Q2 Commodity Chemicals Preview

Research evidence excerpt

Q2 Commodity Chemicals Preview

RBC Capital Markets, LLC

Arun Viswanathan, CFA

(Analyst)

(212) 301-1611,

arun.viswanathan@rbccm.com

Adam Hamilton (AVP)

(212) 266-4099,

adam.hamilton@rbccm.com

June 30, 2026 Brian Dong (Senior

Associate)

(929) 491-9665, Q2 Commodity Chemicals Preview brian.dong@rbccm.comRESEARCH Our view: Overall, while sector valuations have softened somewhat in recent weeks, we believe most

commodity chemicals names remain at or below mid-cycle valuation levels, although some chains

(esp. PU, Epoxy) could take longer to hit mid-cycle levels due to weak demand growth. Given the

ongoing closure at Hormuz, we think June contract pricing could settle flat for many chains, despite

lower June PE spot pricing. May PE settled flat despite +30cpp in April, although CMA is calling for

-25cpp in July. Additionally, we have not seen significant permanent asset closures on the back of

the conflict, although we think some cost curves could steepen as producers seek alternate reliable

feedstock sources, and the US cost advantage is driving margins for domestic producers, given a risingEQUITY oil/gas ratio. Broadly speaking, our estimates are generally in line with consensus. Going into the print,

we think CC is best positioned on 1) continued TSS growth from HFOs and 2-phase coolants, 2) our

expectations for an eventual refrigerants recovery, and 3) continued progress in PFAS settlements.

Names to Watch Going into Q2. Going into the print, our strongest preference is for CC, which we

think should continue to present strong HFO growth despite a delay in HFO step-downs given stronger

after-market margins in HFCs. We are adjusting Q2/FY26/FY27 estimates to $245M/$850M/$990M

from $235M/$850M/$950M (inline vs cons $237M/$844M/$987M), but slightly lower our PT to $26