First-quarter results for Europe’s chemicals sector exceed expectations as Middle East tensions disrupt Asian feedstock supplies.
Europe’s chemicals sector reported a weak but better-than-expected first quarter, buoyed by supply disruptions in Asia. The industry benefited as Middle East tensions cut off naphtha and other feedstock supplies from the Persian Gulf, hitting Asian petrochemical producers harder.
Asia’s petrochemical firms rely heavily on naphtha, LPG, and methanol from the region. Shortages caused by the Iran conflict have forced production cuts, easing competitive pressure on European players. Analysts had anticipated deeper losses for the sector amid broader macroeconomic challenges.
Shares of major European chemical firms edged higher in early trading, reflecting investor relief over the temporary reprieve. The sector remains under pressure from high energy costs and weak demand, but the supply shock provided a modest lift.