Will The Rubber Meet The Road In 2024? Tepid Demand, High Costs Keep Many Chemical Profit Brakes Pressed

Companies Mentioned: Evonik, Versalis, SABIC, Nippon Steel, Sinopec, ADNOC, bp, Imperial Oil, Aramco, ExxonMobil, Chevron, Hess, Goldman Sachs, Equinor, Petrobras, OMV, Repsol, Ecopetrol, Eni, Shell, TotalEnergies, Suncor Energy, Oxy, Air Products, INEOS, Tesla, Solaris, Windrose Technology
Commodities Mentioned: Ethylene, Propylene, Silica, Butadiene, Synthetic Rubber, Ethane, Propane, Polymers, Natural Gas, LNG, Crude Oil, Hydrogen, Gasoline, Diesel, Polystyrene, EVs, Wind, Solar, Nuclear, CCS, Renewable Fuels

Key Findings

General Thoughts: The global Butadiene market faces higher costs, production cuts, and still tepid downstream demand in 1H24, causing substantial pressure for Europe and Asia Ex-China producers and non-integrated buyers.
Supply Chain/Commodities: We discuss the growing criticism of European energy policy and the consequences facing its industrial base, also highlighting facility closure announcements and its ethylene feedstock challenges.
Energy/Upstream: We highlight MTD strength in Europe and Asia natural gas prices relative to US natural gas and Brent Crude and discuss why most US-integrated oil companies command a valuation premium to European peers.
Sustainability/Energy Transition: We flag oil-and-gas company investments in clean technology that are chasing policy, while also showing that China commands a significant global clean technology investment head start.
Downstream/Other Chemicals: We show recent movements in global freight rates, most notably showing still elevated levels between China and the West and, highlight several global 1H24 downstream demand indicators.