08 February 2008 14:41 [Source: ICIS news]
By Nigel Davis
LONDON (ICIS news)--Chemical producers are expecting slower growth later this year but on Friday were not reporting any major impact on demand from the US economic slowdown and global credit crisis.
“People in the markets appear mixed, some like me, are worried, others are optimistic,” one polyvinyl chloride (PVC) producer said summing up the view of many in ?xml:namespace>
“I am certainly concerned about a slowdown in the short-term but so far we have been doing good business on PVC and PE (polyethylene), even though prices look like they might come down.
We haven’t seen any drop in demand yet. Perhaps in the next quarter,” he added.
“I think March and April will give a better idea about how the market is moving in
The cautious sentiment was expressed across most markets although those more closely linked to sectors such as construction and automobiles were feeling pressure.
Sources in the ABS and polyurethanes markets expressed concern that a recession could well be inevitable, perhaps later this year. However, none reported any effect on demand as yet.
The threat of recession in the
Although European demand is consistent with the time of year, an economic slowdown in
A seasonal MPG buyer, however, noted that consumption had been slower during January and February, but that this was more likely to be due to the mild weather and regional holidays in some parts of
However, the source did not rule out this possibility, stating that general demand could be affected later in the quarter, depending on further developments in the
Enormous price volatility over the past seven months had been caused by fluctuations in supply more than any more deep-seated economic concerns, players in the ethylene glycol market said.
With contract and spot prices falling sharply, demand is currently continuing at a healthy level.
Talk of a slow-down later in the year has surfaced, especially on di-ethylene glycol (DEG), which is used in a variety of construction applications.
Bullish growth predictions in central
Certain parts of Europe, such as the
“We have seen in a dip in demand for formaldehyde since mid-December,” a methanol buyer said, and a further decrease was expected in March. The reasons given were macro economic factors in
“We are all living on talk,” a styrene producer said. I don’t know if we will have a recession but I don’t think things will be that dramatic or that it will impact on the European styrene market,” he added.
“We are not feeling any economic slowdown. At this stage we are still optimistic,” a
“We need to be very careful,” warned one European chemical industry CEO earlier this week. “Facts are better than mood,” he said.
“There is reasonable growth and we in
The view from the US is similar although it is clear that demand in key markets for chemicals has slowed considerably. Major players have talked of a slowdown but said they believe the
Dow Chemical’s chief executive, Andrew Liveris, said at the World Economic Forum in Davos that Dow had experienced weaker demand since mid 2007 and that the situation had worsened dramatically in recent months.
Those conditions were likely to persist through the first half of 2008, he suggested, pushing growth lower for the year.
Adal Rafiq, Ed Cox, Caroline Howard, Peter Gerrard, Peter Salisbury, Shelley kerr, Sam Weatherlake, Heidi Finch, Julia Meehan and Fiona Bond contributed to this article
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