Chemicals sector to underperform in run up to U.S. elections- Jefferies

Orion SA

21/09/2020 12:24

** Jefferies says rhetoric around a rise in corporate tax
rates and more stringent environmental regulations would likely
lead to chemicals sector underperforming the broader market
around the U.S. presidential elections
    ** Says under most scenarios, the industrial gases segment
should benefit
    ** Adds U.S. natural gas could move lower in a Biden
administration, if initiatives to restrict flaring translate
into a glut of ethane
    ** A more negative pivot would be if natural gas production
is curtailed through regulatory pressure to help incentivize the
transition to battery storage and hydrogen in the energy
system-Jefferies
    ** Says lithium mining will likely advance in the U.S. under
all scenarios, while electric vehicles adoption likely
accelerates in the Biden scenarios; views this as positive for
Albemarle Corp  ALB.N  and Lithium Americas Corp  LAC.TO  
    ** Sees a more aggressive focus on auto fuel efficiency and
emissions as a net positive for chemicals used for vehicle
light-weighting, electrification, and automation
    ** Says buy-rated Dupont De Nemours Inc  DD.N , Celanese
Corp  CE.N , Cabot Corp  CBT.N , and hold-rated 3M Co  MMM.N 
would all benefit from the focus
    

 (Reporting by Shruti Sonal in Bengaluru)
 ((Shruti.Sonal@thomsonreuters.com; Twitter: @shrutisonal26))