US chem shares plunge after retailers warn of costs

Al Greenwood


HOUSTON (ICIS)–US-listed shares of chemical companies fell on Wednesday as the general stock market posted steep declines after retailers complained about rising costs.

The table shows the major indices followed by ICIS.

18-May Change %
Dow Jones Industrial Average 31,490.07 -1,164.52 -3.57%
S&P 500 3,923.77 -165.08 -4.04%
Dow Jones US Chemicals Index 837.06 -24.01 -2.79%
S&P 500 Chemicals Industry Index 838.59 -23.77 -2.76%

Stocks fell after major US retailer Target reported its Q1 earnings.

Its operating margin rate was 5.3%, well below expectations because of the company’s efforts to reduce excess inventory as well as higher costs for freight and transportation, the company said.

For the second quarter, the operating margin should remain low, varying  widely from 5.3%, the company said. For all of 2022, the operating income margin rate should be 6%.

For comparison, Target expects its long-term margin to be at least 8%.

Shares of Target fell by nearly 25%.

On Tuesday, US retailer Walmart said in its Q1 earnings report that inflation in the US, especially for food and fuel, put more pressure on the company’s margin mix and operating costs than it expected.

For the first quarter, operating expenses as a percentage of net sales rose by 45 basis points, mainly because of higher wages in Walmart’s US operations.

Walmart lowered its earnings guidance for the second quarter and for the full year.

Walmart shares have fallen by more than 17% in the past five days.

Rising costs and excess inventory could slow down demand for goods – although most chemical companies had not noted any demand destruction when they discussed their first-quarter earnings.

Attempts to lower inflation by the Federal Reserve could slow down the economy as well.

It raised its benchmark interest rate by half a point at its last meeting in May, and similar hikes are expected for the rest of the year.

The following table shows the US-listed shares of chemical companies followed by ICIS.

Name $ Current


$ Change % Change
AdvanSix 45.97 -1.24 -2.62
Avient 47.09 -1.15 -2.37
Axalta Coating Systems 25.47 -1.00 -3.78
Braskem 17.09 -0.83 -4.63
Celanese 150.85 -4.66 -3.00
Dow 68.74 -1.23 -1.76
DuPont 64.29 -2.12 -3.19
Eastman 103.84 -3.07 -2.87
HB Fuller 66.91 -0.12 -0.19
Huntsman 35.57 -0.95 -2.60
Ingevity 67.48 -0.23 -0.34
Kronos Worldwide 16.43 0.00 0.00
LyondellBasell 110.20 -1.20 -1.08
Methanex 49.78 -1.28 -2.50
NewMarket 336.04 -3.79 -1.12
Olin 62.89 -2.34 -3.59
PPG 119.40 -4.93 -3.97
RPM International 84.22 -2.66 -3.06
Sherwin-Williams 258.51 -10.75 -3.99
Stepan 107.67 -0.63 -0.58
Chemours 41.39 -1.43 -3.34
Trinseo 45.44 -0.64 -1.39
Tronox 17.66 -0.70 -3.81
Univar Solutions 28.38 -0.66 -2.26
Venator Materials 1.76 -0.11 -5.88
Westlake 130.95 -5.34 -3.92

Thumbnail shows a stock-market chart. Image by Shutterstock. 


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