Rising commodity prices benefit North American chemical producers, strain specialty and European operations Originally published on 17 March
2022 Russia’s invasion of Ukraine will have a limited direct effect on North American chemical producers because neither country accounts for more than 1% of most producers' revenues, assets and raw materials. But higher oil and energy prices and the loss of Russian exports will increase commodity prices, exacerbating the inflationary environment and straining certain supply chains. This combination of factors will reduce margins for specialty companies and most companies' European operations. But many North American commodity producers will benefit, particularly fertilizer companies, because their raw material and energy costs remain relatively low. And Russia (including Belarus for potash) is one of the largest suppliers to the global market. In addition, we expect significant increases in fertilizer selling prices and increased international demand as a result of the dramatic reduction in Russian and Belarusian exports. This will substantially increase North American producers' earnings and cash flows.