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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.
Chained To The Rhythm – Global Chemical Market Volatility To Be Higher In 2023 Than Most Appreciate
Daily Chemical Reaction Chained To The Rhythm – Global Chemical Market Volatility To Be Higher In 2023 Than Most Appreciate Key Points: C-MACC Co-founder, Graham Copley, will be in Europe for client meetings next week, and its other co-founder, Cooley May, will finish...
Fatal Attraction – 1Q23 US Petrochemical Margin Boost Will Lure Production, Profit Squeeze Ahead For Most
US petrochemical markets have lost much of the positive momentum seen in early 2023, and it could reverse abruptly in 2Q23 as domestic production rebounds amid now elevated margins.
We highlight an outlook for crude oil and natural gas values in 2023, with the state of Chinese demand being a swing factor, and show US ethylene production costs relative to Europe and Asia.
US polyethylene producer nominations call for a contract price hike in March, though regional spot and feedstock market trends do not support it. Early-year positive momentum has lessened.
Global gov’t energy transition policies and regional differences are a focus at WPC. The EU set up a regulatory framework to enable the transition, but the US IRA creates a business case for it.
We discuss North American rail volume and Baltic Exchange Dry Index movements that, on a combined basis, suggest that production cutbacks have occurred in support of market balance.
With A Spotlight On Material Shortages – Efficient Use Matters
Was the IRA really intended to support the idea of banks of expensive electrolyzers sitting idle for 70% of the day? Profitable but a poor use of resources.
Not enough is being done to think this through – storage is the go-to solution but requires overbuilding of wind/solar and expensive batteries – more resources.
We would have much less of a critical mineral issue if they were used efficiently, and while this is a challenge, it is one worth pursuing – nuclear would help.
We also look at the benefits of modular and standardized production versus customized solutions – standardization can lead to much more profit.
Otherwise, the WPC conference is driving a lot of discussions around recycling and sustainability and furthered many energy transition conversations from CERA.
Winners & Losers Will Emerge – Clean Tech & Strategies Will Win On Merit, Not Participation & Intentions
Global petrochemical producers outline their market and growth ambitions at WPC. Though all have views, strategies vary, and some bold, risk-adjusted moves lack appreciation in our view.
Russian energy flows to China have risen since the Russia/Ukraine conflict. Prices are hard to pinpoint, but this trend favors China’s global petrochemical feedstock production cost position.
We highlight NW Europe spot polyethylene and polypropylene prices relative to the US, flag Olin restructures and cuts epoxy production due to weak demand, and some India market news.
We highlight waste-to-energy market developments, a biomass-to-fuel project development under review in Louisiana, and multiple global clean energy news items worth considering.
We discuss US chemical manufacturer shipment trends and inventory-to-sales ratios suggesting limited supply issues. On the other hand, our demand concerns remain elevated.
Changes – Chemical Companies Respond To Investor & Climate Activist Pressure, Return Profiles In Flux
Global chemical feedstock price shifts and a push toward net zero have shifted many business plans drastically during the past 24 months, with some carrying more return risk than others.
The global chemical feedstock market significantly favors North American producers relative to those in Europe and Asia, given its cheaper natural gas/NGLs and wide oil-to-gas ratio.
LyondellBasell provided polyolefin growth assumptions through 2030 and gave O&P business guidance for 2027 at its recent investor day – we comment on global supply and demand trends.
We flag LyondellBasell, Dow, and BASF efforts to cut carbon emissions and boost product circularity while being focused on growing returns – we compare and contrast these initiatives.
Global container freight rates on average have returned to 2017-2020 average levels, with the major outlier being elevated Europe to US rates. Dow reiterates its 1Q23 macro outlook.
Global Chemical Update – Atmosphere Shift
C-MACC co-founder, Cooley May, will attend the World Petrochemical Conference this week, where global production shifts, circularity, & GHG emissions will be more in focus than gross capacity growth.
The recent CERA conference focused more on clean energy and energy producers extending product chains into chemicals as fossil fuel demand declines – a growth development that WPC will also target.
US ethylene producers are profitable across all primary feedstocks, with propane cost advantaged to ethane WoW. Asia and European ethylene production margins have improved but remain negative.