LONDON (ICIS)--European chemicals markets saw more positive trends for buyers than producers and traders/distributors in August, particularly in the long term, according to ICIS chemical market confidence index (CMCI) data on Thursday.
Buyers' views of the current market were mixed, with reported business conditions seeing a significant drop.
Order book volumes were slightly higher and profitability was seen as stable.
However, expectations for the next twelve months were more positive, with anticipated profitability and order book volumes rising.
Expectations for future business conditions were down, but by less than a percentage point.
Producers’ expectations for the next twelve months were generally pessimistic, with profitability expectations particularly low compared to the previous month. Order book volumes were also seen as down compared to the previous month.
However, the index still remained mostly in positive territory, with current business conditions moving from a negative to a positive number but profitability expectations sliding in the opposite direction
Traders/distributors were generally positive about short-term conditions, with profitability in particular seeing a spike compared to the previous month, but very negative in their twelve-month outlooks.
The most affected factor was the prediction for twelve-month business conditions, which fell by more than 25 points and into negative territory overall.
The overall index shows sentiment is trending towards Europe becoming more of a buyers’ market, with producers having the most overall negative view and buyers the most positive.
However, in the short term this trend was reversed with buyers having the most negative view and traders/distributors overall the most positive. Producers’ views were also in positive territory over the short term.
The traders/distributors and producers’ view is in line with the trend in the overall CMCI index for August, with short-term sentiment more upbeat but the 12-month forecast down from the previous month as a result of more positive economic data in July combined with long-term economic uncertainty for Europe.
Buyer index change May to August
Trader/distributor index change May to August
Producer index change May to August
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