Materials firms bid farewell to a good 2016

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Although 2016 was a challenging year in many ways, investors owning stock in U.S.-based plastics materials firms will be sad to see the year end.

The Dow Jones Industrial Average already was up almost 7 percent for the year before Donald Trump’s surprising win in the U.S. presidential election in early November. Expectations of looser regulations and increased infrastructure spending then sent the market up even further. For the year, the Dow was up 16 percent as of early trading Dec. 28.

Most of the 15 public materials stocks tracked by Plastics News also enjoyed strong showings in 2016. Chemours Co. — a maker of plastic additives and specialty chemicals — led the way, seeing its per-share price increase more than four times to $23 between Jan. 1 and Dec. 28.

Materials-related firms Huntsman Corp., Kraton Polymers and Omnova Solutions each enjoyed jumps of 70-80 percent in their selling prices during the year. Rogers Corp. experienced a leap of just over 60 percent in that period.

Several materials firms saw hikes of 14-21 percent, which were more in line with overall market growth in 2016. These firms included A. Schulman Inc., Hexcel Corp., Dow Chemical Co., DuPont Co., Eastman Chemical Co. and Celanese Corp. PolyOne Corp. and Westlake Chemical Corp. each saw more modest stock price gains of 7-8 percent.

The only materials firms ready to wave goodbye to 2016 are LyondellBasell Industries and Nexeo Solutions.

LyondellBasell — the world’s largest producer of polyolefin resins — saw its stock price dip almost 1 percent in the Jan. 1-Dec. 28 period. Market analyst Peter Neil at marketrealist.com said in a Dec. 16 research note that during the year “unusually high plant maintenance and an unexpected plant breakdown dented [LyondellBasell’s] revenue and margins.”

Nexeo — one of North America’s largest distributors of plastic resins and chemicals — made its stock market debut in June, but has seen its per-share price slide almost 6 percent since then. That performance most likely is disappointing to Wilbur Ross, the firm’s chairman and founder of the investment firm that acquired Nexeo in early 2016.

Ross — a billionaire investor who has been involved in many corporate turnarounds — has been named to lead the U.S. Commerce Department for the new Trump administration.

Many stock analysts are expecting solid growth again in 2017. But if 2016 has taught us anything, it’s to expect the unexpected.