The global chemicals industry is in turmoil—a potential structural reset from China’s capacity build-out, utilization dropping from low-mid 80s to high 70s, and Europe’s energy shock. This has made chemicals one of the weakest European high yield sectors, with spreads blowing out ~600bps over, negative returns, and distress clustering in commodity-heavy, leveraged names.Tim Riminton, Senior Credit Analyst at Bloomberg Intelligence (7+ years on basic materials), explains why this isn’t just Europe: overcapacity ripples globally via collapsing EBITDA (one issuer fell 60% Q/Q), plant closures (up to 20% Europe cracking capacity), weaker coverage, covenant stress, and refinancing risks pushing issuers toward private credit.We break down oil-to-olefins-to-plastics value chain, US shale ethane cost edge vs Europe/China/Middle East, China’s self-sufficiency shift hurting Korea/Japan exporters, operating leverage mechanics, and demand signals from housing/autos/consumer goods signaling broader credit cycle risks like fallen angelsIn this episode we cover- Structural reset vs traditional downcycle in global chemicals and how that is being priced in credit spreads- How the industry turns oil and gas into ethylene, propylene, plastics and higher‑value products- Decades of growth in plastics: GDP‑plus demand and its main end markets (construction, autos, packaging, consumer goods)- Regional cost curves: Europe vs U.S. shale, China/APAC and the Middle East- China’s push for chemicals self‑sufficiency and its impact on exporters like Korea and Japan- Global overcapacity, collapsing utilization rates and what they mean for margins, leverage and returns on capital- Europe’s energy crisis, demand shortfalls and why plants are being shut permanently- Operating leverage in chemicals: why a small volume or margin shock can cut EBITDA by 60% and erode credit metrics- Why large integrated players are closing plants first, and what that means for bondholders and lenders- What the chemicals downturn reveals about global demand, the broader credit cycle and where risks may build nextGuestTim Riminton is a Senior Credit Analyst at Bloomberg Intelligence covering basic materials, with a focus on European and U.S. chemicals. He has covered basic materials for over seven years and brings a credit‑focused perspective on how global overcapacity, regional cost differentials and policy choices are reshaping the sector and its capital structures.Subscribe & connect🔥 Subscribe for full episodes:https://www.youtube.com/channel/UC7al5J1-P_taxdFuPV92KSg?sub_confirmation=1📌 Connect with us:LinkedIn: https://www.linkedin.com/company/fixed-floatingTwitter/X: https://twitter.com/FixedFloating#FinancePodcast #CreditPodcast #Chemicals #HighYieldCredit #Plastics #Overcapacity #China #EuropeEnergyCrisis #Petrochemicals #FixedFloating