14 December 2012 12:07 [Source: ICIS news]
LONDON (ICIS)--European and US chemical industry pricing continued to be resilient through October and November, analyst firm Bernstein Research said on Friday, despite the weak economic environment.
According to the company, gross margins for European and US chemicals companies continued to expand during the period as a result of price increases outpacing cost inflation.
Pricing for specialty chemicals increased 2% year on year during the period in both regions and was flat sequentially, providing sufficient momentum for margins to expand, according to Bernstein.
Price growth for commodity chemicals was flat year on year, increasing 1% in Europe and falling 1% in the US, but also achieved a sequential margin expansion, driven by price increases for petrochemicals and plastics.
The company identified paints and coatings, chloralkali, and industrial gases as their most-favoured sectors at present, due to their ability to hold prices in a weakening economic environment.
The company assigned ‘market outperform’ ratings to AkzoNobel and Air Liquide, and also identified Praxair and Air Products – companies that it does not provide regular coverage for – as strong growth prospects.
Bernstein also earmarked Norwegian fertilizer specialist Yara as likely to outperform average quoted chemical company stocks, after reassessing the prognosis for urea pricing. The company had been pessimistic about the potential for urea price increases but has reevaluated its forecast due to current tight ammonia supplies.
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