Russia chems to remain stable over next 12–18 months – Moody's

21 December 2011 11:28  [Source: ICIS news]

Sibur facility at TobolskLONDON (ICIS)--Russia’s chemical sector will remain stable over the next 12–18 months as strong demand from Asia and Latin America offsets a slowdown in Europe, ratings agency Moody’s said on Wednesday.

"While we expect demand from Europe to slow due to ongoing economic uncertainty, demand in Asia – particularly China and India – and Latin America remains robust," said senior analyst Julia Pribytkova.

Russian chemical producers will also benefit from planned increases in polymer production, supported by strong growth in Russia's retail and construction sectors, the ratings agency said.

Demand for fertilizers will remain strong, with support from emerging and domestic markets outweighing slowing demand in Europe.

There are risks in this sector, however, from cheap North American feedstocks, increasing production of nitrogen-based fertilizers in the Middle East and a rise in Chinese domestic production, Moody’s said in its “special comment” report.

Pribytkova said ongoing investment will benefit Russia's chemical sector but warned that the outlook would be revised downwards if Chinese economic growth slowed to less than 5%. China's 2012 GDP is widely expected to be around 8–9%.

By: Graeme Paterson
+44 20 8652 3214

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