Dow Chemical has been one of the largest beneficiaries of the natural gas boom. The glut of ethane, the chemical feedstock used for making plastics, is resulting in bargain-basement pricing. Investors who have ridden this wave might wonder when it will end. In all likelihood, not for quite a few years. Ethane, unlike other major natural gas components, isn't a superior energy product, but energy companies don't specifically drill for ethane, so it's much harder to control the supply side of the equation.
Based on the amount of natural gas drilling in the U.S., it seems unlikely that the new chemical processing facilities slated to come online will be able to absorb all of the excess ethane. To learn what this means and which companies are poised to take advantage of the situation, tune into the video below featuring Fool contributors Tyler Crowe and Aimee Duffy.
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The article American Chemical Companies Will Take This News Straight to the Bank originally appeared on Fool.com.
Fool contributor Aimee Duffy has no position in any stocks mentioned. Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow them both on Twitter @TMFDuffy and @TylerCroweFool, respectively. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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