1Q24 Results Show The Benefit Of Strong Cost Positions, But Also The Negative Consequences Of Overoptimism

Key Findings

General Thoughts: Long-term global demand and relative cost positions remain the major drivers of most global chemical growth projects – our confidence is higher in cost position and supply than most still lofty demand views.
Supply Chain/Commodities: We discuss Albemarle 1Q24 results and outlook commentary, adding to those noted in our May critical minerals research yesterday and relative cost developments at Westlake and CF Industries.
Energy/Upstream: We discuss Shell’s 1Q24 results and its global growth developments, highlight recent oil and natural gas trends, and show its indicative refining and chemical margins strength in 1Q24 relative to 2H23.
Sustainability/Energy Transition: We discuss decarbonization and clean project ambitions shown in a few 1Q24 chemical sector releases, leading up to our more detailed work on Linde and Air Products in our May 5 research.
Downstream/Other Chemicals: We generally flag weak flexible and rigid packaging demand at Amcor, a market we discussed in our latest polymer price expectations report, and we discuss global freight rate trends.