全球化工装置_更多供应关停之际，制造业或存下行风险_更多供应关停之际，制造业或存下行风险Global Chemicals Cracker_ Potential downside to manufacturing while more supply is being shut_ Potential downside to manufacturing while more supply is being shut

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the Global Chemicals Cracker industry, focusing on the dynamics of chemical demand and supply, particularly in relation to tariffs and manufacturing activity [1][2]. Core Insights and Arguments - Chemical Demand Risks: There is a potential downside to manufacturing as more supply is being shut down. The reversal of pre-emptive inventory builds due to tariffs could pose unexpected risks to chemical demand [1][2]. - Supply Rationalization: Despite announcements of supply rationalization, it appears insufficient to rebalance markets. The average spread in August remained flat, with a notable increase in EU TDI prices offset by declines in Asia [1][2]. - Capacity Reductions: Ten Korean companies are set to reduce naphtha cracking capacity by approximately 2.7-3.7 million tons, representing 18-25% of total capacity. Korea accounts for 6% of global ethylene/propylene capacity [2]. - China's Supply Dynamics: China's Ministry of Industry and Information Technology (MIIT) may phase out smaller refining and chemical facilities, but older crackers owned by Sinopec and PetroChina are expected to see upgrades, leading to net supply additions rather than closures [2]. - Global Economic Indicators: Citi's global economic surprise index increased in July but has since fallen in August, primarily due to China. Industrial production in China expanded by 6% YoY in July, but austerity measures are beginning to impact demand [2]. Margin and Performance Analysis - Margin Trends: The average spread was stable month-over-month in August, with lower spreads in Asia offset by TDI in Europe. BASF's average weighted spread decreased by approximately 1% month-over-month, indicating a potential EBITDA of around €7.3 billion, which is about 3% below consensus [3][10]. - Sector Performance: The chemical sector's weak performance in Q2 suggests that chemical demand has not significantly benefited from pre-buying. The outlook for September is critical to assess demand trends for the remainder of 2025 [2][3]. Company-Specific Developments - BASF: The company reported a marginal decline in its weighted average spread for chemicals and materials, translating to a negative net pricing impact of approximately €0.1 billion for the second half of the year [10]. - Arkema: European acrylic acid margins were flat month-over-month, but margins in China dropped by about 22% due to lower prices. Arkema is viewed positively for its long-term earnings resilience [10]. - Clariant: The company is favored for its defensive portfolio, which is less reliant on commodity pricing and more focused on higher quality end markets [10]. - Dow Chemical: Dow announced a 50% cut to its dividend due to a prolonged soft commodity cycle and missed Q2 earnings expectations [15]. - LG Chem: The company is focusing on high-value-added products amid industry oversupply, with a realistic outlook on cathode shipment guidance [14]. Additional Important Insights - Market Sentiment: The overall sentiment in the chemical industry remains cautious, with expectations of continued low margin conditions for the rest of the year [11][15]. - Investment Recommendations: Within diversified chemicals, companies such as AKE, CLN, EVK in Europe, and LG Chem, PChem, and Kumho in Asia are highlighted as favorable investment opportunities [4][10]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the global chemicals cracker industry.