Reports

Latest Reports

 

Our most recent publications are summarized in the blocks below and a more complete list can be found to the right of the blocks. Please call us with any questions.

A Tricky Tomorrow – Sector Momentum Durability, Energy Transition Complexity & Political Uncertainty Are All Scary

The World needs chemicals and polymers, and 3Q results broadly confirm this case and show a stronger recovery post-2Q COVID lows than most anticipated only a few weeks ago. We discuss the patterns of consumption and the current resurgence of COVID, resulting in pockets of demand being stronger for longer.
Separately – if we look at the Presidential debate last week we note Joe Biden’s intent to address climate change goals, but also note the extreme difficulties that he (and others) have in articulating the path – we provide some perspective.
We discuss our sector views given historic levels of uncertainty with most forecasts, both from a macro level, because of COVID and the US election, and from a chemical supply/demand perspective because of so much capacity off line and because of the varied timelines for different supply chains to return to normal despite current global economics generally encouraging all to operate.

Over The Hills But Not Far Away – Lean Supply Chains & Outages Mask Production Potential

US chemical production improved on a month-to-month basis in 3Q20 but levels remain lower YoY – we discuss the current production setting alongside multiple 3Q20 sector earnings report to display rising commodity price risk.  
We flag several corporate news/update items worth note today (e.g. Air Liquide, Dow, Hexpol, Mattel, Sonoco, and Ube Industries 3Q updates, etc.).
Other items of note today range from Asia butadiene and styrene price strength, to a flattening of the global petrochemical production cost curve WoW, to global government stimulus efforts to support consumer health.

Connecting The Dots With Different Plots – 3Q20 Chemical Sector Results & Broadening Data Sets

Chemical sector 3Q20 results broadly reflect QoQ demand growth, lean supply chains and higher per-unit margins – we foresee many of these trends holding for most of 4Q before fundamental headwinds begin to multiply.  
We highlight several corporate news/update items worth note (today e.g. Alpek, Axalta, Dow, Sasol, Sika, Valero and Yansab 3Q20 updates, etc.).
Other items of note today range from Asia butadiene and butanediol price strength, to WoW reductions in US refining operating rates and rail traffic, to multiple global petrochemical facility start-ups targeted for mid-to-late 4Q20.

Uncharted Waters – Planning When History Is No Guide

Readers of our Daily work will be familiar with the unexpected boosts to chemical demand and profitability that have characterized 2020. COVID has upended conventional thinking and calls into question any historic proxy.
3Q was better than expected for many chemical companies and better than their own guidance, suggesting many are surprised by the state of the recovery. Recent consumer spending data sheds some light but also raises questions.
Our general view is unchanged, but the longer demand is inflated, and prices high, the more capacity will be encouraged – especially in Asia and the bigger the fall will be when demand normalizes. We discuss likely winners and losers.

Isolation Renovation & Food Packaging – Stand-Out 3Q Demand Ascensions With Uncertain Dimensions

Chemical sector 3Q20 results this week display notable strength in home improvement product demand and global food packaging demand – we see demand optimism continuing in 4Q but rising stamina concerns in 2021.    
We highlight two exhibits: a) US LDPE integrated margins relative to the five-year range – we discuss our concerns with profit margins despite better-than-expected demand; and b) AkzoNobel paints/coatings volume trends.
Other items worth mention range from corporate items (e.g. AkzoNobel, Silgan, Stepan, Avery Dennison, WD-40, LG Chem, Saudi Kayan results), to several price hike initiatives, to the ex-China push for rare earth materials.