05 October 2010 18:41 [Source: ICIS news]
By Nigel Davis
BUDAPEST (ICIS)--Chemical and petrochemical players will report healthy third-quarter earnings, according to many of them.
Demand in Europe and the ?xml:namespace>
Prices also have held up remarkably well, with some supply chains particularly tight.
Producers have cut costs, of course, and it is that cost containment that is helping feed cash through to the bottom line.
There is also more money available for some of the growth projects that were put on hold as the recession loomed. More of them will be dusted off in the coming months.
Pull-through demand from the durable goods markets in the
Alongside strengthened demand in
Most noteworthy perhaps is the air of confidence. Having ridden out the worst of the precipitous downturn, it looks as if healthy returns can be made under current market conditions.
The management of supply to demand over the next three years will be vitally important when it comes to retaining margins.
No one can be complacent, however. The business environment has changed markedly. The undercurrents of change have been amplified by the crash of 2008.
The focus of activity in chemicals has shifted eastwards, the consequences of which are being felt everywhere.
Companies operating in
While cuts have been made in the
But what about
As was discussed in a recent Insight piece, demand growth in
It is the sheer size of these markets now that grabs the attention. Changes in demand growth from them affect all players.
Petrochemical markets in
“Weaker Asian markets in the third quarter have raised fears that the recovery of the petrochemical industry could falter or even worse fall back to a trough, surrendering recent gains,” suggests Nexant.
Petrochemical margins in western Europe in the quarter were almost 15% above the average of the past two decades, even though operating rates were confined to below 85%, according to the firm’s data.
The profitability of
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