US chem shares plunge as Dow Jones falls 3.43%

Author: Al Greenwood

2020/10/28

HOUSTON (ICIS)--Chemical shares fell sharply on Wednesday as the Dow Jones Industrial Average fell by 3.43%.

It was the second day this week that the index had fallen by more than 2%.

Markets are falling amid concerns that a rise in coronavirus cases will lead to lockdowns, slowing demand domestically in the US and internationally in Europe.

The table below shows the major indices followed by ICIS.

26-Oct Change %
Dow Jones Industrial Average 26,521.07 -942.12 -3.43
S&P 500 3,271.17 -119.51 -3.52
Dow Jones US Chemicals Index 626.73 -19.54 -3.02
S&P 500 Chemicals Industry Index 636.37 -17.15 -2.62

The declines in the stock market follow reports of rising hospitalisations and a record number of new cases in the US.

In the US, new cases reached 73,240 and deaths reached 985, according to Johns Hopkins University.

If cases and hospital visits continue rising, regulators may bring back restrictions and lockdowns that could cause demand for petrochemicals to fall.

Germany's federal and state governments are already adopting such measures because infections keep doubling every 10 days. France is expected to announce similar restrictions.

Short-term restrictions have already been adopted by Ireland, Italy, Spain, France, Germany and Slovenia.

The worries about new restrictions caused oil markets to decrease prices, as shown in the following table.

28-Oct 27-Oct Change %
Brent 39.12 41.20 -2.08 -5.05%
WTI 37.39 39.57 -2.18 -5.51%

Falling oil prices hurt petrochemical producers in the US because they rely overwhelmingly on gas-based feedstocks such as ethane. Much of the world relies on oil-based naphtha.

As a result, lower oil prices diminish the cost advantage of US-based petrochemical plants.

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

$ Current

Price

$ Change % Change
AdvanSix 14.29 -0.89 -5.86
Avient 30.42 -0.48 -1.55
Axalta Coating Systems 24.84 -0.58 -2.28
Braskem 8.24 -0.32 -3.74
Celanese 111.51 -0.6 -0.54
Dow 45.18 -1.39 -2.98
DuPont 55.91 -1.44 -2.51
Eastman 80.27 -2.18 -2.64
HB Fuller 45.24 -2.07 -4.38
Huntsman 24 -0.3 -1.23
Ingevity 53.37 -3.47 -6.1
Kraton 26.41 -1.01 -3.68
Kronos Worldwide 12.91 -0.35 -2.64
LyondellBasell 69.33 -4.04 -5.51
Methanex 29.24 -1.31 -4.29
NewMarket 332.45 -11.04 -3.21
Olin 16.3 -0.33 -1.98
PPG 125.21 -2.18 -1.71
RPM International 83.54 -2.53 -2.94
Sherwin-Williams 678.66 5.19 0.77
Stepan 115.12 -1.57 -1.35
Chemours 19.81 -0.61 -2.99
Trinseo 31.12 -1.41 -4.33
Tronox 8.39 -0.73 -8
Univar 16.76 -0.57 -3.29
Venator 1.83 -0.12 -6.15
Westlake 65.26 -2.68 -3.94

Click here to view the ICIS Coronavirus, oil price crash - impact on chemicals topic page.

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