Sprockets! – Global Trade Tensions, Misaligned Policies, & Worsening Competitive Positions

Key Findings

General Thoughts: Europe is in an already difficult global trade position because of its high relative costs and slow, mostly mature demand profile – Trump tariffs could worsen an already dire European competitive situation.
Supply Chain/Commodities: We discuss Braskem 3Q results and its view of polymer spreads and asset utilization rates in Brazil after recently launched import tariffs, and headwinds facing chemical producers in Asia Ex-China.
Energy/Upstream: We highlight the NRG Energy 3Q24 earnings report, and its financial outlook comments, and related electricity price sensitivities that suggest a view of flat-to-up rather than lower electricity prices ahead.
Sustainability/Energy Transition: We discuss Li-Cycle 3Q24 results reflecting continued losses and DOE funds to the company being put toward lifting its production into an already oversupplied market that could backfire.
Downstream/Other Chemicals: We highlight global food prices hitting the highest level in 18 months, according to UN data, and the strength in global average container freight rates relative after hitting 2H24 lows in October.