Low-Cost Positions & Integration to Drive Outperformance in Commodities & Recycling; Power Markets Set To Struggle

Key Findings

General Thoughts: Commodity chemical producer 2Q business updates broadly display the benefits of low-cost positions in mostly oversupplied global markets, while downstream market health remains mixed by category.
Supply Chain/Commodities: Dow 2Q results were good in the context of an oversupplied global market, and we provide further thoughts on the global coatings market after the RPM business update, which follows peer reports.
Energy/Upstream: TotalEnergies and Valero 2Q24 business updates highlight weak global crude oil refinery margins mirrored by its peers, and we flag US natural gas demand for power hitting a multi-year high in July.
Sustainability/Energy Transition: WM 2Q24 results display its growth ambitions ahead of a likely rush on recycler waste demand, and the TX-grid will struggle to keep pace with demand, even if net-zero goals pushed back.
Downstream/Other Chemicals: The US economy continues to shine on a relative basis, as shown by strength in business activity. We also highlight ALPEK views of tight global freight markets benefiting its domestic businesses.