Chems fall as Dow Jones plunges over 3%

Al Greenwood

21-Aug-2015

The Dow Jones Industrial Average closed at 16,459.75, down 530.94 points or 3.12%. (source:Rex Features)HOUSTON (ICIS)–US chemical stocks fell once again on Friday as the Dow Jones Industrial Average dropped by more than 2% for the second day in a row.

The Dow closed at 16,459.75, down 530.94 points or 3.12%. The industrial average is now more than 10% below its 52-week high of 16,990.69, meeting the definition of a correction.

The Dow Jones US Chemicals Index performed better than the industrial average, falling by 2.45% on Friday. However, the chemicals index is down more than 15% from its 52-week high.

Like the industrial average, the S&P 500 also had a second day of losses exceeding 2%. It fell by 3.19% to 1,970.89. The S&P 500 is down 8% from its 52-week high.

Drops exceeding 2% have been rare since the financial crisis of 2008-2009. Back-to-back drops of such a large magnitude are even less frequent.

Many factors are weighing on the stock market. China, the world’s second largest economy, is showing increasing signs of distress.

The country’s major stock indices fell sharply in July. Earlier this month, its yuan currency weakened against the US dollar.

Earlier on Friday, the Caixin Flash China Manufacturing Purchasing Managers’ Index (PMI) fell to 47.1 in August, a 77-month low. A PMI reading over 50.0 indicates the economy is generally expanding.

In oil markets, Brent closed at $46.51, down 60% from its June 2014 high of $115/bbl. West Texas Intermediate (WTI) closed at 41.40/bbl, also down 60% from its high of $107 in June 2014. Both are at six-year lows.

Prices for other commodities have declined, which has damaged several emerging economies.

Brazil, the second largest economy in the western hemisphere, is already in a deep recession. Economists expect the country’s GDP to contract by more than 2% this year.

During second-quarter earnings presentations, US chemical companies noted both the strengthening of the US dollar and the slowdown in several emerging markets.

Among the listed companies followed by ICIS, only one stock rose  Calgon Carbon. The US-based carbon-black producer rose by 0.19%.

US-based refiner PBF Energy lost the most, dropping by 11%.

Among the majors, Dow Chemical fell by 2.4%, while DuPont fell by 0.8%.

US-based refiner Phillips 66 dropped by 4.8%, while Dutch polyolefins producer LyondellBasell declined by 3.5%.

US-based industrial gases producer Praxair and paints-and-coatings producer PPG Industries each dropped by 2.7%.

Canadian fertilizer producer PotashCorp fell by 2.9% while US-based specialty chemicals producer Eastman Chemical declined by 2.6%

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?