Daily Chemical Reactions

The Safety Dance – US Chemical Equities Underperformed The Overall Market In 1H24; Will 2H24 Be Any Better?
June 28, 2024
Commodities Mentioned:
Polyethylene, Polypropylene, Polystyrene, Polymer Grade Propylene, PET, Crude Oil, Industrial Gases, Specialty Chemicals, Commodity Chemicals, Fertilizer, Agricultural Chemicals, Paper, Lithium, Copper, Natural Gas, LNG, Diesel, Ethylene, Methanol, Ammonia, Chlor-Alkali, EVs, Hydrogen
Companies Mentioned:
Dow, LyondellBasell, Westlake, ExxonMobil, Venture Global LNG, Fisker, Polestar, Toyota, Amogy, Mitsubishi, Plug Power

Daily Chemical Reaction

The Safety Dance – US Chemical Equities Underperformed The Overall Market In 1H24; Will 2H24 Be Any Better?

Key Findings

  • General Thoughts: The US S&P chemical sector index has notably underperformed the overall S&P 500 Index YTD, with S&P chemical outperformance driven by its relatively more risk-averse areas, industrial gases and agriculture.
  • Supply Chain/Commodities: We flag the benefits of the C-MACC/PXi polymer pricing service for the investment community, our 2H24 view of chemical sector performance, and a few recent chemical market developments.
  • Energy/Upstream: We highlight crude oil and natural gas movements relative to commodity, specialty, fertilizer and agricultural chemical equity performance, and our preference to stay in cost-advantaged areas.
  • Sustainability/Energy Transition: We discuss asset-under-management trends at global sustainable investment funds and note that growth in this area has been most pronounced in Europe relative to the Americas and Asia.
  • Downstream/Other Chemicals: We discuss North American chemical rail traffic strength, noting it is the second strongest AAR category YTD, and flag recent currency movements, specifically the US Dollar and Japanese Yen.

Exhibit 1: The S&P 500 Chemicals Index and all its sub-sectors underperformed the overall market in 2Q24.

Source: Bloomberg, C-MACC Analysis, June 2024

See the PDF below for all charts, tables, and diagrams

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