Chemical Industry Crossroads:Upstream Leverage vs. Downstream Pressure

Companies Mentioned: ADNOC, QatarEnergy, Aramco, Enterprise Products, ExxonMobil, Chevron Phillips Chemical, Versalis, Braskem, Phillips 66, Lotte Chemical Titan, Air Products, Mantle Ridge, ChemOne, LyondellBasell, Covestro, QatarEnergy, GE, Venture Global, Woodside, Johnson Matthey, Pattern Energy, Ford, SK On, Amazon, Google
Commodities Mentioned: Polyethylene, Ethylene, Lithium, Natural Gas, LNG, Crude Oil, Ethane, Naphtha, Renewable Power, Hydrogen, CO2, Ammonia, Batteries, EVs

Key Findings

General Thoughts: Low-cost oil and gas producers’ efforts to extend their value chains into high-return integrated growth areas will likely intensify in chemicals as oversupply weighs on its non-integrated and high-cost producers.
Supply Chain/Commodities: We highlight the Phillips 66 capital program for 2025, the planned start-up of two Chevron Phillips Chemical JV petrochemicals facilities with QatarEnergy in 2026, and more news on Air Products.
Energy/Upstream: US LNG exports are poised to set a record in 2024 and show the US as the top global exporter before significant expansion in 2025, while growth efforts elsewhere also ensure more global natural gas exports.
Sustainability/Energy Transition: Amazon announces a US$10bn data center project in Ohio, which we discuss through the lens of growing US (and global) electricity needs. We also discuss mounting “green” business failures.
Downstream/Other Chemicals: Continued economic troubles in Europe are well known by most in the West, so we shift gears to discuss problems in parts of Asia beyond China, such as South Korea, that receive less attention.