US chem companies to lower '13 outlooks on order patterns, demand

16 January 2013 19:41  [Source: ICIS news]

US chem companies to lower ­HOUSTON (ICIS)--Jefferies expects US chemical companies to lower their 2013 outlooks by about 5% on choppy order patterns and lower demand because of attempted price increases, the investment bank said on Wednesday.

The outlook will remain uncertain as raw materials, order patterns and foreign exchange continue to be volatile, Jefferies said in its fourth-quarter preview of the chemical industry.

Other factors include government deficit-cutting measures in the US and EU, slow recovery in retail sales in China, weak prospects in Latin America, as well as unusual weather-distorting seasonality.

Jefferies expects companies will attempt to sustain growth through buybacks, reduced capital expenditure budgets, as well as mergers and acquisitions (M&A).

Jefferies expects fourth-quarter earnings to be in line, although companies may note shifts modest optimism about Chinese demand and lacklustre trends in South America.

There are concerns that food inflation could delay stimulus measures, and the industry may also see flattening momentum in transportation end markets as well as less optimism about the recovery in the construction market.

By: Tracy Dang
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