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On June 18, Marcelo Papiani, chief analyst for the petrochemical industry at credit rating agency Fitch Ratings Brazil, said that the downturn in the global petrochemical industry could continue until 2028, and the multi-year crisis caused by overcapacity might have lasting effects. Papiani said that the narrowing of price spreads during this period of weakness, compared to the average levels before it, could have a profound impact on the financial conditions of petrochemical companies, as well as their ability to borrow and invest. Given the current situation, Fitch Ratings predicts that this period of weakness will continue until 2028, as global new production capacity keeps increasing, yet demand is not able to absorb this additional capacity. Papiani said, “We now expect the downward cycle to be longer, possibly lasting until 2028, as current chemical prices are still at their lowest levels, and this situation is likely to continue for some time.” I heard that some industry experts believe the downturn will end by 2030. We need to wait and see, but in fact, its end date has been postponed several times. ” Papiani said, “This is the longest downturn that most global petrochemical companies have experienced.” What we are trying to figure out is whether, as the industry recovers and price spreads return to their medium-term levels, industry profits can reach their previous levels.” He explained this theory using the key financial indicator of corporate performance, namely the ‘profit/debt ratio’: the higher this ratio, the greater the pressure on companies to reduce their leverage, which in turn may affect capital expenditures and other measures aimed at improving long-term productivity. Papiani said, “After the crisis, whether companies expect their profits and leverage levels to return to pre-crisis levels is a key question.” These indicators will eventually recover from their current crisis-driven levels, but I doubt they will return to their previous levels. Some companies still believe that the market will return to its previous state; I don’t quite agree with this, but we’ll have to wait and see. ”