Last year was “one of the toughest periods on record for the entire chemical industry”, according to Victrex (VCT) chief executive Jakob Sigurdsson. This was largely a reverberation from the pandemic, customers of chemicals companies having been so desperate to buy up supplies in 2020-21 that the cupboards remained more or less fully stocked deep into 2023.
Investors reacted as expected to last year's dramatic statements from bosses and (more importantly) earnings downgrades, knocking Victrex and Croda (CRDA) shares significantly. It was a similar story in terms of earnings at Elementis (ELM), although the company didn’t face the same share sell-off in 2023.
Sigurdsson says restocking is now slowly starting to happen, but others in the sector have forecast improvements in volumes only later this year. Jefferies analysts say the industry should see some recovery in volumes by the second half, albeit after further falls in Q1.