Global Chemicals Cracker: Markets have moved on

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Global Chemicals Cracker: Markets have moved on

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26 Jun 2026 00:00:00 ET │ 35 pages

Global Chemicals Cracker

Markets have moved on

CITI'S TAKE

Sebastian Satz, CFA AC

Share prices of beneficiaries from the Middle East conflict have corrected +44-203-569-3662

sharply from recent peaks, effectively pricing in further declines in spreads, sebastian.satz@citi.com

which remain above pre-conflict levels for now. Macro indicators continue

to point to a moderate demand recovery. The average spread declined by 6% Ranulf Orr, CFA

MoM in June, while the median remained flat. The largest negative moves +44-20-7986-3922

were in Polyols (EU) and MDI as well as TDI in Asia, while benzene and Asian ranulf.orr@citi.com

ethylene recorded the strongest gains during the month.

Omi Pallavi

Share price reset before spreads — Share prices of upstream chemical producers +44-20-7508-1367

have largely retraced to pre–Middle East conflict levels, as investors have rotated out omi.pallavi@citi.com

of perceived beneficiaries. This comes even as spreads have not yet fully normalised, Patrick Cunninghamparticularly in Europe and the US. At the same time, stronger 2Q earnings should

support further deleveraging. On the supply side, logistical bottlenecks and delays +1-212-816-6684

in asset restarts are likely to constrain the pace of normalization, effectively putting patrick.cunningham@citi.com

a higher floor under spreads versus pre-war levels, most notably in ethylene. With Oscar Yee

manufacturing PMIs still in expansionary territory, the case for a modest recovery in

+852-2501-2473demand remains intact.

oscar.yee@citi.com

Macro data: mixed picture — Global manufacturing PMIs were stable in May. Citi’s

Global Economic Surprise Index improved so far in June, with strength in EU/US