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what we are talking about today

Daily Chemical Reaction

Dance To The Music – Sector Optimism Pops Higher As Asia Strengthens, Locking Ability In Question

Further improvement in Asia petrochemical prices keeps positive sector sentiment in motion to start the week and the trend is favorable for producers profit near-term – we discuss items keeping our outlook optimism in check.    
We highlight multiple relevant corporate items (e.g. Axalta, Nippon Paint, PPG, Univar, Shin-Etsu & Wacker corporate strategy news; BASF, Lanxess & Formosa facility news; multiple sector price hike notices, etc.)
Other items in this report range from the ending of Chinese waste imports on January 1, to plastic processor push in India to ban/restrict raw material exports, to a mattress recycling law shifting starting in 2021 in California.

Global Chemical Update – Testing Positive, For Now

Asia & NW Europe petrochemical values rise broadly relative to US values WoW – in this report, we discuss why recent price strength in ex-US markets is a plus for US producers and discuss outlier trends that are worth note.  
Other items discussed in this report: the global petrochemical production cost curve steepens WoW; Asia & US PVC values hit five-year highs; Asia PP & PE rise relative to US levels; Global aromatic markets remain mixed     

M&A Emerges From Partial Hibernation – Too Soon?

Global chemical sector M&A activity has recently surged. Some remain special situations, but others are likely the result of discussions that started before the Pandemic, where both sides are now comfortable that they understand the risks.
Despite the recent uptick in sector M&A activity, prior recessions delayed many major strategic moves as companies waited to see how the landscape settled, given the general acceleration of commoditization during periods of stress. We do not expect this time will be different but discuss some potential exceptions.
The overall global chemical market heads into the last month of the year with higher prices and momentum than we would have expected 6 months ago. So far, 4Q20 shows little seasonal weakness relative to 3Q, and though December may be weaker MoM, we find sector indicators broadly suggesting oversupply in 1H21.

what we are saying about tomorrow

C-MACC Scenarios & Persepctives 

Paper Pressure: Plastic Recycling Unlikely To Keep Pace With Demand; A Brick Wall In 2030 With A Slow Incline Ahead 

Plastic recycling headlines are easy to find but most, in our opinion, are more about the headline itself and represent limited volume, especially in the context of the overall polymer market. Small problems being solved while large ones loom.
There are significant challenges and costs to recycle large volumes of polymers, and without broad collection and separation standards, the chemical and packaging industries are working with at least one hand tied behind their backs.
Meanwhile the wall or cliff approaches – consumer products companies have renewable/recycle packaging promises made; 2022/2023/2024 and major ones by 2030. As a result, alternatives are being evaluated, and the paper industry is innovating quickly with the view of market share gain relative to plastic alternates.

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