...Industry conditions in petrochemicals and fertilizers are off peak. In fertilizers, prices for potash and phosphate declined sharply versus the record highs seen in 2022, but 2023-2024 prices should remain broadly above 2021 averages. In petrochemicals, a tough macroeconomic environment is depressing demand in several end-markets, at the time of new capacity additions, notably in Asia. We believe this combination will lead to an oversupply in 2023 and 2024, which will weaken olefin and polyolefin prices, and in turn margins, cash flow, and credit metrics. Outlook bias is firmly negative and here to stay. Despite negative rating actions since the start of 2023, 22% of our portfolio remains on a negative outlook, broadly on par with 20% on Dec. 31, 2022. Most negative outlooks relate to high-yield issuers. The challenge is to keep both the volumes and the prices. Sluggish demand and low confidence create an environment of slowing volume growth and still-high costs, despite receding raw material...
