Poland's ZChP given 'Sell' rating by bank on ferts, TiO2 weaknesses

25 January 2013 16:46  [Source: ICIS news]

LONDON (ICIS)--WOOD & Company has downgraded its rating on the stock of Poland's Zaklady Chemiczne Police (ZChP) to 'Sell' from 'Hold', noting market weaknesses that it believes will hit its multi-component fertilizer and titanium dioxide (TiO2) profitability, the investment bank said on Friday.

“Against the revised fertilizer demand forecasts of the International Fertilizer Industry Association (IFA), which assume flat to declining multi-component fertilizer demand and a 5% increase in global capacities, we expect the continued erosion of ZChP's product prices in 2013, leaving little to no room for margin improvement,” said Piotr Drozd, an analyst at WOOD & Company.

The “uninspiring outlook” for ZChP in 2013 was also partly due to TiO2 prices which the bank expected to remain depressed, added Drozd.

By mid-January this year, European TiO2 contract prices were dropping on lower raw material costs and poor demand.

ZChP, based in Police in the far northwestern corner of Poland, is a member of the Zaklady Azoty Tarnow (ZAT) group.

Both companies use the brand name of Grupa Azoty – a chemical group ZAT is currently formalising with its subsidiares – for marketing purposes.

By: Will Conroy
+44 20 8652 3214

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