Canadian chemical sales forecast to rise 12% in 2006

27 December 2005 16:04  [Source: ICIS news]

TORONTO (ICIS news)--Canadian chemical sales are expected to rise by 12% in 2006, the Canadian Chemical Producers Association (CCPA) said on Tuesday.

 

Canadian chemical sales totalled Can$23bn ($19.6bn/Euro16.5bn) for 2005.

 

Exports will increase 11%, with exports to the US expected to rise 12%, CCPA said, citing a recent survey of member companies.

 

Operating profits at Canadian chemical companies are expected to rise by 33% to Can$2.7bn in 2006. Fixed capital investment is forecast to decline by 17% to Can$1bn in 2006, "perhaps a reflection of rising natural gas prices in North America, now the highest in the world," CCPA said.

 

Natural gas costs remain a primary concern for Canadian and US-based chemicals production, CCPA said. "A key concern is the ability of North American petrochemical producers, which are primarily natural gas-based, to remain globally competitive while at the same time facing higher natural gas and natural gas feedstock costs than offshore competitors, which are primarily oil-based."

 

Another key factor affecting Canadian chemicals makers could be further increases in the Canada-US exchange rate.

By: Stefan Baumgarten
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