From Gloom to Doom: Q2 Delivers a Reality Check for the Chemical Sector

Just when the market was hoping for signs of a floor, Q2 earnings from hashtag#Dow, hashtag#CPChem, and hashtag#LYB delivered a sobering message: the bottom isn’t in yet.

📉 Integrated polyethylene margins slid even further in Q2—especially in North America, where April delivered a particularly rough landing.

The damage report:

·       Dow posted negative earnings and free cash flow, triggering a dividend cut to conserve cash (and, perhaps, nerves).

·       CPChem and LYB hugged the breakeven line like it was the last life raft on the deck.

📊 The chart below, courtesy of BIC Advisory Group, gives new visual meaning to “falling like a rock.” 

So… where do we go from here?

Well, nowhere fast. Announced PE price increases in North America are having about as much success sticking as Teflon in a rainstorm.

As my French-Canadian friends like to say:

🧣 “Hold on to your tuque!”

It’s going to be a bumpy ride.