Chemicals Monthly Update June 2026

The chemical sector witnessed mixed performance during June 2026, with commodity chemicals remaining under pressure amid aggressive Chinese competition, mixed export demand and cautious customer ordering patterns. In contrast, specialty chemical segments continued to demonstrate relatively resilient realizations, supported by a favorable product mix and healthy order execution. Crude-linked feedstock prices softened towards the latter part of the month, which is expected to gradually ease input cost pressures and support margin recovery across several chemical value chains. However, near-term inventory losses may persist for select manufacturers. On the global front, the European chemical industry continued to face structural challenges despite improving business confidence, as elevated energy costs, weak industrial demand, low capacity utilization, and subdued export activity weighed on production and profitability, keeping the outlook cautious for export-oriented chemical businesses. In the US, demand trends remained mixed, with specialty chemicals showing greater resilience than commodity chemicals amid continued macroeconomic uncertainties and cautious customer procurement. Meanwhile, the Chinese chemical industry continued to exert pricing pressure on global commodity chemical markets through excess capacity and aggressive exports, limiting the recovery in commodity chemical realizations. The domestic chemical sector is expected to report mixed performance in Q1FY27, driven by monsoon-related weakness in agrochemical demand and continued resilience in select specialty chemical segments. Meanwhile, specialty chemical companies with exposure to fluorochemicals, refrigerants, acetyl derivatives, and CDMO are likely to outperform, supported by a favourable product mix, healthy order execution, and improving capacity utilization.  Input costs remained elevated during the initial part of the quarter owing to higher crude-linked feedstock prices, before correcting towards the quarter-end.

Indian chemical prices exhibited mixed trends during June 2026. Methanol declined by ~40% MoM owing to improved supply availability and subdued downstream demand. In contrast, Acetic Acid increased by ~18% MoM, primarily supported by tighter domestic supply and improved demand from downstream industries. Isopropyl Alcohol and Ethyl Acetate increased by ~14% MoM and ~2% MoM, respectively, supported by improved demand from the pharmaceutical, paints, coatings, and adhesives industries, along with relatively tighter regional supply. Meanwhile, Acetone and Phenol declined by ~7% MoM and 9% MoM, respectively, owing to weak downstream demand. Bromine prices remained firm, rising by ~12% MoM, owing to healthy demand from flame retardants and energy storage applications. Meanwhile, refrigerant gases such as R22 and R134a corrected, amid improved supply availability and easing demand following the peak summer season.

We remain selectively positive on companies with differentiated business models and higher exposure to value-added specialty chemicals. Navin Fluorine International and SRF are expected to benefit from sustained momentum in fluorochemicals and refrigerants, while PI Industries is well-positioned to capitalize on its expanding CDMO business. Aarti Industries is likely to benefit from an improving product mix and easing input costs. In contrast, commodity and intermediate chemical players such as Deepak Nitrite, Laxmi Organic Industries and Jubilant Ingrevia may continue