Chemical Market Analysis
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Chemical & Associated Industries
C-MACC has extensive expertise in the chemical and related industries. With a background in both finance and chemistry, we offer services that provide market analysis, news discovery, expert perspectives, and valuable data. Our services are used by corporations and investment firms to gain insights and make informed decisions.
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what we are talking about today
Daily Chemical Reactions
Prices Inflation Is Slowing, But Will It Result In Demand Growing? Meanwhile, It’s Negative For Manufacturers
Global price inflation has slowed in 2H23, as shown recently in US and other country reports, but it is much more positive for global consumers than manufacturers, especially in the West.
The recent decline in Brent Crude relative to US natural gas has returned the oil-to-gas ratio to pre-COVID levels and pushed the global petrochemical cost curve lower, favoring lower prices.
We discuss expanding Chinese petrochemical production working in favor of keeping global prices low, which is a headwind to Ex-China chemical producers and their energy transition.
US refinery margins have fallen recently, in part due to gasoline prices falling more than crude oil values – US ethanol margins remain relatively elevated, likely to spur domestic production.
We discuss a few happenings in global crop markets, two long-term outlooks of the hydrogen and recycling build-out in Europe, and take a look at global LNG import and export capacity.
Tighter Ammonia Markets – A Plus For Producers & Its Clean Transition, Negative For Non-Integrated Derivative Profits
C-MACC Co-Founder Cooley May is attending the Ammonia Energy Association conference this week, with his meetings spanning ammonia suppliers, buyers, and their support industries.
Ammonia prices surged in 2H23, which has cut non-integrated derivative margins and shows the significant benefits of integrated producers, particularly those with a cost advantage.
We flag our latest hydrogen economy research, Blue Is The Color – Ammonia Is The Game, that discusses the rush to grow blue capacity amid its fewer challenges than with green production.
We discuss ExxonMobil’s efforts in lithium, a global polyethylene market facing oversupply, and highlight recent chemical feedstock movements favoring lower global chemical prices ahead.
The Li-Cycle facility development pause adds to a rising global “pause list” due to increased project costs and return issues. We also discuss numerous relevant downstream demand trends.
How The Markets Look
The Weekly Catalyst
Global Chemical Update – Bracing For A Kick To The PP
The weakness in Brent Crude Oil values relative to US natural gas during the past three months has favored lower polymer prices despite outages working in favor of some, such as polypropylene (PP).
We view PP as likely to weaken more than polyethylene (PE) and polyvinyl chloride (PVC) from current levels by 1H24, and we view PVC as the most likely to see an outsized early 1H24 price rebound.
US propane is the most cost-advantaged integrated US ethylene cracker feed, and US PDH margins reflect a 2H23 high and 24% above its 10-year average – both favor propylene and PP production.
weekly sERVICE
Hydrogen Economy Update
Finding Alternate Sources of Hydrogen Will Likely Be Critical
As low-cost green hydrogen becomes more elusive, we would expect increased efforts to find alternative sources of hydrogen. Gasification and pyrolysis are technologies that show promise.
The history of gasification is not good, but technology is improving, and syngas production can drive both fuels and materials production – finding low-cost feedstock is the challenge, as is scale.
Pyrolysis is very dependent on what it is you are heating up and your source of heat – as with gasification, you do not produce a pure stream of hydrogen, but it can be captured for fuel/materials.
Europe appears very disadvantaged in the table below as it does not have the low-cost feedstocks or the energy at the right price – Europe should rethink its attitude toward CCS to add some options.
Our work with multiple clients and many technologies suggests that there will likely be opportunities for all options, but it will be very situation and location-specific.
Valuable insights for critical subjects
Sustainaility & Energy Transition
Emission Impossible: Where Is Tom Cruise When You Need Him?
Regardless of the location of COP28 and who is hosting this was always likely to be a showdown between those wanting a practical approach & those on a Mission.
We cannot Cruise to any lower carbon scenario easily, and unless there is a route that minimizes economic harm, we risk Fallout, and Rogue Nations saying no.
A successful COP28 will turn the attention more towards emissions and away from exiting fossil fuels quickly, driving a coordinated effort to decarbonize fuels.
But the emission focus will raise the bar for all, and material, fuel, and vehicle do-gooders will need a more intense focus on their own footprints, metals also.
Otherwise, we look at options for the NOCs and the IOCs, grid infrastructure, the amount of US-based investment relying on CCS, EV consolidation, and batteries.
what we are covering
Sunday Thematic & Weekly Recap
Taking The Downturn Seriously: Most Are Getting There, Slowly
As we reach the tail end of earnings season, we see examples of feedstock advantages providing a competitive edge and global competition intensifying.
Companies are beginning to rethink strategy and revising cost reduction targets upwards, but we think much more will come in a more challenging 2024.
2022 C-MACC Coverage of Companies and Commodities
