Our most recent publications are summarized in the blocks below and you can browse through all our reports to the right of the blocks. We encourage you to request a trial for full access to our research.
Blow At High Dough – Elevated Prices & Government Incentives Lift Profit Cycle Risk For Some Chemicals
The global commodity chemical industry faces profit cycle risk from energy producers expanding downstream and gov’t incentives favoring “new” technology deployments.
We discuss issues with the Freeport LNG start-up and NW Europe natural gas price strength relative to US levels, which is a near-term plus for US chemical producers.
We highlight Olin initiatives to maximize the values of the ECU and why this helps new technologies/other producers advance their projects, a potential long-term risk.
We discuss the Yara agreement to ship green fertilizer to Argentina to decarbonize potato production and the global EV deployment impact on power grid reliability.
We discuss the latest US job report, highlight announced layoffs at Amazon and Walmart, and flag Kroger’s view that food price inflation is beginning to moderate.
Got A Hold On Me – Energy Transition Metals To Stay Tight, Most Others Face A Holiday Loneliness Fight
We anticipate clean energy materials and fertilizer prices to reflect more support than most commodity chemical market values amid production improvements into 2023.
We highlight the drop in Brent Crude values relative to natural gas in 4Q22 and the strength in US diesel prices relative to gasoline, among other relevant global trends.
We discuss the steepness in Asia ethylene production costs relative to the US, partly due to low co-product values, and note recent European polymer price movements.
We discuss why construction costs for SMRs pose a significant challenge for new nuclear capacity and frame our bullish view of renewable energy certificates demand.
We discuss the contraction in both the China and US PMI contracted in November and the uptick in US consumer spending in October led by higher durable-goods purchases.
COP27 was the ideal opportunity for the natural gas lobby to make its case, and while the purists are objecting – those focused on energy security cannot resist.
Gas oxy-combustion with CCS should see a boost as users look for baseload alternative to wind, solar and nuclear – hydro needs a low-cost breakthrough.
Labor remains a major bottleneck for energy transition as old energy jobs are still growing and not providing the labor pool for new energy – training is needed.
2023 is a critical possible tipping point for ESG investing, especially in the US – regulators need to step up to improve the image – but be impeded in the US.
Otherwise, we look at opportunities for chemical recycling and waste to energy, and more consolidation in RNG.
Global chemical product market indicators reflect improving availability, suggesting considerable risk amid an energy price surge – the risk facing most markets is sizable.
NW European natural gas prices have surged relative to US levels, and we discuss why the major test will be 1Q23 (not December). We also highlight US production trends.
We discuss chemical distribution market consolidation and flag projected supply additions in markets, such as HDPE and methanol, where margins are presently low.
bp and Shell are buying renewable natural gas (RNG) assets, which is a plus for the sellers, but we discuss why benefits to Shell and bp will likely be relatively small.
Global container freight rates, on average, are trending toward 2019 levels, keeping our concerns of an international slowdown in motion despite a few positive updates.
NW European Natural Gas prices have surged higher following their mid-2H22 flop, a risk we noted in our early 4Q22 research for European chemical production but a net plus for US exporters.
Global nitrogen/ammonia fertilizer prices held up WoW, helped by rising production costs, which were considerably higher in NW Europe relative to the US. A notable plus for domestic producers.
USGC ethane values rose relative to Ex-US naphtha values WoW, flattening the global ethylene cost curve a bit at the feedstock level. US natural gas also surged higher compared to Brent Crude.
Global polymer values, on average, were modestly lower WoW, with polypropylene values seeing the most significant decline per our model, while polyethylene reflected the most support.
As worsening business conditions into yearend lower 2023 outlooks, we think money will be made by those making consolidation moves versus those who hide.
Almost no one has a worrying balance sheet among the large materials companies, and those who choose to acquire or merge will likely drive growth.
The US is heading into its weakest period of chemical profitability since the shale wave began – local oversupply is upsetting the competitive advantage dynamic.
As OPEC manages oil prices, US oil production should rise, eventually helping natural gas prices, but ensuring plenty of NGL supply to support ethylene growth.
Otherwise, we look at more problems for Europe, inflation or deflation in 2023, cost curves in energy transition, the strong farm economy, and a weak China.