Heat Of The Moment – 4Q24 Weakness & Better 2025 Is The Consensus, Overly Optimistic Outlooks Are A Problem For All

Key Findings

General Thoughts: Mixed chemical sector 3Q24 results continue to roll in, showing varying demand trends across end markets, though most anticipate improvement in 2025 irrespective of 4Q24 business developments.
Supply Chain/Commodities: With 3Q24 earnings reports and outlooks from Westlake and DuPont mostly aligning with our outlook, we discuss the missed 3Q24 expectations, lowered 4Q24 guidance, and dividend cut at Celanese.
Energy/Upstream: We highlight and discuss the uptick in US ethane, ethylene, and ethylene-derivative exports, showing significant growth in ethylene-derivative exports relative to ethylene and ethane, but all showing growth.
Sustainability/Energy Transition: We discuss rising capital investment to expand transmission, grid infrastructure and storage with the low-capacity factor renewable power build-out, which favors higher power consumer costs.
Downstream/Other Chemicals: We discuss the recent uptick in US mortgage rates that are likely to weigh on US housing conditions near-term and flag other relevant news showcasing chemical end-market demand trends.

Exhibit 1: Western methanol prices have continued to surge relative to Asia; a negative for non-integrated upgraders.