April 6, 2022

Q1 Chemical M&A Deals

Chemical Deal Results

Seems like a slow quarter; lots of deals in Q4 2020 in anticipation of tax changes . . .

http://www.chemicaldeals.com/Results.aspx?searchtext=&quarter=1st+Quarter+2022

April 4, 2022

Trucking Issues

Dow transport index drops nearly 5% on concerns of freight downturn

Index loses more than 771 points as freight issues take it on chin

Mark SolomonFriday, April 1, 2022 3 minutes read

Listen to this article 0:00 / 4:49 BeyondWords

The Dow Jones Transportation Average fell out of bed Friday, dropping nearly 5% in one of the index’s worst single-day performances in recent history.

The 20-stock index fell $771.72 to close the session at $15,511.30. 

J.B. Hunt Transportation Services Inc. (NASDAQ: JBHT) fell more than 9.6%, Landstar System Inc. (NASDAQ: LSTR) declined 7.3%, Norfolk Southern Corp. (NYSE: NSC) dropped 6.79%, and Old Dominion Freight Line Inc. (NASDAQ: ODFL) fell 6.76%. At its low point of the session, about 15 minutes before the 4 p.m. ET close, the index was down by more than $800 from Thursday’s closing price.

Virtually all of the damage came from the freight side of the index. The six airlines making up the index came through relatively unscathed, with Southwest Airlines Co. (NYSE: LUV) actually posting a gain in the session.

The decline came as the Department of Labor reported Friday that the number of truck transportation jobs fell in March after 21 consecutive monthly gains. The seasonally adjusted figures came in at 1,550,800 jobs, a decline of 4,900 jobs and the first month-to-month drop since April 2020, when the U.S. economy was collapsing as the COVID-19 pandemic took hold. There was no company-specific news that could be seen as triggering such an extreme drop.

Equity markets in general shrugged off the decline in the index. The Dow Jones Industrial Average, the Standard & Poor’s 500 Index and the NASDAQ posted gains in volatile intraday trading.

The transport index had rebounded in recent weeks, mirroring a recovery in the overall equity market through most of March after pronounced weakness in January and February. The index hit $16,579 on Jan. 4 before falling for the balance of the month and well into February. The index troughed at $14,523 on Feb. 23, the day before Russia launched its invasion of Ukraine. It reversed course from there, peaking at $16,573 on March 29 before posting three consecutive days of declines.

The index is well below its 52-week closing high of $17,039.38, set last Nov. 2.

The index was created in July 1884 by Charles Dow, and initially consisted of nine railroads and two non-rail companies. The index’s composition at its inception reflected railroads’ dominance in interstate commerce and the industry’s profound importance to the country’s growth.

The index has long been viewed as a leading indicator of the broad market’s direction, mainly because economic demand shows up first in shipping order books. Over the decades, freight recessions have presaged broad economic recessions.

The freight industry, and especially the trucking sector that dominates it, is notoriously cyclical. In an op-ed on Thursday, FreightWaves Founder and CEO Craig Fuller predicted an imminent freight recession. Fuller cited data from FreightWaves’ SONAR platform showing a steep decline in the rate of tender rejections for contract truckload services. The drop of nearly 500 basis points in one month reflects a sharp drop in shipping activity, less demand for carriers’ services and the effective end of carriers calling the shots as to which loads they will accept or reject, Fuller wrote.

The tender rejection rate fell 1.3% during the last week of March alone, historically one of the best periods of the year for carriers, according to SONAR data.

In an op-ed the week before, Fuller predicted a “bloodbath” in the truckload market with demand destruction wiping out many operators that had either entered the market or over-expanded during the last two to three boom years.

Anthony Smith, FreightWaves’ chief economist, said that goods demand will continue to be impacted as consumers shift more of their spending to services such as travel. In addition, there is still a lot of upstream inventory in the hands of manufacturers, wholesalers and distributors, Smith said. Cargo owners that opted to fill up warehouses to keep buffer stock on hand are saddled with more inventory than they need and aren’t eager to ramp up their orders, he added.

Carriers and third-party logistics providers also shoulder some of the blame for growing in a “sloppy manner” over the past couple of years, Smith said. Highly elevated rates during that period “covered up a lot of mistakes that will hit much harder in the next few months,” he said.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes Transportation Services (No. ), J.B. Hunt (No. 4), Landstar System (No. 6) and Old Dominion Freight Line (No. 9).

April 4, 2022

Trucking Issues

Dow transport index drops nearly 5% on concerns of freight downturn

Index loses more than 771 points as freight issues take it on chin

Mark SolomonFriday, April 1, 2022 3 minutes read

Listen to this article 0:00 / 4:49 BeyondWords

The Dow Jones Transportation Average fell out of bed Friday, dropping nearly 5% in one of the index’s worst single-day performances in recent history.

The 20-stock index fell $771.72 to close the session at $15,511.30. 

J.B. Hunt Transportation Services Inc. (NASDAQ: JBHT) fell more than 9.6%, Landstar System Inc. (NASDAQ: LSTR) declined 7.3%, Norfolk Southern Corp. (NYSE: NSC) dropped 6.79%, and Old Dominion Freight Line Inc. (NASDAQ: ODFL) fell 6.76%. At its low point of the session, about 15 minutes before the 4 p.m. ET close, the index was down by more than $800 from Thursday’s closing price.

Virtually all of the damage came from the freight side of the index. The six airlines making up the index came through relatively unscathed, with Southwest Airlines Co. (NYSE: LUV) actually posting a gain in the session.

The decline came as the Department of Labor reported Friday that the number of truck transportation jobs fell in March after 21 consecutive monthly gains. The seasonally adjusted figures came in at 1,550,800 jobs, a decline of 4,900 jobs and the first month-to-month drop since April 2020, when the U.S. economy was collapsing as the COVID-19 pandemic took hold. There was no company-specific news that could be seen as triggering such an extreme drop.

Equity markets in general shrugged off the decline in the index. The Dow Jones Industrial Average, the Standard & Poor’s 500 Index and the NASDAQ posted gains in volatile intraday trading.

The transport index had rebounded in recent weeks, mirroring a recovery in the overall equity market through most of March after pronounced weakness in January and February. The index hit $16,579 on Jan. 4 before falling for the balance of the month and well into February. The index troughed at $14,523 on Feb. 23, the day before Russia launched its invasion of Ukraine. It reversed course from there, peaking at $16,573 on March 29 before posting three consecutive days of declines.

The index is well below its 52-week closing high of $17,039.38, set last Nov. 2.

The index was created in July 1884 by Charles Dow, and initially consisted of nine railroads and two non-rail companies. The index’s composition at its inception reflected railroads’ dominance in interstate commerce and the industry’s profound importance to the country’s growth.

The index has long been viewed as a leading indicator of the broad market’s direction, mainly because economic demand shows up first in shipping order books. Over the decades, freight recessions have presaged broad economic recessions.

The freight industry, and especially the trucking sector that dominates it, is notoriously cyclical. In an op-ed on Thursday, FreightWaves Founder and CEO Craig Fuller predicted an imminent freight recession. Fuller cited data from FreightWaves’ SONAR platform showing a steep decline in the rate of tender rejections for contract truckload services. The drop of nearly 500 basis points in one month reflects a sharp drop in shipping activity, less demand for carriers’ services and the effective end of carriers calling the shots as to which loads they will accept or reject, Fuller wrote.

The tender rejection rate fell 1.3% during the last week of March alone, historically one of the best periods of the year for carriers, according to SONAR data.

In an op-ed the week before, Fuller predicted a “bloodbath” in the truckload market with demand destruction wiping out many operators that had either entered the market or over-expanded during the last two to three boom years.

Anthony Smith, FreightWaves’ chief economist, said that goods demand will continue to be impacted as consumers shift more of their spending to services such as travel. In addition, there is still a lot of upstream inventory in the hands of manufacturers, wholesalers and distributors, Smith said. Cargo owners that opted to fill up warehouses to keep buffer stock on hand are saddled with more inventory than they need and aren’t eager to ramp up their orders, he added.

Carriers and third-party logistics providers also shoulder some of the blame for growing in a “sloppy manner” over the past couple of years, Smith said. Highly elevated rates during that period “covered up a lot of mistakes that will hit much harder in the next few months,” he said.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes Transportation Services (No. ), J.B. Hunt (No. 4), Landstar System (No. 6) and Old Dominion Freight Line (No. 9).

April 1, 2022

More From BASF

German Chemical Giant Warns Of “Total Collapse” If Russian Gas Supply Cut

by Tyler DurdenFriday, Apr 01, 2022 – 05:44 AM

CEO of Germany’s multinational BASF SE, the world’s largest chemical producer, has warned that curbing or cutting off energy imports from Russia would bring into doubt the continued existence of small and medium-sized energy companies, and further would likely spiral Germany into its most “catastrophic” economic crisis going back to the end of World War 2. 

Company CEO Martin Brudermuller issued the words in an interview with Frankfurter Allgemeine newspaper just ahead of German officials by midweek giving an “early warning” to industries and the population of possible natural gas shortages, as Russia appears ready to firmly hold to Putin’s recent declaration that “unfriendly countries” must settle energy payments in rubles, related to the Ukraine crisis and resultant Western sanctions. 

According to Bloomberg he mused that while “Germany could be independent from Russia gas in four to five years” it remains that “LNG imports cannot be increased quickly enough to replace all Russian gas flows in the short term.”CEO of BASF Martin Brudermüller, file image

But in the meantime, Brudermuller described that “It’s not enough that we all turn down the heating by 2 degrees now” given that “Russia covers 55 percent of German natural gas consumption.” He emphasized that if Russian gas disappeared overnight, “many things would collapse here” – given that “we would have high levels of unemployment, and many companies would go bankrupt. This would lead to irreversible damage.” He continued:

“To put it bluntly: This could bring the German economy into its worst crisis since the end of the Second World War and destroy our prosperity. For many small and medium-sized companies in particular, it could mean the end. We can’t risk that!”

The dire warning of coming disaster in the event Russian gas is shut off came in response being questioned over whether it’s at all possible to abandon Russian energy. 

Asserting that this issue is not “black and white” – and that the German economy stands on the brink of catastrophe, the BASF CEO said that if this standoff continues to escalate it will “open the eyes of many on both sides”…

Below is the question posed by the newspaper, and Brudermuller’s response:

And what if, for example, Putin’s demand for payment in rubles leads to an immediate stop in gas supplies?

“A delivery stop for a short time would perhaps open the eyes of many – on both sides. It would make clear the magnitude of the consequences. But if we don’t get any more Russian gas for a long time, then we really have a problem here in Germany. At BASF, we would have to scale back or completely shut down production at our largest site in Ludwigshafen if the supply fell significantly and permanently below 50 percent of our maximum natural gas requirement. Minister Habeck has already activated the early warning level of the gas emergency plan.”

Separate sources estimate that at Ludwigshafen alone this scenario would immediately lead to some 40,000 employees being possibly laid off, or at least put on short-time working hours. 

He warned further in the interview that many Germans are currently greatly underestimating the consequences of what Russia shutting off the taps would mean… nothing less than a historic crisis:

“Many have misconceptions. I notice that in many of the conversations I have. People often make no connection at all between a boycott and their own job. As if our economy and our prosperity were set in stone.”

He explained that higher prices are already having a huge impact on the food supply given at this point BASF has been forced to reduce the production of ammonia for fertilizer production.

Brudermuller called this “a catastrophe and we will feel it even more clearly next year than this one. Because most of the fertilizers that the farmers need this year have already been bought. In 2023 there will be a shortage, and then the poor countries in particular, for example in Africa, will no longer be able to afford to buy basic foodstuffs.” In a very alarming statement and forewarning, he added: “There is a risk of famine.”

https://www.zerohedge.com/energy/basf-ceo-warns-germany-total-collapse-if-russian-gas-supply-cut

April 1, 2022

More From BASF

German Chemical Giant Warns Of “Total Collapse” If Russian Gas Supply Cut

by Tyler DurdenFriday, Apr 01, 2022 – 05:44 AM

CEO of Germany’s multinational BASF SE, the world’s largest chemical producer, has warned that curbing or cutting off energy imports from Russia would bring into doubt the continued existence of small and medium-sized energy companies, and further would likely spiral Germany into its most “catastrophic” economic crisis going back to the end of World War 2. 

Company CEO Martin Brudermuller issued the words in an interview with Frankfurter Allgemeine newspaper just ahead of German officials by midweek giving an “early warning” to industries and the population of possible natural gas shortages, as Russia appears ready to firmly hold to Putin’s recent declaration that “unfriendly countries” must settle energy payments in rubles, related to the Ukraine crisis and resultant Western sanctions. 

According to Bloomberg he mused that while “Germany could be independent from Russia gas in four to five years” it remains that “LNG imports cannot be increased quickly enough to replace all Russian gas flows in the short term.”CEO of BASF Martin Brudermüller, file image

But in the meantime, Brudermuller described that “It’s not enough that we all turn down the heating by 2 degrees now” given that “Russia covers 55 percent of German natural gas consumption.” He emphasized that if Russian gas disappeared overnight, “many things would collapse here” – given that “we would have high levels of unemployment, and many companies would go bankrupt. This would lead to irreversible damage.” He continued:

“To put it bluntly: This could bring the German economy into its worst crisis since the end of the Second World War and destroy our prosperity. For many small and medium-sized companies in particular, it could mean the end. We can’t risk that!”

The dire warning of coming disaster in the event Russian gas is shut off came in response being questioned over whether it’s at all possible to abandon Russian energy. 

Asserting that this issue is not “black and white” – and that the German economy stands on the brink of catastrophe, the BASF CEO said that if this standoff continues to escalate it will “open the eyes of many on both sides”…

Below is the question posed by the newspaper, and Brudermuller’s response:

And what if, for example, Putin’s demand for payment in rubles leads to an immediate stop in gas supplies?

“A delivery stop for a short time would perhaps open the eyes of many – on both sides. It would make clear the magnitude of the consequences. But if we don’t get any more Russian gas for a long time, then we really have a problem here in Germany. At BASF, we would have to scale back or completely shut down production at our largest site in Ludwigshafen if the supply fell significantly and permanently below 50 percent of our maximum natural gas requirement. Minister Habeck has already activated the early warning level of the gas emergency plan.”

Separate sources estimate that at Ludwigshafen alone this scenario would immediately lead to some 40,000 employees being possibly laid off, or at least put on short-time working hours. 

He warned further in the interview that many Germans are currently greatly underestimating the consequences of what Russia shutting off the taps would mean… nothing less than a historic crisis:

“Many have misconceptions. I notice that in many of the conversations I have. People often make no connection at all between a boycott and their own job. As if our economy and our prosperity were set in stone.”

He explained that higher prices are already having a huge impact on the food supply given at this point BASF has been forced to reduce the production of ammonia for fertilizer production.

Brudermuller called this “a catastrophe and we will feel it even more clearly next year than this one. Because most of the fertilizers that the farmers need this year have already been bought. In 2023 there will be a shortage, and then the poor countries in particular, for example in Africa, will no longer be able to afford to buy basic foodstuffs.” In a very alarming statement and forewarning, he added: “There is a risk of famine.”

https://www.zerohedge.com/energy/basf-ceo-warns-germany-total-collapse-if-russian-gas-supply-cut