16 September 2008 15:29 [Source: ICIS news]
“For most non-US chemical companies, the impact of a stronger US-dollar may be quite beneficial to earnings in 2009,” the analysts said, and pointed to currency translation gains and changing trade patterns with more imports into the US and dwindling exports.
According to HSBC’s analysis, industrial gases producers Linde and Air Liquide as well as ?xml:namespace>
“Linde and Braskem offer the best balance of insulation from trade volatility and currency-related earnings benefit, we believe,” it added.
Meanwhile, most US-based chemical producers, for whom the strong euro had been a benefit in 2006 and 2007, would likely see downside as the US dollar was strengthening, the analysts said.
“If the dollar remains at current levels, we would expect to see an increase in basic chemical imports into the US, which for certain products could reduce US capacity utilisation rates, generating a drop in pricing and, in turn, margins,” the analysts said.
($1 = €0.70)
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