Europe chem producers anxious about effects of Brexit – October CMCI

LONDON (ICIS)–European chemical producers’ confidence in the market significantly weakened in October across almost all indicators, according to the latest Chemical Markets Confidence Index (CMCI) from ICIS.

Producers are most worried about current business conditions, with confidence plummeting by a huge 29.4 points when compared with September.

Undoubtedly, Brexit and the concerns around the weak sterling are having a significant effect on business conditions across the board as producers’ confidence in business conditions over the forthcoming 12-month period are also down, in this case by 14 points.

The Chemical Industries Association (CIA) and the European Chemical Industry Council (Cefic) have set up task forces to explore potential post-Brexit scenarios and both groups have warned that, despite positive economic data during August and September after the June referendum, the clouds mid- and long-term could be much darker.

While confidence in current profitability is up 2.8 points among producers, this figure is overshadowed by the 27.1-point fall in confidence profitability expectations for the 12 months to come.

With Cefic saying earlier this month that the European chemicals’ business climate is currently stable but “lacking dynamics” for future growth, it comes as no surprise to see producers express pessimism about profitability in the next year.

In terms of order-book volumes, current and future confidence is down in October from the previous month.

Producer Index

Overall, sentiment in the chemicals industry reflects a return to the negativity of Q2 after a temporary stabilisation earlier in this quarter.

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