27 April 2009 17:00 [Source: ICIS news]
LONDON (ICIS news)--The latest International Monetary Fund (IMF) global economic outlook forecast makes depressing reading. The IMF thinks global gross domestic product (GDP) will fall 1.3% this year in what will prove to be the first global recession since the Second World War. In January, it projected a 0.5% global economic decline.
The major, export-led economies are expected to sufferer badly with ?xml:namespace>
Depressed operating rates reflect the fact that chemicals export demand has collapsed alongside the demand for the goods from
Chemicals output data show huge swings in production and shipments of basic chemicals and plastics in February compared with January this year, let alone the slump in output compared with February 2008.
As companies in other parts of the world have highlighted, depressed automotive and consumer-serving industries and a depressed construction market have continued to feed back into chemicals demand.
DuPont last said its global economic forecast for 2009 had been revived downward significantly since January.
BASF CEO Jurgen Hambrecht was quoted in the German press as saying that the worst was probably yet to come. He did not see an economic upturn until the middle of next year.
The economic contraction could be painful and deep and is likely to prompt further shutdowns and restructuring across the chemicals sector.
The undercurrent of change has already prompted closures. On 2 April, Mitsui Chemicals and Sumitomo Chemical became the latest to announce the termination of a production joint venture, this time in polystyrene (PS).
That news comes on the heels of other cutbacks in polyester chain chemicals from Asahi Kasei, Mitsubishi Chemical and Mitsui Chemicals that show how
Mitsui Chemicals last week probably told it like it was for large parts of the sector. It projected a significantly greater full-year 2008/09 net loss of Y95bn ($977m), compared with a January forecast of a Y13bn shortfall. Asahi Kasei had earlier slashed its full-year profits forecast, as had Shin-Etsu Chemical and sector giant Mitsubishi Chemical.
The trouble is, this downturn is different. It takes away the export opportunities that have been so important to many businesses for so long and cuts great swathes through the country’s export-led manufacturers, the customers on which
The current sharp economic contraction is likely to accelerate the inevitable, put further intense strain on petrochemicals and basic chemicals production and highlight the shift to more specialised parts of the business.
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