Costs & Integration Matter – North America Feedstock Cost Advantage, China’s Role In Chemical Oversupply Evident In 1Q24

Companies Mentioned: BASF, Dow, Alpek, Shin-Etsu, Reliance Industries, Valero, BHP, Anglo American, Methanex, Equinor, ExxonMobil, Waste Management, Mura Technologies, Eastman, Brightmark, Technip Energies, Anellotech, Caterpillar, Toyota
Commodities Mentioned: Feedstocks, Propylene, Styrene, Polymers, Polyethylene, PVC, Polypropylene, RNG, Crude Oil, Copper, Aluminum, Coal, LNG, Plastic Waste, Syngas, Carbon, PET, SAF, Nuclear Power, Fuels, Natural Gas, Ethylene

Key Findings

General Thoughts: Global chemical markets will likely remain oversupplied in 2024 as North America pushes its cost position and China boosts production at the expense of most producers in Asia Ex-China and Europe.
Supply Chain/Commodities: We discuss the differences between the Dow and BASF 1Q24 results and outlooks, Alpek results in Plastics & Chemicals, and Reliance & Shin-Etsu results to frame performance in Asia Ex-China.
Energy/Upstream: We discuss Reliance Industries’ views of global gas and LNG markets, the business setting for its crude-to-chemicals business, and Equinor facing shareholder pressure to do more in energy transition.
Sustainability/Energy Transition: We discuss the WM push into sustainable products benefiting from its waste integration relative to those having to compete for waste and Valero’s ambitions in clean fuels as a growth vehicle.
Downstream/Other Chemicals: We discuss Dow’s views of its global end-markets, North American rail carloads in chemicals being among only a few sectors showing YTD growth, and China export price weakness YoY.