Global Competition for Cheap US Chemical Feedstock to Rise, Benefiting Integrated Domestic Petrochemical Producers

Companies Mentioned: Enterprise Products, Invista, Dow, Air Products, Nova Chemicals, ExxonMobil, Westlake, Celanese, Braskem, Ineos, Lanxess, Aramco, Sonatrach, LyondellBasell, Mantle Ridge, Venture Global, Halliburton, Kinder Morgan, Chevron, Phillips 66, Valero Energy, Marathon Petroleum, POET, ADM, Green Plains, The Andersons, ArcelorMittal, Tata Steel, ThyssenKrupp, Salzgitter, Woodside, Siemens Energy
Commodities Mentioned: Ethylene, Propylene, PE, PVC, Natural Gas, Crude Oil, LNG, LPG, Ethanol, Corn, Steel, Ammonia, efuel, Biofuel, Hydrogen

Key Findings

General Thoughts: Trump’s policies favor expanding global access to relatively cheap US oil and natural gas/NGLs, which benefits integrated domestic petrochemical producers more than US merchant buyers of these feedstocks.
Supply Chain/Commodities: We discuss recent movements in global propane prices, highlight recent strength in spot US ethylene and propylene, and our favorable view of the additions to the Air Products’ board of directors.
Energy/Upstream: We discuss the EIA forecast for upward-trending annual natural gas prices in 2025 and 2026 relative to 2024 and increasing global crude oil refinery capacity despite US and European production cuts.
Sustainability/Energy Transition: We discuss the recent weakness in US ethanol production margins and related policy news. We also provide views on CBAM and compare shifts in EU carbon prices to EU natural gas prices.
Downstream/Other Chemicals: We highlight the recent weakness in global freight rates, following the rush to stock up before Chinese New Year and unknown Trump Policies, and discuss views on the interest rate setting.