Daily Chemical Reactions | Sunday Thematic & Weekly Recap

Trading Places – Taking Some Holiday Risk
December 6, 2020
Commodities Mentioned:
PVC, Polyethylene, Polypropylene, Polystyrene, PET, Ethylene, Propylene, Benzene, Isocyanates, Paraxylene, Butadiene, Bisphenol A, Plasticizers, Hydrogen, Crude, Naphtha, Natural Gas, NGLs, EDC, Lithium, Polyols, Adipic Acid, Butanediol, Isopropanol, TDI, Urethanes, Methanol, Bromine, Bitumen, Industrial Gas, Paperboard, Epoxies, Carbon Fiber
Companies Mentioned:
Dow, Lyondell, Braskem, Exxon, CP Chem, Westlake, Shintech, Formosa, Oxy, Amcor, Aramco, Arcanum, Axalta, Nippon Paint, Baerlocher, BASF, Borealis, Chandra Asri, Covestro, Elementis, Evonik, Faurecia, Indorama, Kemira, Lanxess, LG, PPG, Huntsman, Univar, Wacker, TechnipFMC, Air Products, JM, DSM, SABIC, Elkem, Global Green Chem, Graham, Henkel, Ganfeng, Lithium Americas, Piedmont, Petrobras, Sunningdale, Toyo Styrene, BHP, Shell, Lucid Motors, Renault, Volvo, Sangaria, COIM, Sinochem, Clariant, Equinor, Sasol, Polimekh, Planet Recyc, Polynt, ProAmpac, Resilux, Trinseo, Pemex, Sempra, Nestle, 3M, Daimler, UPS, Covestro, SABIC, Albemarle, ICL, BMW, Kinder Morgan, Porsche, Siemens, Stepan, BYD, Odfjell, Hyosung, Greenbrier Marine, Cargill, Axens, Eni, Southwest, Delta, Ford, Neste, Nova, Vistra, Air Liquide, Linde, Messer, Chevron, BP, Total, Sherwin

C-MACC Sunday Recap 43

 

Trading Places – Taking Some Holiday Risk

 

  • We expect commodity chemical companies – especially those that have not suffered storm related production outages – to have spectacular 4Q 2020s – well above current consensus and with greater upside surprises than other chemical sub-sectors. They may, or may not, offer bullish 2021 guidance.     
  • The commodity group has underperformed the other chemical sectors over the last 12 months, but the caveat is that the other sectors have kept pace with an S&P500 that is defining new PE highs – as are some of the other chemical groups. The commodity group has underperformed, has the strongest current per-unit margin and absolute earnings momentum. But is not cheap. What to do?
  • In this Recap, we discuss recent sector developments and discuss some short- and medium-term investment ideas, providing a risk framework around each and potential steps to mitigate that risk. This is a little off-piste for us in a widely distributed report but not uncommon in one-on-one client discussions.   

Last week we discussed 33 Chemical and related products and 97 Companies

This past Wednesday we introduced a new weekly research service dedicated to the coverage of Climate, Renewable, Energy Transition and ESG subjects – this is an area of the market that we have written about extensively this year [see Link here and highlights below] and where we see momentum building during the next decade. Our prior Sunday weekly ESG etc. round up moves to this new service.  

See PDF below for all charts 

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