Summer of Love – Maybe Not; Summer of Profits – Possible for Some

C-MACC Sunday Thematic and Weekly Recap

Summer of Love – Maybe Not; Summer of Profits – Possible for Some

• As each week of the summer progresses, we get another data point that causes planning headaches, both short and medium term. Hurricane Beryl may have caused minimal industry damage, but the early arrival is not good.
• Meanwhile, politics is all over the place with surprises in Europe, the US (as recently as yesterday), Mexico, and India kicking off a year in which consequences for industrial and climate policy are increasingly opaque.
• In Europe this week we have had discussions with companies at the challenging end of the scale – high costs on a global basis, even higher costs of decarbonization, and a strong green lobby that wants to ban everything.
• Near-term, the storms in the US and the supply chain challenges making Chinese exports more expensive are causing some optimism in Europe as well as some price support in the US – short term in our view.
• Otherwise, we look at the Covestro dance with ADNOC, and the different assumptions/strategies behind the Air Products LNG sale. We question whether SAF can save hydrogen quickly and we look at data center power.

Exhibit 1: The relative economic challenges of Europe have been long apparent but since the Ukraine war relative costs are higher – note that all companies in the chart have businesses in most world regions – BASF is more Europe biased.

Source: Capital IQ, C-MACC Analysis, July 2024

See PDF below for all charts, tables and diagrams