US chem shares jump again as Dow Jones rises 3.44%

HOUSTON (ICIS)–US-listed shares of chemical companies rose again on Wednesday as the Dow Jones Industrial Average increased by nearly 3.5%.

The table below shows the major indices followed by ICIS.

	8-Apr	Change	%
Dow Jones Industrial Average	23,433.57	779.71	3.44
S&P 500	2,749.98	90.57	3.41
Dow Jones US Chemicals Index	508.07	25.71	5.33
S&P 500 Chemicals Industry Index	513.64	26.52	5.44

The increase in stock indices comes as the coronavirus (Covid-19) continues to spread in the US, albeit at a slower rate.

The US reported 395,011 cases, up by 5.5% from Tuesday, according to the Centers for Disease Control and Prevention (CDC). Fatalities rose by 5.7% from Tuesday.

Globally, cases reached 1.36m, up 5.8%, according to the World Health Organization (WHO). Fatalities rose by 9.1%.

If the growth in cases slows, then governments could relax the restrictions they imposed on travel and work.

These restrictions have caused demand for several chemicals and plastics to fall.

RPM International expects fiscal Q4 sales to fall by 10-15% because of the effects of the coronavirus. The company’s fourth quarter starts on 1 March.

A chemical equity analyst slashed 2020 earnings estimates for Dow and LyondellBasell.

The automobile industry, an important chemical market, is also buckling under the restrictions.

US sales of new light vehicles in March fell by more than 30% both month on month and year on year, according to seasonally adjusted annual rates (SAAR) from the US Bureau of Economic Analysis (BEA).

The restrictions also caused a rapid decline in oil prices since the start of the year, when Brent futures contracts were above $60/bbl.

Brent settled at $32.84/bbl on Wednesday, up by 97 cents.

OPEC and its allies are scheduled to meet on Thursday, opening up the possibility that they could reach a new deal to limit production.

The lapse of the previous supply-cut agreement has allowed the countries to produce oil without constraint, putting further pressure on prices.

Oil prices are important to the chemical industry because prices for chemicals and plastics tend to follow them with a six-month lag, according to the ICIS Petrochemical Index (IPEX). The index tracks 12 major petrochemicals and polymers.

In Europe, shares of chemical stocks fell as fresh data emerged on the extent of the economic contraction

In Asia, shares of petrochemical companies were mixed.

Japan declared a state of emergency late on Tuesday, while Singapore passed a law which prohibits social gatherings of any size in both private in public spaces.

China lifted travel restrictions on Wuhan effective Wednesday. The provincial capital of Hubei was the virus epicenter in mainland China and had been on a lockdown since 23 January.

The table below shows the US-listed stocks followed by ICIS.

	$ Current Price	$ Change	% Change
AdvanSix	11.72	0.34	2.99
Axalta Coating Systems	18.02	1.32	7.90
Braskem	6.48	0.02	0.31
Celanese	82.09	6.25	8.24
Dow	34.74	2.41	7.45
DuPont	38.86	1.60	4.29
Eastman	56.54	3.67	6.94
HB Fuller	30.22	1.98	7.01
Huntsman	15.63	0.58	3.85
Ingevity	40.90	2.79	7.32
Kraton	9.84	0.77	8.49
Kronos Worldwide	8.91	0.59	7.09
LyondellBasell	55.45	3.80	7.36
Methanex	13.95	0.57	4.26
NewMarket	396.22	11.91	3.10
Olin	13.49	0.70	5.47
PolyOne	20.49	1.12	5.78
PPG	93.38	2.29	2.51
RPM International	64.77	2.32	3.72
Sherwin-Williams	488.30	24.95	5.38
Stepan	94.66	1.18	1.26
Chemours	9.51	0.88	10.20
Trinseo	20.78	0.35	1.71
Tronox	5.34	0.57	11.95
Univar	12.14	0.85	7.53
Venator Materials	1.35	0.04	3.05
Westlake Chemical	41.81	1.23	3.03

Focus article by Al Greenwood

Additional reporting by Deniz Koray, Joseph Chang, Tom Brown and Nurluqman Suratman

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