Who’s Got The Power?! China Pushes Its Chemical Positions To Global Markets, Data Center Electricity Use Could Eclipse EVs

Companies Mentioned: Wanhua, Dragoman, ChemOrbis, Yulong Petrochemicals, Celanese, Borouge, Alcoa Corporation, PPG, Aramco, Reliance Industries, Kinder Morgan, Petrobras, Phillips 66, Woodside, Microsoft, Google, Amazon, Dominion, Gevo, Air Products, ExxonMobil, 1s1, X-energy, BASF, Braskem, SCG, Lotte Chemical, Vison RNG, Johnson Matthey, Airbus, Nestle, J.B. Hunt, Insteel Industries, Flowserve
Commodities Mentioned: Ethylene, Crude Oil, Naphtha, Ethane, LPG, Polyolefins, Benzene, Natural Gas, LNG, Electricity, Nuclear Power, EVs, Lithium, Batteries, Electrolyzers, Ammonia, Hydrogen, Carbon

Key Findings

General Thoughts: We discuss the IEA projected crude oil feedstock surge into the Chinese chemical industry, which generally agrees with our outlook and more globally supports our view of elongating chemical value chains.
Supply Chain/Commodities: We discuss the upcoming start-up of a Wanhua ethane/naphtha cracker in China, a 4Q24 setting of further chemical sector restructuring across Europe, and a few 3Q24 corporate business updates.
Energy/Upstream: We discuss the global crude oil market as we are more optimistic than many industry forecasts and why we think futures market prices that suggest lower crude prices YoY in 2025 could be meaningfully wrong.
Sustainability/Energy Transition: Power demand concerns are rising to “frenzy” levels, and we discuss views, such as data center demand for electricity potentially exceeding EV demand by 2030, supporting the rising concerns.
Downstream/Other Chemicals: We highlight PPG’s views on 4Q24 global business and macroeconomic trends and further discuss our views of China consumer price inflation posting well below Western levels in September.