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.
Rollin’ and Tumblin’ – Global Polymer Prices Move Lower, US Premiums Shrink, Olin Cuts 3Q Profit View
Global polymer prices have declined significantly relative to 1H22 highs, and we discuss the collapse in US premium polymer prices compared to Asia since 2Q22.
US refinery margins remain above the price five-year range and notably higher YoY. We discuss refinery utilization rates and capacity growth estimates by region.
Olin cuts its 3Q22 EBITDA guidance to a level more than 10% below the Street consensus view, and we highlight takeaways from Henkel’s capital markets day.
Renewable natural gas is an area where demand will likely outpace availability, and we discuss reports on carbon tax incentives and global CCS developments.
Though container freight rates from China to the US continue to plunge and Houston saw record port traffic in August, logistic challenges continue to face many industries.
Global polymer margins on avg. reflect little change WoW, as gains in the US resulting from falling feedstock values were offset by weakness in NW Europe due to lower polymer prices. We continue to foresee a rocky 2H22 profit setting for producers, such as Dow and LyondellBasell.
USGC ethane values remain at the low end of the five-year range relative to US natural gas and have recently declined relative to Ex-US naphtha values, which is a plus for domestic ethylene producers.
US ethanol margins improved WoW, and we note that US ethanol prices reflect a growing premium relative to RBOB gasoline. This setting is positive for US ethanol producers, such as ADM and Poet.
Macro indicators for farm-input sellers are generally positive. US (& global) ammonia price support WoW relative to US natural gas is a plus for domestic producers, such as Nutrien and CF Industries.
We finish our week of criticism of the sell-side with a knock-out blow to the head and question what investors are paying for and why – it’s certainly not research.
Paralysis in estimate revisions (until instructed by the corporate) suggests there is zero value in quality predictive research today – otherwise, it would exist.
I Want To Hold Your Hand – Corporate Guidance Cuts Drive Street Estimates Lower, More Reductions Ahead
Sell-side equity research has become less about quality research than providing corporate concierge services – more estimate cuts are needed, but it could take time.
We discuss the global surplus of ethylene feedstock, as Ex-US naphtha values reflect an unusual discount to crude oil, and USGC ethane reflects a discount to natural gas.
Huntsman downgrades its 3Q profit views, adding itself to a growing list of producers highlighting weakening business conditions – the trend will likely continue into 4Q22.
Investment capital targeting the clean energy sector is notably risk averse, with most only looking at “oven ready” projects – we view this as a risk to many growth targets.
FedEx slashed 3Q22 profit expectations and offers a dire view of the global economy, and we discuss recent food inflation, mortgage rate, and US dollar developments.
Waiting On A Miracle – Chemical Producers Begin To Cut 3Q Profit Views, 4Q Estimates Also Need Attention
Chemical producers are increasingly cutting 3Q profit expectations but fail to give 4Q views despite Street estimates likely being too high – this is a missed opportunity.
US refinery margins have fallen relative to 2022 highs but remain significantly higher than in 2019. We think capacity additions based only on fossil fuels are hard to justify.
We highlight Dow and LyondellBasell views of 3Q22 profit trends and discuss why we think US polyethylene (PE) contract prices face further downward pressure in 2H22.
We flag the IEA monthly electricity statistic posting that displays monthly OECD solar power production and shows the reliance on other power sources during winter.
North American chemical rail traffic statistics improved YoY last week, and YTD traffic is higher. We also discuss recent US retail sales and industrial production postings.
The future is bright for biofuels, but these fuels will not allow airlines to meet demand targets. The math around production does not work – inputs will fall short.
Synthetic fuel is the longer-term solution, but the (renewable) power needs to make the fuel means that it will likely be experimental and small before the 2040s.
Meanwhile, if you can make zero carbon biofuels the airlines will likely pay what it takes – this is good news for Gevo, Aemetis, and others if they can deliver.
On the ground, while each fuel has its fan base, ammonia increasingly looks like the best option for longer-distance transport fuel, like shipping.
Otherwise, we look at recycled polymer pricing, LNG and CCS, more on hydro and other renewable power, electrolyzer demand, and new energy employment.