From Polymers to Critical Minerals: Can 2025 Navigate Oversupply & Find A Bottom?

Companies Mentioned: Braskem, Olin, Westlake, Arcadium, Rio Tinto, Sinopec, Bharat Petroleum, PEMEX, LyondellBasell, Venture Global, Cheniere, QatarEnergy, ExxonMobil, Chevron, Hammerfest LNG, GEVO, Valero, POET, ADM, The Andersons, Green Plains, Citi, Bank of America, Big Lots, LL Flooring, Maersk, Redfin
Commodities Mentioned: Polyvinyl Chloride (PVC), Polypropylene (PP), Copper, Lithium, Methanol, Zinc, Polymers, Natural Gasoline, Crude Oil, Biofuel, Ethanol, LNG, Renewable Diesel, Natural Gas, Sustainable Aviation Fuel (SAF), Corn, Carbon

Key Findings

General Thoughts: We view 2025 as a year of continued commodity market oversupply absent unforeseen and a mixture of significant cost curve, policy, demand, and production shifts that will be needed to push prices higher.
Supply Chain/Commodities: Brazil’s spot PVC prices rose recently relative to Asia, Europe, and the US, following its 2H24 protectionist policy support. We will discuss critical mineral price trends from 2024 relevant for 2025.
Energy/Upstream: We discuss the build-out of US natural gas infrastructure to bring products to the higher-priced global markets and US crude-oil refinery margins facing downward pressure amid recent gas price weakness.
Sustainability/Energy Transition: EU carbon prices surged higher from mid-December into the close of 2024, rising to levels last seen in 1H24. US ethanol production margins fell in 4Q24 to close the year at multi-year lows.
Downstream/Other Chemicals: We discuss the recent surge in the US Dollar to more than a 2-year high relative to other major foreign currencies, a headwind for US exporters, and several US housing market developments.