Causes of Industrial Demand Loss
Industrial demand is suffering, but we believe price-induced losses should return rather quickly.
Ammonia and methanol prices have risen this year as cost of gas input has risen.
Type #1: Margin Squeeze - Ammonia
- Probably lost about 250 mmcf/d (out of 1.5 bcf/d)
Type #2: In long-term decline - Steel
- Global spare capacity constrains rebound
Type #3: Linked to Economy - Building Materials
- Weak housing starts softening demand
Will demand bounce back?
- We believe demand likely to return quickly below $5.00
- Medium-term inflationary impact