Global Ammonia Price Strength: Good for US Producers, Bad for Farmers; Bloated Solar Module Market to Persist Near Term

Companies Mentioned: CF Industries, LSB Industries, Nutrien, Huntsman, BASF, Covestro, Dow, Wanhua, Sinopec, KMG, Pemex, China National Petroleum Corporation, Indian Oil Corporation, BYD, Issaquena Green Power, Carbon Clean, Petronas, Xpeng, SunPower, Woodside Energy, Syngenta
Commodities Mentioned: Ammonia, Benzene, Corn, Fertilizer, Soybean, Naphtha, PET, PTA, Crude Oil, Natural Gas, Basic Chemicals, Polymers, Gasoline, Diesel, Jet Fuel, EVs, Steel, Carbon Dioxide, Solar Modules, Offshore Wind, Hydrogen, Canola, Water

Key Findings

General Thoughts: US fertilizer and agricultural chemical equities continue to outperform crop markets, though some recent input price strength, such as in fertilizer, further disfavors on-farm spending amid shrinking incomes.
Supply Chain/Commodities: We frame the global benzene market, highlighting price differences between the US, Asia, and Europe, and flag falling sentiment among German manufacturers that could further worsen in 2H24.
Energy/Upstream: We discuss the leadership change at PEMEX, falling crude oil and natural gas production in Mexico relative to 2021-23 levels, and the push among Chinese refiners to become more internationally focused.
Sustainability/Energy Transition: We highlight ramping US solar module production despite elevated inventory from imports and offshore wind power developments being alluring but prohibitively expensive in some markets.
Downstream/Other Chemicals: We discuss US and Brazil’s corn and soybean exports to China, rising competition in global crop markets, and the multi-layered movement from China to become more self-sufficient in agriculture.