The Urethane Blog
April 12, 2023
Dow, chemical makers upgraded at Piper Sandler
Apr. 12, 2023 8:12 AM ETDow Inc. (DOW), EMN, LYB, WLK, CE, MEOH, ASIX, OLN, MX:CABy: Rob Williams NY, SA News Editor1 Comment
Dow (NYSE:DOW) and several other chemical makers late Tuesday were upgraded by analysts at Piper Sandler.
The U.S. chemical companies have a significant advantage over global rivals in setting the prices of their products because of lower costs of raw materials.
“These upgrades are not based on global economic recovery (which would only serve to amplify the outcome), but on shifting energy values and the ensuing supply adjustments that we see occurring,” Charles Nelvert, senior research analyst at Piper Sandler, said in the April 11 report. “We see a number of tailwinds developing that should create substantive benefits for chemical industry margins, primarily for North American production.”
| Piper Sandler ratings for chemical makers, April 11 | |||
| Current | Previous | ||
| Dow Inc. (DOW) | Overweight | Neutral | |
| Eastman Chemical Co. (NYSE:EMN) | Overweight | Neutral | |
| LyondellBasell Industries N.V. (NYSE:LYB) | Overweight | Neutral | |
| Westlake Corp. (NYSE:WLK) | Overweight | Neutral | |
| Celanese Corp. (NYSE:CE) | Neutral | Underweight | |
| Methanex Corp. (NASDAQ:MEOH) | Neutral | Underweight | |
| AdvanSix Inc. (NYSE:ASIX) | Overweight | – | |
| Olin Corp. (NYSE:OLN) | Overweight | – |
April 12, 2023
Wanhua Chemical acquires Yantai Juli approved, TDI giant position consolidated further
On April 9, Wanhua Chemical issued an announcement that the company recently received approval from the operators of the State Administration of Market Supervision and Administration, agreeing that Wanhua Chemical intends to acquire shares in Yantai Juli Fine Chemical Co., Ltd.; at the same time, the State Administration of Market Supervision and Administration agrees to the additional restrictive conditions of operator concentration.
Wanhua’s acquisition of Juli antitrust was approved, and the competition pattern of TDI continued to be optimized
Wanhua Chemical plans to acquire a stake in Yantai Juli and take sole control of Yantai Juli, while Wanhua Chemical and Yantai Juli submit a restrictive commitment to the General Administration of Market Supervision. The General Administration of Market Supervision decided to attach restrictive conditions to approve the concentration, requiring both parties and entities after the concentration to fulfill their relevant obligations, including that the annual average price of supplying TDI to customers in China’s domestic market shall not be higher than the average price for the 24 months before the commitment date (March 30, 2023) after the completion of the transaction, maintain or expand the production of toluene diisocyanate in China, and continue R&D and innovation. Supply TDI to customers in the domestic market of China in accordance with the principles of fairness, reasonableness and non-discrimination. Customers in the domestic market in China shall not be forced to purchase TDI products exclusively or carry out tying unless there are legitimate reasons.
Yantai Juli and its wholly owned subsidiary Xinjiang Heshan Juli have a nominal production capacity of 230kt/year of TDI. Through this acquisition, the proportion of Wanhua Chemical TDI capacity in China will further increase from 35-40% to 45-50%, the main competitors in the domestic market will also change from 6 to 5, and the domestic TDI competition pattern will continue to be optimized. At the same time, if factoring into the 250kt/year TDI project under construction in Fujian, the company’s total nominal capacity will reach 1.03 million tons/year (including Juli’s TDI capacity), accounting for 28% of the world, ranking first in the world, with significant scale advantages.
https://www.ccfgroup.com/newscenter/newsview.php?Class_ID=600000&Info_ID=2023041230005
April 11, 2023
Morgan Stanley sees freight upcycle nearing
Shippers becoming less negative on economy, transportation needs
· Monday, April 10, 2023
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A dash of optimism around improving freight demand in the back half of the year was noted in a quarterly survey of shippers released Monday.
Morgan Stanley’s (NYSE: MS) Freight Pulse showed sentiment among the group improved slightly even as data points have yet to point to an upward trajectory for freight markets. Of shippers polled, 38% said they will likely maintain current inventory levels, which was a 10-percentage-point increase from the fourth-quarter report. The number of respondents saying they need to reduce inventories also declined for the first time since the third quarter of 2021.
Nearly 75% of shippers surveyed expect inventories to normalize in 2023, with almost 50% saying it will happen in the second half of the year.
“Despite all the bad headlines and mixed datapoints on macro, our latest quarterly Shipper Survey keeps showing signs of improvement under the surface,” stated Ravi Shanker, Morgan Stanley transportation equity analyst.
Heading into the first-quarter earnings season, which starts in earnest next week when J.B. Hunt (NASDAQ: JBHT) reports, many analysts are taking a wait-and-see approach to the back half after being more bullish to start the year.
Outlook improves among shippers, capacity to stay loose
Shippers’ overall view of the economy also moved higher for the second consecutive quarter. However, a 4.9 reading remained “comfortably below” the 15-year-old survey’s long-term average of 5.8. Shippers from the manufacturing and food and beverage verticals were most constructive while responses from retail shippers saw the biggest declines.
The outlook for transportation capacity across all modes loosened again.
Capacity predictions for the next six months were the loosest for airfreight and ocean, while rail capacity is expected to be the tightest. However, the outlook for rail capacity saw the biggest sequential deterioration out of all modes.
The outlook for both volume and pricing growth in trucking was described as “pretty grim,” with volumes “consistently in negative territory (similar to 2020 levels but slightly better than 2009 levels).” Pricing sentiment saw the biggest declines ever recorded, down in the low-single-digit range. However, the report pointed out that the comparisons were to record price levels.
FreightWaves’ trucking data has yet to inflect positively. Rejected tenders continue to bobble along the bottom alongside spot rates.
There was no change in truckload capacity expectations, with most respondents indicating intermodal will soon be the loosest mode after being the tightest over the last three quarters. Even with lower TL rates and rail service issues, 43% of shippers said they are shifting some freight from TL to the rails. This was the first increase in a year for the metric with only 25% saying they would make the change a quarter ago.
The report also showed rail volumes will be flat year over year (y/y), down from a 0.7% growth expectation last quarter. Pricing expectations stepped slightly higher but remained below the long-term average. Shippers said rail service has deteriorated, almost reaching the survey low established in the third quarter of last year.
Expectations for parcel call for slight y/y volume growth (except for airfreight) with the rate outlook snapping back into positive territory.
“We are not sure what the macro outlook holds in store for us but what is very clear is that at the current pace of destocking, inventory levels should be normalized soon and if the consumer holds up in 2H23, conditions are ripe for a restocking upcycle (esp. if we also overcorrect on inventory destocking),” Shanker said.
April 10, 2023
New Breakthrough in Differentiated Spandex May Trigger New Growth Points for PTMEG
PUdaily | Updated: April 10, 2023
On March 29, during Yarn Expo Spring 2023, Lianyungang LDZ New Aoshen Spandex Co., Ltd. launched two differentiated spandex products, temperature-sensitive shape memory spandex and deodorant spandex, at its own new product launch event. According to the manufacturer’s introduction, the elasticity of temperature-sensitive shape memory spandex can change with temperature, achieving characteristics of easy wear below the transition temperature and high resilience at or above the transition temperature; while deodorant spandex maintains water resistance while having the function of neutralizing and decomposing odor molecules.
In China’s total synthetic fiber output, spandex accounts for only 1-2%. It is usually used in the manufacturing of some elastic fabrics, especially sportswear and leisurewear. With the improvement of mass consumption, people’s requirements for fabrics have gradually increased. At present, China’s spandex industry has become quite mature, and the industry’s growth rate has been greater than 10% in recent years, especially the demand for differentiated and high-end spandex has grown significantly. As the main downstream product of PTMEG, spandex accounts for about 90% of PTMEG consumption. In recent years, the growth of the spandex industry has also driven the stable development of the PTMEG industry.
Recent Market Trends: Since the beginning of March, China’s spandex market has been showing a sustained mild weakness. The post-pandemic demand recovery was not strong as expected, and the national consumption sentiment in the textile industry was not high. The peak season for spandex was slightly shorter than in previous years, and prices fell slightly during the month. By the end of March, spandex manufacturers’ orders gradually decreased, and there were few summer orders obtained by them. Although the operating rate could still be maintained at around 80%, due to the inability of spandex to be stored for a long time, spandex manufacturers’ confidence declined, and their enthusiasm for purchasing feedstocks was difficult to sustain. Against this backdro, it has been difficult for PTMEG suppliers to continue supporting the market, and prices have fallen.
Market Outlook: Owing to the international political situation and economic conditions, some countries in the Middle East and South Asia are facing difficulties in approving letters of credit, and the strike wave in many European countries is affecting port operations. The pattern of weak overseas demand may be difficult to change in the short term. Chinese demand has rebounded visibly, but the speed of economic recovery is still unable to quickly boost the textile industry. Downstream manufacturers in the PTMEG-spandex industry chain mainly made replenishment purchases on rigid demand, and it is difficult to change the market weakness in the short term. However, in the long run, the textile industry is still one of the pillar industries in China’s economy. With the growth of the national economy, the demand for textile and its upstream feedstocks will continue to grow. Moreover, the emergence of differentiated spandex will expand the application fields from simple knitted fabrics to medical bandages, healthcare products, car interiors, artificial organ materials and many other areas, thus opening up broader market space. In the industry landscape with multiple growth points, there is still considerable room for growth in the spandex industry, which will drive the positive expectation for PTMEG consumption.
April 10, 2023
Personnel changes at BASF
MOSCOW (MRC) — The Board of Executive Directors of BASF SE has decided on the following personnel changes, said the company.
Tobias Dratt (50), President, North America, BASF Corporation, Florham Park, New Jersey, will assume responsibility for the Division Global Business Services, Ludwigshafen, Germany, effective May 1, 2023.
Marc Ehrhardt (54), President, Global Business Services, Ludwigshafen, will, at the same time, assume responsibility for the Division North America, BASF Corporation, Florham Park, New Jersey.
We remind, BASF will establish compounding capacities for its certified compostable biopolymer ecovio in Shanghai, China, said the company. Upon the successful completion of qualification trials, commercial material quantities will be available for customers throughout the region Asia-Pacific from mid-2023.
https://www.mrchub.com/news/407096-personnel-changes-at-basf
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