What's the Buzz in Basics Volume LXXXVIII

Research evidence excerpt

What's the Buzz in Basics Volume LXXXVIII

Agriculture

Chemicals

Packaging

What's the Buzz in Basics Volume LXXXVIII May 17, 2026

The Wolfe Byte

There is understandable growing skepticism re: the sustainability of 1Q trends, which we believe limits interim

upside (ex-Electronics Materials). 2H input inflation and signals of demand destruction remain key risks.

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Still More Skepticism Than Not Across the Vast Majority of Our Coverage: As we've been discussing the past few

wks, investors still seem to be in "wait n' see" mode across most sub-sectors, w/ Electronics Materials being the primary

exception (more below). There are arguably signs of preliminary demand destruction across PE/PP which the buy-side

seems willing to ignore in interim; many seem to be "holding out" for the May US PE Px settlement - w/ suppliers still

targeting +20cpp. Given signs of demand destruction in Asia / Europe, we see more risks than not - but concede that w/

the SoH still closed, customers seem to have little option (at least in the interim).

As a corollary to stubbornly high input Px dynamics, investors still seem to be avoiding Coatings - underscored by the

belief 2H input inflation guides aren't cautious enough - and despite the buy-side believing Px power is solid across

most end-mkts, most are willing to wait it out in the context of growing 2H macro fears (evident during Fri 5/14 trading).

Inbound interest is on the rise in Packaging w/ a focus on favorable BevCan volume trends (particularly in Europe),

but a choppy Brazil and inconsistent US op leverage is leaving most on the sidelines (at least for now). Finally, within