Insight

Chemicals & Specialty Materials Update Q1 2023

Chemicals & Specialty Materials Q1 2023 Earnings Summary

The 41 Chemicals & Specialty Materials companies that provide details on organic revenue growth showed a slight decline of (1.1%) in Q1 '23 vs. the year ago period
Similar to Q4 2022, pricing actions continued to support the top-line for a majority of the sub-sectors (up 6.1% on average). Exceptions were:
- Agchems and Fertilizers - where Fertilizer producers generally saw significant price declines while Agchem companies were able to push through price increases; and
- Commodity & Diversified producers who experienced fairly broad price declines
Once again, volumes (down 7.2% on average) were a concern across most of the industry

High Yield - Average New Issue Yields

Source: LCD Interactive High Yield Report, Monthly & Quarterly Volume tab

Credit Markets Update Q3 2022

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YoY Δ

Agchems/ Fertilizers

Coatings & Adhesives

Commodity & Diversified Chemicals

Industrial Gases

Minerals & Inorganics

Specialty Chemicals

Titanium Dioxide

Overall

Price

Volume

Organic Growth

Summary

The Chemicals & Specialty Materials industry continued to experience strong headwinds that pushed year-over-year organic sales growth in Q1 2023 to (1.1%) compared to 8.0% growth year-over-year in Q4 2022
Declining consumer demand, stubborn inflation, increasing risk of recession in key markets and continued economic uncertainty all played a role in impacting organic sales across the industry
- In addition, customers working their way through excess inventory/destocking remained an issue during the quarter
While price increases continued to support the majority of the industry, the rate of increase in prices slowed from the prior quarter. Volumes however, continued to show a negative trend (with some exceptions)
On a positive note, some industry participants suggest that destocking has largely run its course, except for certain end-markets where it is expected to continue for a few more months
While there are some positive signs, we believe the broad macro-economic challenges continue to cast uncertainty on the near-term growth of the Chemicals & Specialty Materials industry

We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.