Chemical producer business updates highlight persistent efforts to push prices to recover higher costs. This report discusses several factors that could keep the inflationary conditions in motion, favoring US premium prices. We highlight pertinent energy, chemical, and other corporate updates (e.g., Ashland, Axalta, Eastman, Freeport LNG, EQT, Covestro, BP, & others). We note relevant ESG items, ranging from the construction of a notable chemical recycling facility in France to several renewable industry updates. We also highlight our weekly ESG thematic published later today in LINK. We discuss numerous other pertinent chemical sector items in this report.
The global petrochemical production cost curve remains favorable for US producers relative to Asia producers. We discuss a few prevalent factors that could limit US integrated polymer producer margin risk in 2022. Our Sunday Thematic, Be-Laboring The Point Of Worker Shortages, studies risks cited in recent research, Take That Job And Shove It – Labor Concerns Rise As A 2022 Risk, Logistic & Input Cost Issues Still Notable. Other global commodity trends flagged in this report comprise monomer, polymer, and feedstock indicators relevant to gauging sector profitability.
Recent chemical producer updates and macro news provides evidence of mounting concerns with sourcing labor in the US. We discuss the Sherwin-Williams business update and flag several emerging risk factors to consider. We highlight pertinent energy, chemical, and other corporate updates (e.g., Sherwin-Williams, LyondellBasell, SABIC, EDF, DIC, LG Energy, & others). We note relevant ESG items, ranging from levers needed to decarbonize LNG to our research titled, Hydrogen – Hype, Hope, and Headlines. We discuss numerous other pertinent chemical sector items in this report.
We introduce our hydrogen stock index and make a constructive investment case for equipment makers, which comprise most of the index today. Green hydrogen producers with strong balance sheets will likely make it through, but many start-ups will get squeezed by high costs and competition. Monolith has an interesting offering, and DOE backing should get a first world-scale unit built – a greater problem for producers of carbon-black than hydrogen. We look at what we expect to be an onslaught of bullish headlines to start the year, with new technologies and new participants looking for backing & support. Otherwise, we discuss natural gas, carbon values, and recycled polymers (again), plus some thoughts on Origin Materials and our new ESG stock indices.
The US faces short- and long-term labor challenges, an issue that is prevalent in other regions and globally ranks behind only COVID and inflation in CEO worries. Short-term worker shortages may continue while Omicron spreads, and Sherwin Williams will unlikely be alone seeing a negative impact on near-term results. A structural lack of labor could thwart long-term manufacturing/construction ambitions; costs will rise to attract skilled workers from early retirement/childcare. We discuss strength in construction chemicals despite the concerns above and question why Huntsman is being bothered by an activist when things look good. Otherwise, we highlight some more energy issues and look at inventories.