Recent European Chemical Sector Sentiment Lift Faces Challenges, As Do Global Chemical 2030 Circularity Goals

Companies Mentioned: Aramco, Braskem, Nova, ExxonMobil, Issaquena Green Power, Borealis, Coca-Cola, Repsol, Shell, TotalEnergies, Technip Energies, Turner Industries, Dow, LyondellBasell, Indorama Ventures, Sabic, LG Chem, Neste, SK Geo Centric, PTT Global Chemical, SCG Chemical, Mitsubishi Chemical
Commodities Mentioned: Copper, Nickel, Aluminum, Ammonium Sulphate, Polyethylene, Crude Oil, Ethylene, rPET, Ethanol, Hydrogen, Ammonia, Carbon Capture, Wind, Solar

Key Findings

General Thoughts: European chemical industry fundamentals have improved from YTD lows, and confidence has recently risen, albeit from low levels. We continue to see substantial risk facing its manufacturing industry in 2H24.
Supply Chain/Commodities: We discuss why price volatility is likely more certain than direction for the next few months amid high US weather risk, Aluminum market strength YTD, and challenges facing European chemicals.
Energy/Upstream: We discuss the Aramco share sale, recent weakness in Brent crude oil prices and Ex-US naphtha relative to US natural gas and USGC ethane, and WoW weakness in Europe and Asia natural gas prices.
Sustainability/Energy Transition: We generally discuss global chemical industry circularity goals through 2030, its advancement towards these goals, and the challenges facing most as they strive to meet their ambitious targets.
Downstream/Other Chemicals: We highlight China exports in terms of total value relative to price per unit trends to show volume is the primary driver of growth, US trade deficit strength, and other global economic trends.