Daily Chemical Reactions

Thinking Global, Drinking Local – NPE Takeaways – US Drunk On Upstream Feedstock, China On Chemical Supply, Europe In Rehab
May 7, 2024
Commodities Mentioned:
Benzene, Crude Oil, MDI-urethanes, Polyethylene, Natural Gas, NGLs, Wind, Solar, Hydro, LNG, Coal, PET, Polypropylene, Polyhydroxyalkanoates (PHA), Nuclear Power, Biofuels, Carbon Credits
Companies Mentioned:
Aramco, ExxonMobil, Chevron, ADNOC, Braskem, OMV, Borealis, Covestro, Mubadala, Avient, Huntsman, BASF, Versalis, BP, Origin Materials, Danimer Scientific, TotalEnergies, SINOPEC

Daily Chemical Reaction

Thinking Global, Drinking Local – NPE Takeaways – US Drunk On Upstream Feedstock, China On Chemical Supply, Europe In Rehab

Key Findings

  • General Thoughts: Western benzene prices have fallen from 1Q24 highs but remain at a sizable premium relative to Asia, suggesting Western non-integrated buyers still face stiff downstream product price competition from Asia.
  • Supply Chain/Commodities: We flag Aramco 1Q results, and one of the noted sustainable competitive advantages is downstream integration, which enables long-term placement of its upstream products into growth markets.
  • Energy/Upstream: Brent Crude oil has declined during the past two weeks relative to US natural gas prices, which we view as a headwind to global chemical prices and North American petrochemical production margins.
  • Sustainability/Energy Transition: We discuss Origin Materials and Danimer Scientific showcases at NPE, and flag EU carbon price expectations as some seek to move forward with the sale of allowances to fund green investment.
  • Downstream/Other Chemicals: We highlight Avient 1Q24 product demand by region while discussing the consensus view that Asia and Europe demand will improve in 2H24 while Americas demand remains supportive.

Exhibit 1: US Benzene Prices start to tumble down in the first week of May 2024 but remain at a premium to Asia

Source: Bloomberg, C-MACC Analysis, May 2024

See PDF below for all charts, tables and diagrams


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