Mat-Chem Notes

WTR-CMI for the week. It was another down week for the market, with both the Russell 2000 (down 0.5%) and the S&P 500 (down 0.8%) losing value. Our WTR-CMI index underperformed, losing 1.8%, dragged down by NGVT, ASH, and EAF, as they delivered disappointing results and provided more cautious guidance. April auto sales looking up. Germany's new passenger vehicle sales increased 13% Y/Y, while French sales increased 22% Y/Y. In the US, reporting OEMs are seeing a 9% improvement versus year-ago sales levels. Improving automotive sales volumes can be seen as a positive for PPG, AXTA, FUL, HXL, and AVNT, among others, in our index. Paints & coatings market growth. According to a recent Research and Markets report, the global paints & coatings market is expected to grow from $159 billion in 2022 to $171 billion in 2023 and $288 billion in 2030 a CAGR of 7.7%. However, we note that most of the volume growth anticipated over that time will come from commercial, industrial, and infrastructure projects, spurred on by spending on mining, equipment, and infrastructure. The forecast also does not factor in the likely deflation in the industrial coatings segment, as raw material costs come down. While we see this forecast as positive for SHW, PPG, AXTA, and RPM, we caution that both volume and price assumptions may be overly optimistic. US farmers feeling better, for now. Purdue's Ag Economy Barometer reading for April ticked up to 123, up 6 points from March, and on par with 2022 levels. However, researchers noted that the improvement came largely from a better outlook on financial health, which may have been buoyed by high commodity prices at the time of the survey. As grain prices softened, it is possible the May survey may feature a retrenchment of farmer sentiment. WWR and SK On to work on anode materials. Westwater Resources (NASDAQ: WWR) and leading Korean battery manufacturer SK On announced a joint project to optimize the development of graphite-based anode chemicals for the EV battery industry, which can later translate into a commercial supply agreement. New Zealand softens on deep-sea mining. While formally on the side of those looking to slow, if not ban, deep-sea mining in international waters, the country recently took up a review of the risks and benefits of such mining, in light of the global need for battery metals and New Zealand's aspirations to play a role in that once-in-a-generation transition.