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.

Upstream Market & Forward Curve Views; Corporate Updates

We frame recent shifts in upstream crude, natural gas and NGL values, and discuss the forward curves and why they may be (and likely are) wrong.
We find chemical spot price support in China (polyethylene, both caustic soda & PVC, etc.) and view it as a near-term plus for US producers.
Other items of note include an Ingevity business update, the US chemical freight carload uptick WoW and Sasol divestment commentary.

Ocean view – New Braskem, TX Polypropylene Facility Will Swing US to Net Exports

Braskem announces construction of its La Porte, TX polypropylene (PP) plant is complete – a significant supply addition in a weak demand period – we take a broadly cautious global view of the PP market in 2H20 and 2021.
We discuss a business update from Solvay that notes relative strength in construction relative to autos and aerospace – these trends align with our view, and recent commentary from Huntsman and Sherwin Williams.
Other items today range from naphtha markets seeing strength, the likely US June polyethylene contract uptick, and global chemical demand in limbo.

Cost Curve Views, Growth Capex Blues & The Coiled Consolidation Spring

We think industry restructuring and consolidation will be primary sector themes during the next few year – we provide a basis for our view from recent cost curve developments, upcoming production additions (notably Asia) and relative to basic chemical (notably ethylene) price trends.
We discuss business updates from Huntsman and Sherwin Williams that support our case for strength in Building & Construction markets.
Other items today range from oil-and-gas commentary, to global methanol production additions and a discussion of ACC specialty chemical data trends.

Aramco, Sasol and? – Structural Change In Basic Chemicals

While expected, the completion of the SABIC acquisition by Aramco last week could drive meaningful and not necessarily helpful change for much of the chemical industry – given Aramco’s global expansion ambitions in Chemicals.
Separately, as bids emerging for a share in the Sasol facility in Lake Charles, a different scale of transaction and driven by very different motivations, we discuss motivations and what might make sense for a buyer.
Early signs of what is coming as companies likely emerge from this downturn with different perspectives, growth estimates and different stakeholder priorities.

Pushing The Dragon – Global Chemical Update

Spot prices moved favorably for US ethylene derivative sellers WoW, and we frame the HDPE market shifts facing producers, such as LyondellBasell.
Unlike the strength witnessed in most US commodity chemical spot prices WoW (that came despite lower raw materials), we find US methanol declined – we discuss the market setting facing producers, such as Methanex.  

You Can Live In A Car, But Most People Prefer Houses – Building Products Likely To Outperform Autos

We see mixed signals for both building and autos but expect building and construction to show the more significant recovery – a positive for vinyl-chain (PVC) producers, such as Westlake, Shintech, OxyChem, Formosa (and Olin for EDC).   
The chart of the week focuses on the disconnect between what most industry observers/investors are watching (oil and gas) and what really matters for global ethylene cracker operators (ethane and naphtha). The ethane premium to natural gas has increased and of the strength in naphtha relative to crude – see chart #2. Cheap gas relative to crude is positive for US chlor-alkali and methanol producers.
Asia ethylene price strength continues; something we still believe will a 1H20/early 2Q20 event, as our findings suggest it is already soliciting a supply response, as evidenced by Enterprise running its US ethylene export terminal at or above current design capacity and a rising level of product flows targeting Asia.