JP Morgan has advised investors to exercise caution with regards to specialty chemical companies this year, according to a report published by Digital Look.

Analyst Martin Evans told the publication that consumer demand would be unlikely to tally with volume growth, leading to issues of oversupply, affecting prices in the medium-term. What’s more, currency costs are likely to impact as the Chinese yuan weakens and raw material costs are predicted to rise.

JP Morgan recommended underweighting for BASF, Solvay and Lanxess, while Evonik was downgraded from overweight to neutral thanks to the widely held belief that methionine prices will drop.

It wasn’t all bad news however; AkzoNobel and Croda were both upgraded.