Ocean Eyes – US PE & PVC Markets At Risk From Potential US Port Labor Strikes, So Is Gasoline!

Daily Chemical Reaction

Ocean Eyes – US PE & PVC Markets At Risk From Potential US Port Labor Strikes, So Is Gasoline!

Key Findings

• General Thoughts: We discuss the potential impacts of polyethylene (PE) and polyvinyl chloride (PVC) from the US East and Gulf Coast labor strikes, as it could result in curbing domestic producer operating rates in October.
• Supply Chain/Commodities: We discuss the high level of US PE and PVC exports relative to domestic demand compared to other polymers, news of sector restructurings in Europe, and news of production rate shifts in China.
• Energy/Upstream: We discuss whether surging AI power demand will ‘terminate’ natural gas demand risk, the port strikes implying risk to US gasoline exports, and we highlight rising China crude oil imports from Russia.
• Sustainability/Energy Transition: We discuss US, EU, and UK carbon price trends, and US carbon prices are rising relatively more but from a much lower level than the other regions. We also flag our recent hydrogen research.
• Downstream/Other Chemicals: We comment on recent declines in business expectations in Germany and discuss recent global freight rates weakness relative to YTD highs that may find support well above pre-COVID levels.

Exhibit 1: US polyethylene (PE) exports by sea more than doubled between 2018 and 2023, with Houston/Galveston being the major seaport for export, and most (90%+) of PE sea-bound exports ship from US East and Southeast ports.

Source: US Census Bureau, C-MACC Analysis, September 2024

See the PDF below for all charts, tables, and diagrams