11 October 2010 17:55 [Source: ICIS news]
By Nigel Davis
Producers, traders and others in
Nexant ChemSystems reminded everyone that petrochemical margins were down sharply quarter to quarter in the third quarter this year, particularly in
For the third quarter in
In general terms, petrochemicals have followed, and will continue to follow, the rest of developed world economies down as they adjust to the withdrawal of national stimulus packages and of the reality of debt reduction.
Economic growth in the developed world and in
Demand pull from the emerging markets, particularly China, was vitally important last year and has and has continued to be in 2010, although a wider range of petrochemical intermediates have been in recovery mode.
Stronger demand in important consuming industries in North America and
The recovery, therefore, is more broad-based, a fact that will be borne out in the third-quarter financial results of many firms.
But the outlook remains uncertain, with eyes on the health of the economies of the
Stronger industrial demand in North America and
It remains to be seen how recovering sectors of economic output react to the dropping of particular stimulus measures, the apparent ongoing reluctance of banks to lend and the austerity measures being adopted by highly indebted nations.
The economic indicators published in the
The balance between austerity and expansion may be fine but not fine-tuned enough to help underpin some sectors of recovering industry. If that is the case, petrochemicals will suffer.
And yet there are those who believe that while growth has slowed, such an episode can (and possibly will) provoke policy responses: the balance will be maintained.
“We expect the European economy to regain momentum as we move into 2011,” said economists from Credit Suisse on Monday in a note from the bank to clients. “Monetary conditions remain extremely accommodative, and there are growing signs that the recovery in demand is becoming increasingly self-sustaining,” they suggested.
The bank is sticking with its forecast of 2.5% GDP growth in the euro area and in the
“There's increasing evidence that what started out as a vigorous export-led recovery is generating much stronger domestic demand,” it adds. “The German consumer is back and here to stay.”
If that is the case, then it is good news for chemicals.
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