Early portents are that the chemical industry is headed for stormy seas. Eastman Chemical has sharply reduced its earnings forecast for the third quarter, while a stock analyst has downgraded Dow.Chemical executives are growing increasingly worried about a host of problems with the world economy. Energy prices are spiking in Europe and could get worse if Russia continues to withhold natural gas this winter. Chinese economic performance has been dogged by stringent COVID-19 lockdown measures.Eastman is lowering its third-quarter earnings forecast by 19%, to $2.00 per share. “Demand has slowed more than expected in August and September, particularly in consumer durables and building and construction end markets and the European and Asian regions,” CEO Mark Costa says in a statement.The company notes that US natural gas prices have reached their highest levels in 14 years. It is also facing snarls on cargo bound from the US to other regions. Eastman says it is raising its own selling prices and controlling costs.Meanwhile, Jefferies stock analyst Laurence Alexander has lowered his rating on Dow from buy to hold. In a note to clients, he cites industry capacity additions and rising costs that have reduced the US’s competitive edge in Dow’s core olefins business. And he is concerned that rising interest rates in the US will erode consumer confidence.Alexander also echoes the concerns that have been top of mind for many industry observers. “International earnings remain at risk due to China’s COVID-control measures and the EU energy shock,” he writes.
I imagine this might slow hiring for Eastman or Dow a little? But we will see.
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looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20