Chem shares drop as Dow Jones falls 4.55%
2020-03-23    [Source:ICIS]
share:

    US-listed chemical shares followed by ICIS fell sharply on Friday as oil prices resumed falling and volatility returned to the stock markets.

    The major indices followed by ICIS all fell by more than 3%, after a break on Thursday, when they rose by less than 2%.

    The table below shows the major indices followed by ICIS.

  20-Mar Change %
Dow Jones Industrial Average 19,173.98 -913.21 -4.55
S&P 500 2,304.92 -104.47 -4.34
Dow Jones US Chemicals Index 417.05 -13.31 -3.09
S&P 500 Chemicals Industry Index 423.01 -14.24 -3.26

    The declines came as oil prices resumed falling. Brent futures fell by $1.49/bbl to close at $26.98/bbl.

    The credit agency S&P Global Ratings lowered its 2020 forecast for Brent to $30/bbl from an earlier forecast of $40/bbl.

    It warned that the world could run out of space to store crude as early as May.

    US chemical producers are vulnerable to low oil prices because they rely overwhelmingly on ethane and other natural gas liquids (NGLs) as feedstocks.

    As a result, US producers lose their cost advantage when oil prices fall in relation to gas. By contrast, much of the world stands to benefit, because they rely on oil-based naphtha.

    While oil prices remained exceptionally low, the coronavirus (Covid-19) continued spreading in the US and the rest of the world.

    The following table shows the cases in the US.

US 19-Mar 20-Mar
Cases 10,442 15,219
Death 150 201
States 50 50

    Source: US Centers for Disease Control and Prevention (CDC)

    The following shows global cases.

World 19-Mar Change from Wednesday
Cases 209,839 16,556
Death 8,778 828

Source: World Health Organization (WHO)

    The following shows the US-listed shares of chemical companies followed by ICIS.

  $ Current
Price
$ Change % Change
AdvanSix 12.68 -0.43 -3.28
Axalta Coating Systems 14.95 -1.44 -8.79
Braskem 4.63 -0.38 -7.54
Celanese 65.34 1.51 2.37
Dow 27.58 -0.54 -1.92
DuPont 31.55 -0.11 -0.35
Eastman 41.02 -0.24 -0.57
HB Fuller 28.53 -0.55 -1.89
Huntsman 13.03 -1.97 -13.13
Ingevity 28.1 -3.14 -10.04
Kraton 5.96 0.3 5.3
Kronos Worldwide 8.13 -0.57 -6.55
LyondellBasell 42.12 -1.12 -2.58
Methanex 9.97 -0.59 -5.59
NewMarket 367.45 -22.38 -5.74
Olin 11.72 -0.97 -7.61
PolyOne 14.68 1.31 9.8
PPG 79.54 2.98 3.89
RPM International 49.06 -1.8 -3.54
Sherwin-Williams 411.01 -34.11 -7.66
Stepan 75.57 -22.73 -23.12
Chemours 9.23 -0.96 -9.38
Trinseo 18 -1.84 -9.27
Tronox 4.88 -0.25 -4.87
Univar 8.95 0.95 11.88
Venator Materials 1.89 -0.17 -8.25
Westlake Chemical 33.91 -3.22 -8.67

    PolyOne shares rose after the company held an investors conference, during which it said operations were running with minimal disruption. The company also raised some doubts about its pending $1.6bn deal to acquire Clariant's masterbatch business.

     Author: Al Greenwood

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