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.

Evaluating The Relatives – Ex-US PE Spot Prices Question The Durability Of Domestic Premiums

We compare spot polyethylene (PE) price developments in the US with overseas markets and show integrated profit margins between regions – we model US tightness dissipating on a relative basis as production returns.
Dow highlights that 3Q20 conditions are better than expected (this aligns with others and our view), LyondellBasell pushes PP price hikes for October and we note several other corporate items (e.g. Repsol, Polyplastics, PPG, Eni, Arkema)
Other items worth note today include industry comments noting increasing Asia petrochemical supply ahead in 4Q20, US container rates hitting record highs and Ford announcing plans for its F150 electric pick-up truck.

A Dragon Pulls The Vinyl Wagon, Propylene Views & US Chemical Rail Traffic Faces Bumpy Tracks

China polyvinyl chloride (PVC) prices move higher this week both on an absolute basis and relative to other major polymer values – we highlight a few items supporting our view that Asia demand is pulling PVC values higher.
USGC refinery operating rates bounced higher WoW, USGC PDH units reflect a profit and USGC propane co-product integrated cracker feedstock costs reflect a similar level to ethane – with these items consider, we continue to see PGP support near-term (relative to ethylene) and discuss our case.
Other items worth note today range from price increases in US polyester polyols, to USGC naphtha and propane setting sail to Asia, to mounting global news surrounding the Hydrogen market as a clean energy resource.

Supply Chains Easing Back To Normal – Still A Glimmer, But Signs Of Reset Emerge

We find initial evidence that recent global polymer price upticks in part as a result of US disruptions is spurring production abroad – we think Asia spot trends relative to US values and Asia integrated margins support our case.
We now see a limited chemical sector impact from Hurricane Sally, discuss the 3M update and re-issuance of 2020 profit views at Brenntag and Uponor, and highlight the Celanese acetyl intermediate price hikes issued overnight.
Other items worth note today include additional costs for Braskem chlor-alkali ahead of a planned late 2020 restart, views on refinery investments to spur chemical production, and thoughts on more global chemical projects.

Global Chemical Update – Lay Down Sally  

USGC storm Sally is targeting East Louisiana/West Mississippi this week, and we see notable production risk in chlor-vinyls. Given offline capacity at Westlake in Lake Charles after Laura, an open US vinyl-chain export window to Asia (Ex. 1, 43) and healthy demand, we foresee price strength in US PVC.
We reiterate our view that recent windfall profits following Hurricane Laura will only work to spur global production of both PE and PP – we flag that US PE and PP values reflect spot premiums relative to Asia currently.
Other items of note range from the global decline in naphtha values WoW, to the modest fall in US spot ethylene relative to an uptick in propylene WoW, to USGC natural gas weakness outpacing US spot methanol declines WoW.

Global Climate Change and ESG Voices To Get Even Louder, Recent Chemical Strength Peaking In Volume

This week we published Perspectives research on ESG investing and climate change, which are connected but a little different, in that the climate change lobby has a lot more consistent data to work with then the ESG crowd – for now. We will follow this research with work during the next few weeks that targets “the Hydrogen Economy” and plastics recycling – both of which are evolving quickly.
The November election in the US could alter the terrain for the subjects outlined above – probably under the umbrella of emission reductions and pollution more broadly, but even if the politics remain unchanged in 2021, public and stakeholder pressure will likely have an increasing impact and any corporate who ignores this development faces a greater risk of falling equity values and more expensive debt.
This week we continued to see Laura driven spikes in polymer prices as production remained curtailed in the Lake Charles area – mainly because of power issues. With feedstock costs also lower MoM – again because of Laura driven demand cutbacks, Sept. will give (short term) windfall profits to the polyethylene and polypropylene producers operating. But sharp reversals likely lie ahead.