23 March 2011 15:14 [Source: ICIS news]
HOUSTON (ICIS)--Earnings for US chemical companies exposed to global auto makers could be hurt by the ?xml:namespace>
Companies with the greatest exposure to the auto end-market include Solutia, Rockwood, Celanese, PPG, Cabot, Dow Chemical and DuPont, Deutsche Bank said.
The downside risk to chemical earnings will begin as soon as the 2011 first quarter reporting period, Deutsche Bank said.
The Japan earthquake caused major damage to Renesas’ Naka factory, the analysts said, which is the most advanced producer of engine-related micro control units (MCU) in the world.
The Naka plant supplies from 18-20% of the auto MCU market, Deutsche Bank said, and the loss of supply is unlikely to be easily resolved.
Automakers will likely attempt to mitigate the disruption by substituting MCUs from other manufacturers, but those will require extensive software de-bugging, the analysts noted.
The Renesas Naka plant supplies 30% of its production to US and European automakers, Deutsche Bank said, with 12% of output for the
In a worst-case scenario, global auto production for 2011 could be reduced by 10-14% as a result of disruptions to the electronic component supply chain, the analysts said.
However, the firm said the impact would likely be more modest, given contingency actions being taken by the auto makers.
The American Chemistry Council (ACC) estimates that each automobile contains an average of $2,700 (€1,890) worth of chemicals.
Earlier this week, several industry sources warned that the shuttered plants could threaten supply chains all the way in
($1 = €0.70)
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