Middle East Supply Disruptions Boost European Chemicals, but Demand Risk Persists

Supply disruptions in the Middle East provided price support for the European chemical sector in the second quarter, allowing major players such as BASF, Brenntag, and Evonik to revise their expectations upward. However, the industry is questioning whether this temporary gain will be sustainable amid weak demand, overcapacity, and competitive pressure from Asia. European chemical companies have benefited in the short term from supply constraints caused by geopolitical tensions in the Middle East. While fluctuations in Brent crude oil prices also impacted costs, the profitability outlook for companies improved. Nevertheless, analysts warn that this price support is not sustainable. Weak global demand and rising overcapacity stand out as structural challenges facing the European chemical industry. The low-cost advantage of Asian competitors threatens the market share of European producers. Therefore, it remains uncertain whether the positive performance in the second quarter can be carried into the third quarter. This is not investment advice.