Daily Chemical Reactions

Cheap Chinese Goods Torpedo Competitors – Advantaged Cost Position Partly Shields The US, Europe Swims Naked!
April 12, 2024
Commodities Mentioned:
Crude Oil, Olefins, Ethane, Ethylene, Propylene, Butadiene, PDH, Propane, Benzene, Natural Gas, Hydrogen, E-Fuels, NGLs, LNG, Coal, Lithium, EVs, Carbon
Companies Mentioned:
ExxonMobil, SABIC, LyondellBasell, Dow, INEOS, BASF, TotalEnergies, Invista, ADNOC, bp, Oxy, Siemens Gamesa, BYD

Daily Chemical Reaction

Cheap Chinese Goods Torpedo Competitors – Advantaged Cost Position Partly Shields The US, Europe Swims Naked!

Key Findings

  • General Thoughts: China’s continued push in manufacturing and global distribution of cheap products harms competing chemical and associated product manufacturers and their energy- and clean-product transition.
  • Supply Chain/Commodities: We discuss the news of more European chemical capacity closures and show US, Europe, and Asia spot ethylene price and margin trends to display the significant North American advantage.
  • Energy/Upstream: We observe negative natural gas values in parts of the US as producers keep their crude oil production elevated and compare Europe and US electricity prices to movements in regional natural gas values.
  • Sustainability/Energy Transition: We compare US, Europe, and the rest of the world’s energy transition investment to China and note the recent rebound in EU carbon values, though they are much lower YoY.
  • Downstream/Other Chemicals: We compare interest rate trends in the West to China to illustrate that headwinds for Western consumers remain high, which generally increases the appeal of cheap imports.

Exhibit 1: US consumer price index (CPI) growth YoY remains elevated relative to modest China CPI growth in March.

Source: Bloomberg, C-MACC Analysis, April 2024

See PDF below for all charts, tables and diagrams


Client Login

Learn About Our Subscriptions and Request a Trial

to gain full access and experience our services!

Request a Free Trial

Archives