US chem shares soar on oil, positive coronavirus drug results

HOUSTON (ICIS)–US-listed shares of chemical companies soared on Wednesday, with some rising more than 10%, as oil futures rallied and Gilead Sciences announced more positive results for its coronavirus drug.

The results showed that a five-day treatment of Remdesivir was as effective as one lasting 10 days, Gilead said.

US cases of the disease now exceed 980,000. Fatalities total more than 55,000, close to the number that perished during the worst flu seasons of the past 10 years.

Oil futures rose sharply, as shown in the following table.

	Wednesday	Tuesday	%
Brent	22.54	20.46	10.2
WTI	15.06	12.34	22.0

The rally came after a report showing a slowdown in the build-up of crude stocks in the US.

Oil prices are important to the chemical industry because prices for plastics and petrochemicals tend to rise and fall with those of crude.

Higher oil prices can boost the margins of US-based chemical producers.

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

	$ Current Price	$ Change	% Change
AdvanSix	12.39	1.52	13.98
Axalta Coating Systems	19.78	0.52	2.70
Braskem	8.31	0.11	1.34
Celanese	86.32	4.38	5.35
Dow	37.62	1.75	4.86
DuPont	48.17	1.76	3.79
Eastman	63.55	2.90	4.78
HB Fuller	38.20	3.08	8.77
Huntsman	17.51	0.67	3.95
Ingevity	44.99	2.45	5.76
Kraton	13.28	2.46	22.69
Kronos Worldwide	10.05	0.52	5.46
LyondellBasell	59.88	4.21	7.56
Methanex	16.28	1.75	12.04
NewMarket	421.58	-4.64	-1.09
Olin	16.30	1.07	6.99
PolyOne	24.35	2.01	8.97
PPG	95.62	4.13	4.51
RPM International	67.72	0.84	1.26
Sherwin-Williams	540.39	31.66	6.22
Stepan	98.38	2.07	2.14
Chemours	12.41	1.10	9.73
Trinseo	22.30	1.57	7.57
Tronox	7.42	0.64	9.44
Univar	14.90	0.92	6.58
Venator Materials	1.45	0.22	17.89
Westlake Chemical	46.71	4.13	9.70

Chemical shares outperformed the general market, as shown in the table below.

	29-Apr	Change	%
Dow Jones Industrial Average	24,633.86	532.31	2.21
S&P 500	2,939.51	76.12	2.66
Dow Jones US Chemicals Index	550.62	15.08	2.82
S&P 500 Chemicals Industry Index	553.46	15.81	2.94

Stock markets rallied, even after a report showing that the US GDP decreased at an annual rate of 4.8% in the first quarter.

US March pending homes sales fell 20.8% month on month, and 16.3% year on year, hurt by coronavirus-led lockdowns and restrictions, the National Association of Realtors (NAR) said.

The Federal Reserve voted on Wednesday to leave interest rates at 0-0.25%, and keep them there until employment and inflation recover from the coronavirus.

In US chemical markets, April propylene contracts fell by 2 cents/lb ($44/tonne).

US benzene spot prices fell to 19-year lows.

Among US companies reporting earnings, midstream company Enterprise Products reported a 7% rise in Q1 net income.

US refiner and renewable fuels producer Valero reported a $1.85bn first-quarter net loss.

In Europe, chemical stocks rose.

Covestro recorded a 12% drop in sales on the previous year, and anticipates its core volume growth for the year to be below 2019 levels.

In Asia, chemical stocks rose.

Focus article by Al Greenwood

Additional reporting by Stefan Baumgarten, Michael Sims, Adam Burkin, Morgan Condon and Nurluqman Suratman

Thumbnail image by Michael Probst/AP/Shutterstock

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