Global Chemicals Call Takeaways

Research evidence excerpt

Global Chemicals Call Takeaways

Update

July 21, 2026 03:47 PM GMT

Morgan Stanley & Co. International plc+MChemicals | Europe Lisa H De Neve

Equity Analyst

Global Chemicals Call Lisa.De.Neve@morganstanley.comSelina Wang +44 20 7677-0250

Research Associate

Selina.Wang1@morganstanley.com +44 20 7425-2552

Takeaways

Chemicals

Europe

Industry View In-Line

Post our Global Chemicals Webcast, joined by Vincent Andrews (US Head of

Chemicals) and Kaylee Xu (China Chemicals Analyst) we highlight key views and

takeaways:

Consensus is for upstream spreads normalisation by 2026 year-end. This

compares to the expectation for upstream spreads and tightness to normalise

previously by mid-/end-2027. While latest developments in the Iran conflict may

affect the flows out of the Strait of Hormuz, we do expect spreads to narrow

downwards, especially in the light of risk for demand moderation in 2H26. In the

light of the mixed demand backdrop and already evident spread reversal, we think

companies companies will guide conservatively for 3Q/4Q26; this may also be

supportive of obtaining best possible price settlements for July.

China chemicals exports slowed in June MoM but are still up YoY. According to

our China chemicals analyst, the Middle Eastern conflict to date including the most

recent developments have not impacted/suppressed Chinese export levels YTD.

Overall, chemical plant utilization rates appear to have remained stable since April,

with ethylene cracker operating rates running at approximately 78-79%, i.e. stable. In

terms of product spreads for April and May, prices remain at higher levels than

January-February levels with feedstock prices having moderated. However, demand

remains the missing piece in Asia, with downstream companies not moving to