Chemicals: Specialty or Commodity, with potentially tough times in between

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Chemicals: Specialty or Commodity, with potentially tough times in between

15 July 2026

Chemicals

Chemicals: Specialty or Commodity, with potentially tough times

in between

Received wisdom in Chemicals investing is that specialty chemicals companies represent James Hooper

+44 20 7676 6995 superior investments to commodity companies. In the current market, we see this as more

james.hooper@bernsteinsg.com of an either / or situation. In times of inflation, the specialty pricing power advantage is

undimmed. But as that inflation partly comes from commodity chemicals, we also see

Abdessamad Raghibi, Ph.D. opportunities here too. We are more concerned by chemicals companies who exist closer

+212 5 22 86 79 41

abdessamad.raghibi@bernsteinsg.com to the middle of the commodity-specialty spectrum, although we make no ratings changes

at this time. Our top picks remain in the industrial gases (Linde and Air Products), but BASF

Sebastien Afoy moves up the preference order to our best European idea.

+44 207 762 1032

sebastien.afoy@bernsteinsg.com We see a discrepancy between the financial markets and the physical world.

Petrochemical prices have declined over the last month or so, driven by headlines of

Specialist Sales peace and China’s release of inventories / strategic oil reserves. Even before the recent

James Brady resumption of hostilities, chemicals capacity was constrained and traffic through the Strait

+44 20 7762 5272 of Hormuz remains slow and prioritising liquids; in our view temporary relief based on

james.brady@bernsteinsg.com

inventory releases is not a sustainable solution to the crisis. We reiterate the conclusion of

our recent petchem Long View - that we expect pricing to be structurally higher - and our

Steve Song