Moody’s sours on chemical outlook

The credit rating agency Moody’s has lowered its outlook for the global chemical industry from stable to negative, as decreasing demand will make it more difficult for chemical companies to pass along higher input costs. Earnings in the first half of 2022 were relatively strong, but companies are worried about the second half, particularly the impact in Europe of lower supplies of Russian natural gas. According to the consulting firm ICIS, 13.5 million metric tons per year of European chemical capacity has been shut down or is running at reduced rates because of high gas prices. Chemical makers in the US, where natural gas is a tenth the price it is in Europe, could pick up some of the slack, Moody’s says.