Europe Chemical Market Confidence Index points to a seller’s market

LONDON (ICIS)–European petrochemical producers are more than three times as confident as buyers, distributors, traders and resellers that profitability will increase in the next 12 months, analysis of the ICIS European Chemical Market Confidence Index (CMCI) showed on Wednesday.

The CMCI runs from +100, to -100, with zero on each index representing neutral, or uncertain conditions, a negative score indicating bearish expectations and a positive score representing bullish expectations.

Although producers, as with all other market players, believe that profitability has decreased compared with twelve months ago, they are less bearish than all other persona types.

This suggests that producers have found it easier to manage the recent volatility in crude oil, stock and currency prices, and macreconomic uncertainty, and that for many chemical industries it is currently a seller’s market. It also suggests that they have had greater success passing through cost changes than other persona types, and suggesting that value is being lost at the consumer side of the chain.

European producers are also the most bullish of any group that order books will expand over the next 12 months, with a 5.2 point gap between producer and buyer confidence in expansion.

Producers also firmly believe that order book volumes have improved compared with the past 12 months, and that business conditions have improved over the same period, and will continue to improve in the next year. However, they are not as confident of this as buyers are, with buyers more than twice as bullish over business conditions improving over the next 12 months.

The Europe CMCI gathers sentiment on the comparison between the current situation and the situation across the past 12 months to give a complete picture of current market conditions and confidence. The information is gathered in the third week of each month.  A full methodology is available on request.

For more details on the overall Europe CMCI, click here