US chem companies to meet Q4 targets on cheap feedstock - analyst

17 January 2013 17:59  [Source: ICIS news]

HOUSTON (ICIS)--US chemical companies are expected to meet or slightly surpass fourth-quarter estimates as lower feedstock costs drive what is typically a weak season, an investment bank said on Thursday.

Deutsche Bank expects strong results for commodity chemicals as ethane remains cheap, and lower prices in titanium dioxide (TiO2) and propylene derivatives should result in solid profitability for coatings companies.

The industrious gases industry should report in-line results despite weakness in Europe and Brazil, Deutsche said, as onsite start-ups support steady growth.

Deutsche said US chemical demand remained solidly positive with minimal de-stocking, which offset declining demand in Europe and below-trend demand in Asia. Still, China began showing modest signs of improvement.

Looking forward, ethane is expected to stay cheap, but US chemical companies will be conservative in their 2013 outlooks as demand and macroeconomics remain uncertain, Deutsche said.

Still, the investment bank expects US chemical companies to express optimism about the improving housing market and positive futures for ethylene margins.

By: Tracy Dang
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