US chems plunge in market rout, oil continues falling

HOUSTON (ICIS)–US-listed chemical stocks fell with the rest of the market on Wednesday as the Dow Jones Industrial Average fell by 4.44%.

The declines followed projections from the White House that 100,000-200,000 people in the nation could die from the coronavirus (Covid-19), according to media reports.

The table below shows the major indices followed by ICIS.

	1-Apr	Change	%
Dow Jones Industrial Average	20,943.51	-973.65	-4.44
S&P 500	2,470.50	-114.09	-4.41
Dow Jones US Chemicals Index	435.17	-26.30	-5.70
S&P 500 Chemicals Industry Index	438.63	-27.97	-5.99

The coronavirus continues to spread in the US, as shown in the following table.

US	31-Mar	1-Apr
Cases	163,539	186,101
Death	2,860	3,603
States	50	50

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

The following shows global cases.

World	31-Mar	1-Apr
Cases	754,948	827,419
Death	36,571	40,777
Nations	202	205

Source: World Health Organization (WHO)

Travel and work restrictions imposed to limit the spread of the coronavirus has caused demand to fall for fuels, causing stocks to rise.

Supplies of fuel ethanol increased by the largest amount ever recorded by the Energy Information Administration (EIA).

For their part, refineries have responded to the decline in demand by lowering rates to 82.3%, their lowest levels since Hurricane Harvey disrupted US Gulf Coast operations in September 2017.

The decline in fuel demand is dragging down oil markets, which are also contending with a price war waged between OPEC and Russia.

A production-cut agreement ended on 1 April, allowing the nations to produce oil without constraint.

US crude stocks rose by 13.8m bbl, the largest increase since October 2016.

US refiner Flint Hills Resources declared force majeure on oil deliveries because it is running out of storage, sources said. Flint Hills was not immediately available for comment.

The deterioration in oil markets has led Whiting Petroleum to file for bankruptcy protection under Chapter 11.

Several analysts have warned that the world could run out of storage, which would cause oil prices to continue falling.

Brent futures for June delivery closed at $24.74/bbl, down from $26.35/bbl.

Petrochemical producers are vulnerable to low oil prices because 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.

In Europe, stocks fell.

BP said it will write down $1bn on its first quarter results in response to the erosion in the oil and gas market.

Styrene contract prices in Europe fell to levels last seen in February 2009.

In Asia, petrochemical shares were mixed.

Purchasing managers’ indices (PMIs) in Japan and South Korea fell deeper into contraction territory.

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

	$ Current Price	$ Change	% Change
AdvanSix	10.00	0.46	4.82
Axalta Coating Systems	16.27	-1.00	-5.79
Braskem	6.17	-0.47	-7.08
Celanese	68.05	-5.34	-7.28
Dow	27.04	-2.20	-7.52
DuPont	32.52	-1.58	-4.63
Eastman	45.51	-1.07	-2.30
HB Fuller	25.92	-2.01	-7.20
Huntsman	13.34	-1.09	-7.55
Ingevity	35.12	-0.08	-0.23
Kraton	7.65	-0.45	-5.56
Kronos Worldwide	8.42	-0.02	-0.24
LyondellBasell	45.03	-4.60	-9.27
Methanex	11.50	-0.67	-5.51
NewMarket	384.93	2.06	0.54
Olin	10.88	-0.79	-6.77
PolyOne	17.69	-1.28	-6.75
PPG	79.89	-3.71	-4.44
RPM International	57.10	-2.40	-4.03
Sherwin-Williams	424.98	-34.54	-7.52
Stepan	83.53	-4.93	-5.57
Chemours	7.54	-1.33	-14.99
Trinseo	16.72	-1.39	-7.68
Tronox	4.03	-0.95	-19.08
Univar	10.01	-0.71	-6.62
Venator Materials	1.48	-0.24	-13.95
Westlake Chemical	35.65	-2.52	-6.60

Focus article by Al Greenwood

Additional reporting by Alex Snodgrass, Michael Sims, Andrew Putwain, Stefan Baumgarten, Morgan Condon and Nurluqman Suratman

Thumbnail image by Shutterstock

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