Chemicals Monthly – Nov 2025 Update

The chemical sector showcased a steady margin recovery during the month, aided by stable crude oil prices and a sequential pickup in export orders from Asia and Europe following a period of notable softness. Demand recovery was evident across key downstream segments, including paints, packaging, and pharmaceuticals, leading to restocking and improved near-term volume. With this recovery aligning with anticipated pre-Budget PLI extensions for specialty intermediates, the chemical sector is positioned for potential earnings upgrades as operational momentum strengthens and order flows normalize. On the global front, the EU27 chemicals sector remains challenging in the near term, as the industry continues to grapple with structurally high energy costs, subdued domestic demand, and sustained competitive pressure from China. Demand uncertainty, global geopolitical disruptions, and US tariff actions are expected to further pressure the sector, with EU27 chemical output estimated to contract by more than 2% YoY in 2025. Deindustrialization continues to gain momentum, with several capacity closures already undertaken and more expected. Industry expectations are now pinned on a demand recovery in 2026, supported by some pricing, which could help revive the overall chemicals sector. On the earnings front, Indian chemical companies posted mixed results in Q2FY26 as they continued to navigate multiple headwinds, including tariff-related uncertainty and persistent China-led overcapacity. These challenges were partially offset by profitable growth, improved utilization of newly commissioned capacity supported by committed orders, and stable raw material costs. Looking ahead, domestic demand in India and the specialty chemical segment are poised to drive near-term growth; the chemical sector  should prioritize companies with strong balance sheets and integrated specialty portfolios. In November, the movement in chemical prices was a mixed bag. Key bulk chemicals, such as Isobutanol and Acetic acid, experienced price declines of 3.6% and 6.7%, respectively. On the other hand, Aniline and Ethanol prices increased, while Isopropyl Alcohol and Methanol prices declined sharply. Benzene saw a modest rise, and Ethyl Acetate increased 5.4%, likely due to steady downstream demand. The growth in Ref gases also softened, as the refrigerant gases index grew 4% MoM, while Heavy Soda Ash prices remain muted, reflecting destocking and softening demand. Soda Ash demand remained subdued in China and Southeast Asia, keeping prices range-bound. Toluene prices rose this month, affecting prominent consumers such as Aarti Industries. The Indian chemical industry is undergoing a transformative phase of accelerated growth, positioning itself as a key player in the global chemicals value chain. Driven by rising domestic consumption, robust export potential, and increasing demand from end-user industries, the sector has become a cornerstone of India’s industrial landscape. Companies such as Aarti Industries, Acutaas Chemicals, GHCL, Laxmi Organics, Privi, Navin Fluorine, Neogen Chemicals, SRF, and Vinati Organics are likely to benefit from the demand for value-added chemical products.