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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.

Capital Costs are Driving Investments Rather Than Operating Costs

Capital Costs are Driving Investments Rather Than Operating Costs

The number of inefficient projects relying on free power or large incentives to drive acceptable projected returns is rising. Operating costs will matter long term!

The hope of free electric power is behind many decisions, but power demand estimates keep rising, suggesting that free power is decades away in large volume.

More and more analyses and opinions are emerging around limiting reliance on China for batteries, but battery materials and components also need attention.

Recycling is having a bad quarter as virgin polymer prices fall in the West – many projects risk financial challenges as costs are fixed, and margins are collapsing.

We also look at the first large DAC project on the Gulf Coast, some more forecasts for ammonia demand, and many substantial looming ESG goals.

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Happy Thanksgiving, But A Likely Cold December Ahead – Global Chemical Profits To Shiver Into 2023

Happy Thanksgiving, But A Likely Cold December Ahead – Global Chemical Profits To Shiver Into 2023

The global commodity chemical market reflects oversupplied conditions in late 4Q22, heightening the risk of a further profit weakness into yearend if energy prices inflate.

The increase in global natural gas prices WoW is a notable concern for North American chemical producers, as it implies a flatter global production cost curve into yearend.

We highlight global ethylene production margins and cost curve developments by region in 2022, though most global product markets reflect oversupply.

We highlight the cost curve displaying major CO2 mitigation strategies and discuss our concerns with the acceptance of premium “green” prices near term in some products.

We discuss the Deere business update and 2023 outlook showing a continuation of benefits from a strong farm economy that aligns with our agriculture sector view.

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Heading South – US Polypropylene Contracts Fall, Downward Pressure To Persist Relative To Propylene

Heading South – US Polypropylene Contracts Fall, Downward Pressure To Persist Relative To Propylene

North American polypropylene (PP) prices face downward pressure as more domestic and global production and logistic improvements position supply to outpace demand.

We discuss the Shell petrochemical development in the Northeast US, which benefits from a low-cost ethane feedstock market that could support more chemical projects.

We discuss recent contract price declines for US PP and propylene and why we continue to take a cautious view of PP markets as availability improves into 2023.

We discuss our concerns with recycled polymer profits, as prices fall relative to costs, and we highlight a direct air capture (DAC) development in Louisiana worth noting.

Global container freight rates on avg. continue to trend toward 2019 levels as global supply indicators improve, working against many manufacturer price hike outlooks.

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Global Chemical Update – Candle In The Wind

Global Chemical Update – Candle In The Wind

Global polymer prices, on average, step lower WoW relative to feedstocks, pushing chemical sector profit lower WoW. We discuss why a near-term sector profitability rebound is unlikely.

Despite a weak near-term chemical sector profit setting, we add to views put forth in our Sunday research discussing the push among oil and midstream energy companies to expand in this area.

USGC ethane values held up WoW relative to Ex-US naphtha values WoW. However, US natural gas prices significantly rose compared to Brent Crude WoW, suggesting a flatter global chemical cost curve.

Macro indicators for farm-input sellers showed support WoW, as corn, soybean, and canola prices held up WoW. Ammonia values also showed support but lower margins due to higher natural gas costs.

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Hungry Heart – Energy Sector Boosts Investments In Petrochemicals Amid ESG Pressure & Growth Concerns

Hungry Heart – Energy Sector Boosts Investments In Petrochemicals Amid ESG Pressure & Growth Concerns

Despite weak global commodity chemical fundamentals, capital investment in this area reflects support as energy sector participants push their portfolios downstream.

We discuss the drop in Brent Crude relative to US natural gas WoW and add to our general views on global petrochemical cost curve developments in 4Q22 and 1H23.

We highlight US propylene and ethylene spot market movements compared to their October contract settlement prices and price developments for both into the yearend.

We flag the importance of cutting emissions from the fertilizer sector to decarbonize food markets and discuss the rising low-carbon ammonia demand beyond fertilizer.

Our chemical sector supply concerns are much lower than demand concerns into 2023 – we flag freight rates, rail traffic statistics, and retailer reports supporting our view.

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