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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.

Slow Burn – Global Chemical Market Oversupply To Keep Most Cost Curve Benefits In Check, For Now

Slow Burn – Global Chemical Market Oversupply To Keep Most Cost Curve Benefits In Check, For Now

Recent global chemical production cost movements and US price support have lifted domestic market sentiment, but our study suggests low run rates will limit the benefit.

US natural gas and USGC ethane values fall further WoW relative to Crude and Ex-US naphtha values, continuing a beneficial trend for domestic petrochemical producers.

We discuss European chemical production, US propane-based ethylene production costs rising relative to ethane, and the input implications of recent crop price shifts.

We discuss efforts to decarbonize product transportation markets and obstacles facing SAF. We also see the diversity in types of packaging is a challenge for recyclers.

China import and export volumes declined meaningfully in late 4Q22, and we also flag US crop exports to China and weak early 2023 North American chemical rail volume.

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Mystic Of The East – Western Markets To Likely Face More Price Headwinds Than Asia Again In 2023

Mystic Of The East – Western Markets To Likely Face More Price Headwinds Than Asia Again In 2023

Western market consumers faced much greater price inflation than those in Asia in 2022, and most expect it to occur again in 2023. A plus for Asia relative to Europe.

We discuss EIA crude and natural gas forecasts for 2023/24 and ongoing trends supporting the case for oil and gas Capex to stay limited despite currently high returns.

We highlight global MDI-to-benzene spreads in light of BASF moving forward with its US MDI expansion and flag global PDH margins as China seeks more LPG imports.

We discuss the IEA energy technology perspectives report highlighting its outlook for a significant shift in oil demand from transport fuels to petrochemicals through 2050.

We highlight the US CPI posting for December, show EIA forecasts for consumer headwinds from diesel and gasoline prices to lessen, and flag a few corporate updates.

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Oil and Gas Have The Cash – How Much Goes To Energy Transition?

Oil and Gas Have The Cash – How Much Goes To Energy Transition?

Redirecting oil and gas profits to energy transition-led investments makes sense in concept – creating a high return on investment backdrop would open floodgates.

Taxation is not the answer. The capital allocation process should be efficient, and governments are bad at this. The Middle East is moving – so should the US.

Chemical companies are looking at direct investment in power generation to reach decarbonization goals – the same logic should apply to cash-rich oil and gas.

Recycling is becoming more of a focus as the economics look less attractive – we see consolidation and more acceptance of chemical recycling as likely outcomes.

While we see plenty of R&D in Hydrogen in the West and a desire to not let China dominate hydrogen equipment etc., IP has only slowed China in other areas.

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Chains and Things – Feedstock Cost Declines Benefit Domestic Chemical Producers, Some More Than Others

Chains and Things – Feedstock Cost Declines Benefit Domestic Chemical Producers, Some More Than Others

North American petrochemical producers have benefited from significant cost relief since late 2022 – we think US PVC producers could benefit more than most expect.

US natural gas and USGC ethane have declined 43% and 22% in the past 30 days, which compares to increases in Brent Crude and Ex-US naphtha – a positive for US chemicals.

Domestic methanol producers are notable beneficiaries of falling natural gas prices, though, unlike PVC, we observe methanol derivative prices under pressure in China.

We see a tipping point for the mechanical recycling market in 2023, as producers face significant margin pressure, and we discuss why we are not a fan of windfall taxes.

We flag downward revisions in 2023 economic forecasts and highlight why corporates should give conservative profit guidance for the year rather than risk missing targets.

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Backward Thinking: Will You Need The Feedstock To Compete?

Backward Thinking: Will You Need The Feedstock To Compete?

Commodity chemical producers lacking feedstock integration face difficult choices as the energy sector expands downstream, pressuring non-integrated chemical returns.

The North American petrochemical producer cost advantage is significant relative to overseas peers, and so is the case for its energy producers serving the global markets.

We discuss US polyethylene contract price trends relative to US, NW Europe, and Asia spot market levels and January contract nominations facing considerable headwinds.

We discuss IEA research discussing patent developments across the hydrogen value chain from 2011-2020 and 2021-22 occurrences pushing growth capital into this area.

The decline in freight rates for ocean shipments, which have mostly returned to pre-COVID levels, and falling product price hike views suggest falling supply concerns.

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