Before we get too far into September — and with the Dow Jones Industrial average already down more than 300 points in early trading Sept. 1 — let's take a look at what happened to plastic materials stocks in the Awful August of 2015.
First, some context: The U.S. stock market in August posted its worst month since 2012. The Dow fell 6.6 percent for the month, with the broader S&P 500 slipping 6.3 percent and the NASDAQ exchange tumbling 6.9 percent. China's recent devaluation of its currency led to a series of events that weakened confidence in economies around the world.
The price of oil — a global commodities price-setter — also fell for most of August, dipping below $40 per barrel for West Texas Intermediate crude before returning to near $45.50. That's roughly the level it occupied at the start of the month.
Now, the good news — and this portion of the column will be brief.
In the midst of all of this price-diving, Kraton Performance Polymers — a maker of styrenic block copolymers based in Houston — somehow managed to see its per-share price grow almost 3 percent in Awful August, reaching the $21.10 mark. For the good folks at Kraton, August wasn't so awful after all.
The heaviest blows on the materials front were absorbed by Chemours Co., Huntsman Corp., Westlake Chemical Corp. and Axiall Corp. each of which saw their per-share stock prices drop 9 to 13 percent during August. Atlanta-based Axiall — a maker of PVC resins, compounds and related products — fared the worst, falling just under 13 percent to around $25.25 per share on Aug. 31.
A larger group of materials firms saw per-share price drops of 5 to 8 percent for the month. This group includes A. Schulman Inc., Dow Chemical Co., DuPont Co., Eastman Chemical Co., LyondellBasell Industries, Celanese Corp. and Hexcel Corp. Global polyolefins leader LyondellBasell of Houston was the luckiest of the lot with a one-month price drop of slightly more than 5 percent, bringing its Aug. 31 per-share price to $85.40.
Another trio of materials makers was able to limit their per-share drops to 2 to 4 percent. These three were PolyOne Corp., Omnova Solutions and Rogers Corp. The Rogers decline was just over 2 percent, leaving its stock at $55.65 per share at the end of the month.
For the year, 12 of the 15 stocks listed above, now are in negative territory. Axiall again has fared the worst, with a price drop of almost 42 percent. Rogers' per-share price is down almost 34 percent since Jan. 1, while per-share prices at DuPont and Huntsman are down almost 30 percent. By comparison, the Dow is down 9.5 percent.
Hexcel's per-share price is up 13 percent so far in 2015, while LyondellBasell's is up 4 percent. Both firms benefited from strong financial results earlier in the year. Kraton continues to lead a charmed life, with its price up 0.3 percent for the year.
Is the worst over? Barron's columnist Michael Kahn doesn't seem to think so. “Right now, the [bullish percentage index] tells us that about 30 percent of NYSE stocks are still on buy signals,” Kahn wrote on Aug. 26. “That's nowhere close to the low levels at the bottom of the last two bear markets or even the 1998 and 2011 corrections.”
“In other words,” he said. “There are plenty of stocks still in good shape.”
As they reach for their antacids of choice, plastics materials executives may not share that same opinion.
Esposito is a Plastics News senior reporter. Follow him on Twitter @fesposito22.
