Material Techno-Economics
Outlook · weekly

Macro, materials & the Ladder

Chemicals sit at the top of almost every industrial value chain, so they signal where the economy is heading before most indicators do. Weekly briefs: the macro picture, chemicals and materials, energy competitiveness, and what moved on the Electricity, Renewable Carbon and Water Ladders.

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Weekly macro & industry update New · 2 Nov

The week's signals for chemicals, materials and energy competitiveness: macro dashboard, policy, prices and what to watch.

Week of 9 November 2026 · Monday brief · data to 9 November

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive signal

Tightening spread. The Bank of England raised its rate to 4%, markets now price a Fed hike in December after a strong US jobs report, and Brazil stopped cutting. Euro-area inflation reached 4.0%, the highest since September 2023, and producer prices are up 11.1% on a year. Oil and gas fell on hopes of a US–Iran deal: Brent lost about 13% in the week and TTF dropped back to €87/MWh. German power did not follow and averaged about €257/MWh. Chemical results were again carried by price, the EU opened a safeguard probe on PET resin, and COP31 opened in Antalya.

  • Oil and gas fell, but power did not. TTF was €87.49/MWh on 9 November, down about 14% from €101.25 a week earlier, and Brent was near $96.6 after its steepest weekly fall since March 2020. German day-ahead power still ranged from €242 to €346/MWh. EU carbon eased to €86.70/t on 9 November, and storage is 72.65%, against a five-year norm of 90%.45444847
  • Central banks tightened further. The Bank of England raised its rate to 4% by a 9–0 vote, with Mann wanting 50bp, and sees inflation peaking near 5% in Q2 2027. After 165,000 new US jobs in October, futures put the odds of a Fed hike on 9 December at 77%. Brazil’s Copom held at 13.75% and ended its easing cycle.13413
  • Euro-area inflation reached 4%. October HICP rose to 4.0%, with energy up 20.8% and core steady at 2.5%. Producer prices rose 2.5% in September alone and 11.1% on a year, with energy up 30.8%. German energy-intensive output fell 3.5% in Q3 from Q2.161718
  • Chemical results improved on price again. Evonik’s adjusted EBITDA rose 40% to €629m on prices up 10% and volumes up 2%. Lanxess and Arkema also passed on energy and raw-material costs. CF Industries estimates that 37% of Europe’s ammonia capacity was offline or running at reduced rates in October.30323336
  • Trade and carbon policy moved. The EU opened a safeguard investigation on PET resin imports on 6 November. More than 100 companies wrote against tying free ETS allowances to new investment. An EU–UK carbon-market link, with mutual CBAM exemptions, is due on 20 November.384022

Macro dashboard

GDP figures are the IMF’s October World Economic Outlook forecasts, unchanged from last week; India’s is for the fiscal year. PMI cells now show final October readings, except UK services, which keeps the flash, and Brazil services, which shows the composite. PMI cells are colored against the 50 line. All other figures are the latest official release; where nothing new came out, last week’s value and period are kept.

≥ 52 strong expansion 50–51.9 expansion 48–49.9 stalling < 48 contraction
EconomyGDP 2026Mfg PMI (Oct · Sep)Services PMI (Oct · Sep)Inflation (core)Policy rate · last moveIndustrial outputStrategic interpretation
USA2.3%IMF Oct; Q3 +3.4% saar54.9Final Oct; ISM 55.556.1Final Oct; ISM 54.53.7% (2.6%)CPI Sep; Oct due 10 Nov3.75–4.00%Hold 28 Oct; Dec hike ~77% priced+2.2% y/ySep; durables +1.8% m/mPayrolls rose 165,000 in October against a 70,000 consensus, with 84,000 of upward revisions. Unemployment fell to 4.1% and hourly earnings rose 3.1% y/y; factories added 19,000 jobs.3 ISM production hit 59.0, the fastest since late 2021, while prices paid eased to a still high 75.2.5 Services cooled: the ISM index fell to 54.5 and the S&P index to 56.1.87 San Francisco Fed President Daly said further tightening is likely needed, and the two-year yield rose to 4.51%.4
Canada1.1%IMF Oct; BoC MPR 1%49.6Oct; Sep 51.548.7Composite, Sep3.1% (trim 1.8%)CPI Sep; ex-gasoline 2.2%2.50%+25bp, 28 Oct; next 9 Dec0.0% m/mGDP Aug; Sep flash −0.1%Manufacturing slipped below 50 for the first time in 2026. New orders fell at the fastest pace in over a year, input costs rose at the fastest pace since June 2022, and firms cited tariffs and disrupted US trade.10 Employment was flat in October (−4,700) and unemployment rose to 6.7%, a second monthly increase; wage growth slowed to 2.2%.9
Brazil2.2%IMF Oct; Focus 1.80%46.1Oct; Sep 44.844.4Composite Oct; Sep 47.44.62%IPCA-15 Oct; +0.32% m/m13.75%Hold 4 Nov, unanimous−1.2% y/yAug; Sep due NovCopom held the Selic at 13.75% and ended what it called its “calibration cycle” after five 25bp cuts since March. The market was split, with 39 of 75 firms expecting a cut.13 The composite PMI fell to 44.4, the lowest in over six years, and new business fell the most since mid-2020.12 Factory new orders have now fallen for 19 months.11
Euro area1.1%IMF Oct; Q3 +0.4% q/q52.7Final Oct; flash 52.451.4Final Oct; Sep 53.04.0% (2.5%)HICP flash Oct; energy +20.8%2.50%Hold 29 Oct+0.7% m/mGermany Sep; +0.4% y/yInflation rose to 4.0%: Italy 5.6%, Spain 4.9%, France 3.8%, Germany 2.8% after a fuel-tax cut.16 Producer prices are up 11.1% y/y, and intermediate goods 7.1%.17 Factory input prices rose at the fastest pace since May, while services firms cut staff for the first time since May.1415 German output rose 0.7% in September but fell 0.4% over Q3; orders rose 4.4% after a 10.1% drop in August.1819
UK1.3%IMF Oct52.8Final Oct; Sep 51.953.1Flash Oct; Sep 52.13.5% (2.8%)CPI Sep4.00%+25bp, 5 Nov; 9–0 vote+0.1% m/mGDP AugAll nine MPC members voted to hike; Mann wanted 50bp. Staff see CPI near 4.5% in Q1 2027 and about 5% in Q2. Bailey said a further rise “may be warranted” but the path is not pre-set, and he read market pricing near 4.75% as risk premia.12 Factory output grew at the fastest pace in two years.21 Car registrations rose 5.4% in October.23 An EU–UK carbon-market link is expected on 20 November.22
India7.0%IMF Oct; FY54.7Final Oct; Sep 55.155.8Final Oct; Sep 55.25.54%CPI Sep5.50%+25bp, 7 Oct+6.7% y/yIIP Sep; 4-month lowServices growth reached a four-month high on domestic demand, and export orders rose, though the final reading came in below the 56.2 flash. Input-cost inflation was the lowest in over six years, but job creation was the weakest of the current run and sentiment is below its long-run average.24
China4.5%IMF Oct; Q3 actual 4.5%52.0RatingDog Oct · NBS 49.350.8RatingDog Oct; Sep 51.6CPI 0.9%PPI +5.0%, Sep; Oct due3.0% / 3.5%LPR held 20 Oct, 17th month+5.5% y/ySep; profits +14.4%Services slowed to 50.8 and the RatingDog composite fell to 52.0, the lowest since July. Firms cut output prices to win business even as input costs rose, and export orders grew more slowly.2625 October trade data are due on 10 November; the consensus surplus is $126.5bn, after $133.5bn in September.27
Japan0.7%IMF Oct53.3Final Oct; 7-month low51.7Final Oct; flash 52.02.1% (2.4%)CPI Sep; Tokyo Oct 2.8%1.25%Hold 30 Oct, 8–1 vote+1.9% y/ySep prelim; +2.2% m/mFinal services came in at 51.7, below the 52.0 flash but up from 51.3.28 Minutes of the September hike to 1.25% were released on 5 November; at the October hold Takata voted for 1.5%, and the BoJ raised its 2027 price outlook to 2.6%. Markets are looking for signs of a December move.29

Sources: Bank of England, BLS, Statistics Canada, Banco Central do Brasil, Eurostat and Destatis releases and reports139131618; S&P Global, ISM, HCOB, HSBC, au Jibun Bank and RatingDog PMIs651421242628; and the national statistics offices cited in each row. Cells without a new release keep last week’s value and its month. Brazil’s services cell shows the composite PMI because no separate services figure was published in the sources used.

Key industries dashboard

These are the end-markets that drive steel, chemicals, cement and fertilizer demand. Each cell shows the latest hard number; tap a cell to open its source. A PROXY tag means no direct series was available, so a close stand-in is shown. This week adds US September construction spending, the euro-area October construction PMI, UK October car registrations and CF Industries’ estimate of idle European ammonia capacity. US October CPI and China’s October trade data come out on 10 November.5202336427

Expanding (> +2% or index > 51) Flat or mixed Contracting No hard data this week
MarketUSACanadaBrazilEuropeUKIndiaChinaJapan
Residential constructionSteel · cement · PVC · insulation−7.4%Housing starts, 1.221m SAAR; −5.2% m/mSep−4%Housing starts, YTD; Sep +3% m/mSep+46.6%SBPE housing financeAug−6.4%Building output, euro areaJul40.7Housing activity PMISep−6%Housing sales, top 9 citiesQ3−20.6%Property investment, YTD; Sep alone −27.2%Jan–Sep−2.7%Housing starts; first fall since MarchSep
Non-residential constructionSteel · cement · coatings−1.9% m/mTotal construction spending; office and power upSep+3.2% m/mNon-res investment; permits −17%Jul+1.9%Cement salesAug42.5Construction PMI, euro area; Sep 43.4Oct48.5Commercial activity PMISep+9.8%Cement outputSep−2.1%PROXYManufacturing FAI, YTDJan–Sep−8.5%Non-res floor area startedAug
Infrastructure & civil worksSteel · cement · bitumen · PE pipe+2.5%Public construction; highways +4.4%Aug−2.9% q/qGovernment capex, realQ2R$300bn2026 plan, +50% (forecast)2026F+0.6%Civil engineering outputJul40.5Civil engineering PMIAug+7.9%Eight core industriesSep−4.2%Infrastructure FAI, YTDJan–Sep+46.3%Public works ordersAug
AutomotiveSteel · polymers · coatings · rubber+5.5%Light-vehicle sales, ~1.32m unitsSep+3.4%New vehicle sales, ~168k (DesRosiers)Sep+10.2%Vehicle production; exports −24.2%Sep+9.3%EU car registrations; YTD +5.7%Sep+5.4%New car registrations; electric share 32%Oct+20.5%PROXYMaruti domestic PV sales; exports +59%Oct−8.4%Vehicle sales (CAAM); NEVs +13.6%Sep+1.3%New vehicle sales (JAMA)Sep
Machinery & capital goodsSteel · engineering plastics · lubricants+13.0%Capital goods orders; core +0.5% m/mSep+2.3% q/qBusiness investment, M&E-ledQ2−15.5%Machinery revenue (Abimaq)Aug+3.0%Capital goods output, euro areaAug+1.8% 3m/3mMachinery & equipment outputAug+16.9%Capital goods outputAug+14.4%Excavator sales; exports +20.7%Sep+60.4%Machine-tool orders, record ¥223bnSep
ElectronicsSpecialty chemicals · gases · copper+9.5%Computer & electronics outputSep+16.7% q/qPROXYComputer investment, realQ2+12.2% m/mElectronics output (no y/y)Jul+17%PROXYGerman electro orders (ZVEI); output +4.5%Aug+3.5% 3m/3mComputer & electronics outputAug+34%Electronics exportsApr–Aug+20.6%Integrated circuit outputAug+52.3%Electronic component exportsAug
PackagingPE · PP · PET · paperboard−3.2%PROXYPaper output; plastics & rubber +0.7%Sep+1.2% m/mPROXYRetail sales volumeAug+5.1%Corrugated board shipmentsJun+0.8%PROXYRetail volume, euro areaAug−0.4% m/mPROXYRetail sales volumeSep−2%PROXYFMCG volumesApr–Jun+1.1%PROXYRetail salesSep+2.3%PROXYRetail sales; −0.7% m/mSep
Agriculture & fertilizerAmmonia · urea · potash · crop protection−2.6%Net farm income 2026F; fertilizer cost +15.3%2026F+8.4%Canola area (record); wheat −5.9%2026−5.4%Fertilizer deliveriesH137%Ammonia capacity offline or reduced (CF estimate)Oct£484/tUK-made ammonium nitrate; urea £482/t9 Oct−11.7%Fertilizer outputSep3.3 MtUrea export quota vs ~5 Mt in 20252026n/aMinor market, not tracked
Materials outputSteel · cement · chemicals−1.3%Chemicals output; +1.0% m/mSep+4.4% m/mChemical product sales; metals at recordAug−0.8%Crude steel; imports +34.6%Sep−2.0%EU27 chemicals output, YTDJan–Jul+0.1%Chemicals outputQ1+1.9%Crude steel, 13.9 MtSep+0.1%Crude steel; Jan–Sep −2.9%Sep−0.6%Crude steel, 6.3 MtSep
Values are y/y unless marked (m/m, q/q, 3m/3m, YTD or index). Index readings are PMIs, where 50 means no change.

What it means for materials

Steel Mixed

US manufacturers cite steel and aluminum costs and tariffs behind an ISM prices index of 75.2. German energy-intensive output fell 3.5% in Q3 from Q2. The planned EU–UK carbon-market link would exempt steel traded between the two from each other’s CBAM.51822

Cement Weak

The euro-area construction PMI fell to 42.5 in October from 43.4. US construction spending fell 1.9% in September, led by housing, although office and power projects grew. German construction output fell 2.6% m/m.20518

Chemicals Price up, volume flat

Evonik’s prices rose 10% and its volumes 2%, and Lanxess and Arkema also passed on higher energy and raw-material costs. Euro-area producer prices for intermediate goods are up 7.1% y/y. In China, ethylene margins are at a ten-year low while capacity keeps growing.3032331737

Fertilizers Cost squeeze

CF Industries estimates that 37% of Europe’s nameplate ammonia capacity was offline or running at reduced rates in October. Its ammonia price averaged $532/t in Q3, up from $418, with US gas at $2.88/MMBtu. TTF eased to €87/MWh but is still more than double its pre-conflict level.3645

1 Global chemicals

Evonik beats its own forecast, and stays independent. Q3 sales rose 13% to €3.83bn and adjusted EBITDA rose 40% to €629m, with prices up 10% and volumes up 2%. After €313m of provisions for its efficiency program, the company still lost €53m. It now expects full-year adjusted EBITDA in the upper half of its €2.0–2.2bn range.30 The CFO said Evonik is focused on its independent development; it is not negotiating with BASF but has not ruled out a confidential exchange of information. DZ Bank downgraded the shares to Hold, and they trade near €21.31

Other European producers also gained on price. Lanxess sales rose 9.6% to €1.47bn and EBITDA before exceptional items rose 11.2% to €139m, mostly because it passed on higher raw-material and energy costs. It now expects the upper end of its €450–500m range.32 Arkema’s sales rose 8.1% to €2.4bn and EBITDA rose 7% to €332m, a 14.1% margin, and it kept its guidance.33

US producers improve, from a low base. Huntsman’s revenue rose 18% to $1.72bn and adjusted EBITDA to $132m from $94m, as MDI prices rose in all three regions, but it still lost $18m.34 Celanese’s sales rose 6% y/y to $2.6bn but fell 7% from Q2.35 CF Industries earned $436m on $2.88/MMBtu gas and is building the $3.7bn Blue Point ammonia plant for 2029 start-up.36

European capacity keeps shrinking. CF says European production economics have become “more challenged” and that 37% of nameplate ammonia capacity was offline or running at reduced rates in October.36 German energy-intensive output was 1.9% lower y/y in September and fell 3.5% over Q3.18 More than 100 companies, including Covestro, Evonik and Wacker, warned that the ETS reform as proposed could “accelerate production closures or relocation”.40

Strategic implication: a second week of results tells the same story. Sales rise 8–13%, mostly on price, while volumes barely move, so earnings depend on passing through energy costs rather than on demand. That works while customers accept it. Euro-area producer prices up 11% and services firms cutting jobs suggest that tolerance is fading. Evonik’s stronger numbers make a BASF deal harder to agree, so the adjustment in Europe is still coming through closures and idled capacity, as in ammonia.

2 Regulatory · EU · USA · China

EU

  • A safeguard probe on PET resin. At the request of member states, the Commission opened a safeguard investigation on 6 November into imports of certain PET resin, mainly used for bottles, after imports “significantly increased”. Parties must come forward by 21 November and file evidence by 27 November.3839
  • Industry pushes back on the ETS reform. More than 100 companies reject plans to give free allowances only to firms that commit to decarbonization investment in Europe, and ask for “fairer benchmarks”, competitive energy prices and demand for low-carbon products. Parliament votes in December.40 The Council’s September position adds about 88m free allowances to 2030, worth some €6bn, plus 33m unallocated ones.41
  • An EU–UK carbon link is close. A draft due at the 20 November summit would link the two ETSs and exempt each side’s goods from the other’s CBAM, which matters for steel, aluminum, cement and fertilizers. The UK CBAM starts in January 2027.22 The next CBAM downstream trilogue is on 30 November, with chemicals and polymers still only in a review clause. There was no new step on the Industrial Accelerator Act or the Chemicals Action Plan this week.43
  • Car CO2 rules are loosened in committee. On 4 November the Environment Committee voted 48–30 to cut the 2035 car target to a 95% reduction, with up to 7.5 points of credit for low-CO2 European steel; the van target falls to 80%. Plenary votes in December.42

USA

  • Midterms and Iran talks set the tone. President Trump acknowledged that the conflict contributed to Republican losses in the midterms, and said further strikes on Iran were “highly unlikely” if talks progress; Secretary Rubio called Iran’s demands unacceptable.44 Manufacturers still cite tariffs and steel and aluminum costs, and Canadian factories blame tariffs and disrupted US trade for their first contraction this year.510

China

  • Capacity policy has not stopped the build-out. China’s ethylene capacity is set to rise from 62 Mt/y in 2025 to 90 Mt/y by 2030, even though petrochemical margins are at a ten-year low and cash margins across the ethylene chain are negative. S&P Global expects China to shift from buyer to “flexible supplier” and rely more on exports.37

3 Energy competitiveness

European TTF gas was €87.49/MWh on 9 November, down about 14% from €101.25 a week earlier and close to a two-week low. On 6 November it was heading for a weekly fall of more than 15%, its first in six weeks. It is still more than double its pre-conflict level: Gulf LNG remains disrupted, and cold, windless weather and Norwegian outages have sped up withdrawals. EU storage was 72.65% on 8 November, against a five-year average of 90%.45

Brent was about $96.6/bbl on 9 November. It fell about 13% in the week to 6 November, the steepest weekly drop since March 2020, after Iran reportedly sent a nuclear proposal through Qatar. Tanker attacks in the Strait of Hormuz continue at near-record rates, and Iran wants the US blockade lifted before it fully reopens the strait.44 Henry Hub was about $3.02/MMBtu on 9 November; TTF at €87.49/MWh equals about €25.6/MMBtu, several times the US price.46 EU carbon (December 2026 contract) was €86.70/t on 9 November, after about €88.95 on 6 November and €89.19 on 30 October.47

German day-ahead power did not follow gas down: €259.31/MWh for 2 November, €252.85, €248.99, €257.38, then €275.64 for 6 November, €259.83 and €242.13 over the weekend, and €345.64 for 9 November, the highest in two weeks. The 2–8 November mean was about €257, against about €250 the week before.48

COP31 opened in Antalya on 9 November and runs to 20 November. Türkiye holds the presidency and Australia leads the negotiations. A draft presidency pledge would raise electricity’s share of global energy use to 35% by 2035, from about 21–23% today. The United States is absent, and the EU has ruled out new finance pledges.4950

Ladder read-across: this week split the routes. Gas fell 14% and carbon 3%, which lowers the cost of fossil ammonia, methanol and hydrogen. Power stayed near €257/MWh and closed the week at €346, so the electricity-to-gas price ratio rose to about 2.9, from about 2.5 a week earlier. Electrified rungs lost ground against fossil routes, even flexible ones, because there were no cheap hours. COP31’s 35% electrification pledge points the right way, but in Europe it needs power prices that follow gas down, through long-term contracts, on-site renewables and grid relief.

4 China overcapacity and export pressure

  • The RatingDog services PMI fell to 50.8 from 51.6 and the composite to 52.0, the lowest since July. Firms cut output prices to win business while input costs kept rising, and export orders grew more slowly.2625
  • October trade data are due on 10 November. The consensus surplus is $126.5bn, after a $133.5bn surplus in September, when exports rose 36.3% and imports 31%.27
  • China added 27 Mt/y of the 45 Mt/y of ethylene capacity built worldwide in 2020–2025, and still imported 6 Mt/y in 2025. Polyethylene self-sufficiency is set to rise from about 50% in 2020 to about 90% by 2028.37
  • Europe’s trade response is growing: the PET resin safeguard probe opened on 6 November, after a sharp rise in imports.3839

Strategic implication: discounting in China’s services and factory-gate prices shows that domestic demand is still weak. Polymer self-sufficiency near 90% and negative ethylene margins mean the surplus has to go abroad once Gulf supply normalizes, and the oil price drop this week brings that closer. Europe now has PVC registration and a PET safeguard under way; the question is whether polyolefins follow before the next wave of Chinese exports.

Five takeaways

  1. Tightening is spreading. The Bank of England hiked, markets price a Fed hike in December and Brazil stopped cutting, so financing costs for new capacity keep rising.
  2. Energy is now in European prices: HICP at 4.0%, producer prices up 11.1% and energy up 30.8% y/y. German industrial output fell 0.4% in Q3, and energy-intensive output 3.5%.
  3. Oil and gas fell on diplomacy, but German power stayed near €257/MWh and reached €346 on 9 November. The gap moved further against electrified routes.
  4. Chemical earnings beat forecasts on price, with volumes up only about 2%. More than a third of European ammonia capacity is offline or running at reduced rates, and Evonik’s strong quarter makes consolidation slower.
  5. Trade and carbon policy is active: a PET safeguard probe, industry pushback on the ETS reform, an EU–UK carbon link and COP31’s electrification pledge.

Watch next week

  • 10 NovUS October CPI; China October trade data, with a consensus surplus of $126.5bn.427
  • 9–20 NovCOP31 in Antalya, including the presidency’s electrification pledge and the fossil-fuel transition debate.4950
  • 20 NovEU–UK summit, where the ETS link and mutual CBAM exemption are expected.22
  • 21–27 NovDeadlines to register and file evidence in the EU PET safeguard probe.38
  • 30 NovSecond CBAM downstream trilogue.43
  • RollingUS November jobs report (4 December), FOMC (8–9 December), Bank of Canada (9 December), and Parliament plenary votes on the ETS reform and car CO2 rules (December).44042

Sources

  1. Continuum Economics: Bank of England hikes by 25bp (5 Nov)
  2. Investment Week: Bank of England hikes rates to 4% (5 Nov)
  3. First Trust: nonfarm payrolls increased 165,000 in October (6 Nov)
  4. 24/7 Wall St.: odds of a December rate hike jump to 77% (7 Nov)
  5. First Trust: ISM manufacturing index 55.5 in October; September construction spending (2 Nov)
  6. investingLive: US S&P Global final manufacturing PMI 54.9 (2 Nov)
  7. Trading Economics: US services PMI, Oct 2026 final (4 Nov)
  8. First Trust: ISM non-manufacturing index 54.5 in October (4 Nov)
  9. Statistics Canada: Labour Force Survey, October 2026 (6 Nov)
  10. investingLive: Canada manufacturing PMI 49.6 (2 Nov)
  11. Trading Economics: Brazil manufacturing PMI, Oct 2026 (3 Nov)
  12. Trading Economics: Brazil composite PMI, Oct 2026 (5 Nov)
  13. DGABC (Estadão Conteúdo): Copom keeps Selic at 13.75% (4 Nov)
  14. Trading Economics: euro-area manufacturing PMI, Oct 2026 final (2 Nov)
  15. Trading Economics: euro-area services PMI revised lower (4 Nov)
  16. Trading Economics: euro-area inflation hits fresh three-year high (4 Nov)
  17. SteelOrbis (Eurostat): euro-area producer prices, Sep 2026 (6 Nov)
  18. Destatis: production in September 2026 +0.7% (6 Nov)
  19. The Star (dpa): German industrial orders rise 4.4% in September (5 Nov)
  20. Trading Economics: euro-area construction PMI, Oct 2026 (5 Nov)
  21. Trading Economics: UK manufacturing PMI, Oct 2026 final (2 Nov)
  22. Euronews: EU and UK set to link carbon markets (6 Nov)
  23. Carwow (SMMT data): new car registrations, October 2026 (5 Nov)
  24. Trading Economics: India services PMI, Oct 2026 final (4 Nov)
  25. Trading Economics: China RatingDog composite PMI, Oct 2026 (4 Nov)
  26. Trading Economics: China RatingDog services PMI, Oct 2026 (4 Nov)
  27. Trading Economics: China balance of trade, Sep data and Oct calendar (9 Nov)
  28. Trading Economics: Japan services PMI, Oct 2026 final (5 Nov)
  29. investingLive: Asia calendar, BoJ September minutes (5 Nov)
  30. Indian Chemical News: Evonik Q3 2026 (4 Nov)
  31. Goldesel: Evonik Q3, BASF approach and analyst views (3 Nov)
  32. Indian Chemical News: Lanxess Q3 2026 (5 Nov)
  33. Indian Chemical News: Arkema Q3 2026 (6 Nov)
  34. Finviz: Huntsman Q3 2026 earnings (2 Nov)
  35. Indian Chemical News: Celanese Q3 2026 (3 Nov)
  36. CF Industries: Q3 2026 results, SEC filing (4 Nov)
  37. Chemical Week: China’s self-sufficiency drive nears destination (Oct 26/Nov 2 issue)
  38. WTO: EU initiates safeguard investigation on PET resin (6 Nov)
  39. MLex: plastic resin imports come under safeguard probe in EU (6 Nov)
  40. WKZO (Reuters): European industry calls for changes to carbon reform (5 Nov)
  41. Council of the EU: targeted ETS measure on carbon leakage (16 Sep)
  42. electrive: Environment Committee votes to relax CO2 rules (5 Nov)
  43. CBAM Guide: first downstream trilogue, no deal; next round 30 November (23 Oct)
  44. Trading Economics: Brent crude oil (9 Nov)
  45. Trading Economics: EU natural gas, TTF (9 Nov)
  46. Trading Economics: US natural gas, Henry Hub (9 Nov)
  47. oEnergetice: Emission allowance price (EUA Dec-26), 9 Nov 2026
  48. euenergy.live: Germany day-ahead electricity prices (2–9 Nov)
  49. Sigmalive: COP31 opens in Antalya (9 Nov)
  50. Eurasia Business News: COP31 opens in Turkey (8 Nov)

Figures are as reported by 9 November 2026 (08:00 CET). Where no new figure was released, last week’s value and its period are kept. Dashboard cells link to their own sources.

Earlier weekly briefs

Week of 2 November 2026 · Monday brief · data to 2 November

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive signal

Central banks mostly held but leaned hawkish, and only the Bank of Canada hiked. The US grew 3.4% annualized in Q3 while the euro area slowed to 0.4% and China’s official factory PMI fell back below 50. The energy shock moved from oil to gas and power: TTF went above €100/MWh for the first time since 2022, and German day-ahead power averaged about €250/MWh, double the week before. Chemical results were again driven by price, and Europe’s trade-defence pipeline filled further.

  • Gas and power drove a sharp rise in European energy costs. TTF reached €101.25/MWh, German day-ahead power ranged from €151 to €314/MWh, and EU carbon rose to €89.19/t, its highest since January. Storage stands at 74.6%. Brent eased to about $110 on signs of diplomacy with Iran.68717067
  • Central banks held, but leaned hawkish. The Fed held at 3.75–4.00% with two dissents in favor of a hike, the ECB held at 2.50% and flagged upside inflation risks, and the BoJ held 8–1. The Bank of Canada raised its rate to 2.50%, and a Bank of England hike to 4% is expected on 5 November.11729827
  • Growth diverged in Q3. US GDP grew 3.4% annualized. The euro area slowed to 0.4% q/q, France contracted 0.1% and Germany grew 0.2%. Canada was flat in August, and its September flash estimate is −0.1%.2199
  • China’s factories slowed. The NBS manufacturing PMI fell to 49.3 and the non-manufacturing PMI to 49.7, both below expectations. Industrial profits rose 14.4% y/y in September, mostly because prices were higher.3840
  • Chemical results improved on price. BASF’s prices rose 12% and volumes 2%, and it raised its EBITDA guidance to €7.4–7.8bn but is cautious about Q4. LyondellBasell expects its European olefins and polyolefins plants to run at 60% in Q4. Evonik rejected BASF’s €24 offer.45465047
  • Trade defence moved forward. The EU is now registering PVC imports, so anti-dumping duties can be applied retroactively, and the UK proposes a 65% safeguard duty on out-of-quota PET. The first CBAM trilogue ended without a deal; the next is on 30 November.615160

Macro dashboard

GDP figures are the IMF’s October World Economic Outlook forecasts, unchanged from last week; India’s is for the fiscal year. Manufacturing PMI cells show the final October reading where it is out (India, Japan, China RatingDog). The other markets keep the October flash or their September reading until today’s releases. PMI cells are colored against the 50 line. All other figures are the latest official release.

≥ 52 strong expansion 50–51.9 expansion 48–49.9 stalling < 48 contraction
EconomyGDP 2026Mfg PMI (Oct · Sep)Services PMI (Oct flash · Sep)Inflation (core)Policy rate · last moveIndustrial outputStrategic interpretation
USA2.3%IMF Oct; Q3 +3.4% saar56.0Flash Oct; final and ISM 2 Nov57.9Flash Oct; Sep 58.83.7% (2.6%)CPI Sep; PCE 3.6% (core 3.1%)3.75–4.00%Hold 28 Oct, 10–2 vote+2.2% y/ySep; durables +1.8% m/mQ3 GDP grew 3.4% annualized, led by investment and consumption. The Fed held, but Cook and Hammack voted for a hike, and the statement says inflation “remains elevated”. Core capital goods orders rose 0.5% in September, jobless claims fell to 194k, and consumer confidence jumped to 91.7.213647
Canada1.1%IMF Oct; BoC MPR 1%51.5Sep; Oct due 2 Nov48.7Composite, Sep3.1% (trim 1.8%)CPI Sep; ex-gasoline 2.2%2.50%+25bp, 28 Oct; next 9 Dec0.0% m/mGDP Aug; Sep flash −0.1%The Bank of Canada raised rates for the first time since 2023, on oil-driven inflation. It sees CPI near 3.5% by year-end and says it will “proceed carefully”. The economy has stalled: GDP was flat in August, and Q3 is tracking about 1.3–1.5% annualized, against the Bank’s 2%.891011
Brazil2.2%IMF Oct; Focus 1.80%44.8Sep; Oct due this week49.2Sep4.62%IPCA-15 Oct; +0.32% m/m13.75%−25bp, 17 Sep; Copom 3–4 Nov−1.2% y/yAug; Sep due NovUnemployment fell to 5.2% in the quarter to September, the lowest for that quarter since 2012, with a record 103.6m people employed. The Focus survey sees the Selic at 13.25% by year-end, which implies 50bp of cuts over November and December. The real weakened to 5.60 after the runoff election, and Anfavea expects 2026 vehicle output to rise 6.7%.1416151213
Euro area1.1%IMF Oct; Q3 +0.4% q/q52.4Flash Oct; final 2 Nov51.7Flash Oct; Sep 53.03.8% (2.5%)HICP Sep; Oct flash 4 Nov2.50%Hold 29 Oct−1.1% y/yAug; Sep due NovQ3 growth slowed to 0.4% q/q (+1.3% y/y). France contracted (−0.1%), Italy was flat and Spain grew 0.6%. German inflation fell to 2.8% after a fuel-tax cut, but Italy is at 5.4% and Spain at 4.9%. The ECB held, warned of “upside risks” from energy and gave no December signal. Lagarde will leave on 7 February. Ifo edged up to 90.2, and unemployment is 6.5%.192122171823252420
UK1.3%IMF Oct52.8Flash Oct; Sep 51.953.1Flash Oct; Sep 52.13.5% (2.8%)CPI Sep3.75%Hold; hike to 4% expected 5 Nov+0.1% m/mGDP AugThe Budget gave £2.6bn of household energy payments, a 5p fuel-duty cut and electricity-cost support for energy-intensive manufacturers through the British Industrial Competitiveness Scheme. It also added £20.4bn for the National Wealth Fund and British Business Bank. Headroom is £15bn. A hike on 5 November is seen as “all but certain”, and Ofgem’s price cap may rise about 22% in January.262728
India7.0%IMF Oct; FY54.7Final Oct; Sep 55.156.2Flash Oct; Sep 55.25.54%CPI Sep5.50%+25bp, 7 Oct+6.7% y/yIIP Sep; 4-month lowThe final manufacturing PMI came in below the flash. Export orders reached a six-month high, while input-cost inflation was the lowest since February. September output growth slowed to 6.7%, with manufacturing +7.6% and mining −6.2%. The RBI’s stance is “calibrated tightening”.353637
China4.5%IMF Oct; Q3 actual 4.5%52.0RatingDog Oct · NBS 49.351.6RatingDog Sep · NBS non-mfg Oct 49.7CPI 0.9%PPI +5.0%, Sep3.0% / 3.5%LPR held 20 Oct, 17th month+5.5% y/ySep; profits +14.4%The two PMIs diverge. The official manufacturing PMI fell 0.8 points to 49.3 (new orders 49.4, input prices 56.8), while the private RatingDog index held at 52.0, although factory-gate and export prices fell. Profits rose 15.5% year to date. The Fifth Plenum gave no new economic stimulus and focused on Party matters.3839404142
Japan0.7%IMF Oct53.3Final Oct; 7-month low52.0Flash Oct; Sep 51.32.1% (2.4%)CPI Sep; Tokyo Oct 2.8%1.25%Hold 30 Oct, 8–1 vote+1.9% y/ySep prelim; +2.2% m/mThe BoJ judged underlying inflation to be “broadly in line” with 2% for the first time. One member voted for 1.5%, and OIS prices about an 80% chance of a December hike. Factory output beat forecasts and METI’s survey points to +5.1% in October, but retail sales (+2.3% y/y) and housing starts (−2.7%) disappointed. Unemployment fell to 2.4%.293031323334

Sources: Federal Reserve, BEA, Bank of Canada, ECB and BoJ releases and reports1281729; HSBC, au Jibun Bank, NBS and RatingDog PMIs35343839; and the national statistics offices cited in each row. Cells without a new release keep last week’s value and its month. A “flash” PMI is a preliminary reading. The final euro-area, UK, US, Canadian and Brazilian manufacturing PMIs are published later on 2 November.

Key industries dashboard

These are the end-markets that drive steel, chemicals, cement and fertilizer demand. Each cell shows the latest hard number; tap a cell to open its source. A PROXY tag means no direct series was available, so a close stand-in is shown. This week adds US September capital goods orders, Japan’s September housing starts and retail sales, and Maruti Suzuki’s October domestic sales as an early read on Indian cars. US September construction spending, October vehicle sales and the October construction PMIs come out this week.53275

Expanding (> +2% or index > 51) Flat or mixed Contracting No hard data this week
MarketUSACanadaBrazilEuropeUKIndiaChinaJapan
Residential constructionSteel · cement · PVC · insulation−7.4%Housing starts, 1.221m SAAR; −5.2% m/mSep−4%Housing starts, YTD; Sep +3% m/mSep+46.6%SBPE housing financeAug−6.4%Building output, euro areaJul40.7Housing activity PMISep−6%Housing sales, top 9 citiesQ3−20.6%Property investment, YTD; Sep alone −27.2%Jan–Sep−2.7%Housing starts; first fall since MarchSep
Non-residential constructionSteel · cement · coatings+1% m/mPrivate non-res spending; office +4.6%Aug+3.2% m/mNon-res investment; permits −17%Jul+1.9%Cement salesAug43.4Construction PMI, euro areaSep48.5Commercial activity PMISep+9.8%Cement outputSep−2.1%PROXYManufacturing FAI, YTDJan–Sep−8.5%Non-res floor area startedAug
Infrastructure & civil worksSteel · cement · bitumen · PE pipe+2.5%Public construction; highways +4.4%Aug−2.9% q/qGovernment capex, realQ2R$300bn2026 plan, +50% (forecast)2026F+0.6%Civil engineering outputJul40.5Civil engineering PMIAug+7.9%Eight core industriesSep−4.2%Infrastructure FAI, YTDJan–Sep+46.3%Public works ordersAug
AutomotiveSteel · polymers · coatings · rubber+5.5%Light-vehicle sales, ~1.32m unitsSep+3.4%New vehicle sales, ~168k (DesRosiers)Sep+10.2%Vehicle production; exports −24.2%Sep+9.3%EU car registrations; YTD +5.7%Sep+12.0%New car registrations; BEV share 28.3%Sep+20.5%PROXYMaruti domestic PV sales; exports +59%Oct−8.4%Vehicle sales (CAAM); NEVs +13.6%Sep+1.3%New vehicle sales (JAMA)Sep
Machinery & capital goodsSteel · engineering plastics · lubricants+13.0%Capital goods orders; core +0.5% m/mSep+2.3% q/qBusiness investment, M&E-ledQ2−15.5%Machinery revenue (Abimaq)Aug+3.0%Capital goods output, euro areaAug+1.8% 3m/3mMachinery & equipment outputAug+16.9%Capital goods outputAug+14.4%Excavator sales; exports +20.7%Sep+60.4%Machine-tool orders, record ¥223bnSep
ElectronicsSpecialty chemicals · gases · copper+9.5%Computer & electronics outputSep+16.7% q/qPROXYComputer investment, realQ2+12.2% m/mElectronics output (no y/y)Jul+17%PROXYGerman electro orders (ZVEI); output +4.5%Aug+3.5% 3m/3mComputer & electronics outputAug+34%Electronics exportsApr–Aug+20.6%Integrated circuit outputAug+52.3%Electronic component exportsAug
PackagingPE · PP · PET · paperboard−3.2%PROXYPaper output; plastics & rubber +0.7%Sep+1.2% m/mPROXYRetail sales volumeAug+5.1%Corrugated board shipmentsJun+0.8%PROXYRetail volume, euro areaAug−0.4% m/mPROXYRetail sales volumeSep−2%PROXYFMCG volumesApr–Jun+1.1%PROXYRetail salesSep+2.3%PROXYRetail sales; −0.7% m/mSep
Agriculture & fertilizerAmmonia · urea · potash · crop protection−2.6%Net farm income 2026F; fertilizer cost +15.3%2026F+8.4%Canola area (record); wheat −5.9%2026−5.4%Fertilizer deliveriesH1+70%Nitrogen prices vs 2024 averageMay£484/tUK-made ammonium nitrate; urea £482/t9 Oct−11.7%Fertilizer outputSep3.3 MtUrea export quota vs ~5 Mt in 20252026n/aMinor market, not tracked
Materials outputSteel · cement · chemicals−1.3%Chemicals output; +1.0% m/mSep+4.4% m/mChemical product sales; metals at recordAug−0.8%Crude steel; imports +34.6%Sep−2.0%EU27 chemicals output, YTDJan–Jul+0.1%Chemicals outputQ1+1.9%Crude steel, 13.9 MtSep+0.1%Crude steel; Jan–Sep −2.9%Sep−0.6%Crude steel, 6.3 MtSep
Values are y/y unless marked (m/m, q/q, 3m/3m, YTD or index). Index readings are PMIs, where 50 means no change.

What it means for materials

Steel Mixed

China exported 10.49 Mt of steel in September, above 10 Mt again, and 85.65 Mt in the first nine months. US capital goods orders rose 13.0% y/y in September, which supports demand for machinery steel. India’s factory output slowed to a four-month low.66536

Cement Weak ex-India

Japan’s housing starts fell 2.7% y/y in September, the first fall since March. China’s official non-manufacturing PMI, which includes construction, fell to 49.7. India’s electricity output rose 11.2%, which points to firm infrastructure activity.323836

Chemicals Price up, Europe idle

BASF’s prices rose 12% and its volumes 2%. European crackers run at about 70%, and LyondellBasell plans a 60% run rate for its European olefins and polyolefins in Q4. Chinese polyethylene rose 15.9% in a month to CNY 9,494/t.45575074

Fertilizers Cost squeeze

Urea rose to $449.50/t, up 3.9% in a month, while TTF above €100/MWh pushed European ammonia costs to a new high. Yara is cutting ammonia output again in Q4 and expects its gas bill to be about $450m higher than a year earlier.73687677

1 Global chemicals

BASF raises its guidance, but is cautious about Q4. Q3 sales rose to €16.4bn, from €14.3bn, with prices up 12% and volumes up 2%. EBITDA before special items rose 15% to €1.6bn, but net income was only €155m, after a €318m impairment in Monomers and restructuring at Ludwigshafen. Full-year EBITDA guidance rises to €7.4–7.8bn.45 Kamieth said markets are better supplied than in Q2, when disruption had supported prices, and that BASF is “significantly above the trough” but not yet at mid-cycle.46

Evonik says no. Evonik’s board rejected the raised €24-a-share offer, which values it at about €11.2bn, and will not negotiate on those terms. It offers only a confidential exchange of positions. The shares closed at €20.90, well below the offer.4748 Kamieth called a deal “a could do, not a must do”. RAG-Stiftung, which holds about 43–44%, has not commented; Evonik reports its Q3 results on 3 November.4649

US and Asian peers do better than Europe. LyondellBasell earned $758m and $1.5bn EBITDA excluding identified items, which include the closure of a European propylene oxide joint venture. It plans Q4 operating rates of 85% for its North American olefins and polyolefins and 60% in Europe, and may build its next MoReTec recycling plant in Europe.5051 Eastman’s sales rose 8%, Wacker’s EBITDA nearly doubled to €217m, Sinopec’s profit rose 64%, and Shell’s Chemicals & Products segment earned $3.86bn on record refining margins.52535655 At Air Liquide, Large Industries sales in Europe, the Middle East and Africa fell 5.7% on a comparable basis, a sign of weaker European base-chemicals demand.54

European olefins remain under pressure. European crackers are running at about 70%. Two closures are planned for 2027, and Borouge’s 750 kt/y propane dehydrogenation (PDH) plant at Kallo is due the same year. Chemical Week expects ample supply in 2027.57 Cefic co-signed an open letter on an industrial hydrogen target.58 US rail carloads rose 3.6% y/y in the week to 24 October.59

Strategic implication: Q3 confirms the split from last week. Earnings are rising on price, but European assets are idling: 60–70% run rates, impairments and closures. BASF’s comment that markets are “better supplied” suggests the price boost has peaked just as gas and power costs rise again. Evonik’s rejection makes consolidation slower and more expensive, and the likely next steps in Europe are capacity exits rather than mergers.

2 Regulatory · EU · USA · China

EU

  • PVC duties can be applied retroactively. Since 23 October the Commission has been registering suspension-PVC imports from China, South Korea, Taiwan and Mexico, so anti-dumping duties can be backdated. The complaint alleges Chinese dumping margins of 84–273%, and provisional duties are expected by 23 April 2027.61
  • The CBAM trilogue ended without a deal. The first trilogue on the downstream extension (20 October) left four issues to working level: an aluminium de minimis threshold, scrap, online platforms and default values. The second trilogue is on 30 November, and chemicals and polymers are covered only by a review clause.60
  • A plastics safeguard is still pending. Šefčovič has said plastics is “closest” to new safeguard measures, but has given no products or timing.62 In the UK, the government proposes a 65% safeguard duty on PET imports above the quota; the consultation closes on 22 November.51
  • No new step on the ETS or the Accelerator Act this week. Last week’s votes on about 100m extra free allowances and on the Market Stability Reserve now go to final approval. The ECB said rising energy prices are an upside risk to inflation, which makes carbon-cost relief more politically urgent.17

USA

  • A quiet week on chemicals rules. The US–China trade truce now runs to 10 January 2027. China’s suspension of its October 2025 rare-earth controls continues, but the April 2025 controls on seven elements stay.63 The Fed’s hawkish hold keeps financing costs high for new US capacity.1

China

  • Old crackers are under review. Under the anti-involution campaign, provinces have submitted assessments of crackers older than 20 years. Each must upgrade or close by the end of 2029, but no closures have been announced, and China is still set to add 6.3 Mt/y of ethylene in 2026.64
  • The plenum was about the Party, not the economy. The Fifth Plenum’s communiqué calls for stability and stronger domestic demand but has no new measures on industry, carbon or overcapacity. The 21st Party Congress is set for the second half of 2027.41

3 Energy competitiveness

European TTF gas was €101.25/MWh on 2 November, up about 6% from €95.47 a week earlier. On 30 October it went above €100 for the first time since late 2022. Gulf LNG supplies remain severely disrupted, with Qatari deliveries halted. EU storage was 74.62% on 1 November, historically low for the season, and withdrawals have started.68

Brent fell more than 3% to about $110/bbl on 2 November, on signs of diplomacy with Iran in Doha. It had neared $113 on 30 October, after a four-year high of $116.72 on 23 October, and rose more than 15% over October.67 On 1 November seven OPEC+ members kept their December targets unchanged for a third month; Gulf producers are still pumping below target. A capacity review is due by mid-November, and the full meeting on 29 November will set 2027 quotas.72 Henry Hub was about $2.89/MMBtu, so TTF is roughly ten times the US price on an energy basis.69 EU carbon closed at €89.19/t on 30 October, up from €86.26 and its highest since January.70

German day-ahead power had no cheap days: €150.54/MWh for 27 October, €248.25 for 28 October, a peak of €313.92 for 29 October, then €269.50, €251.02 and €255.91, and €259.31 for 2 November. The seven-day mean was about €250, against about €121 the week before.71

Ladder read-across: this week hurts every route. Gas above €100 and carbon at €89 push up the cost of fossil ammonia, methanol and hydrogen. Power averaging €250/MWh with no cheap hours means electrified rungs, including flexible ones, did worse still, because the electricity-to-gas ratio moved against them. Last week’s weekend window has closed. Only rungs with long-term power contracts or on-site renewables improved their position against fossil routes.

4 China overcapacity and export pressure

  • The NBS manufacturing PMI fell to 49.3, the lowest since July, and the non-manufacturing PMI to 49.7. Input prices eased to 56.8, while output prices stayed above 50 at 51.7.3844 The RatingDog index held at 52.0, but factory-gate and export prices fell and business confidence is at a nine-month low.39
  • Industrial profits rose 14.4% y/y in September and 15.5% year to date, to CNY 6.03trn. Chemicals profits are up 49.2%, which shows the effect of tight Asian petrochemical markets.4043 Sinopec’s Q3 profit rose 64%.56
  • September exports rose 36.3% y/y and the trade surplus was $133.5bn, taking the nine-month surplus to $938bn. Steel exports stayed above 10 Mt.6566
  • Chinese polyethylene reached CNY 9,494/t, up 15.9% in a month and 38.1% in a year, and polypropylene rose 21.7% in a month. Assessments of old crackers are under way, while 6.3 Mt/y of new ethylene capacity is still due in 2026.7464

Strategic implication: China is short of polymers at home, with high prices and chemicals profits up by half, while its broader economy is slowing again. That gives Europe some respite on bulk polymers. Exports of manufactured goods, however, are still growing fast, and the pressure there is unchanged. Once Gulf LNG and crude flows normalize, new Chinese ethylene capacity and slowing domestic demand will turn the polymer surplus back towards export markets. The PVC registration and a plastics safeguard would put the EU in position before that happens.

Five takeaways

  1. Central banks are holding or hiking, not cutting. Brazil is the only economy in the set still easing, so financing costs for European and North American capacity stay high.
  2. Europe is slowing (Q3 +0.4%, France negative) while the US grew 3.4% annualized; the gap in demand and in energy costs keeps widening.
  3. The energy shock has moved from oil to gas and power: TTF above €100, German power near €250 and EU carbon at €89. This is the worst week for European cost competitiveness since 2022.
  4. Chemical earnings are rising on price, but European plants idle at 60–70%. Evonik’s rejection points to capacity exits rather than consolidation.
  5. Trade defence is building up step by step (PVC registration, a UK safeguard on PET, a possible EU plastics safeguard), while CBAM coverage of chemicals is still only a review clause.

Watch next week

  • 2 NovFinal October manufacturing PMIs for the euro area, UK, US, Canada and Brazil; ISM manufacturing; US September construction spending.1178
  • 3 NovEvonik Q3 results and its first comments after rejecting BASF.49
  • 3–4 NovCopom decision; Focus sees a cut on the way to 13.25%.15
  • 4 NovEuro-area flash HICP for October; forecast 3.9%, from 3.8%.20
  • 5 NovBank of England decision; hike to 4% expected.27
  • Mid-NovOPEC+ capacity review; UK PET safeguard consultation closes 22 November.7251
  • RollingUS Q3 GDP second estimate (25 November), OPEC+ full meeting on 2027 quotas (29 November), second CBAM trilogue (30 November), Bank of Canada (9 December), and the US–China truce expiry (10 January).27260863

Sources

  1. Federal Reserve: FOMC statement (28 Oct)
  2. BEA: GDP advance estimate, Q3 2026 (29 Oct)
  3. BEA: personal income and outlays, Sep 2026 (29 Oct)
  4. Times of Oman (Reuters): US weekly jobless claims fall to 194,000 (30 Oct)
  5. First Trust: durable goods orders rose 1.8% in September (27 Oct)
  6. Trading Economics: US durable goods orders, Sep 2026 (27 Oct)
  7. Verified Investing: Conference Board consumer confidence, Oct 2026 (27 Oct)
  8. Bank of Canada: policy rate raised to 2½% (28 Oct)
  9. Desjardins: Canada real GDP, August (30 Oct)
  10. investingLive: Canada GDP for August 0.0% (30 Oct)
  11. Forex Fundamentals: Canada manufacturing PMI calendar (2 Nov)
  12. Trading Economics: Brazil manufacturing PMI, Sep 2026
  13. IBGE: IPCA-15, Oct 2026 (23 Oct)
  14. Diário do Nordeste (IBGE PNAD): unemployment falls to 5.2% (30 Oct)
  15. Sou Brasília: Focus survey (26 Oct)
  16. Jornal do Comércio: Anfavea raises 2026 production forecast (9 Oct)
  17. ECB: monetary policy decisions (29 Oct)
  18. Euronews: ECB holds at 2.5% as Lagarde announces early exit (29 Oct)
  19. Xinhua: euro-area GDP growth slows to 0.4% in Q3 (30 Oct)
  20. Forex Fundamentals: euro-area HICP calendar (4 Nov)
  21. TMGM: German CPI softens to 2.8% in October (30 Oct)
  22. Euronews: where was inflation highest in October? (30 Oct)
  23. TMGM: Ifo business climate improves to 90.2 (26 Oct)
  24. FX.co: euro-area HCOB flash manufacturing PMI, Oct (23 Oct)
  25. Demócrata: euro-area unemployment 6.5% in September (30 Oct)
  26. Edelman: UK Autumn Budget 2026 (28 Oct)
  27. The British Eye: Bank of England expected to raise rates to 4% (1 Nov)
  28. S&P Global: UK manufacturing PMI, Sep 2026 (1 Oct)
  29. Seoul Economic Daily: Bank of Japan holds at 1.25% (30 Oct)
  30. ActionForex: Tokyo core CPI eases to 2.6% (30 Oct)
  31. investingLive: Japan September factory output and retail sales (30 Oct)
  32. Trading Economics: Japan housing starts, Sep 2026 (30 Oct)
  33. Trading Economics: Japan unemployment rate, Sep 2026 (29 Oct)
  34. ActionForex: Japan manufacturing PMI eases to 53.3 (2 Nov)
  35. Business Standard: India manufacturing PMI eases to 54.7 (2 Nov)
  36. SteelOrbis: India industrial production +6.7% in September (29 Oct)
  37. Business Standard: RBI raises repo to 5.5% (7 Oct)
  38. CGTN: NBS PMIs, Oct 2026 (31 Oct)
  39. ActionForex: RatingDog China manufacturing PMI, Oct 2026 (2 Nov)
  40. CGTN: China industrial profits up 15.5% in nine months (27 Oct)
  41. China MFA: communiqué of the Fifth Plenary Session (29 Oct)
  42. Trading Economics: China LPR unchanged (20 Oct)
  43. Trading Economics: China industrial profits, Sep 2026 (27 Oct)
  44. TradingView (Trading Economics): China manufacturing unexpectedly weakens (31 Oct)
  45. BASF: Q3 2026 results (28 Oct)
  46. MarketBeat: BASF Q3 earnings call highlights (28 Oct)
  47. Börse Express: Evonik bleibt hart (30 Oct)
  48. Börsen-Zeitung: Evonik weist BASF-Offerte zurück (30 Oct)
  49. Trading-Treff: Evonik, Tür bleibt einen Spalt offen (30 Oct)
  50. Indian Chemical News: LyondellBasell Q3 2026 (30 Oct)
  51. ICIS: news headlines (30 Oct)
  52. Finviz: Eastman Q3 2026 results (29 Oct)
  53. CHEManager: Wacker Q3 2026 (29 Oct)
  54. Air Liquide: Q3 2026 revenue (29 Oct)
  55. Oil & Gas Journal: Shell Q3 earnings (29 Oct)
  56. Newsquawk: Sinopec Q3 2026 net profit (29 Oct)
  57. Chemical Week: European olefins outlook pressured (Oct 26/Nov 2 issue)
  58. Cefic: latest updates (28 Oct)
  59. AJOT: AAR rail traffic, week to 24 October (28 Oct)
  60. CBAM Guide: first downstream trilogue, no deal (23 Oct)
  61. Argus: EU PVC anti-dumping duties to be applied retroactively (26 Oct)
  62. MLex: plastics closest to new EU safeguards (23 Oct)
  63. Rinnovabili: US–China truce extended to January 2027 (25 Sep)
  64. Chemical Week: China anti-involution and crackers (Oct 27/Nov 3 issue)
  65. Political.org: China September exports +36.3% (13 Oct)
  66. Mysteel: China steel exports top 10 Mt in September (14 Oct)
  67. Trading Economics: Brent crude oil (2 Nov)
  68. Trading Economics: EU natural gas, TTF (2 Nov)
  69. Trading Economics: US natural gas, Henry Hub (1 Nov)
  70. Trading Economics: EU carbon permits (30 Oct close)
  71. euenergy.live: Germany day-ahead electricity prices (27 Oct–2 Nov)
  72. Star-Advertiser (wire): OPEC+ keeps December targets steady (1 Nov)
  73. Trading Economics: urea (30 Oct)
  74. Trading Economics: polyethylene (2 Nov)
  75. DriveSpark: Maruti Suzuki October 2026 sales (1 Nov)
  76. Finimize: Yara cuts fertilizer output again (22 Oct)
  77. QCIntel: Yara Q3 results call (22 Oct)
  78. US Census: construction spending release (Aug data; Sep due 2 Nov)

Figures are as reported by 2 November 2026 (08:00 CET). Where no new figure was released, last week’s value and its period are kept. Dashboard cells link to their own sources.

Wednesday 28 October 2026 · mid-week update · developments since 26 October

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive view

Two days into the week, the picture from Monday's brief holds, with sharper edges. BASF's third quarter confirms that chemical earnings are recovering on price, not volume. European gas set a new post-2022 high on Norwegian outages and the Gulf, and carbon followed. German business sentiment improved for a sixth month, with manufacturing turning positive for the first time in more than three years. Central banks decide tonight (Fed) and tomorrow (ECB).

  • BASF beats and raises, on price. Q3 sales rose 14% with prices up 12% and volumes up 2%; 2026 EBITDA guidance moves up to €7.4–7.8 billion.1
  • Gas at its highest since 2022. TTF touched €97.64/MWh on 27 October; German storage is about 61% full against about 75% a year ago.4
  • German industry sentiment turns. The ifo index rose to 90.2; manufacturers' situation and expectations are both positive for the first time in more than three years.6
  • China's chemical profits surge. Chemical-industry profits rose 49.2% year-on-year in January–September, a sign of rising margins behind China's export push.7

1 Global chemicals

BASF: earnings up 15%, carried by prices. Third-quarter sales reached €16.4 billion (+14%) and earnings before interest, taxes, depreciation and amortization (EBITDA) before special items €1.6 billion (+15%). Prices rose 12% and volumes 2%. The Chemicals segment's earnings rose considerably; Agricultural Solutions fell. Special items of €437 million mostly reflect restructuring at Ludwigshafen, and a €318 million impairment hit the Monomers division. Net income was €155 million.1

Above the trough, not yet mid-cycle. Chief executive Markus Kamieth said markets were better supplied than in the second quarter, when Middle East disruption supported prices, and that the portfolio is "significantly above the trough" but not at normal levels. BASF has cut about 8,600 positions since January 2024 and lowered 2026 capital spending to about €2.8–2.9 billion, from €3.4 billion planned in February.2

Evonik: "a could do, not a must do." After last week's reported offer of €24 a share, Kamieth said a combination could be strategically and financially compelling, but BASF will not overpay.2

Strategic implication: BASF confirms Monday's reading. Price-led recovery, lower capital spending and continued headcount cuts mean European capacity keeps shrinking even as earnings improve. Shell (29 October), LyondellBasell (30 October) and Evonik (3 November) will show whether the pattern holds for commodity chemicals.

2 Energy and carbon

BenchmarkLatestChange since Monday's brief
Dutch TTF gas€96.70/MWh27 October settlementUp from €93.85; intraday high €97.64, the highest since late 2022.
Brent crude$114.87/bbl28 October, middaySlightly below Friday's $116.72; Gulf peace talks offset new Houthi strikes.
EU carbon (EUA)€88.19/tCO₂27 OctoberUp from €86.26, following gas higher.
EU gas storage74.9%Flat; Germany about 61%.
UK gas (NBP)238.4 p/thermNovember contractUp from 230.9 pence per therm.

Gas rose for European reasons as well as Gulf ones. Unplanned outages at Norway's Sleipner, Oseberg and Åsgard fields removed about 40 million cubic meters a day, wind output collapsed after a windy weekend, and colder weather is forecast from Thursday. Belgium's Doel 4 nuclear unit is offline until 1 November.5

On oil, Qatari mediators have given Iran a new draft deal, with a response expected by the end of the week. The Wall Street Journal reported that Washington warned Gulf states to prepare for a possible renewed US campaign after the 3 November midterms. UBS expects Brent to stay near $110 to year-end.8

Strategic implication: TTF is already close to €100 before winter has started. Sites without hedges for November–March should treat €100 as the floor of planning, not the ceiling.

3 Macro

  • Germany. The ifo business climate rose to 90.2 in October from 89.9, its sixth rise in a row. Manufacturers reported more orders and plan to raise output.6
  • China. Industrial profits rose 14.4% year-on-year in September, the fastest in three months, and 15.5% in January–September. Mining (+38.2%), computers and communications (+103.8%) and chemicals (+49.2%) led.7
  • Central banks. The Fed decides at 19:00 Zurich time tonight; a hold at 3.75–4.00% is expected. The European Central Bank decides tomorrow, with a hold at 2.50% expected.9

Watch for the rest of the week

  • Fed (28 October) and ECB (29 October) decisions and any signal on December hikes.
  • EU energy ministers on network charges and winter security (29 October).
  • Shell results (29 October); LyondellBasell, euro area third-quarter growth and the Bank of Japan (30 October).
  • Iran's answer to the Qatari draft deal, and the US midterms on 3 November.
  • Weather: colder days from Thursday and low wind would test gas storage.

Sources

  1. BASF: Q3 2026 results news release (28 Oct 2026)
  2. MarketBeat: BASF Q3 earnings call highlights (28 Oct 2026)
  3. ICIS: Europe top stories, weekly summary (26 Oct 2026)
  4. Srpske: TTF gas hits €97.64/MWh, highest since 2022 (27 Oct 2026)
  5. Prestige Business Solutions: Energy market report (27 Oct 2026)
  6. ifo Institute: ifo Business Climate rises, October 2026 (26 Oct 2026)
  7. IndexBox: China industrial profits, January–September 2026 (27 Oct 2026)
  8. The National: Oil prices up on Houthi strikes and US threat to renew Iran war (28 Oct 2026)
  9. Admiral Markets: ECB meeting October 2026 and Fed expectations

Week of 26 October 2026 · Monday brief · data to 26 October

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive signal

The October flash PMIs split the world in two: the US, UK and India accelerated while the euro area slowed to a four-month low. Inflation kept rising almost everywhere, Brent touched its highest level since 2022 and TTF rose for a fourth week. Chemical results were better on price, not volume, and Brussels gave energy-intensive industry its first concrete carbon relief. A heavy central-bank week follows.

  • Inflation is still broadening. UK CPI rose to 3.5% (core 2.8%), Canada’s to 3.1% and Japan’s to 2.1% (core-core 2.4%). German producer prices jumped 6.7% y/y, and US firms raised selling prices at the fastest pace since August 2022.19529161
  • Activity diverges between Europe and the rest. The US manufacturing PMI hit a 53-month high of 56.0, the UK composite an eight-month high and India’s a four-month high. The euro-area composite fell to 51.9, ZEW sentiment to 28.1 and consumer confidence to −17.9.12024131517
  • Energy costs rose for a fourth week. TTF reached €95.47/MWh and Brent rose above $116 on 23 October, its highest since June 2022. EU storage, at 74.6%, is the lowest for the time of year since records began in 2009.5859
  • Chemical results improve on price, not volume. Dow’s sales rose 13% and operating EBIT reached $887m, helped by European shutdowns. AkzoNobel’s prices rose 5% while volumes fell 2%. SABIC returned to profit, and BASF reportedly raised its Evonik offer to €24 a share.35363738
  • Brussels gives first carbon relief. Parliament voted for about 100m extra free ETS allowances for 2026–30, covering chemicals, and agreed a Market Stability Reserve deal. Šefčovič said plastics is the sector “closest” to new safeguard measures.484650
  • China’s petrochemical glut has become a crunch. Goldman estimates about 95% of the end-use chemical stocks built in 2025 have been used up, and cracker runs are 79%, against 88% before the war. Domestic demand stays weak: property investment fell 27.2% y/y in September.4128

Macro dashboard

GDP figures are the IMF’s October World Economic Outlook forecasts (13 October); India’s is for the fiscal year.798081 PMI cells now show the October flash readings where a flash survey exists (USA, euro area, UK, India, Japan); Canada, Brazil and China keep their September readings until the 1–3 November releases. PMI cells are coloured on the 50 line. All other figures are the latest official release.

≥ 52 strong expansion 50–51.9 expansion 48–49.9 stalling < 48 contraction
EconomyGDP 2026Mfg PMI (Oct flash · Sep)Services PMI (Oct flash · Sep)Inflation (core)Policy rate · last moveIndustrial outputStrategic interpretation
USA2.3%IMF Oct56.0Flash Oct; 53-month high57.9Flash Oct; Sep 58.83.7% (2.6%)CPI Sep; Oct CPI due Nov3.75–4.00%+25bp, 16 Sep; FOMC 28 Oct+2.2% y/ySep; housing starts −5.2% m/mThe flash PMIs show strong output but the sharpest rise in selling prices since August 2022. Housing starts fell to 1.221m and initial jobless claims to 194k. Markets price only a 15–25% chance of an October hike; Danske expects a hawkish hold and hikes in December and March.1234
Canada1.1%IMF Oct51.5Sep; no flash survey48.7Composite, Sep3.1% (trim 1.8%)CPI Sep; median 1.9%2.25%Decision 28 Oct; ~80% hike odds+0.1% m/mMfg sales, Sep advanceHeadline inflation rose to 3.1% on gasoline (+27.8% y/y), but core measures eased below 2%. August retail rose 1.2% in volume. Swaps moved to about 80% odds of a 25bp hike on 28 October after Macklem’s remarks on oil.56789
Brazil2.2%IMF Oct; Jul 2.4%44.8Sep; lowest since Apr 202349.2Sep4.62%IPCA-15 Oct; +0.32% m/m13.75%−25bp, 17 Sep; next 3–4 Nov−1.2% y/yAug; Sep due NovThe October IPCA-15 came in below forecast on cheaper electricity and airfares, but food (+0.88%) and fuels (+1.20%) rose. The Focus survey trimmed 2026 growth to 1.83%. Brazil is the only economy in the set still cutting; the market is split between a cut and a hold in November.101112
Euro area1.1%IMF Oct52.4Flash Oct; 3-month low51.7Flash Oct; Sep 53.03.8% (2.5%)HICP final Sep2.50%+25bp, 10 Sep; decision 29 Oct−1.1% y/yAug; Sep due NovThe composite PMI fell to a four-month low of 51.9 and France is back below 50, although Germany’s manufacturing PMI rose to 54.2. German PPI jumped to 6.7% y/y (energy +14.9%), ZEW sentiment fell to 28.1 and consumer confidence to −17.9. Danske and consensus expect the ECB to hold on 29 October and hike once more in December.131416151718
UK1.3%IMF Oct52.8Flash Oct; 5-month high53.1Flash Oct; Sep 52.13.5% (2.8%)CPI Sep; Aug 3.1%3.75%Hold; next 5 Nov, hike priced+0.8% m/mProduction, AugInflation beat forecasts at 3.5%, with motor fuels up 29.8% and services 3.7%. The flash composite rose to an eight-month high, but retail sales fell 0.4% and CBI orders dropped to −32. Borrowing is running £6.0bn above the OBR’s path before the 28 October Budget, and markets put more than 90% odds on a hike to 4.00% on 5 November.192021842223
India7.0%IMF Oct; FY54.9Flash Oct; Sep 55.156.2Flash Oct; Sep 55.25.54%CPI Sep; Aug 4.83%5.50%+25bp, 7 Oct+7.9% y/yCore sector, Sep; IIP Aug +8.0%Still the strongest economy in the set: the flash composite reached a four-month high of 56.7 and core industries grew 7.9% in September, led by electricity, coal, refining and cement. Fertiliser output fell 11.7% and natural gas 4.6%, a sign of the gas shock.2425
China4.5%IMF Oct; Q3 actual 4.5%52.1RatingDog Sep · NBS 50.151.6RatingDog Sep · NBS 50.2CPI 0.9%PPI +5.0%, Sep3.0% / 3.5%LPR held 20 Oct, 17th month+5.5% y/ySep; Jan–Sep +5.3%The loan prime rates were held for a 17th month. Fixed-asset investment is down 7.2% year to date and property investment 20.6%, with September alone −27.2%. Beijing allocated CNY 550bn of unused local debt quotas as land-sale revenue fell 27.9%.26272866
Japan0.7%IMF Oct53.3Flash Oct; Sep 54.152.0Flash Oct; Sep 51.32.1% (2.4%)CPI Sep; core-core in brackets1.25%+25bp, 18 Sep; decision 30 Oct+2.7% y/yAug finalUnderlying inflation picked up: core-core CPI rose to 2.4%. Exports grew for a 13th month (+16.7%, chips and AI), and the trade deficit narrowed to ¥536.6bn. A Reuters poll expects a hold on 30 October and a hike in December.29303132

Sources: IMF WEO via Trading Economics, Canadian HR Reporter and Rio Times798081; S&P Global, HCOB and HSBC flash PMI releases113202430; Eurostat via Eunews82, ONS, StatCan, IBGE, NBS8586 and the national statistics offices cited in each row. Cells without a new release keep last week’s value and month. A “flash” PMI is a preliminary reading.

Key industries dashboard

These are the end-markets that drive steel, chemicals, cement and fertiliser demand. Each cell shows the latest hard number; tap a cell to open its source. A PROXY tag means no direct series was available, so a close stand-in is shown. This week adds US September housing starts, EU September car registrations, India’s September core industries, worldsteel’s September output for India and Japan, China’s September property investment, Canada’s August retail volumes and UK September retail sales.333425

Expanding (> +2% or index > 51) Flat or mixed Contracting No hard data this week
MarketUSACanadaBrazilEuropeUKIndiaChinaJapan
Residential constructionSteel · cement · PVC · insulation−7.4%Housing starts, 1.221m SAAR; −5.2% m/mSep−4%Housing starts, YTD; Sep +3% m/mSep+46.6%SBPE housing financeAug−6.4%Building output, euro areaJul40.7Housing activity PMISep−6%Housing sales, top 9 citiesQ3−20.6%Property investment, YTD; Sep alone −27.2%Jan–Sep+6.1%Housing startsAug
Non-residential constructionSteel · cement · coatings+1% m/mPrivate non-res spending; office +4.6%Aug+3.2% m/mNon-res investment; permits −17%Jul+1.9%Cement salesAug43.4Construction PMI, euro areaSep48.5Commercial activity PMISep+9.8%Cement outputSep−2.1%PROXYManufacturing FAI, YTDJan–Sep−8.5%Non-res floor area startedAug
Infrastructure & civil worksSteel · cement · bitumen · PE pipe+2.5%Public construction; highways +4.4%Aug−2.9% q/qGovernment capex, realQ2R$300bn2026 plan, +50% (forecast)2026F+0.6%Civil engineering outputJul40.5Civil engineering PMIAug+7.9%Eight core industriesSep−4.2%Infrastructure FAI, YTDJan–Sep+46.3%Public works ordersAug
AutomotiveSteel · polymers · coatings · rubber+5.5%Light-vehicle sales, ~1.32m unitsSep+3.4%New vehicle sales, ~168k (DesRosiers)Sep+10.2%Vehicle production; exports −24.2%Sep+9.3%EU car registrations; YTD +5.7%Sep+12.0%New car registrations; BEV share 28.3%Sep+21.8%Passenger-vehicle dispatches (SIAM)Sep−8.4%Vehicle sales (CAAM); NEVs +13.6%Sep+1.3%New vehicle sales (JAMA)Sep
Machinery & capital goodsSteel · engineering plastics · lubricants+10.6%Core capital goods orders, YTDAug+2.3% q/qBusiness investment, M&E-ledQ2−15.5%Machinery revenue (Abimaq)Aug+3.0%Capital goods output, euro areaAug+1.8% 3m/3mMachinery & equipment outputAug+16.9%Capital goods outputAug+14.4%Excavator sales; exports +20.7%Sep+60.4%Machine-tool orders, record ¥223bnSep
ElectronicsSpecialty chemicals · gases · copper+9.5%Computer & electronics outputSep+16.7% q/qPROXYComputer investment, realQ2+12.2% m/mElectronics output (no y/y)Jul+17%PROXYGerman electro orders (ZVEI); output +4.5%Aug+3.5% 3m/3mComputer & electronics outputAug+34%Electronics exportsApr–Aug+20.6%Integrated circuit outputAug+52.3%Electronic component exportsAug
PackagingPE · PP · PET · paperboard−3.2%PROXYPaper output; plastics & rubber +0.7%Sep+1.2% m/mPROXYRetail sales volumeAug+5.1%Corrugated board shipmentsJun+0.8%PROXYRetail volume, euro areaAug−0.4% m/mPROXYRetail sales volumeSep−2%PROXYFMCG volumesApr–Jun+1.1%PROXYRetail salesSep+2.7%PROXYRetail salesAug
Agriculture & fertiliserAmmonia · urea · potash · crop protection−2.6%Net farm income 2026F; fertiliser cost +15.3%2026F+8.4%Canola area (record); wheat −5.9%2026−5.4%Fertiliser deliveriesH1+70%Nitrogen prices vs 2024 averageMay£484/tUK-made ammonium nitrate; urea £482/t9 Oct−11.7%Fertiliser outputSep3.3 MtUrea export quota vs ~5 Mt in 20252026n/aMinor market, not tracked
Materials outputSteel · cement · chemicals−1.3%Chemicals output; +1.0% m/mSep+4.4% m/mChemical product sales; metals at recordAug−0.8%Crude steel; imports +34.6%Sep−2.0%EU27 chemicals output, YTDJan–Jul+0.1%Chemicals outputQ1+1.9%Crude steel, 13.9 MtSep+0.1%Crude steel; Jan–Sep −2.9%Sep−0.6%Crude steel, 6.3 MtSep
Values are y/y unless marked (m/m, q/q, 3m/3m, YTD or index). Index readings are PMIs, where 50 means no change.

What it means for materials

Steel Mixed

World crude steel output was 142.4 Mt in September, down 0.2%. The EU fell 5.0% and Germany 13.0%, while China was flat (+0.1%) and India grew 1.9%. US mills run at 80.9% of capacity, with weekly output up 8.6% y/y.3483

Cement Weak ex-India

China’s property investment fell 27.2% y/y in September and new construction starts are down 24.9% year to date. US housing starts fell 7.4% y/y. India’s cement output grew 9.8%, the clear exception.28225

Chemicals Price up, volume down

Dow’s industrial intermediates volumes fell 7% and AkzoNobel’s volumes 2%, while prices rose. Europe’s October benzene contract rose €261 to €1,195/t, and China’s polyethylene is up 8.5% in a month to CNY 8,820/t.35364265

Fertilisers Cost squeeze

Urea was little changed at $453/t, but TTF at €95/MWh raises European ammonia cash costs again. India’s fertiliser output fell 11.7% in September as natural gas output fell 4.6%.645825

1 Global chemicals

Q3 results are better on price than on volume. Dow’s net sales rose 13% to $11.3bn and operating EBIT to $887m, from $180m. It cites the first of three European asset shutdowns and the closure of its Barry siloxanes plant in the UK; higher European energy costs and Middle East supply limits hurt polyethylene, and industrial intermediates volumes fell 7%.35 AkzoNobel’s revenue was €2,538m, with prices up 5% and volumes down 2%. It booked a €230m Russia charge and guides to about €1.47bn adjusted EBITDA for 2026; the Axalta merger is due to close in early 2027.36 SABIC returned to a SAR500m profit, after a Q2 loss, and completed the sale of its Americas and Europe engineering thermoplastics business.37

Consolidation moves a step closer. BASF has reportedly raised its offer for Evonik to €24 a share, from about €22.15, valuing it at about €11.2bn; Evonik and RAG declined to comment.38 BASF and China’s Highsun are also evaluating a 50:50 joint venture combining their European PA6 value chains.39 Cefic re-elected Markus Kamieth as President; he said the industry is “under enormous pressure” and named energy prices, carbon costs and a workable ETS reform as priorities.40

Asia swings from glut to shortage. Goldman estimates about 95% of the end-use chemical inventories built in 2025 have been used up, and aromatics port stocks are at multi-year lows. ICIS sees China’s cracker runs at 81% by year-end, from 79% now and 88% before the war, while BNEF counts about 21 Mt of new polyethylene capacity, a record.41 In Europe, LDPE sellers are seeking more than the monomer pass-through.42

Refining becomes a policy question in Germany. The Economy Ministry started work on a federal refinery strategy; IG BCE said Germany needs its refineries in the long term and that the ETS must be reformed.43

Strategic implication: the Q3 recovery in earnings comes from price and from closures, not from demand. Dow is earning more in Europe partly because it is shutting capacity there. With Asian stocks depleted and Gulf supply disrupted, European producers have some pricing power this quarter, but it rests on the energy shock and will fade as the record wave of new polyethylene capacity arrives. BASF’s Q3 results on 28 October and Evonik’s response to €24 are the next tests.

2 Regulatory · EU · USA · China

EU

  • More free allowances for chemicals. The ENVI committee voted 64–11–2 for about 100m extra free ETS allowances for 2026–30 for chemicals, ceramics and fuels, between the Commission’s 80m and the Council’s 121m. Plenary adopted the position unchanged on 22 October by 474–82–28.4748
  • A Market Stability Reserve deal. Parliament and Council agreed to raise the reserve’s invalidation threshold from 400m to 700m allowances from 2031, keeping more allowances available to the market. Formal approval is pending.46
  • The CBAM trilogue has started. The first political trilogue on the downstream extension was held on 20 October, with a second set provisionally for 30 November. The Commission proposes about 180 product types, the Council about 200 and Parliament 457.44 Eurofer, EUROMETAL and IndustriALL called for the “broadest possible” extension.45
  • Plastics move towards a safeguard. At the informal trade ministers’ meeting in Dublin, Šefčovič said plastics is the sector “closest” to new safeguard measures; chemicals and machinery were also discussed. No products or dates were given.5051 The EU already has anti-dumping probes open on Chinese PVC, aspirin and cellulose ethers.77
  • Simpler chemicals rules and a contested Accelerator Act. Parliament approved the chemicals omnibus deal (477–59–41), which simplifies CLP labelling, cosmetics and fertilising-product rules.49 The Industrial Accelerator Act faces more than 5,000 amendments, including an EPP proposal to scrap it.52

USA

  • A quiet week; earlier changes stand. EPA’s proposal to extend TCE compliance dates to 31 December 2027 is open for comment until 13 November.53 TSCA fee authority runs to 11 December under the continuing resolution.54 Section 232 tariffs of 15% plus minimum import prices on polysilicon start on 4 December.55

China

  • Chemicals join the carbon market. China will add chemicals and petrochemicals to its national ETS in 2027, lifting coverage from about 65% of emissions towards 80%.56
  • Export controls keep widening. On 19 October China put controls on tunnel-boring and dredging equipment, after proposing 40 technologies in AI, biomedicine and solar for its export-restriction list. None targets chemicals.57

3 Energy competitiveness

European TTF gas was €95.47/MWh on 26 October, up about 8% from €88.31 a week earlier, after a fourth weekly gain. It is up 34% in a month and about 200% on a year ago. Gulf LNG flows remain about 80% below last year, and EU storage, at 74.62% on 25 October, is the lowest for the time of year since records began in 2009.58

Brent rose above $116/bbl on 23 October, its highest since June 2022, and was about $115 on 26 October. Attacks on shipping near Hormuz continued, with 23 since 1 October, and transits are about 70% below pre-war levels.5960 Gulf crude exports have recovered faster than LNG; OPEC+ spare capacity is very limited, and the group meets on 1 November.7875 Henry Hub fell to $2.52/MMBtu on mild weather, so TTF is now more than eleven times the US price on an energy basis.61 EU carbon closed at €86.26/t on 23 October, from €85.41.62

German day-ahead power swung widely: €195.66/MWh for 20 October and a peak of €211.94 for 21 October, then €30.12 for 24 October and €13.04 for 25 October, before recovering to €112.97 for 26 October. The seven-day mean was about €121, down from about €184.63

Ladder read-across: gas at €95 and carbon at €86 widen the cost gap for fossil ammonia, methanol and hydrogen again. Unlike last week, power gave flexible loads a window: a weekend at €13–30/MWh and a weekly mean near €121. Rungs that can shift load into cheap hours, such as electric boilers with heat storage and flexible electrolysis, gained this week; baseload electrified routes did not, because weekday prices stayed near €140–210.

4 China overcapacity and export pressure

  • GDP grew 4.6% in the first nine months and 4.5% in Q3. Industrial output rose 5.3% year to date, but retail sales only 2.6%, and fixed-asset investment is down 7.2%.6827
  • Property investment fell 20.6% year to date and 27.2% y/y in September alone; construction starts are down 24.9%.28 Land-sale revenue is down 27.9%, and Beijing allocated CNY 550bn of unused local debt quotas.66 The loan prime rates were held again.26
  • The CPCA expects October NEV retail sales to fall 16.5% y/y and all passenger-car retail about 28.9%, so more cars will go to export markets.67
  • Petrochemicals have tightened: cracker runs are at 79% against 88% before the war, and Chinese polyethylene is up 8.5% in a month.4165 Chemicals will enter the national ETS in 2027.56

Strategic implication: for now, the pressure on Europe is coming through cars, machinery and plastics rather than bulk chemicals, which are tight across Asia. That is why the EU is moving first on plastics safeguards. Once the Gulf reopens and new capacity starts, Chinese polymer surpluses will return quickly. EU tools agreed now (safeguards, anti-dumping on PVC, CBAM downstream) will then be in place.

Five takeaways

  1. Inflation is still rising in the UK, Canada, Japan and German producer prices, so this week’s central banks will lean hawkish even where they hold.
  2. The euro area is slowing (composite 51.9, ZEW 28.1) while the US, UK and India accelerate; Europe faces higher energy costs with weaker demand.
  3. Gas at €95, Brent near $115 and record-low storage for the season make the European winter the main risk to chemical margins.
  4. Chemical earnings are recovering on price and closures, not volumes; BASF’s higher Evonik bid shows consolidation is now the main strategy.
  5. Brussels is delivering relief in pieces: about 100m free allowances, an MSR deal and a likely plastics safeguard, but no structural ETS reform yet.

Watch next week

  • 26 OctGerman Ifo; China’s Fifth Plenum opens (to 29 Oct).72
  • 27 OctChina September industrial profits; US September durable goods.72
  • 28 OctFOMC decision; Bank of Canada decision and Monetary Policy Report; BASF Q3 results; UK Autumn Budget.6997172
  • 29 OctECB decision (14:15 CET); US Q3 GDP and September PCE.7072
  • 30 OctBank of Japan decision; euro-area Q3 GDP flash; German Q3 GDP and October CPI; LyondellBasell Q3.327376
  • 31 OctChina official October PMIs (date estimated).74
  • 1 NovOPEC+ meeting.75
  • RollingCopom on 3–4 November, a BoE hike priced for 5 November, the second CBAM trilogue on 30 November, and Evonik’s response to BASF.122344

Sources

  1. S&P Global flash US PMI, Oct 2026 (23 Oct)
  2. US Census/HUD: new residential construction, Sep 2026 (20 Oct)
  3. US Department of Labor: unemployment insurance weekly claims (22 Oct)
  4. Danske Bank via ActionForex: Fed preview, on hold in October (23 Oct)
  5. Continuum Economics: Canada September CPI (19 Oct)
  6. BabyPips: Canada inflation 3.1% and BoC policy (20 Oct)
  7. Investment Executive: Canada retail sales up 1.2% in August (23 Oct)
  8. Trading Economics: Canada manufacturing sales, Sep advance (23 Oct)
  9. Hashtag Investing: markets put 80% odds on a BoC hike (21 Oct)
  10. InfoMoney: IPCA-15, Oct 2026 (23 Oct)
  11. InfoMoney: Focus survey (19 Oct)
  12. Meelion: Copom November 2026 preview (14 Oct)
  13. HCOB flash Eurozone PMI, Oct 2026 (23 Oct)
  14. investingLive: Germany October flash manufacturing PMI 54.2 (23 Oct)
  15. investingLive: Germany ZEW survey, Oct 2026 (20 Oct)
  16. Global Banking & Finance (Reuters): German producer prices +6.7% y/y in September (20 Oct)
  17. Newsquawk: euro-area consumer confidence flash, Oct (22 Oct)
  18. FXStreet/Danske: ECB October pause (20 Oct)
  19. Kael Tripton: UK inflation rises to 3.5% (21 Oct)
  20. S&P Global flash UK PMI, Oct 2026 (23 Oct)
  21. Retail Bulletin: UK retail sales, Sep 2026 (23 Oct)
  22. ONS: public sector finances, Sep 2026 (21 Oct)
  23. FXStreet/Danske: BoE November hike added (22 Oct)
  24. Sahi: HSBC India flash PMIs, Oct 2026 (23 Oct)
  25. Asianet Newsable: India core sector +7.9% in September (21 Oct)
  26. Xinhua: China loan prime rates unchanged (20 Oct)
  27. NBS: fixed-asset investment, Jan–Sep 2026 (20 Oct)
  28. GMK Center: China property investment −20.6% in nine months (20 Oct)
  29. FXStreet: Japan national CPI, Sep 2026 (22 Oct)
  30. investingLive: Japan flash PMIs, Oct 2026 (23 Oct)
  31. investingLive: Japan exports, Sep 2026 (21 Oct)
  32. FXStreet/Reuters poll: BoJ expected to hike in December (20 Oct)
  33. ACEA: new car registrations, Sep 2026 (22 Oct)
  34. worldsteel: September 2026 crude steel production (23 Oct)
  35. Dow Q3 2026 results (StockTitan/PR Newswire, 22 Oct)
  36. Idéal Investisseur: AkzoNobel Q3 2026 (21 Oct)
  37. The National: SABIC returns to profit in Q3 (25 Oct)
  38. MarketScreener (Reuters): BASF raises Evonik offer (23 Oct)
  39. CHEManager: BASF and HSCC evaluate PA6 joint venture (20 Oct)
  40. Cefic: Board for the 2026–2028 mandate (22 Oct)
  41. Rigzone (Bloomberg): China’s petrochemicals glut turns to crunch (22 Oct)
  42. Plastikmedia: Plastribution polymer price know-how, Oct 2026 (21 Oct)
  43. CHEManager: IG BCE on the federal refinery strategy (23 Oct)
  44. Mayer Brown: CBAM downstream extension, the road to trilogue (7 Oct)
  45. EUROMETAL: industries urge broadest possible CBAM extension (20 Oct)
  46. Eunews: EU agreement on the ETS reserve (21 Oct)
  47. Agence Europe: ENVI calls for 100m more free allowances (20 Oct)
  48. Agence Europe: Parliament adopts position on ETS fallback benchmarks (22 Oct)
  49. Agence Europe: Parliament approves the chemicals simplification deal (22 Oct)
  50. MLex: plastics closest to new EU safeguard measures (23 Oct)
  51. EU Perspectives: EU–China trade, hybrid cars and plastics (23 Oct)
  52. Agence Europe: Industrial Accelerator Act, over 5,000 amendments (16 Oct)
  53. National Law Review: recent federal developments, Oct 2026 (16 Oct)
  54. Alston & Bird: Congress extends EPA TSCA user-fee authority (2 Oct)
  55. Morgan Lewis: anti-stockpiling restrictions on polysilicon imports (5 Oct)
  56. Briefs: China outlines plan to expand its carbon market (22 Oct)
  57. Xinanigans: China weekly (23 Oct)
  58. Trading Economics: EU natural gas, TTF (26 Oct)
  59. Trading Economics: Brent crude oil (26 Oct)
  60. Global Energy Flow: Strait of Hormuz tracker (23 Oct)
  61. Trading Economics: US natural gas, Henry Hub (26 Oct)
  62. Trading Economics: EU carbon permits (23 Oct close)
  63. euenergy.live: Germany day-ahead electricity prices (20–26 Oct)
  64. Trading Economics: urea (23 Oct)
  65. Trading Economics: polyethylene (23 Oct)
  66. China Daily: fiscal revenue and debt quotas (24 Oct)
  67. CnEVPost: CPCA forecasts weak October NEV retail (23 Oct)
  68. Global Times via Manila Times: China GDP +4.6% in nine months (22 Oct)
  69. Federal Reserve: October 2026 calendar
  70. ECB: Governing Council meeting calendar
  71. MarketScreener: BASF calendar
  72. Newsquawk: week in focus, 26–30 October 2026
  73. Finance Calendar: euro-area Q3 GDP flash
  74. Finance Calendar: China official PMIs, October
  75. Nairametrics: OPEC+ keeps November output unchanged (5 Oct)
  76. Quiver Quant: LyondellBasell Q3 results date
  77. Economy.ac: EU–China trade-defence cases (6 Oct)
  78. Discovery Alert: Gulf exports recovery and oil price risk (Oct)
  79. Trading Economics: IMF World Economic Outlook, Oct 2026 (13 Oct)
  80. Canadian HR Reporter: IMF cuts Canada’s 2026 forecast to 1.1% (13 Oct)
  81. Rio Times: IMF Brazil growth forecast 2026 (13 Oct)
  82. Eunews: euro-area September inflation confirmed at 3.8% (16 Oct)
  83. SteelOrbis: US raw steel production, week 42 (19 Oct)
  84. Newsquawk: UK CBI industrial trends orders, Oct (22 Oct)
  85. Trading Economics: China retail sales, Sep 2026 (19 Oct)
  86. Trading Economics: China LPR unchanged (20 Oct)

Figures are as reported by 26 October 2026. Where no new figure was released, last week’s value and its period are kept. Dashboard cells link to their own sources.

Week of 19 October 2026 · Monday brief · data to 19 October

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive signal

The IMF nudged global growth up to 3.1%, but this week’s prints were about inflation. Prices accelerated in the US, India and China, euro-area output fell for a third month, and gas, oil and power all rose. EU leaders called for urgent trade defence but left the ETS deadlocked. European chemicals are responding with cuts and consolidation.

  • Inflation is accelerating again. US CPI rose to 3.7% (core 2.6%), India’s CPI to 5.54% and its WPI to 11.39%, and China’s PPI to +5.0%. Euro-area inflation was confirmed at 3.8%, and German wholesale chemical prices are up 16.4% y/y.53233402226
  • Forecasts hold up, but momentum is fading. The IMF raised 2026 world growth to 3.1% and cut Canada and Brazil. Euro-area output fell 0.5% in August, a third monthly fall, and the Beige Book reports flat activity in 3 of 12 US districts.12218
  • Energy costs rose for a third week. TTF reached €88.31/MWh and Brent $107.78/bbl. German day-ahead power ranged from €160 to €211/MWh. Storage was 74.3% full, still about 15 points below normal.81798582
  • European chemicals are cutting and consolidating. Covestro plans to cut Antwerp polycarbonate from four lines to one, putting up to 260 jobs at risk. BASF signalled a higher bid for Evonik once it can see the books.616059
  • The EU wants trade defence but cannot agree on carbon. The European Council asked for the EU’s toolbox to be strengthened “urgently” and for “targeted and temporary” energy measures. Franco-German proposals target chemicals and PET imports. The ETS review remains split among member states.717268
  • China’s surplus is growing. September exports rose 36.3%, with shipments to the EU up 25.3%, and the surplus was $133.5bn. Q3 GDP grew 4.5%, but property investment is down 20.6% year to date.37384142

Macro dashboard

GDP figures are now the IMF’s October World Economic Outlook forecasts (13 October), replacing the OECD’s September figures. India’s is for the fiscal year. PMI cells are coloured on the 50 line; October flash PMIs are not out yet. All other figures are the latest official release.

≥ 52 strong expansion 50–51.9 expansion 48–49.9 stalling < 48 contraction
EconomyGDP 2026Mfg PMI (Sep)Services PMI (Sep)Inflation (core)Policy rate · last moveIndustrial outputStrategic interpretation
USA2.3%IMF Oct55.9S&P final · ISM 54.558.8S&P final · ISM 54.93.7% (2.6%)CPI Sep; +0.6% m/m3.75–4.00%+25bp, 16 Sep+2.2% y/ySep; mfg +1.1%, util. 76.9%Inflation beat forecasts again: headline 3.7% and core 2.6%. Retail sales rose 0.8% on petrol prices, but the control group only 0.1%, and the Beige Book shows 3 of 12 districts with no change in activity; in August, 10 grew.5786
Canada1.1%IMF Oct51.5Aug 53.048.7Composite; services still contracting3.0% (2.4%)Aug · Sep due 19 Oct2.25%Hold; next 28 Oct+1.5% m/mMfg sales, Aug; volume flatThe IMF cut its 2026 forecast to 1.1%. August factory sales rose on prices, not volume (primary metals at a record, chemicals +4.4%), and September housing starts rose 3% m/m.3111213
Brazil2.2%IMF Oct; Jul 2.4%44.8Lowest since Apr 202349.2Aug 50.54.58%IPCA Sep; +0.82% m/m13.75%−25bp, 16 Sep; next 3–4 Nov−1.2% y/yAug; −0.6% m/mThe IMF trimmed growth to 2.2%. IBC-Br rose 0.3% m/m in August but fell 0.6% on the quarter; retail rose only 0.1%. Steel output fell 0.8% in September while steel imports jumped 34.6%.4151617
Euro area1.1%IMF Oct52.952-month high53.0final3.8% (2.5%)HICP final Sep; energy 18.9%2.50%+25bp, 10 Sep; next 29 Oct−1.1% y/yAug; −0.5% m/m, 3rd fallHard data now lag the surveys: output fell for a third month, with capital goods (+3.0% y/y) the only strong group. German wholesale chemical prices are up 16.4% y/y. Lagarde told the IMFC inflation risks are to the upside.21222624
UK1.3%IMF Oct51.9final52.1final; flash 51.73.1% (2.6%)Aug · Sep due 21 Oct3.75%Hold, 6–3 vote+0.8% m/mProduction, Aug; mfg +1.2%GDP rose 0.1% in August and construction fell 0.2%. Bailey sees subdued second-round effects so far, but most economists polled by Reuters expect a hike next month.272830
India7.0%IMF Oct; +0.6pp55.1Aug 52.855.2final; flash 55.85.54%CPI Sep; Aug 4.83%5.50%+25bp, 7 Oct+8.0% y/yAug; capital goods +16.9%Inflation is breaking out: CPI 5.54% and WPI 11.39%, with fuel and power up 25.85%. Demand is still the strongest in the set: exports rose 23% and passenger-vehicle dispatches 21.8% in September.32333435
China4.5%IMF Oct; Q3 actual 4.5%52.1RatingDog · NBS 50.151.6RatingDog · NBS 50.2CPI 0.9%PPI +5.0%, Sep3.0% / 3.5%LPR; next fixing 20 Oct+5.5% y/ySep; Aug +5.2%Exports carried Q3: shipments rose 36.3% and the surplus reached $133.5bn. Domestic demand is weak: property investment is down 20.6% year to date and total fixed-asset investment down 7.2%. PPI inflation has reached 5.0%.41423740
Japan0.7%IMF Oct54.16-month low51.3final; flash 51.61.9%Aug1.25%+25bp, 18 Sep; next 29–30 Oct+2.7% y/yAug final; −2.4% m/mAugust output was revised down to −2.4% m/m, but core machinery orders rose 5.2% m/m and machine-tool orders are at a record. Reuters sources say the BoJ leans towards holding in October.55565857

Sources: IMF WEO via Trading Economics, CGTN, Canadian HR Reporter and Rio Times12; S&P Global, HCOB, HSBC, RatingDog, ISM and NBS PMI releases9101823293149505354; BLS, Federal Reserve, Eurostat, ONS, MoSPI, NBS, IBGE19, RBI36, Copom calendar20 and ECB25. Cells without a new release keep last week’s value and month. A "flash" PMI is a preliminary reading.

Key industries dashboard

These are the end-markets that drive steel, chemicals, cement and fertiliser demand. Each cell shows the latest hard number; tap a cell to open its source. A PROXY tag means no direct series was available, so a close stand-in is shown. This week adds US September industrial production, China’s September activity, car and excavator data, Canada’s August factory sales and September housing starts, UK August production and Brazil’s September steel.

Expanding (> +2% or index > 51) Flat or mixed Contracting No hard data this week
MarketUSACanadaBrazilEuropeUKIndiaChinaJapan
Residential constructionSteel · cement · PVC · insulation+1.1% m/mPrivate residential spending; total −1.7% y/yAug−4%Housing starts, YTD; Sep +3% m/mSep+46.6%SBPE housing financeAug−6.4%Building output, euro areaJul40.7Housing activity PMISep−6%Housing sales, top 9 citiesQ3−20.6%Property investment, YTDJan–Sep+6.1%Housing startsAug
Non-residential constructionSteel · cement · coatings+1% m/mPrivate non-res spending; office +4.6%Aug+3.2% m/mNon-res investment; permits −17%Jul+1.9%Cement salesAug43.4Construction PMI, euro areaSep48.5Commercial activity PMISep+12.5%Cement outputAug−2.1%PROXYManufacturing FAI, YTDJan–Sep−8.5%Non-res floor area startedAug
Infrastructure & civil worksSteel · cement · bitumen · PE pipe+2.5%Public construction; highways +4.4%Aug−2.9% q/qGovernment capex, realQ2R$300bn2026 plan, +50% (forecast)2026F+0.6%Civil engineering outputJul40.5Civil engineering PMIAug+4.8%Eight core industriesAug−4.2%Infrastructure FAI, YTDJan–Sep+46.3%Public works ordersAug
AutomotiveSteel · polymers · coatings · rubber+5.5%Light-vehicle sales, ~1.32m unitsSep+3.4%New vehicle sales, ~168k (DesRosiers)Sep+10.2%Vehicle production; exports −24.2%Sep+4.5%EU car registrationsAug+12.0%New car registrations; BEV share 28.3%Sep+21.8%Passenger-vehicle dispatches (SIAM)Sep−8.4%Vehicle sales (CAAM); NEVs +13.6%Sep+1.3%New vehicle sales (JAMA)Sep
Machinery & capital goodsSteel · engineering plastics · lubricants+10.6%Core capital goods orders, YTDAug+2.3% q/qBusiness investment, M&E-ledQ2−15.5%Machinery revenue (Abimaq)Aug+3.0%Capital goods output, euro areaAug+1.8% 3m/3mMachinery & equipment outputAug+16.9%Capital goods outputAug+14.4%Excavator sales; exports +20.7%Sep+60.4%Machine-tool orders, record ¥223bnSep
ElectronicsSpecialty chemicals · gases · copper+9.5%Computer & electronics outputSep+16.7% q/qPROXYComputer investment, realQ2+12.2% m/mElectronics output (no y/y)Jul+17%PROXYGerman electro orders (ZVEI); output +4.5%Aug+3.5% 3m/3mComputer & electronics outputAug+34%Electronics exportsApr–Aug+20.6%Integrated circuit outputAug+52.3%Electronic component exportsAug
PackagingPE · PP · PET · paperboard−3.2%PROXYPaper output; plastics & rubber +0.7%Sep−1.4% m/mPROXYFood manufacturing salesJul+5.1%Corrugated board shipmentsJun+0.8%PROXYRetail volume, euro areaAug+2.4%PROXYRetail sales volumeAug−2%PROXYFMCG volumesApr–Jun+1.1%PROXYRetail salesSep+2.7%PROXYRetail salesAug
Agriculture & fertiliserAmmonia · urea · potash · crop protection−2.6%Net farm income 2026F; fertiliser cost +15.3%2026F+8.4%Canola area (record); wheat −5.9%2026−5.4%Fertiliser deliveriesH1+70%Nitrogen prices vs 2024 averageMay£484/tUK-made ammonium nitrate; urea £482/t9 Oct−12.4%Fertiliser outputAug3.3 MtUrea export quota vs ~5 Mt in 20252026n/aMinor market, not tracked
Materials outputSteel · cement · chemicals−1.3%Chemicals output; +1.0% m/mSep+4.4% m/mChemical product sales; metals at recordAug−0.8%Crude steel; imports +34.6%Sep−2.0%EU27 chemicals output, YTDJan–Jul+0.1%Chemicals outputQ1+4.6%Crude steelAug+0.1%Crude steel; Jan–Sep −2.9%Sepn/aNo verified series this week
Values are y/y unless marked (m/m, q/q, 3m/3m, YTD or index). Index readings are PMIs, where 50 means no change.

What it means for materials

Steel Mixed

China’s crude steel output was flat in September (+0.1%) while it exported 10.5 Mt, and Brazil’s steel imports rose 34.6%. Capital goods are growing in Europe, the UK, China and Japan, but China’s car sales fell 8.4%.43441745

Cement Weak ex-India

Chinese property investment is down 20.6% and infrastructure 4.2% year to date. UK construction output fell again in August. India and Japanese public works remain the only clear growth pockets.

Chemicals Price up, volume down

US chemicals output is down 1.3% y/y, while German wholesale chemical prices are up 16.4%. Canadian chemical sales recovered 4.4% in August. China’s PPI at +5.0% means Asian export prices are rising too.

Fertilisers Cost squeeze

Urea eased to $457.50/t and UK ammonium nitrate held at £484/t,8788 but TTF at €88/MWh lifts European ammonia cash costs further. FMC’s Q3 warning shows how weak the crop-input channel is.

1 Global chemicals

Capacity is leaving Europe. Covestro plans to cut its Antwerp polycarbonate lines from four to one and stop making BPA on site, putting up to 260 of about 970 jobs at risk. It cites losses since 2022, polycarbonate overcapacity and energy costs. The aniline project goes ahead.61

Consolidation moves closer. BASF is willing to negotiate a higher price for Evonik once it has access to the books, and is reviewing the planned Oxeno and Syneqt disposals. Berenberg sees room for €24–25 a share, against the reported €22.15.60 Insiders say BASF would keep Evonik’s site and job guarantees, which rule out compulsory layoffs in Germany until 2032.59 In coatings, AkzoNobel and Axalta named their planned merged company “Axanzo”.62

Growth capital goes to the Gulf and Asia. GPIC chose Honeywell UOP technology for a planned aromatics complex in Bahrain, with about 1.2 Mt/yr of paraxylene and 0.5 Mt/yr of benzene.64 LG Chem restarted its Yeosu No. 2 cracker on 12 October after a shutdown since March, but weak margins limit the recovery.65 In Europe, the new projects are bio-based and circular: UPM opened its Leuna biorefinery, and BioBTX won €20.8m from the EU Innovation Fund.66

Agchem is under stress. FMC cut its Q3 revenue guidance to $65–125m and expects an adjusted EBITDA loss of $510–565m.63 US chemicals output rose 1.0% m/m in September but is down 1.3% y/y.6 China’s polyethylene price eased to CNY 8,725/t.67

Strategic implication: Europe is now cutting downstream, not only commodity chemicals: polycarbonate, BPA and coatings. That points to consolidation and site rationalisation rather than a cyclical restart. Q3 results from BASF (28 October) will show how much of the 2026 price rise is margin and how much is cost pass-through.

2 Regulatory · EU · USA · China

EU

  • The ETS review is split. At the 12 October Environment Council, seven states wanted little change, while twelve, including Poland, Italy and Czechia, wanted a smaller reduction factor and many a delay to ETS2. Germany wants free allowances linked to investment; France warned that “work on the CBAM is not finished”.68 Hoekstra reported “significant support” for the architecture, including a €100bn industrial bank. The Irish Presidency aims for a general approach in December.6970
  • The European Council puts energy and trade first. The 16 October conclusions call for “targeted and temporary” energy measures, welcome an extended state-aid framework for the most exposed industries, and ask for the EU toolbox against global imbalances to be strengthened “urgently”. The industrial acceleration regulation is among the files to conclude in 2026. Chemicals and CBAM are not mentioned.71
  • Chemicals are on the trade-defence agenda. Franco-German proposals ask for urgent measures against imports of chemicals and PET.72 Leaders also pushed for import quotas for chemicals and machinery, and the Commission is to present new trade-defence tools by year-end.73 ETS2 remained deadlocked.74
  • The CBAM trilogue starts on 20 October. The Council wants about 200 downstream products and Parliament 457. Parliament asks for an assessment of extending CBAM to chemicals.75 The review proposal would extend the CBAM phase-in to 2038 instead of 2034.70 Cefic wants decisions on the critical-molecules list before the end of 2026.76

USA

  • EPA is easing deadlines. EPA proposed extending some TCE compliance dates under TSCA to 31 December 2027, and moved the 2025 greenhouse-gas reporting deadline to 10 March 2027.77 TSCA fee authority still expires on 11 December.78

China

  • Export controls widen to technology. MOFCOM and MOST propose adding 40 technologies in AI, biopharma and solar, including polysilicon, wafers and cells, to the export-restriction catalogue. Comments are due 15 November. Chemicals are not listed.52
  • Stimulus stays targeted. Beijing is deploying 550bn yuan of unused debt quotas and an 800bn yuan policy-financing tool.48

3 Energy competitiveness

European TTF gas was €88.31/MWh on 19 October, up from about €82 a week earlier after a third weekly gain. It is about 178% above a year ago, with Middle Eastern LNG flows about 80% below last year.81 EU storage was 73.94% full on 12 October, 14.9 points below the five-year average, and 74.31% on 18 October.8281 The Energy Commissioner warned of a “very difficult winter” for affordability, not supply.86

Brent was $107.78/bbl on 19 October, after rising more than 5% last week. Tankers were damaged near Hormuz, where flows averaged 11.6m b/d against a 17.2m b/d baseline.79 The IEA’s October report sees 2026 demand down 2.6m b/d and stocks 509m bbl below end-February.80 Henry Hub eased to $3.08/MMBtu, so TTF is now more than nine times the US price on an energy basis.83 EU carbon fell to €85.41/t on 16 October, from €86.94.84

German day-ahead power stayed high all week: €160.23/MWh for 13 October, a peak of €210.67 for 16 October and €208.44 for 19 October, a seven-day mean of about €184. Last week’s low of €78.58 did not recur.85

Ladder read-across: gas at €88 and carbon at €85 widen the cost gap for European ammonia, methanol and hydrogen on fossil routes. But power near €184/MWh, with few cheap hours, also hurts electrified routes. This week favours flexible loads less than last week did. Without long-term power contracts, the rungs that pay are those that cut gas use per tonne, such as heat pumps and electric steam for low-temperature heat, not new power-hungry molecules.

4 China overcapacity and export pressure

  • September exports rose 36.3% to $447.2bn, against a 25.5% forecast. Imports rose 31% to a record, and the surplus of $133.5bn was the second largest on record.37 Exports to the EU rose 25.3%, a seven-month high, and to ASEAN 52.3%.38 The January–September surplus is $938.1bn.51
  • Q3 GDP grew 4.5% y/y and industrial output 5.5% in September, but retail sales rose only 1.1%. Fixed-asset investment is down 7.2% year to date and property investment 20.6%.4142
  • PPI inflation reached 5.0% y/y (+1.2% m/m), so China exports at higher prices, not falling ones. CPI is 0.9%.4039 Steel exports were 10.5 Mt in September while crude output was flat.4443
  • NEV exports rose 163.5% in September even as domestic passenger-car retail fell 28.0%.46 Excavator sales rose 14.4%, with exports up 20.7%.47 Urea exports remain capped at 3.3 Mt with FOB price floors.89

Strategic implication: with weak domestic demand, China’s industry relies on exports, and the EU is the second-fastest-growing destination. That supports the Franco-German push for quotas on chemicals and PET. Expect more EU anti-dumping cases on intermediates and polymers before year-end, and more Chinese cargoes diverted to ASEAN and India.

Five takeaways

  1. Inflation is accelerating again in the US, India and China, and Europe is at a three-year high, so more rate hikes are likely before cuts.
  2. The IMF upgrade rests on AI investment and the US; Europe’s hard data (output down three months running) are weaker than its PMIs.
  3. Gas at €88, Brent near $108 and power near €184 make Q4 more expensive than Q3 for every European route, fossil or electrified.
  4. European chemicals are adjusting by closing capacity (Covestro Antwerp) and consolidating (BASF–Evonik, Axanzo).
  5. Brussels is prioritising trade defence and short-term energy aid over the ETS, so chemicals are more likely to get quotas than a carbon-cost fix.

Watch next week

  • 19 OctCanada September CPI (consensus 3.0%).14
  • 20 OctDG CLIMA stakeholder consultation on the €30bn Investment Booster, first phase of the Industrial Decarbonisation Bank. Our position: the Competitive Decarbonisation Ladder. Also the first CBAM downstream trilogue; ZEW October; China loan prime rate; Japan September trade.7590
  • 21 OctUK September CPI, ahead of an expected BoE hike.9230
  • 22 OctACEA September EU car registrations.91
  • 28 OctBASF Q3 results, and the Bank of Canada decision.
  • 29 OctECB decision, after HICP at 3.8%.25
  • 29–30 OctBank of Japan meeting.57
  • RollingWhether BASF bids above €22.15 for Evonik, and Covestro’s consultation on Antwerp.

Sources

  1. IMF World Economic Outlook, Oct 2026: IMF upgrades 2026 global growth forecast (Trading Economics, 13 Oct)
  2. CGTN: IMF raises 2026 global growth forecast to 3.1% (13 Oct)
  3. Canadian HR Reporter: IMF cuts Canada's 2026 growth forecast to 1.1% (13 Oct)
  4. Rio Times: IMF Brazil growth forecast 2026 (13 Oct)
  5. US CPI, Sep 2026: 3.7% vs 3.6% expected (investingLive, 14 Oct)
  6. Federal Reserve G.17: industrial production and capacity utilisation, Sep 2026 (16 Oct)
  7. US retail sales, Sep 2026 (Trading Economics, 15 Oct)
  8. Fed Beige Book, October 2026 (investingLive, 14 Oct)
  9. S&P Global US Manufacturing PMI final, Sep 2026 (Trading Economics, 1 Oct)
  10. ISM Services PMI, Sep 2026 (Trading Economics, 5 Oct)
  11. Statistics Canada manufacturing sales, Aug 2026 (Advisor.ca, 15 Oct)
  12. CMHC housing starts, Sep 2026 (16 Oct)
  13. S&P Global Canada Composite PMI, Sep 2026 (Trading Economics, 5 Oct)
  14. Trading Economics: Canada inflation (calendar, Sep CPI due 19 Oct)
  15. Banco Central IBC-Br, Aug 2026 (Agência Gov, 16 Oct)
  16. IBGE retail sales, Aug 2026 (Money Times, 15 Oct)
  17. Aço Brasil crude steel and imports, Sep 2026 (Gazeta Mercantil, 16 Oct)
  18. S&P Global Brazil Services PMI, Sep 2026 (Trading Economics, 5 Oct)
  19. IBGE IPCA, Sep 2026 (Jornal do Comércio, 9 Oct)
  20. Toro Investimentos: Copom meeting calendar 2026
  21. Eurostat: industrial production, Aug 2026 (15 Oct)
  22. Euro-area HICP final, Sep 2026 (Trading Economics, 16 Oct)
  23. HCOB Eurozone Services PMI final, Sep 2026 (Trading Economics, 5 Oct)
  24. Lagarde statement to the IMFC, 17 Oct 2026 (Disruption Banking)
  25. Admiral Markets: ECB meeting October 2026, dates
  26. Destatis wholesale prices, Sep 2026 (DATEV, 14 Oct)
  27. ONS: GDP monthly estimate, UK, Aug 2026 (15 Oct)
  28. ONS: Index of Production, UK, Aug 2026 (15 Oct)
  29. S&P Global UK Services PMI final, Sep 2026 (investingLive, 5 Oct)
  30. Business Recorder: Bailey says second-round inflation pressures look subdued (16 Oct)
  31. HSBC India Services PMI final, Sep 2026 (Angel One, 6 Oct)
  32. MoSPI: CPI press release, Sep 2026 (12 Oct)
  33. News On Air: WPI inflation rises to 11.39% in September (14 Oct)
  34. Business Today: India exports $44.4bn in September (15 Oct)
  35. SIAM passenger-vehicle dispatches, Sep 2026 (Angel One, 15 Oct)
  36. RBI hikes repo rate by 25bp to 5.50% (GKToday, 7 Oct)
  37. China trade balance, Sep 2026 (Trading Economics, 14 Oct)
  38. China exports by destination, Sep 2026 (Trading Economics, 14 Oct)
  39. NBS: Consumer Price Index, Sep 2026 (15 Oct)
  40. NBS: Industrial Producer Price Indexes, Sep 2026 (15 Oct)
  41. China Q3 GDP and September activity (investingLive, 19 Oct)
  42. SMM: NBS Jan–Sep GDP, investment and September output (19 Oct)
  43. SMM: China crude steel production, Sep 2026 (19 Oct)
  44. SMM: China steel exports, Sep 2026 (14 Oct)
  45. CAAM vehicle sales, Sep 2026 (Trading Economics, 12 Oct)
  46. CnEVPost: CPCA September NEV retail (12 Oct)
  47. Mysteel: CCMA excavator sales, Sep 2026 (13 Oct)
  48. Korea Times: China's economy picks up pace in Q3 (19 Oct)
  49. NBS official PMIs, Sep 2026
  50. RatingDog China PMIs, Sep 2026 (investingLive)
  51. ICIS: China September exports surge 36% as surplus nears $1 trillion (15 Oct)
  52. Baker McKenzie: China proposes expanded export controls on AI, biopharma and solar technologies (18 Oct)
  53. Japan Manufacturing PMI final, Sep 2026
  54. Japan Services PMI final, Sep 2026 (Trading Economics, 5 Oct)
  55. Japan industrial production final, Aug 2026 (Trading Economics, 15 Oct)
  56. ESRI: machinery orders, Aug 2026
  57. IndexBox: BoJ ahead of the 29–30 Oct meeting (16 Oct)
  58. JMTBA machine-tool orders, Sep 2026 (Trading Economics, 9 Oct)
  59. Börsen-Zeitung: job guarantees would stay in an Evonik takeover (12 Oct)
  60. Trading-Treff: BASF signals higher offer for Evonik (14 Oct)
  61. Indian Chemical News: Covestro plans Antwerp rejig, up to 260 jobs at risk (16 Oct)
  62. Indian Chemical News: AkzoNobel and Axalta unveil Axanzo (17 Oct)
  63. Indian Chemical News: FMC slashes Q3 outlook (17 Oct)
  64. Indian Chemical News: Honeywell technology for Bahrain aromatics complex (17 Oct)
  65. ChemAnalyst: LG Chem restarts Yeosu cracker (12 Oct)
  66. Chemxplore: chemical industry news (15–16 Oct)
  67. Trading Economics: polyethylene (16 Oct)
  68. Agence Europe: ETS revision, first substantive Environment Council debate (13 Oct)
  69. Commission press corner via Lovguiden: Hoekstra on the ETS review (12 Oct)
  70. CBAM Guide: ministers debate CBAM phase-in to 2038 (12 Oct)
  71. European Council conclusions, 16 Oct 2026 (Diritto Bancario)
  72. Reuters via Investing.com: EU leaders wrangle over energy prices and spending (15 Oct)
  73. Euronews: EU summit, leaders stick to red lines (15 Oct)
  74. Eunews: member states deadlocked over the ETS (15 Oct)
  75. Mayer Brown: CBAM downstream extension, the road to trilogue (7 Oct)
  76. Indian Chemical News: Critical Chemicals Alliance faces crucial test (10 Oct)
  77. National Law Review: October 2026 federal environmental developments
  78. Arnold & Porter: The Chemical Compound, Q3 2026 (8 Oct)
  79. Trading Economics: Brent crude oil (19 Oct)
  80. IEA Oil Market Report, October 2026 (14 Oct)
  81. Trading Economics: EU natural gas, TTF (19 Oct)
  82. TASS: EU gas storage from GIE data (14 Oct)
  83. Trading Economics: US natural gas, Henry Hub (19 Oct)
  84. Trading Economics: EU carbon permits (16 Oct)
  85. euenergy.live: Germany day-ahead electricity prices (13–19 Oct)
  86. Commission warns of a very difficult winter (roic.ai, 14 Oct)
  87. Trading Economics: urea (16 Oct)
  88. AHDB: GB fertiliser prices (9 Oct)
  89. Fertilizer Daily: China urea export quota and price floors (18 Sep)
  90. ZEW release dates 2026–27
  91. ACEA press release calendar
  92. ONS release calendar: consumer price inflation, Sep 2026

Figures are as reported by 19 October 2026. Where no new figure was released, last week’s value and its period are kept. Dashboard cells link to their own sources.

Week of 12 October 2026 · Monday brief · developments since 5 October

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive view

The global expansion is holding up, but the chemicals recovery remains largely supply- and cost-driven rather than demand-led. Europe's Critical Chemicals Alliance has produced a credible intervention framework, yet it remains non-binding while European gas, carbon and financing costs have risen again. China's widening gap between weak domestic absorption and surging exports is becoming the dominant trade risk.

  • Chemical pricing is supply-driven, not demand-led. Disrupted supply, feedstocks and freight are setting prices; there is no broad end-demand recovery.
  • EU chemicals policy now has an actionable framework. Funding and legal implementation are lagging closure risk.
  • Europe's gas disadvantage widened again. TTF is roughly 8½ times Henry Hub, and low storage raises winter tail risk.
  • CBAM's Q3 carbon cost rose 9.4%. 2026 liabilities should already be provisioned, even though cash purchases start in 2027.
  • China is exporting its domestic weakness. Weak home sales and surging exports reinforce the overcapacity thesis; managed trade and quantitative safeguards are becoming more plausible.

1 Global chemicals

European fundamentals remain recessionary. Cefic's Q3 report shows EU chemical production down about 2% year-on-year in January–July, capacity utilisation near 75% versus an 81.3% long-run average, exports down 4.2%, imports down 3.1%, and the extra-EU trade surplus narrowing by €2.2 billion to €21.4 billion.

Post-Golden Week China has not delivered a volume-led rebound. Polyester-chain prices firmed, but market reporting characterises the move as cost-driven. Chinese passenger-car sales fell 28.1% year-on-year in September, and Golden Week spending per trip fell 1.9% to a four-year low: poor signals for coatings, engineering plastics, fibres and consumer chemicals.

More feedstock is returning, but cautiously. Shell partially restarted Qatar's Pearl GTL complex; QatarEnergy offered up to 50,000 tonnes of naphtha, while the damaged second train is not expected back until Q1 2027. The complex's full capacity is approximately 140,000 boe/day.

China reversed its temporary fuel-export pause. October gasoline, diesel and jet-fuel approvals reportedly total about 3.7 million tonnes, versus August exports of 4.6 million tonnes. This should moderate extreme fuel cracks, but could restore Asian competition for crude and naphtha.

Refining is capturing the scarcity rent, not chemicals. Shell indicated a Q3 refining margin of $42/bbl versus $24/bbl in Q2, while warning of weaker chemicals margins. Higher product prices are not translating evenly into petrochemical profitability.

European consolidation pressure increased. BASF is reportedly prepared to improve its rejected €10.3 billion (€22.15 per share) approach for Evonik, although no formal talks or revised bid exist. The strategic logic is portfolio breadth and cost synergies; execution risks include labour, antitrust and German political opposition.

Strategic implication: do not plan on a broad fourth-quarter restocking cycle. Favour specialty businesses with pricing power, keep commodity run rates conservative, and distinguish temporary scarcity margins from sustainable end-market demand.

2 EU industrial policy

New: the Critical Chemicals Alliance moved from diagnosis toward implementation. Its 8 October conclusions cover:

  • criteria and mapping for critical molecules and sites;
  • enhanced import-surge monitoring;
  • stronger trade-defence tools;
  • modernisation support for existing assets;
  • coordinated EU and national funding; and
  • lead markets for low-carbon and circular chemicals.

Cefic wants these findings embedded in the Industrial Accelerator Act, Circular Economy Act, Biotech Act II and ETS review before year-end. However, the critical-molecule list is still a pilot and the recommendations are not yet funded or legally binding.

A material policy conflict is emerging. Downstream sectors support investment aid and contracts for difference, but oppose mandatory recycled or low-carbon content, levies and certificate schemes that could pass green premiums and data obligations on to customers.

Critical minerals. The Commission designated 46 additional strategic critical-mineral projects, supporting the EU's 2030 targets to mine 10%, process 40% and recycle 25% of annual needs. This matters for catalysts, batteries and specialty materials, although it does not solve bulk hydrocarbon-feedstock exposure.

Strategic implication: the best near-term opportunity is to position specific sites and molecules for modernisation funding. "Strategic importance" must be quantified through downstream dependency, import concentration, employment, defence and health relevance and closure risk, not asserted generically.

3 Energy competitiveness

BenchmarkLatestWeekly strategic change
Dutch TTF gas~€81/MWh9 OctoberUp from roughly €73/MWh around the previous brief.
US Henry Hub$3.11/MMBtuStill an order of magnitude cheaper on a delivered-energy basis.
Brent~$103/bbl12 OctoberVolatile but broadly above $100.
EU gas storage<73%Versus 83% last year and a five-year average near 88%.
EUA~€87/tCO₂9 OctoberUp from about €84 on 6 October.

At current exchange rates, TTF is approximately $26–27/MMBtu, around 8½ times Henry Hub before transport and site-specific contracting. Europe's short-term disadvantage therefore widened again. Storage below normal makes winter weather and LNG disruption more important than usual.

No new comparable industrial-electricity dataset was released this week. The structural ordering is unchanged: Europe remains materially above the US, China, India and most Gulf locations, although grid charges, taxes and support schemes make plant-level comparisons essential.

Strategic implication: re-run European site cash-cost curves at TTF €80/€100/€120, Brent $100/$120 and EUA €90/€110. Integrated Gulf and US ethane-based assets retain a decisive advantage; European sites need product differentiation, energy flexibility or policy support to justify incremental capital.

4 EU ETS and CBAM

New price signal, no new scope change.

  • The Commission published a Q3 2026 CBAM certificate price of €82.32/tCO₂, up 9.4% from €75.28 in Q2.
  • Spot and nearby EUA prices reached approximately €87/tCO₂ on 9 October.
  • CBAM's definitive regime continues to cover cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Certificate sales are deferred until 2027, but liabilities accrue on qualifying 2026 imports.
  • The CCA called for chemical-site findings to influence the ETS review, but this is a recommendation, not an enacted change to the free-allocation phase-out or sector coverage.

Company impact: Q3 embedded-emissions provisions should use €82.32, not an annual average. Importers also need product-level CN-code controls, verified supplier emissions and clarity on the carbon price already paid in the country of origin. Treasury exposure will become more visible when 2026 certificates must be purchased in 2027.

5 China overcapacity and export pressure

Three new data points sharpen the concern:

  1. Cars: Chinese domestic passenger-car sales fell 28.1%, while exports surged 73.2% to 923,000 vehicles in September. This is the overcapacity mechanism in miniature: domestic weakness converts directly into export intensity.
  2. Fuels: China approved the resumption of 3.7 million tonnes of October fuel exports after its temporary security-driven pause. A similar recovery in operating rates could eventually increase chemical and polymer exports.
  3. Managed trade: the EU–China hybrid-vehicle understanding could cap Chinese EU shipments at a reported 350,000 a year, versus roughly 800,000 forecast for 2026. Details remain preliminary, but it sets a potential precedent for quantitative safeguards where conventional anti-dumping cases are too slow.

China denies using a weak yuan for export advantage, but the record trade surplus and EU pressure over the currency remain unresolved.

Strategic implication: protection in autos may divert Chinese output and capital into other regions and value chains. Chemicals companies should monitor not only direct China–EU flows but also rerouting through Southeast Asia, Turkey and the Middle East.

Macro dashboard

≥ 52 strong expansion 50–51.9 expansion 48–49.9 stalling < 48 contraction
EconomyGrowth outlookMfg PMIServices PMIActivity · inflation · ratesWhat changed
USA~2.2%202655.958.8PCE 3.4% (core 3.0%)Fed 3.75–4.00%Services accelerated, but input prices and supply constraints increased. September CPI, due 14 October, is expected near 3.7%.
China4.6%52.1private · official 50.151.6Aug IP +5.2% y/yCPI 0.8% · PPI 3.8%Factory surveys improved, but consumer and auto evidence weakened. September inflation and trade releases are the next test.
Euro area0.9%52.953.0Inflation 3.8%Retail +0.1% m/m · ECB deposit 2.50%PMI momentum strengthened, but energy drove inflation sharply higher. German output rose 2.0% m/m while orders fell 10.6%, and Italian output fell 1.3%: a conflicting industrial signal.
India7.1%FY2026/2755.155.2Aug IP +8% y/yRepo +25bp to 5.50%Growth remains the strongest among large economies, but oil, food inflation and the weak rupee forced the first rate hike in nearly four years.
Brazil1.8–2.1%44.849.2CPI 4.58%Aug IP −0.6% m/m · Selic 13.75%Both PMIs are contracting and inflation moved above the 4.5% tolerance ceiling. Forecasts conflict: central bank 1.8%, government 2.0%, World Bank 2.1%.
Emerging markets3.8%IMF54.3global compositeStrong dollarrising global yields tighten conditionsTechnology exporters and India remain strong; oil importers and highly indebted sovereigns face worsening terms of trade. UNCTAD's 2.6% global forecast versus the IMF's 3.0% highlights unusually high forecast uncertainty.

Five takeaways

  1. Chemical pricing is still being driven by disrupted supply, feedstocks and freight, not by a broad end-demand recovery.
  2. European chemicals policy now has an actionable framework, but funding and legal implementation are lagging closure risk.
  3. Europe's gas disadvantage widened to roughly 8½ times Henry Hub, while low storage raises winter tail risk.
  4. CBAM's Q3 carbon cost rose 9.4%; 2026 liabilities should already be provisioned even though cash purchases start in 2027.
  5. China's weak domestic sales and surging exports reinforce the overcapacity thesis; managed trade and quantitative safeguards are becoming more plausible.

Risks and opportunities: next 4–12 weeks

  • S-Oil's 1.8 Mt/year Shaheen cracker start-up and other Asian restarts could reverse current supply tightness.
  • Winter weather, Gulf shipping security and below-normal EU gas storage could push TTF above €100/MWh.
  • China's September trade, inflation and industrial data will show whether Golden Week weakness was temporary.
  • EU decisions on CCA funding, lead-market design and trade surveillance may emerge before year-end.
  • BASF–Evonik developments could accelerate European portfolio consolidation.
  • Fed, ECB and RBI tightening could weaken construction, autos and discretionary chemical demand.

Questions and actions for this week

  • Reprice each European site under TTF €100, EUA €100 and Brent $120 scenarios; identify the first cash-negative assets.
  • Provision CBAM exposure by supplier and product using €82.32/tCO₂, with sensitivity to €100.
  • Select the molecules and sites that can make a quantified CCA funding case before year-end.
  • Review Asia sales plans for potential Chinese export displacement into Southeast Asia, India, Turkey and Europe.
  • Separate scarcity-driven margin gains from genuine customer-volume recovery in Q4 forecasts.
  • Map BASF–Evonik portfolio overlap against your own suppliers, customers, potential divestments and antitrust remedies.

Week of 5 October 2026 · Monday brief · data to 5 October

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive signal

Factory surveys are the strongest in years almost everywhere, but much of that strength is price-driven. Underneath, construction is shrinking, US hiring has stalled, Europe's chemical base is closing plants, and gas is the main Q4 risk.

  • Manufacturing PMIs are above 50 in 7 of 8 economies. India hit 55.1, the US flash 57.0 and the euro area a 52-month high of 52.9. Only Brazil (44.8) is contracting. The ISM prices index jumped to 77.9, so part of the rise is pre-buying during an energy shock.3617
  • Construction is the weak link for steel, cement and chemicals. Residential construction is contracting in 5 of the 8 economies: China's property investment is down 19.9%, euro-area building output is down 6.4% and the UK housing PMI is 37.6.13
  • European chemicals have moved from closures to consolidation. INEOS is mothballing Europe's last world-scale acetyls plant in Hull, Westlake is closing 165 kt/yr of PVC in Cologne, and BASF has confirmed talks about buying Evonik. EU capacity utilisation is 75%.22232425
  • Central banks are tightening into the energy shock. The Fed, ECB and BoJ all raised rates in September and three BoE members voted to hike. The RBI is expected to hike on 5–7 October. Brazil is the only large economy still cutting. US payrolls rose only 29,000 in September and unemployment reached 4.2%, which lowers the odds of another Fed hike in October.49471518
  • China's surplus keeps growing while the trade fronts move. August exports rose 25% and the monthly surplus reached $119.1bn. The US truce now runs to 10 January 2027, and the EU's test comes in Beijing on 8–9 October.413442
  • Chemical trade defence now runs both ways. The EU has opened an anti-dumping case on PVC imports, and China opened a probe into EU p-nitrotoluene days before the 8–9 October Beijing talks.5052
  • The Q4 risk is European gas. TTF reached €76.42/MWh on 5 October, a two-week high, and storage is about 72% full against an 87% five-year average. Qatar has extended force majeure on deliveries to Italy through December.3536

Macro dashboard

GDP figures are OECD forecasts from 23 September. PMI cells are coloured on the 50 line. All other figures are the latest official release.

≥ 52 strong expansion 50–51.9 expansion 48–49.9 stalling < 48 contraction
EconomyGDP 2026Mfg PMI (Sep)Services PMIInflation (core)Policy rate · last moveIndustrial outputStrategic interpretation
USA2.2%57.0S&P flash · ISM 54.558.7S&P flash3.4% (2.4%)CPI Aug · PCE 3.4% (3.0%)3.75–4.00%+25bp, 16 Sep+1.4% y/yAug; mfg −0.3% m/mStrongest survey momentum since 2021, but the ISM prices index is at 77.9 and the Fed is hiking. Electronics and capital goods are leading, and paper output is still falling. Payrolls rose only 29,000 in September; unemployment is 4.2%.
Canada0.9%51.5Aug 53.046.8Aug3.0% (2.4%)Aug2.25%Hold; next 28 Oct−0.9% m/mMfg GDP, JulLosing momentum. Services have contracted for three months and new factory orders are shrinking. LNG Canada Phase 2 is the bright spot.
Brazil2.0%44.8Lowest since Apr 202350.5Aug4.47%IPCA-15, Sep13.75%−25bp, 16 Sep−0.5% y/yJulThe industrial recession is deepening ahead of the October election. Housing finance and vehicle output are the exceptions, and machinery and steel are weak.
Euro area1.0%52.952-month high53.0flash3.8% (2.5%)HICP flash Sep; energy 18.8%552.50%+25bp, 10 Sep0.0% y/yJulSurvey strength, physical weakness. New orders are the strongest since 2022, but construction has contracted for 52 months and chemicals run at 75% utilisation.
UK1.1%51.9final51.7flash3.1% (2.6%)Aug3.75%Hold, 6–3 vote+0.6% y/yJulFlat-lining as inflation rises, with three MPC votes for a hike. Construction is the weakest in this set (housing PMI 37.6). Car demand is firm.
India7.1%FY2026–2755.1Aug 52.855.8flash4.82%Aug5.25%MPC 5–7 Oct; hike expected+8.0% y/yAug; capital goods +16.9%The strongest demand story: autos, cement, steel and capital goods are all growing. Fertiliser output has fallen for five months, which supports import demand.
China4.5%52.1RatingDog · NBS 50.151.6RatingDog · NBS 50.2CPI 0.8%PPI +3.8%, Aug3.0% / 3.5%LPR unchanged+5.2% y/yAug; high-tech +16.7%Two speeds. Exports, chips and equipment are growing while property investment is down 19.9% and cement 11.7%. The rise in PPI comes from energy costs, not demand.
Japan0.8%54.16-month low51.6flash1.9%Aug1.25%+25bp, 18 Sep+3.4% y/yAug; −1.7% m/m · Tankan +24Firm. Machine-tool orders are up 65% and public works orders 46%. The BoJ is normalising. Non-residential building is weak.

Sources: OECD via Euronews, Business Standard and Finimize1; S&P Global, HCOB, HSBC, RatingDog and NBS PMI releases2–21; BLS, BEA, Eurostat, ONS, NBS, IBGE and central bank statements. A "flash" PMI is a preliminary reading.

Key industries dashboard

These are the end-markets that drive steel, chemicals, cement and fertiliser demand. Each cell shows the latest hard number; tap a cell to open its source. A PROXY tag means no direct series was available, so a close stand-in is shown.

Expanding (> +2% or index > 51) Flat or mixed Contracting No hard data this week
MarketUSACanadaBrazilEuropeUKIndiaChinaJapan
Residential constructionSteel · cement · PVC · insulation−1.2%Housing startsAug−4%Housing starts, YTDAug+46.6%SBPE housing financeAug−6.4%Building output, euro areaJul37.6Housing activity PMIAug−6%Housing sales, top 9 citiesQ3−19.9%Property investment, YTDJan–Aug+6.1%Housing startsAug
Non-residential constructionSteel · cement · coatings−1.0%Private non-res spendingAug+3.2% m/mNon-res investment; permits −17%Jul+1.9%Cement salesAug43.0Construction PMI, euro areaAug47.8Commercial activity PMIAug+12.5%Cement outputAug−2.3%PROXYManufacturing FAI, YTDJan–Aug−8.5%Non-res floor area startedAug
Infrastructure & civil worksSteel · cement · bitumen · PE pipe+2.5%Public construction; highways +4.4%Aug−2.9% q/qGovernment capex, realQ2R$300bn2026 plan, +50% (forecast)2026F+0.6%Civil engineering outputJul40.5Civil engineering PMIAug+4.8%Eight core industriesAug−4.0%Infrastructure FAI, YTDJan–Aug+46.3%Public works ordersAug
AutomotiveSteel · polymers · coatings · rubber+1.5%Light-vehicle sales, 16.8m SAARAug+5.4%New light-vehicle salesAug+9.4%Vehicle productionAug+4.5%EU car registrationsAug+13.7%New car registrationsAug+16.1%Passenger vehicle retailAug−5.1%Sales; NEV +17.8%, exports +65%Aug+2.0%New vehicle salesAug
Machinery & capital goodsSteel · engineering plastics · lubricants+10.6%Core capital goods orders, YTDAug+2.3% q/qBusiness investment, M&E-ledQ2−15.5%Machinery revenue (Abimaq)Aug+2.0%German machinery orders (VDMA)Jul+3.0% 3m/3mMachinery outputJul+16.9%Capital goods outputAug+19.3%Excavator salesAug+65.4%Machine-tool ordersAug
ElectronicsSpecialty chemicals · gases · copper+8.7%Computer & electronics outputAug+16.7% q/qPROXYComputer investment, realQ2+12.2% m/mElectronics output (no y/y)Jul+32.6%PROXYGerman electro orders (ZVEI)Jul+3.9% 3m/3mElectronics outputJul+34%Electronics exportsApr–Aug+20.6%Integrated circuit outputAug+52.3%Electronic component exportsAug
PackagingPE · PP · PET · paperboard−2.9%PROXYPaper output; plastics +0.8%Aug−1.4% m/mPROXYFood manufacturing salesJul+5.1%Corrugated board shipmentsJun+0.6%PROXYRetail volume, euro areaJul+2.4%PROXYRetail sales volumeAug−2%PROXYFMCG volumesApr–Jun+0.4%PROXYRetail salesAug+2.7%PROXYRetail salesAug
Agriculture & fertiliserAmmonia · urea · potash · crop protection−2.6%Net farm income 2026F; fertiliser cost +15.3%2026F+8.4%Canola area (record); wheat −5.9%2026−5.4%Fertiliser deliveriesH1+70%Nitrogen prices vs 2024 averageMay£472/tAmmonium nitrate, +17% since Feb18 Sep−12.4%Fertiliser outputAug3.3 MtUrea export quota vs ~5 Mt in 20252026n/aMinor market, not tracked
Materials outputSteel · cement · chemicalsn/aNo verified series this week−6.6% m/mChemical product salesJul−6.2%Crude steelAug+0.5%EU chemicals output; H1 −1.6%Q2+0.1%Chemicals outputQ1+4.6%Crude steelAug−3.7%Crude steel; cement −11.7%Augn/aNo verified series this week
Values are y/y unless marked (m/m, q/q, 3m/3m, YTD or index). Index readings are PMIs, where 50 means no change.

What it means for materials

Steel Mixed

Autos are growing in 5 economies and machinery in 6, but construction, steel's largest use, is shrinking. Crude steel output is down 3.7% in China and 6.2% in Brazil, and up 4.6% in India.

Cement Weak ex-India

India's cement output is up 12.5% and Japan's public works orders are up 46%. China's cement output is down 11.7%, and construction in Europe and the UK is contracting.

Chemicals Bifurcated

Electronics is growing in 7 of 8 economies and autos in 5. Packaging proxies are flat in 5 of 8, and EU chemical plants run at 75% utilisation against an 81.3% long-term average.

Fertilisers Price-led squeeze

EU nitrogen prices are about 70% above the 2024 average and US farm fertiliser costs are up 15.3%. Brazil's deliveries are down 5.4%, India's output is down 12.4%, and China caps urea exports at 3.3 Mt.

1 Global chemicals

New development: INEOS is mothballing all three of its acetyls units at Hull, Europe's last world-scale acetyls plant. It says European gas costs about 12 times the US price and blames EU energy and carbon policy.22 One week later, Westlake said it will close its 165 kt/yr Cologne PVC plant in Q1 2027, taking about $205m in charges and citing energy costs and Asian imports.23 Evonik is closing its Hamburg and Bitterfeld sites.

Consolidation is starting. BASF has confirmed exploratory talks with RAG-Stiftung, which holds about 43–44% of Evonik, and has sent a non-binding expression of interest in a public offer. No price has been disclosed.24 In a market with 75% utilisation, mergers that close overlapping sites become a substitute for organic margin recovery.25

Asia keeps adding capacity. Sinopec Qilu has started building a 1 Mt/yr ethylene unit, even though Beijing has ordered outdated plants upgraded or shut by 2029.26 China's polyethylene price fell 7.8% in September to CNY 8,189/t, while polypropylene was flat. CNOOC-Shell has halted PE output at Huizhou with no restart date, which may support South China prices.2728

US producers are also under pressure. Westlake expects a weaker Q3, with North American PVC and PE prices down and housing volumes soft. Perstorp will close its Toledo polyols site from November.23

Strategic implication: Europe is losing established intermediates such as acetyls and PVC, not only marginal crackers. Assets that are not tied to a protected or strategic value chain should be assumed to be candidates for closure or sale.

2 Regulatory · EU · USA · China

EU

  • CBAM goes downstream. On 15 September Parliament voted 464–50 to extend CBAM to about 457 steel- and aluminium-containing product lines. The Commission proposed about 180 and the Council about 200. Parliament also backed a 2027–29 decarbonisation fund that includes fertiliser producers. Basic chemicals stay out for now.29
  • More free ETS allowances. On 16 September the Council agreed about 88m extra free allowances for 2026–30, worth around €6bn, plus 33m previously unallocated ones. Parliament has voted to fast-track higher fallback benchmarks, which matter most for chemicals.30
  • The Industrial Accelerator Act stalled. The 24 September Competitiveness Council reached no general approach on it.

USA

  • TSCA rules face legal challenge. On 15 September the Fifth Circuit struck down EPA's methylene chloride rule. It held that EPA must assess each use separately and account for existing worker protection. That puts the TCE, PCE and carbon tetrachloride rules at risk.31
  • Power-plant CO₂ limits partly repealed. EPA removed the carbon-capture requirement for new baseload gas turbines, which lowers the cost of new gas-fired power for the US Gulf Coast.32
  • Polysilicon gets price floors. From 4 December, Section 232 minimum import prices of $21/kg for polysilicon and $0.38/W for modules apply, together with a 15% duty.45

China

  • The anti-involution campaign gets enforcement. On 20 September the market regulator SAMR set out cost and price inspections for firms selling below cost. It also revised Price Law provisions and gave industry associations cost benchmarks.33 MERICS argues that results so far are limited to sectors with few players, such as couriers and wind.46

3 Energy competitiveness

European TTF gas reached €76.42/MWh on 5 October, a two-week high and 131% above a year earlier. EU storage was 70.87% full on 26 September, about 16 points below the seasonal norm, and Germany was at 57%. At the current pace, storage reaches about 78% by 1 November, short of the relaxed 80% target.3536 Energy Commissioner Jørgensen has described a "price crisis linking to a supply crisis" and urged demand cuts.38

Brent fell to $102.59 on 29 September as Gulf exports recovered to 16.33 mb/d and Saudi Arabia restarted loadings at Yanbu. WTI was $89.38. It was $101.85 on 5 October, and OPEC+ kept quotas unchanged at its 4 October meeting.513747 Henry Hub was about $3.00/MMBtu on 4 October as US output hit a record 113.3 bcf/d, against roughly $25 for TTF.53 German day-ahead power was about €171/MWh for 5 October, some 12% above its 30-day average.54

LNG Canada Phase 2 took its final investment decision on 29 September. The C$33bn project will double capacity to 28 Mtpa.39 In China, thermal coal rose to CNY 991/t, up 40% on the year because safety checks have tightened supply.40

China's provincial power map, September

China's national spot price averaged about RMB 317/MWh (≈€40) in September, up 4.3% on August, but provinces now look like separate markets: Henan RMB 484 (≈€60), Guizhou 477 and Guangdong 460 at the top; Sichuan 112 (≈€14) and Xinjiang 125 (≈€16) at the bottom, a 4.3-fold spread. The cheap provinces are the hydro and wind/solar bases; the expensive ones are load centres that still rely on coal for the evening peak.56

  • Solar is pushing midday prices towards zero. In Shanxi the noon price averaged RMB 95 (≈€12) against RMB 592 (≈€74) at 18:00. Provinces with negative prices doubled from 5 to 10; Liaoning was negative 41.5% of the time.
  • Peak-to-valley spreads pay for storage. Daily spreads reached RMB 757 in east Inner Mongolia and about 600 in Jilin, Hainan and Shanxi, against 75–130 in Chongqing, Zhejiang, Shanghai and Jiangsu.

China read-across: China can site flexible electrolysers, e-methanol and electrified heat where and when power costs €12–16/MWh, a level no European market offers at scale. Expect the next wave of Chinese green ammonia, methanol and polysilicon capacity in Sichuan, Xinjiang and Inner Mongolia, and price European electrification against that, not against China's €40 average.

Ladder read-across: with gas near €76 and EU carbon near €84, a European ammonia, methanol or acetyls asset pays about 7–8 times the US feedstock cost before carbon. Electrification only works with long-term power contracts and high utilisation, so scarce affordable power should go to chlor-alkali, recycling, semiconductors and grid materials first.

4 China overcapacity and export pressure

  • August exports rose 25% y/y, with ASEAN up 30.2%, the US up 34.4% and the EU up 6.6%. The monthly surplus was $119.1bn.41
  • PPI rose 3.8% in August, driven by energy costs from the Hormuz disruption. Consumer goods prices still fell 0.5%, so the rise does not reflect stronger demand.48
  • The Trump–Xi summit on 23–25 September extended the truce to 10 January 2027 and cut fentanyl tariffs from 20% to 10%. Tariff relief covers $30bn of non-sensitive goods each way. Rare earths remain unresolved.34
  • The EU wants China to curb exports and keep rare earths flowing by the Trade and Investment Council in Beijing on 8–9 October. It has asked China to cap hybrid car exports at about 15% market share.4244 Germany and France are reportedly drafting a call for an EU equivalent of Section 301, and Beijing has signalled it would retaliate.43
  • Trade defence is escalating in both directions: an EU anti-dumping case on PVC imports, welcomed by INEOS, and a Chinese anti-dumping probe into EU p-nitrotoluene opened on 3 October.5052

Strategic implication: plan on Chinese volume pressure through 2027–28. If the 8–9 October talks produce no commitments, expect faster EU trade defence on plastics and intermediates.

Five takeaways

  1. PMI strength is real but price-inflated, and it is not reaching construction-linked materials.
  2. European chemicals are entering a consolidation phase: Hull and Cologne are closing, and BASF is in talks over Evonik.
  3. Gas at about €76/MWh with storage about 15 points below normal is the Q4 margin risk for European commodity assets.
  4. China is exporting its domestic weakness. The US has a truce, and the EU deadline is 8–9 October.
  5. Demand for growth materials is concentrated in India, Japan's capital goods, and electronics everywhere.

Watch next week

  • 6 OctUK September construction PMI, and phase 3 of the US refunds for tariffs imposed under emergency powers (IEEPA).
  • 7 OctRBI decision: 8 of 10 economists expected a 25bp hike.18
  • 8 OctEU Gas Coordination Group meets industry on the 80% storage target and demand curbs.
  • 8–9 OctEU–China Trade and Investment Council in Beijing, now with PVC and p-nitrotoluene cases on the table.
  • Mid-OctUS September CPI and producer prices, and the Q3 CBAM certificate price.
  • 15–16 OctEuropean Council: energy prices, competitiveness and trade defence.
  • After 8 OctChina's chemical operating rates and export offers after Golden Week, and whether BASF names a price for Evonik.

Sources

  1. OECD Interim Economic Outlook, Sep 2026 (Euronews)
  2. S&P Global US flash PMI, Sep 2026
  3. ISM Manufacturing PMI, Sep 2026
  4. Federal Reserve FOMC statement, 16 Sep 2026
  5. BEA Personal Income and Outlays, Aug 2026
  6. HCOB Eurozone Manufacturing PMI final, Sep 2026
  7. ECB monetary policy decision, 10 Sep 2026
  8. Eurostat HICP, Aug 2026
  9. Bank of England Monetary Policy Summary, Sep 2026
  10. S&P Global UK Manufacturing PMI final, Sep 2026
  11. NBS official PMIs, Sep 2026 (SMM)
  12. RatingDog China PMIs, Sep 2026
  13. NBS National economy, Aug 2026
  14. Japan Manufacturing PMI final, Sep 2026
  15. Bank of Japan statement, 18 Sep 2026
  16. BoJ Tankan, Sep 2026 (RTT News)
  17. HSBC India Manufacturing PMI final, Sep 2026
  18. Business Standard poll: RBI may hike repo in October
  19. S&P Global Brazil Manufacturing PMI, Sep 2026 (CNN Brasil)
  20. Copom cuts Selic to 13.75% (Forbes Brasil)
  21. S&P Global Canada Manufacturing PMI, Sep 2026
  22. Hydrocarbon Processing: INEOS idles Europe's last world-scale acetyls plant
  23. Westlake: closure of Cologne PVC plant (29 Sep 2026)
  24. European Coatings: BASF confirms talks over Evonik
  25. Cefic Chemical Trends Report Q2 2026
  26. Oilchem: Sinopec Qilu 1 Mt/yr ethylene construction
  27. Hydrocarbon Processing: CNOOC-Shell suspend PE at Huizhou
  28. Trading Economics: polyethylene
  29. VATupdate: Parliament backs CBAM downstream expansion
  30. Council of the EU: ETS carbon leakage measure, 16 Sep 2026
  31. Holland & Knight: Fifth Circuit vacates methylene chloride rule
  32. EPA: Carbon Pollution Standards repeal, final rule
  33. Global Times: SAMR plan against price wars
  34. China Briefing: Xi–Trump Washington takeaways
  35. Trading Economics: EU natural gas (TTF)
  36. Global Energy Flow: EU gas storage
  37. Rio Times: oil markets, 30 Sep 2026
  38. Taipei Times: EU energy commissioner on supply crisis
  39. Prime Minister of Canada: LNG Canada Phase 2
  40. APBI-ICMA: China thermal coal, Sep 2026
  41. BNN Bloomberg: China exports +25% in August
  42. Euronews: Brussels seeks credible outcome in EU–China talks
  43. Global Times: China on an EU Section 301 equivalent
  44. EU Perspectives: limit hybrid exports or face tariffs
  45. EY: Section 232 polysilicon minimum import prices
  46. MERICS: Beijing attempts to trim overcapacity
  47. OilPrice: OPEC+ expected to keep quotas unchanged
  48. Trading Economics: China producer prices
  49. Trading Economics: US non-farm payrolls, September 2026 (2 Oct 2026)
  50. INEOS welcomes European Commission investigation into unfair PVC imports (30 Sep 2026)
  51. Trading Economics: Brent crude oil (5 Oct 2026)
  52. Euronews: China opens anti-dumping probe into EU days before Beijing trade talks (3 Oct 2026)
  53. Trading Economics: US natural gas, Henry Hub (4 Oct 2026)
  54. euenergy.live: Germany day-ahead electricity prices (4–5 Oct 2026)
  55. Eurostat: Euro area annual inflation up to 3.8%, flash estimate September 2026 (2 Oct 2026)
  56. jiajialucky (WeChat): September 2026 provincial spot power prices, up slightly; provinces with negative prices doubled (2 Oct 2026)

Figures are as reported by 5 October 2026. Several OECD figures come from press coverage of the 23 September Interim Outlook. Dashboard cells link to their own sources.

Week of 28 September 2026 · Monday brief

Chemicals & Competitiveness Brief

Macro & materials update · Rafael Cayuela

Executive signal

The global economy is absorbing the Middle East energy shock better than feared, but the industrial consequences are becoming more severe and uneven:

  • US and euro-area activity surveys strengthened sharply, supported by AI investment, inventories and resilient services.
  • European chemicals are moving from margin compression to physical shutdowns. INEOS’s decision to idle three Hull plants is the clearest new warning.12
  • China’s imbalance is intensifying: strong industrial output and exports coexist with almost stagnant consumption and declining investment.
  • EU policy is becoming more defensive and pragmatic: “Made in EU” requirements, import safeguards and additional ETS free allocation are advancing.
  • The principal Q4 risk is now European gas, not simply oil: the OECD’s baseline assumes Q4 TTF at €82/MWh and Brent at $105/bbl.12

Macro dashboard

EconomyGrowth outlookLatest momentumInflation / ratesStrategic interpretation
US2.2% in 20261Sep flash PMI: manufacturing 57.0, services 58.73; Aug industrial production flat, manufacturing −0.3% m/mCPI 3.4%, core 2.4%; Fed raised range to 3.75–4.00%5AI, services and investment remain powerful, but chemicals demand is less buoyant than headline PMIs imply. Another Fed increase would raise project-financing hurdles.
China4.5% in 20261Private manufacturing PMI 51.5, services 51.4; official manufacturing PMI only 49.8; industrial output +5.2% y/y, retail sales just +0.4%6CPI 0.8%, PPI 3.8%; 1-year/5-year LPR unchanged at 3.0%/3.5%Export-oriented producers are expanding while the broader domestic economy remains weak. The official/private PMI divergence reflects different company coverage and should not be read as a clean recovery.
Euro area1.0% in 20261Sep flash manufacturing 52.7, services 53.0, composite 53.14; July industrial output approximately flat y/yHICP 3.3%, core 2.4%; ECB deposit rate 2.50%The PMI rebound is real but partly reflects inventories, exports and supply disruption. It conflicts with weak physical production and plant closures; do not call this a durable industrial recovery yet.
India7.1% FY2026–27Aug manufacturing PMI 52.8, services 54.19; infrastructure output +4.8% y/y10OECD inflation outlook 4.7%; repo 5.25%Still the strongest large-economy demand story, but manufacturing is at a five-year PMI low. Fertiliser output fell 12.4%, creating import and trading opportunities.
BrazilGovernment cut 2026 forecast from 2.3% to 2.0%Manufacturing PMI 46.3, services 50.5; July production +0.2% m/m, −0.5% y/yIPCA −0.32% m/m, 4.22% y/y; Selic cut to 13.75%11Industrial recession signals are strengthening even as inflation permits gradual easing. Weak domestic chemicals demand; potentially better agricultural and export-related demand.
Emerging marketsGlobal growth 2.9%; EM performance highly divergentAsia generally expanding; Brazil, Mexico and parts of Europe contracting; EM confidence near historic lowsG20 EM inflation projected at 4.8% in 20261Avoid a single “EM” allocation thesis: favour India/Southeast Asia and selective commodity exporters; remain cautious on rate-sensitive Latin American industry.

1 · Global chemicals

New development: INEOS has suspended operations at three Hull chemical plants. The company directly linked the decision to gas and carbon costs, citing UK gas at approximately $23.51/MMBtu versus $2.84/MMBtu at Henry Hub. This is important because it involves established intermediate chemicals, not an experimental decarbonisation project: Europe is losing existing molecules before replacement technologies reach scale.1213

Feedstock picture: oil retreated from the September spike as Saudi Arabia restarted part of its East–West pipeline, but the relief is fragile. Diesel inventories remain exceptionally tight, while the OECD reports that sulphur and petrochemical-compound prices remain elevated. Urea has fallen back toward pre-conflict levels, helped by additional exporters and relaxed Chinese export quotas.1

Demand is improving selectively, not broadly. US manufacturing and euro-area PMIs strengthened, but China’s domestic demand, Brazilian manufacturing and India’s manufacturing momentum weakened. Packaging, consumer durables and construction-linked chemicals therefore remain less convincing than AI, electronics, electrical equipment and infrastructure materials.

Structural capacity remains the dominant margin constraint. China’s ethylene capacity reached an estimated 66 Mtpa in 2025, with another 32 Mtpa expected to be added between 2023 and 2028. Japan plans to remove roughly 1.75 Mtpa, while about 4 Mtpa of European crackers are scheduled to close between 2024 and 2027.141516

Strategic implication: the industry is bifurcating into:

  1. advantaged feedstock and energy locations;
  2. protected or strategically supported European assets;
  3. specialty and application-led businesses with pricing power;
  4. structurally impaired commodity assets requiring closure or consolidation.

2 · EU industrial policy

Three developments point toward a more interventionist European industrial model:

  • The proposed Industrial Accelerator Act introduces “Made in EU” and low-carbon conditions in procurement, auctions and subsidised purchases. Draft provisions include 70% EU components for publicly procured EVs and stronger localisation requirements for foreign investment.1718
  • From 25 September, provisional EU safeguards on electrical steel extend protection beyond raw steel to laminations and transformer cores, with minimum-price thresholds reportedly around €2,800–3,500/t. This is an important precedent for protecting entire value chains rather than only upstream materials.19
  • New Commission proposals would require data centres to disclose energy and water efficiency, potentially preceding mandatory performance standards. This strengthens the case for an electricity-and-water ladder for AI infrastructure.20

Why it matters: Europe is moving from horizontal climate regulation toward selective industrial protection. Chemicals should seek inclusion through demonstrated links to strategic value chains—electrical equipment, semiconductors, defence, healthcare and clean technology—rather than request blanket sectoral subsidies.

3 · Energy competitiveness

European TTF gas was approximately €73/MWh on 28 September, up about 5% over one month and more than double its year-earlier level. EUA prices closed around €86.8/tCO₂ on 25 September, also about 5% higher over the month.21

The OECD reports European gas storage at its lowest seasonal level in more than 15 years and assumes Q4 averages of €82/MWh for TTF and $105/bbl for Brent.1 This creates a difficult combination:

  • expensive gas feedstock for ammonia, methanol and hydrogen;
  • higher electricity marginal costs;
  • an EUA price approaching €90;
  • tighter monetary policy that raises decarbonisation CAPEX costs;
  • low-cost US gas and lower-cost Chinese energy alternatives.

Electricity Ladder conclusion: at these prices, European commodity electrification is economically credible only with long-duration power contracts, very high asset utilisation, flexibility revenues or direct CAPEX/operating support. Scarce affordable electricity should first go to higher-value applications—grids, chlor-alkali, efficient recycling, semiconductors, AI and strategic materials—not indiscriminately to every possible e-molecule. Test it in the Ladder Scenario Lab →

4 · ETS and CBAM

The Council’s position would add about 88 million free allowances, worth an estimated €6 billion, for sectors using heat and fuel benchmarks, plus a potential additional 33 million allowances previously withheld under conditionality rules. Parliament must still agree.22

This is a meaningful competitiveness correction, but it does not neutralise Europe’s energy disadvantage. At roughly €87/tCO₂, one tonne of unabated emissions still represents a significant cash-cost exposure.

CBAM is now operational:

  • importers exceeding the 50-tonne threshold must be authorised declarants;
  • 2026 embedded emissions create liabilities even though certificate purchases begin in 2027;
  • the first declaration and surrender for 2026 imports are due by 30 September 2027;
  • verifier access to the registry began this month.2324

Chemical implication: fertilisers and hydrogen are already directly exposed. Most polymers and organic chemicals remain outside the initial scope, although downstream extension and anti-circumvention measures are advancing. Chemical companies should therefore treat supplier-emissions verification as a commercial capability before their products formally enter CBAM.

5 · China overcapacity and export pressure

The imbalance is becoming clearer:

  • August exports rose 25% y/y, generating a $119.1 billion monthly trade surplus.7
  • Industrial output grew 5.2%, while retail sales increased only 0.4% and fixed-asset investment fell 7.2% in January–August.6
  • August industrial-profit growth slowed to 4.2% y/y, from 11.2% in July, although January–August profits remained 15.7% higher.8
  • The EU’s trade deficit with China widened another 9% in H1 2026, with plastics, batteries, EVs and other manufactured goods under particular scrutiny.25

Beijing’s “anti-involution” campaign may slow additional capacity investment, and the OECD explicitly incorporates that effect into its forecast.1 But it will not quickly remove installed petrochemical capacity or stop producers from seeking export outlets.

Strategic implication: Europe should assume continued Chinese volume pressure through at least 2027–28, even if new project approvals slow. Trade defence, local-content policies and differentiated low-carbon products will matter more than waiting for demand to absorb the surplus.

Five takeaways

  1. The European chemical closure cycle is accelerating: INEOS Hull turns the competitiveness debate into a tangible asset-exit story.
  2. Europe’s main Q4 vulnerability is gas: €70–82/MWh gas plus €85–90/t carbon is incompatible with many commodity assets.
  3. China’s exports are compensating for domestic weakness, exporting industrial overcapacity into Europe and Asia.
  4. EU policy is pivoting toward protection and selective relief, but energy-price reform remains incomplete.
  5. Headline macro resilience masks industrial divergence: AI and electrical value chains are expanding while traditional energy-intensive production contracts.

Watch over the next 4–12 weeks

  • TTF approaching or exceeding the OECD’s €82/MWh Q4 assumption.
  • Progress—or failure—in EU-China talks expected around early October.
  • Further European chemical curtailments ahead of winter.
  • European Parliament negotiations on the additional ETS free allocation.
  • Q3 CBAM certificate price and supplier verification readiness.
  • Post-Golden-Week Chinese chemical operating rates, inventories and export offers.
  • Chinese “anti-involution” measures that move from rhetoric to enforced capacity closures.
  • India’s fertiliser deficit and associated urea/ammonia import requirements.
  • Whether September’s strong US and euro-area PMIs translate into actual orders rather than inventories.

Sources

  1. OECD Economic Outlook, Interim Report, September 2026: Weathering Successive Shocks
  2. OECD press release: Global growth holds up despite successive shocks, but risks persist (23 Sep 2026)
  3. S&P Global US Flash PMI, September 2026
  4. S&P Global / HCOB Eurozone Flash PMI, September 2026
  5. U.S. Bank: Fed raises rates to 3.75%–4.00%, first hike since 2023
  6. investingLive: China's factories outperform as consumption and investment lag behind (August data)
  7. CNBC: China's imports in August miss estimates as calls for rebalancing trade grow (8 Sep 2026)
  8. CNBC: China posts weakest industrial profit growth this year, 4.2% in August (28 Sep 2026)
  9. Investing.com: India manufacturing PMI falls to five-year low in August
  10. Business Standard: Core industries growth eases to 4.8% in August
  11. The Rio Times: Selic rate cut to 13.75% as the Fed raises in Washington
  12. Bloomberg: Ineos idles three UK chemical plants as energy costs surge (22 Sep 2026)
  13. OilPrice.com: UK gas prices force Ineos to idle three chemical plants
  14. RIM Intelligence: China's ethylene production capacity reaches 66 mil tons in 2025
  15. C&EN: Responding to relentless expansion in China, South Korea and Japan keep shrinking ethylene capacity
  16. Wood Mackenzie: Ethylene downcycle puts 24% of global capacity at some risk of closure
  17. EUROMETAL: EU's Industrial Accelerator Act to require 70% local content in EVs
  18. Bird & Bird: Industrial Accelerator Act, new EU content requirements in public procurement and FDI
  19. Transformer Magazine: EU introduces provisional GOES safeguard extending into transformer value chain
  20. DCD: European Commission proposes energy and water efficiency disclosure rules for data centers
  21. Prestige Business Solutions: Energy Market Report, 28 September 2026
  22. Council of the EU: ETS, Council agrees targeted measure to protect energy-intensive sectors from carbon leakage (16 Sep 2026)
  23. European Commission: CBAM verification
  24. DEHSt: CBAM definitive regime from 2026
  25. Eurostat: EU trade with China, latest developments

Figures as reported at the time of writing. Some dashboard figures (inflation prints, policy rates, oil and urea moves) are from national statistics offices and central banks; see the OECD report for the consolidated view.

As rules change

Regulatory update: EU · China · USA

The rules that move the ladders: carbon pricing, trade defence, industrial policy, disclosure and permitting, side by side for the three blocs.

Week of 28 September 2026

Protection, relief and disclosure

European Union

  • ETS free allocation: Council position adds ≈88 million free allowances (≈€6bn) for heat and fuel benchmarks, plus up to 33 million withheld under conditionality. Parliament must still agree. src
  • CBAM definitive period: importers above 50 t must be authorised declarants; 2026 imports create liabilities, first surrender due 30 Sep 2027; verifier registry access has opened. src
  • Industrial Accelerator Act: “Made in EU” and low-carbon conditions in procurement and subsidies; draft 70% EU content for publicly procured EVs. src
  • Electrical steel safeguard: provisional measures from 25 September extend to laminations and transformer cores. src
  • Data centres: Commission proposes energy and water efficiency disclosure. src

China

  • “Anti-involution” campaign: aims to curb disorderly price competition and new capacity; the OECD builds its effect into its forecast, but installed petrochemical capacity is not being removed quickly. src
  • Export controls on urea relaxed: quotas eased, helping urea prices fall back toward pre-conflict levels. src
  • EU–China trade talks expected around early October, with plastics, batteries and EVs under scrutiny as the EU deficit widened another 9% in H1 2026. src

United States

  • Monetary policy: the Fed raised its range to 3.75–4.00%, lifting financing costs for decarbonisation projects. src
  • Energy, chemicals and trade regulation for the US will be tracked from the next update.

What it means for the ladders: Europe is moving from horizontal climate rules to selective industrial protection. See the weekly brief above for the full analysis.