The Push and The Squeeze – 3Q23 Global Chemical Price Surge To Hurt Downstream Margins In Seasonally Weak 4Q

Daily Chemical Reaction

The Push and The Squeeze – 3Q23 Global Chemical Price Surge To Hurt Downstream Margins In Seasonally Weak 4Q

Key Points:

• Non-integrated commodity chemical and specialty producers faced more input cost pressure in 3Q than planned mid-year due to higher feedstock costs and, in some cases, supplier outages.
• Global chemical prices broadly increased in 3Q23, but some have substantially outperformed others, such as US propylene, which has outpaced overseas markets due to domestic outages.
• Some chemical downstream markets, such as building products and those targeting energy efficiency, reflect more support than others – low-cost integrated producers are best in class.
• We discuss a BP solar development set to provide energy to an ExxonMobil/SABIC chemical JV and China’s position as a low-cost renewable producer being a sizable risk for Western producers.
• The negative impact of higher interest rates appears as a rising burden for global consumers, and some markets are shifting as a result, such as the move to smaller, cheaper homes in the US.

See PDF below for all charts, tables and diagrams