SGL Carbon - Biden review of chip supply
Please refer to our unchanged analysis here.
The chip shortage continues to make headlines today, with US President Biden working to review supply chains and to ensure that US automakers get a larger share of the available supply. The impact in the US auto industry could be significant (see chart below).
The impact throughout the supply chain, which also includes other sectors such as consumer electronics and home appliances, would risk SGL’s demand recovery, just as the spiking Brent threatens to squeeze margins.
However, the hit on both fronts is effectively temporary and not structural, and are likely to perceived as such by investors, especially in the current forgiving market. It also helps that most automakers are still expecting 2021 to be much better than 2020, even with the chip shortage, as confirmed by Daimler’s results just today
We currently have a 4% position in the straight bonds and a 2% position in the convertibles.
Juliano
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