16 April 2010 17:15 [Source: ICIS news]
By Stefan Baumgarten
TORONTO (ICIS news)--The rise of the Canadian dollar relative to the US dollar in past weeks is cutting into Canadian chemical producers’ profits, a domestic industry official said on Friday.
The Canadian dollar (C$) – known as the “loonie” – has traded at around parity with the US dollar over the past two weeks after gaining steadily since the start of the year.
“[The C$ dollar strength] is absolutely going to make it less profitable to sell into the ?xml:namespace>
Most Canadian chemical and plastics producers were exporting into the
However, producer's margins and profitability were still strong, Podruzny said.
Also, a stronger Canadian dollar made investment in machinery and equipment more affordable for the industry, he said.
“A higher Canadian dollar usually means lower profits on the sales of our goods and cheaper access to machinery and equipment,” he said.
“While [the dollar strength] will hurt our profitability, our profitability on a global basis is still pretty strong,” he added.
Podruzny said the Canadian dollar strength was a reflection of the health of
Most Canadian analysts expect the loonie to remain strong vis-à-vis the US dollar. It traded above parity against the US dollar at the end of 2007 but later receded.
In related chemical industry news this week, Canadian chemical railcar traffic for the week ended on 10 April jumped 42.8% to 14,372 from 10,061 in the same week last year.
For the year-to-date period, Canadian shipments were up 25.5% to 206,423 from 164,544 in the same period in 2009, according to data from the American Association of Railroads.
($1 = C$1.01)
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