We have discussed in several recent reports the very mixed fortunes in the intermediate and specialty chemical sector related to whether companies have been able to move prices fast enough to cover costs. The two large blue bars in the AkzoNobel chart below show that Akzo was close, but did not make it. We expect other examples like this over the coming weeks but we also expect some companies to have done better – some of this depends on mix and contract terms, but a lot has to do with how early you acted on the rising cost trend and how aggressive you were willing to be with customers. Dow is another example of a company struggling to get pricing high enough to cover cost increases, although Dow and others have aggressive price increase announcements in the market for polyethylene for April and May that would make a significant difference to US margins if successful.
There are a couple of related topics in the charts below from today's daily report, as any conflict with Russia would almost inevitably impact European energy supply, raising prices for natural gas and pulling on as much LNG as possible. That said, we suspect that part of the recent run-up in prices has likely been to build a cushion of inventory, as much as that is possible with limited storage relative to demand.