Europe propylene players sentiment upbeat in June – CMCI

Jonathan Lopez

30-Jun-2016

LONDON (ICIS)–European propylene players remain upbeat on business conditions with all categories in positive territory in June, although expectations for business conditions in the next 12 months worsened, analysis of the Europe ICIS Chemical Market Confidence Index (CMCI) showed on Thursday.

CMCI propylene

Business conditions for the next 12 months took one of the largest hits in the propylene European sentiment, with a decrease in confidence of 12.1 points, down to a mere 2.6 points for the month of June, down from 14.6 points in May.

Business conditions compared with the past 12 months, however, were broadly positive in June with the CMCI index for the month at 15.6 points, up from 7.1 points in May.

Order book volumes in June, compared to the last 12 months, also suffered a notable decrease. In May, propylene markets players felt upbeat about the comparison, with the index at 37.2 points, but in June the figure had decreased sharply to 22.2, leaving a net sentiment change of 15 points less for the month.

Opposite to the June negative sentiment when comparing with the last 12 months, order books for the next 12 months on the other hand caused a more upbeat take, with the index increasing during the month to 42.23 points, up from 34.1 points in May, leaving a net positive change of 8.1 points.

Profitability in June also improved in the European propylene chain, with a positive figure of 11.1 for the month, compared to the negative 9.8 points observed in May. The sharp change in sentiment leave an overall index change of 20.9 points, the largest of all.

However, expectations for the next 12 months in June were not as rosy, although remained in positive territory nevertheless, increasing almost 1 point compared to May from 14.6 points to 15.6 points in June.

The propylene Europe ICIS Chemical Market Confidence Index (CMCI) survey was conducted before the UK went to the polls to decide on its EU future on 23 June, or in the immediate aftermath of the referendum vote deciding to leave the EU. Therefore, it is unclear what role the so-called Brexit vote played in the index.

Additional reporting by Mark Victory

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

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