Brenntag (1K) | Hold | Resilience at a fair price

研报英文原文证据摘录

Brenntag (1K) | Hold | Resilience at a fair price

n Q2 from “robust

current demand and improved margins, particularly in the context of market disruptions resulting from

the crisis in the Middle East”. Thus, Brenntag’s preliminary Q2 results were far above consensus,

forcing the company to publish a “positive profit-warning”. For more details, please refer to the

Future outlook section.

Upcoming Chinese competition

For many years, China has steadily increased its share of global chemical exports, with growth

initially concentrated in commodity chemicals. However, following the US administration’s tariff

announcements on 2 April 2025, we started seeing inflows of Chinese materials that were initially

intended for the US market increasingly being shifted into Europe.

Even before 28 February, the chemical industry in Europe, Latin America, and Asia was already

facing competitive pressure on both volumes and prices. What has changed is that China is now

moving up the value chain. As a result, products that were previously considered specialties are

becoming increasingly commoditised, weighing on product prices. The vitamin market provides

a clear example of this trend. Brenntag has already suffered from pricing pressure in vitamins in

the past, and this could weigh on the company’s gross profits.

Rising Chinese competition in specialty chemicals could also impact the relationship between

distributors and their principals, particularly where exclusive distribution agreements are in

place. However, we are not aware of any exclusive agreements between Brenntag and suppliers

like IMCD and Azelis. The bulk of Brenntag’s business is in commodity chemicals (68% of sales).

Therefore, we only see a minor risk for Brenntag in this regard.

Risks and opportunities arising from M&A