Global chemical market indicators increasingly signal oversupply, supporting negative sector views that could lessen with any 1H23 energy and/or outage-season surprises.
We highlight natural gas
Global polymer markets reflect WoW support amid production cuts, higher Ex-US costs, and rising optimistic views on China demand. North American producers see the most
As chemical product availability increased, US spot polymer premiums relative to Asia mostly dissipated in 2H22. Domestic contract premiums are likely the next to drop.
Global chemical demand headwinds and supply tailwinds are pressuring producer profitability, and we think outages are likely needed to push prices notably higher. Our indicators
US polymer price hikes near term appear unlikely, absent unplanned outages or a surge in energy/feedstock costs. PVC has the most potential for an upside
Global petrochemical markets are oversupplied despite recent operating rate cuts, suggesting any improvement in profitability will trigger a supply response near term.
European natural gas
US polyethylene (PE) contract prices recently hit 10yr highs relative to US, Europe, and Asia spot PE prices. US producer nominated contract PE upticks for
Our concerns around the fate of the global chemical industry for 2023 are now consensus, and while we are looking for what could go right
North American polypropylene (PP) prices face downward pressure into year-end as global production and logistic improvements position supply to outpace demand.
US refinery margins have
NW European Natural Gas prices have surged higher following their mid-2H22 flop, a risk we noted in our early 4Q22 research for European chemical production
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