Chipmakers
Qatar’s closure of a major liquefied natural gas plant after an Iranian drone attack has taken about a third of global helium production offline, Bloomberg Economics estimates. That’s a hit to chipmakers since it’s an essential component of production and there’s no substitute.
Surging energy prices also threaten to dampen demand for semiconductors by driving up the operational costs of AI data centers.
Food and Stoves Supply disruptions in West Asia, where India sources most of its gas, have created acute shortages in its cooking gas market. That has pummeled shares of Eternal Ltd and Swiggy Ltd as well as restaurant operator Jubilant Foodworks Ltd.
Fears of an extended cooking-gas shortage have boosted shares of manufacturers of electric cook-tops, such as TTK Prestige Ltd and Stove Kraft Ltd, as consumers look for alternatives to gas. Automakers Car makers may also suffer as higher oil prices threaten to stifle consumer demand. Ford Motor Co is the most vulnerable because of the disproportionate amount of its revenue that comes from oil-guzzling cars. Toyota Motor Corp and Hyundai Motor Co may face the most impact from the decrease in East Asia sales, as the region accounts for 17% and 10% of their total sales, respectively, according to Bernstein analysts including Eunice Lee. Hyundai shares have plummeted 23% this month, with Toyota down 12%.
RetailersRising oil prices drive up distribution costs while also draining the discretionary spending power of consumers at the pump.
Shares of US-listed apparel brands and retailers have slid, with Lululemon Athletica Inc, Nike Inc, Macy’s Inc and RH all seeing double-digit drops this month.
Clothing suppliers in China are also bracing for higher input costs, with chemical fibers (oil-derived) such as polyester and acrylic widely used in garment manufacturing.
FertilizersAs much as 35% of global fertilizer raw materials pass through the Strait of Hormuz, according to Morningstar DBRS analyst Andrea Petroczi-Urban. This bottleneck is expected to drive North American fertilizer prices higher as global demand intensifies. In anticipation of tightened supply, producers like Nutrien Ltd and The Mosaic Co have seen their stock prices climb.
The outlook is more somber across the Asia-Pacific region, which relies heavily on West Asian imports. Morgan Stanley economists note that Australia is particularly exposed. Stock of Dyno Nobel Ltd has fallen 9% this month, while Nufarm Ltd’s shares have declined 4%.
In India, officials have asked China to allow the sale of some urea cargoes as the war curtails the nation’s gas supplies, threatening fertilizer production in the country. Stocks including Rashtriya Chemicals & Fertilizers have dropped.
