US tariffs against China sends chem stocks, Dow Jones plummeting

HOUSTON (ICIS)–Chemical stocks fell sharply on Thursday after US President Donald Trump said the nation may pursue tariffs on at least $50bn of Chinese goods.

The Dow Jones Industrial Average closed at 23,957.89, down 724.42 points or 2.93% as of 15:12 hours Houston time (21:12 hours GMT).

The S&P 500 closed at 2643.69, down 68.24 points or 2.52%.

Every US-listed company followed by ICIS fell.

The Dow Jones US Chemicals Index closed at 633.66, down 18.05 points or 2.77%.

Platform Specialty Products was the biggest loser, falling by 5.69%. The company makes agrochemicals and electronic chemicals.

Trinseo, a major US and European producer of styrene and derivatives, some of which are exported to China, plunged 5.15%.

The following table shows the companies followed by ICIS that fell by the most.

Name	$ Current Price	$ Change	% Change
Platform Specialty Products Corp	9.78	-0.59	-5.69
Ecopetrol SA ADR	18.34	-1.04	-5.34
Trinseo SA	75.5	-4.1	-5.15
Tronox Ltd	18.99	-0.92	-4.62
Huntsman Corp	29.58	-1.4	-4.52
Kronos Worldwide Inc	22.74	-1.05	-4.41
LyondellBasell Industries NV	106.59	-4.62	-4.15
AdvanSix Inc	35.23	-1.52	-4.14
Ingevity Corp	75.11	-3.18	-4.06
Praxair Inc	146.07	-5.76	-3.79

Source: Morningstar

US-based compounder A Schulman fell by the least. It is being acquired by LyondellBasell.

Refiner Marathon Petroleum was the second best performer, falling by just 0.4%.

The Chinese import tariffs announced by Trump followed aluminium and steel tariffs announced earlier in the year.

The tariffs will increase plant construction costs for petrochemical companies and refineries. However, the industries’ larger concern is that China and other countries could impose retaliatory tariffs on US exports, damaging US and global economies.

There is also the concern about an escalating trade war, as the US is a major exporter of chemicals. Chemical exports are expected to increase significantly as companies start up new petrochemical plants in the US based on cheap shale gas feedstocks.

The output from these plants will overwhelm domestic demand, so companies will rely on export markets to absorb the new capacity. In particular, companies said they would target markets in Asia-Pacific.

Petrochemicals could be a prime target for retaliatory tariffs because of the size of US exports and extent of the cost advantage the country has in making the products.

However, one chemical equity analyst believes this is unlikely and that the plunge in US chemical stock prices was an overreaction.

“I think it was an overreaction today. If you think trade, you think China, and China continues to be a net importer of chemicals. Chemicals in my view would be low in the order of products to be considered for tariffs,” said Hassan Ahmed, analyst at Alembic Global Advisors.

Countries could retaliate by targeting US export crops such as soybeans and corn. Tariffs would discourage plantings, which would lower demand for agrochemicals and  – in the case of corn – lower demand for nitrogen fertilizers.

The table below shows all of the US-listed companies followed by ICIS.

Name	$ Current Price	$ Change	% Change
Platform Specialty Products Corp	9.78	-0.59	-5.69
Ecopetrol SA ADR	18.34	-1.04	-5.34
Trinseo SA	75.5	-4.1	-5.15
Tronox Ltd	18.99	-0.92	-4.62
Huntsman Corp	29.58	-1.4	-4.52
Kronos Worldwide Inc	22.74	-1.05	-4.41
LyondellBasell Industries NV	106.59	-4.62	-4.15
AdvanSix Inc	35.23	-1.52	-4.14
Ingevity Corp	75.11	-3.18	-4.06
Praxair Inc	146.07	-5.76	-3.79
Celanese Corp	100.4	-3.9	-3.73
Westlake Chemical Corp	113.32	-4.36	-3.71
CF Industries Holdings Inc	37.25	-1.42	-3.67
Albemarle Corp	94.07	-3.41	-3.5
Cabot Corp	57.02	-1.92	-3.26
W R Grace & Co	61.56	-2.06	-3.23
Eastman Chemical Co	103.99	-3.46	-3.22
NewMarket Corp	395.6	-12.9	-3.16
Methanex Corp	58.7	-1.9	-3.14
Calumet Specialty Products Partners LP	7.03	-0.23	-3.1
Sherwin-Williams Co	393	-12.21	-3.01
H.B. Fuller Co	49.02	-1.47	-2.91
Braskem SA ADR repr Class A	28.42	-0.84	-2.87
DowDuPont Inc	65.6	-1.83	-2.71
Ashland Global Holdings Inc	68.21	-1.89	-2.7
RPM International Inc	47.89	-1.32	-2.68
Nutrien Ltd	47.33	-1.26	-2.59
The Chemours Co	48.66	-1.27	-2.54
Valero Energy Corp	93.04	-2.42	-2.53
The Mosaic Co	24.68	-0.6	-2.37
Alerian MLP ETF	9.39	-0.23	-2.34
Enterprise Products Partners LP	24.58	-0.59	-2.34
PPG Industries Inc	111.29	-2.66	-2.33
Ultrapar Participacoes SA ADR	21.1	-0.48	-2.22
PolyOne Corp	42.49	-0.94	-2.16
Petroleo Brasileiro SA Petrobras ADR	14.19	-0.31	-2.1
Cosan Ltd	10.98	-0.23	-2.05
Exxon Mobil Corp	73.49	-1.54	-2.05
Kraton Corp	48.02	-1	-2.04
Valvoline Inc	22.49	-0.46	-2
Sociedad Quimica Y Minera De Chile SA ADR	46.86	-0.87	-1.82
Ecolab Inc	134.11	-2.33	-1.71
Stepan Co	83.37	-1.36	-1.61
Venator Materials PLC	18.35	-0.3	-1.61
Phillips 66	94.68	-1.49	-1.55
Andeavor	100.89	-1.52	-1.48
PQ Group Holdings Inc	14.04	-0.21	-1.47
PBF Energy Inc Class A	33.25	-0.46	-1.35
Occidental Petroleum Corp	65.19	-0.85	-1.28
Axalta Coating Systems Ltd	30.22	-0.39	-1.26
Bunge Ltd	72.04	-0.92	-1.26
Westlake Chemical Partners LP	22.83	-0.23	-0.98
DCP Midstream LP	34.41	-0.31	-0.88
Olin Corp	30.6	-0.19	-0.62
Marathon Petroleum Corp	72.94	-0.29	-0.4
A. Schulman Inc	43.28	-0.03	-0.06

Source: Morningstar

Additional reporting by Joseph Chang

Image below shows a container ship. (Source: Al Greenwood)