BoA expects 2009/11 ethylene downturn

19 April 2007 12:26  [Source: ICIS news]

MUMBAI (ICIS news)--Bank of America (BoA) on Thursday said project timelines for all ethylene crackers point to a cyclical decline in the market between 2009 and 2011, based on aggregate growth in nameplate capacity of 24%.

The brokerage said that a supply-driven downturn is likely to occur despite ongoing project delays in Iran.

BoA expects global ethylene demand growth of 4.2% to outpace capacity growth of 3.4% in 2007, adding it expects an increase of $0.02/lb in the April US ethylene contract, following a $0.015 hike in March that was the first bump upwards in seven months.

The brokerage said it remains cautious on ethylene names like Nova Chemicals, Lyondell, Westlake and Dow Chemical over the next 12 months but had a buy-rating on PPG and Rohm and Haas.

It highlighted Celanese and Airgas as its top share picks.

By: Aarti Kapoor
+65 6780 4359

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