EU Chemicals Unstable Rally

The report highlights risks for European cyclical chemicals due to peaking demand, high valuations, and aggressive export competition from China. It recommends tactical protection via put options on the GSXECHEM and GSXECHNX indices.

Key Takeaways

• 1.EU cyclical chemicals face downside risk due to fading pricing tailwinds, demand destruction, and rising Chinese export competition.
• 2.The firm recommends shorting or using tactical put options on the GSXECHEM index as valuations remain stretched.

Table of Contents

• Indic Option Pricing:
• GSXECHEM - Fading the Tactical Tightness in Chems
• GSXECHNX - Hedging Structural Chinese Competition Pressures
• Today's EU Thematic Launchpad

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