European Chemicals: Still More Headwinds Than Tailwinds

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European Chemicals: Still More Headwinds Than Tailwinds

J P M O R G A N Europe Equity Research

15 July 2026

European Chemicals

Still More Headwinds Than Tailwinds

We have seen a rebound in cyclical chemical stocks over the past week, driven by European Chemicals

ACthe re-escalation of the Middle East (ME) conflict. While much remains uncertain Chetan Udeshi, CFA

around the nature and scale of the ongoing conflict, we believe the renewed (44-20) 7742-7034

optimism on cyclical chemicals is premature for the following reasons: 1) In chetan.x.udeshi@jpmorgan.com

general, chemical producers in China/Asia, who were typically most exposed to J.P. Morgan Securities plc

the Strait of Hormuz (SOH) for the sourcing of oil/naphtha (the key oil-based Angelina Glazova, CFA AC

feedstock for petchems) prior to this conflict, have shown much greater flexibility (44-20) 7134-8379

angelina.glazova@jpmorgan.com

in sourcing feedstocks from alternative regions than was originally expected. This J.P. Morgan Securities plc

means that chemical industry oversupply may persist even in a tighter feedstock

Kanchan Sangtani

market. 2) In general, there are no signs of panic buying and/or a material uplift in (91-22) 6157-3639

chemical prices in Asia/Europe yet, despite the bounce in oil prices over the past kanchan.sangtani@jpmchase.com

week or so. In fact, the newsflow on chemicals blogs (e.g. ICIS) highlights that spot J.P. Morgan India Private Limited

prices and margins in Europe for most commodity chems have still been falling

Specialist Sales contact details:over the past week, while in China spreads for most commodity chems are already

at or below Feb end levels (e.g. commodity silicones — relevant for Wacker — Sam Edmunds - Specialist Sales -

European Industrials