US PVC Producers Among the Most in Francine’s Path, Methanol & Ammonia Markets Could Also See Impacts

Key Findings

General Thoughts: We focus on USGC storm Francine and those most notably impacted if it makes a direct hit on Louisiana, as it favors tighter US polyvinyl chloride (PVC) markets and keeping some other markets relatively tight.
Supply Chain/Commodities: While some markets could tighten from Francine’s impact, the potential shutdown of ethylene derivative units, including PVC, could loosen USGC ethylene markets – Louisiana is net short ethylene.
Energy/Upstream: We discuss electricity price inflation in regulated utility markets as higher growth capital costs are spurring efforts to raise prices to ensure adequate returns – this trend is unlikely to reverse anytime soon.
Sustainability/Energy Transition: We highlight and discuss the power grid development backlogs facing many US states and Europe striving to meet demand, and flag falling lease rates for EVs as dealers seek to clear inventory.
Downstream/Other Chemicals: The growth in Chinese exports relative to imports remains an ongoing trend, and it not only signals a weak Chinese economy but also the exporting deflation/low-cost goods to other markets.