Sunday Thematic & Weekly Recap

Global Trade – The Greatest Risk for the Next Two Years?  
June 9, 2024
Commodities Mentioned:
EVs, Electrolyzers, Solar Modules, Hydrogen, TiO2, PVC, Polyethylene, Natural Gas, Ethane, Steel, Ammonia, E-Fuels
Companies Mentioned:
Fulcrum Bioenergy, Chemours, Braskem Idesa, ReNew, Danimer Scientific

C-MACC Sunday Thematic and Weekly Recap

Global Trade – The Greatest Risk for the Next Two Years?  

  • Geopolitics threatens a global industrial, manufacturing, and retail model that has evolved over the last 30-plus years through increasing globalization and supply chains that depend on trade. Reversal would be dislocating.
  • We already have plenty of relative cost issues, with haves and have-nots on cheap energy and labor. These cost issues have caused trade to evolve into today’s interdependence between countries globally.  
  • Unpopular actions by Russia, China, and some in the Middle East cause reactions from others that generally focus on trade (sanctions and tariffs). Rising populism in the US and much of Europe suggests more trade risk.
  • More significant anti-China moves would cause economic hardship in all regions (including China), and any change in the US’s view of its relationship with Europe would likely have damaging unintended consequences.
  • Otherwise, we look at weather changes and whether this could, or already has, driven a rise in inventory. We also look at the investment and strategic challenges for oil and gas and stalling sustainability activity.

Exhibit 1: This WTO volume index for trade shows how the trend slowed after the financial crisis but accelerated again before COVID hit. 

Source: Bloomberg, C-MACC Analysis, June 2024

See PDF below for all charts, tables and diagrams

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