Fitch: Demand outlook not good for EMEA chemical producers

Fitch Ratings said that production cutbacks and capacity shutdowns in the automotive and original equipment manufacturing sectors, as well as declining industrial output and a slowdown in construction, are painting a bleak 2009 demand picture for European, Middle Eastern and African chemical producers. Against depressed demand and this uncertain economic backdrop, the agency said volatility in feedstock costs and foreign exchange will present additional challenges for EMEA chemical producers.

Fitch said that given the sudden and pronounced nature of the downturn, near-term visibility on market conditions and issuer guidance for the cyclical sub-segments of the industry - petrochemicals, plastics, synthetic rubbers, coatings and paints - is very limited. The agency views the downside rating pressure for issuers exposed to these specific sub-sectors as high should market and/or economic conditions deteriorate beyond levels currently envisaged.

Fitch expects year-over-year volume contraction in petrochemicals, polymers and plastics in line with the erosion in key-end market demand and with the trends observed in the fourth quarter.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.