Citi says it's constructive on European chemicals ahead of cyclical recovery
** Citi says it is "constructive but not outright bullish" on European chemicals makers, as it weighs the start of a potential volume recovery against structural concerns
** China becoming self-sufficient in chemicals will drive oversupply, the broker warns
** It says Elkem ELK.OL ("neutral") will struggle slightly as the silicones it specialises in are particularly oversupplied
** Citi raises Evonik EVKn.DE to "buy" from "neutral", saying its industrial business will benefit from a cyclical recovery and noting its key product methionine is one of the few chemicals in relatively short supply
** It raises Wacker Chemie WCHG.DE to "buy" from "sell", saying U.S. and German government support should help its polysilicone business, while the U.S. Uyghur Forced Labor Prevention Act drives demand for non-Chinese polysilicones
** It upgrades Clariant CLN.S to "buy" from "neutral" on recovery in industrial end-markets and cost saving measures
** Citi downgrades Arkema AKE.PA to "neutral" from "buy", as its product mix leaves it less able to benefit from higher cyclical demand
** The broker says Lanxess's ("neutral") shares are the cheapest of all, but its high exposure to agriculture and construction end-markets limits chances for cyclical recovery
Reporting by Louis van Boxel-Woolf
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
