11 December 2009 19:48 [Source: ICIS news]
TORONTO (ICIS news)--Canadian sales of basic chemicals and resins are forecast to increase 2% next year, but volumes will remain flat and operating profits could fall sharply amid a fragile economic recovery, according to a survey by a producers group on Friday.
Sales for 2010 are projected at Canadian dollar (C$) 17.0bn ($16.2bn), a modest increase above the C$16.6bn expected for 2009, the survey by Canadian Chemical Producers Association found.
However, operating profits could plunge by some 36% from the C$1.4bn expected in 2009, partly due to increased natural gas prices next year, the group said.
The group’s projections are based on a number of factors, including a strong Canadian dollar relative to the US dollar, continuing weakness in the automotive, pulp and paper industries, as well as competition from the Middle East, ?xml:namespace>
Importantly, natural gas prices would rise because of reduced exploration and production in western
The unfavourable outlook for natural gas prices compares with low prices of 2009, which enabled Canadian-based producers to retain their operating profitability despite sharply lower sales in the wake of the recession.
Employment in basic chemicals and resins is projected to fall 11% to around 14,000 next year, coming on top of a 17% decline in 2009 from 2008.
($1 = C$1.05)
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