Kein Freudentanz!! German Chemical Restructurings, Strategic Reviews, & Closures Display Broader European Troubles

Companies Mentioned: Westlake, Oxy, Formosa, Shintech, Orbia, BASF, Adnoc, Covestro, Braskem, Olin, Evonik, ONEOK, Equinor, BP, ExxonMobil, Technip Energies, Ingeteam, Acciona Energía, Eolian, CPS Energy, Lhyfe, OX2, Velarion, Dynamic Energy, Cooper-Booth
Commodities Mentioned: Caustic Soda, Chor-Alkali, PVC, Ammonia, Methanol, Ethylene, Natural Gas, Crude Oil, Fuels, Renewable Power, Batteries, Solar PV, Hydrogen, Carbon Dioxide

Key Findings

General Thoughts: European chemical industry restructurings are more at risk of both further advancing and broadening in scope than lessening, and we discuss our cautious regional fundamental view into year-end 2024.
Supply Chain/Commodities: We generally highlight the underlying strategy likely supporting Adnoc’s interest in Covestro, BASF restructuring at Ludwigshafen, and Olin lifting its FM on chlor-alkali products post Hurricane Beryl.
Energy/Upstream: We highlight potential European crude oil refinery shutdowns and conversions, and the allure of integrating low-cost and -carbon chemical feedstocks into existing high-cost chemical production areas.
Sustainability/Energy Transition: We discuss the impact of the upcoming US presidential election outcome on energy transition; regardless of the outcome most of the funding will still most likely flow into Republican states.
Downstream/Other Chemicals: We add to our discussions this week suggesting that the European economy has stalled in 3Q24, and we think recent global freight rate weakness is a risk to European chemical prices in late 2H24.