14 October 2009 23:01 [Source: ICIS news]
HOUSTON (ICIS news)--Moody’s on Wednesday expressed some concern regarding the outlook for Canadian petrochemicals producer NOVA Chemicals, predicting that margins for polyethylene (PE) would come under pressure later in 2009 and remain depressed through 2012.
The ratings firm expects PE capacity to increase worldwide, exceeding demand.
The ratings service kept the overall outlook at stable, however, behind sentiment that ethylene cash margins would remain modestly above prior downturn levels.
The higher margins should come as a result of relatively low natural gas-based feedstock costs in Canada’s Alberta province, which should, in turn, allow NOVA to export chemicals to Asia through the downturn, Moody’s said.
NOVA is likely to undergo substantial swings in profitability from quarter to quarter due to natural gas cost fluctuations from 2010 through 2012, Moody’s added.For more on NOVA visit ICIS company intelligence
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