US chem shares jump for third day on $2tr stimulus package

Author: Al Greenwood

2020/03/26

HOUSTON (ICIS)--US-listed shares of chemical companies rose for the third day in a row on Thursday as the nation continues to make progress towards passing a $2tr stimulus package.

The package is meant to offset the economic downturn caused by the coronavirus (Covid-19).

The table below shows the major indices followed by ICIS.

26-Mar Change %
Dow Jones Industrial Average 22,552.17 1,351.62 6.38
S&P 500 2,630.07 154.51 6.24
Dow Jones US Chemicals Index 475.00 22.40 4.95
S&P 500 Chemicals Industry Index 479.42 21.65 4.73

CNBC reported that the markets completed their largest three-day surge since 1931.

The rise came despite a huge increase in US jobless claims and oil prices remaining at exceptionally low levels.

Brent futures fell to $26.34/bbl from $27.39/bbl, following reports that the US Department of Energy had withdrawn a tender to buy domestic crude for the Strategic Petroleum Reserve.

US jobless claims reached 3.28m last week, up 3m from the previous week, according to the US Department of Labor.

The claims rose as many parts of the US adopted restrictions to prevent the spread of the disease.

Despite these efforts, the coronavirus continues to spread in the US and the rest of the world.

The following shows the US cases.

US 25-Mar 26-Mar
Cases 54,453 68,440
Death 737 994
States 50 50

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

The following shows global cases.

World 25-Mar 26-Mar
Cases 413,467 462,684
Death 18,433 20,834
Nations 197 199

Source: World Health Organization

The disruptions caused by the disease are leading to dire forecasts for the global economy.

FocusEconomics, a forecasting firm, conduced a survey in which economists predicted a global recession in the next 12 months. The majority expect the effects of the disease will extend into 2021.

The subsequent recovery will be a slower U-shaped one versus a faster V-shaped, FocusEconomics said. The panellists said the fiscal and monetary measures being adopted so far are insufficient to prevent lasting economic damage from the disease.

The International Monetary Fund (IMF) also expects global output to contract.

In Mexico, the private sector is calling on federal intervention to counteract the impact on Mexico’s already-fragile economy.

In Brazil, state energy producer Petrobras has lowered operating rates at its refineries because of weak demand for fuel.

To prevent the spread of the disease, Petrobras is postponing maintenance shutdowns at its refineries.

In Europe, stock markets rose for the third day in a row.

The Bank of England (BoE) announced it would keep interest rates at record-low levels of 0.1% to ease the strain of the coronavirus on liquidity in the UK economy.

In Asia, petrochemical share prices ended mixed.

Malaysia’s Prime Minister Muhyiddin Yassin on 25 March announced an extension to the existing movement control order (MCO) to 14 April this year.

Muhyiddin also said that the announcement for an economic stimulus package has been brought forward to 27 March instead of 30 March.

The following shows the US-listed stocks followed by ICIS.

$ Current

Price

$ Change % Change
AdvanSix 10.04 -0.02 -0.20
Axalta Coating Systems 17.45 0.93 5.60
Braskem 7.80 1.76 29.14
Celanese 75.58 2.71 3.72
Dow 29.73 -0.66 -2.16
DuPont 35.90 2.67 8.03
Eastman 48.14 1.56 3.35
HB Fuller 28.14 0.56 2.03
Huntsman 15.59 0.39 2.57
Ingevity 35.59 2.86 8.74
Kraton 7.10 1.08 17.94
Kronos Worldwide 8.96 0.34 3.94
LyondellBasell 54.06 1.96 3.76
Methanex 13.19 -1.28 -8.85
NewMarket 359.18 30.29 9.21
Olin 11.93 0.15 1.23
PolyOne 18.96 1.25 7.06
PPG 89.73 4.02 4.68
RPM International 61.41 4.01 6.99
Sherwin-Williams 465.03 13.37 2.96
Stepan 84.68 2.88 3.51
Chemours 10.87 -0.02 -0.18
Trinseo 19.76 0.70 3.67
Tronox 6.15 0.58 10.41
Univar 11.49 -0.29 -2.46
Venator Materials 2.05 0.07 3.54
Westlake Chemical 40.63 -0.13 -0.32

Additional reporting by Morgan Condon and Nurluqman Suratman, Emily Pickrell and Tom Brown

Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news.

Thumbnail image by Michael Probst/AP/Shutterstock