US chem shares soar on oil rally, coronavirus-vaccine advance

HOUSTON (ICIS)–Shares of US-listed chemical companies rose sharply – many by double digits – on Monday amid a rally in oil prices and positive developments in a vaccine against the coronavirus.

General stock markets also rose, as shown in the following table.

	18-May	Change	%
Dow Jones Industrial Average	24,597.37	911.95	3.85
S&P 500	2,953.91	90.21	3.15
Dow Jones US Chemicals Index	550.19	30.66	5.90
S&P 500 Chemicals Industry Index	556.44	27.43	5.19

Most of the companies followed by ICIS outperformed the general indices by big margins as shown in the table below.

	$ Current Price	$ Change	% Change
AdvanSix	11.42	0.87	8.25
Axalta Coating Systems	21.00	1.30	6.60
Braskem	9.39	1.25	15.36
Celanese	84.31	7.64	9.96
Dow	36.74	3.18	9.48
DuPont	48.10	2.65	5.83
Eastman	62.93	2.96	4.94
HB Fuller	35.67	2.78	8.45
Huntsman	16.83	2.00	13.49
Ingevity	50.95	5.12	11.17
Kraton	13.27	2.29	20.86
Kronos Worldwide	8.76	0.53	6.44
LyondellBasell	59.37	5.77	10.76
Methanex	17.12	3.14	22.46
NewMarket	424.12	3.57	0.85
Olin	11.92	0.82	7.39
PolyOne	23.49	2.25	10.59
PPG	91.85	4.93	5.67
RPM International	69.69	2.98	4.47
Sherwin-Williams	572.25	3.87	0.68
Stepan	91.03	1.56	1.74
Chemours	12.67	1.58	14.25
Trinseo	19.31	1.91	10.98
Tronox	6.56	0.82	14.29
Univar	14.21	1.68	13.41
Venator Materials	1.40	0.13	10.24
Westlake Chemical	43.90	5.37	13.94

Markets rose after the company Moderna announced positive phase-one results for its coronavirus vaccine.

Successful vaccines or treatments could end the lockdowns and restrictions that are crippling demand for fuels and petrochemicals.

At the same time, crude prices rose sharply, as shown in the following table:

	18-May	15-May	%
Brent July	34.81	32.5	7.11
WTI June	31.82	29.43	8.12

Petrochemical prices tend to follow those for crude. For US-based producers, they enjoy a feedstock advantage when crude prices rise in relation to those for ethane and other natural gas liquids, which make up their predominate feedstock.

In US chemical markets, a June butadiene (BD) contract nomination emerged lower as demand continues to be weak.

While global price indications have begun to tick higher on rising naphtha, BD supply is expected to outpace weak demand in the near term.

BD is used to make synthetic rubber, and despite automaker and tyre plant restarts this month, demand is likely to remain curbed as economic recovery from the coronavirus is expected to be slow.

In Europe, chemical shares rose sharply as the week started on an optimistic footing after news on EU funding to tackle the pandemic’s economic consequences.

A joint proposal from Germany and France called for €500bn to be added to the European Recovery Fund, complementing the existing budget, which would do much to restore financial stability in the EU.

In Asia, petrochemical shares rose in cautious trade.

Economic data out of Asia were mixed, with Japan’s economy slipping into a recession, while Singapore posted a third consecutive month of export growth in April.

The world’s third-biggest economy posted a 3.4% year-on-year contraction in the first quarter of 2020 after shrinking 7.3% in the previous quarter.

Japan has been under a state of emergency since April, but restrictions on some prefectures are gradually being lifted.

Additional reporting by Amanda Hay, Morgan Condon and Nurluqman Suratman

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