Daily Chemical Reactions

Spin You Around – European Chemicals Find Needed Support from Production Issues & Logistic Challenges Elsewhere
July 9, 2024
Commodities Mentioned:
Ethylene, Polyethylene, Propylene, Natural gas, Crude Oil, Coal, Carbon, Hydrogen
Companies Mentioned:
LyondellBasell, Dow, ExxonMobil, Shell, Westlake, Borealis, BASF, Ineos, OMV, BP, Freeport LNG, Petronas, Aramco, Posco, Anglo American, Microsoft, Occidental, Lucid, Northvolt, SK On, BYD, Maersk, Temasek, Hengli Group, Smurfit Westrock

Daily Chemical Reaction

Spin You Around – European Chemicals Find Needed Support from Production Issues & Logistic Challenges Elsewhere

Key Findings

  • General Thoughts: US chemical production issues from a likely active Hurricane season following Beryl in its early innings and logistic issues limiting product flows from Asia favor near-term European chemical price support.
  • Supply Chain/Commodities: We highlight the VCI view of the German chemical industry to see an improvement in orders in 2H24; however, structural cost challenges facing Europe’s chemical industry will likely persist.
  • Energy/Upstream: We discuss European LNG import demand expectations through 2030, the likely need for Asian LNG demand to fill out export capacity, and highlight updates from BP and OMV, noting weaker refinery profits.
  • Sustainability/Energy Transition: We discuss the carbon credit deal between Occidental and Microsoft and more evidence that premature electrification hopes are weighing on battery and other energy transition suppliers.
  • Downstream/Other Chemicals: We discuss the continued strength in global container freight rates, keeping Asia in an oversupplied state, partly evidenced by port congestion in Singapore, and favor higher prices in Europe.

Exhibit 1: US production issues and logistic challenges limiting flows from Asia favor higher European chemical prices.

Source: Bloomberg, C-MACC Analysis, July 2024

See PDF below for all charts, tables and diagrams


Client Login

Learn About Our Subscriptions and Request a Trial

Contact us to gain full access and experience our services!

Request a Free Trial

Archives