FREE

Mat-Chem Notes

WTR-CMI last week. Our index of chemicals and materials technology companies posted a 1.6% gain last week, keeping pace with the S&P 500, as both underperformed the Russell 2000's 1.9% appreciation. EAF and ECVT led with >7% gains each, as both stocks continued to recover from the post-earnings sell-off. Disappointing 1Q23 results continued to weigh on NGVT, with the stock losing another 7.2% over the week, while LTHM investors took some money off the table after the Allkem merger announcement, resulting in a 2.4% pullback of the stock. Tier-1 ag-chem cooperation. FMC and fellow ag-chem major, Syngenta, announced an agreement to co-market a new novel herbicide for grass weed in rice and other applications in Asia, demonstrating that marketing muscle of even a Tier-1 player alone may not be sufficient to rapidly penetrate target markets. This may underscore the need for greater marketing cooperation between ag companies as they strive to meet customer needs for new innovative products, which is even more true for emerging bio-based alternatives. H.B. Fuller broadens reach and product portfolio. The company announced its acquisition of UK-based Beardow Adams, a multinational manufacturer of adhesives that will complement and expand FUL's offerings in the hygiene, health, and consumable adhesives business, while offering cost and sales synergies upon integration. Plastic recycler in the spotlight. Loop Industries, which focuses on commercializing chemically recycled PET resin, may be gaining increased traction in the market, with the company announcing a JV to commercialize its products in Asia and supply deals with beauty products brand Garnier and sports apparel brand On AG. The company continues to steadily progress from proof of concept to commercialization, with brand link-ups further validating its approach. Yet the stock remains moribund. Hedging bets in a volatile environment. While ALB is dealing with the effects of Chile's new tax/partnership lithium extradition regime, the company is looking at expanding its operations in the country by going the direct lithium extraction (DLE) route, hoping to work the kinks out of the yet-to-be commercially proven process by 2028. In the meantime, ALB is doubling the size of its Australian lithium hydroxide (LiOH) conversion plant, as the outcome of its negotiations with the Chilean government are far from clear at this point.