Mat-Chem Notes For the Week Ended November 18, 2022



KEY HIGHLIGHTS
  • WTR-CMI last week. Reversing some of the gains from previous weeks, both the S&P 500 and Russell 2000 posted W/W returns of (0.7%) and (1.8%), respectively. Our WTR-CMI index declined 3.2% for the week, driven by double-digit declines in lithium stocks on concerns of slowing demand. EAF was also among the laggards in our index, declining 12.3% despite announcing the restart of its Mexican plant. LAC modestly outperformed its lithium peers by declining 11.6% versus 13-15% declines posted by its peers in the index, as the company announced its exercise of warrants of Arena Minerals.
  • Ag-chem innovations continue. The Brazilian government approved registration of 46 new ag products for use as pesticides in the country, including seven low-impact ingredients approved for organic agriculture. A bio-based insecticide using a novel organism stands out in the new crop of approvals. The country has registered 552 low-impact biologic ingredients since 2000 and 43 such products in 2022 alone. We believe the region provides a great environment for growth of bio-based inputs and other ag-technology, benefiting companies with a strong share in the region, such as BIOX.
  • Better October auto registrations. The European ACEA reported October and YTD new vehicle registrations in Europe, which showed a 12.2% Y/Y improvement, but an 8.1% decline YTD. With tougher November and December comps, the three months of positive Y/Y comps may be coming to an end, and with 2023 GDP growth in the region forecasted at 0.3%, next year may be a tough one for the industry as well.
  • ECVT’s secondary oversubscribed. The secondary offering by funds affiliated with CCMP Capital Advisors, LP was upsized from 16 million to 17.5 million shares at $8.25 per share. All proceeds will go to the selling shareholders, with ECVT purchasing 8 million of the shares.
WTR-CMI WEEKLY PERFORMANCE

Source: Y-Charts as of November 18 close

WTR-CMI last week. Reversing some of the gains from previous weeks, both the S&P 500 and Russell 2000 posted W/W returns of (0.7%) and (1.8%), respectively. Our WTR-CMI index declined 3.2% for the week, driven by double-digit declines in lithium stocks on concerns of slowing demand. EAF was also among the laggards in our index, declining 12.3% despite announcing the restart of its Mexican plant. LAC modestly outperformed its lithium peers by declining 11.6% versus 13-15% declines posted by its peers in the index, as the company announced its exercise of warrants of Arena Minerals.

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