The only certainty is uncertainty: stay selective

Research evidence excerpt

The only certainty is uncertainty: stay selective

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MENA Chemicals

The only certainty is uncertainty: stay

selective

Price Objective Change

Cutting FY26E earnings again on lower sales volumes 14 July 2026

Given uncertainty around the pace of traffic recovery through Strait of Hormuz, we now Equity

assume limited sales volumes for 3-4 months vs our previous forecast of 2-3 months. As MENA

a result, for our petchems coverage, we lower FY26E EPS by 28% (low volumes + Chemicals

prices), while for fertilisers we lower FY26E EPS by 6% (lower volumes). We still favour Sashank Lanka >>

fertilisers, where urea prices are currently more affordable than they have been YTD, Research Analyst

supporting demand pick-up. By contrast, we remain cautious on petchems, where Merrill+971 4Lynch425 8231(DIFC)

capacity additions are accelerating and the young age of Asian assets limits incentives sashank.lanka@bofa.com

for closures. We reiterate Buy on urea-exposed Fertiglobe, SABIC AN and IQCD, while we Abhishek Kumar >>

Research Analyst

like petchems APPC (new PP plant) and Sipchem (debottlenecking) for volume growth. Merrill Lynch (DIFC)

+971 4 425 8227

Full steam ahead on petchem capacity additions abhishek.kumar29@bofa.com

Yiming Wang >>

We see little evidence that conflict-related disruption to Asia petchem feedstock supply Research Analyst

has led to notable new capacity cancellations. Rather, the wave of additions, which was Merrill Lynch (Hong Kong)

+852 3508 5037

expected before the conflict should start coming through soon. c.17mn tonnes of new yiming.wang@bofa.com

ethylene capacity (7% of global supply) is set to come online over the next 12 months. Sun Jung Lee >>