HOUSTON (ICIS)--Oil prices plummeted and US-listed chemical stocks fell on Friday despite the US Congress passing a $2tr stimulus bill intended to offset some of the economic damage caused by the coronavirus (Covid-19).
The table below shows the indices followed by ICIS.
|Dow Jones Industrial Average||21,636.78||-915.39||-4.06|
|Dow Jones US Chemicals Index||454.29||-20.71||-4.36|
|S&P 500 Chemicals Industry Index||459.45||-19.97||-4.17|
Despite Friday's decline, the Dow Jones Industrial Average posted its biggest weekly increase since 1938, according to the Wall Street Journal.
Still, the outlook for the US economy remains poor.
S&P Global Economics expects US GDP to decline by 2.1% in the first quarter and another 12.7% in the second. For all of 2020, GDP should fall by 1.3%.
Before the coronavirus, S&P Global Economics expected US GDP to grow by 1.9%.
"The quarantine of about three-fifths of Americans, either voluntarily or by mandate, has led to a sudden stop in economic activity across the country," according to a statement by Beth Ann Bovino, US chief economist at S&P Global.
"That has left the US grappling with possibly the largest economic contraction on record and the highest unemployment rate on record, going back to 1948," she said.
The coronavirus continues to spread both in the US and around the world, as shown in the following tables.
Source: US Centers for Disease Control and Prevention (CDC)
Source: World Health Organization (WHO)
Measures put in place to limit the spread of the coronavirus have led to severe travel restrictions, causing oil demand to plummet.
The effects of the measures on oil prices is compounded by a price war being waged by OPEC and Russia.
Prices for Brent futures fell to $24.93/bbl, down 5% from Thursday's close of $26.34/bbl.
In response to falling rig prices, the US oil-rig count posted its largest week-on-week decline in five years.
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 petrochemicals and polymers.
US March contracts for polymer-grade propylene settled at 28.0 cents/lb ($617/tonne) DEL (delivered), down by 4 cents/lb. Contract prices were at their lowest levels in 11 years.
In Europe, the ICIS daily price index for the region fell sharply.
Turkish prices for polyethylene (PE) and polypropylene (PP) declined while demand slumped.
New figures that show Europe’s economy is collapsing confirm fears that the world is heading for a deep recession as some chemicals markets have already suffered severe demand shocks.
In Asia, petrochemical shares and crude futures rose after G20 leaders overnight pledged to inject $5tr into the global economy.
In China, a quick recovery for the country's petrochemical industry is out of the question as it is emerging from a prolonged lockdown, while the rest of the world has just started the process of shutting themselves in.
The following shows the US-listed chemical companies followed by ICIS.
|$ Change||% Change|
|Axalta Coating Systems||17.70||0.23||1.32|
Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news.
Additional reporting by Amanda Hay, Michael Sims, Ben Lake, Nigel Davis, Will Beacham, Nurluqman Suratman and Pearl Bantillo