Economic Stressors Leading to Chemical Industry Overstock

over stock over price - The Chemical Company

Inflation and rising cost of living has forced consumers to cut back on spending, leading to severe overstock in inventories. Because of this, the global chemical industry has been cutting operating costs. The energy crisis, which has contributed greatly to the complications surrounding the cost of living, has created a demand shock which has left supply chains overstocked with chemical companies unable to pass on rising upstream costs. This has forced chemical companies to resort to cutting operating rates to levels not seen since the 2008 financial crisis or the beginning of the Covid-19 pandemic. Shrinking demand, overcapacity at warehouses, and rising energy costs are creating more unprecedented outcomes. An article recently published by ICIS examines the current state of the chemical industry, while providing reports from the global ICIS Petrochemical index (IPEX).

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