The Great De-Stocking
- Josh Latham
- +Laura Thompson
āThis feels like Lehman 2.0,āĀ saidĀ Lanxess AGāsĀ CEO, Matthias Zachert, on an ad hoc investor call in June.Ā
He was referring to demand destruction and de-stocking in the chemicals industry. The systematic shock has also been felt in theĀ packagingĀ andĀ pulp & paperĀ industry, and further down the supply chain, with shipping businesses warning of lower volumes over theĀ past few months.Ā
āWeād hoped that the end of 2022 was the trough for this, but the situation has only gotten worse,ā one chemicals analyst toldĀ 9fin. āWeāre very actively managing our chemical exposure at the moment and turning down way more of the opportunities weāve seen in primary and secondary.ā
Some caution that demand could also be a crucial underlying issue. After all, the chemicals industry is usually one of the first to feel any fluctuations in demand from end-markets.