Europe chemicals player confidence rises going into 2017 – CMCI

LONDON (ICIS)–European chemical players’ confidence in current and future business conditions has broadly increased in December compared with November, analysis of the ICIS Chemical Market Confidence Index (CMCI) showed on Thursday.

Europe CMCI Month-On-Month Change – December vs November

Confidence in all indicators except current profitability compared with 12 months ago rose in December compared with November.

Europe CMCI – May-Dec 2016

The largest increase in confidence came from traders and distributors, where the majority of indicators turned to positive territory in the overall index, compared with November when the majority of sentiment from this persona type was broadly negative.

Trader/Distributor Europe CMCI – May-Dec 2016

Following the rise in confidence in December, all indicators bar current profitability are now in positive territory overall (as well as increasing month-on-month) for the first time since August 2016, signalling strong confidence from the industry moving into 2017.

The increase in confidence may reflect the resilience of the European economy and key downstream industries to economic shocks seen in 2016, along with – particularly for traders – a USD/euro exchange rate favourable to exports.

Despite the increase in overall sentiment on current business conditions compared with 12 months ago, both producers and buyers felt that conditions were more negative than in November, while buyers were also more negative on future business conditions – most likely reflecting a wave of building block chemical cost rises at the end of 2016.

ICIS is considering changing the methodology of the CMCI from January to track future expectations 6 months ahead instead of 12 months ahead. If you have any views on this, please contact Mark Victory at mark.victory@icis.com.

The 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

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