European Chemical Sector Remains Cautious on Volumes

Dow Jones08-10

1001 GMT - European chemical companies remain wary on volumes as the geopolitical environment remains uncertain, Bank of America analysts say in a research note. The sector saw upgrades across European chemicals like Evonik, BASF and Syensqo, with most results ahead of consensus estimates, the analysts say. The results were supported by strong pricing pressure driven by higher commodity prices from the Middle East conflict, they add. Higher prices also meant some level of pre-buying in the quarter, while improved earnings didn't translate to stronger free cash flow, given the negative working capital impact from higher raw material prices, the analysts say. Evonik and BASF shares trade 0.8% and 0.5% lower, respectively, while Syensqo trades broadly flat.

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