Europe auto petchem players have positive outlook, except on profit

LONDON (ICIS)–Europe’s key automotive petrochemicals are positive on all future indicators except profitability, analysis of the ICIS Chemical Market Confidence Index (CMCI) showed on Friday.

Negativity on profitability is likely related to firmer crude oil prices and macroeconomic uncertainty.

The Europe ICIS Basket of Automotive Petrochemicals (IBAP) has been increasing for the past two months, but this has largely been the result of increasing crude oil prices. With crude oil continuing to broadly trend upwards, and unstable macroeconomic conditions, players may be concerned with their ability to pass expected upstream cost increases down the chain.

The negative outlook on profitability may also have been magnified by the overwhelming bearish outlook for polyolefins on profitability.

The newly established ICIS Europe CMCI aggregates sentiment from hundreds of petrochemical market players actively involved in price negotiations across more than 60 different markets.

The Europe 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 indexes also gather 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 data, click here

The automotive industry is a major global consumer of petrochemicals which contributes more than a third of the raw material costs of an average vehicle. ICIS tracks the movement of petrochemical raw material costs in auto production both globally and regionally with the weighted ICIS Basket of Automotive Petrochemicals (IBAP).

ICIS produces a monthly Global Automotive report covering the major automotive chemicals markets, the auto-industry, the IBAPs and macroeconomic trends. For more information on the report and details on how to subscribe, please click here