Sunday Thematic & Weekly Recap

Are We There Yet? Commodity Chemical Stocks Look Cheap, But…
October 9, 2022
Commodities Mentioned:
PVC, Polypropylene, Polyethylene, Polyurethane, Polycarbonate, Polystyrene, PET, Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha, Ethylene, Methanol, Carbon, Copper, SAF, LNG
Companies Mentioned:
Nutrien, CF Industries, LSB Industries, Koch Fertilizer, AdvanSix, Dow, LyondellBasell, Westlake, ExxonMobil, Air Liquide, Olin, Borealis, Issaquena Green Power, Trinseo, TotalEnergies, Aramco, Orsted, Shell, Fluor, DuPont, BASF, Linde, Meraxis, PTTGC, Pensana, Freeport LNG, Lanxess, British Steel, Enviva, Enbridge, Yara, Petrobras, KBR, Neste, NextEra, Mitsubishi Chemical, Nucor, Ingevity, Technip, Sinopec, Idemitsu Kosan, BAE Systems, Trinity Industries, Heartland Polymers, Enterprise Products, Formosa Plastics, Braskem, Celanese, Flint Hills Resources, RPM, bp, PureCycle Technologies, Occidental, Western Midstream, Axalta, Sherwin-Williams, Sabic, Evonik, Orlen, Unipetrol, Solvay, Vale, Capstone Green Energy, Ballard, Carlton Power, EnPower, Topsoe, Iberdrola, Novamont, Huntsman, KW Plastics, Mitsubishi Electric, AkzoNobel, PPG, Talos Energy, Gulf Coast Sequestration, Elogen, EnVen, Denbury, Summit Carbon Solutions, Navigator, FREYR Battery, Valero Energy, Marathon Petroleum, Mura Technology, Chevron, Phillips 66, Air Products, Petronas Chemicals, Sumitomo Chemical, Li-Cycle, Albemarle, Pilbara Minerals, Livent, SQM, Worley, Northvolt, W.R. Grace, Nordex, Nexam Chemical, Macquarie, Fortescue, First Solar, Cummins, Altura Power, Suncor Energy, Sekisui Chemical, Scoular, CalBio, Incitec Pivot, Helm, Johnson Matthey, LG Chem, Posco, Barentz, Vopak, Munich Re, Moog, Komatsu, Liberty Energy, Fusion Fuel, Spolchemie, Enefit Green, The Andersons, NRG

C-MACC Sunday Thematic & Weekly Recap 138

Are We There Yet? Commodity Chemical Stocks Look Cheap, But…

  • There are few proxies for what the next year might hold for commodity chemicals, with the early 1990s downturn likely most apt but no surviving equities.
  • Old Dow data can tell us a lot, and it suggests that the current valuation for Dow is anticipating a 50% EBITDA peak-to-trough decline – as in past cycles.  
  • In our view, LyondellBasell has more downside in valuation and estimates, but all will struggle to show share price improvements while earnings keep falling.
  • Macro signals appear to be worsening daily, but oversupply in China may help cool some inflation pockets as freight rates fall, assuming relations hold up.
  • Otherwise, we look at the strength of ammonia – the thirst for hydrogen- and highlight our latest project venture – Issaquena Green Power.

Last week we discussed 18 Chemicals and related products and 126 Companies.

See PDF below for all charts, tables and diagrams

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