Two Chemical Stocks to Hold for Medium Term – Investing.com India

Two Chemical Stocks to Hold for Medium Term – Investing.com India

Chemical stocks are in the news again. Many chemical stocks have witnessed a sharp rise in their prices recently. The story goes like this. Last year, the petrochemical manufacturers trimmed production as the pandemic knocked down the economy. Petrochemicals—made up from oil saw their prices skyrocketing in a couple of months. There are multiple reasons behind it. Oil prices have almost doubled in a year. In July this year, a thunderstorm resulted in the temporary closure of a polypropylene plant in Lake Charles, Louisiana. The chemical is used in auto manufacturing and consumer packaging. Havoc of hurricane Ida along the Gulf Coast caused many plants to shut down for a while. Labor shortage, scarcity of containers, shut down of ports compounded the problems in the petrochemical supply chain.

The plastic pellets used in the automobile industry, medical devices, bicycle helmets, and cereal bags are in short supply. Prices of polyvinyl chloride or PVC used in pipes, credit cards, and vinyl records zoomed 70%. Epoxy resins absorbed in paints, coatings, and adhesives witnessed a 170% price rise. Ethylene used in food packaging to antifreeze to polyester recorded a 43% price hike in recent times. We came across two stocks in the