Daily Chemical Reactions

As Good As It Gets? North American Integrated Ethylene-Chain Producers Beat 1H24 Expectations, Start 2H24 Strong
July 2, 2024
Commodities Mentioned:
Polyethylene, Polyvinyl Chloride, Ethylene, Natural Gas, Ethane, LNG, Crude Oil, Naphtha, Hydrogen, Carbon, Biofuel, Solar Power, Ammonia, EVs, CO2
Companies Mentioned:
Dow, LyondellBasell, ExxonMobil, Chevron Phillips Chemical, Shell, Baystar, Nova Chemicals, Westlake, Oxy, Shin-Etsu, Formosa Plastics, Olin, Spolchemie, RWE, Sungrow, Aramco

Daily Chemical Reaction

As Good As It Gets? North American Integrated Ethylene-Chain Producers Beat 1H24 Expectations, Start 2H24 Strong

Key Findings

  • General Thoughts: US spot integrated polyethylene (PE) and polyvinyl chloride (PVC) production margins beat most expectations in 2Q24 and start off 2H24 strong amid lingering global demand and supply chain uncertainties.
  • Supply Chain/Commodities: We discuss the strength of spot PVC prices in the Americas and Asia relative to Europe, concerns about the dumping of epoxies in Europe, and rising anxiety from Hurricane Beryl developments.
  • Energy/Upstream: We highlight the recent strength in crude oil as a plus for North American chemical producers relative to Europe, recent global natural gas price trends, and USGC ethane currently sitting near YTD lows.
  • Sustainability/Energy Transition: We observe mounting news flow discussing the push to cut carbon dioxide emissions in the West, while Asia is the foremost global emitter, and concerns with energy transition returns.
  • Downstream/Other Chemicals: We frame June PMI postings from China, Europe, and the US, highlight the strength in the US Dollar relative to other major currencies, and flag mixed US housing and rental market trends.

Exhibit 1: US integrated spot polyethylene (PE) and polyvinyl chloride (PVC) margins improve in 2Q24 relative to 1Q24 and close 1H24 at/near YTD highs, while US integrated polypropylene (PP) margins shrink from highs reached in 1Q24.

Source: Bloomberg, C-MACC Analysis, July 2024

See PDF below for all charts, tables and diagrams


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