18 June 2013 09:13 [Source: ICIS news]
SINGAPORE (ICIS)--Moody's Investors Service said on Tuesday its outlook for the chemical industry in North America as well as Europe, the Middle East and Africa (EMEA) remains negative mainly on the back of poor industrial activity in the eurozone.
The uncertainty around China's economic growth and the modest pace of recovery in the US is also weighing on the industry, the ratings agency said in report titled “European Weakness and Uncertain Demand from Asia Keep Chemicals in Doldrums".
"Sales volumes declined for many European chemical firms in the second half of 2012, with disappointing financial results in early 2013 a reflection of the region's contracting GDP and industrial production," said Moody’s senior analyst James Wilkins in the report.
Demand for chemicals in China, which has supported the North American and EMEA chemical industry in recent years, has not reflected the country’s recent growth statistics, according to Moody’s.
Modest economic growth and low natural gas feedstock prices will support sales and margins for North American chemical producers over the next year and this will allow them to export to Latin America and Asia, it said.
“Chemicals sold in certain non-cyclical end markets such as food, beverages, medical products and personal care, should also continue to perform well through this year and next,” the report added.
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