The worst chemicals downturn in living memory is forcing ratings agencies to downgrade more companies and raising fears of bankruptcies. 

-          Chemical company earnings have been bottom-of-cycle since 2023

-          Leverage (borrowing) is high compared to historical levels

-          Low earnings increase pressure on leverage, raises risk of default

-          Fitch has downgraded more chemical companies over last 12-18 months

-          Extended trough in chemicals may lead to bankruptcies

-          Operating rates have not recovered as they did after Global Financial Crisis

-          Fitch expects gradual recovery from 2026

-          A lot more closures needed to rebalance market – could delay recovery

-          Ratings agencies look at company costs, strategies and compare to peers

-          Diversification of geography and product helps manage risk

In this ICIS Think Tank podcast, Will Beacham interviews Guillaume Daguerre who leads Europe chemicals for ratings agency Fitch, John Richardson from the ICIS market development team, ICIS Insight Editor Tom Brown and Paul Hodges, chairman of New Normal Consulting.
Click here to register for the ICIS/European Association of Chemical Distributors (Fecc) distributors CEO round table on Monday 16 June.