Picking Time! Low Priced Commodities Facing Rising, But Expected Demand, Or Those In Need Of Supply Cuts?

Daily Chemical Reaction

Picking Time! Low Priced Commodities Facing Rising, But Expected Demand, Or Those In Need Of Supply Cuts?

Key Points:

• After the commodity price surge of 2021-2022, many producer equity values have followed their respective commodity prices lower in 2023 – an abrupt rebound in both looks unlikely.
• The falling prices across many critical mineral end markets, such as EV batteries, are a plus for their demand, while a demand lift from low prices is less likely in petrochemical end markets.
• The challenges of developing scale for both plastic recyclers and battery recyclers reflect some parallels on the surface but differ beneath the surface from a sourcing and net cost perspective.
• We discuss the RPM and ExxonMobil business updates, as changes in oil and gas markets in 3Q23 suggest the timing of the profit tailwinds and headwinds will differ for each in 2H23.
• We highlight movements in North American rail traffic and the recent decline in Global freight rates, returning them to near 2017-2019 lows, suggesting product availability is not an issue.

See PDF below for all charts, tables and diagrams