Thank You, Sir! May I Have Another!?! More Ethylene Closures Needed Beyond LyondellBasell!

Companies Mentioned: LyondellBasell, Aramco, Huntsman, Ineos, Shell, Trinseo, Nutrien, AmSty, BP, TotalEnergies, Williams, Air Products, PureCycle, Rivian, BYD, Neta Auto, Electric Hydrogen, Mitsubishi Chemical, Mitsui Chemicals, Asahi Kasei, Siemens Gamesa
Commodities Mentioned: Ethylene, Ethane, Styrene, Propylene, Butadiene, Crude Oil, Polystyrene, Ammonia, HDPE, PP, Polycarbonate, Natural Gas, Gasoline, Diesel, LNG, Hydrogen, Carbon, E-Fuels, EV, Wind Power

Key Findings

General Thoughts: We do not view the LyondellBasell strategic review of its European petrochemical assets with surprise, as it is a sign of more to come, as Europe faces challenges with high costs and mature domestic demand.
Supply Chain/Commodities: Part of the C-MACC team is at NPE2024 in Orlando this week, while the other has remained in Houston busy with project work led by Graham Copley amid a growing need for our ethylene study.
Energy/Upstream: We discuss chemical feedstock price trends, showing crude oil and Ex-US naphtha relative to US natural gas/ethane prices – this clearly illustrates why most European chemical producers are in a tough spot.
Sustainability/Energy Transition: We highlight the significant amount of steam/heat needed in many chemical processes, which is one of the challenges to decarbonizing its upstream assets and another major issue in Europe.
Downstream/Other Chemicals: We highlight ifo Institute estimates of weakness in new manufacturing orders in Europe and trade data between Europe and China to show more factors hurting the European chemical industry.