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Mat Chem Notes

WTR-CMI last week. In a flat to down market last week, with S&P 500 holding steady with 0.1% price change and Russell 2000 losing 0.9% of its value, our proprietary WTR-CMI index of 30 chemicals and material technology companies appreciated 0.5% for the week, led by 8.5% appreciation in ALB, which seemed to pull along other lithium names, including PLL, LAC and LTHM, which all posted 2-4% returns. EAF was the index’s laggard, losing 9.4% of its value, possibly due to continued softness in the iron ore and steel production sectors. EU relooks at GMO crops. Long a bulwark against expansion of GMO crops, the EU is taking another look at the 2001 rules which were a major obstacle to market penetration by genetically modified seeds that provide better yields, higher nutritional value, and require less water and less pesticides to produce. New genetic modification technologies and the reality of limited land resources and growing demand has led to the latest proposals on bifurcating the modified plants and seeds when it comes to regulatory oversight and acceptance. EU and UK auto production up strong in June. New passenger car registrations grew 25% YoY in June in Germany and similar 26% in UK, as both regions benefited from pent-up consumer demand. However, as comps become more difficult in 2H23, this torrid growth pace may subside, if the impact of economic slowdown on consumer confidence seen in China’s expected MSD decline in June registrations is any guide. As ISA meetings get going, so do NGOs’ smear campaigns. The International Seabed Authority is scheduled to begin a series of meetings in Jamaica this month in continuing efforts to develop member consensus around deep sea mining regime in international waters. Not surprising, luddite NGOs bent on halting all human activity they consider destructive to the planet have brought the knives out, calling, again, for a moratorium, or an outright ban of such practices, neither being an option for ISA under its UN charter. Still, for companies such as TMC and OMEX, these proceedings and outcomes may have a material impact on companies’ stock prices. The business of chemistry is…so-so. According to the weekly business fundamentals update from the American Chemistry Council (ACC) current conditions in U.S. and global manufacturing industries in general and chemical industry specifically are moving sideways to down, with ISM’s Manufacturing PMI and JP Morgan’s global Manufacturing PMI readings below 50 and getting weaker, chemical shipments down, and construction still trying to find its legs.