HOUSTON (ICIS)--US-listed shares of chemical companies rose as the Dow Jones Industrial Average increased by more than 11% as lawmakers came closer to passing a stimulus bill.
The deal, worth nearly $2trn, could be passed by Congress later in the day. The US is either in a recession or it will enter one as a result of the economic damage caused by the coronavirus (Covid-19).
The table below shows the major indices followed by ICIS.
|Dow Jones Industrial Average||20,704.91||2,112.98||11.37|
|Dow Jones US Chemicals Index||438.91||43.74||11.07|
|S&P 500 Chemicals Industry Index||447.92||46.04||11.46|
Measures intended to slow down the spread of the coronavirus in the US are slowing down the economy.
The following shows the number of US cases.
Source: US Centers for Disease Control and Prevention (CDC)
The following shows global cases.
Source: World Health Organization
Phillips 66 said the coronavirus is destroying gasoline demand around the world.
Axalta Coating Systems has withdrawn its previous financial guidance for 2020.
Meanwhile, the oil industry is contending with a decline in demand caused by the coronavirus and a price war between OPEC and Russia.
Oil prices remain depressed, with Brent rising slightly to $27.15/bbl from $27.03/bbl. It is still well below levels from the start of the year.
Chevron, Phillips 66 and Sunco have responded by cutting capital expenditures.
Enlink Midstream is cutting its dividend.
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.
In addition, petrochemical and polymer prices tend to follow crude oil with a time lag of about six weeks, according to the ICIS Petrochemical Index (IPEX). The index tracks 12 major pretrochemicals and polymers.
US April nominations for butadiene (BD) are sharply lower.
Prices for US toluene and mixed xylenes (MX) fell below $1/gal, reaching 18-year lows.
In Europe, March spot prices for benzene fell by over 50% since Monday.
In the eurozone, March business activity in the eurozone collapsed to its lowest level on record, IHS Markit said.
INEOS is delaying the shutdown of the Forties Pipeline System to prevent the coronavirus from spreading among work crews.
The following shows the US-listed chemical shares followed by ICIS.
|$ Change||% Change|
|Axalta Coating Systems||14.80||1.13||8.27|
Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news.
(adds tables showing coronavirus cases in the US and the world)