Cyclical Chemicals–Olin

The chemical industry is notoriously cyclical. Prices tend to rise and fall with the economy but especially with new housing starts and new car sales. They are basic materials stocks.

Data shows the down trend is in indicating a slowing economy–

Share price change last 12 mo from Yahoo Finance

Bayer BAYRY -47.87%
Chemours CC -42.77
Olin OLN -39.59
Dow -29.00
Westlake Chemical -18.53
Dupont DD -4.73

Chlorine caustic soda is reasonable indicator. Most chlorine is used to make vinyl aka pvc, a low cost plastic used in vinyl siding, shutters, pipe, window frames, etc, but also in vinyl coated fabrics like Naugahyde–often found in cars.

Google search turns up this list: https://www.procurementresource.com/blog/chlorine-manufacturers-in-the-usa

Olin is largest. They bought Dow’s chlorine business. Dow was founded to recover bromine from the brine found in Midland Michigan. They used chlorine to recover the bromine. Its one of their oldest products. Olin has been in the business for a while but became largest by acquiring Dow’s business when it became available. They also have an ammunition business but they are purest play.

Occidental Chemicals is second. They are part of Occidental which is mostly an oil company. They acquired Hooker best known for the Love Canal disaster. They make chlorine from cheap electric power from the Niagra Falls Power project.

Westlake Chemicals is third. They are best known for vinyl building products such as window frames.

I think Olin is the best company to follow. Now if we can spot the bottom and enjoy the recovery.

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Generally stock market used to follow housing cycle. Without “AI cycle” 2024 would have been a major bear market.

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