Global Shipping Issues Benefit Europe, Hurt Asia; Surging US Power Demand Will Not Be Met Without More Natural Gas Use

Companies Mentioned: Borealis, Ineos, Dow, LyondellBasell, ExxonMobil, Hexcel, Huntsman, Asian Paints, Lanxess, Boeing, Airbus, Kinder Morgan, BP, CF Industries, POET, Yara, PepsiCo, Methanex, Entropy, Maersk, D.R. Horton, Fresh Del Monte Produce, United Airlines
Commodities Mentioned: Ethylene, Polyethylene, Propylene, Polypropylene, Adhesives, Epoxies, Methanol, Ammonia, Chlor-Alkali, Natural Gas, LNG, Crude Oil , Photovoltaics, Fertilizer, Carbon Dioxide

Key Findings

General Thoughts: Global container freight rates reached a fresh YTD high this week amid logistic issues and some inventory stocking amid production concerns. Western markets, on average, reflect tighter conditions than Asia.
Supply Chain/Commodities: We discuss European PE and PP spot price support, business updates from Asian Paints and Lanxess, and Hexcel’s 2024 profit outlook reduction due to a more cautious near-term aerospace view.
Energy/Upstream: We discuss Kinder Morgan and BP comments toward natural gas demand exceeding most forecasts amid surging power needs and highlight US natural gas price trends relative to Asia and Europe.
Sustainability/Energy Transition: Solar modules have fallen to a record low, though still at a notable premium to China, and we also provide a few additional thoughts on clean agriculture following our sector report yesterday.
Downstream/Other Chemicals: We highlight the significant drivers of improvement in US industrial production, with energy and utilities both seeing strength MoM, and we comment on North American rail traffic trends.