Europe traders believe conditions have worsened – ICIS CMCI

LONDON (ICIS)–European chemical traders, distributors and resellers believe that business conditions, order book volumes and profitability have worsened over the past 12 months, analysis of the ICIS European Chemical Market Confidence Index (CMCI) showed on Wednesday.

The Europe trader, distributor, and reseller CMCI clearly demonstrates the direct operational difficulty that upstream and macroeconomic volatility and uncertainty is causing throughout the chain.

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.

The results are perhaps unsurprising, given that this persona group typically act as both buyers and sellers, and make their margins based on being able to accurately navigate market movements – an ability which diminishes as the market becomes more opaque.

Nevertheless, traders, distributors and reseller views on business conditions compared with 12 months ago, and order book volumes compared with 12 months ago are in sharp contrast to the views of buyers and producers.

Traders, distributors and resellers are also the most negative on profitability compared with the past 12 months, with this group more than twice as bearish as any other persona type. This group is also the most bearish on future business conditions and order book volumes, although they do believe both of these will improve over the next 12 months.

Traders, distributors and resellers also believe that profitability will improve in the next 12 months, meaning that although they believe that overall conditions are more negative than 12 months ago, they are expecting improvement across all indicators in 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