Mat-Chem Notes for the Week Ended July 31, 2022



KEY HIGHLIGHTS
  • WTR-CMI last week. In what was another positive week for the stock market, both the Russell 2000 and S&P 500 appreciated 4.3% versus week-ago levels, while our WTR-CMI index of 30 chemicals and materials technology stocks outperformed the broader market with a 4.9% return. Lithium stocks once again led our index higher, as PLL, LAC, and ALB benefited from improved investor sentiment on lithium demand and, more importantly, pricing by appreciating 21.1%, 12.3% and 10.3%, respectively. LTHM, while not quite keeping up the pace with an 8.9% improvement, signed a long-term lithium hydroxide supply agreement with GM, which also signed a long-term supply deal with South Korean LG Chem for battery cathodes. At the other end of the performance spectrum, SHW disappointed investors with its 2H22 guidance and saw its stock decline 6.6% for the week, with ASH’s 4.1% decline following an earnings beat and raise bounce the prior week and AXTA posting a 3.3% decline as its 2Q22 earrings and guidance left investors unimpressed, while the CEO transition, which the company announced at the same time, may also have contributed to shareholder unease.
  • Ford touts sufficient materials for EV push. Like many auto OEMs, Ford is not leaving the fate of its EV transition in the hands of Tier-I suppliers and instead is signing supply agreements directly with critical materials suppliers. The company recently announced sufficient lithium and nickel supply contracts to support its projected EV production into 2026.
  • China’s July new car sales continue to rebound. China Automobile Dealers Association expects the country’s new car sales to follow June’s trend of Y/Y improvement with an 18% Y/Y increase in July, as COVID lockdown restrictions continue to ease and the government’s incentives for gasoline powered vehicles kick in. NEV vehicle growth is expected to top 100% Y/Y as well.
  • MTRN commissions commercial plant. Materion and Kairos Power have jointly commissioned a Molten Salt Purification Plant (MSPP) for the production of beryllium fluoride and lithium fluoride for use as heat transfer fluid for the Kairos’ next generation Fluoride Salt-Cooled High-Temperature Reactor (KP-FHR) nuclear reactors.
WTR-CMI WEEKLY PERFORMANCE

Source: YCharts; July 29 close

WTR-CMI last week. In what was another positive week for the stock market, both the Russell 2000 and S&P 500 appreciated 4.3% versus week-ago levels, while our WTR-CMI index of 30 chemicals and materials technology stocks outperformed the broader market with a 4.9% return. Lithium stocks once again led our index higher, as PLL, LAC, and ALB benefited from improved investor sentiment on lithium demand and, more importantly, pricing by appreciating 21.1%, 12.3% and 10.3%, respectively. LTHM, while not quite keeping up the pace with an 8.9% improvement, signed a long-term lithium hydroxide supply agreement with GM, which also signed a long-term supply deal with South Korean LG Chem for battery cathodes. At the other end of the performance spectrum, SHW disappointed investors with its 2H22 guidance and saw its stock decline 6.6% for the week, with ASH’s 4.1% decline following an earnings beat and raise bounce the prior week and AXTA posting a 3.3% decline as its 2Q22 earrings and guidance left investors unimpressed, while the CEO transition, which the company announced at the same time, may also have contributed to shareholder unease.

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