The Urethane Blog

Everchem Updates

VOLUME XXI

September 14, 2023

Everchem’s Closers Only Club

Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more

June 17, 2020

Tax Migration

Progressive Tax States Lose People, Income To Flat And Zero Income Tax States

Submitted by Ted Dabrowski and John Klingner via Wirepoints.org,

Flat and no-income tax states, as a group, are beating out progressive tax states in the contest for people and their incomes, according to the last decade of IRS migration data analyzed by Wirepoints.

The nation’s seventeen flat and no income tax states won a net 1.9 million residents and $120 billion in Adjusted Gross Income (AGI) from progressive tax states during the 2000-2018 period. That’s nearly a 4 percent AGI gain for the flat and no income tax states, based on their 2010 base of $3.3 trillion in AGI. A table with the individual winners and losers over the time period is provided below.

The net gains in AGI not only bolster the tax base the year in which they come in, but they also help all subsequent years. The gains pile up on top of each other, year after year.

That means the country’s flat and zero income tax states, as a group, have accumulated $490 billion in AGI since 2010 from the nation’s progressive tax states, adding vibrancy, investment and tax revenues to the winning states.

States don’t change their income tax schemes often, so when they do, it’s a big deal. The change pits those who favor progressive taxes against those who want a flat tax or no income tax at all. Eight states don’t tax income at all in the U.S., while ten states have flat income taxes. Thirty-two states have some form of a progressive tax scheme.

Connecticut was the last state to move to a progressive tax structure in 1996, while North Carolina (2013) and Kentucky (2018) changed to a flat tax more recently.

Now some Illinois politicians want to abandon the state’s flat tax in favor of a progressive income tax. They argue, among other things, that higher taxes will bring more stability and people to the state.

But the movement of people and wealth across the country tells a different story.

The accumulated pattern over the past nine years is pretty clear. People are moving from progressive tax states to flat and zero income tax states. Of course, people move for a whole host of other reasons beside taxes: jobs, housing, family, weather, retirement, corruption, etc. Taxes are only one reason. But for many people, they are a big one.

The wealth accumulation by the flat and zero-income tax states is all the more impressive considering there were just 17 such states (not including Kentucky) compared to 33 progressive tax states.

Total gains

The $120 billion total is the net transfer between the two groups of states. In terms of individual total wealth gained from migration, zero and flat income tax states make up seven of the top ten winners of net domestic migration.

Florida, a state with no income tax, has been the biggest winner by far. The Sunshine State has gained nearly a million net people and over $95 billion in AGI from other states since 2010.

Zero-tax Texas is up next with a gain of $31 billion in AGI, followed by North Carolina with $16 billion. Two progressive tax states, Arizona and South Carolina are next, then non-progressive Washington, Colorado, Nevada and Tennessee. Progressive tax Oregon rounds out the top 10.

In contrast, the list of top losers is filled with progressive tax states. New York is the worst in the country; it has lost a net $55 billion in AGI to other states since 2010. Illinois, where politicians want to join the ranks of progressive-tax states, is next with a net loss of over $34 billion. Progressive tax California, New Jersey, Connecticut and Ohio are next. Flat tax states Massachusetts and Pennsylvania along with progressive Maryland and Virginia round out the top ten losers.

The gains and losses states have experienced since 2010 aren’t trivial. Winning states have, on average, seen net AGI gains from other states equal to 10 percent of their 2010 base AGI. Once again, Florida takes the top spot with an in-migration gain equivalent to 20 percent of its 2010 AGI. Progressive tax South Carolina is next with a gain of 16.1 percent, followed by Texas with 15.7 percent.

Illinois, meanwhile, lost the equivalent of 10 percent of its 2010 AGI to other states, the 2nd-worst loss in the nation behind Alaska.

What all this shows is that progressive tax states, if they’re attractive in other ways, can still win people and their incomes. And it shows that a flat tax state like Illinois can lose people if it’s corrupt, mismanaged and financially crippled.

So no, taxes aren’t everything. But add a progressive tax scheme to the nation’s most mismanaged, most-indebted, near-junk-rated and highest taxing state in the country and you’re asking for trouble.

Just follow the money.

https://www.zerohedge.com/markets/progressive-tax-states-lose-people-income-flat-and-zero-income-tax-states

June 17, 2020

Tax Migration

Progressive Tax States Lose People, Income To Flat And Zero Income Tax States

Submitted by Ted Dabrowski and John Klingner via Wirepoints.org,

Flat and no-income tax states, as a group, are beating out progressive tax states in the contest for people and their incomes, according to the last decade of IRS migration data analyzed by Wirepoints.

The nation’s seventeen flat and no income tax states won a net 1.9 million residents and $120 billion in Adjusted Gross Income (AGI) from progressive tax states during the 2000-2018 period. That’s nearly a 4 percent AGI gain for the flat and no income tax states, based on their 2010 base of $3.3 trillion in AGI. A table with the individual winners and losers over the time period is provided below.

The net gains in AGI not only bolster the tax base the year in which they come in, but they also help all subsequent years. The gains pile up on top of each other, year after year.

That means the country’s flat and zero income tax states, as a group, have accumulated $490 billion in AGI since 2010 from the nation’s progressive tax states, adding vibrancy, investment and tax revenues to the winning states.

States don’t change their income tax schemes often, so when they do, it’s a big deal. The change pits those who favor progressive taxes against those who want a flat tax or no income tax at all. Eight states don’t tax income at all in the U.S., while ten states have flat income taxes. Thirty-two states have some form of a progressive tax scheme.

Connecticut was the last state to move to a progressive tax structure in 1996, while North Carolina (2013) and Kentucky (2018) changed to a flat tax more recently.

Now some Illinois politicians want to abandon the state’s flat tax in favor of a progressive income tax. They argue, among other things, that higher taxes will bring more stability and people to the state.

But the movement of people and wealth across the country tells a different story.

The accumulated pattern over the past nine years is pretty clear. People are moving from progressive tax states to flat and zero income tax states. Of course, people move for a whole host of other reasons beside taxes: jobs, housing, family, weather, retirement, corruption, etc. Taxes are only one reason. But for many people, they are a big one.

The wealth accumulation by the flat and zero-income tax states is all the more impressive considering there were just 17 such states (not including Kentucky) compared to 33 progressive tax states.

Total gains

The $120 billion total is the net transfer between the two groups of states. In terms of individual total wealth gained from migration, zero and flat income tax states make up seven of the top ten winners of net domestic migration.

Florida, a state with no income tax, has been the biggest winner by far. The Sunshine State has gained nearly a million net people and over $95 billion in AGI from other states since 2010.

Zero-tax Texas is up next with a gain of $31 billion in AGI, followed by North Carolina with $16 billion. Two progressive tax states, Arizona and South Carolina are next, then non-progressive Washington, Colorado, Nevada and Tennessee. Progressive tax Oregon rounds out the top 10.

In contrast, the list of top losers is filled with progressive tax states. New York is the worst in the country; it has lost a net $55 billion in AGI to other states since 2010. Illinois, where politicians want to join the ranks of progressive-tax states, is next with a net loss of over $34 billion. Progressive tax California, New Jersey, Connecticut and Ohio are next. Flat tax states Massachusetts and Pennsylvania along with progressive Maryland and Virginia round out the top ten losers.

The gains and losses states have experienced since 2010 aren’t trivial. Winning states have, on average, seen net AGI gains from other states equal to 10 percent of their 2010 base AGI. Once again, Florida takes the top spot with an in-migration gain equivalent to 20 percent of its 2010 AGI. Progressive tax South Carolina is next with a gain of 16.1 percent, followed by Texas with 15.7 percent.

Illinois, meanwhile, lost the equivalent of 10 percent of its 2010 AGI to other states, the 2nd-worst loss in the nation behind Alaska.

What all this shows is that progressive tax states, if they’re attractive in other ways, can still win people and their incomes. And it shows that a flat tax state like Illinois can lose people if it’s corrupt, mismanaged and financially crippled.

So no, taxes aren’t everything. But add a progressive tax scheme to the nation’s most mismanaged, most-indebted, near-junk-rated and highest taxing state in the country and you’re asking for trouble.

Just follow the money.

https://www.zerohedge.com/markets/progressive-tax-states-lose-people-income-flat-and-zero-income-tax-states

June 16, 2020

Spray Foam Decor

Designers and DIY’ers

We’ve seen an explosion of foam-covered designs across Instagram

By Kristen Bateman

You’ve likely seen a mirror covered in chunky spray foam in pastel pink or vivid orange on Instagram lately. Or maybe even an entire bench covered in it. As it turns out, spray-foam decor is becoming one of the biggest trends of the moment, and it’s also one of the easiest and most affordable things to try.

I first saw spray-foam mirrors from the Copenhagen-based designer Anna Thoma, who had been creating massive mirrors with dreamy pink foam lining the edges. (Abigail Campbell, who sells vintage furniture and recently began making foam mirrors, also first saw them on Anna’s account.) But sometime this spring, I also started seeing almost everyone I know with their own decadent foam mirror that they had DIY’ed. Small oval-shaped mirrors rimmed in pink foam, huge square ones covered in orange-hued foam, and others left in the natural off-white hue began framing lots of selfies in my feed.

“I came across a tutorial from Flex Mami and realized just how foolproof they were to DIY,” explains Abigail, who recently began selling the mirrors and donating proceeds to the Minnesota Freedom Fund, Reclaim the Block, Black Visions Collective, The Marsha P. Johnson Institute, Justice for Breonna Taylor, and The Okra Project.

“When I first posted my version of the DIY to stories, I was surprised to see a lot of people reaching out asking if I could make them one,” she says. “It didn’t occur to me that people wouldn’t want to make it themselves. When the Black Lives Matter protests began, related organizations and bailout funds were in desperate need of donations. Since I still had people requesting mirrors, it seemed like a no-brainer to continue foaming a little while longer but give all of the proceeds to the organizations in need the most.”

The fun thing about the foam trend is that you don’t have to be too precise and it’s super-affordable to DIY, yet it still looks like a very original, unique statement piece. Designers and DIY’ers alike have been putting their own touches on each piece too, like painting the foam in ombré hues. Gustaf Westman has even created foam-covered benches.

“I think the appeal was born out of the repopularization, due in large part to social media, of the Ultrafragola mirror and the desire to have a unique piece to frame your mirror selfies,” adds Abigail. “With the price tag coming in nearly 99 percent less than that of the Memphis design piece and people being stuck at home, it’s no surprise it’s been such a popular DIY as of late.”

If you want to give it a go yourself, you’ll just need a mirror (or a piece of furniture, if you’re feeling adventurous) and a can of spray foam, which can be found for under $10 at most home improvement stores. Make sure the area you’re working in is well-ventilated, with open windows. You should also wear protective gloves and a mask. Set up the area by placing the mirror under a large trash bag or tarp and then spray the edges of the mirror (you can test it on a piece of paper to decide how you want to apply) and let it cure for 24 hours. If you want to, you can also add some color with either spray paint or acrylic paint.

Of course, if you’d rather buy one from the experts, there’s no shortage of people making these mirrors. Anna Thoma may just be the originator of this style, but Jude Camden has also started making a variety of mirrors, and stools and Gustaf Westman’s foam benches are next level. So far, we’ve yet to see the trend pop up on the sites of mainstream retailers, but there are a variety of independent designers stocking them. In this case, Instagram is your best bet for finding tutorials and the designers who are making them.

https://www.architecturaldigest.com/story/spray-foam-decor-is-having-a-moment-among-designers-and-diyers?mbid=synd_yahoo_rss

June 16, 2020

Spray Foam Decor

Designers and DIY’ers

We’ve seen an explosion of foam-covered designs across Instagram

By Kristen Bateman

You’ve likely seen a mirror covered in chunky spray foam in pastel pink or vivid orange on Instagram lately. Or maybe even an entire bench covered in it. As it turns out, spray-foam decor is becoming one of the biggest trends of the moment, and it’s also one of the easiest and most affordable things to try.

I first saw spray-foam mirrors from the Copenhagen-based designer Anna Thoma, who had been creating massive mirrors with dreamy pink foam lining the edges. (Abigail Campbell, who sells vintage furniture and recently began making foam mirrors, also first saw them on Anna’s account.) But sometime this spring, I also started seeing almost everyone I know with their own decadent foam mirror that they had DIY’ed. Small oval-shaped mirrors rimmed in pink foam, huge square ones covered in orange-hued foam, and others left in the natural off-white hue began framing lots of selfies in my feed.

“I came across a tutorial from Flex Mami and realized just how foolproof they were to DIY,” explains Abigail, who recently began selling the mirrors and donating proceeds to the Minnesota Freedom Fund, Reclaim the Block, Black Visions Collective, The Marsha P. Johnson Institute, Justice for Breonna Taylor, and The Okra Project.

“When I first posted my version of the DIY to stories, I was surprised to see a lot of people reaching out asking if I could make them one,” she says. “It didn’t occur to me that people wouldn’t want to make it themselves. When the Black Lives Matter protests began, related organizations and bailout funds were in desperate need of donations. Since I still had people requesting mirrors, it seemed like a no-brainer to continue foaming a little while longer but give all of the proceeds to the organizations in need the most.”

The fun thing about the foam trend is that you don’t have to be too precise and it’s super-affordable to DIY, yet it still looks like a very original, unique statement piece. Designers and DIY’ers alike have been putting their own touches on each piece too, like painting the foam in ombré hues. Gustaf Westman has even created foam-covered benches.

“I think the appeal was born out of the repopularization, due in large part to social media, of the Ultrafragola mirror and the desire to have a unique piece to frame your mirror selfies,” adds Abigail. “With the price tag coming in nearly 99 percent less than that of the Memphis design piece and people being stuck at home, it’s no surprise it’s been such a popular DIY as of late.”

If you want to give it a go yourself, you’ll just need a mirror (or a piece of furniture, if you’re feeling adventurous) and a can of spray foam, which can be found for under $10 at most home improvement stores. Make sure the area you’re working in is well-ventilated, with open windows. You should also wear protective gloves and a mask. Set up the area by placing the mirror under a large trash bag or tarp and then spray the edges of the mirror (you can test it on a piece of paper to decide how you want to apply) and let it cure for 24 hours. If you want to, you can also add some color with either spray paint or acrylic paint.

Of course, if you’d rather buy one from the experts, there’s no shortage of people making these mirrors. Anna Thoma may just be the originator of this style, but Jude Camden has also started making a variety of mirrors, and stools and Gustaf Westman’s foam benches are next level. So far, we’ve yet to see the trend pop up on the sites of mainstream retailers, but there are a variety of independent designers stocking them. In this case, Instagram is your best bet for finding tutorials and the designers who are making them.

https://www.architecturaldigest.com/story/spray-foam-decor-is-having-a-moment-among-designers-and-diyers?mbid=synd_yahoo_rss

June 16, 2020

Analysts Like MDI Producers

Wall Street turns more bullish on chemicals outlook, raises price targets

Author: Joseph Chang

2020/06/15

NEW YORK (ICIS)–Chemicals equity analysts are turning more bullish on the sector, citing a potential bottom in transportation and industrial end markets, an upturn in leading economic indications (LEIs) and price stabilisation.

John Roberts, US chemicals analyst at UBS, significantly raised price targets for Huntsman, Celanese and Eastman on a bottom in automotive and industrial end markets, and based on projected earnings from Q3 2020 onwards to Q2 2021.

“These companies on average have around 30% exposure to transportation and industrial end markets. We believe these markets have hit bottom and expect improvements with an economic recovery will further support stock sentiment and valuation,” said Roberts in a research note.

The analyst took up his earnings multiples on companies – a combination of portfolio mix (Huntsman), and the fact that these earnings, while improved versus the bottom in Q2 2020, should still be much lower than 2019 levels (thus implying normalised profits would be higher).

For Huntsman, the UBS analyst took up his earnings before interest, tax, depreciation and amortisation (EBITDA) estimate for the next 12 months (Q3 2020 – Q2 2021) slightly from $553m, to $561m on a “faster pace of recovery than previously expected”.

Putting around a 10x multiple on EBITDA versus his prior 8x yields his new price target of $23 for Huntsman’s shares versus a prior $18. Huntsman had closed at $18.02 prior to the Monday note.

A higher multiple for Huntsman is warranted, given the company’s transformation as it shed commodity assets and acquired downstream methylene diphenyl diisocyanate (MDI) businesses. Around 70% of Huntsman’s MDI sales are now from differentiated products, said Roberts.

The UBS analyst took up his price target on Celanese from $91, to $112 based on a multiple adjustment on price/earnings (P/E) from around 12x, to 15x, and on Eastman from $68, to $86 based on a P/E multiple increase from around 11x, to 14x. Prior to the Monday note, Celanese closed at $88.52 and Eastman at $69.63. He retains “buy” ratings on all three names.

MDI PRICES BOTTOMING

Alembic Global Advisors analyst Hassan Ahmed bumped up share price targets for Covestro (from €40 to €45), Dow ($45 to $50) and Huntsman ($20 to $22) on a bottoming of MDI prices.

“Asian spot MDI prices seemed to have bottomed and recently started inflecting up. We believe this positive inflection may also begin to manifest itself in MDI margins,” said Ahmed in a research note.

As of 10 June, Asia spot prices for pure MDI on a CFR China basis rebounded to $1,575/tonne from a low of $1,375 on 13 May while polymeric MDI was up to $1,335/tonne from a low of $1,125 on 15 April.

“Our analysis suggests that the worst may be behind the MDI cycle (post Q2 2020), with utilisation rates tightening and margins rising from here,” he added.

On the supply side, Wanhua Chemical’s decision in late 2019 to cancel its 400,000 tonne/year MDI project in St James Parish, Louisiana, US improves the long-term outlook considerably. Historically, industry consultants and Wall Street analysts have overestimated supply-side additions and underestimated capacity closures, he noted.

“On the demand side, our analysis suggests that 6% global demand growth rates are sustainable post-2020,” said Ahmed.

“Signs of life seem to be emerging in the Chinese and US automotive end-markets, with the global MDI industry always rebounding strongly, demand growth-wise, post recessionary periods,” he added.

OUTPERFORMANCE COMING OUT OF RECESSION

The theme of chemical stocks outperforming the broader market in the early stages of a recovery from recession is gaining traction.

“As a rule of thumb, the window for chemicals to participate in an ‘early cycle bounce’ and outperform the S&P 500 typically extends through 4-6 quarters after the end of a recession,” said Laurence Alexander, analyst at Jefferies & Co, in a research note.

“As more evidence emerges that the recovery is becoming more robust, the upstream chemical companies will likely extend their outperformance, given their operating leverage to higher volumes and the potential for fly-ups in margins if peers have unplanned outages – which are more common in the first surge in volumes,” he added.

Thus, the analyst favours BASF, Dow, Huntsman and Methanex, with LyondellBasell and DuPont also likely to benefit.

Key leading indicators on a global and regional basis – the OECD LEIs in particular – are showing “fish hooks” from the bottom, he noted.

“In May, the Global, US and EU LEIs all improved sharply sequentially on both an absolute and year-on-year (YoY) basis. In China, the LEI has already improved to -2.6% on a YoY basis from -13.3% in February,” said Alexander.

“We expect the Chinese LEI to return to positive comparisons in Q3, and the EU (-4.5% YoY) and US (-4.3%) ones in Q4,” he added.

Troughs in earnings per share (EPS) estimates and the initial bounce in LEIs (from trough to flat YoY) tend to be strong signals for both chemical sector returns (15%-20% over 6 months) and for a rotation into upstream chemicals, said the analyst.

While he cautioned that the coronavirus flare-ups, the risk of new lockdowns and a fade in fiscal and monetary stimulus “all muddy the H2 2020 outlook” and that chemical valuation multiples appear stretched, “a turn in LEIs and stabilising estimates are more potent trading signals at cyclical troughs, particularly for upstream chemicals”, said Alexander.

Focus article by Joseph Chang

https://www.icis.com/explore/resources/news/2020/06/15/10519221/focus-wall-street-turns-more-bullish-on-chemicals-outlook-raises-price-targets