Brokerage firm Jefferies expects refrigerant segment at chemical companies to be affected in 2023

Execessive supply of raw materials have affected margins for the packaging film segment of chemical firms, and will create pressure on them in the year to come. The forecast has been made by a brokerage Jefferies India in its outlook for the cheimcal sector.

According to Jeffries, margins for biaxially-oriented polypropylene have narrowed across Asia after commssioning of new capacities. In addition to that the prices of hydrofluorocarbon refrigerant will also soften in 2023, as major players are increasing capacity with economic conditions turning in their favour.

The outlook also expressed positivity about the growth of specialty chemicals in 2023, while mentioning chances of moderation in revenue growth thanks to easing inflation.

Jefferies was however, not upbeat about the commodity chemical firms, since their earnings will be "mean-reverting" next year. This means that prices of assets and returns on them will go back to their average long term levels.