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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Asymmetric who wrote (44803)	10/4/2011 10:36:43 PM
From: Spekulatius	1 Recommendation Read Replies (3) \| Respond to of 78644

re US chemicals - the cheap NG feedstocks create a windfall for US basic chemical companies that puts them at an advantage to Asian or European producers. The biggest beneficiaries are commodity producers like LYB, DOW and probably others. I remember 2006/2007 when the same producers were bitching about high NG prices and they threatened to move their facilities elsewhere. The question for me is how much better can it get? Also it seems like the Europeans are holding their own (BASF has better technology imo and uses their Verbundchemie production system to lower their cost) and low feedstocks may not stay low forever. The extremely low NG prices (and the low Ethane/Propane liquid prices) area truly a windfall and not a real moat. That said, I think some chemical companies like CE (which has an interesting technology to produce ethanol) are looking very cheap. I believe specialty chemical companies like Albemarle are better LT buys than LYB and Dow.