Thank you very much. Very informative! I am looking into specialty chemical distributors (IMCD, Azelis, DGL Group a.o.). I don't understand the relation between the specialty chamical distributors and the market segments that you describe. What is your opinion on this? Is the cyclical tide bringing every company in the chemical industry bringing down (or up) , or are these separate segments? thx!
Thanks for the write up. I was interested in petrochemicals 2 years ago and couldnt found any good primer for that so I appreciate that you provided the basic fundementals of how petrochemicals work and uncovering the current struggle of the industry. With capacity being added in Middle East and China it makes sense why Lyondell, Dow and others have even lower market cap than in Covid. Do you own any American petrochemicals? Ive compared income statement of these companies with prices of feed stocks and surprisingly crude oil has strong correlation ( r2 of being 0.8) to COGS of these companies.
And also Ive got another question: Isnt the current downfall made because of rising NATGAS in Q1 and reluctance of consumers to restock raw materials amid Trump tariffs armagedon?
Indeed, there is a correlation between CoGS and oil, especially in non-American assets and in non-ethylene-chain products.
I do not know why prices go up or down. There are many factors at play, some of which you mention: higher nat gas prices, destocking inventory cycle, a complete halt of exports in April, which has now resumed, and a view that you could add a recession to an already challenging supply side picture.
Thank you very much. Very informative! I am looking into specialty chemical distributors (IMCD, Azelis, DGL Group a.o.). I don't understand the relation between the specialty chamical distributors and the market segments that you describe. What is your opinion on this? Is the cyclical tide bringing every company in the chemical industry bringing down (or up) , or are these separate segments? thx!
Thanks for the write up. I was interested in petrochemicals 2 years ago and couldnt found any good primer for that so I appreciate that you provided the basic fundementals of how petrochemicals work and uncovering the current struggle of the industry. With capacity being added in Middle East and China it makes sense why Lyondell, Dow and others have even lower market cap than in Covid. Do you own any American petrochemicals? Ive compared income statement of these companies with prices of feed stocks and surprisingly crude oil has strong correlation ( r2 of being 0.8) to COGS of these companies.
And also Ive got another question: Isnt the current downfall made because of rising NATGAS in Q1 and reluctance of consumers to restock raw materials amid Trump tariffs armagedon?
Sorry for grammar, English isnt my first language
Jacob, thanks for your comment.
Indeed, there is a correlation between CoGS and oil, especially in non-American assets and in non-ethylene-chain products.
I do not know why prices go up or down. There are many factors at play, some of which you mention: higher nat gas prices, destocking inventory cycle, a complete halt of exports in April, which has now resumed, and a view that you could add a recession to an already challenging supply side picture.