy/Upstream: We discuss rising concerns with the ability of the US electric grid, irrespective of electricity production source, to grow fast enough to keep pace with surging demand from numerous consumption drivers.
Sustainability/Energy Transition: We provide a general breakdown of US government energy transition grants awarded to date and argue much more support needs to be directed toward creating clean, cheap power hubs.
Downstream/Other Chemicals: We highlight the presence of a few major US corporations in China, the decline in foreign company exports from China, and rising concerns that China growth may not notably improve in 2024.