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.

Way Of The Dragon – Thoughts Following Sinopec Meeting, Asia Chemical Values Kick Higher WoW   

Two items focused on Asia today: a) we view Sinopec on a path towards growth downstream and see its global competitive position expanding over time; and b) Asia prices are rising, but many remain below USGC spot levels.
We note numerous corporate items (e.g. Gurit wind read-throughs positive for Huntsman; TPC Group operational issues in Houston; Covestro TDI force majeure; Occidental views on US oil production, etc.)
Other sector items worth a mention today range from USGC polymer values reflecting reduced upward price momentum, to US natural gas price strength, to Ikea buying back used furniture in some areas for recycling.

Space Oddity – Demand & Production Factors Bring Gravity, US Polymer Prices to Leave the Capsule?  

US avg. polymer prices rose ~15% MoM in September and reflect a ~24% higher level since the start of 2020 per our model – we broadly discuss recent demand, production, and cost curve trends that question price durability.
We highlight numerous corporate items worth note (e.g. BASF restarts TDI; Gevo collaborates with Total; Satellite Petrochemical begins ethane-fed cracker start up; Henkel invests in US advanced materials start-up, etc.)
Other sector items worth mention today range from positive developments in hydrogen, to US oil and gas producers seeing tighter credit terms, to global spot market polymer price strength to start the week per our price model.

Dancing On The Ceiling – US spot PE Moonwalks Above Europe & Asia; Meeting Sinopec Tomorrow 

US avg. high density polyethylene spot values currently reflect a premium to avg. levels in Asia and Europe (Ex. #3) – while US producers are now dancing, we foresee a setting of blown speakers and twisted ankles ahead.
We highlight numerous corporate and sector items of note (e.g. thoughts before our meeting with Sinopec tomorrow; BASF polyol price hikes; outage updates in-and-around Lake Charles; Wacker Chemie expansion news, etc.)
Other items worth mention today range from strength in China styrene spot values, to recent global petrochemical cost curve developments, to a walk around the globe highlighting sector and end-market demand news.

Global Chemical Update – Blaze of Glory

We find continued strength in global petrochemical spot markets WoW amid production uncertainties (i.e. Hurricane Delta, etc.) – we think the focus now will incrementally shift from the surge in polymer prices in 3Q20 to the ability to hold current levels as global production surges in response.  
Key items this week include: China polyethylene price support WoW; avg. China PVC and caustic soda values increasing WoW; global spot methanol markets seeing support as US costs surge; and strength in Asia polypropylene.    

Historic 2020 Distractions To Dissipate, ESG Issues To Escalate

Supply chain imbalances and commodity price volatility have both been at historic levels as a result of unprecedented issues (COVID-19, Historic US Hurricane Season, etc.) in 2020 – we advise chemical companies to approach much of the near-term price/margin strength with skepticism and focus on liquidity, as ESG, and more specifically climate change and plastic waste, related costs are set to rise.
We expect company focused carbon targets and further actions on the circular plastic economy to come “rapid fire” during the next 6 months. We also expect the financial market treatment of corporate positioning will favor those with actual plans and progress milestones relative to than those with less tangible rhetoric.
Last week, we found more sector corporate releases highlighting 3Q20 updates that exceed Street expectations and evidence of commodity chemical price/margin support in the midst of Hurricane Delta – though we expect sector optimism to stay high near-term, we are concerned that late 4Q and 1H21 expectations are too high.

Runnin’ With The Devil – 3Q20 Results Set To Beat Low QoQ Views, Outlook Miscues At Record Levels

More sector 3Q preliminary results rolled in overnight showing strength QoQ relative to Street views and commodity chemical prices/margins reflect broad-based strength during the quarter – both items lead us to expect sector optimism to remain high near-term before sustainability concerns surge.
We note several relevant corporate news/update items today (e.g. BASF, PPG, Kemira and Henkel 3Q updates; CP Chem circular PE news; Sumitomo investment update in auto parts; LyondellBasell PP update, etc.).
Other relevant items today range from the monitoring of Hurricane Delta, to OPEC views of the energy sector, to record polyethylene prices in Brazil.