North America Chemicals: Price/Cost and End-Market Uncertainty Dominating the Conversation; Examining Investor Expectations into 2Q Reporting

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North America Chemicals: Price/Cost and End-Market Uncertainty Dominating the Conversation; Examining Investor Expectations into 2Q Reporting

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09 Jul 2026 16:00:00 ET │ 11 pages

North America Chemicals

Price/Cost and End-Market Uncertainty Dominating the Conversation;

Examining Investor Expectations into 2Q Reporting

CITI'S TAKE

A dynamic situation in Iran has re-opened the debate on relative

ACbeneficiaries in the sector. Paint & coatings have been seen as companies Patrick Cunningham

that could benefit most from price/cost expansion with easing inflation +1-212-816-6684

likely to show up in earnings exiting 2026. However, forward guidance patrick.cunningham@citi.com

appears to be less of an outsized catalyst as uncertainty with conflict re-

escalation will give little visibility into end-market weakness and cost Alexander Yi

pressure exiting the year. While investors generally agreed that ECL is a +1-212-816-4220

strong price/cost beneficiary, uncertainty with CoolIT acquisition and alexander.yi@citi.com

broader end-market trends have prompted views of the stock being

rangebound. Absent a sustained spike in oil prices or supply disruption, we Rachel Lee

expect commodity chemical guides will be heavily scrutinized on degree of +1-212-816-4559

normalization post-2Q. rachel.lee@citi.com

Not Bearish Enough on Commodities? — Since our 2Q26 preview on commodities,

most investors pushed back on our PE outlook being “not bearish enough.” Investors

noted rapidly declining PE export prices and overall buyer paralysis ahead of

contract price adjustments, with some suggesting prices rapidly reach 2025 levels.

While we generally understand sentiment given the direction of travel, we continue