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.
Oil futures rose sharply, as shown in the following table.
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.
|$ Change||% Change|
|Axalta Coating Systems||19.78||0.52||2.70|
Chemical shares outperformed the general market, as shown in the table below.
|Dow Jones Industrial Average||24,633.86||532.31||2.21|
|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.
Speak with ICIS
Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.
Want to learn about how we can work together to bring you actionable insight and support your business decisions?