Daily Brief Energy/Materials: Fmc Corp, Fosun International, Crude Oil, Base Oil, Celanese Corp Series A, Westlake Chemical, Iron Ore, Innovation Global Industries, Transocean Ltd, Emmvee Photovoltaic Power Limited and more

• FMC is a global leader in the crop protection market, with a strong, patent-protected portfolio, particularly in high-value insecticides. The company’s pure-play focus on agricultural sciences distinguishes it from more diversified peers.
• The company is currently navigating a severe industry-wide downturn caused by unprecedented inventory destocking in key channels, which has significantly impacted recent revenue and profitability. This cyclical headwind is masking underlying end-user demand.
• Management has initiated a strategic growth plan and restructuring program aimed at navigating the current challenges, driving cost savings, and capitalizing on the eventual market normalization. Future growth is expected to be driven by new product launches from its R&D pipeline and expansion in its Plant Health (biologicals) business.

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• In today’s Morning Views publication we comment on developments of the following high yield issuers: Fosun International
• A group of moderate Senate Democrats have reportedly agreed to support a deal to re-open the US government as well as fund some departments and agencies for the next year, which could end the government shutdown.
• Under the agreement, Congress would pass full-year funding for the departments of Agriculture, Veteran Affairs and Congress, while funding other agencies until 30 January 2026.

• Crude oil futures opened the week slightly higher on growing optimism that the US government shutdown was close to ending, while Iraqi output could be under after Lukoil declared force majeure at the West Qurna-2 oilfield.
• Front-month Jan25 ICE Brent futures were trading at $64.07/b (2130 GMT) versus Friday’s settle of $63.63/b, while Dec25 NYMEX WTI was at $60.14/b against a previous close of $59.75/b.
• Prices ticked higher Monday after the US Senate on Sunday passed the first stage of a deal that would end the government shutdown, underpinning the broader financial risk-on sentiment.

• US base oils demand could be more muted amid expectations of rise in domestic supply over coming weeks following completion of plant-maintenance work.
• Sufficient availability of supply in recent weeks, even during plant-shutdown, points to signs of already-slower demand during that period.
• Expected rise in supply would coincide with time of year when domestic consumption typically slows anyway.

• Celanese is a global leader in the production of acetyl products and high-performance engineered polymers, holding strong market positions in both segments. However, the company is currently navigating significant headwinds, including a high debt load from the Mobility & Materials acquisition and weak demand in key end markets like automotive and construction.
• Recent financial performance has been challenged, highlighted by a significant drop in net income and large impairment losses. In response, management is aggressively focused on cost reduction, increasing cash flow to deleverage the balance sheet, and driving growth through its Engineered Materials pipeline.
• The forward outlook balances the risks of a cyclical downturn and increased competition against an attractive valuation and management’s strategic actions to streamline operations. The company projects $1 to $2 of EPS growth in 2026, driven by cost savings and new business, suggesting potential for recovery if macroeconomic conditions stabilize.

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• Westlake Chemical is navigating a challenging period in the cyclical commodity chemicals market, evidenced by recent financial performance, including net losses in the first three quarters of 2025. Margin compression from volatile global markets and inflationary pressures has significantly impacted profitability.
• Strategically, the company is expanding its value-added offerings through acquisitions, such as the planned purchase of ACI/Perplastic Group. This move aims to bolster its specialty materials portfolio within the Housing and Infrastructure Products (HIP) segment, providing a potential buffer against the volatility of its Performance and Essential Materials (PEM) segment.
• Despite near-term earnings pressure and negative free cash flow, Westlake has demonstrated a strong commitment to shareholder returns, consistently increasing its dividend per share over the past decade. The company’s vertically integrated model and access to cost-advantaged North American feedstock provide a durable competitive advantage.

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• Iron ore rebounded as supply tightened, and trade sentiment improved, though weak demand and margin pressure capped gains.
• Managed money participants increased their net long positions across all futures and options expiries, signalling renewed confidence in the bullish trend.
• The DCE-SGX spread’s climb above key MAs signals firm bullish momentum, though sustained strength remains crucial.

• Innovation Global Industries (IGI) is a leading provider of industrial automation and robotics solutions, poised to capitalize on the secular growth trends of Industry 4.0 and smart manufacturing. The company has a strong track record of innovation and a well-established presence in the high-growth Asia-Pacific market.
• We anticipate robust top-line growth for IGI, driven by increasing demand for automation across various sectors, including electronics, automotive, and logistics. The company’s focus on developing advanced robotics and AI-powered solutions positions it at the forefront of the industry’s technological evolution.
• While the near-term outlook is positive, potential risks include intensifying competition from both established players and new entrants, supply chain disruptions, and the cyclical nature of industrial capital expenditure. Margin pressure could also arise from rising input costs and the need for continued R&D investment to maintain a competitive edge.

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• Transocean’s latest financial results and strategic movements depict a company actively refining its operations to align with market conditions and future needs.
• The company reported strong third-quarter numbers, highlighting solid operational performance, cost reductions, and significant progress in deleveraging.
• Positively, Transocean reduced its debt by approximately $1.2 billion for the year with a focus on improving its capital structure.

• Emmvee Photovoltaic has filed RHP for IPO with a total offer size of up to INR 29B, offering 133.6M shares at a price band of INR 206-INR 221 per share.
• This includes a fresh issue of INR 21.4B (~ 98.8M shares). The company intends to use the proceeds for debt repayment and general corporate purpose.
• Our recommendation would be that investors can buy into this issue as the valuation range looks relatively cheap when compared to peers.