Europe polyolefins sentiment positive on next 12 months – CMCI

LONDON (ICIS)–Sentiment in the European polyolefins market was upbeat in June regarding business conditions in the next 12 months as those surveyed declared profitability during the month compared to the past 12 months had been poor, analysis of the Europe ICIS Chemical Market Confidence Index (CMCI) showed on Thursday.

Sentiment for business conditions at the polyolefins chain for the next 12 months improved sharply from that of May, with the index rising to 30.8 points in June, up from 12.1 in the previous, representing a net change in positive sentiment of 18.6 points.

June, however, left a negative sentiment regarding the month’s business conditions, with respondents saying placing it at a 10.5 points in positive territory, but sharply down from the 27.5 points in May. The overall index change therefore lost in one month 17 points in positive sentiment.

Polyolefins players were in June very upbeat about order book volumes in the 12 months, with expectations sharply up from May’s 17.9 points to 36.8 points in June, a net change in positive sentiment of 18.9 points.

That would contrast with the declared poor order book volumes in June compared to the past 12 months, which continues to be in a sharp negative territory. In May, those surveyed declared negative sentiment of 25.6 points, while in June it worsened to minus 52.6 points.

The same dynamic was observed in profitability, which is expected to improve in the next 12 months. In only a month, sentiment changed from a minus 30.8 points in May to a positive 5.3 points in June, a net change in sentiment of 36 points.

That would leave behind a June profitability which, compared to the past 12 months, stood at a negative 21.1 points, worsening May’s already negative at minus 10.3 points. Overall index improvement, therefore, stood at 10.8 points

The polyolefins 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