Affordable housing, reduced lumber capacity following the downturn, and rising interest rates (which could cause buyers to act sooner rather than later) may act as catalysts, according to ERS. We also note that overseas demand for lumber and fiber remains high, and that lumber futures have increased significantly in recent weeks.
7. Petrochemical players are in a sweet spot.
Petrochemicals manufacturers, which use natural gas as feedstock in the production of their petrochemicals, should continue to benefit in 2011 from weak natural gas prices while their oil-based product prices remain firm, according to ERS. Companies which may benefit, in our view, include Westlake Chemical [NYSE: WLK 43 ***], Dow Chemical [NYSE: DOW 35 ***], PPG Industries [NYSE: PPG 84 *****], and Olin [NYSE: OLN 20 ****].
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