Replies to post #34919 on Chemtura Corp (fka CHMT)

[Madclown]

One of Chemtura's peers in the Chemical Industry, Solutia - (SOA) fell to as low as $1.04 back in March, it is now trading around $12.00. SOA, a former subsidiary and spinoff of Monsanto (Agricultural equivalent of Goldman Sachs) exited bankruptcy a few years ago.

Another peer, Ashland (ASH), who purchased Rogerson's previous turnaround project, Hercules, traded as low as $5.35 and has recovered nicely to about $35. Still kicking my self for selling my stake in Ashland several months ago. I got too impatient. The consolation prize was that I used those funds to buy a stake in Chemtura, so it wasn't a total loss ;)

Just goes to show how difficult an environment it has been for most if not all chemical companies in the last 12 months and where the indusrty stands relative to 5 months ago.

[jackinhtown]

I am in the chemical industry (we sell both specialty and commodity products). What I see is that the specialty sector remains much stronger than commodities at this point. As someone noted in a previous post, Ag chemicals remain strong because people continue to eat. Pharma chems and personal care are also doing well. Capacity utilization in commodities remains down (e.g. 65-70% in phenol, which is a derivative of benzene), which mean margins remain very low (near 0 variable margins in phenol for example). We just got a report that benzene prices for Sept dropped 25% from the August contract. Natural gas is also continuing to drop, meaning lower variable costs. Companies that purchase commodities and use them as building blocks to make specialty chemicals (with high pricing power) should see margins improving. I would put Chemtura in this group. IMO.