Plastics costs can maintain rising as Dow sees demand persevering with to outstrip provide

Spread the love

The massive worth will increase that helped enhance Dow Inc.’s second-quarter earnings are prone to proceed, because the plastics and chemical stated Thursday that it expects pent-up demand to maintain outstripping provide within the coming months.

“[S]trong client demand traits proceed in retail, housing and the manufacturing sectors, and stock ranges stay low throughout most of our price chains. We count on these dynamics to proceed to help worth traits within the third quarter because the trade continues to work to satisfy pent-up demand.”

— Chief Monetary Officer Howard Ungerleider

Ungerleider’s remark, in accordance with a FactSet transcript, was made throughout Dow’s post-earnings convention name with analysts. It comes amid rising considerations {that a} current spike in inflation could final, regardless of the Federal Reserve’s name that it’ll fade by yr finish.

Earlier Thursday, Dow reported second-quarter revenue and income that rose above expectations, as native worth soared 53% whereas quantity elevated 9%.

Pricing elevated 70% in Dow’s packaging and specialty plastics enterprise phase, rose 53% in industrial intermediates and infrastructure and grew 16% in efficiency supplies and coatings.

Additionally learn: Harley-Davidson fights inflation with 2% surcharge, however that’s not fairly sufficient.

Learn extra: Worries of ‘rampant’ inflation leads two analysts to desert their purchase ranking on Conagra’s inventory.

The inventory
edged up 0.1% in noon buying and selling, reversing an earlier intraday lack of as a lot as 2.9%. The inventory has gained 7.7% yr up to now, whereas the SPDR Supplies Choose Sector exchange-traded fund
has superior 11.8% and the Dow Jones Industrial Common
has climbed 13.4%.

Chief Government Jim Fitterling stated the worldwide financial system ought to proceed to enhance off the post-COVID-19 trough, which ought to maintain demand “sturdy.” On the similar time, he expects provide to stay “tight,” because the sturdy demand hasn’t allowed the corporate to extend provide.

“[O]ur outlook is that the demand right here and around the globe continues to be sturdy,” Fitterling stated, as he responded to an analyst query concerning polyethylene costs. “I don’t assume you’ll see an opportunity for us to construct any stock via the third quarter.”

Source link

Written by bourbiza

Bourbiza Mohamed. Writer and Political Discourse Analysis.


Leave a Reply

GIPHY App Key not set. Please check settings