Mat-Chem Notes For the Week Ended November 25, 2022



KEY HIGHLIGHTS
  • WTR-CMI last week. The market rebounded last week, with both the S&P 500 (up 2.0%) and the Russell 2000 (up 1.6%) ending the week higher. Our WTR-CMI index outperformed the broader market by appreciating 2.9% during the week, led by a 27.3% gain by EAF, as the stock recovered from the prior weeks’ sell-off and benefited from the restart of its Mexican plant. Lithium stocks continued to underperform on concerns of a slower uptake of EVs given escalating costs and growing economic uncertainty, with LTHM, LAC, and ALB losing 2-4% of their value last week.
  • Herbicide optionality. Although EU member countries failed to agree on a one-year extension of marketing authorization for glyphosate—the workhouse of broad spectrum herbicides the world over—the College of Commissioners could now approve the rules of extension on its own to bridge the time to mid-2023 when the European Food Safety Authority’s (EFSA) reassessment of the active substance is expected to come out. Meanwhile, CTVA announced the launch of a new post-emergent broad spectrum herbicide formulation for corn that includes three non-glyphosate ingredients, as the ag industry is preparing for the future without glyphosate.
  • Europe’s commercial vehicle sales fail to recover. While the passenger vehicle market in Europe may have stabilized, with modest growth in the last two months, commercial vehicle registrations continued to decline in October and are down 16.8% YTD.
  • Canada’s EV sales lag. Despite an ambitious goal of 60% of new vehicle sales being EVs by 2030, the country is trailing other nations in EV adoption, and would need to see the EV sales pace pick up from ~100,000 annually in 2022 to 1 million by 2030, a 10-fold increase over eight years. To come even close, the country would need to invest in charging infrastructure and higher consumer rebates.
WTR-CMI WEEKLY PERFORMANCE

Source: Y-Charts as of November 25 close

WTR-CMI last week. The market rebounded last week, with both the S&P 500 (up 2.0%) and the Russell 2000 (up 1.6%) ending the week higher. Our WTR-CMI index outperformed the broader market by appreciating 2.9% during the week, led by a 27.3% gain by EAF, as the stock recovered from the prior weeks’ sell-off and benefited from the restart of its Mexican plant. Lithium stocks continued to underperform on concerns of a slower uptake of EVs given escalating costs and growing economic uncertainty, with LTHM, LAC, and ALB losing 2-4% of their value last week.

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