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.

Public Image: Driving Capital Investment and M&A

We will cover the power issues in Texas – and which have delayed this report – next week – once the dust settles. There are lots of strong opinions on what went wrong at the moment, and not much analysis – we will provide some ideas
We focus on valuation this week and what it may do for the mountains of available capital looking for an ESG home – many are looking to shine a bright (socially conscious) light on their image and investment, regardless of cost.
We also take a look at both hydrogen and CCS as they both figure meaningfully in the objectives of both Shell and Bill Gates’ investments – this is also likely to be part of the Texas power solution (but more on that later).

Baby, It’s Cold Outside – USGC Production Issues Further Tighten Markets, Inflation Concerns Mount

USGC production issues this week resulting from the Winter storm add to a series of issues that began in 2Q20. This report comments to the price spikes that we see this week and growing buyer pushback in some product chains.
We flag pertinent chemical sector corporate items (e.g., Adeka, AkzoNobel, Albemarle, DSM, Ecolab, Showa Denko, Repsol profit news; Stepan, BASF, Philips Carbon Black, Total, Sumitomo, & OxyChem production updates)
Other relevant items within this report include commentary on chemical rail traffic WoW, the recent strength in US retail sales, and generally market commentary on impacts from the US winter storm and a recent earthquake in Japan that have only added problems to already out-of-whack supply chains.

Global Chemical Update – A Winter’s Tale

US spot polymer values continued to walk higher relative to Asia and NW Europe WoW. This report highlights findings from US winter storm issues to limited polymer availability working in favor of domestic market strength.
Other items highlighted in this report: Ex-US naphtha values drop relative to USGC ethane WoW; USGC propane reflects a US ethylene cracker profit advantage comparative to USGC ethane; China spot polymer prices reflect price support WoW, though most remain well below relative US levels.

Electric Avenue: Getting Wider Every Day, But Not Enough Alone to Grant Success To All Inputs

The thirst for EVs is growing – in part because of incentives and in part because of a wave of new vehicle availability, which will only accelerate from 2021. EVs are good for lightweight products – aluminum and plastics – to offset battery weight.
But it is a case of “chips with everything” and the EV makers are as much at risk from the semiconductor shortages as the traditional industry. Recent estimates suggest that 2021 global auto production could be held back by as much as 10%.
The real loser is likely butadiene, as incentives to produce are high, while demand is likely to be held back by lower vehicle new builds as well as the lingering impact of COVID, vehicle miles traveled, and more limited tire wear and tear.

Crossroads – Positive Sector Profit Updates Persist; Timing & Risk Of Supply Responses In Question

Chemical intermediates and derivatives values are broadly trending higher amid optimistic demand views and still lean supply chains. This report flags a few spot trends and 4Q20 result takeaways that question profit durability.
We flag relevant corporate items (e.g., Alpek, Huntsman, Chemours, Gail, Nippon Soda, Tikkurila, Sumitomo Chemical & Sensient Technology business updates; Dow, Huntsman, Amsty & Total production & price news)
Other relevant items in this report include Huntsman commentary on the MDI market from its 4Q results alongside MDI price hike announcements, a few thoughts on Butadiene price trends relative to Ethylene, a display of the energy-transition alternatives to hydrogen, and high container freight rates

Emotions In Motion – Demand Optimism High, Production & Raw Material Pessimism Persists

Global chemical 4Q20 results overnight further confirm raw material inflation concerns among non-integrated producers. This issue, along with new ESG initiatives and auto build constraints, are discussed in this report.
We flag relevant corporate items (e.g., Air Liquide, Clariant, ICL, IFF, Kaneka, Kemira, Nippon Paint, Tokai Carbon, Toyobo & Umicore business updates; BASF, Borealis, Evonik, Lanxess & Sibur production news)
Other relevant items in this report include a view of US refinery operating rates and chemical rail shipments WoW, comments to the chip shortage that is impacting auto production, and notes Shell’s energy transition milestones as an example of how ESG initiatives are having broad restructuring impacts.