Chemical conditions tool: June and gloom

Research evidence excerpt

Chemical conditions tool: June and gloom

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European Chemicals

Estimate Change

Language score sinks 07 July 2026

We monitor chemical trading conditions using a proprietary natural language processing Equity

tool that creates a sentiment score from news flow in a leading industry journal (ICIS). Europe

Key finding: trading conditions continued to lose momentum in June with only with 35% Chemicals

of positive words vs. 43% in May and 57% in April. The soft data contrasts with a better

backdrop for manufacturing PMIs with US/EU/China all in expansion territory (>50).

Rapid round trip as Hormuz re-opens

Many of the chemical prices/spreads we track (see overleaf) have essentially round

tripped back to pre-Iran conflict levels. Ineos Chair Jim Ratcliffe has renewed calls for

more State support against Chinese imports to avoid further capacity closures in Europe.

Despite lingering challenges in securing adequate feedstock via the Hormuz Strait,

chemical supply has proved to be more robust than feared. With oil (and chemical) prices Matthew Yates >>

now deflating, we believe procurement managers will be incentivised to destock over the Research Analyst

MLI (UK)

Summer months; especially if inventory was built in the early part of Q2 (which would +44 20 7996 4537

explain the positive preannouncements from Brenntag & Evonik). As such, we reiterate matthew.yates@bofa.com

our Underperform ratings on the more upstream exposed names in our coverage such as John Campbell >>

Research Analyst

BASF and Lanxess. Commentary from ingredient companies has taken a more upbeat MLI (UK)

tone of late, but we have some hesitation as to whether this is flattered by the same +44 20 7995 0643 jcampbell24@bofa.com

stocking pattern seen elsewhere in the sector.