Europe chems sector confidence steadies after volatile few months – CMCI

LONDON (ICIS)–Confidence of European chemicals sector players in current and medium-term market conditions stabilised in September after a volatile few months for the sector, according to ICIS data on Tuesday.

Market player assessment of the current state of the market compared to the same period a year ago skewed towards a favourable consensus, and expectations for business conditions in 12 months are broadly expected to be better still.



The consensus represented a general improvement on sentiment over the last few months, on the back of broadly positive macroeconomic indicators, but more muted than during more volatile periods in the wake of the UK Brexit vote in late June.

In August, the market assessment of current business conditions was more strongly positive, but expectations for the next 12 months were far bleaker.

Demand and profitability expectations were more restrained despite the optimism for overall market conditions, while overall profitability is also expected to be slightly lower in 12 months compared to the present.

Market uncertainty has gradually dissipated following the UK referendum on EU membership, as it became apparent that no significant disruption to the union is expected for the next couple of years as policymakers in London and Brussels begin to deliberate over the form the UK’s exit will take.

Market jitters and private sector output contractions in the UK in the immediate aftermath of the vote, with the country’s manufacturing sector reporting order book some of the strongest rallies in order book volumes in years, according to analyst Markit.

Eurozone manufacturing sector output also improved in August, albeit more slowly, as strong improvements for German and Spanish private sector demand were balanced against modest contractions for Italy and France.

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