Europe downstream Oct confidence indicators fall across the board – CMCI

LONDON (ICIS)–Downstream chemical players’ confidence has fallen across all indicators, despite broadly rising confidence in the end use automotive and fibres sectors, analysis of the ICIS Chemical Market Confidence Index (CMCI) showed on Friday.

Confidence in future business conditions, current and future order book volumes and future profitability reached their lowest level since ICIS began compiling the CMCI in May 2016.

The fall in confidence is in sharp contrast to more positive purchasing manufacturers index (PMI) data in October, and improving macroeconomic conditions in Europe. Nevertheless, the fall matches broadly more negative sentiment across the petrochemical industry, as shown by the overall CMCI.

The drop in confidence in future profitability coincides with a surge in intermediate market profitability expectations, and may be linked to fears that downstream markets will be unable to pass-through higher feedstock costs to end-users.

Although end-use automotive and fibre market confidence indicators have risen in October, this is in the context of strong falls in September, and the downstream market fall in confidence could be seen as a lag effect. Confidence in the downstream construction industry has continued to fall.

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 indices 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